U.S. Supreme Court
Burke v. Dulaney, 153 U.S. 228 (1894)
Burke v. Dulaney
Argued and submitted March 28, 1894
Decided April 23, 1894
153 U.S. 228
In an action by the payee of a negotiable promissory note against the maker, evidence is admissible to show a parol agreement between the parties, made at the time of the making of the note, that it should not become operative as a note until the maker could examine the property for which it was to be given and determine whether he would purchase it.
This action was brought by the testator of the appellees upon a writing purporting to be the promissory note of the appellant for $4,308.80, dated Salt Lake City, Utah, August 10, 1883, and payable one year after date, for value received at the bank of Wells, Fargo & Co. in that city, with interest at the rate of six percent per annum from date until paid. chanroblesvirtualawlibrary
The defendant, Burke, denied his liability upon the note, and at the trial below was sworn as a witness on his own behalf. In support of his defense as set forth in the answer filed by him, he stated the circumstances under which the note was given. He said:
"Mr. Dulaney bought this group of mines -- the Live Yankee and the Mary Ellen. He came to the Walker House in Salt Lake and wanted me to run them for him. I said I would not do it unless I got a show to get some interest in the property. He says, 'I will carry an interest for you, and you can take it if you want it, and, if not, you can give it back to me after you see the property.'"
To this testimony the plaintiff objected, and the defendant admitting that the agreement referred to by him was oral, the objection was sustained. To this ruling he excepted.
Being asked what he did after giving the note in suit, he answered:
"I gave the note. I worked on the property, which was done sometime in September. Worked the property until March. Settled up all of its debts, paid them. Notified Dulaney I wanted nothing more to do with the property; that I was going to Idaho Territory, to Coeur d'Alene mines, and as I was ready to give him a deed at any time he would send me my note. That is all."
Objection being made by the plaintiffs to this testimony, the defendant offered to prove
"that at the time of the giving of the note and prior thereto, Dulaney, the payee of the note, agreed with Mr. Burke, the maker of the note, that the note should be given to represent the price of the interest that Mr. Burke was to have, conditioned upon his demanding it after an inspection of the mining property mentioned."
He offered also to prove that after inspecting the property and testing it, the defendant notified testator that he did not want the interest; that he was prepared to make a deed for the interest to the latter, and demanded the delivery of his note. All this evidence was excluded by the court upon motion of the plaintiffs, to which ruling the defendant excepted.
The defendant having stated that the conversation with the testator, above referred to, and which was excluded by the court, took place prior to the execution of the note, he chanroblesvirtualawlibrary
offered to prove that at the time the note was made, the same agreement was made orally between him and the testator. This testimony was also excluded, and he excepted.
The following question was propounded to him at the trial:
"State whether or not, prior to your making the note, the plaintiff agreed with you that you could explore, work, and develop the mining claims mentioned in the answer, and, if at any time before the maturity of the said note you should desire so to do, that he would relinquish said option of purchase, that you could relinquish your said option of purchase, and that he, plaintiff, would cancel the note, and accept the deed in full discharge of the note and the cancellation thereof."
The defendant having admitted that the agreement referred to in the question was oral, the court excluded the evidence, and he excepted. The court also refused to allow him to state whether he examined, worked, and developed the mining claims mentioned in his answer, and whether he had refused to take such claim under the agreement with the plaintiff.
At the trial, the defendant offered in evidence a deed executed by him to the plaintiff conveying to the latter, in consideration of the surrender of the note in question, all his right, title, and interest in the above property, the same deed that had been filed by the defendant with his answer. The court held this evidence to be inadmissible unless the defendant proposed to show that the plaintiff accepted the deed. To this ruling the defendant excepted. The defendant was not present when Dulaney took a deed from the owner of the mining property, nor was it ever delivered to him. chanroblesvirtualawlibrary