Van Harris Realty, Inc. v. Coffey

254 S.E.2d 184 (1979) 41 N.C. App. 112

VAN HARRIS REALTY, INC.
v.
James D. COFFEY and wife, Karen P. Coffey.

No. 7811DC648.

Court of Appeals of North Carolina.

May 1, 1979.

J. D. Moretz, Sanford, for plaintiff-appellee.

Hoyle & Hoyle by J. W. Hoyle, Sanford, for defendants-appellants.

CARLTON, Judge.

Defendants' several assignments of error result in a single question presented by this appeal: Did the trial court properly apply the parol evidence rule to certain testimony proffered by the defendant?

Plaintiff introduced a written contract signed by defendants in which defendants gave plaintiff an exclusive right to sell certain real estate. Defendants thereafter attempted, through oral testimony, to prove an oral agreement between the parties entered into just before or simultaneously with the written contract which would establish a different understanding of the parties. The alleged oral agreement would establish that the true understanding between the parties was that another real estate broker had the right to sell the real estate for the defendants also and the broker who made the sale would receive the commission. The trial court properly excluded the testimony on the ground that it would "vary or contradict [the written agreement], and would contravene the Parol Evidence Rule."

The parol evidence rule, as frequently phrased, prohibits the admission of parol evidence to vary, add to, or contradict a written instrument. It is most often referred to as a rule of evidence but actually is one of substantive law. In substantive terms, the rule is stated as follows: "Any or all parts of a transaction prior to or contemporaneous with a writing intended to record them finally are superseded and made legally ineffective by the writing." 2 Stansbury, N.C. Evidence (Brandis Rev. 1973), § 251, p. 234.

There are numerous exceptions to the parol evidence rule. Stansbury, supra, § 252 et seq.; 6 Strong, N.C. Index 3d, Evidence, § 32, p. 88 et seq. Defendants argue that this action falls within one of those exceptions, to wit, that

parol evidence is admissible to show conditions precedent, which relate to the delivery or taking effect of the instrument, as that it shall only become effective on certain conditions or contingencies, for this is not an oral contradiction or variation of the written instrument but goes to the very existence of the contract and tends to show that no valid and effective contract ever existed. Bailey v. Westmoreland, 251 N.C. 843, 845, 112 S.E.2d 517, 520 (1960).

We do not believe defendants correctly perceive the exception stated in Bailey. There, in an action to recover a promissory note, the makers' evidence to the effect that they had signed and delivered the note upon the express condition that the same was not to become operative as a binding obligation unless the makers received a certain sum for the sale or collection of a particular note and that neither of these conditions occurred, was held admissible as not being violative of the parol evidence rule. This is sometimes referred to as the doctrine of "conditional delivery" and provides essentially that parol evidence may be introduced to show that the instrument was not to become legally effective until the happening of some condition precedent. Stansbury, supra, § 257.

Defendants cite various other cases in support of the conditional delivery doctrine. Bailey and other cases cited by defendants are, however, clearly distinguishable from the case sub judice. Those cases establish the proposition that parol evidence may be introduced to show a condition precedent which precludes the contract from becoming effective until the condition happens. Moreover, those conditions are not normally in contradiction with the written contract. Here, however, the proffered oral evidence would not have established a condition precedent which, until it happened, would have precluded the contract from becoming effective. Indeed, had the "happening" envisioned by the parol evidence in this case taken place, the contract would never have become effective. Moreover, the parol evidence in the case at bar is in direct contradiction to that in the written contract. The facts before us, therefore, clearly do not fit into the conditional delivery doctrine enunciated by Bailey and other cases.

We have examined the other exceptions to the parol evidence rule and find that none of them here apply. We concede that the decisions in this and other jurisdictions have not been wholly consistent in applying the parol evidence rule. However, the factual situation here presented involves parol evidence which directly contradicts the provisions of the written instrument. We believe the parol evidence rule evolved to lend stability to written contracts and prevent their upheaval in situations precisely like this.

For the reasons stated, we hold that the trial court properly excluded the proffered parol evidence and the decision of the lower court is therefore

Affirmed.

PARKER and HEDRICK, JJ., concur.