Robinson & Griswold vs. Frost, sued with Rider, 14 Barb. 536

By the Court, Willard, P. J. I. It is urged by the plaintiff that the referee erred in admitting Darwin Eider, one of the defendants, to testify on the part of his co-defendant as to matters on .which the plaintiff had not examined him. As the action was not upon a contract, and the process was only served upon one of the defendants, Frost, the plaintiffs, by § 136 of the code of 1849, sub. 2, were permitted to proceed against the defendant served, in the same manner as if such defendant was the only party proceeded against.

By going on with the action, without bringing in the defendant Eider, the plaintiff elected to sever the action. Rider was no longer a party, and could not be affected by the judgment. He was, therefore, a competent witness for either party, and having been examined on the part of the plaintiff; no reason is perceived why he could not be cross-examined fully on the part of the defendant Frost, against whom the plaintiffs had elected to proceed. II. It is insisted that the referee erred in excluding • Daniel Robinson, one of the plaintiffs, who was offered to be examined in their behalf.

He was so offered under § 395 of the code of 1851, upon the alledged ground that Rider, one of the defendants, was examined on the part of the defendants. But it has been shown that Rider was not a party, and was a competent witness; and that he was examined not as a party, but as a witness. There was therefore no foundation for the claim to examine Robinson, and he was rightly excluded by the referee. III. It is urged by the plaintiffs that the whole defense was inadmissible, under the answer. The 128th

section of the code of 1848, required that the answer should contain a specific denial of each allegation of the complaint controverted by the defendant, and this was also required by the 149th

section of the code of 1851. But the code of 1849, under which these pleadings were framed, like the. code of 1852, required only a general denial. But there is no provision in either code as to what evidence is admissible under any issue. We are thus left, with respect to this branch of practice, to the common law, and to such analogies as are deducible from it.

Under the former action of trover, which the present action strongly resembles, every thing was admissible in evidence under the general issue, except a release, and the statute of limitations. (1 Chilly’s Pl. 490.) And special pleading in that action was discountenanced by the court, as leading to unnecessary expense and troublesome prolixity. (10 John. 291.) Under the English new rules, the plea of not guilty in trover operates only as a denial of the conversion, but not as a denial of the plaintiff’s title. (3 Steph. N.

P. 2698.) But the answer in this case denies not only the conversion but the plaintiffs’ title. It denies each and every allegation in the complaint. And, moreover, we have no statute declaring what evidence is admissible under the issue. The evidence was admissible under the general issue, according to the former practice, and I think is equally so under the code of 1849 and 1852. If true, it showed that the plaintiffs had no title to the flaxseed. IV.

The more important objection to the evidence was that it tended to contradict, vary or explain the receipt, which it was insisted was a contract between the plaintiffs and the defendants.

The facts as found by the referee are, that prior to the giving of the receipt in question, an arrangement was made between the plaintiffs and one O’Flanagan, by which the latter was to procure the storage receipt of Frost <fc Rider, (the defendants,) for 4000 bushels flaxseed, and a policy of insurance on the same, and that the plaintiffs would make advances to him on such receipt as collateral security, and that O’Flanagan would consign to the plaintiffs, to be sold on commission, all the oil he should manufacture, except so much as should be necessary to supply his home customers.

This arrangement was, on the 2d December, 1846, communicated by O’Flanagan to Frost & Rider, upon which they made and delivered to him a receipt in the words and figures following: “ Received in store from T. O’Flanagan, four thousand bushels flaxseed for Messrs. Robinson <fc Griswold, of Troy, N. Y. Bridport, Dec. 2, 1846. Frost & .Rider.” This receipt was delivered to the plaintiffs, with a policy of insurance, soon after it was executed by Frost & Rider, and was held by the plaintiffs as collateral security for advances made to O’Flanagan.

The plaintiffs made advances to O’Flanagan to the amount of $4987,69, and O’Flanagan paid them by sales of oil to the amount of $4989,67, exceeding by a small sum the advances. Thus, according to the finding of the referee, the whole amount of the advances were reimbursed by the avails of the flaxseed, and the object of the agreement was fulfilled.

But the plaintiffs held a note against O’Flanagan, dated 13th November, 1846, for $642,76, payable at one day after date, for an antecedent debt, and they claim to apply so much of the avails of O’Flanagan’s payments to the note as will extinguish it, and held the defendants liable for the same amount.

This the referee refused to allow them to do, because the storage receipt was given as collateral security for advances to be made, and not for an antecedent debt; and because the plaintiffs applied the payments made by O’Flanagan to the extinguishment of such advances, to an amount equal to the whole amount of the flaxseed; and because the plaintiffs subsequently accepted the individual note of O’Flanagan, at four months, for the balance due them, including the note of $642,76, and held the same and received payments on it.

The objection to the evidence was that it was by parol, and tended to contradict the written receipt of the 2d December, 1846. The general principle that parol evidence cannot be received to contradict a written agreement, is not denied. (See 1 Phil. Ev. 561.) This rule is applied the most strictly with regard to those agreements which are required by the statute of frauds to be in writing. (Id. 559.) Such evidence would defeat the statute, and introduce that uncertainty which it was the object of the legislature to suppress. The receipt in this case was not ah instrument within the statute of frauds.

The evidence was not inconsistent with it, nor in any respect contradictory to it. The receipt does not show to whom the flaxseed belonged, nor the object of the deposit. The evidence offered and received was of independent and collateral facts, by which that object was shown. The plaintiffs could have no title to the flaxseed, without payment. If their advances to O’Flanagan were reimbursed, as the referee found as matter of fact they were, their claim or lien upon the flaxseed was at an end.

Frost & Eider stood in the character of sureties for O’Flanagan, for the advances to be made by the plaintiffs to him, to the extent of the value of four thousand bushels of flaxseed. The payment of those advances by O’Flanagan necessarily released the sureties from all liability. The plaintiffs having no longer any lien upon the flaxseed, could neither maintain trover nor any other action for it. The defense was properly admissible under an answer denying generally the plaintiffs’ property in the subject of the action. The liability of a surety can never be extended beyond the terms of the agreement.

The intention of the parties was to secure the plaintiffs for future advances. The attempt of the latter to make the transaction cover an antecedent debt of O’Flanagan, was a fraud upon the defendant. [Schenectady General Term, January 3, 1853. Willard, Hand, Cady and C. L. Allen, Justices. The defendants were storing and forwarding merchants residing in Vermont, and the plaintiffs were merchants residing in the city of Troy. The receipt of the defendants was in the nature of a bill of lading of the flaxseed. Such instrument can always be explained by parol.

It may be shown by parol to •have been intended as evidence of an absolute sale, a trust, a mortgage, a lien, or a mere agency. (Grosvenor v. Philips, 2 Hill, 152, per Cowen, J. The Bank of Rochester v. Jones, 4 Comst. 500, 501, per Paige, delivering opinion of the court. Bryans v. Nix, 4 M. & W. 791.) O’Flanagan was the general owner of the flaxseed, and may be treated as the consignor. The plaintiffs were the consignees as security for advances.

They acquired no lien on the flaxseed for antecedent accounts, and their lien for advances actually made was discharged by the reimbursement of those advances by O’Flanagan. (See Bank of Rochester v. Jones, 4 Comst. 497, 501.) If the transaction be viewed as a pledge or a mortgage of the flaxseed, as security for the advances, the result is the same. A parol mortgage is good .enough between the parties. A performance of the condition reinvests the title in the mortgagor. The foregoing remarks dispose of all the exceptions in this case.

There is no error in the report of the referee, and the judgment must be affirmed.