Case Name: Anderson v. Matheny et al.
Court: South Dakota Supreme Court
Jurisdiction: South Dakota
Decision Date: 1903-07-01
Citations: 17 S.D. 225
Docket Number: 
Parties: Anderson v. Matheny et al.
Judges: 
Reporter: South Dakota Reports
Volume: 17
Pages: 225–234

Head Matter:
Anderson v. Matheny et al.
Under Comp. Laws 1887, § 3545, providing that “the execution of a contract in writing* * * supersedes all oral negotiations or stipulations concerning its matter, which preceded or accompanied the execution of the instrument,” the surety on a note cannot show by parol that he signed under an agreement that, in consideration of the surety’s transfer to the maker of the former’s interest in a firm composed of himself and the maker, the payee would proceed on a mortgage given by the maker, before requiring payment from the surety.
Corson J., dissenting.
(Opinion filed July, 1 1903.)
Appeal from circuit court, Minnehaha county. Hon. Joseph W. Jones. Judge.
Action by Gustav Anderson against Reid Matheny and another. From a judgment for plaintiff, the defendant named appeals.
Affirmed.
Hosmer H. Keith, for appellant.
Parol evidence may be given to show that the obligation of the instrument has been discharged by the execution of a parol agreement collateral thereto or he may set up any agreement in regard to the note which makes its enforcement inequitable. Crossman v. Fuller, 17 Pick, 171; Trice v. Yeoman, 54 Pac. 288; Chaddock v. Vanness, 85 N. J. L.> 517; Benson v. Post, -9 N. W. (Dak.) 684; Manufacturer’s Furnishing Co. v. Kremer, 7 S. D. 463; Lawrence v. Fox, 20 N. Y. 268; Osborn & Co. v. Stringham, 4 S. D. 593; Meyer v. Davenport Elevator Co., 12 S. D. 172; Bank v. Guthrie, 78 N. W., 994; Rankin v. Mathieson, 75 N. W. 196; Mathewson v. Jones, Am. Dec. 647.
A party may show that the instrument' relied upon was executed in part performance only of an entire oral agreement or that the obligation of the instrument has been discharged by the execution of a parol agreement collateral thereto or he ■ may set up any agreement in regard to the note which makes its enforcement inequitable. Chapman v. Dobson, 78 N. Y. 74, Benton v. Martin, 52 N. Y. 572; Smith v. Mussetter, 59 N. W. 995.
The whole agreement was admissable in evidence on the part of the defendant. Greenleaf on Ev., Yol 1. 16th Ed., Sec. 284 A., and cases cited; Hope v. Balem, 58 N. Y. 380; Hutchinson v. Hebbard, 34 N. Y. 24; Battennan v. Pierce, 3 'Hill 172, 178: Potter v. Hopkins. 25 Wend, 417; Barry v. Ransom, 12 N. Y 462; Roberts v. Greig, 62 Pac. 574; Burke v. Dulaney, 153 U. S. 228; Hurlbert v. Dusenberry, 57 Pac. 860; Brewing Co. v. Barets, 48 Pac. 834; Ware v. Allen, 128 U. S. 591-596.
Bates & Rogde for respondent.
Section 3524 C. L. provides “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.”
Prior or contemporaneous verbal contracts or agreements cannot be shown, to in any way change or vary the terms of a written contract. Te Poel v. Shutt et al, 78 N. W. Rep., 288; Western Manufacturing Co. v. Rogers et al, 74 N. W. Rep., 849; First State Savings Bank, etc. v. Webster, 79N. W Rep., 1068; Phelps v. Abbott, 72 N. W. Rep. 3; Black Hills.Bank v. Kellogg, 56 N. W. Rep , 1071; Dean v. Bank, 50 N. W. Rep., 831; Hutchinson v. Cleary,-;55 N. W: Rep.,-729;- NationaVBank v. Lang. 49 N. W. Rep., 414; N. W. Fuel Co. v. Burns, 45 N. W. Rep., 699; Plano Co. v. Root, 54 N. W Rep., 924; Strunk v. Smith, 66 N. W. Rep., 926; Thompson v. McKee, 37 N. W. Rep., 367; Washabaugh v. Hall, 56 N. W. Rep., 82.

Opinion:
Haney, P. J.
This action is founded upon two promissory notes, the same in all respects, except as to the date of maturity. The following is a copy of one of them: "Sioux Falls, S. D., July 1st, 1900. No. 1. Due Sept. 1st, 1900. $100. Sixty days after date, we, or either of us, promise to pay to Almskog & Anderson, or order, one hundred and no-100 dollars, for value received, payable at Northwestern National bank, Sioux City, Iowa, with interest at the rate of 8 per cent, per annum from date until paid. Unpaid interest shall bear interest at 8 per cent. And if proceedings are commenced or completed to enforce the collection by suit or otherwise, we agree to pay a reasonable attorney's fee therefor as part of the costs of the same. P. O., Sioux Falls, S. D. L. J. Matheny, R. Matheny, Surety." The plaintiff's ownership having been established, and the notes introduced in evidence, defendant Reid Matheny offered to show by parol testimony "that he signed the notes in question as surety with his codefendant, L. J. Matheny, under the following agreement made by him with the plaintiff in this action, who was then a member of the firm of Almskog & Anderson: That the defendantRéidMatbeney. went to Sioux City, and asked to be released from an indebtedness which the firm of Matheny & Matheny was owing Almskog & Anderson; that they had personal property in their store and place of business in Sioux Falls worth from eight hundred to a thousand dollars, and that he (Reid-Matheny) wanted to go out of the business, and wanted to be released from the amount of indebtedness which the firm of Matheny & Matheny was owing Almskog & Anderson at that time, amounting to six hundred dollars; that it was then and there agreed between this defendant, Reid Matheny, and the firm of Almskog & Anderson, that if Reid Matheny would transfe r all of his interests in the partnership property in Sioux Falls to his then partner; L. J. Matheny, and that L. J. Matheny would make and execute a chattel mortgage upon the stock of goods securing the notes to the amount of $400, that the firm of Almskog & Anderson would release him on $200 of that account, and that they would proceed against the mortgaged property to realize on the other notes before he should be asked to pay anything upon those notes, and, relying upon that agreement, he did transfer his stock of goods to his partner, Matheny; that his partner, Matheny, did make, execute and deliver to Almskog and Ander»on a chatel mortgage upon the entire stock of goods and personal property for security on the $400 notes as they had agreed; that he did sign the notes— the two notes in suit — as surety under the aforesaid agreement; and that Almskog & Anderson have failed and refused to proceed against the property to collect their indebtedness on those notes as they agreed to do." This offer was rejected, all testimony relating to' conversations between the parties at or prior'to the execution of the notes was excluded, and-the court directed a verdict for the plaintiff on the ground that the terms and conditions of the notes in suit could not be varied or contradicted by evidence of any parol agreement made prior to or at the time of-'their execution.'-. " .
The-universally recognized rule regarding the effect to be given a written contract is thus expressed in our Civil Code: ' 'The execution of a contract in . writing, whether the law requires it to be written or not, supercedes all the oral negotiations or stipulations concerning its matter, which preceded or accompanied the execution of the instrument." Comp. Laws 1887, § 3545. Taken in connection with the law governing the obligations of sureties, which must have been in contemplation of the parties when these notes were executed, the terms of the written contracts then entered into, and the obligations then undertaken, by the defendant, are as clear, definite and certain as any language could express. Without attempting to show any fraud or mistake in connection with the execution of these plain and unambiguous written contracts, defendant now seeks to substantially change their terms-and conditions by means of his recollection of conversations had with the payee of the notes at or prior to the time of their execution. It is to avoid just such controversies that persons resort to written evidence of their agreements, and, when they have done so, the law wisely precludes any reopening of the oral negotiations which led up to the written expression of.their intentions. We think the testimony offered by defendant falls clearly within therule excluding parol evidence to vary or contradict the terms of a written contract, and that it was properly excluded.
The judgment of the circuit court is affirmed.