Saliba v. Arthur Fulmer Charlotte, Inc.

• Decision Date: 13 November 1970
• Docket Number: No. 108,108
• Citation: 259 Md. 588,270 A.2d 656
• Parties: Elie SALIBA v. ARTHUR FULMER CHARLOTTE, INC.
• Court: Maryland Court of Appeals

Page 588

259 Md. 588

270 A.2d 656

Elie SALIBA v. ARTHUR FULMER CHARLOTTE, INC.

No. 108.

Court of Appeals of Maryland.

Nov. 13, 1970.

SMITH, Judge.

This case involves the question of whether an oral condition precedent may be shown to bar collection on a note executed as a part of a contract to purchase seat covers. The trial judge relied upon the parol evidence rule and entered judgment for the plaintiff against the defendants. We shall reverse that judgment and remand for a new trial.

Appellee Arthur Fulmer Charlotte, Inc., (Fulmer) is a manufacturer of automobile seat covers. Appellant Elie Saliba (Saliba) in the spring of 1966 was an automobile dealer in St. Mary's County. Saliba had been 'the owner', as he put it, and president of Lee Motors, Inc., at Lexington Park. The charter of that corporation was revoked by proclamation of the Governor on October 31, 1962, for failure to file reports and to pay the necessary taxes in connection with those reports to the Department of Assessments and Taxation. Saliba continued to trade under the name of Lee Motors, Inc.

In April of 1966 various documents were executed. An order dated April 4 was signed by Saliba for the purchase of 262 seat covers. It reads, 'Ship to (Lee Motors, Inc.) McGuires Auto Uphols. & Seat Covers', with an address at Lexington Park identical with that of Lee Motors. It shows that the items were to be charged to 'Lee Motors, Inc.' No delivery date was specified. Under date of April 5, 1966, a 'Distributor 1966 Seat Cover Price Agreement' was executed with the name 'McGuire's Auto Upholstery and Seat Covers', at the top of the instrument. The same address was used. At the bottom there was a notation that this was an agreement submitted with an order for 262 seat covers. After the word 'buyer' appeared 'Lee Motors, Inc., by Elie Saliba'. On April 5 Saliba executed yet another document which recited in part:

'I hereby guarantee to you payment of all sums which shall hereafter become due to you for invoices for merchandise sold to McGuire Auto Upholstery and Seat Covers.'

On the same date a deferred payment plan note to Fulmer in the amount of $4,336.00 was signed 'Lee Motors, Inc. by Elie Saliba'. The first payment on the note was due June 20, 1966, in the amount of $435.00.

Fulmer sued 'Lee Motors, Inc.' and Saliba on the common counts, on a count reciting certain sales in April, May and June of 1966 and on a count referring to the promissory note. Judgment was entered against both defendants in the amount of $5,605.83 together with attorney's fees in the amount of $796.15.

Saliba testified that he conducted the negotiations with a salesman of Fulmer. The salesman did not testify. Saliba said 'McGuire' was 'the name of the upholstery man who does upholstery' whom the salesman 'was suppose(d) to bring to (Saliba) and (who was) suppose(d) to open up the shop.' When asked as to the conditions under which he signed the purchase agreement, Saliba said:

'I signed this document under the condition that he is going to supply 1 or 2 upholsterers, trimmers, whatever you call them, to open up the shop which we need for a shop like that in the Park. Normally, an automobile agency, Your Honor, don't buy $4,000 for the seat covers. We buy $20.00 or $40.00 for our own use.'

There was yet additional testimony of Saliba from which it might be inferred that Saliba at first refused to sign an order; that Fulmer's salesman said he could get 'not one man but who men'; that the salesman didn't want to get the men until there was 'something concrete' to show that an upholstery shop would be opened; that Saliba then signed, saying he didn't want anything shipped 'before (he had) the people to run (the) upholstery shop, because (he was) not an upholsterer and (he didn't) have an upholsterer (there)'; that the salesman said he knew a good man named 'McGuire' who was looking for a job; that the salesman suggested using the name 'McGuire' because they wouldn't want any merchandise until McGuire came in; and that neither Saliba nor anyone on his behalf ever directed shipment of the seat covers, but rather, 'as a matter of fact', Fulmer was called twice and 'told not to ship' because Saliba had no upholsterers.

The trial judge noted that Saliba was resting his defense upon a 'condition precedent, in that the order was not to become effective until the plaintiff was notified that a certain employee characterized as a 'trimmer' had been obtained by the defendants, which employee allegedly was to be procured by the assistance of the plaintiff.' He concluded that had the condition precedent been inserted in the agreements the contention of Saliba would be proper, but declined under the parol evidence rule to consider the condition precedent, quoting our predecessors in Mark-off v. Kreiner, 180 Md. 150, 23 A.2d 19 (1941), as follows:

'One of the most familiar rules of the common law is that parol evidence is inadmissible to vary or contradict the terms of a written instrument. Warren Glass Works Co. v. Keystone Coal Co., 65 Md. 547, 5 A. 253; Castleman v. Du Val, 89 Md. 657, 43 A. 821; Fowler v. Pendleton, 121 Md. 297, 88 A. 124. The reason for this rule is that when contracting parties have discussed and agreed upon their obligations to each other and reduced them to writing, their written contract is more reliable as evidence than the uncertain memory of man. A different rule would increase the temptations to commit perjury and often render instruments of little value. All prior and contemporaneous negotiations are merged in the written instrument, which is treated as the exclusive medium for ascertaining the extent of their obligations. Hence, in the absence of fraud, duress, or mistake, parol evidence of conversations before or at the time the contract was made must be excluded.' Id. at 154-155, 23 A.2d at 23. (Emphasis added by the trial judge.)

In the next paragraph of Markoff the Court said:

'It was argued that, under an exception to the parol evidence rule, the challenged testimony was admissible as a separate collateral agreement on which the written contract was silent. The doctrine of collateral agreement was explained by Chief Justice Fuller in the following words: 'Undoubtedly, the existence of a separate oral agreement as to any matter on which a written contract is silent, and which is not inconsistent with its terms,...