Court Opinion

ID: 6817001
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:02:35.128896+00
Date Added: 2024-06-11T08:44:21.742385
License: Public Domain

Christian, J.,
dissenting:
The Four Wheel Drive Auto Company, the seller, brought suit in the Circuit Court of the city of Norfolk against the Transit Corporation of Norfolk, the purchaser, under section 5190 of the Virginia Code, to enforce its lien for the sum of $4,781.26 reserved upon three automobile busses in a certain conditional sales contract duly executed by the purchaser and recorded pursuant to section 5189.
The only defense made by the purchaser in its original answer was, in substance, that it was induced to purchase said busses upon the express representations and warranties: (a) “That said motor busses, and material and equipment of which they are composed would be reasonably fit for the purpose for which' defendant desired to purchase them,” and (b) “.That they were of good quality and were free from latent defects.”
The first misrepresentation and warranty alleged to have been made by plaintiff was made prior to the order for the busses, and was entirely verbal. When the order for the busses was given on July 17, 1925, that order read: “Enter order as follows, to be delivered at once f. o. b. Clintonville, Wisconsin, according to following terms and specifications.” No general warranty was contained in said order, nor was the representation and warranties set forth in the answer mentioned or hinted at in that order.
The law conclusively presumes that said written order contained all the terms, conditions and warranties of sale and parol evidence is not admissible to contradict, vary or add to the written contract. This, is what is known as the parol evidence rule of law, and is nowhere more rigidly adhered to than in Virginia.
The case of White Sewing Machine Company v. Gilmore Furniture Company, 128 Va. 630, 105 S. E. 134, *878did not in any way modify that wise and well established rule of law. There were no warranties or representations as to the character or quality of the sewing machines in that case. The agent who sold them to the Gilmore Company, as an inducement to purchase same, promised that the sewing machine company would send men into the territory of the purchaser to advertise the sewing machines to the retail trade and thereby they would be sold more rapidly. This was never done. The court held that agreement collateral to the purchase and that the parol evidence rule did not apply-
The order of July 17, 1925, was only an executory contract to purchase the busses according to the terms and specifications set forth. On the reverse side thereof was a warranty against defective material and workmanship; but this warranty was limited to making good at the factory any parts thereof, which shall be returned to the factory within ninety days after delivery. “We further warrant that the four wheel drive principle, as applied in our trucks, will operate and wear successfully.” The parties to this order not relying upon the parol evidence rule of law further provided therein: “The foregoing obligation to make good any defective parts as herein provided is in lieu of all other warranties, expressed or implied, and of all other obligations or liabilities on our part, and we neither assume nor authorize any other person to assume for us any other liability in connection with the sale of our trucks.”
The Transit Corporation did not claim in its answer that there was any defect in the material or workmanship of any of the parts, nor was the seller asked to make good the same. It alleged that the motors in said trucks were defective and insufficient to drive the trucks and it was compelled to substitute Continental *879motors therefor, and it sought to recover the cost of said Continental motors and damages for said substitution.
The Transit Corporation overlooked the fact that this suit was brought upon the executed contract of sale, and that the general rule of law and reason is, that where an executory contract of sale or order is followed by a subsequent executed contract or deed, in the absence of fraud or mistake, the executed contract or deed operates as a satisfaction and discharge of the executory contract, and the rights of the parties rest solely on the executed contract or deed. This is not a case where the order and bill of sale were contemporaneous and can be so construed together.
After the original answer was stricken out, under the above general rule of law, the Transit Corporation tendered an amended answer in which it was alleged that it executed the conditional sales contract dated September 9, 1925, upon the fraudulent representation that the sole effect of said contract was to secure the deferred payments due the seller, and that the covenants and agreements therein contained were non-effective. That is that the conditional sales contract was not of any force or effect, except to secure the balance due and that the covenants and agreements were meaningless; and that the seller would furnish it a letter to that effect which it never did.
The conditional sales agreement recites: “That.the seller in consideration of the payments, agreements and conditions contained herein which on the part of the buyer are to be made, done and performed has this day delivered and agreed to sell and the buyer this day agreed to buy from the seller, but upon the conditions hereinafter recited to the buyer the following described truck or trucks manufactured by the seller” *880etc. “The buyer agrees and acknowledges that the within contract covers all the conditions and agreements between the parties.” “The buyer hereby acknowledges receipt of and accepts the car or cars, having first examined and tested the same and found same in sound and first-class condition.” The conditional sales contract concludes in this language: “This agreement *****' contains the entire agreement between the parties hereto, their agents and employees, either verbal or written.”
The Transit Corporation as part of the consideration for the sale and delivery of the trucks covenants and agrees that they were in first-class condition, and therefore were without defects; and that there were no agreements or warranties which were not contained in the contract sued upon. Thus the parties by express agreement made the parol evidence rule of law part of the contract of sale and delivery. It solemnly agreed that the order had been satisfied and discharged, and its rights rested solely upon the conditional sales contract.
In Slaughter v. Smither, 97 Va. 202-205, 33 S. E. 544, Judge Harrison states the general principle of the parol evidence rule and its reasons as follows:
“The general principle that evidence of a contemporaneous parol agreement is not admissible to vary or contradict the terms of a valid written instrument, except in cases of fraud or mistake, is so familiar and well established that citation of authority in its support would seem to be superfluous. It is a principle founded in wisdom, and cannot be too carefully guarded. Upon its enforcement the certainty and sanctity of written contracts depend, and its violation would be destructive of the most solemn transactions of life. This court has so often, inelaborate opinions, discussed this subject, and adhered without variation *881to the rule of evidence adverted to, as an established axiom of our jurisprudence that nothing further can be added without useless repetition. See Towner v. Lucas, 13 Gratt. (54 Va.) 705; Woodward Baldwin Co. v. Foster, 18 Gratt. (59 Va.) 200; Martin v. Lewis, 30 Gratt. (71 Va.) 672 [32 Am. Rep. 682]; Bank v. Walton, 96 Va. 435 [31 S. E. 890].”
The answer of the Transit Corporation cannot be "brought within the principle of Whitaker v. Lane, 128 Va. 317, 104 S. E. 252, 11 A. L. R. 1157, because it admits that the conditional sales contract took effect at its execution as to part thereof.' The supreme court in its last announcement on this subject in the ease of Continental Trust Company v. Witt, 139 Va. 467, 124 S. E. 268, held where the instrument is in fact delivered as a valid binding obligation, for any moment of time, •and parol evidence is sought to be introduced to show an agreement made before or at the time of delivery by the obligee to release the obligor from his liability under the terms of the instrument, the parol evidence rule is applicable and such evidence is inadmissible. Crafts v. Broadway National Bank, 142 Va. 702, 128 S. E. 364.
The Transit Corporation recognized the force and binding effect of the parol evidence rule of law, but in its answer undertook to take its case out of that rule by alleging that the parol agreement was fraudulent. This cannot be done.
That proof of the violation of an alleged contemporaneous parol agreement does not establish fraud in the procurement of the written contract is well established in Virginia, as was said in Towner v. Lucas, 13 Gratt. (54 Va.) 705-716:
“It is reasoning in a circle to argue that fraud is made out when it is shown by oral testimony that *882obligee, contemporaneously with tbe execution of a bond, promised not to enforce it. Sueb a principle would nullify the rule, for conceding tbat sueb an agreement is proved or any other contradicting tbe written instrument, tbe party seeking to enforce tbe written agreement according to its terms, would always be guilty of fraud. Tbe true question is, was there such agreement? And this can only be established by legitimate testimony. For reasons founded in wisdom, and to prevent fraud and perjuries, tbe rule of tbe common law excludes such oral testimony of tbe alleged agreement; and as it cannot be proved by legal evidence, tbe agreement itself in legal contemplation cannot be regarded as existing in fact. Neither a court of law or of equity can act upon tbe hypothesis of fraud where there is no legal proof of it.”
I wrote tbe opinion in this case affirming the decree of tbe trial court, but my brethren did not concur therein, because they thought tbe question should have been presented to a jury, and tbat tbe order should be construed with tbe conditional sales contract. Tbe order and conditional sales contract are not contemporaneous so cannot be construed together.
Every State is prohibited by tbe Constitution of tbe United States from passing any law violating tbe obligation of a contract, and I think this principle applies to courts. Tbe effect of tbe majority opinion in my judgment authorizes tbe Transit Corporation to violate its solemn and plainly expressed contract and abolishes tbe parol evidence rule of law and I cannot concur therein.