Case Name: PETER MATHIAS, Respondent, v. STATE FARMERS' MUTUAL HAIL INSURANCE COMPANY, a Corporation, Appellant
Court: North Dakota Supreme Court
Jurisdiction: North Dakota
Decision Date: 1918-02-07
Citations: 40 N.D. 240
Docket Number: 
Parties: PETER MATHIAS, Respondent, v. STATE FARMERS’ MUTUAL HAIL INSURANCE COMPANY, a Corporation, Appellant.
Judges: 
Reporter: North Dakota Reports
Volume: 40
Pages: 240–257

Head Matter:
PETER MATHIAS, Respondent, v. STATE FARMERS’ MUTUAL HAIL INSURANCE COMPANY, a Corporation, Appellant.
(168 N. W. 664.)
Hail insurance contract — loss under — adjustment of loss — failure to pay — action to recover — oral agreement on adjustment — amount of loss so fixed — receipt given for less —signed toy mistake.
1. This action is based, on an adjustment of loss under a hail insurance contract. The plaintiff alleged and proved to the satisfaction of the jury that by oral agreement his loss was adjusted at $335; that, being unable to read English, he signed a paper fixing the loss at $250.
Signing of paper —does not make a contract — consent of parties —must toe free and mutual — fraud — undue influence — mistake.
2. The signing of a paper does not make a contract. Under the plain words of the statute there can be no contract where the consent of the parties to the terms of tlie same is nót freé and mutual; and consent is not free when it is obtained by fraud, undue influence, or mistake. In this case the jury found and had a right to find that the document claimed to be a written contract was not a contract.
Opinion filed February 7, 1918.
Rehearing denied July 30, 1918.
Appeal from the District Court of Hettinger County, Honorable W. O. Crawford, Judge.
Defendant appeals.
Affirmed.
Jacobsen & Murray and Moonan & Moonan, for appellant.
Plaintiff’s cause of action is based wholly upon a contract of adjustment of the loss.
“The execution of a contract in writing, whether the law requires it to be written or not, supersedes all the oral negotiations or stipulations concerning its matter which preceded or accompanied the execution of the instrument.” Civ. Code, § 5889; Alsterberb v. Bennet, 14 N. D. 596, 106 N. W. 49.
Evidence of prior parol agreements is not permissible. 17 Cyc. 669.
In order to permit parol evidence of fraud, it should be pleaded. Conn v. Rossarond, 161 S. W. 73; Baur v. Raylorr, 96 N. W. 268.
It was plaintiff’s own fault if he did not understand the settlement; he had full opportunity to acquaint himself with all the facts.
“If the creditor fails to read the condition as stated in a letter from the debtor, or in a receipt given him to sign, or even that he could not read or write, and did not know of the condition indorsed on a check tendered in full payment, these facts do not affect the operation of the rule to the effect that his acceptance will discharge the claim in full.” 1 C. J. 564.
Where fraud is not pleaded, such written acceptance is conclusive. The evidence did not justify the finding of fraud, and from plaintiff’s own testimony it conclusively appears that there was no fraud, and no facts shown, upon which the written instrument could be set aside. Raymond v. Edelbrock, 15 N. D. 231, 107 N. W. 194; Standard Mfg. Co. v. Hudson, 88 S. W. 137.
V. H. Crane, for respondent.
No reply is necessary in framing the issues unless a counterclaim Í3 pleaded in the answer, or unless upon motion the court requires a reply. Comp. Laws 1913, § 7452.
“Where an instrument is pleaded in defense or read in evidence on the trial under a general denial, in support of a defense in an action at law, plaintiff has the same right to show that it was obtained from him by fraud as he would have if it were the subject of a formal issue.” Chambovet v. Cagney, 35 N. Y. Super. Ct. 474; Abbott’s Trial Brief, 1496, ¶ 275.
Under such circumstances plaintiff is at liberty to show that his signature to the written instrument was obtained by fraud, or' by mistake, and evidence upon such subject, and instructions thereon, are proper. Leslie v. Keepers, 31 N. W. 486.
Mistake or fraud may be proved in rebuttal of an accord and satisfaction alleged by defendant. 1 C. J. 582.
In all such cases the rule that prior negotiations are merged in the written agreement has no application. Jones, Ev. p. 546, ¶ 435.
There must be an acceptance of the writing with a full understanding as to the facts. The mere signing of a document does not amount to a contract. Wigmore, Ev. p. 3396, ¶ 2416.
Fraud in the procurement of a contract may be shown by parol, though the claimed contract is in writing, and the effect of the evidence is to contradict or impeach the writing. The plaintiff and defendant here made a parol or oral adjustment of plaintiff’s loss by hail; thereafter a writing was presented to plaintiff to be signed, and he signed it in the full belief that it was in accordance with their oral adjustment, and it was so represented to him by defendant, and he, not being able'to read the language in which the document was written, relied upon such representations when he signed the same. Such a writing does not make a contract, and plaintiff is not bound by it. Wigmore, Ev. p. 3396, ¶ 2415; Day v. Lown, 1 N. W. 786; Kranch v. Sherwood, 52 N. W. 741. '
The adjustment was carried, on and settled in the German language. Plaintiff can neither read, speak, nor write the language of the instrument afterward prepared and presented by the adjuster; plaintiff knew its contents only as told to him by the adjuster, and he signed the writing because he was glad to believe it was the same as the oral settle ment as to amount. These conditions show fraud as defined by our statute. Comp. Laws 1913, § 5849.
There can be no accord and satisfaction where under such circumstances the amount tendered is insufficient, and the plaintiff was not required to return the money actually paid, but had the right to retain it and sue to recover the actual balance due him under the oral adjustment, which amounted to a settled and fixed claim. Eauen v. Prudential Ins. Co. 106 N. W. 198, 1 C. J. 539, ¶ 40, and cases cited.
In order that the payment of a smaller sum than demanded shall operate as a satisfaction of the entire claim, it must be accepted as such. There must be a positive agreement to accept the amount paid as a full discharge of the debt. 1 C. J. 560, ¶ 83; Rapp v. Gidding, 57 N. W. 237.
In any event, if on the evidence the intention of the parties is in doubt, it is a question for the jury. 1 C. J. 583, ¶ 152.
Whether a release of a debt was fairly obtained, where such release is made the basis of a defense, the question is for the jury. 1 C. J. 561, ¶ 84; Rauen v. Prudential Ins. Co. 106 N. W. 198; 1 C. J. 580, ¶ 143.
The conditions upon which a tendered payment shall be received in full satisfaction of a larger amount of indebtedness must be stated clearly, fully, and explicitly, and the party to whom they are made must understand that he is accepting the conditions and taking the money subject to them. 1 C. J. 557, ¶ 80; Sanders v. Standard Wheel Co. 151 S. W. 674.
There must be no fraud, concealment, or misrepresentation as to material facts. Butler v. Richmond, etc., Co. 88 Ga. 594, 15 S. E. 668; 1 C. J. 571, ¶ 108.

Opinion:
Robinson, J.
In this case defendant appeals from a judgment for $92 and costs. The complaint is that in 1914 plaintiff made to defendant his promissory note for $85.94, and in consideration of the same it agreed to insure him against loss by hail to the amount of over $500; that in July, 1914, the crops insured were destroyed by hail and the loss amounted to $500; that afterwards the loss was adjusted at $335, to be paid in cash and in return of the promissory note, and that no payment has been made excepting $164 and the return of the note.
The answer is that the loss was adjusted at the sum of $250, and not $335, and that the contract of adjustment was reduced to writing and signed by the plaintiff. To the answer there was no reply. It did not state a counterclaim and hence there was no necessity for a reply.
On the trial the plaintiff gave testimony showing the insurance, the loss, and an oral contract of adjustment as alleged in the complaint. The defendant showed a contract of adjustment signed by the plaintiff as alleged in the answer. The testimony of the plaintiff was that he could not read English, and that, after the making of the oral contract for adjustment, he signed the papers, believing that it ivas in accord with the oral agreement.
The verdict for $92 is well sustained by the evidence. The jury had' a right to believe the plaintiff and to find in his favor. Under the testimony the plaintiff contracted to adjust his loss at $335, including his promissory note, and by trick and smoothness the adjuster obtained the signature to a paper which was not the contract. Then, when oral testimony was offered to prove the facts and to show that the alleged written contract is not and- never was a contract, it was claimed that such proof was not admissible.
The claim is that by any trick or device a party may obtain the signature of an ignorant, illiterate person to a document in the form of a contract, and then it may not be impeached by proof that it is not a contract. And in such cases by specious and deceptive arguments the judges are too often imposed upon and misled. They forget that the signing of a paper does not make a contract. Under the plain words of the statute there can be no contract where the consent of the parties to the terms of the same is not free and mutual, and consent is not free when it is obtained by fraud, undue influence, or mistake.
In this case the jury found, and had a right to find, that the document claimed to be a written contract was not a contract, and that in truth the contract was as stated in the complaint.
The verdict is just and right, and the judgment is affirmed.