Same - Evidence As To Terms Of Contract18

217. Parol evidence as to the terms of a contract which appears to be complete in writing is inadmissible, except

(a) To prove terms which are supplementary or collateral to so much of the agreement as is in writing.

(b) To explain terms of the contract which need explanation.

(c) To introduce a custom or usage into the contract.

(d) In the application by courts of equity of their peculiar remedies in cases of mistake.

Where a contract is reduced to writing, it is presumed to embody the final and entire agreement of the parties; and parol evidence is accordingly inadmissible to contradict, add to, or otherwise vary, the written contract.19 So, where a written contract has been fully executed and delivered, parol evidence is not admissible of an understanding that it should not be operative according to its terms, or that the liability of the promisor, absolute on the face of the instrument, was intended to be conditional.20 And parol testimony is also inadmissible to contradict an implied term of a contract, or to alter its legal effect.21 Notwithstanding the strictness, however, with which the parol evidence rule is enforced by the courts, parol testimony affecting the terms of a written contract is admissible when the effect of such testimony is not to vary, but to explain, the contract, or to add a term to a contract in writing which is evidently not intended to cover the entire agreement between the parties.22

17 Pym v. Campbell, 6 El. & Bl. 370. And see McFarland v. Sikes, 54 Conn. 250, 7 Atl. 408, 1 Am. St. Rep. Ill; Wilson v. Powers, 131 Mass. 539; Ware v. Allen, 128 U. S. 590, 9 Sup. Ct, 174, 32 L. Ed. 563; Juilliard v. Chaffee, 92 N. Y. 529; Reynolds v. Robinson, 110 N. Y. 654, 18 N. E. 127; Westman v. Krumweide, 30 Minn. 313, 15 N. W. 255; Lipscomb v. Lipscomb, 32 S. C. 243, 10 S. E. 929; Solenberger v. Gilbert's Adm'r, 86 Va. 778, 11 S. E. 7S9; Humphreys v. Railroad Co., 88 Va. 431, 13 S. E. 985; Gibbons v. Ellis, 83 Wis. 434, 53 N. W. 701; Blewitt v. Boorum, 142 N. Y. 357, 37 N. E. 119, 40 Am. St. Rep. 600; Burns & Smith Lumber Co. v. Doyle, 71 Conn. 742, 43 Atl. 483, 71 Am. St. Rep. 235; Hillyard v. Hewitt, 61 Or. 58, 120 Pac. 750. This rule, in the absence of fraud, does not permit parol evidence of an agreement contemporaneous with a written contract, such as a note or bond, which has been completely executed and finally delivered, so as to take effect, that the obligee or promisee would not enforcer the contract, or that the liability of the obligor or promisor should be dependent upon a condition not expressed in the writing. See note 18, infra. See "Evidence," Dec. Dig. (Key-No.) § 397; Cent. Dig. §§ 1756-1765.

18 Anson, Cont. (4th Ed.) 243-251.

19 SMITH v. WILLIAMS, 5 N. C. 426, 4 Am. Dec. 564, Throckmorton Cas. Contracts, 339; Burnes v. Scott, 117 U. S. 582, 6 Sup. Ct. 865, 29 L. Ed. 991; Pierce v. Tidwell, 81 Ala. 299, 2 South. 15; Atlee v. Bartholomew, 69 Wis. 43, 33 N. W. 110, 5 Am. St. Rep. 103; Bofinger v. Tuyes, 120 U. S. 198, 7 Sup. Ct. 529, 30 L. Ed. 649; De Long v. Lee, 73 Iowa, 53, 34 N. W. 613; Gilbert v. Plow Co., 119 U. S. 491, 7 Sup. Ct. 305, 30 L. Ed. 476; Williams v. Kent, 67 Md. 350, 10 Atl. 228; Conant v. Bank, 121 Ind. 323, 22 N. E. 250; Merchants' & Farmers' Nat. Bank v. McElwee, 104 N. C. 305, 10 S. E. 295; Harrow Spring Co. v. Harrow Co., 90 Mich. 147, 51 N. W. 197, 30 Am. St Rep.

421; Gasper v. Heimbach, 53 Minn. 414, 55 N. W. 559; Viollette v. Rice, 173 Mass. 82, 53 N. E. 144; Clark v. Mallory, 185 111. 227, 56 N. E. 1099; Smith v. Bank, 89 Fed. 832, 32 C. C. A. 368. The rule excluding parol evidence is confined to the parties to the contract, or their privies; and it does not apply as between a party and a stranger. Clapp v. Banking Co., 50 Ohio St. 528, 35 N. E. 308; Highstone v. Burdette, 61 Mich. 54, 27 N. W. 852; Bruce v. Lumber Co., 87 Va. 381, 13 S. E. 153, 24 Am. St. Rep. 657; Fonda v. Burton, 63 Vt. 355, 22 Atl. 594; Grove v. Rentch, 26 Md. 367; Clerihew v. Bank, 50 Minn. 538, 52 N. W. 967; First Nat. Bank v. Dunn, 55 N. J. Law, 404, 27 Atl. 908; Marriner v. Dennison, 78 Cal. 202, 20 Pac. 386. Where part of the contract is in writing and part is oral, that part which has been reduced to writing may not be contradicted by parol evidence. English v. New Orleans & N. E. R. Co., 100 Miss. 809, 57 South. 223. See "Evidence," Dec. Dig. (Key-No.) § 897; Cent. Dig. §§ 1756-1765.

20 McCormick Harvesting Mach. Co. v. Wilson, 39 Minn. 467, 40 N. W. 571; Marquis v. Lauretson, 76 Iowa, 23, 40 N. W. 73; Meekins v. Newberry, 101 N. C. 17, 7 S. E. 655; Thompson v. McKee, 5 Dak. 172, 37 N. W. 367; Coap-stick v. Bosworth, 121 Ind. 6, 22 N. E. 772; Dexter v. Ohlander, 93 Ala. 441, 9 South. 361; Engelhorn v. Reitlinger, 122 N. Y. 76, 25 N. E. 297, 9 L. R. A. 548; Ziegler v. McFarland, 147 Pa. 607, 23 Atl. 1045; Osborne v. Taylor, 58 Conn. 439, 20 Atl. 605; Harrison v. Morrison, 39 Minn. 319, 40 N. W. 66; Burns & Smith Lumber Co. v. Doyle, 71 Conn. 742, 43 Atl. 483, 71 Am. St. Rep. 235. Cf. Clinch Valley Coal & Iron Co. v. Willing, 180 Pa. 165, 36 Atl. 737, 57 Am. St. Rep. 626. In the absence of fraud, parol evidence is not admissible to show that the obligee, contemporaneously with the execution of a bond, promised not to enforce it as against one of the parties. Towner v. Lucas' Ex'r, 13 Grat. (Va.) 705; Barnett v. Barnett, 83 Va. 504, 2 S. E. 733; Yeager v. Yeager (Pa.) 8 Atl. 579. See "Evidence," Dec. Dig. (Key-No.) § 420; Cent. Dig. §§ 1728, 1795, 1800, 1804, 1815, 1821, 1929-1944-

21Barry v. Ransom, 12 N. Y. 464; In re Clairfield Lumber Co. (D. C.) 194 Fed. 181, 194; Van Winkle & Co. v. Crowell, 146 U. S. 42, 13 Sup. Ct. 18, 36 L. Ed. 880. See "Evidence," Dec. Dig. (Key-No.) §§ 428, 441; Cent. Dig. §§ 1957-1965, 2080-2047.

22See infra, notes 23, 24. Where a parol contract is executed, the subse quent reduction of the contract to writing does not prevent one of the parlies from proving by parol a term of the original contract not included in the writing. Smith v. Hunt, 50 Ind. App. 592, 98 N. E. 841. See "Evidence," Dec. Dig. (Key-No.) § 417; Cent. Dig. §§ 1874-1899.