Hurlburt v. Dusenbery

Mr. Justice Goddard delivered the opinion of the court. 1. We think the testimony of appellant, as to the contemporaneous oral agreement, was admissible. This evidence — 244 — was not introduced to contradict or change the written agreement, but for the purpose of showing that while it was, in form, a complete contract, yet, it was prepared to enable appellant to procure, from a prospective purchaser, the money to compensate appellees for doing work on their own property, in case the sale he was attempting to negotiate should be consummated; and that it was not to become effective or binding, as between the parties, unless he received the money from that source. In other words the testimony was offered to show that the written agreement was not to become a binding contract until the happening of a condition resting in parol. That oral evidence is admissible for such purpose is now well settled. Burke v. Dulaney, 153 U. S. 22; Bourke v. VanKuren, 20 Colo. 95 ; Pym v. Cambell, 6 El. & Bl. 370; Wilson v. Powers, 131 Mass. 539; McFarland v. Sykes, 54 Conn. 250; Reynolds v. Robinson, 110 N. Y. 654; Wharton on Evidence, § 927 ; Juillard v. Chaffee, 92 N. Y. 529; Grierson v. Mason, 60 N. Y. 394; Denver Brewing Co. v. Barets, 9 Colo. App. 341. The rule is thus concisely stated by Mr. Wharton: “ It is always admissible to show by parol, that a document was conditioned on an event that never occurred. In other words parol evidence is not admissible to vary the terms of a written contract, but it is to show that no contract ever existed of which they were terms. Parol evidence is admissible, therefore, to adopt one of Sir J. Stephens’s expressions, to prove ‘the existence of any separate or oral agreement constituting a condition precedent to the attaching of any obligation, under any contract, grant, or disposition of property.’ Hence, it may, therefore, be shown by extrinsic proof, that a deed, within the statute of frauds, and duly signed, was not intended to operate as a binding conveyance.” In Pym v. Campbell, supra, Earl, J., said: “ The production of a paper purporting to be an agreement by a party, with his signature attached, affords a strong presumption that it is his written agreement; and, if in fact he did sign the paper animo contrahendi, the terms contained — 245 — in it are conclusive, and cannot be varied by parol evidence; * * * but, if it be proved that in fact the paper was signed with the express intention that it should not be an agreement, the other party cannot fix it as an agreement upon those so signing it.” Crompton, J., said: “ I know of no rule of law to estop parties from showing that a paper, purporting to be a signed agreement, was in fact signed on the terms that it should not be an agreement till money was paid or something else done. In Reynolds v. Robinson, supra, it was said that the rule was now well established that “ parol evidence is admissible to show that a written paper which, in form, is a complete contract, of which there has been a manual tradition, was, nevertheless, not to become a binding contract until the performance of some condition precedent resting in parol.” In Greirson v. Mason, supra, it was held that parol evidence is admissible to show that a writing, purporting to be a contract, was not intended as such, but was executed for a specific purpose. The action was brought to recover the proceeds of goods sold by defendant as agent. He set up as a counter-claim his employment by plaintiff’s assignors, to sell on commission, with the agreement on their ’part, that his commission should not be less than $1,500 per year. In reply, the plaintiff produced a written agreement, drawn up by defendant, and signed by their assignors, to the effect that the defendant was to receive a commission of five per cent upon the sales made. Defendant gave evidence, in substance, that the writing was executed not as a contract between the parties, but to induce one Woods to advance money upon the goods. Under these facts, the question was, whether parol proof of the purpose for which the instrument was executed was competent; and speaking to this point, Miller, J., said: “ The object of the testimony was to show that the instrument was executed for a specific purpose, and that purpose being accomplished, was of no effect in changing the contract previously made with the defendant. I think that it was — 246 — competent evidence for this purpose. The defendant made out a contract. The plaintiff proved an instrument which altered the contract, and the defendant had a right to prove that the instrument introduced was not intended as an alteration of the contract, but with a view of accomplishing a particular purpose. Such evidence was not given to change the written contract 'by parol, but to establish that such contract had no force, efficacy, or effect. That it was not intended to be a contract, but merely a writing to be used in inducing Woods to make advancements upon the goods. This is in avoidance of the- instrument and not to change it; and I do not see why the testimony was not as competent in this ease as it would be to show that a written instrument was obtained fraudulently, by duress or in any improper manner. Such evidence does not come within the ordinary rule of introducing parol evidence to contradict written testimony, but tends to explain the circumstances under which such instrument was executed and delivered.” We think that the oral understanding attempted to be shown: by appellant, if established, would bring this case within the rule laid down in the foregoing authorities; and that the court erred in ruling out the testimony offered for that purpose. ■ 2. Aside from the question as to the admissibility of the testimony of Hurlburt, as to the oral agreement, there was, in our opinion, from the testimony introduced, a question of fact in issue. The written agreement of February 1, as testified to by Dusenbery, was materially different from the one testified to by Hui’lburt. He testified that the agreement was to become effective only upon Hurlburt’s election to pay, upon June first, for the work performed prior thereto; and that the payment made by Hurlburt at that time was made in pursuance of that proviso, and that he thereby assumed an obligation to continue and complete the tunnel; while, on the other hand, Hurlburt denied that the original agreement contained any such provision, and stated that the payment he then made was made under a new and distinct agreement and under — 247 — standing. It, therefore, became important, in determining what effect should be given to the fact of his making a payment at that time, for the jury to decide, as between these witnesses, which gave the true version of the transaction; and furthermore, whichever version of the original contract the jury may have accepted as true, this testimony tended to show a new and distinct agreement, upon which this and subsequent payments were made, and that the money was advanced by appellant, not in pursuance of the original agreement which, up to that time was concededly of no binding force or effect, but with the distinct understanding that it was to be returned in case of a sale of the property. The conversation between the parties at that time was admissible upon the question of fact as to whether there was a change or modification of the original contract. Whether Hurlburt’s statements as to the conditions under which he advanced the money were sufficient evidence of such an agreement as would work such change or modification, was for the jury to determine, and the court, therefore, erred in directing a verdict. Ryan v. Hunt, 4 Sneed, 543; McQuown v. Thompson, 5 Colo. App. 466; Colo. C. & I. Co. v. John, 5 Colo. App. 213 ; McRae v. Bank, 6 N. D. 353. It is now for the first time objected that the appellant should not be permitted to avail himself of the defense that ■there was a subsequent agreement, because the same was not specially pleaded. Whether or not, from the averments of the voluminous answer, warrant for the introduction of this testimony may be found, it is unnecessary to determine, since, if this proof was objectionable upon this ground, or was at variance with the averments in the answer, advantage of such objection should have been taken at the time. This was not done; but, on the other hand, the parties treated this question as an issue, and the court expressly ruled that the appellant might show a modification of the written agreement. If such proof was not admissible under the pleadings, the objection should have then been made, and an opportunity given appellant to amend his answer, so as to obviate this objection. Colo. Mortgage Co. v. Rees, 21 Colo. 435, and cases cited. — 248 — It was also error to instruct the jury to allow interest on the balance found due. Interest in this state is recoverable, in the absence of contract, only upon the subjects enumerated in the statute. Hawley v. Barker, 5 Colo. 118; D., S. P. & P. R. R. Co. v. Conway, 8 Colo. 1; Salazar v. Taylor, 18 Colo. 538; De Remer v. Parker, 19 Colo. 242; Dexter v. Collins, 21 Colo. 455. The claim sued for in this case does not come within any of the cases enumerated in the statute then in force. Gen. Stats. 1883, sec. 1707, p. 559. For the foregoing reasons, the judgment is reversed and the cause remanded. Reversed and remanded.