103 Kan. 32 | Kan. | 1918
The opinion of the court was delivered by
The action was on a promissory note for $300 given by the defendant to the plaintiff in part payment of a commission for procuring a real-estate loan. The answer admitted the execution of the note, but alleged that the consideration for which it was given, had wholly failed; that plaintiff had orally agreed with defendant to procure him a loan of $20,000 on his farm in Kiowa county, which was to draw interest at the rate of six percent; that defendant agreed to pay him a commission of $600 for his services; and that he had paid $300 in cash and given the note for the balance. It alleged that when the first installment of interest on the loan became due defendant for the first time discovered that the rate of interest was six and one-half percent, instead of six percent, and that therefore plaintiff had not fulfilled his contract; that defendant was unable to read, and for that reason did not discover when he signed the loan papers that the rate of interest was greater than six percent. He prayed that the note be canceled and for judgment ágainst plaintiff for the $300, cash payment, with interest from the time it was paid, and for costs. The reply was a general denial. The jury returned a verdict in
The defendant had the burden of proof. He testified he had lived in Kiowa county thirty-two years, that in company with one Eastman he went to Hutchinson to the office of plaintiff where they informed plaintiff that he desired a loan of $20,000 upon his land, and did not want to pay over six percent; that Mr. Fontron said that he did not know whether he could do that or not; that he would have to find out from the company if he could make that rate ; that the regular rate was six and one-half percent; that possibly the company might make it at six percent, and he would call up by long-distance telephone and inform defendant later. He further testified that he had never talked with plaintiff about paying him any commission; that he did not make any contract with him at the time he made the loan, but paid the $300 and executed the note after the $20,000 loan had been paid to him; that after he had received the last of the proceeds of the loan plaintiff told him that Eastman had said defendant would give plaintiff a small commission, and that plaintiff “struck him for' $600.” He thought at the time that it was a big commission in place of a little one, but paid $300 cash and gave the note for the balance, thinking he had a six percent loan. He admitted that Mr. Fontron advanced him $12,000 before the- loan was completed; that after talking with Eastman he came to the conclusion that owing to the trouble Fontron had with the loan he ought to pay him a commission. On his direct examination the defendant’s attention was called to one of the applications made to the insurance company for the loan, in which the interest was stated to be at the rate of six and one-half percent. He admitted signing the applications the day following the conversation in the office after he had been notified by telephone that the company would make the loan. His testimony is that he cannot read, and that the written applications for the loan were signed by him without having them read; that he did not have the note and mortgage read over to him, and signed them without knowing what was in them; that his wife signed them without having them read to her, although she can read and write; that he discovered the six and one-half percent rate when he paid
Eastman testified that he introduced Kruse to Fontron, explained the condition of the land, the amount of money wanted, and the rate of interest defendant was willing to pay if he could get it at that rate; that plaintiff said he could n’t make it at six percent; that they never had made any as low as that so far west. “I told Mr. Fontron it was a big loan and that he ought to give him a pretty good rate on it, something to that effect.” The witness was not positive whether or not he told Fontron the defendant would not make a loan unless he could get it at six percent. He testified that plaintiff called him by telephone that evening and said: “I can make that loan for you,” and he replied, “All right, we will be down in the morning.” The next morning he went with Kruse to Fontron’s office, but did not stay over five minutes, and left Fontron and Kruse talking the matter over. As he started out he heard Fontron ask defendant if he would be willing to pay a small commission to get the loan through, stating as a reason that there was no commission in it to him to amount to anything, and that he was having trouble to get it through. The court overruled a demurrer to the defendant’s evidence.
The application was for a six and one-half percent loan, and was in writing, signed by the defendant. It appointed plaintiff agent or attorney in fact for defendant to procure the loan. The mortgages, notes, and coupons were signed by defendant and wife. Plaintiff testified that when the parties called at his office he told them it was a heavy loan to one individual, and that six percent interest was out of the question; that he could not do any better than that at home on the best land; that the rate in Kiowa county was higher than it was in Reno, where the prevailing rate was seven percent, and that a good many loans were being made at seven and one-half percent; but that he would try to get them a loan at six and one-half per cent. His testimony is that after they had studied the matter over they asked if that would include a commission, and he told them it would if he could get the rate from the
J. A. Fontron, father of plaintiff, testified that when he arrived at the office that morning his son said to him, in the presence of defendant, that he had been unable to procure a loan for less than six and one-half percent, and that Kruse had agreed to pay that rate, and asked the witness to draw the application; that Kruse made no remark. • The witness drew up the application, which took two hours to complete, and that defendant was present all that time.
The answer pleads, in effect, a'total failure of consideration, but the facts alleged show that the consideration had not entirely failed. They show that the note sued upon was given in part payment of plaintiff’s services in procuring defendant a loan on his farm for a certain amount to run a certain number of years and to draw interest at six percent-; that a loan was procured for the agreed amount and in all respects satisfactory to the defendant, except that it provided for interest at the rate of six and one-half percent, and that plaintiff accepted and still retains the loan. Having accepted and retained the benefits of plaintiff’s services, he is in no position to claim a total failure of consideration. If the agreement had-
The court gave the following instruction:
“If you find from the evidence that the plaintiff agreed to procure said loan for defendant at the rate of six percent interest per annum; and if you further find that defendant executed the notes and mortgages for said loan without knowledge that they bore six and one-half percent interest; and if you further find that the defendant, without knowledge that the said loan bore six and one-half percent interest, delivered to plaintiff the $300 note sued on as payment or part payment for plaintiff’s services in procuring said loan then you are instructed that the consideration for said note failed and plaintiff cannot recover thereon.”
For the reasons already stated, it is manifest this instruction should not have been given. Other instructions based upon the alleged failure of consideration were also erroneous. The only part of the answer which suggested a defense was that portion which set up a counterclaim for damages resulting from the alleged breach of the contract by the plaintiff, and the question is whether the defendant, who had the burden of proof, offered any competent evidence to sustain that defense. On the trial it developed that defendant had signed a written application for the loan in which he appointed the plaintiff his agent to procure it at six and one-half percent interest — the exact terms upon which the loan was procured.
“The only safe criterion of the completeness of a written contract as a full expression of the terms of the parties’ agreement is the contract itself. . . . and, consequently, all parol testimony of conversations held between the parties, or of declarations made by either of them, whether before or after, or at the time of the completion of the contract, will be rejected.” (Naumberg v. Young, 44 N. J. L. 331, 339, followed and approved in Railway Co. v. Truskett, 67 Kan. 26, 35, 72 Pac. 562.)
“Parol evidence of what was said or done before and at the time of making a written contract is not admissible to alter, vary, or contradict the express terms of the written contract.” (Smith v. Deere, 48 Kan. 416, syl., 29 Pac. 603.)
(See, also, Miller v. Edgerton, 38 Kan. 36, 15 Pac. 894; Rich v. Cattle Co., 48 Kan. 197, 29 Pac. 466; McMullen v. Carson, 48 Kan. 263, 29 Pac. 317; Trice v. Yoeman, 60 Kan. 742, 57 Pac. 955; Railroad Co. v. Price, 62 Kan. 327, 62 Pac. 1001; Railway Co. v. Vanordstrand, 67 Kan. 386, 73 Pac. 113.)
The rule is not altered by the fact that defendant was unable to read. (See authorities cited in Railway Co. v. Vanordstrand, supra, p. 392.) .
This is the invariable rule in the absence of any claim of fraud or mutual mistake. (Griesa v. Thomas, 99 Kan. 335, 340, 161 Pac. 670.)
The present case illustrates the necessity for the rule. The witnesses for the plaintiff testified that the rate was stated to be six and one-half percent before the application for the loan was signed. The defendant testified to the contrary. The application for the loan having been made in writing it is the best evidence, and the defendant ought not to be permitted to vary the terms of the writing by parol evidence of conversations leading up to the making of the written agreement. The fact that the written instrument is not the one upon which the
The only reason stated in the answer for his not knowing the contents of the written application and the other loan papers is, that he is unable to read. But that was all the more reason for his not signing them until examined “by some one for him in whom he had a right to place confidence.” (Hawkins v. Hawkins, 50 Cal. 558, quoted with approval in the Vanordstrand case, supra.)
Besjdes, the defendant should be held estopped to raise this defense at such a late day. The written applications for the loan were signed in November, 1912; he received the $20,000 proceeds in February, 1913; the note was not executed until August 29,1913, and in the meantime he had made a payment of $754 interest on the loan, and claims not to have discovered what rate of interest the loan drew until he made the second payment of interest at the end of the first year from the time the loan was made; and he made no complaint of any misunderstanding of the facts until he filed his answer in May, 1915. The answer contains no averment of fraud or mutual mistake, and there was no proof of either.