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Emerson New York-New Jersey Inc. v. Brookwood Television Inc.

Decided: January 7, 1973.

EMERSON NEW YORK-NEW JERSEY, INC., PLAINTIFF,
v.
BROOKWOOD TELEVISION, INC., AND FREDERICK M. WOOD, DEFENDANTS



Breslin, R.w., J.c.c.

Breslin

This action involves a claim by plaintiff Emerson New York -- New Jersey, Inc. for an amount allegedly owed to it by defendant Brookwood Television, Inc. on account of merchandise sold and delivered by plaintiff to Brookwood. Also named as defendant is Frederick Wood, who, as president of Brookwood, executed a guaranty of payment to plaintiff of all debts that were owing at the time and that should thereafter become due from Brookwood to plaintiff. Wood filed a crossclaim for indemnification against Brookwood, which has been defaulted for failure to answer. Plaintiff now moves for summary judgment against defendant Wood on the written guaranty.

The determination of this motion requires the application of the usual standards for disposing of a motion for summary judgment pursuant to R. 4:46. Where it palpably appears that there is no genuine issue of material fact presented, the court should determine the case on the applicable

law. Bowler v. Fidelity & Cas. Co. of New York , 99 N.J. Super. 184 (App. Div. 1968). All doubts in such proceedings are to be resolved in favor of the opponent of the motion. Judson v. Peoples Bank & Trust Co. of Westfield , 17 N.J. 67 (1954).

In opposition to plaintiff's motion, Wood has submitted an affidavit in which he asserts that during the summer of 1971 plaintiff, through its agents, orally agreed that Wood be released from his obligation and that one Eugene Casole, apparently an officer of Brookwood, be thenceforth responsible for payments from Brookwood to plaintiff. Wood alleges that subsequently Casole met with plaintiff's representatives and agreed to this arrangement.

Plaintiff, though presumably not admitting the oral agreement, contends that it would have no legal effect as far as Wood's guaranty obligation is concerned. Therefore, assuming the existence of such an oral agreement, the issue is whether it is legally sufficient to alter or revoke a written guaranty.

Plaintiff invokes the "parol evidence rule" to prevent the consideration of any facts pertaining to the alleged subsequent oral agreement. The parol evidence rule precludes, as a matter of substantive law, the introduction of evidence of antecedent negotiations or agreements to alter a subsequent writing, on the theory that such antecedent matters were integrated in the written agreement. See Atlantic Northern Airlines v. Schwimmer , 12 N.J. 293 (1953). The rule, however, does not preclude evidence that would tend to subvert or overthrow the writing entirely, Union Fur Shop v. Max Melzer, Inc. , 133 N.J. Eq. 416 (E. & A. 1943); nor does it preclude evidence of agreements made subsequent to the writing. Frank Wirth, Inc. v. Essex Amusement Corp. , 115 N.J.L. 228 (E. & A. 1935); McKinstry v. Runk , 12 N.J. Eq. 60 (Ch. 1858). The parol evidence rule is therefore not applicable to the instant case, since the alleged oral agreement was subsequent to the written guaranty

and would, if otherwise legally sufficient, set aside the guaranty entirely, insofar as it affects Wood.

There remains the question of whether the alleged subsequent oral transactions, if established, would be operative so as to relieve Wood of his obligation under the guaranty. Focusing for the moment on the oral release of Wood from his contingent liability, the fact that said release was merely oral does not call into play N.J.S.A. 25:1-5 (statute of frauds). The statute applies to "a special promise to answer for the debt, default or miscarriage of another person" (N.J.S.A. 25:1-5(b)) but it is silent concerning a release from such a promise. Therefore, although a writing may have been required for the guaranty originally, a release from that obligation could be accomplished orally, notwithstanding the statute of frauds.

It is essential to the success of defendant's contention that the subsequent oral transaction was effectual that there appear some consideration for plaintiff's undertaking to release defendant from his obligation. Plaintiff correctly points out that if evidence of a subsequent agreement is admissible, that agreement must be supported by new and independent consideration. Levine v. Blumenthal , 117 N.J.L. 23 (Sup. Ct. 1936). It is apparent that plaintiff's agreement that defendant be relieved of his obligation under the guaranty could not have amounted to an oral gift since there was no delivery of anything that would represent the obligation. Delivery is an essential ingredient of any gift, including a gift by way of forgiveness of an indebtedness. See Guerin v. Cassidy , 38 N.J. Super. 454 (Ch. Div. 1956). Presumably the rule should be the same in the case of a contingent indebtedness, as here, which could be the subject of a gift by way of ...


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