Hardin v. Ray
| Citation | 404 S.W.2d 764 |
| Decision Date | 16 June 1966 |
| Docket Number | No. 8512,8512 |
| Parties | Russell HARDIN and Mary Louise Hardin, Plaintiffs-Appellants, v. James H. RAY and Violet Ray, Defendants-Respondents. |
| Court | Court of Appeal of Missouri (US) |
Powell, Jones & Ringer, Dexter, for plaintiffs-appellants.
Briney, Welborn & Spain, Bloomfield, for defendants-respondents.
This action was instituted by plaintiffs Russell Hardin and Mary Louise Hardin, husband and wife, against defendants James H. Ray and Violet Ray, husband and wife, to recover $6,570 allegedly overpaid for approximately 1155 acres of land in Stoddard County, Missouri, purchased by plaintiffs from defendants under a written 'Real Estate Contract' dated and executed on December 19, 1963 (hereinafter referred to as the contract.) In their answer, defendants asserted that the contract did not set out 'the actual agreement' of the parties: and by their 'crossbill,' more properly designated a counterclaim (V.A.M.R. Rule 55.01), defendants sought reformation of the contract. Upon trial by the court, judgment was entered (a) 'that plaintiffs take nothing on their (first amended) petition,' (b) 'that defendants take nothing on their crossbill herein, reformation of the contract being hereby denied,' and (c) that one-half of the costs be taxed against plaintiffs and one-half against defendants. After an unsuccessful 'Motion for Judgment and in the Alternative for a New Trial,' plaintiffs appeal. Defendants filed no after-trial motion and do not appeal.
The contract, prepared by an attorney and executed in his office, was dictated by him in the presence of plaintiffs, defendants and one Reginald Merrick, the real estate agent representing defendants-sellers; and, after transcription by his secretary, the attorney read the contract aloud in the presence of the same group, with a copy of the contract then in the hands of one of the plaintiffs and another copy then in the hands of defendant husband. No objection being voiced and no change being suggested, the parties thereupon executed the contract. That portion of the contract material to the controversy before us provided for sale of the land The italicized portions of the above quotation were typewritten in blanks provided on the face of a single-apge printed form. Printed 'General Closing Conditions and Sales Practises' and 'Special Agreements' on the recerse side of the form were made a part of the contract by reference.
Upon consideration of the quoted provisions, it becomes plain that the contract provided for a purchase price of $300,000 to be paid by plaintiffs-buyers in this manner: (a) By payment of $30,000 in cash on December 19, 1963, the date of execution and delivery of the contract; (b) by plaintiffs' assumption of and agreement to pay an indebtedness of $137,430 to Northwestern Mutual Life Insurance Company evidenced by a note secured by first deed of trust on the land (the contract reciting that there was then 'a present balance due in the sum of $150,000.00' which was to be reduced to $137,430 by defendants-sellers making 'the annual principal payment to said company in the sum of $12,570.00 on Jan. 1, 1964'); and (c) by plaintiffs' execution and delivery to defendants of a note for $132,570 to be secured by a second deed of trust on the land. (Except as is otherwise specifically noted, all emphasis herein is ours.) Plaintiffs made the cash payment of $30,000 and executed and delivered their note for $132,570 secured by second deed of trust on the land. This litigation has arisen because the payment of $12,570 made by defendants-sellers on the Northwestern Mutual loan on January 1, 1964, was not a principal payment of $12,570 but consisted of an interest payment of $6,570 and a principal payment of only $6,000, which left plaintiffs with an indebtedness of $144,000 rather than $137,430 secured by first deed of trust on the land and thereby raised the total consideration paid for the land in a corresponding amount (i.e., by $6,570, the interest payment) from $300,000 to.$306,570.
Plaintiffs' theory of the case is that the contract was complete, unambiguous and valid and that defendants breached it in that they reduced the principal sum of the Northwestern Mutual loan by only $6,000 instead of $12,570 and thereby increased the total consideration paid by plaintiffs from $300,000 to.$306,570. Their note for $132,570 secured by second deed of trust on the land having been sold to an innocent purchaser prior to institution of this action, plaintiffs sued defendants for recovery of the alleged $6,570 overpayment.
Plaintiffs' action is grounded on the so-called parol evidence rule, by the application of which our courts uniformly have held that, in the absence of fraud, duress, mistake or mental incapacity, an integrated unambiguous written contract may not be varied, altered or contracted by parol or extrinsic evidence, 1 and all prior or contemporaneous agreements are conclusively presumed to have been merged into the written contract, 2 which 'itself becomes and is the single and final memorial of the understanding and intention of the parties.' Commerce Trust Co. v. Watts, 360 Mo. 971, 977--978, 231 S.W.2d 817, 820; Connor v. Temm, Mo.App., 270 S.W.2d 541, 545. The parol evidence rule, 'founded upon the experience of makind in dealing with the 'slippery memory' of mem' (Jackson v. Chicago, St. P. & K.C.R. Co., 54 Mo.App. 636, 644; Stringer v. Geiser Mfg. Co., 177 Mo.App. 234, 242, 162 S.W. 645, 648--see Tracy v. Union Iron-Works Co., 104 Mo. 193, 198--199, 16 S.W. 203, 204), is not merely a rule of evidence but is one of positive substantive law predicated upon the substantive rights of the parties; 3 and, where the rule if applicable, parol evidence should be ignored, even though received without objection. Commerce Trust Co., supra, 360 Mo. at 977, 231 S.W.2d at 820(7); Connor, supra, 270 S.W.2d at 546(3).
Defendants have not, at any state of the litigation, suggested any fraud, duress or mental incapacity; but, in the trial court, they did both plead and rely upon alleged mistake. In their answer, they denied that the contract set out 'the actual agreement' of the parties and asserted that 'the true agreement' was as stated in defendants' 'crossbill' or counterclaim.
Turning to that pleading, we find that defendants there alleged that, 'prior to the said 19th day of December, 1963 (the date of the written contract), the parties agreed among themselves that defendants would sell said farm to plaintiffs on the following terms,' to wit, (a) that plaintiffs would pay $30,000 in cash to defendant, (b) that plaintiffs would 'assume the balance due by plaintiffs (sic) to Northwestern Mutual . . . secured by a deed of trust' on the land, (c) that defendants would pay 'the principal and interest due on said Northwestern Mutual . . . indebtedness on January 1, 1964, but plaintiffs agreed to include said principal and interest payment in plaintiffs' note to defendants, secured by a second deed of trust on said lands,' and (d) that plaintiffs would execute and deliver to defendants their promissory note in the principal sum of $132,570, secured by second deed of trust on the land. Defendants then averred that the parties 'did thereafter, on December 19, 1963, enter into a written contract which . . . the parties intended to incorporate' the alleged prior oral agreement, but that 'on account of an error on the part of the secrivener . . . said written contract did incorrectly state the true and actual agreement' in that (a) it 'incorrectly stated the consideration for said sale was $300,000 whereas in truth and in fact, the parties agreed that the total amount of the consideration was.$306,570,' and (b) it 'incorrectly states' that "Sellers agree to make the annual principal payment to said company in the sum of $12,570.00 on January 1, 1964,' whereas in truth and in fact sellers (defendants) agreed to pay the annual principal and interest payment . . . of $12,570, consisting of principal payment of $6,000 and interest payment . . . of $6,570.' Finally, defendants stated that the 'contract was incorrectly written by the mistake of the scrivener who drew the same, and that it did not express the mutual intent of the parties, but was executed and delivered by the parties under a mutual mistake of the facts as to the matter aforesaid . . .' The prayer of the 'crossbill' or counterclaim was for a decree 'reforming said contract so as to truly contain and set forth the actual agreement between the parties as herein alleged.'
When, early in the trial, plaintiffs' counsel objected to parol evidence concerning discussions and negotiations between the parties prior to execution of the written contract, which tended to impeach or contradict that contract, the response of defendants' counsel was that 'we have a count in here to reform the contract'; and, in ruling the objection, the trial court said that 'I think in the first place the contract is ambiguous or we wouldn't have this lawsuit, and there is a count...
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