Lebal Co. of America v. Mastrup

HAWKINS, J. pro tem.

Defendant appeals from a judgment for the entire purchase price of certain shares of the capital stock of respondent corporation.

Respondent, a California corporation, held a permit from the Corporation Commissioner to sell this stock for cash or for not less than 25 per cent in cash, the balance payable in six equal monthly cash installments.

A contract in writing for the sale of this stock from respondent to appellant was duly executed by both parties. This contract was in all respects regular upon its face and called for payment in full in cash upon the execution thereof.

However, the evidence shows without contradiction that at no time, either before or after the execution of said contract, was it contemplated by the parties that the sale was to he

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made for cash, hut that appellant would pay for said stock at an uncertain time in the future, when he was able to sell some Transamerica stock owned by him, which at the time of the negotiations was impounded in another transaction. Nothing has been paid on the purchase price.

Appellant contends that the sale was void because it did not conform to the requirements of the permit from the Corporation Commissioner. Answering this contention, respondent asserts that the written contract of sale shows conformity on its face and that because of the parol evidence rule, the evidence of the actual intentions of the parties should not have been received by the trial court and cannot here be considered.

“Parol evidence is always competent to show that a written contract lawful on its face, is illegal or part of an illegal transaction, and such illegality, if serious, need not be pleaded nor urged, to enable the court to act upon it.” (3 Williston on Contracts, sec. 1753, p. 3060;

Morey

v.

Paladini,

187 Cal. 727 [203 Pac. 760];

Endicott

v.

Rosenthal,