M'Lean v. Walker — 10 Johns. 471

Majority

p. 477

M'Lean and Perine against Walker.

NEWYORK,

Oct. 1813.

Headnote

Whers a written agreement, <iate¿ 2d of September, 1808, between A. and B., stated that A. thereby delivered to B. a eertain promissory note of C. for 200 bushels of wheat, valued at 200 dollars, payable in February, 18U, and engaged, in case the wheat did not sell for 200 dollars, to make up the deficiency; and B. thereby gave to A. the power of redeeming the note, by paying 186 dollars with 3 1-2 per cent, interest, any time within six months of the time tlte note was payable. It was held that the note was deposited non pledge, and not as a mortgage, and that a tender by A. of the 200 dollars on or before the day the note fell due, was sufficient to entitle him to a return of the note; and on such tender, and refusal by B., A. might maintain trover for the note.

IN ERROR, from the court of common pleas of Washington 1 _ ° county. Walker brought an action of trover, in the court below, J ’

p. 478

against M'Lean and Ferine, for a promissory note, dated 2d of ®cptember, 1808, made by Asa and Truman Wilber, by which they promised to deliver to the plaintiff 200 bushels of merchantable wheat, at Utica, on the 20th of February, 1811, of the value of 200 dollars. Plea not guilty, with notice of special matter to be given in evidence at the trial.

The plaintiff gave in evidence articles of agreement, dated 4th of February, 1809, between the plaintiff and defendants, by which the plaintiff “ delivered” to the defendants the note mentioned in the declaration, and in which the wheat was valued at 200 dollars, and the plaintiff promised, if the wheat did not sell for 200 dollars, he would make up the deficiency to the defendants ; and the defendants thereby gave the plaintiff the power of redeeming the note, on his paying 186 dollars with 3 1-2 per cent. interest, any time within six months of the time when the said note became due; and if he did not redeem it in that time, he was to make up the amount of 200 dollars, in case the proceeds fell short of that sum. On the 18th of February, 1811, two days before the note fell due, the plaintiff tendered 200 dollars to the defendants, and demanded the note, which they refused to deliver to him. At the time the note became due, the price of wheat in Utica was 1 dollar and 44 cents per bushel. It was admitted that at the time the money was tendered, and the note demanded, one of the defendants had gone to Utica with the note to receive payment.

The court below decided that the note was delivered as a pledge, and not as a mortgage; that the sum tendered by the plaintiff was sufficient, and the plaintiff had a right to redeem it, paying the 200 dollars, any time before the note became due; and that by the tender and refusal, the right to the note was vested in the plaintiff.

The defendants offered parol evidence to explain the intention of the parties, at the time of the agreement, that the contract was to become absolute after the time given for redemption had expired; and that the plaintiff afterwards acknowledged that the note had become absolute, and that he had received his pay for it; and that he should make double the amount of the property he had received for the note that he would, if he had waited until the note had become due. But this evidence was rejected by the court below, as inadmissible; and a bill of exceptions was taken to the opinion of the court

p. 479

The jury, under the direction of the court, found a verdict for the plaintiff for 80 dollars and 60 cents damages, after deducting 12 dollars, as a reasonable compensation for the expenses of one of the defendants, in going to Utica to receive payment of the note.

I. Williams, for the plaintiffs in error, contended,

1. That the note .was delivered as a mortgage, and not as a pledge. That being a mortgage, the legal property was transferred to the defendants, by the delivery, subject to the right of redemption within the time limited. And the plaintiff not having offered to redeem within the time, the property became absolute in the defendants.^[1]

The term deliver used in the agreement does not technically import a special property; but is equally applicable to a transfer of the general property.

_ _ _ 2. That the sum tendered was insufficient to entitle the plaintiff to a return of the note. líe ought to have tendered the money with the interest at 7 per cent The redemption was matter of equity, and the plaintiff, when he demands it, must do equity .^[2] Nor was the sum tendered at the proper time or proper place; it ought to have been at Utica where the note was payable in specific articles. One of the parties had gone to Utica with the note, and it was out of the power of the other defendant to whom the tender was made to return it.

3. On the face of the contract, it was ambiguous whether the parties intended the note to be delivered as a pledge, or a mortgage ; and the parol evidence offered to explain the intention of the parties, at the time, ought to have been received.^[3]

Again, the plaintiff claimed an equity, and the defendants were entitled to every equitable defence. The evidence ought, at least, to have been received in mitigation of damages.

Ur ary, contra, on the authority of Cortelyou v. Lansing, insisted that this was a pledge, and not a mortgage. The note was given only as a security, reserving to the plaintiff the right of redemption. " There was no transfer of the property; and the plaintiff, on the tender of the 200 dollars, was entitled to a return of the note. That was the sum agreed on between the parties, as the amount of the note on the day of payment. .

There was no ambiguity in the agreement, and it could not, therefore, be explained or contradicted by parol evidence,

p. 480

By the tender of the 200 dollars and the refusal, the property ^le no*e ves^e^ in the plaintiff. What may have been said by the plaintiff in conversation, afterwards, could not vary his right.

The note was deposited as a pledge. This is the evident construction of the agreement. It was delivered to the party with a power of redemption, and as a security for a debt which, on the day of payment of the note, would amount to 200 dollars. The defendants below were, at all events, to be secured in the receipt of the 200 dollars on that day. Here was no sale of the note. The property in it was not intended to pass, until after the default. It was merely deposited with the party, and the legal property did not pass, as it does in the case of a mortgage. All that was said in Cortelyou v. Lansing, (2 Caines' Cases in Error, 200.) as to the distinction between a pledge or pawn, and a mortgage of goods, and as to the right of redemption attached to the former, is just and applicable to this case. There was no special and precise agreement, in this case, that the note should become the absolute property of M‘Lean and Perine, if not redeemed within six months before it fell due. A power of redemption was then allowed, and if not made, Walker was, at all events, to see that the note yielded 200 dollars. The sound construction of the agreement was the one adopted by the court below; and the tender of 200 dollars on or before the day that the note fell due, was sufficient and in time, and Walker was, consequently, entitled to his action.

The parol evidence was properly rejected, for there was no such ambiguity on the face of the instrument as to require or authorize it. The written agreement was not to be contradicted or explained away by parol proof, and it was the province of the court to interpret it. The only point more doubtful is, that the court rejected evidence of the acknowledgment of the party, after the time of redemption. But the acknowledgment that the note was then absolute, could not conclude or affect his rights under the agreement, as it was only his unadvised opinion, and one that he had a right to correct, with better advice, and which it appears that he afterwards did correct, by making the tender. His observation that he expected to make more money in another way, was' perfectly immaterial, and his confession that he had received his pay for the note, was either to be considered as contradicting the written agreement, and making the delivery ef the sale an absolute sale, or as

p. 481

~y that the amount for which it was deposIted had been received, and that amount was deducted from the verdict, as it was taken only for the excess in the rise of the wheat beyond the 200 dol1ar~.

Judgment affirmed.