Opinion ID: 1429037
Heading Depth: 1
Heading Rank: 6

Heading: parol evidence admissibility

Text: In affirmative responsive argument, Sellers contend that, lacking misrepresentation, Buyers are not entitled to rescind the agreement because Buyers accepted title with full knowledge that the encroachments existed. In order to substantiate these contentions, Mr. Hammett, Seller, testified at trial that he orally informed Buyers of the encroachments, and, furthermore, that the encroachments were readily visible upon inspection because the boundary between the parcel and the street was marked by two pieces of string tied to a fence. Buyers denied that the statement was made, and objected to its introduction, arguing that any testimony about the oral representations which communicated the existence of the encroachment violates the parol evidence rule. They claim that this evidence, extrinsic to the parties' written agreements, contradicts the parties' clear intentions as expressed by the specific terms of the written and mutually signed documents. One of the covenants states: There are no known defects, EXCEPT: (1) Those which are readily visible upon inspection. From this, Sellers contend that trial testimony is not precluded by the parol evidence rule because it did not contradict, alter, add to, or vary their agreement, but merely explained which defects were readily visible upon inspection. A piece of string on a fence, which basic fact was controverted in this case, does not prove more than its existence without explanatory oral testimony to communicate purpose. There is no difference in whether the oral testimony seeks to disprove warranty status by a prior notice of encroachment, or in description of the surveyed encroachment, by explanation of the string and its survey purpose. In either case, parol evidence was tendered to disprove warranties in the later signed written sales documents. An unexplained piece of string on a fence is just that, and is not determinative as an encroachment readily visible upon inspection. It is similar to an unexplained river. Dugan v. Jones, supra. We find that the evidence should have been excluded by the parol evidence rule. As a general rule, courts will ascertain the intentions of the parties by interpreting the language that is used in the contract and will not resort to adding what has been omitted or omitting what has been added. Bakken v. Price, supra, 613 P.2d at 1230, McClintock, J., concurring in part and dissenting in part; Goodman v. Kelly, Wyo., 390 P.2d 244, 248 (1964). If the contract is in writing and the language is clear and unambiguous, the intention is to be established from the words of the contract by considering the contract as a whole and reading each provision in light of all other provisions. Samuel Mares Post No. 8 v. Board of County Commissioners of Converse County, Wyo., 697 P.2d 1040, 1043 (1985); Knadler v. Adams, Wyo., 661 P.2d 1052, 1053 (1983); Amoco Production Co. v. Stauffer Chemical Co. of Wyoming, Wyo., 612 P.2d 463, 465 (1980). In this case, we must read the covenant that there are no defects except those visible upon inspection in light of other covenants that title was merchantable and that the property complied with all applicable statutes and regulations. Taken as a whole, we find that the written contractual terms preclude the existence of the encroachments that violate the title warranties. Kincheloe v. Milatzo, Wyo., 678 P.2d 855 (1984). We note that this is a transaction involving real property, where written documentation is customarily required by the Wyoming statute of frauds: (a) In the following cases every agreement shall be void unless such agreement, or some note or memorandum thereof, be in writing and subscribed by the party to be charged therewith:       (v) Every agreement or contract for the sale of real estate   . Section 1-23-105, W.S. 1977, Cum.Supp. 1986. This statute reflects a legislative policy to avoid the uncertainty and potential fraud which results from reliance on oral agreements involving the transfer of real estate. Kincheloe v. Milatzo, supra. In Crosby v. Strahan's Estate, 78 Wyo. 302, 324 P.2d 492 (1958), this court relied on the following language from the Supreme Court of Ohio and the United States Supreme Court: `The statute of frauds is founded in wisdom, and has been justified by long experience. As was said by Mr. Justice Grier in Purcell v. Miner, 4 Wall. 513, 517 (18 L.Ed. 435): `The statute is absolutely necessary to preserve the title to real property from the chances, the uncertainty, and the fraud attending the admission of parol testimony. `It should be enforced   .' 324 P.2d at 496, quoting from Newman v. Newman, 103 Ohio St. 230, 133 N.E. 70, 74, 18 A.L.R. 1089 (1921). We reaffirmed our reliance on those authorities and cited Crosby v. Strahan's Estate with approval in Remilong v. Crolla, Wyo., 576 P.2d 461, 464 (1978). We also relied upon another oft-quoted statement that `   [t]he policy of the law requires that everything which affects the title to real estate shall be in writing, and that nothing shall be left to the frailty of human memory or as a temptation to perjury.' 576 P.2d at 464, quoting from Stephens v. St. Louis Union Trust Co., 260 Ill. 364, 103 N.E. 190, 193 (1913). Oral contracts involving real estate are difficult to enforce, and all the agreements and understanding which affect the transfer of real property should be included in the written sales contract. We think it important to protect the integrity of written contracts, particularly where they involve the transfer of realty, and to do otherwise would throw Wyoming real estate transactions into uncertainty and chaos. Under the sound policy of the parol evidence rule, this court will not allow a party to interject alleged oral understandings into an agreement where those understandings contradict, alter, add to, or vary the plain terms of the writing. Busch Development, Inc. v. City of Cheyenne, Wyo., 645 P.2d 65, 68 (1982); Hollabaugh v. Kolbet, Wyo., 604 P.2d 1359, 1361 (1980); Goodman v. Kelly, supra.    It has long been recognized by this and other courts that a different rule would soon render instruments in writing of no value and the temptation to commit perjury would be increased. Hollabaugh v. Kolbet, supra, 604 P.2d at 1361. In this case, Sellers represented that the title was merchantable, and that the property complied with all applicable statutes and regulations. This was not so. They cannot now assert that these sweeping covenants may be contradicted by claiming that they informed Buyers about two strings tied to the fence on the property which marked the boundary. These markings go to the very enforceability of the contract, indicating a defect in the property and its title  that a portion of the land and parts of the buildings extended out into the dedicated city-owned street. Nowhere in the written documents is there any indication that a visible inspection revealed or would reveal the street encroachments. The only indication that any irregularities were discoverable by visible inspection is Sellers' claim that there was string on the fence which would show the boundary of the conveyed parcel. That is not enough. This oral evidence about those markings contradicts Sellers' written covenant of marketability and written covenant that the property was in compliance with all city ordinances, and is not admissible.    [I]f a vendor wishes to convey subject to an encumbrance affecting title the contract should include the appropriate exception [citation], and the Court may not impose an agreement other than that which was arrived at between the parties [citation]. Atlas Realty of East Meadow, Inc. v. Ostrofsky, 56 Misc.2d 787, 289 N.Y.S.2d 784, 786 (1967). Where a defect acceptance agreement which is essential to a seller's right to enforce a contract to transfer real property is not included in the written contract, we will not, under the circumstances of this case, allow Sellers to make the contract enforceable by proving that agreement did exist by parol evidence introduced at trial. See Cordova v. Gosar, Wyo., 719 P.2d 625 (1986).