Case ID: iowa_108/html/0168-01.html
Source: Caselaw Access Project
Author: {"author": "RobiNsoN, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

J. Harvey, Appellant, v. R. L. Henry et al.
    
    2 Contract: evidence. Machinery was purchased with notes secured by a mortgage on the machinery, and a year later the seller, as agent for another, sold the buyers other machinery, taking back in payment part of the machinery formerly sold, certain other machinery, and notes of the buyers, the sale being by written agreement, which stipulated for the taking of such notes aod machinery. In an action on the notes and mortgage given for the first sale, the makers and a third person testified that, as.an additional inducement for the sale, the payee, who had a special interest therein, had agreed, individually, to cancel and surrender them. The payee denied this, stating that the agreement was an exchange of the new property for the old, the difference in price being represented by the notes given by the makers. There was a dispute as to the price of the new machinery, and as to the credit to be given for the old; but, conceding defendant’s testimony to be correct, the notes given and the credit allowed equalled the price, leaving no margin as a consideration for the surrender of the notes in suit. The mortgage to secure the notes was not canceled and the makers never asked to have it done, or to have the notes surrendered, but promised to pay if a discount were allowed. Held, insufficient to show an agreement by the payee to cancel the notes and the mortgage, since the makers had the burden.
    1 Parol Variance: collateral contract.. An agent’s oral agreement, in making a sale in which he had a special interest, by written contract that, as an additional inducement, he will surrender certain notes held by him against the buyers, may be shown by parol in an action on such notes by the agent, though the written contract of sale, made in the name of the principal, was cpmplete; since, as against the agent, the oral contract did not conflict with the written one, but was collateral thereto.
    
      Appeal from Van Burén District Court. — Hon. T. M. Fee, Judge.
    Saturday, April 8, 1899.
    ActioN in equity to recover an amount alleged to be due on two promissory notes, and to foreclose a chattel mortgage given to secure their payment. There was a hearing on the merits, and a decree for tbe defendants. Tbe plaintiff appeals.
    
      —Reversed.
    
    
      Wherry & Walker for appellant.
    No appearance for appellee.
   RobiNsoN, C. J.

— In tbe year 1895 tbe defendants R. L. Henry and Wesley Hénry purchased of J. Harvey & Co. an engine, tank, belt, weigher, and stacker, for tbe agreed price of nine hundred and seventy-five dollars. In payment tbe defendants gave their three promissory notes, of which one for four hundred dollars was payable January 1, 1896, one for four hundred dollars was payable January 1, 1897, and one for one hundred and seventy-five dollars was payable January 1, 1898. To secure the payment of the notes, the defendants executed to the seller a mortgage on the property purchased. The note which first became due has been paid. This action is brought to recover the amount of the other two notes, which the plaintiff claims to own by virtue of blank indorsements, and to foreclose the mortgage. In the year 1896 the defendants purchased of the Nichols & Shepard Company a traction engine, separator, with truck, wagon, straw stacker, belts, and other appurtenances, and gave, as part payment, the engine and certain appurtenances, and the stacker, purchased the year before of J. Harvey & Co., and a separator which the defendants had used several years, and promissory notes for the aggregate amount of one thousand six hundred and ninety dollars. The contract for the new outfit was made through the plaintiff, as agent for the Nichols & Shepard Company; and the defendants claim that the contract price for the outfit was two thousand four hundred and forty dollars, on which credit for four hundred dollars, for the note to J. Harvey & Co-, which had been paid, and three hundred and fifty dollars for the old separator, were to be given, and that the notes in suit were to be canceled, and with the mortgage, were to be surrendered to the defendants. The plaintiff avers that the contract price for the new outfit was but two thousand two hundred and forty dollars, and that the oredit for the old engine, separator, and other property, was but five hundred and fifty dollars, and denies that the contract required the notes in suit to be canceled and surrendered.

I. When the contract for the new outfit was entered into, the defendants signed an order for it, addressed to the Nichols & Shepard Company, which contained the following: “The undersigned agree to receive said machinery, * * * and pay in cash the freight and charges thereon from the factory, and also -agree to pay to your order * * * the further sum of $-, as follows: Old steam outfit taken in trade at $550.00,. including an Aultman & Taylor Separator; note due January 1st, 1897, for $300.00; note due January 1st, 1898, for $595.00; note due January 1st, 1899, for $595.00; and note due January 1st, 1900, for $200.00.” The order does not contain any reference to the cancellation of the notes in suit, but the defendants contend that it was required by a verbal stipulation. That is denied by the plaintiff, and he contends that the order is apparently complete, free from ambiguity, and should be regarded as expressing the entire contract of the parties to the transaction. He insists, therefore-, that it cannot be contradicted or varied by parol evidence. The general rule for which the appellant. contends is well settled. Evidence of a contemporaneous oral agreement is not admissible to vary, add to, or contradict a valid agreement in writing which is clear, definite, and complete. Fawkner v. Paper Co., 88 Iowa, 169, and authorities therein cited. But such evidence is admissible to show “the existence of any separate oral agreement as to any matter on wdiich a document is silent, and which is not inconsistent with its terms, if, from the circumstances of the case, the court infers that the parties did not intend the document to be a complete and final statement of the whole transaction between them.” 7 Am. & Eng. Enc. Law, 91; 17 Am. & Eng. Enc. Law, 443. The order in question, when accepted, becomes a contract in writing between the defendants and the Nichols & Shepard Company, and parol evidence to show that tbe company was required1 to cancel tbe notes in suit would tend to add to tbe writing, and, as between tbe parties to it, would not be admissible. But tbe evidence shows that tbe plaintiff bad a special interest in tbe contract, in tbe compensation be was to receive for securing it. Pie states' that be was required to take the old outfit in settlement with tbe company, and be did take it. He knew that be'would be required to do so when tbe contract was made; and, since it was satisfactory to bis principal for him to do so, there was no legal objection to bis agreeing to cancel and surrender tbe notes which are in controversy, to induce the defendants to enter into the contract. If there was an undertaking to do so, it was collateral to the contract in writing, and is not in conflict with it. Proof that it was made would not in any manner affect tbe contract entered into by tbe defendants with tbe company. This case is unlike that of Horn v. Hansen, 56 Minn. 43 (57 N. W. Rep. 315), cited by tbe appellant.

•II. If tbe agreement was made by the defendants with’ tbe plaintiff, as claimed, it was upon a sufficient consideration ; but it is insisted that tbe evidence fails to show that it was made. Tbe two defendants and their nephew testify, in substance, that tbe plaintiff agreed to take back tbe machinery sold by J. Harvey & Co. tbe year before, for nine hundred and seventy-five dollars, surrender tbe notes in suit, to tbe amount of five hundred and seventy-five dollars, give credit on the price of tbe new outfit for tbe four hundred dollars paid on tbe old one, allow three hundred and--fifty dollars for tbe Aultman &. Taylor separator, and take notes of tbe defendants for one thousand six hundred, and ninety dollars. Tbe defendants bad purchased tbe Ault-man & Taylor separator and a horse power, seven years before, for six hundred and eighty-five dollars, and bad used.it to do their own threshing, and, in addition, as we understand tbe evidence, bad run it two years in threshing for others. Tbe horse power was not included in tbe transaction in controversy. The list price of the property sold to the defendants by the company was two thousand four hundred and forty dollars. There is a discrepancy between the order as it now appears and a copy of it given to the defendants. In the original the amount allowed for the old outfit appears to have been changed from seven hundred and fifty dollars to five hundred and fifty dollars, while in the copy it is seven hundred and fifty dollars. The cause of that discrepancy is not clearly explained, but the plaintiff claims that he discounted the list price of the new outfit fr\vo hundred dollars, and the payments specified in the order amount to the reduced price; but that is denied by the defendants. The plaintiff claims that the alteration was made when the order was signed; but it is not necessary to determine who is right in regard to that matter. Assuming that the defendants’ theory respecting it is right, their claim appears to be that the plaintiff agreed to take back the property sold in 1895, after it had been used one year, and allow therefor just what had been paid for it, and that, in addition, he agreed to allow three hundred and fifty dollars for a separator which had been used seven years, and which, with a horse power, had' been purchased when new for less than twice that sum. The value of this old machinery at the time of the transaction in question is not shown, but it is a matter of common knowledge that the value of such property depreciates greatly by use and lapse of time. The interest of the plaintiff in the sale of the new outfit is not shown, but it was not sufficient to take all of the old machinery received,,and it seems that the alleged agreement would have been an improvident one on the part of the plaintiff. Their testimony is disputed by the plaintiff, who states that the transaction was an exchange of the new property for the old, and that the notes which the defendants gave represented the agreed difference between the values of the new and the old. The plaintiff is corroborated in that respect by the order. It shows that the total amount allowed for all the old' property, including the Aultman & Taylor separator, was five hundred and fifty dollars, or, if the defendants are right as to that, seven hundred and fifty dollars. That sum, added to the amount of the notes, would make two thousand four hundred and forty dollars, or just the price the defendants say they were to pay for the new outfit, and allow nothing for the notes in suit. Since the defendants admit that the order shows a part of what was allowed for the old machinery, it is fair to presume against them that it shows all that w'as allowed. The conduct of the defendants tendw to sustain the claim of the plaintiff. They say that the plaintiff stated, as a reason for not surrendering the notes in suit when settlement was made with the Nichols & Shepard Company, that they were not in his possession, and several days would be required in which to procure them; but the settlement was not made for several days after the order to the company was given. The mortgage executed to secure the notes in suit was not canceled, and it does not appear that the defendants, at any time after the settlement for the new outfit was made, asked to have the notes surrendered or the mortgage satisfied of record. Correspondence between the defendants and attorneys who held the notes in suit for collection satisfies us that the defendants at that time did not claim that the notes had been paid, but that they offered to pay both if a discount were allowed. On the twentieth day of January, 1897, they wrote to one of the attorneys concerning the notes as follows: “The notes are made payable at Bonaparte. Now, when you send the notes and mortgage to Farmers’ & Traders’ Bank, Bonaparte, Iowa, we will pay them at discount of ten per cent. If the owners of the notes had sent the four hundred dollar note which was -due January the 1 si, we would have paid it long ago.” It is true the defendants claim that their offers were made in the belief that the notes had been transferred to an innocent holder; but the explanation, when viewed in the light of all the facts disclosed by the record, is not satisfactory. It is fair to presume, in the first instance, that the order in question expresses fully the contract as to all matters of which it purports to treat. It states what was allowed for the old machinery, and the defendants hare failed to overcome the presumption that the statement in that respect is full and correct. The burden was on the defendants to prove the alleged verbal agreement, and we are of the opinion that they have failed to do so. It is true that three witnesses testify to the effect that the agreement was made, and that but one testifies that it was not; but we are of the opinion that his testimony, with the written order, and the presumption which it authorizes, the conduct and letters of the defendants, and the unreasonable character of some of their claims, outweigh the testimony relied upon to prove the alleged agreement. We therefore conclude that the plaintiff is entitled to recover the amount of the notes in suit, and to a foreclosure of his mortgage so far as it includes property not transferred to the Nichols & Shepard Company in consideration of the purchase of the new outfit. The decree of the district court is reversed.