Leavitt & Co. v. Dimmick

Opinion by Mr. Chibe Justice McBride. 1, 2. We are of the opinion that evidence of the alleged oral agreement was improperly admitted. It is a rule as old as the law of evidence and one re-enforced by statute that all verbal negotiations which precede or accompany a written contract are merged in the writing, which is the sole evidence of the agreement: Section 713, L. O. L.; Hindman v. Edgar, 24 Or. 581 (17 Pac. 862); Gill v. Columbia Contract Co., 70 Or. 278 (141 Pac. 163); Looney v. Rankin, 15 Or. 617 (16 Pac. 660); Stoddard v. Nelson, 17 Or. 417 (21 Pac. 456); Weidert v. State Ins. Co., 19 Or. 261 (24 Pac. 242, 20 Am. St. Rep. 809); Tallmadge v. Hooper, 37 Or. 503 (61 Pac. 349, 1127); Mageon v. Alkire, 41 Colo. 338 (92 Pac. 720). There is not an element of defendant’s alleged oral contract which is not contradicted by or embraced in the written contract. To say that he should in the future have other territory is directly contradicted by that clause which provides that defendant shall have the right to sell in the territory specified “and not elsewhere” as well as by that clause which provided that defendant should have the right — 285 — to sell Willys-Overland cars “until and including the 30th day of June, 1913,” that “this contract shall expire by its own limitation on June 30, 1913,” and the further clause that the written contract “supersedes all contracts or agreements of a prior date, and that any and all existing contracts are hereby terminated at the date of the acceptance of this agreement. ’ ’ Conceding for the purposes of this discussion that the oral agreement was made as alleged, it is impossible to recognize it as surviving after these written stipulations had been signed. In September, 1913, a new agreement in writing was made, which by its terms expired June 30, 1914, but which contained all the conditions and stipulations of the original written contract heretofore quoted, but granting to defendant the additional territory which he claims was promised in the oral agreement. Thereafter plaintiff refused to renew the contract for 1915. Upon the face of it the written agreement is the complete contract, and is practically declared to be so by the clause revoking all prior agreements. Both counsel for respondent and the court below seem to have been under the impression that by the authority of La Grande National Bank v. Blum, 26 Or. 49 (37 Pac. 48), and Hillyard v. Hewitt, 61 Or. 58 (120 Pac. 750), the evidence respecting the alleged oral agreement was admissible, but when analyzed neither of these cases is in point. In La Grande National Bank v. Blum this court held: “The maker of a note as against the payee may show by extrinsic evidence that the note was made and delivered as security for the performance of a contract by him, and that he has performed his contract; such evidence does not change or add to the terms of the writing, but shows simply a failure of consideration. ’ ’ — 286 — In the case at bar the oral evidence does change the terms of the written contract in that it makes a continuous contract from year to year, whereas the written contract is for a specified period with a stipulation that it shall terminate at the expiration of that period. It also contradicts and changes that portion of the written contract abrogating all previous contracts. The two cannot be reconciled. In Hillyard v. Hewitt, 61 Or. 58 (120 Pac. 750), the facts were as follows: The plaintiff brought an action to recover for the price of a consignment of window locks which it alleged had been sold by it to defendant upon his written order. Defendant admitted giving the order, but alleged that said order was given in consideration that plaintiff would appoint defendant its general agent for the sale of the locks in Marion County with a commission for each lock sold; that after obtaining the order the plaintiffs refused to appoint him their agent, and that thereupon he returned the locks to them. The plaintiffs denied making the agreement and alleged that the agent who took the order had no authority to appoint subagents or to make any agreement except for the direct sale of the merchandise. The court’s statement of the evidence is as follows: “Upon the trial plaintiffs called defendant as a witness, and proved by him the execution of the order. The testimony of defendant tended to show that at the date of the signature of the order an agent of plaintiffs visited his place of business, and said he was establishing agencies for the sale of plaintiffs’ goods, and wanted somebody to take the agency for Marion County. He proposed to establish the agencies, giving exclusive territory, so that no one else would have a right to sell in that territory. Under these conditions, defendant agreed to sign the order, which was filled out by the agent. He testifies that the agent was — 287 — sitting at a table opposite defendant, and passed the order over to him to sign, at the same time having his hand on the upper end of the paper, and when defendant affixed his signature the agent took the paper and started to leave the room; that as he was passing out through the door defendant inquired about the assignment of territory, and the agent answered ‘that he had no right to assign that territory, but that the company would assign it when the goods were sent.’ ” In deciding the case we said: “Where a contract, complete in its terms, is shown to have been executed by the parties, it is clear that one will not be permitted to add other terms by parol evidence; but this rule does not prohibit a party from showing that what appears to be a contract is not so in fact, but is merely a part of a larger transaction, which has never been completed: Lawson, Contracts (2 ed.), §§ 382, 383; Greenleaf, Evidence (16 ed.), § 284a; Branson v. Oregonian Ry. Co., 11 Or. 161 (2 Pac. 86); Allen v. Konrad, 59 App. Div. 21 (68 N. Y. Supp. 1057). The testimony tends to show that the contract contemplated included two things: (1) The assigning to defendant of an exclusive agency for the sale of plaintiffs’ goods; and (2) the giving by defendant of an order for the goods which he contemplated selling. Plaintiffs’ agent procured defendant’s signature to the order, and then vanished, without making the assignment, and plaintiffs refuse to perform that part of the agreement which was the procuring cause of defendant’s signature. Here is no complete agreement, but merely half of an agreement.” There was nothing to contradict the order signed by the defendant in that case. The oral evidence in regard to the transaction tended only to show that the consideration upon which the order was founded had failed by reason of the fraudulent conduct of the plaintiffs’ agent. The evidence regarding the alleged oral contract should not have been admitted. — 288 — 3. It is urged by counsel that the jury has found that such contract was made and that its finding is conclusive here; but there being no competent evidence of the existence of the agreement such a result cannot be conceded. 4. * The alleged oral agreement was not within the actual or apparent power of the agent to execute. Defendant had been doing business as plaintiff’s sales agent in 1912, and the agreement for that year contained a clause providing that it should not be considered in force until approved by the vice-president, and another clause which provided that its acceptance should be evidenced by the signature of plaintiff’s vice-president. It will thus be seen that defendant had full notice of the extent of the agent’s powers; and if with this notice he chose to rely upon a “gentleman’s agreement” with the agent, he did so at his peril. It is said in Hillyard v. Hewitt, 61 Or. 58 (120 Pac. 750): “Parties dealing with an admitted agent of another have a right to assume, in the absence of anything indicating a contrary stqte of affairs, that his agency is general”: Aerne v. Gostlow, 60 Or. 113 (118 Pac. 277). In the case at bar everything indicated a “contrary state of affairs.” Every contract which the defendant signed was notice to him that the agent’s authority was limited, and with such notice it was defendant’s duty to inquire and ascertain the extent of the agent’s authority before acting upon the alleged oral contract. The case at bar furnishes an apt argument in favor of the salutary rule against allowing written agreements to be frittered away by evidence of parol negotiations. The plaintiff is a nonresident corporation, and the lips of Scarlett, who it is alleged made an oral agreement much broader in its scope than the written contract which was forwarded to the company, are — 289 — sealed by death. It was to avoid the possibility of such contingencies as these that the maxim “Parol evidence shall not be admitted to vary or contradict a written agreement” was introduced; and while the defendant’s contention may. possibly be true in fact, it is contrary to the policy of the law to vary the rule. 5. The defendant counterclaimed for the expense of certain trips made by him to Portland to adjust certain alleged overcharges made against him by plaintiff. We know of no law, and counsel for defendant has cited us to none, justifying a recovery for these items. They should have been wholly eliminated from the consideration of the jury. The judgment is reversed and a new trial directed. Reversed and Remanded. Mr. Justice Moore, Mr. Justice Bean and Mr. Justice McCamant concur.