Lusk-Harbison-Jones, Inc. v. Universal Credit Co

• Decision Date: 30 January 1933
• Docket Number: 30351
• Citation: 164 Miss. 693,145 So. 623
• Court: Mississippi Supreme Court
• Parties: LUSK-HARBISON-JONES, INC., v. UNIVERSAL CREDIT CO

145 So. 623

164 Miss. 693

LUSK-HARBISON-JONES, INC., v. UNIVERSAL CREDIT CO

No. 30351

Supreme Court of Mississippi

January 30, 1933

Division B

1 EVIDENCE.

Oral agreement, especially where acted on, to modify prior written contract is valid, and proof thereof does not violate parol evidence rule.

2 INSURANCE.

Promise embodied in representations by finance company's agents that company would carry insurance on repossessed automobiles, being justifiably relied on by dealer, would be enforced, as against contention that no consideration was shown.

3 CONTRACTS.

Principle that promise which, as promisor should reasonably expect, induces promisee's substantial action or forbearance, is binding, should be applied cautiously.

HON. S. F. DAVIS, Judge.

APPEAL from circuit court of Washington county, HON. S. F. DAVIS, Judge.

Action by the Universal Credit Company against Lusk-Harbison-Jones, Inc. Judgment for plaintiff, and defendant appeals. Reversed and remanded.

Reversed and remanded.

Percy, Strauss & Kellner, of Greenville, for appellant.

It is settled law of this state that where one of the parties to a contract assumes an additional obligation not required by the original contract, such assumption is void unless there is a legal consideration therefor.

H. B. Owen Tie Co. v. Bank of Woodland, 114 Miss. 136.

A subsequent oral agreement to modify, abandon or rescind a prior written contract is valid and proof thereof does not violate the parol evidence rule, especially where the subsequent agreement is acted upon.

3 Jones on Evidence (2 Ed.), sec. 1500; Mackie & Co. v. Dale & Co., 122 Miss. 430.

Except in the case of contracts for the benefit of third persons an agreement by the parties to a contract to rescind their contractual duties or duties to make compensation, discharges such duties if the agreement is under seal, or is based on sufficient consideration, or induces such a change of position as is stated in section 90; but otherwise is operative only in cases within the rules stated in sections 410-416.

2 Restatement of the Law of Contracts, page 765, sec. 406.

A promise which the promisor should reasonably expect to induce action or forebearance of a definite and substantial character on the part of the promisee and which does induce such action or forbearance is binding if injustice can be avoided only by enforcement of the promise.

1 Restatement of the Law on Contracts, page 110, sec. 90.

Farish, Bell & Felts, of Greenville, for appellee.

In this case we have not a general contract of bailment, but we have a special bailment contract, whereby the defendant undertook to store the automobiles at its sole risk as to loss or injury. The obligations of the defendant, in this special contract of bailment, were fixed by the contract itself, the contract in this case being the receipt executed. By the terms of these receipts, the defendant undertook and agreed to store and keep the automobiles at its sole risk as to loss or injury.

The plaintiff refrained from taking possession of the automobile and left them with the defendant so that they could be sold to the best advantage to the defendant. The plaintiff could have sold them immediately and the defendant would have then been liable for the full amount of the deficiencies.

There is a sufficient consideration for a promise if there be any benefit to the promisor or any loss, detriment, or inconvenience to the promise. The consideration is sufficient if the person to whom the promise is made retrains from doing anything which he has the right to do, whether there be any loss to him or actual benefit to the party making the promise or not.

13 C. J., par. 150, p. 316; Lawson on Contracts (2 Ed.), pars. 98, 99, pp. 116, 117; Miller v. Bank of Holly Springs, 131 Miss. 55, 95 So. 192.

The testimony for the defendant that employees or agents of the plaintiff said that it was not necessary to insure the automobiles could not relieve the defendant of its liability under this special contract of bailment, for the reason that a written contract cannot be varied by parol.

Confidential Pamphlet B did not supersede the special contract of bailment entered into, for it had reference not to any special contracts theretofore made by plaintiff with others, but attempted only to outline future dealings between plaintiff and those from whom it purchased conditional sales contracts.

Argued orally by Ernest Kellner, for the appellant.

OPINION

Griffith, J.

During the years herein mentioned, appellant was the authorized agent for Ford automobiles at Leland and adjacent territory. Appellee is a dealer in automobile paper; that is to say, it advances the cash to the local distributors of automobiles on the conditional sales contracts and notes of the purchasers evidencing deferred installment payments. It would appear from the record that appellee is a subsidiary of the Ford company. In any event, it works in close connection with that company and its local distributors. In 1929 three, and in 1930, two, sales contracts were purchased by appellee from appellant. Under these contracts appellant guaranteed the payment of the full amount of the installments. At different times during the latter part of 1930, default in the installment payments were made by the purchasers under each of the five...