
    Warren B. Collamer, Resp’t, v. Albert H. Farrington, App’lt.
    
      (Supreme Court, General Term, Third Department,
    
    
      Filed July 11, 1891.)
    
    Evidence—Panol—To taut wbitten.
    In an action by a landlord against the surety on a written lease for rent due, as therein provided, Held, that the defendant could not show as a set-off that the plaintiff had promised by a parol contemporaneous agreement to accept the fixtures placed on the premises by the lease on account of the rent, as such parol agreement was not collateral, but merged in the writing.
    (Mayham, J., dissenting.)
    Appeal from a judgment entered upon the report of a referee in favor of the plaintiff in an action brought- upon a contract of .suretyship for the performance of the conditions of a lease by a tenant.
    The tenant’s certificate of hiring was in writing signed by him, and contained covenants to pay rent, and also some other agreements on the part of the tenant, but contained no agreement to be performed by the lessor. The surety contract signed by the defendant purported to be in consideration of the letting of the premises and of one dollar, and provided that the defendant become surety for the punctual payment of the rents and performance of the covenants in the certificate made by the lessee and in default agreed to pay and perform the same himself or any deficiency on the same. The answer alleged payment by the tenant, offsets in favor of the tenant against the plaintiff and the tenant’s insolvency, eviction of the tenant by the plaintiff, and a denial of some of the allegations of the complaint On the trial before the referee various questions as to the admissibility of evidence offered by the defendant were raised and exceptions taken to the ruling of the referee. The referee reported in favor of the plaintiff, and judgment was entered on his report, from which defendant appeals.
    
      L. Varney (William H. McCall, of counsel), for app’lt; Will W. Smith, for resp’t.
   Learned, P. J.

—This is an action by the landlord against the-surety on a lease. The defense is that the leasee, one Jacob H. Farrington, had been the tenant of the landlord for two years previous; that during those previous years the lessee had put certain fixtures in the premises; that when he was about to take the lease in question the plaintiff, as consideration therefor, promised that he would take said fixtures and pay for the same by allowing the value on the last payments which should come due on the lease.

In $ie trial before a referee, evidence was given by defendant of conversations tending to support this defense. Such evidence was objected to as varying the contents of a written instrument. The evidence was taken subject to this objection and was finally excluded by the referee. The question on this appeal is on the correctness of the referee’s ruling in this respect.

It is claimed by the defendant that this ruling was incorrect on two grounds. First, that the general rule does not apply when only one side of the contract is in writing and the oral evidence tends to affect the other side; and, second, that such general rule-does not apply to collateral agreements.

The first of those grounds assumes that the landlord’s part of the contract of lease was not in writing. The written instrument produced by plaintiff was that which is known as the tenant’s part in a so-called landlord and tenant agreement This is a familiar agreement, one part of which is usually signed by the landlord, another by the tenant; each containing the agreements-of the respective parties. It was not necessary for the defendant, if not called upon, to produce the part of the agreement signed by the landlord, and no copy is in the case. But the objection to this evidence assumed that the landlord’s part of the agreement was in writing. The referee’s report seems to so state the fact. He says a written lease was executed by both parties. Certain findings of fact requested by the plaintiff imply this. It does not distinctly appear what was the response of the referee to these requests, but the defendant excepted to the referee’s finding of the second and third of these requests, from which we may infer that they were found.

How, as it is not probable that the lessee would execute this part of the contract of lease without receiving the landlord’s part executed by him, and as the form of this kind of lease is well known, we think that we must understand from the referee’s report and from these other papers in the case that there was such a landlord’s agreement, although it has not been printed in the case. If there had been no writing signed by the landlord the objection to oral evidence could hardly have been made. For there could have been no agreement in writing on the landlord’s-part which the oral evidence could have tended to vary or contra-diet. In this view of the case the first ground of defendant’s appeal fails.

The second ground is that the alleged oral agreement was collateral and therefore admissible.

Now it is to be noticed that the defendant cannot claim that these fixtures were a payment on the rent. The landlord refused to accept them, and caused them, or at least part of them, to be removed. Jacob H. Farrington testifies that all his fixtures were torn out and were in the middle of the floor. So that, assuming that the plaintiff made the agreement claimed by the defendant, he refused to perform it. While then he may be liable on his refusal for damages caused thereby to the lessee, he cannot be correctly said to have received payment of the rent. Of course if he had received payment, either in money or in anything else accepted as payment, this would have been a credit on the amount payable on the lease. But if he only made an agreement that he would accept certain things in payment, which agreement he afterwards refused to perform, this can give the lease only a counterclaim. The lessee is not bound to assert his damages in an action on the lease. The lessee still has his property and can recover only damages for the breach of the agreement to purchase. Or if the lessor unlawfully retains any of this property and refused to pay the lessee therefor, then the lessor may be liable to the lessee. Hence the surety cannot assert this defense. The plaintiff has not been paid. The surety cannot set up this counterclaim which belongs to the lessee. Gillespie v. Torrance, 25 N. Y., 306. Whether on a proper allegation in the answer of the lessee’s insolvency an equitable set-off of this claim might not be allowed, we need not say. But to such a claim to set off in equity this-.claim of the lessee, the lessee himself would be a necessary party; because the claim belongs to him and he cannot be deprived of it. without his consent or without his being heard.

The judgment, therefore, is right and is affirmed, with costs.

Landon, J.

—I concur. The tenant, in writing, agreed to pay a fixed sum in money for rent. Defendant is his surety. Defendant now claims a contemporaneous' oral agreement to pay part in fixtures; that would substitute fixtures for money and thus vary the writing. Such oral agreement is not a collateral one, and is, therefore, merged in'the written one.

Mayham, J. (dissenting).

—The defendant seeks to establish the defense of payment, by showing a parol agreement between the plaintiff and tenant under which the plaintiff was to take certain improvements and fixtures made by the tenant upon the demised premises, the value of which were to apply on the last installment of rent to fall due under the lease. This evidence was objected to by the plaintiff, on the. ground that the contract reduced to writing was the best evidence, and that all conversations prior to, and at the time of making the lease, were merged in the writing, and could not be used as a defense to the surety.

The ruling was reserved by the referee and the evidence received subject to plaintiff’s motion to strike out. The evidence tended to establish the agreement that the improvements and fixtures put upon the demised premises by the tenant during his term should be taken by the plaintiff, and their value applied upon the last instalment of rent, and that them value was $116.02. The case discloses that. At the conclusion of the evidence the plaintiff moved to strike out all of the evidence to the alleged agreement on the part of the plaintiff to buy any property of J. H. Farrington, or take any of the property or fixtures he had put in the premises, if he would take a lease of the building for another year, and to strike out all testimony of the value of the property. The referee granted the motion, and struck out all such evidence, and the defendant excepted to his ruling. The defendant insists that this was error, for which the judgment should be reversed. It is quite clear that if the fixtures and improvements made by the tenant would have been a good defense or payment as to him, they would enure to the benefit of the surety when he is asked to pay the principal debt Baere & Baere v. Armstrong & Riley, 26 Hun, 19. The surety upon a lease for the payment of rent, can make any defense to the action against him for rent that the tenant could make. Sheary v. Adams, 18 Hun, 181.

This is not in the nature of a right of action arising solely in favor of the tenant, of which the surety, when sued alone, could not avail himself. Springer v. Dwyer, 50 N. Y., 22; Lasher v. Williamson, 55 id., 619. If the value of the fixtures and improvements are available to the tenant for any purpose, they are payments upon the last instalments of rent, and reduce or extinguish alike the liability of the lessee and surety. Was the parol evidence of the parol agreement competent in this case ?

The rule is too well-settled to require the citation of authorities, that where the written contract is, or purports to be complete upon its face, containing the stipulations of both parties, it cannot be altered, modified or varied by any prior or contemporaneous parol agreement between the parties, and that all such parol agreements are deemed to be merged in the writing. But this rule does not apply to writings which purport to express only the agreement of one of the parties, or one side of the agreement, Englehorn v. Reitlinger, 122 N. Y., 80-82; 33 N. Y. State Rep., 275, and cases there cited, nor does it apply to a collateral undertaking, not necessarily a part of the contract. Applying the rules stated in the exceptions to the case under consideration, the evidence offered and excluded would seem to be competent Johnson v. Oppenheim, 55 N. Y., 280; Wilson v. Deen, 74 id., 531; Eighmie v. Taylor, 98 id., 288; Snowden v. Guion, 101 id., 458; Schmittler v. Simon, 114 id., 176; 23 N. Y. State Rep., 160.

In the case at bar the certificate of hiring is only made by the tenant, and contains none of the obligations or liabilities assumed by the plaintiff. We must look outside of it for any obligation on the part of the plaintiff, for quiet enjoyment, or even any possession at all of the premises. It does not purport on its face to express the contract of the lessor. As his part of the contract is not therefore in writing, can it be doubted under the authorities, that they may be proved by parol ? The certificate shows that the lessee agreed to pay rent In the absence of any writing as to what the agreement of the lessor was, may not the defendant prove that he agreed to accept improvements and fixtures at their fair value for the amount of that rent? We think he may. Again, as the plaintiff’s agreement was not reduced to writing, it seems that within these exceptions it would be competent to prove that as an inducement to the lessee to enter into the new lease, the lessor might agree by parol, to allow the last instalment of rent to be paid in the new improvements on the place. That would be an agreement collateral to the lease, and it would seem competent within the authority of the cases. .Batterman v. Pierce, 3 Hill., 172. ISTor does the parol agreement sought to be proved, but excluded by the referee, change the written certificate. It does not relieve the lessee from the payment of rent or reduce the amount of the same; or change the time of payment. The law would apply the fixtures on the rent at the commencement of the last month, and vest the title to them, in the lessor at that time; it is collateral to the certificate but not in conflict with its provisions. Arms v. Arms, 13 N. Y. State Rep., 196; Adams v. Van Brunt, 11 id., 659. If we are right in our conclusion that evidence of this parol agreement to' accept the fixtures and in payment of a portion of the rent; then the exclusion of this evidence was error prejudicial to the rights of the defendant As it would be inequitable and unjust to compel the surety to pay this rent, or the part thereof which would be satisfied by the application of the value of the improvements to the payment of the same. Juilliard v. Chaffee, 92 N. Y., 529.

This case is clearly distinguishable from Costello v. Eddy, 34 N. Y. State Rep., 565. In that case the contract was signed by both parties, and was complete in itself, and the parol evidence offered clearly void in its effect, and the court held that it was properly excluded. In this case, for the reasons above stated, we think it was error to exclude the evidence offered, and to strike out the same on the motion of the plaintiff; and as that ruling prejudiced the legal rights of the defendant, the judgment must, for that reason, be reversed.

This makes it unnecessary to consider the other questions raised by the appellant on this appeal.

I think the judgment should be reversed, referee discharged, and a new trial ordered, costs to abide the event

Judgment affirmed, with costs.  