in it, was in fact made between one of them and a person not named." 94 § 635. Absolute written transfer may be proved by parol to be a mortgage. It is a doctrine, which was early established that a court of equity will give effect to the real intention of the parties to make a mortgage even though the parties have made an absolute written and sealed transfer of the property,95 and this doctrine is uniformly upheld at the present day. It should be observed, however, that such a transfer by an insolvent debtor is in many jurisdictions regarded as a fraud on his creditors which will enable them to avoid the transaction even as security; and if the grantor has a positive fraudulent 97 96 Langton v. Horton, 5 Beav. 9; Re Duke of Marlborough, [1894] 2 Ch. 133; Brick v. Brick, 98 U. S. 514, 25 L. Ed. 256; Anthony v. Anthony, 23 Ark. 479; Holt v. Moore, 37 Ark. 145; Edwards v. Bond, 105 Ark. 314, 151 S. W. 243; Raynor v. Lyons, 37 Cal. 452; Todd v. Todd, 164 Cal. 255, 128 Pac. 413; Davis v. Hopkins, 18 Colo. 153, 32 Pac. 70; Walls v. Endel, 20 Fla. 86, 99; Keithley v. Wood, 151 Ill. 566, 574, 38 N. E. 149, 42 Am. St. Rep. 265; Mott v. Fiske, 155 Ind. 597, 58 N. E. 1053; Ensminger v. Ensminger, 75 Ia. 89, 39 N. W. 208, 9 Am. St. 462; McRobert v. Bridget, 168 Ia. 28, 149 N. W. 906; Crutcher v. Muir, 90 Ky. 142, 11 Ky. L. 989, 13 S. W. 435, 29 Am. St. 356; Castillo v. McBeath, 162 Ky. 382, 172 S. W. 669; Pickett v. Wadlow, 94 Md. 564, 51 Atl. 423; Alexander v. Grover, 190 Mass. 462, 465, 77 N. E. 487; Crane v. Reed, 172 Mich. 642, 138 N. W. 223; Klein v. McNamara, 54 Miss. 90; O'Neill v. Capelle, 62 Mo. 202; Names v. Names, 48 Neb. 701, 706, 67 N. W. 751; Rollins v. Brock (N. H.), 101 Atl. 636; Pace v. Bartles, 47 N. J. Eq. 170, 20 Atl. 352; Mooney v. Byrne, 163 N. Y. 86, 57 N. E. 163; Burr v. Kase, 168 Pa. 81, 31 Atl. 954; Brownlee v. Martin, 21 S. Car. 392, 400; Bryan v. Boyd, 100 S. Car. 397, 84 S. E. 992; Lewis v. Bayliss, 90 Tenn. 280, 16 S. W. 376; Eckford v. Befry, 87 Tex. 415, 28 S. W. 937; Perkins v. West, 55 Vt. 265; Snavely v. Pickle, 29 Gratt. 27; Johnson v. National Bank, 65 Wash. 261, 118 Pac. 21, L. R. A. 1916 B. 4; Gilchrist v. Beswick, 33 W. Va. 168, 10 S. E. 371; Beebe v. Wisconsin Mtge. Loan Co., 117 Wis. 328, 93 N. W. 1103. See also Ryan v. Dox, 34 N. Y. 307, 90 Am. Dec. 696, and the note in L. R. A. 1916 B. 18. 97 Stratton v. Putney, 63 N. H. 577, 4 Atl. 876; Rosenbluth v. DeForest, etc., Co., 85 Conn. 40, 81 Atl. 955; Graham v. Townsend, 62 Neb. 364, 87 N. W. 169; Dudley v. Buckley, 68 W. Va. 630, 70 S. E. 376, 14 Am. Encyc. of Law (2d Ed.), 247. But see Hutchison v. Page, 246 Ill. 71, 92 N. E. 571. intent in giving the transaction the appearance of an absolute transfer, he will be denied relief.98 The purpose of an absolute transfer of chattels by bill of sale may likewise be shown to have been merely for security; 99 and the rule is the same where negotiable paper is transferred.1 Two reasons may be given for this apparent exception to the parol evidence rule, the first of which is that doubtless equity regards the enforcement of the transfer according to its terms as so oppressive as to require the same redress as if the grantee had been fraudulent. From this point of view the cases properly fall within the general class which includes written transactions voidable for fraud, illegality and the like. A second reason is that the mortgagee's agreement to release the security on payment of his debt is in its nature collateral to the transfer of the security, and therefore need not form part of the written transfer. It may be thought that these decisions which allow an absolute written transfer to be shown by parol to have been a mortgage, are inconsistent with decisions which deny the promisor on negotiable paper, or under a non-negotiable written contract the right to prove a condition subsequent to his liability; but the line of distinction is between a transfer of property and the giving of a promise. Aside from historical and technical reasons of equitable jurisdiction, which embraced conveyances of land, but was not concerned with the enforcement of negotiable paper, the theoretical propriety of such a distinction must rest on the assumption that A may very likely give an actual conveyance of Blackacre in absolute form when it is agreed that the transfer shall operate merely as a security, 3 Baldwin v. Cawthorne, 19 Ves. Jr. 166. See also generally on the inability of a grantor to set aside a conveyance made on a secret parol trust with intent to defeat creditors, Kirby v. Raynes, 138 Ala. 194, 35 So. 118, 100 Am. St. Rep. 39; Castellow v. Brown, 119 Ga. 461, 46 S. E. 632; Jayne v. Jayne, 148 Ky. 613, 147 S. W. 41; Redmond v. Hayes, 116 Minn. 403, 133 N. W. 1016; Parker v. Parker, 4 Neb. Unof. 692, 96 N. W. 208; Conner v. Carpenter, 28 Vt. 237. 99 Seavey v. Walker, 108 Ind. 78, 9 N. E. 347; Parks v. Hall, 2 Pick. 206; Booth v. Robinson, 55 Md. 419; Voorhies v. Hennessy, 7 Wash. 243, 34 Pac. 931. 1 Vickers v. Battershall, 84 Hun, 496, 32 N. Y. S. 314. 2 See infra, § 637. 4 See Marsh v. McNair, 99 N. Y. 174, 1 N. E. 660. The distinction seems to have been lost sight of in Davidson v. Young, 167 Pa. 265, 31 Atl. 557. but that he is not so likely to make a written contract promising to transfer Blackacre in absolute form when the understanding of the parties is, as before, that the transaction shall be defeasible upon a certain contingency. No satisfactory distinction seems possible on the score of forfeiture. It is true that there may be a greater element of forfeiture in enforcing an absolute conveyance as such when it was intended as a mortgage than in enforcing an absolute promise in spite of an oral condition subsequent; but this is not necessarily the case. Moreover, though the facts giving rise to an implied or resulting trust may be shown by parol to establish that property conveyed in absolute terms is held upon a trust for another, it is said that an express agreement to hold in trust cannot be so established. And yet the forfeiture here may be quite as great as in the mortgage case. § 636. An incomplete writing may be added to by parol. The parol evidence rule assumes agreement upon the writing in question as a complete statement of the bargain. If the parties never adopted the writing as a statement of the whole agreement, the rule does not exclude parol evidence of additional promises.7 5 Perry on Trusts, § 137. • Ibid., § 76. The cases cited by the author for the proposition seem to have related to real estate and to have been based on the section of the Statute of Frauds relating to trusts and not on the parol evidence rule. 7 Harris v. Rickett, 4 H. & N. 1; Lafitte v. Shawcross, 12 Fed. 519; In re Baird, 245 Fed. 504; Brosty v. Thompson, 79 Conn. 133, 64 Atl. 1; Chamberlain v. Lesley, 39 Fla. 452, 22 So. 736; Wood v. Williams, 142 Ill. 269, 31 N. E. 681; Mason v. Griffin, 281 Ill. 246, 118 N. E. 18; Louisville N. A., etc., R. Co. v. Reynolds, 118 Ind. 170, 20 N. E. 711; Carfield Lumber Co. v. Kint Lumber Co., 148 Ia. 207, 127 N. W. 70; Royer v. Western Silo Co., 92 Kan. 333, 140 Pac. 872; Grant v. Frost, 80 Me. 202, 13 Atl. 881; Davis v. Cress, 214 Mass. 379, 101 N. E. 1081; It should be observed, however, that a writing though incomplete may, nevertheless, be adopted as the expression by the parties of that portion of their agreement to which it relates. Accordingly, if a contract is even partially reduced to writing, the written portion is no more subject to contradiction by parol than the entire contract would be had it been wholly reduced to writing. It has been suggested that this mode of expression is inexact, and that always where what is called partial integration exists there is in fact an entire integration of the matter to which the writing relates; and that the outside oral agreement is a different subject-matter. Plausible as this sounds, it seems of doubtful accuracy as a universal proposition. To say that the agreement of an accommodation indorser that he shall be held harmless by the accommodated party is a separate subject from the contract which he enters into by his accommodation signature seems artificial; and certainly if that mode of expression is adopted, the question of what is a distinct subject is so difficult, that the inquiry suggested affords no help towards the solution of the ultimate problem Moore, 61 S. C. 166, 39 S. E. 346; Palmer v. Lawrence, 72 Vt. 14, 47 Atl. 159; Knowles v. Rogers, 27 Wash. 211, 67 Pac. 572; Fosha v. O'Donnell, 120 Wis. 336, 97 N. W. 924. This principle was well expressed by Fuller, C. J., in Seitz v. Brewers' Refrigerator Co., 141 U. S. 510, 12 S. C. 46, 30 L. Ed. 837. "Undoubtedly the existence of a separate oral agreement as to any matter on which a written contract is silent, and which is not inconsistent with its terms, may be proven by parol, if under the circumstances of the particular case it may properly be inferred that the parties did not intend the written paper to be a complete and final statement of the whole of the transaction between them. But such an agreement must not only be collateral, but must relate to a subject distinct from that to which the written contract applies; that is, it must not be so closely connected with the principal transaction as to form part and parcel of it. And when the writing itself upon its face is couched in such terms as import a complete legal obligation without any uncertainty as to the object or extent of the engagement, it is conclusively presumed that the whole engagement of the parties and the extent and manner of their undertaking were reduced to writing. Greenl. Ev., § 275.” Cf. Vogt v. Shienebeck, 122 Wis. 491, 100 N. W. 820, 67 L. R. A. 756, 106 Am. St. Rep. 989. Jeffery v. Walton, 1 Stark. 267; Whatley v. Reese, 128 Ala. 500, 29 So. 606; Blair v. Buttolph, 72 Ia. 31, 33 N. W. 349; Davis v. Cress, 214 Mass. 379, 101 N. E. 1081; Hutchison Mfg. Co. v. Pinch, 107 Mich. 12, 64 N. W. 729, 66 N. W. 340; Horn v. Hansen, 56 Minn. 43, 46, 57 N. W. 315, 22 L. R. A. 617; Thomas v. Scutt, 127 N. Y. 133, 27 N. E. 961; Wilson v. Scarboro, 163 N. C. 380, 79 S. E. 811. of whether a particular oral agreement is admissible. How it may be decided whether a given writing is a complete integration, or only a partial integration has already been considered. 10 § 637. There may be entirely distinct contemporaneous oral and written agreements. The mere fact that an oral agreement is contemporaneous with a written one does not necessarily involve the conclusion that they are part of the same contract. Two entirely distinct contracts each for a separate consideration may be made at the same time and will be entirely distinct legally. Where, however, one agreement is entered into wholly or partly in consideration of the simultaneous agreement to enter into another, the transactions are necessarily bound together. In the following discussion, it is assumed that there is at least this bond; and then if one of the agreements is oral and the other is written, the problem arises whether the bond is sufficiently close to prevent proof of the oral agreement. It is now also assumed that the writing is an integration of a contract between the parties, and the inquiry is how far does the integration extend. § 638. Test for determining whether an oral agreement is so far separate and collateral as to be admissible. A distinction doubtless exists between collateral agreements and agreements which are logically part of the main body of an agreement. This collateral character supposedly may be matter of form or matter of substance. Where an agreement contains several promises on each side, it is ordinarily easy to put any one of them in the form of a collateral agreement. This, however, cannot be the sort of thing intended when it is said that a collateral parol agreement may be proved; for, necessarily in such a case the parol promise which it is sought to add to the writing is collateral in form; and if this were enough any parol agreement might be proved. A distinction must therefore be attempted between promises which are intended to be or are inherently and substantially collateral to the main purpose of the contract as distinguished 10 Supra, § 633. |