Markoff v. Kreiner

Delaplaine, J., delivered the opinion of the Court. A suit for damages for breach of contract for the sale of real estate was instituted by Mary E. Kreiner, purchaser, against David J. Markoff, seller, and Mollie Herman, real estate agent, alleging (1) that the defendants made alterations in the contract without her authorization, and (2) that they refused to provide a mortgage loan for the balance of the purchase price as they had promised. The plaintiff alleged in her amended declaration that on January 15, 1940, she agreed to purchase an apartment house on North Charles Street in Baltimore, subject to ground rent, for the sum of $5,200; that she made a part payment of $500 thereon and also incurred expenses for its improvement and furniture upon assurances of ¹⁵³ the defendants that they would deliver a valid contract for its conveyance and provide a mortgage loan of $4,700, but that the defendants neither delivered a valid contract nor provided the loan. While the bill of particulars was sufficient to apprise the defendants of the nature of the expenses, the defendants had the right to inquire whether there was any writing promising to furnish a loan.

The object of a bill of particulars is to restrict the plaintiff at the trial and afford the defendant such information as may enable him to frame his defense. Owings v. Dayhoff, 159 Md. 403 , 151 A. 240 . At the close of the testimony, the plaintiff moved for a judgment of non pros as to Mrs. Herman, who had participated in the transaction as agent. Under a Maryland statute, the plaintiff in any action at law in this State has the right to dismiss the suit at any point in the trial of the case up to the time when argument begins on the facts.

Code, Art. 75, Sec. 183. The plaintiff may submit to a voluntary judgment of non pros as to any defendant even after the court has granted a demurrer prayer offered by that defendant. State, For Use of Shipley v. Lupton, 163 Md. 180 , 161 A. 393 . The jury rendered a verdict in favor of the plaintiff against Markoff for the sum of 81,024.92.

The first question in this case is whether there was any legally sufficient evidence that the defendants failed to deliver a valid contract of sale. The plaintiff testified that when one of the signed copies was delivered to her after the time for settlement had expired, she discovered that the recited amount of her partial payment had been reduced from $500 to $300, and the balance raised from $4,700 to $4,900. Mrs. Herman claimed that the alterations were made at the bank with Mrs. Kreiner’s acquiescence, but Mrs. Kreiner swore that the copies were not presented to her for her signature until that evening, when she noticed that it recited a payment of $500 and a balance of $4,700. It is a well established principle that any material alteration of a written instrument made after its execution by a party to it or with ¹⁵⁴ his privity invalidates the instrument as to any non-consenting party.

Any change of a recited amount, whereby it becomes a promise to pay a sum different from that originally expressed, is a material and vitiating alteration. The intent or motive with which an alteration of an instrument is made is immaterial as far as its effect upon the rights of the parties is concerned. A material alteration by one who is not a stranger to the instrument will invalidate it, even though innocently made. The law declares such an instrument void, not because the alteration itself amounts to fraud, but because a different holding would open the door to fraud.

Public policy does not allow a person to secure a chance of perpetrating a fraud without assuming any risk of loss in the event it is discovered. Burrows v. Klunk, 70 Md. 451 , 17 A. 378 , 3 L. R. A. 576, 14 Am. St. Rep. 371 ; Gray v. Williams, 91 Vt. 111 , 99 A. 735 ; Citizens’ National Bank of Baltimore v. Williams, 174 Pa. 66 , 34 A. 303 , 35 L. R. A. 464; Green v. Snead, 101 Ala. 205 , 13 So. 277 , 46 Am. St. Rep. 119 .

Whether the alterations in the contract before us were made with the knowledge and consent of Mrs. Kreiner is a question for the consideration of the jury. The defendant’s prayer for a directed verdict was properly refused. The second question is whether the trial court should have allowed testimony showing that the defendants promised to furnish a loan for the balance of the purchase price. One of the most familiar rules of the common law is that parol evidence is inadmissible to vary or contradict the terms of a written instrument.

Warren Glass Works Co. v. Keystone Coal Co., 65 Md. 547 , 5 A. 253 ; Castleman v. Du Val, 89 Md. 657 , 43 A. 821 ; Fowler v. Pendleton, 121 Md. 297 , 88 A. 124 . The reason for this rule is that when contracting parties have discussed and. agreed upon their obligations to each other and reduced them to writing, their written contract is more reliable as evidence than the uncertain memory of man. A different rule would increase the temptations to commit perjury and often render instruments of little value. ¹⁵⁵ All prior and contemporaneous negotiations are merged in the written instrument, which is treated as the exclusive medium for ascertaining the extent of their obligations. Hence, in the absence of fraud, duress, or mistake, parol evidence of conversations before or at the time the contract was made must be excluded.

Delamater v. Chappell, 48 Md. 244, 250 ; Dance v. Dance, 56 Md. 433, 438 ; Blakistone v. German Bank of Baltimore City, 87 Md. 302, 317 , 39 A. 855, 858 ; Bushnell v. Elkins, 34 Wyo. 495 , 245 P. 304 , 51 A. L. R. 13. It was argued that, under an exception to the parol evidence rule, the challenged testimony was admissible as a separate collateral agreement on which the written contract was silent. The doctrine of collateral agreement was explained by Chief Justice Fuller in the following words: ‘Undoubtedly, the existence of a separate oral agreement as to any matter on which a written contract is silent, and which is not inconsistent with its terms, may be proven by parol, if, under the circumstances of the particular case, it may properly be inferred that the parties did not intend the written paper to be a complete and final statement of the whole of the transaction between them. But such an agreement must not only be collateral, but must relate to a subject distinct from that to which the written contract applies; that is, it must not be so closely connected with the principal transaction as to form part and parcel of it.

And when the writing itself upon its face is couched in such terms as import a complete legal obligation, without any uncertainty as to the object or extent of the engagement, it is conclusively presumed that the whole engagement of the parties, and the extent and manner of their undertaking, was reduced to writing.” Seitz v. Brewers’ Refrigerating Machine Co., 141 U. S. 510 , 12 S. Ct. 46, 47 , 35 L. Ed. 837, 840 . Accordingly the three fold test for determining whether a prior or contemporaneous oral agreement between the parties to a written contract is admissible as a collateral agreement is: (1) whether it is an independent collateral agreement separate and dis ¹⁵⁶ tinct from the main contract; (2) whether it is consistent with the provisions of the contract; and (3) whether it is such an agreement as the parties could not reasonably be expected to embody in the contract, but would naturally make as a separate agreement. Bladen v. Wells, 30 Md. 577, 583 ; Basshor v. Forbes, 36 Md. 154 ; Williams v. Kent, 67 Md. 350 , 10 A. 228 ; Roberts v. Bonaparte, 73 Md. 191 , 20 A. 918 , 10 L. R. A. 689; Stallings v.. Gottschalk, 77 Md. 429 , 26 A. 524 ; Merritt v. Peninsular Construction Co., 91 Md. 453, 464 , 46 A. 1013, 1014 ; Knabe v. Bowles, 123 Md. 475 , 91 A. 567 ; 20 Am.

Jur., Evidence, sec. 1140; 1 Restatement of Contracts, sec. 240. The third question in this test, expressed in other words, is whether the intention of the parties was to include in their writing the subject of negotiation on which extrinsic evidence is offered. Mitchill v. Lath, 247 N. Y. 377 , 160 N. E. 646 , 68 A. L. R. 239; Cohn v. Dunn, 111 Conn. 342 , 149 A. 851 , 70 A. L. R. 740, 743; Danielson v. Bank of Scandinavia, 201 Wis. 392 , 230 N. W. 83 , 70 A. L. R. 746, 759, 761. For example, where a person sold a store property in Catonsville and at the same time promised verbally that he would not go into business in Catonsville, the Court of Appeals held that parol evidence of his promise was admissible as an incidental collateral fact about which the contract was silent.

Fusting v. Sullivan, 41 Md. 162 . But it is equally clear that even though an agreement is really collateral, it cannot be enforced if it is inconsistent with the terms of the written contract. Boswell v. Hostetter, 129 Md. 53 , 98 A. 222 ; 4 Page on Contracts, sec. 2194. The contract in this case stipulated that the balance of the purchase price was “to be paid in cash,” and upon payment thereof 30 days from date the vendor would execute a deed for the property.

This court recognizes the rule that a contract of sale is conclusive as to the time, mode, and terms of payment, and such provisions cannot be varied or contradicted by