Opinion
Rehearing Denied Dec. 18, 1929
Hearing Granted by Supreme Court Jan. 16, 1930
Appeal from Superior Court, Orange County; H.G. Ames, Judge.
Action by Jerome L. Richardson against J.F. Lamp and others. Judgment for defendants, and plaintiff appeals. Reversed, and new trial granted.
COUNSEL
W. Earl Redwine, Frank C. Scherrer, and Jerome L. Richardson, all of Riverside, for appellant.
James L. Davis and Sharpless Walker, both of Santa Ana, for respondents.
OPINION
SLOANE, P.J.
This action was brought to recover on a promissory note made and executed by the defendants named herein to the plaintiff, Jerome L. Richardson.
The appeal was taken by the plaintiff after a jury trial from a verdict and judgment in favor of the defendants. The note in question was in words and figures as follows:
"$1,500.00 Riverside, Cal. Jan. 16, 1924.
"On or before six months from date for value received, I promise to pay to Jerome L. Richardson, or order, in the City of Riverside, California, the sum of Fifteen Hundred Dollars ($1,500.00) with interest from date until paid at the rate of seven per cent per annum payable at maturity.
"Should the interest not be so paid, it shall become a part of the principal and thereafter bear like interest as the principal. Should default be made in the payment of any installment of interest when due, then the whole sum of principal and interest shall become immediately due and payable at the option of the holder of this note and in case suit is instituted to collect this note or any portion thereof I promise to pay such additional sum as the Court may adjudge reasonable as attorneys fees in said suit.
"30¢ I.R.S. Cancelled.
"J.F. Lamp.
"C.O. Field.
"D.P. Goodrich.
"A.W. Leichtfuss.
"G.G. Beckmann.
"W.B. Lamp."
The complaint was in the usual form for action on a promissory note, and the answer of the defendants admits the execution of the note and its nonpayment, but pleads, by way of defense, that it was without consideration, and for a further and separate answer and defense alleges: "That at the time and place when and where defendants executed the promissory note set out in paragraph I of plaintiff’s complaint, to-wit, on January 16, 1924, at Riverside County, California, the plaintiff agreed with defendants, and with each of them, that if defendants would execute and deliver to him the said promissory note, he, the plaintiff, would collect the principal and interest thereof from Herman Fisher, B.R. Parrott, and M.C. Fleming, against whom defendants then had claims for money and for damages, and which said claim the said plaintiff agreed to enforce for defendants against the said Fisher, Parrott and Fleming; that defendants, and each of them, executed said promissory note as aforesaid pursuant to a mutual, contemporaneous, dependent, oral agreement then and there entered into between plaintiff and defendants wherein and whereby plaintiff then and there agreed that if defendants would execute and deliver to plaintiff the said promissory note, he, the said plaintiff, would collect the amount of the said promissory note, principal and interest, from the said Fisher, Parrott and Fleming, and would not hold the said defendants, or any of them liable for the payment of said promissory note or for any part thereof, and wherein and whereby defendants, and each of them, by reason of said agreement of said plaintiff, and not otherwise, agreed to execute said promissory note; that none of the said defendants would have signed said promissory note except for the said agreement of the said plaintiff that he would not hold defendants, or any of them, liable on said promissory note and would collect said promissory note only from the said Fisher, Parrott and Fleming, either by compromise and settlement of the said claim of defendants against the said Fisher, Parrott and Fleming, or by suit or suits in behalf of defendants on said claims against said Fisher, Parrott and Fleming, to be filed in the Superior Court of Los Angeles County, California, which said county was then the place of residence of said Fisher, Parrott, and Fleming; that for some months prior to the date of the execution by the defendants of said promissory note, the plaintiff, as the representative of one B.R. Parrott, attempted to sell to a corporation known as the Lone Wolf Oil Company, in which said corporation defendants were interested as officers or stockholders, a property at Signal Hill, California, known as Thompson Well No. 5; that in connection with and incident to the said attempt of plaintiff, as the representative of said Parrott, to sell to said corporation said Thompson Well No. 5, the said plaintiff made a number of trips from Riverside, California, to Orange, California, to Long Beach, California, and to Los Angeles, California; that said trips were not made for or in behalf of these defendants, or any of them, or for or in behalf of said corporation; that on the 16th day of January, 1924, and immediately prior to the execution of said promissory note, the said plaintiff stated to defendants that he considered $50.00 a trip a reasonable charge for said trips and that his total charge for such trips, together with incidental expenses, aggregated about $1,400.00 and that if the defendants would execute and deliver to him their note for that amount he would not hold defendants liable on said note and would not collect said promissory note unless it could be collected as additional damages which he alleged he could collect from the said Fisher, Parrott, and Fleming; that thereupon the defendant G.G. Beckmann stated that if the plaintiff would agree not to collect said promissory note from defendants and would agree to not collect said note at all unless it could be collected as damages from said Fisher, Parrott and Fleming out of a settlement which plaintiff then and there stated he was about to effect in behalf of defendants of their claim against said Fisher, Parrott and Fleming, or out of a suit which he stated he was about to prosecute against said Fisher, Parrott and Fleming on said claim, if a settlement and adjustment could not otherwise be procured, that then the defendants would agree to give to plaintiff a promissory note not merely for the said $1,400.00, but for $1,500.00; that thereupon the said plaintiff and all of said defendants agreed and assented to said proposal and the defendants then and there executed and delivered to plaintiff said promissory note and the said plaintiff received said promissory note under and pursuant to the said understanding and agreement, and not otherwise."
Want of consideration is pleaded as a second further and separate answer and defense to plaintiff’s complaint, in which it is alleged that none of the defendants received any consideration or anything of value for the promissory notes set out in the first paragraph of plaintiff’s said complaint, or for the execution or delivery thereof, and that no other person with the consent of defendants or of any of them, received any consideration or anything of value from said plaintiff for the said promissory note or for the execution and delivery thereof; that there was and is an entire absence and want of consideration for the said promissory note and for the execution and delivery thereof; and that, at the time defendants executed and delivered to plaintiff said promissory note, none of said defendants was indebted to plaintiff in any sum.
On the presentation of the issues raised by the pleadings to the jury, counsel for plaintiff objected to the separate answer and defense, setting up the alleged contemporaneous promise and agreement of plaintiff that he would not hold the makers of said note obligated to its payment, but would collect it from the third parties named, on the ground that it was incompetent, irrelevant, and immaterial, and contains matters evidentiary in nature, and furthermore does not constitute a defense.
The objection was presented and argued before the court, in the absence of the jury, on the ground that the alleged defense was an attempt to vary the terms of the written contract and that the execution of a contract in writing supersedes all the negotiations or stipulations concerning it, which preceded or accompanied the execution of the instrument, and that a contract in writing may be altered only by a contract in writing, or by an executed oral agreement. The court overruled the objection, and permitted the issue so raised by the answer to be presented to the jury, and evidence to be given in support thereof.
This ruling was apparently made by the trial court on the theory that the facts alleged were such as might properly be considered as going to the defense of want of consideration for the note. It is apparent that the principal question involved in this appeal arises upon this special defense of a contemporaneous oral agreement to relieve defendants from liability on the note and the admission, over plaintiff’s objection, of testimony in support thereof. The rule is too well settled to admit of controversy or require citation of authorities, that the terms of a written contract cannot be altered by any such oral agreement of the parties, whether made prior to, contemporaneously with, or subsequent to, the execution of the writing, unless the agreement has been fully executed. In this case the defendants entered into a specific agreement to pay to the plaintiff the sum of $1,500, for a consideration which is expressly stated, and which is presumed from the nature of the instrument. There is no contention that this agreement was reached through any fraud or mistake or undue influence. The defendants pleaded and presented the defense of a failure of consideration, which they had a right to do, and, if the verdict of the jury was arrived at from competent evidence showing a want of consideration for the promise of defendants alone, and was not influenced by testimony given of the contemporaneous oral promise not to enforce payment of the note against them, but to look to third parties for payment, the verdict can be properly sustained. On the other hand, if the parol evidence of this agreement to release the defendants from liability was such as to affect the minds and decision of the jury as an independent agreement, irrespective of the question of a valuable consideration for the promise to pay, the admission of such evidence was palpably reversible error.
The question as to the consideration for which the note was given, was properly presented to the jury, and, while there is some evidence, though of an unsatisfactory nature, to indicate that the professional services rendered by the plaintiff, which form the alleged consideration for the note, were rendered pursuant to an understanding with plaintiff that they were not to be paid for by defendants, but were his own contributions to a mutual enterprise in which they were all engaged, such evidence is far from conclusive against the plaintiff. All of the defendants, makers of the note, testified in categorical denial, that they or either of them at any time employed plaintiff for the services rendered, or that he was to be paid for the services rendered, but, in the face of these declarations, it was conclusively shown, not only by the testimony of the plaintiff himself, but that of each of the defendants, that plaintiff, during a considerable period of time, rendered legal services to the defendants in the organization of a corporation of which defendants were officers and directors and prospective stockholders, and the negotiation of a contract for the purchase by this corporation of an oil well known as Thompson well No. 5, at Signal Hill. While it is claimed by defendants that plaintiff was acting for the owners of this well, with the expectation of receiving a generous commission in case the sale was perfected, and not with the expectation of compensation from defendants, it does appear conclusively from the evidence that he was acting and accepted by defendants as their legal advisor in these matters, and that he was employed by them to effect the organization of this corporation, known as the Lone Wolf Oil Company. They had advanced him $400 to meet the expenses of the incorporation, and had met with him repeatedly in consultation as to the carrying out of the enterprise.
It appears without dispute that the principal sum contracted for under this promissory note was made up in conference with the defendants, as the reasonable charges for services rendered, including some twenty or thirty trips from Riverside to Orange, Santa Ana, and Los Angeles, in pursuance of this business, and that the amount arrived at, included in the note, was agreed to as the reasonable compensation for such services; the only controversy between the parties being as to who was to pay the bill. It was conceded by all parties in their testimony that the proposed oil well purchase fell through by reason of default on the part of the owners to make a good title to the property, and the agreement arrived at between plaintiff and defendants was that an action should be brought against the owners of the property, in the superior court of Los Angeles county, to recover damages for the failure to make good on their agreement of sale, and it is the theory testified to by the defendants, that the amount of compensation to plaintiff incorporated in this promissory note, and which they had obligated themselves to pay, was part of the damages to be recovered in this suit. If the defendants’ own theory of the case is correct, they were attempting to recover the principal sum of this note from the owners of the oil well property, on the theory that it was part of the obligations they had contracted, in attempting to carry out the purchase of the oil well. If, as a matter of fact, they had not incurred this obligation to the plaintiff for his services, this scheme to charge the amount of liability they had thus incurred to the people with whom they were dealing, as part of their damages, was clearly an attempted fraud on their part, and ought, in good conscience, to estop them from claiming want of consideration for the note in question. However that may be, we cannot escape the conclusion that the admission of testimony on the part of defendants showing an express oral agreement on the part of plaintiff to relieve and exonerate the defendants from liability on this note, materially influenced the jury in arriving at its verdict, and that the admission of the same was reversible error, especially in view of the very questionable weight of the testimony as to failure of consideration.
It is true that the case was submitted to the jury on this issue of want of consideration alone, and the instructions given, so far as they went, were appropriate to that issue; but the jury was not instructed to disregard any evidence of the parol agreement of the plaintiff, to relieve defendants from liability and look to the third parties named for his pay. And, even had such an instruction been given, it is doubtful if it would have removed from the minds of the jury the influence of such parol agreement, if they believed it had been actually entered into and relied upon by defendants.
The judgment is reversed, and a new trial granted.
I concur: BARNARD, J.
MARKS, J., deeming himself disqualified from taking part in the decision of this appeal, does not participate.