Although the decision was reversed on appeal, the appellate court holding that the parol-evidence rule was not violated by the admission of evidence of the parol promise, it may not be inappropriate to note a distinction which was made in a Texas case as regards oral promises made without intention of performance, between

30 Gwinther v. Gerding (1859) 3 Head (Tenn.) 197.

Tex. Civ.

31 Wise v. Boyd (1924) App., 267 S. W. 543 (reversed in (1926) Tex., 282 S. W. 570). The court of civil appeals said: "The principal contention is that the parol agreement, made without intention of performance, and its breach, constitute such fraud as will take the case out of the parol-evidence rule. It is true that in some instances a promise to be performed in the future, made with no intention of performance, may sustain a charge of fraud; such rule was evolved in the development of the law of fraud, and as an exception to the general rule that fraudulent representations that will avoid a contract must be as to existing facts. But this rule cannot logically be applied to an oral agreement made in connection with a written agreement, and which contradicts the terms of the writing, for the reason that in such case the parol-evidence rule precludes the proof of the oral agreement, so that there is no foundation on which to build the fraud charge. If truth were capable of exact ascertainment in judicial trials, there would be no reason for the parol-evidence rule, its justification is that it is necessary to preserve the written contract as a means of expressing agreements made between parties thereto in a way that will not be subject to further question as to what those agreements were. The rule sometimes, no doubt, works hardships. and injustice; on the other hand, it ofttimes forestalls fraud and perjury, and is almost necessary to the safe transaction of the business of the

cases where the evidence is relied on to establish fraud in contradiction of the terms of the writing, and other cases where the evidence is relied on to show fraud, the view being taken that while in some instances promise made without intention of performance may constitute fraud, this is not true within the principles here under consideration, if the evidence offered would contradict the express terms of the writing, because in such a case the evidence of the oral promise should be excluded in the first instance under the parol-evidence rule, and there is therefore no basis on which to predicate fraud. 31 Promises made country. We do not take the time to consider in detail the limitations and exceptions which have been worked out by the courts, designed to prevent the application of the rule so as to result in injustice; fraud inducing the execution of the instrument is one of them. But if this exception would permit the establishment of fraud by proof of the oral agreement, in contradiction of the writing, and its violation, then the rule itself would be practically abrogated."

"It is a well-settled principle of the law of sales that an oral representation on which a charge of fraud on the part of the seller may be based in avoidance of the written contract must be a representation of a past or present condition or existing fact, as distinguished from a promissory representation contractual in its nature and contradictory of the written contract." American Law Book Co. v. Fulwiler (1920) Tex. Civ. App. 219 S. W.

881.

The decision in Lanius v. Shuber (1890) 77 Tex. 24, 13 S. W. 614, may perhaps be explained on the ground that the court regarded the alleged false representations as insufficient to show fraud because of their promissory nature. The action was one on a note given, it was alleged, for money borrowed by the payee from the plaintiff; and it was held that exceptions were properly sustained to answers of sureties alleging that they executed the note on representations made by the plaintiff's agent, to the effect that the payee was borrowing the money to buy cattle, and that the money would not be delivered to the payee until he had bought the cattle and executed a

without intention of performance have been held, however, in this state to constitute the basis for fraud inducing a written contract, which would warrant the introduction of parol or extrinsic evidence at variance with the terms of the writing. 32 That a mere failure to carry out an alleged parol promise made contemporaneously with a written agreement does not prove such a fraud in the inception of the contract as will warrant the admission of parol evidence to show the alleged promise at variance with the writing seems clear both on reason

chattel mortgage thereon, so that the defendants would be protected from loss on account of the note; that these representations, promises, and agreements were made falsely and fraudulently for the purpose of defrauding and deceiving the defendants, and did deceive them, and induce them to execute the note.

In Wolff v. Cohen (1926) Tex. Civ. App., 281 S. W. 646, the court expressed the opinion that, in order to make applicable the rule above referred to as to impeachment of written contracts by parol evidence offered to show fraud inducing the contracts, the fraudulent representations must relate to past or present facts, and not be the expression of a mere opinion or something that is promised in the future. But this does not appear necessarily to mean that fraud may not be predicated on promises made without intention of performance, so far as the subject under annotation is concerned.

See in this connection note 62, infra, where the fact that the misrepresentations were of a promissory nature apparently determined the decision in a New York case. And see note 137, infra, as to sales of personal property, where the misrepresentations were of a promissory nature.

32 Rapid Transit R. Co. v. Smith (1905) 98 Tex. 553, 86 S. W. 322; Edward Thompson Co. v. Sawyers (1921) 111 Tex. 374, 234 S. W. 873; Wise v. Boyd, supra.

In Cattle Raisers' Loan Co. v. Sutton (1925) - Tex. Civ. App. —, 271 S. W. 233, the court says that fraud is one of the elements that allow testimony contradicting a fraudulent written contract, if such stands in the way of the truth, and this is true whether such representations be present, pro

and according to the weight of authority. To hold otherwise would, as has been pointed out, be reasoning in a circle and be a virtual abrogation of the parol-evidence rule itself. 33 other words, some evidence is necessary of actual fraud, other than that merely of an alleged variation between the terms of a written agreement and the actual contract. Thus, if the written contract provides for the doing of an act on a certain condition, the promisee cannot show that the promise was an absolute one merely by claiming fraud, unless he produces some other spective, or promissory, or relate to past or future matters.

The general question whether fraud may be predicated on promises made without intention of performance is treated in subdivision III. of annotation in 51 A.L.R. on p. 63 [Fraud, § 19], on the subject whether promises and statements as to future events may constitute fraud.

33 Thus, in Towner v. Lucas (1857) 13 Gratt. (Va.) 705, the court, speaking with reference to the admissibility of oral contemporaneous evidence to contradict or vary the terms of a written instrument, said: "The fraud which will let in such proof must be fraud in the procurement of the instrument, which goes to its validity, or some breach of confidence in using a paper delivered for one purpose and fraudulently perverting it to another. In such cases the oral evidence tends to prove independent facts, which if established avoid the effect of the written agreement by facts dehors the instrument; but do not tend to contradict or vary it. It is reasoning in a circle to argue that fraud is made out, when it is shown by oral testimony that the obligee, cotemporaneously with the execution of a bond, promised not to enforce it. Such a principle would nullify the rule; for conceding that such an agreement is proved, or any other contradicting the written instrument, the party seeking to enforce the written agreement according to its terms would always be guilty of fraud. The true question is, Was there any such agreement? And this can only be established by legitimate testimony. For reasons founded in wisdom and to prevent frauds and perjuries, the rule of the common law excludes such oral testimony of the alleged agreement;

evidence of the alleged fraud. 34 And evidence merely tending to prove a discrepancy between the written contract and the parol understanding of the parties thereto will not necessarily falsify the writing, or show that it does not contain the true contract, and is inadmissible if not accompanied by other evidence of fraud. 35 There must be proof, and not merely averment of fraud, to warrant admission of parol evidence to contradict the writing. 36 It has been observed in a Louisiana case that, in order to open the door to the admission of parol evidence to contradict a written instru

and, as it cannot be proved by legal evidence, the agreement itself, in legal contemplation, cannot be regarded as existing in fact. Neither a court of law or of equity can act upon the hypothesis of fraud where there is no legal proof of it." The doctrine of this case is approved also in Broughton v. Coffer (1868) 18 Gratt. (Va.) 184, and Woodward v. Foster (1868) 18 Gratt. (Va.) 200.

To the effect, also, that failure to comply with an oral agreement inducing the execution of a written contract is not such a fraud as will admit parol evidence to contradict or vary the writing, are Callanan v. Judd (1868) 23 Wis. 343, and Fairchild v. Rasdall (1859) 9 Wis. 379.

34 St. Vrain Stone Co. v. Denver, U. & P. R. Co. (1893) 18 Colo. 211, 32 Pac. 827.

35 See Tribble v. Oldham (1830) 5 J. J. Marsh. (Ky.) 137. The court said that when by fraud or misrepresentation a written memorial of a contract essentially variant from the agreement actually made is imposed upon a party, the deed or writing is not his, and is not obligatory; that in such cases the fraud or misrepresentation may be proved without contradicting the written evidence; but that the bare fact that the contract in writing varies from the parol understanding of either party, or both, does not sustain a plea of non est factum, and such evidence alone is inadmissible.

In this connection attention is called to Vansant v. Runyon (1898) 19 Ky. L. Rep. 1981, 44 S. W. 949, in which the court says that, where fraud or mistake is alleged and proved, "then" it is proper to admit testimony to show the real agreement between the parties;

ment, error or fraud must not merely be alleged, but must be proved, or at least the party seeking to contradict the writing by parol must satisfy the court that he is in possession of evidence necessary for the purpose, and will offer it later in the course of the trial; and it is not erroneous to refuse to permit a party to a writing to introduce parol evidence to contradict it, although he alleges fraud in its procurement, unless he first tenders evidence in support thereof, or satisfies the court that he is in possession of the same. 37 And in a Kentucky case, 38 it is said on this that it will not do, simply upon the allegation of fraud or mistake, without proof to establish the averment, to permit parties to offer parol testimony to contradict the writing which purports to be the evidence of the contract between the parties; in other words, the language seems to imply that fraud must first be established before the parol evidence is admitted, and cannot be proved by the parol evidence itself. 36 See, for example, Vansant v. Runyon (Ky.) supra.

That the buyer of personal property cannot bring an action of tort against the seller, based on alleged representations of the latter regarding the quality of the subject-matter of the sale, merely by alleging that the representations were falsely and fraudulently made, see also De Pasquale v. Bradlee & M. Co. (1927) 258 Mass. 483, 156 N. E. 37.

In Bushnell v. Elkins (1926) 34 Wyo. 495, 51 A.L.R. 13, 245 Pac. 304, the court says that one cannot defeat the parol-evidence rule by simply claiming that promises made were fraudulent, if they were not so in fact, or not such as the law recognizes as fraudulent.

37 Salmen Brick & Lumber Co. v. Peterson (1908) 121 La. 528, 46 So. 616.

38 Western Mfg. Co. v. Cotton (1907) 126 Ky. 749, 12 L.R.A. (N.S.) 427, 104 S. W. 758.

Attention is called to McGill v. Cromwell (1883) 5 Ky. L. Rep. 246 (abstract), in which it is said that parol testimony is not competent to contradict the boundaries of a deed, in the absence of fraud or mistake, and that, when either are alleged, it requires stronger proof than the mere declaration of the parties, to contra

point: "The error is sometimes made of supposing that a mere allegation of fraud or mistake opens the written contract, and its merits will then depend upon the preponderance of the evidence. But it should always be borne in mind that written documents admittedly signed by the parties, entered into in solemn form and with apparent deliberation,-for such the writing implies,-must stand unless, by strong evidence of a convincing nature, the judicial mind is convinced that it was obtained by fraud, or fails because of the mutual mistake of the parties to state the true agreement." Several other cases which support a dict the plain stipulation of the written instruments.

39 It is held in Dyar v. Walton (1887) 79 Ga. 466, 7 S. E. 220, that parol evidence that a settlement closed up by the giving of notes and a mortgage was, by parol agreement of the parties, to be revised by the debtor, and the notes and mortgage reduced by crediting down of all errors, contradicted the writing and was inadmissible; that the making and violating of a contemporaneous parol agreement inconsistent with the writing is not a fraud for which equity will vary or set the same aside, no sufficient reason appearing why such agreement was not incorporated in the writing.

To a similar effect is Moore v. Flowers Lumber Co. (1926) 35 Ga. App. 336, 133 S. E. 650, in which the court says that, where one deliberately signs a note for a stated sum, without informing himself as to the correctness of the amount named, but relies upon the promise of the other party to the contract that it will be revised so as to correct errors, the maker will not be heard to contradict the written instrument by setting up such parol understanding in opposition thereto. See also, for example, supporting the same principle, Brack v. Brantley Co. (1910) 134 Ga. 495, 67 S. E. 1123.

And such cases as Thomson v. McLaughlin (1913) 13 Ga. App. 334, 79 S. E. 182, and Chewning v. Tucker (1916) 17 Ga. App. 768, 88 S. E. 593, apparently turn on the insufficiency of the particular evidence to show fraud, and are not in point in the annotation, although it may be noted that similar cases on the facts may be in point 56 A.L.R.-4.

similar proposition, or which turn on the question of the sufficiency of the evidence to show fraud, rather than on the exception herein considered to the parol-evidence rule, are cited in the footnote. 39

Pennsylvania decisions.

As shown by the cases above cited in support of the general rule admitting parol evidence of fraud which induced or entered into the execution of a written instrument, the the Pennsylvania courts are in accord with that doctrine. But the courts of that state have generally been regarded as occupying an anomalous position with regard to the parol-evidence rule itself, and herein because of a different ruling on the question of what amounts to legal fraud. In those cases the court held that a promise to do certain acts or perform certain services, made to induce the execution of a note, though made with no intention of performance, is not such a fraud as will authorize the admission of parol evidence thereof to vary the terms of a note which contains no such stipulation. From the annotation in 51 A.L.R. 46, subd. III. [Fraud, § 19], on the question as to whether promises and statements as to future events may constitute fraud, it will be observed that the Georgia decisions are not harmonious on the question whether promises made without intention of performance may constitute fraud.

The decision in Knowlton v. Keenan (1888) 146 Mass. 86, 4 Am. St. Rep. 282, 15 N. E. 127, turns apparently on the failure of the alleged oral representations to establish fraud inducing the contract, and on this assumption represents a minority view. (See note 34 of annotation in 51 A.L.R. on p. 78 [Fraud, § 19].) The alleged fraud consisted in a failure to perform an oral promise made contemporaneously with the written agreement, and constituting a part of the transaction. court said that even if the plaintiffs made this oral contract fraudulently, knowing that they could not perform it, the evidence would have been inadmissible; that there was no fraud in the written contract itself, and such evidence could not have been received to control its operation and virtually to annul it; and a distinction is made between representations of the kind in

The

they have sometimes expressed the view that the English doctrine as to the admissibility of parol evidence to vary the terms of a written instrument did not there apply. 40 The divergence of the courts of Pennsylvania from those of other states seems to be largely with regard to what constitutes fraud, the courts in some decisions taking the view that failure to perform an oral promise upon the faith of which the written instrument was signed is in itself such fraud as may be shown by parol. Of course with this proposition, as to what amounts to fraud, as previously noted, the present annotation does not deal. But it seems that much confusion would have

question, that something in the future will be performed, and misrepresentations of fact.

40 In this connection attention is called to the Pennsylvania cases cited in the annotation in 25 A.L.R. on pages 866 et seq., on the question of the application of the parol-evidence rule to leases, where fraud is alleged.

In Phillips v. Meily (1884) 106 Pa. 536, the court, citing Kostenbader v. Peters (1876) 80 Pa. 438, says that the English rule that parol evidence is inadmissible to vary the terms of a written instrument does not exist in that state; that it would perhaps be more accurate to say that the rule has been relaxed, for the guards which the court has thrown around the modification of the rule had, to some extent, preserved the rule itself; that the cases in that state in which parol evidence was allowed to contradict or vary written instruments might be classed under two heads: (1) Where there was fraud, accident, or mistake in the creation of the instrument itself; and (2) where there had been an attempt to make a fraudulent use of the instrument in violation of a promise or agreement made at the time the instrument was signed, and without which it would not have been executed.

41 See, for example, First Nat. Bank v. Sagerson (1925) 283 Pa. 406, 129 Atl. 333.

In Thorne v. Warfflein (1882) 100 Pa. 519, the court said that it had gone far in permitting parol contemporaneous evidence to defeat written instruments; that to go farther would practically abrogate the rule. "We cannot agree that it is proper to

been avoided in this state had the courts in the earlier decisions discriminated as regards the exception to the parol-evidence rule here under discussion, between cases of fraud in the inception of the contract and cases of so-called fraudulent use of the contract. A number of Pennsylvania cases, particularly the earlier ones, recognize the general rule prohibiting the contradiction or varying of written contracts by parol, and the more recent decisions seem to be more nearly in harmony with the weight of authority as to what constitutes fraud warranting the admission of parol evidence, and to overrule some of the earlier cases in that state. 41

throw the whole case into the jury box on the ground of fraud, simply because one of two parties to a written contract testifies that there were parol stipulations contradictory to the terms of the writing, agreed to at the same time. There must be evidence of fraud other than that which may be derived from the mere difference in the parol and written terms. We can find no such evidence in the present case, and we are, therefore, of opinion that the learned court below was in error in leaving the question of fraud to the jury."

That fraud warranting the admission of parol evidence to vary the terms of a written contract cannot be predicated merely on unfulfilled promises, made as an inducement to the contract, is supported by the recent cases of Humphrey v. Brown (1927) 291 Pa. 53, 139 Atl. 606, and Fidelity Title & T. Co. v. Garland (1927) 291 Pa. 297, 139 Atl. 876.

And in Cridge's Estate (1927) 289 Pa. 331, 137 Atl. 455, the court says: "It has long been held in Pennsylvania that parol evidence, if sufficient, may be used to show fraud, accident, or mistake in the making of a contract, or a failure of consideration,

and may be offered to show a contemporaneous parol agreement which induced the signing. . . The rule has been generally recognized that the agreement set up must not be inconsistent with the express provisions of the writing... And the more recent decisions have enforced even more strictly this principle, holding that, if the matter proposed to be shown by parol is the subject of a