
    John Hilliard, Respondent, v. Charles C. Smith, Appellant.
    (City Court of New York
    General Term,
    October, 1895.)
    "Where the meaning of words as used in a written instrument is not entirely intelligible, oral evidence of the circumstances attending its execution and collateral agreements in regard thereto are admissible, as between the parties, to aid in its interpretation.
    In an action brought against an executor individually by a husband of a legatee to recover moneys loaned to him as such executor, evidence as to the conversation which took place at the time of the loan, and receipts for interest which state that the loan was made to the estate, are admissible as tending to show an understanding that the executor was not to assume a personal liability.
    Appeal from judgment in favor of the plaintiff, entered upon a verdict directed by the court.
    
      
      Charles C. Smith,, iñ person, for appellant'. •
    
      A. J. Provost, for respondent.
   McCarthy, J.

Both parties to this action having moved for a direction of a verdict in their favor, they concede that the question involved is one of law.

It is not a question as to the direct liability of the defend-, ant; but to the admission of evidence -offered by .'defendant for-the purpose of changing that liability. ■ ■ -.

The defendant was the. executor of the will of' Adalme L. • Gregg, deceased, and the plaintiff was the husband of one of the legatees of the estate. '

The following is the testimony and proceedings upon the trial: .

Mr. Milliken appeared for the plaintiff.

“ Mr. Morris appeared for the defendant.

“A jury to try the issues was duly impaneled and the case opened to the jury by a statement of the issues to be tried by Mr. Milliken. ■ '

“ Whereupon Mr. Morris moved' the court to dismiss the complaint-on the pleadings, on the ground that the defendant in this action.is sued personally:

“ ‘ -The action is against Charles C. Smith, personally, and the' complaint alleges that'the moneys loaned were so' loaned to him as executor of the estate of Mrs. Gregg, deceased, and for the purpose of carrying out certain provisions of the will under which he was appointed executor by one of the parties in interest under the will.’

“ The Court.^ Can an executor borrow ?

^.Defendant’s Attorney.— He cannot.

The Court.— Then why is he not individually liable ? The word executor is merely descriptive. ■ * . • ' , ‘ • \

Defendant’s Attorney.— He would be- liable ' unless' these parties in interest advanced him the money for the ' express purpose of making it a charge against* the estate for them own benefit.

. “ The Court.—-It cannot be done..

“ Defendant’s Attorney.;—In the case of Schmittler against Simon, 114 New York, 176, it seems that the executor signing an instrument of that character can explain that it was-done for the purposes of the estate, and for the purpose of making it a charge on the estate, particularly when the party advancing the money is himself interested in the estate and may be so charged in an accounting.

“ The Court.— That is where it is in the scope of the executor’s powers and duties to borrow money. That has been held repeatedly, and it has been held repeatedly that when an executor, administrator or any person, acting under a trust creates a liability which he has no power to create ip his official capacity, then he is individually liablé.

“ [Motion to dismiss denied. Exception to defendant.]

“ Defendant’s Attorney.— I move to dismiss the second nause of action on the same grounds; I think there it is more explicitly set forth.

“ [Motion denied. Exception to defendant.]

“ Plaintiff’s Attorney.— Do you deny the receipt of the money, Mr. Smith ? . ' '

“ Defendant’s Attorney.^ Ho. Defendant admits that he received the money and that the same has not been repaid to the plaintiff.

“ Plaintiff’s Attorney.— The interest is forty-three and dollars and the principal is the sum of one thousand five hundred, dollars.

“ [Plaintiff rests.]

“ Charles C. Smith, the defendant, being duly sworn, testified as follows: I am the executor of the estate of Adaline L. Gregg. I know the plaintiff, he is the husband of one of the legatees of the estate. I received from him the moneys mentioned in the complaint, viz., the sum of fifteen hundred dollars in all.

“ Q. Will you state what the conversation was between you and the plaintiff at the time you borrowed these moneys ?

“ Plaintiff’s Attorney.— I object to it, as incompetent, irrelevant and immaterial. The paper shows what it was.

“ [Objection sustained. Exception by the defendant.]

“ Q. Now for what purpose did you borrow these moneys from him ?

“ [Objected to as incompetent, irrelevant and immaterial •; objection sustained; exception by defendant.]

“ Q. Did you pay him any interest on these loans % A. Yes.

“ Q. Did you take any receipts for the interest so paid % A. I did. ..

“ Q. Will you please look at 'these receipts and say what they are ? A. These are receipts for the interest moneys paid on these loans to the plaintiff,

“ Defendant’s Attorney.— How I offer them in evidence.

“ Plaintiff’s Attorney.-—I object to their being introduced in evidence; anything in regard to the use for which -.the money was borrowed I object to, as being entirély irrelevant and immaterial; as to the fact of -paying interest I do mot object.

Defendant’s Attorney.— We offer them in evidence for fhe other purpose.

“ Plaintiff’s Attorney.— And not for the purpose of proving payment of interest %

“Defendant’s Attorney.— Ho, sir; not at all;

“ Plaintiff’s Attorney.— Then I object to them.

The Court.— For -what purpose do you offer these receipts; do you offer them to show for what purpose the money was loaned %

“ Defendant’s Attorney.— To show the purpose for which the loan was made.

“ [Objection sustained. Exception to defendant.]

“ Witness.— I would like to say that at the time the loan-was made it was understood between the plaintiff and myself that there was to be no personal liability assumed by me in taking these loans; it was expressly understood when these ' loans were made that it was to be charged to the estate, and that there was no personal liability assumed by me at that time.

“ Defendant’s Attorney.— I move to strike that out.

“The Court.— Motion granted on the ground that any such agreement could not be binding on. the estate.

“ Defendant’s Attorney.,— I move that your honor direct a verdict for the defendant on the ground -already stated,, namely, that the action is brought against Charles 0. Smith individually, on two notes made by him as executor" of the estate of Adaline L. Gregg, for money advanced to him as such executor by one" of the beneficiaries of the will, for the purpose of enabling him to carry out. the provisions of the' will, and that he is not individually liable, but, if liable at all, only as executor, and then only liable to an accounting as such executor. ■ •

“ The Court.— Didn’t I understand you to say a moment ago that he was not a beneficiary under the will; that he was simply the husband of a legatee ; that was the statement made on the record?

“ Witness.—He is the husband of the legatee, yes.

“ The Court.— The motion is denied on the ground that the defendant admits that the plaintiff is the husband of a legatee, not a party in interest, and in no way interested in this estate.

“ [Exception by defendant.]

“ At this point defendant’s attorney has the four receipts, marked Exhibits 1 to 4, inclusive, marked for identification as follows:

Exhibit 4.

“ ‘ Received, Brooklyn, N. Y., Dec. 19th, 1893, from Charles C. Smith, Executor, Forty dollars for 6 months interest on Five hundred dollars loaned to Gregg estate at six per cent,' being $15.00 due ¡November 1st, 1893, and for 6 months interest on One thousand dollars loaned to Gregg estate, at 5 per cent due ¡November 23,1893, being the sum of $25.00.

“ ‘ 40.00. . John Hilliard'.’.

. “ ‘ Exhibit 3. "

“1 Received, Brooklyn, N. Y., May 10, 1894, from Charles C. Smith, Executor, Fifteen dollars for interest due M'ay 1st, 1894, on Five hundred dollars loaned to him as executor of the estate of Mrs. A. L. Gregg, deceased. .

- “ ‘ $15.00. , - Received payment, ■

“ ‘ John Hilliaed.’

“‘Exhibit 1.

iliJune 8th, 1894.

“ ‘ Received from Oharles 0. Smith, executor, twenty-five dollars interest due on one thousand dollars loaned by me to the estate of Mrs. A. L. Gregg, déceased. Due May 23', 1894. “ ‘ $25.00. John Hilliaed,

“ ‘ Per Josephine A. Hilliaed.7

“ ‘ Exhibit 2. .

“ ‘ Received, Brooklyn, December 1st, 1894, from Oharles O. Smith, executor, forty dollars, being fifteen dollars interest due November- 1st, 1894, on five hundred dollars, and twenty-five dollars interest due November 23, 1894, on one thousand dollars loaned to the estate of Mrs. A. L. Gregg, deceased.

“ ‘ $40.00. Received payment,

“‘John Hilliaed.7

“ Plaintiff’s Attorney.— I move for a direction.

“The Court.— I will grant a direction in favor of the plaintiff.

“ Defendant’s Attorney.— We except on the ground, that, at the time the loan was made, it was expressly understood between the plaintiff and the defendant that there was to be ■ no personal liability assumed by the defendant.

“ By direction of the court the jury found a verdict for the plaintiff for one thousand ..-five hundred and forty-three and dollars ($1,543.50).

“ An allowance of five per cent .was granted by the court.’7

The general rule is that when an agreement is reduced to writing it is as between the parties deemed to merge and overcome all prior or contemporaneous negotiations and declarations upon the subject, and that no oral evidence is admissible to vary, explain, or contradict its terms.

We think the trial justice was in error in the exclusion of these receipts, and evidence of the conversation as to the purpose of the giving and receiving the money claimed and ■admitted to have been received.

This would not be either the varying, explaining or contradiction, but showing rather a collateral arrangement between the original parties.

In the language of Bradley, J., in Schmittler v. Simon, 114 N. Y., at page 184: “ But it may be that it would have been admissible for the defendant to prove * * * that the purpose for which a written contract is made may rest in a collateral oral arrangement, which may be shown to the effect that the design of it is different from that which its terms alone may indicate.” Grierson v. Mason, 60 N. Y. 394; Chapin v. Dobson, 78 id. 74. And again, at page 185,- he says, speaking of the opinion of the Court of Appeals in Schmittler v. Simon, 101 N. Y. 554, between the same parties: “It does.not appear what view the court may have taken of the admissibility of ■emidenoe of the fad, and of the fact itself, if it had then appeared that the payee and the plaintiff when they received the draft had been advised that it was drawn and accepted to be paid out of the drawer’s interest represented by the ■defendant as executor.”

The fact that the defendant was in the receipts designated as executor, and that he in some of them signed and designated himself as executor of Mrs. Adaline L. Gregg, deceased, does not of itself import any other than a personal relation of the -defendant to the instrument, .as the word “ executor ” annexed to his name would presumptively be treated merely as descriptive of the person.

But it might be given some substantial significance by other ■ provisions, if those were-such as to require it in the instrument, and in a proper case this might be aided by extrinsic facts.

In such case it is open to explanation by evidence to show that the purpose, as understood by the parties to thó transaction, was that the party so executing the contract intended to assume no personal liability.

The admission of this proposed evidence may not avail the defendant, but we think it admissible, for where the words, used in their application to an instrument of which they are a, part are not entirely intelligible,, oral evidence of the circumstances attending its execution and collateral agreements in regard thereto may, as between the‘parties, be admissible to aid. in the interpretation in its application of the .language so used..

For these reasons we think the rejected evidence referred to should have been received as bearing upon the understanding of the relation and the character of the liability the defendant assumed..

Judgment is, therefore, reversed and a new trial granted, with costs to the appellant to abide the event.

Van Wyck, Ch. J., and Fitzsimons, J., concur,

judgment reversed and new trial granted, with costs to-appellant to abide event. . '  