Court Opinion

ID: 6484348
Source: CourtListenerOpinion
Date Created: 2022-06-26 23:07:51.622497+00
Date Added: 2024-06-11T15:54:16.364316
License: Public Domain

OPINION OF THE COURT BY
HARTWELL, J.
The case does not permit us to doubt the respondent’s intention in asking the petitioner to dredge slip 1 of section 3. He did not intend that this work should be the beginning of the petitioner’s contract which by its terms would have to be completed in ninety days thereafter, but that the slip alone should be dredged at a cost of about $3,000, and that this should not affect the petitioner’s contract to dredge the entire section “in case further appropriations are made by the legislature for carrying out this work.”
It is true that the petitioner’s October 31 letter expressing its willingness to do the work states the obvious fact that it was “within the limits of dredging to be done” under its contract, *647adding “when the work is completed and the payments made the same will he regarded as a partial performance of said contract.” If the petitioner meant by “partial performance” that dredging the estimated 9,700 cubic yards in slip 1 was a portion of the work of dredging the estimated 183,400 yards from the section, the remark would not mean that doing the work so requested was a beginning of the contract. The latter meaning, if intended, was directly opposed to the respondent’s October 27 letter and to his evident and clearly expressed object from the beginning that the expense be kept down to $3,000, and that nothing more be done until further appropriations were made. The $3,000 worth of dredging in slip 1 could not lawfully have been contracted for by the respondent without advertising for competing bids, and was lawfully obtained by regarding the contract as in force and binding upon both parties as far as that work was done. We do not think that the petitioner was justified in the inference, whether made at the time of beginning the dredging of slip 1 or later, that the respondent meant that this work should be the beginning of the contract. The petitioner’s right' to begin and go on with the contract at any time after its date without awaiting notice from the respondent to begin it, or its duty resting upon an agreement, if any there was, to await such notice was not affected one way or another by the special engagement concerning slip 1. It is not claimed by the petitioner that work done in section 3, after completing slip 1, was expressly authorized by the respondent other than by making the contract.
And this brings us to consider whether the petitioner’s contention is correct that the respondent had no right to delay the contract or to prescribe the time when the petitioner should begin to perform it, a contention based both on the claim that no agreement was made to that effect, and that if made the agreement, being oral, could not modify, enlarge or restrict the terms of the written agreement.
“The general rule is, that no verbal agreements between the parties to a written contract, made before or at the time of the *648execution of such contract, axe admissible to vary its terms or to affect its construction. All such verbal agreements are considered as varied by and merged in the written contract. But this rule does not apply to a subsequent oral agreement made on a new and valuable consideration, before the breach of the contract. Such a subsequent oral agreement may enlarge the time of performance, or may vary any other terms of the contract, or may waive and discharge it altogether.” Cummings v. Arnold, 3 Metcalf 489, the court citing the rule laid down by Lord Denman in Goss v. Lord Nugent, 5 B. & Ad. 65: “After the agreement has been reduced into writing, it is competent to the parties, at any time before breach of it, by a new contract not in writing, either altogether to waive, dissolve, or annul the former agreement, or in any manner to add to, or subtract from, or vary, or qualify the terms of it, and thus to make a new contract; which is to be proved, partly by the written agreement, and partly by the subsequent verbal terms engrafted upon what will be thus left of the written agreement.”
In Cooper v. Island Realty Co., 16 Haw. 92, it was held that in a suit for foreclosure of a mortgage the plaintiff could not show a contemporaneous parol contract that the mortgagor should pay taxes, but said, “This rule is subject to possible qualification, as in Carr v. Dooley, 119 Mass. 295, upon an offer to prove an independent agreement with reference to a distinct and separate matter, though founded upon a consideration embraced in the price of the land.” In the case last cited the plaintiff had been obliged to pay an assessment for a sewer which was a lien on an estate which the defendant had conveyed to him by deed dated June 8, 1810, the assessment not having been made until after the deed was delivered, although the sewer was constructed under the provisions of a previous statute and in pursuance of a prior resolution of the mayor and aldermen. The action was brought on two counts; the first upon a covenant against encumbrances in the defendant’s deed, and the second upon an alleged special promise to pay any assessment which should be made on account of the sewer then being built. The consideration of the promise was averred to be the purchase of the land, and the promise was sought to be proved by a conversation between the parties during negotiations for the purchase and while the sewer *649was in process of construction in front of the premises, the defendant having then said to the plaintiff, “I will pay all that. You shall not be called upon to pay a cent for it.” As to this evidence the court held: “Upon the question of its competency, it is sufficient that it has a tendency to prove an independent agreement made with reference to a distinct and separate matter, and founded upon a consideration embraced in the price of the land. The language relied on was indeed part of a conversation which took place while negotiations were pending which ended in a deed with limited covenants of warranty and against incumbrances, but it is not open to the objection that it is here used to vary or enlarge in any respect the contents of a written instrument, or that the promise proved is within the statute of frauds.”
“It is hardly pretended by counsel for plaintiffs that it was not competent, after the written contract was made and signed by the parties, for them to make another verbal contract in regard to some parts of it, which to that extent should be a substitute for the first one. There is nothing in the nature of the contract itself requiring it to be in writing, nor is there any principle making it necessary that the new one should be reduced to writing because the-first was written.” Teal v. Bilby, 123 U. S. 578.
“It is not necessarily fatal that the evidence is parol which is relied on to show that the contract was not made as it purports on the face of the document to have been made. There was a time when a man was bound if his seal was affixed to an instrument by a stranger, and against his will. But the notion that one who has gone through certain forms of this-sort, even in his own person, is bound always and unconditionally, gave way long ago to more delicate conceptions.” Goode v. Riley, 153 Mass. 587.
Professor Thayer, in his valuable Treatise on Evidence, in an interesting discussion of the parol evidence rule (p. 409), says: “The true inquiry is, whether certain claims or defences be allowable. If relief can be had in such cases, the law of evidence has nothing to say as to any kind of evidence, good under its general rules, which may be offered to prove these things. *650In so far as extrinsic facts, are a legal basis of claim or defence, extrinsic evidence is good to prove them.”
Clearly the law permits a party to a written contract to show that an oral agreement was made at the time when the contract was executed or subsequently, postponing the time of performance named in the contract, or to show that the contract was made on condition that the time of performing it should be postponed from the time named in the contract until the party for whom the service was to be performed should notify the other party to begin it, or until there should be available funds to pay for the work agreed upon.
We think that the facts shown by the evidence are that the respondent made both of the contracts with the petitioner with the mutual understanding that only the contract for dredging section 1 should be performed until there should be • funds available for the payment of the work required by the other contract in dredging section 3, and should notify the petitioner to that effect; also that both parties acted in accordance with that understanding, until the dredging of slip 1 in section 3 came up for discussion, and that this was not intended by the respondent to affect the earlier understanding. In this view of the case the respondent was not required either to repudiate the contract or to notify the petitioner to begin it and cannot be compelled to recognize the petitioner’s claim that it is entitled to perform the entire contract without notice from the respondent that funds are ready. It is true that if funds were not available for the contract the petitioner under this agreement would neither have the duty nor the right to perform it; and if the respondent was to determine whether funds, if available for the purpose, should or should not be used, the petitioner would practically be at his mercy, and the only value of the contract to the petitioner would be that if the dredging were done by the Territory at any time before Ifarch 31, 1904, or within any agreed extension of that period, the petitioner would have it to do, but taking the chance that in view of the possibility or fact of Congress appropriating money for the purpose the Territory *651would not go to the expense. Either this was the mutual understanding or else the parties agreed upon a postponement of the contract for section 3 until there should be funds available for the purpose, whether the respondent should determine to use them or not. This, however, would be giving the agreement too restricted a meaning to accomplish the clearly expressed object of the respondent, to control the expenditure.' It is evident that at some time after the contract was made, perhaps about the time when the work of dredging slip 1 was agreed upon, the petitioner had in mind and was advised by its attorneys that it could hold the superintendent to performance of the contract whether there was money in the treasury to .pay for the work or not. We do not find that the respondent at any time assented to this view, or until the petitioner’s November 26 letter that he knew of his claim. It could not have been expected that delaying the work from December 3, the date of the contract, until December 31, which would leave ninety days until March 31, would show material change in Territorial finances, and there is no evidence that since then there was money in the treasury to meet the expenditure required for dredging section 3.
Kimiey, McClmahan & Cooper and 8. Ii. Derby for petitioner.
J. W. Cathcart for respondent.
We infer that the trial judge dismissed the writ because he found that there was an oral agreement that the performance of the contract should await the respondent’s direction. On this ground we sustain the decree appealed from.