April 22, 1940.
In suit to enforce purchase note and conditional sales contract for sale of refrigerator, evidence held not to authorize finding of fraud or mutual mistake in procurement of the note and contract.
The rights of parties to a written contract must be controlled thereby in absence of fraud or mutual mistake, and all evidence of contemporaneous oral agreements and representations varying, modifying, or controlling the written contract is inadmissible.
Negotiations and conversations leading up to a written contract are merged therein, and evidence of such conversation is not admissible to contradict the contract.
A party charging fraud must prove it by evidence which is clear and convincing.
5. APPEAL AND ERROR.
In suit to enforce purchase-money note and conditional sales contract, alleged error in trial court's action in requiring original holder of note and contract to be made a party complainant need not be considered on appeal, where such action was without prejudice to either complainant.
APPEAL from the chancery court of Grenada county. HON. L.A. SMITH, SR., Chancellor.
S.C. Mims, Jr., of Grenada, for appellants.
Cowles Horton, of Grenada, for appellees.
Suit by the Commercial Credit Company against Mrs. Milton Waldrop and others to enforce purchase-money note and conditional sales contract, wherein defendants filed cross-bill and by court order the Grenada Auto Company was joined as a complainant. Prom an adverse decree, complainants appeal. Reversed and remanded.
It is the contention of the appellants that the learned chancellor was in error in permitting the testimony as to any statements or representations that were made by the salesman of the Grenada Auto Company prior to the execution of the application by the appellees to purchase the merchandise in question, and in support of our position, rely upon what this court has held in the case of Colt v. Odom, 136 Miss. 651, 101 So. 853.
The chancellor was manifestly in error as to his finding of the facts in the case on which he based his decision; that is, that the appellees established fraud on the part of the Grenada Auto Company through its salesman. In reaching such a conclusion the learned chancellor overlooked the requirement that fraud must not only be shown by the clear preponderance of the evidence, but beyond reasonable doubt. This principle is so well established that we feel that it would be an affront to this court to offer any citation in support of the same.
It is further the contention of the appellants that the learned chancellor's decree is manifestly erroneous, for the reason that the appellants, if not entitled to a decree against the appellees, were certainly entitled to a decree for the possession of the merchandise in question. Certainly no court of conscience would deny a seller of merchandise, with the retained title for the purchase money thereof, the possession of the merchandise, and that particularly and especially in view of the fact that the buyer of the merchandise, the appellees in this case admit that the merchandise was delivered and in their possession and that they have never paid a single penny for the same.
It is the contention of the appellants that certainly no court of equity, or court that is reviewing a court of equity, will permit a decree to stand as entered by the chancellor in this case, wherein the record discloses that merchandise was delivered and accepted by the purchaser and nothing paid therefor, and the seller praying to the court in its suit that it he granted the right to repossess the merchandise.
Granting that the appellees are correct, that the whole transaction is tainted by fraud and misrepresentation, still in good conscience and fairness appellees cannot retain the possession of the appellant's property without paying for it. However, we find that the decree of the court ignores the prayer of the appellants in this regard and provides that they recover nothing. It is respectfully submitted that the decree of the chancellor in this case should be reversed and judgment entered for the appellants.
Appellants seek reversal upon the sole authority of Colt v. Odom, 136 Miss. 651. The learned court below held that this authority did not apply, and on the facts of this case there can be no question, we believe, of the correctness of the ruling.
Our position in the court below was, and in this court is, that this suit must be determined upon the principle applied in the cases of Fay and Egan Co. v. Cohn Bros., 158 Miss. 733, and Magee v. Harwell, 184 Miss. 435. Under those cases the learned court below could not have held that appellees were due to pay for this refrigerator on the facts of this case.
The decree involved was, we submit, entirely correct both in law and in equity and accords perfectly with the well established principle set forth in the authorities on which we have relied. If that principle is applied there will be found no reversible error in this record.
Appellant, Commercial Credit Company, a corporation, filed its bill against appellees in the Chancery Court of Grenada County to enforce a purchase-money note and conditional sales contract against a refrigerator in possession of appellees. The cause was heard on bill, answer, and cross-bill, and oral documentary evidence, resulting in a decree in favor of appellees dismissing the cause. From that decree, both Grenada Auto Company and the Commercial Credit Company prosecute this appeal.
Mrs. Waldrop and her sister, Mrs. Claughton, operated, in the City of Grenada, a restaurant, under the tradename of Belmont Cafe, in which they used a refrigerator. The one they had in use was unsatisfactory. The Grenada Auto Company is a corporation. J. Neely is the president, T.E. Neely secretary and treasurer, and both stockholders and directors in the company. Mrs. Waldrop made known to T.E. Neely that the refrigerator she had was unsatisfactory and that she wanted to purchase another one. He sold her the one involved, which, at the time, was in Memphis, Tennessee. The price agreed upon was $390, $40 of which was paid in cash, the balance to be paid in equal monthly installments. At the time of the delivery and installation of the refrigerator, appellees executed to the Auto Company their promissory note for the deferred installments and also a conditional sales contract in which the title to the refrigerator was reserved in the Auto Company until all payments were made. The Auto Company thereupon sold and transferred to the Commercial Credit Company the note and contract. The appellees made default in payment of the installments. The Commercial Company then filed its bill to enforce payment. In their answer and cross-bill, the appellees do not set up definitely that they relied on fraud or mutual mistake in the procurement of the note and contract, but it appears that the evidence was addressed to. one or both of those defenses. It developed in the trial that although the Credit Company owned the note and contract, the Auto Company was keeping the monthly installments paid up. On the application of appellees, the Auto Company joined the Credit Company as complainant. This was done by order of the court, which action of the court is assigned and argued as one of the errors.
In the conditional sales contract, the refrigerator was described as: "D 2685 Blue-Flash Beverage Cooler; Brunswick-Balke-Collender Co., Chicago, Ill. $390.00." The contract contains these provisions: "This contract constitutes the entire agreement; no waivers or modifications shall be valid unless written upon or attached hereto", and "all promises, verbal understandings, or agreements of any kind pertaining to this purchase not specified herein are hereby expressly waived."
T.E. Neely, for appellants, testified that Mrs. Waldrop informed him that she wanted to purchase another refrigerator; that the one she had was too small; that he thereupon showed her a catalogue describing a refrigerator which he thought would suit her. This refrigerator was in Memphis. The catalogue did not state the capacity of the refrigerator nor whether it was a dry refrigerator or a wet one. He testified that he offered to take Mrs. Waldrop to Memphis and show her the refrigerator so that she could determine for herself whether or not it was what she wanted; that she declined to go but agreed to purchase it relying on the description in the catalogue and what he said about it. That thereupon he ordered the refrigerator which in due time came and was delivered to appellees and set up and put in operation by him. The evidence was indefinite as to what a dry refrigerator was and what a wet refrigerator was. Neely testified that the one he sold appellee as both wet and dry and was of the capacity wanted. The evidence on behalf of appellees was to the effect that Mrs. Waldrop
told Neely that she wanted a dry refrigerator of a certain capacity; that he represented the one he was selling her as what she wanted; that although she saw the catalogue she did not read it; that she relied alone on the representation made by Neely; that when the refrigerator came and was installed she found out in a few days that it was not a dry refrigerator and was not of the capacity she wanted; that after using it about three weeks she discarded it, tendered it back to the Auto Company, and purchased another. The evidence showed that the Auto Company refused the tender and stood upon the contract. We are of opinion that the evidence taken most strongly for appellees was insufficient to show that either fraud or mutual mistake entered into and brought about the execution of the note and contract. Where parties enter into a written contract, their rights must be controlled thereby, in the absence of fraud or mutual mistake. All evidence of contemporaneous oral agreements and representations varying, modifying, or controlling the written agreement is inadmissible. Kerr v. Calvit, Walk. 115, 1 Miss. 115, 12 Am. Dec. 537; Morgan v. Reading, 3 S. M. 366, 11 Miss. 366; Herndon v. Henderson, 41 Miss. 584; Kerr v. Kuykendall, 44 Miss. 137; Pinegrove Lumber Co. v. Interstate Lumber Co., 71 Miss. 944, 15 So. 105; Cocke v. Bailey, 42 Miss. 81; Thigpen v. Railroad Co., 32 Miss. 347.
Negotiations and conversations leading up to a written contract are merged therein and evidence of such a conversation is inadmissible to contradict the contract. Red Snapper Sauce Co. v. Bolling, 95 Miss. 752, 50 So. 401; Goff v. Jacobs, 164 Miss. 817, 145 So. 728.
Appellees' reliance appears to have been principally upon the ground of fraud in the procurement of the contract. A party charging fraud must prove it by evidence which is clear and convincing. Carter v. Eastman-Gardner Co., 95 Miss. 651, 48 So. 615; Metropolitan Life Ins. Co. v. Hall, 152 Miss. 413, 118 So. 826; Dowling v. Whites Lumber Supply Co., 170 Miss. 267, 154 So. 703; Columbian Mutual Life Ins. Co. v. Harrison, 170 Miss. 121, 154 So. 722. The evidence in this case falls far short of that requirement. It shows that appellees were not without experience in the use of refrigerators. They saw the refrigerator when it came; permitted it to be set up and put in use, and used it for something like three weeks. Why they did not know that it was not what they wanted and refuse to accept it is unexplained.
The action of the court in requiring the Auto Company to be made a party complainant was without prejudice to either the Auto Company or the Credit Company. It is therefore unnecessary to pass on whether the court erred in so doing or not.
Reversed and remanded.