Beers v. Atlas Assurance Co.

285 N.W. 794, 231 Wis. 361, 123 A.L.R. 372, 1939 Wisc. LEXIS 187

• Court: Wisconsin Supreme Court
• Decided: May 9, 1939
• Status: Published

Opinions

Nelson, J.

The trial court, after due hearing had, held that the fourth amended complaint stated a cause of action in equity for rescission of the contract based on fraud and for an accounting if rescission be decreed.' It seems clear that the plaintiff attempted either to state a cause of action grounded upon his having theretofore rescinded the contract because of the asserted fraud of the defendants or to state a cause of action for equitable rescission because of the asserted fraud of the defendants. That conclusion is amply fortified by statements repeatedly made by the plaintiff in his brief, such as: “The present action is one grounded upon a disaffirmance of the contract;” “disaffirmance of the contract is the gist of the plaintiff’s complaint;” “the court is here dealing with an entirely new complaint, proceeding upon an entirely different theory and that however the court may conclude with reference to the application of the parol-evidence rule to bar promissory misrepresentations in an action grounded upon the affirmance of the contract, the court will and ought to permit proof of such promissory misrepresentations in an action grounded upon the disaffirmance of the contractthe reasons for permitting the parol-evidence rule to operate to bar proof of promises and representations contained in a contemporaneous and oral agreement “do not apply to an action in equity for rescission of the contract based upon its disaffirmance;” “where the relief prayed for by the plaintiff is the rescission of the contract where dis-affirmance of the contract is asserted and the action is one in equity, fraud of the character here asserted may be shown.” Other similar expressions may be found in the plaintiff’s brief.

The plaintiff undoubtedly thought that the rules laid down by this court in its other opinions, which considered the first and second amended complaints, might be obviated or circumvented by amending his complaint and alleging that he had “at all times since the 12th day of October, A. D. 1932, disaffirmed the existence of the alleged contract between the parties and said trust agreement and has never at any time' since said date, by word, act or deed affirmed the existence thereof. That the plaintiff herein and the said Cora G. Beers and the said Rock County Insurance Agency have at all times since the execution of said contract disavowed the same and asserted their right, title and claim in and to the properties and the business forming the subject matter of the said contract.” There is language in the opinion of the court in Beers v. Atlas Assurance Co. 215, Wis. 165, 253 N. W. 584, which doubtless encouraged the plaintiff to hope, that if he amended his complaint so as to allege a disaffirmance of the contract, — a rescinding thereof,—or a cause of action for equitable rescission, he might surmount the barriers of the parol-evidence rule. Mr. Chief Justice Rosenberry, speaking for the court, said (pp. 174-176) :

“An examination of the promises contained in the contract and the promissory misrepresentations alleged in the complaint clearly disclose that they cover the identical subject matter and are inconsistent; that is, the promissory misrepresentations promise a performance different from that contracted for. Therefore, in an action at law, they are not susceptible of proof and have no legal existence, being as a matter of law merged in the written contract. The harshness with which this rule may operate when applied in actions at law has led to the exercise of equity jurisdiction to relieve from such situations and so in actions to reform the contract, in order to express the true intention of the parties as well as in actions to' rescind a contract either in law or in equity, such evidence within established limitations may be received.

“The plaintiff here brings himself within none of these rules. ITe does not disaffirm the contract. This action being for fraud and deceit, affirms it. Pie neither seeks reformation nor rescission. This is not to indicate whether or not under the facts such a right existed, but merely to disclose the position which the plaintiff by his pleading has taken.

“A party to a written contract, which he does not seek to avoid, may not show a contemporaneous parol promise relating to a matter covered by the contract, whether the promisor intended at the time to breach the contract or not. It would be a contradiction in terms to say that an oral promise made in the course of negotiations without intent to> perform it, which promise is embodied in the contract, may be proven as a basis of fraud although there is no attempt to reform or rescind the contract. It may be true that where the making of the contract is part of a fraudulent scheme, the party charged having no1 intention to perform or be bound by the contract, the parol-evidence rule has no application. The facts alleged in this complaint do not bring this case within that doctrine. Here the plaintiff by the form of his action affirms the contract and seeks recovery on the ground that a contemporaneous oral promise relating to a matter covered by the contract was fraudulent because made without intent to perform.”