Taylor v. Elmira Storage & Supply Co.

Coman, J. I think it must be conceded that on its face the written contract set forth in the answer is void for want of mutuality or lack of consideration. By its terms, the plaintiff agrees to sell and deliver to the defendant the various lines of goods manufactured by him, at the prices stated, during a certain period of time. The contract also provides that the defendant shall have the exclusive sale of the plaintiff’s goods in a certain territory, and fixes the terms of payment. This is the length and breadth of the contract. There is no agreement upon the part of the defendant that it will purchase a single article of the plaintiff’s manufacture, or that it will pay the plaintiff any money or other consideration, or do any' act whatever, Neither do I think it is possible to import into the written contract, from a consideration of its terms alone, any agreement upon the part of the defendant to use its best endeavors to sell the plaintiff’s product in the prescribed territory, to advertise such goods or to employ salesmen to effect their sale. The fact that the defendant was given the exclusive [366] right to sell the plaintiff’s product in a certain territory imposed no obligation upon him to make any sales, to attempt to make sales or to refrain from handling and selling the products of other manufacturers, if that should be more profitable, or for any reason more desirable. In short, so far as the written contract is concerned, it is nudum padum and wholly insufficient to support the defendant’s counterclaim. The defendant, however, alleges that the written paper contains only a part of the agreement between the parties, and that the entire agreement which forms the basis of its counterclaim was only partly reduced to. writing While the exact terms of the oral agreement are not set out with all the clearness that is desirable, I think that a fair construction of the allegations of the answer is that the defendant did agree with the plaintiff that it would use due effort to sell his products; that it would employ its organization, catalogues, salesmen and other avenues to that end; and that it was in consideration of such agreement that the plaintiff executed the written contract above referred to. There are further allegations to the effect that the defendant has fully performed all these agreements upon its part and that in doing so it has expended a large amount of money. I suppose that if, under its answer, the defendant is entitled to show that the written contract was executed, by the plaintiff upon a good consideration, either of harm to the defendant or of benefit to himself, the contention that the contract is void for want of mutuality must fail. The mere fact that the defendant has not bound himself to purchase any specified quantity of goods does not render the contract void, provided it is supported by some other good consideration, as, for instance, the payment of a sum of money. And this brings us to the consideration of the real question involved, viz.: Can the defendant be permitted to introduce oral proof to show that the written contract embodies only a part of the agreement between the parties, and that other and essential parts of the agreement were entered into orally and were not reduced to writing ? [367] Of course, it is a general rule that oral proof cannot he introduced to contradict or vary the terms of a written instrument; hut, as has been clearly pointed out by the Court of Appeals, this rule is subject to two important exceptions. Cooper v. Payne, 186 N, Y. 334; Thomas v. Scutt, 127 id. 133; Eighmie v. Taylor, 98 id. 288; Chapin v. Dobson, 78 id. 74. The first exception relates to cases of fraud or mistake and need not be considered here. The second exception relates to that class of cases which recognize the written instrument, but regard it as incomplete, and admit parol evidence, not to contradict or vary, but to complete the entire agreement of which the writing was only a part. The matters which are essential to bring a case within this class are very clearly set forth in the opinion of Judge Vann in Thomas v. Scutt, supra,, and are: 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. Now, applying these rules to the case before me, we find that the writing does not appear upon inspection to be a complete contract, but, on the contrary, it lacks essential elements of such a contract; and it evidently was not designed to express the whole arrangement between the parties. It provides very fully as to the conditions to he performed by the plaintiff, but is silent as to any conditions to be performed by the defendant. As to the second essential referred to by Judge Vann, it is sufficient to say that parol evidence to the effect that the defendant agreed to use its best endeavors to sell the plaintiff’s product, and to that end to expend money in advertising it and in sending out salesmen, etc., is not inconsistent with or contradictory of any provision of the writing, but merely supplementary to it. [368] It would seem, therefore, that the facts pleaded bring the case squarely within the second exception referred to, as a case where the reception of parol evidence is proper to compíete the entire agreement of which the written instrument is only a part. It was evidently the intention of the parties that the part of the agreement which related to the conditions to be performed by the defendant should rest in parol, and the written instrument was subsequently executed in part execution of the parol agreement. It is well settled that a written agreement thus executed does not supersede a prior parol agreement. Baker v. Bradley, 42 N. Y. 316, 319, and numerous cases cited. The only defect in the written contract appears to be the failure to recite the true consideration moving from the defendant to the plaintiff. If it had recited that the consideration was the payment of a sum of money, the receipt of which was acknowledged, the written contract would have been complete and not subject to criticism. The written contract being silent upon that subject, if it had been alleged in the answer that such, consideration was the payment of a sum of money, such allegation would have been unquestionably sufficient to warrant the giving of parol proof upon that question and the counterclaim would not have been demurrable. In cases where the consideration of a written contract is not expressed at all, or is imperfectly expressed, parol proof is always admissible to show the true consideration, and this is never regarded as a violation of the rule against giving parol proof to contradict or vary the terms of a written instrument. Emmett v. Penoyer, 151 N. Y. 564; Baker v. Bradley, 42 id. 316. It is a common business transaction for one contract to be the consideration for another, and in such cases it has always been held that where proof of the contract which is the consideration does not contradict or vary the terms of the other, and where an independent parol agreement has been made as an inducement to a written contract, it is not necessary that the written contract should contain, any reference to the parol agreement to' authorize proof thereof. 21 Am. & Eng. [369] Encyc. of Law (2d ed.), 1112; citing Playa del Oro Mining Co. v. Gage, 60 App. Div. 1; Andrews v. Brewster, 124 N. Y. 433; Emmett v. Penoyer, 151 id. 564; Baker v. Bradley, 42 id. 316. In this case it happens that the consideration agreed upon by the parties and subsequently fully performed was not a sum of money but an agreement for the performance of services and the expenditure of money in advertising, soliciting trade, etc. I see no reason why any different rule should prevail. In each case the written contract is defective in that it fails to express the consideration; and there is no more reason in the one case than in the other why parol proof should he admitted to supply the defect. The demurrer should be overruled, with costs to be taxed. The plaintiff should have the right to reply within twenty days after notice of entry of interlocutory judgment, upon payment of costs. Demurrer overruled, with costs to he taxed. Plaintiff to have right to reply within twenty days after notice of entry of interlocutory judgment, upon payment of costs.