Court Opinion

ID: 6816006
Source: CourtListenerOpinion
Date Created: 2022-07-23 19:01:19.326586+00
Date Added: 2024-06-11T16:03:52.461532
License: Public Domain

Christian, J.,
dissenting.
The legal principles involved in this case are of such importance that in finding myself unable to agree with the conclusions of the other members of the court, I feel constrained to set out my views fully in a dissenting opinion.
There is no dispute about the evidence and the facts found by the jury under instructions from the court, but as the ease hinges upon the parol evidence rule it will tend to clearness to set it forth in substance.
*838Rodgers & Co. wanted to make a shipment of cotton to Bremen, Germany. There were no regular steamship lines to that point, and the shippers did not have enough cotton to make a steamer load, so they had to find a steamer going to Bremen on which they could secure cargo space. In order to do this, they employed Humphreys, a broker, who would be paid by the shipowners or their agent.
Humphreys went to Harriss, Magill & Co., who were agents for the owners and told its manager what Rodgers wanted. The manager said he would see what he could do. After several days, the manager reported he could secure freight room on a Japanese steamer (seven years old, according to Humphreys), the Kian Maru, which was acceptable, and, as was the custom, it would put the contract for freight room in writing to be executed by the shipper and agent. Before this was done Harriss, Magill & Co. informed Humphreys that the Kian Maru could not carry the cotton as a coal embargo prevented. However, it could furnish freight room on the Skinner, which was equally as good a vessel, and this was accepted, and, as usual in such cases, the contract for freight room, including all of its terms in shape of a letter, was sent to Rodgers & Co. by Humphreys and accepted, thus making a contract in writing for freight room between Rodgers & Co. and Harriss, Magill & Co., agents.
There were three contracts for freight room which contained all the terms, conditions and stipulations that were to be included in the bills of lading issued by the owners of the vessel. The scope of the contract for freight room will be better understood by the quotation of those parts that will present the issue before the court.
*839“Harris, Magill & Co., Inc.,
“Steamship Owners, Agents and Brokers,
“New Monroe Building,
“Norfolk, Virginia. “Contract No. 209
“Broker’s No.
“Date November 15, 1919.
“Shipper: Rodgers & Company,
“Address, Norfolk, Va.
“Gentlemen:
“We confirm engagement of freight room from, “Norfolk-Newport News, Va., to Bremen, Germany, via “Commodity: 1000 bales High Density Cotton — 1500 bales standard cotton.
“Rate: One dollar seventy-five ($1.75) per 100 pounds high density; two ($2.00) per 100 pounds standard. “Steamer: Frances L. Skinner.
“Sailing Date: Expected due last half of November
“Subject to the following conditions
It is agreed and understood that this contract is to be carried out under terms and conditions of bills of lading issued by the steamship company * * *
(The vessel shall have liberty to deviate for the purpose of making trial trips and shall pay any reasonable increased cost of cargo insurance, if any incurred in consequence thereof).
“Yours very truly, ‘
“Harriss, Magill & Co., Inc.
G. A. Glasscock, Agent.
“Accepted:
“Rodgers & Co.
“By...............................................
“Shippers
“Freight Brokers: Arthur C. Humphreys.”
Some little time after the above contract was accepted *840Hampton Harris, who was at that time a member of the firm of Rodgers & Company, learned that the “Skinner” was over twenty years old, and it would take a considerable increased insurance on the cargo. He told Humphreys, who went to the office of Harriss, Magill and called Mr. Glasscock from the inner office and said: “Mr. Glasscock, this Skinner that you have substituted for the Japanese steamer is not of the same age as the Khan Maru, but she is well up in the twenties and there is a stiff insurance additional rate.” He said: “We will take care of that and make it all right.” He said: “I have got some Japanese in here with me; that will be all right.”
On December 6-19, Mather & Co., underwriters’ agents, yrrote Rodgers & Co. that the additional rate of cargo insurance on the “Skinner” for age was three-eighths of one per cent.
Some time after December 12, 1919, the “Skinner”' came to Norfolk, according to the contracts for freight room, and Rodgers & Co. loaded upon her 6,202 bales of cotton, accepted bills of lading for their cotton executed by Skinner & Eddy, owners, signed by Harriss, Magill & Co., Inc., as agents, paid the freight in full tO' it, had their cargo of cotton insured (as was the custom) and the cotton was delivered safely.
It will be observed that the cargo of cotton was shipped and delivered strictly according to the written contracts for freight room and the bills of lading. After the contract for carriage of the cotton had been fully executed, without any suggestion of additional terms, Rodgers & Co. wrote to Harriss, Magill & Co., Inc., in January, 1920, demanding payment of $5,155.-48 extra insurance on cotton “shipped, on your steamer” Prances L. Skinner. This was never paid, and two years thereafter Rodgers & Co. proceeded by attach*841ment against Harriss, Magill & Co., Inc., as owners of the “Skinner” to recover the excess insurance paid, upon the ground that it (the defendant) agreed the cotton should be carried on the Kian Maru seven years old, but subsequently substituted the “Skinner,” assuring the plaintiff’s broker that she was equally as good (which was true except in the particular of age), and-when it was discovered that the “Skinner” was over fifteen years of age and carried excess insurance on cargo, promised to pay such excess insurance.
The plaintiffs in their attachment did not mention the written contracts by virture of which their cotton was shipped; when the case came to trial, the defendant objected to all parol testimony because the entire transportation contract was in writing. Its objection was overruled and the entire colloquium was introduced in evidence.
When the evidence was concluded the learned judge of the circuit court held that the defendant was the principal in the contract of carriage, notwithstanding the contract for freight room showed upon its face that it was acting as agent, and the bills of lading, which were the real contracts of carriage, were signed by the owners, Skinner & Eddy. Upon that construction of the contract, and at the request of the plaintiffs and over the objection of the defendant, he gave the two following instructions:

Plaintiff’s Instruction No. 1.

“If the jury believe from the evidence that the defendant agreed that the cotton cargo of the plaintiff should be carried on the steamship Kian Maru, and subsequently induced the plaintiff to consent to the ■substitution of the steamship Frances L. Skinner for *842the steamship Khan Maru by representing or agreeing that the steamship Frances L. Skinner was in every respect as. satisfactory a ship as the Kian Maru, and that the Frances L. Skinner was not as satisfactory as the Kian Maru because the rate of insurance on the Frances L. Skinner was higher than it would have been on Kian Maru for the reason that the Frances L. Skinner was an older vessel than the Kian Maru, they may find for the plaintiff.”

Plaintiff’s Instruction No. 2.

“If the jury believe from the evidence that the defendant agreed to make good the increased cost of insurance after they had knowledge of the fact that the cost of insuring the plaintiff’s cotton cargo on the steamship Frances L. Skinner was greater than it would have been had the cotton been located on the steamship Kian Maru, they may find for the plaintiff.”
There was a verdict and judgment for $5,155.48, and the defendant sued out this writ of error for review in substance of two errors. It should be needless to state that this court can only consider such points and errors in the case as are brought up to it properly, but the majority opinion practically tries the case here de novo.
The first-assignment of error is to the refusal of the court to give two instructions properly stating the law, and submitting to the jury whether the defendant acted as agent for a disclosed principal and assumed expressly and explicitly personal responsibility. The court refused to submit this issue to the jury, thereby holding that the defendant was principal in the transportation contract, or was bound as principal because the owners were not disclosed. This assignment of error will be considered later in this opinion because by *843reason of the defendant being an agent, the majority affirmed the judgment.
The second assignment of error, raised by objections to the admission of testimony, and the giving and refusing of instructions, presents the sole question for consideration of the appellate court; that is, that the contracts signed by both parties for freight room on the Skinner having been fully executed, and the cotton carried and delivered pursuant to bills of lading issued by the owners and accepted by the shippers, whether the slippery memory of one of the parties can contradict, vary or add to those written contracts. This decision is momentous because on it hangs the fate of the parol evidence rule. Should this court decide that all that is necessary for a party to avoid the workings of this ancient and most vital rule is to allege that part of the contract was reduced to writing and part oral (that in effect is what the plaintiffs desire), then where will be the sanctity attached to a written instrument? In no State is this sound rule of public policy more rigidly adhered to than in Virginia, and no exceptions to the rule permitted, but some eases which do not come within the rule are erroneously construed as exceptions.
In this connection, in the written opinion of the trial judge (which opinion is not filed with the record), he says on this point: “It should also be observed that this case is in legal effect an action of assumpsit on the parol promise, and the written contracts were admitted as evidence and were only necessary to show the amount of damages plaintiff had suffered. It was in no sense a suit on a written contract.”
Conceding that the defendant agreed that the cotton cargo should be carried on the Kian Maru, and when it was discovered that the Kian Maru could not carry the cotton because of the coal embargo, then the defendant *844offered the Skinner to carry the cotton with the express-assurance that it was equal in every respect to the Kian Maru, especially in point of age, and if it took excess insurance the defendant would pay the excess, there was a parol executory contract to carry the cotton on the Skinner. The negotiations about the Kian Maru were merged into the contract for the Skinner. When the-parties came to reduce their contract to writing, whether there was an express promise to pay the excess-insurance, or a warranty that the Skinner was the equal in point of age of the Kian Maru, the law is mandatory that those terms should be included in the written contracts. Public policy and the sanctity of written contracts has induced the courts to hold that when parties have reduced their parol negotiations to writing, the written contract is conclusively presumed to contain all of its terms. What legal magic is there in the word “substitute” to keep the abandoned negotiations for freight room on- the Kian Maru in effect, and thus abrogate the parol evidence rule?
■If the Kian Maru negotiations ever resulted in a contract, it was entirely merged and superseded by the contract for the Skinner, and the use of the word “substituted” cannot keep in effect the Kian Maru contract. The obvious fact is that if there was any agreement about the age of the Skinner, or excess insurance, it has been omitted from the written contracts, and the plaintiffs are claiming, as is usual in such cases, their right to introduce oral proof to sustain their allegations upon the alleged promise of the defendant that the Skinner did not take excess insurance, and if she did, it was a distinct independent collateral agreement, and not a part of the written contract for freight room.
The courts in Virginia adhere with the greatest strictness to the parol evidence rule, and allow practically no exceptions thereto.
*845The case of Slaughter v. Smither, 97 Va. 202, 33 S. E. 544, is very similar to the one at bar. In that case the party purchased a drug business and claimed the seller agreed as part of the consideration not to go into the drug business again. This contract of purchase was in writing, but it contained nothing about not going into business, and he undertook to prove by parol that as an independent contract. Judge Harrison said: “This court has manifested no disposition to fritter away the rule of evidence in question by nice distinctions to meet the hardships, real or supposed, of particular cases. The record of the case at bar furnishes, however, no ground in support of the distinction relied upon by the appellee. The written contract filed with the bill is a clear and complete memorial, needing no explanation, and lacking nothing that would add to its binding force. It cannot be assumed that the written contract was designed as an imperfect expression of the parties’ agreement, from the mere fact that the written memorial contains nothing on the subject to which parol evidence was directed. On that assumption, the rule which ex-eludes parol proof as a means of adding to the contract would be entirely abrogated, and to permit parties to lay a foundation for adding to the contract by oral testimony that they agreed that only that part of their contract should be reduced to writing, would open the door to the very evil the rule was designed to avoid."
“The only evidence of the completeness of a written contract as a full expression of the terms of the agreement is the contract itself. Where parties have deliberately put their mutual engagements into writing in such language as imports an obligation, it is only reasonable to presume that they have introduced into the written instrument every material term and circumstance; consequently, all parol evidence of eon*846vernations held between them, whether before, after or at the time of the completion of the contract, will be rejected. If the written contract purports to contain the whole agreement, and it is not apparent from the writing itself that something is left out to be supplied, parol evidence to vary or add to its terms is not admissible.”
If the assurance of the age of the Skinner be assumed to be a warranty, it could not be proven by parol.
In the case of Seitz v. Brewers Refrigerator Company, 141 U. S. 510, 12 S. Ct. 46, 35 L. Ed. 837, where the plaintiff, by written contract, purchased a refrigerator machine and tried to prove a previous oral representation as to the powers of the machine, claiming the representation to be an independent collateral contract, Chief Justice Puller, in holding that the evidence was not admissible, said: “* * but such an agreement must not only be collateral, but must relate to a subject distinct from that to which the written contract applies — that is, it must not be so' closely connected with the principal transaction as to form part and parcel of it, and when the writing itself upon its face is couched in such terms as import a complete legal obligation without any uncertainty as to the object or extent of the engagement, it is conclusively presumed that the whole engagement of the parties and the extent and manner of their undertaking were reduced to writing.”
The whole theory of the plaintiffs’ case is based upon the contention that the parol agreement to carry the cotton upon the Kian Maru was a binding and legal obligation, by which the cotton was loaded, shipped and delivered, and that the Skinner was merely substituted or put in the place and stead of the Kian Maru. This makes an oral contract without terms or condi*847tions expressed for the Kian Maru, contradict, vary and entirely supersede the written contract for carriage of the cotton upon the Skinner, upon the claim that it was an independent collateral agreement.
The learned judge of the trial court, in his written opinion, cites, as authority to sustain his ruling that the Kian Maru was a distinct, independent collateral contract, the two cases of Brent v. Richards, 2 Gratt. (43 Va.), 539, and Tuley v. Barton, 79 Va. 387. The ease of Brent v. Richards held that where a slave had been sold under a written bill of sale, which appeared to be formal and complete, the vendor might prove a contemporaneous parol agreement on the part of the vendee, giving the vendor the right to repurchase the slave upon certain conditions. Since the case of Slaughter v. Smithers, supra, and other cases, the case of Brent v. Richards seems to be no longer law in this State, but if it is, it is confined to the particular case where the written bill of sale represents the exclusive undertaking of the vendor, while the parol agreement related to a collateral and not inconsistent undertaking on the part of the vendee. The ease is not authority in the instant case where the contract was inter parties. Rector v. Hancock, 127 Va. 101, 108, 102 S. E. 663.
Tuley v. Barton was a ease of a receipt which merely acknowledged delivery and was not a contract, so the parol evidence rule does not apply.
Counsel for the plaintiffs, to sustain their contention in this court that the Kian Maru agreement was an independent collateral contract, cited Whitaker v. Lane, 128 Va. 317, 104 S. E. 252, 11 A. L. R. 1157; Clark v. Hugo, 130 Va. 99, 107 S. E. 730, and Reliance Life Ins. Co. v. Gulley's Admx., 134 Va. 468, 114 S. E. 551, These cases decide that where there is a parol condition precedent between the parties, as part oj the delivery, *848whereby the written contract has no vitality until the condition is performed, the written contract was never an obligation until the condition was complied with. But if the written contract had vitality for a single instant of time, parol evidence was inadmissible to vary, contradict, or add to the written contract. The contract in this case was binding upon the parties when signed, and plaintiffs accepted the benefits thereof. The rulings in this ease abrogate the parol evidence rule, and the verdict should be set aside, and judgment entered for the defendant.
It may be inferred that the majority opinion concurs in the facts and law as above set forth. But overlooking the elementary principle that in jury trials the jury must find the facts from the evidence and not the court; that the facts found by the trial court and jury are conclusive upon the appellate court, if sustained by the evidence; the majority opinion has found that Harriss, Magill & Co., Inc., was agent of a disclosed principal, notwithstanding the trial court, at the request of the plaintiff, refused to submit to the jury the question of fact whether the defendant was agent but principal. It was absolutely essential to the plaintiffs’ claim that the defendant be charged as principal, because if agent of the Kian Maru and also agent for the owners of the Skinner, there was no authority to substitute the latter for the former; the contracts were separate and distinct. The plaintiffs, by their pleading and procedure, have elected to treat the defendant as principal, and they are estopped now to take the inconsistent position that it acted as agent in the transaction, nor can this court do so for them. The court cannot make a case for a plaintiff and decide it in his favor.
Having found the above fact, the well settled principle of the law of agency, that an agent may pledge *849his personal responsibility for Ms principal is invoked. The rule of law in VirgiMa applicable to contracts thus made may be stated thus: Every contract made with an agent in relation to the business.of the agency is a contract with the principal, entered into tMough the instrumentality of the agent, provided the agent acts in the name of the principal. If an agent makes full disclosure of Ms principal to the one with whom he is •dealing, the legal presumption is that credit is giúen to the principal and not the agent, unless it further appears that credit was expressly and exclusively given to the agent, and it was clearly his intention to assume personal liability. Lambert v. Phillips, 109 Va. 632, 635, 64 S. E. 945; Richmond, &c., R. Co. v. N. Y. &c. R. Co., 95 Va. 386, 28 S. E. 573.
The legal presumption is that the language used pledged the credit of the principal, (a) uMess credit was •expressly and exclusively given to the agent, and -(b) the agent clearly intended to assume personal liability. 'These facts have to be expressly and properly averred in Me pleadings. Dahlstrom v. Gemunder, 198 N. Y. 449, 92 N. E. 106, 19 Ann. Cas. 771. Further, these essential facts must be proven by the evidence and found by the jury under proper instructions, and not by the court.
The counsel who prepared the petition and conducted tMs case in both courts repudiates their theory ■of the ease and law adopted in the majority opinion, and bases the liability of the defendant as principal upon its signature to the contracts for freight room without disclosing any principal, citing the case of Leterman v. Charlottesville L. Co., 110 Va. 769, 67 S. E. 281, wMch held that Leterman signed the contract wMch in apt words bound Mm personally, and that parol evidence was not admissible to prove another was liable also on the contract. The principal was dis*850closed by the bills of lading before the contract was concluded, and this is all the disclosure required by law.
That the defendant is bound as principal by its signature to the written contracts for freight room and the Skinner substituted therein for the Kian Maru, must, be the plaintiffs’ construction of the contract of transportation, as it can hardly be contended that the defendant was bound in any way by the bills of lading signed by the owners, Skinner and Eddy, by the defendant as agent, in face of the. universal ruling that upon reason and authority it is held, without exception, that when a written contract is made in the name of a principal and signed in his name by another as his agent, it is-not competent to show by parol evidence, in order to recover on the contract, that in signing it the one who purported to sign it as agent signed the name of the principal for his own benefit, with intention to bind himself. Heffron v. Pollard, 73 Tex. 96, 11 S. W. 165, 15 Am. St. Rep. 764; Martin v. Hemphill (Tex. Com. App.), 237 S. W. 550, 20 A. L. R. 984.
This is beyond controversy when we consider Humphreys’ remark to Glasscock, that “this Skinner that you have substituted for the Kian Maru is not the same' age but well up in the twenties,” and Glasscock said: “We will take care of that and make it all right;” thereby affirming his previous obligation. However, the majority opinion takes he said “we will take care of that and make it all right,” from the context, “Mr. Glasscock, this Skinner that you have substituted (potent word) for the Japanese steamer is not of the same age of the Kian Maru, but she is well up in the twenties, and there is a stiff insurance additional rate,” and makes that sentence a distinct, express and explicit promise to pay the excess insurance personally by the defendant. The context shows the obligation in regard *851to insurance was already in existence, according to the plaintiffs, and that sentence was but an acknowledgement of the previous obligation. It is unmindful of the fact that the context violates the parol evidence in order to prove the alleged promises. The plaintiffs are consistent in regarding it only as a reaflfirmanee of the Kian Maru contract.
Assuming that the defendant was agent, this conversation, the majority opinion further takes, disassociated from the balance of the evidence and contracts, to be an independent pledge of the defendant’s credit, ■contrary to the presumption of law that it was the language of the owners of the steamship, and contrary to the intent of Humphreys who made the contracts, ■and the construction of the plaintiffs and their counsel. Furthermore the opinion assumes without proof that there is therein an express and explicit promise on the part of the defendant to pledge its credit for the owners of the steamship, and that it clearly intended to assume personal liability. Having concluded that an independent collateral pledge of its personal responsibility had been made by the defendant for the owners of the Skinner, it holds inferentially that such a contract is an exception to the parol evidence rule. With great deference and respect for my brethren, I am obliged to assert that no such exception to the parol evidence rule can be found in any textwriter or decision.
The opinion cites 1 Mechera on Agency, section 1427, where Mr. Meehem says: “Still further, it is possible that the agent may bind his principal only upon the main or principal contract, and may bind himself only by a subsidiary contract collateral to the main one. Thus an agent selling his principal’s goods, for example, may add to the contract of sale which he makes for his principal his own collateral agreement to warrant *852the quality of the goods so sold. In such a ease, of course, there is no room for election, because both are not bound to the same undertaking.” The majority opinion then says: “The plaintiffs’ ease must stand upon this principle of law.”
The above rule of the law of agency is certainly sound and the basic principle is that the distinct collateral agreement must be alleged and proven to rebut the presumption that the contract was that of the principal. In Wilder v. Cowles, 100 Mass. 487, and Dahlstrom v. Gemunder, 198 N. Y. 449, 92 N. E. 106, 19 Ann. Cas. 771, the courts required the distinct collateral agreement to be plead and proven. It means nothing more than that the principal and agent may be bound for the same transaction, but their agreement must be-separate and distinct and the plaintiff can recover only on one of the agreements. The agent may become, by explicit agreement, surety for his principal.
Several of the cases cited in the majority opinion were eases where an agent selling farm machinery personally warranted the same to induce the purchaser to sign the written order to the manufacturer for the machinery which order contained all the warranty the manufacturer would give. The purchaser demanded the pledge of the agent’s credit.
In the case of Harvey v. Henry, 108 Iowa 168, 78 N. W. 850, the agent had a special interest in the subject matter of the contract, and his oral promise-was an additional inducement (or consideration) for making the written agreement, therefore, collateral thereto. But the facts are entirely different from the instant case, and the ruling is directly contrary to the law as laid down in Slaughter v. Smithers, supra.
In the ease of Hall v. Brown, 36 Wis. 652, the oral promise of Brown, the agent, was made at the time of *853the delivery of the 'written order for the cultivator and the notes, that the notes should be returned or he would pay the notes if the cultivator was not satisfactory,” is in principle somewhat analogous to Whitaker v. Lane and other cases cited by counsel for plaintiff, that is, the notes and order for the cultivator were delivered upon a condition precedent. This principle is not involved in the instant case. In every one of those cases the issue whether by an independent contract the agent expressly and explicitly pledged his credit for his principal, was one of fact for the jury. In none of them was the agent’s contract in writing signed by both parties, so no question of the parol evidence rule could possibly have arisen, except possibly in Harvey v. Henry, 108 Iowa 168, 78 N. W. 850, which was a written contract of exchange of old machinery for new; the agent held the unpaid notes of the purchaser for the old machinery; the purchaser claimed the agent agreed to surrender the notes as part of the exchange; and the jury found against the contention.
This question could not have been submitted to the jury in Virginia in view of the law as laid down in Slaughter v. Smithers, supra.
The law of agency herein discussed can have no bearing on the instant case as the entire undertaking of the defendant was in writing signed by both parties, which showed plainly on its face what the defendant agreed to do for the owners of the steamer, and when the transportation contract was concluded, who were the owners.
The plaintiffs undertook to prove the defendant was the owner of the steamers and they dealt with it as such, and that it was legally bound to carry the cotton on the Kian Maru and substituted the Skinner for the former, and was thereby damaged. If that does not *854contradict, vary and add to the written contracts under which the cotton was carried, then the parol evidence rule is no longer law in Virginia.
I am not unmindful that section 6365, Code 1919, requires the Supreme Court of Appeals to enter such judgment, decree or order as to the court shall seem right and proper. This relates to procedure in the appellate court and does not confer original jurisdiction on the court in violation of Constitution, 1902, section 88. Duncan v. Carson, 127 Va. 306, 103 S. E. 665, 105 S. E. 62. Certainly it does not authorize the appellate court to make a ease different ■ from the plaintiffs’ pleadings, and then try and decide the same upon an issue never suggested or considered by the trial court and jury.