2 F.2d 803 | 9th Cir. | 1924
Lead Opinion
(after stating the facts as above). We will first consider the sufficiency of the counterclaim, as a decision of that question will have a material bearing upon the sufficiency of the affirmative defense. Was oral testimony competent to prove the agreement on the part of the plaintiff to advance the sum of $140,000 to enable the defendant to take up and pay off the claims and liens against the mill property?
“There may be instances in which a contract is partly in writing and partly oral, and the two together constitute the contract; so there may be a question of fact as to whether the written agreement is or is not
“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, may be proven by parol, if under the circumstances of the particular ease it may properly be inferred that tho parties did not intend tho written paper to he a complete and final statement of the whole of the transaction between them. But such an agreement must not only be collateral, but must relate to a subject distinct from that to which tho written contract applies; that is, it must not be so closely connected with the principal transaction as to form part and parcel of it. And when the writing itself upon its face is couched in such terms'as import a complete legal obligation without any uncertainty as to the object or extent of the engagement, it is conclusively presumed that the whole engagement of the parties, and the extent and manner of their undertaking, were reduced to writing.” Seitz v. Brewers’ Refrigerating Co., 141 U. S. 510, 517, 12 S. Ct. 40, 47 (35 L. Ed. 837).
“The second class embraces those cases which recognize the written instrument as existing and valid, but regard it as incomplete, either obviously, or at least possibly, and admit parol evidence, not to contradict or vary, but to complete the entire agreement of which the writing was only a part. Receipts, bills of parcels and writings that evidently express only some parts of the agreement are examples of this class which leaves the written contract unchanged, but treats it as part of an entire oral agreement, the remainder of which was not reduced to writing. Two things, however, are essential to bring a case within this class: (1) The writing must not appear upon inspection to be a complete contract, embracing all the particulars necessary to make a perfect agreement and designed to express the whole arrangement between the parties, for in such a case it is conclusively presumed to embrace the entire contract. (2) The parol evidence must be consistent with and not contradictory of the written instrument.” Thomas v. Seutt, 127 N. Y. 133, 138, 27 N. E. 961, 962.
Upon inspection, the written memorandum would seem to be a complete contract in itself, embracing all the particulars necessary to make a perfect agreement and designed to express the whole arrangement between the parties. But in any event, the oral agreement on the part of the plaintiff to advance money to enable the defendant to lease the mill property free and clear of incumbrances was so closely connected with the principal transaction as to become part and parcel of it. Furthermore, whether tho written memorandum is complete in itself or not, the oral agreement is inconsistent with and contradictory of its terms and conditions. It must be remembered that the plaintiff is not here seeking to recover damages for breach of the written contract, or for breach of an independent oral contract. On the contrary, he is seeking to incorporate the oral contract into the written memorandum, as a basis for the" recovery, thereby varying tho terms of the written contract and changing entirely the covenants and obligations of the parties. Tho rule is elementary that this cannot be done, and inasmuch as the defendant admits his inability to perform the contract as written, the counter claim does not state facts sufficient to constitute a cause of action.
Tho affirmative defense is likewise deficient, for two reasons: First, because of the admitted inability of the defendant to lease the mill property, the rentals have failed and the failure of the rentals did not relieve the defendant from tho obligation to repay the advances. Second, the oral testimony clearly tends to vary and contradict the terms of tho promissory notes. We are not unmindful of the rule that permits a party to show that what purports fco be a contract is not in fact so, because of delivery upon an unperformed condition, or the
It is said that a motion for judgment on the pleadings is not favored by the courts, and this is true, if the motion is permitted to cut off the right to amend, thus preventing a hearing on the merits. But if the motion for judgment is treated as a demurrer to the defective pleading with leave to amend in a proper case, as was done here, the practice is sanctioned by usage and free from objection.
We find no error in the record, and the judgment is affirmed.
Dissenting Opinion
(dissenting). If the answer involved no more than the alleged oral agreement for loan and payment out of rents to accumulate, I would concur. Bor defendant carefully pleads the whole as an entire and nonseverable contract, of which the oral part was voluntarily omitted from the written memorandum, apparently complete on its face; and so the latter is conclusively presumed to contain all terms of the contract, is the contract, and is not to be affected by parol.
In addition to eases cited in the majority opinion, see Sund v. Co., 86 Or. 289, 168 P. 303. In respect to the notes, there is a clear distinction and difference between a note delivered but not to become an obligation until the happening of an event, a condition precedent, as in La Grande v. Blum, 26 Or. 49, 37 P. 49, and a note delivered as a present obligation but subject to avoidance by the happening, of an event, a condition subsequent, as in Colvin v. Goff, 82 Or. 314, 161 P. 568.
Parol evidence is admissible in the first, but not in the last. Wigmore, Evidence, § 2435. The instant notes are of the last category.
But there is more to the answer. By way of set-off, though labeled counterclaim, it alleges that the entire contract was orally made, rests in parol, and intentionally only part was incorporated in the written memorandum (pleaded in hæc verba) and to avoid the statute of frauds. It also pleads all the oral agreement. But it alleges definitely that defendant duly performed all obligatory upon him, and that plaintiff breached the written memorandum as well as the oral agreement, to defendant’s damage in amount $930,000 in respect to the first and in amount $500,000 in respect to the last. Now, since the written memorandum is the only contract pleaded and provable, the only contract sanctioned by law and cognizable in court, all allegations of the oral agreement otherwise are immaterial in pleading as in proof, are mere surplusage which, not stricken as they ought to have been, are to be ignored. They affect not at all the legal sufficiency of the answer as a set-off by reason of the written and only contract, but impair only its form; they are neither advantage nor prejudice to either party, and neither party will be heard in respect to them. Despite them, defendant can recover upon the written contract. Proof of it alone will maintain his set-off; for the immaterial oral agreement need not be, as it cannot be, proven. And in this would be nothing obnoxious to the principles of allegata et probata, variance, or res judicata. In any ease the immaterial need not be proven, and it suffices to prove contracts in legal identity, whether or not proven in fact identity. See Board v. Keene, etc., Bank, 108 F. 515, 47 C. C. A. 464; James v. Goodenough, 7 Nev. 324; Patterson v. Co., 30 Cal. 360; Wallace v. Baisley, 22 Or. 573, 30 P. 432; cases cited, 13 Cor. Jur. 751; 22 Ency. P. P. 533, 537.
The rule is the same even in criminal law. That a litigant improperly mingles immaterial allegations of an oral agreement with a good cause of action upon a written contract, or claims more than his due, is no reason in principle to deny recovery and of what is proven due. A complaint of that nature would be invulnerable to general demurrer, and good as a complaint is good as a set-off.
It is true that defendant contends throughout that the entire contract rests in parol, and that he is entitled to prove it by parol despite the written memorandum. But it is also true that a contention palpably erroneous by mere inspection of the pleading will not justify a cpurt in refusing whatever relief is due upon like inspection. That justly due will not be denied as a penalty for claiming too much. A righteous claim is not to be rejected merely because asserted with erroneous reasons. If the pleading of a litigant discloses that he is entitled to X because 2 plus 2 make 4, he is not to be denied recovery for that his counsel strenuously argues that 2 plus 2 make 5.
In so far as the majority opinion states that the “advance” was to enable defendant to lease the mill property free and clear of
The answer alleges that defendant had purchased the mill, was entitled to possession of it, was indebted for part of the price payable in future installments, and that he had exhibited title as the written contract stipulates and to plaintiff’s satisfaction. It further alleges that the “advance” was to be used to clear incumbrances, and that in consequence of plaintiff’s breach of written contract and ora.1 agreement, defendant some 33 months later was constrained to sell the mill to his damage. And the lease provides that if and when the lessee exercises its right to purchase the mill, defendant will make good and unincumbered title. But in all this is naught impeaching his lawful right and power to lease the'mill, or admitting any inability at any material time.
Without more, it is my opinion that in this state of the case, defendant was entitled to trial of his set-off, and that judgment on the pleadings was error.