Silver Dollar Club v. Cosgriff Neon Company

Nevada Supreme Court

Silver Dollar Club v. Cosgriff Neon Company

389 P.2d 923, 80 Nev. 108, 1964 Nev. LEXIS 128

CourtNevada Supreme Court

DecidedMarch 4, 1964

Docket4672

StatusPublished

Cited by37 cases

This text of 389 P.2d 923 (Silver Dollar Club v. Cosgriff Neon Company) is published on Counsel Stack Legal Research, covering Nevada Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

Silver Dollar Club v. Cosgriff Neon Company, 389 P.2d 923, 80 Nev. 108, 1964 Nev. LEXIS 128 (Neb. 1964).

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[109]*109OPINION

By the Court,

McNamee, J.:

Cosgriff sued Silver Dollar on two written contracts, one of which provided for the installation of a canopy at North Virginia Street, Reno, and the other for the installation of a neon display at the same address. The complaint alleges in two counts delinquency in payments under both contracts. The answer in denying any delinquency alleges as an affirmative defense failure of consideration on the part of the plaintiff.

The court in its judgment determined that the plaintiff had fully performed its agreements by constructing the installations according to the terms of the contracts; that by breach of installment payments for such work all of the balance owing became due and payable, and judgment thereupon was entered in favor of the plaintiff in the sum of $39,103.43. Appeal is from said judgment.

Evidence was presented to the effect that although the written contracts provided for a canopy and a neon display in accordance with certain specifications, the sign which was installed was substantially different from that described in the specifications. There is no contention on appeal that the canopy was different.

With respect to the neon contract, the specifications provided for a sign reading, “HARLEY’S SILVER [110]*110DOLLAR,” in 24 and 12 inch letters. Instead a sign reading, “SILVER DOLLAR CLUB,” was installed. Several payments thereafter were made and then further payments were refused. It is contended that the court erred in admitting over the objection of Silver Dollar parol evidence to show a new oral contract or to show oral modifications of the written contract. It would seem that the error assigned is not so much with respect to admitting the parol evidence as it is to the failure of the court to rule on the objection thereto. By allowing the oral evidence to remain in the record the lower court impliedly overruled the objection.

The evidence discloses that after the contracts were executed Vince Harley, President of the Silver Dollar Club, told respondent’s sales representative that he couldn’t use the name, “HARLEY’S,” in the sign, and he requested changes to be made in the sign and canopy.¹ The changes which were then made, including the deletion of the word, “HARLEY’S,” were approved by Vince Harley, and the neon sign, as finally constructed, was in accordance with the approved changes. The receipt of payments on the contracts after the installation corroborates the oral testimony that a new contract had been made or that the written contracts had been modified. Cosgriff at all times after the installation faithfully maintained and repaired the sign and canopy.

Parol evidence is proper to show subsequent oral agreements to rescind or modify a written contract. Young Electric Sign Co. v. Last Frontier Corp., 78 Nev. 457, 375 P.2d 859; Holland v. Crummer Corporation, 78 Nev. 1, 368 P.2d 63; 2 Nichols, Applied Evidence § 72, at 1265; 2 Jones on Evidence § 475, at 912 (5th ed. 1958).

Appellant maintains that the terms of the contracts themselves prevented subsequent oral modification thereof. Each contract contained the following provision:

[111]*111“TERMINATION OR MODIFICATION OF AGREEMENT : This agreement may be terminated or modified and/or the User released from liability hereunder only by the written endorsement of the Owner. No employee, or other agent of the Owner has authority to vary or waive the provisions of this Contract in any respect whatsoever.”

This provision obviously is for the benefit of Cosgriff only and, therefore, could be waived by it. In any event, if a written agreement can be modified by a subsequent oral agreement any of its provisions likewise may be modified.

“Parties may change, add to, and totally control what they did in the past. They are wholly unable by any contractual action in the present, to limit or control what they may wish to do contractually in the future. Even 'where they include in the written contract an express provision that it can only be modified or discharged by a subsequent agreement in writing, nevertheless their later oral agreement to modify or discharge their written contract is both provable and effective to* do so.” Simpson on Contracts § 63, at 228.

The evidence supports the court’s determination that the original contracts were modified and, as modified, performed by Cosgriff.

Appellant, as user, agreed to pay respondent, as owner, $306.07 per month for 60 months under the neon contract and $386.74 per month for 60 months under the canopy contract. Each contract provided that in the event of default by the user, the owner could declare the entire balance due and payable in which event the user “agrees to pay such balance upon such contingency.” In addition the owner was given the right to take possession of and remove the installation. In the event the user, after the balance of rentals had been declared due and payable, paid the full amount of the rentals, he was entitled to the use of the displays “under all the terms and provisions” of the contracts for the balance of the term of each contract.

[112]*112Under the neon contract the user could purchase the display any time before installation without penalty for $8,264. After installation, “2/3ds of the amount paid in will be applied towards the cash selling price for the first year, after that time, conversion may be made on a prorated basis.” The canopy contract contained a similar provision, except that the purchase price therefor was $10,442. Appellant contends that the judgment for the entire balance owing under the two contracts is in the nature of a penalty rather than liquidated damages for breach, because it so greatly exceeds the amount which would have been the cost of the two displays prior to installation. If appellant had introduced evidence showing that the actual damages were considerably smaller than the amount stipulated, this could be regarded as an indication that the amount named was intended as a penalty, but no such evidence was introduced.

“Certainly, the defendant has the ‘burden of proof’ (and doubtless this means the burden of first proceeding with evidence and also of finally persuading the judge) of the facts, such as disproportion, ease of estimating damages, or want of intent to pre-estimate, as he may count on to show that the stipulation is for a penalty.” McCormick on Damages § 157, at 623 (1935). See also Lu-Mi-Nus Signs v. Jefferson Shoe Stores, Inc., 257 Ill.App. 150; Electrical Products Corporation v. Mosko, 88 Colo. 447, 297 P. 991; Lamson Co. v. Elliott-Taylor-Woolfenden Co., 6 Cir., 25 F.2d 4, 58 A.L.R. 295.

We conclude therefore that judgment was correctly entered for the balance due under each contract.

Affirmed.

Badt, C. J., concurs, and also concurs in the following comments by Thompson, J.

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[109]*109OPINION

By the Court,

McNamee, J.:

Cosgriff sued Silver Dollar on two written contracts, one of which provided for the installation of a canopy at North Virginia Street, Reno, and the other for the installation of a neon display at the same address. The complaint alleges in two counts delinquency in payments under both contracts. The answer in denying any delinquency alleges as an affirmative defense failure of consideration on the part of the plaintiff.

The court in its judgment determined that the plaintiff had fully performed its agreements by constructing the installations according to the terms of the contracts; that by breach of installment payments for such work all of the balance owing became due and payable, and judgment thereupon was entered in favor of the plaintiff in the sum of $39,103.43. Appeal is from said judgment.

Evidence was presented to the effect that although the written contracts provided for a canopy and a neon display in accordance with certain specifications, the sign which was installed was substantially different from that described in the specifications. There is no contention on appeal that the canopy was different.

With respect to the neon contract, the specifications provided for a sign reading, “HARLEY’S SILVER [110]*110DOLLAR,” in 24 and 12 inch letters. Instead a sign reading, “SILVER DOLLAR CLUB,” was installed. Several payments thereafter were made and then further payments were refused. It is contended that the court erred in admitting over the objection of Silver Dollar parol evidence to show a new oral contract or to show oral modifications of the written contract. It would seem that the error assigned is not so much with respect to admitting the parol evidence as it is to the failure of the court to rule on the objection thereto. By allowing the oral evidence to remain in the record the lower court impliedly overruled the objection.

The evidence discloses that after the contracts were executed Vince Harley, President of the Silver Dollar Club, told respondent’s sales representative that he couldn’t use the name, “HARLEY’S,” in the sign, and he requested changes to be made in the sign and canopy.¹ The changes which were then made, including the deletion of the word, “HARLEY’S,” were approved by Vince Harley, and the neon sign, as finally constructed, was in accordance with the approved changes. The receipt of payments on the contracts after the installation corroborates the oral testimony that a new contract had been made or that the written contracts had been modified. Cosgriff at all times after the installation faithfully maintained and repaired the sign and canopy.

Parol evidence is proper to show subsequent oral agreements to rescind or modify a written contract. Young Electric Sign Co. v. Last Frontier Corp., 78 Nev. 457, 375 P.2d 859; Holland v. Crummer Corporation, 78 Nev. 1, 368 P.2d 63; 2 Nichols, Applied Evidence § 72, at 1265; 2 Jones on Evidence § 475, at 912 (5th ed. 1958).

Appellant maintains that the terms of the contracts themselves prevented subsequent oral modification thereof. Each contract contained the following provision:

[111]*111“TERMINATION OR MODIFICATION OF AGREEMENT : This agreement may be terminated or modified and/or the User released from liability hereunder only by the written endorsement of the Owner. No employee, or other agent of the Owner has authority to vary or waive the provisions of this Contract in any respect whatsoever.”

This provision obviously is for the benefit of Cosgriff only and, therefore, could be waived by it. In any event, if a written agreement can be modified by a subsequent oral agreement any of its provisions likewise may be modified.

“Parties may change, add to, and totally control what they did in the past. They are wholly unable by any contractual action in the present, to limit or control what they may wish to do contractually in the future. Even 'where they include in the written contract an express provision that it can only be modified or discharged by a subsequent agreement in writing, nevertheless their later oral agreement to modify or discharge their written contract is both provable and effective to* do so.” Simpson on Contracts § 63, at 228.

The evidence supports the court’s determination that the original contracts were modified and, as modified, performed by Cosgriff.

Appellant, as user, agreed to pay respondent, as owner, $306.07 per month for 60 months under the neon contract and $386.74 per month for 60 months under the canopy contract. Each contract provided that in the event of default by the user, the owner could declare the entire balance due and payable in which event the user “agrees to pay such balance upon such contingency.” In addition the owner was given the right to take possession of and remove the installation. In the event the user, after the balance of rentals had been declared due and payable, paid the full amount of the rentals, he was entitled to the use of the displays “under all the terms and provisions” of the contracts for the balance of the term of each contract.

[112]*112Under the neon contract the user could purchase the display any time before installation without penalty for $8,264. After installation, “2/3ds of the amount paid in will be applied towards the cash selling price for the first year, after that time, conversion may be made on a prorated basis.” The canopy contract contained a similar provision, except that the purchase price therefor was $10,442. Appellant contends that the judgment for the entire balance owing under the two contracts is in the nature of a penalty rather than liquidated damages for breach, because it so greatly exceeds the amount which would have been the cost of the two displays prior to installation. If appellant had introduced evidence showing that the actual damages were considerably smaller than the amount stipulated, this could be regarded as an indication that the amount named was intended as a penalty, but no such evidence was introduced.

“Certainly, the defendant has the ‘burden of proof’ (and doubtless this means the burden of first proceeding with evidence and also of finally persuading the judge) of the facts, such as disproportion, ease of estimating damages, or want of intent to pre-estimate, as he may count on to show that the stipulation is for a penalty.” McCormick on Damages § 157, at 623 (1935). See also Lu-Mi-Nus Signs v. Jefferson Shoe Stores, Inc., 257 Ill.App. 150; Electrical Products Corporation v. Mosko, 88 Colo. 447, 297 P. 991; Lamson Co. v. Elliott-Taylor-Woolfenden Co., 6 Cir., 25 F.2d 4, 58 A.L.R. 295.

We conclude therefore that judgment was correctly entered for the balance due under each contract.

Affirmed.

Badt, C. J., concurs, and also concurs in the following comments by Thompson, J.

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389 P.2d 923, 80 Nev. 108, 1964 Nev. LEXIS 128, Counsel Stack Legal Research, https://law.counselstack.com/opinion/silver-dollar-club-v-cosgriff-neon-company-nev-1964.

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