(after stating the facts). It is first contended by counsel for appellant that the agreement of January 28, 1908, by its terms put an end to the original contract, and that under it appellee is precluded from maintaining this action, but we can not agree with them in this contention. In this respect, this case is different from that of the Cherokee Construction Company v. Prairie Creek Coal Mining Company, ante p. 428.
In that case, the language of the new or substituted agreement was very broad and comprehensive. It purported to be in full settlement of all matters and differences between the parties, and the court held that the language of the contract embraced all matters that might be in dispute between the parties under the original contract, and that parol evidence could not be introduced to vary the terms of the new contract or agreement. There it was attempted to be shown that certain matters embraced in the original contract were not intended to be included in the settlement, and the court held that under the express language of the new agreement this could not be done because it would operate to contradict or vary its terms. Here the language is not sufficiently broad and comprehensive to preclude appellee from maintaining this action for damages for breach of the original contract.
It is next contended by counsel for appellant that the court erred in refusing to admit testimony to the effect that it was understood or agreed between the-parties at the time the new agreement was made that the old contract was at an end, and that the new contract was made for the purpose of rescinding it altogether. This testimony, we think, was competent.' It is the theory of the appellee in this ease that appellants committed a breach of the contract the first of December, 1907, by failing to meet his pay roll, and that appellee was prevented from performing his contract by this act; that, having been prevented from performing his contract, he turned over the property in satisfaction of what he owed appellants, and in order to get them to pay other outstanding indebtedness which he owed. He admits that he turned back to them all the houses and all the other property which he used in running the saw mill, and that the vendors of the machinery took that away from him, but he says that this was done after appellants had refused to allow him to perform his contract with them according to its terms, and that therefore he could not run his mill, and had no use for the property connected therewith.
On the other hand, appellants claim they advanced appellee more than $900 to be used in paying for his machinery and in making preparations to perform his contract; that appellee never paid any of this indebtedness, and that because of this fact they refused to meet his pay roll on December 1, 1907; that on January 28, 1909, they had a full settlement of all matters included in the original contract, and that it was understood between them that the original contract was terminated thereby.
"While the contract remains executory on both sides, an agreement to annul on one side is consideration for the agreement to annul on the other, and vice versa. ” 9 Cyc. 593-4.
We do not think that the effect of the excluded testimony was to vary or alter the terms of the contract of January 28, 1908, as copied in the statement of facts. That agreement went merely to the settlement of the indebtedness between the parties, and did not purport to be an agreement between them as to all matters embraced in the original contract.
The evidence excluded tended to establish a collateral agreement which involves no contradiction of the written agreement, and does not in any way vary its terms. In other words, the excluded evidence did not in any manner tend to contradict or vary any language of the contract of January 28, 1908, or any of the terms thereof, but only tended to establish a distinctly collateral agreement between the parties which was not considered necessary to be put in writing when the written agreement was executed, but which in fact constituted, in part, the consideration for it. The authorities are that proof of such an agreement not inconsistent with the terms of the written contract, may be made by parol evidence. Weaver v. Fletcher, 27 Ark. 510; 17 Cyc. 713-17.
For the error as indicated in excluding this testimony the judgment must be reversed, and the cause remanded for a new . trial.