Argued June 11, 1890
Decided October 7, 1890
Adolph L. Sanger for appellants.
J. Hampden Dougherty for respondent.
The contract sued upon was made through brokers and the sale note was as follows:
"Dated NEW YORK, February 7, 1887.
"Sold for account Messrs. C.F. Boehringer Soehne to Messrs. A.H. Reitlinger Company, fifteen thousand ounces B. S. sulphate of quinine, in 100 ounce tins at fifty-nine cents per ounce, cash ten days from delivery; delivery to be had from a March, 1887, shipment from the factory in Europe, subject to manufacturers' clauses and war risks.
"(Signed.) ST. JOHN BROTHERS."
The defendants sought to show that said agreement was entered into by them upon the representations made by the broker and upon the condition that the price at which Boehringer Soehne would continue selling quinine would be sixty-one cents per ounce, and upon the further condition that the said Boehringer Soehne would issue a circular to the trade to that effect. The trial court received the evidence offered by the defendants to establish this allegation over the plaintiff's objection and exception, but at the close of the defendants' case ruled that the proof did not make out a defense and directed a verdict for the plaintiff, to which ruling the defendants excepted.
The general rule which excludes parol evidence when offered to contradict or vary the terms or legal import of a written agreement is so well settled in this state as not to be a proper subject of discussion. It has, however, many exceptions and its full application has by the decisions of the courts been restricted within narrow limits.
In an action by a promisee, a promisor may show a failure of a consideration for the promise sued upon. ( Eastman v. Shaw, 65 N.Y. 522.)
Or that the contract was destined to take effect only on the happening of some future event, and upon condition that it was to be binding only upon performance of a condition precedent resting in parol. ( Benton v. Martin, 52 N.Y. 570-574; Juilliard v. Chaffee, 92 id. 535; Reynolds v. Robinson, 110 id. 654.)
Or that the instrument sued upon was executed in part performance only of an entire oral agreement. ( Chapin v. Dobson, 78 N.Y. 74; Brigg v. Hilton, 99 id. 570; Routledge v. Worthington Co., 119 id. 592.)
And it has no application to collateral undertakings. ( Lindley v. Lacey, 17 C.B. 578; Jeffery v. Walton, 1 Stark. 213; Batterman v. Pierce, 3 Hill, 171; Erskine v. Adreane, L.R. [8 Ch. App.] 755.)
The subject has been so fully considered in recent cases in this court that any discussion of the reason or policy of the rule and its exceptions is now unnecessary. ( Johnson v. Oppenheim, 55 N.Y. 280; Wilson v. Deen, 74 id. 531; Eighmie v. Taylor, 98 id. 288; Snowden v. Guion, 101 id. 458; Schmittler v. Simon, 114 id. 176.)
The general rule requires the rejection of parol evidence when its effect would be to cut down or destroy stipulations and undertakings entered into between parties and by them put in writing. All prior and contemporaneous negotiations and oral promises in reference to the same subject are merged in the written contract, and the rights and duties of the parties are to be determined by that instrument. When that has been executed it is then conclusively presumed that it contains the whole engagement of the parties.
In Wilson v. Deen it was said: "The very reason of the rule which excludes evidence of declarations is to avoid the uncertainties attendant upon such evidence, and equity will not set aside that important and well-settled rule for the purpose of relieving a party against a risk, which upon his own showing, if it be true, he has voluntarily incurred." And accordingly it was held in that case that a written lease would not be canceled upon the ground that contemporaneous or preceding oral stipulations in the reference to the furnishing of the house had not been performed.
In Eighmie v. Taylor ( supra), it was said: "The writings which are protected from the effect of contemporaneous oral stipulations are those containing the terms of a contract between the parties and designed to be the repository and evidence of their final intention. If, upon inspection and study of the writing read, it may be in the light of surrounding circumstances in order to its proper understanding and interpretation, it appears to contain the engagement of the parties and to define the object and measure the extent of such engagement, it constitutes the contract between them and is presumed to contain the whole of that contract. * * * When the writing does not purport to disclose the contract or cover it when in view of its language, read in connection with the attendant facts, it seems not designed as a written statement of an agreement, but merely as an execution of some part or detail of an unexpressed contract, when it purports only to state one side of an agreement merely, and is the act of one of the parties only in the performance of his promise, in these and the like cases the exception may properly apply and the oral agreement be shown."
We have then but to examine the character of the writing executed by the parties and reading it in the light of their purpose and surroundings determine whether it falls within any of the exceptions to the general rule governing the construction of such instruments. The plaintiff's assignors were manufacturers and the defendants were merchants. In a contract between them for the sale and purchase of the manufactured article we should expect to find stipulations covering the quantity of the article sold, the terms and place of its delivery and the time, place and manner of payment of the purchase-money.
All these are found in the writing in question. The quantity of quinine sold was 15,000 ounces. It was all to be delivered at one time from a shipment to be made from the factory in Europe, in March, 1887. The price was fifty-nine cents per ounce, and it was to be paid in cash within ten days after the delivery of the goods.
Here is a complete agreement. It covers the obligations and duties of both parties, and it leaves nothing unprovided for. If it is to be controlled by evidence of the parol stipulation alleged in the answer, the entire contract is to be changed. The seller's obligation, instead of being limited to a delivery of the quinine at the time mentioned, is increased by a duty of raising the price of his goods and notifying the trade of that fact. His right to the purchase-money and the defendants' obligation to pay the same instead of being dependent upon a delivery of the quinine is made to depend upon another condition not mentioned in the written agreement and wholly independent of the delivery of the goods. In other words, a new contract is to be proven by parol, and the written engagement of the parties is to go for nothing. We are to go outside of the instrument to find a stipulation upon which the validity of the contract is to depend, and then we are to enforce a parol stipulation to the absolute destruction of the written instrument. In the face of such a result it might well be asked what would be left of the rule which forbids parol evidence varying the terms of a written contract.
If we turn to the evidence that was received by the court, it will be seen that the oral stipulation was not a condition precedent to the validity of the contract. The evidence of William Reitlinger and of Mr. St. John, the broker, was to the effect that the price would be raised if the contract was made.
"If you make this contract the seller will issue a circular that the price will be sixty-one cents," was the evidence of Reitlinger as to the representations of the broker. St. John testified that Boehringer said to him "that having sold 15,000 ounces at fifty-nine cents, he would advance the price to sixty-one cents; he would sell but 15,000 ounces at fifty-nine cents, and then would advance the price to sixty-one cents. Upon that statement I predicated that made by me to Mr. Reitlinger."
From this evidence, which is undisputed, it is apparent that a sale was to precede the advance in the price. Instead of being a condition upon the performance of which the validity of the contract was to depend, the advance in price was to follow a contract which should bind the defendants to the purchase of 15,000 ounces at fifty-nine cents. And this was so understood by the defendants. The promise to advance the price was contained in a letter from the broker to the defendants, sent to them with the contract, and when Mr. Reitlinger was asked, on cross-examination, why he did not send back the letter and the contract and ask Mr. St. John to put the clause into the contract and have Mr. Boehringer and Soehne agree to it, he answered "I trusted Mr. St. John." That is, knowing the contents of the writing, defendants consented to accept it as it was, relying upon the parol promise of the broker to advance the price.
We are of the opinion that to except this case from the rule that written contracts cannot be controlled by contemporaneous oral stipulations would be to set aside the rule altogether, with a result, as was said by Judge RAPALLO in Wilson v. Deen, that "writings would be of little value, as they could always be controlled by oral evidence of what was said by the parties at the time of their execution."
The judgment should be affirmed, with costs.