Warinner v. Nugent, 42111

• Citation: 26 A.L.R.2d 278,240 S.W.2d 941,362 Mo. 233
• Decision Date: 11 June 1951
• Docket Number: No. 42111,No. 2,42111,2
• Parties: , 26 A.L.R.2d 278 WARINNER v. NUGENT
• Court: United States State Supreme Court of Missouri

Page 941

240 S.W.2d 941

362 Mo. 233, 26 A.L.R.2d 278

WARINNER v. NUGENT.

No. 42111.

Supreme Court of Missouri, Division No. 2.

June 11, 1951.

Motion for Rehearing or to Transfer to Court en Banc Denied

July 9, 1951.

Wm. G. Boatright, Kansas City, for appellant.

Harry A. Hall, Anthony P. Nugent, Jr., Kansas City, for respondents.

BARRETT, Commissioner.

In this action for $17,500 damages for breach of an oral contract the trial court directed a verdict for the defendant at the close of the plaintiff's evidence. Upon this appeal by the plaintiff the three questions so briefed and argued as to present issues necessary to a determination of the appeal are (1) whether, prima facie, the plaintiff's evidence was sufficient to prove the alleged oral contract and, therefore, should have been submitted to the jury; (2) whether her claim was barred by the statutes of limitation, and (3) whether the contract testified to by the plaintiff was usurious as a matter of law.

The facts and circumstances upon which the plaintiff relies as establishing the contract and, prima facie, her right to recovery are these: The plaintiff, Mrs. Catharine S. Warinner, a life insurance agent, and the defendant, Anthony P. Nugent, a lawyer, were casually acquainted. In August 1941 they met in front of an office building and, after some conversation, Mr. Nugent invited Mrs. Warinner to have a 'coke' with him in Price's. As they talked and reminisced Mr. Nugent told her about his experiences in the depression and the fact that he had lost two fortunes. He told her about a lawsuit he then had from which he had 'a chance to get well.' He represented two Negro boys, the Mayweather brothers, who because of their Indian blood had a claim to valuable oil lands in Oklahoma but it looked as if he would lose the suit for lack of funds to finance himself. He said that he did not have the price of a hotel room or of train fare and that no one would loan him a dime. In the course of their talk Mr. Nugent learned that Mrs. Warinner had some stocks and he began by suggesting that she sell the stocks and loan him the proceeds. She had owned the stocks from five to eight years and had paid $4400 for them but in August 1941 their market value was but $1000. She told him that she could not afford to take a loss on the stocks and he said that if she would sell the stocks and loan him the money that she would make more than she would ever make in the stock market. She said that he painted a glamorous picture of his lawsuit and his chance to make money. Finally he said, 'I am desperate for money. If you will cash this stock, whether I win this suit or not I will guarantee to you out of my future business that forty-four hundred dollars you paid for this stock, whether I win or lose I will guarantee that to you, back to you, the forty-four hundred dollars. If I do win the suit, with my past experience in business losses, I will put this money into annuities.' She told him that he had promised a lot but she would have to think it over and so they parted.

Thereafter he called her on the telephone two and three times a week and importuned her to sell the stock and guaranteed 'more profit than your dividends would ever earn you on this stock.' He promised to urge the Mayweather brothers to invest their money in annuities and finally he had her prepare for himself and wife a prospectus for a $100,000 annuity on their lives. Once he called and had her come to his office and meet the Mayweather brothers. On each occasion he would reiterate his promises and guarantees but she was undecided. 'One day I thought I would and one day I thought I wouldn't.' But finally, after his repeated promises and importuning, on November 13th, 1941, she sold her $4400 worth of stocks for $990.96 to which she added some dividends and loaned Mr. Nugent $1000. Two or three weeks after she had loaned him the $1000 he called and said that he had used the money and was again desperate. She told him that she could borrow $200 from her employer, the Union Central Life Insurance Company, and on January 9, 1942 she executed a note and borrowed that sum. He came to her office and got the check. On that occasion he told her employer about his financial experiences and his lawsuit and the fact that Mrs. Warinner was the only person who would come to his rescue and he repeated to Mr. Wilkin all that he had promised her.

In September 1942, about eight months after she had advanced the money, he called and asked her to come to his office. 'He said he had fixed up a note and he thought it was a good thing to have, that we should have a note. I told him I wasn't interested in a note. I wasn't interested in any interest. I wanted him to live up to the things that he promised me. He said there was no interest entered into it at all. He said that is the way he wanted to do it. He drew the note and at the same time he gave me an assignment on a term policy he had with Occidental which later they notified me, though, had been lapsed for non-payment of premium.' He retained possession of the note and after she read in the newspaper 'Seven and a half million dollar suit granted' she went to his office to congratulate him on his victory. When she inquired what he got out of the suit he said, 'Nobody knows what I made on this case, and as far as I am concerned will ever know.' She said, 'Well, you remember what you promised me, don't you, not once, twice, but many times, a guarantee of this forty-four hundred I paid for this stock, and promised me annuities.' He said, 'Oh, yes, that is the trouble with women, they remember too damm well things you tell them.' On that occasion he told her he was going to pay something on the loan and gave her a check for $300. He produced the note and she endorsed on the back of the note 'Paid, $200.00 on this note 2-10-43 and interest to date.'

In June 1943 he gave her a check for $1020 and she wrote over his signature on the note 'Paid in full 6-9-43.' On that occasion she said, 'I don't want that check. That wasn't our agreement at all. You promised me a guarantee of my loss on the market.' He said, 'We are going to do it this way, and we will talk about the other later.' Subsequently he called on the telephone and told her he was leaving for military service and would have a leave after thirty days or so 'and when I come home we will get together and get this thing straightened out.' He never called and this suit followed in November 1948.

The respondent points to the note, the payments endorsed on the note by the plaintiff and the assignment and release of the life insurance policy and insists that the trial court properly directed a verdict for him at the close of the plaintiff's evidence. The respondent's position is this: 'If plaintiff proved anything, it was only a contemporaneous agreement which was merged in the only writing entered into between plaintiff and defendant, to-wit: a secured promissory note which was paid in full and collateral fully released.' In short the respondent invokes the rule that 'When a written contract shows on its face that it includes the entire agreement and expresses all the obligations assumed by the parties thereto * * * then in the absence of fraud or mistake, parol evidence is not admissible to add to, vary, modify, or contradict the terms of the written contract'. J. B. Colt Co. v. Gregor, 328 Mo. 1216, 1225, 44 S.W.2d 2, 6; 1 Restatement, Contracts, Secs. 237, 240. The difficulty with the respondent's argument is that it assumes the very question presented by the evidence. The question is whether the only fair and reasonable inference is that their entire oral agreement was integrated in the note and assigned life insurance policy. If not the respondent and the trial court misconceived and misapplied the parol evidence rule.

The parol evidence rule is not a rule of evidence but 'of substantive law which, when applicable, defines the limits of a contract. It fixes the subject matter for interpretation, though not itself a rule of interpretation.' As applied to contracts the parol evidence rule 'assumes that there has been a legal act consisting of a promise or set of promises; it also assumes the integration of that act in a written memorial. It assumes the proper interpretation of a written memorial according to some standard which the law adopts; and these assumptions being made, excludes from consideration all other elements of the act though they might have been material had there been no integration in a written memorial. In other words, the written memorial, as interpreted by the law, is, for legal purposes, the sole act of the parties in regard to the matter up to the time of integration. * * * The parol evidence rule does not apply to every contract of which there is written evidence, but 'only applies where the parties to an agreement reduce it to writing, and agree or intend that that writing shall be their agreement.'' 3 Williston, Contracts, Secs. 631-633; 9 Wigmore, Evidence, Secs. 2400, 2430. Here, from the respondent's viewpoint, there are circumstances indicating that the agreement of the parties was integrated in...