Mendenhall Lumber Co. v. State Bank of McHenry

• Decision Date: 27 March 1911
• Docket Number: 14,822
• Citation: 97 Miss. 648,54 So. 883
• Court: Mississippi Supreme Court
• Parties: MENDENHALL LUMBER COMPANY ET AL. v. STATE BANK OF MCHENRY

54 So. 883

97 Miss. 648

MENDENHALL LUMBER COMPANY ET AL. v. STATE BANK OF MCHENRY

No. 14,822

Supreme Court of Mississippi

March 27, 1911

FROM the chancery court of Simpson county, HON. ROBERT E. SHEEHY Chancellor.

The bank, appellee, was complainant in the court below; the lumber company and others, appellants, were defendants there. From a decree in complainant's favor defendants appealed to the supreme court.

Complainant bank, on June 12, 1908, sold lands with the improvements and appurtenances thereon to the members of a partnership doing business under the firm name of Welch & Harrison, for a consideration of $ 18,000; $ 1,000 was paid cash and notes were executed for the balance. Eleven notes were given each for $ 500, one of which was made payable at the end of each month for eleven months following the date of the sale. A note for $ 1,500 was given, maturing twelve months after date, and the balance, $ 10,000, was evidenced by a note due on demand one year after date, and a lien was reserved in the deed of conveyance for the security of the notes. On the same day the notes were executed, and as a part of the same transaction, the parties entered into a supplemental contract, whereby it was agreed that the maturity of the principal of the $ 10,000 should be extended two years, but providing that interest thereon should be paid annually. The eleven $ 500 notes were paid and at the maturity of the $ 1,500 note the debtors offered to pay it and also offered to pay $ 800, the amount of the interest then due on the $ 10,000 note, the offers being coupled with a demand that the payee should place evidence on the $ 10,000 note of the extension previously granted on its principal. This offer was refused. Thereafter this suit was instituted by the complainant bank to enforce its equitable mortgage not only for the sum due on the $ 1,500 note and the $ 800 interest due on the $ 10,000 note, but as well for the principal of the $ 10,000 note. The court below adjudged that there had been a breach of the supplemental contract and enforced the lien for the entire demand.

Welch &amp Harrison, the makers of the notes, had, before the beginning of the suit, sold the lands and property, purchased by them from the complainant, to the Mendenhall Lumber Company, and the suit was against the lumber company as well as Welch &amp Harrison.

Reversed.

Currie & Currie, for appellants.

The two instruments, the deed and the supplemental agreement, having been executed at the same time, relating to the same subject matter, and being between the same parties, are parts of the same contract, and this litigation being between the original parties to the contract, the law will construe the two instruments as one, and being so construed it is apparent from the language used that it was the intention of the parties to extend the date of the payment of the principal of the $ 10,000 note for two years from the 12th day of June 1909, until the 12th day of June, 1911, and the principal of the $ 10,000 note not being due at the time of the rendition of the decree, it is erroneous as to the principal of said note. 3 Mich. 615 (Gibbs) , is decisive of this point; 3 Am. St. Rep. 162; 7 N.W. 687; 13 Am. St. Rep. 344; 100 Am. Dec. 211; 20 Am. Dec. 518, and 7 Smed. & M. 319; Bishops on Contracts, 148, par. 382; Lawson on Contracts, 419; 8 Cyc. 965.

The agreement extending the date of the payment of the principal of the note is a bar to a suit therefor until after the expiration of the time to which extended, and this bar appears on the face of the bill of complaint. Robsin v. Godfrey, 2 Mich. 408; 20 Tex. 311; 59 Cal. 442; 3 Mich. 615; 21 Am. Dec. 328; 36 Am. St. Rep. 142; 17 Am. St. Rep. 464, 82 Me. 34; 19 A. 89; 27 Minn. 384; 7 N.W. 687.

McWillie & Thompson and Ford, White & Ford, for appellee.

Welch & Harrison could not breach the supplemental agreement and at the same time claim its benefits, but they seem to hope that by showing that the terms of the same were in reality part and parcel of the original contract of sale to make the case in substance one of a default in payment of the annual interest on a three years' note, and so defeat the foreclosure on the $ 10,000 note for everything except the $ 800 of accrued interest.

It will be observed that the supplemental agreement begins by referring to the contract of sale and conveyance as already executed, and a second time refers to it as executed at an earlier hour of the same day. This agreement was evidently carefully conned by Welch & Harrison, for the copy filed with the bill of complaint was certified by them as being a true copy. It is plain, definite and unambiguous in its terms and complete in itself. Parol evidence being incompetent to vary an instrument of this nature, the testimony of Welch and Harrison as to negotiations preceding the execution of the agreement is incompetent; but it will be noted that the instrument is never mentioned by them except as a "supplemental agreement" and that while they claim that by the terms of the original contract of sale they were to have three years to pay the $ 10,000 note, it is not pretended that there was ever an agreement on the part of the complainants to accept a three years' note, but only to extend a one year note for two years. It is rather too much to ask us to believe that the vendor, under the circumstances here appearing, agreed at the outset to extend a one year note for two years, when the natural method, uniform in all such transactions, would have been an agreement to accept a three years' note. It is quite plain from appellee's letter of May 25, 1908, that while appellee was not disposed to exact the whole price of the property in cash, it did not propose to carry the $ 10,000 note or any part of the purchase money longer than twelve months.

In the answer on which the case was tried the defendants, Welch & Harrison after setting out the alleged negotiations preceding the execution of the supplemental agreement proceed to state "the sense of said stipulation" as understood by them, but admitting the correctness of the same as exhibited with complainant's bill, and nowhere claim that its execution was attended by any mistake or fraud. Clearly their testimony was incompetent, but even if it were treated as competent it is accompanied by so many weaknesses and inherent defects that it should not prevail over the terms of the writing. Wren v. Hoffman, 41 Miss. 616; Kerr v. Kaykendall, 44 Miss. 137; 9 Ency. Evidence, p. 325.

The rule excluding parol evidence to vary the terms of contracts in writing is not one of evidence, but one of substantial law. This is the doctrine expressed by Wigmore, who says:

"It does not exclude certain data because they are for one or another reason untrustworthy or undesirable means of evidencing some fact to be proved. It does not concern a probative mental process--the process of believing one fact on the faith of another. What the rule does is to declare that certain kinds of fact, one legally ineffective in the substantial law; and this, of course (like any other ruling of substantial law), results in forbidding the fact to be proved at all." 4 Wigmore on Evidence, § 2400; Vide also 9 Ency. Evidence, p. 326.

Certainly the court will not decide that the chancellor erred in holding to the clear, plain, definite and unambiguous instrument, complete in itself, rather than the incompetent and uncertain testimony by which it was sought to vary it, evidence of facts which a substantial rule of law forbade to be proved in any way.

Moreover the objection is founded upon a misconception of the law. While one may not discredit his own witness by showing interest or the like, it is no objection to any relevant evidence of the material facts on which he relies to support his case or defense that it may...