Tenenbaum v. Gerard B. Lambert Co.

LIART, J., (after stating the facts). The only issue raised by the appeal is as to the correctness of the finding of the chancellor. According to the evidence adduced by the plaintiff, he has been engaged in the business of buying and selling sera]) iron and hides at Little Rock, Arkansas, since the year 1890. His son traveled for him over the State of Arkansas, buying scrap iron for him. He went to Elaine, Phillips County, Arkansas, and entered into a contract with the Gerhard B. Lambert Company, a corporation-engaged in business there, for the purpose of buying scrap iron from it, and the contract is evidenced by a letter signed by the Gerhard B. Lambert Company and written to A. Tenenbaum, Little Rock, Arkansas, and dated May 5, 1917, Elaine, Arkansas. The letter is as follows: “Bear Sir: We beg to confirm sale made to you through your representative, M. M. Tenenbaum, for approximately fifty gross tons of scrap iron, free of boilers, grates and stove plates, at $13.50, gross tons f. o. b. cars, Elaine approximately 50 tons of scrap iron and that the bill of lading attached, delivery to be made within two weeks. We beg to acknowledge receipt of your draft for $50 to apply on this shipment. “Yours truly,” The defendant shipped to the plaintiff one car of scrap iron within two weeks and notified the plaintiff that this was all the scrap iron that it had. The plaintiff received the car load of scrap iron, but refused to pay for it, claiming that the contract called for approximately 50 tons of scrap iron and that the defendant had only shipped to the plaintiff 13% tons. The plaintiff claimed that he had contracts out for the sale of the scrap iron, and that in order to fill them he had to buy scrap iron at an advanced price from other parties and that he was damaged in the sum of $540 by the defendant not complying with its contract. It is also shown by the plaintiff that the defendant estimated that it had on hand at Elaine approximately 50 tons of scap iron and that the plaintiff bought that amount from it. On the other hand, it was shown by the defendant that it was engaged in business at Elaine, Arkansas, and that on the 5th day of May, 1917, a son of the plaintiff called upon it to purchase the scrap iron which it had accumulated at its place of business. An agent of the defendant showed Tenenbaum the iron which it had accumulated at Elaine and Tenenbaum estimated the amount to be between 40 and 50 tons. The plaintiff’s agent was also told that the defendant had some more scrap iron at Lambrook on its plantation, eight miles away. The defendant-was engaged in operating a cotton plantation of about 3,000 acres and also operated a store and gin on the premises. The defendant knew nothing as to the amount of scrap iron on hand and relied entirely upon the estimate made by Tenenbaum. The latter knew that the defendant was not engaged in the business of buying and selling scrap iron and that it only intended to sell the plaintiff the amount of scrap iron which it had on hand at Elaine and Lambrook.' The contract in question was written by an agent of the defendant, but was dictated by the agent of plaintiff. ■ The above facts were testified to both by the bookkeeper and manager of the defendant. (1) It is first insisted by counsel for the plaintiff that this testimony on the part of the defendant was inadmissible on the ground that it violated the well known ' rule that parol evidence is inadmissible to modify or vary a written contract. The facts bring this case within an exception to the rule. The rule prohibiting the admission of oral evidence to vary a written contract does not preclude the admission of such evidence to establish fraud in making the contract. This is -so because fraud in a contract could never be proved if the parties were bound by its terms as’ written. Brown v. LeMay, 101 Ark. 95, and Carwell v. Dennis, 101 Ark. 603. (2-3) In the case at bar two witnesses for the defendant testified in positive terms that it was engaged in running a plantation of 3,000 acres and in operating a store, mill, and gin situated thereon; that it only intended to sell the scrap iron which it had accumulated in the course of its business; that it was not engaged in the business of buying and selling scrap iron and that the plaintiff knew these facts and knew that the defendant relied upon his agent in estimating the quantity of scrap iron on hand. The iron was to bo delivered within two weeks. The defendant did deliver all the scrap iron it had on hand to the plaintiff within this time. The chancellor correctly held that the action of the plaintiff in estimating the quantity of scrap iron in the contract at approximately 50 tons, when in fact there were only about 13% tons, was a fraudulent misrepresentation which induced the defendant to sign the contract, as dictated by the plaintiffs agent. This view is strengthened by the fact that the defendant wrote the plaintiff a letter offering to sell him the scrap iron which it had on hand and the'agent of the plaintiff went down there to buy it in response to this letter. It follows that the decree will bo affirmed.