Appeal from District Court, Runnels County; Jno. W. Goodwin, Judge.
Action by W. P. Hawkins against J. M. Johnson. Judgment for defendant, and plaintiff appeals. Affirmed.
W. P. Hawkins, as plaintiff, sued J. M. Johnson, as defendant; the cause of action being founded upon a promissory note, executed by Johnson and made payable to Hawkins. The defendant presented an answer which, among other things, raised the issues of fact which were submitted by the court to the jury. The court instructed the jury to return a verdict for the plaintiff for the amount sued for, unless they found for the defendant under the second paragraph of the charge, which paragraph read as follows:
"Second. If, from the evidence in this case, you believe that on or about the 2d day of April, 1912, plaintiff W. P. Hawkins and J. M. Johnson and F. W. Merrick made and entered into a contract, by the terms of which it was mutually agreed by and between them that W. P. Hawkins would sell and Johnson and Merrick would buy the 10 shares of bank stock owned by plaintiff, that by the terms of said contract the price to be paid for said stock was $1,150, $150 or $152.50 cash, and the balance to be paid 30 days after date of said contract, and if, from the evidence, you further believe that by the terms of said contract, if any, it was further mutually agreed by and between said parties that if at or prior to the expiration of 30 days from the making of said contract, if any, plaintiff Hawkins should elect not to sell his said bank stock or to retain it, that plaintiff should retain the cash payment as a bonus or reward for remaining in said bank, and that defendant and Merrick should be released from their obligation to pay the balance for said stock, and if from the evidence you believe that the note sued upon was given for the balance of the purchase price for said stock, and if from the evidence you further believe that at or before the expiration of 30 days from the time said contract, if any, was made, plaintiff elected to retain his stock in the bank and so notified defendant or Merrick, then and in that event you will find for defendant."
The jury returned a verdict for the defendant, judgment was rendered accordingly, and the plaintiff has appealed. Though the plaintiff testified to the contrary, the evidence submitted by the defendant supports the finding of the jury.
Tom Patterson, of Winters, and G. N. Harrison, of Brownwood, for appellant. Wade & Doss, of Ballinger, for appellee.
KEY, C. J. (after stating the facts as above).
The trial court ruled that appellee had the right to prove by parol evidence the matters alleged in his answer and submitted to the jury by the charge quoted; and that the matters so alleged constituted a defense and relieved him from liability upon the note sued on. Appellant has assigned error upon the rulings referred to upon the ground that they violated that well-established rule of law which, in the absence of fraud, accident, or mistake, denies to either party to a written contract the right to vary its terms by parol testimony. That question has been given careful consideration by this court, and the conclusion has been reached that this case does not fall within the scope of the rule referred to, but belongs within a class of cases that are held not to impinge upon that rule. While there may be some decisions to the contrary, the weight of authority seems to be in line with the decision of the Supreme Court of the United States in Burke v. Dulaney, 153 U. S. 228, 14 Sup. Ct. 816, 38 L. Ed. 698, from which we quote as follows:
"This action was brought by the testator of the appellees, upon a writing purporting to be the promissory note of the appellant for $4,308.80, dated Salt Lake City, Utah, August 10, 1883, and payable one year after date, for value received, at the bank of Wells Fargo & Co. in that city, with interest at the rate of 6 per cent. per annum from date until paid.
"The defendant, Burke, denied his liability upon the note, and at the trial below was sworn as a witness on his own behalf. In support of his defense, as set forth in the answer filed by him, he stated the circumstances under which the note was given. He said: `Mr. Dulaney bought this group of mines — the Live Yankee and the Mary Ellen. He came to the Walker House in Salt Lake, and wanted me to run them for him. I said I would not do it unless I got a show to get some interest in the property. He says, I will carry an interest for you, and you can take it if you want it, and if not, you can give it back to me after you see the property.' To this testimony the plaintiff objected, and, the defendant admitting that the agreement referred to by him was oral, the objection was sustained. To this ruling he excepted.
"Being asked what he did after giving the note in suit, he answered: `I gave the note. I worked on the property which was done some time in September; worked the property until March; settled up all of its debts, paid them, notified Dulaney I wanted nothing more to do with the property; that I was going to Idaho territory, to Cœur d'Alene mines, and as I was ready to give him a deed at any time he would send me my note. That is all.' Objection being made by the plaintiffs to this testimony, the defendant offered to prove `that at the time of the giving of the note and prior thereto, Dulaney, the payee of the note, agreed with Mr. Burke, the maker of the note, that the note should be given to represent the price of the interest that Mr. Burke was to have, conditioned upon his demanding it after an inspection of the mining property mentioned.' He offered also to prove that after inspecting the property and testing it, the defendant notified testator that he did not want the interest; that he was prepared to make a deed for the interest to the latter, and demanded the delivery of his note. All this evidence was excluded by the court upon motion of the plaintiffs, to which ruling the defendant excepted.
"The defendant having stated that the conversation with the testator above referred to, and which was excluded by the court, took place prior to the execution of the note, he offered to prove that at the time the note was made, the same agreement was made orally between him and the testator. This testimony was also excluded, and he excepted.
"The following question was propounded to him at the trial: `State whether or not prior to your making the note the plaintiff agreed with you that you could explore, work, and develop the mining claims mentioned in the answer, and if at any time before the maturity of the said note you should desire so to do that he would relinquish said option of purchase — that you could relinquish your said option of purchase, and that he, plaintiff, would cancel the note and accept the deed in full discharge of the note and the cancellation thereof.' The defendant having admitted that the agreement referred to in the question was oral, the court excluded the evidence
and he excepted. The court also refused to allow him to state whether he examined, worked, and developed the mining claims mentioned in his answer, and whether he had refused to take such claim under the agreement with the plaintiff.
"At the trial the defendant offered in evidence a deed executed by him to the plaintiff, conveying to the latter, in consideration of the surrender of the note in question, all his right, title, and interest in the above property — the same deed that had been filed by the defendant with his answer. The court held this evidence to be inadmissible unless the defendant proposed to show that the plaintiff accepted the deed. To this ruling the defendant excepted. The defendant was not present when Dulaney took a deed from the owner of the mining property nor was it ever delivered to him. * * *
"The general rule that a written contract cannot be contradicted or varied by evidence of an oral agreement between the parties before or at the time of such contract, has been often recognized and applied by this court, especially in cases in which it was sought to deprive bona fide holders of or parties to negotiable securities of the rights to which they were entitled according to the legal import of the terms of such instruments. Renner v. Bank of Columbia, 22 U. S. (9 Wheat.) 587 ; Brown v. Wiley, 61 U. S. (20 How.) 442 ; Specht v. Howard, 83 U. S. (16 Wall.) 564 ; Forsythe v. Kimball, 91 U. S. 291 ; Brown v. Spofford, 95 U. S. 474 ; Martin v. Cole, 104 U. S. 30 ; Burnes v. Scott, 117 U. S. 582 [6 Sup. Ct. 865, 29 L. Ed. 991]; Falk v. Moebs, 127 U. S. 597 [8 Sup. Ct. 1319, 32 L. Ed. 266].
"Several of these cases were cited in the opinion of the court below, and have been cited here, as supporting the exclusion of the evidence which the appellant offered to introduce. [Dulaney v. Burke] 2 Idaho, 719, 23 Pac. 915. It is supposed that Burnes v. Scott is particularly in point for the appellees. That was an action by the indorsee of a negotiable note against the maker. The defendant in that case offered to prove that the note was not intended by him or by the payee as a promissory note, but was given to and was received by the payee as a mere memorandum of the estimated value of the payee's interest in certain railroad bonds placed in the hands of the maker, and which were to be accounted for in the settlement of certain partnership affairs in which the maker and payee were interested; and that upon such settlement it would appear that the payee had received, prior to the giving of the note, more than his proper share of the partnership assets, and, therefore, was not entitled to claim anything in virtue of such memorandum. This court held the evidence inadmissible upon the ground that, by an alleged contemporaneous verbal agreement, it varied and contradicted the...
