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Stewart v. Southwest Cotton Co.

Supreme Court of Arizona

September 24, 1931

S. H. STEWART, as Trustee in Bankruptcy of the Estate of EDWARD GUY ATTAWAY, a Bankrupt, Appellant,
v.
SOUTHWEST COTTON COMPANY, a Corporation, Appellee

APPEAL from a judgment of the Superior Court of the County of Maricopa. Lee N. Stratton, Judge. Judgment affirmed.

Messrs. Sloan, Holton, McKesson & Scott and Messrs. Struckmeyer & Jennings, for Appellant.

Messrs. Moore & Shimmel, for Appellee.

OPINION

[38 Ariz. 548] LOCKWOOD, J. S.

H. Stewart, hereinafter called plaintiff, brought suit as trustee in bankruptcy of the estate of Edward Guy Attaway against the Southwest Cotton Company, a corporation, hereinafter called defendant, to enforce an implied agreement of a principal to reimburse his agent for losses sustained in carrying out his agency. The alleged agency was based upon an oral contract which was set forth in full detail in the complaint. Defendant filed a general demurrer, a special one raising the statute of limitations, and answered, setting up a written contract executed subsequent to the date of the alleged oral one set forth in the complaint, which written contract it pleaded was the only one ever made by the parties upon the subject matter set out in the oral contract. It also raised the question of the statute of limitations by a plea in bar. The demurrers were overruled by the court, and the case went to trial before a jury.

At the trial Attaway was offered as a witness by plaintiff for the purpose of proving the contract declared upon. After certain preliminary questions were answered by the witness, defendant's counsel asked permission to question him or voir dire in order to lay the foundation for objections to further testimony. The request being allowed without opposition, the witness identified the signatures to the written contract relied on by defendant,

Page 1042

and it was admitted in evidence without objection for the sole purpose at that time of laying a foundation for objections to testimony regarding the oral contract. Thereafter the jury was excused and the question of the admissibility of oral evidence to prove the oral contract set up in the complaint was argued. The jury was then called in and oral evidence offered tending to prove the contract pleaded. Objection [38 Ariz. 549] being made, the offer was refused, and the court thereafter directed a verdict in favor of defendant. From the verdict thus rendered and the judgment entered in accordance therewith this appeal has been taken.

There are four assignments of error, raising in effect but one question of law necessary for us to consider in determining the case, and that is whether or not on the record as made parol evidence was admissible to prove the alleged oral contract set forth in the complaint.

The general principles of the parol evidence rule are well set forth by Justice BAKER in the case of S. H. Kress & Co. v. Evans, 21 Ariz. 442, 189 P. 625, as follows:

"The law is very firmly settled that when parties have put their engagements into writing in such terms as import a legal obligation without any uncertainty as to the object or extent of such engagement, it is conclusively presumed that the whole engagement of the parties, and the extent and manner of the undertaking was reduced to writing, and all oral testimony of a previous colloquium between the parties, or of conversations or declarations at the time it is completed, or afterwards, is rejected."

Counsel for plaintiff do not question the rule as above stated, but claim it does not apply to the contract pleaded in this action for the reason that the written contract does not deal with the entire subject matter covered by the oral contract, and that parol evidence as to matters not included in the written contract is therefore admissible. This exception to the parol evidence rule is well recognized. 22 C.J., § 1713, and cases cited. The difficulty lies in determining whether or not the alleged oral contract does contain subject matter not covered by the written contract. By far the greater number of authorities hold that in order to make parol evidence of the terms of the oral [38 Ariz. 550] contract admissible it must first appear from the face of the written contract that it does not deal with the subject matter of the oral contract which it is desired to prove, and that parol evidence is not admissible for this preliminary proof. 22 C.J., § 1717, and cases cited. As was well said in the case of Thomson etc. Co. v. Evans, Coleman & Evans, 100 Wash. 277 170 P. 578:

"Moreover the parties to every written contract, which, on its face, imports a complete legal obligation, are presumed to have introduced into it every material item and term. Silence on a point which might have been embodied does not open the door to parol evidence to include it.

" 'According to the better view the only criterion of the completeness of the written contract as a full expression of the agreement of the parties is the writing itself. If it imports on its face to be a complete expression of the whole agreement, that is, contains such language as imports a complete legal obligation, it is to be presumed that the parties introduced into it every material item and term; and parol evidence cannot be admitted to add another term to the agreement, although the writing contains nothing on the particular one to which the parol evidence is directed. The rule forbids to add by parol when the writing is silent, as well as to vary where it speaks.' 3 Jones Blue Book of Evidence, § 440, pp. 182, 183.

"As said by the Supreme Court of New Jersey:

" 'But in what manner shall it be ascertained whether the parties intended to express the whole of their agreement in the written contract? The question is one for the court, for it relates to the admission or rejection of evidence. It cannot be assumed that the written contract was designed as an imperfect expression of the parties' agreement, from the mere fact that the written agreement contains nothing on the subject to which the parol evidence is directed. On that assumption, that part of the rule which excludes parol proof, as a means of adding to the written contract, would be entirely [38 Ariz. 551] abrogated. And to permit the parties to lay the foundation for such parol evidence by oral testimony that they agreed that that part only of their ...


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