Court Opinion

ID: 3603254
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:49:24.941264+00
Date Added: 2024-06-11T13:58:28.143843
License: Public Domain

Through the defendant's agent the plaintiff ordered certain peach trees of a specified name and variety. The nature of the peach tree business is such that the kind of fruit which will grow upon the tree cannot be definitely determined until about three years after planting. The order was reduced to writing by the defendant's agent and the plaintiff's signature obtained upon the assurance that the alleged contract was in accordance with the previous oral understanding. As the plaintiff did not have his spectacles with him at the time he did not read the contract, relying upon this representation of the seller. The trees received from the defendant in the natural course of time proved to be different from those ordered and much less in value. The purchaser brought action against the seller for his damage. It then turned out that the contract which he had signed was not in accordance with the oral agreement as it contained a limited warranty about which nothing had been said. He was deceived by the agent into signing a written paper to *Page 247 
the contents of which he had never assented. The action, having been brought upon the oral agreement, the defendant pleaded the written contract and upon the trial objected to any evidence which attempted to vary it. The defendant claimed that the plaintiff was bound by the writing and could not in this action prove it to be void for fraud and recover upon the oral arrangement.
The trees, it was admitted, were not the kind ordered, and the plaintiff's damage was satisfactorily proved. The court admitted evidence of the fraud and held that if this were established the plaintiff was not bound by the writing. The question apparently raised by this appeal from a judgment against the defendant is whether the plaintiff can sue at law upon his oral agreement with the agent and prove when confronted in pleading and upon the trial with the alleged writing that it was not a contract as he was deceived into signing a paper other than that intended by the parties. Or must he resort to equity to reform the writing by having the limited warranty stricken out. My associates have divided on these propositions.
I am convinced that the courts below have applied the law as it has found expression in the authorities.
It must be conceded that if the paper were a forgery the plaintiff could sue at law upon the oral agreement and prove the forgery when the alleged contract was produced to bar his claim; so also if his signature were genuine, but he signed it upon the representation that the paper was something other than a contract, for instance, a receipt or a permit. There would be nothing in these instances to reform.
If the writing purports to be a contract, but, by the fraud of one, is materially different than the parties have agreed to, is this any more binding than the forgery or trick paper? To what have the minds met to form a contract? Had the writing in this case by deception *Page 248 
ordered sheep instead of trees would the reformatory powers of equity have been required to give the purchaser damages for bad trees? The rule seems to be that where a party is tricked into signing a contract the material parts of which are not in accordance with the oral agreement such a paper is not a contract, but is void. It is void until in some way affirmed by the party deceived. Some cases speak of it as voidable, by which they mean that the party may, if he choose, affirm and adopt it, while a contract which is voidable only is good till disaffirmed. (Standard Manufacturing Co. v. Slot, 121 Wis. 14.)
The difficulty has arisen, I believe, through a misunderstanding of the rule of evidence that written contracts cannot be varied by parol testimony. This rule only applies to such writings as are contracts in fact or in law, but never prevents oral testimony showing that through fraud there is no
written contract. Thus in Black v. Wabash, St. Louis  P. Ry.Co. (111 Ill. 351) it was said regarding evidence of an oral agreement with an agent which was excluded on the trial:
"The object of the excluded evidence was not to change the terms of an agreement which was admitted to have a valid existence, but rather to show that by reason of the circumstances under which it was obtained it was in legal effect no agreement at all."
Wharton on Evidence, section 931, states it this way:
"It is also always admissible for a party to show that his execution of a contract was induced by fraud or compulsion.
"Before the rules excluding parol testimony to vary documents can be applied, we must determine a document legally exists."
Western Manufacturing Company v. Cotton  Long (126 Ky. 749) says this: *Page 249 
"Where a person by ostensibly reading a contract to another obtains his signature to an agreement materially different from the reading, it is a fraud which invalidates the contract." * * * "When by fraud or misrepresentation a written memorial of a contract essentially variant from the agreement actually made shall have been imposed on a party, the deed or writing is not his. It is not obligatory. And in such cases the fraud or misrepresentation may be proved without contradicting the written evidence." (Cited from Tribble v. Oldham, 5 J.J. Marsh. 142.)
That a deception as to a material part of a writing is as fatal as a misrepresentation of the whole paper or of its nature is made plain by the following authorities: Maxfield v. Schwartz
(45 Minn. 150); Gibbs v. Linabury (22 Mich. 479); Stacy v.Ross (27 Tex. 3); Black v. W. St. Louis  P. Ry. Co. (supra); Eldorado Jewelry Co. v. Darnell (135 Iowa 555);Trombly v. Ricard (130 Mass. 259); Beck  PauliLithographing Co. v. Hauppert  Worcester (104 Ala. 503);Foster v. Mac Kinnon (L.R. 4 Com. Pleas, 704).
The case of Cole Brothers  Hart v. Williams (12 Neb. 440) is somewhat in point. The plaintiff sued for goods sold and alleged a deduction of $100 for lightning rods purchased from the defendant. The defendant set up a written contract whereby the price of the lightning rods agreed to be paid by the plaintiff was $424.25. The plaintiff replied by saying that he did sign a certain pretended written agreement concerning rods but that he was deceived by the agent into believing that it made no mention of price. A verdict for the plaintiff was sustained upholding his oral contract for $100 only.
Through all these cases we find the principle enunciated that where a paper has been signed by a party which purports to be his contract, but which is different from the agreement actually made in a material part, and he *Page 250 
has been fraudulently deceived into believing that the writing is in accordance with the spoken words, there is no contract. It is void; there has been no meeting of the minds; it may be disregarded and the plaintiff may recover or defend according to the contract orally made. Reformation is unnecessary. The rule that a written contract cannot be varied by parol evidence is not applicable. The party seeks not to establish the written contract with changes but to prove that there was no written contract through the fraud of the party claiming it.
And if the writing be void as a contract the party may sue at law for damage in a case such as we have here.
The plaintiff bought trees of the defendant. It was necessary to wait three years after planting to ascertain whether he got what he purchased. They proved inferior trees. He could not return them and was entitled to his full damage, not merely the return of the purchase price. (White v. Miller, 71 N.Y. 118.) No writing was necessary to establish his claim, but it was important to the defendant if this common-law liability had been limited by agreement. The defendant set up such an agreement in writing. The plaintiff could meet it by showing that his signature because of fraud was in law no signature and the paper no contract.
To this effect we find the cases of our own state. Smith v.Ryan (191 N.Y. 452, 457) was an action of ejectment wherein the defense set up a deed and the plaintiff met it by proof that the grantor was insane at the time it was executed and, therefore, was no deed. CULLEN, J., said:
"There are two kinds of fraud which differ essentially in their character; in the one the grantor is induced to convey his property by fraudulent representations as to the value, nature or character of the consideration he receives for the conveyance. This is sometimes called *Page 251 
fraud in the consideration. In the other case the grantor is deceived into the execution of an instrument of the contents of which he is ignorant. This is sometimes called fraud in the execution of the deed. The distinction between the two cases lies just here. It is elementary law that the assent of the parties is necessary to constitute a binding contract. In the first case the assent of the party though obtained by fraud is, nevertheless, obtained not only to the execution of the instrument, but to the contract which it evidences. In the second case there is procured only the signature to and execution of the written instrument, but not assent to the contract therein stated. In cases of this latter class the deed can be avoided at law."
Wilcox v. American Telephone  Telegraph Company (176 N.Y. 115,118) was a case where the defendant produced a paper giving it a right to use the plaintiff's land for the erection of its poles. The plaintiff in his action of trespass showed that it had been obtained from him under the false assertion that it was a receipt. Here concededly there was no contract. It was said:
"The plaintiff does not attempt to rescind a contract as induced by fraud; the charge by him relates, not to the contract, but to the instrument which purports to represent the contract."
In International Ferry Company v. American Fidelity Company
(207 N.Y. 350, 353) an oral agreement was made for insurance. The policy subsequently delivered reducing the contract to writing through fraud did not contain the agreement. The court said:
"The representations fraudulently made by the defendant did not affect the actual contract. That remained effective and could have been enforced by the plaintiff, in a proper action, in accordance with its provisions and conditions."
A release was pleaded by the defendant in Kirchner v. *Page 252 New Home Sewing Machine Company (135 N.Y. 182, 189), to bar the plaintiff's recovery. It was said that, without a reply, plaintiff could meet this release by showing that through fraud or mistake his cause of action was included in the release when it should not have been.
"Generally speaking," says the court, "whatever proofs would be regarded as sufficient to enable the plaintiff to maintain an action for the reformation of the release, so as to except from its provisions the demand in suit, would be available to him in this action by way of avoidance of its terms."
A distinction has been sought between the kind of writings involved. It is said that many of these cases apply to releases or receipts or papers never intended as contracts and that such may be avoided at law for fraud but that a paper which reads like a contract is always a contract till touched by equity provided only that the parties intended a writing to express their intention. The fact that through the fraud of one the intention is not expressed is silenced at law by the oral evidence rule.
I cannot believe that such a distinction exists. Fraud is a great leveler, before it all forms fall and the principle which the authorities enunciate is not determined by the kind of paper in question but by the evil of deception and overreaching. All instruments of every nature come under the same principle. Where through deception a paper is signed which was never intended by the parties, it is no contract, no deed, no release, no receipt.
In certain instances equity may provide the only relief. Where a party seeks not to avoid a writing but to establish it because otherwise he would have no claim at law — contracts or grants required by statute to be in writing — equity must reform as it is the only remedy.
Reason also indicates that a party under the circumstances of this case should not be compelled to go into equity to seek reformation in order to recover. *Page 253 
We all agree that the plaintiff if tricked and deceived into signing a paper which is not his contract is entitled to some form of relief. This is his right, a substantive right. The manner in which this right shall be enforced merely applies to the procedure. The disagreement between my associates is over procedure and not a substantive right. It is said that the plaintiff should set out the transaction in full and ask for a reformation. What would he plead? He would plead the oral agreement, the alleged written contract, the deception and his damage. He would ask for reformation and for judgment in accordance with his reformed contract. All of this can be done in one action and tried before a jury. (Maher v. HiberniaInsurance Co., 67 N.Y. 283.)
What does he do in his action at law. He pleads the oral agreement and sets forth his damage. The defendant sets up the written contract and may demand a reply thereto. (Code of Civil Pro. section 516.) The plaintiff replies setting up the deception and fraud.
So that we have in both actions all the facts on paper before the trial proceeds except in the equity action they are contained in one paper and in the action at law they are set forth in three. In both the burden of proof and the evidence is the same.
In either case the parties may be fully informed regarding the claims of each. I can see no difficulty in permitting the plaintiff to consider the writing as void for fraud in an action at law when it is conceded that he may always plead the fraud as a defense when sued in law or equity. In equity the issues may be tried by a judge without a jury, and at law by a jury only, but there is no greater virtue in a trial by a judge than a trial by jury or vice versa. Both are presumed to find the truth and this presumption is conclusive.
All my associates apparently have assumed that the written contract in this case barred the plaintiff's recovery. *Page 254 
There is a difference between the limitation of warranty and the limitation of liability. The contract limits the warranty but does not limit the liability for the breach of that warranty. It says:
"Any stock which does not prove to be true to name as labeled is to be replaced free or purchase price refunded, but is notfurther warranted."
The warranty, therefore, is restricted to the name or kind of peach tree ordered. If the trees turn out to be other than ordered the warranty is broken, but the liability for the broken warranty is not limited not even to the return of the price or replacement of the trees. All other warranties are excluded by the limitation. For instance there is no warranty that the trees will live for three years, or that they will bear fruit at the end of three years, or that they will give a certain amount of fruit, or that any other condition exists known to the peach tree trade. The warranty is limited to the kind of peach tree ordered. But when this warranty is broken the plaintiff may recover his full damage as there is no limit of liability for a breach of the limited warranty. We held in Sandford v. Brown Brothers
(208 N.Y. 90) that the words "is to be replaced free or purchase price refunded" did not limit the liability. Therefore, they do not limit the liability in this contract. The only words added to the contract as found in the Sandford case are the words, "but is not further warranted." As stated this is not a limit of liability, but a mere limit of warranty. In the Sandford case it was stated that the defendants could limit liability by any appropriate words clearly and distinctly stating it. Such are not the words in question.
Conceding, therefore, that the plaintiff was bound by the written contract, yet he can recover as the limited warranty as to kind was concededly broken, and his damage fully proved. The judgment in his favor must be affirmed anyway. It may be said that this was not the *Page 255 
rule of the case as applied below. The defendant cannot plead any such objection as it would not be as well off under the rule here stated as that given by the trial court. The judgment for the plaintiff, therefore, must be affirmed, with costs.