Garoutte, J., dissenting. — I am compelled to dissent from the views and conclusion of the court declared in this case. If I clearly grasp the grounds upon which the court has based its conclusion, they are in the main that this oral agreement offered to be proven was collateral to the principal contract, and also made without consideration. To my mind neither of these positions has any support whatever. The oral agreement was neither collateral, nor was it without consideration. The consideration for it was the loan of the money, and this agreement to pay the taxes was based upon that consideration as fully and completely as the agreement to pay the interest on the loan, or to repay the loan itself. The agreement was not collateral. It was as much a part of the original contract entered into between these parties as any other covenant contained therein. It was so alleged to be in the answer, and so offered to be proven at the trial. Again, this case in all essentials is an exact photograph of the case of Burbridge v. Lemmert, 99 Cal. 493, except that the agreement to pay the taxes was there made in writing — a writing distinct from the mortgage. That writing was collateral to the contract and without consideration, if this oral agreement is collateral and without consideration; yet this court declared that such writing rendered the agreement in the mortgage to pay [121]interest void. To me, the error of the court seems to lie in assuming that the writing is conclusive evidence of the terms of the contract; and such appears to be the views of Chief Justice Parker in Butterfield v. Kidder, 8 Pick. 512, as well as we are able to ascertain those views from the very meager opinion of the court in that case; and that case is relied upon as the sole authority to support the judgment here declared. It was so decided under the peculiar and special provisions of the revised statutes of Massachusetts, and the decision without doubt must be read in the light of such statutes; for the principle there declared stands alone as an adjudication. In Dunscomb v. Bunker, 2 Met. 8, reference is made to Butterfield v. Kidder, and it is there stated that the rule is different in New York, citing Merrills v. Law, 9 Cow. 65, a case which is squarely opposed to the principal opinion of this court.
The elementary doctrine that parol testimony is not admissible, either to add to or subtract from, or in any way contradict or vary the terms of a written instrument, is conceded and recognized by all courts; and, in conjunction with certain exceptions to the rule, is substantially stated in section 1856 of the Code of Civil Procedure, to wit: “When the terms of an .agreement have been reduced to writing by the parties it is to be considered as containing all those terms, and therefore there can be between the parties and their representatives, or successors in interest, no evidence of the terms of the agreement other than the contents of the writing, except in the following cases:
“ Where the validity of the agreement is the fact in dispute. But this section does not exclude other evidence of the circumstances under which the agreement was made, .... to explain an extrinsic ambiguity, or to establish illegality or fraud.” It is here proposed to show that a certain agreement of mortgage is void as to the interest specified therein, by showing by parol that one term of the agreement, which in itself was unlawful, was intentionally omitted therefrom. This [122]provision, of the statute, in effect, says, that the. terms of the agreement, as evidenced by the writing, are not conclusive as showing all its terms, and that other and additional terms may be shown by parol when the validity of the agreement is attacked. The validity of the agreement is here attacked, and the exception to the general principle forms the true rule. It appears to be the very case where the statute authorizes us to look beyond the contents of the writing for the purpose of ascertaining the actual terms of the agreement.
The intent and purpose of the provision of the constitution was to protect borrowers in their necessities from the exactions of money loaners, and the provision is based upon the same lines, and owes its enactment to the same reasons, that caused the passage of the usury statutes found in nearly every state of the union. It is charged that this agreement was entered into in this manner for the purpose of evading a provision of the constitution, and it would be anomalous if the offending party could so hedge himself about by writings as to prevent a court from reaching such iniquity. Lord Coke said: “To them that lend money my caveat is, that neither directly nor indirectly, by art or cunning invention, they take above six in the hundred, for they that seeke by sleight to creepe out of these statutes will deceive themselves, and repent in the end.” We are unable to discern any difference in principle between the present case and those cases arising under usurious contracts. In that class of cases the doctrine is settled beyond all question that contemporaneous oral agreements are admissible for the purpose of showing the usurious character of the contract, and thereby destroying its validity.
In Willard v. Reeder, 2 McCord, 369, the syllabus states the point in the decision as follows: “Where a person borrowed money and gave his note for the amount, with lawful interest, and at the same time made a verbal promise to pay five per cent more interest, making twelve per cent, the court held, upon an action being [123]brought on the note, that it was usurious and void, although it was left to the borrower’s honor only whether he would pay more than legal interest.” In the opinion of the court the following language is found: “ But it is said this promise did not constitute an agreement because it was merely honorary, and imposed no obligation on the defendant. This course of reasoning would lead to the ridiculous result that a party could not incur the forfeitures and penalty attached to the usury, because the act by which it was consummated imposed no obligation. Agreements against law have the form but not the binding efficacy of contracts, and, consequently, all the obligation they impose must of necessity be only honorary.” In Stein v. Swensen, 46 Minn. 360, 24 Am. St. B,ep. 234, the same principle is again declared, and Gilfillan, C. J., said: ‘As there is no device or shift, on the part of the lender to evade the statute, in or behind which the law will not look in order to ascertain the real nature of the transaction, as no act, however formal, no instrument, however solemnly executed, will stand in the way of the court getting at the truth, in order to determine whether there has been an attempt to evade the law, it was competent to prove the oral agreement indicated by the question.” In 7 American and English Encyclopedia of Law, page 91, the exception to the general rule as to the admission of oral testimony bearing on written instruments is stated as follows: “Provided that any of the following matters may be proved: fraud, intimidation, illegality, want of due execution, .... or any other matter which, if proved, would produce any effect upon the validity of any document, or any part of it, or which would entitle any person to any judgment, decree, or order relating thereto.” Wharton, in his work on Evidence, in volume 2, section 935, says: “On the same reasoning it may be true that the contract embodied by the writing is illegal; and therefore void. If void, it is not a contract. To exclude evidence because it is a contract is to assume the very point in litigation; nor can any form [124]of instrument of indebtedness preclude a debtor from setting up usury.”
There is no sound reason to be urged why the present case does not come squarely within the principle declared by these authorities. If the oral evidence offered in this case was properly rejected, it was wrong to admit it against the practicers of usury, and thus the practical application of those statutes would be defeated by the simplest of devices. The penalties attached to a violation of this provision of our constitution are severe, and it is not likely that parties seeking to violate it would publish their wrong to the world by inserting this void stipulation in the original instrument designed for record. Neither is it probable that they would commit their purpose to writing at all. It would most naturally be done in secret and in parol; for the borrower's parol agreement to pay the taxes upon the mortgage would be just as valuable to the money lender, and probably more valuable, than if the stipulation were incorporated in the mortgage itself. The agreement, however made, would be void in law, and its value would depend solely upon the honor of the borrower. Again, the provision of the constitution is very broad. It uses 'the words “every contract.” It therefore clearly includes oral contracts for the loan of money not evidenced by writing of any character. Such loans would constitute solvent credits, and it cannot for a moment be contended that while the contracts of loan may be oral, yet an agreement to pay taxes by the borrower upon such loan could not also be oral. It is thus apparent that, under certain contracts coming within the purview- of the provision of the constitution, the idea of oral agreements to pay the taxes was naturally and necessarily present in the minds of the framers of the instrument.
Counsel in his argument, and the opinion of the court to some extent, has strongly animadverted upon the depressing results to the general prosperity of the state, and to the special hardships which fall upon the [125]borrowers of money, if the construction which we have given this provision of the constitution shall be declared the law. In answer to such an argument we can only say that, by reason of counsel’s warmth and earnestness in the advocacy of his client’s cause, we hope and believe his fears in this regard are highly exaggerated; but, whatever may be the result, we have no power to add to or subtract from the language of this section of the constitution. We must construe it as it stands enacted, and the question as to the wisdom and policy of this provision is not a matter for our consideration. This court is not the forum to administer relief for evil in the law, if evil there be. For all the purposes of this court it is sufficient that it is a provision of the organic law of the land, and as such it is our duty to uphold and sustain it whenever assailed. As was said by Beatty, C. J., in discussing another provision of the constitution in Sheehy v. Shinn, 103 Cal. 825: “ The provision of the constitution was aimed at the substance of these abuses and not at the form. ... To give effect to the constitution it is as much the duty of the court to see that it is not evaded as that it is not directly violated.” If we hold that this provision may be so easily evaded as is here contemplated, its repeal for all practical purposes will take effect from the date of such holding. Lord Mansfield said: “ Where the real truth is the loan of money, the wit of man cannot find a shift to take it out of the statute.” By this decision it requires but little wit to find a shift to avoid this provision of the constitution.
It is proposed to show in this case that this oral agreement to pay the tax upon the mortgage was a part and parcel of the principal contract, and that it was omitted from the contract evidenced by the writing for the very purpose of evading the provision of the constitution. We think the evidence admissible. To countenance any other practice would render the object of the provision entirely abortive. A provision of the constitution cannot be trifled with in that way, and the result of every such [126]attempt, when the matter is brought to the attention of the court, must be that the money lender will be overwhelmed in his own folly.
Harrison, J., concurred in the foregoing opinion of Mr. Justice Garoutte. Rehearing denied.