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Mitchill v. Lath

New York Court of Appeals
247 N.Y. 377, 160 N.E. 646 (1928)
ELI5:

Rule of Law:

An oral agreement is not enforceable as a collateral contract if it is one that parties would ordinarily be expected to embody in the main written agreement, as it is not truly independent of the written contract's subject matter.


Facts:

  • In 1923, the Laths owned a farm they wished to sell.
  • Across the road from the farm, on land not belonging to them, the Laths had an ice house which they had the right to remove.
  • Catherine Mitchill viewed the farm with an intent to purchase it but found the ice house objectionable.
  • In consideration for her purchase of the farm, the Laths orally promised Mitchill they would remove the ice house by the following spring.
  • Relying on this oral promise, Mitchill executed a detailed written contract to purchase the farm for $8,400.
  • The written contract contained numerous provisions regarding the sale but made no mention of the promise to remove the ice house.
  • After Mitchill took possession of the property, the Laths did not remove the ice house and expressed their intention not to do so.

Procedural Posture:

  • Catherine Mitchill sued the Laths in the Special Term (a trial court in New York) seeking specific performance of the oral agreement.
  • The Special Term found in favor of Mitchill and ordered the Laths to remove the ice house.
  • The Laths, as appellants, appealed the decision to the Appellate Division.
  • The Appellate Division affirmed the judgment of the Special Term.
  • The Laths, as appellants, then appealed to the Court of Appeals of New York, the state's highest court.

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Issue:

Is a prior oral agreement to remove an ice house from adjacent property enforceable when it was made as consideration for a comprehensive written contract for the sale of a farm, but was not included in that writing?


Opinions:

Majority - Andrews, J.

No. The oral agreement is not enforceable because it is not a true collateral contract that can exist outside the parol evidence rule. For an oral agreement to be admissible alongside a written contract, three conditions must be met: (1) the agreement must be collateral in form; (2) it must not contradict express or implied provisions of the written contract; and (3) it must be one that parties would not ordinarily be expected to embody in the writing. While the agreement here is collateral in form, it fails the third condition. The written contract for the sale of the farm was a complete and detailed agreement. A promise to remove an unsightly structure, which was a direct inducement for the purchase, is so closely related to the subject of the sale that it would naturally be expected to be included in the final written instrument. Therefore, the oral agreement is barred by the parol evidence rule.


Dissenting - Lehman, J.

Yes. The oral agreement is an enforceable collateral contract. The dissent agrees with the majority's three-part test but applies it differently. The oral agreement does not contradict the written one, as the written contract deals exclusively with the conveyance of the farm property, while the oral promise concerns an action to be performed on separate property. Crucially, the agreement meets the third condition because the subject matter of the oral promise (removing a structure from land not being conveyed) is distinct from the subject matter of the writing (the conveyance of the farm). It is not an agreement that parties would naturally be expected to include in the deed or contract for sale of a different parcel of land, and thus it should be considered a valid, enforceable collateral agreement.



Analysis:

This case is a foundational decision in contract law, illustrating a strict application of the parol evidence rule. It establishes a widely-cited three-part test for determining when a collateral oral agreement is admissible and enforceable. The court's decision reinforces the finality of integrated written agreements, signaling that courts will not lightly permit such writings to be altered by prior oral promises, even if those promises induced the contract. The ruling serves as a strong caution to contracting parties to ensure all material terms of their bargain are expressly included in the final written document.

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