Parham-Thomas-McSwain, Inc. v. Atlantic Life Ins. Co.
| Decision Date | 29 March 1918 |
| Docket Number | 9945. |
| Citation | 96 S.E. 697,111 S.C. 37 |
| Parties | PARHAM-THOMAS-MCSWAIN, INC., v. ATLANTIC LIFE INS. CO. |
| Court | South Carolina Supreme Court |
Appeal from Common Pleas Circuit Court of Richland County; M. L Smith, Judge.
Action by Parham-Thomas-McSwain, Incorporated, against the Atlantic Life Insurance Company. From a judgment for plaintiff defendant appeals . Affirmed.
Lyles & Lyles, of Columbia, for appellant.
D. W Robinson, of Columbia, for respondent.
Trial in the circuit court for the breach of a contract, verdict for the plaintiff for $9,880, appeal by the defendant. The cause was here twice before (104 S.C. 223, 88 S.E. 470, and 106 S.C. 212, 90 S.E. 1022), and it has been tried in circuit four times. The action springs out of transactions betwixt Parham and the agents of the South Atlantic Life Insurance Company which ran through the years 1912 and 1913. Parham at the outstart on January 11, 1912, by a written contract then made, became a general agent for the South Atlantic Life Insurance Company in some seventeen counties of the state, to solicit and write life insurance. Within the two years mentioned (1912 and 1913), there was a devolution of the interest of the two parties to that initial contract. The South Atlantic Life Insurance Company became the Atlantic Life Insurance Company, and Parham in July, 1913, organized a joint-stock company called the Parham-Thomas-McSwain Company to take the interest which he had in the contract. These changes did not at all affect the issues which have been made. While the action is brought in the name of the Parham-Thomas-McSwain Company, the real party is Parham; he is practical owner of the company, and he is the person who is alleged to have been wronged. The initial contract was amended three several times by letter, and on January 9, 1914, nigh two years to a day after its execution, the contract was terminated by the act of the insurance company pursuant, it is alleged, to the nineteenth paragraph of the contract. This action assigns that termination as a wrongful breach, and charges that it was done pursuant to a scheme of the insurance company to defraud Parham.
The cardinal dates of the whole transaction are these: The original agency contract was made January 11, 1912. The first letter amendment was made January 12, 1912. The second letter amendment was made January 12, 1912. The second letter amendment was returned by Parham to defendant September 30, 1912. The third letter amendment was made October 10, 1912. The Parham-Thomas-McSwain Company was formed July 12, 1913. The contract of January 11, 1912, was assigned to Parham-Thomas-McSwain Company July 10, 1913. Parham bought out Thomas' interest November 22, 1913. Thomas took a subagency of the insurance company November 22, 1913. The contract of January 11, 1912, was canceled January 9, 1914. Thomas took the general agency February 14, 1914.
The appellant has made four exceptions to the court's refusal to direct a verdict, three exceptions to the court's refusal to order a new trial, and one exception to the court's charge. The printed brief has, however, stated and argued only four issues, and they are these: (1) The issue of fact submitted by the court to the jury was not made by the pleadings; (2) there was no evidence of fraud; (3) the assignment by Parham to the Parham-Thomas-McSwain Company of the contract of January 11, 1912, and the defendant's assent thereto merged all prior oral negotiations; (4) the disputed clause about the permanency of the contract was in derogation of the statute of frauds.
We shall pursue these four argued heads, but not separately in the order of their statement; for the third and fourth subjects only suggest the existence of rules of law applicable to the testimony which exclude a consideration of the fraudulent intent. They therefore constitute but a part of the inquiry raised by the second subject. There are, then, really but two issues to be decided, to wit: (1) That first stated, and (2) that second stated.
On the first issue the appellant is mistaken to infer that our opinion on a former appeal (104 S.C. 227, 88 S.E. 470) limited the inquiry respecting fraud to any particular period of time or to any single transaction. After a recitation of the doings of the parties, starting with the execution of the contract of January 11, 1912, and ending with the termination of the contract in January, 1914, the court continued:
It is alleged "that all of this was done in furtherance of a scheme and purpose on the part of the defendant to render the said stock valueless and to injure the plaintiff."
Nor does the complaint so limit the inquiry. It recites the transactions of two years' duration, and at paragraph 14 charges that the whole was done with evil intent. The whole transaction betwixt Parham and the defendant covered the years 1912 and 1913, and the intent and the acts of the defendant within those years about the matter in hand are all brought into question by the pleadings and by the testimony.
Fraud is a state of mind, and it may exist and never be detected, or it may exist and be evidenced only at irregular intervals and by apparently unrelated circumstances. The intent is the warp of the transaction into which the acts of the persons are woven for the woof, and the intent runs from end to end of the transaction, sometimes seen and sometimes unobserved. And whether the intent did exist can rarely depend upon a single act in a particular time. A single circumstance standing by itself might appear to be of no bad import, but joined to another circumstance it might assume a bad aspect. All the circumstances together might warrant an inference that half of them would not sustain.
Coming to a consideration of the second subject--the proof of a reasonable existence of fraud--there lies in our path the two suggestions of the appellant made as subjects 3 and 4 in the argument, and urged to exclude any inquiry into the issue of fraud. It is contended by the appellant that when Parham assigned on July 10, 1913, to the Parham-Thomas-McSwain Company his interest in the contract of January 11, 1912, he thereby "merged all prior oral negotiations." The assignment was therein expressed to be of "all his (Parham's) right, title, and interest in a certain contract dated January 11, 1912, including the right to commissions as set forth in said contract or any amendments thereto."
It is axiomatic that a written agreement betwixt two persons merges all prior talk about the subject of the agreement. And the three cases cited by the appellant from our reports only hold so much. They are: McCarty v. Insurance Co., 81 S.C. 153, 62 S.E. 1, 18 L. R. A. (N. S.) 729; Lumber Co. v. Evans, 69 S.C. 93, 48 S.E. 108; Machine Co. v. Johnston, 102 S.C. 138, 86 S.E. 489.
But it is just as well established that if the writing was procured by words and with a fraudulent intent of the party claiming under it, then parol evidence is competent to prove the facts which constitute the fraud. The fraud, of course, would not in the very nature of the case appear on the face of the paper writing, and it may have been conceived at a time prior to the execution of the paper, and be evidenced by acts done before that time. Indeed, if one party should set on foot a scheme to defraud another party and go about it, there is no sort of subsequent acknowledgment, short of a frank disclosure and condonation, which the first party may get from the second party that will reform a crooked transaction into an honest one. A suggestion by the defendants of the statute of frauds to bar the plaintiff's remedy has no relevancy to the facts. And the cases from our own court cited by the appellant have therefore no relevancy. They are: Duckett v. Pool, 33 S.C. 238, 11 S.E. 689; Mendelsohn v. Banov, 57 S.C. 147, 35 S.E. 499; Hillhouse v. Jennings, 60 S.C. 373, 38 S.E. 599.
The plaintiff rests its right on a contract alleged to have been evidenced by a letter of the defendant, and hereinafter referred to as the destroyed letter. The proof of a contract evidenced by a lost writing is not proof of a parol agreement, but, on the contrary, is a proof by parol testimony of a paper writing lost or destroyed. For so plain a rule of law no authority needs to be cited. But assuming, as the defendant distinctly claims was the case, that a new contract was made in July, 1913, the date when the Parham-Thomas-McSwain Company was organized, and was by parol, yet the statute has no application to bar an action brought upon even such an agreement. The essence of the alleged contract of July, 1913, was that if the new and paid premiums in a year, say from July, 1913, to July, 1914, should amount to $250,000, then, in effect, there should be no rescission of the contract under paragraph 19, before quoted, but that the plaintiff might continue to serve as general agent .
The statute of fraud declares that "no action shall be brought upon any agreement that is not to be performed within the space of one year from the making thereof." The agreement must show that the performance of it is projected forward more than a year from the making of it. It does not affirmatively appear from the words of the contract that it was not to be performed within a year after July, 1913;on the contrary, the contract was presumptively for that year and was to be performed in that period of time. Before the lapse of a year from July, 1913, to wit, in January, 1914, the defendant breached the contract. The defendant suggests "that the plaintiff is suing for a breach of the contract in futuro, not for any compensation for work done...
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