placing most of the stock in the hands of irresponsible dependants, can, without risking their own property, pile up debts against the corporation, which can never be collected, for lack of corporate assets to pay them with; and even where a corporation is formed and managed in good faith, the directors have no right, out of a mere sentiment of honor, to pay away the stockholders' or citizens' money to persons who have no legal claim to it. Written Contract Excludes Verbal Variations. Coey vs. Lehmann, 79 Ill. 173. Lane vs. 3 Scam. 566, 7. Pearce vs. McGowan, 35 Minn. 507. McCormick vs. Taylor vs. Fox, 16 Mo. App. 527. Stuart vs Cambridge, 125 Mass. 102. CHAPTER XVIII. VERBAL AND WRITTEN CONTRACTS. T has been before observed (Page 181) that a written con that, in view of the greater formality attending the signing and delivery of a written document, the written paper is presumed in law to contain all that the parties to it intended to agree upon, in its final and mature shape, casting aside all merely verbal propositions and suggestions; so that evidence. of the latter is not received in court, where it tends to contradict or modify the terms of the written contract. In an Illinois case, which finds a good many parallels elsewhere, the contractors claimed that it was understood that certain changes should be made in the specifications attached to the contract, but that at the time of signing the contract these changes had not been made, and that therefore the contract was never perfected. The Supreme Court ruled that all prior agreements, understandings and arrangements must be regarded as merged in the contract as signed, and evidence of parol variations must be excluded. So in the case of Stuart vs. Cambridge, described at length in Page 148 and the following, where parol evidence was offered that the plaintiff made his estimate from a section showing the foundations extending only fourteen inches below the cellar floor, and that other bidders did the same, it was held that the evidence was inadmissible. A somewhat similar, but still more instructive case is to be found in the Minnesota reports. A firm of architects and builders furnished plans and specifications, and contracted to build a mercantile building on a certain lot. The specifications gave widths of footings, etc., but no other particulars about foundations. When the matter of building was talked about, the question of draining the subsoil of the lot was mentioned, and the owners said that they did not think it would need draining, but if any draining should be needed, they would do it. The contract, as finally entered into, was under seal. In it the contractors agreed to build, erect and complete a three-story business house on a certain lot, in accordance with plans and specifications, which formed part of the contract. On uncovering the subsoil, after the signing of the contract, quicksand appeared, which the contractors had no previous knowledge of, and could not have known anything about. The defendants' pleading averred that, on the discovery of the quicksand, the owners, finding that the subsoil would not, unless drained, sustain the proposed building, "promised that they would cause the land to be well and thoroughly drained; but that they wholly failed and neglected to drain the land or any part thereof." The contractors went on with the building, without seeing that the subsoil was put in proper condition. When it was nearly completed, it fell, the quicksand beneath having become saturated with water. The contractors began to rebuild, and had nearly completed the building a second time, when it fell again, from the same cause as before. They then refused to proceed further with the work under their contract, and the owners brought suit to recover back the money which they had already paid on account of the contract, with damages for loss of the use of the lot during the unsuccessful attempts to build upon it, and for injury caused to the adjoining building, also owned by them, and to the goods in it, by the fall of the new structure. The Supreme Court of Minnesota decided in favor of the owners on all the points brought up. In regard to the alleged promise made by them, before the signing of the contract, to drain the land, the Court said that evidence of this was Stees rs. 20 Minn. 494. Draining Quicksand. Stees vs. 20 Minn. 484. The Responsibility for the Failure of Legal Structures. inadmissible to vary the rights and obligations of the parties under the subsequent sealed contract. As to the subsequent promise of the owners, made after the discovery of the quicksand, to "cause the land to be well and thoroughly drained,” the Court said that this mere promise, being without consideration, was nudum pactum, on which the contractors had no right to rely, and which was inoperative to vary the sealed contract. In regard to what the agreement required the contractors to do, the Court held that the defect in the soil did not excuse the defendants from the performance of their contract; that for their failure to perform it they were liable in damages to the owners, and that it was no defence to the action that the building, so far as it was erected, was constructed in accordance with the plans and specifications. During the trial of the case, the defendant's counsel offered to prove that on the discovery of the insufficiency of the land to sustain the building, unless drained, the owners agreed to keep the land well and properly drained during the construction of the building; and in consequence thereof the defendants did not drain it themselves; that the owners kept the land drained until just before the fall of the building, when they neglected to keep the same drained, by reason of which neglect the soil became saturated with water, and the building fell. The Court held that this evidence was inadmissible, the facts offered to be proved not being pleaded in the defendant's answer, and being inconsistent with the facts therein pleaded. The Court was of opinion, however, that the facts offered to be proved would, if pleaded, constitute a good defence to the action. It may not be out of place to remark here that, while the unfortunate builders were compelled to bear the expense of repairing the damage caused by a defect which they could not have foreseen when they signed their contract, a very different rule seems to have been applied to their counsel. The latter, to whom was committed the responsibility of the case, appears to have erected, with a full knowledge of the facts, a fabric of defence which collapsed in a moment on the application of well-known legal principles. It was shown that he had a good foundation for a successful defence, if he had chosen to avail himself of it; yet he contented himself with basing his case on a parol agreement made before the signing of the written contract, and not mentioned in the latter, and on a promise which was obviously without consideration. A more insecure foundation for a legal structure it would be difficult to conceive; yet, having chosen to use this, instead of the substantial one which lay close at hand, we do not find that he was even asked to indemnify his clients for the collapse of their interest under his care, while they were compelled, apparently as a result of his ineffectual championship, to suffer enormous loss on account of a defect in the foundation of their structure, which they could not possibly have known anything about, and which, on its discovery, some one else had agreed to remedy. However, it has been already observed that the law is made by lawyers, not by contractors, and the latter must content themselves with studying legal matters as they are, not as they would like to have them. There is an apparent exception to the rule that parol testimony is not admissible to vary a written contract, in cases where the verbal testimony, instead of varying the written agreement, merely supplies deficiencies in it. A mason named Daegling once made a written agreement with a general contractor, Donlin, "to do the mason work" in rebuilding a certain court-house which had been burned, "according to plans and specifications to be furnished," and "under the supervision and to the entire satisfaction" of a superintendent to be appointed by the county authorities. No plan or specification showing how much work was to be done on the outside walls was ever furnished, but Donlin showed Daegling on the spot the lines to which he wished the walls to be taken down and rebuilt. Daegling took them down accordingly, but, when they had been taken down to Donlin's line, the county authorities Parol Testimony Admissible to Supply Deficiencies in Written Contract. Donlin vs. Daegling, 80 Ill. 608. |