Southern Street Railway Advertising Co. v. Metropole Shoe Manufacturing Co. ( 1900 )

The declaration in this case contains the common counts, and one setting forth a special contract between the plaintiff and defendant.

The defendant, in addition to the general issue pleas, filed a plea on equitable grounds to this effect; "that the paper-writing, on which suit is brought, is not the contract of defendant, and that said paper-writing was not intended to create, and did not create, any legal relationship whatsoever; that said paper was signed by the defendant upon the request of the plaintiff's agent, in order that the plaintiff or its agents might show the same to other persons dealing with the plaintiff, in order to induce such other persons to pay the rates for advertising mentioned in the contract, and that it was distinctly understood that the paper-writing was not a contract between the parties thereto, and that the bringing of a suit thereon is a fraud upon the defendant; that the only real contract between the parties was a parol contract for certain advertising for which the defendant was to pay three hundred dollars ($300), which sum has been fully paid by the defendant."

At the trial, issue was joined on the replication to the equitable plea and to the general issue pleas. There were ten exceptions reserved at the trial. All of these relate to the rulings of the Court upon the admissibility of testimony, except the tenth, which contains the Court's ruling on the prayers. The contract is in writing and dated the 26th of March, 1898, and it authorizes the appellant to insert the advertising cards of the appellee in 500 cars in Baltimore for a term of twelve months, commencing April 9th, 1898, in consideration of the payment of the sum of three hundred dollars per month, payable at the end of each month during the term of the contract. The appellee reserved the right to cancel the contract at the expiration of three months by giving thirty days' written notice. It also provides that no verbal conditions made by agents will be recognized. Every condition must be specified on the face of the contract. The contract was signed by the vice-president of the plaintiff company and by the president of the defendant company and subsequently approved by the plaintiff company. The contract contains other stipulations and reservations, but as the contract will appear in its entirety in the report of the case, it will not be necessary to set it out in detail in this opinion.

It is conceded that the ten bills of exception practically present but one question and that is, whether parol testimony is admissible to show that the written paper, the cause of action in this case, was never intended as a contract, nor as the binding record of the contract between the parties.

The rule against parol evidence to vary or contradict the terms of an agreement in writing is well settled by the Courts. It is earnestly insisted upon the part of the appellee, that this rule has no application to this case, because the testimony was offered, not for the purpose of varying or contradicting the contract, but to show that the parties to the writing never intended it to be a contract or as the binding record of a contract. We think the Court below was right in admitting the evidence.

In the case of Leppoc v. Nat. Union Bank, Garnishee,32 Md. 144, this Court said: "The rule which excludes parol or verbal evidence to affect that which is written, was not at all infringed by the admission of such evidence to show that the instrument was void or that it never had any legal existence or binding force, for want of due delivery and acceptance." And to the same effect are the cases of Davis v. Hamblin,51 Md. 525, and Harrison v. Morton, 83 Md. 456.

In Pym v. Campbell, 6 El. Bl. 374, it is said: "The distinction in point of law is that evidence to vary the terms of an agreement in writing is not admissible, but evidence to show that there is not an agreement at all is admissible." This rule is sustained by the Courts of England, in the following cases:Rogers v. Hadley, 2 H. C. 249; Lister v. Smith, 3 Swabey Tristram, 282; Nichols v. Nichols, 2 Phillimore, 180; Pattle v. Hornibrook, [1897] 1 Ch. 25. And the Supreme Court of the United States in the recent case of Burke v.Dulaney, 153 U.S. 234, reviews the cases upon this subject both in this country and England, and MR. JUSTICE HARLAN, speaking for that Court, said: "The rule that excludes parol evidence in contradiction of a written agreement presupposes the existence in fact of such agreement at the time suit is brought. But the rule has no application if the writing was not delivered as a present contract, and parol evidence was admissible to show that there never was any concluded, binding contract entitling the party who claimed the benefit of it to enforce its stipulations."

We content ourselves, therefore, by a reference to some of the authorities supporting this view in addition to those already cited. Ware v. Allen, 128 U.S. 590; Adams v. Morgan,150 Mass. 143; Nutting v. Minnesota Insurance Company,98 Wis. 32; Reynolds v. Robinson, 110 N.Y. 654 ; Grierson v. Mason, 60 N.Y. 394; Pollock on Contracts, 236; 1 Greenleaf Evidence, sec. 284, p. 439.

We come then to the evidence as set forth in the bills of exception, and we think it is clear that it was competent for the purposes offered, that is, not to vary or contradict the terms of the written instrument by parol, but to show that such contract had no force, efficacy or effect, because it was not intended to operate as the record of a binding contract between the parties.

The witness, Weilbacher, who was the soliciting agent for the appellant, and who had procured the advertizing contract from the appellee, testified as follows: That he was in the spring of 1898, an advertising solicitor for the plaintiff corporation, and had been at different times during the past three years or so; that his business was to solicit such business for the plaintiff as he could find; that he discovered the defendant company might possibly need advertising and called to see its officers at the company's place of business; that he saw Messrs. G.A. Horner and A.L. Horner, and Messrs. Charles Green and Herbert Green, all of them officers and directors of the defendant company; that he entered into a verbal agreement with them, between them as representing the defendant and himself as representing the plaintiff, to insert the defendant's advertising card for a period of three months, to the extent of one hundred dollars per month, for which the defendant should receive the benefit of one-third of the total number of cars in the city of Baltimore; that after that verbal agreement was entered into the witness submitted to the officers and directors of said defendant company the contract for the signature of the proper officer of said defendant company, and that the paper then shown him, dated March 26th, 1898, being the same paper heretofore set forth, and referred to in the testimony of Miss Ella V. Judge, was one of the three copies of said written contract signed by the defendant and the plaintiff; that he saw said paper signed in triplicate by Charles F. Green, as president of the defendant corporation, and he knew that the signature of Charles L. Bermingham, on behalf of the plaintiff company, was his genuine signature; that no one went with the witness to get the defendant's signature to this contract; and that the reason why this contract came to be signed by the defendant was, that the defendant wished to avail itself of a certain amount of space in one-third of the total number of cars in Baltimore, at the price of one hundred dollars per month, and wished to get the benefit of a reduced rate per car, the regular rate being supposed to be sixty cents per month per car, and as there were about six hundred cars in the city, the defendant would get the benefit of about two hundred cars for the sum of one hundred dollars per month, which would be a rate of fifty cents per car per month, or less; that when he, the witness, presented this paper for the signature of the defendant company some of the officers of the company stated to witness that the contract did not express the amount of space purchased, nor the amount to be paid for such space; nor the period for which the advertising was to be done, which period the officers said was only to cover three months.

The defendant company was to advertise to the extent or to the amount of one hundred dollars per month for the period of three months, or a total expenditure of three hundred dollars, and that no notice whatever was to be given by the defendant to the plaintiff as to the termination of the contract. Witness, in answer to question from defendant's counsel as to what he said to them, which led them to sign the paper sued on, answered that he then replied to them that this specific contract was simply a matter of form, and that the rate as given on that written contract was higher than the rate which they were to receive the benefit of, and that the contract was simply a matter of form to prevent any outsider from knowing that space was being sold for less than the regular rate of sixty cents per month; that it was true that the signing of that paper would not prevent any one from thinking that better rates were being given.

This testimony was further corroborated by the witnesses, George and Arthur Horner, Charles and Herbert Green, and the witness Henry C. Glantz. And this testimony is entirely uncontradicted.

The contention of the appellant that the clause of the writing "that no verbal conditions made by agents will be recognized; every condition must be specified on the face of the contract" cannot avail it under the facts of this case. If the contract itself is void and nugatory this provision can have no effect.

We find no error in the rulings of the Court upon either the prayers or testimony, and for the reasons we have given, the judgment will be affirmed.

Judgment affirmed with costs.

(Decided March 22d 1900.)