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Brown, Appellant, v. Bowen

Supreme Court of Missouri1886-10
90 Mo. 184

Summary

Holding. The judgment of the trial court was affirmed. The court held that parol evidence regarding the verbal agreement between Bowen and Sherman was properly admitted because it was consistent with the written receipt and fell within recognized exceptions to the parol evidence rule.

Brown purchased a promissory note for four hundred dollars that had been assigned to him by Malinda Sherman and sued Bowen for converting it. Bowen claimed he held the note subject to a verbal agreement with Sherman that he would collect the note's proceeds and use them to pay off certain debts she owed him and a third party, Speicberger Bros. Bowen further contended that Brown had notice of this arrangement before purchasing the note. The trial court instructed the jury on the conditions under which Bowen would prevail, including whether Brown had actual notice of the liens on the note's proceeds before his purchase.

The central dispute involved whether verbal testimony regarding the agreement between Bowen and Sherman was admissible despite the existence of a written receipt. Brown argued such parol evidence should be excluded, but the court held it was properly admitted because the written receipt was consistent with and did not contradict the verbal agreement. The verbal agreement either constituted the unwritten portion of an originally oral contract, an independent collateral agreement relating to the same subject matter, or a subsequent modification of the parties' arrangement.

Summary generated by law.co from the public-domain opinion. The opinion text itself is public domain.

Key issues

  • Admissibility of parol evidence when a written receipt exists alongside a claimed verbal agreement
  • Whether a purchaser of a note takes it subject to liens agreed upon by the original payee and a third party
  • Whether notice to a note purchaser of existing liens affects his standing as a good-faith purchaser
  • The contractual capacity of a married woman to execute agreements regarding negotiable instruments

Procedural posture

Brown appealed from a judgment entered by the circuit court in favor of Bowen on a conversion claim involving an assigned promissory note.

Authorities cited

No cited authorities resolved to law.co cases yet.

Opinion

majority opinion

Sheewood, J.—

Plaintiff claims in this action to be the assignee of a note for four hundred dollars, executed to Mrs. Malinda Sherman, and sues defendant for its conversion.

The circuit court refused the following instructions asked by plaintiff:

“1. The court instructs the jury that the evidence of ..the verbal agreement made between Mrs. Sherman and defendant, Bowen, as deposed by defendant and his witnesses, is withdrawn from the jury; the same being incompetent and not pertinent to any material issue in the cause.”

“2. Defendant admits in his testimony that his authority to act as the agent of Mrs. Sherman was revoked before the plaintiff’s purchase of the note in question; and from and after that time he was not authorized to negotiate it, and you should find for plaintiff in such sum as the note was reasonably worth at the time of bringing^suit.”

‘ ‘ 8. That the written receipt and contract given by defendant to Mrs. Sherman at the time of her delivery of the note in question to him, is the only evidence before you as to the terms and conditions on which the defendant took and held said note.”.

And the court of its own motion gave these instructions :

“ If the jury believe from the evidence in the cause • that Mrs. Sherman was in debt to defendant in the sum of one hundred and twenty dollars, and to Speicberger Bros, in the sum of $268.22, and that said Mrs. Sherman instructed defendant to hold said note until collected or negotiated and to pay off said claims with the proceeds thereof, and that defendant agreed thereto with said Mrs. Sherman and Speicberger Bros., and that plaintiff Brown had notice of said claims and agreement with Mrs. Sherman before he purchased said note, then the verdict should be for the defendant, provided the jury believe from the evidence, that the claims of defendant and Speicberger Bros, exceed, or were equal, in value to the said note.”

“ If the jury believe from the evidence in the cause, that defendant and Mrs. Sherman had an agreement that defendant should negotiate said note and with the proceeds pay off one hundred and twenty dollars to himself and a note belonging to Speicberger Bros., and that said Speicberger Bros, note was assigned to defendant Bowen by agreement with Mrs. Sherman with such an understanding, and L. F. Cottey, attorney for defendant, notified plaintiff thereof before he purchased the note, then the verdict should be for the defendant, if the jury further believe from the evidence the amount of said claims exceeded or even equaled in value the said nóte.”

“ Although the jury may believe from the evidence in the cause that defendant may have had an agreement with Mrs. Sherman to negotiate the note in question, and with the proceeds to pay off claims to defendant and Speicberger Bros., the verdict should be for the plaintiff unless the jxiry further believe from the evidence that plaintiff had notice of said agreement before his purchase of the note in question.”

“Although the jury may believe from the evidence in the cause that plaintiff, before he purchased the note in question, had notice of the fact that defendant had a claim of one hundred and twenty dollars for himself and $268.22 for the Speicberger Bros., still the verdict should be for the plaintiff unless he had notice that defendant claimed the proceeds that might arise from the sale of said note for the payment of said claim. If the verdict be for the plaintiff, it should be for the reasonable market value of the note in question at Edina at the date of the demand of the possession thereof from the defendant by the plaintiff.”

These instructions fully and fairly covered the law and facts of the case as developed by the pleadings and evidence. The abstract of the plaintiff’s counsel is wholly unreliable, as I have found by an examination of the transcript in the cause. That transcript contains abundant testimony on the part of defendant himself, and of Cottey, his attorney, showing that plaintiff, before he bought the note in question, was fully apprised of the liens which defendant had on the note and its proceeds to satisfy certain advances he had made to Mrs. Sherman by special contract with her. This made out defendant’s case, according to the terms of his answer; and the instructions given presented the theory of the plaintiff that he purchased the note prior to maturity in good faith and without notice of any liens on it.

It is contended here that the verbal testimony, just referred to, was improperly admitted. This position is untenable. This oral evidence in no way contradicted or varied the receipt given by defendant to Malinda Sherman, for the negotiation of the note and the payment to her of the proceeds. That receipt was perfectly consistent with the verbal agreement made at the time the note was delivered to defendant, that its proceeds, when negotiated, should be applied to the payment of advances already, made by defendant. The rule which prohibits the introduction of parol contemporaneous evidence, does not apply when the original contract was verbal and entire, and a part only was reduced to writing. 1 Greenl. Evid., sec. 284a; Rollins v. Claybrook, 22 Mo. 405 ; Moss v. Green, 41 Mo. 389. Nor where a distinct collateral contemporaneous agreement, independent of, and not varying the written agreement, is offered in evidence, though it relates to the same subject matter. Bonney v. Morrill, 57 Me. 368; Bashor v. Forbes, 36 Md. 154. Nor does the prohibitory rule apply when a complete contract in writing is entered into, which is subsequently varied by a parol agreement. Bunce v. Beck, 43 Mo. 266, and cas. cit.

In this case, under the authorities cited, parol evidence was admissible, whether offered to show that the original contract was- verbal and only partly reduced to writing, or that the parol portion of it was an independent contemporaneous collateral agreement, relating to the same subject matter, or that, subsequently to the execution of the receipt, a different and additional contract was entered into between the parties in relation to the advances already made by defendant, and the course he was to pursue.in relation to the Speicberger note, and its payment out of the proceeds of the note in controversy. The evidence is sufficiently comprehensive to place the admissibility of parol testimony under either one of the heads mentioned. In relation to Mrs. Malinda Sherman being a married woman, and, therefore, incompetent to make the contract with defendant in regard to the note, it is sufficient to remark that, under section 3296, Revised Statutes, and a-recent ruling of this court, she was, in regard to the note in suit, a femme sole, with full powers as such. Blair v. Railroad, 5 West. Rep. 449; s. c., 89 Mo. 383. But it certainly does not lie in plaintiff’s mouth to urge that his assignor was incapable of contracting with defendant because she was a married woman, while depending for his own standing in court upon the validity of her assignment of the note to him. Bigelow on Estoppel, 562, 601, 802, and cas. cit.

For the reasons aforesaid, judgment affirmed.

All concur.