Creasey Corp. v. Dunning

Jones, J. The trial court ruled that the first paragraph quoted in the statement of facts was so- ambiguous as to permit oral testimony showing the understanding of the — 393 — defendant’s agent. That understanding is stated in the testimony above quoted and is summarized in the following question in the special verdict: “At the time when defendant’s wife, Mrs. Margaret Dunning, acting as his agent, signed his name to the membership or. service contract, did plaintiff’s agent, Miss Peterson, state and represent to Mrs. Dunning in substance that whenever the defendant paid in full his subscription of $300 on that contract he would thereby have a credit of that sum with the plaintiff corporation, which credit the defendant could apply in payment of the purchase price of any merchandise that he might thereafter buy from plaintiff; and that whenever said subscription was paid in full, the defendant, if he wished to do so, could thereafter at any time discontinue his membership in the plaintiff corporation and obtain from it the repayment to the defendant of any remainder there might then be of said $300 over and above the sum, if any, which would then be required to balance the defendant’s account for merchandise that he had bought from plaintiff?” Preceding the paragraphs above quoted there were clauses providing for the payment by the defendant of $302 which entitled him to' the services of plaintiff, and containing an agreement by plaintiff to sell merchandise for cost plus the necessary cost of doing business. It will be seen that it contains no clause that when the subscription was paid in full the defendant could discontinue membership and obtain repayment of any remainder over $300 which would then be required to balance defendant’s account for merchandise. Nor does it contain any language susceptible of such interpretation. On the contrary, it contains the explicit provision that if goods were purchased in excess of his payments or in excess of $300 defendant should accompany the order with a check for the excess. Doubtless the meaning might have been expressed in language less liable to be misunderstood, but it seems to us that any possible doubt as to the meaning of the paragraph — 394 — claimed to be ambiguous is removed by the later clause, which expressly provides that the subscriber, should not have the right to trade out the contract and that all merchandise must be paid- for. In speaking of what is known as the parol-evidence rule a very learned writer has said: “Few things are darker than this, or fuller of subtle difficulties.” Thayer, Evidence, 390. Another author, has said: “The admissibility of extrinsic parol testimony to affect written instruments is, perhaps, the most difficult branch of the law of evidence.” 2 Taylor, Evidence (9th ed.) § 1128. If the discussions in treatises and judicial opinions dealing with the admission of parol evidence to explain ambiguities, latent and patent, from the time of Bacon to the present day were to be collected they would fill many volumes. We shall not undertake the vain attempt in which so many have failed to lay down any general rule which should govern in determining in all cases whether parol evidence should or should not be admitted to explain a writing claimed to be ambiguous. Nor shall we undertake to. review the innumerable decisions on the subject. Unlike the great majority of cases, this is not one in which it is claimed that a word or a phrase has an uncertain or equivocal meaning. It is not a case where by usage of trade a word or clause has gained a particular meaning different from the ordinary meaning. It is not a unilateral document like a will where there has occurred an erroneous description of property or of a legatee and where extrinsic evidence has often been received to show the real intent of the testator. We have here a contract between two parties in which there can be little doubt as to its real meaning. It is claimed that one paragraph would not be easily understood by a person of average intelligence and that therefore it is ambiguous, although another clause relating to the same subject is so plain as to exclude any doubt. — 395 — On the theory that the contract was ambiguous, testimony was received directly contradicting terms of the contract as to the meaning of which there could be no doubt. We know of no rule permitting the introduction of parol evidence to explain a written contract on the ground of ambiguity .broad enough to cover the facts of this case. Written contracts are not to be set aside or explained away merely because careful attention is necessary for their comprehension; nor because a person of ordinary intelligence may not have comprehended their full meaning. When the plain meaning of a contract can be gathered from the whole instrument, it would be a dangerous rule that one of the parties could later successfully assert that he had a different intention from that expressed in the writing. Such a rule would prevent reliance on contracts made in absolute good faith; would render investments and titles insecure; and hold out an inducement to fraud and perjury. It is claimed by counsel for defendant that the contract was obtained by fraudulent representations as to its contents and meaning. It is a familiar exception to the parol-evidence rule that fraud may be proven by* clear and satisfactory evidence to show that the contract never had any legal existence and that what appears to be a contract is not and never was one in fact. It is also true that where that issue is raised, broad range may be given to the testimony. The claim is made by plaintiff’s counsel with much force that there was no adequate proof that any misrepresentations were made. The solicitor did not testify and her evidence was not obtainable. The only witness tO' the fraud alleged was the defendant’s wife, wlm had full authority to make the contract. Her testimony was materially weakened by the fact that on the trial in the municipal court, six months before the trial in the circuit court, she testified that the subject of getting the money back was not brought out; that she understood that they could buy up to that — 396 — amount at any time, and that she did not remember that they discussed the subject of applying the $300 on merchandise to be bought. But the jury found for the defendant on this issue, and we shall discuss the subject on the theory that the representations were made as claimed by defendant. The wife of defendant had full charge of his grocery and had about eight years’ experience in that business. She was not illiterate; on the contrary, her testimony shows that she was a person of at least ordinary intelligence and understood the English language. The writing was not misread to her. There was no device to prevent her reading it, and after several conversations with her husband on the subject she did read the application. Hence it cannot be said there was any misrepresentation as to the contents of the instrument. If there was anjr false representation it related to the meaning and legal effect of the contract. It is-a familiar rule that those who sign written instruments are presumed to' know their contents and their legal effect;-but the presumption is not conclusive in all cases; for example, if a lawyer enters into a contract with his client and intentionally misrepresents its legal effect, he should not shield himself from liability .for his misconduct by invoking the rule that every one is presumed to know the law. Other illustrations might be given where persons holding confidential relations with another may be bound by misrepresentations even of the meaning of written contracts into which they enter. But where as in this case the párties stand at arm’s length and no confidential relation or disability is shown and where the contract is signed with full opportunity to- know its contents, there are very cogent reasons for holding that the plain meaning expressed in the writing shall prevail even though that meaning has been misrepresented. The case of Calkins v. State, 13 Wis. 389, is most relied on by defendant’s counsel as authority for the contention that the misrepresentations relied on in the present case are — 397 — admissible. In that case the only point necessary to the decision was whether, it was proper to receive evidence of misrepresentations as to the meaning of a few technical words used in the printer’s trade where that meaning was well known to one of the parties but unknown to the other. We do not consider that case controlling, especially in view of later decisions of this court. Gates v. Parmly, 93 Wis. 294, 66 N. W. 253, 67 N. W. 739; Gormely v. Gymnastic Asso. 55 Wis. 350, 13 N. W. 242; Equitable S. Co. v. Hartmann, 177 Wis. 38, 187 N. W. 686. The testimony relied on by defendant not only related to misrepresentations as to the legal effect of the contract but imported into it new terms wholly inconsistent with its plain language. We do not consider that the facts of this case bring it within the exception to the parol-evidence rule that written contracts may be impeached for fraud. That exception is a salutary one upheld by the courts to prevent fraud.. But we must not overlook the fact that the general rule is also salutary, and intended to prevent those who have knowingly and deliberately signed written contracts, and have afterwards become dissatisfied, from repudiating them to the injury of those who have relied on the contracts. The rule as well as the exception is designed to prevent fraud. There is another phase of the case which should be referred to. The application for membership was made July 12, 1919. After paying the membership fee, in October, 1920, defendant received the certificate of membership, which very plainly stated that he would not be permitted to trade the certificate in merchandise, but that it must be paid for in accordance with the terms specified. Defendant read the certificate, discussed the subject with his wife, and then continued to buy merchandise, including that in question, until September 1, 1921, obtaining any advantage there may have been from the reduced rates and other service rendered by the plaintiff. After this he sought — 398 — to repudiate the contract. In our. judgment, by this conduct he was precluded from raising the defense relied on. There was a demurrer ore terms to the counterclaim and there were numerous objections to evidence. Since, we conclude that on the whole testimony there is no basis for the defense, it is not necessary to discuss these questions. By the Court. — Judgment reversed, and the cause is remanded to the circuit court with instructions to enter judgment for plaintiff as prayed in the complaint.