Contracts

Brief

Gianni v. R. Russell & Co.

Procedural History:

• Lower Court ruled for the Plaintiff.
• Appealed.
• Reversed.

Facts:

• Plaintiff was a tenant of a room in an office building where he conducted a store, selling tobacco, fruit, candy and soft drinks.
• Defendant acquired the entire property which included the store room.
• The defendant’s agent negotiated for a further leasing of the room and a 3 year lease was then signed.
  • Provision: Lessee should use the premises only for the sale of fruit, candy, soda, water, etc. with a further stipulation that it is expressly understood that the tenant is not allowed to sell tobacco in any form, under penalty of instant forfeiture of the lease.
• The lease was signed after had been looked over.
• Plaintiff however contends that during the court of the dealings it was agreed that in consideration for his promise not sell tobacco and to pay an increased rent and for entering into the agreement as a whole, he should have the exclusive right to sell soft drinks for the building.
  • There is no such stipulation in the agreement.
• Shortly after the signing, the defendant turned the adjoining room into a drug store without restricting their right to sell soda water and soft drinks.
• Plaintiff thus brought this action for breach of the alleged oral contract.

Issue:

• Whether evidence of an oral contract is admissible under the parol evidence rule when the written contract is complete and covers the subject matter of the oral agreement?

Holding:

• No. Reversed.

Reasoning:

• Plaintiff was unable to present any witnesses who were present during the execution of the contract in order to corroborate his statement.
• The court states: Where parties, without any fraud or mistake, have deliberately put their engagements in writing, the law declares the writing to be not only the best, but the only evidence of their agreement.
• The court also compared the two items in question, the written and oral contract, and determined whether the parties, situated as were the ones to the contract, would naturally and normally include the one (the oral) in the other if it were made. If they relate to the same subject matter and are interrelated that both would be executed at the same time, the scope of the subsidiary agreement must be taken to be covered by the writing.
• If it is dealt with in the writing, then presumably the writing was meant to represent all of the transactions on that element, if it is not, then probably the writing was not intended to embody that element of the negotiation.