107 Neb. 223 | Neb. | 1921
This was an action by the plaintiff, Security Savings Bank, against the defendant, Walter H. Rhodes, upon a promissory note, signed by the defendant and payable to
The answer alleges that the defendant rendered certain services for the plaintiff bank and for one Davis, president of the plaintiff bank. What proportion of the services was rendered for the bank is not stated, but much the greater part appears to have been for Davis individually. In any event, it is alleged, Davis took it upon himself to pay the defendant what was owing him, some $2,700, and arranged that the defendant should make out and sign a note in that amount, payable to the bank, deliver it to the bank and receive upon it its face value. This was done. It is further alleged that Davis made an oral agreement with the defendant that the defendant would not be required to pay the note, but that Davis would pay it, and, in order to insure payment by Davis, Davis gave his note to the defendant in a like amount. It is further alleged that the bank knew of this oral agreement. The allegations of the answer in that respect are, however, somewhat indefinite. What other officers of the bank knew of the transaction is not alleged. It may have been that the pleader meant no more than a legal conclusion that the bank was charged with knowledge because of the knowledge of the facts by its president. It appears from the pleadings that the note became due and was not paid.
If the bank had no knowledge of the transaction, it of course would not be bound by the agreement made by its president, to the effect that a note, based upon a good consideration and taken by the bank, should not be paid. Kennedy v. Otoe County Nat. Bank, 7 Neb. 59; note, 28
Assuming, however, that the allegations in the answer are allegations of ultimate facts and are sufficient to show that the plaintiff bank had knowledge of the oral agreement, the question presented is whether or not such an oral agreement could properly be proved, or whether the testimony to that end would be incompetent as evidence tending to vary or' contradict the express terms of the written instrument.
Although parol evidence may be adxhissiblé to show the consideration of a written contract when that consideration is expressed as a recital of a receipt, as distinguished from a complete contractual stipulation (Mattison v. Chicago, R. I. & P. R. Co., 42 Neb. 545; Spiegal & Son v. Alpirn, p. 233, post); or to show a want or failure of consideration (Davis v. Sterns, 85 Neb. 121; Norman v. Waite, 30 Neb. 302); or to show that an instrument, purporting to be a written contract, is in fact a sham and was never intended as a contract between the pax-ties (Coffman v. Malone, 98 Neb. 819, and note, L. R. A. 1917B, 263); or to show that the written instrument was conditionally delivered upon an oral agreement that it should not take effect as a contract until some condition had happened (Musser v. Musser, 92 Neb. 387); yet, on the other hand, when a written contract has been unconditionally delivered, in the sense that it is intended to take effect as a legal obligation, a contemporaneous oral agreement, providing that the contract is not to be performed if a certain condition or contingency should occur-, cannot be shown, as such proof would have the effect of adding to, varying or contradicting, the express terms contained in the writing.
The rule is succinctly stated in 22 C. J. 1148, sec. 1540, as follows: “The rule excluding parol evidence has no place in- any inquiry unless the court has before it some ascertained paper beyond question binding and of full effect, and hence parol evidence is admissible to show conditions relating to the delivery or taking effect of the
For an able and exhaustive discussion of that rule and the authorities in relation thereto, see note, L. R. A. 1917C, 306.
In this case the written contract was an agreement that the defendant would pay on a fixed day, absolutely, a certain sum of money. Its express terms' could have had no other meaning. The note was delivered to the bank and the defendant received the proceeds thereof. The agreement did not lack in consideration. That it was a subsisting contract must be conceded. By the very agreement sought to be proved Davis was to be responsible and pay it, and the defendant was to be relieved from that obligation. The bank was looking to the payment of the note. . Evidence of such an oral agreement, as is set up by the answer, is inadmissible, as its effect would be to vary, by parol, the express terms of the note. Van Etten v. Howell, 40 Neb. 850; Aultman, Miller & Co. v. Hawk, 4 Neb. (Unof.) 582; Nebraska Exposition Ass’n v. Townley, 46 Neb. 893; Western Mfg. Co. v. Rogers, 54 Neb. 456; Waddle v. Owen, 43 Neb. 489; Colvin v. Goff, 82 Or. 314, and note, L. R. A. 1917C, 307; 22 C. J. 1152, sec. 1542.
The defendant finds some support in certain decisions of this court which we find it necessary to discuss. In the case of First Nat. Bank v. Burney, 91 Neb. 269, the
The case of Exchange Bank of Ong v. Clay Center State Bank, 91 Neb. 835, is also relied upon by the defendant. In that case, the plaintiff bank transferred a note to the defendant bank and indorsed it “without recourse.” The defendant bank was allowed to prove a parol agreement to the effect that the plaintiff bank had agreed to guarantee payment of the note. There were other phases of the record which might have led to the decision rendered. The assignment of the note appears to have been a sham assignment and merely for the purpose of falsifying the bank records at a time when a visit from the bank examiner was expected. There was also a letter which accompanied the note at the time it was sent to the defendant bank, and this letter contained an indefinite reference to some agreement which might have been sufficient to introduce an ambiguity and allow of the introduction of parol testimony in explanation thereof. But the decision was not based upon those grounds. The opinion recognizes the contract of the assignment of the
In that case reference is made to the decision in Norman v. Waite, 30 Neb. 302, as being a decision in support of the opinion, but the decision in the case of Norman v. Waite was based upon a failure of consideration. It was held competent to show what the consideration for the contract was, and that the contractual obligation assumed, which constituted such consideration, had not been performed by the other party.
The case of Barnett v. Pratt, 37 Neb. 349, is also cited as authority in the Exchange Bank of Ong case, but in that case the court pointed out that the written instrument involved was, on its face, not a complete contract, but merely a receipt or memorandum, and that the parol evidence rule had no application. The court did in that case, by way of dictum, state that when the execution of a written agreement has been induced upon the faith of an oral stipulation, made at the time but omitted from the written instrument, though not by accident or mistake, parol evidence of the oral contract is admissible, although it may add to or contradict the terms of the written instrument. It is true that such is the' rule in Pennsylvania, and a Pennsylvania case is cited in the opinion in support of the rule stated, but in Pennsylvania the so-called parol evidence rule has been almost entirely abolished. . The decisions in that state upon that point are not only in the minority, but seem to hold a unique position among the decisions of the courts of the other states in this country. See discussion in notes, 18 L. R. A. n. s. 434, and L. R. A. 1917C, 321. To follow the dictum in the case of Barnett v. Pratt, supra, would be to utterly destroy the parol evidence rule.
In the case of Towner v. Lucas, Exr., 13 Grat. (Va.)
For the reasons hereinbefore stated, the answer of the defendant, setting forth the oral agreement, was, in our opinion, insufficient to present a legal defense. The judgment of the lower court was correct, and is
Affirmed.