Watson v. Rice
Watson v. Rice
Opinion of the Court
This is an appeal from the district court of Potter county, and we quote from appellant’s statement of the nature and result of the suit as follows: “This was a suit for damages for breach of an alleged contract to redeliver notes of the plaintiff. The plaintiff Rice had executed notes to the defendant Watson, aggregating $825, and paid the defendant $185 in cash, and the defendant'negotiated the notes. This suit was brought to recover $185 in cash and the amounts of the notes which plaintiff had to pay by reason of their having been transferred to an innocent purchaser, and he based his cause of action upon an alleged agreement, at the time the notes were executed and the cash paid, by which he claimed the defendant Watson agreed to redeliver the notes to him when the first one became due and repay his cash if the plaintiff Rice was dissatisfied with the transaction and desired the notes returned and the cash repaid.” The case was tried before a jury, resulting in a verdict in favor of the plaintiff Rice for the sum of $1,276.52, and judgment was entered accordingly.
*107 The substance of plaintiff’s amended petition is: That on or about April 20, 1909, the defendant Watson was promoting the sale of machinery and a patent right for making concrete building blocks under what is known as the Ferguson system, and that defendant had procured 14 other parties to sign a certain agreement in writing by which said parties agreed to pay defendant $15,000 for one of the machines for making such blocks, and a certain royalty on all blocks manufactured by them. That thereupon defendant presented such contract to plaintiff and requested him to execute the same as the fifteenth man and pay plaintiff $185 in cash and execute three notes at $275 each, due in 90 days, 6 months,' and 9 months, respectively. The plaintiff alleges that he repeatedly refused to pay such cash or sign the agreement or to execute the notes; that, in order to induce him to do so, defendant represented to plaintiff that this machine would produce a better building material than would brick and produce it much cheaper than brick, and proposed to plaintiff that, if he would execute the papers and notes and pay the cash, then, in the event plaintiff was not satisfied with the transaction at the time the first note matured, defendant would repay plaintiff such cash, with interest, and return to plaintiff his notes; that, relying upon such promise to return the notes and repay the cash, he executed contract and notes and paid $185; that the 90 days intervening between the date of the execution of the papers and the maturity of the first note was given to plaintiff as the time in which he should investigate the merits of the block machines and the material produced thereby and determine whether or not he was satisfied with the same and whether or not he would demand the return of the notes and the repayment of the money. He alleges further that the defendant Watson fraudulently represented the merits of the machine and material produced thereby, and that all of his representations in regard thereto were false; that plaintiff was induced thereby, and by the promise to repay his money and return his notes within 90 days, to consummate the deal; that during the 90 days plaintiff expressed his dissatisfaction and elected to have the notes and money returned to him; that the defendant sold and transferred the notes to a bona fide purchaser; and that plaintiff had been required to pay them. There was prayer for the principal sum of $1,000, with interest and attorneys’ fees provided for in the notes.
The substance of the defendant’s pleading is that the machines and the building material produced by them in all things complied with the representations made by defendant; that the citizens subscribing thereto appointed a committee, of which plaintiff was a member, to test the machine and its products, which was done, and thereafter plaintiff executed said notes and paid the $185; that, at the time said notes were executed and the money paid by plaintiff, defendant was not present and acting and did not make anv representations whatever; that the entire contract was evidenced by the writings contained in the original contract and notes; that, if there was any agreement to release plaintiff from his obligations, the agreement of all the parties was subsequently reduced to writing, and defendant had no notice and knowledge that plaintiff was relying upon any such agreement; that after plaintiff had made another investigation of the machine, and visited various cities for this purpose, and was fully in possession of all the facts, the defendant offered 'to release him from all obligations and surrender to him his notes, which proposal plaintiff refused to accept, thereby ratifying the contract and estopping himself from this suit; that, long after the alleged agreement to release plaintiff, the unconditional promissory negotiable notes were executed; and that thereafter plaintiff assisted in securing a charter for' the company, became its general manager and one of the directors, and continued to be such manager and director until long after the maturity of said first note, by reason of which plaintiff was estopped.
If Watson had sued upon the notes it is clear that the appellee could have pleaded failure of consideration and interposed the defense that the machine did not fulfill the warranty; and, in our opinion, the appellee’s position is not altered for the worse because he has been forced to pay off the notes and now seeks to recover, basing his action upon fraudulent representations and the agreement above set out. It is held that, if the writing is invalid so that it never had any legal effect, the rule denying the admission of parol evidence has no application, and likewise where its validity is questioned on the ground of fraud. 2 Elliott on Contracts, § 1629. The author quoted further says: “The question usually is as to whether the parol evidence sought to be introduced contradicts or alters the written contract or leaves it to stand unchanged and simply tends to establish an additional collateral agreement. It is often difficult to determine this question, and there is much conflict among the authorities. The form in which the question arises may sometimes be an important factor in determining the admissibility of the evidence, and, referring to leases, it is said that a part of the conflict in the decisions may be explained if we observe that it is one question whether such a collateral agreement may be proved for the purpose of sustaining an action for its breach and a different question whether it may be proved for the purpose of defeating an action on the written lease.” Another writer suggests the following test for determining whether a parol agreement is collaterally admissible: If it interferes with the writing it cannot be proved. If, on the other hand, it relates to a matter beyond the scope of the written contract, the writing does not affect it. In each case it must be determined from the character of the writing and from the circumstances of the ease whether the parol agreement offered to be proved was in regard to a matter which it is reasonable to infer the parties thought settled by the terms of the writing and, if it was, evidence to show it should be excluded. The writing must speak just so far as it is fair to conclude that the parties, acting as reasonable men, and using intelligible language, intended it should speak, and no further. Id. § 1633. “There is also a class of cases in which it is held that parol evidence of a collateral contemporaneous agreement, which assumes the contract as indicated by the writing and undertakes to deal with some contingency or new relation of the parties in the future, that may arise under the written agreement, is admissible.” Id. § 1634. “The general rule-which excludes parol evidence, when offered to contradict or vary the terms, provisions, or legal effects of a written instrument, is subject to many qualifications. Among these qualifications is one to the effect that conditions relating to conditions precedent may be shown by extrinsic evidence. A party who concedes that the instrument evidencing the contract was placed in the possession of the party seeking relief, but claims that the latter took it with the understanding that it was not to go into effect until the happening of some other or further event, and that such event has not transpired, is not considered as one seeking to vary or contradict a written contract, but is one endeavoring to show that no contract between the parties ever in fact came into existence. For this reason evidence of such conditions precedent is held admissible. The cases which so hold merely give recognition to the well-settled rule that an instrument may be delivered by one party to another to take effect on the happening off a contingency, and that, by such collateral agreement, the legal operation of the writing is merely postponed until the happening off the contingency.” Id. § 1636. 'W'e think the-court did not err in admitting the testimony and in overruling the exceptions and submitting the question to the jury. Merchants’ National Bank v. McAnnulty, 31 S. W. 1091; Id., 89 Tex. 124, 33 S. W. 963; Downey v. Hatter, 48 S. W. 32; Pope v. Taliaferro, 115 S. W. 309; Mfg. Co. v. Powell, 78 Tex. 53, 14 S. W. 245; I. & G. N. Ry. Co. v. Dawson, 62 Tex. 262.
The evidence admitted by the court and complained of by the eleventh and nineteenth assignments of error should not have been permitted; but, since the same facts were elicited without objection from other witnesses and at other times during the trial, the error is harmless. The evidence of ap-pellee, to the effect that he had observed certain publications bearing on cement as a building material, and had found no reference in them to the Eerguson system, was properly admitted in rebuttal to the evidence of defendant’s witness James Barron.
The last three assignments, submitted together, go to the sufficiency of the evidence to support the verdict and the judgment. The evidence, taken as a whole,, while sharply conflicting upon the main issues, is sufficient to sustain both theories, of the case insisted upon by plaintiff in the court below.
Upon a review of the entire record, we believe a proper verdict and judgment has been rendered, and such matters as may be deemed irregularities in the conduct of the trial have not affected the determination of the case upon its merits.
We therefore affirm the judgment
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