Court Opinion

ID: 9763555
Source: CourtListenerOpinion
Date Created: 2023-08-29 02:49:11.168383+00
Date Added: 2024-06-11T12:57:27.915919
License: Public Domain

CONCUEEING AND DISSENTING OPINION BY
Me. JUSTICE Bell:
I concur in the opinion of the Court except that part which deals with the parol evidence rule in . connection with Hoffman’s claim.
The majority’s opinion on the admissibility of parol evidence to vary a written agreement opens wide the *244door to fraud; it flies in the teeth of the rule which has been iterated and reiterated in more than a dozen recent decisions of this Court; and it obviously circumvents and effectually nullifies the modern Pennsylvania Parol Evidence Rule which has become firmly imbedded in the law of Pennsylvania since 1925.
The modern Pennsylvania parol evidence rule which dispelled the thick fog of confusion which enveloped the old Pennsylvania parol evidence rule, has been forged and perfected during the last 30 years and is, or up to this moment has been, clearly and firmly established. That rule, it is universally agreed, is as follows:
Where the alleged prior or contemporaneous oral representation or agreement, inducing or otherwise, concerns a subject which is specifically dealt with in the written contract, or the written contract covers or purports to cover the entire agreement of the parties, and such oral representation or agreement will alter, Vary, add to, subtract from, or otherwise modify the written agreement, such oral representation or agreement is merged in or superseded by the subsequent written contract, and parol evidence thereof is inadmissible in evidence unless it is averred and proved that the oral agreement or representation was omitted from the written agreement by fraud, accident or mistake.
Moreover, “Notwithstanding the name given it, the parol evidence rule is a rule, not of evidence, but of substantive law:* [Citing authorities]”: O’Brien v. O’Brien, 362 Pa. 66, 71-72, 66 A. 2d 309.
There is neither averment nor a shred of testimony in the instant case of fraud, accident or mistake; and far more important, there is neither averment nor a scintilla of evidence that the alleged oral agreement, *245which very substantially varied the written agreement, was omitted from the written agreement by fraud or accident or mistake.
Bardwell v. The Willis Company, 375 Pa. 503, 100 A. 2d 102, is factually on all fours with and legally rules the instant case. In that case plaintiff brought an action in trespass for loss of profits “suffered as a result of false and fraudulent material representations” made by defendants immediately prior to or contemporaneous with the execution of the five year lease. Plaintiff further averred that he relied upon these fraudulent representations and was, because of them, induced to enter into the lease. Notwithstanding these averments, this Court sustained a demurrer by defendant which admitted the false inducing representations, and said (pages 506-507) :
“Where the alleged prior or contemporaneous oral representations or agreements concern a subject which is specifically dealt with in the written contract, and the written contract covers or purports to cover the entire agreement of the parties, the law is now clearly and well settled that in the absence of fraud, accident or mistake the alleged oral representations or agreements are merged in or superseded by the subsequent written contract, and parol evidence to vary, modify or supersede the written contract is inadmissible in evidence: Phillips Gas and Oil Co. v. Kline, 368 Pa. 516, 519, 84 A. 2d 301; Grubb v. Rockey, 366 Pa. 592, 79 A. 2d 255; Walker v. Saricks, 360 Pa. 594, 63 A. 2d 9; Gianni v. Russell & Co., Inc., 281 Pa. 320, 126 A. 791; Speier v. Michelson, 303 Pa. 66, 154 A. 127; O’Brien v. O’Brien, 362 Pa. 66, 66 A. 2d 309; Russell v. Sickles, 306 Pa. 586, 160 A. 610.
“There is not the slightest doubt that if plaintiffs had merely averred the falsity of the alleged oral representations, parol evidence thereof would have been *246inadmissible. Does the fact that plaintiffs further averred that these oral representations were fraudulently made without averring that they were fraudulently or by accident or mistake omitted from the subsequent complete written contract suffice to make the testimony admissible? The answer to this question is ‘no’; if it were otherwise the parol evidence rule would become a mockery, because all a party to the written contract would have to do to avoid, modify or nullify it would be to aver (and prove) that the false representations were fraudulently made.
“The Parol Evidence Rule has had a checkered career in Pennsylvania. Now that it has been well and wisely settled we will not permit it to be evaded and undermined by such tactics. Fraudulent misrepresentations may be proved to modify or avoid a written contract if it is averred and proved that they were omitted from the (complete) written contract by fraud, accident or mistake. Cf. Null v. General Motors Truck Co., 311 Pa. 580, 586, 166 A. 562; Sterling Corp. v. Jennings, 101 Pa. Superior Ct. 291.”
Bardwell v. The Willis Company, 375 Pa., supra, is obviously far stronger in favor of the admissibility of parol evidence than the instant case but in spite of the defendant’s record admission of its fraudulent representations, this Court held that this was legally insufficient because there was no averment and proof that the alleged parol contract was omitted from the written contract by fraud, accident or mistake.
In Anderson v. Murdoch, 371 Pa. 212, 88 A. 2d 720, plaintiff sued to recover the value of household goods which were destroyed by fire in defendant’s warehouse. The warehouse receipt provided that the goods were stored at the owner’s risk of loss by fire. This Court held that plaintiff’s testimony that just prior to or contemporaneously with the. execution and delivery of *247the warehouse receipt defendant told plaintiff that the furniture would be stored in a separate fireproof room and there would be no need for plaintiff to carry insurance thereon, and that she relied upon this representation, was inadmissible. The Court said (page. 216) :
“Since the complaint did not aver that these alleged oral representations, to which Mrs. Anderson testified' were omitted from the written contract by fraud, accident or mistake, and since they varied or contradicted the written contract, the trial court was correct in striking from the record this testimony. We have recently so thoroughly discussed the question of the admissibility of parol evidence to alter a written contract and so firmly and, we believe, clearly enunciated the principles applicable thereto that we deem further discussion unnecessary. See Grubb v. Rockey, 366 Pa. 592, 79 A. 2d 255; O’Brien v. O’Brien, 362 Pa. 66, 66 A. 2d 309; Walker v. Saricks, 360 Pa. 594, 63 A. 2d 9; Speier v. Michelson, 303 Pa. 66, 154 A. 127; Gianni v. Russell, 281 Pa. 320, 126 A. 791; Phillips Gas Co. v. Kline, 368 Pa. 516, 84 A. 2d 301.”
In O’Brien v. O’Brien, 362 Pa., supra, the Court, speaking through Mr. Justice Horace Stern, said (pages 70, 71, 72) The question therefore presents itself: Have complainants a right of action on their counterclaim? As far as it is based upon the alleged oral agreement of Clarence J. O’Brien that he would not, for a certain time, engage in a competing business, which agreement was allegedly made immediately prior to the signing of the agreement of dissolution, it is clear that they cannot avail themselves of any such asserted obligation on his part, for the principle enunciated in Gianni v. R. Russell & Co., Inc., 281 Pa. 320, 323, 324, 126 A. 791, 792, has become too firmly imbedded in the law of this Commonwealth to permit of a recovery on any such oral agreement. . . . There*248fore, because of the parol evidence rule, the alleged oral agreement cannot be made the basis of the right of action asserted in the counterclaim which claimants filed in the ¿ction of assumpsit.
'■■“Is the applicability of the parol evidence rule a question that may be raised, as in this case, by preliminary objections in advance of trial? Notwithstanding the name given it, the parol evidence rule is a rule, not of evidence> but of substantive law: Restatement, Contracts, §237, comment a; Wigmore on Evidence, 3d ed., vol. IX, pp. 3, 4, §2400(1) ; Williston on Contracts, rev. ed., vol. 3, p. 1813, §631. Accordingly, the effect of it, and the right of a litigant to obtain judgment in reliance on it, may properly be determined on the pleadings, and judgment may be entered for want of a sufficient answer or reply which sets up an oral agreement invalidated by the rule: Richards v. Integrity Trust Co., 317 Pa. 513, 516, 517, 177 A. 28, 29; Germantown Trust Co., Guardian, v. Emhardt (1), 321 Pa. 561, 564, 565, 184 A. 457, 459; Pennsylvania Company for Insurances on Lives and Granting Annuities v. Lebanon Building & Loan Association, 337 Pa. 316, 318, 319, 10 A. 2d 418, 419, 420; Hambleton v. Hartman, 160 Pa. Superior Ct. 447, 449-451, 51 A. 2d 511, 512, 513 . . . .”
In Russell v. Sickles, 306 Pa., supra, plaintiff sued defendants for money due him under an employment contract. The written contract provided that Russell should be paid a stipulated salary and additional compensation at the end of each year of 40% of the net profits. Defendants claimed that it was orally contemporaneously agreed that where the business operated in any year at a loss plaintiff should bear his share, namely 40%, of each year’s loss. The Court ■held that this evidence was inadmissible. The Court said (pages 591) : “The language of Mr. Justice Simp*249son in Nick v. Craig, 301 Pa. 50, 56, fits the situation -in the case at bar: ‘There is neither averment nor proof that anything was omitted from or added to the agreement by fraud, accident or mistake; hence, it must be construed exactly as it is written; and all prior negotiations as to its terms must be ■ considered as merged in it.’ We have repeatedly announced it . as our policy to uphold the integrity of written instruments* and .to insist upon rigid adherence to . the rule that where parties have deliberately and formally, committed their engagements to writing, they cannot be .permitted, by parol evidence, , to vary or modify the written contract, unless it is averred and proved that by fraud, accident or mistake, the: terms sought to be introduced were omitted from the writing: Gianni v. Russell, 281 Pa. 320; First Nat. Bank v. Sagerson, 283 Pa. 406; Speier v. Michelson, 303 Pa. 66; Hill & MacMillan v. Taylor, 304 Pa. 18.”
In Grubb v. Rockey, 366 Pa., supra, where the purchase price for a farm was stated to be $10,000 and the seller was entitled to receive the rents, issues and profits thereof before the first day of March 1949, .an oral agreement which the chancellor found had been made to reserve to the seller the wheat crop after March 1st and which had induced the written agreement, was held by this Court to be inadmissible. The Court said (page 597) : “While . . . earlier cases so holding were not specifically overruled, a new or modern parol evidence rule was announced in Gianni v. Russell & Co., Inc.,. 281 Pa. 320, 126 A. 791; and the old law was judicially buried in Speier v. Michelson, 303 Pa. 66, 154 A. 127.
“The modern Pennsylvania Parol Evidence Rule is well stated by Mr. Justice Stearne in Walker v. Saricks, 360 Pa. 594, 598, 63 A. 2d 9: ‘This Court said in Gianni v. R. Russell & Co., Inc., 281 Pa. 320, 323, *250126 A. 791: “Where parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only, evidence of their agreement: Martin v. Berens, 67 Pa. 459, 463; Irvin v. Irvin, 142 Pa. 271, 287. All preliminary negotiations, conversations and verbal agreements are merged in and superseded by the subsequent written contract . . . and unless fraud, accident or mistake be averred, the writing constitutes the agreement between the parties, and its terms cannot be added to nor subtracted from by parol evidence: Union Storage Co. v. Speck, 194 Pa. 126, 133; Vito v. Birkel, 209 Pa. 206, 208.” ’ ”
In T. W. Phillips Gas and Oil Co. v. Kline, 368 Pa. 516, 84 A. 2d 301, we held that defendants’ offer to prove that at the time of executing the lease plaintiff represented to them (1) that the lease would provide for payments of f300 a year in the event gas was obtained in paying quantities, and (2) that the lease would provide them with free gas — each of which slightly modified the written lease — was inadmissible. The Court said (page 519) : “This is nothing but an attempt by defendants to alter, by parol evidence, a subsequent written agreement with respect to . . . matters fully and specifically covered at length in the written' agreement. Such an attempt, in view of our recent decisions on this subject is astonishing. Where no fra/ud, accident or mistake is averred and proved, and the alleged prior or contemporaneous oral representation or agreement concerns a subject which is specifically dealt with in the written contract, the law is clearly and well settled that the alleged oral representation or agreement is merged in or superseded by the subsequent written contract and cannot vary, modify or supersede the written contract; and hence parol evidence thereof is inadmissible in evidence: Grubb v. *251Rockey, 366 Pa. 592, 79 A. 2d 255; Walker v. Saricks, 360 Pa. 594, 63 A. 2d 9; Gianni v. Russell & Co., Inc., 281 Pa. 320, 126 A. 791; Speier v. Michelson, 303 Pa. 66, 154 A. 127; O’Brien v. O’Brien, 362 Pa. 66, 66 A. 2d 309; Russell v. Sickles, 306 Pa. 586, 160 A. 610.”
Moreover, in the recent case of Sendick v. Matvey, 391 Pa. 286, 138 A. 2d 92, this Court, speaking through Mr. Justice Benjamin R. Jones, reversed the chancellor and held that in an action in equity instituted by a mother against her daughter to rescind a deed to the daughter, oral evidence to show that the consideration for the deed was a promise by the daughter to take care of her mother was inadmissible, because it would be a violation of the parol evidence rule. The Court said (pages 297-298) : “The chancellor’s conclusion that there was failure of consideration for the deed is based primarily upon Mrs. Parks’ testimony that the appellant [the daughter] had promised [her mother], in order to induce her to convey the property to her, to assume responsibility for her care and maintenance. ... It is equally clear that the only effect of Mrs. Parks’ testimony is to vary or alter the terms of this written agreement by adding to it by parol an additional undertaking by the appellant. This Court stated, in Phillips Gas and Oil Co. v. Kline, 368 Pa. 516, 519, 84 A. 2d 301: Where no fraud, accident or mistake is averred and proved, and the alleged prior or contemporaneous oral representation or agreement concerns a subject which is specifically dealt with in the written contract, the law is clearly and well settled that the alleged oral representation or agreement is merged in or superseded by the subsequent written contract and cannot vary, modify or supersede the written contract; and hence parol evidence thereof is inadmissible in evidence: Grubb v. Rockey, 366 Pa. 592, 79 A. 2d 255; Walker v. Saricks, 360 Pa. 594, 63 *252A. 2d 9; Gianni v. Russell and Co., Inc., 281 Pa. 320, 126 A. 791; Speier v. Michelson, 303 Pa. 66, 154 A. 127; O'Brien v. O’Brien, 362 Pa. 66, 66 A. 2d 309; Russell v. Sickles, 306 Pa. 586, 160 A. 610.’”
' These cases, we repeat, clearly and expressly rule the instant case and hold that parol evidence of the alleged oral agreement which varied the written agreement was inadmissibe, especially since there was no averment and not even a scintilla of testimony by any witness . that the alleged oral agreement had been omitted from the written agreement by fraud, accident or mistake. If this modern parol evidence rule could be so easily circumvented and nullified by persons having an interest in the alleged oral agreement, the rule which, has now become a rule of substantive law and not a rule of evidence (O’Brien v. O’Brien, 362 Pa., supra) would become virtually worthless1 and all-of the aforesaid. cases and other decisions of this Court on the' subject would be effectually nullified or by necessary-implication, overruled. \
Not only was there, we repeat, no averment or proof that the alleged oral agreement was omitted from the written agreement by fraud, accident or mistake, biit there is not even any proof of fraud, accident , or mistake. Plaintiff’s only proof, at J)est, is a prior or contemporaneous oral agreement which greatly varies the written agreement viz., a judgment note for $30,000. Even if this oral- agreement had been proved, it would undoubtedly' be inadmissible and legally inadequate under all the authorities.
Plaintiff’s Evidence, Even if Admissible, Was Totally Inadequate
To pile Pelion upon Ossa, the majority’s decision cannot or should not be sustained for two additional reasons. The majority bases its position on the test-i*253mony of C. William Kraft (counsel for Boyd) j who testified seven years after the alleged oral agreement (between Boyd and Albright who was the payee in the judgment note) which greatly varied the judgment note, that Albright admitted to him and his client, in a heated conversation ten months after the alleged oral agreement, that he had made an oral agreement prior to the execution of the judgment note and that he did not intend to keep it. This is a strange admission for a man to make to his adversary and his adversary’s attorney. The Chancellor believed Judge Kraft* and found that the parties had made the exact agreement which Judge Kraft testified Albright orally admitted. However, plaintiff’s other witness, Guerrina, testified to a different oral agreement; the testimony of the architect Jobson, who incidentally wrote a confirming letter one day after the alleged oral agreement, as to his understanding was entirely different; and Albright was not called upon to testify in behalf of the plaintiff when it. was his burden to prove by evidence which was clear, precise and convincing a specific oral agreement — if any existed and was admissible — which varied the written agreement. Such testimony, under all the facts and circumstances of this case, certainly does not rise to the test of “clear, precise and convincing” evidence which is necessary — if admissible at all — to justify the material alteration of the subsequent written agreement. This contrariety of recollection or testimony is an additional illustration of one of the basic reasons for the modern Parol Evidence Buie.
How unwise and fallacious the majority’s new interpretation of the Parol Evidence Buie is may be illustrated by the following example: If plaintiff and *254ten witnesses testified, and their testimony was clear, precise and convincing, that prior to or contemporaneously with, the written agreement, plaintiff and defendant agreed to an oral agreement which varied or modified the written agreement, or if defendant admitted this oral agreement by demurrer, that testimony is inadmissible and that admission of record is legally insufficient to vary or modify the written agreement: Bardwell v. The Willis Co., 375 Pa., supra, and cases hereinabove cited. However, if plaintiff testifies and his testimony, even though contradicted, is clear, precise and convincing, that the day after or one year after or seven years after the written agreement was signed, defendant admitted the contemporaneous or prior oral agreement — such testimony is not only admissible but is legally sufficient to vary or modify the written agreement. An easier way to circumvent and nullify the modern Parol Evidence Rule and to reopen (as before Gianni v. R. Russell & Co., Inc., 281 Pa. 320, 126 A. 791) the gate to fraud, it would, he difficult to-imagine.
• The majority opinion says that the Parol Evidence Rule “is aimed at the prevention of, not the protection, of fraud.” There is not a scintilla of evidence in this case of fraud. The basic reasons for the establishment of Pennsylvania’s modern Parol Evidence Rule were (:a) - to prevent fraud; (b) to eliminate the tremendous confusion which the old Rule had caused, and (c) to establish the integrity of written agreements. Like the Statute of Frauds, the Dead Man’s Rule, the Statute of Limitations, Laches, Estoppel, Adverse Possession and other rules of limitation or repose, cases will arise where a just claim is defeated. While that would not be sufficient to justify the abandonment, emasculation or nullification of the modern Parol Evidence Rule, this is not such a case. It is, we repeat, difficult *255to imagine an easier way to avoid or circumvent and nullify the modern Parol Evidence Rule than that approved in the' majority opinion. Even the appellants never urged this circumvention, nor did Judge Harold L.-.Ervin (who is. now a member of the Superior Court of Pennsylvania) who admitted* this oral evidence to prove payment (payment or non-payment can always be proved by parol evidence). ...
The majority opinion has cited one modern Supreme Court case in an attempt to support the admission of this testimony which, as we have seen, circumvents and nullifies the modern Parol Evidence Rule, namely, Allinger v. Melvin, 315 Pa. 298, 172 A. 712. The AlUnger case was a wise decision but it is clearly distinguishable. The question there was whether parol evidence was admissible to prove a contemporaneous agreement that execution on a bond (and accompanying mortgage) should be limited to the mortgaged premises. Both parties to the bond testified that the aforesaid restriction which was agreed upon had been omitted from the bond by mistake and that the obligee, to avoid delaying settlement, agreed that-he would immediately give the obligor'a letter or agreement protecting Mm and restricting the obligation to the mortgaged real estate. The obligee then, executed and delivered to the obligor the letter which restricted the bond. The. Court correctly held that the testimony by both parties -of tMs oral ágreement which was omitted by mistakex was admissible, and said (page 304) : “. . . In view of the finding of the jury, based on the evidence of both parties to the contract, there can be no question that Whelan made a mistake in omitting from the bond the agreed-upon restrictions, that Melvin detected the mistake, refused to execute the papers, and ultimately did *256so .only, on Whelan’s' promise to correct the mistake, as -was' in fact done by the letter, and supporting oral evidence received. . . , Here- both parties to the contract agree that, the instrument, as Whelan drew it, did not express their agreement, and that it would not have been executed unless the supplementary , [restricting] agreement had been made. Proof of such agreement was proper: . .
I- would, hold that the judgment- noifce executed by Boyd could not be varied and nullified by this alleged prior parol agreement and I would allow Hoffman’s claim thereunder.
Mr. Justice Musmanno joins in this opinion, •

 Italics throughout, ours.

 We, of course, believe in Judge. Kraft’s credibility.

 Sur a petition to open judgment.