Marks v. Twohy Bros.

BEAN, J.

This court, in the case of O’Neil v. Twohy Bros. Co., ante, p. 481 ( 190 Pac. 306 ), held that the trial court erred in overruling the demurrer, the motion for judgment on the pleadings, the motion for a nonsuit and the request for a directed verdict. The O’Neil case is now pending upon a petition for a rehearing, and we are earnestly requested to review again the questions decided by the opinion in that case. The issues in the O’Neil case are the same as those in the case of Marks v. Twohy Bros. Co., now under consideration.

As we understand the record, there is no controversy in regard to the following facts, namely: The Ochoco Irrigation District employed the plaintiff to construct the dam across Ochoco Creek and to build *524 the main canal leading from the dam downstream. The first one and one-half miles of this main canal is located upon the exact site of the Table Land Ditch and upon a steep hillside, so that in order to construct the main canal the Table Land Ditch at this place must necessarily be destroyed. The several plaintiffs were the owners of the Table Land Ditch jointly, and each of them was individually the owner of a vested right to a certain quantity of water from Ochoco Creek appurtenant to his lands. They carried the water to their respective lands through their joint property, the Table Land Ditch. In view of the fact that the district’s main canal could not he constructed without tearing up and destroying the Table Land Ditch, the district purchased from the plaintiffs in the several cases mentioned, the Table Land Ditch, and in consideration of the sum of $10,000 a deed of conveyance was executed by the several plaintiffs to the Ochoco 'Irrigation District, conveying to it the title in fee to the Table Land Ditch with covenant of warranty of the title of the ditch to the district. In the deed the several plaintiffs reserved to themselves their several individual water rights appurtenant to their respective lands. The reservation clause in the deed appears as follows:

“This conveyance.does not cover any water .rights owned by the individuals making this conveyance nor to any water right appurtenant to their individual lands. ’ ’

The complaint of plaintiff Marks is based upon the right to use the Table Land Ditch during the .season of 1918, for the purpose of conveying the water, to which he had a right, upon his lands. It will be noticed that plaintiff alleges that during all of that season there was a sufficient supply of water in *525 Ochoco Creek to irrigate plaintiff’s lands and crops during the months of March, April, and May, and that during all of that time plaintiff had the right to the use of such ditch for the purpose of conveying water from the creek to his lands for irrigation.

If the conveyance of the Table Land Ditch by the several plaintiffs to the Ochoco Irrigation District transferred all of the right, title, and interest of the plaintiffs in that ditch, of course the claim of plaintiff, as made in his complaint, cannot be sustained. Or, as stated in the brief of plaintiffs:

“The effect of this deed is the principal question raised upon this appeal in the causes of action involving fhe right of the several plaintiffs to flow water through the Table Land Ditch.”

The validity of the deed is not in question. It is complete upon its face. No ambiguity of the instrument is suggested or apparent. It may be stated that we are not dealing with a collateral agreement of the parties which does not affect the conveyance, nor with a question of fraud, accident or mistake.

Admitting the execution of the deed from the plaintiffs to the district, in order to overcome the force of the conveyance plaintiff asserts that—

“As a part of the consideration for said land said Ochoco Irrigation District orally agreed with each of. the grantors in said deed (and particularly with the plaintiff) that said Table Land Ditch should be thereafter continuously maintained and used by said district for the purpose of conveying 'the water appropriated by each of said grantors (including the plaintiff) in and through said ditch to the lands of each appropriator above mentioned (and including the lands of plaintiff mentioned in the complaint), and that the water appropriated by said grantors severally should ba conveyed therein to the lands of each *526 separate grantor until the irrigation works of said district should be constructed and completed.”

It is maintained by the defendant that the deed pleaded in its answer and introduced in evidence cannot be varied, contradicted, enlarged, or diminished by parol. It is the contention of plaintiffs that as the written instrument recites a' monetary consideration, only oral testimony is -admissible to show the true consideration.

1. The consideration mentioned in the deed is $10,000. The additional consideration pleaded in plaintiff’s reply, and sought to be' shown by oral evidence, is an executory or contractual consideration, in effect an additional reservation of the right to the "use of the Table Land Ditch by plaintiffs. We quote Section 713, Or. L., in full:

“When the térms of an agreement have been reduced to writing by the parties, it is to be considered as containing all those terms, and therefore there can be, between the parties and their representatives or successors in interest, no evidence of the terms of the agreement, other than the contents of the writing, except in the following cases:—

“1. Where a mistake or imperfection of the writing is put in issue by the pleadings;

‘ ‘ 2. Where the validity of the agreement is the fact in dispute. But this section does not exclude other evidence of the circumstances under which the agreement was made, or to which it relates, as defined in Section 717, or to explain an ambiguity, intrinsic or extrinsic, or to establish illegality or fraud. The term ‘agreement’ includes deeds and wills as well as contracts between parties.”

Section 798, Or. L., as far as pertinent, reads thus:

“The following presumptions, and no others, are deemed conclusive: * *

“3. The truth of the facts recited from the recital in a written instrument, between the parties thereto, *527 their representatives or successors in interest by a subsequent title; but this rule does not apply to the recital of a consideration; * * . ”

It is a -well-established rule of the common law, which has been embodied in the statutes of a number of the states, including Oregon, that when any grant *ar other disposition of property, or any contract, agreement, or undertaking has been reduced to writing, and is evidenced by a document, such document cannot be contradicted, altered, added to, or varied by parol or extrinsic evidence. The rule is founded on the long experience that written evidence is so much more certain and accurate than that which is based on memory only that it would be unsafe, when the parties have expressed the terms of their agreement in writing, to admit weaker evidence to control and vary the stronger, and thereby show that the parties intended a different contract from that expressed in the written memorial signed by them. It is obvious that but for the rule, written instruments would soon come to be of little value if their explicit provisions could be varied, controlled, or superseded by parol evidence, and it is plain that a different rule would greatly increase the temptations to commit perjury. According to the modern and better view, the rule which prohibits the modification of a written contract by parol is one not of evidence merely but of substantive law: 22 C. J., p. 1070, § 1380.

2. As indicated by our statute, the rule has its exceptions. A recital in a written instrument as to the payment of the consideration is in the nature of a receipt. As a general proposition, the rule excluding parol or extrinsic evidence to vary or contradict written instruments does not apply to mere receipts, *528 which are usually general in their expressions; but these may be contradicted, varied, or explained. The rule that parol evidence is admissible to explain or contradict receipts applies to all writings which" are in the nature of receipts, even though they might not technically be termed such: C. J., p. 1135, § 1520, and p. 1137, § 1521.

3, 4. A recital in a written instrument as to the payment of the consideration is merely in the nature of a receipt, and may be contradicted or explained by parol or extrinsic evidence, unless such contradiction would have the effect of rendering nugatory some substantial and contractual provision of a valid written instrument. In the case of a conveyance like the one under consideration from plaintiffs to the Ochoco Irrigation District, where the grantors, or one claiming under them', attempt by contradicting the consideration clause, to defeat the operation of the deed, or to lessen the force or effect thereof, or to incorporate therein a reservation of a right or interest in the property conveyed, which reservation is not enumerated in the conveyance, such parol or extrinsic evidence is inadmissible to vary, contradict, enlarge or diminish such deed: Finlayson v. Finlayson, 17 Or. 347, 354 ( 21 Pac. 57 , 11 Am. St. Rep. 836 , 3 L. R. A. 801); Sutherlin v. Bloomer, 50 Or. 398 ( 93 Pac. 135 ); Douglas County Bank v. Bloomer, 50 Or. 561 ( 93 Pac. 141 ); Oregon Mill Co. v. Kirkpatrick, 66 Or. 21 ( 133 Pac. 69 ); Muir v. Morris, 80 Or. 378 ( 154 Pac. 117 , 157 Pac. 785 ); Elliott Contracting Co. v. City of Portland, 88 Or. 150 ( 171 Pac. 760 ); Blake-McFall. Co. v. Wilson, post, p. 626 ( 193 Pac. 902 ); 22 C. J., p. 1167, § 1562. Upon this point the rule is stated thus in 22 C. J., § 1566:

*529 “Where the effect of parol evidence contradicting the consideration expressed in the instrument or showing the true consideration to be different therefrom would be to change or defeat the legal operation and effect of the instrument, or to add new matter to an agreement complete upon its face, the evidexlce is not admissible; for in such case it comes within the rule which forbids the introduction of parol evidence to vary, contradict, or defeat a written instrument, and not within the exception to that rule that parol evidence is admissible for the purpose of contradicting or showing that the true consideration is other and different from that expressed in the writing. ’ ’

5. The considerations recited in the' conveyance in question are monetary on the one side and contractual on the other. The consideration moving from the grantee to the grantors is purely monetary. That moving from the grantors to the grantee is contractual; it is a conveyance of all the right, title, and interest of the grantors in the Table-Land Ditch. If the grantors, under the guise of varying the monetary consideration, can ingraft new terms into the instrument by parol evidence, and reserve to themselves the right to the use of the Table Land Ditch during the season of 1918, they could in the same manner reserve to themselves the right to its use for a longer period of five or fifty years, or defeat the purpose of the conveyance.

6. Stated in general terms, a purely money consideration, mentioned in a written instrument, which is complete upon its face, cannot be amplified by parol evidence so as to ingraft into the instrument an additional executory or contractual consideration. Where the written instrument appears to be perfect and complete, the terms of a contractual consideration cannot be contradicted or varied by parol: Vulcan Iron Works Co. v. Roquemore, 175 Fed. 11 ( 99 C. C. A. *530 77 ); Leftkovitz v. Gadsden First Nat. Bank, 152 Ala. 521, 529 (44 South. 613); Ashley etc. R. Co. v. Cunningham, 129 Ark. 346 ( 196 S. W. 798 ); Harding v. Robinson , 175 Cal. 534 ( 166 Pac. 808 ); Brosseau v. Jacobs’ Pharmacy Co., 147 Ga. 185 ( 93 S. E. 293 ); Romono Oolitic Stone Co. v. Missouri Valley Bridge etc. Co., 173 Ill. App. 534 ; Indianapolis Union Ry. Co. v. Houlihan, 157 Ind. 494 ( 60 N. E. 943 , 54 L. R. A. 787); Slump v. Blain, 177 Iowa, 239 ( 158 N. W. 491 ); Trice v. Yoeman, 60 Kan. 742 ( 57 Pac. 955 ); Egan v. Hotel Grunewald Co., 134 La. 739 ( 64 S. W. 698 ); Chaplin v. Gerald, 104 Me. 187 ( 71 Atl. 712 ); Farquhar v. Farquhar, 194 Mass. 400 ( 80 N. E. 654 ). As more fully stated in 22 C. J., page 1171, Section 1569:

“Where the statement in a written instrument as to the consideration is more than a mere statement of fact or acknowledgment of payment of money consideration, and is of a contractual nature, as where the consideration consists of a specific and direct promise by one of the parties to do certain things, this part of the contract can no more be changed or modified by parol or extrinsic evidence than any other part, for a party has the right to make the consideration of his agreement of the essence of the contract, and when this is done the provision as to the consideration for the contract must stand upon the same plane as the other provisions of the contract with reference to conclusiveness and immunity from attack by ¡phrol or extrinsic evidence. For the same reason, where the writing is complete upon its face, an additional executory consideration cannot be shown by parol, or, as it is sometimes expressed, new terms cannot be engrafted into an agreement by parol under the guise of varying the consideration.”

Undoubtedly for some purposes parol evidence may be introduced to explain or amplify the consideration *531 mentioned in a written instrument. However, this exception to the general rule will not permit proof of an oral agreement for the purpose of imposing an affirmative obligation on one of the parties to the written memorandum of which there is no indication or suggestion in the writing. If such evidence were permitted to be introduced on the theory of an inquiry into the consideration of the conveyance, it is obvious that the rule respecting the finality of written contracts would be abrogated: Watkins Salt Co. v. Mulkey, 225 Fed. 739, 744 ( 141 C. C. A. 11 ). This was plainly announced in Howe v. Walker, 4 Gray (70 Mass.), 318, when the court speaking through Mr. Justice Thomas said:

“Nor can you, under the guise of proving by parol the consideration of a written contract, add to or take from the other provisions of the written instrument. This would practically dispense # * with that sound rule of the common law, which finds in the written contract the exclusive and conclusive evidence of the intent and agreement • of the parties, and will not suffer such written contract to be varied or affected by any contemporaneous parol agreement.”

In Castleman-Blackmore Co. v. Pickeral etc. Co., 163 Ky. 750, 758 ( 174 S. W. 749 ), it is said:

“The rule that oral evidence is admissible to vary the consideration, stated in a written contract, should not be extended to include every motive that prompts the making of a contract. Here the alleged undertaking on the part of the defendant, though related in a way to the consideration, was purely contractual in its character, and cannot be regarded as a part of the consideration within the meaning of the rule relied on. Where a contract is valid and complete in itself parol evidence of other terms should not be permitted under the mere guise of showing consideration.”

*532 Any discordant notes which may have been sounded are but evasions of the rule herein applied. The rule still stands, and is almost universally recognized: See note to Green v. Batson, 5 Am. St. Rep. 194 , at page 201.

7. Parol evidence, to show an entire absence or a partial or total failure of consideration, is not within the rule which excludes such evidence to vary or contradict the terms of a written contract: 10 R. C. L., p. 1052, § 247.

The case of Houston v. Greiner, 73 Or. 304 ( 144 Pac. 133 ), comes within the principle last announced. This case is claimed by counsel for plaintiff to be contrary to the ruling announced in O’Neil v. Twohy Bros. Co., ante, p. 481 ( 190 Pac. 306 ), and herein Houston v. Greiner was a suit to set aside a deed, upon the grounds: (1) Failure of consideration; (2) mental incapacity of the grantor; (3) undue influence and coercion. Fraud on the part of the grantee was set forth in the complaint, as appears from an examination of the record in the case. The suit was decided upon the first point mentioned. There was no money consideration passed for the deed sought to be set aside. It was executed in consideration of an agreement for maintenance. The validity of the deed was in dispute.-. The question involved came squarely within the exception mentioned in subdivision (2) of Section 713, Or. L., as well as the rule above stated in regard to the admissibility of parol evidence to show an absence or failure of consideration for a contract. The opinion in that case is not in conflict with the rule in O’Neil v. Twohy Bros. Co., ante, p. 481 ( 190 Pac. 306 ), and in the present case. The announcements of this court in regard to the question under consideration in the case *533 at bar are in consonance with the overwhelming authority of precedents in other states.

It is plain from all of the circumstances of the case that it was the plan of the irrigation district, which was organized in the interest of the plaintiffs, to change the irrigation system then employed by the several plaintiffs, and to erect a dam across Ochoco Creek and construct a canal leading therefrom, a portion of which was on the site of the Table Land Ditch. In order to do this it was absolutely necessary to destroy the Table Land Ditch. That was the reason of the purchase of the ditch and the execution of the conveyance mentioned. Plaintiffs by their suits, in so far as the same pertain to the Table Land Ditch, are seeking to nullify the effect of their conveyance.

8. Doubtless by means of the reservoir created by the construction of the dam, the use by the plaintiffs of the water from the creek, the right to which they reserved in the conveyance of the ditch, would be extended later in the irrigation season and increased by their arrangement with the district. It is not an uncommon thing for water which has been regularly appropriated and used for purposes of irrigation to be conveyed in a ditch or canal other than the one in which it is at first appropriated and conveyed. It is not claimed, as we understand, that the water rights and the right to the use of the Table Land Ditch could not be separated and the ditch sold and conveyed separately without the water rights changing ownership. Plaintiffs cannot part with the ownership of their ditch and also keep it. The fact that there was no other means of conveying water to their lands during the time of the construction of the district canal does not change the legal effect of the deed.

*534

9. It is argued by counsel for plaintiff that the reservation of the water right in the deed carried with it the right to the use of the ditch for the purpose of conveying the water to plaintiff’s land; but this cannot be conceded. Under the circumstances of this case, if under any, the ditch cannot be said to be appurtenant to the water or water right.

10. Where a person enters upon property under the right, authority and orders of another, as the defendant asserts it entered upon the Table Land Ditch under the authority of the Ochoco Irrigation District, and in an action against defendant, Twohy Bros. Company, by plaintiff for trespass it justifies under the district, it becomes a question as to whose right and title is the better, that of plaintiff or that of the irrigation district, under the orders and authority of which the entry was made. If the irrigation district’s title is the better, entry under its authority is a complete defense; Logan v. Vernon & Co., 90 Ind. 552 ; Gault v. Jenkins, 12 Wend. (N. Y.) 488; Danforth v. Briggs, 89 Me. 316 ( 36 Atl. 452 ); Goetchins v. Sanborn, 46 Mich. 330 ( 9 N. W. 437 ); Carrier v. Carrier, 85 Conn. 203 ( 82 Atl. 187 ).

We see no necessity of alluding to the statute of frauds, or the right of ■ eminent domain, which are referred to in the briefs.

It follows that the causes of action pertaining to the Table Land Ditch cannot be maintained. The trial court erred in overruling the demurrer to the reply, and denying the motion for judgment on the pleadings, and the motion for nonsuit in the present case of Marks v. Twohy Bros. Co.

The judgment of the lower court will therefore be reversed. Beversed.

Mr. Justice McBride did not sit in this case.