Exum v. Lynch

• Decision Date: 15 October 1924
• Docket Number: 160.
• Parties: EXUM v. LYNCH.
• Court: North Carolina Supreme Court

125 S.E. 15

188 N.C. 392

EXUM v. LYNCH.

No. 160.

Supreme Court of North Carolina

October 15, 1924

Appeal from Superior Court, Greene County; Frank A. Daniels, Judge.

Action by J. C. Exum against W. E. Lynch. Judgment for plaintiff and defendant appeals. No error.

Civil action for the recovery of $7,400, with interest from January 1, 1922, alleged to be due on a promissory note executed by the defendant to the Snow Hill Banking & Trust Company, and duly transferred to the plaintiff for value.

Upon the trial, defendant admitted the validity of plaintiff's claim, but pleaded a counterclaim of $14,266.66, with interest from January 1, 1920, alleged to be due the defendant by the plaintiff on certain promissory notes.

There was a denial of liability by the plaintiff in answer to the counterclaim set up by the defendant; and, upon the issue thus joined, the jury found against the defendant. Judgment was thereupon rendered in plaintiff's favor for the amount of the note admittedly due, and the defendant was denied any recovery on his counterclaim. The appeal by the defendant challenges the correctness of the trial, in so far as it relates to his counterclaim.

Purchaser's testimony as to vendor's agreement to release purchasers from liability on notes in case of sale by them, and take obligation of party to whom sold, held competent on issue whether new notes subsequently given by copurchaser as grantee of whole property were to be secured by mortgage thereon, subject to prior mortgages, as were old notes, or whether vendor was entitled to reinstatement of latter on surrendering new notes, because of alleged failure of consideration.

Purchaser's conveyance of half undivided interest in land, valued at $20,000, to copurchaser, whom he caused to deliver notes for $14,266.66, secured by mortgage on property, held sufficient consideration for vendor's promise to release grantor from liability on original notes.

Edward M. Land, of Statesboro, and R. H. Taylor, of Snow Hill, for appellant.

J. Paul Frizzelle, of Snow Hill, for appellee.

STACY J.

The correctness of the judgment entered below is conceded unless, as assigned, prejudicial error or errors were committed on the trial of the cause relating to the defendant's counterclaim.

On November 15, 1919, the defendant sold to the plaintiff and one B. D. Taylor three tracts of land, containing approximately 122 acres, for $20,000. The purchasers paid $1,175 in cash at the time of sale, assumed two outstanding mortgages on the property given by the defendant to J. T Holmes and M. W. Warren, and executed their joint notes, aggregating $14,266.66, secured by mortgage on the property, for the balance of the purchase price.

Thereafter, on or about January 1, 1921, the plaintiff, J. C. Exum, it is alleged, came to the defendant and stated that he desired to convey his interest in the lands to the said B. D. Taylor and wanted to be released from the notes which he and Taylor had executed to the defendant. After negotiations, it was agreed that Exum might be relieved of his liability on these notes, if Taylor, as grantee of the whole property, would execute new notes, aggregating $14,266.66, to the defendant's wife and secure the payment of same by giving a first mortgage on the property. This, of course, contemplated a cancellation of the Holmes and Warren mortgages, and defendant alleges that such was the sole consideration for said exchange of notes. Plaintiff, on the other hand, contends that the new notes were to be secured in the same way as the old notes, by mortgage on the property, subject to the Holmes and Warren mortgages. The exchange was made at the solicitation of the defendant, according to plaintiff's contention, and the Holmes and Warren mortgages were not canceled. It is the defendant's position that he is entitled to have the old notes reinstated by surrendering up the new ones, because of the alleged failure of consideration, and then to have judgment on his counterclaim against the plaintiff, J. C. Exum, for the amount of the old notes. The jury did not accept the defendant's version as to the conditions and circumstances of this exchange of notes, and judgment was accordingly entered, denying the counterclaim.

Before taking up the question of consideration, we observe one exception relating to the admission of evidence, which defendant contends was erroneous and prejudicial to his cause. Plaintiff, while a witness in his own behalf, was allowed to testify as follows:

"At the time Mr. Taylor and I purchased this land from Mr. Lynch, the original agreement was--Mr. Lynch understood we expected to sell the land, and that we bought it to sell--in case of sale he would release us and take the obligation of the party to whom we sold."

Objection by defendant; overruled and objection.

It is the position of the defendant that this evidence was in direct conflict with the express terms of the written agreement between the parties, and that it should have been excluded, resting as it does in parol. It is undoubtedly the general rule that no verbal agreement between the parties to a written contract, made before or at the time of the execution of such contract, is admissible to vary its terms or to contradict its provisions. All such agreements are considered as varied by and merged in the written contract. Overall Co. v. Hollister Co., 186 N.C. 208, 119 S.E. 1. "It is a rule too firmly established in the law of evidence to need a reference to authority in its support that parol evidence will not be heard to contradict, add to, take from, or in any way vary the terms of a contract put in writing and all contemporary declarations and understandings are incompetent for such purpose, for the reason that the parties, when they reduce their contract to writing, are presumed to have inserted in it all the provisions by which they intend to be bound." Smith, C.J., in Ray v. Blackwell, 94 N.C. 10.

It must be remembered that the purpose of this evidence was not to vary or to contradict the terms of the contract as expressed in writing, but to show the entire agreement looking to future transactions. Such was not in conflict with the written provisions, but tended to show the contract in its entirety or in its completeness, and thus rounded out its terms, according to defendant's contention. Richards v. Hodges, 164 N.C. 183, 80 S.E. 439; Pierce v. Cobb, 161 N.C. 300, 77 S.E. 350, 44 L. R. A. (N. S.) 379. This doctrine, as it obtains with us, is well stated in the first headnote to Evans v. Freeman, 142 N.C. 61, 54 S.E. 847, as follows:

"The rule that, when parties reduce their agreement to writing, parol evidence is not admissible to contradict, add to, or explain it applies only when the entire contract has been reduced to writing, and, where a part has been written and the other part left in parol, it is competent to establish the latter by oral evidence, provided it does not conflict with what has been written."

Furthermore, this evidence was clearly competent upon the mooted question as to whether the subsequent exchange of notes was made in accordance with the contention of the plaintiff or that of the defendant. It was reasonably calculated to throw light upon this particular inquiry; and, even if incompetent for some purposes, while competent for others, it will not be held for legal or reversible error, unless at the time of its admission defendant asked that it be properly restricted, and such request was refused. In re Southerland's Will, 124 S.E. 632, at the present term. The exception must be overruled.

This, then, brings us to the question of consideration, the real debate between the parties.

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