#### NEW ORLEANS TERMINAL CO. v. DIXIE RENDERING, Inc.*

No. 13993.

Court of Appeal of Louisiana. Orleans.

March 21, 1932.

Monroe & Lemann and Walter J. Suthon, Jr., all of New; Orleans, for appellant.

Dart & Dart and Leo L. Dubourg, all of New Orleans, for appellee.

*

Rehearing denied April 18, 1932. Writ o£ certiorari denied by Supreme Court May 23, 1932.

JANVIER, J.

New Orleans Terminal Company sues Dixie Rendering,- Inc., for $796.21, claiming that .amount to be the balance due for repairing, under contract, a switch track belonging to defendant and connecting with the tracks of plaintiff company.

The district court dismissed the suit on exception of no cause of action.

Exceptor maintains that the contract under which plaintiff xindertook to make the repairs is evidenced by two certain final letters into which all prior negotiations and correspondence had become merged and, according to exceptor, in those letters it was understood that $2,670 was to be the total cost of the repairs. It is therefore argued that, since the said sum, $2,070, has been paid, the petition shown no cause of action.

Plaintiff asserts - that the petition shows that the two letters referred to were merely the last in a long series of letters and followed some verbal negotiations, and that the said last two letters show in themselves that they do not contain the complete contract, which, according to plaintiff, can only be obtained from the oral evidence and earlier correspondence which will be offered in support of the allegations of the petition.

The two letters, which exceptor maintains, contained the entire correspondence, read as follows:

> “January 19, 1924.

> “Mr. E. H. Wischan, President, Dixie Rendering Incorporated, Alabo and North Peters Street, New Orleans, Louisiana.

> “Dear Sir: Referring to conversation in this office with the writer this morning.

> “The following is a detailed estimate of the cost for making necessary repairs to the track serving your plant formerly known as the St. Bernard Rendering and Fertilizer Company:

> 300 Cross Ties.$ 270.00

> 1 Set switch ties. 115.00

> 201⁄2 Tons 75-pound relay rail.... 810.00

> 90 Joints. 30.00

> Labor for making necessary repairs to track beyond trestle . 225.00

> Lumber for repairs to trestle . 390.00

> 150# Bolts. 8.00

> Labor for making repairs to ' trestle . 222.00

> Total .$2,070.00

> “If you will let me have certified check to-cover the cost of these necessary repairs we will instruct that the work on the track be started at once.

> “Yours truly,

> “Vice-President.’ ’

> “January 21, 1924.

> “New Orleans Terminal Company, Q. & O. Building, Camp & Natchez Sts. City.

> “Attention Mr. J. É. Fitzwilson, Vice-Pres.

> “Gentlemen: Enclosed herewith please find certified check for $2,070.00 covering cost of repairs to our Switch Track as per your estimate on file.

> “We understand that the rails that you are to remove are those placed there at your own expense in conjunction with St. Bernard Rendering & Fertilizing Co. when they made repairs sometimes ago, now since we are assuming the entire cost of the repairs to be made as agreed we wish it clearly understood that this improvement will place us in control of this switch, in other words the property will be our own.

> “We wish to impress upon you the necessity of beginning this work at once.

> “Yours very truly,

> “Dixie Rendering Incorporated,

> “By [Signed] E. S. Wischan,

> President.”

The petition alleges that the cost of the work was $2,866.21, and that, in the negotia*273tions which preceded the two letters, which we have quoted in full, it was agreed that the railroad company would do the work and charge the rendering company the cost thereof, which cost was merely estimated to be $2,070, but that it was understood that, if the actual cost exceeded that estimate, then the actual cost would he paid.

The word “estimate”" contained in the letter of January 19th is susceptible of two interpretations. It may have been used in the sense of a “bid,” or “offer,” or, on the other hand, it may have been intended that the meaning to be thereby conveyed, was “approximate,” and, in view of the allegations of the petition, it is easy to see that evidence as to the contents of the prior correspondence and as to verbal discussions will be necessary to place upon the word “estimate,” as used in the letter, the meaning intended by the parties to be thereby conveyed.

There is, as stated by exceptor, a well-established rule of law which, in McGuigin v. Boyle, 1 Or. App. 166, is quoted from page 372 of Greenleaf on Evidence as follows: “When parties have deliberately put their engagements into writing in such terms as impart a legal obligation without any uncertainty as to the object or extent of such engagement it is conclusively presumed that the whole engagement of the parties, and the extent and manner of their undertaking, w;as reduced to writing; and all oral testimony of a previous colloquium between the parties, or of conversation, or declarations, at the time when it was completed, or afterwards, as it would tend in many instances to substitute a new and different contract for the one which was really agreed upon, to the prejudice, possibly, of one of the parties, is rejected. In other words, as the rule is now more briefly expressed, parol contemporaneous evidence is inadmissible to contradict or vary the terms of a valid written instrument.”

But here, from the documents themselves, to wit, the letters quoted, it appears that it was probably not intended by the parties that those letters should constitute the entire agreement. But, even if such was the intention, it is evident' that the oral evidence of verbal understandings and of prior communications is not intended to contradict or vary anything contained in those letters, but only to supplement them, and to explain away what might otherwise be ambiguous.

The rule of law applicable to the right of parties to supplement by parol incomplete written documents is set forth in Davies v. Bierce, 114 La. 663, 38 So. 488, as follows: “Where a writing, although embodying an agreement, is manifestly incomplete and not intended by the parties to exhibit the whole agreement, but only to define some of its terms, such parts of the actual contract as are not embraced within its scope may be established by parol evidence. The general rule of evidence prescribed by article 2276 of the Civil Code as to parol evidence not being allowed to alter, contradict, or vary written evidence is not violated by allowing parol evidence to be given as to a distinct, valid, contemporaneous, collateral agreement between the parties which w;as not reduced to writing, when the same is not in conflict with the provisions of the written agreement.”

That an ambiguity in a written document may be explained by verbal evidence is well settled, and this rule has been well expressed by our Supreme. Court in the case of Dickson v. Ford et al., 38 La. Ann. 736, in which is found the following:

> “The reason or the philosophy of the rule which, as an exception, flows logically from the very terms of the general rule, is that parol evidence, in such cases, is admitted, not against or beyond what is contained in the acts, as a contradiction of the clear recital, or legal meaning of the stipulations contained therein,' but on the contrary, to give effect to the contract arising therefrom, by supplementing necessary information omitted therefrom, or to ascertain the true intent of the parties when the same is not clearly expressed or described therein.

> “As thus understood and construed, the rule is not amenable to the charge that it tends to destroy or impair the sanctity or binding force of authentic acts, but on the contrary, it tends directly to enhance the validity ánd efficacy of such acts, by substituting light for darkness, certainty for obscurity, and truth for error.”

Since we believe that evidence of the prior conversations and of the earlier communications may explain and amplify the two letters referred to, and that such evidence may show an agreement on the part of defendant to pay the actual cost, it follows that the exception should not have been sustained.

' The judgment appealed from is annulled, avoided, and reversed, and the matter is remanded to the district court for further proceedings according to law and not inconsistent with the views herein expressed.

Reversed and remanded.