Hatley v. Stafford

Citation. 284 Or. 523 (S.C. of Oregon, 1978)

Brief Fact Summary.

Hatley (Plaintiff), lessee, filed an action for trespass against Stafford Farm (Defendants), lessor.  The Plaintiff alleged that the Defendants trespassed by taking possession of the 52-acre farm and cutting the immature wheat crop.   

Synopsis of Rule of Law.

When parties reduce the terms of their agreement to writing, the writing is considered to contain all of the terms of the agreement, and parol evidence is not permitted to contradict the written terms.

Facts.

The Defendants contended that they were entitled under the lease agreement to terminate the lease and recover possession, and that they exercised their right in order to build a mobile home park.  Defendants further contended that they offered to pay the Plaintiff his cost per acre, not to exceed $70 per acre; but that the Plaintiff demanded the fair market value of $400. 

The Plaintiff claimed that the written agreement between the parties was not fully integrated, and the trial court allowed him to introduce evidence concerning the alleged oral agreement limiting the time the buy out provision could be exercised.  The jury returned a verdict for the Plaintiff.  

Issue.

Did the trial court err in allowing admission of the parol evidence?

Held.

No.  There was sufficient evidence to justify the trial court’s decision to admit the parol evidence.

·         There was nothing in the writing with respect to the duration of the buy out provision, so the oral time limitation was not “inconsistent” with the terms of the writing.

·         The trial court was entitled to consider the fact that a literal reading of the written contract would have led to an unreasonable result—allowing the Defendants to pay the Plaintiff $70 for wheat worth $400.

Dissent.

The parol evidence rule should be strictly adhered to whenever parties reduce their agreement to writing, and the majority’s decision rendered the statute meaningless.  

Concurrence.

None

Discussion.

Since the court found that the lease was not a complete integration of the parties’ actual agreement, the parol evidence rule did not apply and the Plaintiff could properly present evidence of the additional terms.