Richards v. Hodges

Walker, J., after stating the case: The general rule is readily admitted, that a contract in writing; complete on its face, cannot be altered by parol evidence of inconsistent agreements previously or contemporaneously made, in the absence of fraud, accident, or mistake. The terms of a written contract cannot be varied ór contradicted in such a way, but all such negotiations are conclusively presumed'to have been merged into the final agreement, of which the writing is, in law, the only memorial. The difficulty arises always in the application of this rule and the determination in any given case of the question whether the proposed evidence does tend to vary dr contradict it, or shows merely a collateral and independent agreement having no such tendency. In recent years we have decided numerous cases with reference to the bearing and application of this rule ,to their special facts, and some in which weire involved the consideration whether the terms of the instrument were essentially varied or — 188 — contradicted, and tbe obligations of p'arties under tbe contract thereby changed or modified. Cobb v. Clegg, 137 N. C., 153; Evans v. Freeman, 142 N. C., 61; Typewriter Co. v. Hardware Co., 143 N. C., 97; Medicine Co. v. Mizell, 148 N. C., 384; Basnight v. Jobbing Co., 148 N. C., 350; Walter v. Venters, 148 N. C., 388; Woodson v. Beck, 151 N. C., 144; Pierce v. Cobb, 161 N. C., 300; Carson v. Insurance Co., ibid., 441; Ipock v. Gaskins, ibid., 673, and many others; but those cited, if carefully examined, will serve to illustrate the force and extent of the rule in’its application to cases of varying phases. We should give proper heed to the admonition of Justice Shepherd in Moffitt v. Maness, 102 N. C., 457, quoting the words of Judge Taylor in Smith v. Williams, 5 N. C., 46, and those of other eminent jurists, that the written memorial is far more trustworthy than oral statements of witnesses, “the sages of the law having said that the fallability of human memory weakens the effect of that testimony which the most upright mind and one fully impressed with the solemnity of an oath may be disposed to give to it.” He counsels us that in some of' the cases we have approached close to the verge of the law, and that there is great danger that we may pass beyond it. But we apprehend no such danger in this ease, for the charge of the court may well be sustained, and safely, too, upon an unquestioned principle of the law. There is no attempt here, to vary or contradict'the written agreement, but only to show that the plaintiff has 'accepted the new notes in full payment and satisfaction of the original ones. If the original parol stipulation, that they should be thus received as a discharge of the first obligation, changes the contract as evidenced by the writing, that is, the sixteen notes, which we need not decide, Richards afterwards took the new ones, kept them, proved them in bankruptcy,.and, as. the jury found under the evidence and the verdict as interpreted by the charge, he so received them in substitution for the other notes as a satisfaction thereof. In this view, it can make no difference whether the oral stipulation was made contemporaneously with or subsequently to the date of the original notes, as he — 189 — afterwards voluntarily submitted to a performance of it by accepting the new notes. It then became an executed contract. The previous agreement to- accept the notes of the company in substitution for or as a satisfaction of the defendant’s notes was, at least, competent to show that they were delivered to plaintiff and retained by him for that purpose, that is, to satisfy the others, or, in other words, to explain his act of receiving them. The case of Rugland v. Thompson, 51 N. W. Rep. (Minn.), 604, seems to be exactly in point. It appeared there that the payee and holder of a promissory note had accepted from the maker certain personal property and services, and it -was held admissible to prove an oral agreement when the note was made, that whatever should be thus supplied to the payee should be applied in payment on the note; such evidence being admissible, not to vary the agreement expressed in the note, but only as bearing upon and characterizing the subsequent delivery and acceptance of the property and services. And so is the case of Buchanon v. Adams, 49 N. J. L., 636 (60 Am. Rep., 666), where the defendant proposed to prove that the plaintiff had orally agreed with the defendant, at the time of giving the note in suit, that he would receive lumber in payment of it, and that it would not 'be negotiated. The Court decided that while this evidence, by itself, was incompetent, as we held in Walker v. Venters, supra, yet “that the testimony offered, when supplemented by proof that such agreement was executed, on the part of the defendants, by the delivery of more than sufficient lumber to pay the note, was admitted for the' purpose of showing that the lumber was in fact received in .payment and satisfaction of the note, and not .for the purpose of varying the terms of the written promise to pay. The rule is well -settled that evidence of contemporaneous declarations is inadmissible to vary the terms of a written contract,” citing several cases in support of the ruling. See, also, Germania Bank v. Osborne, 83 N. W., 1084; Braly v. Henry, 71 Cal., 481; Honeycut v. Strother, 2 Ala., 135. The last three cases go even beyond the necessities of our case. Reference is also directed to a number of eases of a like tenor, to be found in a. valuable note to Wood — 190 — son v. Beck, supra, as reported in 31 L. R. A. (N. S.), 235. Tbe Court, in Middleton v. Griffith, 57 N. J. L., 442, after referring to tbe case just cited, Buchanon v. Adams, said: “It was beld in Chaddock v. Van Ness, 6 Vroom, 517, that parol evidence of a contemporaneous agreement between tbe parties, as to tbe mode of payment, wbicb bas been executed in satisfaction ' of tbe debt, is admissible in an action by tbe payee against tbe maker. Tbe principle upon wbicb such evidence is admissible in an action by tbe payee is that it goes do establish tbe fact of payment or satisfaction. Oliver v. Phelps, 1 Zab., 597, 603. If tbis offer of evidence in tbis case was to establish a, contemporaneous agreement as to its mode or manner of payment between tbe plaintiff and defendant, and which bad been executed in satisfaction of tbe note or debt secured thereby, then it was admissible to defeat tbe action; but in order to be admissible, tbe offer must tend to show tbis result.” Parol evidence will not be received for tbe purpose of engraft-ing upon a promissory note, which appears upón its face to call for tbe payment of a definite sum of money at a sj)eeified time, absolutely and unconditionally, a promise wbicb contradicts its ternjs and subverts its legal effect; but in Zimmerman v. Adee, 126 Ind., 15, tbe Court, while fully recognizing and adopting that principle, beld, upon a state of facts like ours, “that tbe rule wbicb precluded proof of prior .or contemporaneous agreements did not prevent proof of an executed agreement made at the time of tbe making of a note to tbe effect that tbe instrument should be surrendered upon tbe performance of certain conditions, wbicb bad been fully performed. Where tbe object of parol evidence is to show that a note bas actually been satisfied in some other way than by tbe payment of money, it is perfectly competent for tbe maker to prove that contemporaneously with tbe making of tbe note it bad been agreed that it might be paid or satisfied by delivering another note, and that tbe other note bad actually been delivered in pursuance of tbe agreement,” citing Hagood v. Swords, 2 Bailey, 305; Crosman v. Fuller, 17 Pick., 171; Low v. Treadwell, 12 Me., 441; Bradley v. Bemtly, 8 Vt., 243; Buchanan v. Adams, 9 Cent. Rep., — 191 — 120. Citations to tbis point might easily be multiplied indefinitely, but we will content ourselves with a reference to only a few of them. Sutton v. Griebel, 118 Iowa, 78; Howard v. Stratton, 64 Cal., 487; Tucker v. Tucker, 113 Ind., 272, where the Court held: “This rtde (of exclusion) does not, however, prevent the maker of a promissory note from alleging and proving an. executed agreement, made at the time of the execution of the note, that it should be delivered up upon the performance of certain conditions by the maker. The effect of aver-ments and proof of that nature is not to vary, contradict, or add to the note, but to show that, according to the terms of a collateral agreement, made at the time, and since fully executed, the note has been paid and satisfied.” See, also, an elaborate' note to Am. Gas and V. M. Co. v. Wood, 43 L. R. A. (O. S.), at page 483, where many cases to the like effect are collected, especial attention being called to Juilliard v. Chaffee, 92 N. Y., 529, and Patrick v. Petty, 83 Ala., 420. We may consider it as settled by the authorities that where the collateral agreement, though in parol, has actually been performed, or passed from the executory to the- executed stage in the negotiations between the parties, it is competent to show the oral agreement, not for the purpose of varying or contradicting the writing, but to expláin and characterize that part of the transaction by which the collateral agreement was executed; and, too, apart from the prior oral agreement, it would be competent to show, independently, as an isolated fact, for what purpose the subsequent notes were given by defendant and received by the plaintiff, as it does not alter any written contract. The parties can voluntarily stipulate as to the method of performing their contract (Typewriter Co. v. Hardware Co., 343 N. C., 97), and it is binding upon them, at least, when the agreement is executed, as much so as if the original contract had been performed identically as stated therein, the new method being substituted for the old. It does not appear clearly in the record at what time the new notes were actually delivered. When an oral contract of this kind is made with respect to performance of the written con — 192 — tract, tbe creditor wbo accepts one set of notes in satisfaction of tbe other and prior one cannot object tbat tbe new notes turned out to be uncollectible. On this point tbe law is thus stated in 2 Greenleaf on Ev. (14 Ed.), sec. 523: “Proof of tbe acceptance of tbe promissory note or bill of a third person will also support tbe defense of payment. But her© it must appear to have been tbe voluntary act and choice of tbe creditor, and not a measure forced upon him by necessity, where nothing else could be obtained. Thus, where tbe creditor received the note of a stranger wbo owed bis debtor, tbe note being made payable to the agent 'of the creditor, it was held a good payment, though tbe promisor afterwards failed. So, where one entitled to receive cash receives instead thereof notes or bills against a third person, it is payment, though thé securities turn out to be of no value,” citing in support of tbe text Wiseman v. Lyman, 7 Mass., 286, and other cases. There was no fraud or suppression of tbe facts, and no necessity forced upon tbe plaintiff to take tbe new notes, and certainly no duress. It was bis free and voluntary act, with full knowledge of all tbe circumstances. Taking an abstractly equitable view of tbe matter, be has lost nothing’, really; as, if be bad kept tbe stock, it would have been practically worthless; and tbe defendant conversely acquired nothing of value by tbe purchase. Under tbe circumstances, if we required defendant to pay tbe original notes, when plaintiff agreed to take tbe company’s notes in satisfaction of them, it would not be just from a moral standpoint, .even if, in strictness, it is tbe correct legal aspect of tbe case. But we consider tbe case only as it is affected by tbe law, and not by any moral question involved.. There were no requests for special instructions, presenting any other feature of tbe case, and under tbe charge and tbe evidence the jury have found tbat plaintiff actually received tbe notes of tbe company in performance of bis prior contract, and this- makes a complete defense to bis recovery upon tbe sixteen notes, there being ample evidence to sustain tbe charge. No error.