Heath Northwest, Inc. v. Peterson

• Decision Date: 09 December 1965
• Docket Number: No. 37853,37853
• Citation: 67 Wn.2d 582,408 P.2d 896
• Court: Washington Supreme Court
• Parties: HEATH NORTHWEST, INC., Respondent, v. Charles C. PETERSON and Jane Doe Peterson, his wife, doing business as Peterson Motor Enterprises, Appellants.

Page 582

67 Wn.2d 582

408 P.2d 896

HEATH NORTHWEST, INC., Respondent, v. Charles C. PETERSON and Jane Doe Peterson, his wife, doing business as Peterson Motor Enterprises, Appellants.

No. 37853.

Supreme Court of Washington, Department 1.

Dec. 9, 1965.

Cartano, Botzer & Chapman, Seattle, for appellants.

Croson, Johnson & Wheelon, Robert B. Leslie, Jr., Seattle, for respondent.

BARNETT, Judge. ^*

This action is on a written contract to recover rental payments for the lease of a sign.

Appellant (defendant) Charles C. Peterson, in the autumn of 1962, went into business as a machine tool distributor in the city of Seattle. Shortly thereafter he entered into negotiations with respondent Heath Northwest, Inc. (plaintiff), a corporation engaged in the business of fabricating, selling, and leasing signs. As a result of these negotiations, appellant executed an instrument wherein he agreed to make 36 monthly payments of $68 each for the 'use' of a sign, which respondent corporation agreed to construct, install and maintain. A customized 'reader board' sign was fabricated by respondent and installed at appellant's business premises. Appellant used the sign for 8 months, making monthly payments totaling $544. But his business did not prosper, and he vacated the shop in September of 1962. The sign was abandoned, being left attached to the vacated premises, and the monthly payments ceased. Pursuant to the terms of the written contract, respondent declared the balance of the rentals accelerated and due, and, in December of 1962, brought suit for the total unpaid rentals in the amount of $1,904, plus taxes and fees. Prior to trial, the sign was removed from the building by respondent and has been in its possession since that time.

The trial court, sitting without jury, found for the respondent and entered judgment for the full amount sought. Peterson appealed.

Appellant's position at trial was that he did not agree to lease the sign, but instead contracted to purchase it on conditional sale. He offered testimony to the effect that a salesman of respondent corporation induced him to believe that the sign would become his after he had made the 36 monthly rental payments. The trial court refused to consider this evidence in interpreting the contract between appellant and respondent. Error is assigned to this ruling.

We hold that the trial court did not err in refusing to consider the extrinsic evidence. An examination of the writing disposes of appellant's contention that it is ambiguous. It is a lease and nothing else. It provides that appellant, denominated the 'User,' is to pay to respondent, denominated the 'Owner,' a monthly sum of $68 for 36 consecutive months for the 'right and license to use' the display. Respondent undertakes to construct and install the sign, and to maintain and service it during the rental period. Respondent is to insure the property for the benefit of both parties, and reserves the right to repair or rebuild in the event of damage or destruction of the sign, 'extending the term hereof for the period of removal and repair.' The document contains no language concerning the passage of title at the end of the term or at any other time. It is expressly provided that 'Upon the termination of this lease, or any extension hereof, the Owner shall have and retain the right to remove the display from the premises upon which it is installed.'

Appellant's version of the contract, being diametrically opposed to this written provision, cannot be established by parol evidence. It is the law of this state that prior conversations and negotiations, in the absence of ambiguity, merge into the final integrated writing. Parol evidence is not then admissible to contradict the terms of the instrument. Fleetham v. Schneekloth, 52 Wash.2d 176, 324 P.2d 429 (1958).

The evidence establishes that a copy of the agreement was mailed to appllant by respondent, accompanied by a letter inviting appellant to scrutinize the document and to advise respondent if he did not find it to be in accordance with his understanding. Appellant failed to protest. He not only executed an unambiguous lease contract, but, when its explicit terms were directly called to his attention, he displayed no quarrel with its plain import. Under these circumstances, parol testimony cannot be permitted to transform a manifest lease agreement into a sale.

Kindley v. Williams, 76 S.D. 225, 228, 76 N.W.2d 227, 230, 57 A.L.R.2d 1070 (1956), involved a similar situation. The parties executed a lease agreement for the use of an airplane over an 18-month period. They also made a contemporaneous oral agreement that title to the plane would pass to the user upon the completion of the term. The court refused to consider this evidence. In holding that the...