Federal Discount Co. v. Fletcher & Ratliff

• Decision Date: 17 March 1913
• Docket Number: 15,795
• Parties: FEDERAL DISCOUNT CO. v. FLETCHER & RATLIFF
• Court: Mississippi Supreme Court

61 So. 308

104 Miss. 251

FEDERAL DISCOUNT CO. v. FLETCHER & RATLIFF

No. 15,795

Supreme Court of Mississippi

March 17, 1913

APPEAL from the circuit court of Hinds county, HON. W. A. HENRY Judge.

Suit by the Federal Discount Company against Fletcher & Ratliff. From a judgment for defendant, plaintiff appeals.

The facts are fully stated in the opinion of the court.

Reversed.

Watkins & Watkins, for appellant.

In this case the question presented is whether or not the court below erred in admitting the testimony of J. T. Ratliff, one of the defendants, which varied and contradicted the terms of the note sued on, and in admitting the contract of purchase made between the St. Louis Jewelry Co. and the defendants.

It is an established rule of law that when an agreement or contract is entered into between parties, and the contract or agreement reduced to writing and by them signed, if this writing be in itself complete and unambiguous, then all prior agreements were merged into and superseded by the said written agreement, and no evidence will be admitted to modify or contradict the terms of said writing.

We submit that the testimony of J. T. Ratliff was wholly incompetent for the reason that it was an attempt to use parol testimony relating solely to events and transactions which took place prior to or contemporaneously with the signing of the note sued on in this case. This note was, in itself, a full, complete and unambiguous contract; it needed no extrinsic evidence by way of interpretation or explanation.

The testimony of Ratliff as admitted by the lower court over objection of the plaintiff was that at the time of signing the note given by Fletcher & Ratliff to the Federal Discount Co. he had an understanding with Mr. Alexander that he was not to be required to pay the note unless by the time of its maturity he had been able to sell a sufficient quantity of the jewelry to pay the same out of the proceeds.

We submit that under the decisions of all the courts this evidence is inadmissible, and the court will reverse a judgment based upon such evidence.

"In actions on negotiable paper, which is absolute on its face parol evidence is inadmissible to prove an agreement that payment should depend upon some contingency or condition."

Jones Law on Evidence (2 Ed.), par. 494, citing a great number of authorities in support of this rule.

This rule is also established in the state of Mississippi by the decisions of our own court:

In the case of Cocke v. Blackburn this question was presented to the court, and in rendering an opinion Justice CAMPBELL used the following language: "We now announce our adherence to the wholesome doctrine that where parties embody their mutual agreements in a formal written instrument, it must be taken as containing all they then desired to preserve the evidence of, and that it is not competent afterwards, in a trial at law, to add to or subtract anything from it, by parol evidence of something which it should have contained or omitted." This case (58 Miss. 537) is a suit based on a promissory note where parol evidence was sought to be introduced showing that the note was not to be paid unless certain conditions were fulfilled by the payee.

To the same effect is the case of Herndon v. Herndon 41 Miss 594, and numerous other cases in our court.

In the case of Peevy v. Graves, 12 Ill. 287, which was a suit on a promissory not given to insure payment of certain other notes assigned by the drawer of the note sued on to the plaintiff, it was held by the court that "Parol evidence to the effect that the note sued on was to be void if said assigned notes were paid at maturity, was inadmissible, and the fact that the note sued on secured the extention of time of payment is sufficient consideration to support the same."

In the case of Sears v. Wright, 24 Maine, 278, a note was given as payment for logs sold. An attempt was made to show that there was an understanding that if the logs could not be sold, and on their being manufactured into boards there was a total loss, then the note was not to be paid. Evidence was to the effect that said logs could not be sold. The court held that "By the terms of the written contract it could not be inferred that the plaintiff had consented to subject himself to any such contingency." The evidence was held properly excluded.

In 20 Century Digest, Sec. 1943--Evidence--paragraph (tt) we find the following, taken from case of Spanlove v. Westrup (Pa.):

"A parol agreement between the maker and payee of a note that it is not to be payable until the goods, for the price of which it had been given, had been sold, is inadmissible as a defense, being contradictory of the terms of the note itself."

Ibid. Paragraph (WW) in the case of Franklin v. Smith, 1 Posey Unrep, Cas. 229 (Texas):

"In an action on a note, parol evidence is inadmissible to vary the terms of the writing by establishing an agreement or understanding between the plaintiff and the defendant that the note sued on was to be paid only out of the proceeds of the sale of patents on inventions, and in case no such proceeds were realized, the note was not to be paid at all."

We would also especially refer to ...