
    FREDERICK P. SAWYER vs. JOSEPH WEAVER.
    Equity. —
    No. 3686.
    I. A deed contained a recital that there were eight promissory notes in. the hands of another person, for one thousand dollars each, secured by a deed of trust on the property thereby conveyed, and then there is this covenant, “ and the said party of the second part (the grantee) hereby assumes the payment of the same as part of the consideration of thia deed, and will hold the said Weaver (the grantor) harmless from all obligation thereon.” Held, That this covenant bound the said grantee-to satisfy said notes, together with all interest that had accrued or that might thereafter accrue, although he would thereby be liable to pay more than the amount of the consideration expressed in the deed.
    II. No principle of law, in courts of equity as well as in the courts of common law, is better settled than that all negotiations by parol prior to the execution of a written contract are merged in such contract, and more especially in a contract under seal; and that a party will be estopped from proving such was not the contract between the parties unless the party alleges that his signature was procured by fraud, imposition, or other dishonest practices.
    STATEMENT OE THE CASE.
    On the 10th of April, 1874, the plaintiff filed his bill, alleging that, about the 15th of July, 1873, he agreed to purchase from the defendant certain real property in square four, (4,) in the city of Washington, for the exact sum of $20,000, the same property being encumbered by a debt of $8,000, and no more i that the payments were to be $2,000 in cash, $10,000 on the 1st day of January, 1874, and $8,000 to discharge a mortgage on the premises held by one Harvey North 3 but after the purchase he found the claim of North to be more than $8,000, by interest having accumulated thereon to the aggregate amount of $1,300. The prayer of the bill was that said sum of $1,300 be deducted from the amount yet remaining unpaid on plaintiff’s note given to the defendant, and for an injunction to prevent the negotiation of such note, and for a decree for $1,300 in case the note has already been negotiated.
    On the 2oth day of May, 1874, the defendant filed his answer, in which he admits that the purchase was as plaintiff alleges in his bill, but he denies chat the purchase-money was limited to the precise sum of $20,000, or that the property was encumbered by any amount particularly limited to $8,000, and no more. He denies that there was any mistake whatever as to complainant’s liability for the interest on the North notes. He avers that the agent, Wilson, knew and was expressly informed, when the deeds were prepared, that those notes bore interest. The deed of trust executed by complainant to Phillips, of even date with the deed of purchase, is made part of the answer, and contains the following recitals:
    “And whereas there is now an indebtedness on said property of eight promissory notes of S. D. Castleman and said Weaver, each for one thousand dollars, with interest, as will appear by deed recorded in liber No. 604, folio 474, and part of the consideration of this sale is that the said Sawyer shotcld assume said indebtedness, and pay the same, and to hold the said Weaver harmless therefrom ; and whereas the said parties of the first part [meaning complainant and wife] are desirous to secure the full and punctual paym'ent of said notes, and all interests, cost, and expenses that may accrue thereon, according to the true intent and meaning of the same.”
    Said deed also provides, that in case “ default or failure shall have been made in the payment of the said debts due as aforesaid to the said Weaver, or to the said Survey North, or any part thereof, or of any proper costs or charges thereon, or which may accrue thereon,” the trustee shall make sale of the premises upon certain terms, conditions, &c., contained in said deed; and after paying the expenses of the sale, and other expenses in the execution of the trust, shall “ pay, in the first place, whatever of said debts, interests, costs, and expenses, may be due and unpaid at the time of such sale or sales; secondly, to pay whatever of said debts, interests, costs, and expenses may then remain unpaid, although the same may not then have become due and payable.”
    The deed of trust referred to in the foregoing recital states as follows:
    “ Whereas the said Joseph D. Castleman and Joseph Weaver, parties of the first part, are justly indebted unto Harvey North in the sum of ten thousand dollars, ($10,000,) for which amount he holds the ten joint and several promissory notes of the said Castleman and Weaver, bearing date on the 17th day of March, A. D. 1871, each for the sum of one thousand dollars, payable, respectively, in one, two, three, four, five, six, seven, eight, nine, and ten years after date, to the order of said Castleman and Weaver, with interest at the rate of seven per cent, per annum.”
    Eeplication being filed on the 29th of May, 1874, the parties proceeded to take testimony; but it becomes unnecessary to consider the same, as the decision of the case rests upon the construction of the foregoing instruments, there being no charge of fraud in the bill in regard to the execution of the conveyance first above mentioned.-
    
      ■George W. Paschal for complainant:
    As to the construction of the deed from Weaver to Sawyer, the chancellor, following the common sense of every average mind, without hearing Sawyer’s counsel, ruled that “ all interest, cost, and expense that may accrue thereon” meant just what they always mean, according to grammar and to the approved forms in such a connection, interest in the future, and not some occult, unknown, and uncertain interest in the past, which is inconsistent with the deed and the whole facts. “ Eight thousand dollars ” occurs in the deed when reciting the whole consideration. It is that and no more in the purchaser’s covenant to pay that $8,000. In these there is no. insertion of interest. And when it is mentioned in the deed of trust, it is mentioned in connection with the purchaser’s two notes of that date, which bore none but future interest at the same rate. The interest is used in connection with u costs and expenses,” necessarily things of the future. They are all subjects, which control the verb (in the potential mood) “may accrue,” necessarily a thing to come after the time of writing. And this verb is qualified by the adverb'“ thereon,” which relates as well to the North notes as to Sawyer’s own notes. So that, upon the very papers which the parties made, there can be no doubt that Mr. Justice-Wylie arrived at a correct conclusion and rendered the proper decision.
    The appellant insists that the reference to the Oastleman and North mortgage was not only notice to the purchaser of the amount due them, but that the reference to it made it a part of the contract, and it is to be read with the two instruments already noticed and as part of them. But this is not sound. The mortgage was constructive notice to the purchaser, to be sure, but it was inter alias actos. A reference to it would have shown that there were ten notes, not eight. The purchaser could not know that any of them or how much was paid, and the natural business view would have been that the interest had been paid semi-annually. He did not agree to pay off the mortgage, but only eight thousand dollars of the debt and future interest thereon. The warranty,, although limited, covenants against all Weaver’s own incumbrances, without excepting the North mortgage. The vendee took his word as to the extent of the incumbrance. As to this there was a mistake or fraud, whichever the vendor pleases, (for both are alike relievable in equity,) and the object of this suit was to establish that there was such mistake or fraud; and hence that the purchaser gave his notes for too much.
    If we turn from the instruments to the pleadings, we shall find that upon them the chancellor decided correctly. It was sworn bill, asking for a preliminary injunction. The bill states positively that the trade was made through George B. Wilson, the tenant of Weaver, (for Weaver and Sawyer had never met,) The relation of Wilson to Weaver is admitted, although Weaver calls Wilson Sawyer’s agent. So the allegation that the minds of the parties met upon the proposition of twenty thousand dollars for the property is admitted by the answer with no other qualification than that enigmatical one, “the defendant emphatically denies that the purchase-money to be paid for the property was limited to the precise 
      and mathematical sum of $20,000.” Any given number is precise and mathematical. And a sum being agreed upon, it requires legerdemain to increase or diminish it. Neither adjectives nor epithets can do it. And if one or the other be done, the trick cannot bear mathematical scrutiny. So the appellee admits the double recitation in the deed of “twenty thousand dollars” and “eight thousand dollars.” But here he says that they did not mean “the precise and mathematical •amounts” expressed. An answer which thus admits, and then resorts to a meaningless jargon, will be taken as an unqualified admission, and the jargon will be excluded as senseless. Again, the appellant admits, in effect, that Sawyer ■agreed to pay $8,000 of the North debt; but he denies that it was agreed that the interest thereon was to be subtracted from the purchase-money. It was not charged that it was so agreed. There was no bargain about the back interest, for none had ever been heard of or thought of by Sawyer or Weaver’s tenant, Wilson. They both so positively swear, and Weaver does not contradict them.
    In a word, the bill charges that the trade was for $20,000 and no more. The answer virtually admits the fact, but resorts to the defendant’s construction of the papers to show that, although no more was intended, yet a tortured reading increases the amount.
    
      R. T. Merrick and Benjamin Davenport for defendant:
    1. The notes to Harvey North bore interest on their face, and were particularly set forth and described in the deed of trust given to secure their payment, and which deed of trust is referred to for the more certain description and identification of said notes in the deed of trust executed by complainant and wife to Phillips, to secure the execution by complainant of the terms of this contract of sale.
    2. The complainant therefore h-ad actual notice of the purport, nature, and obligation of said notes.
    3. The complainant having notice of the extent and nature of the obligation of the notes held by Harvey North, in his deed of trust to Phillips sets forth that said notes bear interest, and recites that part of the consideration of his purchase is that he should assume the indebtedness created by said notes, and pay the same, and hold the defendant harmless therefrom/■ and thereupon, to secure the performance of said contract, covenants that in case of default in the payment of said notes, or any part thereof the property conveyed may be sold, and that the proceeds and sale be applied to pay notes and interest, c6c.
    4. It follows that the contract between these parties as to the notes in question was in writing, under seal, and cannot,, therefore, be varied by parol evidence.
    5. There can be neither fraud nor mistake in the transaction; for it is apparent from the various deeds that complainant was as fully advised in the premises as the defendant; and whatever may have been said between the parties in the progress of their negotiations as to the price to be paid, and the obligations to be assumed, in consideration of the purchase, the writing shows the terms ultimately arrived at and agreed upon.
   Mr. Justice Olin

delivered the opinion of the court:

This cause comes before us on appeal from the decree of Justice Wylie, holding the special term.

The facts in the case are substantially as follows:

On the 10th of April, 1874, the plaintiff (complainant) filed a bill in equity, alleging that, about the 15th of July, 1873, he agreed to purchase certain real property from the defendant in-squ'are 4 of the city of Washington, for the exact sum of $20,000, the property being encumbered at the time of purchase by a debt of $8,000, and no more; that the payments were to be $2,000 in cash, $10,000 on the 1st day of January, 1874, $8,000 to discharge a mortgage on the premises held by one Henry North; but that after the purchase he found the claim of North to be more than $8,000 by reason of interest having accumulated therein to the aggregate amount of $1,300; the prayer of the bill is that the said sum of $1,300 be deducted from the amount yet remaining unpaid on complainant’s note given to the defendant, and for an injunction preventing the negotiation of said note, and for a decree’ for $1,300 in case the note had already been negotiated.

On tlie 25th of May, 1874, the defendant filed his answer admitting that the purchase was as alleged in complainant’s bill, but he denies that the purchase-money price was limited to the precise sum of §20,000, or that the property was encumbered by any amount particularly limited to §8,000, and no more.

W. denies, however, that there was any mistake whatever in the premises as to complainant’s liability on the North notes he owes; that the agent, Wilson, who negotiated the purchase of this property, knew, and was expressly informed, when the deeds were prepared, that those notes bore interest.

The bill in this case seems to have been drawn with something like a double aspect. First, that the papers as executed, made between the parties at the time, did not truly express the parol agreement made between the parties at the time of the then execution ; or, second, that the papers actually executed, if properly construed, only required the complainant to pay the precise sum of §20,000, the purchase-price expressed iu the deed, as the consideration for the conveyance. It was ihe latter point, doubtless, upon which the justice proceeded in entering the decree which is appealed from to this court. That decree in substance orders that the interest which had accrued on the North notes at the time of the purchase of this property, or rather at the time of the execution of the deed of conveyance, be deducted from the purchase-price of the property, so that in any event Sawyer, the complainant, would not be obliged to pay more than $20,000 for the property, hut upon whichever ground this decree was placed, I think it was erroneous. In reference to the first ground, it will he observed that there is no averment in the bill of any trick, fraud, or contrivance by reason of which Sawyer, complainant, was induced to execute under his hand and seal the pax>ers introduced iu evidence in this note, much less is there any proof in support of such averment had it been made. No principle of law, iu courts of equity as well as in courts of common law, is better settled than that all negotiations by parol, prior to the execution of a written contract, are merged in such contract, and most especially in a contract under seal, and that a party will be estopped from proving such was not the contract between the parties, unless the party alleges that his signature was procured by fraud, imposition, or other dishonest practices. To allow a deed or other instrument, evidenced in the most solemn manner any written agreement can be, to be set aside and overthrown by the loose recollection of a treacherous memory of conversations that preceded the execution of it, would subvert a well-established principle of law, and render such parol testimony of equal force with the most solemn written document. But if we turn to the testimony in this case, I think it is equally clear that the deed of conveyance was executed in precise accordance with the parol terms of negotiation which preceded it.

It is true that the witness makes an ex-parte affidavit to be used on motion for an injunction in this case, which, if considered in and of itself alone, would tend to show that the terms of sale were only $20,000, and that nothing was said upon the subject of back interest on the North notes. This ex-parte affidavit, by a stipulation of counsel, was made a part of the evidence in the case. But Wilson was called before the examiner and subjected to the test of a cross-examination 5 on that examination he says that, after he, Wilson, had told Sawyer the property in question was cheap, Wilson was told to call'on Weaver and ascertain upon what terms the latter would sell the property. Wilson sees Weaver in pursuance of* this agreement, and, as he testifies, Weaver told him that there were eight notes, payable annually, bearing seven per cent, interest; that if Mr. Sawyer would give him $12,000 and talce care of the North notes he could have the building, and the $12,000 he could pay to suit himself; that he reported this conversation to Mr. Sawyer; “Mr. Sawyer then told me to let Mr. Weaver have the papers drawn up, and he would pay him $2,000 in cash, and the balance in two payments of $5,000 each, three and six months, with interest, at the rate of the North notes.” This testimony, together with the ex-parte affidavit of Wilson before alluded to, and the amount of the consideration named in the deed, $20,000, is all the legal testimony on the trial of the cause tending to show what was the consideration agreed to be paid prior to the execution of the deed. The consideration expressed in a deed is but slight evidence of the true consideration. The consideration of a deed should be expressed to be such as will support a deed of bargain and sale, and for that purpose $5 is as good as $50,000; both are open in courts of law, as well as in equity, to explanation or even contradiction. Samuel Phillips, the attorney and counsel, who was employed to draw up the deed of conveyance from Weaver to Sawyer, testifies that Wilson, acting on behalf of Sawyer in negotiating the purchase of this property, was, with Weaver, present at his office when the deed was drawn, and that the subject of interest on the North notes was particularly mentioned, as it was the express understanding between Wilson and Weaver that the said Sawyer was to assume the payment of the interest as well as the principal, and to hold the said Weaver harmless from all obligation on said notes. How exactly, this testimony corresponds with that of Wilson, and with the covenant in the deed executed by Sawyer, it would seem to be needless to inquire.

I conclude, therefore, that the learned justice did not pass this decree on the ground that any such fraud or mistake nad been practiced or made as would justify a court of equity in setting aside an agreement under seal. Onthesecondground, the simple question is as to the true intent and meaning of the papers executed by the respective parties.

The deed of conveyance of this property executed by Weaver and wife to the complainant Sawyer contains, among other things, this recital, “ it being understood that Harvey North holds eight promissory notes of said Oastleman and Weaver, each for the sum of one thousand dollars, secured by a deed of trust on said property, recorded in liber 640, folio 474, and the said party of the second part hereby assumes the payment of the same as part of the consideration of this deed, and will hold the said Weaver harmless from all obligations thereon.”

If the language of this covenant, as interpreted by the absurd rule of the common law long since exploded, that requires the words of a deed to be interpreted most strongly against the grantor, be applied in this case, I still think this covenant bound Sawyer to pay and satisfy the notes held by North, together with all interest that had accrued, or might thereafter accrue, thereon. How else could he save Weaver harmless from the consequences of having signed these notes. At the time of the execution of the deed of conveyance of this property to Sawyer, the latter executes what is usually termed a deed of trust to secure deferred payments, which contains-the following recital or covenant. “And whereas thereis now an indebtedness on such property of eight promissory notes of S. D. Castlemau and Weaver, each for one thousand dollars, with interest, as will appear by deed recorded in liber No. 643, folio 474, and part of the consideration of this sale is that the said Sawyer shall assume such indebtedness, and pay the same, and hold the said, Weaver harmless therefromP

I think it quite unnecessary to apply the same rule of construction before alluded to to interpret an instrument of this kind. On tbe other hand, the plain and obvious meaning of the language to an ordinary understanding is that there was an incumbrance on the property conveyed of eight promissory notes for one thousand dollars each, with interest, and reference is made to the book and page where this incumbrance is recorded; thus we see that by the deed of conveyance of “Weaver to Sawyer, and also in the mortgage or deed of trust given by Sawyer to Weaver to secure deferred payments of the purchase-price of the property, there is a covenant on the part of Sawyer to pay the North notes and save Weaver harmless from having signed the same. How, I again repeat, could Sawyer save Weaver harmless from the consequence of signing the North notes, if he did not pay the interest which had accrued as well as to accrue? Weaver was as legally bound to pay the back interest on the North notes as he was to pay the principal.

The decree in this case should be reversed, the bill dismissed, and the complainant pay the costs of this suit.

Mr. Justice Wylie

delivered the following dissenting opinion:

On the 15th of July, 1873, the complainant bought from the defendant a lot of ground, for which he agreed to pay $10,000; $8,000 in cash, down, $1,000 on the 1st of January, 1874, and assume the payment of a mortgage-lien on the property, the principal of which was $8,000.

I think there can be no doubt that these were the terms agreed upon between the parties, previous to the execution of the deed,

A deed of trust was given by the purchaser to secure the deferred payments, and the mortgage-debt subject to which the property was sold.

At the time of the transaction there were arrears of overdue interest upon the incumbrance amounting to the sum of $1,300, not known to the purchaser, and this is the subject of the present controversy.

The deed of trust contains the following recital, declaring the intention and object of the parties, and.which the defendant insists obliges the complainant not only to pay the principal of the incumbrance with interest from the date of the sale, but also all the previously-accumulated and overdue interest:

“And whereas there is now an indebtedness on said property of eight promissory notes of S. D. Oastleman and said Weaver, each for $1,000, with interest, as will appear by deed recorded in liber No. 604, folio 474 5 and part of the consideration of this sale is that the said Sawyer should assume said indebtedness, and pay the same, and hold the said Weaver harmless therefrom ; and whereas the said parties of the first part are desirous to secure the full and punctual l>ayment of said notes, and all interest, costs, and expenses that may accrue thereon, according to the true intent and meaning of the same.”

It appears to me that this recital, fairly construed, shows that no interest upon the ineumbrauce in question was to be assumed by the purchaser, except such as should afterward accumulate; for it declares the object to be “the full and punctual payment of said notes, and all interest, costs, and expenses that may accrue ” (not that have accrued) “ thereon, according to the true intent. and meaning of the same.”.

The recital also declares:

“And whereas there is now an indebtedness on said property of eight promissory notes of S. D. Oastleman, each for $1,060, with interest.”

The indebtedness here mentioned, it seems to me, is to be understood as meaning a debt of $8,000, bearing interest, and the interest to be assumed by the purchaser, as afterward more clearly defined in the same sentence, was the interest which “may accrue,” and therefore only future interest.

I submit that this interpretation is not overstrained, but is that which is most equitable, and certainly most consistent with all the evidence we have as to the intention of the parties.

I think, also, that the question has been, in principle, determined this way by the decision made by Lord Hardwicke, in Roberts vs. Kuffin, 2 Atk., 112, cited with approbation in Roper on Leg., 288. Owen Roberts made his will to the following effect: I give to my son, Thomas Roberts, £200, secured by a mortgage on the estate of Mr. Marriot, and all the messuages, lands, and tenements, for securing the same.

The question in the case was whether the legatee took merely the £200, or that sum with interest. The Lord Chancellor said:

“This entitles the devisee to the principal only of the mortgage, and not to the interest from the time of the execution ef the will, nor from the death of the testator, or any other time whatever. If a man gives £200, due upon a bond by his will, this does not carry interest incurred in the life-time of the testator.”

In the present instance, the deed of trust was given to secure an “indebtedness” of “eight promissory notes of $1,000 each,” “with interest;” in other words, a debt of $8,000 with interest, and that interest such only as “ may accrue.” I cannot see how such language can be made to cover arrears of interest as to which the purchaser was undoubtedly ignorant at the time of executing the deed of trust.

But the counsel of defendant also argued, in support of his position, from the following other terms of the deed of trust: “In case of default or failure in payment of said debts due as aforesaid to the said Weaver or the said Harvey North, or any part thereof, or of any proper costs or charges thereon, or which may accrue thereon, the trustee should make sale of the property on the terras prescribed by the deed; and,' after paying the expenses of the sale and trust, shall pay, in the first place, whatever of said debts, interest, costs, and expenses may be due and unpaid at the time of such sale; secondly, to pay whatever of said debts, interest, costs, and expenses may then remain unpaid, although the same may not then have become due and payable.”

Undoubtedly, all the unpaid interest upon the debt was to be paid from the proceeds of the sale; but these provisions of the deed shed no light whatever upon the question under consideration.

If it be settled that the object of this deed of trust was not such as to secure the payment of the overdue and unpaid interest in question, then in case of a sale, under its provisions, it must be conceded that no part of the proceeds could be properly so applied. For, as was said by Lord Hardwicke in the case already referred to, u when there is a devise, in express words, the construction in this court is, that subsequent general words shall not extend it further than the natural meaning of the preceding ones will do.”

It seems to me, therefore, that on the very face of this deed the claimant is entitled to the relief he asks. Dehors the deed, I think the evidence in the cause is still more convincing, but I do not care, in a dissenting opinion such as this, to go over that ground, as the opinion of the court determines that the parties are bound in this case by their solemn deed, and I am willing to take position upon the ground it has selected.

It is to be borne in mind, however, that the present issue is between Sawyer and Weaver only as to the construction of their contract as between themselves.

The question would be widely different, as between Sawyer and the party entitled to the first incumbrance, if a sale were to be made under it. No contract entered into between Sawyer and Weaver could impair that security to the full extent of all the debt and interest from the beginning.  