This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Performance and breach of a contract are questions which necessarily arise after the contract has been entered into. Accordingly, the parol evidence rule does not prevent a party to a contract from showing such breach as amounts to a discharge,1 as of a promissory note not in the hands of a bona fide holder.2 Under a written contract by which A agrees to convey a certain right or interest to B, extrinsic evidence of the fact that A does not possess such interest is admissible, since such evidence does not contradict the contract itself, but affects the performance thereof.3 Extrinsic evidence to the effect that property which was sold did not conform to the terms of the contract,4 or that one of the parties to the contract had so acted as to repudiate it,5 is not rendered inadmissible by the parol evidence rule. So the parol evidence rule has no application to evidence tending to show payment.6 Extrinsic evidence to the effect that the payee of a note agreed to foreclose a mortgage which was given to secure it and to apply the proceeds of such mortgage upon such note and that such foreclosure has been had, is in legal effect evidence of payment and is not rendered inadmissible by the parol evidence rule.7 If A has signed B's name to a check without B's authority, extrinsic evidence to the effect that A actually received the money upon such check is admissible.8
12Acebal v. Levy, 10 Bing. 376; Hoadley v. McLaine, 10 Bing. 482.
See also, Elmore v. Kingscote, 5 Barn. & C. 583.
13Boardman v. Spooner, 95 Mass. (13 All.) 353, 90 Am. Dec. 196. (The court said, however, that if the purchasers themselves had signed such a written memorandum they could not show that they had a right to reject the goods if they did not believe them to be of good quality.)
1 Florida. Braxton v. Liddon, 49 Fla. 280, 38 So. 717.
Iowa. Lektric Sales Co. v. Hammer, 182 Ia. 1228, 166 N. W. 593.
Montana. Petit v. Sinclier, 53 Mont. 317, 163 Pac. 467.
North Dakota. Sargent v. Cooley, 12 N. D. 1, 94 N. W. 676.
Wyoming. J. W. Denio Milling Co. v. Malin, 25 Wyom. 143, 165 Pac. 1113
See, as to oral statement of ability to perform. Clapp v. American Express Co., - Mass. - , 125 N. E. 162.
2Kelley v. Guy, 116 Mich. 43, 74 N. W. 291; Warner v. Shulz, 74 Minn. 252, 77 N. W. 25.
3 Petit v. Sinclier, 53 Mont. 317, 163 Pac. 467.
4Lektic Sales Co. v. Hammer, 182 Ia. 1228, 166 N. W. 593.
5 J. W. Denio Milling Co. v. Malin, 25 Wyom. 143, 165 Pac. 1113.
6 Continental Gin Co. v. Stocker, 235 Fed. 1005.
Payment of promissory note. G. Ober & Sons Co. v. Drane, 106 Ga. 406, 32 S. E. 371.