Lunnie v. Gadapee, 476

• Decision Date: 02 May 1950
• Docket Number: No. 476,476
• Citation: 73 A.2d 312,116 Vt. 261
• Court: Vermont Supreme Court
• Parties: LUNNIE v. GADAPEE.

Page 312

73 A.2d 312

116 Vt. 261

LUNNIE v. GADAPEE.

No. 476.

Supreme Court of Vermont.

May 2, 1950.

Witters & Longmoore, St. Johnsbury, Clarence V. Akley, Lyndonville, for plaintiff.

Arthur L. Graves, St. Johnsbury, Frederick G. Mehlman, St. Johnsbury, Kyle T. Brown, Jr., St. Johnsbury, for defendant.

Before SHERBURNE, C. J., and JEFFORDS, CLEARY, ADAMS and BLACKMER, JJ.

BLACKMER, Justice.

The plaintiff bought eleven cows; he says from the defendant. The defendant claims he sold the cows to a third person prior to their purchase by the plaintiff. However that may be, the defendant was an active participant in the transaction, and it is for fraudulent representations claimed to have been made by him in connection with the sale that the plaintiff brought this suit. Trial was by jury; the verdict was for the plaintiff, and judgment was entered thereon. The defendant claims error.

To secure payment of the purchase price, the plaintiff gave the defendant a promissory note, commonly called a conditional sale or lien note. This note recited that it was given for eleven described cows 'this day conditionally sold and delivered by Robert Gadapee to Milton Lunnie and said property is to be and remain the property of said Robert Gadapee until said note is wholly paid.'

In several different ways and at different times during the trial, the defendant endeavored to show that he had no title to the cows at the time of the sale, and no interest in the proceeds of the sale. This he was not permitted to do, and it constitutes his first assignment of error.

The gravamen of the action is the claimed false representations. The defendant claims that if he obtained no benefit from the transaction alleged to have been induced by his fraud, such fact is material as tending to show the making of the misrepresentations less probable.

The materiality of such evidence is not a new question. Hadley v. Bordo, 62 Vt. 285, 19 A. 476, was an action for false warranty of a horse. The defendant was permitted to show that the exchange of horses from which the claim arose was not between the plaintiff and the defendant, but was between the plaintiff and a third person. The evidence was considered material, the Court saying, 62 Vt. at page 289, 19 A. at page 478, 'if he (defendant) did not own the mare so exchanged, he would be less likely to become a party to the exchange, or warrant the mare sound, than though he did own it.' The same conclusion was reached in Hidden v. Hooker, 70 Vt. 280, 40 A. 748. In that case the plaintiff based his suit on claimed false representations made by the defendant in purchasing the plaintiff's interest in a partnership. The defendant was permitted to show that he made the purchase for a third party and without gain to himself. It was said, 70 Vt. at page 281, 40 A. at page 749, 'It is claimed that the defendant committed a fraud in order to induce the purchase. It would be less probable that he would so do if he was acting for another than it would be if acting for himself.' Hadley v. Bordo, supra, was cited with approval. The instant case is the same; the offered evidence was material.

The plaintiff makes claim that the offered evidence was properly rejected under the familiar rule against the admission of parol evidence to change or vary either the terms or legal effect of a written instrument, in this instance the conditional sale note described above. The rule is established by a long line of our cases. But the parol evidence rule, like most things, has its exceptions. It does not apply where the writing is collateral to the issue involved, and the action is not based on such writing. To state it another way, the parol evidence rule applies only where the enforcement of an obligation created by the writing is substantially the cause of action. 32 C.J.S., Evidence, § 1011, pp. 1026 & 1027; 20 Am.Jur., Evidence, § 1134, p. 988; Holloman v. Southern R. Co., 172 N.C. 372, 90 S.E. 292, L.R.A.1917C, 416, Ann.Cas.1917E, 1069; Davis v. Cauffiel, 287 Pa. 420, 135 A. 107; Hanauer v. National Surety Co., 279 Pa. 345, 123 A. 863. And also, the exception is applicable where the parties to the litigation and to the writing are the same. Gordon, Inc. v. Schram, D.C.Mun.App., 44 A.2d 662; 32 C.J.S., Evidence, § 1011, p. 1027, note 73.

If the terms of the conditional sale note leave any doubt that it was a transaction for security purposes only, the evidence does not. The cows were selected, the price was agreed upon, and delivery was made August 29th. The sale was completed on that day. The next day the note was presented by the defendant and executed by the plaintiff. The suit is on the representations, not on the note, and the case is governed not by the parol evidence rule, but by the exception thereto In Hadley v. Bordo, supra, we reached this same conclusion, although the parol evidence rule was not mentioned expressly. Therein we said, in permitting the defendant to show another to have been the seller, 62 Vt. at page 289, 19 A. at page 478, 'This suit is not founded upon the contract evidenced by the note and lien, but upon the warranty given upon the sale of the horse. The writing with the note was not drawn for the purpose of transferring the property to the plaintiff, or as evidence of the sale in respect of warranty, price, or other detail, but for another and collateral or independent purpose, viz., to serve as security for the note given the defendant.'

Among his citations, two cases especially relied on by the plaintiff to establish exclusion under the parol evidence rule are Gillett v. Ballou, 29 Vt. 296, and McNamara v. Pickett, 109 Vt. 500, 1 A.2d 716. In both of these cases the writing sought to be changed by parol was the exact writing on which the suit was brought. For that reason, they do not control. Other cases stressed by the plaintiff are Winn v. Chamberlin, 32 Vt. 318, 319, and Wood v. James, 93 Vt. 36, 106 A. 566. These cases have to do with the supplementing by parol of writings which only partially integrate transactions, and stand for the principle that the supplementation must be consistent with the writing. The principle is sound, but not applicable. The conditional sale note was not an incomplete writing. The defendant did not seek to supplement but to contradict it. Under the circumstances, such was his...