A. M. Wilson Co. v. Knowles

Christianson, Ch. J. This is an action to foreclose a conditional sale contract. Py the terms of this contract the plaintiff sold certain personal property, consisting of pool tables and other equipment for a pool room, to the defendant and reserved title to all such property in the plaintiff until the full amount of the purchase price had been paid. The amount due upon the contract is not in dispute, but tbe defendant asserts by waj^ of set-off tbat “as a part of tbe consideration for the purchase by the defendant herein of the said merchandise the plaintiff, through its agent undertook, promised and 'agreed with the defendant to furnish to the defendant a five year lease covering a certain building located on Lot 4, Block 48, of the original plat of the city of Bismarck;” and it is 'alleged that the plaintiff failed to comply with the terms of this agreement and that as a result the defendant was damaged in the sum of $2000. The defendant demands judgment “that the amount due on the said contract he computed and deter [888] mined and that after deducting tbe same from tbe contract by tbe plaintiff that tbe defendant have judgment against tbe plaintiff for said difference, etc.” Tbe ease was tried upon tbe issues thus framed to tbe court without a jury. When tbe defendant sought to introduce evidence relating to the alleged agreement on tbe part of tbe plaintiff to furnish defendant with a lease, objection was made on tbe ground, among others, that such evidence was inadmissible under tbe parol evidence rule; and that a valid agreement to this effect could not be established by parol evidence. Tbe trial court permitted tbe evidence to be introduced, but with tbe specific understanding that be would eventually rule upon its admissibility and the validity of tbe alleged oral agreement in determining tbe merits of the litigation. Tbe principal evidence as to tbe existence and terms of tbe alleged agreement consisted of the testimony of tbe defendant, himself. He testified that when be was first approached by the agent of the plaintiff be refused to buy tbe personal property unless a suitable location for a pool room was. procured; that thereafter some discussion was bad with regard to tbe place mentioned in tbe answer; and that the agent of tbe plaintiff then asked tbe defendant whether be would purchase tbe fixtures if be got a lease to the building; that later when the conditional sales contract was signed and tbe defendant paid a part of tbe purchase price plaintiff’s agent stated to tbe defendant that “be bad tbe lease in bis possession or in such condition that be bad tbe lease secured;” that it was a five year lease at a rental of $200 per month. Tbe only proof of damages adduced by tbe plaintiff bad reference to tbe loss of anticipated profits. That is, be testified as to tbe loss or profits which he claims it was likely be would have earned if be bad received tbe lease. After dire consideration tbe trial court ruled that tbe evidence adduced by the defendant to prove tbe agreement to furnish a lease was inadmissible; and, lienee, that no valid agreement to that effect bad been proven. In so ruling, however, jhe trial court indicated that if tbe agreement might be made in tbe manner in which it is claimed to have been made, and if it could be proven in tbe manner in which plaintiff sought to prove it, that tbe court would have held that the agreement existed. [889] Tbe trial court made findings and conclusions in favor of the plaintiff.' Judgment was entered accordingly 'and defendant has appealed from tbe judgment and demanded a trial anew in this court. In our opinion tbe judgment is correct and must be affirmed. It is doubtless true that tbe rule that parol testimony cannot be received to vary or add to or subtract from the terms of a valid written instrument “is not violated by allowing parol evidence to be given of the contents of a distinct, valid, contemporaneous agreement between the parties which was not reduced to writing when the same is not in conflict with tbe provisions of tbe written agreement.” Jones, Ev. p. 114. But obviously tbe parol agreement must be a valid one. The fact that it is collateral to a written agreement does not render it legal, valid or enforeible, if standing alone it would be illegal, invalid or unenforceable. Tims a party to a written contract may not under the guise of proving a collateral oral agreement “establish as a cause of action an oral agreement -within the statute of frauds.” Alsterberg v. Bennett, 14 N. D. 596, 106 N. W. 49. The defendant in this case had the burden of establishing a valid agreement on the part of the plaintiff “to furnish to the defendant a five year lease covering a certain building.” The construction most favorable to the defendant, of the evidence adduced is that at the time the sales contract was executed the plaintiff represented to'him that it had a lease for the building in question for a term of five years at an agreed rental of $200 per month; and that it was orally agreed between the parties that the plaintiff would transfer this lease to the defendant or sublet the premises to him for the same term, and at the same rental, as that stipulated in the lease. But this agreement would itself be within the statute of frauds. Comp. Laws, 1913, subdiv. 5, § 5888; 1 Williston, Contr. § 491; 27 C. J. pp. 211, 214, 215; 25 R. C. L. pp. 562—566. And, hence, subject to the very attack which the plaintiff made upon the agreement, and the evidence adduced to establish it. Hence, the trial court was correct in concluding that defendant had failed to establish the agreement on the part of the plaintiff for the breach of which he asked to be compensated. We believe that the trial court’s conclusion, would have been correct, even though all question as to admissibility of evidence and as to the statute of frauds be laid aside. In other words, we are of the opinion that the defendant [890] failed, to sustain the burden of proof, even though it be assumed that the evidence was admissible and the alleged oral agreement not within the statute of frauds. In view of the conclusion we have reached as to the alleged oral agreement it is unnecessary to determine whether there was any competent evidence as a basis for computation of damages. Judgment affirmed. Nuessle, JohNsoN, Burke, and Birdzell, JJ., concur.