Southern Package Corporation v. Beall

• Decision Date: 09 May 1938
• Docket Number: 33154
• Citation: 181 Miss. 740,180 So. 789
• Court: Mississippi Supreme Court
• Parties: SOUTHERN PACKAGE CORPORATION et al. v. BEALL

180 So. 789

181 Miss. 740

SOUTHERN PACKAGE CORPORATION et al. v. BEALL

No. 33154

Supreme Court of Mississippi

May 9, 1938

Division A

1 TRIAL.

Where defendants' testimony in suit on note in support of alleged agreement concerning how note was to be paid was objected to on ground that testimony was an effort to vary terms of note and that alleged agreement violated statute of frauds, but objections were not ruled on, finding for plaintiff did not constitute a holding that agreement had not been made, but indicated that such issue was not decided (Code 1930, section 3343; Laws 1934, chapter 252).

2. APPEAL AND ERROR.

Where chancellor in suit on note did not determine whether or hot parties had agreed that note was to be paid by charging it against a crate account, case was remanded so that facts relating to agreement might be determined and effect given thereto (Laws 1934, chapter 252).

3. APPEAL AND ERROR.

The reviewing court was without authority in suit on note to pass on facts de novo.

HOST. V. J. STRICKER, Chancellor.

APPEAL from the chancery court of Copiah county, HON. V. J STRICKER, Chancellor.

Action on a note by W. L. Beall against the Southern Package Corporation and another. Decree for plaintiff, and defendants appeal. Reversed and remanded, with instructions.

Reversed and remanded.

W. S Henley, of Hazlehurst, and Watkins & Eager, of Jackson, for appellants.

The evidence offered by the appellant in defense to the note sued upon was admissible, should have been admitted, and the facts were of evidential value.

70 A.L.R. 759; Cocke v. Blackbourn, 57 Miss. 689; Stockard v. Eckford, 2 Miss. 490; Elliott v. Carnell, 5 S. & M. 91; Matlock v. Livingston, 9 S. & M. 489; Luckett v. Henderson, 12 S. & M. 334; Marsh v. Lyle, 34 Miss. 173; Eckford v. Hogan, 44 Miss. 398; Fry v. Pruett, 56 Miss. 783; Hattiesburg Bottling Co. v. NuGrape Bottling Works, 116 So. 885, 150 Miss. 762; Millsaps v. Bank of Greenville, 71 Miss. 362.

The following cases dealing with deeds, contracts and instruments, other than promissory notes, announce the rule that the true consideration may always be inquired into, although oral evidence is required to establish the same.

Allen v. Allen, 168 So. 658, 175 Miss. 735; Tallahatchie Compress Co. v. Hartshorn, 125 Miss. 662, 88 So. 278, 17 A.L.R. 974; Raleigh State Bank v. Williams, 117 So. 365, 150 Miss. 766; Green v. Boothe, 44 So. 784, 91 Miss. 618; Sunflower Bank v. Pitts, 66 So. 810, 108 Miss. 380.

We now turn to authorities out of Mississippi. Such testimony is uniformly admitted, though the principles are not always the same. The evidence is justified either, first, on the ground that the agreement is collateral to and not contradictory to the original agreement; second, that it is necessary in order to show why the parties entered into the contract, that is to say, the establishment of the consideration; third, in many cases the admission of the evidence is based upon the fact that a fraud would be perpetrated if the evidence was not admitted.

Bromfield v. Trinidad Nat. Inv. Co., 36. F.2d 646; Murchie v. Cook, 1 Ala. 41; Hardigree v. Riley, 122 So. 814, 219 Ala. 607; Parkinson Oil Co. v. Davis, 153 So. 419; Roberson v. Cantrell, 160 So. 224; Reiniger v. Besley, 141 P. 574; Bennett v. Tillmon, 44 P. 80; Braley v. Henry, 71 Cal. 480, 60 Am. Rep. 543, 11 P. 385, 12 P. 623; Howard v. Stratton, 64 Cal. 487, 2 P. 263; Pyskatz v. Sobusick, 145 A. 58; Clement v. Houch, 113 Iowa 504, 85 N.W. 765; Randolph Bank v. Osburn, 207 Iowa 729, 223 N.W. 493; Murdy v. Kiles, 101 Iowa 549, 70 N.W. 714; Moore v. Altweyer, 202 N.W. 214; Owensboro Wagon Co. v. Wilson, 79 Kan. 633, 101 P. 4; Johnson v. Burnham, 115 A. 261; McGuennes v. Kyle, 208 Mass. 443, 94 N.E. 700; Mitchell v. Sleman, 5 Md. 376; Bowkar v. Johnson, 17 Mich. 42; Germania Bank v. Osburn, 81 Minn. 272, 83 N.W. 1084; Teidt v. Johnson, 151 Minn. 288, 186 N.W. 179; Henry Lbr. Co. v. Schobrich, 198 N.W. 406; Roe v. Bank, 67 S.W. 303; New York Life Ins. Co. v. Smucker, 106 Mo.App. 304, 80 S.W. 278; Allen v. Hardware Co., 118 S.W. 1157; Bennett v, Tillman, 18 Mont. 28, 44 P. 80; Mitchell v. Lath, 160 N, E. 646, 162 N.E. 511; Evans v. Freeman, 142 N.C. 661, 54 S.E. 847; National Bank v. Winslow, 193 N.C. 470, 137 S.E. 320; Smith Premier Typewriter Co. v. Hardware Co., 143 N.C. 97, 55 S.E. 417; Smith v. Page Trust Co., 195 N.C. 183, 141 S.E. 575; Kernodle v. Williams, 153 N.C. 475, 69 S.E. 431; Kernodle v. Kernodle, 174 N.C. 441, 93 S.E. 956; Powell v. Security Bank, 141 Okla. 169, 284 P. 5; Palestine Drug Co. v. Boggs, 29 P.2d 56; Vincent v. Russell, 201 P. 433; Send v. Flogg, 168 P. 300; Barnes v. Shelton, 16 S. C. L. 33, 18 Am. Dec. 642; Martin v. Home Bank, 92 S.C. 226, 75 S.E. 404; National Loan Bank v. Tolbert, 124 S.E. 772; Nalle v. Gates, 20 Tex. 315; Robe v. Yett, 164 S.W. 30; Clayton v. Western National Wall Paper Co., 146 S.W. 695; Goldstein v. Union National Bank, 216 S.W. 409; Hansen v. Yturria, 48 S.W. 795; Dooley v. Gray, 54 S.W.2d 556; Vance v. Snyder, 6 W.Va. 24; Jarrett v. Nickell, 9 W.Va. 345; Roy v. Jerd, 146 A. 250; Citizens Savings Bank v. Paradis, 146 A. 3; Jones v. Key, 16 Wis. 562; Evans v. Freeman, 54 S.E. 847.

There are also many other cases in which it is announced that as to executed contracts, the parol evidence rule is not applicable.

Patrick v. Petty, 3 So. 779; Duncan v. Sheehan, 13 Ky. L. 780; Rugland v. Thompson, 51 N.W. 604; Seley v. Colbert, 272 S.W. 818; Buchanon v. Adams, 60 Am. Rep. 666; Gibson v. First National Bank, 123 S.E. 606; Love v. Dakin, 112 So. 795, 147 Miss. 835; Meyer v. Casey, 57 Miss. 617.

The statute of frauds has no application in this case.

Johnson v. Bank of Sun Prairie, 145 N.W. 178; Larsen v. Johnson, 78 Wis. 301, 47 N.W. 615, 23 Am. St. Rep. 404; Smith v. Hall, 290 S.W. 480; Crisafulli Bros. v. Cucamonga Vintage Co., 217 P. 763; Central Tex. Min. Mfg. & Land Co. v. Weems, 11 S.W. 270.

A A. Cohn, of Brookhaven, and J. H. Garth, of Hazlehurst, for appellee.

It is the contention of W. L. Beall in this case that the Southern Package Corporation and H. J. Wilson are now indebted to him on $ 3000 with 4% interest thereon from the date of the note, plus the attorney's fee of 15%, less, however, a credit of $ 498.15. That W. L. Beall never promised to pay to the Southern Package Corporation the indebtedness of Anderson-Beall Company, and, if he had done so, it would not be binding because it was in contravention of paragraph (a) of Section 3343 of the Code of Mississippi 1930, which provides as follows, to-wit: "Certain contracts to be in writing.--An action shall not be brought whereby to charge a defendant or other party; (a) Upon any special promise to answer for the debt or default or miscarriage of another person."

The authorities in Mississippi are replete with cases sustaining the contention of the appellee in this case.

Sweatman v. Parker, 49 Miss. 19; Allen v. Smith & Brand, 133 So. 599; Wade v. Long, 151 So. 564; Wenger v. First National Bank of Biloxi, 164 So. 229; Home Ins. Co. v. Moore & Rawls, 151 Miss. 189, 117 So. 524; Palmer v. Bridges, 151 Miss. 12, 117 So. 328; Moore v. Kirkland, 112 Miss. 55, 72 So. 855; Olive v. Lewis, 45 Miss. 203; Lee v. Newman, 55 Miss. 365.

As to the introduction of parol evidence of a contemporaneous agreement as a defense to a promissory note, we wish to call the court's attention to 71 A.L.R. 542577, both inclusive.

The rule excluding parol evidence as to the manner or means of payment has been applied in cases involving promissory notes, where it was sought to show agreements for payment.

71 A.L.R. 566; Hair v. La Brouse, 10 Ala. 548; LaFayette County Monument Corp. v. Magoon, 73 Wis. 627, 3 L. E. A. 761, 42 N.W. 17; Racine County Bank v. Keep, 13 Wis. 210; Bender v. Montgomery, 8 Lea. 586; Tuskaloosa Cotton-Seed Oil Co. v. Perry, 85 Ala. 158, 4 So. 635; Bishop v. Dillard, 49 Ark. 285, 5 S.W. 341; Spring v. Lovett, 11 Pick. 417; Smith v. Stevens, 3 Ind. 332; Clanin v. Esterly Harvesting Math. Co., 118 Ind. 372. 3 L.R.A. 863, 21 N.E. 35; Coapstick v. Bosworth, 121 Ind. 6, 22 N.E. 772; Zinsser v. Columbia Cab Co., 66 A.D. 514, 73 N.Y.S. 287; Hoyt v. French, 24 N.H. 198.

In Harrison v. Morrison, 39 Minn. 319, 40 N.W. 66, parol evidence was held inadmissible to show an agreement that, if the maker of a note should be forced to assign for the benefit of his creditors, the payee should file his claim on the note with the assignee, and execute a release to the maker. The court said that the case was not one of a separate collateral agreement upon a matter distinct from that to which the writing related, and upon which it was silent, but related to the very matter covered by the writing, and was inconsistent with its terms.

Leonard v. Smith, 11 Met. 330; Hours v. Sioux City Brass Works, 134 Iowa 484, 110 N.W. 166; Hills Sav. Bank v. Hirt, 204 Iowa 940, 216 N.W. 281; McCusker v. Geiger, 195 Mass. 46, 80 N.E. 648; Woodson v. Beck, 151 N.C. 144, 31 L.R.A. (N.S.) 235, 65 S.E. 751; Union Nat. Bank v. Lavacota Oil & Gas Co., 89 Okla. 258, 213 P. 869; Federal Discount Co. v. Fletcher and Ratliff, 61 So. 308, 104 Miss. 251.

It is elementary that parol evidence is never admissible to contradict or vary the terms of a valid written instrument.

Hawkins v. Shields, 100 Miss. 739, 57 So. 4; O'Neal v. McLeod, 28 So. 23; Wigmore on Evidence (2 Ed.), par. 2444; Bromfield v. Trinidad Nat. Invest. Co., 36 F.2d 646; Kerr v. Holder, 13 Ga.App. 9, 78 S.E. 682; Cole v. Bank of Bowersville, 31 Ga.App. 435, 120 S.E. 790; 71 A.L.R. 553; Pack v. Thomas, 13 S. & M. 11.

Evidence is inadmissible to prove an alleged parol agreement made prior to or contemporaneously with the note or bill that it should be paid wholly or partly in goods or...