
    DIMON HUBBARD v. JAMES B. STETSON, GEORGE OSGOOD, CORNELIUS COLE, BENJAMIN A. BRISTOW, R. W. TAYLER.
    Equity.' —
    No. 4748.
    I. A deed absolute on its face may be shown by parol to be a security for a loan of money.
    II. A single witness, swearing to an acknowledgment of the defendant that an absolute deed was a securit}', will not be allowed to overrule the instrument, where the answer and the testimony of the defendants deny the fact of a loan.
    
      STATEMENT OE THE CASE.
    This is an appeal from a decree of the Equity Court, passed October 19, A. D. 187(3, dismissing complainant’s bill with costs.
    The bill filed December 27, 1875, sets forth that on or about the 8th day of December, A. D. 1870, the plaintiff borrowed of the defendants Osgood & Stetson the sum of $500, and to secure the repayment of the same executed an absolute assignment to them of certain claims which the plaintiff had against the British Government for goods and merchandise destroyed by the so-called Confederate steamers Alabama and Florida, which said claims 'were then on file in the State Department at Washington, D. C.; that it was distinctly understood and agreed by and between the parties at the time that the said assignment was intended by way of security only, and that the plaintiff was to have'the privilege at any subsequent time of paying back the sum borrowed, with interest at current rates, and having the said assignment cancelled; that afterwards Osgood & Stetson, through their attorney, Cornelius Cole, filed their claims as assignees of plaintiff in the Court of Commissioners of Alabama Claims, and obtained an aw'ard for the sum of $9,853.11; that the plaintiff has offered and is ready to repay the said loan of $500 with interest, but that the said defendants Osgood & Stetson have refused, and still refuse, to accept the same and cancel the said assignment according to the agreement, and claim the entire amount of said award, denying that the plaintiff has any interest therein whatever.
    The plaintiff then prays that an account may be taken, and a decree passed making a just and equitable disposition of said award, and that Osgood, Stetson, and Cole may be enjoined from drawing, and Bristow, Secretary of the Treasury of the United States, and R. W. Tayler, First Comptroller, from paying the amount of said award during the pending of the suit.
    The answer denies that the assignment was intended only as a security for the repayment of the $500, but avers that the plaintiff sold to the defendants Osgood & Stetson his said claims absolutely for $500, in gold coin, and gave them therefor an absolute assignment, a copy of which is filed as a part of the answer; it denies the right of plaintiff to any part of the award, which it avers was $0,649.27, instead of the amount alleged in the bill; it further states that the plaintiff, Hubbard, presented his claim to the said Court of Commissioners of Alabama Claims at the same time that the ■assignees, Osgood & Stetson, presented theirs, and that the said court duly adjudicated the said conflicting claims between the assignor and assignees, and Anally rendered judgment in favor of the assignees, Osgood & Stetson.
    The complainant was examined as a witness on his own' behalf, and his evidence confirms the allegations of his bill that the assignment of his claims, although absolute in form, was intended as a security for a loan of $500.
    Charles H. West testified that he knew Dimon Hubbard; was in his room in December, 1870, when Stetson was present; that Stetson asked Hubbard to go around to Mr. Mas-tick’s office to make some new assignments about some Alabama claims, as he had no security for $500 he had loaned Hubbard; that Hubbard said he had already made one or two or three assignments, and did not see 'the necessity of making any more. Stetson said he had not sufficient security, and in case anything happened to Hubbard he would not be able to get that money from Hubbard, if he had to wait till that time; that the assignment made was no security at all; that they were in no condition to take any risk; that just before Stetson went out he said: “If you will go around to Mastick’s office and fix this assignment I will give you a suit of clothes.”
    The defendants Osgood & Stetson both testify that the assignment was absolute both in form and fact; that they purchased the claims for $500 in coin, and took the risk of their payment; that they were Alabama claims, and that the transaction took place about a year previous to any treaty between the two governments. They explain the reason of applying to complainant for a special power of attorney to be that they had been informed that he was endeavoring to sell the claims over again. The case is here on an appeal from an order dismissing the bill.
    
      J. M. Yznaga and Bainbridge E. Webb, for complainant.
    
      Enoch Totten, for defendants Osgood & Stetson.
   Mr. Justice MacArthur

delivered the opinion of the court:

The rule that a deed absolute on its face may be shown by parol evidence to be a security for a loan of money, is now well-settled law. The assignment in the present case is a sale of securities, and, at the date of the instrument, these securities were simply claims of doubtful value. There was no certainty that the injuries sustained from the Alabama would ever be recognized or paid by the government. It is a circumstance which we cannot overlook that they had no value, except a speculative one, until a year afterwards, when the treaty of Washington was entered into by the United States and the Government of Great Britain. Under these circumstances no inference in favor of this being a loan is to be drawn from the fact that the amount paid was greatly less than the face of the claims. The disproportion, we think, therefore, should not have much weight either way. The parties purchasing assumed the risk of losing the whole, and it appears that the complainant had made previous unsuccessful attempts to dispose of them to other parties, thus showing the doubtful character of their value among persons engaged in that business.

The form of the deed is an absolute transfer of these claims. There is no provision made for repaying the money, and it is admitted that in order to show that the transaction was a loan, the express terms of the instrument must be overruled by the parol statements of witnesses. This kind of proof is admissible, but it ought clearly to show that the contract did not express the intention of the parties. The testimony, we think, is inadequate to establish the fact of a loan. The defendants Osgood & Stetson flatly contradict the complainant, and swear positively to the sale. The answer, which is responsive to the bill, denies that it was a loan. A single witness will not be sufficient to overcome the answer of the defendant, especially when it is supplemented by their examination as witnesses. The testimony of West, who was examined by the plaintiff, is equivocal. Stetson testifies that on the occasion referred to by West he asked for a special power of attorney, becausb he had been informed that the complainant was endeavoring to sell the claims over again. We can, therefore, attach no special importance to this circumstance. West also swears that Stetson spoke of the assignment as a security. It is to be noted that the witness is speaking of a conversation in the office of the complainant, and is, therefore, carefully to be considered and cautiously to be admitted. This is the only circumstance in the case, aside from what the complainant has said, that is entitled to any weight; but the court cannot attach such an importance to an acknowledgment, coming from a single witness, and which may have been qualified or misunderstood, so as to overthrow a written instrument and impeach the pleadings in the case. This would be giving an effect to parol proof which would endanger the integrity of any contract executed for a money consideration.

The decree below must be continued.  