Gladden v. Keistler

Decision Date31 October 1927
Docket Number12302.
Citation140 S.E. 161,141 S.C. 524
PartiesGLADDEN v. KEISTLER (two cases).
CourtSouth Carolina Supreme Court

Appeal from Common Pleas Circuit Court of Chester County; S.W. G Shipp, Judge.

Separate actions by W. B. Gladden and C. B. Gladden against A. N Keistler. From a judgment setting aside verdicts for plaintiffs and granting a new trial in each case, plaintiffs appeal. Affirmed and remanded.

Cothran J., dissenting.

Hemphill & Hemphill, of Chester, for appellants.

Gaston & Hamilton, of Chester, for respondent.

STABLER J.

The appeal in these cases was originally heard by the court composed of Mr. Justice (now Chief Justice) WATTS, Associate Justices COTHRAN and MARION, and acting Associate Justices PURDY and RAMAGE, and a majority opinion was filed on January 4, 1927, reversing the lower court. Subsequently, upon petition of the respondent a rehearing was granted, and the cases were argued at the June, 1927, term.

The two cases are identical in all respects except as to the names of the plaintiffs, and were tried together in the circuit court and heard together in this court.

The plaintiffs alleged in their complaints that they sold and delivered to the defendant their respective one-third interests in the capital stock of the Keistler Company, a corporation; that the defendant agreed, in consideration of such transfer, to pay them $7,000 in cash or its equivalent, to convey to them certain real estate, and to pay to each of them one-third, or an amount equivalent to one-third, of the net proceeds of certain fire insurance claims of the corporation then in litigation; that the defendant had paid them the $7,000, and had conveyed to them the real estate in accordance with the agreement; that the insurance litigation had been concluded; that the net proceeds recovered therein amounted to $4,229.72; and that the defendant had refused to pay to them their respective one-third portions thereof. Each plaintiff demanded judgment for such one-third portion, or $1,409.90, with interest.

The defendant by his answers alleged that the contract under which he purchased the plaintiffs' holdings in the Keistler Company was in writing; that he had fully complied with its terms; and that it did not provide for the payment by him to them of any part of the insurance proceeds.

The written instrument set up by the defendant is as follows:

"Received, Chester, S. C., June 3, 1921, of Messrs. W. B. and C. B. Gladden, their several stock certificates covering eighty (80) shares of the capital stock of the Keistler Company, also the certificates for the forty (40) shares of said stock still standing on the books of said company in the name of J. D. Bankhead, but owned by said gentlemen and myself in the proportion of one-third each, which said stocks, together with the two-thirds interest of the said Messrs. Gladden in the stock standing in the name of J. D. Bankhead, I have bought from them at and for the sum of seven thousand dollars ($7,000.00) and one-half of the five (5) contiguous lots owned by the Keistler Company at Great Falls, S.C. I have this day given to said Messrs. Gladden in settlement of this transaction my check for four thousand dollars ($4,000.00) and my two (2) notes in the sum of fifteen hundred dollars ($1,500.00) each, with interest from June 1, 1921, at the rate of eight per cent. per annum, and payable one on July 1, 1921, and the other on August 1, 1921, and I hereby promise and agree that the Keistler Company shall convey by a good and sufficient deed to the said Messrs. W. B. and C. B. Gladden the one-half of our real estate above described just as soon as same can be surveyed and platted, which I agree to have done right away. Our real estate above described is made up of lots Nos. 4, 5, 6, 7, and 8 of the Mrs. S. M. Gladden property, as platted by Jas. McLarnon, C. E., in May, 1916, and the one-half thereof the Keistler Company is to convey to Messrs. W. B. and C. B. Gladden is the western half of said property, the dividing line to begin at the point on the front of said property so as to divide the frontage equally and to run to a point on the northeastern boundary of said property so as to divide the said property into two equal parts. A. N. Keistler.
In presence of R. B. Caldwell.
R. H. Gladden."

At the trial of the cases this instrument was placed in evidence. Parol testimony for the plaintiffs was admitted tending to show that, prior to the execution of the writing, the plaintiffs and the defendant entered into an oral agreement whereby it was agreed that the plaintiffs would sell to the defendant their stock in the corporation for $7,000 cash, or its equivalent, the conveyance of certain real estate, and two-thirds of what might be realized from the insurance claims then in litigation. The plaintiffs also introduced testimony as to what took place in connection with the execution and delivery of the written instrument. This evidence tended to show that on the 3d day of June, 1921, the Gladdens and Keistler went to the Commercial Bank, of which R. B. Caldwell was president, and the Gladdens signed a transfer of their stock and delivered it to Keistler, and Keistler signed the written instrument, and a copy was delivered to W. B. Gladden, who was also acting for C. B. Gladden. Caldwell, who seems to have given some assistance in the matter, testified as to what took place at that time:

"Mr. Banks Gladden, I think it was, asked me if I didn't think he ought to have some sort of a little paper, as he expressed it, with reference to the division of those lots they had there."

Later Caldwell went into his private office and dictated the instrument above set out, and brought it back into the room where Keistler and W. B. Gladden were; C. B. Gladden having left the room. To quote further from Caldwell's testimony:

"I knew about the suit they had pending for the insurance. I asked them what was to be done about the insurance. Mr. Banks Gladden, I think, was the one that answered me. He said, 'If we get that, it will be in money. We have an understanding that it is to be divided among us in accordance with our holdings in the Keistler Company.' I asked them if that was to be put in this paper I had drawn. *** Mr. Banks Gladden said: 'Well, it doesn't make any difference; we all understand one another, and we have never had any trouble; if we get that, it will be in money, and it will be divided."'

Mr. Caldwell further says that Keistler was present, "and then I laid this receipt on the table, and my recollection is that I asked Mr. Keistler if that was satisfactory to him. He said it was, and he read over this receipt and signed it. *** Mr. Gladden just said he wanted some little paper with reference to this real estate, and, when I drew this paper, I set out the facts that had been mentioned, to show a consideration for Mr. Keistler to convey the lot." On cross-examination Caldwell stated that he knew about the insurance before he drew the paper, but that he did not put anything about it in the written contract, and said:

"I don't recall a single thing Mr. Keistler said; Mr. Keistler is not a man that talks much; I don't know that he said anything at all; I don't recall. I certainly understood that he accepted Mr. Gladden's statement about the insurance."

The defendant duly objected to the parol testimony tending to show that he agreed to turn over to the plaintiffs a part of the insurance proceeds, upon the grounds that the parties had reduced the entire agreement to writing, and that such testimony tended to vary the terms of such written agreement and was incompetent, but the testimony was admitted over his objection. In his testimony he denied that he had made any such agreement. At the close of all the testimony, he renewed his objection through a motion for a directed verdict; the court overruled the motion and submitted the cases to the jury, who found for each of the plaintiffs the amount claimed, without interest.

In due time the defendant made a motion for a new trial on the ground, as stated in his motion for a directed verdict, that the parol testimony objected to was erroneously admitted. The court, after consideration, granted the motion by the following order:

"The above cases were tried before me and a jury (the two cases by agreement were tried together) at the last term of the court of common pleas for Chester county, and verdicts were rendered in favor of each plaintiff. Motions for new trial in each case were made by defendant on the minutes of the court, and were marked 'Heard,' and written arguments have been filed with me by each side. The main ground of the motion is that the court erred in admitting parol testimony to impeach the written contract introduced in evidence in the case and error in refusing to strike out such parol testimony after the written instrument was introduced. The matter has given me much concern, and is not without difficulty. I have, after careful study and thought, reached the conclusion that I was in error in refusing to strike out the parol testimony that tended to contradict and add to the written paper. It is true that it has been repeatedly held that the consideration of a written deed or contract may be inquired into, but in cases where the consideration is a mere recital. In the cases here the consideration referred to was more than a mere recital; it was contractual in its nature, and was executory in its nature. It was a paper in which the defendant acknowledged the receipt of the stock purchased, and agreed to pay for it in the express manner expressed in the paper.
To allow parol testimony to show that, in addition to what
the paper shows he agreed to pay for the stock, a part of which at least is executory, he agreed
...

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    ...attempted to change the terms of the written contract by parol, an attempt inhibited by the parol evidence rule. See Gladden v. Keistler, 141 S.C. 524, 140 S.E. 161. A striking statement of the rule and the reasons for it is made in the case of Northern Assurance Co. v. Building Asso., 183 ......
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    ... ... particular, its very birth; and presents an exceptional ... occasion for the imperative application of the parol evidence ... rule. See Gladden v. Keistler, 141 S.C. 524, 140 ... S.E. 161, where the rule is fully discussed. A very striking ... statement of the rule and the reasons for it ... ...
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    ... ... establishment of a contract entirely different from that ... which had been entered into ...          In the ... case of Gladden v. Keistler, 141 S.C. 524, 140 S.E ... 161, the court in an elaborate opinion by Mr. Justice Stabler ... declares: ... "A case, however, that is ... ...
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