between plaintiff and defendant, that Mr. Grindley's knowledge that plaintiff would receive the bonus must have defeated or hindered any extension of the lease to defendant, hence plaintiff is entitled to the $ 3,600 which it would have received had defendant not made impossible the performance of the condition upon which the bonus was to be paid.
Plaintiff's president-attorney contends that the alleged oral side agreement is not within the parol evidence rule and is enforceable because it was an inducement to his entering into the written contract. He contends further that, even if it be found that there was no express oral side agreement, there was an implied condition of the written assignment contract that defendant should do nothing which would hinder plaintiff in its performance of the contract, specifically, that defendant should not disclose to the owners or their agent the provision for payment to plaintiff should the proposed extension of the lease be granted. He has argued that it was not necessary for defendant's attorney to send counsel for the owners' agent a copy of the entire assignment agreement, and that he, Benton, would have informed the agent of the assignment had he been requested by defendant to do so.
The burden in this case is upon the plaintiff. There is a sharp conflict of testimony in many respects, most of which the court holds immaterial to a determination of the issues presented. In the light of all the material evidence in the case, the court concludes that plaintiff has not sustained its burden and is not entitled to recover.
First, plaintiff has not proved the existence of the alleged oral side agreement with defendant.
Second, as a matter of law, there could be no valid side agreement contrary to the express terms of the written contract, originally drafted by plaintiff's president-attorney and signed by him after the alleged oral agreement, still providing for forthwith notice to the owner by plaintiff and in terms stating that it embodied the whole agreement between the parties.
It is elementary law that where parties enter into a written contract, their rights must be controlled thereby, and, in the absence of fraud or mistake, all evidence of any contemporaneous oral agreement on the same subject matter, contradicting, varying, modifying, or adding to the terms of the written agreement is inadmissible. Shankland v. Mayor, etc., 5 Pet. 390, 30 U.S. 390, 8 L. Ed. 166, affirming Shankland v. Corporation of Washington, Fed.Cas.No. 12,703, 3 Cranch C.C. 328; Selden v. Myers, 20 How. 506, 61 U.S. 506, 15 L. Ed. 976; Willard v. Tayloe, 8 Wall. 557, 75 U.S. 557, 19 L. Ed. 501. The written contract merges all previous negotiations and is presumed, in law, to express the final understanding of the parties. Brawley v. United States, 96 U.S. 168, 24 L. Ed. 622; Van Ness v. Mayor, etc., of City of Washington, 4 Pet. 232, 29 U.S. 232, 7 L. Ed. 842, affirming Van Ness v. United States, Fed.Cas. No. 16,868, 2 Cranch C.C. 376, 2 D.C. 376; Kinney v. McNabb, 44 App.D.C. 340.
The court recognizes that parol evidence of the understanding of the parties may be admitted to explain ambiguous language or to show an agreement as to some matter not included in the writing, for which it fails to provide, and that parol evidence also is admissible to prove a contemporaneous agreement in addition to and not inconsistent with or a variation of the written agreement between the same parties, which was an essential inducement of the written contract, or where the parties did not adopt the writing as a statement of their whole agreement. Brewood v. Cook, 92 U.S.App.D.C. 386, 207 F.2d 439.
The written contract here involved, however, is not ambiguous, does not omit provisions which must be supplied, and, in view of the express provision that it contains the entire understanding of the parties, does not come within the principles applied in the Brewood case, supra.
The court further recognizes that every contract has an implied or constructive condition that neither party will hinder the other in the discharge of the obligations imposed upon him by the contract. Restatement of the Law of Contracts, § 315(1); Sunswick Corp. of Delaware v. United States, 109 Ct.Cl. 772, 75 F.Supp. 221, certiorari denied 334 U.S. 827, 68 S. Ct. 1337, 92 L. Ed. 1755. When the performance of one promise is an express or constructive condition of the duty to perform a return promise, there is obvious injury and a legal wrong if the promisor prevents the happening of the condition on which his duty to perform is made dependent. Williston on Contracts § 1293A.
'An exception to this principle must be made where the hindrance is due to some action of the promisor which under the terms of the contract or the customs of business he was permitted to take * * *. Another obvious exception to the general rule is where the prevention or hindrance by one party is justified by the wrongful conduct of the other party, as where a material breach by one party induces the other to refuse subsequent performance of a promise or condition.' There is a further qualification of the general rule, namely, 'Acts that would have hindered or prevented performance are not a breach if the condition or return promise would not have been performed if those acts had not been done.' Williston on Contracts § 1293A; Restatement of the Law of Contracts § 315(2).
It is the view of the court that, assuming that disclosure of the bonus provision would necessarily defeat or hinder the obtaining of an extension of the existing lease or a new lease, a condition of secrecy on the part of defendant could not be implied as part of the written contract, inasmuch as the landlord, pursuant to business practices, had a right to proof of the assignment and knowledge of its terms.
Further, assuming there was an enforceable express oral agreement or implied condition of the written contract that defendant should not inform the owners of the full terms of the assignment contract, there was an initial breach of the written contract by plaintiff in failing promptly to notify the owners of the assignment of the lease. This entitled the defendant to take such steps as appeared necessary to protect his interests under the assignment, to the extent of furnishing the owner with a copy of the document under which defendant claimed possession of the premises.
Third, assuming again that there was such an oral side agreement, that it was enforceable, and that defendant breached it, there is no proof that this breach caused the owners to refuse to extend the lease. If it be conceded that a presumption of unfavorable effect would flow from proof of the lessors' knowledge of the bonus, the evidence in this case rebuts such presumption. As pointed out heretofore, the heirs were more interested in selling the property for a good price and wished to have no further dealings in which plaintiff was involved, because of their displeasure with its breach of warranty suit against them, pending for two of the three years during which plaintiff was attempting to secure the extension. It may well be that the heirs viewed plaintiff's offer to drop what they considered an entirely unfair suit against them, upon the condition that they extended the lease, as an attempt to obtain the extension by coercion. Further, the lease was not extended for defendant after July 31, 1955, the building being sold for a sum far in excess of the appraised value.
For the foregoing reasons, I find for the defendant on the plaintiff's claim.
The defendant has counterclaimed against the plaintiff for malicious prosecution. This counterclaim is based upon dismissal of a prior, substantially identical complaint (C.A. 424-55), plus the allegation that plaintiff brought the instant suit with full knowledge that it was baseless, particularly in view of an affidavit of Mr. Grindley, taken by defendant after dismissal of C.A. 424-55 and served on plaintiff prior to filing of this action. Mr. Grindley in his affidavit stated that he had recommended extension of the lease to Mr. Lavine but the owners had never consented to such an extension, and denied that the owners refused to extend or make a new lease because of any agreement on the part of defendant to pay any sum of money to plaintiff for that purpose.
Our Court of Appeals has laid down the rule with regard to the maintenance of actions for malicious prosecution: '* * * No action will lie for the recovery of damages sustained by the prosecution of a civil action with malice, and without probable cause, when there has been no arrest of the person or seizure of the property of the defendant, and no special injury sustained, which would not necessarily result in all suits prosecuted to recover for like causes of action.' Peckham v. Union Finance Co., 60 App.D.C. 104, 105, 48 F.2d 1016, 1017. Applying this rule, the Court has held, 'The burden of being compelled to defend successive unconscionable suits is not one which would 'necessarily result in all suits prosecuted to recover for like causes of action." Soffos v. Eaton, 80 U.S.App.D.C. 306, 307, 152 F.2d 682, 683.
It is true that the complaint dismissed in C.A. 424-55 was substantially identical with the complaint in the instant case. It was not, however, dismissed upon the merits, but on the ground that the action was premature, having been filed prior to July 31, 1955, the expiration of the period in which renewal of the lease would have entitled plaintiff to the bonus. Re-filing of the action after the cause of action had matured was therefore a result normally to be expected by the defendant. Although defendant's knowledge of the Grindley affidavit might be considered as bearing upon malice and want of probable cause, these elements are immaterial in view of the principle enunciated in the Peckham case, supra. Inasmuch as there was no arrest of person or seizure of property and the only elements of damage on which proof was adduced were the attorney's fee incurred by defendant and compensation for defendant's own loss of time from his business necessitated by defense of the suit, both elements of damage which would necessarily result from any litigation against defendant, it is the view of the court that, under the Peckham rule, plaintiff is entitled to judgment on defendant's counterclaim.
Counsel for the defendant will please prepare promptly appropriate findings of fact, conclusions of law, and order, submitting a copy to counsel for the plaintiff and to the court. Counsel for plaintiff will then prepare such objections and additions thereto as he may deem appropriate, and serve a copy thereof upon counsel for defendant, with a copy to the court. The court will, after receipt of plaintiff's suggestions, consider the proposals and, if need there be, respective counsel will be advised of the time for conference thereon.