Garrett v. Ellison

• Decision Date: 13 October 1937
• Docket Number: 5831
• Citation: 93 Utah 184,72 P.2d 449
• Court: Utah Supreme Court
• Parties: GARRETT v. ELLISON

72 P.2d 449

93 Utah 184

GARRETT v. ELLISON

No. 5831

Supreme Court of Utah

October 13, 1937

Appeal from District Court, Fifth District, Juab County; LeRoy H Cox, Judge.

Action by Alice B. Garrett and others against LaVern Ellison. Judgment for defendant, and the named plaintiff appeals.

REVERSED AND REMANDED, WITH DIRECTIONS.

Will L Hoyt, of Nephi, and A. E. Bowen, of Salt Lake City, for appellant.

P. N Anderson, of Nephi, and Lewis Larson, of Manti, for respondent.

LARSON Justice. FOLLAND, C. J., and HANSON and MOFFAT, JJ., WOLFE, Justice, concurring.

OPINION

LARSON, Justice.

This action, an appeal from the district court of Juab county, has changed its color, disposition, and character since it was commenced. Many of the parties have been eliminated, the res has changed its character, and the relief sought and the purpose for which the litigation exists, are different. Many of the assignments of error are now moot and the questions remaining for consideration are limited. We shall, therefore, state the facts only as they are now pertinent and not involve the record with matters heretofore eliminated.

In September, 1932, there was recorded in the office of the county recorder of Juab county a certain mortgage dated in July previous, signed by three persons named Bracken, in favor of "Alice B. Garrett and LaVern Ellison, joint mortgagees, with right of survivorship" covering certain lands in Juab county and given to secure a promissory note for $ 5,091.25 due October 1, 1935, payable "to the order of Alice B. Garrett or LaVern Ellison." The note uses the disjunctive or instead of the conjunctive and of the mortgage, and says nothing about right of survivorship. Alice B. Garrett mentioned in the note and mortgage is the appealing plaintiff and LaVern Ellison is the defendant in this action. In October, 1933, Alice B. Garrett made of record a release of the aforesaid mortgage, took a new note from the same parties, for the same amount, due the same date, secured by a new mortgage on the same lands, both note and mortgage being made in favor of "Alice B. Garrett" without any mention of La Vern Ellison. This second mortgage was duly recorded in 1934. Brackens, the mortgagors, sought to refinance the loan through the Federal Land Bank. The Land Bank required a release of the first mortgage by La Vern Ellison. She refused to execute a release, and Mrs. Garrett and the Brackens then brought suit to compel Mrs. Ellison to release the mortgage and have the court declare the same paid, and that Mrs. Ellison had no interest in the lands. Defendant answered setting up the foregoing facts and claiming a half interest in the note and mortgage, as a "joint owner" thereof. Plaintiffs replied, denying defendant's claims, and during trial sought to amend their complaint and reply by pleading that all the consideration for the first note and mortgage was furnished by Mrs. Garrett, and that Mrs. Ellison's name was inserted as one of the payees upon an oral understanding and agreement, that Mrs. Ellison had no pecuniary interest in the note and mortgage, but, in the event of Mrs. Garrett's death Mrs. Ellison was to collect said note as trustee for the benefit of the heirs of Mrs. Garrett. The court refused to permit the amendment, and also refused to permit plaintiffs to offer evidence of such matters on the ground that such evidence would violate the parol evidence rule by permitting plaintiffs to contradict the terms of the written mortgage by parol. While the cause was pending in the district court, but after hearing was completed, Mrs. Garrett and Mrs. Ellison, the parties on this appeal, stipulated that the mortgage be released, and that the Federal Land Bank bonds be deposited with the clerk to abide the event of the action as between Mrs. Garrett and Mrs. Ellison. The trial court entered judgment in favor of Mrs. Ellison, defendant, and Mrs. Garrett, plaintiff, prosecutes this appeal. The issue now is as to whether Mrs. Ellison is entitled to one-half of the bonds on deposit, or whether Mrs. Garrett should be permitted to show by parol that La Vern Ellison had no beneficial interest in the note and mortgage. There are but two questions for us to decide: (1) Was the evidence plaintiff offered, to prove that La Vern Ellison had no pecuniary interest in the note and mortgage, incompetent as a violation of the parol evidence rule? (2) Was the court in error in sustaining the objection to plaintiff's proposed amendments to her complaint and reply? We will discuss them in order.

1. The parol evidence rule, while simple to state, is often confusing in its applications, due largely to misunderstanding of its purposes; that is, attempting to apply a rule rather than a reason. The rule, so-called, may be stated thus: Parol evidence is inadmissible to vary, alter, control, or contradict the terms of a written instrument, in an action founded upon such writing, between the parties or privies thereto. Moyle v. Congregational Soc. of Salt Lake City, 16 Utah 69, 50 P. 806; Smith v. Moynihan, 44 Cal. 53; Hussman v. Wilke, 50 Cal. 250; 5 Chamberlayne, Mod. Law of Ev. p. 4906. Of course, the rule, even as between the parties to the instrument, does not foreclose all parol evidence, but only such as would change or vary or contradict the terms of the writing, when such terms are clear and definite. And the rule only applies to those elements or parts of the writing which are contractual between the parties and not merely recitals of fact. Wilford v. Bliss, 174 Ill.App. 28; Gill v. Ruggles, 97 S.C. 278, 81 S.E. 519; Komp v. Raymond, 175 N.Y. 102, 67 N.E. 113. A rule has been established that an agreement by parol which is collateral to the written contract and on a distinct subject may be proved. To lay down, in advance, a distinct formula that will determine by "rule of thumb" what cases come within it, is difficult. Sun Printing & Pub. Ass'n v. Edwards , 113 F. 445, 51 C. C. A. 279; Durkin v. Cobleigh, 156 Mass. 108, 30 N.E. 474, 17 L. R. A. 270, 32 Am. St. Rep. 436. But we need not enter into a discussion of the varied application of the rule, or seeming exceptions to it. The rule is founded upon the principle that when the parties have discussed and agreed upon their obligations to each other, and reduced those terms to writing, that such terms, if clear and unambiguous, furnish better and more definite evidence of what was undertaken by each party than the too often fickle memory of man, for why else reduce it to writing. The rule applies to exclude extrinsic utterances, when it is sought to use those utterances for the purpose for which the writing was made and has superseded them as the legal act. This action, as it now stands, between Mrs. Garrett and Mrs. Ellison, is not founded or predicated upon a written contract. The instruments involved in this action (the note and mortgage) are contracts between Mrs. Garrett and Mrs. Ellison on the one side, and the Brackens on the other. It was written to evidence the obligation of the Brackens to the payees and fix the terms of the contract as between the payors and payees. Those terms are manifest from the instruments and may not be varied by parol. But neither of the instruments assume to show, or be, a contract or agreement between Mrs. Garrett and Mrs. Ellison. The writings fix no obligation on either party, they impose no liability or confer no right on one as against the other. They authorize the Brackens to make payment to either of the payees, but they nowhere attempt to define the rights of the payees, one to another. The trial court took the view that the mortgage estopped every one to dispute the recitals therein. The contractual terms of the mortgage estop the parties thereto, but they do not form the contract and are not covenants between the parties to the obligation on one side. Sprague v. Beamer, 45 Ill.App. 17. They are not conclusive of the facts recited, as between them. In Barry v. Ransom, 12 N.Y. 462, it was held that the rule was limited to the parties actually contracting with each other by the written instrument; that although, in the absence of evidence, all persons becoming sureties for a common principal are liable to contribution, still one of the sureties may prove, by parol, that another surety promised to indemnify him from loss, and that such evidence does not contradict or vary the terms or legal effects of the written obligation. Thomas v. Truscott, 53 Barb. (N.Y.) 200. And in Lee v. Adsit, 37 N.Y. 78, 89, 95, it is said:

"The rule that parol extrinsic evidence shall not be received to contradict or vary a contract which is in writing, applies only in controversies between the parties, promissor and promissee, in such contract. * * * Neither are the terms of a written contract conclusive as to the shares or proportions in which a set of parties on one side of the contract are interested in its fruits as between themselves. Such questions do not usually enter into the consideration of those who settle the forms of written contracts. Each party, in framing the contract, considers only what by its terms he may exact from the other, and what the latter may thereby exact from him. The parties of the first part in a contract may have no joint or mutual interest in the subject-matter; one may be merely the agent, clerk or servant of the other; yet the paper would warrant, prima facie, the supposal of an equal interest. In an action on the contract against the other party, no question of this sort can arise. But, surely, in a controversy between the parties of the first part, the paper is not conclusive and irrefragable evidence of a mutual and equal interest in the benefits of the contract." Burrows v. Turner, 24 Wend. (N.Y.) 276, 35 Am. Dec. 622; Catlett v....