Brosseau v. Jacobs' Pharmacy Co.

Evans, P. J.

(After stating the foregoing facts.) Brosseau made two contracts. One was with Jacobs’ Pharmacy Company, a business corporation, the subject-matter of which was service to be rendered to that corporation, of which Dr. Joseph Jacobs was the president. He made the other contract with Dr. Jacobs as an individual, and the subject-matter of it was the sale of certain shares of the capital stock of Jacobs’ Pharmacy Company, which Dr. Jacobs personally owned. The corporation and Dr. Jacobs joined in the suit for the cancellation of both contracts, on the theory that Brosseau had violated and abandoned his contract of service and had admitted his inability to comply with his obligations therein contained, and, that contract -thus becoming void, the contract for the purchase of stock fell with the contract of employment. No objection was raised as to the joinder of plaintiffs. The evidence authorized a finding that the consideration of the contract of employment had failed, and that contract was no longer obligatory. The various assignments of error relate to the question whether it was competent to show hy parol evidence that the contract for the purchase of stock was dependent upon Brosseau performing his duties under his contract to work for Jacobs’ Pharmacy Company, and to the question whether the provision in the contract that the transfer of stock was to be effected at once could be shown by parol evidence to mean that the stock was not to be delivered until paid for as prescribed in the contract.

1. The two contracts are not between the same parties; they do not refer to each other; and are separate and independent agreements, so far as the instruments themselves disclose. The general rule is that parol evidence is .not admissible to add to, take from, or vary a written contract. There are certain exceptions; and it will be our purpose to inquire whether the evidence objected to falls within any recognized exception to the general rule. One exception to the parol-evidence rule is that the consideration.of a contract is open to inquiry; but this rule is applicable only when the statement of the consideration in the contract is merely by way of recital. If the consideration be so stated in the contract as to •make it one of its terms or conditions, as where the consideration consists of mutual promises expressed in the contract, a different consideration, whether variant or additional, can not be shown by parol. Burke v. Napier, 106 Ga. 329 (32 S. E. 134); Wellmaker v. Wheatley, 123 Ga. 201 (51 S. E. 436). An inspection of the contract for the purchase of shares of stock will disclose that the consideration is not expressed hy way of recital, but that the mutual undertakings of the parties are given as the terms of the contract. Hence a parol inquiry into the consideration is not permissible on this idea.

2. Again, it is insisted that the contract of purchase of stock carries an internal suggestion that it is incomplete, and that parol proof that a part of its consideration was the performance of the contract of service may be given. This court has recognized and applied the rule that before parol evidence can be admitted to show a collateral agreement, it must appear, either from the contract itself or from the attendant circumstances, that the contract is incomplete, and that what is sought to be shown as a collateral agreement does not in any way conflict with or contradict what is contained in the writing. Forsyth Mfg. Co. v. Castlen, 112 Ga. 199 (37 S. E. 485, 81 Am. St. R. 28). The contract for the purchase of shares shows no incompleteness. Its terms may be unusual, and the equation of reciprocal benefits may not be in exact balance; but the algebraic formula of a perfect equation can not be invoked to destroy the liberty of contract. It is not necessary to the validity of a contract of sale that the thing purchased be the exact equivalent of the promised consideration. Mere.inadequacy of consideration alone will not void a contract. Civil Code (1910), § 4244. To allow proof of terms or conditions additional to those expressed in the contract would be to fritter away the rule. Even if extrinsic proof should be allowed to show that the attendant circumstances afford an inference that the contract was incomplete in the statement of the reciprocal obligations of the parties, parol evidence will not be received to show that, in addition to the obligations expressed in the writing as the consideration of the purchase of the shares of stock, the vendee also agreed to perform a contract with another person. The rule which permits supplementary proof in case of apparent incompleteness in written statements of the obligations of the parties denies parol proof variant from the written terms .by the imposition of additional and other terms dependent upon a contemporaneous 'parol agreement. If Brosseau and Dr. Jacobs made a contemporaneous agreement that the contract of sale should not be binding unless Brosseau should carry out his agreement with the Pharmacy Company, such oral agreement would contradict the writing by imposing an additional term of contract, and parol evidence of it would be rejected. This court has decided that parol evidence is inadmissible to show that a note given for the purchase-price of machinery was not to be paid unless the machinery should do a certain amount of work in a given time. Lunsford v. Malsby, 101 Ga. 39 (28 S. E. 496). The effect of allowing parol evidence that Dr. Jacobs’ contract for the sale of his stock to Brosseau was dependent upon the service rendered by the latter to Jacobs’ Pharmacy Company is to set up that a written contract should become void upon the happening of a certain contingency resting in a parol collateral agreement, which is not permissible. 5 Chamberlayne on Evidence, § 3553. ■-

3. The contract is not ambiguous. Jacobs agrees to sell to Brosseau ten shares of the capital stock of Jacobs’ Pharmacy Company for the sum of fifteen thousand dollars to be paid from dividends of the company, with the option to Brosseau to pay additional sums on the purchase-money. Brosseau agrees to purchase the ten shares of stock at the price stated, and to pay for same as stated, and further agrees to pay interest on unpaid balances at the end of each year at the rate of 6 per cent, per annum. At the end of each year the annual dividend is to be applied to the purchase-price, and Brosseau is to pay 6 per cent, interest on these annual balances. The-terms of the contract are expressed with clearness, and parol evidence will not be allowed to raise an ambiguity for the purpose of proving that the contract was different from that expressed in the writing.

4. Nor is parol proof admissible to show that the motive of the vendor in selling shares of stock was to secure the vendee’s services for Jacobs’ Pharmacy Company, because the motive with which a party enters into a contract is no part of its consideration. 9 Cye. 320. “The consideration must be of some value in the eye of the law, and must move from the plaintiff to the defendant. Hence a disappointment of the motive, by the fraudulent misrepresentations of the plaintiff, is not a fraud on the contract, and is not available as a defense.” Austell v. Rice, 5 Ga. 472. The parol testimony allowed by the court, of the motive of Dr. Jacobs in entering into the contract and that the contract of sale of shares of stock was dependent on the performance of the contract of employment with Jacobs’ Pharmacy Company, was improperly received.

5. The contract of sale of shares of stock contained this clause: “Transfer of stock to be effected at once.” On the theory that this clause was ambiguous the court allowed parol evidence that the certificate of shares was not to be delivered until paid for. This clause is laconic, but is neither equivocal nor cryptic. In the absence of these words, the vendee would have no right to demand a transfer of the stock until paid for according to the terms of the contract. The parties meant something by inserting this clause in the contract, and the obvious import of the language is that the stock purchased should be at once transferred and delivered to the purchaser.

6. Finally, it is earnestly argued that the contract for the sale of the shares of stock is unilateral. We do not think so-. Without restating the contract, we call attention to the fact that Dr. Jacobs agrees to sell ten shares of stock to be paid for out of dividends of the corporation, plus any additional moneys at the option of Brosseau; and Brosseau agrees to purchase the stock on the terms stated, and to pay interest on unpaid balances at the end of each year at the rate of six per cent, per annum. The contract contains mutual obligations, and is not deficient in mutuality. The purchase-price is $15,000; at the end of each year dividends are-to be credited on the purchase-price, and the vendee is to pay to the vendor 6 per cent, on the net balance.

■ Because of the admission of the parol testimony varying the' terms of the contract, the judgment refusing a new trial must be

Reversed.

All the Justices concur.