*1 Bay, Re of Green Production Credit Association Rosner, a Gene spondent, v. Francis Gene /k/a Harvey Rosner Rosner, wife, Defendants: wife, Appellants. May Argued 1977. 1977. Decided

No. 75-208. June reported 79.) (Also in 255 N.W.2d

547 appellants For the by there a Howard brief W. argument Eslíen Eslíen, Eslíen, by and Jeske & oral and Eslíen, Howard W. all of Oconto Falls. respondent argu-

For the there awas and oral brief by ment Bay. C. J. Stodola of Green ROBERT HANSEN, W. J. an This is action on a mortgage July 29, secured note executed 1969. The appeal on issue this whether evidence rule testimony by Harvey bars admission of defendant Rosner he by employee was told an plaintiff of that he responsible obligations brother, would be for of his Francis Rosner, July Gene under the note of 1967. represented note pre- This both the consolidation of all singly vious brothers, indebtedness of the two jointly, approximately loan of $22,000. This court has recent defined the rule evidence follows: embody ‘"'When to a contract agreement writing their writing and intend the to be expression final agreement, their the terms of the writing may not be varied or contradicted any prior written or oral in the absence fraud, duress, or mutual mistake.”1 Deposit Case, the Federal this

In before it had agreed note a in which the comakers of a situation Mortgage an unwritten that First there was keep compensating deposit on Investors balance the note there lacked a Additionally, bank. involved 1 Deposit Corp. Mortg. Investors, v. First Fed. Ins. 76 Wis.2d citing (1977), Contracts, 3 362 Corbin sec. N.W.2d (1960), the rule as “When which states follows: two expressed have made a contract and it in to which have integration they both as the have assented and accurate contract, evidence, otherwise, whether of that antecedent understandings negotiations will not admitted for writing.” varying contradicting purpose of See also: Bun Krauss, 528, 529, burg Wis.2d N.W.2d 473

548 generally negotiable instrument,

term which found in a is namely parties Federal the interest rate. Since the Deposit agreed the note did not contain reference to and collateral— n agreed-upon provisions two —interest taking held this court the trial had not erred in parties actually “to if evidence determine assented only agreement— admittedly part note — superceding Deposit as a In document.”2 Federal where gap apparent toas interest was on the of the face note, agreed parties there awas con- agreement temporaneous collateral, oral to it was apparent undisputed that written note “in- complete only part in that been ha[d] writing,”3 having reduced to “reduced some provisions to written form and left others unwritten.”4 permitting parol complete apparent-

In evidence to such ly admittedly incomplete agreement partially set note, Deposit in the forth Federal held evidence undertaking, could be to admitted the unfinished vary agree- but or alter the terms of the written ment, quoting from an earlier case: partial only to be shown is “[W]hen by parties, integration reached proper it evidence establishes consider which subject agreement, limitation that such full the parol part with the that has evidence does not conflict writing.”5 integrated been limitation, emphasized above, importance of the The holding: this added made clear in Morn decision if, objection, parol “Therefore, even without contract, to a written the intention of express provisions con- conflicts with such which disregard gets record, the court tract, into the must it.”6 2 163. Id. at 3 Id. at 157.

4 Id. 157. Schalk, 307, 314, Morn v. 14 Wis.2d N.W.2d 6Id. at 315. *6 repeatedly held, Thus it is clear and this court has testimony, that oral parol to be admissible under the clarify existing ambiguity evidence rule “. .. must an understanding and cannot establish an in variance with of the written document.”7 terms If the oral testi mony part is offered agreement, a of the entire as “then part the oral cannot contradict part.”8 ambiguity written complained The of is not to “by testimony it,” arise resort to oral to create in but “clarify must offered help stead and limited to an ambiguity existing option.”9 in a written ambiguity or incom there no us,

In the before case mortgage by parties. note executed pleteness in the testimony introduce Nonetheless, to the defendants seek employee plaintiff of to con with an aof conversation unambiguous change provi the clear and tradict and agreement. the written Since conversation of sions years allegedly prior to execu upon two occurred relied is, in connection with the note involved —that tion of parties note see of an earlier between execution —we no assent, to lack and find an as of for issue no basis right only a claim of a Here we have claim of such.10 7 Corp. Wasilewski, 488, 481, 30 Milwaukee v. 141 Conrad Wis.2d citing Werner, (1966), Firestone Tire & Rubber Co. v. 140 N.W.2d August (1931); 306, 118 Brandt & Co. v. Ver 236 N.W. 204 Wis. 3, 152 hagen, 448 161 N.W. Wis. 8 Paulson, citing 161, 252 Wis. 31 N.W.2d Id. at Will of Kelly, (1948); 146 512 Hannon v. Wis. N.W.2d pages (5th ed.), 887, 888, Jones, (1914); Evidence sec. 466. 9 Id. at 488. 10° Bunbury Krauss, supra, up this court See: n. holding holding that -written contract of the the trial to, agreeing judge assented with the trial not assent to the land contract as the did com “. . . 'integration’ plete accurate contract.” mortgage vary note, on its terms any that,

face, by under introduction of view, part in “conflict been would with the has tegrated writing.”11 exactly That what the Morn quoted holding, Deposit, in Federal interdicts. Deposit Case, the As made clear in the recent Federal its evidence rule defenders its has critics.12 The see the exclusion evidence offered defenders vary operating the terms a written document as reliability integrity “preserve con- written opportunity perjury tracts, to reduce the and to for prevent jurors being unsophisticated from misled testimony.”13 conflicting the rule false view Critics causing injustices party “because it to avoid allows *7 legal obligation accepted during negotia- a he which process.”14 tion dispute appropriate public policy

The not as is Arguments repeal for us to resolve. for or retention parol are evidence rule addressed to the to be legislature, not has, the courts. Our court more than once, parol-evidence made clear that rule not “[t]he so much the rule of evidence as rule substantive .”,15 . law. .

Thus, long been, under the law in this state it has as under the law it at the time of the as was execution of the mortgage note involved, here under law it legislature will continue to unless or until the to elects change it, we not, hold that evidence was in this vary and under these circumstances, case to admissible 11' Schalk, supra, v.Morn n. at 314. Deposit Corp. Mortg. supra, Investors, Fed. Ins. First v. n. at 156. 13 Id. at 156. 14 Id at 156. 51 Corp. Wasilewski, supra, Conrad Milwaukee n. Schalk, supra, citing Morn v. 5.n. express agreement or contradict terms of the written between the this to lawsuit. ruling postscript, no more

As than a affirm we by plaintiff of the trial a court that letter to sent de- containing suggestion fendants, an offer or of com- promise brothers, settlement between the two Rosner was not offer, admissible into evidence. Such mere accepted by parties, pro- was inadmissible under the liability 904.08, visions of sec. Stats.16 Defendants’ way by suggestion the note inwas no a affected for by agreed parties. settlement not By Judgment affirmed. Court.— (dissenting). ABRAHAMSON, The J. applicable prior agreements

rule is written or bar oral varying contradicting subsequent agreement written subsequent if the parties written is intended expression agreement. be the final (For statement of the rule see note 1 majority opinion.) party when a Thus invokes step evidence rule the first trial court take must to determine whether the intended the written integrated partial, final, to be a total or agreement, they any agree- prior or whether intended agreement. part ments to be of their total De Federal Corp. posit Mortg. Ins. v. First Investors, 76 Wis.2d *8 parol 151, 157, 250 N.W.2d 362 Relevant evi always “integration.” on the of dence admissible is issue 16 904.08, Compromise Stats., and to Sec. entitled com offers or promise, providing: (1) furnishing offering of “Evidence or (2) promising furnish, accepting offering promising to or or or compromising accept, attempting to a consideration valuable or compromise disputed validity to a claim which was as to either prove liability amount, invalidity to or is admissible or of the amount. Evidence of claim or its conduct or made in statements negotiations compromise is likewise not admissible. . .

552 respect always “. . Parol is with . evidence admissible integration, parol intended to assent issue of that to the evidence is is, to admissible show whether writing complete (or partial) the final and as agreement. v. Bank Danielson statement their 398, (1930); Scandinavia, Scarne’s 201 230 83 N.W. Wis. Challenge, Co., D.M. Orum 267 Wis. Inc. v. ; (1954) Z 134, 142, 64 E Paintr N.W.2d 836 Touchett v. (1955); Corp., 635, 643, Johnson 268 68 442 Wis. N.W.2d Industries, Hill’s Press Nasco 33 Wis.2d (sec (1967) ; 9 Contracts Restatement of N.W.2d (Tent. 1973).” Federal ond), 235(2), Draft secs. Deposit Corp. Mortgage Investors, Ins. 76 Wis.2d v. First at 158. away the bar, the trial court assumed

In the case namely assented whether question, threshold integrated partial complete, final, as the to agreement on agreement, that since the its held and testimony appeared complete and unambiguous, face in- to terms party of a other admissible. applied follows: evidence rule as The trial court controversy Harvey Rosner as- to “The determination of the exclusively upon application depends almost evidence story permitted Harvey tell indicated I I Rosner to his and rule. subject objection I that had serious receive it to and would testimony propriety further to of such reservations jury opinion I expressed if a would this were case testimony. of all of such admission into evidence refuse vary, alter or “It evidence inadmissible is basic complete, a when written instrument the instrument contradict fraud, unambiguous accident, and valid where there is no allegation respect claim or thereof with to the instru- mistake by myriad Wisconsin, supported This is cases ment. recently Count, La in the case of Tucker v. decided November most may prove be a condition 1974. Parol admissible to may taking instrument, precedent to the effect of the and it also prove novation after the admitted execution instru- ment. is made condition or claim here. . . “No such . Harvey trial, “At Rosner that at endeavored show some inquired signing what he could time become liable to for he *9 majority opinion glosses The step also over the first process, although majority recognizes parol evidence can be introduced to parties that the show did not assent partial complete as a integration agreement.2 combining obligations

note of these two and claimed brothers signature that he was per- assured that his would not make him sonally part liable for that of the indebtedness which came from prior signed by *10 majority

To the opinion extent that implies that testimony before oral ambiguity admissible, an or incompleteness writing must exist the face of the inspection that mere of the and written document will reveal whether partially totally or in- tegrated, disagree I majority. would with Whether agreement appears the written to the court to be com- plete is not the determinative factor. Note, Warranties, Disclaimers & the Parol Rule, Evidence 53 Colum. L. 858, Rev. 861-865 Whether the document em- part all bodies of—or of—the final parties question is a for the trial court to decide on the all the basis of facts and circumstances. Bunbury v. Krauss,

In 528, 529, Wis.2d (1969), adopted N.W.2d 473 approach this Corbin’s requiring evidence to particular determine if the writing integration is an of the contract: . “It is stated in Corbin, Contracts, p. 357, thus sec. 573: “ parties When two have made contract a have and expressed it they in a have both as- to which sented complete integration and accurate that evidence, contract, whether or otherwise, of ante- understandings negotiations cedent will not ad- the be purpose mitted for varying contradicting or writing.’ (Emphasis supplied.) “Corbin, paragraph points in the same of his out text, rule, above, implies as stated expressing existence of a written contract the intent parties any question without of fraud or mis- take, tegration complete parties and to in- which assent understanding. of their supra, Corbin, pp. “3 sec. states following evidence, may on the issues oral or written, be submitted: “ ‘(1) parties (2) Have the made a contract? Is that contract void or illegality, fraud, voidable because of mis- any (3) take, or other reason? Did assent particular writing to a as. and accurate “integration” of that contract? “ determining any Tn issues, them, these one of “parol applied. there is no evidence rule” to be On these issues, no otherwise, relevant evidence, whether standing is excluded. No written document is sufficient, long any alone, to determine one of them, however may many be, formal, detailed it however, and however may signatures be the one seals and assertions. No inspection of these can issues mere determined ” the written document.’ Bunbury supra, Krauss, In had executed *11 providing monthly payments land contract for of $217.50. ambiguity incompleteness There no was on the face of writing. buyer attempted par- the The to that the show orally agreed negotiations monthly pay- ties that the judge would be court held the trial ments This $175. properly heard the evidence to determine whether writing complete the was to the and accurate assented as “integration” upheld the of the contract. This judge’s finding parties to trial that the not did assent integra- complete the contract the and accurate land tion of the contract. judge “In the instant ease the trial found as a fact the the land

that the did not assent to contract as ‘integration’ complete of the contract. and accurate testimony opinion Flo- he the “In his summarized pertinent question to the whether rence Krauss parties of the had assented to the written ever terms contract: “ flatly testified Tn the instant case Miss Krauss agree payments of to make that at no time ever did she (217.50) Dollars Hundred Seventeen Two 50/100 point testimony per for clear on this Her was month. her the circumstances she she stated that under pay possibly than One more afford brother could not per Seventy-five ($175.00) month Hundred Dollars indicate, however, that should the contract. did She profit there operations be a from the farm then might payments be increased to the Two Hundred Seven- ($217.50) figure. teen the year undisputed It is 50/100 operations consistently farm were in the red for each through from 1963 1966. addition, attorney “In defendants’ immediately testified that at closing, Bunbury thereafter, Mr. agreed accept Seventy-five One Hundred Dollars ($175.00) per earnings month until such time the farm up could make the difference. “ ‘It seems court that obvious this did not assent to the land contract on December executed 17,1962 complete “integration” as the and accurate of the contract.’ “Although testimony disputed, is we cannot con land con clude that finding trial court’s tract not contrary great was assented weight to is to the preponderance and clear of the Corbin, page evidence. 3 366, supra, points out that when there is assertion _ that a completely integrated offered as a con tract not to as an assented accurate or agreed statement of terms, may may assertion or this not worthy be whether of belief. Under court, rules the evidence question credible to be determined the trier facts, this case judge. circuit gives In the judge event the trial credence testimony, to the was not here, as he did that the written contract to, assented testimony and the to that effect is contrary great weight preponderance and clear evidence, finding the court’s sustained, will be for, Corbin, page as 3 366, supra, states, mainly ‘This is *12 ” question for the trial court.’ Bunbury v. Krauss,

supra, 41 Wis.2d 530. The Federal Deposit, Bunbury and Johnson Hill’s (33 Press Cases’ Wis.2d 148 (1967)), N.W.2d 9 interpretation application of the evidence by rule supported are 402.202, sec. Stats., Wisconsin’s enactment of the Uniform Commercial Code evidence rule in sales transactions.3 While the Code 3 402.202, Sec. Stats.: respect “Terms with confirmatory to which the memoranda of parties agree the or which are otherwise writing set forth in a

557 applies section to a support sales transaction, there is application for its in other of the areas law. Conran Yager, 263 S.C. 211 (1975). S.E.2d theAs only Code writings indicates, by intended the expression as a final agreement of respect their with the by written terms are covered the evidence rule. The section abolishes the presumption, apparently relied on to by some extent the writing majority, that the automatically the expression total and par- final of the agreement.4 ties’ Michael Sons, Schiavone & Inc. v. by intended expression agreement aas final of their respect with to such may terms as are included therein not be by any prior contradicted temporaneous evidence of or of a con- may oral explained sup- but or plemented : “(1) By dealing of usage course (s. 401.205) of trade performance of (s. course 402.208); “(2) By of consistent evidence additional terms unless writing court finds the to have been intended also aas agreement.” and exclusive statement of the of the terms 4 The Official Comment to sec. 2-202 of Uniform Commercial rejects requirement precedent Code that a condition finality integration admission of evidence on ais determination language incomplete used document is or am biguous. U.L.A., 2-202, p. Uniform Commercial Code sec. (Master 1976). Ed. provides specific Writers have observed that the Code no determining question criteria for whether or expression agreement. is intended as final of the See 1 Ander- son, Code, p. 294, (2d Commercial 2-202:16 sec. Ed. Uniform. 1970); 4 B.C. (1963); Squillante, and Comm. L. Rev. Ind. The Rule Evidence, Construction Contraéis Sale: Rarol 78 Comm. L.J. 89 One writer commented 2-202 as sec. follows: light courts, regrettable “In in the confusion it is that the Code, Uniform Commercial treatment its Parol Evidence Rule, explicitly require does not all courts hear integration Instead, hedged relevant to the issue. Section 2-202 is vague phrases give with which a court considerable latitude in interpretation. clearly 2-202, however, The Comments Section recognizes proper indicate the Code status Parol *13 558

Securalloy Co., Inc., Supp, 801, (D. 312 F. 804 Conn. 1970) ; Corp. Hospital Supply Corp., Fan-Gil v. American App. (1973); 49 Mich. 211 N.W.2d Zwierzycki Owens, (Wyo. 1972). 499 P.2d 996 generally

In Federal Deposit, that we stated notes are recognized being complete as not the of (76 158), Wis.2d at in Federal agreed Deposit incomplete the note was an instrument. Deposit holding Federal read, however, cannot be merely complete evidence is admissible “to undertaking, vary unfinished but or alter agreement.” Deposit terms of the written In Federal the note, terms, payable its was The demand. evidence issue in the case related an oral establishing repayment. a date of in The evidence issue did not document; it unfinished related to a question term contained itself. The Deposit in Federal was whether evidence ad- missible “partial show that the note was not a in- Rule; they suggest Evidenee ex- to consider determining trinsic evidence in whether written Contract integration. an Furthermore the Code that extrinsic realizes proper interpretation writing. evidence is essential to a escape performance “Under the Code the seller will be unable to obligations by hiding which he has assumed behind the com- plete-in-itself characteristic which at- courts have often tributed to written instruments. Since extrinsic evidence would always interpretative aid, be since, an admitted as if the followed, are non-integration Comments would be also admitted, adoption of practice alter Code usual will normally courts. Courts which hear evidence will suffer only slight change practice, presently but courts which mis- apply proper path. Reliability the Rule will directed to the written instruments and fairness will both be fostered. The end product replacement legal will be verbalization with com- reality.” mercial Note, Warranties, Buie, Disclaimers & The Parol Evidence Colum. L. Rev. *14 tegration,” agreement i.e., that the note was not final as those parol terms contained therein. We held evidence question. was admissible on this

Unfortunately majority opinion the the al- muddies ready parol glossing unclear by evidence rule over the language Deposit of Federal which parol evidence allows to determine only whether the admittedly part of note — the final, superceding assented to as a —was document as to those matters in the contained note. writing If the parol not a final document, evidence agreement, admissible the show of the final terms contradictory writing. whether or not The court’s concluding Deposit lines Federal summarize the decision: “ arol evidence can be [P] as to whether introduced note integration partial was intended aas and as to what If writing

terms. final did not intend the to be the part statement of their in whole or in parol then the evidence would be admitted to show parties’ 163, 164. true intent.” 76 Wis.2d Deposit holding

The Federal upon Case was based note, the absence of two from the of the terms face but upon by cases decided this court and cited in Federal Deposit clearly which step state that in a case first parol where the evidence rule is invoked is to determine whether the intended the document to be the final agreement. statement

While rule is a rule of substantive statutory law, it is not law but law fashioned courts, authority and the retain courts to abolish modify Holytz the rule. Milwaukee, v. 17 Wis.2d case, In N.W.2d the instant however, no abolition or modification of evi- necessary itself, dence rule is the rule propounded since Deposit prior in the Federal Case cases, remains unchanged. foregoing reasons,

For the I would find the trial failing erred to consider the evidence to determine whether assented partial integration accurate, final and complete, judgment I contract. would reverse and remand the case; respectfully I therefore dissent. Appellant, Respondent. Doheny, Kohler, *15 May 4, 75-380. No. Submitted 1977. briefs Decided June 1977. reported (Also 482.) in 254 N.W.2d notes Gene Rosner and wife. brief, Harvey justice “In his counsel for Rosner talks about equity and fairness. The rule is an ancient designed protect rule integrity of signed law written, person signs instrument, instruments. accept When an he must agreement. that the instrument contains the entire Other- fact person wise, dealing no afterwards with that instrument could rely upon ever the terms of it. point “The maker attempt should not at that be able to payment by introducing avoid a whole new element or elements manifestly into the situation. person It would be unfair for a claim signed that an charged instrument which he and is with understanding, something entirely says in fact doesn’t mean what it it does—it means Thus, person different. no would ever be safe purchasing acquiring any relying upon such instrument and Thus, justice the terms of it. I am equity sure that fairness are on the side of the evidencerule. unambiguous “The note is clear and on its [sic] and itself fact any contains no restrictions or conclude, conditions I hind. therefore, testimony by Harvey that none of the offered Rosner and behalf, vary on his which tends to or contradict the terms of the note, unambiguous face, which is on its is admissible in evidence. Harvey Rosner, therefore, plaintiff is liable to the in the full July 29th, note, together amount due on with costs and (Emphasis supplied.) disbursements.” majority opinion The states: “Since the conversation relied upon allegedly years prior occurred two to execution of the note is, involved—that in connection with the execution of an earlier note between the see no basis for an issue as to lack —we °” assent, and find no claim of such.10 °“10 Bunbury Krauss, supra, See: n. this court upholding parties holding trial court that the written contract of the to, agreeing was not assented judge with the trial ‘. . . and did not assent to the land contract as the ” “integration” accurate contract.’