Court Opinion

ID: 3235954
Source: CourtListenerOpinion
Date Created: 2016-07-05 16:10:33.818742+00
Date Added: 2024-06-11T07:40:23.417538
License: Public Domain

On Rehearing.
The brief in support of the application is a reargument of the questions considered on the original submission, with the citation of some additional texts and decisions and the earnest insistence upon the proposition that the provisions of Code, § 3973, providing that "all receipts, releases, and discharges in writing, whether of a debt of record, or a contract under seal, or otherwise, must have effect according to the intention of the parties thereto," should be accorded the effect to allow inquiry through parol evidence — notwithstanding the comprehensive, unambiguous terms borne by the quoted fifth clause — into the intent of the parties with respect to the comprehension therein of the extinction of the asserted liability on account of the misrepresentations or fraud set forth in the initial pleading. Otherwise stated, the proposition contended for is: That because of the terms of the quoted statute the intention of the parties, in the execution of this release, is open to inquiry or explanation, and that the extent or application of the exoneration given in the quoted clause is subject to investigation, notwithstanding the comprehensive, unambiguous *Page 392 
terms of the release which was executed for a valuable consideration. The object and whole operation of this statute (section 3973) has been long since stated by this court, since which time the statute has been, without substantial change, re-enacted with that construction impressed upon it, and hence a part of it. In Stegall v. Wright, 143 Ala. 204, 206, 207,38 So. 844, even in considering a receipt, not a release, it was said:
"The statute does not in any way change the probative force of a receipt. It simply declares that it must have effect according to the intention of the parties. In ascertaining what the intention of the parties was, the rules of evidence are thesame as they were before the statute." (Italics supplied.)
The quoted sentence could not be true if the statute's effect was to relegate to the realm of parol inquiry the intention with which parties gave unambiguous written releases and discharges. In Murphy v. Black, 148 Ala. 675, 41 So. 877, Justice Denson writing, it was held that even an unambiguous receipt, wherein something more than the mere reception of money or other thing was acknowledged, is not open to inquiry by parol; that "it was [is] the duty of the trial court to interpret it and declare its effect to the jury." In Jordan v. McDonnell, 151 Ala. 279, 282, 44 So. 101, 102, it was said of this statute:
"As heretofore decided, the only effect of section 1805 [now section 3973] of the Code of 1896 is to dispense with the necessity of a formal release under seal, and give effect to the receipt of [or] release 'according to the intention of the parties.' "
This statement of the limited effect of the statute (Code, § 3973) consists with the pronouncement made in Cleere v. Cleere, 82 Ala. 581, 588, 3 So. 107, 60 Am. Rep. 750, among other earlier decisions. The reason for the rule opening mere receipts for money or other thing "to explanation, modification, or contradiction by parol evidence" (Gravlee v. Lamkin, 120 Ala. 221, 24 So. 756, 759, among others, including Stegall v. Wright, 143 Ala. 206, 207, 38 So. 844), lies, as Brickell, C. J., declared in Gravlee v. Lamkin, supra, in the "informal, nondispositive" nature of a mere written receipt, of which, as distinguished from a release, Cowen, J., in McCrea v. Purmort, 16 Wend. (N.Y.) 460, 474, 30 Am. Dec. 103, 113, said:
"A release cannot be contradicted or explained by parol, because it extinguishes a pre-existing right; but no receipt can have the effect of destroying, per se, any subsisting right — it is only evidence of a fact. The payment of the money discharges or extinguishes the debt; a receipt for the payment does not pay the debt, it is only evidence that it has been paid. Not so of a written release; it is not only evidence of the extinguishment, but is the extinguisher itself."
Touching this distinction, Justice Maynard remarked, in Kirchner v. New Home Sewing Mach. Co., 135 N.Y. 182, 188,31 N.E. 1104, 1106:
"There is just here a wide difference between areceipt and a release, and whatever confusion there may be in the authorities upon this point has resulted from a failure toobserve the distinction." (Italics supplied.)
So, the statute (Code, § 3973) cannot aid the appellant in the premises.
The language of the fifth clause, quoted in the original opinion, is too plain, to unequivocal, too comprehensive to need construction or interpretation. It stipulated, for a consideration and as a part of the sale consummated, that appellee "shall never be liable directly or indirectly for any claim of any sort or description growing out of or arising out of the sale of any of the stock of the Rye-Ola Company to said Ben F. Barbour. And this stipulation applies" to both sales of the stock. More all-inclusive language could not have been employed with respect to the subject of the exoneration assured, for a consideration, by the provision.
The terms employed being all-inclusive, unambiguous, and unqualified in any degree by other provisions in the instrument of which the fifth clause is a part, the writing constitutes, to quote the full, well-supported statement from the Kirchner Case, supra —
"the only competent evidence of the agreement of the parties upon the subjects to which they relate unless avoided for fraud, mistake, duress, or some like cause. In Parsons on Contracts the rule is stated to be: * * * 'If a plaintiff is met by a general release under his seal to the defendant, he cannot set up an exception by parol.' In the early case of Pierson v. Hooker (3 Johns. 68; s. c., 3 Am. Dec. 467), the release was 'of and from all debts and demands of every nature and kind whatsoever,' and evidence was offered and excluded at the trial to show that at the time of its execution it was not intended to include the demand in suit, and Chief Justice Kent held the ruling correct, saying: * * * 'The instrument is general and comprehensive, and expressly reaches to every debt and demand of every kind. To show by parol proof that it was not so intended is to contradict or explain away the instrument, which is contrary to the established rule of law.' "
As noted in the original opinion, the general rule to which Kent referred was announced by this court in Thomason v. Dill,30 Ala. 454, 455, and this deliverance by Kent was cited to support it.
In Sherburne v. Goodwin, 44 N.H. 271, 275, 276, it was pertinently said: *Page 393 
"In the case before us, it is shown by the master's report that Goodwin did, and Coues' agent did not, understand that the money in question was included in the adjustment. But however this fact may be, it is clearly not admissible to affect the construction of the release, which, unlike a mere receipt not under seal, cannot be controlled by parol evidence of the intention of the parties. Indeed, a release, by its own operation, extinguishes a pre-existing right, and cannot be controlled or explained by parol. * * * A release, therefore, shall be held to include all demands embraced by its terms, whether particularly contemplated or not; and parol evidence is not admissible to show that a certain claim was not in the minds of the parties."
To sanction allegation, as a predicate for evidence, in qualification or contradiction of the unambiguous terms of this release — in a court of law without jurisdiction to reform contracts — would be but an evasion, as said in Sherburne v. Goodwin, supra, of the "rule that forbids the introduction of parol evidence to contradict a written instrument."
The doctrine is too familiar, too sound in its reason, and too conservative and just in its results, to be the subject of doubt or reconsideration at this late day. No court could have more consistently adhered to its observance than has this court.
Since the release covered, by its all-inclusive terms, the wrongs declared on, and since these comprehensive terms cannot be contradicted by parol or an exception or exceptions ingrafted or interposed through allegation as an inducement to evidence outside the writing, the plaintiff (Barbour) was confronted with the necessity, if he would prevail against his release, to avoid the obligation he therein, for a consideration, assumed (whereby he invested the defendant with the correlative rights thereby assured), of rescinding the contract upon the ground of fraud, mistake, etc. But, in order to rescind for fraud the party desiring to rescind must seasonably do so, and, besides, he must restore that which he has received under the contract or else, in discharge of the primary duty, he must appropriately assert such facts and circumstances as, in legal contemplation, excuse him from the discharge of this primary duty. There are cases to the contrary in other jurisdictions, as we stated in the original opinion; but here the rule has been repeatedly reiterated and its correctness recognized, even down to the recent deliverances made in Betts v. Ward, 196 Ala. 248, 251, 72 So. 110; Beatty v. Palmer, 196 Ala. 67, 71 So. 422; B. R. L.  P. Co. v. Jordan, 170 Ala. 530, 54 So. 280. In the last-cited decision it was said, upon abundant authority there cited:
"The person who would disaffirm a fraudulent contract must return whatever he has received under it. This is on a plainand just principle. He cannot hold on to such part of the contract as may be desirable on his part and avoid the residue, but must rescind in toto, if at all." (Italics supplied.)
And writing to the replication in that case it was further declared:
"She cannot compel the defendant to litigate with her as to a part of the subject-matter of the release, and at the same time insist on holding to the consideration. The replication was therefore bad for failing to aver that the money was restored or offered to the defendant within a reasonable time after the discovery of the fraud. If she did not know of the fraud until the plea was filed, she should have tendered it with the replication."
The rule is settled in this jurisdiction, and no sound reason has been suggested why the present case should be excepted from its operation.
The insistence that this plaintiff (appellant) does not seek to rescind, but simply to eliminate, because of fraudulent imposition, the claim declared on from the operation and effect of the all-inclusive terms of this release, is but the statement of the same contention in another form. Contracts induced by fraud are not absolutely void; they are voidable only. The plaintiff, for a consideration, in writing released defendant from all possible liabilities in respect of the sales of the stock. To exclude from its exonerating effect a liability that, unless the release is contracted in its operation, has been extinguished, for a consideration, can only be accomplished by a reformation of the instrument or a rescission in toto of the contract, as our cases decide. To allow, in a court of law, the alteration of the certain effect of the terms of this release upon allegation and proof that the liability desired by the releasor to be excepted from the instrument's operation was the product of the releasee's fraud in respect of the contract of sale, not in the execution of the release, would be unwarrantably to extend the jurisdiction of the court of law into the field of equity; to sanction averment as an inducement to, and predicate for, the adduction of evidence to contradict or qualify by parol and unambiguous writing; and to accord relief against a release, valid on its face, that has not been efficiently rescinded. In this state the distinction between the jurisdiction of the courts of law and the courts of equity has been maintained; and this is particularly true with respect to reformation of instruments. In this state a court of law cannot reform a writing; only a court of equity can award that relief. Not so in New York. There, as the Kirchner Case, supra, discloses, a plaintiff in a court of law can establish his right to relief, in the face of an unambiguous release through the means of "whatever *Page 394 
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." To apply that doctrine to the present case would require the abolition of the distinction between the jurisdiction of our courts of law and equity, as well as repudiate the rule that forbids the contradiction or qualification of a writing by parol.
The doctrine, illustrated in Maxwell v. Sherman, 172 Ala. 626,55 So. 520, that permits one fraudulently imposed upon or deceived in a contract of sale either to sue for damages or to rescind, does not touch the present contest that is controlled by the dominating factor of a release that, unless avoided in an appropriate way, extinguished the liability upon which the plaintiff declares. Until avoided in some appropriate way, the effect of the release was to extinguish the liability declared on, regardless of the form in which that liability is sought to be enforced.
It is also insisted that the fraud alleged should be accorded the effect to estop the defendant (appellee) from having the benefit of the release from the liability declared on. In other words, that, though the release operated by its all-inclusive terms to extinguish the liability declared on, the defendant should not be permitted, because of the fraudulent wrong declared on, to avail of the exoneration effected by the release. The estoppel thus asserted presupposes the right in the plaintiff to introduce, through parol, an exception into the release, to qualify and restrict the terms of the release in a court of law — a process that would be but the reformation of the instrument in a tribunal that, under our system, cannot exercise that authority. Furthermore, the recognition of the estoppel asserted would exempt the plaintiff from the primary duty to rescind and restore. B. R. L.  P. Co. v. Jordan, 170 Ala. 530, 537, 538, 54 So. 280.
The application for rehearing is denied.
ANDERSON, C. J., and McCLELLAN, MAYFIELD and SOMERVILLE, JJ., concur in the opinion on rehearing.
SAYRE, J., concurs as stated.
THOMAS, J., concurs in the conclusion.
GARDNER, J., dissents.