# Hubbard v. Marsh > Supreme Court of Iowa · January 10, 1950 · 241 Iowa 163 URL: https://www.frixlaw.com/law-library/cases/9848199 ## Case - **Full name:** C. W. Hubbard, Appellant, v. J. B. Marsh, Doing Business as Marsh Veneer & Lumber Company, Appellee - **Court:** Supreme Court of Iowa - **Decided:** January 10, 1950 - **Citations:** 241 Iowa 163; 40 N.W.2d 488; 1950 Iowa Sup. LEXIS 395 - **Precedential status:** Published - **Opinion:** Dissent by MaNtz - **Judges:** Mulroney, Mantz, Bliss, Oliver, Garfield, Hays, Maotz, Hale, Wennerstrum, Smith, Wennersteum - **Cited by:** 10 later opinions in the Frix Law Library ## Citator (automated) - No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases. - Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9848199 ## Opinion text MaNtz, J. (dissenting) — I respectfully dissent from the majority opinion. The opinion, in my judgment, misconstrues the contract sued upon, enlarges its terms, deals with matters not involved and appealed from, and avoids others which, in my opinion, are decisive in the case and which would support the ruling of the trial court. The majority opinion seems to discuss but one issue and that is the basis for the holding — the so-called ambiguity of the contract letter as set forth therein. The majority opinion purports to set forth two grounds urged by plaintiff in his appeal. The grounds set forth are (1) the court erred in not construing the contract as entitling plaintiff to at least ten per cent of the profits and (2) in construing the contract as unambiguous. The majority opinion seems based upon ground (2) as set forth above and in so doing seems to assume that the compensation to plaintiff as there stated was not in fact the true compensation. We call attention to the fact that plaintiff in his brief and argument set forth and argued two other errors: (3) “The court erred in holding that the contract of employment consists only of the written portion thereof” and (4) “the court erred in holding parol evidence would not be admitted to show part of the contract resting in parol or to explain ambiguity.” The majority opinion ignores these two claimed errors. Let us examine the pleadings. Paragraphs 3 and 5 of plaintiff’s petition are as follows: Paragraph 3. “That on or about the 24th day of May, 1944, plaintiff entered into an agreement, partly in writing and partly oral, whereby plaintiff was employed by defendant in the carrying on of his business; that the written portion of said agreement is contained in a letter of defendant to plaintiff dated March 17, *170 1944, copy of said letter being attached hereto, marked ‘Exhibit A’, and hereby made a part of this petition. The oral portion of said agreement is set ont in Par. 5 of this petition.” Paragraph 5. “That it was mutually orally agreed and understood between the parties that plaintiff would participate in the profits of the company of defendant to the extent of at least 10% of such profits, but not to exceed 33%, the amount of participation by plaintiff in the profits of the business in excess of 10% and not to exceed 33% being at the option of defendant.” Thus he claims that the contract was partly in writing and partly oral, and contemporaneously entered into. A mere casual examination will reveal that these two paragraphs are in conflict and repugnant to each other. Yet the majority opinion avoids passing upon the oral part thereof and merely refers to it by asserting that “The plaintiff’s argument that the contract should properly be construed as he contends— entitling him to at least ten per cent of the profits — is quite persuasive but we hesitate to so rule at this stage of the proceedings, especially because plaintiff’s petition asserts that there is an oral portion to his contract of employment.” Yet we find plaintiff devoting a considerable part of his argument to the issues raised by these pleadings. The court specifically ruled that oral evidence was not admissible. To fail to pass upon the correctness of this matter is, in my opinion, to simply set up the grounds for another appeal, the present being the second one. As to the discussion of the majority opinion as to the $100 per week simply being a drawing account, in a sense the language carries the impression or implication that this $100 per week is simply expense money. It seems to me it is not necessary to go beyond the written letter to show what was meant by the term “drawing account.” The very next sentence speaks of this sum as “weekly compensation.” The item of $100 per week has in the same sentence, “plus traveling expense.” I do not find in plaintiff’s brief or argument any claim that the $100 per week was anything other than compensation. He does not make any such claim in pleading, he does not argue it, so why pass upon it? Such a discussion is unnecessary and simply adds nothing. The citation, Packard Motors v. Tally, 212 Ala. 487 , 103 So. 455 , has no application. There the employee was working on commission *171 and was given a certain drawing account. The real issue there was whether such could be reached by garnishment. That court’s definition of what was a drawing account as applied to the real issues involved was pure dictum, It will be seen that paragraph 4 of said letter and paragraph 5 of plaintiff’s petition, in part, refer to the same matter, to wit, the percentage of profits arising from the business. The letter designates the drawing account of plaintiff as $100 per week; also traveling expenses. Immediately there follows: “In addition to this weekly compensation, you will participate, on my option, in the net profits of the Marsh Yeneer and Lumber Company, in both the Dubuque and Indianapolis operations.” (Italics supplied.) When we compare the above statement (as to the option) with that part of the claimed oral part of the contract, it can readily be seen that the latter conflicts with the former. Plaintiff argues that the written part of the agreement definitely obligated defendant to pay the designated wage, expense money, and in addition ten per cent of the profits of the business; and that no option was needed or required as to that per cent, but that the only place the option could be exercised by appellee was between said ten per cent and thirty-three per cent of the profits. The trial court in its ruling held that the oral part pleaded was inconsistent with the written agreement pleaded and that “to permit oral evidence of the alleged oral contract would be to add to and specifically change the terms of the written agreement.” Likewise, the court also found that there was no ambiguity in the written contract. I am of the opinion that the court was right in its ruling. Plaintiff does not plead or argue that in the contract of employment between him and defendant there was any fraud or mistake. He simply claims that he entered into said employment by virtue of a contract — a part in writing and a part oral— contemporaneous with said writing. His claim simply relates to a share of the profits which he pleads and argues was promised under the contract as a whole. Plaintiff in his petition states: “That pursuant to said agreement of the parties, plaintiff devoted his full time and attention *172 to defendant’s business through all of the year 1944 and up to about December 1, 1946.” Plaintiff’s right to compensation arises out of the contract between him and defendant. The trial court found that the only contract under whieh plaintiff could claim compensation was the writing of March 17, 1944, accepted by him on May 24, 1944. The court sustained the claim of defendant that such writing was the only contract - between the parties. I think that the pleaded facts sustain such finding. The writing is clear and without ambiguity. It refers to prior negotiations, the nature of the employment, the part plaintiff was to carry on, the needs of the business, the objects sought to be attained, the co-operation between the parties, then follows a separate paragraph which definitely sets forth the compensation to which plaintiff was entitled and then immediately follows, “you will participate, on my option, in the net profits,” etc. There is nothing uncertain or ambiguous in such paragraph. It fixes the weekly compensation and expenses and then specifically states that any participation in profits will be at the option of defendant. It seems an idle waste of words to infer or presume that any man of any business sense or capabilities would be so unsophisticated as to claim or assert that he did not understand what the word “option” meant. It simply does not add up to make common sense and borders upon the absurd. It amounted to his closing his eyes to that word and the squinting at the prospect of future profits. The effect of the majority opinion is to permit him to do so. An option means a privilege or right of election to exercise a privilege. Lively v. Tabor, 341 Mo. 352 , 107 S.W. 2d 62 , 111 A. L. R. 976; Hyatt v. Vinita Brass Works, 89 Okla. 171 , 214 P. 706 .; right of election; alternative; Malone v. Meres, 91 Fla. 709 , 109 So. 677 ; Levy v. Rothe, 17 Misc. 402 , 39 N. Y. Supp. 1057 ; Suhre v. Busch, 343 Mo. 170 , 120 S.W. 2d 47 ; Norwood v. Adams, Tex. Civ. App., 51 S.W. 2d 625 . In the case of Myers v. Stone & Son, 128 Iowa 10 , 102 N.W. 507 , 111 Am. St. Rep. 180 , 5 Ann Cas. 912, it is held that an option is a personal privilege — • the right to-choose, etc. The word “option” is the power of choosing, the right of choice, an alternative. Oleson v. Bergwell, 204 Minn. 450 , 283 N.W. 770 . Option means choice — election. 3 *173 Bouvier’s Law Diet., Rawle’s 3d Rev. 2421. Many other decisions approving the above rule might be cited. In the instant ease “on my option” simply meant the right, choice or privilege of defendant to give to plaintiff a share in the profits of the business. Defendant had an absolute right to grant or refuse and it can hardly be said that his refusal can be legally questioned. Plaintiff did not sign the written offer for over two months after it was sent Mm. He had ample time to examine and study it and can hardly claim that he was misled or overreached. He did not plead ambiguity; he raised it by argument. • Where a contract is complete and its terms are neither ambiguous nor Uncertain parol evidence to explain it is inadmissible. Rath v. Schoon, 192 Iowa 180 , 182 N.W. 180 ; Seibel v. Commonwealth Life Ins. Co., 194 Iowa 701 , 190 N.W. 173 ; Comptograph Co. v. Burroughs Adding Machine Co., 179 Iowa 83 , 159 N.W. 465 ; Weitz Sons v. United States F. & G. Co., 206 Iowa 1025 , 219 N.W. 411 . In Heiple v. Reinhart, 100 Iowa 525, 528 , 69 N.W. 871, 872 , we said: “It is an elementary rule of construction, that all parts of a written contract must be construed together, and force and effeet given to each, where that is practicable. The intent of the parties to a contract is ordinarily deteirmined by the language they use, and, if that is definite, certain, and complete, it must control.” Citing Emerick v. Clemens, 26 Iowa 332, 335 ; Greene v. Day, 34 Iowa 328, 333 . See also Nylander v. Nylander, 221 Iowa 1358 , 268 N.W. 7 ; Hardy v. Hardy, Cal. App., 135 P. 2d 615 ; State Bank of Wilbur v. Phillips, 11 Wash. 2d 483 , 119 P. 2d 664 ; Morgan v. Wheeler, 150 Kan. 667 , 95 P. 2d 320 . In the absence of mistake or fraud a written contract merges all prior and contemporaneous negotiations in reference to the same subject and the-whole engagement of the parties and the extent and manner of their undertaking are embraced in the writing. All verbal agreements made at or before the time of the execution of a contract are to be considered as merged in the written instrument. 12 Am. Jur., Contracts, section 232, page 756; Farrell v. Wallace, 161 Iowa 528 , 143 N.W. 488 ; Hanley v. Chicago, M. & St. P. R. Co., 154 Iowa 60 , 134 N.W. 417 . Ambiguity is doubtfulness — doubleness in meaning. Chap *174 man v. Metropolitan Life Ins. Co., 172 S. C. 250, 173 S. E. 801 . Ambiguity is an uncertainty of meaning in the terms of a written instrument. First National Bk. v. Hancock Warehouse Co., 142 Ga. 99 , 82 S.E. 481 ; Business Men’s Assurance Assn. v. Read, Tex. Civ. App., 48 S.W. 2d 678 ; Caldwell v. State, 115 Ohio St. 458 , 154 N.E. 792 ; Wheelwright v. Pure Milk Assn., 208 Wis. 40 , 240 N.W. 769 ; Arkansas Amusement Corp. v. Kempner, 8 Cir., Ark., 57 F. 2d 466 ; 3 C. J. S., Ambiguity, 1034. Ambiguity is duplicity, indistinctness or uncertainty of meaning in a written instrument. 1 Bouvier’s Law Diet., Rawle’s 3d Rev. 186. A contract is ambiguous when the meaning cannot be ascertained within the four corners. Miller Cattle Co. v. Francis, 38 Ariz. 197 , 298 P. 631 . We can see nothing doubtful or uncertain in the written contract. The oral part pleaded would add to it something- contrary to its terms. Plaintiff argues that under his plea the contract was partly oral and partly written, and that evidence would be admissible to show such oral part. He argues that oral evidence is necessary to explain the language of the written part; also to establish the oral part. This court has had such an issue before it many times. I will call attention to some additional holdings of this court wherein the issue as to the validity of such claimed contracts was considered where there were contradictions and conflicts between the written and the claimed oral parts, where the same were contemporaneously executed. It is a well-settled rule that parol-evidence is not admissible to vary the terms of a written contract. Kelly v. Chicago, M. & St. P. Ry. Co., 93 Iowa 436 , 61 N.W. 957 ; Lerch v. Sioux City Times Co., 91 Iowa 750 , 60 N.W. 611 ; Miller v. Morine, 167 Iowa 287 , 149 N.W. 229 ; Blackledge v. Puncture Proof Retread Co., 190 Iowa 1303, 1307 , 181 N.W. 662 , 663. In the last-cited case there was a written contract and petitioner claimed that at the same time there was a contemporaneous agreement. Evidence offered to support the oral contract was held inadmissible. In the opinion, by Chief Justice Evans, it was said: “While it is true, as an abstract proposition of law, that an independent oral contract may be entered into between the parties to a written contract, and contemporaneously therewith, *175 it is also true that such oral contract must be independent in fact, and must not be a contradiction, modification, or qualification of the written contract, either as to its enforcement, its consideration, or its executory obligation. We deem it very clear, in the ease before us, that the oral contract relied on by plaintiff did affect the consideration for the contract in an overwhelming sense. It was, in material respects, contradictory thereto. It is argued by plaintiff that the exclusion of these agreements operates as a fraud upon the plaintiff. But the plaintiff had its privilege to plead the fraud. If the oral agreements and representations pleaded by plaintiff were made fraudulently, there was no impediment in any rule of evidence to plaintiff’s proof of the same, upon appropriate allegations. We think the ruling of the trial court in this regard was clearly correct.” In In re Estate of Simplot, 215 Iowa 578, 581 , 246 N.W. 396, 397 , this court considered the matter of the admission of evidence to support an oral agreement which was claimed to have been contemporaneous with a written agreement. Therein Justice Evans discussed such matter and set out what were termed the “exceptions” to the rule excluding evidence by which it was sought to show said contemporaneous oral agreement. Briefly, there was a will contest. It was finally settled by the defendant paying to plaintiff a certain sum, and in a written stipulation it was agreed that the matter, involved was fully settled. Later, suit was brought against the estate of the defendant in the stipulation claiming that at the time such stipulation was entered into there was an oral agreement that such stipulating defendant would execute a will making the other stipulating party a beneficiary thereunder. Objections were made to the evidence offered to sustain such claimed oral agreement. Such objections were sustained and on appeal the plaintiff-appellant in argument said, “ ‘The only question before this court for review is whether or not the offered [parol] evidence tends to vary or contradict the terms of the written instrument, which is claimed to be a full and complete contract-.’ ” The opinion is exhaustive and the exceptions to said oral evidence were set forth in detail. Said exceptions were seven in number and each was separately discussed and authorities referred to. Said opinion cites in its support, Miller v. Morine, *176 supra; Canfield Lbr. Co. v. Kint Lbr. Co., 148 Iowa 207 , 127 N.W. 70 ; Taylor v. Galland, 3 (G. Greene) Iowa 17; Edwards v. Wagner, 191 Iowa 822 , 183 N.W. 450 ; Kelly v. Chicago, M. & St. P. Ry. Co., supra; Jessup v. Chicago & N.W. R. Co., 99 Iowa 189 , 68 N.W. 673 . I think that the record and reasoning in the cited ease has direct application to the instant case. In the cited case of Miller v. Morine, supra, the court said at page 289 of 167 Iowa, page 230 of 149 N.W.: “The one question in the case, however, is, Was it competent for the defendant to prove the alleged oral agreement or promise of the plaintiff, and thus ingraft it upon the written lease?” Immediately following this the court held: “Parol evidence is not admissible to vary the terms of a written instrument. Thus where a written lease was free from ambiguity and recited that in consideration of the rental to be paid the lessor was to perform certain covenants, evidence of a parol agreement that the lessor for the same consideration was to perform a different covenant not expressed in the writing was not admissible.” (Page 287 of 167 Iowa.) In the instant case, we have a written agreement which shows on its face that it was the result of conference and discussion between Hubbard and Marsh. The trial court held that such contract was full and complete upon its face and free from ambiguity. I believe the trial court was right. Plaintiff seems to argue that the compensation, $5200 per year, borders on the field of being nominal. I do not so regard it. It was something he elected to take, and taking into consideration the time elapsing'between the offer and the acceptance, he had ample time to think it over. In the paragraph relating to the compensation it was set forth that he might receive additional compensation at the option of defendant — he to participate in the profits-of the concern. A careful reading of the letter reveals that defendant could or would exercise the option, depending upon the performance of the duties by plaintiff. The pleadings of defendant deny that plaintiff made good — it is averred that he caused losses to the business. The letter clearly states what plaintiff was to receive in case defendant exercised his option to permit him to share in the profits. It can hardly be said that the *177 matter of plaintiff’s compensation as set forth in the written contract and that as claimed in the oral contemporaneous agreement are harmonious and not in conflict. The written contract was the result of conversations in Indianapolis and Dubuque. The first paragraph of the contract so states. Possibly there were later conferences — the record is silent on that point. The law presumes that the parties reduced their contract into the writing. 12 Am. Jur., Contracts', section 232, page 756, states: “All verbal agreements made at or before the time of the execution of a contract are to be considered as merged in the written instrument.” See also 17 C. J. S., Contracts, 750, 751; Jacobsen v. Moss, 221 Iowa 1342 , 268 N.W. 162 ; Slump v. Blain, 177 Iowa 239 , 158 N.W. 491 . In the Jacobsen case heretofore cited it was held that where a contract was reduced to writing it was considered a merger of all of the matters involved in the contract. See also Seeger v. Manifold, 210 Iowa 683 , 231 N.W. 479 ; Jones v. Sargent, 193 Iowa 1256 , 188 N.W. 818 ; Banwart v. Shullenburg, 190 Iowa 418 , 180 N.W. 190 . If the contention of the plaintiff in the instant case he sustained then such a rule would put oral evidence upon a parity with the written contract, and no written contract would be immune against said oral contradiction. See also Parks & Co. v. Howard Hotel Realty Co., 200 Iowa 479 , 203 N.W. 247 . The opinion, by Justice Faville, cites many of the cases heretofore set forth to sustain the rule above set forth, holding that in the absence of fraud, mistake or ambiguity, oral evidence is not admissible to show another and different contract — one which by its very terms contradicts the written contract. Plaintiff states in his argument that the written contract standing by itself entitles him to at least ten per cent of the profits. For what period of time ? Note his inconsistency. Then why the pleadings of the oral contract ? It is rather significant that on July 28,1947, Judge Chalmers made the ruling of which plaintiff complains. However, we find plaintiff filing a reply to defendant’s answer on February 17, 1949. All of this would indicate, that plaintiff was confused and uncertain as to his proper position in the matter. I have no quarrel with the general principles laid down in most of the cases cited in the majority opinion. I deny their ap *178 plication to the pleaded facts in this case. The letter written March 17, 1944, followed conversations and conferences both in Indianapolis and Dubuque, at both of which places defendant conducted his business. It must be presumed that at such times the various matters pertaining to and dealing with the contemplated employment were thoroughly gone into and discussed. However, the letter shows that there was no binding agreement arrived at, for in the first paragraph of the letter we find the defendant saying: “I propose to give you the following opportunity.” The letter was written from one businessman to another and it is reasonable to assume that plaintiff was no novice in business affairs. Here was an offer made and over two months later it was accepted. Under it plaintiff worked two and one-half years, doubtless being paid regularly, and it was not until after he left that employment that any claim was made for a share ' in the profits. Apparently dates meant little to plaintiff, in view of his pleading that he worked all of 1944, when as a matter of fact he could not have been so employed for at least five months of that period. In the offer, standing out crystal-clear, was the statement as to what plaintiff was to be paid and at the same time it was clearly and unequivocally stated that any further compensation will be “on my option.” Plaintiff was not required to accept — he had the alternatives of negotiating further or of refusing to sign. He could have asked for a clarification in order that the point be made fixed or certain. The majority opinion seeks to tie into the statement other parts of the letter. In my judgment, those things included in the letter merely advised plaintiff what defendant might do by way of additional compensation in case defendant felt that he was entitled to more. Boiled down, it would be akin to an offer to an employee by the prospective employer, after telling the former what was expected, then saying, “I’ll pay you $5 per day and if I am satisfied with your work and convinced you are entitled to more I’ll pay you $7.50 per day.” It all goes back to what the employer felt like doing after the arrangement had been tried out. Defendant’s answer was that defendant was not satisfied with plaintiff’s work and that under his management log shortages of about 120,000 feet showed up and an inspector had to be sent to inspect logs in • the place of plaintiff; also, plaintiff’s absences and his neglect of *179 his duties. Upon a study of the letter of March 17,1944, and paragraph 2 thereof it will be noted that the specific duty of plaintiff was to “take charge of its log department.” While the exercise of the option was a privilege of the defendant, yet here you have in his pleading a specific ground why, how and where the plaintiff was falling down on the job. A sane and sensible view of the whole situation would be that defendant could exercise the option privilege as he saw fit. Plaintiff claimed that he carried on his work for defendant for close to two and one-half years but nowhere asserts that he ever laid claim to any of the profits until he left the employment. As I view the effeet of the majority opinion it simply opens the way for plaintiff to avail himself of an opportunity to go forth and litigate with the expectation of getting something for nothing. I, for one, am unwilling to afford him that opportunity. I assert that the pleaded facts and the law are against him. I would affirm. Hale and WenneRSteum, JJ., join in this dissent. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9848199. Public record. Not legal advice.