Calloway v. McKnight

• Decision Date: 03 February 1914
• Parties: CALLOWAY v. McKNIGHT.
• Court: Missouri Court of Appeals

163 S.W. 932

180 Mo. A. 621

CALLOWAY v. McKNIGHT.

St. Louis Court of Appeals. Missouri.

February 3, 1914.

1. EVIDENCE (§ 397) — PAROL EVIDENCE — VARYING CONTRACT.

In the absence of fraud or mistake, parol evidence is not admissible to vary or contradict a written contract.

2. EVIDENCE (§ 461)—PAROL EVIDENCE—EXPLAINING CONTRACT.

A written contract to assume and pay notes, "with interest on same from March 8, 1910, until paid," and "to fully comply with the conditions of said notes," was an agreement to pay interest on the notes according to their terms, so that parol evidence was not admissible to show the rate of interest contemplated.

3. PRINCIPAL AND SURETY (§ 14)—ASSUMPTION OF DEBT—EFFECT AS TO LIABILITY.

Defendant, by agreeing to assume payment of a mortgage note executed by plaintiff, became the principal debtor, leaving plaintiff simply as surety on the note.

4. CONTRACTS (§ 94)—FRAUD.

Where defendant agreed to assume certain notes executed by plaintiff which provided for 8 per cent. interest after maturity, he was bound to pay such interest, if he did not arrange with the holder for payment of a less rate, and cannot claim fraud by plaintiff in stating that he was paying the holder 6 per cent., and that the interest which defendant would pay would be the same.

Appeal from Circuit Court, Scotland County; Chas. D. Stewart, Judge.

Action by W. J. Calloway against S. W. McKnight. From a judgment for defendant, plaintiff appeals. Reversed and remanded, with directions to enter judgment for plaintiff.

J. M. Jayne, of Memphis, for appellant. Pettingill & Luther, of Memphis, for respondent.

ALLEN, J.

On March 5, 1910, plaintiff and defendant entered into a written contract for the sale by plaintiff to defendant of certain real estate. As a part of the purchase price, defendant assumed the payment of certain notes, and interest thereon; one of such notes being for the sum of $1,500. With respect to the latter, the written contract provides as follows: "Also said second party [defendant] is to pay off and fully discharge a certain note of $1,500.00, given by said first party [plaintiff], and signed by himself and wife, and payable to John T. Martin, with interest on same from March 8, 1910, until paid." A further provision of the contract is as follows: "All of the above notes and interest mentioned and assumed, as a part payment of the purchase price, the said second party binds himself, his heirs, and assigns forever to fully comply with the condition of said notes," etc.

It appears that this note, which had been executed by plaintiff and his wife to Martin, and which defendant assumed, was dated March 8, 1909, and was payable one year after said date, at the Farmers' Exchange Bank, at Memphis, Mo., and bore interest at the rate of 6 per cent. per annum until due; but it provided that, if the principal thereof were not paid at maturity, then the same would bear interest at the rate of 8 per cent. per annum, payable annually.

Although the note was due three days after the execution of the aforesaid written contract, it seems that no dealings were had with Martin, the payee thereof, but that the note was merely allowed to remain overdue, and on December 8, 1910, the defendant paid the principal of the note, with 6 per cent. interest thereon to that date. The payee, Martin, insisted that he was entitled to receive 8 per cent. upon the face of the note from and after maturity, to wit, March 8, 1910. Defendant declined to pay more than 6 per cent. Martin then demanded of plaintiff the payment of the additional 2 per cent. for the period of time mentioned, and finally threatened to institute suit against plaintiff therefor. Thereupon, on October 26, 1911, plaintiff paid the same, with interest, amounting to $23.44, and this suit is to recover said sum from defendant upon his contract assuming the said note and interest.

The cause was instituted before a justice of the peace, where defendant had judgment. Upon plaintiff's appeal to the circuit court, and a trial de novo there, defendant again prevailed, and the plaintiff brings the case here by appeal.

Upon the trial in the circuit court, the latter, over objections of plaintiff's counsel, admitted testimony concerning the oral negotiations between the parties prior to the execution of the written contract between them, with respect to the interest upon the Martin note. This was error. In the absence of fraud or mistake, parol or extrinsic evidence is not admissible to vary, modify, or contradict the terms or provisions of a written contract. "The written contract is conclusively presumed to merge all prior negotiations, and to express the final agreement of the parties. To permit a party...