Zell v. Am. Seating Co.

138 F.2d 641

 

RULE:

It has been held virtually everywhere, when the question has arisen that certainly in the absence of any fraudulent or illegal purpose a purported written agreement, which the parties designed as a mere sham, lacks legal efficacy, and that extrinsic parol or other extrinsic evidence will always be received on that issue. 

FACTS:

Parties had an oral agreement which was reduced to a written agreement. The written agreement differed significantly from the oral agreement. The parties disagreed over compensation, and plaintiff sued defendant for breach of contract. The plaintiff claimed that the written contract was an inaccurate representation of the oral agreement, but the Trial Court agreed with the defendant, and said that the parol evidence rule prohibited introduction of the difference between the agreements. Defendant's motion for summary judgment was granted, and plaintiff appealed from the motion for summary judgment.

ISSUE:

Whether the Trial Court should have allowed the jury to hear testimony of the parties' oral agreement, and how it differed from the parties' written contract.

ANSWER:

Yes, the Trial Court should have allowed the jury to hear testimony of the parties' oral agreement.

CONCLUSION:

The Court held that the parol evidence rule seemed to be adopted due to jury distrust, but did not agree with defendant's belief that the parol evidence was so beneficent, promoting the administration of justice, and so necessary to business stability, that it should be given the widest possible application. In fact, the Court suggested that legislation restrict use of the parol evidence rule. Thus, judgment reversed and case was remanded.

Click here to view the full text case and earn your Daily Research Points.