The Merchants State Bank of Fargo v. Ruettell

• Decision Date: 14 December 1903
• Citation: 97 N.W. 853,12 N.D. 519
• Court: North Dakota Supreme Court

97 N.W. 853

12 N.D. 519

THE MERCHANTS STATE BANK OF FARGO v. HARRY D. RUETTELL

Supreme Court of North Dakota

December 14, 1903

Appeal from District Court, Cass county; Pollock, J.

Action by the Merchants' State Bank of Fargo against Harry D Ruettell. Judgment for plaintiff, and defendant appeals.

Affirmed.

S. G. More and R. M. Pollock, for appellant.

Defendant should have been permitted to show the true consideration for the use of the land. The consideration is always open to investigation when such investigation and proof attending it do not tend to change in other respects the contract, of destroy it. Jones on Ev., 475; Greenleaf on Ev., section 304; Hendrick v. Crowley, 31 Cal. 476; Halpin v. Stone 78 Wis. 183, 47 N.W. 177.

Under the clause in the lease giving defendant option of extending the lease one year from its expiration, he should have been permitted to prove, that prior to the assignment of the lease to plaintiff, he paid the assignor $ 160 in October, 1899, as rent for the year 1900. Defendant's testimony on this point was rejected, as varying the terms of a written instrument. The proof was not susceptible to this objection. Exercising this option he made a new lease for 1900. The landlord being thus paid his rent, his assignee could have no better right than he had. The transaction constituted an executed oral agreement, completed by payment of the rent in full. The assignment by the landlord to plaintiff was subject to all equities between him and the defendant. Rev. Codes section 5222.

Newman Spalding and Stambaugh, for respondent.

A written contract cannot be contradicted or altered by parol evidence, and the evidence offered to show a different consideration than that expressed in the lease, was within the rule, and not one of the exceptions. Diven v. Johnston, 3 L. R. A. 308; Deering v. Russell, 5 N.D. 319, 65 N.W. 691; Hutchinson v. Cleary 3 N.D. 270, 55 N.W. 729; National Ger. Amer. Bank v. Lang, 2 N.D. 66, 49 N.W. 414; Northwestern Fuel Co. v. Bruns, 1 N D. 137, 45 N.W. 699.

OPINION

MORGAN, J.

The plaintiff sues to recover $ 200 as rent for the use and occupation of a farm under a lease from the owner. The complaint sets forth the lease in full, and an assignment of it to the plaintiff. One Browning was the owner of the land, and in April, 1899, leased it in writing to the defendant, Ruettell, for one year, for the sum of $ 200, to be paid in advance. The lease contained a proviso that defendant had the option to extend the lease for another year from April, 1900. In January, 1900, the owner of the land, Browning, assigned the lease to plaintiff. Upon receiving the assignment, plaintiff notified defendant that it had possession of the Browning land, and that, if defendant desired to lease it for another year, to advise plaintiff of the fact. Plaintiff and defendant had interviews thereafter in reference to the leasing of the land, but failed to come to any agreement, as defendant claimed that he was entitled to the use of the land for 1900 under the special proviso of the lease giving him an option to extend the lease for another year. The answer alleges that the lease set forth in the complaint did not correctly state the agreement of the parties; that the rental of said land was to be $ 160 per annum, and not $ 200, as stated in the lease. Defendant further sets forth in his answer that in the fall of 1899 defendant and Browning made a new contract in respect to said land to the effect that defendant was to farm the land for the year 1900, and for the use thereof was to credit the sum of $ 160 on a note held by defendant against said Browning, and that such credit had been made on said note by defendant pursuant to such agreement, and that defendant had occupied and farmed the land in 1900 under said new agreement, and not under the lease of April 10, 1899. The trial resulted in a directed verdict for the plaintiff for $ 200 and interest. A motion for a new trial, based on a statement of the case duly settled, was denied, and defendant appeals from the judgment.

The appellant assigns twenty-four errors of law occurring at the trial. Two of them only are argued and these fairly raise everything claimed as error in the additional assignments. These assignments present the following questions: (1) Should the defendant have been permitted to show that the rental for the land in question was $ 160 per annum, instead of $ 200, as stipulated in the written lease? (2) Should the defendant have been permitted to show that he occupied the land during the cropping season of 1900 under an oral lease made in October, 1899, under which he was to use the land for 1900? The first question stated is raised by the answer, and apprises the plaintiff that defendant will contend on the trial that the consideration for the use of the land was to be $ 160, and not $ 200, as expressly stated in the lease. All of the testimony offered at the trial to show that the rent was other than as stated in the lease was objected to as varying the express terms of a written contract, and sustained on that ground. Defendant contends that such rulings were erroneous, as the evidence offered would vary the terms of a written contract only so far as the consideration for the same is concerned, and that written contracts may be varied in respect to the consideration by parol proof. A similar question was before this court in Bank v. Prior, 10 N.D. 146, 86 N.W. 362, involving the admissibility of parol evidence to vary the terms of a mortgage on real estate. In that case it was held that an oral agreement made before or at the time of the execution of the notes and mortgage, to the effect that on payment of two of the four notes secured by the mortgage the mortgage should be released as to the two remaining notes was inadmissible as a defense to the foreclosure of the mortgage as to the two unpaid notes, as such evidence was inconsistent with, and varied the terms of, the mortgage, and defeated its operation in part. In that case the general rule was followed that parol proof is inadmissible to vary the terms of a written contract as to the consideration for the contract if such proof is inconsistent with the terms of the written instrument, or tends to defeat it in whole or in part. The case at bar and that case are alike in principle. The written lease provides for payment of $ 200 rent, and the oral contract would change its terms so that $ 160 only are payable. The parol evidence offered is inconsistent with the terms of the written lease, and would destroy and nullify its terms in part. If its terms may be varied to the extent claimed in this case, it could be varied without limit, resulting in showing that a nominal consideration was payable only, or no consideration at all. As bearing on this question, see Hume Bros. v. Taylor, 63 Ill. 43; Chapman v. McGrew, 20 Ill. 101; Loach v. Farnum, 90 Ill. 368; Collamer v. Farrington (Sup.) 15 N.Y.S. 452; Delamater v. Bush, 63 Barb. (N.Y.) 168. The last case cited was an action for rent, and the court said: "While in deeds and other instruments you may, for certain purposes, prove the consideration to be different from that expressed, it is not admissible to contradict an agreement or covenant to pay a certain sum." In Williams v. Kent (Md.) 10 A. 228, the court said: "It is well settled that, where the lessor and lessee enter into a written agreement for the rent of property for a sum specified, parol evidence will not be received, either for the purpose of increasing or diminishing the sum so agreed upon. The written contract must speak for itself." There was no error in rejecting the testimony offered.

The answer alleges that the defendant is entitled to the possession of the premises during the year 1900 by virtue of a parol contract entered into between himself and Browning in October, 1899, by which Browning leased the premises to him for 1900 at an agreed rental of $ 160, which he paid to Browning in October, 1899. At the trial the defendant offered proof of such parol contract. On objection by the plaintiff that such proof contravened the provisions of the statute of frauds, as contained in subdivision 5 of section 3887, Rev. Codes 1899, the proof was rejected. Said section and subdivision 5 thereof provide than an agreement for the leasing for a longer period than one year is invalid unless the same, or some note or memorandum thereof, is in writing, and subscribed by the party to be charged, or by his agent, duly authorized in writing. During the trial, and after plaintiff had made a motion for a directed verdict in his favor, the defendant qualified his offer of proof above mentioned as follows: "The defendant now informs the court that the agreement and lease, under which he claims to have cropped the land for the year 1900, was an oral agreement, under and by the terms of which the defendant was to occupy and cultivate the land until such time as the rental therefor at $ 160 per annum would pay the debt which was due from said Browning to this defendant, and which amounted to something like $ 340, with accrued interest, the same being in the form of a promissory note; that in pursuance of such oral agreement and arrangement the defendant, Ruettell, then paid, by crediting upon said note the rental for the year 1900, the sum of $ 160." The defendant now insists that such offer of proof should have been accepted, and that prejudicial error was committed by its rejection. A different conclusion has been reached by us. At the time this oral agreement was entered into, defendant was in possession of the premises under the written lease which did not expire until April following. The testimony proposed by the offer refers to possession for the cropping season of 1900. The...