Pang See & Co. v. Aloha Motors, Ltd.
| Decision Date | 30 June 1936 |
| Docket Number | No. 2211.,2211. |
| Citation | 33 Haw. 861 |
| Court | Hawaii Supreme Court |
| Parties | PANG SEE & COMPANY, LIMITED, v. ALOHA MOTORS, LIMITED. |
OPINION TEXT STARTS HEREEXCEPTION FROM CIRCUIT COURT FIRST CIRCUIT. HON. A. M. CRISTY, JUDGE.
Syllabus by the Court
In an action at law for damages arising out of the breach of an oral agreement alleged to have been entered into contemporaneously with a written contract, which contract imports a complete legal obligation with no uncertainty as to the object or extent of the engagement, and the oral agreement is at variance with its terms and depends for proof upon parol testimony, the complaint does not state a cause of action.
H. W. Wong and W. B. Lymer for plaintiff.
R. J. O'Brien for defendant.
This is an action for damages arising out of an alleged breach of contract. The defendant demurred to the complaint on several grounds, including the following: “That said second amended complaint fails to set forth facts sufficient to constitute a cause of action; * * * that said second amended complaint fails to set forth facts sufficient to constitute a cause of action for the reasons: * * * (c) That it affirmatively appears that the alleged subsequent written contract of August 9, 1933, a copy of which is attached to the second amended complaint as Exhibit ‘A’, merged the prior parol contract of the same day; * * * (e) That the allegations of the second amended complaint conclusively show that the parties reduced the result of their negotiations to writing and that the conditional sale contract and the letter of defendant to plaintiff, copies of which are attached to the second amended bill of complaint as Exhibits ‘A’ and ‘B’, cover the same subject matter as the prior alleged parol contract, and were accepted by plaintiff.” The court sustained the demurrer on these grounds and the case is here on plaintiff's exception.
It appears from the complaint that on the 9th day of August, 1933, the parties signed a conditional sales contract, the subject of which was a Chevrolet automobile. A copy of this contract is attached to the complaint as Exhibit “A” and made a part thereof. The price of the automobile was $964, payable $250 on or before delivery and the balance of $714 at the office designated by seller, in fifteen installments of $45 each, followed by the sixteenth installment which was to be $39.
It is provided in the contract that “title to said property shall not pass to the purchaser until said amount is fully paid in cash.” There are other provisions which are immaterial to the present inquiry and therefore need not be referred to.
The complaint is quite voluminous and it would serve no useful purpose to quote it in full. The following summary of portions of it will suffice to disclose the question of law presented by the demurrer.
The defendant was the sales agent of Chevrolet automobiles and the plaintiff was the sales agent of radio sets known as the Philco radio. Shortly prior to the execution of the contract above referred to as Exhibit “A” the defendant proposed to the plaintiff that if the latter would purchase from the former a Chevrolet sedan automobile and make a cash payment of $250 such payment would be the only amount of cash the plaintiff would be required to pay on account of the purchase price, and that the balance could be liquidated in the following manner: The plaintiff would install in automobiles thereafter to be sold by the defendant, “Model 5 Transitone” Philco radio sets at the prevailing price of $45 per set, and whenever the defendant sold an automobile which contained a Philco radio set the sum of $45 would be credited by the defendant on the unpaid balance due on the automobile purchased by the plaintiff from the defendant, and that this would continue until the entire unpaid balance was finally liquidated. The defendant would also guarantee to sell at least one radio set each and every month during the term of the proposed contract and would foster and stimulate the sale of plaintiff's radios to the exclusion of all other makes of radios. If this arrangement was satisfactory to the plaintiff the defendant would enter into a contract containing these provisions.
On or about the 9th of August, 1933, the defendant presented to the plaintiff for its signature a form of agreement of sale or conditional sale contract, which the defendant's duly authorized agent informed plaintiff's representative would have to be executed by both parties as it was the customary printed form of contract used by defendant when sales of automobiles were made by it. The printed form contained no reference to the proposed specific agreement above referred to and the plaintiff refused to sign it unless the full terms of said proposed agreement should be embodied in it, whereupon defendant, through its duly authorized agent, expressly verbally agreed with plaintiff to carry out the full terms and conditions of the proposed agreement and agreed that if plaintiff would sign the printed form of contract the defendant would faithfully carry out all the terms and conditions of said proposed contract, the defendant expressly agreeing with plaintiff at said time, as a condition to plaintiff's signing the said written contract, that defendant would faithfully carry out all of the undertakings it had specifically theretofore proposed. Whereupon, the contract as expressed in Exhibit “A” was signed, the cash payment of $250 was made and the automobile was delivered to the plaintiff.
After signing the contract the defendant caused to be signed on its behalf and delivered to plaintiff a written memorandum which defendant's duly accredited agent assured plaintiff's representative was in full accord with the verbal agreement already mentioned. The plaintiff was under the impression that the memorandum expressed the full intention and agreement of the parties as to the manner in which the unpaid balance of $714 was to be liquidated. The memorandum is as follows:
Honolulu, Hawaii
“August 9, 1933.
“Pang See and Co., Ltd.
Honolulu, Hawaii
“Gentlemen:
“We feel that with a little effort on our part that we will be able to sell a number of radios for you.
“(Sgd) J. A. JACKSON
“JAJackson/ep
“(Sgd) JAJ”
The memorandum was not a full or real statement of the parol agreement on the faith of which the conditional sale contract had been signed. The plaintiff did not discover the inadequate and improper wording of the memorandum until after the defendant had repossessed itself of the automobile, which had been delivered to the plaintiff.
The plaintiff performed all of the terms and conditions required of it under the oral agreement between the parties. The defendant, however, contrary to the terms and conditions of said oral contract and in direct breach thereof, retook and repossessed the automobile, which was the subject of the contract, and sold and delivered it to another buyer and not only failed to sell or stimulate the sale of Philco radios but advanced the sale of other radios handled by the defendant's competitors. The plaintiff prays judgment against the defendant for the sum of $250, the amount paid to the defendant when the automobile was delivered, and for the further sum of $2,000 damages arising out of the defendant's refusal to comply with the terms of the oral agreement.
Whether the complaint states a cause of action depends upon the right of the plaintiff under the law to inject into the written contract extensive agreements which are contradictory of and in addition to those appearing in the written contract and which depend for proof upon parol testimony.
It is contended by the plaintiff that the oral statements made by the defendant prior to the execution of the written contract concerning what it would agree to do regarding the matter of payment of the deferred balance of the purchase price in the event the sale was consummated and of fostering the sale of defendant's radios, and its subsequent assurance given at the time the contract was signed that the oral agreement would be lived up to, were a condition upon which the written contract was executed and therefore the proof of the oral agreement by parol evidence is permissible.
In support of this view our attention is directed to Ferguson v. Rafferty, 128 Pa. 337, where the rule invoked by the plaintiff is thus stated (p. 356): “Parol evidence is admissible to establish a contemporaneous oral agreement which induced the execution of a written contract, though it may vary, change, or reform the instrument.”
After years of judicial debate the Pennsylvania court finally came to the conclusion that the rule as previously announced was too broad and therefore restricted it within quite narrow limits. (Fuller v. Law, 207 Pa. 101; Gianni v. Russell & Co., Inc., 281 Pa. 320; 52 Pa. L. R. 601; 74 Pa. L. R. 235.)
In the Fuller case the defendant purchased $30,000 worth of stock from the plaintiff, paying therefor $25,000 in cash and giving a $5,000 note for the balance. This note was subsequently renewed and upon failure of payment suit was brought on it. The note was as follows:
+-------------------------------------------+
¦“$5,000.¦No. 40718. ¦
+--------+----------------------------------¦
¦ ¦“Pittston, Pa. September 18, 1899.¦
+-------------------------------------------+
“January 18th after date I promise to pay to the...
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