Graham v. Savage
| Decision Date | 06 May 1910 |
| Docket Number | 16,284 - (65) [2] |
| Parties | ROBERT B. GRAHAM v. M. W. SAVAGE and Another |
| Court | Minnesota Supreme Court |
Plaintiff and respondent sought to recover from defendant and appellant a money judgment in a named sum. The complaint alleged that between certain dates said plaintiff at defendant's request performed services "in the placing and sale of the capital stock of the said defendant," for which defendant promised to pay a named sum, and prayed judgment for the balance, less payments made, with interest. The defendant answered, admitted the employment of plaintiff "as a stock solicitor and salesman for the stock" pursuant to a written contract made a part of the complaint alleged other matters not here material, except as may hereinafter appear, denied the indebtedness, and prayed that plaintiff be thence dismissed. The written contract set forth an agreement to pay plaintiff "agent as commission on all sales made and closed by agent a sum equal to ten per cent. of the amount of purchase price of each sale of stock made and closed by agent as aforesaid."
During the course of trial defendant objected to the admission of certain testimony concerning a meeting to which plaintiff had brought a "subscription heading for stock." The court thereupon permitted plaintiff to so amend the complaint as to allege "that in place of a sale the taking of the subscriptions for stock was the contract." The trial then proceeded. Plaintiff admitted that he had signed the written contract previously referred to at some time. He then testified, notwithstanding objection, that a representative of the defendant requested him to sign the contract. He read it over, and told the representative he "couldn't do it; it was absolutely contrary to [his] arrangement." He was asked to sign it "as a personal favor." The representative insisted on all the other agents and salesmen doing the same thing. "It would be a personal favor to him, and we could go right along and work under the old arrangement, and it wouldn't have any bearing on my connection at all." The representative said, after it was signed: "You are working on the same basis, just [the] same as when you came in."
Plaintiff was corroborated by another witness, who said that the representative of defendant informed plaintiff that it made no difference so far as the previous contract was concerned that he wanted it to show the other stock salesmen that plaintiff was not drawing any more than they. Plaintiff said under the circumstances he would sign it; but the supposition was that it was not to interfere with his previous contract.
The representative of the defendant testified that plaintiff made no objection at the time to signing the contract, and that "the contract as signed contained and embodied the oral agreement theretofore entered into between [him] and [plaintiff] * * * with the exception of the drawing account, which wasn't embodied in this contract; it had been terminated."
The court submitted the issues to the jury, which found for plaintiff. Defendant moved for a new trial, and appealed to this court from the order denying his motion.
Parol Evidence Varying Written Contract -- Exception to Rule.
Exceptions to the rule which excludes parol evidence varying or contradicting a complete and unequivocal written contract are recognized only when clearly necessary and proper, because of their natural tendency to invite perjury and fraud and to deprive formal agreements of their certainty.
Parol Evidence Varying Written Contract -- Case Followed.
Ordinarily when a written contract is made and delivered, and nothing remains to complete its execution, parol evidence is inadmissible to prove an understanding that it should not be operative according to its terms. McCormick Harvesting-Machine Co. v. Wilson, 39 Minn. 467, followed and applied.
Parol Evidence Varying Written Contract.
The law has recognized as an admitted exception to this rule that no legal obligation is created by a document which concerns merely transactions of friendship and the like, as in an instrument executed to console a dying person or to calm a lunatic.
Parol Evidence Varying Written Contract.
This exception does not permit parol evidence to be introduced to show that what purported to be a complete written contract is in effect a sham, and is designed to be used for purposes of deceit and fraud.
Parol Evidence Varying Written Contract
A contract admitted to be a legal act cannot be shown by words of mouth to have been agreed not to be observed according to its terms.
Parol Evidence Varying Written Contract -- Reversible Error.
Plaintiff sought to recover from defendant commissions for "placing and sale of its capital stock." Defendant admitted employment of plaintiff as a "stock solicitor and salesman for the stock," in accordance with the written agreement to pay the "agent as commission on all sales made and closed by agent [a given per cent.] of the amount of purchase price of each sale of stock made and closed by agent." Plaintiff was permitted to amend, so as to allege "that in place of a sale the taking of the subscriptions for stock was the contract," and to show by parol that plaintiff had executed the written agreement as a matter of friendship for, or accommodation to, defendant, because defendant "wanted to show the other stock salesmen that [plaintiff] was drawing no more than they." It is held that it was reversible error to receive such oral proof over defendant's objection.
M. H. Boutelle and N. H. Chase, for appellant.
James A. Peterson and H. F. Woodard, for respondent.
JAGGARD, J., (after stating the facts not within [] as above).
Defendant's exceptions involve a number of alleged errors which, in the view we have taken, it is not necessary to here discuss. The gist of the controversy is whether the rule as to the exclusion of parol evidence justified the trial court in receiving evidence of an oral agreement, made prior to the execution of the written agreement, and contradictory thereof. The trial court charged in part: "If the written contract * * * be the contract under which [the plaintiff] worked, then it ends the case, and the verdict must be for the defendants, because under the terms of the written contract the compensation did not come due and payable till the subscribers paid in the money for the stock, and it appears that plaintiff has been paid ten per cent. on all sums that have been paid in on the subscriptions taken by plaintiff, and, in addition, sufficient to balance the amount claimed by plaintiff for expenses." To this plaintiff took no exception, and from this he has not appealed. The testimony, moreover, necessitated the charge.
It should be presumed that the rule as to the exclusion of parol evidence is founded on obviously sound public policy. Exceptions to it are allowed only when clearly justified. The burden is on the proposer to show the necessity and propriety of the suggested exception. An indiscriminate or a ready recognition of exceptions would practically annul the rule itself. It would not only be an invitation to fraud and perjury, but it would deprive written contracts of their certainty, and render prudent men almost powerless to surely protect themselves. The danger involved and the caution to be exercised in this matter has been emphasized by courts so frequently as to render citation of the many authorities a work of supererogation. See however Minneapolis T.M. Co. v. Davis, 40 Minn. 110, 41 N.W. 1026, 3 L.R.A. 796, 12 Am. St. 701; Mitchell, J., in Smith v. Mussetter, 58 Minn. 159, 161, 59 N.W. 995.
It is no answer to urge that in particular cases injustice may result from the refusal to recognize an exception. The same objection is the traditional one urged against the statute of frauds. The relevant general rule as to the exclusion of oral testimony was thus formulated in McCormick Harvesting Machine Co. v. Wilson, 39 Minn. 467, 40 N.W. 571: "Where a written contract is made and delivered, and nothing remains to complete its execution, parol evidence is inadmissible to prove an understanding that it shall not be operative according to its terms." A defense to a written contract made out by such evidence is subject to suspicion. The admission of such evidence should be cautiously allowed to avoid mistake and imposition. It should be confined to cases clearly within the...
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