Bredouw v. Jones , 431 P.2d 413 ( 1967 )

WILLIAMS, Justice

(dissenting).

I respectfully dissent to the foregoing majority opinion.

No further statement of facts is required.

As claimed grounds of error, plaintiff in error, hereinafter called plaintiff advances three propositions. The first is that the court erred in permitting the introduction of parol testimony for the purpose of varying the terms of a written contract. I do not agree.

Plaintiff urges that certain decisions of this Court stand for the rule that parol evidence is not admissible to vary the terms of written agreements. There is, of course, a general rule of that effect.

However, the parol evidence rule has certain exceptions including those of conditional delivery and fraud in the inducement or inception of a contract, both pleaded by defendant.

In this connection it is to be noted that while the written contract between the realtors and the defendants for sale of the motel for a specified commission which provided for compensating for the services of the realtors by issuance of the series of notes was in evidence, it appears that .such brokerage contract had been completed, had spent its life, by the issuance of the notes to the realtors at the time the deed to the property was issued. It was, the notes, themselves, upon which plaintiff brought suit. It follows that the promissory notes which were executed in performance of the earlier contract and which are the basis of plaintiff’s action in this case could be shown to have been delivered subj ect to a condition which had not been fulfilled, or could be shown to have been fraudulently obtained,' and that they, or some of them, therefore, never came into force as binding obligations.

The case of Commercial National Bank of Muskogee v. Ahrens, 117 Okl. 65, 245 P. 557, involved a series of notes, as in the instant case, and also an antecedent written contract in the form of a conditional sales contract for the purchase of an automobile. The suit in that case was also' upon the notes and not the contract, and the defendant over plaintiff’s objection testified that the notes were delivered subject to a condition which had not been fulfilled. In holding that the parol evidence rule was inapplicable the opinion states:

“It is contended that the court erred in admitting evidence for defendant to show such conditional delivery of said notes as alleged. It is well settled that parol evidence is not admissible to vary the terms of a written contract, but parol evidence may be introduced to prove a separate parol agreement constituting a condition precedent to the taking effect of- the written contract. Waggoner Bank & Trust Co. v. Doak, 172 P. 61, 69 Okl. 245; Gamble v. Riley, 135 P. 390, 39 Okl. 363; Edwards v. City Nat. Bank of McAlester, 201 P. [233] 236, 83 Okl. 204. As between defendant, Ahrens, and the motor company, this evidence was not for the purpose of contradicting the terms of these notes, but to show that under no circumstances was defendant to become liable on the $1,200 note, and only on condition on the $590 note, except as to said $90 — that they were not present contracts, but were to take effect on condition. Under the well-known rule, the evidence is sufficient to support the judgment in this behalf, and, in fact, is undisputed.”

In Harlow Pub. Co. v. Walden, 168 Okl. 163, 32 P.2d 278, we held a promissory note inay be delivered by the maker to the payee upon condition, or as an escrow, and that where evidence is offered for the purpose of showing that a written instrument was delivered conditionally, or that the note never became operative, the allegation of non-performance of the conditions precedent states a defense to an action upon the note. See also, In re Fullerton’s Estate, Okl. 375 P.2d 933; Fane Development Co. v. Townsend, Okl., 381 P.2d 1012 and Yeager v. Jackson, 162 Okl. 207, 19 P.2d 970.

Where liability on a written instrument is sought to be avoided on the grounds of fraud, the parol evidence rule does not apply and such evidence is admissible to establish fraud and vitiate the contract. See Superior Distributing Corp. v. Hargrove, Okl., 312 P.2d 893; Hill v. Anderson, Okl. 363 P.2d 849, and cases cited by the majority.

From an examination of the record and the foregoing and other authorities, I am of the view that in permitting the introduction of parol evidence in the trial of the instant case for the purpose of showing either that the notes were delivered conditionally, or that fraud was perpetrated, the trial court did not err.

Plaintiff’s second proposition is that the verdict and judgment are not sustained by sufficient evidence and are contrary to law. An examination of the record discloses that plaintiff did not demur to the evidence when defendants assumed the burden of proof" and introduced evidence tending to show an affirmative defense and rested their case, but called witnesses in rebuttal. At the conclusion of all of the evidence both sides rested, and no motion was made for a directed verdict. Plaintiff did not except to the instructions to the jury or offer any requested instructions but acquiesced in the instructions given by the court. This is an action of legal cognizance. The alleged insufficiency of the evidence was not presented to the trial court. Since such was not done, its sufficiency cannot be considered here. Beatty v. Moore, 113 Okl. 105, 239 P. 570; Milburn et al. v. Miners’ & Citizens’ Bank, 101 Okl. 281, 226 P. 44; Adair v. Moore, 183 Okl. 563, 83 P.2d 813, 814; Federal National Bank of Shawnee v. Sartin, 114 Okl. 244, 246 P. 617. In East Basin Oil & Uranium Company v. R. L. Pound, etc., Co., Okl., 321 P.2d 694, the third paragraph of the syllabus reads:

“Where in an action of law there is conflict in the evidence, and verdict in favor of plaintiff is approved by the trial court, this court cannot weigh the evidence and reverse the judgment because the evidence on which the verdict was founded was contradicted by other evidence at the trial.”

To my mind, the plaintiff’s second proposition is lacking in substantial merit.

Plaintiff’s third proposition is that the alleged oral agreement would have been void as being against public policy and that the trial court erred in overrulinng plaintiff’s motion to strike defendant’s answer. Plaintiff contends that the sale and lease-back arrangement between the purchaser and defendants for a stated consideration of $900,000 was so far in excess of the sum defendant would have been willing to accept for a cash sale of the motel as to be a sham, that the amount was nominated in order to afford certain tax benefits to the purchaser, thereby constituting a conspiracy to cheat and defraud the United States Government of income tax and, therefore, void as against public policy; and that the trial court erred in overruling plaintiff’s motion to strike defendants’ answer.

Plaintiff cites Dormeyer v. Haifa, 343 Ill.App. 177, 98 N.E.2d 532, an Illinois case, for the contention that the courts will not aid in the enforcement of certain contracts because of their illegality. Such a rule would not apply in this case. It was not shown in the trial of this case that the price agreed upon was a fictitious price as far as the government was concerned. It would appear that if the present defendants had been able to make the property pay on the basis of the rental charged the cost to the purchaser would have been $900,000. In that event, I see no reason why depreciation could not he computed on the basis of the price upon which the parties had agreed. Fraud or wrongdoing will not be presumed but must be alleged and proved by the party relying on it. Oklahoma Co. v. O’Neil, Okl., 333 P.2d 534. The alleged oral agreement was not shown to have been against public policy.

Furthermore, although defendants pleaded in their answer that the nominal purchase price and nominal rentals were inflated values chosen for the purpose of permitting the purchasers to take depreciation upon a high cost basis and secure tax advantages, this question was not raised by plaintiff at the trial, nor in the motion for new trial, nor in the petition in error, but is raised for the first time in this appeal. In Sharp v. Henry, Okl., 298 P.2d 1058, 1059, it was said a contention based on an issue not presented to the trial court is not reviewable on appeal; and that parties will not be permited to argue in this court for the first time questions not raised in the trial court. Gibbins v. Wade, 202 Okl. 138, 210 P.2d 955; Sims v. Bennett, 208 Okl. 321, 255 P.2d 916.

In my opinion a reversal for any or all the reasons assigned is not justified, but rather the judgment of the trial court from which the present appeal was taken should be affirmed.

I am authorized to state that Mr. Justice BERRY concurs with the views herein expressed.