Bull'S Head Bank v. Koehler

1 N.Y. City Ct. Rep. 264
CourtNew York Marine Court
DecidedNovember 15, 1878
StatusPublished

This text of 1 N.Y. City Ct. Rep. 264 (Bull'S Head Bank v. Koehler) is published on Counsel Stack Legal Research, covering New York Marine Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bull'S Head Bank v. Koehler, 1 N.Y. City Ct. Rep. 264 (N.Y. Super. Ct. 1878).

Opinion

McAdam, J.

The plaintiffs sue upon the following negotiable instrument.

“$900.00. New York, August 29, 1877.
“Four months after date, I promise to pay'to the order of myself, nine hundred dollars, at the Bull’s Head Bank. Value received.
“ Herman Koehler. Indorsed—“Herman Koehler,
David M. Koehler,
Joseph M. Koehler.”

The action is against the maker and indorsers, all of whom defend. The defense is that the note was given to the plaintiff pursuant to an oral agreement made on March 3. 1876, whereby the defendant, Joseph M. [265]*265Koehler (who was then largely indebted to the plaintiff) was to give the note of Herman Koehler, for $900, indorsed by him, the said Joseph M., and by David M. Koehler, and the plaintiff, in consideration thereof, was to accept a payment of $300 and interest on the note when it matured, and a renewed note at four months for the balance, on a like understanding, upon receiving which the note in suit was to be surrendered ; that upon the maturity of said note the defendants tendered the cash payment of $300 and the renewed note; that the plaintiff declined to accept the offer and refused to surrender the old note.

Upon the trial two objections were urged against this defense. First. That the agreement alleged, not being in writing, could not be proved without violating the elementary rule of law that paroi evidence is inadmissible to alter or vary the terms or legal effect of a negotiable instrument. Second. That the alleged tender had not been kept good by a deposit in court and was'therefore unavailing to the defendants, even if the contemporaneous agreement alleged had been properly proved and was of binding force in law.

The court, upon the trial, sustained these objections, and held, as to the first proposition, that the oral agreement alleged (for it was conceded on the trial to be oral) could not be proved, as the admission of such proofs would allow the written contract to be altered and varied, both, in its terms and legal effect, by oral testimony, and thus permit the elementary rule of evidence, before stated, to be violated.

The correctness of this ruling will be first considered.

Both sides admit that, in general, paroi evidence is inadmissible to contradict or vary a written instrument, and that where parties have reduced their agreement to writing, the terms of the writing, if clear and unambiguous, are the best evidence of what they intended, [266]*266and that the writing cannot be impeached by paroi evidence tending to show that something different was designed, and that under this rule a written instrument can no more be varied or contradicted, in respect to its legal effect, than it can be in respect to its express terms.

The defendants claim, however, that the agreement alleged by them falls within a class of cases which have been held to be exceptions to the general rule before stated ; and the defendants cite, to sustain their position: Pechner v. Phenix Ins. Co., 65 N. Y. 196; Easterly v. Barber, 66 Id. 433; Butterman v. Pierce, 3 Hill, 171; Hutchins v. Hebbard, 34 N. Y. 24 ; Hope v. Balen, 58 Id. 380; Messmore v. New York Shot & Lead Co., 40 Id. 422 ; White’s Bank of Buffalo v. Myles, Alb. L. J., June 1, 1878; Bookstaver v. Janes, 60 N. Y. 146, 151 ; Johnson v. Hathorn, 3 Keyes, 126, 133; Western New York Ins. Co. v. Clinton, 66 N. Y. 326, 331; 2 Parsons on Contr. 553; Barker v. Bradley, 42 N. Y. 316 ; Bowen v. Bell, 20 Johns. 340; McCullough v. Girard, 4 Wash. C. Ct. 289 ; Rennard v. Sampson, 12 N. Y. 561 ; Thomas v. Dickinson, 2 Kern. 364; Benton v. Mastin, 52 N. Y. 570, 574.

This array of authorities looks formidable on a brief, but an examination of the cases shows that they do not sustain the position urged by the defendants.

Peckner v. Phenix Ins. Co. (65 N. Y. 196), turned upon a question of waiver, and the court said (p. 207): “As a result of all the cases and of sound principle, I think it is clear that a condition required by a written instrument, not under seal, that an act be performed, or evidenced by a statement in writing, may be waived by paroi, and that, from necessity, the acts going to establish waiver may be shown by paroi evidence ;” and further on the court says: “The principle does [267]*267not admit osai testimony to vary or contradict that which is in writing.”

Easterly v. Barber (66 N. Y. 433), merely reaffirms what was held in Barry v. Ransom (12 N. Y. 462), that an agreement made between sureties prior to or contemporaneously with their executing a written obligation as sureties, by which one promises to indemnify the other from loss, does not contradict or vary the terms or legal effect of the written agreement, and that in an action between them, it may be proved by paroi evidence. The court (66 N. Y. 436), in referring to 12 N. Y. 462, continue: “It was said by Dekio, J., in his opinion, that an agreement among the sureties, arranging their eventful liabilities among themselves in a manner different from what the law would prescribe, in the absence of an express agreement, would not contradict any of the terms of the bond. It was also held, that the engagement among themselves had no necessary place in the instrument between them and the other contracting parties. The case cited referred to a joint and several bond, where' the obligors were equally liable upon its face. No reason exists, however, why the same principle is not applicable to notes and bills of exchange. The terms of the contract contained in instruments of this character, which are within its scope to define and regulate, cannot be changed by paroi; but the undertaking between the indorsers is a distinct and separate subject, an outside matter, which may be properly proved independent of and without «any regard to the instrument itself.”

Batterman v. Pierce (3 Hill, 171), was an action on a promissory note made by the defendant, and given by him to the plaintiff, on the sale of a lot of standing wood. It appeared that, at the time of the sale, the plaintiff agreed that the purchaser was to have two seasons within which he might cut and remove the [268]*268wood, with, a guaranty from the plaintiff that if the wood was in the meantime destroyed by tire, while the plaintiff was burning his fallow on a lot adjoining (an event of which the parties seemed to be apprehensive) that the plaintiff would be answerable for all the damages which might follow. The defendant pleaded the guaranty as a defense or recoupment to the note, and the court (p. 175) said : ‘ ‘ Here there were mutual stipulations between the parties, all made at the same time, and relating to the same subject-matter; and there can be no difference in principle, whether the whole transaction is embodied in one written instrument setting forth the cross obligations of both parties, or whether it takes the form of a separate and distinct undertaking by each party.” After the evidence relating to the guaranty had been received in evidence, the trial judge struck it out, on the ground that it constituted no defense or answer to an action on the note.

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Bluebook (online)
1 N.Y. City Ct. Rep. 264, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bulls-head-bank-v-koehler-nymarct-1878.