Allen v. Marciano
| Decision Date | 09 November 1951 |
| Docket Number | No. 9134,9134 |
| Parties | ALLEN v. MARCIANO. Ex. |
| Court | Rhode Island Supreme Court |
Anthony Grilli, Joseph F. Baffoni, Providence, for plaintiff.
A. Anthony Susi, Arthur P. Vacca, Providence, for defendant.
This is an action of assumpsit which was tried before a justice of the superior court sitting without a jury and resulted in a decision for the plaintiff for $300. The case is here solely on defendant's exception to that decision.
On September 3, 1949 the parties entered into a written agreement in which plaintiff agreed to buy and defendant agreed to sell a certain parcel of real estate for $10,700. At the time the plaintiff signed the agreement defendant was not present but was represented by an agent with full authority to act for him. The agent received the sum of $300 from the plaintiff as a binder and part payment on the purchase price and thereafter turned it over to defendant when the latter signed. By the express terms of the agreement the balance of $10,400 was to be paid in cash within ninety days upon defendant delivering a deed conveying a clear title. On or about September 15, 1949 plaintiff notified defendant that he was financially unable to complete the transaction because he could not obtain a mortgage loan in the amount of such balance. At that time he also requested defendant to refund the $300, which the latter refused to do. The written agreement contains no provision for a refund in the event plaintiff was financially unable to complete the transaction according to the terms of the agreement.
The plaintiff bases his right to a refund on an oral agreement with defendant's agent which was made before plaintiff signed the written agreement and paid the $300. He was allowed, over defendant's objection, to testify as to the nature and content of such oral agreement. His testimony was to the effect that before signing the agreement and paying the $300 he informed defendant's agent that he did not have sufficient funds to purchase the real estate; that he would need a mortgage loan for the balance of $10,400; and that he would have to rely on obtaining a so-called G.I. Loan in order to go through with the deal. He further testified that defendant's agent thereupon agreed that the sale was dependent upon the obtaining of such a loan and that the $300 was to be paid subject to plaintiff's right to a refund if the sale could not be completed because of his failure to secure such a loan.
The plaintiff's wife and his father-in-law Joe Florio, who were present during the negotiations, also testified substantially to the same effect. The defendant's agent did not testify. Apparently the trial justice relied upon plaintiff's testimony and found that there was an oral agreement under which in the circumstances plaintiff was entitled to recover.
The defendant contends that the trial justice erred in receiving and relying upon such testimony on the ground that it tended to contradict or vary the written agreement and therefore violated the parol evidence rule. He duly excepted to the admission of such testimony but he has not prosecuted that specific exception here. His single exception is to the trial justice's decision. Ordinarily under that exception he could not argue here any objection to a ruling made during the trial admitting certain evidence. However, he may do so in the circumstances of the case at bar, since in this state it is settled that the so-called parol evidence rule is not merely a rule of evidence but a rule of substantive law, and that any evidence violative of that rule even though admitted without objection will not be considered. Gaddes v. Pawtucket Institution for Savings, 33 R.I. 177, 187, 80 A. 415. If the evidence in question here is in fact so inhibited then error inheres in the trial justice's decision. Therefore defendant's general exception to the decision is sufficient to bring before us for review the ruling admitting such evidence.
In our opinion the testimony objected to does not in fact tend to contradict or vary the written agreement. On the contrary such testimony is directed not to the content of the agreement or to the intention of the parties in entering into it, but rather to the question whether it ever came into existence as a binding obligation. It tends to show only that the agreement was not to become effective until the happening of a certain event, namely, plaintiff's procurement of a sufficient loan to enable him to consummate the contract, and that such event did not in fact happen.
Testimony relating to an oral agreement concerning a condition precedent to the taking effect of a written agreement has long been recognized generally in England and in this country as not within the inhibition of the parol evidence rule. The leading English case in support of such view appears to be Pym v. Campbell, 6 El. & Bl. 370. Wigmore in his treatise on evidence says that such doctrine is completely accepted in the United States. 9 Wigmore on Evidence, § 2410. And the proposition is stated in Restatement, Contracts, § 241, in the following language: 'Where parties to a writing which purports to be an integration of a contract between them orally agree, before or contemporaneously with the making of the writing, that it shall not become binding until a future day or until the happening of a future event, the oral agreement is operative if there is nothing in the writing inconsistent therewith.' Numerous cases in practically all jurisdictions in this country are cited in support of the doctrine in 32 C.J.S., Evidence, § 935, p. 857, where it is stated: 'In general, parol evidence is admissible to show conditions precedent, which relate to the existence of a valid contract, but is not admissible to show conditions subsequent, which provide for the nullification or modification of an existing contract.'
The correct application of that distinction to the evidence concerning the nature of the condition orally agreed upon presents the chief difficulty with which courts have been forced to struggle in determining whether the proffered testimony lies within or without the inhibition of the parol evidence rule. Where testimony does not admit the existence of a completed agreement in writing to which it is sought to annex an oral condition but rather is to the effect that such writing was not to come into existence at all unless and until a certain event orally agreed upon happened, such testimony clearly relates to a condition precedent and is admissible.
The reason underlying this recognized exception to the parol evidence rule is well stated in 46 Am.Jur., Sales, § 283, p. 467, in these words: 'Evidence is generally held admissible to show that the parties made an agreement before or at the time they...
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