Derbeck v. Albright

203 N.W. 337, 186 Wis. 515, 1925 Wisc. LEXIS 269

• Court: Wisconsin Supreme Court
• Decided: April 7, 1925
• Status: Published

Opinions

Doerfler, J.

Without reviewing the evidence, let it be said that we áre satisfied that Sharon, the agent of the defendant, perpetrated a moral fraud upon the plaintiff. Upon returning to the automobile in which the plaintiff and her son were waiting while Sitaron interviewed the president of the Acceptance Company, he falsely gave the impression that the Acceptance Company would be satisfied to receive $35 per month and interest, which would extend the time for the payment of the balance over a period considerably in excess of one year. Relying upon the representations of defendant’s agent that payments in the sum of $35 per month would be accepted, the plaintiff paid on the purchase price the sum of $600. In direct violation of the oral agreement between the parties, Sharon a few days thereafter presented to the plaintiff for her signature the conditional sales contract and the twelve notes, each note being for the sum of $68.16, and one of said notes becoming due at the end of each month during the year succeeding. The conditional sales contract, among other things, obligated the plaintiff to pay the balance in monthly instalments of $68.16, the last instalment to become due twelve months after date. The notes were judgment notes and were for the sum of $68.16 each, payable to the defendant, with interest. Each note contained the following provision:

“This note is one of a series of twelve purchase-money notes secured by chattel mortgage executed this day. If this note be not paid when due, then all of said series of notes shall immediately become due and payable, at the option of the holder hereof, without notice or demand.”

When the notes were to be sighed, and before they were delivered, the plaintiff discovered that they called for the payment of $68.16 and interest, each. Sharon’s attention again was called to the agreement, and he then represented that that was the usual method pursued by the defendant in his business, and that the plaintiff could pay $35 per month and interest and let the balance slide until the end of the year, when a new contract would be made out.

The question presented on this appeal is whether the representations. made by Sharon were such as to constitute a legal fraud. That a moral fraud was perpetrated is beyond question. In order to determine the question' at issue we must not only take into consideration the representations that were made at and prior to the time the $600 was paid on the machine, but the entire transaction, which culminated in the execution of the conditional sales contract and of the notes. The contract itself was specific and called for the payment of the balance in twelve monthly instalments. This contract was submitted to the plaintiff, and under the state of the evidence it must be assumed that she was familiar Avith the provisions thereof. The notes expressly provide for monthly payments in the sum of $68.16 and interest, and plaintiff was not ignorant of this fact. Moreover, these notes were judgment notes, and contained the usual provisions of instruments of that nature. Furthermore, each note contained a provision under which the total amount of the balance would, upon election of the payee, immediately become due upon default in the payment of any instalment.

It is contended by plaintiff’s counsel that the actual legal fraud perpetrated by the defendant consisted in Sharon’s statement that under the usual method of doing business by the defendant, the plaintiff, notwithstanding the express provisions of the contract and the notes, could make payments in the sum of $35 a month and interest, leaving the balance slide until the end of the year, when a further extension would be granted.

We have therefore two agreements, the one in writing and the other oral. Both agreements Avere entered into at substantially the same' time. There is no ambiguity in the written contract, nor does it exist in the notes. Under a well established rule of law, all oral agreements made between parties involving the subject matter of a written contract must be deemed to have merged in the written contract when the contract is executed. Jones, Evidence (2d ed.) 545; Manufacturers & M. I. Bureau v. Everwear H. Co. 152 Wis. 73, 138 N. W. 624; Greene v. American M. Co. 153 Wis. 216, 140 N. W. 1130. When the parties to a contract enter into a solemn obligation, as was done in the instant case by the execution of the conditional sales contract and the notes, and where the language of these written documents is clear and express and leaves no room for doubt as to interpretation, it would create a dangerous precedent to hold that the oral contract shall govern and take precedence over the clear and unambiguous provisions of the written instruments. A contrary holding, instead of deterring the commission of fraud, would be conducive to the perpetration of fraud, and would greatly affect the force and standing of commercial paper and written contracts in general.

The original statute of frauds was enacted in 1677 in England, and in this country a similar statute has been enacted and is now in force in nearly all of the states 'of the Union. These statutes were designed mainly for the prevention of fraud, and require the contracts coming within their purview to be in writing, the superior standing and dignity of written contracts as compared to oral contracts being thereby expressly recognized. When the plaintiff, therefore, at the time of the execution of the written contract, had full knowledge of its contents, and with such knowledge executed and delivered the same, the oral contract lost all force and efficacy.

No case that in its facts substantially coincides with the instant case has been cited to our attention by counsel, nor have we had better success in our own research. However, we have arrived at the conclusion above indicated, and feel satisfied that the rule as above stated ’ will best subserve the ends of justice. The judgment of the circuit court will therefore be affirmed.

By the Court. — It is so ordered.