Richardson v. Johnsen

Cole, J.

The controlling question in this case arises under the statute of frauds. It is admitted that the plaintiff made an absolute sale of all his right and interest in the land contract in the first instance. And it is further admitted that he executed the written assignment for the purpose of transferring to the defendant the contract according to the real intent of the parties at the time. Roth parties understood that the sale and assignment were unconditional and absolute, made for the consideration expressed. Now it is claimed by the defendant — and this is the ground upon which the defense *103 rests, — that sometime subsequent to tliis transaction there was a parol agreement entered into, by wbicb it was agreed that the assignment should be rescinded, or that the contract should be taken and held • by the defendant as security for whatever the plaintiff then owed or might thereafter owe him for supplies advanced; and the question is, Could this agreement be established by parol evidence? The circuit court held that it was not competent to prove the agreement by parol, unless, in making the sale and assignment, the plaintiff had actually made some false representation in regard to the taxes, or was guilty of some fraud which impeached the sale.

In a number of cases which have come before this court, the doctrine has been laid down, that parol proof was admissible to show that a deed absolute on its face was in fact only a mortgage. Sweet v. Mitchell, 15 Wis., 642 ; Kent v. Agard, 24 id., 378; Kent v. Lasley, id., 654; Wilcox v. Bates, 26 id., 466. But in these and other like cases it was apparent that the conveyance, though absolute in form, was really intended to stand as a security for the payment of a debt, and therefore the courts impressed upon it the character of a mortgage. The correctness of the rule, however, admitting parol evidence to show that this was the naturé of the deed, has often been questioned on principle (Paine, J., in Sweet v. Mitchell, supra); but confessedly the doctrine is too firmly established to be changed by the courts. But.it is obvious that the doctrine of these cases does not extend to the case where the parties, by some subsequent parol agreement, attempt to convert an absolute deed, or an absolute assignment of a land contract, into a conditional one. Here it is said that, subsequent to the assignment of the contract, the parties agreed that the same should be retained and held by the defendant as a security merely for his demands, and that it is competent by parol evidence thus to change the nature of the assignment. The parol agreement, of course, directly contradicts the assignment, by converting an absolute assignment into a conditional one, and *104 transfers to tbe plaintiff an equitable interest in the lands embraced in the contract. “ This is going much beyond the rule admitting parol evidence to show that an absolute deed was given as a security and thus convert it into a mortgage. * * Believing as we do, that the rule itself was a violation of principle and sound policy, while we have regarded it as our duty to follow it so far as.it ma,y be fairly regai’ded as established by authorities, we are not inclined to extend it any further.” PaiNe, J., in Sweet v. Mitchell. We therefore think it incompetent by parol evidence to show that the parties subsequently agreed to convert the assignment into a conditional one. Such an agreement would be void under the statute of frauds.'

Without dwelling on the exceptions taken to the charge of the court, and to the refusals to give the instructions asked on the part of the defendant, we will say that the rulings of tire court on those points appear to us quite as favorable to the defendant as the law would allow. We have examined all the authorities cited on the brief of the counsel for the defendant, but find nothing in them in conflict with the views above expressed. Dearborn v. Cross, 7 Cow., 48, is the only case which has any bearing on the question before us tending to sustain the position that parol evidence was admissible to change the nature of the assignment; but the facts of that case are so different as to render the decision inapplicable.

We do not think there was any error of which the defendant can complain in the direction of the circuit court as to the amount of the recovery, provided the jury found in favor of the plaintiff. The amount was really settled by the pleadings and the undisputed testimony in the case.

By the Court. — The judgment of the circuit court is affirmed.