282 Or. 379 578 P.2d 1244

Argued March 7,

affirmed May 16, 1978

LIVRAN, Respondent, v. FOWLER TIRE SERVICE, INC., Appellant.

(TC 32071, SC 25176)

578 P2d 1244

*380Robert E. Swift, Newberg, argued the cause for appellant. With him on the briefs was Swift & Swift, Newberg.

Jack C. Nulsen, Jr., Newberg, argued the cause for respondent. With him on the brief was Nulsen & Paxton, P.C., Newberg.

Before Denecke, Chief Justice, and Holman and Lent, Justices, and Thornton, Justice Pro Tempore.

THORNTON, J., Pro Tempore.

*381THORNTON, J.,

Pro Tempore.

This is an action at law on a promissory note. The cause was tried before the court without a jury. The court found in favor of the plaintiff and entered judgment against the defendant for the face amount of the note, $4,827, less a credit of $2,034.25 and for attorney’s fees in the sum of $875.

Plaintiff was the president and majority stockholder in defendant corporation (Fowler). In August 1974 he began negotiations with the other stockholders for the sale of his stock to the corporation in return for payment of debts owed him by the corporation and a share of the net profits of the corporation. On November 1, 1974, a special meeting of the board of directors of the corporation was held, at which an agreement was worked out between the parties. The terms of the agreement were reported in the corporate minutes.1 The minutes indicated that James T. Woodward, a director of defendant corporation, was authorized to sign a written agreement memorializing *382the transaction on behalf of defendant.2 The promissory note forming the basis for this action was signed at the November 1 meeting. Blank spaces were left in the minutes and promissory note for the amount of plaintiffs share of net profits. These blanks were filled in shortly thereafter when the corporation’s year-end financial statement was completed and reviewed by the parties.

Defendant contends that the corporate minutes constitute the written agreement of the parties and that under this agreement plaintiff would receive nothing on the note if the corporation did not show a net profit for its 1974 fiscal year. All of defendant’s assignments of error are related to the interpretation by the trial court of the agreement of the parties.

PAROL EVIDENCE

Defendant’s primary contention is that the agreement specified that plaintiff should be paid out of the net profits of Fowler. Therefore, if there were no net profits, no money was owed to plaintiff. In fact Fowler showed a net loss of about $1,900, although its subsidiary, Willamette Retreading, Inc. (Willamette), showed a profit of about $11,000. Plaintiff claims that the parties intended net profits to be determined from the combined financial positions of both Fowler and Willamette. Defendant argues that this was not the case and relies upon the parol evidence rule to say that the corporate minutes constitute an integrated writing *383whose terms may not be varied by extrinsic evidence of the parties’ intent.

The parol evidence rule, ORS 41.740,3 applies only to proof as to terms of a bargain that the parties intended to memorialize in a writing. Land Reclamation v. Riverside Corp., 261 Or 180, 183, 492 P2d 263 (1972); Welborn v. Rogue Comm. College, 26 Or App 857, 554 P2d 535 (1976); see, 1 Restatement of Contracts § 237 (1932); 3 A. Corbin, Contracts 440, 443, § 581 (1960). There is no evidence to indicate that the parties contemplated the minutes to be an integrated writing of their agreement. In fact the minutes themselves indicate that another writing was to be prepared and signed. Moreover, plaintiff did not sign the minutes in his individual capacity. The minutes are simply a recitation of the plaintiffs offer for the purpose of maintaining corporate records. We conclude that the trial court properly admitted and considered evidence regarding the parties’ agreement that was extrinsic to the November 1, 1974, minutes.

TRIAL COURT FINDING

The trial court concluded that the parties intended that the net profit figures for both Fowler and Willamette would be taken into consideration in calculating plaintiff s share of net profits. When reviewing the findings of the trial court we look to determine if the findings are supported by substantial evidence, viewing the evidence in the light most favorable to the *384prevailing party below. Geer v. Farquhar, 270 Or 642, 644, 528 P2d 1335 (1974). Plaintiff testified that the parties contemplated that the profits of both companies would be taken into consideration in setting the sum that would be his share. Further, the amount of money specified in the promissory note indicates that the net profits of both companies were considered in computing plaintiff’s share of net profits. This evidence is sufficient to support the trial court’s finding that when referring to the plaintiff’s "share of Company net profits” the parties intended that the combined net profits of both Willamette and Fowler be considered.

AMOUNT OF NOTE

Defendant argues that the agreement as set forth in the minutes requires that a specific amount be set forth pursuant to precise calculations. While we can discern no such requirement as to method of calculation in either the minutes or any of the witnesses’ testimony, plaintiff did testify that the calculation was made considering his percentage of stock ownership and other interests in the respective companies. The trial court found that plaintiff was entitled to the face value of the note. We conclude that there was substantial evidence to support the finding of the trial court on this issue.

Defendant argues that plaintiffs sale of stock was not sufficient consideration for the defendant’s promise to pay plaintiff a portion of net profits. This final assignment of error is untenable and does not warrant discussion.

Affirmed.

Livran v. Fowler Tire Service, Inc.
282 Or. 379 578 P.2d 1244

Case Details

Name
Livran v. Fowler Tire Service, Inc.
Decision Date
May 16, 1978
Citations

282 Or. 379

578 P.2d 1244

Jurisdiction
Oregon

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