Ikovich v. Silver Bow Motor Car Co.

This is an action in conversion to recover damages in the sum of $611.74 because of the alleged wrongful conversion of an automobile by defendant. The answer of the defendant sets forth that on the 21st day of November, 1942, plaintiff purchased from the defendant the automobile in question at the agreed price of $1,000; that the payments were to be made by surrendering a used car for which plaintiff was granted an allowance of $334, and the balance of $666, together with $54 insurance and finance charges or a total of $720, was to be paid by plaintiff in installments of $40 each, payable monthly from and after December 21, 1942, until fully paid.

It alleges that a conditional sales contract was entered into between plaintiff and defendant by the terms of which defendant retained title to the automobile but surrendered possession to the plaintiff who had the right to use it upon complying with the agreement. The conditional sales contract authorized the defendant, upon plaintiff's failure to comply with the terms of the contract, to retake possession, and to consider the agreement at an end. It authorized defendant in that event to sell the car and apply the proceeds to the contract debt and balance, if any, to be paid to plaintiff.

The answer alleges that plaintiff failed to comply with the terms of the contract in that he made but one installment payment of $40, and that this was made on December 21, 1942, but that the January, February and March installments were past due and unpaid and that on April 17, 1943, defendant took possession of the automobile in accordance with the terms of the conditional sales contract. Defendant asks that it have judgment against the plaintiff for the sum of $680, together with interest and costs, and that the automobile be sold at public auction and the proceeds applied to the expenses of sale, the amount due to the defendant, and the remainder, if any, to be paid to plaintiff. A copy of the contract was attached to the answer.

Plaintiff, by his reply, admits the signing of the contract referred to in the defendant's answer, and alleges as new matter, in substance, that about the 28th day of December 1942 a dispute arose between plaintiff and defendant "with respect to the contract and agreement" and in compromise settlement of the dispute it was agreed that the plaintiff should have the automobile repaired and upon doing so the defendant would give to plaintiff credit for the amount the plaintiff would be obliged to expend for such repairs; that pursuant to this agreement plaintiff had the automobile repaired at a cost of $181.38, which he paid and which he requested defendant to apply as a payment on the purchase price of the car, but that defendant refused to do so.

The cause was tried to the court sitting with a jury. The jury brought in a verdict for plaintiff in the sum of $611.74, and judgment was entered accordingly. Defendant has appealed from the judgment.

Defendant contends that much evidence was permitted to be introduced, over its objection, as not within the issues in the case and tending to vary the terms of the written contract and that the undisputed competent and admissible evidence necessitated a directed verdict in its favor. Plaintiff was permitted to testify over objection upon the grounds above stated that when he signed the contract it was simply the printed form and that it contained no typewritten matter and that no one signed for the defendant; that defendant's agent told plaintiff that he would fill in the contract and for plaintiff to return later and he would be given a copy; that plaintiff cannot read English but he noticed it was signed only by himself; that he called upon the representative of defendant who said, "That's no good; we will make the new one, and we will sign and you sign on the other one." This he said was never done. Defendant's objection to this evidence should have been sustained and the evidence excluded.

There was no issue raised in the pleadings that the written[1, 2] contract was not properly signed. There was no suggestion in the pleadings that because of his inability to read plaintiff did not know what was in the contract nor was there any intimation in the pleadings that the written contract did not express the intention of the parties nor that typewritten matter had been added to it after it was signed. This evidence should have been excluded as not within the issues raised by the pleadings. Also it should be remembered that the signature of all parties to a contract is not always essential to its validity and binding force. 17 C.J.S., Contracts, Sec. 62, p. 410; 12 Am. Jur. 551. Here it was shown that the contract was drawn up in triplicate. One was sent to the registrar of motor vehicles and acted upon. It was not signed but the names of both parties were typewritten in the place provided for signatures. One was retained by the defendant and it was properly signed by both parties. The one delivered to plaintiff was not signed by defendant or its agent but was signed by plaintiff. Plaintiff treated the contract as binding. He surrendered his used car in exchange for the one covered by the contract and he made the first installment payment falling due on December 21, 1942. Also by his reply plaintiff treats the contract as having been properly executed and in effect but alleges that it was altered by a subsequent agreement. Defendant at all times treated the contract as binding. There was thus a written contract between the parties, though the copy delivered to plaintiff was unsigned by defendant, and the contract was subject to the usual rule that those who acquiesced in it will not be permitted to vary, alter or modify its terms by oral evidence. Manufacturers' Merchants' Inspection Bureau v. Everwear Hosiery Co., 152 Wis. 73,138 N.W. 624, 42 L.R.A., N.S., 847, Ann. Cas. 1914C, 449.

The written contract recited that the described automobile was[3] to be delivered "without warranty except as to title," and recited that the buyer (plaintiff) "shall keep the same in good repair at his own expense."

Over objection plaintiff was permitted to testify that before buying the car he said to defendant: "Are you sure this car is in good condition, not been wrecked, or the motor burned in this car? Are you sure this car is in A-1 shape?" to which defendant's representative replied: "Absolutely; we haven't got any car wrecked, or with motor burned; this car is like new."; that plaintiff said: "If it isn't, I wouldn't give you $50 for it," and defendant said: "Yes, it is like new; we guarantee it like new, and if anything is wrong with it we will make it good." He further testified, "The car didn't have no pump. There was blowed oil all over the motor. It didn't have no compression, and everything wore out, and oil was coming all over the motor, and every time I went to slow down I kill the motor * * * all doors was out of line and out of shape, and one light was different than the other in front * * * and the bumper jerk right off the frame, and I can't tell you everything else that was wrong with it without a mechanic."

This evidence was objected to because not within the issues presented by the pleadings and because it was an attempt to vary the terms of the written contract. Both of these grounds were well taken. No issue of fraud, misrepresentation or breach of warranty was raised by the pleadings. Hence the objection that the evidence was not within the issues should have been sustained.

Furthermore, when the pleadings present no issue of fraud or[4] mistake, as here, the general rule is that when the terms of a contract have been reduced to writing by the parties it must be considered as containing all the terms of the agreement and parol evidence cannot be resorted to, to alter the written contract. The rule is statutory in Montana. Sec. 10517, Revised Codes.

"The principle is well established and of general application, subject to certain exceptions, that when a contract has been reduced to writing the contents of such writing cannot be added to, contradicted, altered, or varied by parol or extrinsic evidence, and that such writing supersedes all oral negotiations concerning its matter which preceded, accompanied, or led up to its execution. This was the rule at common law, and has been embodied in the statute law of this state." Webber v. Killorn,66 Mont. 130, 132, 212 P. 852, 853, and see Continental Oil Co. v. Bell, 94 Mont. 123, 21 P.2d 65.

We may say in passing, though the question is not raised in[5] the pleadings, that usually plaintiff's inability to read does not alter the rule. A person unable to read is still bound by contracts which he signs and which are otherwise valid and enforcible. W.T. Rawleigh Co. v. Washburn, 80 Mont. 308,260 P. 1039; Sanden v. Northern P. R. Co., 43 Mont. 209, 115 P. 408, 34 L.R.A., N.S. 711; Zimmerman v. Mutual Life Ins. Co., 90 Mont. 336,3 P.2d 278.

"So, where a person cannot read the language in which a contract is written, it is ordinarily as much his duty to procure some person to read and explain it to him before he signs it as it would be to read it before he signed it if he were able to do so, and his failure to obtain a reading and an explanation of it is such gross negligence as will estop him from avoiding it on the ground that he was ignorant of its contents." 17 C.J.S., Contracts, Sec. 139, p. 494.

This rule of course would not be true if there were allegations of fraud, mistake or undue influence but, as before stated, no such allegations were presented by the pleadings in this case.

Was it proper to receive evidence of the alleged subsequent agreement regarding the repair of the car and of defendant's promise to credit the repair bill as payments under the contract? As above noted, this altered the written contract. "A contract in writing may be altered by a contract in writing, or by an executed oral agreement, and not otherwise." Sec. 7569, Revised Codes. The subsequent agreement was not in writing. It was not an executed oral agreement, for "an executed contract is one, the object of which is fully performed. All others are executory." Sec. 7552, Revised Codes, 1935.

"An oral agreement altering a written agreement is not [6, 7] executed unless its terms have been fully performed, and performance on the one side is not sufficient. There must be a complete execution of the obligation of both parties in order to bring the modification within the terms of the statute." Continental Oil Co. v. Bell, supra [94 Mont. 123,21 P.2d 67]. This is the well established rule in California under statutes identical with ours. 6 Cal. Jur., Contracts, Sec. 226, p. 375, et seq. Here the president of defendant denied emphatically that he had entered into any subsequent agreement regarding the repair of the car. He admitted that plaintiff requested that he pay a repair bill but that he told plaintiff "We had nothing to do with the repairs on his car." If evidence on the point were admissible under our statute, then of course this conflict in the evidence would present a jury question. But under our statutes this evidence was inadmissible. It is to be noted that there is nothing in the record to show any act on the part of defendant in recognition of the alleged subsequent agreement and hence the doctrine of estoppel or waiver has no application.

The purpose of our statute allowing a written contract to be altered only by a writing or by an executed oral agreement would be frustrated if performance on the one side only is sufficient to work such an alteration by oral agreement as against one who has done nothing in recognition of the alleged oral contract and who denies its existence. Absence of such acts on the part of defendant here makes this case entirely different from those of Inter-State Lumber Co. v. Western Mortg., etc., Co., 51 Mont. 190,149 P. 975; Roberts v. Sinnott, 55 Mont. 369,177 P. 252, and Kester v. Nelson, 92 Mont. 69, 10 P.2d 379. Likewise the case is different from that of Griffith v. Cedar Creek Oil Gas Co., 91 Mont. 553, 8 P.2d 1071, where the subsequent oral agreement was fully executed by both parties; and that of Webber v. Killorn, 66 Mont. 130, 212 P. 852, where there was full performance by the parties of that part of the contract as to which parol evidence was received.

It should be remembered too that since the written contract[8] involved a price in excess of $200, and a contract running for more than one year, it was within the statute of frauds. Secs. 7519, 7591 and 10613, Revised Codes. While at common law contracts not within the statute of frauds may be altered by a new agreement in parol (2 Williston on Contracts, Rev. Ed., Sec. 591, pp. 1702, 1703; 6 Williston on Contracts, Rev. Ed., Sec. 1828, p. 5178), yet it must be kept in mind that we are not concerned here with the common law rule but with the rule prescribed by statute and with a contract within the statute of frauds. Statutory restrictions against the modification of a written contract by parol must be complied with to have a valid modification. 17 C.J.S., Contracts, Sec. 377. There is a difference also between a contract required by the statute of frauds to be in writing and one not within the statute of frauds. 2 Williston on Contracts, Sec. 593, p. 1705 et seq.

"The general rule is that parties to a written agreement coming within the provisions of the statute may not, by mere oral agreement, alter one or more of the terms thereof, and thus make a new contract, resting partly in writing and partly in parol, at least if the modification is of a material term of the contract, and, as hereinafter indicated, has not been executed. The contract can be modified only in the manner in which the contract could be legally made enforceable in the first instance." 37 C.J.S., Frauds, Statute of, Sec. 232, pp. 731, 732. The general rule certainly has application in this state in view of our statute, Sec. 7569, which prohibits the alteration of any contract in writing except by another contract in writing or by an executed oral agreement. Evidence of the subsequent oral agreement was inadmissible under our statutes.

Plaintiff contends that even though we treat the written contract as binding, and that it cannot be altered by parol, we still must hold that defendant had no right to take the car because the written contract merely gives the right to take it for the purpose of sale and that defendant has made no attempt to sell it but, on the contrary, notified plaintiff by letter that if he would promptly pay the overdue installments it would redeliver the car to him. This offer to plaintiff was not necessary according to the terms of the contract but it gave plaintiff more consideration than the contract called for and we think plaintiff cannot be heard to complain on that account. Defendant now seeks recognition of the right to sell the car and it has that right under the contract.

Plaintiff also contends that defendant was guilty of[9] conversion of the automobile because of the manner in which it was taken from his possession. The evidence discloses that the car was parked on a vacant lot behind plaintiff's house with the front wheels in the alley. Defendant took it without plaintiff's previous knowledge or consent except as that consent was given in the written contract of sale. Defendant would not have been justified in using force to obtain possession of the car. But there was no force used by defendant in this case. Force is not "necessarily involved where the vendor under a conditional sale of an automobile seizes the vehicle when he finds it parked in front of the vendee's premises." 47 Am. Jur. "Sales" Sec. 953; Gaffney v. O'Leary, 155 Wn. 171, 283 P. 1091. And "according to some authority, the conditional vendor of an automobile, having demanded possession of the vehicle upon the vendee's default in payments and having been refused possession by the vendee, does not resort to force, violence or even stealth in obtaining possession of the vehicle by towing it away to a place for storage upon finding it parked in front of the vendee's dwelling house and locked." 47 Am. Jur., Sales, Sec. 953, note 19; First Nat. Bank T. Co. v. Winter, 176 Okla. 400, 55 P.2d 1029. This case bears no analogy to that of Franklin v. Spratt, 174 Ark. 268, 295 S.W. 26. In that case defendant actually sold the car in question, which was valued at $850, for $150. Of course that amounted to conversion. The only point the court decided was that error had been committed in the instructions relative to the measure of damages. Likewise the case of Voltz v. General Motors Acceptance Corp., 332 Pa. 141,2 A.2d 697, 698, is far different from this case. There the defendant took the car at 2:30 a.m. by removing it from plaintiff's garage, and the Supreme Court alluded to the fact that defendants admitted that they saw the automobile in front of plaintiff's home on the night preceding the morning they took it, but did not attempt to take it at that time or communicate with Voltz and apprise him of their intentions, and that they testified, "It was easier to take it out of the garage." Had the defendant taken the car in broad daylight, as in this case, or on the evening preceding the morning when they took it and after plaintiff was notified of defendant's intention so to do the court doubtless would have held there was no conversion, for otherwise there would have been no occasion to refer to the fact that they did not take it at that time. Nor do we believe that the statement in Uhl v. Wexford Co., 268 Mich. 473, 256 N.W. 488, 489, that "the right of the vendor to re-enter into possession depends, not on contract, but on law" has application here. In that case the court was dealing with a contract which was silent as to the right of the vendor to retake possession. In such a case the law and not the contract would control. In this case the contract authorizes the vendor to retake possession upon default. When the matter is covered by contract it controls unless the contract is invalid as against public policy or otherwise, which is not contended for here.

Defendant assigns error also in the giving of certain instructions over its objection, and in the refusal to give others. Since under the admissible and competent evidence in the case there is but one result possible, and that is a judgment for demendant, there is nothing for a jury to pass upon in the case. No useful purpose would be served in discussing the propriety of the instructions given and refused. The court erred in denying defendant's motion for a directed verdict.

The judgment is reversed and the cause remanded with directions to enter judgment for defendant as prayed for in its answer.

Mr. Chief Justice Johnson and Associate Justices Morris and Cheadle concur.