Kinsler, Jeff 4/28/2015

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Allen v. Marciano, 79 R.I. 98 (1951)
84 A.2d 425

admitted without
considered.

79 R.I. 98
Supreme Court of Rhode Island.

objection,

will

not

be

2 Cases that cite this headnote

ALLEN
v.
MARCIANO.
Ex. No. 9134. | Nov. 9, 1951.

[3]

Action of assumpsit by Lloyd R. Allen against Eugene

Marciano to recover amount paid as a binder and part payment
on the purchase price of realty. Trial in the Superior Court,
Providence and Bristol Counties, Charles A. Walsh, P. J.,
without a jury resulted in a decision for plaintiff and defendant
brought an exception to the decision. The Supreme Court,
Condon, J., held that evidence that before plaintiff signed
written contract to purchase realty, defendants agent orally
agreed that sale was dependent upon plaintiffs ability to
obtain a GI loan and that binder payment was made subject to
plaintiffs right to a refund if sale could not be completed
because of failure to obtain such loan showed a condition
precedent to the taking effect of written contract and was
admissible under an exception to parol evidence rule.

A general exception to decision of trial justice

based on an oral agreement was sufficient to
bring before Supreme Court for review the ruling
admitting evidence of such agreement over
objection that it violated parol evidence rule,
since if such evidence was in fact so inhibited,
error inhered in trial justices decision.
1 Cases that cite this headnote

Exception overruled and case remitted for entry of judgment

on the decision.
[4]

Appeal and Error

Rulings as to Evidence
Ordinarily, an objection to a ruling made during
trial admitting evidence cannot be argued under
a general exception to decision of trial justice.
Cases that cite this headnote

[2]

Evidence
Grounds for Exclusion of Extrinsic Evidence
The parol evidence rule is a rule of substantive
law and not merely a rule of evidence and any
evidence violative of such rule, even though

Evidence
Contracts of Sale and Deeds
Evidence that before purchaser signed written
contract to purchase realty vendors agent agreed
that sale was dependent upon purchasers ability
to obtain a GI loan to pay balance of purchase
price and that amount paid as a binder and part
payment was paid subject to purchasers right to
a refund if sale could not be completed because
of failure to obtain such loan showed a condition
precedent to the taking effect of written contract
and was not inadmissible under parol evidence
rule as tending to contradict or vary the terms of
written agreement.

West Headnotes (8)

[1]

Appeal and Error

Rulings as to Evidence
Appeal and Error
Including Errors in One Assignment

3 Cases that cite this headnote

[5]

Evidence
Contracts in General
Parol evidence is admissible to show conditions
precedent which relate to the existence of a valid

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Kinsler, Jeff 4/28/2015

For Educational Use Only
Allen v. Marciano, 79 R.I. 98 (1951)
84 A.2d 425

contract, but is not admissible to show

conditions subsequent, which provide for the
nullification or modification of an existing
contract.

Cases that cite this headnote

3 Cases that cite this headnote

Attorneys and Law Firms

[6]

Evidence
Contracts in General
Where testimony does not admit the existence of
a completed agreement in writing to which it is
sought to annex an oral condition but rather is to
the effect that such writing was not to come into
existence at all unless and until a certain event
orally agreed upon happened, such testimony
relates to a condition precedent and is admissible
under an exception to parol evidence rule.
5 Cases that cite this headnote

[7]

Evidence
Contracts in General
Testimony of an oral agreement as to a condition
precedent to the taking effect of a written
instrument does not contradict or vary such
instrument and is admissible to prove that the
instrument did not in fact become effective as a
binding contract.
7 Cases that cite this headnote

[8]

Vendor and Purchaser

Grounds for Recovery of Payments
Where vendor before purchaser signed written
contract to purchase realty agreed to refund
amount paid as a binder and part payment on the
purchase price if purchaser could not obtain a GI
loan for balance of purchase price and purchaser
was unable to obtain such loan and promptly
notified vendor of such fact, purchaser was
entitled to refund of binder payment.

**425 *106 Anthony Grilli, Joseph F. Baffoni, Providence, for

plaintiff.
A. Anthony Susi, Arthur P. Vacca, Providence, for defendant.
Opinion
**426 *99 CONDON, Justice.

This is an action of assumpsit which was tried before a justice

of the superior court sitting without a jury and resulted in a
decision for the plaintiff for $300. The case is here solely on
defendants exception to that decision.
On September 3, 1949 the parties entered into a written
agreement in which plaintiff agreed to buy and defendant
agreed to sell a certain parcel of real estate for $10,700. At the
time the plaintiff signed the agreement defendant was not
present but was represented by an agent with full authority to
act for him. The agent received the sum *100 of $300 from the
plaintiff as a binder and part payment on the purchase price
and thereafter turned it over to defendant when the latter
signed. By the express terms of the agreement the balance of
$10,400 was to be paid in cash within ninety days upon
defendant delivering a deed conveying a clear title. On or
about September 15, 1949 plaintiff notified defendant that he
was financially unable to complete the transaction because he
could not obtain a mortgage loan in the amount of such
balance. At that time he also requested defendant to refund the
$300, which the latter refused to do. The written agreement
contains no provision for a refund in the event plaintiff was
financially unable to complete the transaction according to the
terms of the agreement.
The plaintiff bases his right to a refund on an oral agreement
with defendants agent which was made before plaintiff signed
the written agreement and paid the $300. He was allowed,
over defendants objection, to testify as to the nature and
content of such oral agreement. His testimony was to the
effect that before signing the agreement and paying the $300
he informed defendants agent that he did not have sufficient
funds to purchase the real estate; that he would need a
mortgage loan for the balance of $10,400; and that he would
have to rely on obtaining a so-called G.I. Loan in order to go

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Kinsler, Jeff 4/28/2015

For Educational Use Only
Allen v. Marciano, 79 R.I. 98 (1951)
84 A.2d 425

through with the deal. He further testified that defendantsorally agree, before or contemporaneously with the making of
agent thereupon agreed that the sale was dependent upon the the writing, that it shall not become binding until a future day
obtaining of such a loan and that the $300 was to be paid or until the happening of a future event, the oral agreement is
subject to plaintiffs right to a refund if the sale could not be operative if there is nothing in the writing inconsistent
completed because of his failure to secure such a loan.
therewith. Numerous cases in practically all jurisdictions in
this country are cited in support of the doctrine in 32 C.J.S.,
The plaintiffs wife and his father-in-law Joe Florio, who were Evidence, 935, p. 857, where it is stated: In general, parol
present during the negotiations, also testified substantially to evidence is admissible to show conditions precedent, which
the same effect. The defendants agent did not testify.relate to the existence of a valid contract, but is not admissible
Apparently the trial justice relied upon plaintiffs testimonyto show conditions subsequent, which provide for the
and found that there was an oral agreement under which in the nullification or modification of an existing contract.
circumstances plaintiff was entitled to recover.
[1] [2] [3]
*101 The defendant contends that the trial justice erred [6] The correct application of that distinction to the evidence
in receiving and relying upon such testimony on the ground concerning the nature of the condition orally agreed upon
that it tended to contradict or vary the written agreement and presents the chief difficulty with which courts have been
therefore violated the parol evidence rule. He duly excepted to forced to struggle in determining whether the proffered
the admission of such testimony but he has not prosecuted that testimony lies within or without the inhibition of the parol
specific exception here. His single exception is to the trial evidence rule. Where testimony does not admit the existence
justices decision. Ordinarily under that exception he could not of a completed agreement in writing to which it is sought to
argue here any objection to a ruling made during the trial annex an oral condition but rather is to the effect that such
admitting certain evidence. However, he may do so in the writing was not to come into existence at all unless and until a
circumstances of the case at bar, since in this state it is settled certain event orally agreed upon happened, such testimony
that the so-called parol evidence rule is not merely a rule of clearly relates to a condition precedent and is admissible.
evidence but a rule of substantive law, and that any evidence
violative of that rule even though admitted without objection
will not be considered. Gaddes v. Pawtucket Institution for The reason underlying this recognized exception to the parol
Savings, 33 R.I. 177, 187, 80 A. 415. If the evidence inevidence rule is well stated in 46 Am.Jur., Sales, 283, p. 467,
question here is in fact so inhibited then error inheres in the in these words: Evidence is generally held admissible to show
trial justices decision. Therefore defendants generalthat the parties made an agreement before or at the time they
exception to the decision is sufficient to bring before us for entered into a written contract of sale that such contract of sale
review the ruling admitting such evidence.
should become binding only on the happening of a certain
condition or contingency, *103 the theory being that such
[4]
In our opinion the testimony objected to does not in fact evidence merely goes to show that the writing never became
tend to contradict or vary the written agreement. On the operative as a valid agreement and that there is therefore no
contrary such testimony is directed not to the content of the variance or contradition of a valid written instrument.
agreement or to the intention of the parties in entering into it,
but rather to the question whether it ever came into existence The following cases are illustrative of the application of the
as a binding obligation. It tends to show only that theexception to the rule in favor of the admission of such oral
agreement was not to become effective until the happening of agreements. In Ware v. Allen, 128 U.S. 590, 9 S.Ct. 174, 32
a certain event, namely, plaintiffs procurement of a sufficientL.Ed. 563, in a suit on a promissory note the ruling of the trial
loan **427 to enable him to consummate the contract, and that court admitting evidence of an oral agreement that the note
was not to take effect until the makers counsel approved the
such event did not in fact happen.
transaction which involved the giving of the note was
[5]
Testimony relating to an oral agreement concerning a sustained. In Burke v. Dulaney, 153 U.S. 228, 14 S.Ct. 816, 38
condition precedent to the taking effect of a written agreement L.Ed. 698, oral evidence was held properly admitted to show
has long been recognized generally in England and in thisthat a note which was given for certain property was not to
country as not within the inhibition of the parol evidence rule. take effect until the maker of the note could examine such
The leading English case in support of such view appears to beproperty.
Pym v. Campbell, 6 El. & Bl. 370. Wigmore *102 in his
treatise on evidence says that such doctrine is completelyIn Wilson v. Powers, 131 Mass. 539, it was held that an oral
accepted in the United States. 9 Wigmore on Evidence, agreement could be shown, even though the condition was not
2410. And the proposition is stated in Restatement, Contracts,express, if from the circumstances existing before or
241, in the following language: Where parties to a writingaccompanying the transaction it could be inferred. In Levene
which purports to be an integration of a contract between themv. Crowell, 243 Mass. 441, 138 N.E. 9, which was an action
for a brokers commission on a sale of certain ships, the
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Kinsler, Jeff 4/28/2015

For Educational Use Only
Allen v. Marciano, 79 R.I. 98 (1951)
84 A.2d 425

admission at the trial of an oral agreement that the written objection by the plaintiff that such testimony violated the parol
contract for the sale of the ships was not to become effective evidence rule the trial court excluded it. On appeal the
until approved by the United States Shipping Board was appellate division sustained such ruling, but on further review
sustained. There the court defined the expression completed by the court of appeals it was reversed. When the oral
instrument, referring to the written contract in question as one testimony goes directly to the question whether there is a
which in form is complete and would be an executed written contract or not, that court said, it is always
instrument if it were delivered with the intent that it shouldcompetent; but when the effect of the oral testimony is to
take effect and be operative according to its terms. That caseestablish the existence of a written contract, which it is
was cited and followed in Hallett v. Moore, 282 Mass. 380, designed to contradict or change by parol, then the spoken
185 N.E. 474, 91 A.L.R. 572.
word must yield to the written compact. The court went on to
illustrate the difference between a condition precedent and a
**428 Where there was a written contract between a condition subsequent in such parol agreements by comparing
contractor and a subcontractor, but it was orally agreed at the the case before it with Jamestown Business College Assn,
time that such contract was not to become effective until Ltd. v. Allen, 172 N.Y. 291, 64 N.E. 952. There the note was
approved by the building commission, evidence of such oral delivered and the maker sought to show an oral agreement of
agreement and of the building commissions refusal *104 tothe payee to release the maker upon the happening thereafter
approve the contract was admitted and held to be a goodof a future contingency which might or might not arise.
defense to the subcontractors action to enforce the written
This distinction appears in at least one of our own cases.
contract. Nuttall v. Berntson, 83 Utah 535, 30 P.2d 738.
Sweet v. Stevens, 7 R.I. 375. There defendant gave plaintiff a
A striking application of the exception to the parol evidence postdated check in exchange for a promissory note made by a
rule appears in the facts set out in White Showers, Inc., v.third person and payable to the plaintiff. When defendant was
Fischer, 278 Mich. 32, 270 N.W. 205, 207. The defendantsued on the check on which he had stopped payment the trial
there entered into an agreement in writing to purchase an court allowed him to testify that at the time he gave the check
irrigation system from the plaintiff. The writing contained a to plaintiff it was orally agreed between them that if the maker
provision that all agreements were covered therein and were of the note refused to receive it and it thus became of no use to
not subject to cancellation without the plaintiffs consent. the defendant the latter was to return it to the plaintiff and he
Nevertheless the defendant offered to show awould thereupon give defendant his check. This court
contemporaneous oral agreement that the writing was to havesustained the ruling of the trial justice and pointed out that
no effect unless he could obtain a release from a contract, such testimony was not evidence in contradiction or variance
which he had previously entered into with another companyof the written instrument. While it did not specifically
for a similar system, and that he had been unable to obtain characterize such oral **429 agreement as a condition
such release and had promptly notified the plaintiff. Over the precedent, it is clear from the facts stated that it was a
objection of the plaintiff that such testimony violated the parol condition of that kind and that whether the written instrument
evidence rule, the trial court admitted it. Such ruling was became a binding obligation was contingent upon the
sustained on appeal and the court, quoting from an earlier happening of such condition.
Michigan case, stated: The making and delivering of a[7] In our opinion that case may be considered as authority for
writing, no matter how complete a contract according to its the above exception to the parol evidence rule that testimony
terms, is not a binding contract if delivered upon a condition of an oral agreement of a condition precedent to the taking
precedent to its becoming obligatory. In such case it does noteffect of a written instrument does not contradict or vary it and
become operative as a contract until the performance or is admissible to prove that the instrument did not in fact ever
happening of the conditions precedent. Proving this is not an become effective as a binding contract. We have found no later
attempt to vary the terms of a writing admitted to have been cases in this state to the contrary and none have been cited to
executed and delivered * * *. See also Lerner Shops of Northus. We are therefore of the opinion that the rule as it has been
Carolina, Inc., v. Rosenthal, 225 N.C. 316, 34 S.E.2d 206.
applied elsewhere in the cases hereinabove discussed is the
law here. We are also of the opinion that the testimony
A case on its facts even more like those in the case at bar is objected to clearly falls within the exception to the rule, and
Smith v. Dotterweich, 200 N.Y. 299, 93 N.E. 985, 987, 33 hence the trial justice did not err in receiving and considering
L.R.A.,N.S., 892. There the defendant gave his notes init in reaching his decision.
payment of premiums on certain insurance policies and when
sued on the notes he sought to show that at the time they were [8] On the above view the credible and legal evidence is
given there was an oral understanding between him and the undisputed that there was an agreement between the parties to
plaintiff that the insurance contract was to be binding only if return plaintiffs $300 to him if he could not obtain a G.I.
he could obtain a sufficient loan on the policies; otherwise the Loan; that plaintiff was unable to obtain such a loan; and that
policies were *105 to be canceled and the notes recalled. On
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Kinsler, Jeff 4/28/2015

For Educational Use Only
Allen v. Marciano, 79 R.I. 98 (1951)
84 A.2d 425

he promptly notified defendant of that fact. Therefore the trial

justice did not err in rendering a decision for the plaintiff.
The defendants exception is overruled, and the case is
remitted to the superior court for entry of judgment on the
decision.
Parallel Citations
84 A.2d 425

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Kinsler, Jeff 4/28/2015

For Educational Use Only
Allen v. Marciano, 79 R.I. 98 (1951)
84 A.2d 425
End of Document

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Works.

2015 Thomson Reuters. No claim to original U.S. Government Works.