Court Opinion

ID: 5004349
Source: CourtListenerOpinion
Date Created: 2021-10-01 01:47:46.218424+00
Date Added: 2024-06-11T08:17:13.044099
License: Public Domain

FUNDERBURK, Justice
(dissenting).
Plaintiffs’ suit was for balances claimed to be due upon two certain contracts for road work, one dated February 24, 1930, and the other June 2, 1930. The petition made no mention of any subsequent contract or agreement, or the execution of the $2,191.87 note. Defendant’s answer, among other things, alleged an overpayment on said contracts of $2,207.53 ; that-about December 4, 1930, when a settlement was attempted, there was a bona fide dispute regarding the state of the accounts growing out of said contracts, which was settled by the plaintiffs’ executing to de< fendant the note for $2,191.87. By way of cross-action defendant alleged a cause of action against plaintiffs on the said note and prayed for judgment thereon. By supplemental petition plaintiffs alleged, in reference to said note, among other things, an agreement as follows: “And the said defendant herein promised and agreed with the plaintiffs herein that if they (that is, plaintiffs) would execute the note for $2191.87 set out .and described in the defendant’s said answer herein, that when the final estimate was had for the work done on the Jones, Wise and Parker Counties jobs, if it was then determined that the said plaintiffs did not owe the said defendant anything that he would cancel and return it to these plaintiffs and would pay them any balance that was due and owing them under their said original contracts and that there plaintiffs, under said circumstances and agreements, made, executed and delivered, said note for said sum of $2191.87.” (Italics ours.) It was also alleged that the note was executed to gain permission of defendant for plaintiffs to move their teams and tools to Brown county. The agreement thus alleged would imply that if the final settlement showed that plaintiffs owed the defendant as much as the amount of the note, then said amount would be payable according to its provisions, and if something less than the amount of the note, credit thereon would be given accordingly. It was not alleged that the agreement was made without any intention on the part of defendant to perform it, nor was any other fact alleged to show that the agreement alone did not constitute a valid contract enforceable as such. If valid, such an agreement, of itself, was an all-sufficient consideration for the execution and delivery of the note. It was not alleged, in substance or effect, that said note was delivered for any special purpose, or subject to any condition precedent to its taking effect. All parties agree that when the note was executed and delivered there had been a bona fide dispute and the jury so found. The record shows indisputably, I think, that that dispute was settled by the plaintiffs’ executing and delivering the note in consideration of the permission of defendant to the removal of plaintiffs’ teams and tools, and in consideration of the promise and agreement of defendant “that when the final estimate was had for the work * ⅜ ⅜ if it was then determined that the said plaintiffs did not owe the said defendant anything, that he would cancel the note and return it to these plaintiffs, and would pay them any balance that was due and owing them under said original contracts.” This parol agreement could not be proved to show that the note never had any validity. It could only be proved as in itself a cause of action which gives full recognition to the validity of the note. The agree*286ment, I think, if properly construed, was valid and enforceable as a cdntraet, for the reasons discussed in Johnson v. Elmen, 94 Tex. 168, 69 S. W. 253, 52 L. R. A. 162, 86 Am. St. Rep. 845. If so, after the making of such contract plaintiffs no longer had any cause of action upon the original contracts. “If a new contract is substituted by agreement, the original is at an end, and no recovery can be had on it, nor can any action be maintained to cancel or rescind it. Failure to perform a substituted contract does not revive the original one, and the cause of' action of the pax’ty not in default is upon the new contract and not upon the original.” 10 Tex. Jur. p. 375, § 211; Braddock v. Brockman (Tex. Civ. App.) 29 S.W.(2d) 811. Just recently we held this same principle applicable to the substitution of a right of rescission by a new agreement, and that the available cause of action in such case is upon the agreement. Minneapolis-Moline Power Implement Co. v. Gatski, 57 S.W.(2d) 593. Another applicable rule of law is stated thus: “An independent parol agreement which is shown to have been entered into as an inducement to the making of a written contract may be proved and enforced, although it is not referred to in writing.” 17 Tex. Jur. p. 826, § 311; Callaway v. Albin, 114 Tex. 5, 261 S. W. 372.
In my opinion plaintiffs sought recovery and the court gave them judgment upon a wrong theory. They had no rights based upon want or failure of consideration for the note. Their own pleadings alleged such a consideration. The only cause of action which plaintiffs really had, as shown by their allegations in the supplemental petition, was one, the validity of which was dependent upon the validity of the note. They were under the necessity of conceding the validity of the note in order to be entitled to prove the verbal contract, and thereby get credit for all or a part of such note by judgment upon their cause of action upon the oral agreement of which the note was the supporting consideration.
But plaintiffs did not sue upon that cause of action. The allegations in the supplemental petition were purely defensive, and in denial of the validity of the note. Even if the pleadings were sufficient, the cause was submitted to the jury on no such theory. As to the cause of action upon which plaintiffs relied for recovery being as it was inconsistent with the validity of the note, the evidence of the contemporaneous parol agreement was subject to the rule stated in 17 Tex. Jur. p. 847, § 3S3, upon the authority of Chalk v. Daggett (Tex. Com. App.) 257 S. W. 228, and Shaw v. Lumpkin (Tex. Civ. App.) 241 S. W. 220, as follows: “It is not permissible to show a contemporaneous oral agreement that a'note for a certain sum, payable at a fixed time, was not to be collectible until there had been an accounting between the parties, and that it was then to be payable wholly or partly in credits to be shown by the accounting.” If, on the other hand, plaintiffs had sued upon the agreement made contemporaneously with the execution of the note, thereby giving full recognition to the validity of the note, then such evidence would have been admissible because its effect could, not have been to contradict or vary the terms of the note. A failure to recognize this distinction accounts, in my opinion, for a number of decisions, and particularly Pope v. Hennessey (Tex. Civ. App.) 38 S.W.(2d) 834, and Roddy v. Citizens’ State Bank (Tex. Civ. App.) 11 S.W.(2d) 652; the last-named two cases being recognized in Tex. Jur. as being in conflict with Chalk v. Daggett, supra, and Shaw v. Lumpkin, supra. See 17 Tex. Jur., p. 847, § 383.
In my opinion, R. S. 1925, art. 5932, § 16, can have no application. AVhat special purpose was it, either pleaded or proved, for which the note was delivered? Was it the purpose of plaintiffs to deliver it as a trick or artifice to induce the defendant to yield his claim of right — apparently recognized by-plaintiffs — to prevent the removal of the teams and tools until a settlement was made? I think certainly the special purpose within the meaning of said statute must be some common purpose of the parties. AVhat purpose of interest or possible advantage to defendant, as well as to plaintiffs, did or could the notes serve if the agreement was as alleged by the plaintiffs? It afforded no security for any balance which might be found to be due defendant by the subsequent accounting. It furnished no equivalent advantage for his yielding the claim or right to prevent the removal of the teams and tools. I can conceive of no purpose of any concern to the defendant which the delivery of the note, under the circumstances, served, and •the only purpose from the standpoint of the plaintiffs was to induce the defendant to yield his claim of right to prevent the removal of the teams and tools with no compensating advantage whatever.
Plaintiffs had the right, by alleging and proving the cause of action which they, according to allegations in their supplemental petition, really had, to require defendant to comply with his agreement, and by showing that at the time the note was givon nothing was due him, to enforce credit of the whole amount of the note and thereby enforce his obligation to “cancel and return” same, not in the sense that it was a-void and meaningless thing, but to the contrary, in. the sense that by the thus enforced performance of the agreement the note was in effect paid and its consequent cancellation and return the same as a note is cancelled and returned when paid.
In this case the importance of the fact is overlooked or minimized, I think, that the *287note was admittedly delivered. “A parol condition affecting the payment of a delivered (italics ours) instrument is not enforceable if it operates to add to, take from or vary the terms of the writing. Oral evidence is inadmissible to vary an unconditional promise to pay money by showing a prior or contemporaneous parol agreement that the promis-sor shall not he required to pay, or that it was not absolutely payable, as for example, that it should be payable only upon the performance of a specified condition or the happening of a certain contingency * * *. Nor is it permissible to show an oral agreement reducing the amount stipulated to be paid, as for example, an agreement that a less sum is to be paid upon a certain contingency, or providing for a remission or rebate of a portion of the principal or interest, or a contemporaneous agreement that a joint and several maker- of a note was liable for only a part of it.” 17 Tex. Jur. p. 844, -§ 388.
If these well-settled principles of law can be set at naught simply by regarding each case as one in which the parol agreement) provides for a conditional delivery or delivery for a special purpose, and that regardless of the fact that no such condition or purpose be shown or even alleged, then it has certainly come to pass that a promissory note, except where the doctrine of innocent purchaser for value applies, is an utterly meaningless thing.
It may be that had the suit been upon the proper cause of action and the issues submitted and determined accordingly, the judgment would not have been much different from what it is; but, giving effect to the note instead of canceling it, and crediting plaintiffs with the amount the jury found they were entitled to, a very different judgment would be required. The issues to the jury become largely meaningless when applied to the proper cause of action, since they were found upon an entirely different theory.