Denman v. Kaplan

205 S.W. 739
CourtCourt of Appeals of Texas
DecidedJune 6, 1918
DocketNo. 305
StatusPublished

This text of 205 S.W. 739 (Denman v. Kaplan) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Denman v. Kaplan, 205 S.W. 739 (Tex. Ct. App. 1918).

Opinion

BROOKE, J.

This suit was filed in the Fifty-Eighth district court of Jefferson county on the 13th day of February, 1912, by A. Kaplan, as plaintiff, against T. F. Denman, as defendant, to recover upon a promissory note alleged to have been executed and delivered by the defendant to the Morse Timber Company, Dimited, on June 3, 1911, for the sum of $2400, and which was assigned by the Morse íimber Company, Dimited, to the plaintiff, A. Kaplan. The case was tried and judgment rendered for the plaintiff on April 18, 1917, and from th® judgment defendant has appealed to this court and assigned errors.

There are three questions involved in this ' appeal, viz.: (1) Was the sale of the 30 shares of stock by the Morse Timber Company, Limited, to T. F. Denman, and the taking of the note as consideration therefor, the “doing of business” within the purview of articles 1314 and 1318? (2) Was the assignment of the note by the Morse Timber Company, Dimited, to the plaintiff, Kaplan, sufficient, prima facie, to show title to the note sued on? (3) Did the trial court err in excluding the evidence offered by defendant which he contends shows failure of consideration for the note sued on?

[1, 2] The first assignment of error complains that the court erred in excluding the evidence of defendant, T. F. Denman, because same varied the written contract sued upon, which was objected to by defendant.

The contention is made that a written contract, complete and unambiguous of itself, cannot be added to, altered, varied, or changed by .evidence of a contemporaneous parol agreement between the parties, in the absence of allegations and proof of fraud, accident, or mistake. It seems that the defendant pleaded as a defense to the suit on the note, and so testified on the trial of the case, that the consideration for the note sued on was 30 shares of the capital stock of the Morse Timber Company, Limited, which was issued and delivered to him at the time of the execution and delivery of the note, but that at the same time, and as a part of the same transaction, the defendant was employed as agent to sell stock of the Morse Timber Company at Beaumont, and that it was agreed by and between the defendant and the Morse Tim[740]*740ber Company at tbe time of tbe execution of tbe note that tbe defendant was to pay tbe note from or with commissions on tbe sales of stock of tbe Morse Timber Company, and that in tbe event tbe defendant was unable to sell sufficient amount of tbe stock to enable tbe defendant to pay tbe note from his commissions, tbe note was not to be paid, and tbe 30 shares of stock were to be returned to tbe Morse Timber Company, and tbe note sued on was to be canceled and returned to tbe defendant.

Tbe view we take of this matter is that there was no error in tbe action of tbe lower court in bolding that tbe written contract could not be altered or varied by evidence of a contemporaneous parol agreement between tbe parties in this case. Tbe rule of evidence is elementary. It appears to this court that appellant undertakes to escape tbe operation of tbe rule by confusing tbe application of it with bis plea of failure of consideration, and in our opinion, where a plea of failure of consideration is made under such plea, we do not think the' court would be authorized to admit evidence showing, not a failure of consideration, but a contemporaneous parol agreement entirely different and contradictory of tbe written contract. If appellant’s pleading in fact raises tbe issue of failure of consideration, be failed to offer any proof to substantiate tbe plea, and rather attempted under tbe plea to introduce evidence varying tbe terms of tbe written contract by a contemporaneous parol agreement different from and contradictory of tbe written contract, tbe consideration of which be claimed bad failed. We are of opinion that it is well settled in this state that tbe consideration recited in a written contract can be explained or contradicted by parol, except in cases where parol proof of consideration shows an entirely different contract from that shown by tbe writing.

[3] Tbe evidence in this case shows mat tbe consideration for the note sued on was 30 shares of stock of tbe Morse Timber Company, and the further agreement that upon a certain contingency tbe note should not be paid, and that the note should be canceled and surrendered and tbe stock returned to tbe timber company. This shows an entirely different contract from that evidenced by tbe note, and is contradictory of its terms. Tbe fact that tbe statute required all of tbe facts to be alleged, and a plea of failure of consideration to be verified, does not change tbe rule of evidence, and it was never intended that it should. This statute merely requires tbe defendant to comply with it as preliminary to offering such proof as should be admitted under tbe settled rules of evidence. Judge Stayton, in Dolson v. De Ganabl, 70 Tex. 622, 8 S. W. 321, says:

“In view of the further disposition of tbe case, we deem it proper to say that the note sued on evidences the contract of the parties, and under the pleadings all evidence as to parol contemporaneous agreements between the appellant and the deceased affecting tbe contract evidenced by the note, and tending to vary or contradict it, should be excluded. The note fixes the obligation of the appellant to pay, and bis pleadings leave open to him only the defense that, it was executed without consideration.”

Tbe note sued on in tbe instant case was an absolute promise to pay. Tbe consideration for tbe note was 30 shares of stock of tbe Morse Timber Company. The note was executed and delivered. Tbe stock was issued and delivered. Tbe contract was completed and-executed as between tbe parties. Tbe evidence offered by tbe defendant and excluded by the trial court does not show, nor does it even tend to show, that tbe note sued on was without consideration, or that tbe consideration bad failed^ but attempts to show that there was a contemporaneous pa-rol agreement between tbe parties to tbe note, to tbe effect upon certain contingencies that might or might not thereafter occur tbe note should not be paid, tbe consideration returned, and tbe entire transaction canceled and held for naught. This does not show a want of consideration, as the 30 shares of stock may have a greater present value than at the time of tbe execution of tbe note. This evidence merely shows a contemporaneous parol agreement between tbe parties to tbe effect that upon contingencies that might thereafter occur the entire contract was to be rescinded. This does not touch tbe question of consideration. This is not the case of a note executed with a parol agreement between tbe parties that tbe note is not to become a contract until and unless a certain event occurred, and where it is shown that tbe event did not occur.

In this case, tbe note was executed and delivered to tbe payee as a complete contract, and tbe payee bad power to sell or otherwise dispose of tbe note, and in fact did sell and assign tbe note. Tbe payee in, the note issued and delivered to tbe maker of tbe note a certificate for 30 shares of stock. The maker of tbe note bad this stock in his possession with power to sell and dispose of tbe same, and tbe written contract took effect and went into operation between tbe parties with the condition or contingency resting entirely in parol that tbe entire contract was to be rescinded, tbe consideration restored, and tbe note canceled, if a certain event came to pass. In tbe case of Life Ins. Co. v. Allen, 170 S. W. 131, decided by the Et.

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Bluebook (online)
205 S.W. 739, Counsel Stack Legal Research, https://law.counselstack.com/opinion/denman-v-kaplan-texapp-1918.