KENDRICK v. SPECK, 67 F.2d 295

NORTHCOTT, Circuit Judge. This is a suit brought in the District Court of the United States for the Western District of North Carolina, by the appellee (herein referred to as plaintiff) against appellant (herein referred to as defendant). At the trial at Charlotte, N. C., in February, 1932, the judge below directed a verdict in favor of the plaintiff for the sum of $3,000', with interest from September 5, 1925, until paid, and judgment was entered for this amount, together with the costs. From this judgment this appeal was brought.

In September, 1925, the plaintiff negotiated a sale of certain real estate in the state of Florida belonging to the defendant and one Erwin. The owners received for the land $56,000 in cash, and two notes of $56,045 each, executed by the purchasers, due in one and two years after the date of the sale, and secured by a mortgage on the land sold. As his commission for the sale of the land the plaintiff received the sum of $8,440.50 out of the initial cash payment, and the owners of the land executed two notes, one signed by each of them, payable to the plaintiff in the sum of $4,220.25 each.

The note signed by the defendant read as follows: “Note. “$4220.25 September 5th, 1925. “One Tear next after date, I, we or either of us promise to pay to the order of A. J.

Speck, subject to condition on back, Four Thousand Two Hundred Twenty 25/100 Dollars, at Bank of Pompano, Fla. “For value received, with interest after date at the rate of 8 per cent per annum until paid. “The holder of this note being expressly authorized to retain any general or special deposit, collateral, real or personal security or proceeds thereof, belonging to the undersigned, now or hereafter in the possession' of said holder, during the time this note remains unpaid, and at, before or after maturity to apply same to this or any other debt or liabilities of the undersigned to the said holder, due or to become due. “Now, should it become neeessary to collect this note through an attorney, either of us, whether maker, security or endorser of this note, hereby agrees to pay all costs of such collections, including reasonable attorneys’ fee.

The drawers' and endorsers severally waive presentment, for payment, protest and notice of protest for non-payment of this note. “Signed — J. V. Kendrick [Seal.] •* A rlnv/iCQ “No. Due, Sept. 5, 1926.” Notation on back of above note: “This note is given as part of commission on sale of 56 acres in Broward County Fla. and be payable out of second payment on said sale. “Signed — A. J.

Speck.” At the trial the defendant offered evideneé tending to prove that the plaintiff was not to receive the sums of money evidenced by the notes given, in addition to the cash received by him, but was to receive 10 per cent of the cash actually received by the vendors of the land from the sale of said land.

This evidence was in the form of testimony by the defendant alone without corroboration, and the trial judge excluded a large part of this testimony as improper — as being an effort to vary a written instrument by parol evidence." From the evidence it developed that upon the failure of the purchaser of the property in question to make the second payment the vendors of the land compromised with the purchaser for the sum of $6,000, each of the vendors receiving $3,000. This was done without any notice to the plaintiff or consultation with him.

The mortgage on the land sold, which secured the deferred payments, was released and no effort was made by defendant to collect the deferred payments other than the compromise above mentioned. It is contended on behalf of, the defendant that the trial judge erred in excluding the oral evidence with regard to the transaction, and in directing a verdict for the plaintiff and signing the judgment. We cannot agree with these contentions.

It has long been settled that parol evidence is inadmissible to alter- or explain written instruments, and that conversations or agreements of parties prior to the execution of a written instrument are presumed to have been merged and embodied in their written agreement. Van Winkle v. Canty Crowell, 146 U. S. 42, 13 S. Ct. 18, 36 L. Ed. 880. Authorities to this effect could be multiplied without number. Here the note speaks for itself, and there is no ambiguity justifying oral evidence with regard to it. The defendant agreed to pay the plaintiff out of the second payment on the property.

The defendant compromised the claim for the second payment without notice to the plaintiff, and released the security for it without any attempt to collect it. The defendant received $3,000 of the second payment and, under the expressed terms of the written agreement, certainly owed the plaintiff on the note sued on the said amount of $3,000. Provisions of this character should be construed liberally in favor of the payee. Smithers v. Junker (C. C.) 41 F. 101, 7 L. R. A. 264, Dille v. Longwell, 188 Iowa, 606, 176 N. W. 619.

The action of the judge below in directing a verdict for the amount of $3,000 was correct, and the judgment is accordingly affirmed.