Tracy v. Union Iron Works
H. W. Tracy v. Union Iron Works
Subsequent history: aff'd, Tracy v. Union Iron Works Co., 104 Mo. 193 (1891). (read from the later opinion; check before relying)
Headnotes
Summary
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Opinion of the Court
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Hall, J.
I think that this case is exactly parallel with the case of Pearson v. Carson, 69 Mo. 550 , and is ■consequently controlled by it, unless it has been over *351 ruled by tlie Supreme Court, and of this there is no pretense.
It is conceded by counsel for appellant that the general rule is, that verbal evidence “cannot be admitted to contradict, add to, subtract from, or vary a written instrument” (language of Phillips in his work on Evidence, approved in Bruce v. Beck, 43 Mo. 279 ), but they contend that the general rule does not apply to this case on two grounds: (1) That the verbal agreement in this case was collateral to the written lease, and not a part of it; and (2) that the written lease was accepted by defendant by reason and on account of the verbal agreement, and that to permit the plaintiff to take advantage of the omission of the said agreement from the lease would be to allow him to perpetrate a fraud upon the defendant.
The facts in the case of Pearson v. Carson were stronger in favor of the position that the verbal agreement was a distinct and independent agreement than are the facts in this case. That action was on the following contract:
“J. W. Carson has rented of R. W. Pearson one hundred and sixty acres of pasture land, on the Pearson farm, for the sum of ninety-five dollars — one-half to be paid on the fifteenth day of August, 1875, the balance to be paid on the first day of November, 1875. Said Pearson acknowledges the receipt of ten dollars on payment.
“Signed. J. W. Carson.
“ R. W. Pearson.”
The defence made is' thus stated in the opinion of the court: “As a defence to this action, which was for the last instalment, which had not been paid, the defendant proposed to prove that he was the owner of a lot of Texas cattle, and rented this pasture to feed them during the feeding season ; that plaintiff agreed to keep up and maintain the fence around the pasture and to look after said cattle; that said lands were not fenced as *352 represented, and the fences were not kept up, except for about four weeks, and his cattle strayed away, and he was unable to keep them in said pasture.” The trial court refused to allow the evidence, and in so doing was sustained by the Supreme Court. The court said: “In effect, the evidence would engraft on the written contract two very material additions to it, and impose on the owner two obligations which the contract does not impose, to-wit, to keep the fences in repair and look after the cattle.” The case of VanSluddiford v. Hazlett, 56 Mo. 322 , and Life Association of America v. Cravens, 60 Mo. 388 , are unlike the present, and so are the cases of Moss v. Green, 41 Mo. 390 , and Rollins v. Claybrook, 22 Mo. 405 . “ The written contract in the present case is-complete, and to introduce the provisions proposed,relating as they'do to the same subject-matter, would add to and vary the written agreement.”
In Smith v. Williams, 1 Murphy, 430, Judge Taylor observes : “The first reflection that occurs to the mind upon the statement of the question, independent of any technical rules, is, that the parties, by making a written memorial of their transaction, have impliedly agreed that, in the event of any future misunderstanding, that writing shall be referred to as the proof of their act and intention ; that such obligations as arise from the paper by such construction, or legal intendment, shall be valid and compulsory on them, but that they will not subject themselves to any stipulations beyond the contract, because if they meant to be bound by any such, they might have added them to the writing, and thus have given them a clearness, a force, and a direction which they could not have by being intrusted to the memory of a witness.” This remark by Judge Taylor, clear and explicit as it is, might have been written as entirely applicable to the case we now have under consideration. The plaintiff and- defendant both went to the farm of plaintiff, and examined the pasture. They returned to Mexico, twelve miles off, and defendant himself there *353 wrote this contract. Nothing is said in it about keeping up the fences by plaintiff, or about his duty to look after the stock. Whether the plaintiff would have let this pasture for ninety-five dollars with these material additional burthens on him, we are left to conjecture, and must rely on the verbal statement of either the defendant or the plaintiff, and, as Judge Taylor well says, “the object of the paper writing was, incase of subsequent misunderstandings, that it alone should show what their acts and intentions were.”
As to the first reason relied upon by counsel for appellant in support of their position, it was added : “In Lane v. Price, 5 Mo. 101 , the precise question was decided by this court. Judge McGirk, in that- case, conceded the correctness of the general principles on which the case was decided, but denied their applicability to the facts of that case, on the ground that the parol contract was a substantive and distinct one, in nowise changing or enlarging the written contract. In this case it is clear that the parol evidence offered makes a material addition to the written contract. It requires the owner of the pasture to keep up the fences and to look after the stock; both of these requirements recognizing a lease, but a lease upon terms nowhere indicated in the written contract, and materially added to it.” This language conclusively disposes of the position that the verbal agreement in this case is a distinct agreement, collateral to, and not a part of, the lease.
As to the question of fraud, the court said : “ It is not pretended that any fraud was practiced by the proprietor, the plaintiff, since the defendant visited the farm, and could see for himself the condition of the fences, as well as the plaintiff, and he drew up the contract himself, and seemed to think that any obligation of plaintiff on that subject was unnecessary.” This would seem to dispose of the defence in this case based upon fraud. But it is only fair to admit that the defence was not presented to, or considered by, the court *354 in the light in which it is so clearly and forcibly presented in this case. The defence, however, is not maintainable when considered as an original proposition, in my opinion. It is not sought to avoid the written' lease because of any fraud or mistake in omitting the verbal contract or stipulation from it; but it is sought to treat the verbal contract.as a part of the lease, notwithstanding it was omitted therefrom. It is sought to do this on., the principle of estoppel. It is argued that,' because the defendant was induced to execute the lease with the verbal stipulation omitted from it by the plaintiff’s ■statement to the effect that it would be regarded as a part of the lease as much as if it were written in it, then it is a part of the lease, for the reason that otherwise the plaintiff would be permitted to perpetrate a fraud upon the defendant. In short, the position is taken that ■since the plaintiff induced the defendant to execute the written lease by the representation that the oral stipulation would be deemed a part of the lease, the plaintiff is estopped from claiming that the stipulation is not a part of the lease. The cases cited by counsel from Pennsylvania and California support this position. But I am constrained to differ from them. This very ■question: arose in Ins. Co. v. Mowry, 96 U. S. 546 , and was decided contrary to the view expressed in these ■cases. That was an action on a policy of insurance. The court,‘by Field, J., said:. “By the express condition of the policy, the liability of the company was released upon the failure of the insured to pay the premium when it matured; and the plaintiff could not recover, unless the force of this condition could in some way be overcome. He sought to overcome it, by showing that the agent, who induced him to apply for the policy, represented to him, in answer to suggestions, that he might not be informed when to pay the premiums, that the company would notify him in season to pay them, and that he need not give himself any uneasiness on that. subject; that no such notification was *355 given him before the maturity of the second premium, and for that reason he did not pay it at the time required. This representation before the policy was issued, it was contended in the court below, and in this court, constituted an estoppel upon the company against insisting upon the forfeiture of the policy. But to this position there is an obvious and complete answer. All previous verbal arrangements were merged in the written agreement. The understanding of the parties as to the amount of the insurance, the conditions upon which it should be payable, and the premium to be paid, was there expressed, for the very purpose of avoiding any controversy or question respecting them. The entire engagement of the parties, with all the conditions upon which its fulfilment could be claimed, must be conclusively presumed to be there stated. If, by inadvertence or mistake, provisions other than those intended were inserted, or stipulated provisions were omitted, the parties could have had recourse for a correction of the agreement to a court of equity, which is competent to give all needed relief in such cases. But, until thus corrected, the policy must be taken as expressing the final understanding of the assured and of the insurance company. The previous representation of the agent could in no respect operate as an estoppel against the company. Apart from the circumstance that the policy subsequently issued alone expressed its contract, an estoppel from representations can seldom arise, except where the representation relates to a matter qf fact, to a present or past state of things. If the representation relates to something to be afterwards brought into existence, it will amount only to a declaration of intention or of opinion, liable to modification or abandonment upon a change of circumstances of which neither party can have any certain knowledge. The only case in which a representation as to the future can be held to operate as an estoppel is where it relates to an intended abandonment of an existing right, and is made *356 to influence others,’ and by which they have been induced to act. An estoppel cannot arise, from a promise as to future action with respect to a right to be acquired upon an agreement not yet made. The doctrine of estoppel is applied with respect to representations of a party to prevent their operating as a fraud upon one who has been led to rely upon them. They would have that effect, if a party, who, by his statements as to matters of fact, or as to his intended abandonment of existing rights, had- designedly induced another to change his conduct or alter his condition in reliance-upon them, could be permitted to deny the truth of his statements, or enforce his rights against declared intention of abandonment. But the doctrine has no place for application when the statement relates to rights depending upon contracts yet to be made, to which the person complaining is to be a party. He has it in his power in such cases to guard in advance against any consequences of a subsequent change of intention and conduct by the person with whom he is dealing. For compliance with arrangements respecting future transactions, parties must provide by stipulations in their agreements when reduced to writing. The doctrine carried to the extent for which the assured contends in this case would subvert the salutary rule, that the written contract must prevail over previous verbal arrangements, and open the door to all the evils which that rule was intended to-prevent.”
I have quoted from the foregoing opinion at such length, because it furnishes a complete answer to the-argument in support of the contrary view, and also because this court has followed that opinion in Greenwoods. Ins. Co., 27 Mo. App. 401 .
In White v. Ashton, 51 N. Y. 285 , the same doctrine is ahnounced. In answer to the argument in supjiort of the contrary view, the court says: “This argument is plausible, but it is not sound. Its allowance would overthrow the well-established rule, that the writing must prevail over any and all previous parol agreements *357 it is a common, almost an inevitable result, that the party who relies upon a parol understanding, in hostility to, or unsupported by, the written contract, suffers damage. It is the fact existing in nearly every one of that class of cases, that the party who claims the rigor of the writing inflicts an injury upon his confiding neighbor who trusts to a verbal assurance. While we lament that a higher standard of honor does not prevail, we must stand by the well-settled rules of law. In this case the carrier had the right to look into his bill of lading, and be governed by what he there should read. We do not know what necessities operated to change his avowed intention of taking the inner route, nor should we be justified in canvassing them. It is enough that he chose to stand by his writing. I am not aware of any principle of estoppel which can be applied to the case. An estoppel in pais is sometimes invoked to exclude a party from showing the truth, when by his acts or declarations he has induced another to act in a particular manner. In such a case he will not be permitted to deny the truth of his admission if the consequence would be an injury to such other person. 1 think it will be found that the present case does not fall within this principle. Here was a promise simply to do a given thing, allowing the utmost force to the evidence and the offers, to-wit, to transport the goodá by the inner route. There was no assertion of an existing fact, the truth of which the party now wishes to disprove. He failed to perform his verbal agreement. Is there any .case which, upon the principle of estoppel, will prohibit his taking advantage of the rule that this agreement was merged in writing % ” After a review of the authorities, it is added: “None of them cover the present case or give countenance to the idea that the principle is to subvert that other principle, that all prior or contemporaneous parol agreements are absorbed in the writing by which the contract is consummated.”
The rule on this subject is thus stated by Mr. Bigelow, in his work on Estoppel: “So, too, it may be *358 broadly stated that a parol promise, made in conjunction with, and intended to constitute, one of the terms of a written contract, bat not incorporated into the written instrument, cannot operate by estoppel; though cases may arise where fraudulent promises of the kind would be entitled to the consideration of the courts.” Big. Estop. (3 Ed.) 489. Not wishing to draw out this opinion to greater length, I content myself with saying that the exception stated by Mr. Bigelow, if indeed it be a valid exception, does not, as the authorities supporting it show, include this case.
The verbal stipulation or agreement relied on by defendant must be deemed to be merged in the written lease. The defence set up was not maintainable.
The judgment of the circuit court should be affirmed.
With the concurrence of Ellison, J., it is so ordered. Philips, P. J., dissents.
Philips, P. J., being of opinion that the decision is in conflict with the opinion of the Supreme Court in Brown v. Bowen, 90 Mo. 185 , this case is certified to the Supreme Court.
Dissent
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Philips, P. J.,
Dissenting. — I am unable to concur in the opinion of the majority of the court. The new matter pleaded in the answer properly belongs to that character of anterior and contemporaneous agreements and promises on the part of the landlord, which show a collateral promise, or express assurance by the landlord to have done a certain other thing,, not named in the writing, but collateral to the- thing demised, whereby the tenant is induced to execute the written contract without the inducing matter being incorporated in it, and without which assurance and promise the tenant would not have signed the lease. 1 Such a representation, unfulfilled on the part of the landlord, would give him an unconscionable advantage, which no court ought to suffer.
I concede that the case of Pearson v. Carter, if viewed solqly in the light of the mere words employed *359 in it, regardless of the state of the pleadings, and the state of the facts, gives strong support to the position of the majority. It is to be observed that in none of the cases decided by our Supreme Court, touching this question, was the distinct defence here interposed set up ; but the defence relied upon was merely that a part of the contract was omitted from the writing; and the thing omitted was either a condition of the contract, or appurtenant to the thing demised ; while here the thing omitted from the contract was collateral, essentially, to the thing demised, and the tenant was induced to so omit it from the writing upon the express assurance of the landlord that it was not necessary to be inserted, as it would be done without it. The railroad switch in this case was independent of the house let, was not appurtenant thereto. The contract respecting the lease of the house was complete within itself. This is not to make that contract conditional, as in the case of Lane v. Price, 5 Mo. 110 ; nor to add any terms thereto inconsistent with the written stipulations, or contradictory of them. It is further pleaded as a fraudulent assurance, whereby defendant was deceived into doing that which he would not have done but for the deception; and the fraud is to be found in the act of the landlord repudiating his representation after he has thus inveigled the tenant into the writing. I hold that the decided weight of authority is, that it is the province of the courts of equity and law to relieve the tenant against such wrong and fraud. And if our court holds the contrary, it is singular in its protection of fraud, deceit, and injustice.
In Morgan v. Griffith, 6 L. R. (Crt. of Exch.) 70, the tenant declined to sign the lease for á farm on account of the land being overrun by rabbits. The landlord declined to put in the lease a stipulation binding him to destroy the rabbits; but verbally promised the lessee that he would destroy them. Thereupon the tenant executed the written lease. The landlord, failing to keep the promise, was held liable to an action for damages. The court said: “The verbal agreement *360 was entirely collateral to the lease, and was founded on a good consideration. The plaintiff, unless the promise to destroy the rabbits had been given, would not have signed the lease, and a court of equity would not have compelled him to do so, or only on the terms of the defendant performing his undertaking. * * * The verbal agreement, although it does not affect the mode of enjoyment of the land demised, is, I think, purely collateral to the lease. It was on the basis of its being performed that the lease was signed by the plaintiff, and it does not appear to me to contain any terms which conflict with the written contract.”
In the later case of Erskine v. Adeane, 8 L. R. (Ch. App. Cases) 756, a farmer, being in negotiation for a lease of a farm, declined to take it on account of the quantity of game on it. The lessor promised that he would kill down the game, and not let the shooting; but refused to insert this promise in the lease. Upon this verbal assurance the tenant signed the lease. Action for damages predicated of the verbal promise. Sir James, L. J., observed that he was unable to distinguish this case, on principle, from that of Morgan v. Griffith, supra. Sir Gr. Mellish, L. J., said: “No doubt, asa rule of law, if parties enter into negotiations affecting the terms of a bargain, and afterwards reduce it to writing, verbal evidence will not be permitted to introduce additional terms into the agreement; but, nevertheless, what is called a collateral agreement for a lease or for any other deed under seal, may be made in consideration of one of the parties executing that deed, unless, of course, the stipulation contradicts the terms of the deed itself. I quite agree that an agreement of this kind is to be rather closely watched, and that we ■should not admit it without seeing clearly that it is substantially proved, etc. * * * When it has been proved that Mr. Bennett, having found a quantity of game upon the farm, said that it was impossible that he could take it with that quantity of game on it, when * * * it is quite plain that Mr. Adeane said that Mr. *361 Bennett need not be afraid of that, etc.; and when the lease was executed on the faith of that agreement, and upon these representations so made, it would be contrary. to the ordinary rules of justice if the tenant afterwards have no remedy. * * * As to the 'amount of damages, that is a matter to be inquired into; all we have to say now is, that this is an agreement that is binding in point of law, and assuming that there has been damage sustained, that Mr. Bennett is entitled to be paid for it out of Mr. Adeane’s estate.”
This doctrine is emphasized in Coal Co. v. McShain, 75 Pa. St. 238. The written agreement stipulated for the transportation of ten thousand tons of coal, at such time as desired, at $1.30 per ton. This was the written contract. On the trial the defendant sought to prove that the verbal agreement was, that McShain should furnish this coal before a certain date, the first of October, 1868 ; that when the written memorandum was pre-sented by the company to McShain to sign, he called attention to the fact that it omitted the agreement and understanding as to the time within which the coal was to be furnished, there being a great advantage to the shipper as to the right to deliver it within that time. The plaintiff thereat remarked: “Of course, that is understood;” thereupon McShain, with that understanding and upon that assurance, signed the paper. The court say: “ It is certainly permissible to give evidence of a verbal promise made by one of the parties, at the time of making a written contract, where such promise was used as an inducement to obtain the execution thereof (citing Campbell v. McCleneshan, 7 S. & B. 171). This rule,” say the court, “is put upon the ground that the attempt afterwards to take advantage of the omission from the contract, of such promise, is a fraud upon the party who was induced to execute it upon such promise, and hence he will be permitted to show the truth of the matter. * * * To say that this (written contract) might be enforced without regard to the express parol stipulation, under which it was signed, *362 •would, be to disregard long and well-settled legal principies, as well as the plainest demands of common honesty.”
And in Shurghert v. Moore, 78 Pa. St. 464, it was held admissible, in an action by a landlord for breach of the tenant’s contract of lease reduced to writing, for the tenant to prove that he was induced to sign the instrument of writing by reason of the landlord’s verbal promise that he would build a barn on the farm before harvest.
This rule is recognized in California. In Murray v. Dake, 46 Cal. 644 , the plaintiff leased of defendant a storehouse. Contract in writing, which called for “all that certain brick building situate, etc., together with the lot on which the same stands, and the rear yard to the depth of seventy feet.” The building then had but one story. During the term of this lease the landlord added 'a second story to this building, and made an outside entrance to the same. Refusing possession of this second story to the lessee, the latter brought ejectment therefor. The defendant, at the trial, against the objection of the plaintiff, was permitted to prove that, during the negotiations for the lease, it was understood that only the building as it then was, was to be embraced in the lease ; that defendant was to have the right to erect and use the second story ; that one of the lessees drew up, or caused to be drawn up, the written lease, and when it was presented to the lessor for his signature he objected to signing it unless it contained the agreement about the second story. He was answered by the lessees that this would make no difference whether or not this reservation was made in the lease, as it was so understood, and defendant might erect the second story ; that upon these assurances the defendant was induced to sign the contract.
The court held the proof admissible, placing its opinion upon the broad equitable ground, that “to permit the plaintiff to avail himself of this lease, in violation of his express agreement,, to recover the prop *363 erty in controversy, would be to uphold and sanction fraud and bad faith;” quoting from Coger ’s Ex'r v. McGee, 2 Bibb, 321: “For a party either to produce a mistake, or prevent it from being rectified, under the declaration that he would observe the understanding of the parties as verbally expressed and requested to be inserted in the writing, and afterwards attempt an advantage from its omission in the writing, is fraudulent, and ought to be relieved against.” Also, from Parks v. Chadwick, 8 Watts & Serg. 96 : “It is as much a fraud to obtain a paper for -one purpose, and use it for a different and unfair purpose, as to obtain it by fraudulent statements.” So it is said in Renshaw v. Gans, 7 Barr, 117: “All the cases show that to pave the way for the reception of oral declarations, it is not necessary to prove a party was actuated by a fraudulent intention at the time of the execution of the writing. His original object may have been perfectly honest and upright: but if, to procure an unfair advantage to himself, he subsequently deny the parol qualifications of the written contract, it is such a fraud as will, under the rules, operate to let in evidence of the real intent and final conclusion of the contractors.” To the same purport are the cases of Taylor v. Gilmen, 25 Vt. 412; Bonney v. Morrell, 57 Me. 368; Bashor v. Forbes, 36 Md. 154 .
The observations of Mr. Justice Miller, in Ins. Co. v. Wilkinson, 13 Wall. 231, 232 , commend themselves to my approval. After paying the highest tribute of praise to the general rule invoked by the respondent in this case, he observes : “ But experience has shown that in reference to these very matters the rule is not perfect. * * * A rule of evidence adopted by the courts as a protection against fraud and false swearing, would, as was said in regard to the analogous rule known as the statute of frauds, become the instrument of the very fraud it was intended to prevent, if there did not exist some authority to correct the universality of its application. It is upon this principle that courts of equity proceed in giving relief ;. *364 and though the courts, in a common-law action, may be more • circumscribed in the freedom with which they inquire into the origin of written agreements, such an inquiry is not always forbidden by the mere fact that ,the party’s name has been signed to the writing offered in evidence against him. * * * The principle is, that, where one party has, by his representations, or his conduct, induced the other party to a transaction to give him an advantage which it would be against equity and good conscience to assert, he would not, in a court of justice, be permitted to avail himself of that advantage. And although the cases to which the principle is to be applied are not as well settled as we could wish, the general doctrine is well understood, and is applied as well by the courts of law as equity, where the technical advantage thus obtained is set up and relied on to defeat the ends of justice or establish* a dishonest claim.”
The exception herein indicated to the general rule of the exclusive operation of the written contract, is recognized by Wharton on Evidence (vol. 2, secs. 928, 929, 1331). And it is also clearly recognized by our Supreme Court, in the recent case of Brown v. Bowen, 90 Mo. 189, 190 , in which Judge Sherwood distinctly says: “ The rule which prohibits the introduction of' parol contemporaneous evidence does not-apply * * * where a distinct ■collateral contemporaneous agreement, independent of, and not varying, the written agreement, is offered in evidence, though it relates to the same subject-matter.” And in support of this proposition, he cites the cases of Bonney v. Morrill, 57 Me. 368, and Bashor v. Forbes 36 Md. 154 , which on examination will be found to maintain the doctrine of the English and American cases cited heretofore. If this case does not support the distinction I have attempted to make, judicial language is meaningless.
The claim in the majority opinion that it is sought to maintain this defence on “the principle of estoppel” is an .entire misconception of the position *365 assumed by me. As a matter of course, the doctrine of estoppel is inapplicable; it is not claimed that the plaintiff represented a state of facts as existing ■which clid not exist. There is no claim that he induced the defendant to act upon the faith of such fact, as of a thing done, or existing. But the proposition is, that, as a part of the consideration of the tenant taking the lease, and signing the contract, the plaintiff promised to do something collateral thereto, but for which promise he would not have executed the contract, and that the plaintiff knowing this, and afterwards failing to perform the collateral undertaking, cannot enforce the consideration of the written contract without performing the other promise. The distinction is too clear to' require elaboration.
The case of Insurance Co. v. Mowry, 96 U. S. 546 , in no manner conflicts with the English authorities cited herein, or those from Pennsylvania and California. In that case the assured was seeking to evade a positive condition, incorporated in the written contract, by showing a parol contemporaneous agreement not to insist on the letter of the contract. The distinction between nullifying a positive written stipulation by a parol contemporaneous agreement or understanding, and asserting a right or liability based upon a collateral agreement not incorporated in the contract, by reason of plaintiff ’ s assurance that the thing which was the inducement to the execution of the writing, would be done as part of the whole consideration, is too palpable to admit of debate. The defendant here declined to execute the written lease except upon the assurance made by plaintiff that this switch would be immediately built. To permit him, after thus luring the defendant into executing the writing, to-take advantage of the omission of the collateral undertaking from the instrument, would be to allow him to perpetrate a fraud and wrong upon his confiding tenant. It would make the rule of convenience and safety invoked by the majority opinion an agent of injustice and oppression. This a court of. *366 justice, where the case is clearly made out, should not permit. I am unwilling to become accessory to the wrong.
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