153 N.E. 33 | NY | 1926
Prior to the adoption of the Eighteenth Amendment to the Constitution of the United States the number of liquor tax certificates in each borough of the city of New York was limited. When the quota was exhausted, it was necessary for one who would open a saloon to go to the holder of a certificate and make terms with him for the assignment of an existing certificate to the new place of business. Such certificates had a so-called bonus value. Defendant had a building in The Bronx. Plaintiff was a brewing corporation which had a liquor tax certificate for sale for the year ending September 30, 1915. Defendant desiring to use or lease a portion of the building for saloon purposes bought the certificate from plaintiff for $3,400 and gave his promissory note therefor, dated May 24, 1915, and payable on demand. The certificate was transferred to his property and in his name and was renewed for the year ending September 30, 1916. He ran the saloon until he found a man named Kirch for a tenant who ran the business under the certificate issued to defendant until the end of the year. Kirch had applied for a liquor tax certificate for the premises in his own name which was issued to him for the following year. Under this certificate Kirch might sell the right to do business at the place in question or transfer the certificate to another place. Defendant was thereby deprived of control of the certificate but was left liable on the note. Kirch as holder of the certificate was vested by law with substantially the same rights that defendant acquired under the certificate transferred to him by the plaintiff for which he gave the $3,400 note in suit. The liquor tax certificate and its renewals were assigned to plaintiff by defendant as security for the note. The jury has found that plaintiff participated in obtaining a *159 certificate for Kirch without defendant's knowledge or consent. Kirch assumed and agreed to pay to plaintiff the defendant's note but the note was not paid.
Action was begun thereon. Defendant set up as a defense that it was given in consideration of the transfer to defendant of a liquor tax certificate; that plaintiff agreed that immediately upon the procuring of a tenant satisfactory to plaintiff by defendant, plaintiff would take the tenant's obligation in place of the defendant's note and discharge defendant from further liability thereon; that plaintiff refused to accept the tenant as its debtor and discharge the note. A further defense alleged that plaintiff retained the power to transfer the certificate to a person of defendant's choosing and without notice to him transferred the certificate to Kirch, whereby the consideration for the note failed.
Parol evidence was received on the trial, over objection and exception, of the plaintiff's contemporaneous promise to take the tenant's note if defendant got a satisfactory tenant for the premises and thereupon to return defendant's note to him; of defendant's act in procuring a tenant and of plaintiff's refusal to accept the tenant and discharge the note. This was error. The parol evidence rule as applicable to the integration of contracts is said by Wigmore (5 Evidence [2d ed.], § 2400) to be a rule of substantive law. "The writing is the contractual act of which that which is extrinsic forms no part." While it is subject to many exceptions (Newburger v. American Surety Co.,
Bookstaver v. Jayne (
No failure of consideration is shown. The certificate was transferred to defendant for the agreed bonus value. It ran only to the end of the year. He received what he bargained for. Proof of a bad bargain does not establish failure of consideration. Defendant may have had reason to expect better treatment but the Eighteenth Amendment was ratified on January 29, 1919, and put an end to bonus values.
The judgments should be reversed and judgment directed in favor of the plaintiff for the sum of $3,400, with interest thereon from May 24, 1915, with costs in all courts.
HISCOCK, Ch. J., CARDOZO, McLAUGHLIN, CRANE, ANDREWS and LEHMAN, JJ., concur.
Judgment accordingly. *162