Mayberry v. Nichol

• Citation: 39 S.W. 881
• Parties: MAYBERRY v. NICHOL et al.
• Decision Date: 05 December 1896
• Court: Supreme Court of Tennessee

39 S.W. 881

MAYBERRY v. NICHOL et al.

Court of Chancery Appeals of Tennessee.

December 5, 1896.

Appeal from chancery court, Davidson county; Thomas H. Malone, Chancellor.

Bill by Etta Mayberry, by next friend, against A. Nichol and others, to set aside a mortgage for fraud. Bill dismissed, and complainant appeals. Affirmed.

Colyar, Williamson & Colyar, for appellant. M. B. Howell, for appellees.

NEIL, J.

The controversy in this case arises over a deed of trust alleged to have been fraudulently drawn, so as to include debts not intended by the makers, and not contracted by them, to be secured therein. The instrument in question was executed by the complainant and her husband, the defendant J. H. Mayberry, on the 28th of April, 1894, and conveyed to William H. Leickhardt as trustee, the real estate described in the pleadings, and purported to secure to defendant A. Nichol the payment of three notes of $500 each, all dated February 24, 1894, executed in the purchase of a stock of drugs that day made from Nichol, and also to secure to him the payment of a promissory note made of even date with the trust deed itself, for $300, maturing at two years. These are all the provisions of the instrument that need to be recited to make intelligible the dispute between the parties. The bill is filed by the wife against her husband, and the aforesaid trustee and A. Nichol, the beneficiary in the trust deed. It charges that the property conveyed had been deeded to her and her husband jointly by one R. W. Turner; that on the 24th day of February, 1894, her husband bought from defendant Nichol a stock of drugs at $1,500, and executed his three notes of that date each for $500, and maturing, respectively, at 12, 18, and 24 months; that, about two months after this purchase, her husband, desiring to borrow $300, applied to A. Nichol to lend him the money, and that Nichol readily agreed to do so; that Nichol asked, as she was informed by her husband, that a mortgage be given on the home, the above-mentioned property, to secure the $300; that she consented to this arrangement on condition that the note be made payable at the expiration of three years, this consent being given when her husband presented Nichol's terms as first stated. The bill then continues as follows: "Thereupon the said defendant Nichol had a mortgage prepared, and came with a notary public to have it executed. The mortgage was delivered to her husband, who brought it to her room, and told her it was a mortgage to secure the $300 borrowed, to secure which she had previously given her consent. The mortgage was not delivered to her. She did not read it, and it was not read to her either by her husband or the notary public who took her privy examination. She acknowledged it upon what was told her, — that it was to secure the $300 borrowed. She has been informed by her husband, and which she believes to be true, that this [his] agreement was simply to execute a mortgage to secure the $300, and that he (the said husband) did not read it nor hear it read, and that he believed what he told complainant, — that it was a mortgage for $300 only. However, this is not within her personal knowledge, and she makes a [this] statement upon his representation; but of one thing she is certain, — that it was represented to her that it was only for $300, and this she believed, and would not have burdened the property, her home, with a debt which, united with the purchase money unpaid, would, these hard times, have swept away her home. * * * Complainant has recently found that the mortgage as written and registered provides for securing three five hundred dollar notes, which had been executed by her husband on the 24th of February previous, given, as aforesaid, for the drug store, fixture, shelves, etc. Complainant is advised that said contract of mortgage, so far as she was concerned, was not only a fraud upon her, but it was a nudum pactum. * * * Your complainant further charges that there was no agreement or understanding whatever that the mortgage should be made as to the fifteen hundred dollar notes of her husband, nor did she know or have intimated to her that they were to be put in the mortgage." It is also charged that the trust deed, in so far as it purports to secure the three $500 notes, were without consideration as to the complainant, in that she was no party to the transaction out of which those notes grew, and that that transaction was complete when the trust deed now in question was executed, and that there was no new consideration, and no giving up of any right on the part of defendant Nichol, and no extension of time; that complainant received nothing, and Nichol surrendered nothing. The bill contains the further charge: "Upon an examination of the mortgage, a copy of which she now sees for the first time, and never having read the original or heard it read, she finds that, while her agreement was to have the $300 due in three years, it is due in two years, and she supposes the note so reads, though she thought it was to be due in three years." The prayer of the bill is "that the mortgage as to the $1,500 be set aside for fraud and want of consideration, and for general relief." Defendant Nichol answered, admitting that he had sold the stock of drugs to complainant's husband, and had taken the three $500 notes, substantially as charged in the bill. Concerning the particular transaction complained of, the answer continues: "About April 26th, said J. H. Mayberry applied to respondent Nichol for a loan of $300. Respondent was willing to make this loan on proper security, and he then informed said Mayberry that the security for the notes he held was not satisfactory, and he wanted the mortgage which would be executed to secure the loan to also include those notes. Said Mayberry promptly and readily assented. Respondent prepared the deed in trust, and, at the appointed time, he went with said Mayberry and G. R. Ogleby, a notary public, to the residence, when the instrument was signed and acknowledged before said notary. Respondent was not in the room, and does not know what occurred. Said Mayberry was absent from the room in which respondent sat for, perhaps, half an hour, having the deed with him, and he presumed that he was engaged in explaining the deed to her. * * * Respondent denies that said mortgage was a fraud upon complainant, or nudum pactum. He denies that it was without consideration. The deed is very explicit, and fully states the facts under which it was made. Respondent cannot make answer to the charge that complainant thought the $300 note was due at three years. The deed shows when it was due." He denies all charges of fraud. The trustee, Leickhardt, joined in this answer, and there was an order pro confesso as to complainant's husband, the defendant J. H. Mayberry.

The principles that govern the controversy thus raised are stated in Wry v. Cutler, 12 Heisk. 28, as follows: "When parties have entered into a written contract, the writing must be treated as a full, perfect, and correct expression of their intent, until the contrary be established beyond controversy. 1 Story, Eq. Jur. § 152. A court of equity will admit parol evidence to defeat or vary the terms of a writing, upon the ground of fraud, accident, or mistake; but it exacts the clearest and most satisfactory evidence of the existence of such grounds of relief; and, in the absence of such evidence, the writing must be taken as the only veritable exposition of the contract." In Bailey v. Bailey, 8 Humph. 230, 233, the rule is thus stated: "The jurisdiction of courts of equity to correct mistakes in deeds or other instruments, or to reform them, when they do not carry out the intention of the parties in making them, is not to be questioned. But, to entitle the party to this relief, the proof must be clear, certain, and satisfactory; for, in the language of Chancellor Kent (Boyd v. M'Lean, 1 Johns. Ch. 590; Gillespie v. Moon, 2 Johns. Ch. 585), courts of equity in such cases are deeply impressed with the danger to be apprehended from perjury and to the community at large by the insecurity of paper title. It is laid down in several cases of unquestionable authority that such relief will only be afforded where express evidence can be adduced of the certain intention of the parties at the time of the execution of the deed or other instrument sought to be reformed. See 1 Ves. Sr. 317; 2 Atk. 203; 3 Brown, Ch. 451; Getman v. Beardsley, 2 Johns. Ch. 274." In Perry v. Pearson, 1 Humph. 431, 439, it is stated: "Although equity will relieve against omissions in written contracts, whether they have occurred by mistake or fraud, and will hear parol proof to establish the omission, yet the evidence must be clear and strong, proving it to the entire satisfaction of the court." In Davidson v. Greer, 3 Sneed, 384, it is said: "The general rule is that parol evidence will not be admitted to vary, change, or reform writings, because, where there is a writing, it ought to be treated as a full and correct expression of the intent. But there is an exception allowing this to be done in case of a mistake in drafting the instrument. Story, Eq. Jur. 156. But this relief is never granted unless the proof is entirely clear and satisfactory. The mistakes alleged must be made manifest by proof, and established beyond reasonable controversy. The presumption is always in favor of the writing, and must be effectually rebutted by evidence of an accident or mistake." In Talley v. Courtney, 1 Heisk. 715, it is said: "The jurisdiction of a court of equity to reform a written contract of any grade or dignity, whether sealed or unsealed, upon parol evidence, when mistake or fraud has intervened to defeat the intention of the parties, has never been seriously questioned in Tennessee. Wood v. Goodrich, 9 Yerg. 266; Helm v. Wright, 2 Humph. 72. Though doubt and controversy have grown out of the doctrine, yet they are to be...