Sentinel Acceptance Corp. v. Colgate

• Citation: 424 P.2d 380,162 Colo. 64
• Decision Date: 06 March 1967
• Docket Number: No. 21279,21279
• Parties: SENTINEL ACCEPTANCE CORPORATION, a Colorado Corporation, Plaintiff in Error, v. Mary E. COLGATE, Defendant in Error.
• Court: Supreme Court of Colorado

Page 380

424 P.2d 380

162 Colo. 64

SENTINEL ACCEPTANCE CORPORATION, a Colorado Corporation, Plaintiff in Error, v. Mary E. COLGATE, Defendant in Error.

No. 21279.

Supreme Court of Colorado, En Banc.

March 6, 1967.

Wormwood, Wolvington, Renner & dosh, Richard W. Laugesen, Jr., Denver, for plaintiff in error.

Kenneth C. Schoen, Denver, for defendant in error.

PRINGLE, Justice.

Sentinel Acceptance Corporation brought an action against Mary E. Colgate for the balance due on a promissory note. The parties will be referred to as plaintiff and defendant, or by name.

The note in issue and various other documents were signed contemporaneously by the defendant on December 21, 1962. The face amount of the note was $1,038.96. Two payments were made by the defendant, one in February and one in April of 1963. The amount left unpaid, and here in issue, is $882.30, including all applicable finance charges.

The note was given as payment for an inter-communication, burglar alarm, and fire alarm system which was installed in the defendant's home by Mark II Electronics, Inc. Mark II subsequently assigned the note to the plaintiff.

The trial court found that Sentinel was not a holder in due course of the note, and that the transaction was void for fraud on the part of the plaintiff and the note was therefore unenforceable. Plaintiff brings writ of error here and assigns in the main two grounds for reversal:

1. That the trial court erred in admitting parol evidence which contradicted and varied the terms of the written agreements of the parties.

2. That the evidence was insufficient as a matter of law to sustain the judgment.

At the trial, the defendant testified that she signed a sales contract, a note and chattel mortgage, a bonus demonstration agreement and other papers. Each of the various documents which defendant signed contains a clause denying that any oral warranties exist and stating that no warranties were made which are not contained within the instrument.

Over objection, defendant was allowed to testify as to her understanding of the agreement. She claimed that she signed the various documents only because she was told that she was to receive the equipment free if she furnished the names of a sufficient number of prospects for Mark II's demonstration program.

It is well-settled that the parol evidence rule excludes extrinsic evidence which varies or contradicts the express terms of a written agreement, and that the rule applies to sales transactions as well as to other types of contracts. Knupple v. Moreland, 148 Colo. 242, 366 P.2d 136; Alley v. McMath, 140 Colo. 600, 346 P.2d 304. Plaintiff's objection at the trial was well taken. the trial court should have excluded the defendant's testimony as to her understanding of the transaction. Van Vechten v. Smith, 59 Iowa 173, 13 N.W. 94. This is not a case where defendant contends that she was unable to read and to understand the instruments which she signed. In fact, on the witness stand she admitted that she knew what a note was and knew that she was signing a note. Her...