dornfll Slam ^rlynol Eibtaty Cornell University Library KF 801.J76 A treatise on the construction or interp 3 1924 018 822 266 Cornell University Library The original of tiiis book is in tine Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31924018822266 A TREATISE CONSTRUCTION OR INTERPRETATION COMMEECIAL AND TeABE CONTRACTS. By -DWIGHT AEVBN JOFES, OF THE NEW YORK BAR. / r 'Ji ^ r- \r el I' NEW TOEK: BAKEE, VOOEHIS & CO., LAW PUBLISHEES, 60 NASSAU STREET. 1886. I,, (, u, ' -, I - c- 0: <^ 7 CopyRiGHT, 1886, By D wight ARVEn" JONES. Willis MoBosald & Co., Pkintbes, 25 Park Row, N. Y. PREFACE. This book is the result of an effort to state simply and clearly tlie principles which govern the interpretation of all mercantile contracts. As these principles are in no sense local or technical, the writer has drawn alike from American and English reports, and has endeavored to give heed to every authority which would aid in the establishment of such true rules of construc- tion as are founded in reasoa. It is believed that the well-considered cases cited throughout the volume, and particiil'arly those illustrating the aid parol evi- dence brings to construction, show a liberal and wise tend- ency on the part of many courts to depart from arbitrary rules and to strive after the real intention of parties. In the presentation of the various topics within the scope of the sub- ject treated, the aim has always been to follow this tendency, and to insist upon the practicability and the importance of testing the authorities by reference to just principles of construction. By these means it is hoped that a systematic and consistent method for reaching the meaning of contracting parties has been disclosed, and that the rules of law set forth will be recognized as rules of justice. New Yobk, June 1st, 1886. TABLE OE CONTENTS. CHAPTER I. NATURE AND SCOPE OF CONSTRUCTION. PAGE § I. Construction defined ; i 2. Interpretation and construction used as synonymous terms 3 3. Legal meaning of language determined by construction 4 4. Construction establishes uniform methods of reading contracts 5 5. Construction a remedy for defects in language 6 6. Construction aims to remove ambiguities 7 7. Principles of construction of wide application 8 8. The limits of construction 8 9. Plan of treatment 9 CHAPTER II. WHO CONSTRUES THE CONTRACT. § 10. General statement of law 10 11. Judge alone constructs if no disputed fact 12 12. Rule not altered if contract is expressed in several writings 13 13. Surrounding circumstances do not necessarily make question for jury • 15 14. Disputed questions of fact for jury 16 15. Judge to instruct jury hypothetically as to contested facts 17 16. Functions of judge and jury in determining meaning of language.. 19 17. Jury ascertains the terms of the contract 22 18. Other questions for jury 25 19. Who construes contract governed by foreign law 26 20. Jury determines existence of foreign law; judge interpets it 27 CHAPTER III. WHAT LAW GOVERNS CONSTRUCTION. :§ 21. The intention prevails if ascertainable 30 22. Whole contract and its surroundings to be examined 32 23. General presumption as to intention 35 VI TABLE OF CONTENTS. FAGS 24. Force of presumption that place of making controls 36 25. What determines where contract is made 37 26. Rule when contract is not to be performed where made 39 27. Rule if performance to be in several places 40 28. Authorities questioning rule 42 29. Exception, if terms of contract show intention 44 30. Exception, if circumstances show one place only in contemplation of parties ■. 46 31. How the lex fori affects construction 4& CHAPTER IV. LAW GOVERNING CONSTRUCTION IN SPECIAL CASES. , § 32. Illustration of rules applicable to commercial paper. — Contract of maker or acceptor 51 33. Law governing contract of drawer , 52 34. Law governing contract of indbrser 56 35. Interpretation of contracts governed by general commercial law.. . 59^ 36. Difficulties of perfecting a system of commercial law in the United States 60- 37. Instances of conflict between Federal and State courts, illustrated by recent cases 6i 38. United States Supreme Court rule adopted in New York. 64 39. Other State authorities in support of rule 66 CHAPTER V. THE ADMISSIBILITY AND EFFECT OF PAROL EVIDENCE AS AN AID IN CONSTRUCTION. § 40. General sphere of such evidence 69 41. Importance of considering rules governing such evidence 70- 42. Statement and interpretation of general rule of law 72 43. Reason for the rule. — Written evidence preferred to oral 75 44. Why written evidence is preferred ■. 77 45. Object of the rule excluding parol 78 46. Lord Bacon's test for determining admissibility 79 47. Not adopted here 80 48. Principles more important than arbitrary rules 80 49. Distinction not of practical value, for term patent ambiguity indef- inite 82 50. Term requires special interpretation 83 51. When patent ambiguity exists 86 52. Rule as to latent ambiguities brings no aid to present discussion. . 89 53. Subdivision of subject 89 TABLE OF CONTENTS. VU CHAPTER VI. WHEN PAROL EVIDENCE MAY EXPLAIN THE MEANING OF WORDS. PAGE § 54. General classification of subject 91 55. Principle upon which parol is admitted to explain foreign and tech- nical words 92 56. Proof of technical meaning, distinct from proof of usage 92 57. Distinction illustrated by New York case 93 58. What included in phrase technical terms 94 59. When technical sense of word does not prevail 95 60. Value and necessity of regarding usage to ascertain the meaning of words . ' 97 61. Apparent meaning of a word no guide to its customary meaning. . 98 62. Words to be understood as parties used them 99 63. Local meaning of words regarded loi 64. Authorities sustaining rule that unambiguous words may be ex- plained by usage _. 103 65. Extreme instance of difference between apparent and customary meaning of word 105 66. Application of principle to rule that a usage must not contradict writing r 106 67. Bend v. Georgia Insurance Co 108 68. Principal authorities relied on to support dissenting opinion, criticised 109 CHAPTER Vn. WHEN PAROL EVIDENCE MAY EXPLAIN THE MEANING OF WORDS— (Continued). § 69. Context of contract may show meaning of words iii 70. Convincing evidence required to justify disregard of context 112 71. When meaning of word acquired by usage governs 113 72. What evidence of usage must show 114 73. Statutory and legal meaning of words not to be contradicted by usage lis 74. Parol evidence to explain indefinite words of contract 117 75. Early cases recognizing principle 117 76. Doctrine carried forward by recent cases'. 118 77. This testimony only admitted when contract unintelligible without it 120 78. How this evidence differs from other admissible parol 121 79. Text writers have not conceded its admissibility 121 80. Principle justifying its use .■ 122 VIU TABLE OF CONTENTS. CHAPTER VIII. PAROL EVIDENCE TO SHOW SURROUNDING CIRCUMSTANCES. PAGE § 8i. Importance of regarding the circumstances surrounding a contract 124 82. General rule as to proof of circumstances 126 83. Questions to be considered in chapter 126 84. Identification of parties included within term 1 27 85. Identification of subject-matter also included 127 86. Vague words thus applied to subject-matter. — Macdonald v. Long- bottom 129 87. Other cases illustrating rule 130 88. Facts surrounding execution of contract a part of circumstances of the case 132 89. Other matters to be shown as part of the surrounding circumstances 133 90. Court cannot have exact light of parties who make a contract 134 91. Circumstances can never show meaning which contradicts writing. 135 92. Irreconcilable inconsistency, however necessary 136 93. Entire contract to be considered to determine whether inconsistency exists 137 94. If written contract is vague or incomplete circumstances may show real contract 138 95. Evidence of practical construction of parties 140 CHAPTER IX. WHEN PAROL EVIDENCE OF USAGE MAY BE GIVEN. § 96. General contents of chapter 141 97. Principle justifying reference to usages 142 98. Judge Story's caution as to extending doctrine 143 99. Former dislike of usage not now prevalent 145 100. Usage a necessary and safe means of interpreting trade contracts.. 145 loi. Incidents annexed to contracts by usage alike in different trades. . 146 102. English cases illustrating nature of such incidents 147 103. American illustrative cases i^g 104. Usages which contradict the writing cannot be proven 1 50 105. Instances where usages have been excluded because contradictory to writing • j 1-2 106. When a usage contradicts the writing 153 107. Apparent inconsistency not sufficient.— Hutchinson v. Tatham 154 108. Test for determining whether usage is inconsistent with language. 155 109. A usage which qualifies only, does not contradict 1 56 TABLE OF CONTENTS. IX CHAPTER X. THE NECESSARY CHARACTERISTICS OF A VALID TRADE USAGE. PAGE § I lo. Essential requisites of every usage of trade 158 111. When a usage of trade is established 158 112. Particular practices of an individual do not make a usage of trade 160 113. Usage must exist as a fact 162 1 14. How fact of existence proved 163 115. When a usage is presumptively known 164 116. Rule if occupation requires familiarity with many trades 166 117. When presumption of knowledge is conclusive 167 118. Recent application of rule 170 119. Law where one enters special market 171 120. Other requisites of a usage to annex an incident 172 121. When a usage is unreasonable 172 122. When a usage contradicts a rule of law i74 123. Usage cannot override a general principle of law I75 124. Usage must be applicable to principal contract I77 125. Instances where usage if proved would make new contract 177 CHAPTER XL WHEN SUPPLEMENTARY PAROL EVIDENCE IS ADMISSIBLE. § 126. What is meant by supplementary parol evidence 180 127. How Statute of Frauds affects subject 181 128. Subsequent parol agreements not to be considered 182 129. When prior or contemporaneous oral agreements may affect writ- ing 183 130. Importance of this principle admitting parol where the writing is manifestly informal 184 131. Jeffery v. Walton 184 132. Oral warranty admitted if writing informal 185 133. Other authorities sustaining principle 187 134. Test for determining whether writing is complete 188 135. What is extent of complete contract 190 136. When oral agreement collateral to and consistent with writing may be shown 190 137. Instance of collateral parol stipulation. — Lindley v. Lacey 191 138. Other cases showing collateral contracts 192 139. What parol agreements excluded if written contract complete. ... 193 140. Reason for admission and exclusion of agreements in cases cited. 195 141. Test for determining whether parol agreement is collateral 196 X TABLE OF CONTENTS. CHAPTER XII. COLLATERAL PAROL CONTRACTS; DISCUSSION OF PARTIC- ULAR AUTHORITIES. PAGE § 142. Decision of New York Court of Appeals in Chapin v. Dobson. ... 199- 143. Doubt occasioned by the opinion of the court 201 144. Quotation from opinion 201 145. Angell V. Duke erroneously referred to 203 146. Other authorities cited do not justify doctrine of Chapin v. Dobson 205 147. Mann v. Nunn 205 148. Morgan v. Griffith ; Erskine v. Adeane 206 149. Decision of New York Court of Appeals in Eighmie v. Taylor. . . 208 1 50. Comments on opinion of Court of Appeals 209 151. Doctrine of opinion 2iO' 1 52. Question presented by opinion 21 1 153. Doubtful if Chapin v. Dobson was followed 212 1 54. Authorities cited do not support opinion 214 155. Authorities opposing doctrine 215 1 56. Principles for determining scope of contract not affected by these cases 216 CHAPTER XIII. PAROL EVIDENCE TO SHOW CONTRACT CONDITIONAL. 157. General rule 218 158. Murray v. The Earl of Stair 218 159. Pym V. Campbell 219 160. American authorities in support of doctrine 220 161. Other cases illustrating rule 221 162. Principle of rule applies to all contracts 223 163. Authorities holding rule is not applicable to sealed instruments.. . 224 164. Authorities holding that parol may show a sealed instrument was delivered subject to a condition 226 165. Conclusion to be derived from the .cases 228 166. Parol may show contract conveying property was never intended to be absolute , 228 167. Reason for this rule 229 168. Illustration of rule , 230 169. Pennsylvania doctrine as to contemporaneous parol agreements . . 230 TABLE OF CONTENTS. XI CHAPTER XIV. WHEN PAROL EVIDENCE IS CONTRADICTORY. PACK § 170. General statement of rule excluding parol 233. 171. Parol not to vary terms of contract 233 172. Parol not to contradict terms of contract : 234 173. Authorities already cited sustain rule 235 174. Language, if clear, expresses the will of the parties 236 175. Parol must never contradict express terms of contract 238 176. Rule illustrated by the contracts arising upon negotiable paper 239- 177. Parol agreements among parties signing negotiable paper not ex- cluded 242 178. Rule excluding parol applicable to every contract 244 179. A complete written contract merges all prior parol negotiations. . . 245 180. Complete contract conclusive as to all matters comprised therein. 246 181. Legal effect of a writing not to be contradicted 247 182. Illustration of rule 249- CHAPTER XV. LIMITS WITHIN WHICH RULE EXCLUDING PAROL OPERATES. § 183. Sphere of operation of rule excluding parol evidence 252^ 184. Nature of limitations of rule 253, 185. Certain language may be contradicted 253 186. Authorities recognizing principle 254 187. Contract words in receipt not to be contradicted 255 188. Rule excluding parol does not apply to strangers to writing 256 189. Authorities sustaining this doctrine '. 257 190. Parol may show contract was never made 258 191 . Fraud, mistalie, and illegality proved by parol 259 192. Parol may show unsealed contract to be without consideration 259 193. Seal conclusive evidence of consideration at common law 260 194. Rule abrogated in some States 261 195. Parol may always explain consideration clause 26a 196. Oral evidence showing agreement discharged, waived, or supplant- ed, does not contradict 264, 197. Conclusion from discussion of rule excluding parol evidence 264. CHAPTER XVI. RULES OF CONSTRUCTION.— WORDS TO BE INTERPRETED- IN ORDINARY SENSE. § 198. General nature of rules of construction 266 199. Certain rules of great importance 267 200. Words to be understood in their plain, common, and ordinary sense 268 201. Ordinarv sense sometimes referred to as strict and primary 270 Xn TABLE OF CONTENTS, PAGE 202. Phrase, strict and primary sense, does not apply to reading of com- mon words 271 303. Words to be interpreted as parties used them 273 204. Rule that words are to be interpreted in ordinary sense does not apply to technical terms 275 205. Evidence of usage may show that words have been employed in special sense 276 206. Context, circumstances, and habits of parties may affect ordinary meaning 277 207. Statutory and legal meaning may control ordinary meaning 277 208. How ordinary sense of word is determined 277 209. Holt V. CoUyer 278 CHAPTER XVII. THE CONSIDERATION OF THE WHOLE CONTRACT. § 210. Importance of rule that whole contract is to be considered 280 21 1. What constitutes the entire contract 281 212. How to determine whether writings are a part of a single contract 283 213. Writings made a part of contract by reference will be construed therewith 284 214. Effect to be given to every part of contract, if possible 285 215. Rule applied where contract contains written and printed pro- visions 287 316. Written and printed provisions to be reconciled, if possible 289 217. How general intent is ascertained 291 218. General intent more important than meaning of special words 294 219. General intent, therefore, overrides ordinary meaning of particular words 29s 220. Words restrained by subject-matter 299 221. Mistakes in grammar, spelling, and punctuation, disregarded. . . . 301 CHAPTER XVIII. RULES FOR CONSTRUING AMBIGUOUS CONTRACTS. § 222. Nature of such rules 304 223. Construction supporting a contract favored 304 224. Legal sense of contract preferred to illegal 306 225. Reasonable construction to be adopted 306 226. Whatever is necessarily implied in language is a part of contract.. 308 227. Construction to be against party using ambiguous terms 311 228. Ambiguous promise construed in favor of promisee 313 229. Promisors not always the proferentes 315 230. How to determine who are \\\&proferentes 316 231. Rules of interpretation and construction laid down by Lieber 319 232. Construction brings no aid after all rules have been applied 324 TABLE OF CONTENTS. XIU Special Rules for Particular Contracts. CHAPTER XIX. RULES FOR CONSTRUCTION OF WARRANTIES IN INSUR- ANCE policies. PAGC §233. What is meant by special rules for particular contracts 326 234. Warranties in contracts of insurance said not to be governed by intention 326 235. Warranty in policy to be literally interpreted 327 236. Reason for construing warranty literally 329 237. The intention determines what statements are warranties 330 238. If language doubtful, intention controls; immaterial statements when not warranties 332 239. Statements affecting risk are warranties 333 240. Language of warranty will not be extended 335 241. If contradictory provisions in whole contract, intent sought for. . , 335 242. Moulor V. American Life Insurance Co 337 243. Schwarzbach v. Ohio Valley Protective Union 344 244. The language of the warranty will be interpreted reasonably 347 245. Representations interpreted pursuant to the intent 350 246. Warranties to be construed by ordinary rules of construction 352 CHAPTER XX. construction of GUARANTIES, AND OTHER SPECIAL CON- TRACTS. § 247. Question to be considered with regard to guaranties 353 248. No occasion for question if contract is clear 353 249. Reason for construing other contracts contra proferentem applies to guaranty 354 250. Authorities uphold rule that construction should be against guar- antor , 356 251. Authorities questioning or limiting rule 360 252. A surety is favored by the law, his contract will not be extended.. 361 253. Contracts of carriers interpreted by ordinary rules 363 254. Carriers' exemptions from liability 3^7 255. Intention sought, whatever is nature of contract 370 256. Meaning of language in different contracts not the same 375 XIV TABLE OF CONTENTS. CHAPTER XXI. THE EFFECT OF MATERIAL AND IMMATERIAL ALTERA- TIONS IN A CONTRACT. PAGE ■§ 257. Statement of matter for discussion 377 258. Division of subject 378 259. What is an alteration of a contract . '. 378 260. General statement of present rule 379 261 . Rule applies to all contracts 380 262. Recent authority showing broad principle of rule 381 263. Immaterial alterations do not avoid contract 383 264 This rule always prevalent in America 384 265. Fraudulent immaterial alterations will not avoid 385 266. Fuller V. Green 386 267. What is a material alteration 389 268. Extract from opinion in Suffel v. Bank of England 390 269. Instances of material and immaterial alterations 392 270. Fraudulent material alterations 393 371. Innocent material alterations 396 CHAPTER XXH. BURDEN OF PROOF AND PRESUMPTIONS AS TO ALTER- ATIONS. § 272. Statement of method of treatment 399 273. Party producing a writing apparently altered should have burden of freeing it from suspicion 400 274. Questions arising as to the making of material alterations are mat- ters of fact 402 275. If no contradictory evidence, no question arises for jury 402 276. Summary of principles controlling subject 403 277. What is meant by burden of proof 403 278. Rule that burden is upon party producing advocated by Parsons, . 405 279. Dodge V. Haskell 408 280.. Wilde V. Armsby 409 281. The saime rule applies to all contracts 413 282. Authorities holding burden on party alleging bad faith if instru- ment free from suspicion 416 283. If alteration not suspicious, but shown prima facie to be subse- quent to execution, burden on plaintiff 420 284. Questions of fact for jury 421 285. Referring questions to jury does not reconcile authorities 425 286. If no evidence impeaches writing alteration assumed to be prior to execution 428 TABLE OF CONTENTS. XV PAGE 287. A writing containing no evidence of subsequent alterations to be admitted at once 431 288. Explanatory evidence may be required in first instance if instru- ment suspicious on its face 433 289. Statement of presumptions 439 CHAPTER XXIII. ALTERATIONS BY A STRANGER, AND BY CONSENT. I 290. Law of England and America in conflict 441 291. Rule in England as stated by Mr. Justice Stephen 442 292. Davidson v. Cooper , 444 293. Other English cases following Davidson v. Cooper 445 294. English rule well but not fully established 448 295. Criticism on rule 450 296. Rule in America /. 452 297. Drum V. Drum 454 298. Alterations by accident or mistake 457 299. Alterations by consent 458 300. When filling of blanks in negotiable paper is not alteration 459 301. Question arising with reference to complete bills or notes with blank spaces 464 302. Law of England on question 465 303. American authorities following Young v. Grote 467 304. American authorities holding that maker is not liable 471 305. Grounds upon which maker is said to be liable 478 306. These grounds do not make genuine bill 482 307. Maker of such note not liable for negligence 482 308. Other grounds insufficient for holding maker 491 INDEX 497 TABLE OF CASES. {^References are to pages. ^ Abbott V. Bates, 107, 115, 166 V. Commercial Bank, 193 V. Hendricks, 259, 260 V. Middleton, 3 V. Rose, 462 Abrams v. Pomeroy, 254 Adams v. Adams, 305 V. Flanager, 243 V. Frye, 385, 388, 456 V. Hill, 282, 284 V. Ins. Co., 159 V. Pittsburgh Ins. Co., 1 59 V. Warner, 312 & Westlake Mfg. Co. v. Cook, ■7. 135 , . „ Express Co. v. Boskowitz, 138 ^tna Bank v. Winchester, 380, 487 Ins. Co. V. France, 329, 340 Ins. Co. V. Grube, 336 Ins. Co. V. Wheeler, 316 Nat. Bk. V. Charter Oak Life Ins. Co. 63, 176 Agawam Bank v. Sears, 472 V. Strever, 16, 298, 354 Airey v. Merrill, 376. Alabama Great South R. R. Co. v. Lit- Albright v. Voorhies, 140, 246, 308 Alcorn V. Morgan, 256 Aldous V. Comwell, 383, 387 Aldrich v. Aldrich, 126 Alexander v. Germania Fire Ins. Co. 334 V. Vanderzee, 21 AUegre's Adm'rs v. Maryland Ins. Co. 98 Allen V. Brown, 240 V. Kemble, 58 V. Merchants' Bank, 58, 163 V. Rundle, 241 V. Sowerby, Adm'r, 192 V. Sundries, 147 V. Pink, 185 AUerv, Aller, 261, 262 Almgren v. Dutilh, 118 B Alsagar v. St. Catherines Dock Co. 288 American Basket Co. v. Farmville Ins. Co. 337 Express Co. v. Pinckney,288 Ames V. Brown, 452 V. McComber, 27, 37 Amonett v. Montague, 187 Anderson v. Fitzgerald, 328, 350 Andrews v. Pond, 39 Androscoggin Bank v. Kimball, 462 Angell V. Duke, 202, 203, 204, 205, 206, 207 Angle V. N. W. Mutual Life Ins. Co. 380,460,461,462,471,474 Anker v. Franklin, 206, 246 Anthony v. Harrison, 261. Appleman v. Fisher, 98, 165, i68 Appleton V. Fisher, 95 Archibald v. Thomas, 306 Arctic Fire Ins. Co. v. Austin, 13 Argall V. Cheney, 448 Armstrong v. Burrows, 23, 95 Arnold v. Cheque Bank, 481, 484 Arnot V. Erie R'y Co., 259 Arthur v. Roberts, 92 Artizans' Bank v. Backus, 425, 430 Ashworth v, Redford, 21 Ashbury R'y Carriage Co. v. Riche, 400 Aspdin V. Austin, 311 Astor V. Union Ins. Co., 97, 167 * Atkinson v. Hawden, 394, 397 Atlantic Ins. Co. v. Conrad, 281 Attwood V. Emery, 308 Atwaterv. Clancy, 150, 186 Atwood V. Cobb, 250 V. Sellar, 176 Auburn City Bank v. Leonard, 244 Aughinbaugh v. Copperheffer, 97 Auley V. Stewart, 107 Aurora Fire Ins. Co. v. Eddy, 348 Austin V. Miller, 59 v.Wacks, 250 Avery v. Bushnell, 281 xvm TABLE OF CASES. Avery v. Stewart, 98 Aymar v. Sheldon, 53, 54, 58 Ayres v. Western R. Co., 367 Babbitt V. Globe Ins. Co., 284 V. Young, 238 Babcockv. Deford, 192 V. L. S. M. S. R. R. Co., 316 Backhouse v. Selden, 51 Bacon v. Chesney, 363 Badger v. Jones, 254 Baeder v. Camie, 373 Baile v. Ins. Co., 260 Bailey V. Bensley, 151, 171 V. Heald, 53 V. Homestead Fire Ins. Co. 337 V. Lloyd, 292 V. Taylor, 417,418,423,424,425, 427 Baillie v. Kessler, 231 Bain v. Whitehaven Ry. Co., 48 Bainbridge v. Wade, 85, 132 Baines v. Woodfall, 324 Baker v. Drake, 161 v. Higgins, 250 Baldwin v. Dow, 260 Baley r. Homestead Fire Ins. Co., 350 Bank v. Page, 161 of Cass County v. Morrison, 433, ' 434 of Hindustan v. Smith, 447, 458 of Kentucky v. Adam's Ex. Co. 368, 369 of Pittsburg V. Neal, 461, 462 of U. S. V. Donnelly, 50 v. U. S., 53 of Ireland v. Evan's Charity Trustees, 465, 466, 485 of Montreal v. Recknagel, 286 of the Republic v. Millard, 472 Barclay V. Hopkins, 187 V. Lucas, 363 v. Wainwright, 231 Bargatt v. The Orient Mut. Ins. Co., 116,288 Barhydt v. Bonney, 240 v. Ellis, 286 Baring v. Claggett, 333 Barker v. Borzone, 149, 165, 168 v. Bradley, 188 V. Chariot, 372 v. Garvey, 239 V. Troy, &c. R. R. Co., 140 Barkworth v. Young, 375 Barlow v. Lambert, 95 V. Scott, 314 Barnard v. Gushing, 281 Barnard v. Gaslin, 241 V. Kellogg, 151, 156, 175 Barnes v. Ingalls, 163 Bamett v. Abbott, 254 Barney V. Newcomb, 311 Barnstable Bank v. Ballcu, 240 Baron v. Placide, 95 Barreda v. Silsbee, 25 Barrington v. Bank of Washington, 417, 427 Barrow V. Dyster, 152 Barry v. Ransom, 243 Barter v. Wheeler, 43 Bartlett v. Hawley, 238 V. Pentland, 160, 166, 167 V. Pyers, 278 Barton v. Fitzgerald, 286 V. McKelway, 104, 159 V. McLean, 8, 310 Basshor v. Forbes, 193 Bast V. Bank, 221, 232, 246 Batchelder v. Queen's Ins. Co., 132 Batterman v. Pierce, 214, 215 Baxendale v. Bennett, 461,466,481,4831 Baxter v. Lelan, 165 Bayliffe v. Butterworth, 171 Beachem's Assigs. v. Eckford's Exrs. 140 Beall V. Poole, 222 Seaman's Admrs. v. Russell, 413, 417t 422, 423, 424, 427, 433 Beatty v. Gates, 13 Bedard v. Bonville, 120 Beer v. Insurance Co., 1 52 Begg v. Forbes, 1 5 Belcher v. Mulhall, 246 Belden v. Seymour, 263 Belger v. Dinsmore, 370 Belknap v. Nat. Bank of N. A , 472 Bell v. Bruen, 38, 40, 291, 355 V. Ins. Co., 292 V. Martin, 130 V. Quick, 453 V. Woodman, 258 Bellinger v. Bentley, 244 Belloni v. Freeborn, 360 Bend V. Georgia Ins. Co., io6, 108 Bender v. Montgomery, 241 Benedict v. Cowden, 392, 493 V. Huntington, 305 V. Ocean Ins. Co., 287 Bennett v. Agricultural Ins. Co., 12, 331 V. Judson, 351 Bent Recr. v. Alexander Recr., 298 Bent V. Hartshorn, 358 Bentley v. Daggett, 166 TABLE OF CASES. XIX Benton V. Martin,' 221, 222, 242 Bergamini V. Bastian, 311 Bergin v. Williams, 128 Berwick v. Horsfall, 16 Beswick v. Swindells, 292 Bickett V. Taylor, 126 Biddle v. Wilhelm, 232 Bigelow V. Stilphens, 397, 455 Birch V. Depeyster, 117, 122 Birmingham Ins. Co. v. Kroegher, 153 Birrell v. Dryer, 311, 316 Bishop V. Chambers, 424, 426 Bissell V. Campbell, 97, 164 V. Ryan, 159 Black V. Goodrich Trans. Co., 370 V. Shreve, 226 Blackett v. Royal Ex. Assur. Co., 104, 109, 151 Blade v. Noland, 395 Blakey v. Johnson, 452, 471 Blanchard v. Bucknam, 372 V. Trimm, 183 Blanchet v. Collieries Co., 44 Blin V. Mayo, 161 Bliss V. Brainard, 35 Blitz V. Union Steamboat Co., 308 Bliven v. New England Screw Co., 14, 151 Block V. Bachelder, 308 V. Columbia Ins. Co., 161 Blodgett V. Durgin, 51 Blood V. Harrington, 187 Blooming Grove Mut. Fire Ins. Co. v. McAnemey, 331 Blossom V. Griffin, 126, 132, 196, 289 Boalt V. Brown, 379 Board v. Shipley, 188 Boardman v. Gaillard, 165 V. Spooner, 164, 181, 194 Boehen v. Williamsburgh Ins. Co., 315 Bolckow V. Seymour, 23, 187 Bolton V. Bp. Carlisle, 448 Bomery v. Morrill, 193 Bond V. Clark, 194 Bonesteel v. Flack, 228 Bonham v. Craig, 230 Bonton v. Am. M. L. Ins. Co., 315 Boody V. Stone, 161 Bookstaver v. Glenny, 193, 221, 242 V. Jayne, 221, 242 Boon V. iEtna Fire Ins. Co., 3°°. S'S Booth V. Cleveland R. Mill, 286, 309 V. Powers, 380, 397 V. Robinson, 139, 230 Boothly V. Stanley, 409, 43° Borckeling v. Katz, 239 Boston & S. G. Co. v. Moore, 237 Bottomley v. Forbes, 147, 164 Boune v. Gatliff, 161 Bourne v. Seymour, 112 Boutelle v. Ins. Co., 331 Bowen v. Bell, 263 V. Bradley, 40 v.' Newell, 52 V. Proprietors of the South Building, 139 V. Stoddard, 173 Bowerbank v. Montare, 298 Bowers v. Jewell, 385, 390, 422 Bowes V. Shand, 21, 107, 114, 269 Bo wring v. Shepherd, 171 Boyce v. Edwards, 52 Brackett v. Barney, 225, 226 V. Montfort, 388 v. Norton, 27 Bradford v. Manly, 186 Bradlaugh v. De Rin, 59 Bradley V. Manly, 116 V. Mann, 479 V. Marshall, 284 V. The Washington A. & G. S. P. Co., 136 - V. Wheeler, 145, 152, 164, 174 Bradshaw v. Coombs, 187 Bradstreet v. Rich, 187, 188 Brady v. Oastley, 192, 248 v. Reed, 237 Braman v. Bingham, 225 Branch v. Palmer, 374 Brandon v. Barrett, 176 Mfg. Co. V. Morse, 248 Brandreth v. Sandford, 282 Branson v. Oregonian Ry. Co., 222 Brawley v. U. S., 112 Braynard v. Marshall, 37 Breck v. Cole, 254 Bremer v. Freeman, 29 Breneman v. Furniss, 242 Brenner v. Luth, 246 Brewer v. Hardy, 305 V. Woodman, 243 Brewer's Fire Ins. Co. v. Burger, 189 Brewster v. Countryman, 187 Brice v. Hamilton, 255 Brick V. Brick, 73, 132 Bridgeport Bank v. Dyer, 161 Brigg v. Hilton, 186, 187, 200 Brigham v. Rogers, 195 Brink V. Merchants', etc., Ins. Co., 337 British Linen Co. v. Drummond, 35 Brockway y. Malony, 37 Bromley v. Johnson, 249 Brooks V. Allen, 380, 452 V. Brooks, 104 XX TABLE OF CASES. Brooks V. White, 254 Broughton v. Bradley, 34 Brown v. Brooks, 97 V. Brown, 19, 269 V. Byrne, 98, 104, 142, 143, 147, 156 V. Eastern Slate Co., 193, 222, 240 V. Fletcher, 127 V. Foster, 151, 157 V. Kough, 161 V. McGrau, 21 V. Orland, 24 V. Owen, 188 V. Parker, 244 V. Phelon, 421 V. Reed, 469, 470 V. Slater, 305 V. Spofford, 240 V. Tayleur, 153 V. The Camden & Atlantic R, R. Co.,47 V. Thurber, 258 V. Wiley, 240 Chemical Co. v. Atkinson, 143 Browning V. Home Ins. Co. 335 V. Wright, 267 Brown's Admrs. v. Hatton, 14 Bruce v. Westcott, 478 V. Wright, 243 Brunhild v. Freeman, 237 Bryan v. Brazil, 238 Bryant v. Com. Ins. Co., 173 Bryce v. Lorillard Ins. Co., 334 Buchtel V. The Mason Lumber Co., 189 Buck V. Burk, 97 Buckeley v. Lord, 363 Buckingham v. Jackson, 306 Buckle V. Knopp, 147, 166, 168 Buckler v. Huff, 452 Bucklin v. Bucklin, 261 Budd V. Sinclair, 217 Building Assn. v. Hetzel, 161 BuUard v. Thompson, 33 Burchard v. Dunbar, 35 Burcbfield v. Moore, 448, 451 Burgess v. Seligman, 61, 230 V. Wickham, 156 Burgwin v. Bishop, 41 5 Burkholder v. Plant, 262 Burleigh v. The Gebhard Fire Ins. Co., 333 Burnham v. Ayer, 385, 424 V. Dorr, 260, 263 Burr V. The Broadway Ins. Co., 128, 131 Burr V. American Spiral Spring Butt. Co., 292 Burrell v. Root, 261 Burson v. Huntington, 493 Burt V. Sexton, 183 Burton v. Blin, 173 Burwell v. Pioneer, 255 Busch V. Pollock, 95, 97 Butler V. Gale, 120 V. Smith, 222 Butterworth v. Western Assurance Co., 126 Cabarga v. Seeger, 23 Cabot V. Christie, 351 Cady V. Imperial Ins. Co., 349 Calender V. Dinsmore, 151 Caley v. Hoopes, 232 V. Phila. R. R. Co., 231 Calcutta & Burmah Steam Nav. Co. v. Demattos, 267 Callahan v. Stanley, 95 Cambridge Sav. Bank v. Hyde, 462 Campbell V. Dearborn, 230 V. Hall, 258 V. N. E. Mut. Life Ins. Co., 346, 347, 350 V. Nichols, 37, 52 Canal Co. v. Hill, 286 Cape Ann Nat. Bk. v. Burns, 380, 477 Carnegie v. Morrison, 48 Carpenter v. Grand Trunk Ry. Co., 42, 49 V. Jameson, 256 V. The Providence Wash- ington Ins. Co. 59 Carr v. Dooley, 193 V. Nat. Security Bank, 472 V. Welch, 392, 462 Carter v. Goal Co., 171 Case V. Boughton, 261 Casey v. Holmes, 282 Casler v. Conn. M. Life Ins. Co., 96 Casoni v. Jerome, 452 Cassidy v. Begoden, 187 Catlin V. Smith, 173 Catton V. Simpson, 387 Cauter v. Bennett, 35 Cazenove v. British Equitable Ins. Co., 352 Chaddock v. Vanness, 221, 241, 242 Chadsey v. Guion, 291 Chad wick v. Brumley, 1 30 V. Eastman, 458 Chalfrant v. Williams, 230 TABLE OF CASES. XXI Chapin v. Dobson, 48, 186, 199, 200, 201, 202, 203, 204, 205, 206, 208, 209, 212, 216, 217 V. Potter, 1 6 Chapman v. Cottrell, 37 V. Devereux, 173 V. Robertson, 39, 40 V. Rose, 462 V. Secomb, 294 Charles v. Denis, 230 Charlotte v. Chouteau, 27 Charlton v. Gibson, 120 V. Reed, 380 Chartered Mercantile Bk. of India, London, and China v. Netherlands India Steam Nav. Co., 31, 34, 35 Chase v. Alliance Ins. Co., 66 Chase's River Bridge v. Warren Bridge, 3" Chatham Bank v. Allison, 37, 58 Chattock V. Shawe, 348 Cheney v. Goodrich, 1 59 Chicago V. Sheldon, 140 Packing Co. v. Tilton, 164 St. Louis, & N. O. R. R. Co. V. Abels, 370 Chick, ex parte, re Meredith, 3 Child V. Sun Mutual Ins. Co., 97 Chippendale v. Thurston, 375 Chouteau v. Suydam, 226, 237 Chumasero v. Gilbert, 48 Church V. Town, 239 Churchill v. Palmer, 127 Churchward v. The Queen, 310 Citizens' Bank v. Richmond, 380, 462 City of Elizabeth v. Force, 390 Norwich, 370 Winona v. Thompson, 250 Claflin V. Meyer, 404 Clanrickard v. Sidney, 323 Clan ton v. Barnes, 53 Clapham v. Cologan, 333 Clapp V. Tirrell, 263 Clark V. Baker, 165 V. Barnwell, 291 V. Eckstein, 238 V. Gifford, 228 V. Hart, 240 V. N. Y. Life Ins. & Trust Co., 278 V. Silbermann, 269 V. Woodruff, 288, 294 Clarke v. Pratt 28 V. Rodgers, 417 V. Westmore, 329 Clayton v. Gregson, 98, 115 Cleaveland v. Smith, 294, 323 Clever v. Kirkman, 220, 222 Cleves V. Willoughby, 195 Clifford V. Parker, 413, 426 V. Turrill, 264 Climan v. Cook, 284 Clopton V. Elkin, 452 Clough V. Seay, 397 Clute V. Small, 394 Cobb V. Buswell, 35 V. Fountaine, 305 V. Wallace, 24, 187 Cochran v. Nebeker, 390, 421, 425 V. Retburg, 98, 105 Cockbum V. Alexander, 151 Cocke V. Blackbourne, 246 Cockerell V. Autompte, 112 Cocks V. Barker, 226 Coddington v. Davis, 282 Coffin v. Storer, 372 Coghlan v. Stetson, 308 Cohen v. Southeastern R'y Co., 43 Coit V. Commercial Ins. Co., 97, 167 Coldbank v. White, 258 Coldwell v. Layton, 294 Cole v. Hills, 385, 412, 422, 440 V. Howe, 132 v. Smith, 139 v. Wendell, 118 Colegrove v. Rockwell, 243 Coleman v. Manhattan Beach Imp. Co., 131 Coles V. Bank of England, 466 V. Hulme, 282, 302 Collen V. Lukens, 231 CoUender v. Dinsmore, 95, 119, 149, 151 Co. V. Marshall, 37 Collins V. Delaporte, 281 V. New England Iron Co., 160 V. Tillou's Adm'r, i86 Collis V. Emett, 305 Collyer v. Collins, 97, 120 Colpoys V. Colpoys, 86 Colt V. Phoenix Fire Ins. Co., 131 Colton V. Vandervalzen, 248 Columbo, The, 291 Col well v. Lawrence, 138, 247 Combe v. Woolf, 363 Comer v. Cunningham, 39 Commercial & Railroad Bank v. Lum, 427 Ins. Co. V. Mehlman, 153 Commonwealth v. Indust. Say. Bank, 390 Ins. Co. v. Berger, 314 xxn TABLE OF CASES. Commonwealth Mut. Fire Ins. Co. v. Huntzinger, 330, 331 Comstock V. Breed, 261 V. Hier, 242 V. Smith, 425 Condict V. Flower, 452 Conn. Mut. Life Ins. Co. v. Union Trust Co., 348 Conover v. Inhabitants of Middletown, 25 • Converse v. Harzfeldt, 374 Conway v. Alexander, 230 Cook V. Finch, 250 V. Litchfield, 37, 53 V. Moffa, 37 V. Wells, 149 Cooke V. England, 151 Coon V. Knapp, 256 Cooper V. Berry, 1 59 V. Cleghorn, 246 V. Robinson, 254 V. Smith, 95 Co-operative Ass'n v. Leflore, 329, 335 Cope V. Dodd, 159, 162 Corbett V. Underwood, 151 Corcoran v. Doll, 443, 445 Cornell v. Nebeker, 462, 488 V. Todd, 282 Corn Exchange Bank v. Nassau Bank, 175 Cornish v. Abington, 313 Corwin v. Hood, 366 Cory V. Burr, 286 Cotting V. State, 40 Couch V. Woodruff. 195, 246 County of Des Moines v. Hinkley, 126, 128, 129 Courcier v. Ritter, 313 Courtenay V. Fuller, 183 Courtois V. Carpenteir, 35 Cox V. Heisley, 151, 158, 174 V. National Bank, 240 V. Palmer, 417 Coyne v. Weaver, 286, 295, 305 Crabtree v. Clark, 409, 425, 427 Craig V. Wells, 282 Craighead v. McLoney, 396 Cramer v. Lovejoy, 241 Craver v. Wilson, 261 Crawford v. Branch Bank, 53 V. Elliott. 1 26 v. West Side Bank, 380, 390 Creery v. Holly, 247 Cremer v. Higginson, 360 Cribbs v. Adams, 66 Crislip v. Cain, 350, 351 Crittenden v. French, 306 Crockery. Higgins, 186 Cromwell v. Royal Ins. Co., 37 Cromwell's Case, 282 Cronkhite v. Nebeker, 473, 479, 487 Crookwit v. Fletcher, 446, 451 Crosby v. Wyatt, 243 Cross V. Eglin, 112 Crossing v. Scudamore, 323 Crossman v. Crossman, 379, 430 Crouch V. Credit Fonder of England, 152, 176 Cubbedge v. Napier, 40 CuUen V. Butler, 299, 300 Cumberland Bank v. Hall, 418, 427 Cumberlege v. Lawson, 226 Cummingsv. Antes, 281 Cunningham v. Milner, 258 Currier v. Boston & Maine R. R., 309 Curtis V. Del., Lack. & W. R. R. Co., 41, 42,65 V. Howell, 250 V. M'artz, 1 8 Curtiss V. Howell, 132, 133 V. Leavitt, 40, 41 Cushing V. Field, 385 Cushman v. U. S. Life Ins. Co., 348 V. North Western Ins. Co., 288 Cuthbert v. Cumming, loi Cutler V. Wright, 29, 49, 52 Daggett V. Johnson, 250 Dalev. Evans, 256 T. Gear, 241, 242 Dalton v. Daniels, 1 68 Dana v. Fiedler, 97, 237 Daniels v. Hudson River Fire Ins. Co., 167, 347 Dauchy v. Tutt, 374 Davenport v. Mason, 187 Davidson v. Cooper, 380, 383, 442, 444, 445, 446, 447, 448, 449. 45 1, 453 Davis V. Boardman, 314 V. Carlisle, 427 V. Clemson, 37 V. Coleman, 37 V. Galloupe, 151 V. Jenney, 409, 418,433 V. Jones, 219, 220 V. Morgan, 241 V. Randall, 240 V. Shield, 181 V. Symonds, 76 S. M. Co. V. Stone, 237, 254 Dayton v. Hoagland, 14, 126 Dean v. Nelson, 324 Debbey v. Thrall, 385 TABLE OF CASES. XXUl Deblois v. Earle, 311 De Camps v. Carpin, 1 2 Decatur Bank v. St. Louis Bank, 297 Decker v. Furniss, 295 Decorah v. Kesselmeiser, 287 De Hahn v. Hartley, 328 De la Chaumette v. Bank of England, 57 De Lavelette v. Wendt, 259 X)en V. Wright, 453 Denney, m re, 302 Dent V. North Am. S. S. Co., 133, 234 Depauv. Humphreys, 35 Deshler v. Beers, 160 Despard v. Walbridge, 228 De Tastett v. Coronsillat, 313 Deveill v. Burnell, 375 Devlin v. Coleman, 221, 242 Dewees v. Manhattan Ins. Co., 334 Deyo V. Bleakley, 286 Dickinson v. City of Poughkeepsie, 106,159 V. Edwards, 40, 52, 58 V. Gay, 151, 176 Dickson v. Harris, 239 Dietz V. Parish, 226, 228 Dike V. Erie Ry., 36, 39, 46 Dilleber v. Home Life Ins. Co., 335 Dimech v. Corlett, 299 Di Sora v. Phillipps, i, 28 Ditch V. VoUhardt, 254 Dix V. Otis, 224 Dixon V. Royal Ex. Ship Co., 167 Doane v. Dunham, 97, 149 Dobbin v. Bradley, 149, 358, 363 Dodd V. Farlow, 151, 174, 176 V. Mitchell, 302 Dodge V. Haskell, 408 Doe V. Catamore, 414, 430 V. Dixon, 314 V. Salkeld, 323 Dolan V. Green, 37 DoUiver v. St. Joseph Ins. Co., 335 Don V. Lippman, 52 V. Whetten, 151 Donlin v. Doegling, 131 Donnell v. Columbia Ins. Co., 315 Donohoe v. Kettell, 286, 309, 323, 324, 371 Dorchester & Milton Bk. v. New Eng- land Bank, 1 59 Dorman v. Wilson, 254 Dorsey v. Packwood, 375 Douglass V. Reynolds, 356, 362 Dow V. Rowell, 53 Downs V. Richardson, 426 Doyle V. Dixon, 195 Draper v. Snow, 132, 281 V. Wood, 386, 462, 472, 473 Drew V. Towle, 23 Drum V. Drum, 409, 455 Drummond v. Prestman, 356, 359 Dubois V. Mason, 49 Dudgeon v. Pembroke, 288 Dudley v. Bosworth, 263 V. Vose, 239 Duer Sons Admr. v. Alsop; 53 Dumont v. The U. S., 303 Duncan v. Hill, 171 V. Topham, 270 Dundas v. Bowler, 53 Dunlap V. International Steamboat Co., 369 Dunn V. Hewitt, 187 V. Welsh, 48 Durant v. Burt, 171 Durgin v. Ireland, 228 Dutton V. Gerrish, 189 Duvall V. Farmers' Bank, 162 Dyer v. Smith, 27 Dykersv. Allen, 151 V. Townsend, 239 Earnest v. Express Co., 370 East Tenn., Virg. & Geo. R. R. Co. v. Johnston, 161 Easton v. Smith, 21, 97 Eaton V. Eaton, 260 Eckert v. Picket, 396 Eden v. Blake, 183 Edgerly v. Bush, 31 Edsall V. Camden & Amboy R. R. & T. Co., 316, 367 Edwards v. Farmers' Ins. Co., 284 V. Goldsmith, 19, 24 Egleston v. Knickerbocker, 256 Eichelberger v. Old Nat. Bank, 462 Eighmie v. Taylor, 188, 189, 201, 208, 209,214, 215,217 Elder V. R. R. Co., 164 Elkins V. Empire Trans. Co., 237, 288, 370 Ellis V. Hamilton, 240 Ellsworth V. N. Y. Life Ins. Co., 374 Elmore v. Marks, 228 Elston V. Kennicott, 254 Ely V. Adams, 85, 86 V. Ely, 422, 430 Emerson v. Murray, 424 Emery v. Owings, 13 V. Parry, 1 95 , „ . Emigrant Indust. Sav. Bank v. Roche, 301 XXIV TABLE OF CASES. Eneas v. Hoops, 104 English V. McNair, 302 Enrico v. Brand, 228 Erskine v. Adeane, 198, 205, 207, 214, 215 Esmond v. Benschoten, 250 Esterly v. Cole, 166, 169 Etheridge v. Paline, 194 Etting V. Bank of U. S., 25 Evans v. Anderson, 35 V. Deming, 436 V. Foreman, 380 V. Myers, 116 V. Sanders, 305, 311 Evansville Nat. Bk. v. Kaufmann, 354, 356, 360, 362, 363 Everett V. Vendryes, 52, 55 Ewaldt V. Farlow, 193 Ewing V. Burnet, 302 Ex parte Washington Park, 284 Express Co. v. Caldwell, 368 Fabbri v. Phoenix Ins. Co., 161 Fagin v. Connoly, 21 Fairfield v. County of Gallatin, 68 Falkner v. Earle, 147, 163 Falley v. Giles, 358 Falls Wire Mfg. Co. v. Broderick, 278 Fant v. Miller, 37 Fant Recr. v. Sprigg, 258 Faries v. Ranger, 140 Farmers' Bank v. Sprague, 161 Ins. Co. V. Blair, 425 & Mechanics' Bank v. Cham- plain Trans. Co., 149, 168, 169 & Mechanics' Bank v.Day,9S ' & Mechanics' Bank v. Erie Ry. Co., 168 Farnsworth v. Boardman, 126, 133 Farrar v. Hutchinson, 255 Farrow v. Hayes, 246 Farwell v. Tillson, 24 Fassin v. Hubbard, 241 Faulkner v. Hart, 41, 49, 64, 66, 68 Fawkes v. Lamb, 147, 156 Fay V. Gray, 237, 246 v. Smith, 456, 462, 472 Feig V. Myers, 433 Fenderson v. Owen, 23, 95 Fernandey v. Glynn, 450 Ferguson v. Cliiford, 27 Ferris v. Wilcox, 1 26 Festerman v. Parker, 13, 19, 24 Fiegel v. Latour, 374 Field v. Lelean, 147 V, Munson, 132, 254 Filden v. Besley, 374 Filkins v. Whyland, 185, 188, 189 First Nat. Bank v. Dana, 25 V. Deal, 496 V. Edgerton, 359 V. Hurlbut, 284 V. Lock-Stitch Fence Co., 63 V. Shaw, 36, 48 of Cincinnati v. Kelly, 36 of Parsons v.Franklin, 129 Fish V. Hubbard's Admrs., 85 Fisher V. Abeel, 187 V. Mellen, 351 Fitch V. American Pop. Life Ins. COt, 336, 347 Fitz V. Comly, 246 Flagg V. Baldwin, 49 Flash V. Conn, 68 Fletcher v. Blodgett, 477 V. Thompson, 477 Fleet V. Murton, 148, 155, 163, 164 Flood V. Joyner, 254 Floyd V. United States, 310 Foden v. Scharp, 39 Folsom V. Marine Ins. Co., 159 Fontaine v. Boatmen's Sav. Inst., 260 Foot V. .^tna Life Ins. Co., 329, 332 V. Bentley, 186 Ford V. Beech, 294, 298 V. James, 225 V. Williams, 139, 239 V. Yates, 182 Fordyce v. Nelson, 52 Forsythe v. Kimball, 240 Foster v. Clifford, 240 v.'Mackinnon, 220 V. Napier, 260 Fowkes v. Manchester & London Ass. 315 V. M. & L. Life Ins. Co., 349 Fowlev. Bigelow, 19 Frail v. Ellis, 264 Francis v. Ocean Ins. Co., 27 Frank V. Lilienfeld,46l,478 Franklin v. Twogood, 66 Fire Ins.Co.v. Undegraff, 337 Ins. Co. V. Humphreys, 165 Life Ins. Co.v.Sefton,iSi,i56 Frederick v. Campbell, 195 Freese v. Brownell, 37, 53 French v. Carhart, 132 V. French, 37 Frink v. Buss, 35 Frith V. Barker, 162, 174 TABLE OF CASES. XXV Frost V. Blanchard, 194, 246 Fuller V. Crittenden, 255 V.Giles, 312 V. Green, 386 V.Robinson, 173 Funck V. Haskell, 308 Furbush v. Goodwin, 258, 324 Fumess v. Meek, 1 5 Fusting v. Sullivan, 192 Gabay v. Lloyd, 160, 166 Gadd v. Houghton, 238 Gaffney v. Hicks, 281 Gage V. Tirrell, 364 Galena Ins. Co. v. Kupper, 116 R. R. v. Barrett, 281 Gallup V. Lederer, 164 Galpin v. Atwater, 194, 216 Gait v. Adams Express Co., 371 Gammon v. Freeman, 281 Gano V. Aldridge, 305 Ganson v. Madigan, 21 Garcelon v. Hampden Fire Ins. Co.,346 Gardiner v. Clark, 1 2, 24 Gardner v. Walsh, 387 Garey v. Meagher Co., 164 Garland v. Lane, 37 Garrard v. Haddon, 469, 470 V. Lewis, 392, 463 Garrison v. United States, 311 Gately v. Irvine, 254 Gates V. McKee, 354, 356, 357, 362 Gay V. Rainey, 37 Gelpcke v. City of Dubuque, 49 George v. Joy, 98 Georgia R. R. Co. v. Gann, 367 Germania Bank v. Distler, 254 Ins. Co. V. Sherlock, 288 Gerrard v. Clifton, 311 Gerrish v. Glines, 477 Getty v. Shearer, 412 Gibbons v. United States, 306 V. Young, 147 Gibbs V. Fremont, 58 V. Gray, 112 Gibson v. Crick, 173 V. Culver, 149, i6i V. Small, 143 v. Stevens, 36 Gilbert v. N. A. Fire Ins. Co., 225, 226 Giles V. Comstock, 237 Gill V. Weller, 374 Gillaspie v. Kelley, 462, 488 Gillett v. Sweat, 425, 428 Gillette v. Smith, 397 Gilroy v. McMillan, 246 Ginz V. Stumph, 230 Girard Life Ins. Co. v. Mutual Life Ins. Co., 156 Gleason v. Walsh, 165 Glendale Mfg. Co. v. Protection Ins. Co., 161, 246 Globe Works v. Wright, 13, 24 Gobert v. Busby, 99 Goff v. Bankstone, 221, 226 Goldshede v. Swan, 237 Golson V. Ebert, 38 Gooch V. Bryant, 422, 427 Goodman v. Eastman, 494 V. Simonds, 59, 461 Goodrich v. Stevens, 129 Goodspeed v. Fuller, 260, 263 Goodtitle v, Bailey, 305 Goodwin v. Goodwin, 245, 255 Gordon t. Gordon, 188 v. Little, 162, 176 Gorrissen v. Perrin, 98 Goss v. Ellison, 237 Gothrupt V. Williamson, 462, 488 Goucher v. North Trav. Men's Amn. Life Ins. Co., 336 Grace v. Adams, 195 V. American Ins Co., 342 Grade v. Maryland Ins. Co., 167 Graham v. Gillespie, 469, 476 Grant V. Maddox, 98, 105, 106, 137 Graves v. Johnson, 139, 243 V. Lake Shore Ry. Co., 370 v. Legge, 36, 171 Gray v. Carr, 300 V. Clark, 140, 302, 305 V. Gannon, 161 V. Harper, 117, 118, 122 V. Hinton, 374 V. Jackson, 43 Greathead v. Walton, 58 Great Northern Ry. Co. v. Harrison, 311 Greaves V. Ashline, 182 Green v. Dyersburg, 307 V. Milwaukee R. R. Co., 161 V. Moffett, 116 V. Randall, 189, 193 Greenawalt v. Moore, 231 Greenfield Sav. Bk. v. Stowell, 462, 468, 471,483 Greenough v. McClelland, 243 Greenstine v. Borchard, 1 5 1 Grey v. Pearson, 2 Grierson v. Mason, 187, 242 Griffey v. N. Y. Cent. Ins. Co., 306, 335 Griffin v. Clowes, 228 Griffiths v. Hardenberg, 126, 289 Grinnell v. Western U. T. Co., 161 XXVI TABLE OF CASES. Grissell V. Bustowe, 171 Groat V. Gile, 151 Gross V. Pagliano, 288 Grout V. Townsend, 262 Guardhouse v. Blackburn, 74 Gudgen v. Besset, 220 Gullischen v. Stewart, 285 Gunnestad v. Price, 299 Guptill V Damon, 24 Guthrie V. Imbrie, 139, 244 Hackett v. Potter, 28 V. Smith, 97 Haddock V. Woods, 119 Haddon v. Perry, 291 Hagan v. Domestic Sewing Machine Co., 97 Haigh V. Brooks, 298 V. Kaye, 230 Hale V. Brown, 374 V. The New Jersey Steam Nav. Co., 47 Halifax Union v. Wheelright, 466, 483 Hall V. Adams, 248 V. Cazenove, 254 V. Costello, 27 V. Fuller, 462, 487, 495 V. Hall, 263 V. Howard Ins. Co., 346 -rr „ V. Janson, 151, 153 Hallgarten v. Oldham, 36 Halliday v. Hart, 237 Halwerson v. Cole, 164 Hamilton v. Nickerson, 162 V. Taylor, 282, 284 Hammatt v. Emerson, 351 Hanger v. Evins, 194 Hannah v. Shirley, 128 Hanover June. & Susq. R. R. Co. v. Haldeman, 264 Hanson v. Crawley, 385 Hargrave v. Smee, 257 Harnerv. Groves, 194, 237 Harper v. Albany Insurance Co., 288. 306 V. City Ins. Co., 168 V. Dail, 254, 256 V. N. Y. City Ins. Co, 287 V. Ross, 229 Harriman v. First Baptist Ch., 239 Harrison v. Blackburn, 301 Harris v. Nosito, 35 V. Rickett, 192 V. Tumbridge, 165 V. White. 49 Harrison v. Sterry, 35 Harsh v. Klepper, 380 Harsts Lessee v. Kirkbridge, 231 Hart V. Hammett 98 V. Taylor, 295 V. The Pennsylvania R. R. Co., 367 Hartsell v. Myers, 254 Hartwell v. Camman, 95 Harvey V. Smith, 471 v. Terre Haute R. R. Co., 370 Hasbrook v. Paddock, 354 Haskins v. Warren, 162, 176 Hassam v. Barret, 230 Hatch V. Douglas, 95 Hatcher v. McMorraine, 53, 58 Hathesing V. Laing, 160 Hauer v. Patterson, 241 Havana R. R. Co. v. Walsh, 187 Hawes v. Smith, 96 Hawkes v. Pike, 228 Hawkins v. Lee, 187 Hayden v. Goodnow, 417 v. Mentzler, 263 Hayton v. Irwin, 151, 152 Hazard v. Irwin, 351 Hazelton v. Valentine, 27 Co. v. Buck Mountain Co., 29s Heald v. Cooper, 104 Heam v. New England Mut. Marine Ins. Co., 151, 153 Hebbard v. Haughian, 262 Hedges v. Bowen, 128 HefFner v. Wenrich, 41 1 Hei, Admr. v. Haller, 189 Heineman v. Heard, 404 Heisey v. Verrill, 193 Helme v. The Insurance Co., 156 Helmerichs v. Gehreke, 189 Hemming v. Trenery, 41 5 Hendrick v. Lindsay, 294 Henfree v. Bromley, 442, 443, 450 Henman v. Dickinson, 426 Henry v. Armitage, 239, 260 Henshaw v. Dutton, 224 Hepler v. Mt. Carmel Sav. Bk. 462 Herkimer v. Nigh, 255 Herrick v. Molin, 417, 421, 422 Herrman v. Merchant's Ins. Co., 269 Herryford v. Davis, 1 38 Hersom v. Henderson, 186 Hert v.- Oehler, 479 Heseltine v. Siggers, 297 Hewins v. Cargill, 380, 421 Hewitt V. Watertown Ins. Co., 296 Heysham v. Dettre, 193 Heywood v. Perrin, 285 Heyworth v. Knight, 147, 1 56 TABLE OF CASES. XXVU Hibernia Nat. Bk. v. Lacombe, 35, 37, 58 Hickman v. Haynes, 250 Hicks V. Brown, 53 V. Morris, 255 V. Shouse, 310 Higgins V. McCrea, 284 V. Moore, 165, 179 V. Phoenix Mut. Life Ins. Co., 336 V. Senior, 238 Highe V. Guardian Mut. L. Ins. Co., 349 Hildreth v. O'Brien, 254 Hill V. Blake, 264, 286 V. Cooley, 430 V. Evans, 25 V. Goodrich, 230 V. Hibemia Insurance Co., 104 V. Miller, 288 V. Priestly, 140 V. Syracuse, etc. R. R. Co., 195 Hills V. Barnes, 417, 424, 426 V. Loomis, 230 V. Miller, 281 Hinneman v. Rosenback, 237 Hinton v. Coleman, 166 V. Locke, 105, 106, 174 Hirschfield v. Smith, 58 Hiscocks V. Hiscocks, 267 Hitchin v. Groom, 13 Hodges V. Drakeford, 194 V. Tenn. Marine & Fire Ins. Co., 228 Hodgson V. Davies, 147 Hoey V. Jarman, 359, 414, 431 Hoffman v. jEtna Fire Ins. Co., 298, 300, 313 Holbrook v. Finney, 281 V. Vibbard, 54, 58 Holland v. Hatch, 385 Holmes' Appeal, 260 V. Broughton, 49 V. Hall, 324 V. Hubbard, 286, 291, 292, 301 T. Trumper, 479, 488, 493 Holt V. Colyer, 273, 278 Homans v. Lombard, 24 Home Ins. Co. v. Watson, 261 Homer V. Life Ins. Co. 183 V. Wallis, 388 Hood V. Hallenbeck, 244 Hooper v. Gunn, 37 V. Webb, 13 Hoover V. Miller, 311 Hope V. Balem, 198 Hopkins v. Westcott, 370 Home V. Rouquette, 58 Horsey V. Graham, 119 Horsley v. Price, 288 Hotchkiss V. Mosher, 255 Hotson V. Browne, 25 Houghton V. Gilbert, 100 V. Watertown Fire Ins. Co., 20, 115 Hound, The Ship, 308 House V. Palmer, 315 Houston V. Potts, 37 Howard v. Great Western Ins. Co. , 167 V. Harris, 230 V. Ins Co., loi, 159 V. Stratton, 260 v. Thomas, 195 etc., Ins. Co. v. Cormick, 332 Howe V. Hardy, 149 Howenstein v. Barnes, 44 Hubbard v. Gurney, 75, 243, V. Marshall, 188, 237 Huckman v. Femie, 350 Hudson V. Clementson, 98 V. Ede, 147, 168 Canal Co. v. Pennsylvania Coal Co., 310 Hueskev. Broussard, 120 Hughes V. Edwards, 230 V. Stanley, 143, 149 Hull V. Augustine, 49 V. N. W. McL. Ins. Co., 315 Hulton V. Arnitt, 237 Hume V. Rundell, 297 Humes V. O 'Bryan, 14 Humfrey v. Dale, 107, 132, 143, 147, 148, 155 Humphrey v. Guillon, 426 Humphreys v. Crave, 387 Hunt V. Gray, 395, 397, 414, 425, 432, 453 V. Johnson, 261 v. Standart, 40, 53, 54, 58 Hunter v. General Mut. Ins. Co., 288 V. McHose, 232 Huntington v. Finch, 387, 417 Hursh v. North, 160 Huse V. Hamblin, 58 Hussman v. Wilke, 258 Hutchins v. Hebbard, 132, 187 v. Scott, 444 Hutchinson v. Tatham, 148, 154 Hutchison V. Bowker, 14, 19, 121 Hutley V. Marshall, 292 Hutton V. Warren, 143 Hyde v. Bruce, 335 V. Goodnow, 35 Hylerv. Nolan, 139, 243, 259 XXVUl TABLE OF CASES. Hyler v. Wellington, 230 lasigi V. Curtis, 25 Illinois Centl. R. R. Co. v. Cassell, 25 V. Jonte, 371 India Rubber Co', v. Adams, 189 Ingalls V. Cole, 120 Inge V. Murphy, 27 Inglis V. Battery, 78, 134 Ingraham v. Hart, 27 V. Primrose, 466 In re Denny, 302 Phoenix Bessemer Steel Co., 281, 282 Insurance Co. v. Mowry, 246, 324 V. Tweed, 486 V. Webster, 315 V. Wilkinson, 337 V. Wright, 151, 311 Ireland v. Livingston, 162 Irish V. Railroad, 149 Irvey v. Lalland, 35 Irwin V. Thompson, 187 Isnard v. Torres, 469 Ives V. Farmers' Bank, 472 Ivory V. Michael, 479 Jacks V. Nichols, 40, 5 1 Jackson v. Bladgett, 305 « V. Frost, 303 V. Jacoby, 422, 425 V. Lawrence, 315 V. Miller, 260 V. Osborne, 417,421,422, 424, 425 V. Sheldon, 226 V. Stackhouse, 300 Jacobs V. The Credit Lyonnais, 3 1, 44 James v. Bligh, 256 V. Lycoming Ins. Co., 294 Jeffery v. Walton, 185, 214, 215 Jeffrey v. Hursh, 282 Jeffries v. Life Ins. Co., 329, 340 Jenkins v. Eldridge, 230 V. Lykes, 251 Jenness v. Berry, 24 Jennings v. Sherwood, 17 V. Whitehead & Atherton Machine Co., 119 Jessel V. Bath, 291 Jewell V. Railway Co., 142 V. Wright, 40, 52, 58 Johnson v. Baker, 226 V. Concord R. Co., i6i v. Gawtry, 37 V. Hathorn, 324 V. Martinus, 241 Johnson v. Opp^nheim, 195, 198, 208 V. Raylton, 148, 157, 310 V. Sellers, 314 V. The Duke of Marl, 426 V. The Northwestern Natlns. Co., 314 V. Weed, 255 Johnston v. Bank, 161 Harvester Co. v. McLean, 392 V. Huston, 230 Jolliff V. Collins, 194 Jones V. Albee, 241 V. Bowden, 176 V. Bunker, 24 V. Clark, 105 V. Fales, 393 V. Hoey, 149, 151, 162, 164 V. Kent, 309 V. Littledale, 238 V. Overstreet, 285 Jordan v. Meredith, 173 v. Stewart, 416, 428 Joseph v. Bigelow, 254 v. Salomon, 56 Joyce V. Realm Ins. Co., 287 J. Russell Mfg. Co. v. N. H. Steam- boat Co., 161 Juillard v. Chaffee, 132, 187, 200, 258 Kain v. Aid, 194 Kansas City, &c., R. R. Co. v. Simp- son, 370 Karnmuller v. Krotz, 354 Kavanagh v. Day, 58 Kean v. Davis, 244 Keate v. Temple, 354 Keen's Exrs. v. Monroe, 390 Keegan v. Kimaine, 246 Keller v. Webb, 116 Kellogg V. Richards, 256 Kelly V. Roberts, 246 V. Upton, 298 Kemble v. Lule, 120 V. Rhinelander, 335 Kemp V. Byrne, 187 Kennedy v. Crandell, 394 Kenyon v. Berthon, 329 V. Nichols, 28 Keough V. Leslie, 231 Kester v. Reynolds, 161 Ketcham v. The Brazil Block Coal Co., 1 20, 140 Key V. Cotesworth, 14, 25 Keythly v. Watson, 267 Kidner v. Keith, 227 Kilgore v. Bulkley, 27, 177 TABLE OF CASES. XXIX Kilgore v. Dempsey, 58 Kimball v. Brannen, 98 V. Bryan, 240 V. Myers, 259 Kingv. Hinde, loi, 168, 170 V. Sarvia, 35 V. Shepherd, 375 V. Stewart, 397 Kingsbury v. Kirmin, 171 V. Westfall, 362 Kingston v. Knibbs, 167 Kinney V. Schmitt, 462 V. Whiton, 187 Kirchner v. Venus, 166 Kitchen v. Place, 474 Kline v. Baker, 27, 37 Klosterman v. Loos, 244 K. M. Mfg. Works v. Macalister, 188 Knapp V. Warner, 126, 133 Knight V. Clements, 413, 426, 438, 439 Knowles v. Hill, 462 V. Toone, 283 Knowlton v. Erie R'y Co., 40 Knox V. Clifford, 240 Knoxville Nat. Bk. v. Clark, 380, 473, 479 Kountz V. Kennedy, 400, 458 Lacy V. Green, 97, 133 V. Loftin, 243 Ladd V. Ladd, 287 Lady Argoll v. Cheney, 450 La Farge v. Rickert, 250 Laffin & Rand Powder Co. v. Sinshei- mer, 243 Laird v. Campbell, 232 Lamb v. Camden, &c., R. Co., 405 V. Croff, 194 Lamott V. The Hudson River Fire Ins. Co., 238 Lampshire v. Slaughter, 201, 203, 208 Lang V. Pike, 362 Langdale v. The People, 285 Langdon v. Paul, 385, 387 Langenberger v. Kroeger, 452 Lanns v. Barker, 363 Lash V. Perlin, 182, 187 Lattimer v. Hill, 243 Laurance v. McCalmont, 291, 355 Lawrence v. Bassett, 37 V. Gallagher, 97 V. Maxwell, 171 V. Miller, 250 V. Tucker, 263 Lazear v. National Union Bank, 246 Lazier v. Westcott, 379 Leas V. Walls, 470 Lebel v. Tucker, 52, 57 Le Breton v. Miles, 33 Ledyard v. Hibbard, 105, 152 Lee V. Adsit, 258 V. Dick, 149, 356 V. Lane & Yorks R. R. Co., 255 V. Silleck, 37, 56 Leeds Bank v. Walker, 390 Leeming V. Snaith, 114 Leggott V. Barrett, 292 Lehndorf v. Schields, 187 Leidemann v. Schultz, loi Leifchild's Case, 264 Leinau v. Smart, 193 Leming v. Ralston, 53 Lerned v. Jones, 239 Lethulier's Case, 98 Levy V. Gadsby, 12 Lewis V. Dunlap, 230 V. Great West. R'y Co., 132, 161 V. Marshall, 98, 113, 159, 162 V. Payn, 379 V. Schenck, 395 V. Seabury, 193, 197 Lewiston v. Junction R. R. Co., 13 LeykariflFv. Ashford, 412 Liddle v. Market Fire Ins. Co., 289 Liebke v. Knapp, 260 V. Methudy, 199 Lindauer v. Cummings, 230 Lindermann v. Ingham. 36 Lindley v. Lacey, 189, 191,206 Lindsley v. Lovely, 98, 194 Lisle V. Rodgers, 479 Lister v. WindmuUer, 275 Little V. Banks, 138 v. Herndon, 415 Littlefield v. Coombs, 292 Liverpool Credit Co. v. Hunter, 35 Livingston v. Armington, 311 Livingstone v. Story, 281 Lloyd V. Guibert, 32, 34, 36, 49 V. Maund, 17 Locke V. McVean, 358 Lockwood V. Railroad Co., 63 Lombardo v. Case, 177 London & S. W, Bk. v. Wentworth, 463, 481 Long V. N. Y. Central R. R. Co., 247 Loraine v. Cartwright, 313 Lord Arlington v. Merrick, 363 Falmouth v. Roberts, 41 5 Lothian v. Henderson, 333 Lougher Coal & R'way Co. v. Wil- liams, 120 Lovejoy v. Lovett, 140 XXX TABLE OF CASES. Loveland v. Burke, 149 Lovewell v. Westchester Fire Ins. Co., 278 Low V. Merrill, 410 Lowe V. Lehman, 104 Bros. V. Young, 254 Lowell Mfg. Co. V. Safeguard Fire Ins. Co., 257 Lowry v. Western Bank, 58 Lozano v. Jansen, 299 Lubbering v. Kohlbrecher, 419, 452 Lucas V. Groning, 21 V. Ladew, 49 Luce V. Dorchester Ins. Co., 161 Luckhart v. Ogden, 14 Ludlow V. Brigham, 37 V. Simond, 362 Lutz V. Thompson, 374 Lyman v. Clarke, 300 Macdonald v. Longbottom, 129 V. Whitfield, 139 Mackie v. Pleasants, 333 Mackrell v. Simond, 372 Macleod v. Skiles, 237 Macy V. Whaling Ins. Co. 160 Madden v. Smith, 374 Magee v. Lovell, 289 Maher v. Hibemia Ins. Co. 237, 238 Mallan v. May, 272 Mallory v. The Tioga R. R. Co. 285 Malone v. Dougherty, 183 Malpas V. The London & Southwest- ern Ry. Co. 193 Mandv. Trail, 149 Mann v. Nunn, 202, 205, 206 V. Whitbeck, 282, 283 Mansfield v. Edwards, 242 R. R. Co. V. Veeder, 96 Many v. Beekman Iron Co. 306 Marc V. Kupper, 116 March v. AUabough, 17, 299 Marcy v. Dunlap, 449 Markham v. Jaudon, 153, 161 Marks v. Cass Co. Mill Co. 151 Marrett v. Brackett, 161 Marsh v. Dodge, 281 V. McNair, 132, 189, 228, 237, 246 Marshall v. Drescher, 462, 488 V. Gougler, 388 V. Gridley, 250 V. Perry, 115, 157, l6l Marson v. Petit, 387 Marsters v. Lush, 48 Martin v. Berens, 232 V. Cole, 241 Martin V. Delaware Ins. Co. 159, 160 V. Hall, 159 V. Tradesmens' Ins. Co. 452 Martin's Ex'r v. Lewis' Ex'r, 240 Marye v. Strouse, 374 Maryland v. Railroad Co. 128, 324 Marzetti v. Williams, 471 Mason v. Alabama Iron Co. 132, 294 V. Pritchard, 357, 358, 359 V. Ryers, 120 Mast V. Pearce, 194, 199, 215 Master v. Miller, 380-384, 393, 400, 442, 445, 446, 453 Masterson v. Boyce, 239, 258 Matheson v. Equitable Marine Ins. Co. 159 Mathews v. Sheehan, 230 Matteson v. Ellsworth, 387 Matthews v. Coalter, 419 V. Coatlin, 427 Mattison v. Atkinson, 443 Mauran v. BuUus, 360 Maybee v. Sniffen, 425 Maynard v. Syracuse, &c., R. R. Co. 63, 366 V. Wright, 303 Mayor, &c., of New York v. Exchange Fire Ins. Co. 139, 161 McAvoy V. Long, 13 McCIuskey v. Cromwell, 362 McConnell v. Brillhart, 75 V. New Orleans, 324 McCormick v. Fitzmorris, 425 V. Huse, 237 McCoy V. Erie & Western Trans. Co. 112 McCrea v. Purmatt, 263 McCreary v. McCreary, 193 McCuUough V. Girard, 188 McDaniel v. The Chicago & North- western R'y Co. 42 McDonald v. Bailey, 53 McEwan v. Guthridge, 1 53 McEwen v. Ortman, 246 McGrath v. Clark, 479, 491 McGraw v. Sturgeon, 104 Mclntyre v. Belcher, 310 McKenzie v. Sykes, 24 McKim V. Aulbach, 151 McKinster v. Babcock, 263 McLean v. NicoUe, 181 McMaster v. The Insurance Co. of N. A. 258 McMicken v. Beauchamp, 417 McMillan v. Parkell, 238 McPherson v. Cox, 148 McVean v. Squires, 186 TABLE OF CASES. XXXI Meade v. Beale, 59 Mechanics' Bank v. Bank of Colum- bia, 99, 243, 244 Meeker v. Meeker, 263 Meikel v. St. Sav. Ins. 421 Melville v. Hayden, 360 Merchants' Bank v. Griswold, 36 Nat. Bank v. Comstock, 242 MeridenBrit. Co. v. Zingsen, 281 Merriam v. Harsen, 262 V. Pine City Lumber Co. 237 V. United States, 126, 134, 136 Merrick v. McNally, 104 Merwin v. Star Fire Ins. Co. 335 Metcalf V. Weld, 173 V. Williams, 136, 244 Metzner v. Bolton, 147 Meyer v. Casey, 260 V. Dresser, 35, 39, 176 V. Huneke, 393 V. Isaac, 357 V. McCabe, 49 V. The U. S. & P. R. R. Co. 176 Miantinomi, The, 116 Michels v. Olmstead, 193, 222 Michigan Central R. R. Co. v. Boyd, 42 Coll. of Med. V. Charles- worth, 324 Millbank v. Dennistown, 1 5 Millain v. Thomas, 246 Miller v. Burke, 96, 161 V. Finlay, 479 V. Fletcher, 224 V. Gambie, 221 V. Gilleland, 41? V. H. J. & S. R. R. Co. 222, 291 V. McKenzie, 259 V. Mut. Life Ins. Co. 347 V. Reed, 412 V. Stevens, 97, 104, 116, 126 V. Stewart, 362 V. Tetherington, 98 Millett V. Marston, 189 Millikin v. Martin, 433 V.Pratt, 35,38 Mills V. Bank of U. S. 176 V. Catlin, 311 V. Gould, 284 V. Starr, 395 V. Wilson, 37 Milward v. Hibbert, 163 Milwaukee & St. P. R'y Co. v. Smith, 68 Mineral Point R. R. Co. v, Barron, SO Mintier v. Mintier, 295 Miss. Tr. Co. v. Walsh, 168 Mitchell V. Henry, 105 Mitchell's Trusts, 292 Mobile Life Ins. Co. v. Pruett, 246 & M. R'y Co. V. Jurey, 292 Mar. Dock Ins. Co.v. McMil- lan, 278 Moge V. Herndon, 386 MoUett V. Wackerbarth, 380 Monohan v. Finn, 183 Moneypenny v. Moneypenny, 300 Monocacy Bridge Co. v. American Iron Bridge Mfg. Co. 129 Montague v. Tidcombe, 282 Montgomery v. Chase, 195 Mooney v. Howard Ins. Co. 104, 170 Moore T. Campbell, 112 V. Garwood, 19 V. Griffin, 286 V. Gwynn, 27 V. Harris, 45, 288 V. Holland, 16, 24 V. Hutchinson, 380 T. Meacham, 237 Moran v. Prather, 95, iii, 273 Morey v. Homan, 302 Morgan v. Griffith, 198, 203, 205, 206, 208, 214, 215 V. New Orleans, &c., R. R, Co. 48 V. Smith, 189 Morrell v. Frith, 17, 26 Morrill V. C. T. Segar Mfg. Co. 139, 244 Morris V. Budlong, 230 V. Eves, 35 V. Litchfield, 310 V, Vandam, 426 . V. Vanderlin, 417 Morrison Bros. v. Huggins, 397 Morse v. Buffalo F. & M. Ins. Co. 314 Morss v. Salisbury, 136, 140 Moses V. B. & M. R. R. Co. 66 Mosley v. Vermont Mut. Fire Ins. Co. 30s. 331, 336 Mott Y. Hall, 165 Moulor v. American Life Ins. Co. 337 Moulton V. St. Paul, &c., R. R. Co. 370 Mowry v. World Mut. Life Ins. Co. 332 xxxn TABLE OF CASES. Muckleroy v. Bethany, 421 Muhlig V. Fiske, 237 Mullen V. Morris, 54 Mulligan v. 111. Cent'l R'y Co. 195 Mumford v. Gething, 129 V. McPherson, 194, 200 Munde v. Lambie, 237 Munro v. Allaire, 300 Munroe v. Douglas, 49 V. Eastman, 430 V. Pilkington, 36 V. Taylor, 222 Murphy v. Collins, 35, 37, 49, 51 V. St. Louis, 374 Murray v. R. R. Co. 232 V. The Earl of Stair, 219 Muser v. Holland, 370 Musselman v. Stoner, 250 Musser v. Johnson, 244 Musson V. Lake, 51, 53 Mutual Loan Fund Assoc, v. Sudlow, 243 Myers v. Edge, 363 V. Sari, 98, 104, 109, 114, 147, 156 V. Walker, 97 Myrick v. Michigan Cent. R.R. Co., 62 Nash V. Drisco, 20, 269 V. Hunt, 129 V. Towne, 71, 126, 238 Nashville Life Ins. Co.t. Matthews, 1 20 Nathaniel Hooper, The Ship, 372 National Bank v. Burkhardt, 151, 160 V.Green, 53, 68 v.Ins. Co., 341, 345 Nat. Mer. Bank v. Hampson, 311 Naumberg v. Young, 189, 194, 197, 205, 206, 207, 216 Nave v. Berry, 310 Naylor v. Palmer, 299 Nazro v. Fuller, 462 Neese v. The Farmers' Ins. Co., 49 Neff V. Horner, 380, 452 Neil v. Case, 392, 421, 434, 435 Neilson v. Harford, 11, i6, 19, 20 v. Wait, 173 Neldon v. Smith, 97 Nelson v. Morse, 131 V. Sun Mutual Ins Co., 93 Nesbittv. Lushington, 300 Nettleton v. Billings, 302 Neudecker v. Kohlberg, 303 Newberger v. Howard, 370 Newcomb v. Presbrey, 416 Newcastle Fire Ins. Co. v. Macmorran, 328 Newell V. Radford, 139, 181. 182 V. The People, i Newenham v. Smith, 136 Newhall v. Appleton, 97 New Jersey Steam Nav. Co. v. Mer- chants' Bank, 139, 239, 368 Newman v. Wallace, 425 New York Belting & Packing Co. v.The Washington Fire Ins. Co., 108, 120 New York Central Ry. Co., Matter of, 132 Guaranty & Ind. Co. v. Gleason, 403 Iron Mine v. Citizens' Bank, 176 Nichol V. Burke, 239 Nicholas v. N. Y. C. & H. R. R.Co. 366 Nichols V. Johnson, 387, 452 Nicholson v. Paget, 357, 358, 359, 360 Nickalls v. Merry, 171 Nicoll v. Burke, 195, 217 Miles V. Culver, 194 Noblev. Durell, 116 V. Kelly, 262 v. Kennoway, 159, 164, 167, 168 Nonotuck Silk Co. v. Fair, 115, 160 Noonan v. Bradley, 306, 311 Norden v. Dempsey, 98 Norelli v. Rossi, 450, 457 Norrington V. Wright, 352 Norris V. Clarke, 131, 186 North V. Henneberg, 387, 416. North Am. Fire Ins. Co. v. Throop,237 Northampton Mutual Live Stock Ins. Co. t.Tuttle, 38 Northwestern Mut. Life Ins. Co. v. Heimann, 336 Norton v. Coons, 243 v. Woodruff, 140 Norway Plains Co. v. B. & M. R. R. Co., 65 Savings Bank v. Moors, 126, 133 Note, Confederate, Case, 1 01 Noyes v. Nicholas, 362 Nunez V. Dantel, 310 Nutt V. Humphrey, 239 Gates V. Natl. Bank, 59 Ober V. Carson, 176 O'Brien v. Gilchrist, 256 O'Bryan v. Kinney, 195 Odenbaugh v. Bradford, 230 Odgers v. Saunders, 309 Odiome v. Sargent, 282 Oelricks v. Ford, 139, 151, 179, 239 Ogletree v. State, 405 TABLE OF CASES. XXXlll Oldham v. Brown, 126, 139 O'Neil V. Grain, 182 Orrick v. Colston, 461, 478 Osborn v. Farwell, 302 Ostrander et al. v. Reed, 200 Overman v. Hoboken City Bank, 163 Overton v. Bolton, 37 V. Matthews, 459, 462 Owens V. Holland Purchase Ins. Co., 335 Pacific Works v. Newhall, 193 Packard v. Earl, 115, 160 V. Hill, 299 Pagan v. Wylie, 469, 476 Page V. Cole, 95, 97 V. Danaher, 409 Paige V. Carter, 254 V. Merrill, 474 Paine v. Edsell, 412 V. Haine, 129 v. Howells, 152 V. Jones, 363 V. Ringold, 23 V. Smith, 178 V. Upton, 259 Pallen v. Shaw, 427 Palmer v. Albee, 87 • V. Largent, 387 V. Warren Ins. Co., 311, 314 Paramore v. Lindsey, 418, 434 Parker V. Ibbetson, 147, 155 Parmelee v. Hoffman Fire Ins. Co., 334 Parrott v. Thacher, 164 Parshall v. Eggert, 295 Parsons v. Martin, 177 Partridge v. Forsyth, 164 V. Insurance Co., 96 Pattinson v. Luckley, 448 Paul V. Rider, 242 Paxton V. Courtnay, 173 Payson v. Withers, 40 Pearsall v. Summersett, 363 Pearson v. Scott, 177 Peck V. Mayo, 54 V. United States, 126 Peckham v. Haddock, 305 Peisch V. Dickson, 82, 85, 118 Peninsula & Oriental Steam Nav. Co. V. Shand, 32, 44 Pennoch v. McCormick, 229 Pennsylvania Co. v. Fairchild, 42 Penny v. Corwithe, 437 People V. Chalmers, 362 Perkins v. Jordan, 149, 165 Perrine v. Cooley's Exrs., 186 Perry v. Bigelow, 239 Perry v. Schulenberg-Boeckeler Lum- ber Co., 160 V. Smith, 254 Pettus V. McKinney, 246 Peugh V. Davis, 229, 230 Phelan v. Moss, 470 Phila., &c., R. R. Co. v. Howard, 375 Philbrook v. Eaton, 229 Phillbrook v. Emswiller, 195 Phillips V. Briard, 177 v. Meily, 232 Phipps V. Tanner, 303 Phoenix Bessemer Steel Co., In re, 281, 282 Ins. Co. V. Taylor, 151 V. The Liverpool & G.W.S.S.Co.,48 Iron Co. V. Samuel, 34, 103 Pickard v. Bailey, 27 Piedmont Mfg.Co.v.C.&G.R.R.Co., 17 Pierce v. Indseth, 58 v. Parker, 130 V. Randolph, 13 Piersol v. Grimes, 452 Pigg V. Clarke, 270 Pigot's Case, 442, 445, 448 Pike V. Fay, 186 V. Munroe, 311 V. Street, 241 Pindar v. Continental Ins. Co., 1 5 1,237 V. Resolute Fire Ins. Co., 238 Pine Grove v. Talcott, 59 Pitney v. Glens Falls Ins. Co., 21, 126 Pitts, &c., Co. v. Poor. 254 Planters' Ins. Co. v. Myers, 335 Mut. Ins. Co. V. Deford, 335 Plumer v. Guthrie, 230 Pohalskiv. The Mut. Life Ins. Co., 96, 120, 246, 269, 275, 278 Polhemus v. Hermain, 151 Pollen V. Leroy, 97 Pollock V. Stables, 168, 171 Pomeroy v. Ainsworth, 41 Pope v. Nickerson, 41 V. Porter, 374 Pordage v. Cole, 310 Porter v. Havens, 13 V. Hills, 1 59 Post V. Hover, 305 Potter V. Hopkins, 187 V. Smith, 151, 157 V. The Ont. & Liv. Mut.Ins.Co., 309 Powell, Ex parte, 176 V. Divett, 445, 446 V. Edmunds, 189, 194 Powers V. Briggs, 244 XXXIV TABLE OF CASES. Powers v.Northeast.Mut.Life Assn.329 Pratt V. Canton Cotton Co., 126 Pratt's Admrs. v. U. S., 183 Preble v. Baldwin, 193 Prentiss v. Savage, 40 President, &c., v. Hall, 425 Preston v. Ellington, 241 V. Greenwood Ins. Co., 151 Prevost V. Gratz, 417, 426 Pribble v. Kent, 255 Price V. Livingstone, 269 V. Page, 53 Price's Admrs. v. Tallman's Admrs., 437. 453 Primm v. Haren. 25 Pringle v. Chambers, 425 Pritchard v. Brown, 263 V. Norton, 33, 34, 35, 38, 40 Pullen V. Hutchinson, 421, 433 Pulte V. Derby, 286 Putnam v. Clark, 433 V. Sullivan, 472 Pym v. Campbell, 219, 220 Quarry Co. v. Clements, 119, 277 ^Queen, The v. Nevill, 300 v. Silvester, 300 V. Stoke-upon -Trent, 147, 156 Quigley v. De Haas, 119 Radford v. Folsom, 230 Rafert v. Scroggins, 158, 165 Railroad Co. v. Bacon, 387 v. Fraloff, 369 V. Lockwood, 368 V. Murray, 160 V. National Bank, 60, 62 V. Pratt, 368 Railroad Companies v. Schutte, 269 Railway Co. v. Stevens, 368 R.aisin v. Clark, 176 Ramsey's Admrs. v. McCue, 430 Randall v. Lynch, 311 V. Reynolds, 256 V. Rhodes, 194 V.Smith, 151, 174 Randolph v. Holden, 151 Rankin v. Blackwell, 418, 425 Rann v. Home Ins. Co., 315 Ranney v. Higby, 14 Rapelje v. Bailey, 358 Raper v. Birbeck, 450 Rapp V. Palmer, 159 V. Rapp, 13 Rathburn v. Budlong, 256 Rawlins v. Desborough, 350 Rawlinson v. Clarke, 308 Rawson v. Holland, 161 Raymond v. Tyson, 371 Read v. Brookman, 443 Reader v. Helmes, 260 Reardon v. Faneuil Hall Ins. Co., 237 Reddich v. Doll, 462, 479 Redman v. H. F. Ins. Co., 305, 336 Reed v. Ellis, 131 v. Field, 281 v. Insurance Co., 71, 125, 128 V. Kemp, 385 V. Wood, 194 Rees V. Berrington, 363 V. Overbaugh, 442, 452 V. Warwick, 21- Reeside, The Schooner, 143 Reeves v. Pierson, 479 Reffell V. Reffell, 254 Reformed Dutch Church v. Ten Eyck, 379 Reissner v. Oxley, 140 Relf V. Rapp, 369 Re Mitchell's Trusts, 292 Renard v. Sampson, 198 Rendell v. Harriman, 129, 237, 244 Renner v. Bank of Columbia, 161, 248 Reuss V. Picksley, 25 Reynolds v. Commercial Fire Ins.Co. , 135,288,313 V. Robinson, 222 Rice V. Dwight Mfg. Co., 19, 21 V. Forsyth, 194 V. Hart, 65 Rich V. Lord, 300 V. Parrott, 286 Richards v. Fuller, 187 V. Protection Ins. Co., 334 Richardson v. Draper, 48 V. Goddard, 59 V. Palmer, 306 V. Watson, 99 Richmond v. Union Steamboat Co., 142, 140 Rickman v. Carstairs, 3 Ricker v. Fairbanks, 269, 294 Riley v. City of Brooklyn, 284 V. Mayor of New York, 254 v.N.Y. L. E. & W. R. R. Co., 193 Rindge v. Judson, 356 Rindskoff v. Barrett, 97 Rintoul v. N. Y. Centl. &c. R. R. Co., 371 Ripley v. ^tna Ins. Co., 165, 237,269, 336 Risley v. Phoenix Bank of the City of New York, 187 TABLE OF CASES. XXXV River Wear Com. v. Adamson,7i, 133 Robards v. Marley, 48 Robarts v. Tucker, 466, 484 Roberts v. Brett, 270, 375 V. Havelock, 373 V. Wilder, 149 Robertson v. Burdekin, 57 V. French, 270 V. Hay, 452 V. Jackson, 105, 159 Robinson v. Bland, 32, 39 V. Bulloch, 308 V. Fiske, 97 V. G. W. Ry. Co., 89, 128 V. McNeil, 189 V. MoUett, 161, 168, 172,173, 175, 177 V, Myers, 416, 425 V. Randall, 403 V. Reed, 412 V. United States, 143,149, 164 Rodgers v. Donevan, 240 V. Kneeland, 135 Roe V. Tranmarr, 323 Rogers v. Hadley, 220 V. Mechanics' Ins. Co., 162 V. Shearer, 308 V. Smith, 281. V. Vosburgh, 380 V. Zook, 49 Rolleston v. Hibbert, 194 RoUestone Nat. Bk. v. Carleton, 126 Ross V. Bradshaw, 350 V. Espy, 241 V. Gould, 404,438 Rothschild v. Currie, 58 Roundtree v. Gilroy, 241 Rouquette v. Overman, 35, 36, 57, 58 Rowand v. Finney, 259 Rozier v Buffalo, N. Y. & Phila. R. R. Co., 189 Rubber Tip Pencil Co. v. Hovey, 281 Rugg V. Hale, 1 29 Runnion v. Crane, 430 Rush V. Carpenter, 288 Russell V. Bondie, 288 V. Carr, 254 V. Church, 255 V. Langstaffe, 461, 462, 464 V. Phillips, 305 V. Southard, 230 Rutland & Burlington R. R. v. Crock- er, 281 Ryan v. Hall, 250 V. Ward, 256 Salmon Falls Mfg. Co. v. Goddard, 75 Samuel v. Evans, 302 Sanders v. Betts, 303 Sanderson v. Symonds, 384, 387 Sari V. Bourdillon, 130 - Saunderson v. Piper, 87, 294, 392 Savage v. O'Neil, 48, 49 Sawtelle v. Drew, 173 Sawyer v. Chambers, 221 V. Hammott, 282 Sayre v. Reynolds, 418 Scaife v. Farrant, 365 Scanlon v. Kerth, 244 Schenck v. Griff en, 1 5 1 Schieffelin v. Harvey, 1 74 Schmidt v. The Peoria Fire & Marine Ins. Co., 348 Schintzer v. Print Works, 149 Schreiber v. Butler, 325 Schrienfelt v. Junkermann, 38 School District v. Lynch, 17 Schuylkill Mar. Co. v. Moore, 269 Schultz V. Astley, 464 V. Coon, 256, 315 V. Merchants' Ins. Co., 333 Schwalm v. Mclntyre, 387, 41 1 Schwarz v. Appold, 380 Schwarzbach v. Ohio Valley Protective Union, 328, 344, 350 Scoby V. Blanchard, 263 Scofield V. Ford, 489 Scott V. Bourdillon, 269 V. Corp. Liverpool, 8 V. Irving, 160, 173 V. Libby, 372 V. Perlee, 31 V. Pilkington, 44 V. Swett, 195 V. Whitney, 166 Scruggs V. Bait. & Ohio R. R. Co., 371 Scrutton v. Childs, 288 Scudder V. Bradbury, 176 v. Union Nat. Bank, 44, 50 Seago V. Deane, 206 Sears v. Wempner, 255 Security Bank of Minn. V Luttgen, 230, 248 Sedden v. Senate, 8 Selchow V. Stymus, 258 Selden v. Williams, 1 22 Sellars v. Johnson, 1 3 Sencesbox v. McGrude, 256 Serviss v. Stockstill. 237 Sewall V. Boston Water Power Co.,472 V. Gibbs, 164 Seyboldt v. N. Y., &c., R. R. Co., 403 Seymour v. Cowing, 222 V. Osborne, 95 XXXVl TABLE OF CASES. Shackelford v. Hooker, 95 Shaferv. Ph. Ins. Co. of Brooklyn, 315 Shanklin v. Cooper, 54 Sharp V. Rodebaugh, 120, 187 V. United States, 222 Sharpe v. Orme, 419 Shaughnessy v. Lewis, 254 Shaw V. Furguson, 1 59 Sheldon v. Hartford Ins. Co., 336 Shepard v. Haas, 187 V. Whetstone, 458 Shephard v. Little, 263 Shepherd v. Gilroy, 194 V. Naylor, 291 Sherburne v. Goodman, 292 Shillito V. Reineking, 40, 51 Shine v. The Central Sav. Bank, 359, 362 Shirras v. Craig, 263 Shore v. Wilson, 270, 306 Short V. Trabue, 51, 58 V. Woodward, 24 Shrewsbury V. Gould, 311 Shryon v. Hawkes, 392 Shughart t. Moore, 231 Shultz V. Astley, 467 Sibely v. Fisher, 413 Siebel v. Vaughn, 471 Silberman v. Clark, 95, 152, 237 Simmons v. Rudall, 430 Simons v. Johnson, 132, 300 Simpson v. Davis, 409 V. Henderson, 120 V. Margitson, 16, 20, 98, 269, 294 V. Stackhouse, 427, 401,411 V. Vaughn, 303 Sims V. Unite! States Trust Co., 143 Singer Mfg. Co. v. Allen, 139 V. Hester, 269 Sirrine v. Briggs, 430 Skaaraas v. Finnegan, 221, 224 Skeels v. Starrett, 246 Slacum V. Pomery, 53 Slater v. Emerson, 375 Slawson v. Loring, 244 Sleght V. Hartshorne, 99 Sloan V. Rice, 397 Small V. Gibson, 129 Smith V. Chicago Ry. Co., 35 V. Clayton, 95, 99 V. Crocker, 385 V. Dallas, 189 V. Dann, 149, 156 V. Dunham, 388 V. Faulkner, 14, 18, 24, 140 V. Fellows, 449 Smith V. Flanders, 88 V. Holland, 256 V. Jeffreys, 89, 121, 122 V. Lucas, 3 V. Mace, 396 V. McGowan, 422, 426 V. Nat. Life Ins. Co., 285, 315 V. O'Donnell, 188 V. Rice, 159 V. Shell, 182, 187, 188 V. Thompson, 21 V. Thomsen, 129 V. Turpin, 284 V. Wilson, 98, 99, loi, 104, 105 Smyth V. Ward, 151 Snelling v. Hall, 151 Snyder v. Van Doren, 462 Sodus Bay & Corning R. R. Co. v. Hamlin, 452 Sohn V. Jarvis, 1 5 1 Soresby v. Sparrow, 443 South & North Ala. R. R. Co. v. Henlein, 370 Souther v. Kellerman, 104, 165 Southern Express Co. v. Moon, 370 Southwell V. Bowditch, 8 Southwestern Freight & Cotton Press Co. V. Stannard, 159, 166 Spalding v. Coon, 126 Spartali V. Benecke, 98, 142, 151 Spaulding v. Evans, 302 Spear v. Snider, 374 Spears V. Ward, 151, 165, 278 Speckels v. Sax, 195, 202, 206, 245, 248 Spencer v. Millisack, 140 Springfield Bank v. Merrick, 393 Springsteen v. Samson, 135, 237, 354 Squire v. New York Central R. R. Co., 370, 371 Stacey v. Randall, 382 Stackpole v. Lenion, 350 Stacy V. Kemp, 186 v. Thrasher, 258 Stagg V. Com. Ins. Co. 1 5 1 Stahl V. Berger, 459 St. Albans v. Ellis, 311 Stanford v. Pruet, 37 Stanley v. Western Ins. Co. 268 S apenholst v. Wolff, 1 26 State v. Berg, 452 v. Dean, 390 V. Dunnavant, 299 V. McDonald, 260 Stavers v. Curling, 295 Steam Packet Co. v. Sickles, 374 Stearns v. Field, 403 Steele v. Mart, 254 TABLE OF CASES. xxxvu Steele v. McTyer, 164 Steel Works v. Dewey, 1 52 Steenspring v. Bennett, 305 Steinhauer v. Witman, 261 Sterfflebeen v. Arnold, 260 Stevens v. Cooper, 248 V. Haskell, 246 V. Reeves, 160 V. Smith, 161 V. Webb, 375 Stewart v. Aberdeen, 161 V. Gelot, 57 V. Lang. 287 V. Phoenix Ins. Co., 192, 256 V. West India S. S. Co., 1 52 Steyer v. Dwyer, 97 Stickney v. Jordan, 58 Stix v. Mathews, 40 St. Louis R. C. & N. Ry. Co. v. Cleary, Stoessiger v. Southeastern Ry. Co.,467 Stokes v. Boors, 374 Stone V. Denney, 351 v. Harmon, 250 V. Vance, 194 Stoner v. Ellis, 436 Stoney v. Perry, 35 Stoops V. Smith, 118, 126 Stout V. Cloud, 459 Stratton v. Pettit, 120, 305 Strieker v. Tinkham, 40 Strohecker v. Farmers' Bank 324 Strong V. Barnes, 281 Stuckley v. Bailey, 282 Sturdivant v. Hull, 240 SufFel V. The Bank of England, 381, 390, 448 Suit V. Woodhall, 37 Sullivan v. Rudishill, 397 Sumner V. Stewart, 171 Suse v. Pompe, 52 Susquehanna Bank v. Evans, 241 Sutton V. Tatham, 171 v. Toomer, 394 Swain v. Frazier, 254 Swam v. North British Australasian Co., 466, 483, 48s Sweeney v. Thomason, 106 Sweet V. Lee, 122 V. Shumway, 119, 130 V. Stevens, 222 Sweete v. Farlie, 350 Sweeting v. Pearce, 160, 166 Swift V. Hawkins, 261 V. Tyson, 59 Syers v. Bridge, 162 V. Jonas, 147 Sylvester v. Staple, 240 Symonds v. Lloyd, 98, 105, 108 Taber v. Ins. Co., 176 Taddiken v. Cantrall, 458 Taft V. Schwamb, 237 Talbot V. Wilkins, 258 Talbott V. The Merchants Despatch Trans. Co., 42 Tapfield v. Hilliman, 195 Tatham v. Cataraon, 426 Tatum V. Bonner, 358 Taylor v. Beavers, 95, 97 V. Briggs, 98, 113, 159 V. Devey, 173 V. Homersham, 299 v. Laird, 374 V. Little, 230 V. Mosely, 413 V. Preston, 260 Tebo V. Robinson, 308 Teese v. Brownell. 5 1 Terry v. Wheeler, 187 Teutonia Fire Ins. Co. v. Mund, 298, 301,314,315 Texas & St. L. Ry. Co. v. Rust, 20 Thayer v. Viles, 263 The Columbo, 291 The Queen v. Nevill, 300 v. Silvester, 300 Third Nat. Bank of Syracuse v. Clark , ' 241 Thomas v. Fame Ins. Co., 332 V. Hammond, 187 V. Nelson, 187 v. Truscott, 289 Thompson v. Ashton, 175 V. Davenport, 139, 239 V. Hamilton, 165 V. Ins. Co. 246 V. McClenachan, 282 V. Ketcham, 39 V. Richards, 19 V. Riggs, 1 53 V. Sloan, loi V. Stewart Admrs., 239 Thorne v. Warfflein, 232 Thornton v. Appleton, 388 v. Dean, 40 Thorp V. Craig, 58 Thrall v. Newell, 305 Throckmorton v. Tracy, 286 Thwing v. Great Western Ins. Co., 38 Tielens v. Hooper, 270 Tilden v. Blair, 48, 52 Tilley v. County of Cook, 173, 177 Tillotson V. Tillotson, 40, 51 XXXVlll TABLE OF CASES. Tillou V. The Clinton & Essex Mut. Ins. Co., 437 Timmermann v. Dever, 281 Tisdale v. Harris, 187 Tisloe V. Graeter, 256 Titus V. Kule, 238 Tobey v. Leonard, 258 Todd V. Raid, 173 Tomlinson v. Briles, 188 Toomerv. Rutland, 380, 397 Torry v. Black, 261 Totley V. Nesbitt, 443 Towle V. Kettell, 372 Townsend v. Stearns, 324 V. Toker, 264 Trabue v. Short, 53 Trambly v. Ricard, 259 Trapp V. Spearman, 387 Trasher v. Everhart, 28 Tread way v. Sharon, 164 Trevidick v. Mumford, 187 Trew V. Burton, 384 Trigg V. Taylor, 487 Trimby v. Vignier, 35, 52 Trow V. Glen Cove Starch Co., 395, 396 Trowbridge v. Dean, 269 'Trueman v. Loder, 98, 127 Truett V. Wainwright, 387 Tucker V. Luizer, 174 V. Meeks, 303 Turner y. Meriden Fire Ins. Co., 337 Twell V. Gatewood, 1 86 Ubsdell V. Cunningham, 310 Unger v. Jacobs, 189, 246 Union Nat. Bank v. Coster's Exrs., 358 V. Roberts, 452 R. Co. V. Yeates, 173 , Trust Co. V. Whiton, 126, 187 United States v. Breed, 97 v. Buchanan, 159 V. Gibbons, 126 V. Granite Co., 294 V. Linn, 412, 421 V. Shaw, 14, 25 V. Spaulding, 444, 453 V. Peck, 128 Express Company v. Backman, 370 Life Ins. Co. v. Advance Co., 164. Vail V. Rice, 112, 151, 162 Van Amburgh v. Kramer, 262 Van Brunt v. Day, 187 Vance v. Lowther, 390 Vanderbergh v. Spooner, 181, 182 Vandervoort v. Smith, 1 94 Van Duzer v. Howe, 474, 487, 492, 493 Van Eman v. Stanchfield, 13 Van Epps v. Walshe, 126 Van Evera v. Davis, 193, 1 95 Van Hagen v. Van Rensselaer, 281, 282, 300 Van Home v. Belle, 421 Van Ness V. Packard, 165 Van Nostrand v. The N. Y. Guaranty, &c., Co., 285 Van Ostrand v. Reed, 194, 199 Van Syckel v. Dalrymple, 246 Van Vechten v. Smith, 241 Vanzant v. Arnold, 33 Vaughn v. Six hundred Casks, etc., 291 v. Smith, 12 Veazie v. Forsaith, 135 Veerkamp v. Hulburd Canning, etc,, Co., 373 Vermilye v. Adams Exp. Co., 174 Vermont St. M. E. Church v. Brose, 140 Vinton v. Baldwin, 140 Violette v. Patton, 462 Vogle V. Ripper, 396 Von Keller v. Schulting, 1 32 Vose v. Dolan, 462 V. Eagle Life, &c., Ins. Co., 350 Wade V. Withington, 472 Wadsworth v. AUcott, 153, 255 Waggoner v. Eager, 462 Wagner v. Egleston, 1 5 Wakefield v. Fargo, 300 Waldron v, Ritchings, 41 V. Willard, 305 Walker v. Barrow, 1 59 v. Jackson, 161 V. Schindel, 193 V. Whitehead, 36 Wall V. East River Ins. Co., 1 59, 334 Wallace v. Baker, 231 V. Kelsall, 255 WalHs V. Little, 220 Walls V. Bailey. 104, 142, 166, 168, 172 Walrath v. Thompson, 354 V. Whittekind, 92 Walsh V. Bailie, 363 V. Homer, 168 V. Trevianon, 291, 292 Walters v. Short, 438 Ward V. Lewis, 224, 226 Waring v. Louisville N. R. Co., 126 TABLE OF CASES. XXXIX Waring V. Smyth, 437 Warnick v. Rogers, 450 "Warren v. Lusk, 48 V. Wheeler, 250 Bank v. Barker, i6i Warrington v. Early, 462 Washburn v. Gould, 286 Washington Ins. Co. v. Raney, 345 Park, Ex parte, 284 Savings Bank v. Ecky, 479 Waterman v. Andrews, 287 V. Vose, 472, 479 Watkins v. Nash, 227 Watrous v. McKie, 126. Watson V. Insurance Co. of N. A., 376 V. Rowe, 12 V. Tarpley, 59, 61 Watsontown Car Mfg. Co. v. Elms- port Lumber Co., 120 Waugh V. Bussell, 384 V. Middleton, 302 Wayland v. Mosely, 256 Way man v. Southard, 35 Wayne v The General Pike, 98 Co. Sav. Bank v.Low,4l, 48,52 Weaver v. Fegely, 116 Webb V. Rice, 228 Weeks v. Medler, 192 Welch V. Coulbord, 433 Welsh V. Dusar, 12 Welz V. Rodius, 192 Wendlinger v. Smith, 222 Wessell V. Glenn, 462 West V. Smith, 25 Westcott V. Thompson, 13, 239, 286 Westman v. Krumweide, 221, 224 West Trans. Co. v. Kilderhouse, 37 Wetherill v. Ins. Co., 153 V. Neilson, 176 Wetmore v. Pattison, 311 Wheat V. Arnold, 412 Wheeler v. Billings, 189, 259 & Wilson Mfg. Co. v. Laus, 237, 246 Wheeling, Pittsb. & B. R. R. Co. v. Gourley, 288 Wheelock v. Freeman, 380, 412 Wheelton v. Hardisty, 350 Whelpdale's Case, 442 Whidden v. Belmore, 310 Whiston v. Stoddar, 37 Whitcher v. Hall, 374 White v. Boyce, 189, 228 v. Haas, 397, 412 V. Hoyt, 21.313- V. Miller, 263 White V. Parkin, 192 V. Reed, 358 V. Smith, 302 V. Talmage, 250 White's Bank v. Myles, 126 Whitehurst v. Boyd, 282 Whitelock v. Musgrove, 127 Whitewell v. Winslow, 237 Whitfield V. CoUingwood, 425 V. Faugset, 443 Whitford v. Laidler, 237 Whitmer v. Frye, 412 Whitney v. Black River Ins. Co., 336 v. Boardman, 95, 97 V. Shippen, 231 Whitwell V. Winslow, 241 Wicks V. Caulk, 418 Wiener v. Whipple, 246 Wiggin V. Goodrich, 183 V. Goodwin, 193 Wigglesworth v. Dallison, 165 Wilbraham v. Stanley, 98 Wilcox v. Hunt, 35, 50 Wilde v. Armsby, 409, 423 Wilkes V. Ferris, 284, 301 Wilkins v. Ins. Co., 335 Wilkinson v. Conn. Mut. Ins. Co., 346 v. Gaston, 299 V. Johnson, 450, 457 v. Scott, 263 Willett V. Shepard, 412 Williams v. Ashton, 430 V. Carr, 40 V. Glenn, 243 V. Insurance Co., 336 V. Morgan, 195 V. Morris, 182 V. Niagara Ins. Co., 161 V. Norton, 374 V. Robinson, 75, 182 V. Starr, 387 V. Wade, 53 Williamson v. Reddish, 254 Willis V. Hanover,&c.,Ins. Co., 305, 337 V. Hulbert, 187, 193 V. Martin. 302 Willmering v. McGaughey, 104, 269 Willse V. Whittaker, 241, 242 Wilson V. Bauman, 163, 165 V. Deen, 189, 195, 201, 202, 203, 206, 230, 245, 248 V. Harris, 433 V. Henderson, 427 V. Lazier, 51 V. Powers, 221 V. Randall, 181, 284 V. Sherburne, 195 xl TABLE OF CASES. Wilson V. Sullivan, 258 V. Wilson, 303 Winchester V. Grosvenor, 254 Wing V. Ansonia Clock Co., 375 Winona v. Thompson, 246 Winslow V. Patten, 311 V. Winslow, 325 Winthrop v. Union Ins. Co., 162 Witbeck v. Waine, 189, 263 Witherill v. Neilson, 1 5 1 Wolf V. D. M. & H. D. Ry. Co., 138 V. Fletemeyer, 260 Wood V. Corl, 66 V. Mathews, 139, 230, 343 V. Priestner, 127, 132, 359 V. Rowcliffe, 284 V. Steele, 380, 462 V. Wood, 159 Woodall V. Greater, 246 Woodman v. Chesley, 13 WoodruflFv. Hill, 52 V. Merchants Bank, 151, 177 Woods V. Miller, 105 Worcester Bank v. Wells, 52 Gas Light Co. v. Wor- chester, 308 Worcester Med. Inst. v. Harding, 13 Worden v. Nourse, 37 Wormuth v. Tracy, 230 Worrall v. Gheen, 475, 483 Wright V. Andrews, 35 V. Delafield, 49 V. Gay, 229 V. Johnson, 363 V. McPike, 188 V. Weeks, 95 V. Williams, 313 . Wyerhauser v. Dun, 473 Wyman v. Babcock, 230 Yates V. Pym, 107, 109 Yocum V. Smith, 471 Young V. Grote, 465, 471, 476, 479, 481 V. Harris, 53 V. Lehman, 471 V. Mut. Life Ins. Co., 315 York Co. V. Central R. R. Co., 368 Zerrahn v. Ditson, 120, 246 Zimmerman t. Rote, 469 CONSTEUOTION OE INTERPEETATTON COMMEECIAL AND TEADE CONTEACTS. THE CONSTRUCTION OF COMMEECIAL AND TEADE CONTEACTS. CHAPTER I. NATURE AND SCOPE OF CONSTRUCTION. § I. Construction defined. 2. Interpretation and construction used as synonymous terms. 3. Legal meaning of language determined by construction. 4. Construction establishes uniform methods of reading contracts. 5. CoiTstruction a remedy for defects in language. 6. Construction aims to remove ambiguities. 7. Principles of construction of wide application. 8. The limits of construction. 9. Plan of treatment. § I. Construction defined. — The construction of a con- tract is the ascertainment of the thought which its lan- guage expresses.^ » Thus Johnson, J., of the New York Court of Appeals, in Newell v. The People, 7 N. Y. 97, says : " Whether we are considering an agreement be- tween parties, a statute or a constitution, with a view to its interpretation, the thing we are to seek is, the thought which it expresses." Lord Chelmsford, in Di Sora v. Phillipps, 10 H. of L. Cas. 638, says : " The construction of a contract is nothing more than the gathering of the intention of the parties to it from the words they have used." Powell defines construction to be " the drawing of an inference by the aid of reason, as to the intent of a contract from given circumstances, upon prin- ciples deduced from men's general motives, conduct, and actions." Powell on Cont. p. 223. Kent says: "The rules which have been established for the better inter- 1 2 NATURE AND SCOPE OF CONSTRUCTION. [§ I. This embodied thought constitutes the substance of every contract, and when once it is discovered, the full intention of the contracting parties is disclosed, and the whole aim of construction is satisfied. In order to reach this result the law studies the words or signs composing the contract and their relation to facts/ and, as in the construction of a statute, the object to be attained is the intention of the Legislature,^ so, here, the one definite end to be arrived at is the intention of the parties. Con- struction brings no aid to the contract unless this goal is reached ; its benefits are incalculable when, pursuant to its rules, the law can place upon the contract a meaning consistent with its language. The language of each contract, however, is the groundwork upon which its interpretation rests. It fur- nishes, when viewed in the light surrounding its use, the mirror which reflects the thought of the contract and the intention of the parties.^ Evidently, then, this intention pretation of contracts are the conclusions of good sense and sound logic ap- plied to the agreement of the parties. Their object is to ascertain with pre- cision the mutual understanding of the contract in a given case." Kent's Com. vol. II, p. 553. Leake says : " The construction or interpretation of written contracts con- sists in ascertaining the meaning of the parties as expressed in the terms of the writing according to the rules of grammar, and subject to the rules of law." Digest of the Law of Contracts, p. 217. ' Stephens' Digest of the Law of Evidence, Art. 91 (I) (Chase's edition, p. 167). * Sedgwick on the Construction of Stat, and Const. Law, p. 193. ^ Thus Elphinstone, in his recent work The Interpretation of Deeds (1885), says at page 36 : " The word ' intention ' may be understood in two senses, as descriptive of, either (i) that which the parties intended to do, or (2) of the meaning of the words that they have employed." And as to the intention of parties to a deed, he says : " The question always is, ' what is the meaning of what the parties have said ? ' not ' what did the parties mean to say ? ' The latter question is one which the law does not permit to be asked, it being a presumption juris et dejiire, to rebut which no evidence is allowed, that the parties intended to say that which they have said." The rule of construction '• is to adhere as rigidly as possible to the express words." Lord Cranworth, C, in Grey v. Pearson, 6 H. of L. C. 78. § 2.] NATURE AND SCOPE OF CONSTRUCTION. 3 cannot be easily or arbitrarily read from the contract, but, on the contrary, must be studied from it with the great- est care, lest, on the one hand, the real will of the parties be not carried into effect, or, on the other, the rules of language or the uniformity of legal principles be sacri- ficed. It is the province of the law of construction to pre^ scribe how this will of the contracting parties may be sought in a reasonable, scientific, and legal manner, with- out prejudice to the proper use of language. It is this law, as illustrated by cases of a commercial or trade char- acter, which is to be here examined. § 2. Interpretation and construction used as synony- mous terms. — Throughout the present volume inter- pretation and construction are used as synonymous words. Attempt, however, has been made to distinguish between them and interpretation employed to denote merely the process of ascertaining the meaning of the terms of the contract, and construction to describe the further process of bringing this meaning into consonance with established rules of law.^ But they are used inter- changeably by the judges, in the digests, and by the large majority of text writers, and notwithstanding the high au- thority of those who have endeavored to enforce the dis- tinction, no sufficient reason for its adoption is perceived. " One must consider the meaning of the words used, not what one may guess to be the intention of the parties." Jessel, M. R., in Smith v. Lucas, L. R. i8Ch. D. 542. "The question . . . is not, what was the intention of the parties, but what is the meaning of the words they have used ? " Lord Denman, C. J., in Rickman v. Carstairs, 5 B. & Ad. 663. See also Abbott v. Middleton, 7 H. of L. C. 114; Ex parte Chick, Re Meredith, L. R. 11 Ch. D. 739. ' Compare Lieber's Hermeneutics, chap. Ill, pp. 43-50; p. no, note i; p. Ill, note 3; Greenleaf on Evidence, § 277; Parsons on Contracts, vol. II, p. 491, note (a) ; Burrill's Law Dictionary, Construction. 4 NATURE AND SCOPE OF CONSTRUCTION. [§ 3- Moreover, if the attempt is made to wholly separate the interpretation of an agreement from its construction, the subject here presented loses its unity, and is divided in a manner so artificial that it is impracticable to treat either branch of it consistently, or the whole without repetition.* In the following pages the words are used interchange- ably, and each is intended to denote the full exposition of the agreement ; including the examination of its terms under the rules of law, the search after the intent of the parties under the same restrictions, and the statement of the meaning which the law puts upon the contract in view of the disclosed intent and the words used. § 3. Legal meaning of language determined by con- struction. — Lieber has said that there would be no such thing as understanding one another among men if words were not used according to rules generally adopted;^ and it is because they are so used, and in daily conduct and life, men are held to mean what their words express,* that it is possible to have a defined system for the construction of contracts. When men put their thoughts into language it may be concluded that they do so with the belief and con- fidence that their words will be understood by others, and it is in reliance upon that belief and confidence that they ' Wharton, in his recent Commentary on the Law of Contracts (1882), adopts with slight variations the distinction between interpretation and con- struction drawn by Lieber, and seems to be the only writer who has en- deavored in his treatment of this sjjbject to completely separate the one from the other. A reading of his chapter on " Interpretation and Con- struction " (Wharton on the Law of Contracts, vol. II, chap. XIX) will, it is be- lieved, show that while the claimed difference in meaning in these words may exist in logic and accurate phraseology, it is not supported by legal authority, and in no way brings aid to the practical law student. Consult, also, Story on Contracts, where the distinction is noted without being folio-wed out in the treatment of the subject, § 771. * Hermeneutics, p. 1 1 . » Wald's Pollock on Contracts, p. 457. § 4-] NATURE AND SCOPE QF CONSTRUCTION, 5 contract. Further, it is doubtless upon the theory that their intention is capable of discovery from their lan- guage, that so many rules and principles of construction have grown up in the law. Thus it becomes essential that definite legal standards for the ascertainment of the meaning of words should be adopted, that these standards should be so far as possible accurate and invariable, and that the law should allow no departure from this meaning when once ascertained pursuant to legal rules. This principle leads to the rule requiring the sacrifice in some instances of the actual intention of parties to that intention which they have clearly expressed in their writing, or which the law reads there ; it being deemed more for the public welfare that apparent in- justice should be done in a single case than that the unquestioned meaning of language should be violated, and uncertainty thus be thrown upon every agreement. To determine, then, the meaning which the law places upon the language used in any given case, and to estab- lish rules by which the language of all agreements shall be interpreted, are most important features of construc- tion. § 4. Construction establishes uniform methods of reading contracts. — The necessity of uniformity in meth- ods of arriving at the intent of parties is obvious, as with- out it contracting parties would have no security in enter- ing into an agreement, and could place no reliance upon its meaning when once made. In commercial and trade contracts uniformity of construction is alike necessary to carry out the will of the parties and to enable the business interests of the community to rest upon a sound foundation. Variableness in the meaning of ordinary business contracts would of necessity totally destroy con- 6 NATURE AND SCOPE OF CONSTRUCTION. [§ 5- fidence in mercantile transactions, and operate to over- throw all commerce and trade. The aim of the law, therefore, is to establish principles of interpretation applicable to such contracts, which will aid the parties in their making and provide a systematic method of read- ing them when they have been concluded. For, as Par- sons says ^ : "If any one contract is properly construed, justice is done to the parties directly interested therein. But the rectitude, consistency, and uniformity of all con- struction enables all parties to do justice to themselves. For then all parties, before they enter into contracts, or make or accept instruments, may know the force and effect of the words they employ, of the precautions they use, and of the provisions which they make in their own behalf, or permit to be made by other parties." § 5. Construction a remedy for defects in language. — A large portion of the agreements which come before the courts for construction are ambiguous in their mean- ing, because of the nature of language. The uncer- tainty, inexactness, and ambiguity inherent in words themselves, the foresight and discrimination necessary in order to combine them so that the language employed will clearly express the intention which the parties desire to disclose, the difficulties which come from the ignor- ance of men, the carelessness with which they use lan- guage, and the complexity of the agreements which they attempt to embody in words, all make it evident that the language alone will not always disclose the will of the parties.^ In such cases the aim of construction is to obtain the real sense in which the words were used, and » Parsons on Contracts, vol. II, pp. 491, 492. See, also, Smith on Con- tracts, p. 539. 2 Compare, Lieber's Hermeneutics, chap. II; Sedgwick on the Construc- tion of Stat, and Const. Law, p. 190; Story on Contracts, § 772. § 6.] NATURE AND SCOPE OF CONSTRUCTION. 7 the effort to do so is made in every way which the law deems advisable, considering always the good of the many. The defects and difficulties of language are to a great extent cured by reference to the surround- ing circumstances under which the agreement was made, to the subject-matter of the contract, to local peculiar- ities in the use of words, and, in some instances, to direct evidence of the actual intention of the parties. The prin- ciples of construction determine what may, and what may not, be considered in this search for the intent. § 6. Construction aims to remove ambiguities. — Not only when the defects or misuse of language have caused uncertainty in the contract does construction aid in its removal, but where an agreement is obscure from any cause, whether the doubt arise from the writing itself or from without, construction aims to make clear the inten- tion of the parties. It brings to the aid of the writing many extrinsic circumstances which throw much light upon its meaning, and calls into operation various rules, resting in good sense, which frequently assist in re- moving discrepancies. It presumes that the parties have intended something by their contract, and it will not surely thwart this intention by rejecting the con- tract, until examination, inquiry, and study, have shown that there is no intelligent meaning which the words will bear. Thus it will be seen, as the subject is in- vestigated, that the office of construction is largely remedial ; that it carries into effect agreements which, upon a strict, literal interpretation, must totally fail; that it endeavors to promote good faith among men by striving to discover what they have agreed upon, and by insisting that they shall adhere to their agreements ; and that it is the reliance of men who express their contracts in the most formal manner, and the safeguard of those 8 NATURE AND SCOPE OF CONSTRUCTION. [§§ 7, 8. who can bring to the court but a brief and informal memorandum of their agreement. § 7. Principles of construction of wide application. — It has been said : " There is no equitable construction of an agreement distinct from its legal construction. To con- strue is nothing more than to arrive at the meaning of the parties to an agreement ; and this must be the aim and end of all courts which are called upon to enforce any rights created by and growing out of contract."^ It is also held, that the presence or absence of a seal cannot affect the construction,^ nor does the nature of the agree- ment affect the principles which are to govern its inter- pretation.* Indeed the law of construction finds its justification and authority in reason and morality, and each of its rules and principles is based upon "good sense and sound logic." • It is a broad system, free from technicalities, which provides how the court may reach the substance of every contract. And the object of this work is to present this system, so far as it is applicable to contracts of a commercial and trade character, and is exemplified by cases which have arisen upon the con- struction of such contracts. § 8. The limits of construction. — Construction, how- ever, is not reformation. It does not aid nor authorize 1 Lord Chelmsford, in Scott v. Corp. Liverpool, 3 D. & J. 360. And Parsons says : " The principles of construction are much the same at law and in equity. Indeed, these principles are of necessity very similar, whether ap- plied to simple contracts, to deeds, or to statutes. There are differences, but in all these cases the end is the same ; and that is the discovery of the true meaning of the words used." Parsons'on Contracts, vol. II, p. 494. See, also, Leake's Digest of the Law of Contracts, p. 217; Chitty on Contracts, vol. I, p. 104; Smith on Contracts, p. 542. 2 Sedden v. Senate, 1 3 East, 62, 74 ; Barton v. McLean, 5 Hill (N. Y.), 256 ; Parsons on Contracts, vol. II, p. 495. See, also, references in note I, supra. ^ Southwell V. Bowditch, L. R. i C. P. 374. § 9-] NATURE AND SCOPE OF CONSTRUCTION. 9 the making of a new contract. Its purpose, as is per- ceived from the definition already given, is to understand the contract which the parties have made. If that may not be done, after the terms of the contract have been studied separately and collectively, after appropriate extrinsic matters have been looked to for aid and expla- nation, after rules of construction have been applied, relief does not lie in interpretation. If no clear inten- tion consistent with the language is developed in the process of construction, the parties have expressed no thought in the language they have used, and there is no contract to be construed. It is only when a contract free from mistake and fraud is presented, that the rules and principles of construction operate. When, there- fore, grounds are discovered for setting the contract aside, we pass beyond the limits of construction and come upon principles of equity wholly outside the scope of this work, § 9. Plan of treatment. — The main object in this volume then, is to fully disclose the manner in which the law ascertains the thought expressed in the language of a commercial or trade contract. To attain this end the subject is considered under the following general subdi- visions : Who construes the contract. What law governs construction. The admissibility and effect of parol evidence as an aid in construction. Rules of construction. * Special rules applicable to particular contracts. The effect upon construction, of alterations in the contract. CHAPTER II. WHO CONSTRUES THE CONTRACT. § lo. General statement of law. 1 1 . Judge alone construes if no disputed fact. 12. Rule not altered if contract is expressed in several writings. 13. Surrounding circumstances do not necessarily make question for jury. 14 Disputed questions of fact for jury. 1 5. Judge to instruct jury hypothetically as to contested facts. 16. Functions of judge and jury in determining meaning of language. 17. Jury ascertains the terms of the contract. 18. Other questions for jury. 19. Who construes contract governed by foreign law. 20. Jury determines existence of foreign law; judge interprets it. § ID. General statement of law. — The line which separates the functions of judge and of jury in the construction of contracts seems at times quite indis- tinct. It will, however, never be lost sight of, if it is remembered that under no circumstances is it the pro- vince of the jury to declare the law, and upon no consider- ation is the judge to interfere with the right of the jury to settle contested questions of fact.^ It is sometimes asserted that the construction of every written contract is for the court, but if the term construction is used to denote the full exposition of the meaning of the contract, such a statement is not accurate. Indeed, in the construction of commercial and trade contracts, the jury is constantly required to participate with the judge in ascertaining the meaning of the contract, by discovering the true status of the facts surrounding the contract, as well as the real sense in which the parties have used the language ; when, » Greenleaf on Evidence, vol. I, § 49 ; Taylor on Evidence, vol. I, § 22. § lO.] WHO CONSTRUES THE CONTRACT, II however, these facts are ascertained and the entire con- tract is before the court, the judge is to apply the rules of construction and determine the meaning of the whole document. The wisdom of this course is apparent, for it would be especially disastrous if the interpretation of every contract was left to a varying body having no re- gard whatsoever for the establishment and maintenance of general principles, and looking only to the necessity of deciding the case in hand. Thus it is well said : ^ "It is obviously of the utmost importance, that these rules of construction should be applied with consistency, and indeed, as far as practicable, with uniformity. In order to secure the attainment of these objects, the construc- tion of all written instruments belongs to the judges, who may reasonably be expected to apply with uniform- ity the rules with which they are by study and experience familiar, and not to the jury, whose habits of mind or experience are necessarily different and various, and who, in many cases not being familiar with the rules and in all cases practically unacquainted with their application, cannot reasonably be expected to apply them with uni- formity." No briefer or better general statement of the law, showing the duty of the judge and jury in construction, has been made, than that found in the much quoted case of Neilson v. Harford,^ and which is as follows : " The construction of all written instruments belongs to the court alone, whose duty it is to construe all such instru- ments as soon as the true meaning of the words in which they are couched, and the surrounding circumstances if any, have been ascertained as facts by the jury ; and it is the duty of the jury to take the construction from the court, — * Smith on Contracts, p. 539. 2 8 M. & W. 806, 823. 12 WHO CONSTRUES THE CONTRACT. [§ II. either absolutely, if there be no words to be construed as words of art, or phrases used in commerce, and no sur- rounding circumstances to be ascertained ; or condition- ally, when those words or circumstances are necessarily referred to them. Unless this were so, there would be no certainty in the law; for a misconstruction by the court is the proper subject, by means of a bill of excep- tions, for redress in a court of law ; but a misconstruc- tion by the jury cannot be set right at all effectually." Other and more recent cases have carried out these general propositions, and necessitate a more detailed statement of the law as it now exists. § II. Judge alone construes if no disputed fact. — Where, in a complete written contract, there are no am- biguities, no surrounding circumstances which give rise to contested matters of fact, and no questions involved as to the sense in which the parties have used the words in the writing, it is for the judge alone to construe the writing.^ He is to declare its meaning and its legal effect, and the jury is bound to follow his instructions.* Thus, where an agreement was clearly usurious on its face, it was held by the United States Supreme Court in an early case to be the duty of the judge to so instruct the jury.® In every case where all the evidence which may 1 Leake's Digest of the Law of Cont. pp. 218, 219 ; Vaughn v. Smith, 58 Iowa, 553; Bennett v. Agricultural Ins. Co. 51 Conn 504; De Camps v. Carpin, 19 South Car. 121 ; Welsh v. Dusar, 3 Binn. (Pa.) 329; Wason v. Rowe, 16 Vt. 525 ; Gardiner v. Clark, 17 Barb. (N. Y.) 538; infra, § 12. 2 Parsons on Contracts, vol. II, p. 492. ' Levy V. Gadsby, 3 Cranch, 180 (1805). In which case Marshall, Ch. J., says: "The counsel for the plaintiff has also contended, that although the paper-writing produced would, on the face of it, import a usurious contract, yet, as the jury might possibly have inferred from it certain extrinsic facts which would have shown the contract not to have been within the act, the jury ought to have been at liberty to infer those facts. But in this case the question arises upon a written instrument, and no principle is more clearly § 12.] WHO CONSTRUES THE CONTRACT. I3 bear on the meaning of the parties is before the court, and the problem is merely to state that meaning, the judge must proceed alone, for it is not proper in any such case to leave to the jury the intention of the par- ties.^ " The understanding of parties to a contract is to be learned from the terms of the contract, if plain and unambiguous, and when not so,, from those terms with such explanatory facts as the law allows to be proved ; and the question of what was their understanding, whether to be determined upon the face of the agree- ment alone, or upon extrinsic facts in connection with it, is always a question of law."^ It is error to allow the jury to decide as to the morality or legality of an agree- ment ; ^ while the judge may declare a contract, upon an examination of its terms, to be immoral and corrupt.* What obligations the contract imposes is always a ques- tion of law.^ § 12, Rule not altered if contract is expressed in sev- eral writings. — It is as much the duty of the judge alone to construe the contract if it is contained in a series of letters, or any number of documents, as though it were settled, than that the construction of a written evidence \sic\ is exclusively with the court." 1 Hitchin v. Groom, 5 C. B. 515; Woodman v. Chesley, 39 Me. 45; Globe Works v. Wright, 106 Mass. 207 ; Emery v. Owings, 6 Gill (Md.), 191 ; Festerman v. Parker, 10 Ired. (N. C.) 474. Where there are no technical words used, evidence to show how the contract is to be construed, is not admissible, " it is for the court and not for engineers to construe the con- tract." McAvoy w. Long, 13 III. 147. See also Lewiston v. Junction R. R. Co. 7 Ind. 597 ; Beatty v. Gates, 4 Ind. 1 54 ; Sellars v. Johnson, 65 N. C. 104; Van Eman v. Stanchfield, 8 Minn. 518; Rapp v. Rapp, 6 Pa. St. 45 ; Hooper v. Webb, 27 Minn. 485; infra, § 16. 2 Westcott V. Thompson, 18 N. Y. 363. * Pierce v. Randolph, 12 Tex. 290. * Porter v. Havens, 37 Barb. (N. Y.) 343. " Worcester Med. Inst. v. Harding, 65 Mass. 285 ; The Arctic Fire Ins. Co. V. Austin, 69 N. Y. 470; S. C. 25 Am. Rep. 221. 14 WHO CONSTRUES THE CONTRACT. [§ 12. set forth in a single instrument, provided the whole agreement is expressed in the writings ; ^ and he must decide whether the alleged contract is so expressed.^ Thus, in an English case,^ where the defendants had, before suit, offered the plaintiflFs, by letter, a specified cargo of " good barley," and the plaintiffs replied, accept- ing the offer, but qualified their acceptance by stating that they expected " fine barley," the defendants refused to ship the cargo on the ground that they had not offered to sell " fine barley," and the judge held that they were justified in so doing, and nonsuited the plaintiffs in an action for the non-delivery of the barley under the contract. Upon the appeal. Lord Abinger, C. B., said : " It ap- pears to me that the question as to the interpretation of this contract is a question entirely for the court and not for the jury. That they should ever be the judges on such matters was founded on this, that there might be technical words used in a contract which the jury might understand and the court might not ; but it would be contrary to all practice to say, after the terms are explained to the satis- faction of the court, that the jury are to have the inter- pretation and not the court." ' " It is the duty of the court to construe written instruments, and that principle is not affected by the fact that the instruments consist of written correspondence extending over a considerable length of time, or that it may embrace a great variety of circumstances. If a contract is to be sought in such a correspondence, or if the discharge of a right or obligation is to be deduced from it, the duty must be performed by the court and not by the jury." Clifford, J., in United States v. Shaw, i Cliff. 317. See also Bliven V. New England Screw Co. 23 How. 420; Ranney v. Higby, 5 Wis. 70; Brown's Admrs. v. Hatton, 9 Ired. (N. C.) 319; Luckhart v. Ogden, 30 Cal. 547 ; Dayton v. Hoagland, 39 Ohio St. 671 ; Smith v. Faulkner, 78 Mass. 251. See Humes v. O'Bryan, 74 Ala. 64, as to the rule if contract is expressed in telegrams. 2 Key V. Cotesworth, 7 Exch. 595. ' Hutchison v. Bowker, 5 M. & W. 535. § 13-] WHO CONSTRUES THE CONTRACT. 1 5 It is also for the judge alone to decide the time when the contract is concluded, if that fact appears from the writings before the court, and whether or not it does so appear, is for the judge to say upon the inspection of the writings in each particular case.^ The judge construes a written offer of contract ; but whether such an offer has been verbally accepted is a question of fact.^ § 13. Surrounding circumstances do not necessarily make question for jury, — If the contract is entirely writ- ten, the fact that there are surrounding circumstances which bear, in some measure, upon its interpretation, does not always deprive the court of the exclusive right to construe the contract. Thus it is held, that even if there is a correspondence extending over a considerable period, and during its existence circumstances intervene which it is proper to show to the court, the contract is nevertheless to be construed by the judge if the writings constitute a complete contract.* Evidence of surround- • In Fumess v. Meek (27 L. J. Exch. 34) the action was brought by a char- terer, on a charter-party, and the breach alleged was failure to get the vessel ready to load within a reasonable time. It appeared that the defendant wrote plaintiff's agent on January 16, 1857 : " At last we have concluded this affair, and I return you the charter-party duly signed. Let me have the counterpart with merchants' signatures and I hope to have the ship got ready with the least possible delay." The agent retained the copy of the charter sent him, but plaintiff at first objected to give a counterpart, and only sent it to the defendant on January 27th, and after altering the date thereon from January 1 6th to January 27th over his initials. The important contested question was, on which of these days was the charter-party completed ? The Lord Chief Baron at the trial charged the jury, as matter of law, that the contract was not completed until January 27th, and upon appeal the charge was sus- tained. The court held that, although it was generally a question of fact for the jury whether a deed or agreement was delivered in escrow, where the facts were undisputed it was the duty of the court to interpret them, and Wat- son, B., said : " It was for the learned judge to state the effect of the written documents, which he did correctly." 2 Wagner v. Egleston, 49 Mich. 218. ' Begg V. Forbes, 30 Eng. Law & Eq. 508. See also Milbank v. Den- nistoun, 21 N. Y. 386. l6 WHQ CONSTRUES THE CONTRACT. [§ 1 4. ing circumstances, moreover, can never contradict the plain meaning of the words of the contract ; and the judge should not submit to the jury, evidence of any circumstances which would justify a construction con- trary to the plain sense of the language of the contract.^ It has been held that the court cannot draw inferences of fact from undisputed evidence, if request is made to have the evidence submitted to the jury.^ But where the inferences called for "are not inferences of fact, founded upon proof which is equivocal, or which ad- mits of various interpretations, but inferences of law, to be drawn from a given and recognized state of facts," there is nothing calling for the interposition of the jury.* So if a writing is lost, and there is no dispute as to its terms, it is to be construed by the court.* § 14. Disputed questions of fact for jury. — Where questions of fact are in controversy, the jury is always to decide them. It is not material how the questions arise ; whether they develop in the consideration of the circum- stances surrounding the making of the contract, in an examination of its subject-matter, in an endeavor to ascertain the sense in which the parties have used speci- fied words or phrases in the writing, or in the effort to discover what the entire contract between the parties is, they are never to be passed upon by the judge. Not- withstanding the force and breadth of this rule, it is not proper to conclude from it, as has been done in some 1 Simpson v. Margitson.K Q. B. 23; infra, § 77. 2 Chapin v. Potter, r Hilt. (N. Y.) 366; infra, % 18. * Agawam Bank v. Strever, 18 N. Y. 502. « Berwick v. Horsfall, 4 C. B. (N. S.) 450, where Willes, J., says: "But the fact of a document being lost, does not make the construction of its con- tents a question for the jury. The true rule is laid down in Neilson v. Har- ford, 8 M. & W. 806. The construction of all written documents is for the court and not for the jury." See Moore v. Holland, 39 Me. 307. § 15.] WHO CONSTRUES THE CONTRACT. 1 7 instances, that when the written document is affected by- such evidence, the whole must be arbitrarily left to the jury.^ "The construction of a doubtful instrument itself is not for the jury, although the facts by which it may be explained are." ''• § 15. yudge to instruct jury hypothetically as to con- tested facts. — What a writing means when considered by itself, is, as we have seen,* entirely a question of law ; and what it means in the light of the extrinsic facts which the evidence undertakes to connect with it, is also a ques- tion of law. Thus it was said by the Massachusetts Supreme Court, in a case where the contract was con- tained in letters : " If a contract at all, they are a con- tract in writing. As such, the question of their inter- pretation — of their legal effect — was a question of law for the court. Nor is such interpretation the less a ques- tion of law, because the construction may be aided by the use of extrinsic evidence, including what may be called the practical construction put upon the contract 1 See Lloyd v. Maund, 2 Term Rep. 760; School District v. Lynch, 33 Conn. 330; Jennings v. Sherwood, 8 Conn. 123. * Parke, B., in Morrell v. Frith, 3 M. & W. 402. This case, without over- ruling Lloyd V. Maund {supra), much impairs its force as a precedent. In the recent case of March v. Allabough, 104 Pa. St. 335, it is said : "Thus the construction of an agreement is, in all cases, a matter of law for the court ; the truth of the facts bearing On that construction is for the jurj-, whilst the force and effect of those facts upon the construction are for the court in their instruction to the jury." See also Piedmont Mfg. Co. v. C. & G. R. R. Co. 19 South Carolina, 354. "It is also a well settled rule of law, that the interpretation or construction of written contracts is a question of law for the court, and not one of fact for the jury. Nor is the rule different where resort is had to extrinsic evidence, for light as to the proper construction of the writing. There, while the court may require the jury to find the facts established by such evidence, it should itself determine the proper construc- tion to be given to the instrument in the light of the facts so submitted to the jury." Bailey, J., in The Adams & W^estlake Mfg. Co. v. Cook, 16 Bradwells' Rep. (111. App.) 161 (1884). 8 Supra, § II. 2 l8 WHO CONSTRUES THE CONTRACT. [§ 15, by the conduct and acts of the parties. The court by the aid of extrinsic evidence, may put themselves in the situation of the parties and look at the contract from their standpoint. But from whatever source light may be thrown upon the contract, what is its meaning, what promises it makes, what duties or obligations it imposes, is a question of law for the court. It is, after all, the legal reading and interpretation of what is written." * This final determination of the meaning of the entire contract being a question for the court, and it being the duty of the jury to determine whether any disputed facts are established by the evidence, it becomes the duty of the judge to charge the jury hypothetically, leaving to it the evidence in support of such facts, with clear and definite instructions upon the law applicable to the different con- clusions which may be reached in regard to them.** ' Smith V. Faulkner, 78 Mass. 255. See, also, cases cited, p. 17, n. 2. ^ In Curtis v. Martz, 14 Mich. 506, where the action was replevin to re- cover " one wooden statue of an elephant ; " and the question mainly consid- ered was whether this statue was included in either of two chattel mortgages covering, respectively, " furniture " and '' signs." Christiancy, J., in his lucid opinion says ; '• The court was requested to charge that the question whether the property replevied was included in either of the mortgages, was one of intent in the mortgagors, and for the jury to determine. This we think was properly refused. A charge in this general form would have been objection- able if not clearly erroneous ; for, though the question was, in one sense, one of intent, it was the intent of the contract, the construction of which belonged to the court, and not to the jury. If all the facts the parol evidence tended to prove in reference to the nature and use of the property, had been apparent on the face oi the instrument, it would have been the duty of the court to in- struct the jury directly and positively, as to the effect or intent of the instru- ments, and the duty of the jury to follow that instruction. But such facts did not appear upon the face of the instruments, and it became necessary to resort to the extrinsic evidence to show the subject-matter to which they applied, and the uses made of the property, in order to gfive the instruments their true construction ; in other words to ascertain the intent. Had these facts been ascertained by special verdict or otherwise, it would have been the duty of the court to construe the instruments in connection with, and in the light of such facts, in the same manner as if expressed upon their face. As they had not thus been ascertained, they could only be ascertained by the § l6.] WHO CONSTRUES THE CONTRACT. 19 § 16. Functions of judge and jury in determining meaning of language. — The meaning of the language used in a contract is ordinarily to be determined by the court.^ " The meaning of words and the grammatical construction of the English language, so far as they are established by the rules and usages of the language, are prima facie matter of law to be construed and passed upon by the court." "^ The general rule for the reading of the words of the contract is that they are to be taken in their ordinary and primary sense ; and what this ordi- nary sense is, is a question of law, for the judges are pre- jury on the trial ; and when thus ascertained, they were to have their due weight upon the construction of the instruments. But this construction still belonged to the court. The court could not find the facts, nor could the jury construe the instruments, even in the light of the extrinsic facts they should find, except according to the instructions of the court. '■ It was, therefore, a proper case for a conditional or hypothetical charge. The jury should have been told (in substance) what would be the proper con- struction of the mortgages upon the different states of fact which might be found by them." So in Rice v. Dwight Mfg. Co. 56 Mass. 85, Forbes, J., says : " It appears that certain regulations adopted by the defendants, together with parol evidence, were relied on by them, to prove a special contract. " The judge was requested to instruct the jury as to the law applicable to the facts which the evidence tended to prove. This he declined to do, on the ground that as the evidence upon which the defendants relied consisted in part of the regulation and in part of evidence which was derived from other sources, and as the evidence offered, or some part of it, was alleged to be so obscure that it could not be understood by common minds, therefore it did not pre- sent a question of law for the court, but a question of fact for the jury. , This, we think, was erroneous. It was, no doubt, the province of the jury to de- cide all questions of fact ; but it was the duty of the court to instruct the jury, hypothetically, that if a particular fact, or combination of facts, was proved, certain legal consequences would follow." See also Fowle v. Bigelow, 10 Mass. 379; Moore z/. Garwood, 4 Exch. 681; Hutchisons. Bowker, 5 M. & W. 535; Neilsonz/. Harford, 8 M. & W. 806; Edwards z-. Goldsmith, 16 Pa. St. 43; Thompson z/. Richards, 14 Mich. 172; Festermanz'. Parker, 10 Ired. (N. C.) 474. ' Parsons on Contracts, vol. II, p. 492 ; Wharton on Contracts, vol. II, §647- = Shaw, C. J., in Brown v. Brown, 49 Mass. 573. :20 WHO CONSTRUES THE CONTRACT. [§ 1 6. ■sumed to be familiar with the English language.^ Foreign and all technical words, however, must be explained to itliem by the evidence of experts.* If this expert testi- mony is contradictory the jury must decide the meaning iof the term in question.* It is also the province of the jury to determine whether a word has acquired a special sense by the usage of trade ; * and so the jury would decide whether the words of a contract are used by the parties in a sense peculiar to themselves. It is, however, the duty of the judge, where words are shown " to have acquired an exact and techni- cal meaning in any trade or business, and are used in a contract relating to such trade or business," to instruct the jury that their prima facie meaning is that which they have acquired in the business in reference to which they are used.® It may be stated as a general rule, that wherever un- certainty exists as to the sense in which the parties to a contract have employed specific terms, and parol evi- dence is introduced to explain their meaning, it is for the jury to determine this meaning upon all the evidence. And Dwight, C, has thus generalized this principle : ' Consult, infra. Rules of Construction ; Simpson v. Margitson, 1 1 Q. B. 33; Nash V. Drisco, 51 Me. 417; infra, p. 21, n. 2, and § 17. * I-nfra, %% 56, 58. " But the legal effect of the words or phrases when their meaning is ascertained by experts, belongs to the construction of the contract and is for the court." Parsons on Cont., vol. II, p. 557. Thus the court may instruct the jury that if a particular meaning or sense were proven, " certain legal consequences would follow." Neilson »>. Harford, 8 M.&W. 806. " The jury are to determine what the contract is, and what in cases of dispute is the interpretation of disputed words; the court is to determine what is the ■construction which these words, with the meaning thus established, are to have." Wharton on Contracts, vol. II, § 647. ' Texas & St. L. Ry. Co. v. Rust, 19 Fed. Rep. 239 ; Parsons on Cont., "^ol. 11, p. SS7; infra, \ 92. * Infra, § 92. ' Houghton V. Watertown Fire Ins. Co., 131 Mass. 300. § 1 6.] WHO CONSTRUES THE CONTRACT. 21 " It is well settled that questions as to the meaning of particular words used in a special sense in a written instru- ment, are for the jury."^ Unless, however, evidence is brought before the court as to the peculiar sense in which ordinary words are employed, there is no warrant for submitting them to the jury in order to learn their mercantile meaning, and they will be construed by the court in their natural sense." ^ Pitney v. Glens Falls Ins. Co. 65 N. Y. 6. See also White v. Hoyt, 73 N. Y. 505; Ricez/. Dwight M'f'gCo. 56 Mass. 80; Fagin w. Connoly, 25 Mo. 94; Lucas 7/. Groning, 7 Taunt. 164; Rees v. Warwick, 2 B. & Aid. 113. '' It is proper, especially in cases of commercial correspondence, to leave to the jury the interpretation of language when its meaning depends on concomitant circumstances." Brown v. McGran, 14 Pet. 479. See, also, Taylor on Evi- dence, § 44, and cases ; Smith v. Thompson, 8 C. B. 44 ; Eaton v. Smith, 37 Mass. 1 50 ; Ganson v. Madigan, 1 5 Wis. 144 ; infra, n. 2. ^ In two comparatively recent English cases, where there appeared to be no evidence before the court as to the mercantile meaning of the words em- ployed, the court, nevertheless, left the interpretation of the language to the jury on the ground that its meaning was ambiguous, and the transaction being a mercantile one, it was proper to obtain the finding of the jury upon the question. See Alexander v. Vanderzee, L. R. 7 C. P. 530 (1872), and Ashworth v. Red- ford, 43 L. J. C. P. 57 (1873). The same question has, however, since come be- fore the House of Lords in the case of Bowes v. Shand, L. R. 2 App. Cas. 455 (1877), and been contrarily decided. In that case the defendants, by a contract, dated London, 17th of March, bought of the plaintiffs " about 600 tons of Ma- dras rice, to be shipped at Madras or coast for this port during the months of March — April, per Rajah of Cochin." It appeared at the trial that out of 8,200 bags of rice completing the 600 tons, 7,120 bags were put on board in the month of February, and three separate bills of lading were sigpned for them in that month. Of the remaining 1,080 bags, 1,030 were also put on board in the month of February, and 50 on the 3rd of March, on which day the bill of lading for the last lot of 1,080 bags was signed. Evidence was given that rice shipped in February would be the Spring crop, and would be equally as good as rice shipped in March or April. There were also contradictory ex- pressions of opinion in the evidence as to whether the shipment could be called a March shipment. Upon these facts the question arose, have the plaintiffs fulfilled their contract ? The trial court, with the assistance of the jury, decided that they had, but the Queen's Bench Division, upon appeal, reversed the decision. L. R. i Q. B. D. 470. The Court of Appeal, however, reversed the ruUng of the Queen's Bench Division, and sustained the trial court. L. R. 2 Q. B. D. 112. Upon 2 2 WHO CONSTRUES THE CONTRACT. [§ Ij. § 1 7. yury ascertains the terms of the contract. — Wherever any question arises as to what is the real con- tract between the parties, it is to be settled by the jury. Thus the genuineness of every written contract, if ques- a further appeal the House of Lords unanimously reversed the unanimous decision of the Court of Appeal, and held that there was no question for the jury and upon the facts proven there was no fulfillment of the contract. L. R. 2 App. Cas. 455. Upon the final appeal the Lord Chancellor, in his admirable opinion, says : " So far as the construction of the contract ex- pressed in those words is concerned, unless there be something peculiar to the words by reason of the custom of the trade to which the contract relates, the construction of the contract is for the court. That has been said so often that I need not refer your lordships to any authority upon the subject. The court it is, which, when once it is in possession of the circum- stances surrounding the contract, and of any peculiarity of meaning which may be attached by reason of the custom of the trade, to any of the words of that contract, has to place the construction upon the contract." The Lord Chancellor then considers the natural meaning of the words of the contract, and holds that if the contract is interpreted without reference to any evidence of usage, and simply according to the natural significance of its words, it means, " that the shipment must be made, that the rice must be put on board, during the two specified months, and neither before nor after those months," "what is sold is not 300 tons of rice in gross or in general. It is 300 tons of Madras rice to be put on board at Madras during the par- ticular months." He then continues: " Now, having submitted to your lord- ships what I understand to be the natural and literal meaning of this contract, I ask how is that natural meaning to be got rid of ? My Lords, I conceive in this way, and only in this way. It was, of course, competent for those who were resisting the application of this natural construction of the contract, tp have said : ' We will prove by evidence that, according to the custom of the trade, these words, which have this natural signification, are used in a wider or in a different sense. The natural meaning of the words is, no doubt, that the rice shall be shipped during those two particular months ; but we will show that by the custom of the trade a latitude is allowed, and that provided the shipment has been conducted in such a way as that the ship will be able to sail during those two months ; that means by the custom of the trade the ship- ping of rice on board during the months in question. That, of course would, according to the well-known rule of law which admits parol evidence, not to contradict a document but to explain the words used in it, supply, as it were, the mercantile dictionary in which you are to find the mercantile meaning of the words which are used. That would be a legitimate and well-known mode of construing the document.' " No evidence to give the words anything but their ordinary meaning having been introduced, the contract was construed by the Lord Chancellor, according to its natural import. § 1 7-] WHO CONSTRUES TItE CONTRACT. 23 tioned, is to be determined by the jury, and the words ■composing the contract must be deciphered by it.' In a Pennsylvania case ^ where, at the trial, the court refused to allow the jury to decide the date of a receipt when it was illegible and in dispute, upon appeal it was said : " That the court assumed an exclusive right to decipher the contested letters, is both true and fatal. It doubtless belongs to it to interpret the meaning of written words ; but this extends not to the letters, for to interpret and to decipher are different things. A writing is read before it is expounded, and the ascertainment of the words is finished before the business of exposition be- gins. If the reading of the judge were not matter of fact, witnesses would not be heard in contradiction of it ; and though he is supposed to have peculiar skill in the meaning and construction of language, neither his busi- ness nor learning is to be supposed to give him a supe- rior knowledge of figures or letters. His right to inter- pret a paper written in Coptic characters would be the same that it is to interpret an English writing ; yet the words would be approached only through a translation. The jury were, therefore, not .only legally competent to read the disputed word, but bound to ascertain what it was meant to represent." ' So, where a question arises as to whether the parties before the court have intended to contract with one another upon the terms of a certain writing, the meaning of which is not in dispute, this is a matter of fact for the jury to decide ; * and if a dispute occurs as to ' Parsons, vol. II, p. 493. 2 Armstrong v. Burrows, 6 Watts (Pa.), 266. 3 See also Fenderson v. Owen, 54 Me. 372, where Armstrong v. Burrows isupra) is approved; Cabarga v. Seeger, 17 Pa. St. 514; Paine v. Ringold, 43 Mich. 341 (1880). But see Drew v. Towle, 30 N. H. 531. * In Bolckow V. Seymour, 17 C. B. (N. S.) 106, the Lord Chief Justice at the trial left it to the jury to say whether, taking the whole of the correspond- 24 WHO CONSTRUES THE CONTRACT, f§ 1 7. whether the terms of the contract are contained in the writing, the jury must settle it.^ Whenever the full contract is not expressed in the writing, and parol evi- dence is introduced to show it, the jury must decide upon what terms the parties have contracted;^ and if the contract rests wholly in parol, the jury must ascertain from the evidence the terms of the agreement, but the construction and effect of these terms are for the judge * ence and the parol evidence together, there was any such contract as that declared on. Williams, J., upon appeal, said ; " The question left to the jury- was, whether the parties had contracted with one another upon the terms of the document of the 19th of November, l86z." " Unquestionably, if once it is established that a document or documents represent a contract between the parties, it is not competent to the judge to ask the assistance of the jury in construing it. The real question is, whether there was or was not any contract between the parties upon the terms expressed in the document of the 19th of November, 1862." This case has been cited to sustain the proposition that where there is oral evidence introduced with the contract " the whole is to be left to the jury." (See Story on Contracts, § 818; Taylor on Evidence, § 44.) The case, however, hardly warrants such conclusion, for the con- trolling question appears to have been : Was there a written contract ? And this was the question which was submitted to the jury, > Gardner v. Clark, 17 Barb. (N. Y.) 538. * Jenness v. Berry, 17 N. H. 549; Cobb v. Wallace, 5 Cold. (Tenn.) 540; infra, Supplementary Parol Evidence. s Foden v. Sharp, 4 Johns. (N. Y,) 183. 2 Daniel on Negot. Inst. § 878; Story's Confl. of Laws, §§ 319, 320. 3 Infra, %-i\. * Story on Conflict of Laws, § 280, and note a, p. 376, and cases cited therein ; Wharton on Conflict of Laws, §§ 398, 399 ; Kent's Com. vol. II, p. 457 ; Comer V. Cunningham, 77 N. Y. 391 ; Dike v. Erie Railway, 45 N. Y. 113; Meyer v. Dresser, 16 C. B. (N. S.) 646; Chapman v. Robertson, 6 Paige (N. Y.) 627; Addison on Contracts. B. V. Abbott's Notes (1883), p. 311; Thompson v. Ketcham, 8 Johns. (N.Y.) 189, in which case Chief Justice Kent says : " The lex loci is to govern, unless the parties had in view a different place by the terms of the contract. Si partes alium in contrahendo locum respexerint. This is the language of Ruber. Lord Mansfield, in Robinson v. Bland (2 Burr. 1077), says the law of the place can never be the rule where the transaction is en- tered into with an express view to the law of another country, and that was the case with the contract in that cause." So Chief Justice Taney, in Andrews v. Pond, 13 Peters, 65, says : " The general principle as to contracts made in one place to be performed in another is well settled. They are to be governed by the law of the place of performance." 40 WHAT LAW GOVERNS CONSTRUCTION. [§ 27. Indeed, the place of the performance of a contract is regarded by the kw as supplying the most positive indi- cation of the intention of the parties as to the law which they have desired to incorporate in their agreement ; and it is upon the assumption that the contract is to be per- formed at the place where it is made, that the place of making is referred to for the interpretation of its terms.^ And the Court of Appeals, in a recent New York case says:^ "We find nothing in the citations made to us, nor elsewhere, that shakes the general rule of law of this State that a purely personal contract is to be gov- erned by the law of the place where, by its terms, it is to be performed." § 27. Rule if performance to be in several places. — If a contract may be performed indifferently, in any locality, it must be referred to the place of making for its inter- And in Prentiss v. Savage, 13 Mass. 23, Parker, Ch. J., said : " It seems to be an undisputed doctrine, with respect to personal contracts, that the law of the place where they are made shall govern in their construction, except when made with a view to performance in some other country, and then the law ot such country is to prevail. This is nothing more than common sense and sound justice, adopting the probable intent of the parties as the rule of con- struction." See, also, Cotting v. State, 62 Ga. 241 ; Chapman v. Robertson, 6 Paige (N. Y.), 627 ; Knowlton v. Erie Ry. Co. 19 Ohio St. 260 ; Belle v. Bruen, I How. (U. S.) 182; Strieker 7/, Tinkham, 35 Ga. 176; Hunt w. Standart, 15 Ind. 33; Stix V. Mathews, 63 Mo. 37 r; Thornton v. Dean, 19 S. C. 583. See supra, n. 2, p. 31 ; also infra, %% 31, 32, 33. 1 Pritchard v. Norton, 106 U. S. 124; Williams v. Carr, 80 N. C. 294; Shillito V. Reineking, 30 Hun (N. Y.), 345 (opinion Daniels, J.) ; Jacks v. Ni- chols, 5 N. Y. 178; Tillotson v. Tillotson, 34 Conn. 335; Kent's Comm. vol. ni, p. 96; Wharton on Confl. Laws, § 398. Thus, in Curtiss v. Leavitt, 15 N. Y. 9, it is said (p. 88) : " In general, the rule is that if no place of perform- ance is stated, or the contract may be indifferently performed anywhere, it must be referred to the lex loci contractus.^'' * Dickinson v. Edwards, "]•] N. Y. 573, 587, approving Jewell v. Wright, 30 N. Y. 259; S. C. 33 Am. R. 671 (overruling Bowen v. Bradley, 9 Abb. Pr. (N. S.) 395). See also Payson v. Withers, 5 Biss. 269; Cubbedge v. Napier, 62 Ala. 518; Bishop on Cont. § 731. §'27.] WHAT LAW GOVERNS CONSTRUCTION. 41 pretation.^ Where, however, it is to be performed par- tially in one place, and partially in another, the object of the court should be to ascertain the intention of the par- ties, and discover from all the circumstances what law they desired to govern the contract.^ If this intention is reached, it will, as already stated, prevail.® Apart, however, from circumstances which clearly show the will of the parties, and as the most reason- able method of arriving at the probable intention, the law presumes that each portion of the contract is to be construed according to the law of the particular locality where it is to be performed. Thus it is said in a case* which is the foundation for much of the law upon this point: " If a contract is to be performed, partly in one country and partly in another country, it admits of a double aspect, nay, it has a double operation, and is, as to the particular parts, to be interpreted distinctively ; that is, according to the laws of the country where the particular parts are to be performed or executed." ^ It is accordingly held, where baggage is conveyed by a common carrier from one State to another, to be there delivered, that the law of the place of delivery governs as to the obligations and duties pertaining to such delivery ; ^ and this is thoroughly in accord with the general rule that the place of performance is to be taken as supplying the law by which the contract is to be construed.'^ 1 Curtiss V. Leavitt, 1 5 N. Y. 88 ; Waldron v. Ritchings, 9 Abb. Pr. (N. S.) 359- ^ Supra, §§ 21, 22; Story's Confl. of Laws, note a, p. 376. ' Supra, § 21. * Pope V. Nickerson, 3 Story, 484. ' See, also, Story on Contracts, § 804; Leake's Digest of the Law of Con- tracts, p. 208; Poraeroyz/. Ainsworth, 22 Barb. (N. Y.) n8; Faulkner v. Hart, 82 N. Y. 413; "Wayne Co. Sav. Bank v. Low, 81 N. Y. 566. « Curtis V. Del. Lack. & W. R. R. Co. 74 N. Y. I2i ; Faulkner w. Hart, 44 N. Y. Super. Ct. 471. See, however, infra, §§ 29, 30. ' Supra, § 26. 42 WHAT LAW GOVERNS CONSTRUCTION. [§ 28. § 28. Authorities questioning rule. — The courts of Illinois^ and lowa^ have held, with regard to contracts of carriers, that, although they are partially to be per- formed in several sovereignties, yet the law of the State where they are made controls their construction, and will govern even though a loss under the contract occurs in a different State. The most plausible reason for this view of the law is that a contract of carriage is entire and is indivisible, and being made and to be partially per- formed in the State where it is made, it is proper to look to the law of that place only for its interpreta- tion. The weight of authority, however, does not sus- tain this view of the law,* and upon principle it may ' Pennsylvania Co. v. Fairchild, 69 111. 260; The Michigan Central R. R. Co. V. Boyd, 91 111. 268. See also Rorer on Inter-State Law, pp. 51, 59; Hutchinson on Carriers, §§ 140-144. 2 McDaniel v. The Chicago & Northwestern Ry. Co. 24 Iowa, 412. Some doubts of the generality of the principle enunciated in this case have been since expressed by the Supreme Court of Iowa in the case of Talbott -v. The Mer- chants' Despatch Trans. Co. 41 Iowa, 247. In that case a bill of lading constituted the contract, and stipulated, inter alia, for exemption of the car- rier from liability from losses by fire. The bill was drawn in Hartford, Conn., " where such exemption was lawful, and whence the merchandise was to be shipped to Des Moines, Iowa, in which State carriers were not permitted to limit their liability. The goods were transported to Chicago, 111., where they were destroyed, without fault of the carrier." Cole, J., writing the opinion of the court, says: " It was held by this court, in McDaniels v. The C. & N. W. R'y Co. 24 Iowa, 412, that a contract of affreightment made in Iowa for the transportation of cattle by railroad from Onito, Iowa, to Chicago, Illinois, and for their delivery at the latter place, was to be determined by the laws of Iowa, for that the contract was made in Iowa, and was therein partly to be performed. Applying the rule of that case to this, it seems, necessarily, to follow that since this contract was made in Connec- ticut, and was there to be partly performed, its validity and effect should be determined by the law of that State. But, without determining that such a rule should be applied to its full extent to every contract, or even to this, we here ground our decision of this cause upon the special facts of the case, which show that the contract was valid in Connecticut, where the contract was made, and in Illinois, where the loss occurred." ^ Curtis V. Del. Lack. & West. R. R. Co. 74 N. Y. 1 21 ; Carpenter v. Grand § 28.] WHAT LAW GOVERNS CONSTRUCTION. 43 be said that where the rule stated in the preceding section is applied no attempt is made to divide the contract, the question being merely as to its interpreta- tion — as to what the contract is and intends — as to what laws the parties have " silently incorporated " into their writing. If they have embodied the laws of one place, as to a part of the contract, and the laws of a different locality as to another portion of it, the contract is as complete and undivided as though one law governed. Again, it may be said that the fact that the contracts are to be performed in several States supplies evidence of intention to submit to the laws of such States. It is to be remembered that the carrier always, and the passenger or shipper ordinarily, is aware of the sov- ereignties through which the journey is to be made, and it may well be inferred that the contract is entered into with reference to the laws of these various States or countries as to the rights and obligations relative to performance in such localities. Even if the contract in such cases is termed a contract of the place where it is made, its performance and the obligations arising there- from are governed by the laws existing at the place of such performance.^ Thus the United States Supreme Court says: "Matters bearing upon the execution, the interpretation, and the validity of a contract, are deter- mined by the law of the place where the contract is made. Matters connected with its performance are regulated by Trunk Ry. Co. 72 Me. 388; Gray v. Jackson, 51 N. H. 9; Barter v. Wheeler, 49 N. H. 9; and supra, § 27. See, however, Wharton's Confl. of Laws, § 471, where it is said : " In determining the interpretation of a contract for carriage the law of the carriers' principal office is to prevail; " and effort is made to bring the authorities to support this proposition. See § 472. and note i. > Cohen v. Southeastern R'y Co. L. R. 2 Exch. D. 253; supra, n 2, p. 34. 44 WHAT LAW GOVERNS CONSTRUCTION, [§ 29. the law prevailing at the place of performance. Matters respecting the remedy . . . depend upon the law of the place where the suit is brought." ^ The court is inclined, in the particular case presented, to look at the nature of the question which arises, and it is held, if the question presented is one not bearing on the performance of the contract, the lex loci contractus will control its determination,^ while every matter of interpretation connected with the performance of the contract will be governed by the law of the place of performance.^ § 29. Exception, if terms of contract show intention. — The general principle, that a contract to be performed in several places is to be governed, as to performance, by the laws of such places respectively, is fully recognized in the recent English case of Jacobs v. The Credit Lyon- nais, and it is apparently conceded, by the opinion in that case, that the foreign law involved would be appli- cable to that portion of the contract performed abroad, if it were not for the fact that the express terms of the writing controlled the question.* In the case of The Peninsula and Oriental Steam Navigation Co. v. Shand,^ an action for damages for the non-delivery of baggage, which the appellants had agreed to carry from South- ampton to Mauritius, it was held, that the foreign law could not enter into the contract and control its mean- ' Scudder v. Union Nat. Bank, 91 U. S. 406. 2 Scott V. Pilkington, 31 L. J. Q. B. 81. ' Howenstein v. Barnes, 5 Dillon's C. Ct. 482. See also Wharton on Confl. Laws, § 473a. * Supra, § 21, n. 2, p. 31. See also Blanchet v. CoUeries Co. L. R. 9 Ex. 74. » 3 Moore's P. C. (N. S.) 272. § 29-] WHAT LAW GOVERNS CONSTRUCTION, 45 ing against the provisions of the contract itself. The court in that case says : " This is a contract made be- tween British subjects in England, substantially for safe carriage from Southampton to Mauritius. The perform- ance is to commence in an English vessel in an English port ; to be continued in vessels which for this pur- pose carry their country with them ; to be fully com- pleted in Mauritius ; but liable to breach, partial or entire, in several other countries in which the vessels might be,^ in the course of the voyage. Into this con- tract, which the appellants frame and issue, they have introduced for their own protection, a stipulation, pro- fessing in its terms to limit the liability which, according to the English law, the contract would otherwise have cast upon them. When they tendered this contract to the respondent, and required his signature to it, what must it be presumed that he understood to be their in- tention as to this stipulation .? What would any reason- able man have understood that they intended 1 Was it to secure to themselves some real protection against re- sponsibility for accidental losses of luggage and for dam- age to it ; or to stipulate for something to which, however clearly expressed, the law would allow no validity. This question leaves untouched, it will be observed, the extent of the contemplated protection ; it asks, in effect, was it intended that the stipulation, in case of an alleged breach of contract, should be construed by the rules of the Eng- lish law, which should give some effect to it ? or by those of the French or any other law, according to which it would have none, but be treated as a merely fruitless attempt to evade a responsibility inseparably fixed upon the appellants as carriers .? The question appears to their Lordships to admit of one answer only." ^ ' See, also, Moore v. Harris, i App. Cas. 318, 331. 46 WHAT LAW GOVERNS CONSTRUCTION. [§ 3O. These cases abundantly show, what it seems almost unnecessary to bring authorities to prove, namely that no law can be assumed to enter into the contract if it contradicts the express terms of the writing. The pre- sumed intention, in this case as in others, is overcome by the positive and express statements of the contracting parties.^ § 30. Exception, if circumstances show one place only in contemplation of parties. — The rule that the contract is to be construed with reference to the laws of the State or country within which it is to be performed, does not apply where the specified performance is merely inci- dental, and cannot be regarded as a substantial part of the contract. Thus, in New York it was held, by the Court of Appeals, in a case where a passenger was to be carried from the City of Buffalo, in that State, to the City of New York, and the railway ran for short distances through the States of Pennsylvania and New Jersey, and the passenger was injured in an accident occurring in the State of Pennsylvania, that as the contract was made in New York between citizens thereof, for car- riage from one point therein to another, it was clearly a New York contract, and could not be controlled by the statutes of Pennsylvania.^ So in a Pennsylvania case ' Compare with §§21, 22, supra. ' Dike V. Erie Railway, 45 N. Y. 113. In this case the court says: " It cannot be assumed that the parties intended to subject the contract to the laws of the other States, or that their rights and liabilities should be qualified or varied by any diversities that might exist between the laws of those States and the /ex loci contractus. . . Upon principles of comity effect is some- times given by the courts of a State to foreign laws. In matters of contract such effect is accorded to statutes of other States, only to carry out the intent of, and do justice between the parties, never to qualify or vary the effect of a contract between parties not citizens of such foreign States, and subject to its laws, and not made in view of the law of such States." § 30-] WHAT LAW GOVERNS CONSTRUCTION. 47 where a contract was made in Philadelphia by the plaint- iff with the defendant — a New Jersey corporation — for carriage from that city to Atlantic City, in the State of New Jersey, and it became necessary to decide what law determined the obligation of the defendant for a lost trunk, it was held, upon all the circumstances, that the law of New Jersey was that which the parties must be presumed to have had in contemplation, and that the commencement of the journey in Philadelphia, consist- ing as it did of merely crossing the river into the State of New Jersey, was an immaterial circumstance.^ The same principle is illustrated by the authorities hereafter referred to, holding that if a place of payment for negotiable paper is named simply as a matter of con- venience in mating the payment, and without the inten- tion of giving importance to such place as furnishing the law of the contract, the paper will be construed accord- ing to the law of the place where the note in contem- 1 Brown v. The Camden & Atlantic R. R. Co. 83 Pa. St. 316. Much the same question arose in the case of Hale v. The New Jersey Steam Nav. Co. 15 Conn. 539, where the court in its opinion says: " It appears that this boat was in the business of transportation from New York to Providence ; that the plaintiff owned carriages, which he wanted to have transported to Boston ; that the defendants received them in N'ew York to convey them to Boston or Providence ; and that they were lost in the Sound off Long Island, near Huntington ; and the question is, by what law is this con- tract to be governed ? The rule upon that subject is well settled, and has been often recognized by this court, that contracts are to be construed according to the laws of the State where made, unless it is presumed from their tenor, that they were entered into with a view to the laws of some other State. . . There is nothing in this case, either from the location of the parties, or the nature of the contract, which shows, that they could have had any other law in view than that of the place where it was made. Indeed, as the goods were shipped to be transported to Boston or Providence, there would be the most entire uncertainty what was to be the law of the case, if any other rule was to prevail. We have, therefore, no doubt that the law of New York, as to the duties and obligations of common carriers, is to be the law of the case." 48 WHAT LAW GOVERNS CONSTRUCTION. [§ 3 ^ • plation of law is made.^ It must always be remembered that the " fact that acts are to be done abroad under a contract does not necessarily make it a contract to be performed there, in a legal sense. . . . The true in- quiry is, what was the intent of the parties." ^ §31. How the lex fori affects construction. — The law of the forum affects the construction of a contract in sev- eral important particulars. It decides all questions as to the admissibility of parol evidence to affect the contract, and so determines what aid may come to the contract from this source.* It also gives the law pursuant to which the contract must be construed, if no foreign law is properly brought before the court.* In so doing, however, it regards as well as may be the probable intention of the parties. Thus it is • Tilden v. Blair, 21 Wall. 241 ; Wayne County Savings Bank v. Low, 81 N. Y. 566. See also, as further illustrating this principle, Carnegie v. Morri- son, 43 Mass. 381 ; Morgan v. New Orleans, &c., R. R. Co. 2 Wood's C. C. 244; Richardson v. Draper, 23 Hun (N. Y.), 188. 2 First National Bank v. Shaw, 61 N. Y. 283 : supra, § 22. ^ Thus Wharton says (Confl. of Laws, §767): "We must hold that our distinctive rules, excluding irrelevant matter and hearsay, are to be applied to all cases coming before our courts, no matter to what law the substantive merits of such cases are subject. . . . They cannot be dispensed with by our courts without abandoning our distinctive jurisprudence, and they must therefore be applied to all cases, no matter to what law the merits of the case may be subject." So Lord Brougham, in Bain v. Whitehaven Ry. Co. 3 H. of L. C. 119, says : " Whether a witness is competent or not, whether a certain matter requires to be proved by writing or not, whether certain evidence proves a certain fact or not, that is to be determined by the law of the country where the question arises." See, also. Story on Conflict of Laws, §§ 634, 634 a, and note (a); Leake's Digest, p. 207 ; Dunn v. Welsh, 62 Ga. 241. * Chapin v. Dobson, 78 N. Y. 74; Savage -u. O'Neil, 44 N. Y. 298 ; Robal-ds V. Marley, 80 Ind. 185; The Phoenix Ins. Co. v. The Liverpool and G. W. S. S. Co. 22 Blatch. C. Ct. Rep. 372; Marsters 7/. Lush, 61 Cal. 622; Chu- masero v. Gilbert, 24 111. 293 ; Warren v. Lusk, 16 Mo. 102. As to manner of proving foreign law, compare, Addison on Contracts) Abbott's notes, p. 310, n. I ; U. S. V. Turner, 1 1 How. 663 ; Rorer on Inter-State Law, p. 34 ; Wharton's Confl. of Laws, §§ 771-779 ; Story's Confl. of Laws, p. 863, n. a. § 3I-] WHAT LAW GOVERNS CONSTRUCTION. 49 held that the common law governs the interpretation of a contract made within its range in the absence of proof of any foreign law.^ And, likewise, the statute law of the. forum does not enter into a contract made with reference to the laws of another State.** If, how- ever, the contract is made in a locahty where the com- mon law is not presumed to exist, the court construing the contract will follow its own views of justice and apply its own laws.* The law of the forum will also determine whether the contract offends against good morals or the public policy of that locality, and on either of these grounds will refuse to enforce it.* It also controls as to the parties to the action, the time within which suit may be ' See cases cited infra, n. 4. See also Carpenter v. Grand Trunk Ry. Co. 72 Me. 388 ; Wright v. Delafield, 23 Barb. (N. Y.) 498 ; Murphy v. Collins, 121 Mass. 6; Meyer v. McCabe, 73 Mo. 236; Munroe v. Douglas, 5 N. Y. 447; Wharton on Confl. Laws, §§ 779, 780; Rorer on Inter-State Law, p. 119; Lloyd 7/. Guibert, L. R. i Q. B. 115. 2 Murphy v. Collins, I2l Mass. 6, where it was distinctly held that there was no presumption that the statute law of another State was similar to that of Massachusetts. Meyer v. McCabe, 73 Mo. 236; Cutler v. Wright, 22 N. Y. 472 ; Wright v. Delafield, 23 Barb. (N. Y.) 498 ; Holmes v. Broughton, 10 Wend. (N. Y.) 75; Dubois v. Mason, 127 Mass. 37; Lucas v. Lade w, 28 Mo. 342; Hull V. Augustine, 23 Wis. 383; Rogers v. Zook, 86 Ind. 237. See also Harris v. White, 81 N. Y. 532, where the question is referred to but not decided. Stephen's Digest of the Law of Evidence, Chase's edition, p. 104. In the case of Neese v. The Farmers Ins. Co. 55 Iowa, 604, the court merely presumed that the statute of another State in regard to the requisites of a notarial certificate was similar to that of the forum, and in Carpenter v. Grand Trunk Ry. Co. 72 Me. 388, the court held that a statute of Maine in regard to common carriers could have no extra-territorial force, and that a contract for carriage beyond the limits of that State would not be affected by such a statute except so far as it was to be performed in such State. Neither of these cases, therefore, seem to oppose the doctrine here advocated. 3 Savage v. O'Neil, 44 N. Y. 298 ; Tudor's Mer. Cases, p. 677. * Faulkner v. Hart, 82 N. Y. 413 ; Gelpcke v. City of Dubuque, i Wall. 17s, 205 ; Flagg V. Baldwin (N. J.), Alb. L. J. Nov. 8, 1884. 4 50 WHAT LAW GOVERNS CONSTRUCTION. [§ 31- brought, and decides all questions in regard to the rem- edy.^ ^ Scudder v. Union Nat. Bk. 91 U. S. 406; Mineral Point R. R. Co. v. Barron, 83 III. 365 ; Bank of U. S. v. Donnelly, 8 Pet. 361 ; Wilcox v. Hunt, 13 Pet. 378; Daniel on Neg. Instr., §§882-892; Rorer on Inter-State Law, PP- 52, 53 ; Parsons on Contracts, vol. II, p. 588 ; Wharton's Confl. of Laws, §§ 73S, 747- CHAPTER IV. LAW GOVERNING CONSTRUCTION IN SPECIAL CASES. § 32. Illustration of rules applicable to commercial paper. — Contract of maker or acceptor. 33. Law governing contract of drawer. 34. Law governing contract of indorser. 35. Interpretation of contracts governed by general commercial law. 36. Difficulties of perfecting a system of commercial law in the United States. 37. Instances of conflict between Federal and State courts, illustrated by recent cases. 38. United States Supreme Court rule adopted in New York. 39. Other State authorities in support of rule. § 32. Illustration of rules applicable to commercial paper. — Contract of maker or acceptor. — The import- ance of regarding in every case the place of the per- formance of a contract is well illustrated by the decis- ions in reference to the interpretation of contracts arising upon negotiable paper. Thus, if no place of payment is specified in a note, it is payable by the maker where made, and, on that ac- count, governed by the law of the place of making ;^ and the liability of the acceptor of a bill of exchange is de- termined by the law of the place of acceptance, unless the bill by its terms is payable elsewhere.^ If, however, I Daniel on Neg. Insts. § 895; Murphy w. Collins, 121 Mass. 6: Shillito V. Reineking, 30 Hun (N. Y.), 345; Jacks v. Nichols, 5 N Y. 178; Blodgett V. Durgin, 32 Vt. 361 ; Wilson v. Lazier, 11 Gratt. (Va.) 482; Backhouse v. Selden, 29 Gratt. (Va.) 586; Tillotson 7/. Tillotson, 34 Conn. 335; Short w. Trabue, 4 Mete. (Ky.; 299. See, supra, § 25, as to what determines where a contract is made. * Daniel on Neg. Insts. § 896 ; Musson v. Lake, 4 How. 262 ; Teese v. 52 WHAT LAW GOVERNS CONSTRUCTION. [§ 35, some particular place of payment is named in a note or bill, then the obligation of the maker or acceptor, arising; upon it, is determined by the law of the place of per- formance/ unless, indeed, the whole contract shows that the place of payment was named for some incidental purpose, and cannot be regarded as indicating the seat of the obligation.^ So in an action against the maker or acceptor, the indorsee need only show that he has a good title to the paper, under the law which controls the contract of such principal debtor.* § 33. Law governing contract of drawer. — The con- tract of the drawer of a bill of exchange is a much more Brownell, 35 N. J. L. 286; Everett z/. Vendryes, 19 N. Y. 436; Worcester Bank v. Wells, 49 Mass. 107; Boyce v. Edwards, 4 Pet. 1 11. 1 Jewell V. Wright, 30 N. Y. 259 ; In re State Fire Ins. Co., 32 L. J. Ch. 300 ; Dickinson v. Edwards, 77 N. Y. 573 ; Cutler v. Wright, 22 N. Y. 472 ; Suae V. Pompe, 8 C. B. (N. S.) 538; Bowen v. Newell, 13 N. Y. 290; Campbell V. Nichols, 33 N. J. L. 81; Woodruff v. Hill, 116 Mass. 310; Fordyce ?/. Nelson, 91 Ind. 447; Don v. Lippman (5 CI. & Fin. I), Tudor's Mercantile cases, p. 651, where it is said : " The extent of the obligations incurred by the acceptor of a bill of exchange or the maker of a promissory note depends upon the law of the place where the same are payable." See, also, Parsons on Notes and Bills, vol. II, p. 324; Byles on Bills, p. 403, note. 2 Tilden v. Blair, > 21 Wall. 241 ; Wayne County Sav. Bank v. Low, 81 N. Y. 566. ^ Trimbey v. Vignier, i Bing. (N. C) 151 ; Everett v. Vendryes, 19 N. Y. 436-439; Woodruff w. Hill, 116 Mass. 310. See also Lebel v. Tucker, L. R. 3 Q. B. 77 (1867). Where it was held that, on a bill of exchange drawn, accepted, and payable in England, the contract of the acceptor is governed by the law of England, and an indorsee, under an indorsement valid by such law, can sue the acceptor in England, although the indorsement was made in France, and by the law of that country gave no right to the indorsee to sue in his own name, and although the law of France might govern the contract of the indorsee. In this case, Lush, J., said: "The original contract cannot be varied by the law of any foreign country, through which the instrument passes." The Bill of Exchange Act (45 and 46 Vict. 1882) now governs many questions which arise upon English notes and bills and should be consulted in regard to them. See Tudor's Mer. Cases, p. 659. § 33-] RULES IN SPECIAL CASES. 53 complex obligation than is that of an acceptor, and there has been much difference of opinion as to what, law should govern its interpretation. It has, moreover, been the custom to regard the contract of the drawer of a bill as the same contract as that made by an indorser ; and Daniel gives a large number of decisions, holding that the place of the drawing or indorsing furnishes the law by which each contract is to be interpreted.^ The same writer deprecates this view of the law, although he seems to regard it as settled.* ^ Daniel on Negot, Insts. §§ 899, 900. Some of the cases sustaining this view of the law are the following: Aymar v. Sheldon, 12 Wend. (N. Y.) 443; Cook V. Litchfield, 8 N. Y. 280; Williams v. Wade, 42 Mass. 82; Slacum v. Pomery, 6 Cranch, 221; Young v. Harris, 14 B. Mon. 556: National Bank ■V. Green, 33 Iowa, 140 ; Clanton v. Barnes, 50 Ala. 403 ; Trabue v. Short, 18 La. Ann. 257; McDonald v. Bailey, 14 Me. loi ; Hicks v. Brown, 12 Johns. (N. Y.) 142 ; Dundas v. Bowler, 3 McLean, 397 ; Hatcher v. McMor- raine, 4 Dev. 122; Dow z/. Rowell, 12 N. H. 49; Freese v. Brownell, 35 N. J. L. 286; Hunt V. Standart, 15 Ind. 33; Lemingz/. Ralston, 23 Pa. St. 137; Price V. Page, 24 Mo. 595; Bank of U. S. v. U. S., 2 How. 711 ; Crawford ■v. Branch Bank, 6 Ala. 15; Bailey w Heald, 17 Tex. 102; Duerson's Admr. V. Alsop, 27 Gratt. (Va.) 241 ; Musson v. Lake, 4 How. 262, in which case the United States Supreme Court says : " So far as their (the acceptors') liabilities are concerned, they were governed by the law of Louisiana. But the drawer and indorsers resided in Mississippi ; the bill was drawn and indorsed there, and their liability, if any, occurred there." See, also, Rorer on Inter- State Law, pp. 60, 61, 62; A. V. Dicey, 16 Am. Law Review, 506. So Wharton said, Confl. of Laws, ist ed., § 450: " Each person placing his name to commercial paper, whether as maker, drawer, acceptor, or indorser, is liable, according to the special local law, bearing on his own particular engagement. Thus, the indorser will be liable in respect to damages and exchange, according to the law of his indorsement, that being as far as he is concerned, the place of the performance of the obligation ; and this is irre- spective of what is the law binding the acceptor." But see 2d ed. Id., § 456. 2 Daniel, § 901, where it is said: "This doctrine, that the drawer and indorser are bound, according to the law of the place of drawing or indors- ing, although sustained by great weight of opinion, and an overwhelming current of authorities, has not escaped criticism and dissent, and rests, as it seems to us, rather upon the sanction of decisions, than upon clearly and well defined principles. If A., in New York, draws a bill on B., in Richmond, directing him to pay $1,000 at the First National Bank in Raleigh, North Carolina, he thereby guarantees to C, the payee, that the money shall be there 54 WHAT LAW GOVERNS CONSTRUCTION. [§ 33. The New York Court of Appeals, however, in a recent case has clearly distinguished these contracts, and has held, that the contragt of the drawer is an agreement on his part to pay the bill at the place where it is payable, and therefore to be controlled by the law of such place,, while the indorser's contract is an agreement to pay at the place where the indorsement is made, and is, there- fore, subject to the law there governing. In the case referred to, a draft upon New York bankers was drawn by a corporation located at New Orleans, in Louisiana, and sold by it to another corporation located at the same place, for use in New York, and the court in its opinion says : " Where is this contract to be performed } Clearly in New York City. Nor could it be performed else- where. The only object of the parties, payee as well as drawers, in entering upon it was to have the money paid in New York. This only was in contemplation of the parties. As is said in 2 Daniel's Negotiable Instru- ments, page 685 : ' He, the drawer, has contracted that paid by B. on the day o4 its maturity. He is as clearly bound as B. is, al- though secondarily, that the money shall be paid at the time and at the place named. If either tenders the amount at the time and place, it would be a good tender. And although A.'s liability is contingent upon due notice of dishonor, the liability is, nevertheless, for breach of his contract, that B. should pay at Raleigh. He has contracted that the amount shall be there paid by the hand of B., and yet his contract is regarded as being governed by the law of New York ; while B.'s contract to pay by his own hand is gov- erned by the law of North Carolina. This seems to us an inconsistency of the law ; and while the doctrine is now, perhaps, too well settled to be dis- turbed, it does not bear the test of searching analysis." See, also, Kent's Com., vol. II, p. 460; Parson's N. & B., vol. II, p. 347; Mullen v. Morris, 2 Barr, 87 ; Shanklin v. Cooper, 8 Ind. 42 (substantially overruled by Hunt V. Standart, 15 Ind. 33); Peck v. M^yo, 14 Vt. 33. So in note (a), p. 439, Story's Confl. of Laws, after a review of the English authorities upon this subject, it is said: "Turning to the American cases, it has sometimes been broadly said, that the drawer's and indorser's contract is governed by the law of the State where it was made. Aymar v. Sheldon, 12 Wend. (N. Y.) 439-443; Holbrook v. Vibbard, 2 Scam. (111.) 465, and other cases. But none of the actual decisions go to this extent." § 33-] RULES IN SPECIAL CASES. 55 the amount shall be there paid by the hand of B.,' the drawee. Any other construction would render the con- tract meaningless, and productive only of mischief. The plaintiff, in New Orleans, wants money in New York, defendant promises it shall be there for him, and relying on that the plaintiff pays in New Orleans the agreed amount. It is obvious that it cannot be ascertained, whether the promise is kept until it is taken to New York, and then, upon the theory of the appellant, if it is not performed the promise is to be returned to the drawer in New Orleans, and then, in New Orleans, the money is to be repaid. And thus after delay the plaint- iff is restored to his original desire, and must find some other method of transferring his money to New York. There is before us a single undertaking. It could be performed only in New York, and the general law above referred to shows that the rights of the parties are to be governed by its laws as the lex loci. Nor is the ques- tion a new one. In this court it has been declared as too well established to require a reference to books. ^ It was there distinctly presented. The action was by the indorser of a bill of exchange drawn in New Gre- nada, upon a corporation in New York city. The in- dorsee sued the drawer of the draft. The drawer de- fended. He had been charged as drawer by reason of default of the drawee. He denied the indorsement by the payee. He also sought to amend his answer by set- ting up the law of New Grenada, under which he claimed the draft was not well indorsed. The decision of the court shows the difference between the rules applicable to the contract of the drawer and that of the indorser. Holding that the contract of the former was to be gov- erned by the law of the place where it was to be per- • Everett v. Vendryes, 19 N. Y. 436. 56 WHAT LAW GOVERNS CONSTRUCTION. [§ 34. formed, saying : ' By drawing the bill the defendant undertook that the drawee in New York would pay it to the payee or his order, and if the drawee did not so pay it, he himself would make such payment.' What payment ? Why, the payment called for by the draft — a payment in New York. And such is the construction to be given to the defendant's contract here. The case also illustrates the principle above adverted to, that more than one law will apply to the same bill of exchange. Holding, as in Lee v. Selleck,^ that the contract of the indorser would be governed by the law of New Grenada, where it was made, the drawee was held under the law of the place of performance, and the indorser under the place of contract. And this accords with well defined principles as stated in 2 Daniels' Negotiable Instru- ments, page 684, and avoids the inconsistency of the law in respect thereto, which the learned author depre- cates."^ § 34. Law governing contract of indorser. — In the opinion from which the above quotation is taken, the general proposition is laid down, that the contract of the indorser is governed by the law of the place whei-e the indorsement is made.^ This, however, is not to be taken 1 33N. Y. 615. 2 Rouquette v. Overman, L. R. lo Q. B. 525, is also a strong authority to the proposition, that the drawer's contract is to be performed pursuant to the laws of the place of payment of the bill. There it is said, as to the drawer's contract : " All that he does is to warrant that the bill shall be accepted by the drawee and, having been accepted, shall, on being presented at the time it becomes due, be paid. In other words, he engages as surety for the due per- formance by the acceptor of the obligations, which the latter takes on himself by the acceptance. His liability is, therefore, to be measured by that of the acceptor, whose surety he is ; and as the obligations of the acceptor are to be determined by the lex loci of performance, so, also, must be those of the surety." See, also, Joseph v. Salomon, 19 Flor. 623. ' See supra, § 32; cases cited, n. i, p. 53. See, also, as to where the indorsement is made, supra, % 25. § 34-] RULES IN SPECIAL CASES. 57 as the rule applicable to all questions which may arise in relation to the indorser's contract ; for the indorser merely undertakes to carry out upon certain conditions the agreement made by his principal debtor. This original agreement, then, is the measure of the conditional obliga- tion into which he enters, and he has nothing to do with its formation or the determination of the laws which regu- late it. It is a concluded contract when his obligation comes into force and the indorser's promise is that he, upon certain provisos, will fulfill this primary contract. It is therefore proper to refer all questions as to what the original contract was to the law governing that contract, " for the original contract cannot be varied by the law of any foreign country through which the instrument passes," ^ and all questions as to the provisos upon which the indorser has agreed to fulfill this contract to the place of the making of the indorsement.^ Thus the 1 Lush, J., in Lebel v. Tucker, L. R. 3 Q. B. 77 : Thus in Note B. to § 373 (P- 239), Savigny's Conflict of Laws, by Guthrie, it is said, in regard to the general proposition that an indorser's contract is to be governed by the law of the place of indorsement : " While, however, this proposition may be ■correct so far as regards certain incidents of the contracts arising out of a bill or note — such as the nature of the remedy or special defenses competent to indorsers — ^it is now settled, both in England and Scotland, that each party to a bill, whether drawer or indorser, obliges himself only as a surety for the acceptor ; and as the acceptor's obligations are to be measured by the law of the place of performance (z. e., in general of his domicile), so must be those also of the surety. Stewart v. Gelot (1871), 9 Macph. 1057; Rouquette v. Overman (1875), L. R. 5 Q. B. 525; 44 L. J. Q. B. 221. Against the ac- ceptor the rights of each holder, even under a transference made abroad and by the law of the place of indorsation, insufficient to found an action by or against the indorsee in that place, are the same as those of the original payee, provided the indorsation be valid by the law of the acceptor's domicile." Citing Story, §§ 317-345-347 ; Westlake, § 241 ;• De la Chaumette v. Bank of England, 9 B. & C. 208 ; Robertson ^'. Burdeldn, 6 D. 17 ; i Ross' L. C. 812 ; Lebel v. Tucker, 37 L. J. Q. B. 46 ; L. R. 2 Q. B. ^^. The same writer inclines to the opinion that the rights acquired against the indorser, however, are those conferred by the law of the place of indorsation. 2 See, for general statement of the nature of the indorser's contract, Rou- 58 WHAT LAW GOVERNS CONSTRUCTION. [§ 34. weight of authority now holds that the indorser must pay the bill or note with interest at the rate prevailing- at the place of the payment of the paper.^ So whether the presentment of the note or bill is properly made, and in season, is a question relating to the contract of the principal, and is to be determined by the law of the place where the bill is payable.^ What notice of dishonor, however, the indorser is entitled to receive, is to be determined by the law of the place of the indorse- ment, for " the matter of notice (unlike presentment and demand) has nothing to do with the liability of the maker or acceptor; it concerns the party notified alone." ^ quette v. Overman, L. R. lo Q. B. 525 ; Story's Confl. Laws, note a, p. 439 ; Jewell V. Wright, 30 N. Y. 259; Dickinson v. Edwards, 77 N. Y. 573; Hibernia Bank v. Lacombe, 84 N. Y. 367 ; Greathead v. Walton, 40 Conn. 226. ' Kavanagh v. Day, 10 R. L 393-; Stickney v. Jordan, 58 Me. 106; Kil- gore u. Dempsey, 25 Ohio St. 413 ; Story's Confl. Laws, note a, p. 439; infra, n. 2. See contra, 16 Am. Law Review, 510; Allen v. Kemble, 6 Moore's P. C. 322 ; Gibbs V. Fremont, 20 Eng. L. & E. 555. These cases, however, are criticised in Rouquette v. Overman, and Hibernia Bank v. Lacombe, supra. 2 Rouquette v. Overman, L. R. 10 Q. B. 525 ; Pierce v. Indseth, 106 U. S. 546 ; Daniel on Neg. Insts. § 908;. Tudor's Mer. Cases, p. 652; Aymar V. Sheldon, 12 Wend. (N. Y.) 439; Chatham Bank v. Allison, 15 Iowa, 357 ; Thorp V. Craig, 10 Iowa, 461 ; contra, Hatcher v. McMorine, 4 Dev. 122. * Story's Confl. Laws, note a, p. 439 ; Daniel on Neg. Insts §910; Story on Bills, §§ 176, 177 ; Aymar i-. Sheldon, 12 Wend. (N. Y.) 439; Thorp v. Craig, lo Iowa, 461 ; Allen v. Merchants' Bank, 22 Wend. (N. Y.) 215; Short v. Trabue, 4 Met. (Ky.) 299 ; Holbrook v. Vibbard, 2 Scam. (111.) 465 ; Hatcher V. McMorine, 4 Dev. 122; Lowry w. Western Bank, 7 Ala. 120; Hunt z/. Standart, 15 Ind. 33; Huse v. Hamblin, 29 Iowa, 501. In Rothschild v. Currie, i Queens Bench, 43, it was held that the notice of dishonor required to be given an English indorser, upon a bill drawn in England but payable in France, was that which the law of the place of payment prescribed. This case has, however, been doubted. (Compare, Hirschfield v. Smith, L. R. i C. P. 340, 343 ; Byles on Bills, p. 404 ; Story on Notes, § 339.) The recent case of Home v. Rouquette, L. R. 3 Q. B. 514, decided by the Court of Appeals in 1878, leaves the point substantially untouched; for in that case the indorsement, in regard to which the foreign law was invoked, although written was not made in England, as it "was not completed till the delivery of the bill in Spain." Bramwell, L. J., also says, in reference to the § 35-J RULES IN SPECIAL CASES. 59 §35- Interpretation of contracts governed by general commercial law. — The United States Supreme Court has for many years endeavored to build up in this coun- try a uniform system of commercial law, commensurate with the increasing commercial relations of the different parts of the country. It has accordingly held that ques- tions of a general nature, arising upon commercial con- tracts, should be decided pursuant to the principles of the law merchant, or the broad doctrines of commercial law, and has refused to follow decisions of State courts upon these questions unless in unison with such doc- trines or principles.^ In Carpenter v. The Providence Washington Insur- ance Co.,^ that court speaks as follows : " The questions under our consideration are questions of general commercial law, and depend upon the con- struction of a contract of insurance, which is by no means local in its character, or regulated by any local policy or customs. Whatever respect, therefore, the decisions of State tribunals may have on such a subject — and they certainly are entitled to great respect — they cannot conclude the judgment in this court. On the decision there made : " This, in no way, decides that one who has in Eng- land indorsed a bill to a person resident in this country, would be liable to the holder of it, who took it by subsequent indorsement in another country, if the English indorser received from this holder such notice only as is required by the law of the foreign country, and not such as is required by the law of England. That question does not arise in the present case." See, also, Bradlaugh v. De Riii, L. R. 5 C. P. 473, and compare Story's Confl. Laws, note (a), p. 439. At what time the principal debtor is in default is, however, to be settled by the law regulating his liability. 16 Am. Law Review, 509. * Meade v. Beale, Taney, 339; Swift v. Tyson, 16 Peters, l ; Carpenter z/. Insurance Co., Id. 495 ; Austin v. Miller, 5 McLean, 1 53 ; Watson v. Tarp- ley, 18 How. 517; Goodman v. Simonds, 20 How. 343; Richardson v. God- dard, 23 How. 28 ; Pine Grove v. Talcott, 19 Wall. 666; Gates v. National Bank, 100 U. S. 239. See Rorer on Inter-State Law as to how far the Federal courts will follow State decisions, pp. 84, 85, 86. 2 16 Peters, 495. 60 WHAT LAW GOVERNS CONSTRUCTION. [§ 36. contrary, we are bound to interpret this instrument . according to our own opinion of its true intent and objects, aided by all the lights which can be obtained from external sources whatsoever ; and if the result to which we have aimed differs from these learned courts, we may regret it, but it cannot be permitted to alter our judgment." In a recent case, also, Mr. Justice Clifford comments at length upon the necessity and wisdom of a broad commercial jurisprudence, and says : " Commercial law is a system of jurisprudence acknowledged by all maritime nations, and upon no subject is it of more importance that there should be, as far as practicable, uniformity of decision throughout the world." ^ § 36. Di;fficulties of perfecting a system of commer- cial law in the United States. — The labors of the Supreme Court to thus establish and extend a system of commer- cial law which shall control, at least throughout this country, have met with but partial success, owing to the fact that their decisions upon such questions are not binding upon the State courts.^ The anomalous result is therefore produced that the interpretation of a contract depends, in some instances, upon the fact whether it is brought for its construction before a Federal or a State court. Doubtless such a position of affairs creates much > Railroad Co. v. National Bank, 102 U. S. 14. In the same opinion it is also said : " Judicial yiews of a corresponding character were expressed by Lord Mansfield, as Chief Justice of the King's Bench, nearly a century earlier, when he said that the maritime law is not the law of a particular country but the general law of nations." (Luke v. Lyde, 2 Burr. 882.) And again: " Commercial law," says Bouvier, " is a phrase employed to denote the branch of the law which relates to the rights of property and the relations of persons engaged in commerce. Persons engaged in commercial adventures, wherever they may have their domicile, have business relations throughout the civilized world, from which it results that commercial law is less local and more inter- national than any other system of law, except the law of nations." 2 Consult Rorer on Inter-State Law, pp. 7, lo, 11. § 37'^ RULES IN SPECIAL CASES. 6 1 uncertainty in the law, and throws discredit upon the idea that its rules and principles are founded in reason ; and it is said by the Supreme Court that " for the sake of harmony, and to avoid confusion, the Federal courts will ' lean towards an agreement of views with the State courts if the question seems to them balanced with doubt. Acting on these principles, founded as they are on comity and good sense, the courts of the United States, without sacrificing their own dignity as independent tribunals, endeavor to avoid, and in most cases do avoid, any unseemly conflict with the well-considered decisions of the State courts."^ Notwithstanding, however, the desire of the courts to avoid conflict, it is impossible to do so, and there seems no escape from the awkwardness of double interpretation of commercial contracts, involv- ing questions as to the right and liability of persons located in different States, unless the State courts will yield their preferences and opinions, for the sake of uni- formity of law, to the decisions of the United States Supreme Court, when made after a full discussion of the points of law involved. Indeed this remedy would seem to be but partial, for, if the statute law of a State attaches to a contract, even the Supreme Court will construe the agreement pursuant to its provisions.^ § 3 7. Instances of conflict between Federal and State courts, illustrated by recent cases. — Two recent cases in the Supreme Court illustrate the nature and the import- ance of the questions in regard to which conflicts arise. In the later of these the question under discussion was : What is the contract of a carrier accepting goods marked ^ Burgess v. Seligman, 107 U. S. 20. 2 Infra, § 38. Although, in some instances, the court will not allow the law- merchant to be controlled by State statutes. Watson v. Tarpley, 18 How. 517- 62 WHAT LAW GOVERNS CONSTRUCTION. [§ 37. for a place beyond its own line ? The contract was made in Illinois, and decisions of the courts of that State were cited to the Supreme Court, holding that the mere ac- ceptance by the carrier of goods so marked created a liability for their safe carriage from the place of their reception to that of their destination. The Supreme Court, however, refusing to follow these authorities, left the question to the jury, whether there was a through contract, taking into consideration all the facts of the case, and said : " What constitutes a contract of carriage is not a question of local law, upon which the decision of a State court must control. It is a matter of general law, upon which this court will exercise its own judgment. . . . If we are to follow on this subject the ruling of the State courts, we should be obliged to give a different interpre- tation to the same act — the reception of goods marked for a place beyond the road of the company — in different States, holding it to imply one thing in Illinois and an- other in Massachusetts." ^ In the other case above referred to the question came before the Supreme Court, whether it would — the trans- fer of a note having been made in New York — follow^ the decisions of that State, holding that a note given in payment of an antecedent debt is, in the hands of the one so taking it, subject to the equities existing between the original parties ; and that court decided that it would not.^ In his opinion in the case Mr. Justice Harlan says : " The decisions of the New York court, which we are asked to follow in determining the rights of parties under a contract there made, are not in exposition of any legis- » Myrick v. Michigan Central R. R. Co., 107 U. S. 102. 2 Railroad Company v. National Bank, 102 U. S. 14. Miller and Field, JJ., dissent. § 37-] RULES IN SPECIAL CASES. 63 lative enactment of that State. They express the opin- ion of that court, not as to the rights of parties under any law local to that State, but as to their rights under the general commercial law existing throughout the Union, except where it may have been modified or changed by some local statute. It is a law not peculiar to one State or dependent upon local authority, but one arising out of the usages of the commercial world." Mr. Justice Clifford, in the same case, makes a strong plea for uniform law upon questions of the character there presented, and concludes his concurring opinion as follows : " Uniformity of decision in such cases is highly desi- rable, and these observations are sufficient to show that nothing is wanting to accomplish that great object but the concurrence of a few more of the State courts, of which none are more to be desired than the courts of New York or Pennsylvania. It is hoped they will con- cur at no distant day." ^ ^ The pertinacity with which the State courts adhere to their own rulings upon points of general commercial law is well illustrated by a recent Connec- ticut case, where it is said legislative action only could change the rule of that State, that an indorsement of a note in blank does not render the indorser directly liable to the payee, unless proceedings have been taken against the maker, ^tna Nat. Bank v. Charter Oak Life Ins. Co., 50 Conn. 167. See, also, cases cited, note i, p. 59. So, in Mynard v. Syracuse, &c., R. R. Co., 71 N. Y. 180, the Court of Appeals refused to depart from its own rule and follow a recent decision of the Supreme Court of the United States upon a question of commercial law saying, by Church, Ch. J.: " In the recent case of Lockwood v. Railroad Co., 17 Wall. 357, the Supreme Court of the United States decided that a common carrier cannot lawfully stipulate for exemption from responsibility for the neg- ligence of himself or his servants. If we felt at liberty to review the question, the reasoning of Justice Bradley in that case would be entitled to serious con- sideration ; but the right thus to stipulate has been so repeatedly affirmed by this court that the question cannot with propriety be regarded as an open one in this State. . . . Theremedy is with the legislature, if remedy is needed." See, also, First Nat. Bank v. Lock-stitch Fence Co., 24 Fed. Rep. 221 (May, 1885). 64 WHAT LAW GOVERNS CONSTRUCTION. [§ 38. § 38. United States Supreme Court rule adopted in New York. — In a recent case^ the Court of Appeals, re- versing a judgment of the General Term of the Superi'or Court, of the City of New York has adopted the rule applied by the federal courts to the construction of com- mercial contracts, and has refused to follow the decisions of the courts of other States where they were merely declaratory of the common law upon commercial ques- tions, and were clearly at variance with the generally ac- cepted common-law doctrine upon the point involved. The importance of the decision will justify a brief state- ment showing how the question was presented. The action was brought against common carriers, to recover damages for the loss of certain goods which were shipped at New York, to be transported by rail to Boston, and there delivered to the consignees — the plaint- iffs. The goods arrived at Boston, and were called for by the consignees on the day of their arrival, but delivery was refused until the next day, because it was not con- venient for the carriers to make delivery at the time it was requested. The goods were, therefore, stored in the carrier's warehouse, and were destroyed by fire before the consignees had another opportunity to demand them. These facts, which seem sufficient to show the bearing of the case upon the question under consideration, with others of less importance, were presented to the court as a case agreed upon. With them were also presented two decisions of the Supreme Court of Massachusetts, show- ing that for more than twenty-one years, upon the state of facts admitted, the law of that commonwealth had been "that the proprietors of a railroad, who transport goods for hire, and deposit them in a warehouse until the owner or consignee has a reasonable time to take them 1 Faulkner v. Hart, 82 N. Y. 413; s. C. 37 Am. R. 574. § 38.] RULES IN SPECIAL CASES. 65 away, are not liable as common carriers for their loss by fire, without negligence or default on their part ; that the railroad corporation ceases to be a common carrier, and becomes a warehouseman, as a matter of law* when it has completed the duty of transportation, and has assumed the position of a warehouseman, as a matter of fact, and according to the usages and necessities of the business in which it is engaged." '^ The decisions of the Massachusetts court did not, however, rest upon a statute of that State, or upon the ground that local custom had entered into the contracts of the parties, but appeared to be simply statements of the common law applicable to each case. The New York Court of Appeals, having previously decided that the law of the place where baggage was to be delivered controlled the construction of the contract as to the delivery,* made no attempt in the case presented to evade that rule ; but, inasmuch as the established rule of the common law upon the facts before the court in this case made the defendants liable as carriers, and not as ware- housemen merely, the court held that another question was presented for its decision, namely : Shall the Massa- chusetts decisions be accepted as conclusive statements of the common law, and as the law which the parties to the contract made a part of their agreement ? Discussing this question, the court says : " So, also, if the Massachu- setts cases were decisive as to the law upon the question considered, it might well be urged that the plaintiffs en- tered into the contract having them in view. But, as we have seen, they are not conclusive, and the real point is, what is the common-law rule .? And the courts of Mas- sachusetts having decided one way, and the courts of the 1 Norway Plains Co. v. B. & M. R. R. Co. 67 Mass. 263; Rice v. Hart> 118 Mass. 201. « Curtis V. Del. Lack. & West. R. R. Co., 74 N. Y. 121 ; supra, § 27. 5 66 WHAT LAW GOVERNS CONSTRUCTION. [§ 39- United States and of this State, as well as those of other States and countries, differently, it is open, in a case aris- ing in the courts of this State, to determine the true rule- It is the same subject, and involves the precise point, whether the common law shall prevail, and whether the decision of the State court is erroneous. "The question is not as to the application of a local statute or a local law, but one of a comprehensive char- acter, affecting a general rule applicable to all contracts of the nature of the one now involved." The court then takes the position that it will not follow decisions of State courts to the extent of sacrificing " truth, justice,, and law," and that, " in reference to a law not of a single State, but affecting the commerce of the world, the deci- sions of the courts of such States are not obligatory upon, the courts of other States or countries." § 39. Other State authorities in support of rule. — There is authority for this rule in the courts of Massa- chusetts,^ and it has been acted upon in New Hampshire.^ The Supreme Court of Iowa, also, after a most careful examination of the question, held that it was not estopped from considering a question of the common law, because a court of the State under the laws of which the contract was to be construed had already decided the point.® * Chase v. Alliance Ins. Co., 91 Mass. 311. In which case it is intimated that decisions in Scotland would not, when merely declaratory of the general commercial law, be binding upon the courts of Massachusetts, although the contract was itself Scotch, and said : '' The question is not one of local juris- prudence, but of the construction and effect of a commercial contract, in which the rule adopted by any local tribunal, if it seems to be erroneous upon general principles, must be confined to the jurisdiction within which it was made." Citing Wood v. Corl, 45 Mass. 203 ; Cribbs -v. Adams, 79 Mass. 597. 2 Moses V. B. & M. R R. Co., 32 N. H. 523. » The case establishing this doctrine is Franklin v. Twogood (1868), 25 Iowa, 521, an authority apparently not considered by the New York Court of Appeals in Faulkner v. Hart, supra, % 38, but well worth study. The at- tempt was made in this case to apply the rule of the Wisconsin courts, that § 39-] RULES IN SPECIAL CASES. 67 Where, however, the decision of a State court is present- ed, which contains an exposition of the statute law of a transfer of negotiable paper by a separate writing, operates in the same manner as an indorsement upon the instrument itself, and it was contended that the law of that State should be followed by the courts of Iowa in con- struing a contract of this character when it was to be governed by the Wisconsin law. Upon this question, Wright, J., in an exhaustive opinion, says : " It will be observed that it is not claimed that the rule of com- mercial law, or law merchant, was changed by any statute of Wisconsin ; nor did plaintiff propose to show that there was any local custom obtaining in Racine, and that the contract of indorsement was made with reference there- to. But the substance of the whole offer was to show that the Supreme Court of Wisconsin had given a different construction to these contracts from that given by us on the former appeal ; that this, therefore, established the lex loci, and must govern. " We concede the rule, that the law of the place where a contract is made will ordinarily govern its interpretation and the rights of the parties thereunder, and that this appHes to indorsements as to other contracts. But when it is a law common to all the States — or, rather, when it is a question arising under the common law or law merchant — which court is to determine and declare what the lex loci is ? Is it competent to show by the decisions of the highest court where the contract was made that the law has been declared as plaintiff claims, and thus conclude the question in this State? If so, then the exposition of the law by the courts of a sister State — not of a statute, but of a law which obtains here and there alike — becomes not a light merely to us, but absolute authority, excluding all investigation and commanding our implicit obedience. Than this, few if any positions could be more dangerous or unten- able. . . . Now, the rule is, that a construction given to the statutes or constitution of a State by its supreme judicial tribunal will be followed by the federal courts and those of other States. Not so, however, when we come to a question under the general or common law. Adjudications upon such sub- jects are aids or lights, entitled to just so much weight as their reasonableness entitles them to, but possessing nothing of the conclusive force of the former. . . . Adopt any other theory and we shall soon cease to have a common law ; the law merchant will be without uniformity ; indeed there will be no such thing. Contracts will depend for their interpretation, all over the Union, upon the particular views of the judges upon the bench in the State at the time they were made, unless, indeed, it might be that the exposition of the law as existing at the time of the contract, shall be accepted as entering into it, and to govern all subsequent judges; and all our well-established ideas of what is meant by the law of the forum and of the place of contract would be set at defiance. The inquiry in such cases is, what is the law ? not, what are the facts .' " If we inquire what are the statutes of a sister State, we first settle a fact ; 68 WHAT LAW GOVERNS CONSTRUCTION. [§ 39, the State where it is rendered, it will be ordinarily ac- cepted as conclusive, for the courts of a particular State are looked upon as the best interpreters of its statute law.^ find out what they are and give them a construction, unless this has already teen done by their courts, and then, even, we give a construction by following theirs. " In settling what the common law is, however, we have nothing to do with the fact or the words of the legislative power ; but looking to decisions, text ■writers, and the sages of the law, we declare the rule, not as existing here, but in all the States, except as modified by statute. If this is not so, then the judges make the law — their rulings enter into and become a part of all con- tracts made in their States, while they remain undisturbed — and thus we would introduce a doctrine which we feel bound to say has neither reason nor prece- dent for its support." See, also. National Bank v. Green, 33 Iowa, 140. See, contra, The Mil- waukee & St. P. R'y Co. V. Smith, 74 111. 197, where the court was called upon to declare the common law of Wisconsin as to a contract of carriage, and said, in its opinion : " There is no statute of Wisconsin upon the subject according to the testimony. It depends, then, upon the unwritten or common law of Wisconsin. . . . Now, the question is not what is the common law of England or of this State, but what is the common law, in this respect, of Wisconsin } The courts of that State are free to act upon their own notions of public convenience as well as the courts here. A rule which this court deems to be promotive of public convenience, the courts of Wisconsin might hold to be otherwise. . . . Although this court has held the law to be dif- ferent in this State, we would not be so wedded to our own decision as to im- pose it upon the citizens of another State as the law of that State, and enforce upon them the performance of a contract they had no reason to suppose that they had ever made, and which the best legal advice obtainable in the State where the transaction was had would have pronounced they had never en- tered into." > Faulkner ?». Hart, 82 N. Y. 413 ; Fairfield v. County of Gallatin, 100 U. S. 47 ; Flash v. Conn, 109 U. S. 371. CHAPTER V. THE ADMISSIBILITY AND EFFECT OF PAROL EVIDENCE AS AN AID IN CONSTRUCTION. § 40. General sphere of such evidence. 41. Importance of considering rules governing such evidence. 42. Statement and interpretation of general rule of law. 43. Reason for the rule. — Written evidence preferred to oral. 44. Why written evidence is preferred. 45. Object of the rule excluding parol. 46. Lord Bacon's test for determining admissibility. 47. Not adopted here. 48. Principles more important than arbitrary rules. 49. Distinction not of practical value, for term patent ambiguity indefinite. 50. Term requires special interpretation. 51. When patent ambiguity exists. 52. Rule as to latent ambiguities brings no aid to present discussion. 53. Subdivision of subject. § 40. General sphere of such evidence. — Having dis- cussed the purpose of construction, the functions of the judge and jury in ascertaining the meaning of a con- tract and the law of place affecting its interpretation, we come now to a direct consideration of the manner in which the law discovers the intention of the contract- ing parties, from the language they have used. While the words employed are first brought to the attention of. the court, the will of the parties cannot ordinarily be obtained from them alone ; and the court will not determine the meaning of a mercantile contract until it is possessed of all the data which may aid it in the undertaking, and until it can be assured of the sense in which the words of the contract are used by those who have employed them. The primary resort, then, in the search for the intent, is to extrinsic evidence. yo PAROL EVIDENCE IN CONSTRUCTION. [§ 41- The facts which such evidence brings before the court are as important to a right understanding of the contract as are the words of the writing, and must be considered before any attempt can be made to finally construe the contract. Especially with reference to commercial and trade contracts is it necessary to view these facts ; for without them, in a large proportion of cases, it is im- possible to understand even the expressed terms of such contracts ; and in many of those cases where the words themselves seem clear and free from doubt, it is impossible to apply them to the facts in regard to which the parties have contracted, without the aid of oral evidence. § 41. Importance of considering rules governing such evidence. — Apology or explanation has sometimes been made, for introducing a discussion of the subject of the admissibility of parol evidence to affect a written con- tract, when writers have been treating of the construc- tion of contracts.^ Indeed, in some instances, the sub- ject of interpretation or construction is presented as apparently distinct from the principles which admit or prohibit the use of oral testimony as an aid to under- standing contracts.* In reference to the contracts here considered, how- ever, the propriety and necessity of discussing these principles seems unquestionable, and, not only so, but it is believed to be of the utmost importance to bring them fully and at once to the attention of the reader ; for, as has been already stated, these contracts are usually unintelligible without such evidence. Indeed a learned writer has illustrated most effectively the de- * Story on Contracts, § 819; Chitty on Contracts, vol. I, p. 141. 2 Powell on Contracts, Interpretation, p. 223 ; Smith on Contracts, Con- struction, p. 483 ; Metcalf on Contracts, Construction, p. 272. ^,41-] PAROL EVIDENCE IN CONSTRUCTION. Jl iPendence of men upon explanatory evidence to make clear a simple direction in ordinary life/ and no expres- sion occurs more frequently in the books than that in order to understand any contract it is not only proper but necessary to occupy as nearly as may be, the position of the contracting parties.^ When, moreover. * See Lieber's Hermeneutics, pp. i6, 17. There it is said, inter alia, p. i6 : •■ ' Were we desirous, therefore, of avoiding- every possible doubt as to what we say, even in the most common concerns of our daily life, even if we pro- -nounce so simple a sentence as ' g^ve me some bread ' endless explanations :and specifications would be necessary; but, in far the greater number of cases, the difficulties would only increase, since one specification would re- quire another. To be brief, the very nature and essence of human language, being, as we have seen, not a direct communion of minds, but a communion lay intermediate signs only, renders a total exclusion of every imaginable mis- -apprehension in most cases absolutely impossible." See, also. Broom's Common Law, pp. 508, 509. * Thus in a recent case (Reed v. Insurance Co. 95 U. S. 23) the United States Supreme Court says : " Although a written agreement cannot be ■varied (by addition or subtraction) by proof of the circumstances out of which it grew, and which surrounded its adoption, yet such circumstances are con- ;stantly resorted to for the purpose of ascertaining the subject-matter, and the standpoint of the parties in relation thereto. Without some knowledge de- rived from such evidence, it would be impossible to comprehend the meaning of an instrument, or the effect to be given to the words of which it is com- posed. ' ' The preliminary knowledge is as indispensable as that of the language in which the instrument is written. A reference to the actual condition of things at the time, as they appeared to the parties themselves, is often neces- .«ary to prevent the court, in construing their language, from falling into mis- takes and even absurdities." The same court said, in Nash v. Towne, 5 Wall. 689: " Courts, in con- ■struction of contracts, look to the language employed, the subject-matter, and the surrounding circumstances. They are never shut out from the same light which the parties enjoyed when the contract was executed, and, in that view, they are entitled to place themselves in the same situation as the parties who made the contract, so as to view the circumstances as they viewed them, and ^o to judge of the correct application of the language to the things described." Lord Blackburn, in River Wear Com. v. Adamson, L. R. 2 App. Ca. 763, said : " In all cases the object is, to see what is the intention expressed by the words used. But from the interpretation of language, it is impossible to know what that intention is, without inquiring further, and seeing what the (Circumstances were with reference to which the words were used, and what 72 PAROL EVIDENCE IN CONSTRUCTION. [§ 42. it is realized that the contracts which are not clear and precise are the ones brought before the courts for construction,^ it appears that, in discussing the principles controlling the admissibility of parol evi- dence to aid in the construction of commercial and trade contracts, we are treating of that branch of our subject which affords direct means of ascertaining the actual meaning of a vague contract ; we are consider- ing the most satisfactory of all means of discovering the intention of the parties, for these are not rules founded on the general motives and conduct of men from which we may endeavor to reach their probable intentions, but principles, from the application of which we gain sucb intelligence and aid as enable us to understand what the parties in the specific case presented have agreed upon. This branch of the law is, therefore, not only a phase of construction, but so important a part of that subject that no excuse is offered for presenting it before, what are usually called, the "rules of construction" are con- sidered. And we shall now discuss the general rule of law governing the exclusion of parol testimony ; the limits within which the rule now operates ; and aim to» specify the various ways in which such evidence may assist in the search for the intent of the contract § 42. Statement and interpretation of general rule of law. — The best and certainly the broadest way in which the general rule of law referred to in the preceding sec- tion may now be stated is : parol evidence is inadmis- was the object appearing from those circumstances which the persons using- them had in view." * " Indeed, the very idea and purpose of construction imply a previous- uncertainty as to the meaning of the contract ; for where this is clear and unambiguous, there is no room for construction, and nothing for constructioni to do." Parsons on Contracts, vol. II, p. 500. § 42.] PAROL EVIDENCE IN CONSTRUCTION, 73 SIBLE TO CONTRADICT OR VARY THE TERMS OF A WRITTEN CONTRACT.^ But this rule, even as thus stated, needs explanation and qualification before it can be laid down as a universal guide upon this subject. Thus it is said by one writing with reference' to the construction of policies of insur- ance:** "It is a general rule, that parol evidence can never be received to contradict or materially vary the terms of a written agreement ; and the rule, properly ex- plained, is wise and salutary, and universally true ; but if its terms are understood, as too frequently they have been, in their literal and broadest sense, they plainly ex- clude the admission of parol evidence in most of the cases in which, in respect to a contract of insurance, it is usually received. " The effect of the evidence in all cases, in which the terms of the policy, without its aid, may be sensibly interpreted, is to vary, and vary materially, the contract of the parties in its legal construction. The general ob- ject of its introduction is to compel or justify a construc- tion that otherwise could not have been adopted, so as to enable the assured to recover for a loss that the policy in its ordinary interpretation would not have covered. " The true meaning of the rule, excluding parol evi- dence, is, that such evidence shall never be received ta show that the intention of the parties was directly op- posite to that which their language expresses, or substan- tially different from any meaning that the words they * That is to say, the language of the contract cannot be contradicted or varied. Greenleaf on Ev. § 277. So the United States Supreme Court says : ' ' The rule which excludes parol testimony to contract or vary a written instru- ment has reference to the language used by the parties. That cannot be qualified or varied from its natural import, but must speak for itself." Brick, V. Brick, 98 U. S. 514. See, infra, Contradictory Parol Evidence. « Duer on Insurance, vol. I, p. 176. 74' PAROL EVIDENCE IN CONSTRUCTION. f§ 42. have used upon any construction will admit or convey." This language applies with full force to all contracts here discussed, and many instances might be brought for- ward to show that parol evidence varies the apparent meaning of a written contract by bringing out the sur- rounding circumstances, by showing words to have been used in some special sense, by annexing customary inci- dents and by adding supplementary matter. As we shall see, however, other terms can never be substituted for those which the parties have used, and parol evidence can, under no circumstances, contradict that language of a written contract .which expresses the m-utual will of the parties. These rules between the parties to a contract, are always true, for " in any inquiry in which the court has not got before it some ascertained paper beyond question binding and of full effect"^ a rule excluding parol evidence is out of place. If such a paper is before it there can be no question as to fraud, mistake, illegality, or subsequent modification of the contract, and the sole inquiry is : What does the language of the contract mean ? This being the question, there are many ways, as we shall presently see, in which parol may assist us in ascertaining this meaning ; but there is no way in which it can be utilized so as to irreconcilably contradict the written language. Whatever explanatory facts it offers, whatever cus- toms or collateral terms it imposes, must be such as are consistent with the language of the contract. " All lati- tude of construction must submit to this restriction, namely, that the words and language of the instrument will bear the sense sought to be put upon them." * * Guardhouse v. Blackburn, L. R. i P. & D. 109; Wald's Pollock on Con., p. 440. 2 Chitty on Contracts, p. 74. "The general rules of evidence are the same at law as in equity, and it is no more competent to vary the terms of § 43'] PAROL EVIDENCE IN CONSTRUCTION. 75 § 43. Reason for the rule.- — Written evidence pre- ferred to oral. — It has been said : " There is an import- ant distinction between the exclusion of oral evidence, because of the Statute of Frauds and its exclusion at common law ; the reason of the latter rule is that a writing entered into by the contracting parties must be presumed to contain the entire agreement ; and all oral stipulations, though proved to be true, are supposed to have been waived, and to be merged in the writing. Under the Statute of Frauds, on the contrary, the oral evidence is rejected because it is the policy of that law to regard it as untrustworthy per se. The difference be- tween the two rules is best shown by the case of a written contract, on its face manifestly incomplete ; here, if the subject-matter is within the Statute of Frauds, no oral evidence can be received to supply the defects of the writing ; whereas the common-law rule is no bar to such admission." ^ It may be added, however, that the reason why the common law presumes the writing to contain the con- tract, and the Statute of Frauds regards oral evidence as untrustworthy, is because such evidence, both by common a written instrument by parol evidence in equitable action than in those strictly legal, unless in exceptional cases for the purpose of maintaining an action or defense under some recognized head of equitable jurisdiction." Hubbard v. Gurney, 64 N. Y. 457. See, infra. Contradictory Parol Evidence. * Reed on the Statute of Frauds, vol. I, § 12. There does not seem to be much connection betvsfeen this distinction and our subject. So far as the admissibility of parol evidence to aid the interpretation of a contract is concerned, there is apparently no difference between the rules applying when the contract to be interpreted is one within the Statute of Frauds and those governing when it is without that statute. The statute left the rule excluding parol as it found it (Williams v. Robinson, 73 Me. 195 ; The Salm. Falls Mfg. Co. V. Goddard, 14 How. U. S. 446; McConnell v. Brillhart, \^ III- 353)- There is no contract to be construed unless the statute has been complied with (Reed on Stat, of Frauds, vol. I, § 321, n. (d.), p. 503), and, where it has been obeyed, the contract should be construed pursuant to common-law principles. Supra, Supplementary Parol Evidence. 76 PAROL EVIDENCE IN CONSTRUCTION. [§ 43- sense and the law, is recognized as inferior to written evi- dence, inasmuch as by writings only may the thoughts and intentions of men be recorded in an enduring and in- telligible manner. When, therefore, a written contract is presented which expresses the will of the parties, by cer- tain known terms, about the existence of which, fraud and mistake aside, there can be no question, it would be most unreasonable to reject these terms as evidencing the contract, and to trust to the " uncertain testimony of slippery memory " ^ to supply its provisions. Starkie has said:^ "To admit oral evidence as a substitute for instruments, to which, by reason of their superior authority and permanent qualities, an exclusive authority is given by the parties, would be to substitute the inferior for the superior degree of evidence ; conjec- ture for fact, and presumption for the highest degree of legal authority ; loose recollection and uncertainty of memory for the most sure and faithful memorials which human ingenuity can devise or the law adopt — to intro- duce a dangerous laxity and uncertainty as to all titles to property, which, instead of depending on certain fixed and unalterable memorials, would thus be made to depend • Lord Coke in The Countess of Rutland's Case, 5 Rep. 26 a. * Starkie on Evidence, p. 651. Addison also says (Addison on Contracts, vol. I, p. 198): "Most systems of jurisprudence have manifested a decided preference for written memorials over verbal representations founded on the doubtful or imperfect recollection of witnesses. The French law requires a very large class of contracts to be put into writing, ' in consequence,' it ob- serves, 'of the corruption of manners and subornation of witnesses,' and formally prohibits the admission of oral evidence against the contents of a written document. It is a fundamental rule of our own common law that oral evidence shall not be given to add to, subtract from, or alter or varj' any description of written contract : ' quoties in verbis nulla est ambiguitas, nulla expositio contra verba fienda est.' " This general rule or principle of law has been established on the ground that writing stands higher in the scale of evidence than oral testimony, and that the stronger evidence ought not to be controlled or altered by the weaker." Consult Pothier on Obligations (750), Eng. ed. p. 500 ; Davis v. Symonds, i Cox, 404. § 44-] PAROL EVIDENCE IN CONSTRUCTION. 7/ on the frail memories of witnesses, and be perpetually liable to be impeached by fraudulent and corrupt prac- . tices." § 44. Why written evidence is preferred. — Writing is preferred by the law, because it requires deliberation and thought in its preparation ; and the more formal the document, the stronger is the presumption that the par- ties have embraced therein the entire agreement. Thus, if there is drawn and executed a formal contract which follows a correspondence, the letters are merged in the contract,^ because that is the more deliberate statement of the intentions of the parties ; but, if no contract follows the correspondence, " then the letters themselves will be taken as the contract, and will exclude evidence of a less considerate character." So Pollock says " that men are taken to mean what they have chosen to say deliberately and in a permanent form, rather than what they may have said in hasty or less considered discourse. Hence the general rule that evidence of an oral agreement is not admissible to con- tradict the terms of a written document."^ ' Parsons on Contracts, vol. II, p. 548 ; infra, Contradictory Parol Evidence. 8 Wald's Pollock on Contracts, p. 438. " Now, I think it is quite fixed — and no more wholesome or salutary rule relative to written contracts can be devised — that where parties agree to em- body, and do actually embody, their contract in a formal written deed, then, in determining what the contract really was and really meant, a court must look to the formal deed, and to that deed alone. This is only carrying out the will of the parties. The only meaning of adjusting a formal contract is that the formal contract shall supersede all loose and preliminary negotiations— that there shall be no room for misunderstandings which may often arise, and which do constantly arise, in the course of long, and, it may be, desultory conversations, or, in the course of correspondence or negotiations, during which the parties are often widely at issue as to what they will insist on and what they will concede. The very purpose of a formal contract is to put an end to the disputes which would inevitably arise if the matter were left upon verbal negotiations or upon mixed communings, partly consisting of letters and partly of conversations. The written contract is that which is to be ap- 78 PAROL EVIDENCE IN CONSTRUCTION. [§45- § 45. Object of the rule excluding parol. — The object of the rule, now under consideration, clearly is to effectu- ate the expressed intentions of men. " The law will not make, nor permit to be made, for parties a contract other than that which they have made for themselves."^ It regards the written words as the deliberate expression of the will of the contracting par- ties, so far as they directly cover the subject-matter therein contained, and constitutes the writing as the starting-point in the effort to discover the intent, as well as the guide, throughout the entire search. The real thought of the parties must, however, be ascertained. The words themselves, therefore, must be understood in the sense in which they were used, the facts surround- ing the execution of the contract must be considered, the situation and circumstances of the parties, as well as their knowledge or ignorance of certain facts, and their general object in contracting must be regarded ; general or local customs may have entered into the contract, and should receive their proper force, and so long as there is any uncertainty as to the meaning of the language, to re- move all ambiguities which do not impenetrably conceal the intention of the parties, resort must be had to parol evidence. " To reject the evidence is to annul the con- tract by converting a venial and easily removable uncer- tainty into a fatal vice." Therefore wherever parol evi- dence simply tends to explain the meaning of the parties, as expressed in the language of the contract, it is proper and necessary to look to it, for it assists in the pealed to by both parties, howeyer different it may be from their previous de- mands or stipulations, whether contained in letters or in verbal conversations." Lord Gifford, quoted by Lord Blackburn in Inglis v. Battery, L. R. 3 App. Cas. 552, 577. 1 Duer on Ins., vol. I, p. 169. § 46.] PAROL EVIDENCE IN CONSTRUCTION. J'Q. accomplishment of the object of the rule, as above stated. So, again, if the parties to a contract have not ex- pressed their complete agreement in writing, the object of the rule would be wholly sacrificed if the law should construe the part of their agreement which they have written to be the entire contract. It is clear, therefore, that while the purpose of this general rule excluding parol evidence requires full eflFect to be given to the writing, and that nothing oral shall contradict it, it does not exclude evidence which merely adds to the writing suppletory or collateral matter consistent with the terms and legal import of the written contract. § 46. Lord BacorCs test for determining admissibility^ — Lord Bacon says : " There be two sorts of ambiguities of words ; the one is ambiguitas patens, and the other, latens. Patens is that which appears to be ambiguous upon the deed or instrument ; latens is that which seem- eth certain and without ambiguity, for anything that appeareth upon the deed or instrument ; but there is some collateral matter out of the deed that breedeth the ambiguity. Ambiguitas patens is never holpen by aver- ment ; and the reason is, because the law will not couple and mingle matter of specialty, which is of the higher account, with matter of averment, which is of inferior account in law ; for that were to make all deeds hollow and subject to averments and so, in effect, that to pass without deed, which the law appointeth shall not pass but by deed. Therefore, if a man give land to J. D. and J. S. et hceredibus, and do not limit to whether of their heirs, it shall not be supplied by averment to whether of them the intention was, the inheritance should be limited. . . . But if it be ambiguitas latens, then other- 8o PAROL EVIDENCE IN CONSTRUCTION. [§§ 47, 48. wise it is ; as if I grant my manor of S. to J. F. and his heirs, here appeareth no ambiguity at all. But if the truth be that I have the manors both of South S. and North S., this ambiguity is matter in fact ; and there- fore it shall be holpen by averment, whether of them it was that the party intended should pass." ^ § 47. Not adopted here. — This ancient distinction be- tween latent and patent ambiguities, which may fairly be said to be responsible for much of the difficulty and abstruseness surrounding this branch of the law,^ is still frequently referred to by the judges. It has, however, been wholly discarded in this vol- ume as a basis for the discussion of the questions which arise in reference to the admissibility of parol evidence to aid in the construction of a contract. That such a course should not be pursued arbitrarily is apparent,' and it therefore becomes necessary to show the connec- tion of this distinction with our subject, and that the position here taken in regard to it finds support in reason and authority. § 48. Principles more iTnportant than arbitrary rules. — The first consideration which has led to the arrange- ment of the present discussion as to parol evidence, without regard to this distinction, is the belief that principles are more worthy of discussion than arbitrary rules. To attempt a full review of the numerous and dis- cordant authorities upon this subject of latent and patent « Bacon's Maxims, Reg. 23 [25] ; Greenleaf on Ev., § 297. 2 " Perhaps the most difficult branch of the law oi evidence is that which regulates the admissibility of extrinsic parol testimony to affect written instruments^'' Taylor on Evidence, § 1128. ' It has, indeed, been said that this distinction "is the recognized basis of the law governing this subject." Best on Evidence, p. 417. § 48.] PAROL EVIDENCE IN CONSTRUCTION. 8 1 ambiguities, referring as they do in the most part to wills, would, it is believed, prove of little value, and lead to the discovery of no principle which would sustain the exactness of the rules laid down by Lord Bacon. It may, indeed, be fairly doubted if too much regard has not already been paid to the letter of these rules, couched as they are in general terms,^ too great an endeavor made to extend them to all writings, and too little effort ex- pended to discover the force and extent of the princi- ples which underlie them. Parsons has said : " The rules of Lord Bacon rest entirely upon the principle that the law will not make, nor permit to be made, for parties, a contract other than that which they have made for themselves. They can have no other basis than this ; and so far as they carry this principle into effect they are good rules and no further."^ This being the principle upon which they are grounded, attention is at once turned to it. And as the effort in construction is to ascertain the meaning of the contract which has been made, it is perceived that the search for this meaning must end when it becomes certain that to go further will either violate the terms of the writing or cause a contract which should have been written to be made by parol. It is believed that, by a direct examination of the scope of these simple principles, we are freed from the restraint of this technical distinction, and reach the reason from which alone it derives force. Moreover, it can hardly be matter of dispute that the more the law is freed from arbitrary rules, and rests upon principles of reason and justice, the more ' Kent's Com., vol. II, p. 556, note d. 2 Parsons on Contracts, vol. II, p. 561. 82 PAROL EVIDENCE IN CONSTRUCTION. [§ 49. it commends itself to the common sense and respect of mankind. § 49, Distinction not of practical value, for term J)atent ambiguity indefinite. — Again, it may be said, that these rules give no practical aid in determining when parol evidence may assist in the construction of a contract, and when it may not. The rule excluding parol evidence in cases of "patent ambiguity," appar- ently means that where matter causing uncertainty ap- pears upon the face of the instrument, no parol evidence can explain it. Thus, in Phillips on Evidence, it is said : " Lord Bacon's comment upon patent ambiguities has caused some embarrassment, both among writers and readers. He seems to have held, that no instance of ambiguity, apparent in the instrument, could be holpen by averment, that is, by extrinsic evidence. But this certainly is not law at the present time." This general, broad sense of the term patent ambi- guity, is that in which many writers and judges have understood Lord Bacon to have used it, and it has been said •?■ " Its frequent use in this way, in connection with the general proposition, that a patent ambiguity admits of no explanation by matters extrinsic, has occasioned no inconsiderable degree of confusion, and led Mr. Jus- tice Story to think that there must be an intermediate class of ambiguities, comprising those instances where the words are equivocal, but yet admit of precise and definite application by reverting to the circumstances under which the instrument was made.^ The ambiguity (in such cases) is not latent in any proper sense ; it arises from the known infirmity of language ; it is inherent in * Cowen and Hill and Edward's notes to Phills. on Ey., vol. II, note 515, p. 747- 2 Peisch V. Dickson, i Mason, lo. § 50-] PAROL EVIDENCE IN CONSTRUCTION. 83 the instrument ; appearing on its face, and evincing a difficulty at the very moment of perusal. And yet it admits of explanation. It will not do to say, therefore, that a patent ambiguity (meaning thereby merely an ambiguity patent or appearing on the face of the instru- ment) cannot be explained by evidence aliunde; though such remarks are frequently found, in the books." ^ So it is said in Broom's Common Law, at page 508 : *' It would, nevertheless, be erroneous to suppose that ex- trinsic evidence is under no circumstances admissible to clear up a prima facie patent ambiguity in a written contract, for proof of facts may be given with a view to showing that the apparent uncertainty does not in truth exist." § 50. Term requires special interpretation. — Vice Chancellor Wigram justifies Lord Bacon's rule as to patent ambiguities by explaining the distinction be- * The following quotation from Elphinstone's Interpretation of Deeds {pp. 112, 113) will also show the unsatisfactory nature of this term patent ambiguity. " The rule as to the admissibility of evidence to explain ambi- guities, including equivocations, is commonly stated as follows : ' In a written instrument, if there be 3l patent ambiguity, it never is allowed to be explained by verbal evidence, though a latent ambiguity is so.' Smith on Contracts, 6th ed., p. 45. See also Smith's Law of Property, 4th ed., pp. 896, 990; Chitty's Contr. 10 ed., pp. loi, 102. Many dicta of judges and even judicial decisions will be found to the same effect. " The reader, who has rightly apprehended the rules already laid down in this treatise, will observe that the rule as thus stated is incorrect, for the following reasons : (i.) In all cases of ambigfuity, whether patent or latent, extrinsic evidence is admissible to ascertain the primary meanings of the words, and until such evidence is adduced it is impossible to say whether the instru- ment is ambiguous or not. See Wigr. Ex. Ev. 179, pi. 203. (2.) Direct evi- dence of intention is admissible for the purpose of explaining an equivoca- tion, but not a patent ambiguity. It is to be observed also, that by the phrase " latent ambiguity," in the foregoing quotation, is meant an equivoca- tion ; but the books often use the phrase in a wider sense, including any doubt raised by the application of extrinsic evidence, whether it be what is more properly called an inaccuracy, or a mere prima facie case of ambiguity which is ultimately solved by the further application of ordinary evidence." 84 PAROL EVIDENCE IN CONSTRUCTION. [§ 5O- tween uncertainty and ambiguity in language, and hold- ing that, while it is proper to explain by parol an uncer- tainty or inaccuracy arising from the use of written lan- guage, an ambiguity cannot be thus explained.^ The reason for this distinction in favor of inaccurate language is that it is impossible to assert that such language is ambiguous in its meaning until one, with the proper skill in understanding language and the necessary infor- mation of the surroundings under which the instrument was executed, has endeavored to interpret it. This distinction is followed by Greenleaf, who says : " But here it is to be observed that words cannot be said to be ambiguous because they are unintelligible to a man who cannot read ; nor is a written instrument ambig- uous or uncertain merely because an ignorant or unin- formed person may be unable to interpret it. It is ambig- uous only when found to be of uncertain meaning by persons, of competent skill and information. Neither is a judge at liberty to declare an instrument ambiguous be- cause he is ignorant of a particular fact, art, or science, which was familiar to the person who used the words, and a knowledge of which is therefore necessary to a right understanding of the words he has used. If this were not so, then the question, whether a will or other instrument were ambiguous or uncertain, might depend, not upon the propriety of the language the party has used, but upon the degree of knowledge, general or local, which a particular judge might happen to possess ; nay, the technical accuracy and precision of a scientific man might occasion his intestacy or defeat his contract. Hence it follows that no judge is at liberty to pronounce an instrument ambiguous or uncertain until he has brought to his aid, in its interpretation, all the lights » Wigram on Extrinsic Evidence, §§ 199-203. Consult, infra, §§ 74-80. § 50-] PAROL EVIDENCE IN CONSTRUCTION, 85 afforded by the collateral facts and circumstances, which, as we have shown, may be proved by parol." ^ * Greenleaf on Ev. § 298. In Fish V. Hubbard's Adm'rs, 21 Wend. (N. Y.) 651, Cowen, J., at p. 661, referring to this explanation offered by Wigram, says: " It is by such a course of reasoning alone that the rule can be saved. No one can deny that it is very loosely expressed, though a veneration for the great character of Lord Bacon as a logician has led English judges and writers on evidence into a constant repetition of it without often adverting to its singular generality. It never was acted upon in its widest extent, and, as far as the decisions have gone, it is said by a learned judge that after several efforts he had found him- self unsuccessful in his attempts to reconcile them. Story, J., in Peisch v. Dickson, I Mason, 10." See, also, Ely v. Adams, 19 John. (N. Y.) 313. Duer says (Duer on Ins., vol. I, p. 170) : " The object of the rule is to ex- <:lude the hazard of the virtual substitution of an oral contract for that which should be contained in the written instrument, and the evidence that it pro- scribes, relates to the terms of the agreement, not to its subject. The rule, therefore, is not applicable when the evidence sought to be introduced relates, not to the acts and declarations of the parties as evidencing the nature of their agreement, but solely to extrinsic facts that, by themselves, determine the con- struction that ought to be adopted, and from their nature must have been, in the understanding of the parties, the basis of their contract." In a note to the above text the author, after referring the reader to Green- leaf on Ev., says: " It will be seen that the views of this writer correspond with the positions •of the text, and that the cases are almost innumerable in which extrinsic, fre- quently parol, evidence is admitted to explain a patent ambiguity. In truth, often as it has been repeated, no proposition considered as general is more erroneous than that adopted by Mr. Starkie, ' that parol evidence is never admissible to explain an ambiguity that is not raised by extrinsic facts.' " Starkie on Ev., p. 655. Thus, also, it was said by Coleridge, J., when construing a written guaranty susceptible of two meanings, in Bainbridge v. Wade, 20 L. J. Q. B. 7 : " But there is also another rule of law, equally clear, that you may apply any of the means allowed by law, in order to ascertain the meaning of the written instru- ment, and one of those is that in seeking to construe a written document you are to look to the circumstances of the party at the time when the document was executed, and until you have done that fully you cannot say that the lan- miage used is ambiguous. Very often the writer of the document makes use of a participle or tense which is intended to mean the future, but which may in strictness denote the past time. Therefore we must look first to the con- text of the instrument, and if that is not enough to show the meaning, then we must look to the circumstances attending the party at the time of his writ- ing the document." 86 PAROL EVIDENCE IN CONSTRUCTION. [§ 51. § 51. When patent ambiguity exists. — Understand- ing the term patent ambiguity in tbiis limited sense, it appears that such an ambiguity never exists so long as the law can, by any of its rules or principles of construc- tion, arrive at the intention of the parties.^ It arises Mere uncertainty in the contract is never fatal so long as the contract which the parties have made may be carried out, and " the law will not pronounce a contract incurably uncertain, and therefore null, until it has cast upon it alL th? light to be gathered, either from a collation of all the words used, or from all contemporaneous facts which extrinsic testimony establishes." Parsons, on Contracts, vol. II, p. 560. " It is to be observed that all Lord Bacon's illustrations of the maxim that; a patent ambiguity cannot be holpen, are matter of construction of law, not of fact — the rule interpreted by the illustrations, would seem only to amount to this, that evidence of intention shall not be given ; it does not appear in any' way to exclude the application of extrinsic circumstances to explain any patent inaccuracy or obscurity of expression relating to ' matter in fact.' " Spence on the Equitable Jurisdiction of the Court of Chancery, vol. I, p. 563. See,, also, Ely v. Adams, 19 John. (N. Y.) 313 ; Peake's Law of Ev. 77, 78 ; Ram on Wills. 32, note o ; Chitty on Contracts, vol. I, p. 147. ' Thus Starkie says ; " By patent ambiguity must be understood an ambi- guity inherent in the words, and incapable of being dispelled either by any legal rules of construction applied to the instrument itself, or by evidence showing that terms in themselves unmeaning or unintelligible are incapable- of receiving a known conventional meaning. The great principle on which the rule is founded is, that the intention of parties should be construed, not. by vague evidence of their intentions, independently of the expressions which they have thought fit to use, but by the expressions themselves.'''' Starkie oni Evidence, p. 652. In Colpoys v. Colpoys, Jacob, 451, it is said: "In the case of a patent ambiguity, that is one appearing on the face of the instrument, as a general rule a reference to matter dehors the instrument is forbidden. It must, if possible, be removed by construction, and not by averment. But in many cases this is impracticable ; where the terms used are wholly indefinite and equivocal, and carry on the face of them no certain or explicit meaning, and the instrument furnishes no materials by which the ambiguity thus arising can be removed ; if in such cases the court were to reject the only mode by which the meaning could be ascertained, viz. : the resort to extrinsic circum- stances, the instrument must become inoperative and void. As a minor evil, therefore, common sense, and the law oi England {yAi\c!ti are seldom at vari- ance), warrant the departure from the general rule, and call in the light of extrinsic evidence. The books are full of instances sanctioned by the highest authorities both in law and equity. When the person or the thing is desig- § 5I-] PAROL EVIDENCE IN CONSTRUCTION. 87 only when no intention is derivable from the language, viewed with all the light which the law permits. In such a case, there is apparent doubt in the mind of the author of the instrument, either as to the subject-matter or purposes of the contract, or the persons to be affected by it.^ And an ambiguity of this character cannot be cured by parol, if written evidence of the fact in doubt is required ; for, if it were, the law and not the parties would make the contract.*^ nated on the face of the instrument, by terms imperfect and equivocal, admit- ting either of no meaning at all by themselves, or of a Variety of different meanings, referring tacitly or expressly for the ascertainment and completion of the meaning to extrinsic circumstances, it has never been considered an objection to the reception of the evidence of those circumstances, that the ambiguity was patent, manifested on the face of the instrument." And the rule in New York is stated to be as follows : " By patent ambi- guity, therefore, must be understood an inherent ambiguity, which cannot be removed either by the ordinary rule of legal construction, or by the applica- tion of extrinsic and explanatory evidence, showing that expressions, prima facie unintelligible, are yet capable of conveying a certain and definite mean- ing." Wait's Law and Practice, vol. Ill, p. 525. * Parsons on Contracts, vol. II, p. 557, notee; Wharton on Evidence, § 957. " Where a patent ambigfuity exists, the writer appears to be halting be- tween two intentions." Elphinstone's Interpretation of Deeds, p. 104. See, however. Palmer v. Albee, 50 Iowa, 429. s Saunderson v. Piper, 5 Bing. N. C. 425, is usually cited as illustrative of the nature of a patent ambiguity, but it would seem with questionable propriety. In that case an action was brought by the indorsees of a bill of exchange against the acceptors. The bill by its written words purported to be for " two hundred pounds " but upon its margin were placed the figures " 245/.,'' and the stamp attached to it was of the value required for a bill of the larger amount. Evidence was also given at the trial showing that the bill was executed in payment for merchandise of the value of 245/., and upon appeal it was said : " It is true that there was abundant evidence to show that this was intended as a bill for 245/., if that evidence was admissible ; but the evidence was not admissible, because this is a case of patent ambiguity. " The court, therefore, construed the instru- ment to be a bill for two hundred pounds. And as the action was brought upon the written bill for that amount, to allow parol evidence to show that it was intended to be for any other amount would permit such evidence to con- tradict the terms of a written contract. At all events the refusal to regard the evidence, on the ground that there was a patent ambiguity, seems an 88 PAROL EVIDENCE IN CONSTRUCTION. [§ 5 1. We, therefore, conclude that the rule excluding parol evidence in the case of a patent ambiguity is of no force except where that evidence would make by parol a con- tract which the law required to be written/ and that in these cases, it can only be relied upon as a ground for excluding parol evidence, when it is claimed that there is no clear intention of the parties, and never when the unsatisfactory disposition of the case; for there was no indefiniteness or uncertainty in the minds of the contracting parties, nor did any " inherent doubt" exist as to any of the features of the contract. Indeed the intention of the parties was clear, and there was no technical patent ambiguity in the case. Certainly this is so, if we accept Starkie's definition thereof, namely : '' An ambiguity inherent in the words and incapable of being dispelled either by any legal rules of construction applied to the instrument itself, or by evidence showing that terms in themselves unmeaning or unin- telligible are incapable of receiving a known conventional meaning," for such ambiguity as did exist was wholly removed by '' legal rules of construc- tion," for the contract was not avoided, but was enforced, and that too upon the ground that its terms could admit of but one meaning. It would, it is believed, be simpler and more accurate to cite the case as an example of the controlling effect of a written instrument rather than as an illustration of the rule which prohibits parol from explaining a patent ambiguity. Consult Smith V. Flanders, 129 Mass. 322, where a contract for the erection of a building provided that the work should be done in all respects according to the plan and specification which had been furnished by the architect. One clause in the specification required " all walls to be vaulted." By the plan, the walls of the building appeared to be sixteen inches in width, without the appearance of any vault or space intended to be left in them. And the court held that no ambiguity existed, as the written contract prevailed over the less formal plan, that, by the contract, the walls were to be only sixteen inches in- cluding the vault ; and that parol evidence was inadmissible to explain the con- tract, saying: "This is in analogy to the rule by which, when there is discrep- ancy or repugnancy between the written and printed parts of a contract, the former will prevail over the latter." • It is said that direct evidence of intention can never be given to cure a patent ambiguity, Elphinstone's Interpretation of Deeds, p. 112; Leake's Di- gest, pp. 215, 216, but consult, infra, §§ 74-80. If a contract is not required to be written, parol may show that the parties had in mind a definite intention, and did agree upon the terms of the contract. Thus it has been said that even a blank in a contract of sale, not required by the statute of frauds to be written, might be filled by oral testimony. See Chitty on Contracts, 153. But see Parsons on Cont., vol. II, p. 563. §§ 52. 53-] PAROL EVIDENCE IN CONSTRUCTION. 89 object of the evidence is simply to explain the terms of the writing, and thus reach the will of the contract. It is evident, then, that this term brings no aid to the pres- ent inquiry, the purpose of which is to determine the principles by which the intention of parties is to be reached. § 52. Rule as to latent ambiguities brings no aid to j)resent discussion. — It is manifest that Lord Bacon's rule as to latent ambiguities has little meaning except as contrasted with the rule in regard to patent ambigui- ties already discussed ; therefore, having determined to proceed with reference to the principle underlying that rule, the same course must be pursued in regard to this one. Without inquiring, then, as to the sense in which this term, latent ambiguity, was used by Lord Bacon,^ it may be said that, to understand the reason for the admission of parol evidence to explain any uncer- tainty or ambiguity in a contract, resort must be had to the principles derived from the conduct and life of men, which permit its use. And in every case it must be shown that the parol testimony offered will assist in leading to the thought of the contract in order that it may be admissible in evidence. § 53. Subdivision of subject. — Laying aside, there- fore, Lord Bacon's rules as guides in the present discus- sion, with the view of illustrating clearly the simple principles stated in a preceding section, we divide the subject into three branches. Under the first of these * Consult, however, Spence on the Equitable Jurisdiction of the Court of Chancery, vol. I, p. 564; Parsons on Contracts, vol. II, p. 256, and p. 557, note e; Phillips on Ev., vol. II, 747-751 ; Addison on Contracts, vol. 1, p. 183; Alderson, B., in Smith v. Jeffreys, 15 M. & W. 561 ; Robinson v. G. W. Ry. Co., 35 L. J., C. P. 123; Jarman on Wills, notes by Randolph & Talcott, vol. I, p. 473; Powell's Law of Evidence, p. 451, et seq. 90 PAROL EVIDENCE IN CONSTRUCTION. [§ 53. will be considered all the instances in which parol testi- mony may be given to expound a contract ; under the second, the limits within which parol may show that the writing is not the entire contract, and undgr the third, the present confines of the rule that oral evidence cannot contradict a writing. These subdivisions will be termed respectively Explanatory Parol Evidence. Supplementary Parol Evidence. Contradictory Parol Evidence. CHAPTER VI. WHEN PAROL EVIDENCE MAY EXPLAIN THE MEANING OF WORDS. § 54. General classification of subject. 55. Principle upon which parol is admitted to explain foreign and technical words. 56. Proof of technical meaning, distinct from proof of usage. 57. Distinction illustrated by New York case. 58. What included in phrase technical terms. 59. When technical sense of word does not prevail. 60. Value and necessity of regarding usage to ascertain the meaning of ■ words. 61. Apparent meaning of a word, no guide to its customary meaning. 62. Words to be understood as parties used them. 63. Local meaning of words regarded. 64. Authorities sustaining rule that unambiguous word may be explained by usage. 65. Extreme instance of difference between apparent and customary mean- ing of word. 66. Application of principle to rule that a usage must not contradict writ- ing. 67. Bend v. Georgia Insurance Co. 68. Principal authorities relied on to support dissenting opinion criticised. § 54. General classification of subject. — Parol testi- mony is admissible for the purpose of explaining the meaning of particular words and phrases used in a con- tract : — Where such words or phrases are not in common and ordinary use, but are foreign, obsolete, scientific, professional, abbreviated, or for any reason technical ; When it is claimed that the words of the contract have by usage acquired a special mercantile or limited sense in reference to the subject-matter of the contract ; 92 EXPLANATORY PAROL EVIDENCE [§§ 55, 56. Where the questioned words have no fixed and deter- minate ordinary, technical, or customary meaning. Each of these divisions will be considered separately. § 55. Principle upon which parol is admitted to ex- plain foreign and technical words. — While the judges are assumed to be familiar with the ordinary meaning of words in general use in the English language, and are called upon to interpret them, they are not required or supposed to be versed in foreign languages, or the tech- nical phrases of science, of art, or business. It is there- fore necessary that these phrases should be explained to the court by parol evidence, in order that the con- tracts containing them may be intelligible.^ Evidence thus designed to translate the words of a contract evi- dently in no way contradicts or varies the writing, for it simply shows the meaning of the signs which are written. By it the contract is brought before the court, and it is obvious that it is impossible to contradict the contract before it is ascertained what its terms provide. § 56. Proof of technical meaning, distinct from, proof of usage. — Although the contrary has been asserted,^ there ' Supra, \ 16. And where a doubt exists as to what a word, letter, or figiire, contained in an instrument, was intended to be, parol evidence is admissible to show the intent of the parties, for the object of the inquiry is to ascertain what the language of the instrument m fact is, and not to give it a construc- tion. Arthur v. Roberts, 60 Barb. (N. Y.) 580; Phillips' Evidence, vol. II, p. 733, supra, § 17. So if word is obliterated, parol may show what was ■originally written. Walrath v. Whittekind, 26 Kan. 482. ^ It has been said : " In resorting to evidence of usage for the meaning of particular words in a written instrument, no distinction exists between such -words as are purely local or technical ; that is, words which are not of uni- versal use, but are famiUarly known and employed, either in a particular dis- trict, or in a particular science or trade, or by a particular class of persons ; and words which have two meanings, the one common and universal, the other technical, peculiar, or local. In either case, extrinsic evidence of usage will alike be admissible to define and explain the technical, peculiar, or local meaning of the language employed ; though, in the latter case, it will also be § 57-] TO SHOW MEANING OF WORDS. 93 seems to be a marked difference between the principles which control the introduction of parol evidence to ex- plain the meaning of technical words, and those which govern the admissibility of such evidence to show that a word in ordinary use has acquired a special or mercan- tile sense. In the one case the contract has no meaning until the word is interpreted, and the evidence offered is that of experts who are familiar with its meaning ; and who, in a certain sense, act as interpreters for the court ; in the other the contract usually has a plain and distinct meaning, and parol evidence is offered to show that its apparent meaning is not its real meaning. To accom- plish this, it brings before the court facts which raise the presumption that the disputed words, in reference to the subject-matter of the contract, have, by a usage which conforms to the rules of law governing usages, acquired a special sense.^ § 57. Distinction illustrated by New York case. — This distinction is illustrated by a case ^ in the New York Court of Appeals, where the meaning of the term " port- risk," as used in a policy of marine insurance, was under discussion. In regard to these two words thus conjoined the court says, by Folger, J. : " Separately, they could be interpreted ; together, no full and exact sense is conveyed by them to the mind of one who has not a knowledge of the vocabulary of marine insurers and insured. They have a meaning and bearing upon the true interpreta- tion of the contract ; and it seems, as we have already said, a restrictive bearing. Unable, from any natural necessary to prove such additional circumstances as will raise a presumption that the parties intended to use the words in what logicians call their second intention, unless this fact can be inferred from reading the instrument itself." Taylor on Ev., § 1161. ' Greenleaf on Ev., § 295. 2 Nelson v. Sun Mutual Ins. Co., 71 N. Y. 453. 94 EXPLANATORY PAROL EVIDENCE [§ 58. and ordinary sense of the words, to say exactly what that bearing is, we have to admit that they are used by marine underwriters as a technical term — a term of usage, so far as the continuous employment of technical words may be called a usage. I should rather, however, deem that to be a usage which has taken words which, in com- mon use, singly or together, have a meaning and intelli- gibility to all eyes and ears, and which has, by putting them in a particular use, as in some trade or handicraft, attached to ithem a meaning and effect not consonant with their public or general meaning. . . . The phrase ' port-risk ' is not in that category. It is not used as simply the two words which make it up, but as a compound word and phrase, and as such it does not con- vey to the public, or in general, a definite sense, if any sense. In short, the compound has become one of the technicalities of a business not free from abstruseness, and which deals to much extent in technical phrases, the meaning of which, as used by the experts in the business, needs explanation to the unaccustomed. We see no reason, then, why it was not proper at the trial to take the testimony of men expert in this business to explain to the court the meaning of this technicality We do not look upon the evidence of the experts, which was put into the case, as taken to prove a usage of a trade, but to explain words which had been given a tech- nical meaning, in a business in which they were used, as conveying a sense which the public uninstructed could not derive from them." § 58, What included in phrase technical terms. — Within the phrase, technical terras, may he included every word, character, or sign used in a contract to convey an idea, and which is not a word in ordinary use in the Eng- § 59-J TO SHOW MEANING OF WORDS. 95 lish language.^ Whenever, therefore, a contract contains any signs, letters, or words which have been used to ex- press the intent of the contracting parties, and which do not discover their meaning to one versed in the ordinary use of English, the parol evidence of experts is proper to show the meaning of the terms in reference to the sub- ject-matter of the contract. " Where characters, marks, or technical terms are used in a particular business, unin- telligible to persons unacquainted with such business, and occur in a written instrument, their meaning may be ex- plained by parol evidence if the explanation is consistent with the terms of the contract." ^ § 59' W^hen technical sense of word does not prevail. — If, however, the word sought to be explained has a distinct and definite ordinary meaning, which accords with the surrounding circumstances, it would seem that nothing less than the context itself, or proof of a well established usage, will authorize its reading in any other ^ See, infra, § 75, as to words whose meaning is fixed by law. 2 Collender v. Dinsmore, 55 N. Y. 200. Thus Parsons says: " If a contract refers to principles of science, or art,' or use, the technical phraseolo- gy of some profession, or occupation, or common words in a technical sense, or the words of a foreigh language, their exact meaning may be shown, as we have already remarked, by the testimony of ' experts,' who are persons posses- sing the peculiar knowledge and skill requisite for the interpretation of the con- tract." Parsons on Cont., vol. II, p. 556. See also Moran v. Prather, 23 Wall. 492; Seymour v. Osborne, 11 Wall. 516; Silberman v. Clark, 96 N. Y. 522; CoUender v. Dinsmore, 55 N. Y. 200 ; Wright v. Weeks, 25 N. Y. 160; Taylor v. Beavers, 4 E. D. Smith (N. Y.), 215 ; Page v. Cole, 120 Mass. 37 ; "Whitney v. Boardman, 118 Mass. 243 ; Cooper v. Smith, 15 East, 102; Hartwell v. Camman, 10 N. J. Eq. 128 ; Smith v. Clayton, 29 N. J. L. 357; Armstrongs. Burrows, 6 Watts (Pa.), 226; Farmers' & Mechanics' Bank v. Day, 13 Vt. 36; Hatch v. Douglas, 48 Conn. 116 ; Fenderson v. Owen, 54 Me. 372; Busch V. Pollock, 41 Mich. 64; Appleton v. Fisher, 34 Mo. 540; Shack- elford V. Hooker, 54 Miss. 716; Baron v. Placide, 7 La. Ann. 229; Barlow v. Lambert, 28 Ala. 704 ; Callahan v. Stanley, 57 Cal. 476 ; Wharton on Cont., §634; Phillips on Evidence, 709. 96 EXPLANATORY PAROL EVIDENCE [§ 59. sense than the ordinary and common one. The mere fact that a word has a scientific or technical sense in which it is used among certain persons, is not sufficient to allow the introduction of parol evidence to show such meaning. Thus in an action upon a life insurance policy in the New York Superior Court/ the questions consid- ered turned upon the interpretation of a permit under the policy, reading, " Permission is hereby given to . . . . to proceed to Cuba, and return before April i, 1871. He to take his own risk of death from epidemics." The insured while absent died of yellow fever, which, how- ever, was not prevalent at the time of his death. The insurers, to defeat the action, offered to show that yellow fever was spoken of as one of the risks which the insured assumed under the name of epidemic, and also by expert testimony that yellow fever is classified in medical science and known as one of the diseases called epidemics. This evidence was excluded, and upon appeal the ruling was approved. Freedman, J., refer- ring to the attempt to give a technical meaning to the word " epidemics," says : " Unless the terms of a written instrument have generally, in respect to the subject- matter, as, by the known usage of trade or the like, ac- quired a peculiar sense, distinct from the popular sense of the same words, or, unless the context points out that, in the particular instance, and in order to eflfectuate the immediate intention of the parties, they should be under- stood in a peculiar sense, they are to be understood in their plain, ordinary, and popular sense.'' ^ 1 Pohalski v. The Mutual Life Ins. Co., 36 Super. Ct. (N. Y.) 234. " Unani- mously affirmed by the Court of Appeals, Apl. 7, 1874, without a written opin- ion, the court resting its decision upon Judge Freedman's opinion." Note to report of case, 36 Super. Ct. supra. 2 See, also, Miller v. Burke, 68 N. Y. 615; Casler v. Conn. M. Life Ins. Co., 22 N. Y. 427; Partridge v. Insurance Co., 15 Wall. 573; Hawes v. Smith. 12 Me. 429; Mansfield R. R. Co. v. Veeder, 17 Ohio, 385. § 6o.] TO SHOW MEANING. OF V/ORDS. 97 § 60. Value and necessity of regarding usage to as- certain the meaning of words. — Writers have frequently- enlarged upon the necessity, value and antiquity of re- garding usage as a means of interpreting mercantile con- tracts, and it is universally admitted that there is no method by which such contracts may be correctly read, unless reference is thus made to the mercantile sense in which their words are used. This general rule and the principle upon which it is founded, have been thus ex- pressed by the New York Court of Appeals : " Evidence is always admissible to explain the mean- ing of terms used in any particular trade or occupation when their meaning becomes material in order to con- strue a contract ; and the principle on which the rule is founded extends to forms of expression commonly used in any particular business as well as to single words. In both cases the evidence is admitted as a means of en- abling the court to declare what the language of the con- tract did actually express to persons standing in the position of contracting parties, and so to ascertain what it does express to the court, which for this purpose is bound to place itself in their position." ' Notwithstand- ' Johnson, J., Dana v. Fiedler, 12 N. Y. 40. See, among the many cases which illustrate the application of this rule, the following : American— U. S. v. Breed, I Sumn. 159; Lawrence z/. Gallagher, 73 N. Y. 613; Bissell V. Campbell, 54 N. Y. 353; Pollen v. Leroy, 30 N. Y. 549; Hagan v. Domestic Sewing Machine Co., 9 Hun (N. Y.), 73 ; Astor v. Union Ins. Co., 7 Cow. (N. Y.) 202; Child v. Sun Mutual Ins. Co, 3 Sandf. (N. Y.) 26; Collyer w. Collins, 17 Abb. Pr. (N. Y. ) 467 ; Buck z/. Burk, 18N. Y.337; Coitw. Commercial Ins Co., 7 Johns. (N. Y.) 385 ; s. C, 5 Am. Dec. 282 ; Taylor V. Beavers, 4 E. D. Smith (N. Y ). 215 ; Newhall v. Appleton, 49 N. Y. Super. Ct. 238; Page V. Ccle, 120 Mass. 37; W^hitney v. Boardman, 118 Mass. 242; Miller «». Stevens, 100 Mass. 518: Eaton v. Smith, 37 Mass. 150: Nel- donz/. Smith, 49 N. J. L. 148; Lacy v. Green, 84 Pa. St. 514; Aughinbaugh V. Copperheffer, 55 Pa. St. 347: Brown v. Brooks, 25 Pa St. 210: Hackett v. Smith. 4 W. N. C. (Pa ) 475 ; Busch v. Pollock. 41 Mich. 64; Doane v. Dun- ham, 79 111. 131; Myers w. Walker, 24 111. 133; Steyer t/. Dwyer, 31 Iowa, 20; RindskofE v. Barrett, 14 Iowa, loi ; Robinson v. Fiske, 25 Me. 401; 7 98 EXPLANATORY PAROL EVIDENCE [§ ^I- ing the fact that this general principle is uncontested^ many questions of nicety and interest arise in its applica- tion to particular cases, and it becomes necessary to con- sider to how great an extent these " glossarial usages " may be looked to for the intention of the parties.^ § 61. Apparent meaning of a word no guide to its- customary meaning. — Usages explaining the sense in which the words of a contract are used, possess one feature which, to a marked degree, distinguishes them from usages which annex incidents to written contracts ;: and this arises from the fact that the former are employed to give a meaning to the original signs composing the: writing, while the latter are looked to for the purpose of adding to the written terms incidents which are consis- tent with their ascertained meaning. When, therefore, the written signs are to be inter- preted the simple question is, what meaning has usage given to these marks ? But, when it is desired to annex a particular usage to an intelligible writing, it at once becomes important to determine whether the usage is consistent with the declared intentions of the parties, Lindsleyz/. Lovely, 26 Vt. 123; Hart v. Hammett, 18 Vt. 127 ; Wajme v. The General Pike, 16 Ohio, 421 ; Allegre's Admrs. v. Maryland Ins. Co., 20 Am. Dec. 424; Wilbraham 7/. Stanley, 57 Cal. 476; Kimball v. Brannen, 47 Mo. 398 ; Avery v. Stewart, 2 Conn. 69 ; George v. Joy, 19 N. H. 544; Appleman V. Fisher, 34 Md. 540. English — Steamship Co. Norden v. Dempsey, L. R. i C. P. 654 ; Myers 11. Sari, 30 L. J. Q. B. D. 9 ; Brown v. Byrne, 3 El. & BI. 703 ; Gorrissen V. Perrin, 27 L. J. C. P. 29 ; Clayton v. Gregson, 5 A. & E. 302 ; Lewis v. Marshall, 7 M. & Gr. 729 ; Grant v. Maddox, 1 5 M. & W. 737 ; Trueman v. Loder, 1 1 A. & D. 600 ; Miller v. Tetherington, 6 H. & N. 278 ; Symonds v. Lloyd, 6 C. B. N. S. 691 ; Hudson v. Clementson, 18 C. B. 213 ; Spartali v. Benecke, 10 C. B. 212 ; Taylor 2/. Briggs, 2 C. & P. 525 ; Smith z/. Wilson, 3 B. & Ad. 728 ; Simpson v. Margitson, 11 Q. B. 23 ; Cochran v. Retburg, 3 Esp. 121 ; Lethulier's Case, 2 Salk. 443. 1 For a consideration of the rules governing the admissibility of proof of usages, annexing incidents, and providing the essential requisites of a valid usage, see, infra, Chapters IX, X. § 62.] TO SHOW MEANING OF WORDS. 99 The disregard of this distinction has caused consider- able confusion in the cases upon this subject, and it is important to show why it is an inherent feature of the usages now under consideration, that the apparent mean- ing of the words of the contract will never prevent their proof, or deter the parties from showing the special sense which these words have acquired, § 62. Words to be understood as parties used them. — The object of construction being to reach the intention of the parties, it is evident that result can only be ac- complished by interpreting the words in the sense in which it is reasonable to suppose the parties have used them.^ The primary rule for the reading of words, as we shall see,* is, that they are to be understood in their plain and ordinary sense ; but this rule is based simply upon the theory that to thus understand them will best enable the court to reach the intent of the contract, and there is no arbitrary and unalterable standard by which the meaning of words may be reached. If, therefore, the contract itself, or the circumstances > " The object is to get at the real effect to the parties of the terms used, and if they have acquired secondary meanings in connection with par- ticular kinds of transactions, it is as important to have them translated as if the contract were in a foreign language." Carver's Carriage of Goods by Sea, § 169. So in Smith v. Clayton, 29 N. J. L. 357, where evidence was im- properly given as to the ordinary meaning of the word " grain," the New Jersey Supreme Court said : " The word is not a technical term, the significa- tion of which is only known to those of the trade. In such a case parol evi- dence is admitted of necessity for the same reason that an interpreter must be employed to translate a paper written in an unknown tongue, and it has always been admitted. Sleght v. Hartshome, 2 Johns. 542 ; Gobert «/. Busby, 3 Sim. 34 ; Mechanics Bank v. Columbia, 5 Wheat. 336 ; Smith v. Wilson, 3 Bam. & Ad. 728; Richardson v. Watson, 4 Bam. & Ad. 789. An usage may be shown by parol evidence, and some of the cases go so far as to permit evidence that an English word, not a term of art or peculiar to a particular trade or occupation, has a pecuUar provincial signification different from its natural meaning, as that a dozen means thirteen.'' ^ Infra, Rules of Construction. lOO EXPLANATORY PAROL EVIDENCE [§ 62. surrounding it, indicate that its words are used in some special sense, it will defeat the intention of the parties to construe them in their ordinary sense, and that which is a rule for obtaining the thought of the contract will be converted into a means of thwarting its provisions.^ We are then to discover in each case what is the real mean- ing of the word as used in the contract before the court, and the fact that it has a plain, unambiguous, and appar- ent meaning is no reason for the rejection of proof that it is employed in the contract presented in a special sense which it has acquired by usage. Indeed, if it is shown that a special sense is attached by a known usage of trade to a word of a contract made in the ordinary "Course of such trade, it is presumed that the word bears its special meaning.^ In such a case a general dictionary gives no light as to irs meaning.* ' Thus Lawson says (Lawson on Usages and Customs, § i8i) : '' Mercan- tile contracts are commonly framed in a language peculiar to merchants, and hardly understood outside their world. Agreements which are entered into every day in the year between members of different trades and professions are expressed in technical and uncommon terms. The intentions of the parlies, though perfectly well known to themselves, would be defeated were the lan- guage employed to be strictly construed according to its ordinary meaning in the world at large. Hence it was soon established by the courts as a lule of construction that while words in a contract relating to the ordinary transac- tions of life are to be construed according to their plain, ordinary, and popular meaning, yet, it' in reference to the subject-matter of the contract, particular words and expressions have, by usage, acquired a meaning different from their plain, ordinary and popular meaning, the parties using those words in such a contract must be taken to have used them in their peculiar sense, and that sense may be fixed by parol evidence." 2 Infra, Chapter X. 3 Houghton V. Gilbert, 7 C. & P. 701. *■ A dictionary is, after all, only a volume of precedents. But words have not only a coinmon, conversational and literary meaning, they very often have a technical, a business sense, and in transactions connected with that particular trade or profession, there is every probability that the Janus-faced word will be used in its technical sense, and it is then of importance, by means of witnesses conversant with the business, trade, and locality to which the document relates, to speak as to § 63.] TO SHOW MEANING OF WORDS, lOI § 63. Local meaning of words regarded. — The mean- ing of terms at the place where the parties use them, or to which they look as the seat of the contract, may also control their interpretation. It is proper, therefore, to receive evidence of the particular sense which any word of the contract has acquired by usage in a special locality. For in such a case the rule that the judges are to deter- mine the ordinary sense of words is not disregarded, as the question is not, what is the ordinary meaning of this term ? but, what technical sense has it derived from the locality of the contract ?^ The fact that a word has a fixed ordinary meaning by the law of the forum, does not affect this principle, as the object is not to give an intelligible meaning to the contract, but to arrive at the particular meaning which the parties have embodied therein. An interesting case upon this point recently came before the Court of Com- mon Pleas of Philadelphia county, Pennsylvania. There the action was assumpsit against the Phoenix Iron Company, upon a written contract made in London and assigned to it. The original contract provided for the shipment from London to Philadelphia of certain merchandise, in the "early spring" of 1880, and no ship- the particular conventional meaning of the words in question." Browne on Usages and Customs, p. 47. ' "The place in subordination to whose idioms a word is used is to deter- mine the sense of that word." Wharton on Cont., § 637. And the intention of the parties derived from the contract itself, the surrounding circumstances, the domicile of the parties, and their apparent object in the use of the ques- tioned word is to control in the determination of this place. Compare Smith V. Wilson, 3 B. & Ad. 728 ; Cuthbert v. Gumming, 1 1 Exch. 405 ; Howard V. Ins. Co. 109 Mass. 384; Wharton on Evidence, §§ 961, 961a; Thompson V. Sloan, 23 Wend. (N. Y.) 71; Confederate Note Case, 19 Wall. 548; Leid- emann v. Schultz, 23 L. J. C. P. 17; Kingw. Hinde, L. R. (Ir.) 12 Ch. 113. In the absence from the writing of any clear intention as to the place with reference to which the parties have used particular terms, the principles determining the law of the contract, will also, ordinarily, give the local usage applicable to it. See, supra, chap. III. I02 EXPLANATORY PAROL EVIDENCE [§ 63. ment was made thereunder until April 24th of that year. The Phoenix Iron Company refused to accept the merchandise, on the ground that the terms of the con- tract had not been complied with, as that date was not within the term " early spring," The case therefore turned upon the sense in which these words should be interpreted. At the trial, evidence was received of the sense in which the words are used in London, and Hare, P. J., in charging the jury, said : " It was contended during the argument, that as there was no evidence that any of the words in these contracts of sale were used technically as words of art, or with reference to the usage of the iron or any other trade, it was the duty of the court to say what the words meant, as being words of that English language which we speak in common with the people of England. . . . There can be no doubt that such is the general rule, that is to say, that the court should ordinarily, taking written words in their common acceptation, interpret the instrument as a whole. . . . The meaning of the word ' spring ' relatively to the case in hand, is complicated by an inquiry as to the sense in which that term is under- stood in England, and consequently presents a ques- tion which, so far as I am aware, is altogether novel. That question is, England being a foreign country rela- tively to us, although we are for the greater part de- scendants of the English race, and speak the same lan- guage, what is the province of the court in defining the meaning of English words as used in an English con- tract, when that contract is brought to the United States for interpretation } " This question the court answered for the present case by refusing to fix the meaning of the words as matter of law, and by submitting to the jury the evidence indicat- ing the sense in which they were employed in England, § 64.] TO SHOW MEANING OF WORDS. IO3 thus adopting a wise rule of interpretation, and making the understanding of the parties the basis of the decision.^ § 64. Authorities sustaining rule that unambiguous ^word may be explained by usage. — The doctrine that a word need not be ambiguous in order to admit proof of usage has been disputed,* but it finds abundant support 1 Phoenix Iron Co. "v. Samuel, 41 Leg. Int. 156 (1884). See also s. C.,39 Leg. Int. 257. Upon the appeal in this case the court said: "It is undoubt- «dly true as a general rule, that a written contract must be construed by the court. Somfetimes, however, the meaning and sense in which a certain expres- sion therein is used, may be submitted to the jury. Here the language was ' Shipment in early spring.' No month by name was mentioned. The con- tract was made in London. The old rails were to be shipped from Europe. The object is to arrive at the understanding of the parties to the contract. Presumably they understood it as it is understood at the place where made, and where the vendors were to perform their part of the agreement. This view tends to prove the assent of both minds, and give effect to the joint understanding of the parties. It follows that evidence of the meaning of the ■word spring as there understood was properly received." ^ Starkie says: "Merchants are not prohibited from annexing what weight and value they please to words and tokens of their own peculiar car- riage, as may best suit their own purposes, but they ought not to be permitted to alter and corrupt the sterling language of the realm. If they use plain and •ordinary terms and expressions, to which an unequivocal meaning belongs, which is intelligible to all, then, it seems, that according to the great principle ■so frequently adverted to, that plain sense and meaning ought not to be altered by evidence of a mercantile understanding and usage. It is clear, indeed, that if a contrary practice were to prevail, and be carried to its full extent, the effect would nearly be to render it impossible to make a special contract in mercantile affairs, and to compel all persons, under all circumstances, to conform to the usages of trade ; the written contract would become a dead letter ; the question would not be, what is the actual contract, but what is the usage ; and the very same terms would denote different contracts as often as mercantile fashions varied." Starkie on Ev. p. 706. And Mr. Justice Stephen, in his most valuable digest of the Law of Evidence, when considering, "what evidence may be given for the interpretation of documents,'" says: Art. 91, (2.) •" In order to ascertain the meaning of the signs and words made upon a docu- ment, oral evidence may be given of the meaning of illegible or not commonly intelligible characters of foreign, obsolete, technical, and provincial expressions, of abbreviations and of common words which, from the context, appear to have been used in a peculiar sense ; but evidence may not be given to show that common words, the meaning of which is plain, and which do not ap- 104 EXPLANATORV^ PAROL EVIDENCE [§ 64. in the books. Thus Blackburn, J., has said :^ " I do not think that it is necessary, in order to render such evi- dence admissible, that there should be any ambiguity on the face of the phrase which was to be construed ; " and Folger, J., expressing the opinion of the New York Court of Appeals,^ states that "the meaning of words; may be controlled and varied by usage ; even when they are words of number, length, or space, usually the most definite in language." Coleridge, J., also says:^ "That,. pear from the context to have been used in a peculiar sense, were in fact so> used." The last clause of this quotation (which the writer has italicized) does not seem to be justified by the authorities cited to sustain it, viz. : Blackett v. Royal Ex. Assur. Co. 2 C. & J. 244 (see for comments on this case, infra,. § 68), and is clearly contradicted by the case of Smith v. Wilson, 3 B. & Ad. 728, which is cited with approval by the eminent justice, to sustain another proposition; and by many other cases. See cases referred to through § 64, supra. In Hill v. Hibernia Insurance Co. 10 Hun (N. Y.), 26,. however, the exclusion of evidence to show the meaning of the words " stand- ing detached " among insurance men generally, was approved principally upon the ground that there was no ambiguity in such words. See also Willmer- ing V. McGaughey, 30 Iowa, 205. ' Myers v. Sari, 3 E. & E. 703, 30 L. J. Q. B. 9. See also Browne ». Byrne, 3 El. & Bl. 703; Eneas v. Hoops, 42 N. Y. Super. Ct. (10 J. & S.) 517- 2 Walls V. Bailey, 49 N. Y. 464. ' Brown v. Byrne, 3 El. & Bl. 703. So it it said : " But it is as true ift law, as in other subjects, that usage is to govern in the application of lan- guage. Consuetude, cum omnium domina rerum, turn maxime verborum est. Hence there is an exception to the rule just mentioned, in those cases in which words have acquired, by usage, a peculiar sense different from the ordinary and popular one. And it is in such cases immaterial whether the sense, acquired by usage, be the strict grammatical or etymologfical one, or one which departs from all philosophical as well as popular and ordinary meaning, and is wholly anomalous." Buller, J., says: "A policy of ifis'.'.r- ance has at all times been considered, in courts of law, as an absurd and incoherent instrument; but it is founded on usage, and must be governed and construed by usage." Metcalf on Contracts, p. 275. See also Mooney v. Howard Ins. Co. 138 Mass. 375 (1885); Miller v. Stevens, 100 Mass. 515; McGraw v. Sturgeon, 29 Mich. 426; Merrick v. McNally, 26 Mich. 374; Southern. Kellerman, 18 Mo. 507; Barton v. McKelway, 22 N.J. L. 165; Brooks V. Brooks, 25 Pa. St. 210; Lowe v. Lehman, 15 Ohio St. 179; Heald V. Cooper, 8 Me. 32 ; Albany Law Journal (N. Y.), vol. XXVII, p. 464 \ § 65.] TO SHOW MEANING OF WORDS. IO5 in the construction of a contract among merchants^ traders, or others, evidence will not be excluded because the words are in their ordinary meaning unambiguous ; for the principle of admission is, that words perfectly unambiguous in their ordinary meaning, are used by the contractors in a different sense from that. What words more plain than ' a thousand,' ' a week,' ' a day ? ' Yet the cases are familiar in which .'a thousand' has been held to mean twelve hundred, 'a week' a week only during the theatrical season, ' a day ' a working day. In such cases the evidence neither adds to nor qualifies, nor contradicts the written contract ; it only ascertains it by expounding the language."* § 65. Extreme instance of difference between appar- ent and customary meaning of word. — The extent to which custom may go in explaining the meaning of ordinary language is illustrated in the English case of Mitchell V. Henry.* There it was of importance to con- sider the color of the specimen of a trade-mark de- posited at the patent office museum, and the question arose incidentally whether by custom an article could be shown to be white which was apparently black. Upon appeal two of the judges held contrary, however, to the opinion of the Master of the Rolls, that it would be proper to introduce evidence of the custom of a trade as to what was known therein as white selvage, and that even if the exhibit itself appeared upon inspection to be black rather than white, it might be included Hinton v. Locke, 5 Hill (N. Y.), 437; Ledyard v. Hibbard, 48 Mich. 421; Woods V. Miller, 55 Iowa, 168; S. C. 39 Am. R. 170; Robertson v. Jackson, 2 C. B, 413; Jones v. Clark, 2 H. & N. 725 ; Symonds v. Lloyd, 6 C. B. N. S. 691 ; Smith v. Wilson, 3 B. & Ad. 728 ; Parsons on Cent., vol. II, p. 543. > See Smith v. Wilson, 3 B. & Ad, 728; Grant v. Maddox, 15 M. & W. 737; Cochran v. Retberg, 3 Esp. 121. 2 L. R, IS Ch. Div. 181. 106 EXPLANATORY PAROL EVIDENCE [§'66. within the trade meaning of the term white selvage. And James, L. J., said : " I am bound to say that, in my opinion, the question is not whether the selvage is white, but whether it is what the trade knew as a white selvage, whether anybody connected with the trade could have any doubt that it came within the description of white selvage.'' § 66. Application of principle to rule that an usage must not contradict writing. — Judges and text writers when considering the general proposition that evidence of custom will never be allowed to contradict the writ- ing,^ have sometimes neglected to regard this principle, and, taking the apparent meaning of the words as show- ing the terms of the contract, have accordingly held that evidence of an usage which contradicted this meaning, contradicted the contract.^ It is evident, however, that this general rule prohibit- ing evidence which contradicts the writing can have no application when the effort is merely to discover the sense of the words used in the writing, for as has been pre- viously said, the provisions of the contract must be ascertained before any rule prohibiting their contradic- tion can come into force." * Infra, Chapter IX. ^ Hinton v. Locke, 5 Hill (N. Y.), 437 ; Bend v. Georgia Ins. Co., opinion Tallmadge, J., i Leg. Obs. (N. Y.) 12; Sweeney v. Thomason, 9 Lea (S. C), 359; S. C, 42 Am. R. 676 (criticised, 27 Alb. L. J. 464); Story on Contracts, § 801 ; Dickinson v. City of Poughkeepsie, 75 N. Y. 65 (see doubts expressed by Hand, J., p. 77, as to propriety of allowing evidence of usage to explain meaning of the word " earth "). ' This principle has been recognized in many cases, but no where more •distinctly than in Grant V. Maddox, 1 5 Mee. & W. 737. The plaintiff there ^agreed, in writing, to perform at the defendant's theatre for three years at a salary of £l, £6 and £7 per week, in those years respectively. The court held that parol was proper to show that by the usage of the theatrical profession, the words week and year in this connection meant the theatrical week and year, and that the plaintiff was not entitled to recover for the vacation pe- riod during which the theatre was closed. § 66.] TO SHOW MEANING OF WORDS. lOJ From these principles it would seem to follow that the rejection of the evidence to show the meaning of the words " prime singed bacon" in the frequently cited case of Yates v. Pym/ was unauthorized, inasmuch as the question was not, what is the apparent meaning of the words ? but, what is the meaning which, by the custom of the trade, the words have acquired 7 And Adison, B., said : " I am of opinion that the evidence was properly ad- mitted and the question properly left to the juiy, and therefore that this rule ought to be discharged. It is perfectly true that you have no right to qualify or alter the effect of a written contract by parol evidence ; but it is perfectly com- petent to you to qualify or alter by parol evidence the meaning of the words which apparently form the written contract, and to insert the true words which the parties intended to use. That is not to alter the contract, but to show what the contract is. Whenever the words used have, by usage or local custom, a peculiar meaning, that meaning may be shown by parol evidence." And Rolfe, B., also further illustrated the rule and said: " There has not been in this case any infringement of the rule that parol evidence cannot be received to alter a written contract ; for here the evidence was admitted only for the purpose of explaining the meaning of the words used in the contract. It is clear that this may be done with respect to foreign words or scientific ex- pressions; and I think the same is true of a case where the words of a con- tract have reference to a particular profession. I wish, however, to guard myself against being supposed to say, that where a certain usage exists, and the parties have put the terms of their agreement into writing, they can say that the agreement is to receive a different construction, because it is contrary to the usage. No such question arises in the present case." So in Auley v. Stewart, 7 Am. Dec. (2 Conn. 69) 240, Gould, J., says : •' Upon the motion for a new trial the question first in order is whether parol evidence was admis- sible to show what was meant by the words, ' wholesale factory prices.' These ■words, I confess, would seem to me. prima facte to import the actual whole- sale market prices at the factory. But if this, or any other similar term is, by the common consent and general usage of all dealers in a particular branch of business, used in a different sense, and so understood by their customers, there can be no reasonable objection to a party's proving it by parol." See also Abbott v. Bates, 24 W. R. loi, 43 L. J. C. P. 150 : Bowes v. Shand, L. R. 2 App. Cas. 455 ; supra, n. 2, p. 21. ' 6 Taunt. 446. This case is stated by Lawson to be in conflict with many later cases upon this subject. Lawson on Usages and Customs, p. 447. See also Browne on Usages and Customs, p. 80; Humfrey v. Dale, 7 El. & Bl. 275, where Campbell, C. J., cites it as an instance of the exclusion of an usage annexing an inconsistent incident to the contract. I08 EXPLANATORY PAROL EVIDENCE [§ 67^ § 67. Bend v. Georgia Insurance Co. — In the case of Bend v. Georgia Insurance Co.,^ evidence was offered at the trial to show that by the words " glassware in casks " in the memorandum of excepted articles in a fire insur- ance policy, according to the understanding and usage of insurers and insured, was meant glassware in open casks only. The evidence was rejected at the trial, but upon appeal it was held that it was admissible, and a new trial was granted. This case, although several times cited by eminent writers without criticism, as holding that the evidence offered was inadmissible,^ is a strong authority in support of the proposition that parol evi- dence of the customary meaning of a word is proper,, although such meaning is shown to be directly contrary, to its apparent meaning, for the ground upon which the evidence was rejected by the trial judge was that it con- ' I New York Legal Observer, 12. * GreenleafonEvidence, p. 376, note4; Taylor on Evidence, §1166; Angell on Insurance, § 25 ; Lawson on Usages and Customs, p. 439; Symonds w. Lloyd, 6 C. B. N. S. (brief of counsel) 439. See, however, for a correct citation of the case, The N. Y. Belting and Packing Co. v. The Washington Fire Ins. Co. 10 Bosw. (N.Y.) 434, where Robertson, J., of the same court which decided Bend v. Georgia Ins. Co , says : " And glass in tight casks has been shown not to be intended by glassware in casks (Bend v. Georgia Ins. Co. I N. Y. Leg. Obs. 12)." The error in the citation of this case seems to have arisen from the fact that, in the report of the case in the New York Legal Observer in 1842, the only opinion printed was that of Justice Tallmadge, who rejected the evidence at the trial, and upon appeal adhered to his ruling that the evidence was inadmissible, and wrote a dissenting opinion sustaining his view of the law. The editors of the Legal Observer, in a note printed at the foot of page 12 (i N. Y. Leg. Obs.), say : " We very much regret our inability to present to the public the opinion delivered by the Chief Justice ; the dissent- ing opinion of Mr. Justice Tallmadge appears to contain the points of law involved in the case." This opinion of the Chief Justice, which was possibly delivered orally from the bench, cannot now be reproduced, but the records of the Superior Court show that both the Chief Justice and Justice Oakley con- curred in setting aside the nonsuit, and in the opinion that the evidence of- fered was admissible. •§ 68.] TO SHOW MEANING OF WORDS. ICQ tradicted the writing, and that definite and unequivocal terms could not be thus explained by parol. § 68. Principal authorities relied on to support dis- senting opinion, criticised. — The cases upon which Mr. Justice Tallmadge relied to sustain his ruling were Yates V. Pym,^ which has been already alluded to,^ and Blackett z/.The Royal Exchange Assurance Co.* In this latter case a policy of insurance was written in the usual form, upon a ship, her tackle, apparel, boats, etc., and evi- dence of usage that the underwriters never pay for the loss of boats slung upon the quarter, outside of the ship, was held inadmissible. This decision, however, has not passed without criticism, and the case cannot be re- garded as an authority of much weight upon this point. Thus in Myers v. Sari,* Cockburn, C. J., says, in re- gard to it: "Mr. Lush indeed says, that, because the words have a general meaning, parol evidence is not admissible to explain them ; and cites, as an authority for that contention, the case of Blackett v. Royal Ex- change Assurance Company, in which Lord Lynd- hurst, C. B., delivering the judgment of the court, held ■that a policy upon ship, covering boats by its general terms, could not be restricted in its operation by parol evidence of a usage at Lloyds, that boats slung in the ship's quarter were not protected by the insurance. I, of course, am bound by that case, so far as it goes, but I am not disposed to carry it any further, or to apply it to any circumstances not exactly similar. I think the case goes to the extreme verge of the law, for I am unable to see why the evidence was not admissible to show that, by general understanding amongst insurers, the word ' 6 Taunt. 446. ^ Supra, § 66. »2Cr. &J. 244. *3E. &E. 316. no EXPLANATORY PAROL EVIDENCE. [§ 68. ' boats ' did not mean all boats. However, the case need not bind us here." It is also noticeable that there was no clear offer in this case to show that the word " boats " had ob- tained by usage a special sense, and no plain indica- tion was given to the court that the object of the testi- mony was the explanation of the meaning of a specific term of the writing. CHAPTER VII. WHEN PAROL EVIDENCE MAY EXPLAIN THE MEANING OF WORDS— (Continued). § 69. Context of contract may show meaning of words. 70. Convincing evidence required to justify disregard of context. 71. When meaning of word acquired by usage governs. 72. What evidence of usage must show. 73. Statutory and legal meaning of words not to be contradicted by usage, 74. Parol evidence to explain indefinite words of contract. 75. Early cases recognizing principle. 76. Doctrine carried forward by recent cases. 77. Testimony only admitted when contract unintelligible without it. 78. How this evidence differs from other admissible parol. 79. Text writers have not conceded its admissibility. 80. Principle justifying its use. § 69. Context of contract may show meaning of words. — Notwithstanding the fact that the apparent meaning of a word used in a trade contract is no obstacle to prov- ing the customary sense of such word, if the context of the writing shows clearly the meaning which the parties have attached to it, the writing itself speaks, and parol evidence cannot contradict it. Thus in a case in the United States Supreme Court,^ when it became material to determine the meaning of the words steamboat debts, as used in an instrument of indemnity, whereby one transferring his interest in a certain steamboat was to be saved harmless from any and all claims and demands that might arise or be brought against the steamboat named, with some stated exceptions, it was held proper to exclude parol evidence to show that the words of the 1 Moran v. Prather, 23 Wall. 492. 112 EXPLANATORY PAROL EVIDENCE [§ 70. contract were by custom used to designate only such debts as might be enforced against the steamboat itself. Mr. Justice Clifford, writing the opinion of the court, says: '• Terms of art, in the absence of parol testimony, must be understood in their primary sense, unless the context evidently shows that they were used in the particular case in some other and peculiar sense, in which case the testimony of persons skilled in the art or science may be admitted to aid the court in ascertaining the true intent and meaning of that part of the instrument, but the words of the instrument which have reference to the usual transactions of life must be interpreted accord- ing to their plain, ordinary, and popular meaning ; and the rule is that parol evidence is not admissible to con- tradict or vary such an instrument. Difficulty will some- times arise in determining whether the particular term or phrase in question is used in a technical or in a pop- ular sense, but the court is of the opinion that no such difficulty is presented in this investigation," So those cases which hold that the words " more or less," are not to be contradicted by usage sustain the general doctrine that the writing speaks clearly upon the question and excludes proof of usage.^ § 70. Convincing evidence required to justify dis- regard of context. — Where the contract thus throws light upon the words composing it, and shows them ' Cross V. Eglin. 2 B. & Ad. 106; Vail v. Rice. 5 N. Y. 155; Braw- ley V. U. S. 96 U. S. 168; Bourne v. Seymour. 16 C. B. 337 ; Cockerell v. Aucompte, 2 C. B. fN. S.) 440: Moore v. Campbell, 10 Exch. 323; Gibbs v. Gray, 2 H. & N. 22. In McCoy v. Erie & Western Trans. Co. (42 Md. 4981, it is said: ''However terms maybe understood in their ordinary sense, if tlie parties have attached other or unusual or arbitrary meaning to them, to be derived from their fair interpretation in the contract, they have the right so to employ them. But to accomplish such purpose, and to vary the common understanding, the meaning ought to be plain and free from reasonable doubt." § 7^-1 TO SHOW MEANING OF WORDS. II3 to have been used in their ordinary sense, nothing but the most convincing evidence will authorize their inter- pretation in any other sense. Thus, in an English case,^ Tindal, C. J., upon appeal, said: "The contract itself, as it appears to us, speaks with much plainness and pre- cision. The words ' cargo' and ' freight,' do, prima facte and in their natural and ordinary meaning, refer to goods only. And when in the same document occur the words ' cabin passengers ' and ' passage-money,' and a contract is made respecting them, between the same parties who made the contract respecting the cargo and freight, the inference is almost irresistible, that the former words were not intended, within the meaning of the contract- ing parties, to comprise passengers and passage-money of any description ; the parties showing themselves cap- able of making a contract as to passengers, by their proper and specific terms. In order, therefore, to vary the ordinary meaning of such plain words, and to make them comprise passengers and passage-money as well as goods, we think the evidence ought to have been clear, cogent, and irresistible." § 71. When meaning of word acquired by usage governs. — Where, however, the context does not show the sense in which the parties have used the words of a contract, whatever may be their apparent signification, it is proper for either of the parties to attempt to show that they are controlled in their meaning by trade or local usages. In order to attach a peculiar sense to a word, however, "there should be distinct evidence that the word has that particular meaning,"^ and without such 1 Lewis V. Marshall, 13 L. J. C. P. 193. 2 Taylor v. Biggs, 2 C. & P. 525: Abbott, C. J., " If the word bale had acquired a particular meaning in regard to the trade of Liverpool and Alexandria, I should consider that that meaning should apply in this case ; 114 EXPLANATORY PAROL EVIDENCE l.§ 72- evidence it is not proper to allow the jury to determine the meaning of the word.^ Whenever evidence of this character is presented the main considerations in decid- ing vphether vvrords are to be interpreted in any special sense are : " Can it be said that both parties must have «sed these w^ords in this sense, and that each party had good reason to believe that the other party so under- stood them."^ § 72. What evidence of usage must show. — If the evidence brings an affirmative answer to these questions an irrebuttable presumption arises that the word is em- ployed in its special trade sense, and it will be so con- strued by the court' If, however, it appears that the but there should be distinct evidence that the word has that particular mean- ing." 1 Bowes z/. Shand, L. R 2 App. Cas. 455: supra, n. 2, p. 21. It has also been held that '■ the court in construing a mercantile contract is bound in the absence of any averment to the contrary, to construe all words in their ordinary and none in any teclmical sense." Leeming v. Snaith, 16 Q. B. 275. ^ Parsons on Cont. vol. II, p. 543. * Myers v. Sari, 30 L. J. Q. B. 9. In this case it became material to determine the meaning of the phrase, "a weekly account of the work," when used in a building contract, and parol evidence was admitted to explain the sense in which the words " weekly account " were used in the building trade. Hill, J., said: ''Now the rulegoverning the admissibility of evidence to explain the language of contracts is, that words relating to the transactions of com- mon life are to be taken in their plain, ordinary and popular meaning; but if a contract be made with reference to a subject-matter as to which particular words and expressions have by usage acqun-ed a peculiar meaning different from their plain ordinary sense, the parties to such a contract, if they use those words or expressions, must be taken to have used them in their restricted and peculiar signification. And parol evidence is admissiole of the usage which affixes that meaning to them. The admissibility of such evidence does not depend upon whether the expressions to be construed is ambiguous or unambiguous; Ijut merely upon whether or not the expression has, wiih ref- erence to the subject-matter of the contract, acquired the peculiar meaning." And Blackburn, J , also said: "I am of the same opinion. I agree with my brother Hill that the words of a written commercial contract are to be under- stood in the sense which they have acquired in the trade to which the contract § 73-] TO SHOW MEANING OF WORDS. II5 parties were not upon an equal footing, and there was not sufficient reason for each to believe that the other understood the word in its special sense the presump- tion will be rebutted, and the word will be interpreted in its ordinary sense.^ The usage shown must be so far general as to be established in the trade or locality in reference to which the contract is made, and if it is not so no presumption arises that it entered into the con- tract.^ ^ yS- Statutory aud legal meaning of words not to be contradicted by usage. — Where the meaning of any of relates. It is a /r/wza /"aczV presumption that, if the parties to such a con- tract use expressions which bear a peculiar meaning in the trade, they use them in that peculiar meaning which can be ascertained only by parol evi- dence. I do not think that it is necessary, in order to render such evidence admissible, that there should beany ambiguity on the face of the phrase which has to be construed." So in Houghton v. Watertown Fire Ins. Co. 131 Mass. 300, Lord, J., says : " The jury should be instructed that where words have acquired an exact and technical meaning in any trade or business, and are used in a contract relating to such trade or business, prima facie they are to be construed in the meaning or sense which they have acquired in that business." And it is said ; "Where a word is understood in a special sense in the trade in which the parties are engaged, the presumption is, that they have used it in that way." Carver's Carriage of Goods by Sea, § 170. That this prima facie presumption becomes irrebuttable when it appears that " each party had good reason to believe that the other party " under- stood the words in their trade sense. See infra. Chap. X. > Abbott V. Bates, 43 L. J. C. P. 1 50, where Grove, J., says, inter alia ; "When the plaintiff entered upon the indenture of apprenticeship, he did not belong to the trade of horse trainers, and therefore it is not to be assumed that he was aware of its usages. No evidence was given that the attention of him- self or of those who advised him was called to the fact that he was entering upon a written contract relating to a trade which employed technical terms, and that the words in that contract had acquired a peculiar and unusual signification. I therefore think, on this ground, that the plaintiff is not bound by the alleged usage." 2 Clayton v. Gregson, 6 Nev. & Man. 694; Marshall v. Perry, 67 Me, 78; Packard v. Earl, 113 Mass. 280; Nonatuck Silk Co. v. Fair, 112 Mass. 354. A more detailed discussion of the requisites of a usage in order that it may enter into a contract will be found infra. Chap. X. See also infra, § 112, as to when individual practices enter into a contract. Il6 EXPLANATORY PAROL EVIDENCE [§ 73. the words of a contract is fixed by statute, it is not com- petent to show a usage which contradicts this meaning. Thus, in a leading English case,^ it was held where a statute provided that every pound of butter should weigh sixteen ounces, that a custom of a particular lo- cality that a pound should weigh eighteen ounces was illegal. So where a statute fixed the meaning of the word " ton," it was held improper to attach to that word any meaning which would contradict its statutory meaning.^ The principle of these decisions does not go further, however, than to prevent a usage from interfering with the statutory meaning. Where, therefore, a word with such a meaning acquires by usage a sense altogether unrelated to that which the statute gives it, the two meanings of the word may co-exist, for there is no con- tradiction between the statute law and the usage. Parol evidence has been held to be admissible to show that in a written contract for the purchase of a definite number of " barrels " of petroleum oil at a speci- fied price per gallon, the word " barrel " was used to des- cribe a vessel of a certain capacity, and not as the statute measure of quantity.® Where a word or phrase has by judicial decision obtained a fixed signification, and it is deemed for the public good that this meaning should not be varied by usage, the law prohibits the proof of a usage which would give such word or phrase a sense contradictory to its established legal sense.* ^ Noble V. Durell, 3 Term Rep. 271. 2 Green v. Moffett, 22 Mo. 529. Compare also Evans v. Myers, 25 Pa. St. 114; Weaver v. Fegely, 29 Pa. St. 27 ; The Miantinomi, 3 Wall. Jr. 46 ; Green- leaf on Ev., § 280. For other similar cases see Lawson on Usages and Cus- toms, § 217. ' Miller z/. Stevens, 100 Mass. 518. See also Keller v. Webb, 125 Mass. 88; Bradley z/. Manly, 13 Mass, 139; Noble ?/. Durell, 3 T. R. 271. * Bargett v. The Orient Mutual Ins. Co. 3 Bosw. (N. Y.) 385 ; Marc v. Kup- per, 34 111. 286 ; Galena Ins. Co. v. Kupper, 28 111. 332 ; Greenleaf on Ev. § 280 §§ 74> 75-] TO SHOW MEANING OF WORDS. Il7 § 74. Parol evidence to explain indefinite words of contract. — If the meaning of the words of a contract can- not be certainly settled by a reference to their ordinary, technical, or customary sense, and are left in doubt by the context and the surrounding circumstances, the court must either reject the contract as void for uncertainty, or endeavor to discover from the parties themselves the sense in which they have used ambiguous expressions, As the lesser evil the latter course is pursued by the law, and now it seems well settled that resort may be had to the conversations or " communings " of the parties in order to fix the meaning of otherwise indeterminate words. And this evidence is resorted to because it interprets the contract and shows the sense in which its terms are used, and does not violate the principles which prohibit the contradiction of a written contract by oral testimony. § 75. Early cases recognizins[ principle. — Among the earliest cases establishing this point were Birch v. Depeyster^ and Gray v. Harper.* In the former of these a question arose as to the meaning of the word " privi- lege " in a shipping contract, and it was contended that no evidence was admissible by way of' explanation of the meaning of the term, except such as would show its gene- ral meaning " in mercantile understanding." The defend- ant, however, proposed to give in evidence a conversation between the parties, before the agreement was entered into, from which the sense in which -the word was used would appear. Gibbs, C. J., admitted the testimony and said: '■•■ The distinction which you take is that evidence may be received to show what the mercantile part of. the nation » I Stark. 210; also reported 4 Camp. 385. 2 I Story, 574. Il8 EXPLANATORY PAROL EVIDENCE [§ 76. mean by the term privilege, just as you would look into a dictionary in order to ascertain the meaning of a word, and that it must then be taken to have been used by the parties in its mercantile and established sense. But I think that the word privilege is of so indeterminate a signification, that I must receive this evidence. It is certainly evidence, and, in the way in which it is offered,, falls within the general current of mercantile understand- ing, since they had, previous to the agreement, a conver- sation on the subject of privilege; to this extent it is evidence, if not further, and if the term has been used in different trades in different ways, the conversation is evi- dence to show in which sense it was used on the present occasion." In Gray v. Harper, the inquiry was as to the meaning of the word " cost," and conversations at the time of making the contract were admitted to show the sense in which the parties used it. Story, J., in chbrging the jury, said in regard to the admission of the testimony: " Those conversations may be deemed a part of the res gestee^ and thus may be referred to as explanatory of the real intentions of the parties in the use of the word." ^ § 76. Doctrine carried forward by recent cases. — Re- cent American cases have also recognized the worth of this principle, and have materially broadened the law as to the admission of parol to explain the terms used in a contract. Thus the Massachusetts Supreme Court says,* > See, also, Peisch v. Dickson, i Mason, 12 ; Almgren v. Dutilh, i N. Y. 28; Colew. Wendell, 8 John. (N. Y.) 116. 2 Stoops V. Smith, 100 Mass. 63. In this case an agreement was to be construed by which the plaintiff was to be paid " fifty dollars for inserting^ business card on two hundred copies of his advertising chart, to be paid when the chart is published," it was held that the word " published " had no fixed signification which the court could apply to the contract, and that the repre- sentations and descriptions made by plaintiff as to the mode of publishing § 76.] TO SHOW MEANING OF WORDS. IIQ in regard to this explanatory testimony : " The purpose of all such evidence is to ascertain in what sense the par- ties themselves used the ambiguous terms in the writing which sets forth the contract. If the previous negotia- tions make it manifest in what sense they understood and used those terms, they furnish the best definition to be applied in the interpretation of the contract itself." So, also, the Ohio Supreme Court, in a case where testimony explanatory of the sense in which the parties had used the word " perch," had been rejected at the trial, held that as the word had obtained no uniform meaning by usage, and its sense could not be determined from the context and was not fixed by statute, it was error to reject such testimony.^ Johnson, J., in that case said: "In this state of doubt and uncertainty, and in the absence of any express statutory definition, we hold that the rejected testimony was admissible to show in what sense the w^ord was used in the written contract. It does not tend to vary the terms of the writing. It simply en- ables the court to ascertain what its terms mean, and to construe and enforce it as the parties intended." "^ could be properly shown to explain the meaning of the term In Swett v, Shumway, 102 Mass. 365, the court, referring to the propriety of regarding statements made during negotiations, says: " The sense in which the parties understood and used the terms expressed in the writing is thus best ascer tained." See, as illustrating the same principle, Jennings v. Whitehead & Atherton Machine Co., 138 Mass. 594; Horsey v. Graham, L. R. 5 C. P. 39. 1 Quarry Co. v. Clements, 38 Ohio St. 587. 2 In Ouigley v. De Haas, 98 Pa. St. 292, dams were to be built " in a good and substantial manner, as flood dams should be built in such streams- cribbed, sparred, puddled-ditched, calked and graveled "—and it was held proper to show by the parol testimony of the parties what they meant by the words. In Haddock v. Woods, 46 Iowa, 433, the court says : " It is true that the understanding which the parties had of the contract may not be shown by oral evidence, but it is not true that their understanding of tlie meaning of terms used therein cannot be shown." And in Collender v. Dinsmore, 55 N. Y. 200 the New York Court of Appeals clearly intimate that where an ambi- guity exists, prior negotiations of the parties can be given in evidence to show I20 EXPLANATORY PAROL EVIDENCE [§ ']'], ^T]. This testimony only admitted when contract unin- telligible without it. — This parol testimony of prior conver- sations and negotiations of parties, to show the sense in which they have used certain ambiguous terms in their contract, should only be received, however, when all other admissible parol evidence has been given, and the contract still remains unintelligible. For it is only on the ground that the thought of the parties cannot be otherwise discovered that its use can be justified. If, then, the written contract, when considered as a whole, shows this thought, there is no propriety in referring to such testimony. And if a word has a distinct and clear ordinary meaning, parol evidence is not proper to show that in the particular case before the court the parties used it in some unusual sense,^ nor is it admissible to show that words, the meaning of which is determined by custom only, are used in a different sense by the parties to a contract.^ in what sense particular words or phrases were used by the parties in making the contract. See also Collyer v. Collins, 17 Abb. Pr. (N. Y.) 467 ; N. Y. Belting & Packing Co. v. The Wash. Fire Ins. Co., 10 Bosw. (N. Y.) 428; Bedard v. Bonville, 58 Wis. 270; Sharp v. Rodebaugh, 70 Ind. 547; Ketcham V. The Brazil Block Coal Co., 88 Ind. 515 ; Kemble v. Lule, 3 McLean, 272; Hueske w. Broussard, 55 Tex. 201; Mason v. Ryers, 26 Kan. 464; sufira, §§ 75. 76. See. contra, Nashville Life Ins. Co. -v. Matthews, 8 Lea (Tenn.), 499. The meaning of vague expressions used by the parties to written contracts is often ascertained in the effort to apply the words to the subject-matter of their agreement. The reader is, therefore, referred to the next following chapter where other cases illustrating the rule stated in the text may be found. * In such cases the meaning of the contract is plain, and there is nothing to look for beyond' this ascertained intent. Compare, Zerrahn v. Ditson, 117 Mass. 553; Watsontown Car Mfg. Co. v. Elmsport Lumber Co., 99 Pa. St. 605 ; Pohalski v. The Mutual Life Ins. Co , 36 Super. Ct. (N. Y.) 234; Ingalls V. Cole, 47 Me. 530; The Lougher Coal & R'way Co. v. Williams, 30 L. & E. 496; Stratton v. Pettit, 16 C. B. 420; Charlton v Gibson, i C. & K. 541 ; Simpson v. Henderson, i M. & W. 300; Butler v. Gale, i Williams, 739; Parsons on Cont., vol. II, p. 495. ^ Thus, where " ware potatoes " were contracted for, and those words in the place of contract meant, by fixed usage, a specific kind of potatoes, it was §§ 78,79-] TO SHOW MEANING OF WORDS. 121 . § 78. How this evidence differs from other admissible parol. — It must be conceded that evidence of this char- acter is very different from testimony which brings to the court the facts surrounding the contract, or discloses the usages of trade which affect it, or translates the terms of the writing in accordance with the fixed rules of some particular language or science. In these cases there is no direct reference to the understanding and intention of the particular parties. The evidence all relates to matters outside of the writing and beyond the control of the parties who framed it; and these matters may be wholly investigated without reference to the testimony of the parties. On the other hand evidence to show the sense in which ambiguous expressions in the contract are used is direct evidence of the intention of the parties in the use of these words. It does not, however, give them the power to depart from the writing, for the only inquiry in regard to which this evidence of intention is admissible is, in what sense have the parties used this specific term? The words themselves, therefore, limit the inquiry, and while parties may not testify to their understanding of a contract they may show by their own parol testimony their understanding of the use of par- ticular terms in the contract.^ § 79. Text writers have not conceded its adm,issibility. — While this evidence has been admitted in many cases and for a considerable period, text writers have been unwilling to give any prominence to the principle upon held that parol evidence was inadmissible to show that the parties contracted for an inferior quality of ware potatoes. Smith v. Jeffreys, 15 M. & W. 561. See also Hutchinson v. Bowker, 5 M. & W. 56; Parsons on Cont., vol. II, p. 496- > Supra, n. z, p. 119. 122 EXPLANATORY PAROL EVIDENCE [§ 8o. which the cases admitting it were founded,^ or have refused to sanction the admission of any testimony of intention direct." Probably the disinclination of writers to regard evidence of this nature has arisen from the fact that they have endeavored to cling to Lord Bacon's rule excluding parol evidence in all cases of patent ambi- guity. And it may well be said that this ambiguity is apparent on the face of the instrument. But if we inter- pret Lord Bacon's rule to mean that parol evidence is only excluded when the writer of the instrument has no intention in regard to the matters referred to therein, and when it would make a new contract, we find that the rule is elastic enough to admit this testimony, and is no obstacle to the recognition of the worth of these cases. § 80. Principle justifying its use. — It is believed, however, that the principle upon which these cases rest is the simple and far reaching one that effect is to be * Thus in Taylor on Evidence, § H93, it is said: "Besides the evidence of usage so called, it seeras that where a written agreement is expressed in short and incomplete terms, or contains words of indeterminate signification, witnesses, present at the time of making the agreement, may be called to explain that which \sper se unintelligible ; such explanations not being incon- sistent with the written terms (Sweet v. Lee, 3 M. & Gr. 452), on one or two occasions, even conversations between the parties when the contract was being made, have been received, in proof of the sense which they attached to" the ambiguous expressions. (Birch v. Depeyster, i Stark. R. 210; Grays:/. Harper, i Story's R. 574; Selden v. WiUiams, 9 Watts, 9.) The principle, however, of these cases is not very clear, and no great weight should in pru- dence be attached to them. (Smith v. Jeffreys, 15 M. & W. 561.)" ^ " In all cases where extrinsic evidence has been received to explain written evidence, it will appear that it has been received not in the form of declarations of intention by parties, but in the form of collateral and sur- rounding facts, which, like every other species of presumptive evidence, may reasonably be connected with the substantial issue, and so form data to aid the court or jury." Powell's Law of Evidence, pp. 456, 457. See also Green- leaf on Ev., § 279; Parsons on Cont. vol. II, p. 564, n. (1); Starkie on Ev. p. 654 ; Phillips on Ev. vol. II, p. 786 ; Stephen's Digest of the Law of Evidence, Art. 91 (3). § 8o,] TO SHOW MEANING OF WORDS. 1 23 given to the intentions of men ; and that they should be welcomed as furnishing a safe and wise method of in- terpreting an indeterminate contract. The writing, as has been said, acts as a check upon the parol testimony offered, and while the law should hold to the rule that the written words may only be explained and never con- tradicted, oral evidence of conversations and negotiations of the parties to show the sense in which words have been used, should, when both such parties are livings always be received if the contract would remain obscure and ineffective without a reference to it. CHAPTER VIII. PAROL EVIDENCE TO SHOW SURROUNDING CIRCUM- STANCES. f 8i. Importance of regarding the circumstances surrounding a contract. 82. General rule as to proof of circumstances. 83. Questions to be considered in chapter. 54. Ident;fication of parties included within term. 85. Identification of subject-matter also included. ■8^. Vague words thus applied to subject-matter. — Macdonald v. Long- bottom. 57. Other cases illustrating rule. •88. Facts surrounding execution of contract a part of circumstances of the case. 89. Other matters to be shown as part of the surrounding circumstances. 90. Courts cannot have exact light of parties who make a contract. ■91. Circumstances can never show meaning which contradicts writing. 92. Irreconcilable inconsistency, however necessary. 93. Entire contract to be considered to determine whether inconsistency exists. 94. If written contract is vague or incomplete, circumstances may show real contract. 95. Evidence of practical construction of parties. §81. Importance of regarding the circumstances sur- rounding a contract. — The important and essential aid which parol evidence renders in the search for the intent of contracting parties, is well illustrated by the cases al- ready cited, showing its various methods of explaining particular words used in a contract ; but its benefits are realized with equal clearness when attention is directed to the fact that by it alone are courts permitted to "view a contract with reference to the circumstances which sur- round its formation. Few, if any, written contracts can be understood aright without a resort to this evidence, and we have seen it demonstrated that an ordinary speech § 8l.] TO SHOW SURROUNDING CIRCUMSTANCES. I25 in daily life cannot be properly interpreted and applied without the help derived from a knowledge of the cir- cumstances in regard to which it was made.^ Being thus dependent upon this knowledge in ordinary converse, it is but reasonable that the courts should readily and liber-, ally admit proof of the circumstances in reference to which parties contract. The whole object of this testi- mony is explanatory, and by it the language is applied to its subject-matter, the contracting parties are identified, their relative positions are shown, and every collateral fact which will aid in making clear the meaning of the contract is brought before the court. To disregard it therefore is no more justifiable than would be a refusal to give a meaning to the written words of a contract, for the circumstances and the words are generally interwoven in such a manner that the words cannot be interpreted aright if the circumstances are in any degree overlooked. The United States Supreme Court ^ has said : "Al- though a written agreement cannot be varied (by addi- tion or subtraction) by proof of the circumstances out of which it grew and which surrounded its adoption, yet such circumstances are constantly resorted to for the pur- pose of ascertaining the subject-matter and the stand- point of the parties in relation thereto. Without some knowledge derived from such evidence it would be im- possible to comprehend the meaning of an instrument, or the effect to be given to the words of which it is com- posed. This preliminary knowledge is as indispensable as that of the language in which the instrument is writ- ten. A reference to the actual condition of things at the time, as they appeared to the parties themselves, is often necessary to prevent the court, in construing their lan- guage, from falling into mistakes and even absurdities." 1 Supra, n. i, p. 71. * Reed v. Insurance Co., 95 U. S. 23. 126 EXPLANATORY PAROL EVIDENCE [§§82,83. § 82. General rule as to proof of circumstances. — Wherever, then, a question arises as to the meaning of a written contract, it is always proper to give parol testi- mony to show the surrounding circumstances, or, as they .have been termed, the " circumstances of the case." ^ This principle is illustrated by cases without number, and is unquestioned.^ " It is a fundamental rule that in the construction of contracts the courts may look not only to the language employed, but to the subject-matter and the surrounding circumstances, and may avail them- selves of the same light which the parties possessed when the contract was made."® § 83. Questions to be considered in chapter. — While the foregoing general rule is universally conceded to be a sound principle in the construction of contracts, and there is no occasion for further discussion of the rule it- self, questions arise in reference to it which require con- sideration. These are: What facts are included within 1 Stephen's Digest of the Law of Evidence, Art. 91. 2 See United States v. Gibbons, 109 U. S. 200; Merriam v. United States, 107 Id 437 ; Peclc v. United States, 102 Id. 65 ; Nash v. Towne, 5 Wall. 689; Waring v. Louisville N. R. Co., 19 Fed. Rep. 863; Van Epps 7/. Walshe, I Woods, 598; Union Trust Co. i/. Whiton, 97 N.Y 172; White's Bank v. Myles, 73 N. Y. 335 ; Knapp v. Warner, 57 N. Y. 668; Griffiths v. Hardenbergh, 41 N. Y. 464; Blossom v. Griffin, 13 N. Y, 569 ; Bickett v. Taylor, 55 How. Pr. (N. Y ) 126; Pitney «». Glens Falls Ins. Co., 61 Barb. (N. Y.) 335 ; Stapenholst V. Wolff, 35 Super. Ct. (N. Y.) 25; Rollstone Nat. Bank v Carleton, 136 Mass. 226; Aldrich v. Aldrich, 135 Mass. 153; Norway Plains Savings Bank V. Moors, 134 Mass. 129; Butterworth v. Western Assurance Co., 132 Mass. 489; Farnsworth w. Boardman, 131 Mass. uj; Stoops t/. Smith, 100 Mass. 63; Miller w. Stevens, 100 Mass. 518; Ferris z/. Wilcox, 51 Mich. 105; Spal- ding V. Coon, 50 Mich. 622; Dayton v. Hoagland, 39 Ohio St. 671 ; Oldham V. Brown, 28 Ohio St. 41 ; The County of Des Moines v. Hinkley, 62 Iowa, 637; Crawford w. Elliott, 78 Mo. 497; Pratt v. Canton Cotton Co., 51 Miss. 470; Watrous z*. McKie, 54 Tex. 65; Phillips on Evidence, Cowen & Hill's notes, vol. II, 510; Leake's Digest, p. 210 et s;q.; Chitty on Contracts, p. 147; Starkie on Ev. p. 67S; Stephe;i's Digest of the Law of Ev. Art. 91 (4). ' Merriam v. United States, 107 U. S. 437. § 85.] TO SHOW SURROUNDING CIRCUMSTANCES. 1 27 the term "circumstances of the case?" How far may these facts influence the writing ? And what do judges mean when they state that courts may avail themselves of the same light which the parties possessed at the time they executed the contract ? It is necessary, therefore, to consider the subject with regard to these inquiries. § 84. Identification of parties included within term. — "An agreement is never intelligible unless the persons and subject-matter with which the parties are dealing can be identified." ^ One of the first uses of parol evidence is, therefore, to identify the parties who have signed a, contract, and this use illustrates the absolute dependence of all writings upon parol testimony for their application to particular persons.^ It is said : " We not only may, but must, in the case of every contract, have evidence who are the parties to it." ® And if a party has adopted an assumed name for the purpose of a contract, his real name may be shown and he may be identified as the con- tracting party .^ Where two or more persons answer to the description in the contract, direct evidence of the intention of the parties may be given to apply the contract to its proper objects.^ § 85. Identification of subject-matter also included.--— The phrase circumstances of the case also includes all those facts which are necessary for the identification of the subject-matter of the contract, and these may always 1 Brown v. Fletcher, 35 L. T. 165; compare, Churchill v. Palmer, 115 Mass. 310. 2 Trueir.an v. Loder, 1 1 A. & E. 589 ; Whitelock v. Musgrove, i C. & M. 511 ; Greenleaf on Ev., § 288; Parsons on Cont. vol. II, p. 549. 3 Bramwell, B., Wood v. Priestner, L, R. 2 Ex. 70. * Richardson's Case, L. R. 19 Eq. 588; Trueman -v. Loder, supra. » See § 85. 128 EXPLANATORY PAROL EVIDENCE [§85. be brought before the court, by parol evidence. Green- leaf has said : " It is obvious that parol or verbal testi- mony must be resorted to in order to ascertain the nature and qualities of the subject to which the instrument re- fers. . . . Whatever, therefore, indicates the nature of the subject, is a just medium of interpretation of the language and meaning of the parties in relation to it, and is also a just foundation for giving the instrument an interpretation, when considered relatively, diiferent from that which it would receive if considered in the abstract."^ It is held, theref6re, that parol evidence of extrinsic circumstances tending to show what persons or things were intended by the parties is always admis- sible,* and if these circumstances show that two or more persons or things answer to the descriptions in the con- tract parol evidence of the intention direct may be given to remove the ambiguity.* The situation and character of the subject-matter of the contract may also be brought before the court by parol, and will be regarded in con- * Greenleaf on Evidence, § 286. * United States v. Peck, 102 U. S. 64; Reed v. Insurance Co. 95 U. S. 23 ; Hannah v. Shirley, 7 Or. 115; Maryland v. Railroad Co. 22 Wall. 105 ; Greenleaf on Ev., § 288. ' Parsons on Contracts, vol. II, p. 564, note (1) ; Starkie on Ev. p. 654, and n. i ; Elphinstone's Interpretation of Deeds, p. loS et seq.; Leake, pp. 210, 211. This principle applies with full force to the contracts under con- sideration in this volume. Thus in Robinson v. Great Western Ry. Co. 35 L. J. C. P. 123, where a contract was made for the carriage of goods on a rail- way to a station named, and there were two such stations, evidence of inten- tion direct was admitted to show which was intended. So in a recent Massa- chusetts case (Bergin v. Williams, 138 Mass. 544), it was held proper to identify by parol, certain specifications referred to in a written contract to erect a building, and to consider them with the contract upon the question whether it was void for uncertainty. The court there said as to this proof: " It is the same kind of evidence, that of the situation of the parties and of the subject-matter, and the attending circumstances which is generally necessary to identify persons and things mentioned in a writing." See also Hedges v. Bowen, 83 111. 161 ; The County of Des Moines v. Hinkley, 62 Iowa, 637; Burr V. The Broadway Ins. Co. 16 N. Y. 267; infra, §§ 85, 86. § 86.] TO SHOW SURROUNDING CIRCUMSTANCES. 1 29 struing the contract.^ So parol evidence is proper to i^ntify a paper referred to in a written contract.^ § 86. Vague words thus applied to subject-matter. — Macdonald v. Longbottom. — If, again, the subject of the contract is described by indefinite words, which however may be rendered certain and intelligible by parol, such evidence should be received for that purpose ; and evi- dence of conversations between the contracting parties is admissible to thus apply the contract to its subject- matter. In a 'much quoted English case * the expression " your wool " was used in a written contract, as descriptive of the wool which the purchaser agreed to take from the vendor, and evidence was admitted of a conversation between the parties, in which the seller said that he had for sale a quantity of wool partly of his own clip and partly contracted to be bought of other persons, in order to show what the parties meant by the term "your wool." Lord Campbell, C. J., there said: "The subject-mat- ter of the contract was ' your wool,' and I am of opinion that where there is a contract for the sale of a specific subject-matter, parol evidence may be received to show what the nature of that subject matter was, and that in effect may be by proving what was in the knowledge of the parties at the time of the contract being made. Now, in order to show that, it was proposed to prove the conversation between the plaintiff and the defend- 1 Payne v. Haine, 16 M. & W. 541 ; Small v. Gibson, 16 Q. B. 128. 2 Monocacy Bridge Co. v. American Iron Bridge Mfg. Co. 83 Pa. St. 517. 3 Macdonald v. Longbottom, i E. & E. 977 ; 28 L. J. (Q. B.) 293 ; Morris' Appeal, 88 Pa. St. 368. Compare Mumford v. Gething, 29 L. J. (C. P.) 105. The County of Des Moines v. Hinkley, 62 Iowa, 637 ; Goodrich v. Stevens, 5 Lans. (N. Y.) 230; Smith v. Thomsen, 8 C. B. 44; Nash v. Hunt, 116 Mass. 237; Rugg V. Hale, 40 Vt. 138; infra, % 87. 9 130 EXPLANATORY PAROL EVIDENCE [§ 8/. ant, in which it 'was mentioned that the plaintiff had wool of his own, and also that he had contracted for the purchase of other wool. There was knowledge in both parties of what the subject-matter was. There was an offer to buy ' your wool ;' that was the specific subject-matter which was to be purchased. Then is there any difficulty in admitting what passed at that conversation ? I think that there is none. It is no part of the contract, and is not adding to or varying a written contract, but it is evidence which enables us to say what the contract referred to." § 87. Other cases illustrating rule. — Many other cases illustrate this rule. Thus where a contract in writing was made for the extension of the time of payment of "certain notes" parol evidence was ad- mitted to show what notes were intended to be so extended,^ and where a contract was made in writing for the supply of a "candlestick complete" it was held that parol was admissible to show what was understood to be necessary to render it complete.* The Massachusetts Supreme Court has recently said : * " It is a rule of interpretation that the intention of the parties to a contract is to be ascertained by applying its terms to the subject-matter. The admission of parol » Bell V. Martin, 18 N. J. L. 167; see also Pierce v. Parker, 45 Mass. 80. » Sari V. Bourdillon, i C. B. N. S. 188. ' Swett V. Shumway, 102 Mass. 365. And in Chadwick v. Brumley, 12 Week. Rep. 1077, the court says; "If this were an agreement to supply goods of a certain quality, no doubt it could not be shown that the descrip- tion meant something different from the ordinary sense of the words used, as was decided in the cases cited. . . . because there would then be a contract already containing a definite description. But this falls within another class of cases ; that, namely, where there is a negotiation with respect to some particular thing, and where parol evidence may be admitted to show what was the particular thing the parties contracted about, and which is not definitely or not adequately described by what they have said." § 87.] TO SHOW SURROUNDING CIRCUMSTANCES. I3I testimony for such purpose does not infringe upon the rule which makes a written instrument the proper and only evidence of the agreement contained in it. Thus, for the purpose of identifying the subject-matter to which the written contract relates, parol testimony of that which was in the minds of the parties, and to which their attention was directed at the time, may be given. " It may be shown that a sample, to which the terms of a contract are applicable, was exhibited or referred to in the negotiation, and other statements of the parties then made may be resorted to. The sense in which the parties understood and used the terms expressed in the writing is thus best ascertained." ^ * " It may be laid down as a broad and distinct rule of law, that extrinsic evidence of every material fact, which will enable the court to ascertain the nature and qualities of the subject-matter of the instrument, or, in other words, to identify the persons and things to which the instrument refers, must of •necessity be received. . . . Whatever be the nature of the document under review, the object is to discover the intention of the writer as evidenced by the words he has used ; and in order to do this, the judge must put him- self in the writer's place, and then see how the terms of the instrument affect the property or subject-matter. With this view, extrinsic evidence must be admissible of all the circumstances surrounding the author of the instrument." Taylor on Evidence, § 11 94. See also Reed v. Ellis, 68 111. 206; Donlin z*. Doegling, 80 111. 608 ; Coleman v. Manhattan Beach Imp. Co. 94 N. Y. 229 ; Colt V. Phoenix Fire Ins. Co. 54 N. Y. 595; Burr v. Broadway Ins. Co. 16 N. Y. 267 ; Nelson v. Morse, 52 Wis. 240 ; sufra, % 82. The Supreme Court of Minnesota in the case of Norris v. Clarke Qune, 1885), reported in the Northwestern Reporter, July 4, 1885, attempted to qualify this principle. There a contract was presented for construction which read as follows: "This is to state that B. A.Clarke is to have the sale of my brick in Fergus Falls during the season of 1883, and that I am to deliver them on board car at Fergus Falls at nine (9) dollars per M ; settle- ment to be made monthly ; " and parol evidence was offered to show that the words " my brick " were used to mean all the brick of a certain manufac- ture. But this evidence was excluded, and the court held that, it being set- tled whose brick was meant, the intention of the parties in regard to it was to be gathered from their language. See, however, supra, 74-77, 86; infra, §132. 132 EXPLANATORY PAROL EVIDENCE [§ 88, § 88. Facts surrounding execution of contract a parf of circumstances of the case. — Every collateral fact which existed at the time the contract was executed, and which was known to the parties, may be shown to the court,"^ and may aid in the interpretation of the contract. But in order that any such fact may affect the con- struction of the Contract it must have been within the knowledge of both parties to the contract.^ The situa- tion of the parties may also be proved,* as well as their pre-existing relations,* for parol evidence is clearly ad- missible to show the circumstances under which the con- tract was made and the relation of the plaintiff and de- fendant to it, and to each other in respect of it.^ So the time when and the place where the contract was ex- ecuted, if not shown by the writing, may be determined by parol evidence, as both belong to that class of attending and surrounding circumstances which may always be resorted to for assistance in explaining and applying the terms of the contract* The date of the contract may also be thus supplied.'^ So facts which indi- cate the object of the parties in contracting should be considered.* " In all cases the object is, to see what is the intention expressed by the words used. But from the * Curtiss V. Howell, 39 N. Y. 211; Field -v. Munson, 47 N. Y. 223; Simons v. Johnson, 3 B. & Ad. 175 ; Lewis v. Great West. R'y Co. L. R. 3 Q. B. 195. 2 Von Keller z/. Schulting, 50 N. Y. 108. Compare Batchelder z/. Queen's Ins. Co. 135 Mass. 449. 5 Fench v. Carhart, i N. Y. 96 ; Wood *. Priestner, L. R. 2 Ex. 282 ; Bainbridge v. Wade, 16 Q. B. 89. * Blossom V. Griffin, 13 N. Y. 569; Matter ofN. Y. C. R. R. C0.49 N. Y. 414. " Humfrey v. Dale, 7 E. & B. 266. ' Draper v. Snow, 20 N. Y. 331. ' Cole V. Howe, 50 Vt. 35. 8 Juillard v. Chaffee, 92 N. Y. 529; Marsh v. M'Nair, 99 N. Y. 174; Brick V. Brick, 98 U. S. 514 ; Hutchins v. Hebbard, 34 N. Y. 24; Mason v. Ala. Iron Co. 73 Ala. 270. § 89.] TO SHOW SURROUNDING CIRCUMSTANCES. 1 33 imperfection of language it is impossible to know what that intention is without inquiring further and seeing what the circumstances were with reference to which the words were used, and what was the object appearing from those circumstances which the persons using them had in view." ^ § 8g. Other matters to be shown as part of the surrounding circumstances. — In general it may be said : " For the purpose of explaining a written instrument ex- trinsic evidence of all the circumstances surrounding the author of the instrument, the knowledge of which can in any way be made ancillary to the right interpretation thereof, is admissible." '^ The question presented in each case will be, then, does the fact offered to be proved tend to throw light upon the contract .? — and, if it does, the evidence should be received. It is obvious that great liberality should be shown toward this class of testimony. 1 Lord Blackbume in River Wear Com. v. Adamson, L. R. 2 App. Cas. 743> 763- 2 Knapp V. Warner, 57 N. Y. 668. " Where the meaning of an agree- ment is doubtful, its terms are to be considered in the light thrown on them "by proved or admitted illustrative facts. The situation in which the parties «tand, the necessities for which they would naturally provide, the conveniences they would probably seek to secure and the circumstances and relations of the property in regard to which they have negotiated, are all elements in the interpretation of an instrument." Lacey v. Green, 84 Pa. St. 514. "In order to ascertain the relation of the words of a document to facts, every fact may be proved to which it refers, or may probably have been intended to refer, or which identifies any person or thing mentioned in it. Such facts are hereinafter called the circumstances of the case." Stephen's Digest of Evidence, Art. 91 (4). " Those whose duty it is to determine the rights and obligations of the parties to the contract maybe informed of all such extrinsic facts within the knowledge of the parties to the contract at the time of making it as will afford any aid in determining the sense in which its language was used by the parties and the intention and purposes designed to be affected by such use." Curtiss v. Howell, 39 N. Y. 211. See also Dent v. North Am. S. S Co. 49 N. Y. 390; Norway Plains Sav. Bank v. Moors, 134 Mass. 129; Famsworth z/. Boardman, 131 Mass. 11 J. 134 EXPLANATORY PAROL EVIDENCE [§ (;0. for its exclusion may render the entire contract fruitless, while if it is admitted and does not bear on the contract rarely, if ever, will harm be done. § 90. Courts cannot have exact light of parties wha make a contract. — The statement is frequently made that the law does not deny to the court in interpreting a con- tract " the same light which the parties possessed when the contract was made."^ In its literal sense, how- ever, this proposition is not true. The parties who make the contract have not only the light thrown upon it by a knowledge of all those surrounding circumstances which tend to make it clear and effectual, but also that contributed by their prior con- versations, negotiations and understandings. The court, however, except in rare instances, is not allowed to look to such prior verbal communications as a means of ob- taining light.'' In order to establish uniformity in the use of language and to prevent uncertainty in all written contracts it is deprived of whatever assistance such com- munications might bring to the expressed language, if that language is intelligible. In a Scotch case it was,, however, held " that in all mercantile contracts, whether they be clear and distinct or the reverse, the court are entitled to be placed in the position in which the parties stood before they signed, and therefore may look at all that was said and done by them during the time of the "communings." But this language was repudiated by the English Court of Appeal ; and that court held that no fact not fairly and legitimately comprehended within the expression "surrounding circumstances" in its legal sense could be brousrht before the court* 1 See for an instance of this, Merriam v. United States, 107 U. S. 437. ^ Supra, §§ 74, 80; infra, Contradictory Parol Evidence. • ^ Inglis V. Buttery, L. R. 3 App. Cas. 562, 577. § 9I-] TO SHOW SURROUNDING CIRCUMSTANCES. 135 § 91. Circumstances can never show meaning which contradicts writing. — In considering the circumstances surrounding the contract it is never to be forgotten that no interpretation which is derived from the circumstances will be permitted to stand unless it is consistent with the language of the writing ; and that the principles which permit the introduction of evidence of the circumstances co-exist with those which regulate the interpretation of the words. The New York Court of Appeals, by Church, Ch. J., has said •} " We may resort to surround- ing circumstances in all cases of doubtful construction and patent "^ ambiguity. If the words are clear and un- ambiguous, a contrary intention derived from outside circumstances is of no avail. A new contract cannot be made by showing that the intention was to make a dif- ferent one from that expressed." The same court, by Potter, J., again says : ^ "It is conceded to be a sound rule in the construction of contracts, that where the lan- guage is clear, unequivocal and unambiguous, the con- tract is to be interpreted by its own language, and courts are not at liberty to look at extrinsic circumstances sur- rounding the transaction, or elsewhere, for reasons to as- certain its intent ; the understanding of the parties must be deemed to be that which their own written agree- ment declares.* Where a literal performance is impos- 1 Reynolds v. Commerce Fire Ins. Co., 47 N. Y. 597. 2 Doubtless this word is misprinted for latent. ' Springsteen v. Samson, 32 N. Y. 703; see also Veazie v. Forsaith, 76 Me. 172; Rodgersz/. Kneeland, 10 Wend. (N. Y.) 218. * So in The Adams and Westlake Mfg. Co. v. Cook, i6 Bradwell's Rep. (III. App.) 161, Bailey, J., says: "Where the language of a contract 'is plain and unambiguous, it must be enforced according to its obvious meaning, but where it is equivocal or doubtful, it is proper to look to extrinsic circum- stances, particularly those surrounding the execution of the instrument, to ascertain the meaning the parties intended to convey by the language em- ployed to express their agreement. But the intention which the courts will enforce must, after all, be that which is expressed in the writing. An inten- 136 EXPLANATORY PAROL EVIDENCE [§ 92. sible or impracticable, or where the language is ambigu- ous or susceptible of more than one construction, or is vague, or general, or inappropriate to express the true intent, extraneous evidence is admissible to explain the intent of the parties."^ § 92. Irreconcilable inconsistency, however necessary. — A case in the United States Supreme Court* well illus- trates how far the courts will allow the circumstances of the case to affect the writing, and shows that these will not be held to contradict the written words of the con- tract if there is any construction which the court may adopt which will be consonant both with the words of the contracting parties and the surrounding circum- stances. In the case referred to the action was brought upon a contract made by a mail agent, who agreed " to hire the steamboat Franklin until the Sydney is placed on the route, to commence to-morrow, 20th instant, at ($35) thirty-five dollars per day, clear of all expenses other than the wages of Captain ." The lessees on their part agreed to the terms offered " for the use of the steamboat Franklin until the Sydney is placed on the route to Potomac Creek." Evidence was offered at the trial which (to express its object briefly) tended to show that the steamboat route to Potomac Creek was not a route open all the year, but was closed during a season when the river was not navigable, and it was contended that this fact, known to both parties, was a part of the contract, and influenced its interpretation to such an ex- tent that the hirer of the steamboat, under the language of the contract above given, was not obliged to retain tion of either or both the parties different from the one so expressed cannot be regarded." See also Newenham v. Smith, 10 Ir. L. R. N. S. 245. 1 See also Merriam v. United States, 107 U. S. 437 ; Metcalf v. Williams, 104 U. S. 97 ; Morss v. Salisbury, 48 N. Y. 636. 2 Bradley v. The Washington A. & G. S. P. Co., 13 Peters, 89. § 93"] TO SHOW SURROUNDING CIRCUMSTANCES. 1 37 the boat during that part of the year when navigation was closed. On the other hand, it was argued that the words of the contract were clear and unambiguous, and that the only act which would terminate the hiring was the placing of the Sydney, a new steamboat under prep- aration for the service, upon the route. The judge at the trial excluded the evidence as con- tradicting the writing; but upon appeal the Supreme Court of the United States held — not, however, without the dissenting votes of three of its justices, one of whom was Mr. Justice Story — that the evidence should have been received and the contract construed according to the circumstances of the case. This decision, although looked upon as an extreme case, seems to be thoroughly in accord with the growing tendency to receive parol to aid in the construction of a contract, and with the well- recognized principle of construction that the intention of the parties should govern. Moreover, the written words of the contract in question do not necessarily exclude the interpretation adopted, for the writing is silent as to the fact upon which the construction turned ; and when the incidents and facts showing the nature of the " route to Potomac Creek " are disclosed, the contract is merely applied to its subject-matter, and is interpreted in accord- ance with the clear intent of the parties.^ § 93. Entire contract to be considered to determine whether inconsistency exists. — So, in determining whether a proposed construction, suggested by the surrounding circumstances, is consistent with the writing, the entire written contract is to be examined for the intent of the parties; and the fact that the apparent meaning of a word is contradicted by such circumstances is not a sufifi- 1 Compare this case with Grant v. Maddox, 15 M. & W. 737. See also supra, §§ 86, 87. For reference from § 16 see §§ 113, 114. 138 EXPLANATORY PAROL EVIDENCE [§ 94, cient reason for rejecting the construction which they favor. Wherever, indeed, the actual intent of the parties is ascertained from the circumstances, and this accords vi^ith their general will as expressed in the writing, partic- ular words and phrases must be disregarded to give effect to this main intent. Thus where the word " penalty " is used in a contract to specify the nature of the liability to be incurred upon a breach, it is held that this use of the word is not by itself sufficient to determine that liqui- dated damages are not to be recovered, for "the ac- tual intention of the parties, so far as it can reasonably and fairly be ascertained from the language of the con- tract, and from the nature of the surrounding circum- stances of the case, is to be considered."^ So, where the words of a receipt were contradictory, the Supreme Court of Illinois said, in regard to the contradiction : " The law, in the absence of proof, does not determine this question either way. What is the true intent of the parties giving or receiving this receipt must be deter- mined by circumstances to be proved." ^ This principle is well established, and many cases in a subsequent chapter will be found which illustrate the importance attached by the law to these circumstances, and the extent to which the apparent meaning of a word will be sacrificed to the clear intent of the parties as ex- pressed in the whole contract, construed in the light of its extrinsic facts.^ § 94. If written contract is vague or incomplete, cir- cumstances may show real contract. — Wherever the writ- ing does not show the agreement clearly and fully it is ' Little V. Banks, 85 N. Y. 258. See also Wolf 7/. D. M. & H. D. Ry. Co., 64 Iowa, 380 ; Herryford v. Davis, 102 U. S. 235 ; Colwell v. Lawrence, 38 N. Y. 71 ; infra. Rules of Construction. 2 Adam's Express Co. v. Boskowitz, 107 111. 660. * Infra, Rules of Construction. § 94-] TO SHOW SURROUNDING CIRCUMSTANCES. 1 39 proper to look to the circumstances for information of the real contract of the parties. Therefore " it is a well established rule of law that the whole facts and circum- stances attending upon the making, issue, and transfer- ence of a bill or note may be legitimately referred to for the purpose of ascertaining the true relation to each other of the parties who put their signatures upon it, either as makers or as indorsers, and that reasonable inferences^ derived from these facts and circumstances, are admitted to the effect of qualifying, altering, or even inverting the relative liabilities which the law merchant would other- wise assign to them. It is in accordance with that rule that the drawer of a bill is made liable in relief to the ac- ceptor, when the facts and circumstances connected with the making and issue of the bill sustain the inference that it was accepted solely for the accommodation of the drawer." ^ So parol evidence is proper to show that one who has signed a contract in his own name was merely an agent for an undisclosed principal, provided the object of the testimony is to enable the principal to recover on the contract,** or to make him liable thereon.^ And where a memorandum of sale merely mentioned the names of two persons, it was held that the circumstances and relations of the parties might be considered in order to explain which was buyer and which was seller.* » Macdonald v. Whitfield, L. R. 8 App. Cas. 733. See also Bowen v. Pro- prietors of the South Building, 137 Mass. 274; Singer Mfg. Co. v. Allen, 122: Mass.467; Graves 2/. Johnson, 48 Conn. 1 60; Booth z/. Robinson, 55 Md. 419; Wood V. Mathews, 73 Mo. 477; Hylerw. Nolan, 45 Mich. 357; Cole z/. Smith, 29 La. Ann. 551; Oldham v. Brown, 28 Ohio St. 41 ; Mayor, &c. of New York V. Exchange Fire Ins. Co., 3 Abb. Ct. App. Dec. 261 ; Morrill v. C. T. Segar Mfg. Co., 32 Hun (N. Y.), 542; Guthrie v. Imbrie, 12 Ore. 182 ; Ren- dell V. Harriman, 75 Me. 497 ; infra, Contradictory Parol Evidence. 2 Oelricks V. Ford, 23 How. 63; Ford v. Williams, 21 How. 289; N. J^ Steam Nav. Co. v. Merchants' Bank, 6 How. 381 ; Leake's Digest, p. 210. 3 Thompson v. Davenport, 9 B. & C. 78; Taylor on Evidence, § 1153. * Newell V. Radford, L. R. 3 C. P. 52. 140 EXPLANATORY PAROL EVIDENCE. [§ 95. § 95. Evidence of practical construction of parties. — Among the facts which parol may bring to the knowl- edge of the court to aid in the interpretation of an am- biguous contract, must be also named the practical con- struction which the parties have put upon their own agreement. For if acts are performed under a doubtful contract they may be shown in evidence to indicate the intention of the parties in regard to its meaning.^ " In cases where the language used by the parties to the con- tract is indefinite or ambiguous, and hence of doubtful construction, the practical interpretation by the parties themselves is entitled to great if not controlling influ- ence." ** But it is held that the real meaning of an unex- ecuted contract will prevail over that which the parties have assumed to be its meaning when computing the amount due thereon.* And evidence of the acts of the parties under a contract can not be given if its language is plain and unambiguous.* ' Lovejoy v. Lovett, 124 Mass. 270; Smith v. Faulkner, 78 Mass. 255 ; Barker v. Troy, &c. R. R. Co., 27 Vt. 766; Gray w. Clark, 11 Vt. 583; Ver- mont Street M. E. Church v. Brose, 104 111. 266 ; Ketcham v. The Brazil Block Coal Co., 88 Ind. 515; Reissner v. Oxley, 80 Ind. 580; Faries v. Ranger, La. Ann. 1883, p. 102. 2 Chicago V. Sheldon, 9 Wall. 50 ; Vinton v. Baldwin, 95 Ind. 433. ' Spencer v. Millisack, 52 Iowa, 31. * Hill V. Priestly, 52 N. Y. 635 ; Morss v. Salisbury, 48 Id. 637 ; Albright 'u. Voorhies, 36 Hun (N. Y.), 437 ; Beachem's Assigs. v. Eckford's Extrs., 2 Sandf. Ch. (N. Y.) 116; Norton v. Woodruff, 2 N. Y. 153. CHAPTER IX. WHEN PAROL EVIDENCE OF USAGE MAY BE GIVEN. 5 96. General contents of chapter. 97. Principle justifying reference to usage. 98. Judge Story's caution as to extending doctrine. 99. Former dislike of usage not now prevalent. 100. Usage a necessary and safe means of interpreting trade contracts. loi. Incidents annexed to contracts by usage alike in different trades. 102. English cases illustrating nature of such incidents. 103. American illustrative cases. 104. Usages which contradict the writing cannot be proven. loj. Instances where usages have been excluded because contradictory to writing. 106. When a usage contradicts the writing. 107. Apparent inconsistency not sufficient. — Hutchinson v. Tatham. 108. Test for determining whether usage is inconsistent with language. 109. A usage which qualifies only, does not contradict. § 96. General contents of chapter. — The frequency with which the law resorts to proof of usages, in order to interpret the meaning of the language of a contract, has been commented upon, and the cases illustrating that branch of the general sphere of usages in construction have been mentioned.^ In the present chapter the law governing the proof of usages which annex incidents to contracts, and the rules prescribing the essential char- acteristics of a trade usage in order to enable it to affect a contract, will be considered.^ In treating of this com- 1 Supra, % 60. 2 Leake says (p. 199) : A usage of trade operates " either by introducing additional terms and incidents into the written contract ; or by merely explain- ing and construing the words and phrases used." And Elphinstone, in his Interpretation of Deeds (p. 9), lays down the following rule : " Evidence of custom or usage is admissible to add to the contract expressed in a deed, terms which are not inconsistent with it," and says : " This rule having refer- 142 EXPLANATORY PAROL EVIDENCE [§ 97. prehensive branch of the law, we can hope but to express clearly its salient points as modified and illustrated by the recent decisions.^ § 97. Principle justifying reference to usages. — The general theory upon which usages are allowed to be proved is that the contracting parties have intended to incorporate them in their contract. The law recognizes the fact that men assume that the words of the contract will be understood in their trade meanings, and that the terms of their agreements will be governed by the well recognized usages of the callings to which they relate ; and it necessarily looks to these usages to ascertain the real thought of the contract. It finds that merchants do not write all the terms of their contracts, but rely upon the knowledge and good faith of one another as to mat- ters so well known that special reference to them would be burdensome and unnecessary. And that they, there- ence to implied additional terms, must be carefully distinguished from one with which it is often confounded, the rule, namely, that extrinsic evidence may be used to show the meaning that the usage of the business to which the contract relates has fixed to words or phrases employed in setting forth the expressed terms of the contract. . . . The distinction is obvious : the rule under consideration forces us to introduce additional and unexpressed stipulations into the contract contained in the deed, while the rule referred to deals with the manner in which the expressed terms of that contract is to be ascertained." See also, as recognizing and approving this distinction, Anson on Contract, pp. 238, 239; Browne on Usages and Customs, pp. 57, 65, 72; Spartali v. Benecke, 10 C. B. 312; Brown v. Byrne, 3 E. & B. 703. * The usages treated of in this chapter are usages of trade. Such general usages or customs as are incorporated in the law of the land enter into the contracts of parties with such law, and need no especial consideration. No distinction is recognized between the words " usage " and " custom " as ap- plied to a course of trade, for the words are used interchangeably in the cases (Richmond v. Union Steamboat Co., 87 N. Y. 240; Walls v. Bailey, 49 N. Y. 615; Lawson's Usages and Customs, p. 26; Jewell v. Railway Co., 55 N. Y. 84). The particular practices of an individual never constitute a usage of trade {infra, § 112), and the application of the word usage to such practices is thought to be misleading, and has been avoided as far as possible in the treatment of this subject. § gS.'j TO ANNEX TERMS BY USAGE. I43 fore, agree upon many of the terms of their contracts by mere silence. What these terms are must be shown by parol evidence, " The truth is that the principle on which the evidence is admissible is that the parties have not set down on paper the whole of their contract in all its terms, but those only which were necessary to be de- termined in the particular case by specific agreement, and which, of course, might vary infinitely, leaving to implication and tacit understanding all those general and varying incidents which an uniform usage would annex, and according to which they must in reason be under- stood to contract, unless they expressly exclude them."^ § 98, Judge Story's caution as to extending doctrine. — ^Judge Story, in the case of The Schooner Reeside,* expressed himself as strongly against extending the doc- trine of usages, and said : " I own myself no friend to the almost indiscriminate habit of late years of setting up particular usages or customs in almost all kinds of busi- ness and trade, to control, vary, or annul the general liabilities of parties under the common law, as well as 1 Humfrey v. Dale, 7 E. & B. 366. " In all contracts, as to the subject- matter of which known usages prevail, parties are found to proceed with the tacit assumption of these usages ; they commonly reduce into writing the spe- cial particulars of their agreement, but omit to specify these known usages, which are included however, as, of course, by mutual understanding. Evi- ■dence, therefore, of such incidents is receivable. The contract, in truth, is partly express and in writing, partly implied, or understood and unwritten." Coleridge, J., Browne v. Byrne, 3 El. & B. 715. "The custom of trade, which is a matter of evidence, may be used to annex incidents to all written ■contracts, commercial or agricultural, and others, which do not by their terms exclude it upon the presumption that the parties have contracted with refer- •ence to such usage, if it is applicable," Parke, B., Gibson v. Small, 4 H. L. C. 397. See also Robinson v. United States, 13 Wall. 365; Brown Chemical Co. V. Atkinson, 91 N. C. 389; Hughes v. Stanley, 45 Iowa, 622; Sims ». United States Trust Co., 35 Hun (N. Y.), 533; Hutton v. Warren, i M. & W. 475 ; Carver's Carriage of Goods by Sea, p. 182. 2 2 Sumn. 567. 144 EXPLANATORY PAROL EVIDENCE [§ 98. under the commercial law. It has long appeared to me that there is no small danger in admitting such loose and inconclusive usages and customs, often unknown to par- ticular parties, and always liable to great misunderstand- ings and misrepresentations and abuses, to outweigh the well known and well settled principles of law. And I rejoice to find that, of late years, the courts of law, both in England and in America, have been disposed to nar- row the limits of the operation of such usages and cus- toms, and to discountenance any further extension of them. The true and appropriate office of a usage or cus- tom is to interpret the otherwise indeterminate intentions of parties, and to ascertain the nature and extent of their contracts, arising, not from express stipulations, but from mere implications and presumptions, and acts of a doubt- ful or equivocal character. It may also be admitted to as- certain the true meaning of a particular word, or of partic- ular words in a given instrument, when the word or words have various senses, some common, some qualified, and some technical, according to the subject-matter to which they are applied. But I apprehend that it can never be proper to resort to any usage or custom to control or vary the positive stipulations in a written contract, and a forti- ori, not in order to contradict them. An express contract of the parties is always admissible to supersede, or vary, or control a usage or custom ; for the latter may always be waived at the will of the parties. But a written and ex- press contract cannot be controlled, or varied, or contra- dicted by a usage or custom ; for that would not only be to admit parol evidence to control, vary, or contradict written contracts, but it would be to allow mere pre- sumptions and implications properly arising in the ab- sence of any positive expressions of intentions to control^ vary, or contradict the most formal and deliberate written declarations of the parties." §§ 99> lOO.] TO ANNEX TERMS BY USAGE. I45 § 99. Former dislike of usage not now prevalent. — The foregoing extract has been frequently quoted, and many courts have shown a strong aversion to allowing a free resort to proof of usage. Thus it was said by Earl, C, in New York : ^ "As to the admissibility of usages in general the later cases show that the dislike to them which seems always to have characterized the ablest judges in this country, and particularly in this State, is now becoming general ; and it is now quite well settled that usage or custom cannot be proved to contravene a rule of law or to alter or contradict the express or im- plied terms of a contract, or to make the legal rights or liabilities of the parties to a contract other than they are by common law." This dislike of usages, however, has not prevailed in England to the same extent as in this country, and the later cases there, as we shall presently see, have carried forward the doctrine relative to them to more liberal bounds than have heretofore existed. § 100. Usage a necessary and safe means of inter- preting trade contracts. — The' vigorous words of Mr. Justice Story and the general attitude of our courts have, doubtless, done much to fix the present requisites of usages, and to prevent their encroachment upon written contracts. But judging from the frequency and liberality with which they are used to interpret trade contracts, it can- not be said that they are frowned upon by the law. In principle there surely is no reason why they should be. They serve as the only means of interpreting mercan- tile contracts in accordance with the intentions of the parties, the goal of all construction. They constitute t Bradley v. Wheeler, 44 N. Y. 495. See also Lawson on Usages and Customs, p. 20 et seq. 10 146 EXPLANATORY PAROL EVIDENCE [§ lOU "the laws of laymen," and are indissolubly connected with all trade and with the law as it now exists, and by- explaining the meaning of specific terms in the contract, they frequently offer the only method of translating the language so that it is intelligible. It would seem, therefore, that while the limits within which they may operate should be strictly and clearly defined, and the integrity of the writing should be thus; maintained, within those boundaries full effect and favor ought to be given to such proof as a reasonable and ac- curate method of discovering the intentions of contract- ing parties,^ § loi. Incidents annexed to contracts by usage alike in different trades. — It would be impossible in this volume to present adequately all of the cases which, in the various branches of the law, have illustrated the rule that incidents may be annexed to contracts by usage. Such a course, moreover, is not necessary in order to- make clear the general character of such incidents or to illustrate the principles which underlie this branch of law. For these principles in the different trades are the same, and there is no propriety in admitting proof of usage in one calling more readily than in another.^ A few only of the leading cases will, therefore, be given to ^ " As we shall see, however, there has, in more recent times than those ta which Mr. Justice Story referred, been a tendency upon the part of judges to extend the office of a usage, and while they have been as unwilling to allow a usage to rule express words, they have allowed a usage to supply words and incidents to a written contract which were not inconsistent with it. They, too, looked to the intention of the parties, but they came to the conclusion that the real drift of these intentions would be better ascertained by a careful regard to the circumstances of the individual at the time of the contract than from a slavish regard only to the written words of the instrument." Browne: on Usages and Customs, p. 5. See also pp. 88, 89. 2 Browne on Usages and Customs, p. 72. § I02.] TO ANNEX TERMS BY USAGE. I47 illustrate the general nature of the terms which usage may annex to all commercial and trade contracts. § 102. English cases illustrating nature of such incidents. — In England it has been held that a custom existing in a particular trade, to the effect that upon a yearly hiring certain holidays during the year were allowed, could be proved,^ and that usage might show that all sales in a trade were made by sample, although in the case before the court the sale was not stated in the bought and sold notes to have been so made.* So where there was an engagement at a yearly salary, and a stipula- tion in the contract for an increase of salary at the end of a year, it was held proper to show a custom of the business to determine the hiring by a month's notice at any time ; * also on the sale of West India rum, it was held proper to show the customary allowance of ware- house rent made to the buyer upon such sales; * and that on a sale of goods by a broker in the City of London, to be paid for by bill, the seller might refuse the credit of the buyer and rescind the contract.'' More recently it has been held that the usage of the port of delivery under a charter-party would control as to the weight of the cargo upon which freight was to be recovered ; * that upon a contract made and signed by the defendants " as ^ The Queen v. Stoke-upon-Trent, 5 Q. B. 303. 2 Syers v. Jonas, 2 Exch. 1 1 1. 3 Parkers. Ibbetson, 4C.B.N.S. 346; cf. Metzner z/. Bolton, 9 Exch. 518. * Fawkes v. Lamb, 31 L. J. Q. B. 98. " Hodgson V, Davies, 2 Camp. 530; Myers v. Sari, 3 E. & G. 306; Humfrey v. Dale, 7 E. & B. 266 ; Brown v. Byrne, 3 E. & B. 703 ; Heyworth V. Knight, 17 C. B. N. S. 298. Other English cases, where usage has annexed incidents to a contract, are : Field v. Lelean, 6 H. & N. 617 ; Falkner v. Earle, 3 B. & S. 360; Buckle z/. Knoop, L. R. 2 Exch. 125; Bottomley 7/. Forbes, 5 Bing. N. C 121 : Gibbons v. Young, 8 Taunt. 254; Allen «<. Sundries, i H. 6 C. 123. See also Leake's Digest, p. 199; Chitty on Cont. vol. I, p. 143; Carver's Carriage of Goods by Sea, p. 182 et seq. ' Hudson V. Ede, L. R. 2 Q. B. 566, 3 Q. B. 412. 148 EXPLANATORY PAROL EVIDENCE [§ IO3. agents to merchants," it was proper to show a trade usage that if the principal's name was not disclosed within a reasonable time after the signing of a charter- party, the broker should be personally liable.^ So upon a contract of sale of goods by the manufacturer thereof, it was held proper to show a custom, in the absence of express provision in the contract, that the goods to be supplied were to be of the manufacturer's own make.* These recent decisions have materially broadened the law of England in regard to usages, and it can hardly be doubted that the evidence was wisely received in each of the cases, and that the contracts were construed with the proper regard for the intention of the parties. To use the language of Browne:* "We cannot see that the law has suffered in any respect from the extension which has been allowed to the common conduct as interpreting the common transactions of men." § 103. American illustrative cases. — The usages which in this country have entered into contracts are of similar character to those sanctioned by the English authorities mentioned in the preceding section. Thus, for example, it has been recently held by the New York Court of Appeals, that a usage well known to the charterer and the master of a vessel that by the custom or usage of the port of Liverpool, freight was collectible only on net weight of cotton to be there delivered, entered into a charter-party, which should be construed with reference to it.* It is also held by the * Hutchinson v. Tatham, L. R. 8 C. P. 482. See also Humfrey v. Dale, 7 E. & B. 266; Fleet v. Murton, L. R. 7 Q. B. 126. In the last case brokers contracted for their principal and wrote " sold to our principal " and signed as brokers, and evidence of custom was received to show that they were liable as well as the principal, if they did not thereafter disclose his name. In- fra, %% 107, 108. » Johnson v. Raylton, L. R. 7 Q. B. 438. ' Usages and Customs, p. 89. * McPherson v. Cox, 86 N. Y. 472. § I03-] TO ANNEX TERMS BY USAGE. I49 same court that goods transported by water, are to be delivered by the carrier in accordance with the usage and custom of the place of delivery, or the course of dealing between the parties, if the bill of lading makes no express provision, and even if the bill of lading specifies that delivery is to be made to the consignees, the manner in which it should be made is controlled by the usage of the place of delivery.-* Upon a sale of berries in bags, it was held proper to show a custom that the sample upon which the sale was made, repre- sented the entire lot sold, and not the character of each bag.* So where an article was sold, by sample and by weight, without more specific agreement, evidence of a general usage was admissible to show that the weight was to be computed as previously ascertained at the time of packing, and marked on the cases, and not by actual weight at the time of the sale.* Where, also, a charter-party was silent as to the exact time of the com- mencement of the lay days the custom of the port was held to control.* And where upon a contract made by telegram for the purchase of wheat no time or place of payment was specified, custom was allowed to control as to these matters.^ In a case in the United States Supreme Court,* ^ Richmond v. Union Steamboat Co. 87 N. Y. 240. See also Loveland v. Burke, 120 Mass. 139; Irish v. Railroad, 19 Minn. 376; Farmers' & Mechan- ics' Bank v. Champlain Trans. Co. 18 Vt. 131 ; Gibson v. Culver, 17 Wend. (N. Y.)305- 2 Schnitzer v. Print Works, 114 Mass. 123. 3 Jones V. Hoey, 128 Mass. 585. * Barker v. Borzone, 48 Md. 474. 5 Mand v. Trail, 92 Ind. 521 ; S. C. 47 Am. R. 163. 6 Robinson v. United States, 13 Wall. 363. See also Doane v. Dunham, 79 111. 131; Hughes V. Stanley, 45 Iowa, 622; Collender x/. Dinsmore, 55 N. Y. 200; Smith z/. Dunn, 6 Hill (N. Y.). 543; Dobbin v. Bradley, \^ Wend. (N. Y.).422; Leew. Dick, 10 Peters, 482; Howe v. Hardy, 106 Mass. 329; Perkins v. Jordan, 35 Me. 23; Cook v. Wells, 91 Mass. 350; Roberts z/. 150 EXPLANATORY PAROL EVIDENCE [§ IO4. where a party agreed to deliver a certain number of bushels of " first quality clean barley," and the contract did not state whether the barley was to be delivered in sacks or in bulk, evidence of a usage to deliver in sacks was held to be proper, Mr, Justice Davis saying : " In Barnard v. Kellogg,^ this court decided that proof of a custom or usage inconsistent with a contract, and which either expressly or by necessary implication contradicts it, cannot be received in evidence to affect it ; and that usage is not allowed to subvert the settled rules of law. But we stated at the same time, that custom or usage was properly received to ascertain and explain the mean- ing and intention of the parties to a contract, whether written or parol, the meaning of which could not be ascertained without the aid of such extrinsic evidence, and that such evidence was thus used on the theory that the parties knew of the existence of the custom or usage and contracted in reference to it. . . . Parties who contract on a subject-matter concerning which known usages prevail, by implication incorporate them into their agreement, if nothing is said to the contrary. The evidence in the present case did not tend to contradict the contract, but to define its meaning, in an important point, where by its written terms it was left undefined. This it is settled may be done." § 104. Usages which contradict the writing cannot be proven. — No more important, frequent, or difficult inquiry is presented, in the consideration of usages which annex incidents to a contract, than, is the claimed usage consistent with the language of the contract ? ^ For it is Wilder, 6963. 340; Atwaterz'. Clancy, 107 Mass. 369 For cases arising in different trades consult Lawson on Usages and Customs. 1 10 Wall. 383. ^ This inquiry never arises in reference to usages which explain the mean- ing of the words of a contract {supra, % 61). And any general statement of ^ 104.] TO ANNEX TERMS BY USAGE. 151 a well settled rule that parol evidence of a usage, which will annex an incident to a contract can never be given if it directly contradicts the written contract.^ If the writing speaks, there is no necessity for resort to usage. Thus where a bill of lading contained the clause " aver- age to be adjusted according to British custom," the usage 'the law governing usages, which fails to recognize this distinction, is inac- curate, and only occasions apparent uncertainty in the law. To illustrate, it is broadly and frequently asserted that "though usage maybe admitted to elucidate what is doubtful it is not admissible to contradict what is plain," and again, " a contract plain in its terms is not to be controlled by evidence of usage." See Story on Contracts, § 801, and cases cited ; Barnard v. Kel- logg, 10 Wall. 383; Stagg V. Com. Ins. Co. 10 Wall. 589; Dodd v. Farlow, ~93 Mass. 426 ; Hearn v. The New England Mut. Marine Ins. Co. 3 Cliff. 318; Calenders. Dinsmore, 55 N. Y. 200; Dent/. Whetten, 8 Wend. (N. Y.) 160. Lord Mansfield says: " Usage is always considered in policies of insurance, even when no difficulty arises on the words themselves." Preston v. Green- wood Ins. Co. 4 Doug. 28. See also Duer on Insurance, vol. I, p. 255. Con- sult, supra, § 61. 1 National Bank v. Burkhardt, 100 U. S. 686 ; Barnard v. Kellogg, 10 Wall. 383; Insurance Co. v. Wright, I Wall. 470; Oelrichs v. Ford, 23 How. 63; Bliven v. Screw Co. 23 How. i; The Reeside, 2 Sumn. 567; •CoUenderw. Dinsmore, 55 N. Y. 200; Groat v. Gile, 51 N. Y. 431 ; Pindar -V. Continental Ins. Co. 36 N. Y. 648; Vail v. Rice, 5 N. Y. 155 ; Dykers v. Allen, 7 Hill (N. Y.), 499 ; Woodruff v. Merchants Bank, 25 Wend. (N. Y.) •674; McKim i-. Aulbach, 130 Mass. 481; s. C 39 Am. R. 470; Jones v. Hoey, 128 Mass. 585; Brown v. Foster, 113 Mass. 136; Davis v. Galloupe, III Mass. 121 ; Snelling v. Hall, 107 Mass. 134 ; Potter v. Smith, 103 Mass. -68 ; Dickinson v. Gay, 89 Mass. 29 ; Greenstine v. Borchard, 50 Mich. 434 ; :S. C. 45 Am. R. 51 ; Sohn v. Jarvis, loi Ind. 578; Franklin Life Ins. Co. v. Sefton, 53 Ind. 380 ; Spears v. Ward, 48 Ind. 541 ; Bailey v. Bensley, 87 111. 556; Corbett v. Underwood, 83 111. 324; Smyth v. Ward, 46 Iowa, 339; Randolph v. Holden, 44 Iowa, 327 ; Marks v. Cass Co. Mill Co. 43 Iowa, 146; Randall v. Smith, 63 Me. 105; Polhemus v. Hermain, 50 Cal. 435; ■Cooke w. England, 27 Md. 14; Witherill z/. Neilson, 20 Pa. St. 448; Cox w. Heisley, 19 Pa. St. 247 ; Schenck v. Griffen, 38 N. J. L. 462 ; Phoenix Ins. Co. ■V. Taylor, S Minn. 492; Spartali v. Benecke, 10 C. B. 212 ; Blackett v. Royal Exchange Assurance Co. 2 Cr. & J. 244 (see supra, § 68) ; Hall v. Janson, 4 El. & Bl. 500; Cockburn v. Alexander, 6 C. B. 791 (see Browne on Usages and Customs, pp. 68, 69); Hayton v. Irwin L. R. S C. P. 134; Elphinstone's Interpretation of Deeds, pp. 12-16. 152 EXPLANATORY PAROL EVIDENCE [§ I05- of British adjusters was made a part of the coritract to the exdusion of the general law and usage.* § 105. Instances where usages have been excluded because contradictory to writing. — In a case in the New York Court of Appeals, where it appeared that the de- fendants had contracted to sell to the plaintiff at a spec- ified price four thousand tons of steel rails " f . o. b.,"' and the contract provided for " Inspection at makers* works," it was held that after the explanation of the let- ters f. o. b. the contract was clear and unambiguous, and that evidence to prove the custom of the trade as to who- should bear the expenses of the inspection of the rails was properly excluded at the trial.'^ So the Supreme Court of Ohio held, when construing a policy of insur- ance on the assured's general stock of hardware and agri- cultural implements, which provided that " if the as- sured shall keep gunpowder (or) petroleum, without written permission in this policy, then this policy shall be void," that it was not proper for the assured to show a custom among hardware dealers to keep the prohib- ited articles for sale as a part of their stock, and thus prevent a forfeiture of the contract.^ And it has been 1 Stewart v. West India S. S. Co., L. R. 8 Q. B. 88. See also Barrow v, Dyster, L. R. 13 Q. B. 635 ; aff. 33 Week. Rep. 199; Hayton v. Irwin, L. R. 5 C. P. 134. 2 Silberman v. Clark, 96 N. Y. 522. Earl, J., says : " If this contract had simply provided for the ' usual inspection,' then it would probably have beea open for either party to show what was meant by ' usual inspection,' and' under what circumstances, by whom, and at whose expense the inspection was to be made, according to the established custom of the trade The meaning of the language used cannot be changed or varied by the proof of any custom, and hence there was no error in this case upon the trial in excluding such proof." See also Bradley v. Wheeler, 44 N. Y. 495 ; Paine v^ Howells, 90 N. Y. 660 ; Crouch v. Credit Foncier of England, L. R. 8 Q. B. 386. ' Beer v. Insurance Co. 39 Ohio St. 109, the court says : " Usage must not be inconsistent with the words of the agreement " and cites, among other cases, Steel Works v. Dewey, 37 Ohio St. 242 ; Ledyard v. Hibbard, 48. § I06.] TO ANNEX TERMS BY USAGE. 153 held upon the construction of a marine insurance poHcy, where a vessel was insured " at and from Liverpool to port in Cuba, and at and thence to port of advice and discharge in Europe," that going to a second port in Cuba was a deviation from the terms of the policy, and could not be justified by proof of custom that it was allowable.^ § 1 06. When a usage contradicts the writing. — Although the general rule that a usage which contradicts the terms of a written contract can never annex an incident to it is well settled, it is not easy to apply the Mich. 421 ; Birmingham Ins. Co. v. Kroegher, 83 Pa. St. 64; Wetherell v. Ins. Co. 82 Mass. 276 ; Commercial Ins. Co. v. Mehlman, 48 111. 313 ; McEwan V. Guthridge, 13 Moore's P. C. 30. ^ Hearn v. The England Mut. Marine Ins. Co. 3 Cliff. 318. In the opinion of the court, Clifford, J., says: "Extrinsic evidence of custom and usage is doubtless admissible in certain cases where the transaction is of a commercial character, to annex incidents to written contracts in respect to which the con- tracts are silent, but such evidence cannot be properly received if it is incon- sistent with the terms of the written instrument whether such inconsistency appears by the express terms of the written contract or by reasonable implica- tion from the same as applied to the subject-matter.'' See also Markham v. Jaudon, 41 N. Y. 235 ; Brown v. Tayleur, 4 Ad. & Ell. 241 ; Hall v. Janson, 4 EU. & B. 510; Thompson v. Riggs, 5 Wall. 679. In Wadsworth v. Allcott, 6 N. Y. 64, receipts were read in evidence to show the terms upon which cer- tain wheat was delivered to the defendants, and evidence of usage was offered for the purpose of showing that these receipts imported a sale and not a bail- ment. In regard to this evidence, Paige, J., said: "The offer of evidence of usage among millers and sellers of wheat, to show that the receipt of the 2ist November, 1845, imported a sale, was properly rejected. The terms of the contract contained in the receipt, are plain and unambiguous. The evi- dence of usage was not offered to ascertain the meaning as understood by millers and sellers of wheat, of particular terms in order to explain the subject of the contract. It went not to interpret or explain, but to vary and contra- dict the contract (2 Comst. 241, 244; 2 Sumn. 367; 13 Pick. 181 ; 2 Cowen & Hill's Notes, 141 1). No usage or custom can be set up to control the rules of law, or to contradict the agreement of the parties. But where there is nothing in the agreement to exclude the inference the parties are presumed to contract in reference to the usage or custom which prevails in the particular trade or business to which the contract relates ; and the usage is admissible to ascertain the intention of the parties." 154 EXPLANATORVr PAROL EVIDENCE [§ lOj. rule to the cases. For it is difificult to determine in many instances whether the incident which the usage would annex has been expressly excluded from the contract. The presumption of law is that usages affecting the terms of trade contracts enter into and form a part of such con- tracts. " When a practice has come to be constantly followed by all those engaged in a trade, and is such that its existence is well known among them, it becomes unnecessary in contracting to expressly insert the condi- tion or rule which it establishes. That is adopted tacitly, and taken for granted, as one of the data of the transac- tion. And if on the particular occasion it were intended noi to follow it, that intention would naturally be ex- pressed in the contract." ^ The burden of showing that the usage is excluded rests, therefore, upon the writing, and it must speak with no uncertain voice. And unless the usage offered to be proved is altogether " inconsist- ent and irreconcilable " with the written words, it will ordinarily enter into the contract. § 107. Apparent inconsistency not sufficient. — Hutch- inson v. Tatham. — In the case of Hutchinson v. Tatham^ action was brought upon a charter-party, which was ex- pressed to be made between the plaintiffs and the defend- ants " as agents to merchants." The defendants, also, in signing the charter-party, described themselves as " agents to merchants." Upon the trial, evidence was admitted which prov^ed a trade usage, that if a principal's name was not disclosed within a reasonable time after the signing of a charter- party, the broker became personally liable thereon, and by virtue of this usage the defendants were made respon- • Carver's Carriage of Goods by Sea, p. 182. s L. R. 8 C. P. 482. § I08.] TO ANNEX TERMS BY USAGE, 155 sible. Upon appeal the court approved the admission of this testimony, and Grove, J., said : " It is not easy to define exactly the limits within which evidence of mer- cantile custom is admissible to vary the meaning of a written contract. It is clear that evidence is not admis- sible to contradict the writing ; but in one sense the con- tract must always be varied by the admission of the evidence of custom, inasmuch as the effect of the contract would not be the same without the parol evidence, or else the parol evidence would itself be unnecessary. The evidence of custom that is inadmissible must be, it ap- pears to me, evidence of something inconsistent and ir- reconcilable with the written contract." ^ § 1 08. Test for determining whether usage is incon- sistent with language. — The best test for determining whether a usage is inconsistent with the language used by the parties is to attempt to write it into their contract. If it may be thus put side by side with the written words, and the whole stands without contradiction when viewed in the light of the surrounding circumstances, the lan- guage presents no obstacle to the proof of the usage. For to fall within the exception of repugnancy, the inci- dent must be such as if expressed in the written contract would make it insensible or inconsistent.^ * Brett, J., also said, in this case : " If evidence were tendered to prove a custom that the defendants should be liable as principals under all circum- stances, that would contradict the document ; but it has been decided that, though you cannot contradict a written document by evidence of custom, you may add a term not inconsistent with any term of the contract. What I ap- prehend, it is here attempted to add, is not that the defendants would be liable as principals in the first instance or under all circumstances, but that, though prima facie, and in most cases the brokers are mere agents, yet, if they fail to disclose the name of the principals within a reasonable time, they, the agents, may, on the happening of this contingency, be principals. This is not, I think, on the whole inconsistent with the contract, and, therefore, though with some doubt, I think the evidence was admissible. See also Fleet V. Murton, L. R. 7 Q. B. 126; Humfrey v. Dale, 7 E. & B. 266. 8 Humfrey v. Dale, 7 E. & B. 266. In Parker v. Ibbetson, 4 C. B. N. S. 156 EXPLANATORY PAROL EVIDENCE [§ IO9. This test is accurate and just, for the effect of the usage, if proved, is the same as if it were written into the contract.^ A usage annexing an incident will, then, never be excluded from proof by the words used, unless it clearly appears from them, when properly interpreted, that it would be unreasonable to suppose they were em- ployed with reference to the usage. § 109. A usage which qualifies only, does not con- tradict. — Wherever, therefore, a usage merely qualifies the words of the contract, and the court can presume that it was in the minds of the parties at the time they used such words, this presumption will be acted upon, and the language and usage will be construed together.* Thus it has been held in Pennsylvania that it is proper, in an action upon a life insurance policy, to show a cus- tom among life insurance companies to receive premiums if tendered at any time within thirty days of the time they fall due, provided the insured is in good health, and that this custom includes policies stipulating for forfeiture in case of a non-payment of premium on the day.* 346, there was a contract of employment, at a yearly salary, with a stipulation for an increase thereof at the end of a year. It was, however, held that a usage of the trade allowing the hiring to be determined at any time, upon a month's notice, was not excluded by the written contract. See also The Queen v. Stoke-upon-Trent, 5 Q. B. 303; Brown w. Byrne, 3 E. & B. 715; Myers v. Sari, 3 E. & E. 306; Smith v. Dann, 6 Hill (N. Y.), 543 ; Barnard V. Kellogg, 10 Wall. 383; Leake's Digest, p. 197; Browne on Usages and Customs, p. 86; Elphinstone's Interpretation of Deeds, pp. S7-6l. Compare also Burgess v. Wickham, 33 L. J. Q. B. 17; Fawkes v. Lamb, 31 L. J. Q. B. 98. 1 Heyworth v. Knight, 17 C. B. N. S. 298. 2 Supra, § 107. 8 Girard Life Ins. Co. v. Mutual Life Ins. Co., 97 Pa. St. i ; 86 Pa. St. 236; Helme v. The Insurance Co. 61 Pa. St. 107. See, however, Franklin Life Ins. Co. v. Sefton, 53 Ind. 380. In the last case the custom offered to be proved was one totally irreconcilable with the writing, it being a general custom of the company to receive payment of premiums after they were due. And § log.] TO ANNEX TERMS BY USAGE. 157 So, in a recent English case,^ evidence was excluded at the trial, by which it was proposed to show a custom existing among manufacturers of iron plates and their customers, that, in the absence of a stipulation to the contrary, the plates to be supplied must be of the manufacturer's own make, and that the purchasers were entitled to reject any other plates tendered under the contract. Upon appeal it was said : " This evi- dence was improperly rejected. . . . The contract contains no express stipulation on the question in dis- pute, and as this is the fact, the principle of the cases is that if there is a custom or practice of the trade, the par- ties must be taken, as regards matters on which the con- tract is silent, to have dealt with reference to the practice or custom of the trade, and to have expressed in their written contract those matters for which the custom of the trade did not provide, or in which, in the particular case; they decided to depart from or vary the custom." " the custom or usage of the company could not be set up to control the terms of the contract between the parties." * Johnson v. Raylton, L. R. 7 Q. B. 438. Carver says : " The inclination of the courts appears to have been to give effect to a custom unless it is un- mistakably in conflict with the contract." Carriage of Goods by Sea, p. 193. Whether in any given case the language does preclude the usage is doubt- less a difficult question to answer, and one which requires a careful consider- ation of the context and circumstances. The recent decision of the Supreme Court of Maine, in the case of Marshall v. Perry, 67 Me. 78, illustrates this statement. There it appeared that upon a sale of butter an express warranty in writing had been given by the seller, and that at the trial of an action brought upon the warranty, he attempted to show a custom of the trade at the place of sale, that in ordinary transactions in the trade the seller is not liable to take back the butter or make any deduction from the price agreed upon, unless the purchaser examines the butter as soon as may be after deliv- ery, and, in case of defect in quality, returns it to the seller, or gives notice of the defect at once. The court held that this custom could not enter into the contract in the face of the express warranty, which in effect excludes the idea that the parties intended to have the sale governed by the rules and customs applicable to ordinary transactions. See also Brown v. Foster, 1 13 Mass. 136 ; Potter V. Smith, 103 Mass. 68. CHAPTER X. THE NECESSARY CHARACTERISTICS OF A VALID TRADE USAGE. § I lo. Essential requisites of every usage of trade. 111. When a usage of trade is established. 112. Particular practices of an individual do not make a usage of trade. 113. Usage must exist as a fact. 1 14. How fact of existence proved. 115. When a usage is presumptively known. 1 16. Rule if occupation requires familiarity with many trades. 117. When presumption of knowledge is conclusive. 118. Recent application of rule. 119. Law, where one enters special market. 120. Other requisites of a usage to annex an incident. 121. When a usage is unreasonable. 122. When a usage contradicts a rule of law. 123. Usage cannot override a general principle of law. 124. Usage must be applicable to principal contract. 125. Instances where usage if proved would make new contract. § I ID. Essential requisites of every usage of trade. — No trade usage, whether it gives a meaning to the words of a contract, or annexes incidents thereto, can enter into the agreement of the parties unless it appears — That it was established at the time the contract was made ; And that it was presumptively known to the con- tracting parties. § III. When a usage of trade is established. — There is no propriety in asserting that a trade usage must be ancient, although this term is sometimes employed in cases where its characteristics are under discussion.' » Rafert v. Scroggins, 40 Ind. 195 ; Coxe v. Heisley, 19 Pa. St. 243. " All the authorities concur in saying that if usage is relied upon, it must be shown to be ancient, certain, uniform, reasonable, and so general as to furnish this §111.] ESSENTIALS OF A USAGE. 159 It would be manifestly absurd to insist that a usage of a modern trade should be ancient, and it would be most unreasonable to exclude from proof a practice of a trade which was universally in vogue at the time a contract was made, but which a few years before that time was unknown. Indeed the antiquity of a usage is a matter of no moment, in a case where the evidence shows that the usage existed throughout the entire trade at the time and place of the contract.^ If it did so exist as the general custom of the trade, it is established ; otherwise not.^ And it has been recently held, that presumption of knowledge by both parties." Bissell v. Ryan, 23 111. 570 ; see also Robertson v. Jackson, 2 C. B. 412; Lewis v. Marshall, 7 M. & G. 729; Rapp V. Palmer, 3 Watts (Pa.), 178; Shaw 7/. Ferguson, 11 Cent. L. J. 106. 1 Lord Mansfield said, in Noble v. Kennoway (2 Doug. 510), where it ap- peared by the evidence that the usage proven had been in existence for three years: "Every underwriter is presumed to be acquainted with the practice of the trade he insures, and that whether it is recently established or not. If he does not know it he ought to inform himself. It is no matter if the usage has only been for a year." So Parsons says (Parsons on Contracts, vol. II, p. 963), it is not necessary that a usage "should have existed time out of mind, but only such length of time as to afford a presumption in connection with other facts that it was known to the parties." And in Walker v. Bar- row, 6 Minn. 508, it is said: "It must be . . . clearly shown that the custom existed at the place where, and the time when, the contract or act sought to be affected by it was made or performed." See also Adams v. Pittsburgh Ins. Co. 95 Pa. St. 348 ; Wall v. East River Ins. Co. 3 Duer (N. Y.), 264; Cooper V. Berry, 21 Ga. 56; Smith v. Rice, 56 Ala. 517; Matheson z/. Equitable Marine Ins. Co. 118 Mass. 209, 218: Barton v. McKelway, 2 N. J. L. 165; Dorchester and Milton Bank 7/. New England Bank, 55 Mass. 177- Taylor v. Briggs, 2 C. & P. 525; Phillips on Ev, vol. II, p. 797; Lawson on Usages and Customs, pp. 29, 30; Arnould on Marine Insurance, vol. I, p. 284. ^ A usage will not be held to be established unless it is general, and so universal that every one in the trade must be taken to know it. Compare Wood V. Wood, I C. & P. 59; Howard v. Ins. Co. 109 Mass. 384; Porter v. Hills, 114 Mass. 106; Cheney w. Goodrich, 106 Mass. 566; Martin z/.' Hall, 26 Mo. 386; ¥d\somv. Marine Ins. Co 38 Me. 414; Southwestern Freight and Cotton Press Co. v. Stannard, 44 Mo. 71 ; Adams v. Ins. Co. 94 Pa. St. 348; Martin v. Delaware Ins. Co. 2 Wash. C. C. 254; Cope -v. Dodd, 13 Pa. St. 33 ; United States v. Buchanan, 8 How. 83 ; Dickinson v. City of Pough- keepsie, 75 N. Y. 65; Parsons on Contracts, vol. II, p. 541, note k; Duer on l6o EXPLANATORY PAROL EVIDENCE. [§ 112. the existence of a usage throughout two-thirds of a trade was not sufficient to constitute it a trade usage.^ " That a custom of trade may have the effect of annex- ing a qualifying or independent term to a contract, it must be definite and uniformly adopted. There must be no uncertainty as to what it is ; and it must have been followed, in that shape, and as a regular thing, in trans- actions of that particular kind, by all persons habitually engaged in that trade, or branch of the trade. For if the custom is not definite, it is not possible to say with certainty what the term is, which is to be incorporated in the contract ; and if it has not been uniformly adopted, it cannot confidently be presumed that it was adopted on the particular occasion."* § 1 1 2. Particular practices of an individual do not make a usage of trade. — It is to be noticed that the par- ticular practices, or habits of dealing, followed by one or two individuals or houses, never make a usage of trade in any proper sense. For such practices can never be- come established so as to bind one who is unfamiliar with them.^ And they depend for their authority to aid Ins. vol. I, p. 261 ; Arnould on Marine Ins. p. 284; Browne on Usages and Customs, p. 54. * Perry v. Schulenberg-Boeckeler Lumber Co., Sup. Ct. Minn. N.W. Rep., April 25, 1885. See also Martin v. Delaware Ins. Co. 2 Wash. C. C. 254; Macy V. Whaling Ins. Co. 50 Mass. 354; Parsons on Contracts, vol. II, p. 542. ^ Carver's Carriage of Goods by Sea, p. 185. " " A person, by employing a broker in London to insure a ship, who effects the insurance at Lloyds, does not become bound by the usages prevailing amongst brokers and underwriters doing business there, with which he was not informed ; because they are the usages of a particular house only and not gene- ral usages of the business in London.'' Leake's Digest, p. 199; Hathesingr/. Laing, L. R. 17 Eq. 92; Gabay v. Lloyd, 3 B. & C. 793; Bartlett v. Pentland, 10 B. & C. 760; Sweeting v. Pearce, 9 C. B. N. S. 534; Scott v. Irving, i B. & Ad. 605. See also Hursh v. North, 40 Pa. St. 241 ; Packard v. Earle, 113 Mass. 280; Stevens v. Reeves, 26 Mass. 198; Nonotuch Silk Co. v. Fair, 112 Mass. 354; Collins v. New England Iron Co., 115 Mass. 23 ; National Bank ■V. Burkhardt, 100 U. S. 686 ; Deshler v. Beers, 32 111. 68 ; Railroad v. Murray, § 112.] ESSENTIALS OF A USAGE. l6l in the interpretation of a contract upon the fact that all of the parties to the contract had actual knowledge of their existence, Wh'en, however, particular parties adopt special methods of conducting business, or use words in a technical sense with the knowledge of those with whom they contract, courts will construe their agreements with reference to such practices.^ The previous dealings of contracting parties are frequently referred to for the pur- pose of showing mutual acquiescence in some individual habit, and thereby making it a part of the contract.^ 72 111. 128; Marshall v. Perry, 67 Me. 78; Boody w. Stone, 24 Vt. 660; Ste- vens V. Smith, 21 Vt. 90; Baker v. Drake, 66 iJ. Y. 518; Rawson v. Holland, 59 N. Y. 618; Markham v. Jaudon, 41 N. Y. 235; Miller v. Burke, 68 N. Y. 615 ; Farmers' Bank 7f. Sprague, 52 N. Y. 605 ; Johnson v. Concord R. Co. 46 N. H. 213 ; Luce V. Dorchester Ins. Co. 105 Mass. 399; Williams v. Niag- ara Ins. Co. 50 Iowa, 561 ; Glendale Mfg. Co. v. Pro. Ins. Co., 21 Conn. 19. 1 One dealing with a bank is chargeable with its usages of which he has actual knowledge. Warren Bank v. Barker, 74 Mass. 221. A local practice of one party, which is within the actual knowledge of the other, can generally be made a part of the contract. Compare Fabbri v. Phcenix Ins. Co. 55 N. Y. 129; Grinnell v. Western U. T. Co., 113 Mass. 299; Marrett v. Brackett, 60 Me. 524; Stewart v. Aberdeen, 4 M. & W. 211 ; Walker v. Jackson, 10 M. & W. l6i ; Robinson v. MoUett, L. R. 7 H. L. 802 ; Block v. Columbia Ins. Co., 42 N. Y. 393 ; Renner v. Bank of Columbia, 9 Wheat. 582 ; Gibson V. Culver, 17 Wend. (N. Y.) 305 ; Biin v. Mayo, 10 Vt. 56; Bank v. Page, 9 Mass. 157. 2 Johnston v. Bank, loi Pa. St. 600; Bldg. Assn. v. Hetzel, 103 Pa. St. 508; The J. Russell Mfg. Co. v. N. H. Steamboat Co., 50 N. Y. 121 ; Fabbri V. Phcenix Ins. Co. 55 N. Y. 129; East Tenn. Virg. & Geo. R. R. Co. v. Johns- ton, 75 Ala. 596 ; S. C, 51 Am. R. 489 ; Green v. Milwaukee R. R. Co., 38 Iowa, 100; S. C, 41 Iowa, 410; Mayor, &c. of N. Y. v. Exchange Fire Ins. Co., 3 Abb. Ct. App. Dec. 261 ; Gray «/. Gannon, 4 Hun (N. Y.), 57 ; Kester V. Reynolds, 6 Hun (N. Y.), 626 ; Bridgeport Bank v. Dyer, 19 Conn. 136; Brown v. Kough, 52 L. T. 878; Boune v. Gatliff, n CI. & F. 45 ; Parsons on Contracts, vol. II, p. 542. In Lewis v. Great Western Ry. Co., L. R. 3 Q. B. 195, the question was as to the meaning of the words ' ' owner's risk " in a contract note, and Bram- well, L. J., said: " I think it is a rule of evidence or law that where words are used which would comprehend some other than one necessarily exclusive meaning upon which the judges are to put an interpretation, then, as Parke, B., said, all the surrounding circumstances and the course of dealing between the parties not only may, but must, be looked at to ascertain the meaning of 11 1 62 EXPLANATORY PAROL EVIDENCE. [§ 1 1 3. § 1 13. Usage must exist g,s a fact. — Evidence to show that a usage was established at the time of the contract must be such as proves its existence as a matter of fact.^ Mere opinions are of no consequence, as witnesses must be able to testify to actual instances where the usage has been followed, and must have positive knowledge of its prevalence.^ " The custom of merchants, or mercantile usage, does not depend upon the private opinions of. merchants as to what the law is, or even upon their opin- ions publicly expressed, but it depends upon their acts ; the inquiry in such cases is not after the opinions of traders in respect to the law upon a mer- cantile question, but for the evidence of a fact, to wit, those words when used in reference to those surrounding circumstances and that course of dealing." And Brett, L. J., said : " I apprehend that, in order to construe a written document, the court is entitled to have all the facts relat- ing to it, and which were existing at the time the written contract was made, and which were known to both parties. Certain facts existing at a time when a written contract is made are sometimes customs of trade or the ordinary usages of trade ; sometimes the course of business between the parties ; sometimes they consist of a knowledge of the matter about which the parties were negotiating. The court is entitled to ask for those facts to enable it to construe the written document, not simply because they are customs of trade or the course of busi- ness between the parties, but because they are facts which were existing at the time, and which have a relation to the written contract, and which are things which must be taken to have been known by both parties to the con- tract." 1 " Usage is a matter of fact, not of opinion." Jones v. Hoey, 128 Mass. 585. " The character and description of evidence admissible . . . is the fact of a general usage and practice prevailing in the particular trade or busi- ness, not the judgment or opinion of the witnesses." Lewis v. Marshall, 7 Man. c& G. 729. See also Heskins v. Warren, 115 Mass. 514 ; Ireland v. Liv- ingston, L. R. 2 Q. B. 99; Winthrop v. Union Ins. Co., 2 Wash. C. C. 7 ; Rogers v. Mechanics' Ins. Co., i Story, 603 ; Vail v. Rice, 5 N. Y. 155; Frith V. Barker, 2 John. (N. Y.) 327 ; Gordon -v. Little, 8 Serg. & R. (Pa.) 533 ; Lawson on Usages and Customs, pp. 96-105 ; Parsons on Contracts, vol. II, p. 544, note. ^ Supra, n. I ; Syers v. Bridge, 2 Doug. 527 ; Cope v. Dodd, 13 Pa. St. 33; Duvall V. Farmers' Bank, 9 Gill. & J. 31 ; Duer on Ins., vol. I, p. 1B3. Compare Hamilton v. Nickerson, 95 Mass. 351. § II4-J ESSENTIALS OF A USAGE. 163 the usage or practice in the course of mercantile business in the particular case." ^ § 114. How fact of existence proved. — Any witness therefore, who has this required knowledge is compe- tent.^ He must, however, speak clearly as to the exist- ence of the usage in the particular trade to which the contract relates." But evidence of a usage existing among all the mechanics and artisans of a city is admis- sible to show the existence of such a usage among pho- tographers carrying on business there.* And in a recent English case evidence of a usage existing in the London colonial market was admitted for the purpose of proving a similar usage in the London fruit market.^ In this latter case, however, Cockburn, C. J., said : " I own I entertain somewhat more doubt as to the admissibility of evidence of a similar custom in other trades than the particular trade which was the subject-matter of this con- tract ; " and it is to be noticed that although the court admitted evidence of the usage in the colonial market, it was to corroborate other testimony showing the existence of the usage in the fruit market to which the contract in the case related. But it is believed that this decision can 1 Walworth, Ch., in Allen v. Merchants' Bank of New York, 22 Wend. (N. Y.) 222. 2 In Wilson v. Bauman, 80 III. 493, it was said, as to the manner of prov- ingthe usage there relied on : " It was not to be settled by special skill or science, but by a knowledge of what the architects did under a particular form of employment, and any body who had any experience in the matter was com- petent to testify." Supra, notes i and 2, p. 162. » Allen V. Merchants Bank of New York, 22 Wend. (N. Y.) 222 ; Overman v. Hoboken City Bank, 31 N. J. L. 563. See also supra, §111. * Barnes v. Ingalls, 39 Ala. 193. Compare Falkner v. Earle, 32 L. J. Q. B. 124. 6 Fleet V. Murton, L. R. 7 Q. B. 126, 130. In Milward v. Hibbert, 3 Q. B. 120, the court merely held that a plea setting forth that a custom existed in London, might be proved by evidence showing that the custom existed in London and other English ports. 164 EXPLANATORY PAROL EVIDENCE. [§ 1 1 5. only be justified upon the particular facts of the case, that there is no authority to support it, and that no general principle sanctions the admissibility of testimony of this character.^ To allow parol evidence of the exist- ence of a usage in one trade or market, to establish the fact that it existed in another, would be an unreasonable and dangerous extension of the doctrine of usage, and one which there is little danger the courts will favor. Although it was at one time questioned whether a single witness could prove the existence of a usage, it is now settled that he may do so.^ If the evidence as to the existence of a usage is contradictory the question must be settled by the jury;^ who also must decide upon controverted questions of fact arising out of the circum- stances under which the agreement was made.* § 115. When a usage is presumptively known. — Whenever a legal usage is shown to be established in a trade, it is presumptively known to all parties within that trade and not outside of the jurisdiction of the usage.® In order therefore to raise this presumption of knowledge* it must not only appear that the usage is 1 Consult Browne on Usages and Customs, pp. 57, 58 ; opinion of Cockburn, C. J., Fleet v. Murton, L. R. 7 Q. B. 130; Noble v. Kennoway, 2 Dougl. 510; supra, notes I and 2, p. 162. 2 Jones V. Hoey, 128 Mass. 585; Boardman v. Spooner, 95 Mass. 353; Robinson v. United States, 13 Wall. 363; Bissell v. Campbell, 54 N. Y. 353; Partridge v. Forsyth, 29 Ala. 200; Bottomley v. Forbes, 5 Bing. N. C. 121. Contra, Treadway v. Sharon, 7 Nev. 37 ; Halwerson v. Cole, i Spears (S. C), 321 ; Parrott v. Thacher, 26 Mass. 426 ; Greenleaf on Evidence, § 260 a. 3 Chicago Packing Co. v. Tilton, 87 111. 547; Steele v. McTyer, 31 Ala. 667; Elder v. R. R. Co. 13 S. C. 279; Gallup v. Lederer, i Hun (N. Y.), 282 ; Garey v. Meagher Co. 33 Ala. 630. * Leake's Digest of Contracts, p. 197. 5 Robinson v. United States, 13 Wall. 363; U. S. Life Ins. Co. v. Advance Co. 80 111. 549 ; Bradley v. Wheeler, 44 N. Y. 495 ; Sewall v. Gibbs, i Hall (N. Y.), 602. ' " The existence of the usage does not raise a conclusion of law that the contracting parties made their agreement with reference to the usage, but is § I 1 5-] ESSENTIALS OF A USAGE. 1 65 established, but that the contract was made in the ordi- nary course of the trade or business in which the usage prevails.^ It is not material in how small a sphere the usage operates if it is shown to be there established, and if the parties are so circumstanced that it is reasonable to assume that they are familiar with the practices of the particular trade or locality to which it relates.^ On the only evidence from which that conclusion may be drawn." Leake's Digest of Contracts, p. igS. 1 It must appear that the parties are all engaged in the trade wherein the ■contract is made and are within the sphere of operation of the usage. These facts are necessary to be shown to enable the court to presume knowl- edge. Consult Leake's Digest, p. 198 ; Barker ?/. Borzone, 48 Md. 474 ; Soutier -v. Kellermann, 18 Mo. 509; Appleman v. Fisher, 34 Md. 554 ; Boardman v. Gaillard, i Hun (N. Y.), 217; Ripley z/. ^tna Ins. Co. 30N. Y. 136 ; Higgins ■V. Moore, 34 N. Y. 417. " In general, although the burden of proof is upon him who alleges the usage, all that need be shown is that it was presumptively known to both parties — either from residence in the place, and familiarity with, or having been concerned in similar transactions if the usage be local, or from its being a general usage of the trade or business, or anything from which knowledge may be fairly presumed." . Smith's Lea. Cas., vol. I, part 2, p. 962, note to Wigglesworth v. Dallison. A usage " must be generally known and established and so well settled and uniformly acted upon as to raise a fair presumption that it was known to both contracting parties, and that they con- tracted in reference to it, and in conformity with it." Wilson v. Bauman, 80 111. 493. The usage is binding on the parties if knowledge of it may be fairly implied. Mott^/. Hall, 41 Ga. 118. " A custom or usage which binds the parties to a contract does so only upon the principle either that they have knowledge of its existence or that it is so general that they must be supposed to have contracted with reference to it." Harris v. Tumbridge, 83 N. Y. 92. "The usage must be notorious. It must have existed under such circum- stances, or for such lengfth of time, as to have become generally well known to all persons concerned in or about the branch of trade to which it relates, and so as to warrant a presumption that contracts are made with reference to it." Amould on Marine Insurance, p. 285. 2 Gleason v. Walsh, 43 Me. 397, where it is said : " The authorities are abundant that a usage may be general and still confined to a particular city, Angell V. Duke, 32 L. T. 320; Wilson v. Deen, 74 N. Y. 531 ; Speckels V. Sax, I E. D. Smith (N. Y.), 253; supra, \ 139. 2 The only ground for distinguishing it from those cases which assert the general rule, is that here the parol agreement related to a " preliminary mat- ter to be done at once before the lease should take effect." Ch. J. Erie, in Lindley v. Lacey, 17 C. B. N. S. 578 (see also remarks of Depue, J., in Naumberg v. Young, 44. N. J. L. 331). But there seems little value in the distinction, as upon the facts the parol agreement was apparently without consideration until the lease was signed, and as soon as this document was executed the agreement became merged in it. The agreement, therefore, cannot be said to have been in existence as a valid contract before the lease was made. Compare Seago v. Deane, 4 Bing. 459. » 32 L. T. 320. ■» L. R. 6 Ex 70 (1S71). See also Anker v. Franklin, 43 L. T. N. S. 317. § 148.] COLLATERAL CONTRACTS. 20/ to the effect that the landlord had promised before the execution of the lease that rabbits, which had overrun the land, should be destroyed ; and this decision was approved in Angell v. Duke.^ It appeared from the facts of the case that this agreement was to be performed before the lease was signed, and that the tenant took possession of the land without a lease, the execution of which was delayed for several months because the agree- ment was not carried out. While, therefore, the lease was finally executed and accepted as drawn, the acceptance of it by the tenant could not be considered as a waiver of his rights under the prior oral contract which was already broken, and it was proper that the landlord should have been held liable upon it. So in the case of Erskine v, Adeane,^ the parol agreement was that the- landlord should destroy certain game which was injuring the premises, and the court allowed it to be proved. In this case there was evidence that this agreerflent was excluded from the lease, in order that the latter might conform to the other leases made by the same landlord; which apparently repelled the inference that the writ- ing was the whole contract. It may be further said, in reference to the two cases mentioned in this section, that the matters to which the parol agreements referred, although relating to the hiring of the property, were not so closely connected therewith or of a character so incidental as to justify the conclusion that the written lease in either case expressed the inten- tions of the parties in reference to them. While these cases therefore may be regarded as au- thoritative upon the facts presented in them,^ and as 1 32 L. T. 320. Compare n. i, p. 196, and n. 2, p. 206. z L. R. 8 Ch. App. 756 (1873)- 3 Depue, J., in Naumberg v. Young, 44 N. J. L. 331, however, questions 208 SUPPLEMENTARV PAROL EVIDENCE. [§ I49. confirmatory of the distinction pointed out by Chief Justice Erie, they in no sense sustain the proposition suggested by Chapin v. Dobson/ and followed in Lam- phire v. Slaughter.^ § 149. Decision of New York Court of Appeals in Eighmie v. Taylor. — The New York Court of Appeals in the case of Eighmie v. Taylor, decided in March, 1885,* has attempted to draw a new principle from the opinion in Chapin v. Dobson, apparently with a view of showing how the remarks made in the latter case in re- gard to collateral parol contracts may be justified. The defense, however, is not sufficient for this purpose as it •ignores the principal authority upon which the remarks referred to were made, and neglects to correct the error into which the court was inadvertently led, and which has been already commented upon.* Moreover it is believeH, that in its departure from simple and well established principles, and its drawing of refined and unnecessary distinctions, the opinion in Eighmie v. Taylor throws further doubt upon the law in regard to this subject. As with Chapin v. Dobson, so with the case now under discussion, no criticism is made upon the final decision of the court. The former case is a clear illus- tration of the power and duty of the court to annex a parol warranty to an informal memorandum which is a portion only of the entire agreement, while the latter the decisions, and brings many reasons to show that they are not to be fol- lowed. See Johnson v. Oppenheim, 55 N. Y. 280, 293, where they are cited with approval, and Stephen's Digest of the Law of Evidence (Chase's ed.), p. 165, where Morgan v. Griffith is cited to illustrate the text. ' 78 N. Y. 74. 2 61 How. Pr. (N. Y.) 36. ' 98 N. Y. 288. * Supra, § 145. § I50-] COLLATERAL CONTRACTS. 209 shows the justice and propriety of excluding from the agreement a prior parol warranty when the parties thereto have taken the trouble to define, in full written terms, the duties, privileges, and obligations which shall belong to each of them. One case, therefore, does not touch the other. The principles applicable to one are not those which govern the other. On the contrary, the one shows the wisdom of the admission of parol evi- dence to reach the intent, the other the reasonableness of excluding it to arrive at the same end. § 150. Comments on opinion of Court of Appeals. — It would, therefore, seem that the court in Eighmie v. Taylor was not called upon to defend its prior action in holding that a parol warranty could be added to the informal writing presented in the case of Chapin v. Dobson, on any other ground than that afforded by the incompleteness of the writing there construed. But it went further, and apparently overlooking the authori- ties, which hold that a warranty as to present condition may always be shown if the whole contract is not writ- ten,^ attempted to show that the warranty presented to the court in Chapin v. Dobson was of a peculiar char- acter. In regard to this the court says; "It is further insisted, however, that the second exception to the rule is applicable, and that a recovery upon the parol war- ranty may be sustained on the ground that it constituted a separate collateral agreement, independent of the writ- ing, and not at all in conflict with it. The argument at this point is rested chiefly upon the case of Chapin v. Dobson, which is claimed to be decisive. That case did sustain a parol warranty in the face of a written agree- ment of sale, but that warranty was not as to the then present quality or condition of the thing sold, but as to * Supra, § 132. 14 ■210 SUPPLEMENTARY PAROL EVIDENCE. [§ 1 5 1. what it would accomplish in the future, after the com- pleted and executed sale, the terms of which it did not seek to touch or modify. The opinion of Danforth, J,, brings out this distinction with a clearness which it is not .easy to mistake. He says, ' it is one thing to agree to sell or furnish machines of a specific kind, as of such a patent, or of a particular designation, and another thing to undertake that they shall operate in a particular man- ner or with a certain effect, or, as in this case, that they shall do the buyer's work satisfactorily.' The guaranty sustained, it is thus apparent, was founded upon a future contingency which assumed the completed contract as .executed, and to remain unchanged." § 151. Doctrine of opinion. — The extract from the •opinion just given can only mean that where a parol warranty is not " as to the then present quality or con- idition of the thing sold" but as to what it will accom- plish in the future, it may be annexed to writings which contain the terms of a contract between the parties, and are " designed to be the repository and evidence of their final intentions." That this is the meaning of the court ;appears also from the intimation in the opinion that if ithe warranty in the case before the court had related to ithe future and not present condition of its subject-matter, another question would have been presented, and this although it was said of the documents to be construed: "They contain a definite agreement of bargain and sale, they specify the consideration, they describe the subject, they contain mutual covenants for protection of each party, and leave nothing of a complete, perfect, and consummated agreement to be supplied. On their face no element is wanting of an entire contract, exhaust- ing the final intentions of both parties. It is, therefore, ^uch a paper as falls within the protection of the rule, f 152-] COLLATERAL CONTRACTS. 211 and must be conclusively presumed to contain the whole contract as made." That this must be the correct interpretation of the opinion, appears also from the fact that if there is no •complete written contract, but merely a receipt or bill of* parcels, there is no ground for excluding the warranty, whether it relates to the present or the future. In all such cases the real contract rests in parol and may be shown. § 152. Question presented by opinion. — We are then brought to the question, can a parol warranty which relates to the future condition of the thing sold, which is in regard to what it will accomplish in the future, be proved notwithstanding the fact that there is a subse- quent complete written contract between the parties? And, to put a specific case, would it be proper where writings "showed a full, definite, and completed agree- ment of bargain and sale," to prove that before they were executed a parol warranty had been made that certain oil wells on land affected by the writings " would con- tinue for a fixed period, to yield as much oil as they were then yielding, or a certain definite quantity at the end of such period ? " It is believed that there is no ground in reason or au- thority for a distinction which will thus exclude proof of a parol warranty in regard to the present condition of the subject-matter of the contract, and admit it in regard to its future condition. Wherever there are writings which, upon examination in the light of the surrounding circumstances, appear to deliberately express an entire contract of sale, these writings speak the final inten- tions of the parties, and are conclusively presumed to contain their entire agreement, and whenever such a com- plete contract is presented, it would be impossible to 212 SUPPLEMENTARY PAROL EVIDENCE, [§ 1 53. annex to it a parol warranty as to the future condition of the article sold without varying the obligations which are determined by its terms. Furthermore, these war- ranties which relate to the future, also relate to the pres- ent. They do affect the present condition and quality of the article sold ; the warranty is that the present ccm- dition and quality of the thing sold is such that it will accomplish certain specified things ; that the article is so made that at the end of a defined time it will be in good order ; that in the specific case alluded to, the oil wells were at the time of the sale, in such condition and of such quality, that they " would continue for a fixed period to yield as much oil as they were then yielding, or a cer- tain definite quantity at the end of such period." Again, a warranty in regard to the capabilities of a new article must of necessity relate to the future. It can- not be a statement as to what its subject-matter has done ,- it must speak as to what it will do. Therefore, were this distinction sound, it would be possible to bring within it a large proportion of prior parol warranties ; and writ- ten contracts would lose much of their stable character. The distinction, however, does not seern valuable. The warranty in each case affects the terms of sale. It is wholly incidental to a complete contract written with a view of defining the mutual obligations of the parties, and every reason which justifies the exclusion of proof of an oral warranty as to the present condition will apply to the rejection of oral testimony to prove a warranty as to the future condition. § 153. Doubtful if Chapin v. Dobson was followed. — Had not the Court of Appeals specifically stated that this distinction between the admissibility of present and future warranties was derived from Chapin v. Dobson, it would, it is believed, be open to question whether it was § 1 53-] COLLATERAL CONTRACTS. 213 intended by Danforth, J., to advocate this doctrine. For it is when contrasting the written contract in that case with the guaranty that he uses the words quoted in a preceding section, and not when contrasting a guaranty as to present condition and quality with one as to what was to be accomplished by the article upon its use. It is after stating the finding of the referee, " that the mat- ters in writing and the above guaranty constituted the contract or agreement between the parties," that he says : " The written contract and the guaranty do not relate to the same subject-matter. The contract is limited to a particular machine as such. The guaranty is limited to the capacity of the machine. It is one thing to agree to sell or furnish machines of a specific kind, as of such a patent, or of a particular designation, and another thing to undertake that they shall operate in a particular man- ner or with a certain effect, or, as in this case, that they shall do the buyer's work satisfactorily. The first would be performed by the delivery of machines answering the description or the specifications of the patent ; and whether they did or not conform thereto would be the only inquiry. As to the other, it in no respect touches the first, nor does it operate as a defeasance, but leaves it valid and to be performed, and the consequences of a breach of the guaranty are a recoupment or abatement of damages in favor of the defendant, and this is so whether the contracts are in writing or not ; for the guaranty is vaHd although not in writing, and the same rule must apply, for in either case the relation of the guaranty to the contract would be the same."^ Clearly it may be argued that there is no intimation in this extract that the guaranty proved in this case is different from that which is ordinarily given as to quality, and yet it is upon a part of it that the distinction is 1 78 N. Y. 82. 214 SUPPLEMENTARY PAROL EVIDENCE. [§ 154, based. Again, it seems almost impossible to support the distinction if other parts of the opinion are referred to. Thus, while commenting on the claim that a guaranty was implied upon the sale in that case, Danforth, J., says: " If the fitness of the machine is implied, the guaranty is in harmony with it and adds nothing." In other words, the oral guaranty proved is spoken of by the learned judge as of the precise nature of the guaranty which would be implied if the plaintiffs had undertaken to supply a machine for a required purpose of which they had notice. It cannot be doubted that if it was of this nature, it would be an essential part of the contract of sale.^ Again, it may be said that there was no occasion for drawing such a distinction in this case ; because, the con- tract being informal, a warranty of the present condition of the articles purchased, if supplementary to the writings might equally well have been shown.** § 154. Authorities cited do not support opinion. — The cases cited by Finch, J., in Eighmie v. Taylor,* ia support of the doctrine under discussion, are: Jeffery v. Walton,* Batterman v. Pierce,^ Erskine v. Adeane,* and Morgan v. Griffith.'' The two former cases were simple * This implied warranty is that " the goods sold shall be suitable for the special purpose for which they are intended by the buyer." (Biddle on War- ranties, §§ 167-183.) And whether it is complied with can only be ascer- tained upon the use of the goods. There is no ground for claiming that such a warranty is not an inherent part of the contract of sale, as it derives its existence directly from it and goes to make up the obligations of this con- tract. In the same manner the warranty which is made by parol before the exe- cution of a written contract enters into this contract and gives especial mean- ing to it. There is, therefore, no more reason for separating the one than the. other from the sal e. 2 Supra, § 132. ' Supra, % 149. * I Stark. 213. 6 3 Hill (N. Y.), 171. « L. R. 8 Ch. App. 756. ' L. R. 6 Exch. 70. § 1 5 5-] COLLATERAL CONTRACTS. 215 instances of contracts, resting in part upon written docu- ments, and in part upon oral testimony, and give no- support to any. sucii proposition as that to which they- are cited. The remarks of Lord Ellenborough in Jeffery V. Walton have been already quoted, and show sufficiently the ground of the admission of the parol evidence in that case.^ And in Batterman v. Pierce, Bronson, J., said :: " There is clearly nothing in the objection that the de- fense set up contradicts the note. The defendants do not deny that they made just such a contract as that ora which the plaintiff seeks to recover. But they allege that the plaintiff at the same time entered into an en- gagement on his part, which has subsequently beetti broken." Erskine v. Adeane and Morgan v. Griffith have been already commented upon,^ and as in each case the collat- eral parol contract related to " the then present condi- tion " of the premises at the time of the leasing, it would seem that if these authorities could be held to assert any general proposition, it would be in direct opposition to- that laid down in Eighmie v. Taylor. Indeed, there i& no authority in this latter case which in any degree war- rants a departure from the general rule of law that the question, whether a prior parol contract is admissible if there is a subsequent writing, is to be determined by the character of the writing and the circumstances; and there is no other rule which the Court of Appeals has. sanctioned by actual decision. § 155. Authorities opposing doctrine. — Several of the- cases already cited flatly oppose the distinction expressed in the opinion under discussion. Thus, in Mast v. Pearce,^ the warranty was that certain cultivators were " well 1 Supra, § 131. * Supra, § 148. 8 58 Iowa, 579, 582 (1882). 2l6 SUPPLEMENTARY PAROL EVIDENCE. [§ J 56. made, of good material, adapted to the purposes for which they were constructed, and in all respects . . . sound and perfect and of merchantable v^ue and quality," it was, however, held that this oral warranty was merged in a subsequent written contract of sale. The Supreme Court of Iowa, in its opinion in this case, says : " The written contract of sale is complete in itself It, in sub- stance, recites a sale of the cultivators at certain prices, and to be paid for in a certain manner. It is signed by both parties, and, to be fully understood, does not require the aid of extrinsic evidence. It contains no warranty of any kind as to the quality of the cultivators." And adds : " We think the court should have excluded the evidence as to a parol warranty, and should have instructed the jury that the parties were bound by the terms of the written contract." Again, in Galpin v. Atwater,^ the Supreme Court of Connecticut, after careful considera- tion of the authorities, held that a parol warranty, alleged to have been made prior to the execution of a deed con- veying a patent right for the making of sewing machines, to the effect that machines made under the patent would work well and not drop stitches, and would do the vari- ous sewing of a family, was merged in the subsequent deed. So, in Naumberg v. Young,* the warranty was that certain machinery in. the leased factory was " in good repair and capable of supplying the power necessary to carry on the plaintiff's business." In each of these cases it will be perceived that the warranty was similar to that proved in Chapin v. Dobson, and was, nevertheless, held to be merged in the writing. § 156. Principles for determining scope of contract not affected by these cases. — In view of the considerations set * 29 Conn. 93. 2 44 N. J. L. 331, supra, n. i, p. ic § 156.] COLLATERAL CONTRACTS. 217 forth in the preceding sections, we, therefore, conclude that no new principle which will aid in determining when a collateral contract may be proved, is deducible from the recent authorities, Chapin v. Dobson an"d Eigh- mie V. Taylor, or from the cases upon which they are claimed to rest. And it is believed that these decisions in no way disturb the general rule that reference must be had in every instance to the language and circumstances of the written contract, in order to ascertain whether it is just to allow the parties to supplement the writing by proving a prior or contemporaneous parol agreement in regard to its subject-matter.^ 1 Supra, % 141. See further, NicoU v. Burke, 78 N. Y. 580; Budd v. Sin- clair, 50 N. Y. 663. CHAPTER XIII. PAROL EVIDENCE TO SHOW CONTRACT CONDITIONAL. § 1 57. General rule. 1 58. Murray v The Earl of Stair. 1 59. Pym V. Campbell. 160. American authorities in support of doctrine. 161. Other cases illustrating rule. 162. Principle of rule applies to all contracts. 163. Authorities holding rule is not applicable to sealed instruments. 164. Authorities holding that parol may show a sealed instrument was de- livered subject to a condition. 165. Conclusion to be derived from the cases. 166. Parol may show contract conveying property was never intended to be absolute. 167. Reason for this rule. 168. Illustration of rule. 169. Pennsylvania doctrine as to contemporaneous parol agreements. § 1 5 7. General rule. — Another class of prior or con- temporaneous oral agreements which may supplement a writing and alter its apparent meaning is that composed of agreements which make the writing conditional upon some future event. Evidence to prove these agreements in no way contradicts the terms of the writing, for its object is to ascertain when these terms are to constitute a contract between the parties. And it is always proper to prove the existence of any separate oral agreement constituting a condition precedent to the attaching of an obligation of a written contract.^ § 158, Murray v. The Earl of Stair. — The fore- going principle was clearly recognized in the case of • Stephen's Digest of the Law of Evidence, Art. 90 (3). § '^59-] TO SHOW CONTRACT CONDITIONAL. 219 Murray v. The Earl of Stair, decided by the English Court of King's Bench, in 1823.^ There the court held that it was for the jury to determine upon the whole evidence, whether a bond had been delivered as the deed of the obligor, or upon the oral agreement that it should remain in the hands of the subscribing witness, until cer- tain events should occur ; and thus established the pro- positions since asserted in Davis v. Jones,^ namely, that a written instrument does not necessarily operate from delivery, for " it is competent to a party to show that it was delivered as an escrow, and that, though it appears upon the face of it to be presently operative, it was in reality not intended to operate until the happening of a given event." § 159. Pym V. Campbell. — Another of the leading^ cases upholding this doctrine is Pym v. Campbell.^ In that case it was held that a written agreement of pur- chase might be shown to have been executed upon the parol understanding that the property was to be approved by certain persons before the writing should operate as a contract, and that in default of such ap- proval there was no contract. Erie, J., in his opinion^ said : " The point made is, that this is a written agree- ment absolute on the face of it, and that evidence was admitted to show it was conditional ; and if that had been so it would have been wrong. But I am of opinion that the evidence showed that in fact there was never any agreement at all. The production of a paper pur- porting to be an agreement by a party, with his signa- ture attached, affords a strong presumption that it is his written agreement ; and if in fact he did sign the paper 1 2 B. & C. 82. 2 17 C. B. 625. s 6 E. & B. 370. 220 SUPPLEMENTARY PAROL EVIDENCE [§ l6o. animo contrahendi, the terms contained in it are con- clusive, and cannot be varied by parol evidence ; but in the present case the defense begins one step earlier, the parties met and expressly stated to each other that, though for convenience they would then sign the memorandum of the terms, yet they were not to sign it as an agree- ment until A. was consulted. I grant the risk that such a defense may be set up without ground, and I agree that a jury should therefore always look on such a de- fense with suspicion ; but, if it be proved that in fact the paper was signed with the express intention that it should not be an agreement, the other party cannot fix it as an agreement upon those so signing. The distinc- tion in point of law is that evidence to vary the terms of an agreement in writing is not admissible, but evi- dence to show that there is not an agreement at all is admissible." ^ § 1 60. American authorities in support of doctrine. — The United States Supreme Court has recognized the propriety of admitting this species of parol evidence, and has recently said: "The first question to determine in construing a document is whether there is a document to construe, hence it is always admissible to show by parol that a document was conditioned on an event that never * See also Wallis v. Little, 11 C. B. (N. S.) 369, where the court allowed an oral agreement to be proved, to the effect that if the consent of a certain person was not obtained to the assignment of a farm, the agreement assign- ing it was to be void. In this case, Erie, C. J., said : " We are of opinion that it [the evidence] was admissible. In Pym v. Campbell, 6 Ellis & B. 370, and Davis v. Jones, 17 C. B. 625, it was decided that an oral agreement to the same efifect as that relied on by the defendant might be admitted, without infringing the rule that a contemporaneous oral agreement is not admissible to vary or contradict a written agreement. It is in analogy of a deed as an escrow ; it neither varies nor contradicts the writing, but suspends the com- mencement of the obligation." See also Gudgenw. Besset, 26 L. J. Q B. 36; Rogers v. Hadley, 2 H. & C. 227; Foster v. Mackinnon, L. R. 4 C. P. 704; Clever z/. Kirkman, 33 L. T. (N. S.) 672 (1875). § l6l.] TO SHOW CONTRACT CONDITIONAL. 221 occurred." ^ And where a note was delivered upon the parol agreement that it should only become operative upon the consent of the surety, it is proper to receive evidence of the conversations which took place at the time of or before such delivery, in order to establish this parol agreement where the note is still in the hands of the original holder. "The manual delivery of an instru- ment may always be proved to have been on a condition which has not been fulfilled, in order to avoid its effect. This is not to show any modification or alteration of the written agreement, but that it never became operative,, and that its obligation never commenced. . . . If it were shown that two parties had agreed that an instru- ment should be thereafter prepared to take effect only upon compliance with a certain condition or the occur- rence of a certain event, and thereafter such an instrument were prepared and delivered, even if nothing was said at the time of the actual delivery, it would be for the jury to say whether such delivery did not take place under and in pursuance of the previous agreement.* § i6i. Other cases illustrating rule. — In like manner it is held that where one signs a note with the maker, it is proper for him to show by parol that he signed as surety upon the condition that the note should be null unless a third party agreed upon should also become a surety.* And wherever the signer of a paper affixes his name to it, upon the condition that it shall not go into effect 1 Bast V. Bank, loi U. S. 96. 2 Wilson V. Powers, 131 Mass. 539. See also Benton w. Martin, 52 N. Y. S74; Daniel on Neg. Insts. §68; Byles on Bills, pp. 101-104; Chaddock z/. Vanness, 35 N. J. L. 518; Bookstaver z/. Jayne, 60 N. Y. 149; Devlin v. Coleman, 50 N. Y. 53; Bookstaver v. Glenny, 3 T. & C. (N. Y. Sup. Ct.) 248; Sawyer v. Chambers, 44 Barb. (N. Y.) 45 ; Miller v. Gamble, 4 Barb. (N. Y.) 146. 3 Westman v. Krumweide, 30 Minn. 313. See also Skaaraas v. Finnegan, 31 Minn. 48; Goff z'. Bankston, 35 Miss. 518. 222 SUPPLEMENTARY PAROL EVIDENCE [§ l6l. until others also sign it, the instrument is not a valid obligation against him until the condition is fulfilled.^ One, however, will not be allowed to escape liability upon a subscription to the capital stock of a corporation, upon the ground that the agents of the company agreed with him that he should not be liable unless certain other subscriptions were obtained, for in this case the rights of subscribers who have signed upon the belief that the sub- scriptions obtained were absolute, would be violated if the oral agreement was proved.^ But wherever all the parties to a written contract agree verbally that it shall not become operative until the happening of a future «vent, parol evidence is admissible to show the agree- ment.® 1 Wendlinger v. Smith, 75 Va. 309 ; S. C. 40 Am. R. 727 ; Butler v. Smith, 35 Miss. 457. 2 Miller z/. H. J. & S. R. R. Co., 85 Pa. St. 95; Wharton on Ev. § 1068. ^, See, further, Brown v. Eastern Slate Co., 134 Mass. 383; Benton z*. Martin, 52 N. Y. 570; Branson v. Oregonian Ry. Co., 11 Oregon, 161 ; Beall ■w. Poole, 27 Md. 645 ; Seymour v. Cowing, 4 Abb. Ct. App. Dec. (N. Y.) 200; Sharp V. United States, 4 Watts (Pa.), 21 ; Michels v. Olmstead, 14 Fed. Rep. 219; Sweet v. Stevens, 7 R. I. 375; Clever w. Kirkman, 33 L. T. 672; Munroe v. Taylor, 8 Hare, 56; Taylor on Evidence, § 1135. In Reynolds v. Robinson, 37 Hun (N. Y.), 561 (1885), action was brought to recover damages for a breach of a contract to sell lumber. The contract was expressed in letters, and by its terms the purchaser was to have a credit of sixty days. At the trial, before a referee, oral evidence was offered and received tending to show that, prior to the making of the written contract, at a personal interview between the parties it was agreed that the sale and de- livery of the lumber should be contingent upon a satisfactory report from certain commercial agencies. The referee held that it was a part of the agreement between the parties that the pecuniary standing of the purchasers should be ascertained, and that the sale and delivery of the timber and lumber was contingent upon a satisfactory report from the agencies agreed upon ; and that, as the vendors had received an unsatisfactory report, they were not bound to deliver the lumber. Upon appeal, however, the court reversed the decision of the referee, and held that the evidence, to establish this parol agreement, was inadmissible, as it contradicted the writing, Bradley, J., saying; " The written agreement in this case contains a stipulation for a specific credit, and the parol evidence upon which the conclusion of the referee rested was to the effect that such provision was dependent upon the condition that § l62.J TO SHOW CONTRACT CONDITIONAL. 223 § 162. Principle of rule applies to all contracts. — There is nothing in the principle of this rule which limits its operation to unsealed contracts. The evidence which it admits tends to show that the parties have not yet con- tracted upon the terms set forth in the written agree- ment. That they have agreed to postpone the operation of the writing until a future period, although it has been executed. That they did not make the alleged contract. The rule, therefore, only admits evidence which is offered to show that the writing, however complete it may be, however accurately it may express a proposed agreement, was not fully adopted by the parties as their contract. By this testimony, therefore, the terms of the writing are left intact, and there is no reason why a valid parol agreement, made in regard to the operation of the instru- ment, should not be proved. Indeed it would be highly unjust to enforce the instrument against such an agree- ment of the parties. And because the instrument hap- pened to bear a seal it would be none the less so. In every case, whatever is the character of the instrument, evidence to show a parol agreement of this description should, in principle, be admissible, and the intention of a report derived from the commercial agencies was or should be satisfactory to the defendants in respect to the financial character of the plaintiff. That was in no sense a collateral or independent agreement, but tended directly to impair the force of a provision introduced into the written contract, and to prove that, instead of being an absolute undertaking, as its terms imported, it was a qualified or conditional one, and that by reason of a reserved right the fact existed which defeated it. That proposition is in violation of the- well established rule, and in its application generally salutary one, which preserves the force and effect of written contracts against the uncertain con- sequences of parol evidence upon their plain provisions. " The court, in its opinion, does not distinguish this case from the authori- ties cited in the above sections. And as the evidence appears to have dis- closed the fact that the written contract was only to become binding upon the receipt of a satisfactory report from the commercial agencies named, it would seem to have been clearly admissible. 224 SUPPLEMENTARY PAROL EVIDENCE [§ 163. the parties upon the whole transaction ought to govern in the interpretation of the written contract. § 163. Authorities holding rule is not applicable ta sealed instruments. — Some of the cases, however, have drawn a distinction between sealed and unsealed instru- ments, and have limited the operation of the rule to the latter class.^ But no clear principle is put forward for this distinction, and, as we have stated in the preceding section, there does not seem to be any ground for its existence. Probably the reason why it has been repeat- edly held that a sealed contract cannot be delivered, and yet remain conditional, is because of the old rule that no condition can be attached to the delivery of a deed if it is given to the grantee, as a stranger only can hold it in escrow.^ But, as thus stated, this rule cannot be success- fully defended. It may be truly said that where the de- livery of so formal a document as a deed is made direct to the party who is to claim under it; there is a strong presumption that it is to become effective at once as a valid instrument, and that it would require clear and con- vincing evidence to establish any qualifying parol agree- ' Compare, Skaaraas v. Finnegan, 31 Minn. 48; Westman v. Krum- weide, 30 Minn. 313; Henshaw t/. Dutton, 59 Mo. 139; Ward 7/. Lewis, 21 Mass. 518 ; Dix v. Otis, 22 Mass. 38; Miller v. Fletcher, 27 Gratt. (Va.) 403;. S. C. 21 Am. R. 356; Washburne on Real Property, vol. Ill, p. 399. ^ Sheppard's Touchstone, pp. 57, 58; Whyddon's Case, Cro. Eliz. 520; Co> Litt., 36a; Cooley's Blackstone,vol.I, p. 508; Byles on Bills (Sharswood's Am. Notes), p. 103. Washburne says: " If the delivery (of a deed) is made to the party, no matter what may be the form of the words, the delivery is absolute, and the deed takes effect presently as the deed of the grantor discharged of the conditions upon which the delivery was made.'' Law of Real Property, vol. Ill, p. 399, citing many cases. But in the same paragraph in which the above sentence is found there is also the following: " It must, after all, de- pend, in each case, upon whether the parties at the time meant it to be a de- livery to take effect presently." Washburne, therefore, while admitting the force of this technical rule, contradicts it by his general conclusion on the sub- ject. See also Miller v. Fletcher {supra), where adherence to the rule is strongly advocated and many cases are cited. § 163.] TO SHOW CONTRACT CONDITIONAL. 225 ment. But the best authorities do not sustain the propo- sition that a deed cannot be put into the possession of the grantee upon condition, and such a rule could not be enforced unless courts were prepared t6 yield the prin- ciple that the real intention of the parties must govern the interpretation of their acts. In one case, however, it is declared to be well settled that a delivery of a deed to the grantee upon condition vests the title in him, al- though it may be contrary to the intention of the par- ties.^ ^ Braman v. Bingham, 26 N. Y. 483. In this case Selden, J., goes so far as to question whether the giving of a deed to the grantee to be by him put into the possession of a third party as an escrow is not a legal deliv- «ry of the instrument to the grantee. He says : " It has been held in one case that a deed may be delivered to the grantee for the purpose of transmis- sion to a third person, to be held by him in escrow until the happening of some event, when it should take effect as a conveyance, and that such delivery would not be absolute. Gilbert z/. N. A. Fire Ins. Co., 23 Wend. 43. In that case the grantee had deposited the deed with the third person in pursuance of the arrangement, the condition had not been performed, and the grantee made no claim under the deed. The case presented merely the question whether the grantor still retained an insurable interest in the premises des- cribed in the deed, the nominal grantee testifying to the terms in which the deed was delivered to him. Limited to its peculiar circumstances, no fault can be found with the decision ; but if the grantee had retained the deed, claiming that its delivery to him was absolute, and in a contest between him and the grantor parol proof of a conditional delivery had been offered, I think the result would have been different. If I am wrong in this conclusion, the case discloses an avenue for the overthrow of titles, by parol proof, which was supposed to be closed by the rule to which it would seem to form an exception. The reason given for the rule excluding parol evidence of a con- ditional delivery to the grantee applies to all cases where the delivery is de- signed to give effect to the deed, in any event, without the further act of the grantor. ... If a delivery to the grantee can be made subject to one parol condition, I see no ground of principle which can exclude any parol condition. The deed having been delivered to the grantee, 1 think the parol evidence that delivery was conditional was properly excluded." But the Court of Appeals has not adopted this doctrine, and the case criticised by Judge Selden has been recognized as a proper decision. See Brackett v. Barney, 28 N. Y. 333. The opinions of the judges of this court upon the point have been, however, much at variance. Thus, in Ford v. James, 2 Abb. Ct. App. Dec. 163, Grover, J., said: "A deed may be deposited with the grantee or 15 226 SUPPLEMENTARY PAROL EVIDENCE [§ 164. § 164. Authorities holding that parol may show a sealed instrument was delivered subject to a condition. — Other authorities, however, do not thus disregard the in- tentions of the parties, but on the contrary look to them for the correct interpretation of these contracts, and it will be seen that in a number of cases conditions have been attached to the delivery of sealed instruments. Thus where a deed was delivered to the grantee to be by him placed in the hands of a third party who was to hold it as an escrow, it was decided not to be a legal delivery to the grantee.^ So where a surety executed a composition deed, to be void if all the creditors did not sign it, and it was delivered to one creditor who was to obtain the consent of the other creditors, it was held not to be a binding obligation unless all the creditors executed it* And where a surety signed, a sealed instrument upon the condition that he should not be bound unless another person named should also sign, it was held proper to prove this parol condition.^ So a deed may be delivered to- await complete execution by other parties,* handed to him for any purpose other than as the deed of the grantor, or as an effective instrument between the parties, without becoming at all operative as a deed." But in Cocks v. Barker, 49 N. Y. 107, Allen, J., said: " If a deed is delivered to the party or his agent, and not to a stranger, it is absolute, and parol evidence of conditions qualifying the delivery is inadmissible. " The position of the court has been more recently stated by Church, Ch. J., in the following rule, which is founded in reason, and which should, therefore, stand as the law upon this subject : " If the circumstances show that there is no in- tention to make a present binding contract, the formal acts constituting par- tial or even entire execution must yield to such intention." Dietz v. Parish, 79 N. Y. 525. See also Chouteau v. Suydam, 21 N. Y. 179. * Gilbert v. North American Ins. Co. 23 Wend. (N. Y.) 43. See also Brackett v. Barney, 28 N. Y. 333 ; Jackson v. Sheldon, 22 Me. 569 ; Simon- ton's Estate, 4 Watts (Pa.), 180; n. i, p. 225. 2 Johnson v. Baker, 4 B. & Aid. 439. Compare with Ward v. Lewis, 21 Mass. 518; Black v. Shreve, 13 N. J. E. 455. ' Goff w. Bankston, 35 Miss. 518. * Brackett v. Barney, 28 N. Y. 333. See also Cumberlege v. Lawson, 1 C. B. N. S. 709; n. 2, supra. § 164.] TO SHOW CONTRACT CONDITIONAL. 227 The question arose in the case of Watkins v. Nash/ whether the delivery of a complete deed to the solici- tor of the grantee necessarily operated as an absolute delivery and a passing of the title from the grantor to the grantee, although the deed was in fact intended to be con- ditional on the payment of a mortgage debt. And Sir Charles Hall, V. C, said : " Now as to this execution operating effectually or not at law, there can be no doubt that it was intended to be what is called an escrow. But it is said that the deed thus executed could' not be an escrow, because it was not delivered to a stranger ; and that is, no doubt, the way in which the rule is stated in some of the text books, Sheppard's Touchstone, for in- stance ; but when those authorities are examined, it will be found that it is not merely a technical question as to whether or not the deed is delivered into the hands of A. B., to be held conditionally ; but when a delivery to a stranger is spoken of, what is meant is a delivery of a character negativing its being a delivery to the grantee or to the party who is to have the benefit of the instru- ment. You cannot deliver the deed to the grantee him- self, because that would be inconsistent with its preserv- ing the character of an escrow. But if upon the whole transaction it be clear that the delivery was not intended to be a delivery to the grantee at that time, but that it was to be something different, then you must not give effect to the delivery as being a complete delivery, that not being the intent of the persons who executed the instrument." ^ 1 L. R. 20 Eq. Cas. 262 (1875). 8 In Kidner v. Keith, 15 C. B. N. S. 35, it is said : " There is no doubt in point of law that where by express declaration, or from the circumstances, it appears that the delivery of a deed was not intended to be absolute, but that the deed was not to take effect until some contemplated event should have happened, the deed is not a complete and perfect deed until that event has happened." It is only when there is a delivery of a deed with intent to part 228 SUPPLEMENTARY PAROL EVIDENCE [§ 1 66. § 165. Conclusion to be derived from the cases. — Parol evidence is therefore admissible both upon prin- ciple and authority to show an agreement between the parties that a sealed written contract was not to become a binding instrument until the happening of a certain event, whoever may have possession of the writing. But, on the other hand, such evidence is not admis- sible to attach qualifying and contradictory oral condi- tions to a formal valid contract, whether sealed or un- sealed, which has been legally delivered and accepted as the real contract of the parties.^ § 1 66. Parol may show contract conveying property was never intended to be absolute. — Parol evidence is also resorted to for the purpose of showing that the writing which purports to be the contract of the parties was never intended by them to be their real contract,^ and that although the writing is absolute on its face, it was in reality conditional. Thus the Court of Appeals has declared the law to be well settled in the State of New York, that an instrument assigning or conveying real or personal property in absolute terms could be shown by parol evidence to have been intended only as security. And the Supreme Court of the United States has said that a Court of Equity " looks beyond the terms of the instrument to the real transaction ; and when that is shown to be one of security, and not of sale, it will give with it as a deed and for the benefit of the grantee that the law fails to carry out the intention of the parties as expressed in a condition annexed to its de- livery. Dietz ■z/. Farrish, 44 N. Y. Super. Ct. 190; aff. 79 N. Y. 525. See also Hawkes v. Pilce, 105 Mass. 560; Elmore v. Marks, 39 Verm. 538 ; Clark V. Gifford, 10 Wend. (N.Y.) 311 ; Griffin v. Clowes, 20 Beav. 61; n.l,p. 225. ^ Infra, Contradictory Parol Evidence. 2 Marsh v. McNair, 99 N. Y. 174. Compare White v. Boyce, 21 Fed. Rep. 228; Enrico v. Brand, 9 Hun, 654; Despardz/. Walbridge, 15 N Y. 374; Hodges V. Tenn. Marine and Fire Ins. Co. 8 N. Y. 416 ; Durgin v. Ireland, 14 N. Y. 322; Webb v. Rice, 6 Hill, 219; Bonesteel v. Flack, 41 Barb. 435. § 167.] TO SHOW CONTRACT CONDITIONAL. 229 effect to the actual contract of the parties. As the equity, upon which the court acts in such cases, arises from the real character of the transaction, any evidence, written or oral, tending to show this is admissible. The rule which excludes parol testimony to contradict or vary a written instrument has reference to the language used by the parties. That cannot be qualified or varied from its natural import, but must speak for itself. The rule does not forbid an inquiry into the object of the parties in executing or receiving the instrument."^ § 167. Reason for this rule. — The reason for this rule is readily found in the fact that courts aim to en- force real contracts and not fictitious ones. Before parol evidence will be excluded as contradictory to the legal effect of a writing, it must appear that the writing represents a genuine contract. And wherever fraud or mistake is discovered in the execution of an instrument, or wherever any ground is found upon which equity may reform it as not honestly expressive of the agreement of the parties,^ the reason for the rule excluding parol evi- dence does not apply, and the effort of courts will be to do justice between the parties in view of their real trans- actions. The rule admitting this testimony is, however, of equitable origin, and in Massachusetts it was recently held that oral evidence in an action at law was inadmis- sible to show that a formal bill of sale acknowledging the receipt of the consideration therein named was given merely as security for a loan.^ In the case referred to the court said : " We are of opinion that this evidence, so far as it was admitted for the purpose of varying, explain- ing, or controlling the bill of sale, was incompetent in an » Peugh V. Davis, 96 U. S. 336. 2 Consult, infra. Chap. XV. 3 Philbrook v. Eaton, 134 Mass. 398; cf. Pennoch v. McCormick, 120 Mass. 275; Harper z/. Ross, 92 Mass. 332; Wright z/. Gay, loi 111. 233. 230 SUPPLEMENTARY PAROL EVIDENCE [§§ 1 68, 1 69. action at law and should have been rejected." If there is any equitable reason why evidence of this character should not be received, courts will exclude it.^ § 168. Illustration of rule. — Pursuant to this rule it has been held that an absolute transfer of a certificate of stock may be shown by parol evidence to have been made for security only ; ^ and that the real contract under which a bill of lading was transferred may also be proved.^ So an absolute assignment of an insurance policy may be proved to be conditional.* In the same manner, while a contract of indorsement cannot be varied in its terms, it may be shown that a note was not to be held absolutely by an indorsee.^ And evidence to show that a bill of sale or deed was a mortgage only and not an absolute conveyance is now generally admissible.* § 169. Pennsylvania doctrine as to contemporaneous parol agreements. — The Courts of Pennsylvania have > Hassam v. Barret, 115 Mass. 256; Bonham ■z/. Craig, 80 N. C. 224; Story's Equity, § 1018; Wharton on Evidence, § 1032. 2 Burgess v. Seligman, 107 U. S. 20; Peugh v. Davis, 96 U. S. 336; Ginz V. Stumph, 73 Ind. 209. ^ Security Bank of Minn. v. Luttgen, 29 Minn. 363. * Mathews v. Sheehan, 69 N. Y. 585. Compare Wormuth v. Tracy, 15 Hun (N. Y.), 180; Hill v. Goodrich, 39 Mich. 439. " Compare MTood v. Mathews, 73 Mo. 477 ; Hyler v. Wellington, 57 Iowa, 413 ; Lewis v. Dunlap, 72 Mo. 174; Charles v. Denis, 42 Wis. 56. « See upon this proposition, Washburne's Real Prop. vol. H, p. 49 et seg., where many cases are cited, and the doctrine held in different localities is stated. And compare Morris v. Budlong, 78 N. Y. 543 ; Conway v. Alexander, 7 Cranch, 238 ; Hughes v. Edvi^ards, 9 Wheat. 489 : Jenkins v. Eldridge, 3 Story, 293; Taylor z/. Little, 2 Sumn. 228; Wyman v. Babcock, 19 How. 289; Russell V. Southard, 12 How. 154; Campbell v. Dearborn, 109 Mass. 130; Hassam v. Barrett, 115 Mass. 256; Logue's Appeal, 104 Pa. St. 136; Plumer v. Guthrie, 76 Pa. St. 441; Chalfrant z/. Williams, 35 Pa. St. 212; Odenbaugh v. Bradford, 67 Pa. St. 96; Lindauer v. Cummings, 57 111. 195 ; Booth V. Robinson, 55 Md. 419 ; Radford v. Folsom, 58 Iowa, 473 ; Johnson V. Huston, 17 Mo. 58 ; Hills v. Loomis, 42 Vt. 562 ; Howard v. Harris, 3 Lea. Cas. Eq. 625; Haigh v. Kaye, L. R. 7 Ch. 469; Kent's Com. vol. IV, pp. 142, 143 ; Phillips on Evidence, vol. II, p. 708. § 169.] TO SHOW CONTRACT CONDITIONAL. 23 1 been taken to advocate the doctrine that wherever the execution of a written document is obtained by means of a contemporaneous verbal stipulation, parol evidence is admissible to prove such stipulation.^ It is obvious that if such an unqualified rule were adopted every ma- terial conditional or collateral parol agreement would <;ome within its provisions; and the cases apparently favoring it have, therefore, been properly and severely criticised. Thus Rapallo, J., in Wilson v. Deen,* says: "The cases declaring this doctrine are very nu- merous, and it has been carried so far as to hold that in an action against a surety upon a bond, he may, as a defense show that he executed it under a verbal declara- tion by the obligee that his signing was a mere matter of form, and that he should never be called upon for pay- ment. It is unnecessary to say that in this State such a doctrine has never been adopted, and that the current of our authorities sustains the proposition that both at law and in equity one who sets his hand and seal to a written instrument, knowing its contents, cannot be permitted to set up that he did so in reliance upon some verbal stipulation, made at the time, relating to the same sub- ject and qualifying or varying the instrument which he thus signs. The very purpose of the rule which excludes evidence of such declarations, is to avoid the uncertain- * In Greenawalt v. Moore, 85 Pa. St. 369, the Court said: "But from Harst's Lessee v. Kirkbride, decided in 1773, reported by Chief Justice Tilghman in Wallace v. Baker, i Binn. 610, down to the present time, this court has uniformly held, that where at the execution of a writing a stipula- tion has been entered into, a condition annexed, or a promise made by word of mouth, upon the faith of which the writing has been executed, that parol evidence is admissible, though it may vary and materially change the terms of the contract." See also Keough v. Leslie, 93 Pa. St. 424; Baillie v. Kessler, 90 Pa. St. 82 ; Whitney v. Shippen, 89 Pa. St. 22 ; Collen v. Lukens, 89 Pa. St. 22 ; Barclay v. Wainwright, 86 Pa. St. 191 ; Caley v. Phila. R. R. Co. So Pa. St. 363 ; Shughart v. Moore, 78 Pa. St. 369. 2 74 N. Y. 535. ■ 232 SUPPLEMENTARY PAROL EVIDENCE. [§ 169. ties attendant upon such evidence, and equity will not set aside that important and well settled rule for the pur- pose of relieving a party against a risk, which, upon his- own showing, if it be true, he has voluntarily incurred. It is only when through fraud or mistake a party has exe- cuted an instrument which he believes to be in accordance with the real agreement, but which is, in fact, different, that equity will relieve; and even then, the mistake, as well as the agreement, must be made out by clear proof.'' Recent cases in Pennsylvania have, however, clearly shown that the ground upon which the courts of that State admit proof of these parol stipulations is, that tO' enforce the writing without the oral stipulation would work a fraud ; and it is only where it distinctly appears that the written document was executed upon the faith, of the stipulation, and where a Chancellor would reform the writing that proof of such parol collateral contracts; is admissible.^ From these later authorities it therefore appears that this evidence is admitted merely for the sake of disclosing a fraud ; and while the courts of Penn- sylvania may differ from other courts as to what evidence shows such a fraud they do not accept this parol testi- mony upon any novel ground, and do not alter the rules already stated, applicable to supplementary parol evi- dence. For it is always competent to show fraud for the purpose of avoiding a contract.^ * Thus in Thome v. Warfflein, 100 Pa. St. 527, it was held that in order to contradict the written terms of a contract by evidence of oral stipulation there must be other evidence of fraud than that which is supplied by th& breach of the oral stipulation, and in Phillips v, Meily, 15 W. N. C. 225, and Murray z/. R. R. Co. 103 Pa. St. 37 (13 W. N. C. 213), it was held that it was only where a Chancellor would reform an instrument that parol might contradict it. See also Biddle v. Wilhelm, 40 L. \. 382 ; Hunter v. McHose, 100 Pa. St. 41 ; Laird v. Campbell, 100 Pa. St. 64, Martin v. Berens, 67 Pa. St. 459 ; Bast v. Bank, loi U. S. 93 ; Caley v. Hoopes, 86 Pa. St. 493. 2 Infra, Chap. XV. CHAPTER XIV. WHEN PAROL EVIDENCE IS CONTRADICTORY. § 170. General statement of rule excluding parol. 171. Parol not to vary terms of contract. 172. Parol not to contradict terms of contract. 173. Authorities already cited sustain rule. 174. Language, if clear, expresses the will of parties. 175. Parol must never contradict express terms of contract. 176. Rule illustrated by the contracts arising upon negotiable paper. 177. Parol agreements among parties signing negotiable paper not exr eluded. 178. Rule excluding parol, applicable to every contract. 179. A complete written contract merges all prior parol negotiations. 180. Complete contract conclusive as to matters comprised therein. 181. Legal effect of a writing not to be contradicted. 182. Illustration of rule. § 1 70. General statement of rule excluding parol. — In a preceding chapter the rule prohibiting parol evi- dence from changing or contradicting the terms of a contract was discussed in a general manner, and the reasons for the existence of the rule were given.^ It is now proposed to illustrate by reference to cases the nature of contradictory parol evidence, and to define, as accurately as may be, the limits within which the rule which excludes such evidence now operates. This rule,, as already stated, is as follows : Parol evidence is inad- missible to contradict or vary the terms of a written con- tract. § 171. Parol not to vary terms of contract. — The direction that parol evidence must not vary the terms of 1 Supra, Chap. V. 234 CONTRADICTORY PAROL EVIDENCE, [§ 1 72. a contract cannot of necessity be questioned while any preference is given to written language. For if evidence to show that the parties used other words than those ex- pressed in the writing were admitted, it is obvious that the record of their intentions would be valueless, and that it would be futile to attempt to form a stable sys- tem for the construction of contracts. It is, therefore, a rule universally accepted that wherever a writing expressed the whole or a part of a valid written contract, the terms of this writing are the particular signs to be interpreted, and parol evidence is wholly inadmissible to substitute any other words for those which are contained in the written document : " The writing, it is true, may be read by the light of sur- rounding circumstances, in order more perfectly to un- derstand the intent and meaning of the parties ; but as they have constituted the writing to be the only out- ward and visible expression of their meaning, no other words are to be added to it, or substituted in its stead. The duty of the court in such cases is to ascertain, not what the parties may have secretly intended, as contra- distinguished from what their words express, but what is the meaning of words they have used." ^ § 172. Parol not to contradict terms of contract, — The prohibition of the rule under discussion, that parol evidence must not contradict the terms of a written con- tract, is of a less simple and direct character, and has ^iven rise to much discussion and acute reasoning. Time out of mind its force and meaning have been sub- 1 Greenleaf on Ev., § 277. " Facts existing at the time of the making of the contract may be properly considered for the purpose of interpreting the language ; but no evidence of the language employed by the parties in making the contract can be resorted to except that which is furnished by the writing itself " Dent v. North American S. S. Co. 49N . Y. 390. See also, infra, §§ 174, 175- § ^73-1 WHEN PAROL IS EXCLUDED. 235 jects of consideration, and the courts for centuries past have endeavored to apply it to particular cases, so as to do equity between the parties before the courts, and to bring it into conformity with other just principles for reaching the thought expressed in a contract. Through all these years, however, the rule, as above stated, has re- mained unshaken, and there is no method at present by which the meaning of the words of a contract, when once ascertained, can be contradicted by the parties. But as this rule is adopted for the purpose of ascertain- ing the intentions of men, so courts in the application of it scrupulously regard the intent of the contract, and will never reject evidence which properly explains or supple- ments a writing. § 1 73. Authorities already cited sustain rule. — This regard of the law for written language has already clearly appeared in these pages. For we have seen that while it is permitted to parties, in some instances, to contradict the apparent meaning of words, they are allowed to do this only that the law, following out the usages of men, may ascertain the real meaning of the words in question.^ And when this real meaning is discovered, the words are held to express the unalter- able will of the parties. So we have found that the ex- planatory evidence which oral testimony may bring to aid in the interpretation of a contract is only such as will show a meaning of the parties which is consistent with the language they have employed,^ and that a usage^ or a law* which contradicts the terms of a contract cannot be annexed to it. So, even when parol evidence is admitted for the purpose of explaining vague and ambiguous 1 Supra, §§ 60, 61, 62. 2 Supra, §§ 91, 92. ' Supra, §§ 106, 108. * Supra, §§ 21, 29. 236 CONTRADICTORY PAROL EVIDENCE. [§ I74. words in a contract, it can only attach to sucii words a meaning which they are capable of bearing.^ Again, we have learned that where a contract is but partially written, whatever is added to the writing by parol evidence must be reconcilable with it.* In all of these instances, therefore, we perceive that the law, with admirable consistency, preserves the writ- ing from contradiction, and at the same time neglects no opportunity for discovering what reasonable men would mean by the language employed. § 1 74. Language, if clear, expresses the will of par- ties. — It is to be concluded, then, that if the language of a written contract is clear and certain, it must be taken to express the will of the parties, and it is not proper to look elsewhere for their intention. The document which shows the contract is allowed to govern without reserve so far as it speaks clearly.* So it is said : " It is con- » Supra, § 78. s Supra, §§ 131, 140. ' " In construing a commercial contract, the object must be to arrive at the real intention of the parties to it. It is that, so far as it can be ascertained, which must determine the meanings of the words and phrases used, their materiality, and their dependence one upon another. But the intention must be judged of from the expressions which the parties themselves have given of it ; not by reference to what might probably, or ought in fairness, to have been the intention. Men should be able to rely upon the courts to give full effect to the terms for which they stipulate, and to the limitations which they set upon the obligations they undertake. The document which shows the contract is, therefore, allowed to govern without reserve so far as it speaks clearly. And as that document is generally to be regarded as the expression by the parties of their agreement, it cannot be contradicted, or qualified, or added to, by any preliminary or contemporaneous agreements made between them. Nor can evidence be given to show that their real intention was dif- ferent from that which appears in the writing, so far as that is clearly and unambiguously expressed. Unless, indeed, there has been misrepresentation or mistake ; or unless it can be shown that the document was not meant to express the whole contract ; or that it was not to operate unless some preUm- inary conditions were fulfilled. This rule does not, however, prevent effect being given to an agreement § 174-] WHEN PAROL IS EXCLUDED. 237 ceded to be a sound rule in the construction of contracts, that where the language is clear, unequivod^l, and un- ambiguous, the contract is to be interpreted by its own language, and courts are not at liberty to look at extrin- sic circumstances surrounding the transaction or else- where for reasons to ascertain its intent. The under- standing of the parties must be deemed to be that which their own written agreement declares." ' made at the same time upon a matter which is collateral to the contract shown by the document. Nor does it prevent either party from showing that the contract was altered or rescinded after it was made, either verbally or otherwise." Carver's Carriage of Goods by Sea, § 164. Questions "arising upon the interpretation of contracts must be deter- mined by the language of the instrument itself, unless some ambiguity ap- pears upon its face, or unless phrases of doubtful meaning are employed therein, requiring explanation, in which case resort may be had to parol evi- dence, and proof of the attendant circumstances to discover the real meaning and intent of the parties." Whitford v. Laidler, 94 N. Y. 145, citing Chouteau ■V. 'Suydam, 21 N. Y. 179; Hinnemann v. Rosenback, 39 Id. 98; Moore w. Meacham, 10 Id. 207 ; Dana v. Fiedler, 12 Id. 40. See, supra, %\ 42-46. " If the parties have reduced their contract and the whole of it to writing, and the instrument is free from ambiguity or uncertainty, the courts have universally applied the rule and excluded parol testimony to vary the terms of the contract." Hubbard v. Marshall, 50 Wis. 322; infra, n. i. 1 Springsteen v. Samson, 32 N. Y. 703. See also Marsh v. McNair, 99 N. Y. 174; Silberman v. Clark, 96 N. Y. 522 ; Brady v. Reed, 94 N. Y. 631 ; Maher v. Hibernia Ins. Co., 67 N. Y. 283 ; Pindar v. Continental Ins. Co., 38 N. Y. 366; Hallidayz/. Hart, 30 N. Y. 474; Ripley w. jEtna Ins. Co., 3a N. Y. 136; Giles ^z. Comstock, 4 N. Y. 270; The North Am. Fire Ins. Co. v. Throop, 22 Mich. 146; Rendell v. Harriman, 75 Me. 497; Goss v. Ellison, 136 Mass. 503; Reardon v. Faneuil Hall Ins. Co., 135 Mass. 121 ; Whitewell -v. Winslow, 134 Mass. 343; Muhlig v. Fiske, 131 Mass. no; Davis S. M. Co. V. Stone, 131 Mass. 384; Fay v. Gray, 124 Mass. 500; Munde v. Lambie, 122 Mass. 336; Boston & S. G. Co. v. Moore, 119 Mass. 435; Wheeler & Wilson Mfg. Co. -v. Laus, 62 Wis. 635; McCormick v. Huse, 66 111. 315; Brunhild v Freeman, ^^ N. C. 128; Merriam v. Pine City Lumber Co., 23 Minn. 314; Taft v. Schwamb, 80 111. 289; Hulton v. Arnitt, 51 111. 198; Serviss v. Stockstill, 30 Ohio St. 419; Elkins v. Empire Trans. Co., 32 Sm. 315; MacLeod v. Skiles, 81 Mo. 595; s. C. 51 Am. R. 254; Harnor v. Groves, 24 L J. C. P. 53; Goldshede v. Swan, I Exch. 158; Addison on Con- tracts (Abbott's), vol. I, p. 198; Phillips on Ev., vol. II, p. 655 et seq. 238 CONTRADICTORY PAROL EVIDENCE. [§ 1 75 § 175. Parol must never contradict express terms of contract:— Q-dSts without number might be cited to illustrate the nature of evidence which contradicts the express terms of writings. But it is believed that reference to only a few of these will clearly show the principle which underlies them all, namely, that parol evidence directly antagonistic to the ascertained meaning of the words of a contract, is never admissible.^ Thus where an insurance policy was written which pro- vided that camphene should not be used for lighting, although it appeared that more than the usual premium had been paid for the amount of insurance obtained, it was held that parol evidence to show a contemporaneous oral agreement allowing the use of such material was in- admissible, as it would contradict the writing.^ And one who signs a contract as principal cannot avoid responsi- bility by showing that he was a mere agent,® for " parol evidence can never be admitted for the purpose of ex- onerating an agent who has entered into a written con- tract in which he appears as principal, even though he should propose to show, if allowed, that he disclosed his agency and mentioned the name of his principal at the time the contract was executed."* But if the object of parol testimony to show that one has signed a contract in behalf of an undisclosed principal, is to enable the prin- 1 See cases cited, supra, n. i, p. 237, and compare § 42. 2 Lamott V. The Hudson River Fire Ins. Co. 17 N. Y. 199. Compare Pindar v. Resolute Fire Ins. Co. 47 N. Y. 114; Maher 7/, Hibernia Ins. Co. 67 N. Y. 283. 8 Bartlett v. Hawley, 120 Mass. 92; Bryan v. Brazil, 52 Iowa, 350; Mc- Millan V. Parkell, 64 Mo. 286; Babbett v. Young, 51 N. Y. 238; Titus v. Kule, 10 Ohio, 444 ; Jones v. Littledale, 6 Ad. & E. 486; Higgins v. Senior, 8 M. & Mf. 834: Gadd v. Houghton, 46 L. J. Ex. 71 ; Leake's Digest of Con- tracts, p. 210. * Nash V. Towne, 5 Wall. 689. § 176.] WHEN PAROL IS EXCLUDED. 239 cipal to recover on the contract/ or to hold him liable as well as the agent, it is received? Where, however, a pur- chaser of beer in barrels agreed in writing that the barrels should be returned, it was held that he could not show an understanding that he was to retain them.® And where a written contract was entered into by which one agreed to supply " a room that is improved and suitable" for a specified purpose it was held that the contract was fulfilled by the furnishing of any such room, and that it was not proper to show by parol evidence that the parties had agreed that one particular room must be supplied, as this evidence would contradict the contract.* Again, parol evidence to show that one who signed a subscription paper and thereby pledged himself to make a certain payment in cash was to be allowed to pay the amount subscribed in labor, is contradictory to the writ- ing.' § 1 76. Rule illustrated by the contracts arising upon negotiable paper. — A parol agreement which contradicts the terms of a negotiable note or bill is excluded from proof whether or not the instrument has passed into the hands of a bona-fide holder for value. No such agreement, therefore, which aims to prove that a note or bill was to be paid in a different manner or at a diflferent time, from that specified by its terms, can be shown," for its provisions 1 New Jersey Steam N. Co. v. Merchants Bank, 6 How, 381 ; Ford v. Williams, 21 How. 289; Oelrichs v. Ford, 23 How. 63; Nichol v. Burke, 78 N. Y. 580; Lerned v. Jones, 91 Mass. 419; Leake's Digest, p. 210. 8 Masterson v. Boyce, 29 Hun (N. Y.), 456 ; Barker v. Garvey, 83 111. 184 ; Borckeiing v. Katz, 37 N. J. E. 1 50 ; Harriman v. First Baptist Ch. 63 Ga. 1 86 ; Dykes v. Townsend, 24 N. Y. 61 ; Nutt v, Humphrey, 32 Kan. 100; Thomp- son V. Davenport, 9 B. & C. 78. 3 Westcott V. Thompson, 18 N. Y. 363. * Thompson v. Stewart Adm'rs,6o Iowa, 223. Compare Dudley v. Vose, 1 14 Mass. 34. 5 Stewards of Meth. Epis. Church v. Town, 49 Vt. 29. « See Daniel on Neg. Insts. §§ 80, 81, and cases cited. See also Henry V. Armitage, 48 L. T. (Q. B.) 576: Perry v. Bigelow, 128 Mass. 129; Dick- 240 CONTRADICTORY PAROL EVIDENCE. [§ 1 76. must not be contradicted in any respect^ So the contract of the indorser is fixed by the terms of the instrument. Thus the United States Supreme Court has recently son V. Harris, 60 Iowa, 727 ; Kimball v. Bryan, 56 Iowa, 632 ; Barhydt V. Bonney, 55 Iowa, ^\^■, Clark v. Hart, 49 Ala. 86; Sturdivant v. Hull, 59 Me. 172; Sylvester v. Staple, 44 Me. 496; Cox v. National Bank, 100 U. S. 704; Brown v. Spofford, 95 U. S. 474; Forsythe w. Kimball, 91 U. S. 291 ; Brown v. Wiley, 20 How. 442 ; Bigelow on Bills, pp. 168, 173 ; Parsons on Notes and Bills, pp. 501, 507, 525; Wharton on Evidence, § 1058. So an agreement that the maker of a note was not to be liable upon it is ex- cluded from proof. Rodgers v. Donevan, 36 Leg. Int. 156. And the same rule has been asserted of the acceptor of a bill, Davis v. Randall, 115 Mass. 547, and of a surety thereof. Barnstable Bank v. Ballou, 1 19 Mass. 487 ; Allen •V. Brown, 124 Mass. 77; Taylor on Evidence, § 11 51. In Brown v. Eastern Slate Co. 134 Mass. 590 (1883), the Massachusetts Supreme Court, however, admitted proof of a prior parol agreement made between the officers of a corporation, who executed certain promissory notes in the name of the com- pany, and the payees of the notes, to the effect that there should be no per- sonal liability upon the paper. This agreement, it was held, did not affect the terms of the notes, inasmuch as there was no personal liability thereon apart from the statute, and the effect of it was merely to do away with the statu- tory provision applicable to the case. 1 In Ellis V. Hamilton, 4 Sneed (Tenn.), 512, it was said: "The doctrine is well established that in an action on a promissory note or bill of exchange, the defendant will not be allowed to give parol evidence of an agreement be- tween him and the plaintiff, at the time of making the note, that it should be renewed, and that payment should not be demanded on its becoming due; or that a note, purporting to be payable on demand, was intended by the parties to be payable on a contingency, or that a note payable on a certain day was intended to be payable on some other day, or that it was to be paid out of a particular fund, or that it should be paid in any other mode than is imported on its face. It is not necessary to refer to the rules applicable to subsequent agreements ; or to independent collateral agreements, or where the whole con- tract has not been reduced to writing, and this is apparent from the face of the writing; or to cases of parol contract, where the giving of a note by one party does not merge the parol contract ; as, for instance, where a personal chattel is sold with warranty by parol contract, and a note is given for the purchase money. Between all these, and perhaps other exceptional cases, and a case like the one in judgment, where it is attempted to give effect to a prior or contemporaneous verbal contract to vary or contradict a written agreement, there will be found, on careful examination, a clear and well-marked distinc- tion." See also Knox v. Clifford, 38 Wis. 651 ; Foster v. Clifford, 44 Wis. 569; S. C. 28 Am. R. 603 ; Martin's Ex'x v. Lewis' Ex'r, 30 Graft. (Va.) 672 ; S. C, 32 Am. R. 682. § 176.] WHEN PAROL IS EXCLUDED. 24I held that parol evidence could not show an agreement that an indorsement in blank was to be without recourse, and Mr. Justice Matthews said of the contract of in- dorsement : " The contract created by the indorsement and delivery of a negotiable note, even between the im- mediate parties to it, is a commercial contract, and is not in any proper sense a contract implied by the law, much less an inchoate or imperfect contract. It is an express contract, and is in writing, some of the terms of which, according to the custom of merchants and for the con- venience of commerce, are usually omitted, but not the less on that account perfectly understood. All its terms are certain, fixed, and definite, and when necessary sup- plied by that common knowledge based on universal custom, which has made it both safe and convenient to rest the rights and obligations of parties to such instru- ments upon an abbreviation. So that the mere name of the indorser, signed upon the back of a negotiable in- strument conveys and expresses his meaning and inten- tion as fully and completely as if he had written out the customary obligation of his contract in full." ^ The Con- necticut Supreme Court has also held that the exclusion of proof of a parol agreement which would vary the liability of one who had guaranteed a note as "good and collectible until paid," was proper.^ In each of 1 Martin v. Cole, 104 U. S. 30. See also Van Vechten v. Smith, 59 Iowa, 173; Whitwell V. Winslow, 134 Mass. 343; Willse v. Whitaker, 22 Hun (N. Y.), 243; Fassin v. Hubbard, 55 N. Y. 465; Cramer v. Lovejoy, 17 Week. Dig. (N. Y.) 387; Bender v. Montgomery, 8 Lea (Tenn.), 586; Roundtree v. Gilroy, 57 Tex. 176; Preston v. Ellington, 74 Ala. 133; Barnard ^'. Gaslin, 23 Minn, 192; Third Natl. Bank of Syracuse v. Clark, 23 Minn. 263; Chad- dock V. Vanness, 35 N. J. L. 521 ; Davis v. Morgan, 64 N. C. 381 ; Dale v. Gear, 38 Conn. 15; Daniel on Neg. Insts. §§ 717, 718, 719; contrast with Ross V. Espy, 66 Pa. St. 487; Hauer z/, Patterson, 84 Pa. St. 274; Susque- hanna Bank v. Evans, 4 Wash. C. C. 480; Johnson v. Martinus, 4 Halst. 144; Pike V. Street, i Mood. & Malk. 226 ; Byles on Bills (Sharswood's ed.), 267. s Allen V. Rundle, 50 Conn. 9. See to same effect, Jones v. Albee, 70 III. 34- 16 242 CONTRADICTOKY PAROL EVIDENCE. [§ 1 77. these cases the testimony excluded will be found upon examination to be repugnant to the clear and reasonable meaning of the language of the writing. But it is to be remembered that where parol evidence does not contra- dict the terms of a note, but only explains the transac- tion, it will be admitted, unless the instrument has passed into the hands of a bona-fide holder for value.^ And " as between original parties to a promissory note, proof may be given of the consideration, and the facts attend- ing the making and delivery of such note, and the indors- ing of the same, which are not inconsistent with the instrument, and which may tend to show that it has been diverted from its original purpose, or that there is a failure of consideration." * § 1 77. Parol agreements among parties signing nego- tiable paper not excluded. — A bill or note, however, speaks authoritatively only of the contract made by those who are named in it with those who become holders of it. It does not profess to declare the full contracts made by and between its several parties. These agreements, are not a part of the main contract, and should not be expressed therein. " The engagements among them- selves of the several parties who have become bound to another by a joint, or a joint and several contract, have no necessary place in the instrument between them and such other contracting party. They are foreign to the * Supra, § 94. 2 Bookstaver v. Jayne, to N. Y. 149. See also Daniel on Negot. Instsi, §§ 7^7-72^; Byles on Bills, pp. 102, 154; Chaddock v. Vanness, 35 N. J. L. 518 ; Dzltv. Gear, 38 Conn. 15; Breneman v. Furniss, 90 Pa. St. 186; Corn- stock V. Hier, 73 N. Y. 269 ; Grierson v. Mason, 60 N. Y. 394 : Merchants. Natl. Bank v. Comstock, 55 N. Y. 24; Benton v. Martin, 52 N. Y. 570; Devlin v. Coleman, 50 N. Y. 53; Willse v. Whitaker, 22 Hun (N. Y.), 243;. Bookstaver v. Glenny, 3 T. & C. (N. Y. Sup. Ct.) 248 ; Mansfield v. Edwards, 136 Mass. 15; Paul v. Rider, 58 N. H. 119. § ^77-] WHEN PAROL IS EXCLUDED. 243 purpose and object of the principal contract, and are not generally to be looked for among its stipulations." ^ Thus it is held that one of two makers of a promissory note may prove by parol that he signed the note as surety for the other, where the action is between them- selves, or is brought by a holder of the note who has knowledge of the suretyship.^ So parol evidence has been held to be admissible in an action between the par- ties, to show that a note was indorsed merely to transfer the title and not to create the contract of indorse- ment, and that it was agreed between the indorser and the indorsee that the former should not be lia- ble to the latter.* So it may be generally said that " nothing is more common than to introduce evidence of the real and true relation of parties to each other whose names are on ne- gotiable paper, where prima facie the position or order of signature makes a contract different from the true relations of the parties. The proper inquiry is, who among the parties is to pay the debt." * ' Denio, J., in Barry v. Ransom, 12 N. Y. 462. 2 Hubbard v. Gurney, 64 N. Y. 457, where the authorities upon this point are collected and reviewed by Church, C. J. See also Greenough v. McClel- land, 30 L. J. Q. B. 15 ; Mutual Loan Fund Assn. v. Sudlow, 28 L. J. C. P. 108 ; Laffin & Rand Powder Co. v. Sinsheimer, 48 Md. 41 1 ; S. C 30 Am. R. 472. 3 Bruce v. Wright, 5 T. & C. (N. Y. Sup. Ct.) 81. See also Lattimer v. Hill, 8 Hun (N. Y.), 171 ; Brewer v. Woodman, 54 Vt. 581 ; s. C. 42 Am. R. 857. * Ellsworth, J., in Colegrove v. Rockwell, 24 Conn. 583, quoted in Graves V. Johnson, 48 Conn. 160. See also Williams v. Glenn, 92 N. C. 253; Wood V. Mathews, ^^ Mo. 477 ; Hyler v. Nolan, 45 Mich. 357 ; Adams v. Flanager, 36 Vt. 400; Crosby v. Wyatt, 23 Me. 156; Lacy v. Loftin, 26 Ind. 324; Dan- iel on Neg. Insts. , § 41 8, and cases cited ; Mechanics' Bank v. Bank of Colum- bia, 5 Wheat. 326; supra, § 94. In Norton v. Coons, 6 N. Y. 33, it was however held, that proof of a prior parol agreement could not be given to qualify among themselves the liabili- ties of sureties to promissory notes. The court held that such liabilities were as well defined by the law as though they were expressed in writ- 244 CONTRADICTORY PAROL EVIDENCE. [§ IjS. If, moreover, it is doubtful upon the face of a note who is bound thereby, parol evidence will be received to cure the ambiguity.^ § 1 78. Jiu/e excluding parol, applicable to every con- tract. — Wherever, however, repugnancy is discovered between proffered parol evidence and a written contract which it aims to explain, the evidence must be rejected. len terras, and Gray, J., said: "In the one case the parties have defined their liabihties in express terms, in the other the law has defined them, and in terms equally express, and thus settled as between the sureties the legal effect of subscribing their names to the note. They are each chargeable with knowledge of the legal liability incurred as between themselves by the execu- tion of the note, and should therefore be regarded as standing in the same •relation to each other, and bound by the same rules, they would be if the legal •effect of their contract had been fully written above their signatures. . . . No doubt is entertained that parol evidence of collateral facts is admissible to rebut the presumption arising from the face of the instrument, that all are principals and equally bound to contribute. The defendant's proposition goes further. After proving for whose benefit the note was made, and who received the funds, and thus establishing the relation of principal and surety, he proposes to show that he was not co-surety, not by extrinsic facts, but by a parol agreement varying the operation of his contract as defined by law and subscribed to by him, and thus in effect made his written agreement. Within ray means of research I haVe not been able to find a case going that length, and I apprehend none exists. The law in this case having defined the rights and obligations of the sureties as between themselves, their signatures estab- lish their assent to it, and the contract is thus made as clear and certain as if the whole had been written. It is the highest and best evidence of their agreement, and the reason of the rule that excludes parol evidence from being received to vary the operation of a contract, wholly written by the parties, applies with all its force to this case." 1 Mechanics' Bank v. Bank of Columbia, 5 Wheat. 324 ; Metcalf v. Wil- liams, 104 U. S. 97; Morrill v. C. T. Segar Mfg. Co., 32 Hun (N. Y.), 543; Hood V. Hallenbeck, 7 Hun (N. Y.), 362 ; Bellinger v. Bentley, i Hun (N. Y.), 562; Auburn City Bank v. Leonard, 40 Barb. (N. Y.) 119; Guthrie v. Imbrie, 12 Ore. 182; Klosterman v. Loos, 58 Mo. 292; Musser v. Johnson, 42 Mo. 74 ; Kean v. Davis, 20 N. J. L. 683 ; Rathbun v. Budlong, i Am. Lea. Cas. 614 ; Rendell v. Harriman, 75 Me. 497 ; Brown v. Parker, 89 Mass. 337 ; Slawson v. Loring, 87 Mass. 342; Daniel on Negot. Insts., § 1 21 8. Compare Scanlan v. Keith, 102 111. 634; Powers v. Briggs, 79 111. 493. § 1 79-] WHEN PAROL IS EXCLUDED. 245 And this is the rule prevailing in the construction of every commercial or trade contract. The principle upon which it is based is not affected by the nature of the transaction, in regard to which writ- ten language is employed, and we find that evidence "against the contents of a writing" is always inadmis- sible.^ And upon the theory that the deliberate use of written language is the best indication of the intention of parties at a given time, the law holds that it will not depart from its just rule of interpretation where there is no mistake or fraud, even though apparent injustice should result in a single case.^ § 1 79. A complete written contract merges all prior parol negotiations. — Whenever a written contract pur- ports to be a complete statement of all the matters agreed upon by the parties in reference to the transaction to which it relates, it is presumed by the law that the par- ties have merged in this writing their entire contract, and parol evidence is inadmissible to add anything to it, or to alter it in any particular. " When parties have deliber- ately put their mutual engagements into writing, in such language as imports a legal obligation, or, in other words, a complete contract, it is only reasonable to presume that they have introduced into the written instrument every material term and circumstance ; and, consequently, all parol testimony of conversations held between the par- ties, or of declarations made by either of them, whether before, or after, or at the time of the completion of the con- tract, will be rejected ; because such evidence, while de- , serving far less credit than the writing itself, would inevi- 1 Poth. on Obi. 758 (Eng. ed.), p. 504- 2 Compare Parsons on Contracts, vol. II, p. 494 ^^^ ^eq.; Wharton on Con- tracts, §658; V^ilson V. Deen, 74 N, Y. 531; Speckels v. Sax, I E. D. Smith (N. Y.), 253; Goodwin v. Goodwin, 59 N. H. 548; supra, % 174. 246 CONTRADICTORY PAROL EVIDENCE. [§ 180. tably tend, in many instances, to substitute a new and different contract for the one really agreed upon, and would thus, without any corresponding benefit, work in- finite mischief and wrong." ^ § 180. Complete contract conclusive as to matters comprised therein. — In a previous section^ we have con- sidered the method of ascertaining whether in any case the contract presented is a memorial of the transaction, and also the extent to which such a contract speaks. We there found that whatever matters it was fair to con- clude that the parties, acting as reasonable men, had fully disposed of by their writings, must be held to be within the purview of the written contract. From this proposition it necessarily follows that parol evidence which would alter the obligations of the parties as they arise from a formal writing is also contradictory parol evidence and therefore inadmissible. Thus Benjamin says, that where " a duty or obligation of any sort results by virtue 1 Taylor on Evidence, § 1 132. See also Greenleaf on Ev., § 275. Thomp- son V. Insurance Co., 104 U. S. 259; Bast v. Bank, loi U. S. 93 ; Insurance Co. V. Mowry, 96 U. S. 547 ; Marsh v. McNair, 99 N. Y. 74, and cases cited ; Keliyw. Roberts, 40 N. Y. 432; Pohalski v. The Mutual Life Ins. Co., 36 Super. Ct. (N. Y.) 234; Albright v. Voorhies, 36 Hun (N. Y.), 437 ; Unger v. Jacobs, 7 Hun (N. Y.), 220; Van Syckel v. Dalrymple, 32 N. J. E. 233; Stev- ens V. Haskell, 70 Me. 202; Cocke v. Blackbourne, 58 Miss. 537; Cooper v. Cleghorn, 50 Wis. 113; Woodall w. Greater, 51 Ind. 539; Pettus z/. McKin- ney, 74 Ala. 108; Mobile Life Ins. Co. v. Pruett, Id. 487; Couch w. Wood- ruff, 63 Ala. 466 ; Keegan v. Kimaine, 1 2 Bradwell's R. (111. App.) 484 ; Bren- ner •z'. Luth, 28 Kan. 281 ; Winona v. Thompson, 24 Minn. 199; Lazear w. Natl. Union Bank, 52Md. 78; Skeels z/. Starrett, N. W. Rep., July 4th, 1885, Sup. Ct. Michigan; Zerrahn v. Ditson, 117 Mass. 553; Farrovkf v. Hayes, 51 Md. 498; Wiener -v. Whipple, 53 Wis. 298; S. C. 40 Am. R. 775; Wheeler & Wils. Mfg. Co. V. Laus, 62 Wis. 635; Fay v. Gray, 124 Mass. 500; Fitz v. Comly, 118 Mass. 100; Frost 1/. Blanchard, 97 Mass. 155; Millain r/. Thomas, 43 Conn. 252; Glendale Mfg. Co. v. The Protection Ins. Co., 21 Conn. 37; McEwen v. Ortman, 34 Mich. 325; Belcher w. Mulhall, 57 Tex. 17; Anker V. Franklin, 43 L. T. N. S. 317; Gilroy w, McMillan, 6 Ont. Rep. 120 (1885). 2 Supra, § 141. l8l.J WHEN PAROL IS EXCLUDED. 247 •of the law, or of local customs, or the usages of particu- lar trades, from the written stipulations, such duty or obligations may not only be enforcedj as though it were expressly included among the written terms, but is as carefully guarded by the rule now under consideration, as if expressed in the written paper, and cannot be con- tradicted or qualified by parol evidence."^ And parol evidence cannot add to a complete written contract any provision or stipulation which is not clearly collateral to it and is wholly beyond its scope.^ § 181. Legal effect of a writing not to be contra- dicted. — It is perceived therefore, that the legal effect of a complete contract may be as unalterable as its express terms. And it has been said that there is no rule of law better settled or more salutary in its application to con- 1 Benjamin on Sales, § 202. See also Colwell v. Lawrence, 38 N. Y. 71. So in Creery v. Holly, 14 Wend. (N. Y.) 25, it was held that parol evidence of an agreenrient, that goods might be stowed on deck, made before the giving of a bill of lading, was inadmissible to vary the provisions of the bill, although the goods were lost by reason of their being on deck. And Nelson, J., said : " It is true in this case that nothing is said in the bill as to the manner of stowing away the goods, whether on or under the deck, but the case concedes that the legal import of the contract, as well as the understanding and usage of mer- chants, impose upon the master the duty of putting them under deck, unless otherwise stipulated, and if such is the judgment of the law upon the face of the instrument, parol evidence is as inadmissible to alter it as if the duty was stated in express terms. It was a part of the contract. 8 Johns. R. 189. It seems to me it would be extremely dangerous, and subject to the full force of ■every objection that excludes the admission of this species of evidence, to per- mit any stipulation, express or impUed, in these instruments, when free from ambiguity, to be thus varied ; and besides, from the high character given to these instruments in commercial business, would expose the insurer and purchaser to frauds, against which they could not well be protected without wholly reject- ing them. If the implied obligation of the master, in this case arising out of the conceded construction of this bill of lading, may be varied by parol testi- mony, I do not see how any other stipulation included in it could be sustained upon an offer to impeach it in the same way." Cf. Long v. N. Y. Central R. H. Co., so N. Y. 76. 2 Supra, § 134- 248 CONTRADICTORY PAROL EVIDENCE. [§ 181. tracts than that which precludes the admission of parol evidence to contradict or substantially vary the legal import of a written agreement.^ And this rule is. rigidly enforced. Thus in New York, in a case^ where there had been oral promises made to repair cer- tain premises, subsequently leased by formal indenture which made no reference to repairs, the trial court sus- tained an action upon the oral promises, and thus per- mitted the legal obligations of the parties as fixed by the lease to be varied by parol evidence. But upon appeal the judgment was reversed, although the application of the rule seemed to work hardship, and Woodruff, J., said : " I regret that this judgment cannot be sustained. It appears to me to exhibit a case of hardship in the 1 Renner v. Bank of Columbia, 9 Wheat. 581. See also Stevens v. Cooper^ I Johns. Ch. (N. Y.) 429; Colton v. Vandervalzen, 87 Ind. 361; Brandon M'f'g Co. V. Morse, 48 Vt. 322; Brady v. Oastler, 3 H. & C. 112. The legal effect of an agreement expressed in several writings is as operative as though the agreement was contained in one instrument, and it cannot be varied by parol evidence. Hall ^'. Adams, I Hill (N. Y.), 601. When the law determines what is the legal effect of a contract, it is because, from the nature of the contract, there is deducible the intention in the minds of the parties that such should be its effect. Security Bank of Minn. v. Luttgen, 29 Minn. 361. 2 Speckels v. Sax, i E. D. Smith, 253, quoted with approval by Rapallo,^ J., in Wilson v. Deen, 74 N. Y. 531, where the same point was decided and the Court said : " A written contract merges all prior and contemporaneous negotiations and oral promises in reference to the same subject, and that when the terms of a lease are in writing, the rights and duties of the parties depend upon the terms or legal intendment of the lease itself, or as otherwise expressed, that it is conclusively presumed that the whole engage- ment of the parties, and the extent and manner of their undertakings, are embraced in the writing. This rule has been repeatedly applied to cases- like the present, where tenants have set up oral agreements or promises alleged to have been made by the landlord at the time of or before the exe- cution of the lease, and as an inducement thereto. The alleged promises have, in most of the cases, been to put the premises in repair, but they have- uniformly been held to have been merged in the lease." And in conclusion it is said : " There can be no more dangerous judicial experiment than the endeavor to sustain the supposed equities of a particular case at the hazard of subverting an established and wholesome rule of law." § 1 82.] WHEN PAROL IS EXCLUDED, 249 application of the rule that a written agreement is to be taken to merge all previous parol stipulations in regard to the subjects embraced therein ; or, in other words, that ' it is conclusively presumed that the whole engagement of the parties, and the extent and manner of their under- taking, was reduced to writing,' and therefore parol evi- dence of prior parol promises cannot be received. There is much reason to believe that the plaintiff was, in this case, grossly deceived by assurances on the part of the defendant that have not been performed. Nevertheless, the rule is well settled, and though it may operate harshly in this instance, the propriety and wisdom of the rule, in general, cannot be questioned." § 182. Illustration of rule. — As we have seen, the legal effect of a complete contract of sale without warranty can- not be changed by proof of a prior parol warranty.^ And when a contract specifies no time within which an act there- in referred to is to be done, the law implies that the time agreed upon is a reasonable time and will not admit oral proof to show that the parties fixed upon any other period for its performance. Thus when the time for the delivery of the articles purchased is not specified in the writing, the presumption of law that the vendor has a reasonable time within which to deliver cannot be con- tradicted.^ And when in a lease there was a provision ^ Supra, % 139. 2 In Bromley v. Johnson, 10 Week. Rep. 303, the court said that the defendant had "in effect asked the plaintiff to give him a note in writing of the contract, and the plaintiff gave him what purported to be so. It was taken by both parties as being so at the time it was given. It had all the essential elements or parts of a contract : the parties, the subject-matter, the price, and the like; and it was silent as to any time for delivery. That being so the case clearly came within the rule of law, that where a con- tract had been reduced into writing by the parties, parol evidence as to its terms could not be received. Not only so, but the case was a very strong illustration of the rule, for here the parties gave contradictory evidence on 250 CONTRADICTORY PAROL EVIDENCE. [§ 182. giving the lessee a privilege of purchasing the leased premises, and no time was expressed within which the offer was to be accepted, it was held that the writing contained the contract of the parties, and that parol evi- dence was not admissible to change the legal presump- tion that a reasonable time only was granted for the ac- ceptance of the offer.^ Upon a sale of timber by a oath, as to the terms of the parol contract, which was just the evil the rule of law tended to prevent." So in White v. Talmage, 35 Super. Ct. (N. Y.) 223, it was said : " The offer to show that the contract did not contain the "whole of the agreement, because no time was specified for delivery, was properly overruled. The written memorandum, or bought and sold notes, were the best, and therefore the only proper evidence of ttie contract. They could not be varied, enlarged, or contradicted by any parol evidence. There was no ambiguity or concealed meaning that required explanation or develop- ment. And their silence in respect to the time of delivery, did not allow of its being shown that it was to be different from that which the law regulates in regard to such contracts." See also Benjamin on Sales, § 683, and note 6; Hickman v. Haynes, L. R. 10 C. P. 598. Compare Esmond -v. Van Benschoten, 12 Barb. (N. Y.) 366; Lawrence v. Miller, 86 N. Y. 131- ^ Stone V. Harmon, 31 Minn. 512, in which case it was said: " As in the ■case of other written instruments parol evidence was admissible to show the situation of the parties, and the circumstances under which it was executed. But in the light of such facts the language of the contract is presumed to merge the expression of the intention and understanding of the party making it." Compare Marshall v. Gridley, 46 111. 247; Cook v. Finch, 19 Minn. 350; City of W^inona v. Thompson, 24 Minn. 199; Austin z/. Wacks, 30 Minn. 335 ; ^yan v. Hall, 54 Mass. 520; Warren v. Wheeler, 49 Mass. 97; Atwoodz/. Cobb, 33 Mass. 227 ; Curtiss v. Howell, 39 N. Y. 211 ; Baker v. Higgins, 21 N. Y. 397; La Farge v. Rickert, 5 Wend. (N. Y.) 187; Daggett v. Johnson, 49 Vt. 345; Musselman v. Stoner, 31 Pa. St, 265. In La Farge v. Rickert, 5 Wend. (N. Y.) 187, Sutherland, J., said : " The written contract of the par- ties, therefore, according to the established rules of construction, having settled their rights and duties as to the place at which these articles were to be delivered, it was improper to admit parol evidence of their declarations be- fore or at the time of the giving of the receipt, to show that a different place had been agreed upon. The written contract was the only legal evidence of the intentions of the parties up to the time it was executed. All previous ar- rangements were merged in that. A written contract cannot be varied by parol ; and where the legal construction and effect of an instrument are well settled, it is varying the instrument to show that the parties intended some- § 1 82.] WHEN PAROL IS EXCLUDED, 25 1 contract in writing which specified no time within which the wood was to be cut, it was held that the true con- struction of the contract was that a reasonable time was allowed, and parol evidence to show that the parties had agreed upon a special time was excluded.^ thing else, as much as it would be to prove that the terms used were not in accordance with the previous agreement." 1 Jenkins v. Lykes, 19 Fla. 148 (1882). CHAPTER XV. LIMITS WITHIN WHICH RULE EXCLUDING PAROL OPERATES. § 183. Sphere of operation of rule excluding parol evidence. 184. Nature of limitations of rule. 185. Certain language may be contradicted. 186. Authorities recognizing principle. 187. Contract words in receipt not to be contradicted. 188. Rule excluding parol does not apply to strangers to writing. 189. Authorities sustaining this doctrine. 190. Parol may show contract was never made. 191. Fraud, mistake, and illegality proved by parol. 192. Parol may show unsealed contract to be without consideration. 193. Seal conclusive evidence of consideration at common law. 194. Rule abrogated in some States. 195. Parol may always explain consideration clause. 196. Oral evidence showing agreement discharged, waived, or supplanted does not contradict. 197. Conclusion from discussion of rule excluding parol evidence. § 1 83. Sphere of operation of rule excluding parol evidence. — Although the rule excluding parol evidence from contradicting a written contract is absolute where it properly applies, it is confined in its operation by cer- tain limitations which result from the intervention of other principles of law. These limitations, therefore, merely prescribe the sphere of action of the rule, and, rightly speaking, do not form exceptions to it. They show its extent and the limits within which it may con- trol to advantage, but in no sense do they question or affect the force of the rule within its appropriate sphere. It is now our purpose to consider, briefly, the nature of these limitations. § 185.] LIMITS OF RULE EXCLUDING PAROL. 253 § 1 84. Nature of limitations of rule. — To the present point we have found that parol evidence, which is repug- nant to the ascertained and clear meaning of the language of a written contract, is not admissible to alter such mean- ing. That this rule is adopted for the purpose of car- rying out the intentions of parties to particular con- tracts, and forms the groundwork of a system of interpre- tation which looks to methods of learning the sense in which men use language, without a resort to their own statements and opinions. In the rule it is therefore implied, that the written language which may not be contradicted is mutual lan- guage ; that is to say, language adopted by the parties to the contract to express the matters upon which their minds have met. That the effort to contradict this lan- guage is made by one of the parties for whose benefit the rule is adopted ; and that there is at the time the rule is invoked a valid contract existing between the parties. Hence contradictory parol evidence is not excluded if : The language is not contract language ; The action is between strangers to the writing ; There is no valid contract in existence. § 185. Certain lans;uage may be contradicted. — Where a contract contains language which does not stand as ex- pressive of the mutual will of the parties, but is merely declaratory of a fact, it may with propriety be controlled by parol evidence. For it is only the words of a written contract which fix the obligations and rights of the parties, and which it is fair to assume were weighed in the minds of the contracting parties, that the law will hold to be binding upon them. Such words relate to the essence of the contract, to the very things in regard to which the parties aim to express their intentions in written lan- guage, and the rule in regard to them is unalterable. 254 CONTRADICTORY PAROL EVIDENCE. [§ 1 86. But recitals of fact stand upon a totally different footing. They are not statements of intention. They do not im- pose obligations or confer rights. Their purpose is mere- ly to record something done in the past. While, there- fore, it is proper to give to such recitals much weight as written evidence, and to consider them in the first in- stance as accurate statements of fact, the rule excluding parol evidence furnishes no sufficient reason for prohibit- ing their contradiction. § 1 86. Authorities recognizing principle. — Many cases have illustrated this principle. Thus it has been held that the true date of a contract may be shown without regard to the statement made in the writing in regard thereto,^ unless, indeed, the date of the writing fixed, by reference, the time of performance, and so entered into the sub- stance of the contract.^ It is also proper to contradict the assertions of a document in regard to the payment of the consideration.^ And parol evidence is always admis- sible to explain or contradict every receipt which merely acknowledges the payment of money or the delivery of goods.* ' Greenleaf on Evidence, §§285, 305; Shaughnessy z/. Lewis, 130 Mass. 355 ; Davis, &c. Co. v. Stone, [31 Mass. 384; Russell w. Carr, 38 Ga. 459; Paige V. Carter, 64 Cal. 489 ; Germania Bank v. Distler, 64 N. Y. 642 ; Field u. Mun- son, 47 N. Y. 221 ; Perry z/. Smith, 34 Tex. 277; Breck z*. Cole, 4 Sandf. (N. Y.) 79; Abrams v. Pomeroy, 13 111. 133; Bamett v. Abbott, 53 Vt. 120; Hart- sell w. Myers, 57 Miss. 135 ; Gately v. Irvine, 51 Cal. 172; Pitts, &c. Co. v. Poor, 7 Brad. Rep. (111. App.) 24; Reffell v. Reffell, L. R. I P. & D. 139; Steele v. Mart, 4 B. & C. 273; Cooper v. Robinson, 10 M. & W. 694; Hall v. Caze- nove, 4 East, 477. 2 Joseph V. Bigelow, 58 Mass. 82. ' Infra, §§ 192-194. * Riley v. Mayor of N. Y., 96 N. Y. 331 ; Harper v. Dail, 92 N. C. 394 j Dorman v. "Wilson, 39 N. J. L. 474; Swain v. Frazier, 35 N.J. Eq. 326; Hil- dreth v. O'Brien, 92 Mass. 104; Badger z/. Jones, 29 Mass. 371; Brooks v. White, 43 Mass. 283; Flood v. Joyner, 96 Ind. 459; Ditch v. VoUhardt, 82 111. 134; Elston V. Kennicott, 52 111. 272; Winchester w. Grosvenor, 44 111. 426 ; Lowe Bros. v. Young, 59 Iowa, 364 ; Williamson v. Reddish, 45 Iowa, § 187.] LIMITS OP RULE EXCLUDING PAROL. 255 § 187. Contract words in receipt not to be contra- dicted. — But so far as a receipt contains contract obliga- tions it will be within the rule protecting written con- tracts, and only the recitals of fact may be contradicted. Thus where a receipt was given which read as follows : " In the matter of the proof of the will of . In con- sideration of twenty-five hundred dollars to me paid by Executrix, I hereby waive all right to contest said will or the proof thereof, and all claim I have or might have as heir of said deceased," the court refused to admit parol evidence to contradict the writing.^ And Foster, J., said: "These two principles of law are elementary, a written receipt may be explained, varied, or contradicted by parol evidence ; a written contract may not. A re- ceipt may be either a mere acknowledgment of payment or delivery, or it may also contain a contract to do or refrain from doing something in relation to the money paid or the thing delivered. In the former case it is merely prima facie evidence of the fact and not conclu- sive, and therefore the fact which it recites may be con- tradicted by parol testimony. But in the latter case, being a contract between the parties, it stands on the footing of all other contracts in writing and cannot be contradicted or varied by parol. A writing which par- takes of the nature both of a contract and a receipt may be contradicted and explained in regard to any fact 550 ; Burwell v. Pioneer, 37 N. Y. 312 ; Hotchkiss v. Mosher, 48 N. Y. 478 ; Johnson v. Weed, 9 Johns. (N. Y.) 310; Starkie on Evidence, p. 718; Herki- mer V. Nigh, 10 111. App. 372; Brice v. Hamilton, 12 S. C. 32; Wadsworth V. AUcott, 6 N. Y. 64; Pribble v. Kent, 71 Am. Dec. 327 ; Fuller v. Critten- den, 9 Conn. 406; Hicks v. Morris, 57 Tex. 658 ; Sears v. Wempner, 27 Minn. 351 ; Russell v. Church, 65 Pa. St. 9; Farrar v. Hutchinson, 9 A. & E. 641 ; Wallace v. Kelsall, 7 M. & W. 273 ; Lee v. Lane & Yorks. Ry. Co., L. R. 6 Ch. App. 527 ; Taylor on Evidence, § ii34. 1 Goodwin v. Goodvi^in, 59 N. H. 548. 256 CONTRADICTORY PAROL EVIDENCE. [§ 1 88. which it erroneously recites, but in other respects it is to be treated like other written contracts. " The writing before us, denominated a receipt, par- takes of this double nature. In so far as it may be re- garded as a receipt, it is capable of explanation and con- tradiction with regard to any fact erroneously recited, but in its main features it is more properly to be re- garded as a contract made binding upon the plaintiff by his signature, and on the defendant by being delivered to and accepted by her. In this respect it could no more be varied or controlled by oral evidence than any other written contract between the parties."^ § 188. Rule excluding parol does not apply to stran- gers to writing. — Another important limitation of the rule excluding parol evidence, is found in the fact that it never applies except where the action is between the par- ties to the contract or their representatives. The parties should see to it that the writing expresses clearly the terms of the contract. It would be therefore most unjust to compel strangers to bear the results of the omissions or misstatements in the contract.^ Moreover, one having 1 See also Alcom v. Morgan, 77 Ind. 184; Carpenter «/. Jamison, 75 Mo. 285 ; Schultzt/. Coon, 51 Wis. 416; S. C. 37 Am. R. 839; Stewart v. Phoenix Ins. Co. 9 Lea (Tenn.), 104; Harper v. Dail, 92 N. C. 394; Smith v. Holland, 61 N. Y. 63s; Ryan v. Ward, 48 N. Y. 204; Coon v. Knapp, 8 N. Y. 402; Kellogg V. Richards, 14 Wend. (N. Y.) 116; Egleston ■z/. Knickerbocker, 6 Barb. (N. Y.) 402; James w. Bligh, 93 Mass. 4; O'Brien v. Gilchrist, 34 Me. 554; Tisloe v. Graeter, i Blackf. 353; Wayland v. Mosely, 5 Ala. 430; Sencesbox v. McGrude, 6 Minn. 484; Dale v. Evans, 14 Ind. 288; Starkie on Evidence, pp. 718, 719; Randall v. Reynolds, 52 N.Y. Super. Ct. 145 ; Phil- lips on Evidence, vol. II, pp.6s2,653 ; Leake's Digest of Contracts, pp.901, 902. 2 Greenleaf, § 279, says: "The rule under consideration is applied only (in suits) between the parties to the instrument, as they alone are to blame il the writing contains what was not intended, or omits that which it should have contained. It cannot affect third persons, who, if it were otherwise, might be prejudiced by things recited in the writings contrary to the truth, through the ignorance, carelessness, or fraud of the parties ; and who, there- fore, ought not to be precluded from proving the truth, however contradictory § 1 89.] LIMITS OF RULE EXCLUDING PAROL. 257 no connection with the writing has placed no reliance upon its terms, and has never employed the language used to express the contract as he understood it, there is, therefore, no ground for holding that such an one may not prove the real facts without regard to the writing. § 189. Authorities sustaining this doctrine. — This rule cannot be questioned, but nevertheless the judges are frequently called upon to restate it. Thus, for ex- ample, in a recent case in the New York Court of Ap- peals, where it was contended that parol evidence, which contradicted certain policies of insurance, had been im- properly received by the trial court, it was said ■} " But the contention on the part of the defendant is, that parol evidence could not be received to vary or affect the con- struction which the general policies would receive if their language only was considered ; that extrinsic facts and circumstances known to only one of the parties to the policies cannot be proved by parol evidence to show that such language means something different from its plain import, the language being so plain and free from ambi- guity that its meaning cannot be doubted, and the learned counsel for the defendant, to sustain this conten- tion, calls our attention to the general rule of evidence which prohibits parol evidence to vary, explain,^ or qualify a written instrument embodying the agreement of the parties to the action. " But these general policies were not contracts be- tween the parties to this action, and the wholesome rule above referred to applies only in suits between the to the written statements of others." Taylor follows this language, except that he causes the first paragraph to read, " the rule is applied only in suits between the parties to the instrument and their representatives." Taylor on Evid., § 1 149. See also Poth. on Obi. (Eng. ed.) p. 506. 1 Lowell M'f'g Co. V. Safeguard Fire Ins. Co. 88 N. Y. 598. 2 See Supra, § 42. 17 258 CONTRADICTORY PAROL EVIDENCE. [§ I90. parties to the written instrument. In Lee v. Adsit/ it is said that ' the rule that parol extrinsic evidence shall not be received to contradict or vary a contract which is in writing applies only in controversies between the parties, promisor, and promisee, in such contract,' and that ' the writing is not conclusive as between one of the con- tracting parties and a third person ; ' and in McMaster V. The Insurance Co. of North America,^ it was held that ' the rule that parol testimony may not be given to con- tradict a written contract, applies only in suits between the parties to it or their privies. In a contention be- tween , a party to an instrument and a stranger, either can give parol testimony differing from the contents of the instrument' " Here neither of these parties was a party to these general policies, and it was competent to show by the extrinsic facts that they were not taken out for the bene- fit of the plaintiff, and that they did not, in fact, attach to or cover its property." ^ Where one derives no right or interest under a written agreement, he is not in privity with the parties who make the agreement, and he cannot invoke the rule which excludes parol proof of the terms of the contract.* § 190. Parol may show contract was never made. — It is also obvious that parol evidence which tends to show that a writing, which purports to be the contract of the 1 37 N. Y. 78. 2 55 N. Y. 222. ' See also Stacy v. Thrasher, 6 How. 44 ; Tobey v. Leonard, 2 Cliff. 40; Juillard v. Chaffee, 92 N. Y. 529; Brown v. Thurber, ^^ N. Y. 613; Campbell v. Hall, 16 N. Y. 575; Selchow v. Stymus, 26 Hun (N. Y.), 145; Fant, Receiver z/. Sprigg, 50 Md. 551; Cunningham w. Milner, 56 Ala. 522; Talbot V. Wilkins, 31 Ark. 411; Col. Bank z/. White, 14 Nev. 373; Hussman v. Wilke, 50 Cal. 250; Bell v. Woodman, 60 Me. 465; infra, n. 4. * Masterson v. Boyce, 29 Hun (N. Y.), 456; Wilson -v. Sullivan, 58 N. H. 260; Furbush v. Goodwin, 25 N. H. 425. § 192.] LIMITS OF RULE EXCLUDING PAROL. 259 parties, never was such contract, in no way interferes with the meaning of the language of the writing. For such evidence relates to facts beyond the paper, and facts which, from their nature, must be established by oral tes- timony. Therefore, proof of this character may show that a paper is not genuine, that the parties never assent- ed to a specific writing as expressive of the terms of their agreement, that the contract was never delivered at all, ■or that it was delivered as an escrow.^ § 191. Fraud, mistake, and illegality proved by parol, — So parol evidence is admissible to show fraud, mistake, or illegality in the execution of a contract ; and any fact which tends to prove to the court that no legal contract has been made between the parties may be established by oral testimony.* Evidence to establish any defect of this character in the alleged contract does not come within the spirit or the letter of the rule excluding parol evi- dence. § 192. Parol may show unsealed contract to be without consideration. — Parol evidence may also be given to show that an unsealed written contract was made without a consideration, although the face of the writing is thereby contradicted.^ For this evidence merely shows that there 1 Compare Leake's Digest of Contracts, p. 183; Wharton on Contracts, § 629; Greenleaf on Evidence, § 284; Anson on Contracts, pp. 227, 230, 231 ; supra, § 1 57. 2 Stephen's Digest of Evidence, 90 (i), Chase's ed. p. 162 ; Greenleaf on Evidence, §§284, 296 a; Taylor on Evidence, §§ 1136,1137; Wharton on Evidence, §§ 1019, 1054; Paine v. Upton, 87 N. Y. 327; Rowand v. Finney, •96 Pa. St. 192; Trambly v. Ricard, 130 Mass. 259. 3 In Miller v. McKenzie, 95 N. Y. 575, Earl, J., said: " Notwithstanding the statement in the note that it was given for cash loaned, it is open to either party to show the true consideration thereof, i Parsons on Notes and Bills, 194; Abbott V. Hendricks, i M. & G. 791 ; Wheeler v. Billings, 38 N. Y. 263; Arnot V. Erie Railway Co., 67 Id. 321." See also De Lavalette v. Wendt, 75 N. Y. 579; Hyler v. Nolan, 45 Mich. 357; Kimball v. Myers, 21 Mich. 276; 26o CONTRADICTORY PAROL EVIDENCE. [§ I93. 4 was no real contract between the parties, and that, there- fore, they have not brought themselves within the protec- tion of the rule which guards written agreements. More- over, the consideration clause of a contract is a receipt only, and as such is open to contradiction by parol testi- mony. Where, however, negotiable paper has passed into the hands of bona fide holders for value, it is subject to special rules, and as against a holder of such a character the consideration cannot be inquired into.^ § 193. Seal conclusive evidence of consideration at com- mon law. — At common law, however, the rule is well es- tablished that an instrument under seal cannot be shown to be without a consideration.* Some authorities have held that the reason of this was that no consideration was necessary to support a formal document bearing a seal ; but the more accurate and reasonable theory seems to be that, although the existence of a consideration is necessary Liebke v. Knapp, 79 Mo. 22; Baile v. Ins. Co., 73 Mo. 371; Fontaine v. Boatmen's Savings Inst., 57 Mo. 561 ; Baldwin v. Dow, 130 Mass. 416 ; Good- speed V. Fuller, 46 Me. 144; Bumham v. Dorr, 72 Me. 198; Sterfflebeen «». Arnold, 57 Cal. 11 ; State v. McDonald, 43 N. J. L. 591 ; Eaton v. Eaton, 35 N. J. L. 290 ; Foster v. Napier, 74 Ala. 393 ; Howard v. Stratton, 64 Cal. 487 ; Reader v. Helmes, 57 Ala. 440 ; Jackson v. Miller, 32 La. Ann. 432 ; Meyer V. Casey, 57 Miss. 615; Wolf v. Fletemeyer, 83 111. 418; Taylor w. Preston, 79 Pa. St. 436; Holmes' Appeal, 79 Pa. St. 279; Wharton on Evidence, § 1044; Taylor on Evidence, § 1138; Daniel on Negot. Insts., §§ 174,201,203. '' Every bill or note imports two things : value received, and an agreement to pay the amount on certain specified terms. Evidence is admissible to deny the receipt of value, but not to vary the engagement." Abbott v. Hendricks, I M. & G. 795. Compare Henry v. Armitage, 48 Law Times, 576. ^ Daniel on Negot. Insts., §§ 174, 790; Wharton on Evidence, § 1058. 2 Leake's Digest of Contracts, pp. 146, 147 ; Kent's Com., vol. II, p. 465 ; Parsons on Cont., vol. I, p. 428. " By the English common law, a seal, attached to a written instrument, is held to be conclusive proof of consideration. In equity, however, the recital can be overhauled on proof of fraud or mistake ; and this doctrine is, in the United States, generally accepted by common law courts." Wharton on Evi- dence, § 1045. § 194'] LIMITS OF RULE EXCLUDING PAROL. 26 1 to the validity of every contract, in the case of sealed in- struments this existence is conclusively presumed.^ And this conclusive presumption arises from the solemnity of the instrument and the deliberation with which it has evi- dently been prepared. Parsons has questioned whether this is a fair inference from the use of a seal, and seems to regard the rule as of slight intrinsic value. § 1 94. Rule abrogated in some States. — That the rule of law making a seal conclusive evidence of a considera- tion does not find its justification in the conduct of men, is well shown by the fact that resort has been had to leg- islative enactment and to principles of justice for relief from its oppression.^ In such cases, while the seal is or- dinarily allowed to stand as presumptive evidence of a consideration, permission is given to parties to contradict the presumption. But other considerations than valu- able ones may be shown to support the contract.* And ^ See supra, n. 2, p. 260. Also consult Anthony v. Harrison, 14 Hun (N. Y.), 198 (infra, n. 2), and AUer v. AUer, 40 N. J. L. 446. In Parsons on Contracts, vol. I, p. 428, it is said that the only mean- ing of this rule is " that the act of sealing is a deliberate and solemn act, implying that caution and fullness of assent which the rule of the civil law was intended to secure." And he adds: " Whether this inference from the use of a seal can now be made with sufficient force to sustain the very great dif- ference made by the law between sealed instruments and those which have no seal might be doubted. The distinction rests now, perhaps, more on the ■difficulty of disturbing a rule established by long use and of very extended operation." 2 Consult Anthony v. Harrison, 14 Hun (N. Y.), 207, affi'd by Court ot Appeals on opinion below, 74 N. Y. 613, in which case the authorities bearing upon the common law rule are ably reviewed by the referee before whom the action was tried. Home Insurance Co. v. Watson, 59 N. Y. 395 ; Graver v. Wilson, 14 Abb. (N.S.)374; Case 7/. Boughton, 11 Wend. (N. Y.) 109 ; Torry -V. Black, 58 N. Y. 190; Burrell v. Root, 40 N. Y. 497; Aller z/. AUer, 40 N. J. L. 446; Comstock ». Breed, 12 Cal. 288; Swift «/. Hawkins, i Dal. (Pa.) 17; Steinhauer v. Witman, i S. & R. (Pa.) 43. See also Parsons on Cont., vol. I, p. 429 ; Wharton on Evidence, § 1045. ' Hunt V. Johnson, 44 N. Y. 27 ; Bucklin v. Bucklin, i Abb. Ct. App. Cas. 262 CONTRADICTORY PAROL EVIDENCE. [§ I95. even where a seal is but presumptive evidence of consid- eration, the effect of a deed which recites a nominal con- sideration only cannot, in the absence of fraud, be contra- dicted by proof that no actual consideration was paid. For, in such a case, the grantor is estopped from contra- dicting the effect of the writing.^ The same principle,, likewise, applies to releases.^ § 195. Parol may always explain consideration clause. — While parol evidence may not at common law show that contracts under seal are without consideration such' evidence is freely admitted for the purpose of explaining the consideration of both sealed and unsealed contracts. In this way other considerations than those expressed in the writing may be proved, that the consideration-money has not been paid may be shown, and every other fact which gives information in regard to the true consider- ation of the agreement may be brought before the court* 42; Van Amburgh v. Kramer, 16 Hun (N. Y.), 205; Aller w. AUer, supra; Burkholder v. Plank, 69 Pa. St. 225. 1 " And as between the parties, when a mere nominal consideration is in- serted in a deed for the purpose of supporting it, evidence of the non-payment of such consideration will not destroy the deed. The grantor may sue the- grantee and recover it. Merriam v. Harsen, 2 Barb. Ch. 232, 267." Gilbert^ J., Van Amburgh v. Kramer, 16 Hun (N. Y.), 207. Washburne, in the fourth edition of his Treatise on Real Property (1876), expresses his belief that the cases " all agree, in efTect, in this — that it is not competent to prove that no consideration has been paid, where one has been acknowledged in the deed, for the purpose of impeaching the validity of the deed, unless it is for the purpose of establishing fraud against the grantor." And he says : " The true doctrine is stated in Grout v. Townsend, 2 Hill (N.. Y.), 554, that where a deed acknowledges the receipt of a consideration, the grantor and all claiming under him are estopped from denying that one was- paid. They may disprove the payment for the purpose of recovering the con- sideration-money ; but they cannot do so for the purpose of destroying the effect and operation of the deed." Vol. IH, p. 377. See cases cited, pp. 377, 378. 2 Wharton on Evidence, § 1163 ; Noble v. Kelly, 40 N. Y. 420. » Thus Allen, J., in Hebbard v. Haughian, 70 N. Y. 54, says: " The only § I95-] LIMITS OF RULE EXCLUDING PAROL. 263 The allegations of the contract in regard to these matters effect of the statement of the consideration and its payment in the deed was to estop the grantor from alleging that the deed was without consideration. In brief, the consideration clause was open to explanation, and to be varied by parol proof." In Goodspeed v. Fuller, 46 Me. 141, Appleton, J., said: ' ' The only effect of the consideration clause in a deed, is to estop the grantor from alleging that it was executed without consideration, and to prevent a resulting trust in the grantor. For every other purpose, it may^ be varied or explained by parol proof. The gfrantor may show, notwithstanding the ac- knowledgment of payment, that no money was paid, and recover the price in whole or in part against the grantee. Wilkinson v. Scott, 17 Mass. 249. This clause is prima facte evidence only of payment, and may be controlled or rebutted by other proof. Clapp v. Tirrell, 20 Pick. 247. The recitals in the deed, of the amount and payment of consideration, do not estop the grantee from sustaining an action for the price. Thayer v. Viles, 23 Verm. 494 ; White V. Miller, 22 Verm. 280. ' This clause is either formal or nominal,' says Dagget, J., in Belden v. Seymour, 8 Conn. 304, ' and not designed to fix conclusively the amount either paid or to be paid.' The amount of con- sideration, and its receipt, is open to explanation by parol proof in every direc- tion. It may be shown that the price of the land was less than the consider- ation expressed in the deed, as in Bowen v. Bell, 20 Johns. 338 ; or that it was more, as in Belden v. Seymour, 8 Conn. 304; or that it was contingent, dependent upon the price the grantee may obtain upon a resale of the land, as in Hall v. Hall, 8 N. H. 129 ; or that it was in iron, when the deed expressed a money-consideration, as in McCrea v. Purmatt, 16 Wend. 460 ; or that no money was paid, but that it was an advancement, as in Meeker v. Meeker, 16 Conn. 387 ; or that a portion of the price was to be paid by the grantee, and the balance was an advancement, as in Hayden v. Mentzler, 10 S. & R. 329; or that it was paid by some one other than the grantee and thus raise a re- sulting trust, as in Scoby v. Blanchard, 3 N. H. 170; Pritchard v. Brown, 4 N. H. 397 ; Dudley v. Bosworth, 10 Humph. 9. The damages for the breach of the covenants in a deed may be increased or diminished, as between the parties, by proof of a greater or less price paid for the land than is expressed in the deed. Belden v. Seymour, 8 Conn. 304; Morse v. Shattuck, 4 N. H. 229. The entire weight of authority tends to show that the acknowledgment of payment in a deed is open to unlimited explanation in every direction." See also Shirras v. Craig, 7 Cranch, 34; Lawrence v. Tucker, 23 How. 14; McKinster^/. Babcock, 26 N. Y. 378; Burnham v. Dorr, 72 Me. 198; Wit- beck z/. Waine, 16 N. Y. 532; Shephard v. Little, 14 John. (N. Y.) 210; Starkie on Evidence, pp. 718, 719; Washburne on Real Prop. vol. Ill, pp. 375, 376; Wharton on Evidence, § 1044. Elphinstone, however, lays down the following rule in his Interpretation of Deeds, p. 145 : " If the considera- tion is stated inaccurately, or is not stated at all, or if part only of the con- 264 CONTRADICTORY PAROL EVIDENCE. [§ I97. being mere recitals of fact, are not binding upon the parties.' § 196. Oral evidence showing agreement discharged, waived, or supplanted, does not contradict. — Again it is obvious that evidence showing the annulment of the terms of a contract, can in no way be brought within the prohibition of a rule designed to govern the in- quiry after the meaning of the language which expresses those terms. And we therefore find that the rule is no barrier to any testimony which aims to show that the contract has been waived or discharged.^ So it brings no reason for the exclusion of evidence of a subsequent valid agreement designed by the parties to take the place of their former contract, or to alter its provisions in any particular.^ § 197. Conclusion from discussion of rule excluding parol evidence. — It is concluded from the foregoing dis- cussion of the rule of law, which excludes parol evidence from varying or contradicting a written contract, to sideration is stated, evidence is admissible to prove the true consideration, so as it be not inconsistent with the consideration expressed in the deed." Compare Leifchild's Case, L. R. i Eq. 231; Clifford v. Turrill, 9 Jur. 633; Townsend v. Toker, L. R. i Ch. 459; Frail v. Ellis, 16 Beav. 350. 1 Supra, § 186. * Greenleaf on Evidence, § 302 ; Taylor on Evidence, §1141; Bliss on Life Insurance, p. /^igetseq.; Wood on Fire Insurance, p. 832; Hanover Junction & Susq. R. R. Co. v. Haldeman, 82 Pa. St. 36. ' Greenleaf on Evidence, § 303 ; Taylor on Evidence, § 1 144; Wharton on Evidence, § 1017. The Statute of Frauds will, however, often affect the ques- tion of the validity of such subsequent agreements. See Wharton on Evidence, § 1025; Reed on the Statute of Frauds, § 453 et seq.; Taylor on Evidence, § 1144; Hill V. Blake, 97 N. Y. 216. And it is said that "by the strict rule of English common law, an instrument under seal " cannot be rescinded by parol evidence. "At the same time, when there has been an executed parol re- scission of a contract under seal, the rescission being for an adequate con- sideration, equity will not permit the rescinded contract to be enforced." Wharton on Evidence, § 1018. See also 2 Am. Lead. Cases, 590-595. § 1 97-] LIMITS OF RULE EXCLUDING PAROL, 265 ascertain the meaning of a specific contract other terms can never be substituted for those which the parties have used, and that oral testimony can under no circumstances contradict such language of a contract as expresses the mutual will of the parties. And this is believed to be the universal rule in every action between the parties to a contract, or their representatives.^ ^ Compare with, supra, § 42. CHAPTER XVI. RULES OF CONSTRUCTION. WORDS TO BE INTERPRETED IN ORDINARY SENSE. § 198. General nature of rules of construction. 199. Certain rules of great importance. 200. Words to be understood in their plain, common, and ordinary sense. 201. Ordinary sense sometimes referred to as strict and primary. 202. Phrase, strict and primary sense, does not apply to reading of common words. 203. Words to be interpreted as parties used them. 204. Rule that words are to be interpreted in ordinary sense does not apply to'technical terms. 205. Evidence of usage may show that words have been employed in special sense. 2q6. Context, circumstances, and habits of parties may affect ordinary meaning. 207. Statutory and legal meaning may control ordinary meaning. 208. How ordinary sense of word is determined. 209. Holt V. CoUyer. § 198. General nature of rules of construction. — Rules of construction are " principles deduced from men's general conduct and motives."^ They are the " conclusions of good logic and sound reasoning applied to the agreement or the parties," ^ and as such are em- ployed by courts, in conjunction with oral testimony, to reach the thought of a contract. These rules, however, for the most part, look only to the ascertainment of the probable intention of parties, and derive their authority from the fact that they are just conclusions drawn from the ordinary conduct of men. Many of them will, there- fore, be inapplicable, if the actual intention of the parties ' Powell on Cont., p. 223. 2 Kent's Com., vol. II, p. 553. § I99-] HOW LANGUAGE IS INTERPRETED. 267 is made clear by the writing itself or by the parol evi- dence .which is introduced to explain it. And it is only when doubt as to the real meaning of the contract can- not be otherwise dispelled that courts should resort to maxims of construction. Indeed Lord Bacon is quoted as saying that a general rule of construction is " but a sound in the air that cometh in sometimes to help and make up other reasons without any great instruction or direction, except it be duly conceived in point of differ- ence where it taketh place and where not."^ § 199. Certain rules of great importance. — Bvft there are certain rules ordinarily classed with the maxims of construction which should not be thus described. For although they are deductions from the general con- duct of men they enable courts to understand writ- ings and apply to the construction of every contract. They are founded upon principles which are the " canons by which all writings of every description are construed, and by which the meaning and intention of men are as- certained." ^ They have, therefore, the force rather of rules of law than of rules of construction,** and resort is had to them, not only to dispel doubt, but also to give the first intelligibility to the writing. That they should, therefore, be fully set forth is of great importance, and * Blackburn, J., Calcutta & Burmah Steam Nav. Co. v. Demattos, 32 L. J. Q. 330. And Leake says (Digests ot Contracts, p. 220) : " Some general rules or maxims Eave been laid doWn by the courts for the construction of written contracts which may here be noticed, though they do not appear to be of much practical efficacy ; the rules themselves being for the most part self- evident propositions, and the difficulty consisting chiefly in choosing which \a follow in each particular case." See also article on " Rules of Construction and Rules of Arithmetic," Law Journal, Feb. 11, 1885. ^ Smith on Contracts, p. 538 ; Hiscocks v. Hiscocks, 5 M. & W. 363. ^ Parsons on Contracts, vol. II, p. 491, note (a) ; Keythly v. Watson, 3, Exch. 716; Browning v. Wright, 2 B. & P. 24. 268 RULKS OF CONSTRUCTION. [§ 200. before discussing other maxims of construction, we con- sider the following rules : The words of a contract are to be understood in their plain, common, and ordinary sense. The entire contract must be considered to determine the intention of the parties.^ § 200. Words to be understood in their plain, com- m.on, and ordinary sense. — The general rule for the inter- pretation of the words contained in a written contract is, that they are to be understood in their plain, common, and ordinary sense.^ This is the fundamental rule for 1 Infra, Chapter XVII. ^ Lord EUenborough, in Robertson v. French, 4 East, 135. says, that the ''words of every agreement are to be understood in their plain, ordinary, and popular sense, unless they have generally, in respect to the subject-matter, as by the known usage of trade, or the like, acquired a peculiar sense distinct from the popular sense of the same words, or unless the context evidently points out that they must, in the particular instance, and in order to effectuate the immediate intention of the parties to that contract, be understood in some other and peculiar sense." And in the same case Gibson, C. J., says: "The best construction is that which is made by viewing the subject of the contract as the mass of mankind would view it ; for it may be safely assumed that such was the aspect in which the parties themselves viewed it." Powell says: " The signs of the intentions of men are to two sorts, namely, words and actions. As to positive words the rule seems to be, that, unless there be the most decisive reasons which lead us to conjecture the intent was otherwise, they are to be understood in their proper and most known signification. Not the grammatical one, which regards the etymology and original of them, but that which is vulgar and most in use ; for use is the judge, the law, and the rule of speech.'' Powell on Contracts, p. 225. Parsons says: " The object of inter- . pretation and construction is to find the intention of the parties, and surely that intention is best sought by affixing to the words of an instrument such meanings as are common or ordinary." Contracts, vol. II, p. 501, note t. So Kent says; " The bulk of mankind act and deal with great simplicity," and " words are to be taken in their popular and ordinary meaning, unless some good reason be assigned to show that they should be understo&d in a different sense." Com., vol. II, p. 555. See also Chitty on Contracts, vol. I, p. 113; Greenleaf on Evidence, § 278 ; Smith on Contracts, p. 561 ; Parsons on Contracts, vol. II, p. 501 ; Metcalf on Contracts, p. 275; Leake's Digest of Contracts, p. 222. In Stanley v. Western Ins. Co. L. R. 3 Ex. 71, a question arose as to the meaning of the word "gas" in an § 20O.] HOW LANGUAGE IS INTERPRETED. 269 the interpretation of language. It supplies the test for determining the meaning of the great majority of all the words in every contract, and must always be borne in mind by one who would read a contract correctly. It' is, moreover, the rule by which the sense of every ordi- nary word in each contract is to be reached, unless it becomes necessary to depart from it in order to effec- tuate the intentions of the parties. insurance policy, and Kelly, C. B., said : " The words of the policy are to be construed, not according to their strictly philosophical or scientific meaning, but in their ordinary and popular sense." Martin, B., also said: The words " are to be construed according to their natural meaning, and as ordinarily under- stood by mankind. What is the meaning of ' gas ? ' I apprehend it means gas as ordinarily understood by mankind, and not as the word may be used in works of art. " In Price v. Livingstone, L. R. 9 Q. B. D. 679, the question arose on a charter-party, what is meant by sailing from the last port .' and it was said: "The word 'port 'must be understood in its ordinary commer- cial sense. There are ports which, like the port of Cardiff, extend to miles for fiscal purposes, but they are not for commercial purposes to be treated as having that extent. . . . What is meant by sailing is departure from the port for the purpose of proceeding on her voyage." In Herrman v. Mer- chant's Insurance Co. 81 N. Y. 184, the subject for construction was a con- dition in a fire insurance policy, that the policy should be void if the premises became " vacant and unoccupied." Earl, J., said: " Here we have the two words joined together, vacant and unoccupied ; and what do they mean ? They should not be taken in any technical or narrow sense. They need not be taken in the sense in which they may have been understood by under- writers, as both parties to this contract were not underwriters, supposed to be familiar with the meaning of such words when used in the, business of fire insurance. But they must be taken in their ordinary sense, as commonly used and understood. We must endeavor to ascertain how the insured un- derstood and could properly understand them, in other words, the meaning which they convey to the common mind." See also Simpson v. Margitson, II Q. B. 23; Scott V. Bourdillon, S B. & P. 213; Bowes v, Shand, L. R. 2 App. Cas. 455; supra, n. 2, p. 21; Schuylkill Mar. Co. v. Moore, 2 Whart. (Pa.) 491; Railroad Companies v. Schutte, 103 U. S. 140; Nash v. Drisco, 51 Me. 417; Ricker v. Fairbanks, 40 Me. 43; Clark v. Silberman, 96 N. Y. 522; Ripley v. ^tna Ins. Co. 30 N. Y. 136 ; Pohalski v. Mutual Life Ins. Co. 36 N. Y. Super. Ct. 234 ; Trowbridge v. Dean, 40 Mich. 687 ; Brown V. Brown, 49 Mass. 373; Singer Mfg. Co. v. Hester, 2 McLean, 417; Willmering v. McGaughey, 30 Iowa, 205. Cpmpare Sedgwick's Construction of Stat, and Cons. Law, p. 219 et seq. ; Blackstone's Com. Book I, p. 60. 270 RULES OF CONSTRUCTION. [§ 20I. § 201. Ordinary sense sometimes referred to as strict .and primary. — It has been stated that this same rule is thus expressed : words are to be construed according to their strict and primary acceptation, unless from the con- text of the instrument, and the intention of the parties, to be collected from it, they appear to be used in a different sense, or unless in their strict sense they are incapable of being carried into effect.^ But as an ordinary word is never assumed to be used in its strict and primary sense, etymologically speaking, the rule when thus stated gives by itself no method for the interpretation of such a word.* 1 Chitty on Contracts, vol. I, p. 113. " The first rule to lay down is that -words are to be understood in their plain and literal meaning." Anson on Contracts, p. 241. Compare Pigg v. Clarke, L. R. 2 Ch. D. 672, criticised in Lieber's Hermeneutics, p. 107; Duncan v. Topham, 8 C. B. 225; Roberts ■z/. Brett, 34 L. J. C. P. 241 ; Tielens v. Hooper, 5 Exch. 830; infra, n. 2, p. 274. ^ In Shore v. Wilson, 9 CI. & F. 525, Coleridge, J., says : " It is unques- tionable that the object of all exposition of written instruments must be to as- certain the expressed meaning or intention of the writer; the expressed meaning being equivalent to the intention, and I believe the authorities to be too numerous and clear to make it convenient or necessary to cite them, that, where language is used in a deed which in its primary meaning is un- ambiguous, and in which that meaning is not excluded by the context, and is sensible with reference to the extrinsic circumstances in which the writer was placed at the time of writing, such primary meaning must be taken, conclu- sively, to be that in which the writer used it , such meaning, in that case, conclusively states the writer's intention, and no evidence is receivable to show that in fact the writer used it in any other sense, or had any other intention. This rule, as I state it, requires perhaps two explanatory observa- tions : the first, that if the language be technical or scientific, and it is used in a matter relating to the art or science to which it belongs, its technical or scientific must be considered its primary meaning; the second, that by 'sensible, with reference to the extrinsic circumstances,' is not meant that the extrinsic circumstances make it more or less reasonable or probable, what the writer should have intended, it is enough if those circumstances do not exclude it, that is, deprive the words of all reasonable application according to such primary meaning." " This rule, thus explained, implies that it is not allowable in the case supposed to adduce any evidence, however strong, to prove an unexpressed intention verging from that which the words used im- port. This may be open, no doubt, to the remark, that, although we profess § 202.] HOW LANGUAGE IS INTERPRETED. 271 § 202. Phrase^ strict and primary sense, does not apply to reading of common words. — Moreover, in the to be exploring the intention of the writer, we may be led in cases to decide contrary to what can scarcely be doubted to have been the intention, rejecting evidence which may be most satisfactory in the particular instance to prove it. The answer is, that interpreters have to deal with the written expressions of the writer's intention and courts of law to carry into effect what he has written, not what it may be surmised, on however probable grounds, that he intended only to have written. In proportion as we are removed from the period in which an author writes, we become less certain of the meaning of the words he uses, we are not sure that at that period the primary meaning of the words was the same as now, for by the primary is not meant the etymological, but that which the ordinary usage of society affixes to it. We are also equally uncer- tain whether at that period the words did not bear a technical or conven- tional sense, and whether they were not so used by the writer." Lord Chief Justice Tindal (at p. 565) says : " The general rule I take to be, that where the words of any written instrument are free from ambiguity in themselves, and where external circumstances do not create any doubt or difficulty as to the proper application of those words to claimants under the instrument or the subject-matter to which the instrument relates, such instrument is always to be construed according to the strict, plain, common meaning of the words themselves ; and that in such case evidence dehors the instrument for the purpose of explaining it according to the surmised or alleged intention of the parties to the instrument, is utterly inadmissible. If it were otherwise, no lawyer would be safe in advising upon the construction of a written instrument, nor any party in taking under it, for the ablest advice might be controlled, and the clearest title undermined, if at some future period parol evidence of the particular meaning which the party affixed to his words, or of his secret intention in making the instrument, or of the objects he meant to take benefit under it, might be set up to contradict or vary the plain language of the instrument itself The true interpretation, however, of every instrument being manifestly that which will make the instrument speak the intention of the party at the time it was made, it has always been considered as an exception, or perhaps to speak more precisely, not so much an exception from, as a corollary to, the general rule above stated, that where any doubt arises upon the true sense and meaning of the words themselves, or any difficulty as to their application under the surrounding circumstances, the sense and meaning of the language may be investigated and ascertained by evidence dehors the instrument itself ; for both reason and common sense agree that by no other means can the language of the instrument be made to speak the real mind of the party. Such investigation does of necessity take place in the interpretation of instruments written in a foreign language ; in the case of ancient instruments, where, by the lapse of time and change of manners, the words have acquired in the present age a different meaning from that which they bore when originally employed ; in cases where terms of 272 RULES or CONSTRUCTION. [§ 202. case from which the language given in the preceding section is derived, the question was as to the meaning of the word " London " in certain articles of agreement, whereby one agreed not to carry on the business of a surgeon-dentist in London and certain other specified places. It appeared that this word was used in a popu- lar and colloquial sense, to apply to a larger territory than was included within the limits of the city of Lon- don, but the court refused to interpret it in this sense, and held the parties to its strict and primary meaning, although in so doing one of the judges admitted that the intention of the parties was probably defeated.^ In this case, therefore, it would seem that the actual de- cision was, that where a word has a defined legal mean- ing which it is important for reasons of public policy to keep unaltered, courts will not recognize a popular usage art or science occur in mercantile contracts, which, in many instances, use a pecuUar language employed by those only who are conversant in trade and commerce ; and in other instances in which the words, besides their general common meaning, have acquired, by custom or otherwise, a well-known peculiar idiomatic meaning in the particular country in which the party using them was dwelling, or in the particular society of which he formed a member, and in which he passed his life. In all these cases evidence is admitted to expound the real meaning of the language used in the instrument, in order to enable the court or judge to construe the instrument, and to carry such real meaning into effect." See mfruyn. 2, p. 274. 1 Mallan v. May, 13 M. & W, 511, where Pollock, C. B., said: "We must apply the ordinary rules of construction to this instrument, and though by so doing we may, in some instances, probably in this, defeat the real intention of the parties, such a course tends to establish a greater degree of certainty in the administration of the law. One of these rules is, that words are to be con- strued according to their strict and primary acceptation, unless from the con- text of the instrument, and the intention of the parties to be collected from it, they appear to be used in a different sense, or unless, in their strict sense, they are incapable of being carried into effect ; and subject always to the observation, that the meaning of a particular word may be shown by parol evidence to be different, in some particular place, trade, or business, from its proper and ordinary acceptation." § 203.] HOW LANGUAGE IS INTERPRETED. 273 giving to such a word a different meaning ; but on the contrary will interpret the word in its strict and primary- sense.^ The true principle seems to be that the phrase, strict and primary sense, has no application to the interpreta- tion of ordinary words used in the common transactions of life, but is confined in its application to scientific and technical terms.^ § 203. Words to be interpreted as parties used them, — The object in the interpretation of words is to get at ' Infra, § 207. * In Holt V. Collyer, infra, §209, Fry, J., said: "In my view the principle upon which words are to be construed in instruments is very plain, where there is a popular and common word used in an instrument, that word must be zot&Xxm^A prima facie in its popular and common sense. If it is a word of a technical or legal character it must be construed according to its technical or legal meaning. If it is a word of a technical and scientific character, then it must be construed according to that which is its primary meaning, namely, its technical and scientific meaning." So the United States Supreme Court has said: " Terms of art, in the absence of parol testimony, must be understood in their primary sense, unless the context evidently shows that they were used in the particular case in some other and peculiar sense , in which case the testimony of persons skilled in the art or science may be admitted to aid the court in ascertaining the true intent and meaning of that part of the instrument, but the words of the instrument which have reference to the usual transactions of life must be interpreted according to their plain, ordinary, and popular meaning." Moran -v. Prather, 23 Wall. 492. And Taylor says : ' ' The terms of every document must, in the absence of all parol testimony, be construed in i}cAvc primary sense, unless the context evidently points out that, in the particular instance, and in order to effectuate the im- mediate intention of the parties, they must be understood in some other and peculiar sense. But it may be said, what is the primary sense of a word ? and this is a question which, in some cases, may be more easily asked than answered. It may however, be stated generally, that if the language be technical or scientific, and be in a matter relating to the art or science to which it belongs, its technical or scientific must be considered its primary meaning; but if, on the other hand, the expressions have reference to the common transactions of life, they will be interpreted according to their plain, ordinary, and popular meaning." Taylor on Evidence, §1131. See also Addison on Contracts, p. 182; Leake's Digest of Contracts, p. 222; Elphin- stone's Interpretation of Deeds, pp. 47, 48. Compare, infra, n. 2, p. 274. 18 2 74 RULES OF CONSTRUCTION. [§ 203. the meaning they conveyed to the parties who used them.^ And it is because the rule that words are to be under- stood in their plain, ordinary, and common sense fur- nishesthe best method of arriving at this meaning, that it is a wise and just rule. Courts observe the sense in which words are commonly used and understood by those who employ them, and when they are called upon to construe a contract containing such words, they inter- pret them in the same sense in which they are thus em- ployed. As the great majority of the words in contracts are commonly used by mankind in their ordinary sense, so the great majority of the words construed by courts are read in their ordinary sense pursuant to the rule above given.^ One is, therefore, held bound by the plain ^ Supra, § 62. = Mr. Elphinstone, in an article " On the Limits of Rules of Construction " in the Law Quarterly Review for October, 1885 (vol. I, p. 466), states that the three following rules are to be employed in reaching the meaning of words in the document : "First. When the words used in an instrument are in their primary mean- ings unambiguous, and when such meanings are not excluded by the context and are sensible with respect to the circumstances of the parties to the instru- ment at the time of execution, such primary meanings must be taken to be those in which the parties used the words. " Second. Extrinsic evidence is admissible for the purpose of determining the primary meanings of the words employed, and for no other purpose what- soever. " Third. Where the primary meaning of a word is excluded by the con- text, we must affix to that word such of the meanings that it may properly bear as will enable us to collect uniform and consistent intentions from the whole instrument." And he adds : " In these rules, by primary, sometimes called literal, meaning is intended not necessarily the primary etymological {i. e., literary or dictionary) meaning, but either (i) the meaning usually affixed to the words at the time of execution, by persons of the class to which the parties to the instrument belonged; or (2), the meaning in which the words must have been used by parties having regard to their circumstances at the time of execution ; or (3), the meaning which it can be conclusively shown that the parties were in the habit of affixing to them. " It follows that the primary meaning of a technical word in an instru- ment relating to the art or science to which it belongs is its technical meaning ; thus in a legal document, wherever a word occurs which in law bears a tech- § 204.] HOW LANGUAGE IS INTERPRETED. 275 and popular sense of ordinary words which make clear his obligations, even though he did not appreciate their meaning; for the party with whom he contracted was jus- tified, in the sight of the law, in relying upon the plain meaning of ordinary language.^ § 204. Rule that words are to be interpreted in ordi- nary sense does not apply to technical terms. — But the rule that words are to be understood in their ordinary sense has no application to words not in common use, for such words, strictly speaking, have no plain, common, and ordinary sense. It may, indeed, be said that the technical sense of a technical word is the ordinary sense in which such a word is used by those who employ it ; but it is believed to be more accurate to altogether except technical words from the purview of the general rule we have given, and to confine the operation of that rule to words which have a plain, ordinary, and common meaning. It is obvious, however, that the only method by which the thought of a contract which contains scientific or technical words m^y be obtained, is by interpreting such words in their scientific or technical sense. For, unless nical meaning, that technical meaning and not the popular meaning, if any, is the primary meaning for this purpose." Compare Stephen's Digest of Evi- dence, Art. 91, Chase's ed. p. 167. The foregoing rules, however, do not seem altogether applicable to the •construction of contracts, for they do not make clear the one principle upon which the interpretation of such documents rests ; namely, that words are generally to be understood in that sense which — in the words of Coleridge, J.,su^ra, n. 2, p. 270— "the ordinary usage of society" affixes to them. Moreover, the second rule entirely disregards the well settled law that no extrinsic evidence can be given to show the meaning of a word used in its plain, ordinary, and popular sense as a familiar word in the English lan- guage. See Pohalski v. Mutual Life Ins. Co., 36 N. Y. Super. Ct. 252 ; zn/ra, § 208; supra, § 16. 1 Lister i/. Windmuller, 52 N. Y. Super. Ct. 407 ; Law Quarterly Review, 1885, vol. I, p. 298; m/ra, Chap. XVIII. 276 RULES OF CONSTRUCTION. [§ 205. this sense is ascertained, the contract will be either wholly unintelligible, or will not be read as the parties intended it should be.^ Parol evidence is, therefore, always admit- ted to show the meaning of words of this character. And where a word has no clear, ordinary meaning, and neither the context nor the circumstances show the sense in which it was used by the parties, evidence will be received to make clear the sense in which it has been employed.^ § 205. Evidence of usage may show that words have been employed in special sense. — The most prominent ex- ception to the letter of the rule requiring words to be read in their ordinary sense is found in the case of words which have acquired a special sense by usage. This ex- ception, however, is made necessary by the reason for the rule itself, and it is only to carry out the intention of the parties that the law looks to usage to learn the meaning of words. In the construction of mercantile contracts it is frequently found necessary to regard the usages of par- ticular trades or localities in the employment of words, as merchants often attribute peculiar meanings to com- mon words.^ Where a word has thus a particular mean- ing in the^ place of the contract, or in the trade to which it relates, it is more reasonable to assume that parties affected by the usage have employed the word in this peculiar sense rather than in the popular signification which has been affixed to it by the general usage of society. If, then, any of the words of a contract are shown by parol evidence to have had a special sense in which they may have been used in preference to their ordinary sense, and the contract and the circumstances warrant the conclusion that the parties used them in such special sense, they will be so interpreted.* 1 Supra, % 54 et seq. 2 Supra, \ 74 et seq. = Supra, §§ 60-68. ^ * Supra, § no, ^/ seq. § 2o8.] HOW LANGUAGE IS INTERPRETED, 277 § 206. Context, circumstances, and habits of parties unay affect ordinary meaning. — Another exception to the rule under discussion is, that the ordinary sense of a word will not control, when the context shows that the parties could not have used the word in such a sense.^ This principle is nothing more than a declaration that where parties have clearly disclosed the sense in which they have used special words it is proper to follow that sense ; a proposition which cannot be questioned, if it is admitted that the object of construction is to reach the intention of the parties. The circumstances of the case may also make clear the intention of the parties, and while they are never permitted to contradict the writing, they frequently modify the apparent meaning of its words.^ So the pre- vious dealings of contracting parties sometimes fix the sense in which they employ certain words.^ § 207. Statutory and legal m,eaning may control ordinary meaning. — Again, where a word has a defined statutory meaning, this meaning will be taken to be its •ordinary and common meaning, and courts will assume that it is used by contracting parties in its statutory sense.* So public policy often demands that when the meaning of words in frequent use in mercantile contracts is once fixed by judicial decision, such meaning shall be taken to be the ordinary meaning of the words and shall not be subject to alteration.^ § 208. How ordinary sense of word is determ.ined. — Apart from the foregoing exceptions the words of a 1 Supra, % 69; infra. Chap. XVII. 2 Supra, §§ 91, 92. ^ Supra. § 112. * Supra, § 73. See also Quarry Co. v. Clements, 28 Ohio St. 587; Wharton on Contracts, § 632. 5 Supra, § 73, and n. 4, supra. 278 RULES OF CONSTRUCTION, [§ 2O9. contract are to be interpreted in that sense which the usage of ordinary society has affixed to them.^ The pro- vince of determining what this sense is belongs to the court.^ And in deciding the question the judges may properly refer to their own knowledge of the language^ to dictionaries, to judicial decisions, and to every book or authority which will bear upon the inquiry, what is the common meaning of this word?" Where a question arises as to the meaning of an English word in use both in England and in this country, and the contract is to b& construed by the law and custom of this country, doubt- less our usage of the word would control its interpreta- tion, but if the contract was an English contract, by the ordinary meaning of the word would be understood that meaning which common usage in England gave to it.* § 209. Holt V. Colly er. — The foregoing principles have been recently illustrated in the case of Holt v.. CoUyer.^ There the question arose as to the meaning of the word " beer-house." This word was employed in a lease which contained a covenant that the lessee should not use the shop leased as a " beer-house," and it appeared that he had opened a grocer's shop and sold beer to be drunk off the premises. The landlord contended that this was a breach of the covenant, as the word "beer- 1 Supra, §§ 200, 201. See also Clark v. N. Y. Life Ins. & Trust Co. 64 N. Y. 33. 2 Supra, § 16. See also Mobile Marine Dock and Insurance Co. v. Mc- Millan, 31 Ala. 711 ; Lovewell v. Westchester Fire Ins. Co. 124 Mass. 418; Falls Wire Mfg. Co. v. Broderick, 12 Mo. App. 378; Bartlett v. Pyers, 5. Vict. L. R. Law, 69. ' Spears v. Ward, 48 Ind. 541 ; Holt v. CoUyer, supra, § 209 ; Pohalski V. Mutual Life Ins. Co. 36 N. Y. Super. Ct. 234. See as to the effect of decisions upon the meaning of words, " Rules of Construction and Rules of Arithme- tic." Law Journal, Feb. 11, 1885; infra. Special Rules. * Supra, § 63. » L. R. 16 Cb. Div. 718. § 209.] HOW LANGUAGE IS INTERPRETED. 279 house" was a general word used to include every place where beer was sold. He also claimed that the word had a similar technical meaning in the trade, which he was entitled to show. The court, however, by Mr. Justice Fry, said : " In my view the principle upon which words are to be construed in instruments is very plain — where there is a popular and common word used in an instru- ment, that word must be construed prima facie in its popular and common sense. If it is a word of a tech- nical or legal character, it must be construed according to its technical or legal meaning. If it is a word which is of a technical and scientific character, then it must be construed according to that which is its primary mean- ing, namely, its technical and scientific meaning. But before you can give evidence of the secondary meaning of a word, you must satisfy the court from the instrument itself or from the circumstances of the case that the word ought to be construed, not in its popular or pri- mary signification, but according to its secondary "inten- tion." There being nothing in the case to warrant the conclusion that the word should be construed in its secondary sense, the court proceeded to ascertain its ordinary meaning, not neglecting the use of dictionaries and adjudicated cases, or any other means of information which would assist in coming to a conclusion.^ * Mr. Justice Fry concludes his opinion as follows : " But independently of the weight of authority, I should have come to the same conclusion as that expressed in those cases. I put this question to myself, should I, in ordinary usage and ordinary parlance, call a grocer's shop at which beer is sold, either by wholesale or by retail, a beer-house, when the principal business carried on in that shop is that of a grocer, and when the business of the sale of beer is merely ancillary to that business of a grocer, and I answer that I should not myself do so." CHAPTER XVII. THE CONSIDERATION OF THE WHOLE CONTRACT. § 210. Importance of rule that whole contract is to be considered. 211. What constitutes the entire contract. 212. How to determine whether writings are a part of a single contract. 213. Writings made a part of contract by reference will be construed there- with. 214. Effect to be given to every part of contract, if possible. 215. Rule applied where contract contains written and printed provisions. 216. Written and printed provisions to be reconciled if possible. 217. How general intent is ascertained. 218. General intent more important than meaning of special words. 219. General intent, therefore, overrides ordinary meaning of particular words. 220. Words restrained by subject-matter. 221. Mistakes in grammar, spelling, and punctuation disregarded. § 210. Importance of rule that whole contract is to be considered. — The rule of construction, that the whole contract must be regarded in order to reach the sub- stance of the transaction between the parties, applies to the interpretation of every contract, and is a proposition of the utmost importance. It does not, however, need argu- . ment to sustain it, for to disregard certain portions of a contract, and to exclusively follow others when the ob- ject to be attained is the discovery of the intent of the parties to the entire contract would be apparent foUy.^ 1 "In the first place, it is the^most important of all the rules of construc- tions, that the whole of the agreement is to be considered. This is so reason- able and clear that no explanation is required of it, for obviously it cannot be the intention of the parties to an agreement with stipulations or qualifications, that some of them should be altogether disregarded, and a part of the agree- § 211.] CONSIDERATION OF WHOLE CONTRACT. 281 "The same parties make all the contract and may be supposed to have had the same purpose and object in view in all of it, and if this purpose is more clear and certain in some parts than in others, those which are ob- scure may be illustrated by the light of others." ^ Notwith- standing the obvious justice of this rule, it frequently be- comes necessary for judges to assert it. Many important propositions of law have also grown from it which aid in determining what is the full contract of the parties, and which disclose the manner in which the rule is applied. §211. What constitutes the entire contract. — In every case, therefore, the question must arise : what is the en- tire contract ? If it appears that a portion of the agree- ment rests in parol, it is proper to introduce oral evi- dence to show to the court the full terms of the contract.^ And if the facts show that the parties have executed several instruments as parts of a single transaction, it is necessary to take all such instruments into consider- ation in order to understand the one contract.^ ment magnified into an equality with the whole ; but, on the contrary, such meaning is to be given to particular parts as will, without violence to the words, be consistent with all the rest, and with the evident object and inten- tion of the contracting parties.'' Smith on Contracts, p. 542. 1 Parsons on Contracts, vol. II, p. 502. 2 Supra, §§ 130-134- ' Livingston v. Story, 1 1 Pet. 386 ; Atlantic Ins. Co. v. Conrad, 4 Wash. 672 ; Wilson v. Randall, 67 N. Y. 338 ; Marsh v. Dodge, 66 N. Y. 533 ; Meriden Brt. Co. v. Zingsen, 48 N. Y. 247 ; Rogers v. Smith, 47 N. Y. 324; Draper v. Snow, 20 N Y. 331; Van Hagan v. Van Rensselaer, 18 Johns. 420; Rubber Tip Pencil Co. v. Hovey, 9 Abb. Pr. (N. S.) 74; In re Phoenix Bessemer Steel Co., 44 L. J. Ch. 683; Timmerman v. Dever, 50 Am. R. 240; Gaffney?'. Hicks, 131 Mass. 124; Avery z/. Bushnell, 123 Mass. 349; Collins V. Delaporte, 115 Mass. 156; Galena R.. R. v. Barrett, 95 111. 467; Holbrook v. Finney, 4 Mass. 596; Hills v. Miller, 3 Paige, 254; 25 N. W. Rep. 881; Barnard v. Cushing, 45 Mass. 230; Rutland & Burling- ton R. R. Co. V. Crocker (U. S. C. Ct., Vt), 21 Law Reporter, 201 ; Gammon V. Freeman, 31 Me. 243; Cummings v. Antes, 19 Pa. St. 257; Kenyon v. Nichols, I R. I. 411 ; Strong v. Barnes, 11 Vt. 221 ; Reed v. Field, 15 Vt. 282 RULES OF CONSTRUCTION. [§2II. That several instruments should be thus construed together as a single contract they must be between the same parties and must constitute features of the one agreement. That they do not bear the same date, there- fore, is not a material circumstance,^ and mere identity of date and of parties will not insure the reading of docu- ments as parts of one agreement.^ For to be so read the facts must show that the parties intended them to state the single contract.^ If it appears from the documents or the circumstances that it was intended that the writ- 672; Whitehurst v. Boyd, 8 Ala. 375; Casey v. Holmes, 10 Ala. 776; Odi- orne v. Sargent, 6 N. H. 401. " If several deeds or instruments are made as part of one transaction, they are to be construed together with reference to the general object intended (2 Co. 75a; Cromwell's Case, i Burr. 106; Montague v. Tidcombe, 11 Verm. 519). So a bond, and the condition of defeasance are to be construed to- gether as one instrument (Coles v. Hulme, 8 B. & C. 568). So with letters, each letter must be construed with reference to the whole correspondence (Stuckley v. Bailey, i H. & N. 405). And, therefore, contemporary docu- ments forming parts of the same transaction, must be construed in favor of consistency, and a construction of one document that is ambiguous must yield to that of the other, which is clear {In re Phoenix Bessemer Steel Co., 44 L. J. C. P. 683)." Leake's Digest of Contracts, p. 229. " Where several documents are so reciprocally dependent that the mean- ing of the one cannot be brought out without the introduction of the other, then they may be received together as affording a common basis for construc- tion. When one of a series of letters cannot be understood without the study of the whole series, then the whole series must be taken into consideration. But unless closely related and inter-dependent, such papers are not admis- sible for the purpose of getting at the meaning of a document under investi- gation. It is not necessary that the documents should bear the same date if they relate to the same subject." Wharton on Contracts, § 655. See also Addison on Contracts (Abbott's), p. 181, n. 2; Chitty on Contracts, vol I, p. 126, n. t; Parsons on Contracts, vol. I, p. 503, n. x. ' Coddington v. Davis, I N. Y. 186; Brandreth v. Sandford, i Duer (N. Y.), 390; Van Hagen v. Rennselaer, 18 Johns. (N. Y.) 420; Stacey v. Ran- dall, 17 111. 467; Sawyer v. Hammott, 15 Me. 40; Adams v. Hill, 16 Me. 215; Hamilton v. Taylor, 18 N. Y. 358 ; Thompson v. McClenachan, 17 S. & R. (Pa.) no. 2 Craig V. Wells, 11 N. Y. 315; Cornell v. Todd, 2 Den. (N. Y.) 130-, Mann v. Witbeck. 17 Barb. (N. Y.) 388. 3 Jeffrey v. Hursh, 25 N. W. Rep. 176 (1885). See, also, n. 3, p. 281. § 212.] CONSIDERATION OF WHOLE CONTRACT. 283 ings should constitute different transactions, this inten- tion will control.^ § 212. How to determine whether writings are a part of a single contract. — In order to determine whether writings refer to one transaction, the nature and terms of the contract, the circumstances surrounding the parties, the subject-matter of their agreement, and all appropriate extrinsic matters must be considered. For it is only in this way that the entire agreement in regard to the particular subject-matter before the court can be ascertained. If it appears that the real contract is expressed in several documents which bear upon one another, and that they together disclose the intention of the parties, then the court will regard them as parts of the one transaction. An interesting adjudication, illus- trating the law upon this point, has been recently made by the New York Court of Appeals. ** In the case re- ferred to, it appeared that a note indorsed by a married woman was offered for sale to one who refused to pur- chase it until answers were made to certain questions which he submitted to the indorser. To secure the acceptance of the note, answers to these questions were given in a writing dated three days after the date of the note. By this statement the married woman charged her separate estate for the payment of the debt, and in reliance upon this fact, the note was accepted. Upon these facts the court held that the note and written statement must be construed together as parts of the one transaction, Miller, J., saying: "The fact that one instrument is dated after the other can make no differ- ence, if the contract is not carried into effect until the date of the latter. The existence of the two papers prior 1 Mann v. Witbeck, 17 Barb. (N. Y.) 388. 2 Knowles v. Toone, 96 N. Y. 534 (1884). 284 RULES OF CONSTRUCTION. [§ 2 1 3. to the payment of the money upon the note, and their possession by the plaintiff at the time when it was paid, established that they are to be taken and regarded as part of the same transaction." ^ § 213. Writings made a part of contract by reference will be construed therewith. — Where the language of a contract refers directly to some other document or paper, and makes it clear that the parties contracted with refer- ence to such writing, it will constitute a part of their ^greement.^ Thus, where there was a bill of sale which transferred all the household goods, of every kind and description whatsoever, in a certain house, and which stated that these goods were more particularly mentioned and set forth in an inventory of even date with the bill, it was held that the inventory was a part of the contract, that both the papers should be construed together, and that nothing passed by the bill which was not mentioned in the inventory.^ If a paper is so referred to in a contract that there is no reasonable doubt that it is a part of the contract, it will be connected therewith, and may be identified by parol evidence.* When a contract provides that it is made subject to special rules and regulations, these are made a part of the agreement* And if memoranda are made upon the 1 See also First Nat. Bank of Saugerties v. Hurlbut, 22 Hun, 310. 2 Bradley 2/. Marshall, 54 111. 173; Wilson v. Randall, 67 N. Y. 338; Bab- laitt V. Globe Ins. Co., 66 N. C. 71 ; Smith v. Turpin, 22 Ohio St. 478; Adams -v. Hill, 16 Me. 215 ; Edwards v. Farmers' Ins. Co., 74 111. 84. ^ Wood V. Rowcliffe, 6 Exch. 407. Compare Wilkes v. Ferris, 5 John. (N. Y.) 335. * Ex parte Washington Park, 52 N. Y. 131 ; Riley v. City of Brooklyn, 46 N. Y. 444; Hamilton v. Taylor, 18 N. Y. 358; Climan v. Cook, i Sch. & Lef. 22. 5 Mills V. Gould, 42 N. Y. Super. Ct. 119; cf. Higgins v. McCrea, 116 U. S. 671. § 214.] CONSIDERATION OF WHOLE CONTRACT. 285 writing which throw light upon the facts surrounding the making of the contract, the court will consider them.^ In a case where an inconsistency was found to exist be- tween the terms of a bill of lading and a charter-party which it incorporated by reference within its provisions, it was held that the terms of the bill controlled.^ § 2 1 4. Effect to be given to every part of contract, if possible. — Having ascertained what are the constituent parts of the contract, it is the aim of the court, in the consideration of these parts, to interpret the contract according to its peculiar terms, and to give effect to every provision which the parties have made.' The 1 Langdale v. The People, 100 111. 263; Mallory ?/. Tioga R. R. Co., 3 Abb. Ct. App. Dec. 139; Van Nostrand v. New York Guaranty, &c., 39 N. Y. Super. Ct. 73 ; Heywood v. Perrin, 27 Mass. 228 ; Jones v. Overstreet, 47 T. B. Men. (Ky.) 547. 2 Gullischen v. Stewart, L. R. 13 Q. B. D. 317. ^ In Smith v. National Life Ins. Co., 103 Pa. St. 177, it appeared that a policy of life insurance provided that the company would, if requested, " after the payment of premiums for two full years, issue a paid-up policy " for a specified amount. But the policy was subject to the usual covenant by the assured to pay the premiums on the day they fell due, and to the stipulation that in case of the violation of any of the conditions contained in the policy it would be void. And the court, construing all of these provisions together, held that a request for the issue of a paid-up policy could not be made after the original policy had been forfeited for non-payment of premiums, Mr. Jus- tice Clark saying: " Under the rule of construction, which requires that full effect must be given to every stipulation in a contract, the provision first quoted must be read in connection with the second and fifth conditions. The ob- vious and natural meaning of these conditions, taken together, is that unless the premiums are paid on or before the day upon which they become due res- pectively, the entire policy shall become void, and all payments made shall be forfeited to the company. The payment of the premiums constitutes not only the consideration but the condition of the contract. " The provision for forfeiture is not limited to the first two annual premiums. It is general, and applies to all. In the previous clauses of the policy the number and amount of these premiums are particularly specified, and the time is fixed for the payment of each, the last being payable on the 20th day of April, 1883. The second condition requires that ' the premiums shall be paid in cash on or before the days upon which they become due.' There is no discrimination or distinction; the condition is applicable to all. The effect 286 RULES OF CONSTRUCTION. [§ 214. whole should, if possible, be construed so that no clause, sentence, or word shall be superfluous, void, or insignifi- cant.^ Effort should be made to reconcile each provision with every other, for the whole agreement must, if pos- sible, stand.^ And it is only where there is an irreconcil- able inconsistency in the several clauses of a contract that one will be made to yield to another.* Repugnant of the second and fifth conditions, therefore, when read in connection with the previous clause, providing for a surrender of the original and the issue of a paid-up policy, is to abridge its operation and only to give it effect when that surrender is made in the lifetime of the policy. That is to say, during some current year for which payment has been made, and before or on the day the annual premium is payable. If any condition of the policy is violated, the whole instrument by its own terms is rendered null and void ; and when the policy became void, none of its provisions remained. Neither party had any further rights under it. The policy was, however, by its terms, non-for- feitable if the assured chose at the proper time to avail himself of the right it secured. He had a special right, peculiar to the holder of this class of poli- cies, upon discovering his inability to pay at the time fixed by the conditions of his contract, to surrender and avoid a forfeiture. That right existed until forfeiture occurred, then all rights ceased. This construction results from the obvious force of the language employed. Indeed the words of the policy ad- mit of no other." In Barton v. Fitzgerald, 15 East, 541, Lord EUenborough said : " It is a true rule of construction that the sense and meaning of the parties, in any particular part of an instrument, may be collected ex antecedentibus it conse- quentibus. Every part of it may be brought into action in order to collect from the whole one uniform and consistent sense, if that may be done." And in Throckmorton z/. Tracy, i Plow. 161, it was said: " Every part of the deed ought to be compared with the other, and one entire sense ought to be made thereof." See also Canal Co. v. Hill, 1 5 Wall. 94 ; Donahoe v. Kettell, i Cliff. 141 ; Rich V. Parrott, i Cliff. 58; Cory v. Burr, L. R. 8 Q. B. 313; Hill v. Blake, 97 N. Y. 216; Booth V. Cleveland Mill Co., 74N. Y. 15; Bank Montreal w. Recknagel, 52 N. Y. Super. Ct. 334; Westcott v. Thompson, 18 N. Y. 363; Deyo V. Bleakley, 24 Barb. (N. Y.) i ; Smith's Lea. Cases, vol. II, p. 540. 1 Addison on Contracts (Abbott's), vol. I, p. 181. 2 Coyne v. Weaver, 84 N. Y. 386; Holmes v. Hubbard, 60 N. Y. 183; Moore v. Griffen, 9 Shepley (Me.), 380; Pulte v. Derby, 5 McL. 333; Wash- burn V. Gould, 3 Story, 162. " Construction is to be such that the whole in- strument or contract, and every part of it, may take effect, if it be possible, consistently with the rules of law and the intention of the parties." Metcalf on Cont. p. 287. 8 In Barhydt v. Ellis, 45 N. Y. 107, Rapallo, J., said : " Effect must be § 215.] CONSIDERATION OF WHOLE CONTRACT. 287 clauses even in a deed must be reconciled, if possible, by a reference to the circumstances and acts of the parties,^ and parol evidence of the circumstances of the case is admissible to cure an ambiguity caused by seemingly repugnant clauses in a contract, although it is apparent on the face of the instrument.^ § 215. Rule applied where contract contains written and printed provisions. — The strong effort which courts make to give effect to all the provisions of a contract is clearly perceived when the decisions in regard to the comparative importance of the written and printed terms of a contract are considered. That written portions of a contract are entitled to more consideration than provisions which are printed, has been frequently held, and the reason for the rule is that it is but just to assume that the parties have more accurately expressed their intentions in those words which they have themselves selected to apply to the par- ticular contract, than in those which are prepared for them and intended to answer for all similar contracts.* given, if possible, to every part of an agreement, and it is only when there is an inconsistency or repugnancy which is totally irreconcilable that a discrimi- nation will be made as to which part will be made to yield to the other." See also Benedict v. Ocean Ins. Co., 31 N. Y. 389; Harper v. N. Y. City Ins. Co.. 22 N. Y. 441 ; Decorah v. Kesselmeiser, 45 Iowa, 166; Ladd v. Ladd, 8 How. 28; Stewart v. Lang, 37 Pa. St. 201. ' Waterman v. Andrews, 14 R. I. 2 Supra, %% 49, 50, 51 ; infra, n. 2, p. 288. 3 Thus in Joyce v. Realm Ins. Co., L. R. 7 Q. B. 580, Blackburn, J., said: " The ordinary and general rule in the case of a policy of insurance, of course, is that we must construe the policy as we find it. It is a printed form, with written parts introduced into it, and we are to take the whole together, both the written and the printed parts. Although it has sometimes been endeav- ored to be argued that we ought to bestow no more attention on the written parts than on the printed parts, which are uniform in most policies of insur- ance, there is no doubt that we do, and ought to, make a difference between them. The part that is specially put into a particular instrument is naturally more in harmony with what the parties are intending than the other, although 288 RULES OF CONSTRUCTION. [§ 2 1 5. But this rule does not permit the rejection of any of the printed matter of a contract which, by any possible con- struction, may be reconciled with what has been written.^ And the surrounding and particular circumstances of each case will be looked to in order to bring the oppos- ing clauses into accord ^ it must not be used to reject the other, or to make it have no effect." And in Scrutton v. Childs, 36 L. T. 212, a written clause of a charter-party, which provided that a cargo should be loaded at Trinidad, " as customary," pre- vailed over a printed clause, which stated that the cargo was to be " brought to and taken from alongside at merchant's risk and expense." See also Dud- geon V. Pembroke, L. R. 2 App. Ca. 284; Elkins v. Trans. Co., 2 Week. Notes, 403; Clarke-. Woodruff, 83N. Y. 518; Hillw. Miller, 76N.Y. 32; Am. Exp. Co. V. Pinckney, 29 111. 392 ; Reynolds v. Commercial, &c. Ins. Co., 47 N. Y. 597 ; Bargett v. Orient Ins. Co., 3 Bosw. (N. Y.) 385 ; Harper v. Albany Ins. Co., 17 N. Y. 194; Rush v. Carpenter, 54 Iowa, 132 ; Cushman v. North-' Western Ins. Co., 34 Me. 487; Russell v. Bondie, 51 Mich. 76; Germania Ins. Co. V. Sherlock, 25 Ohio St. 33; Moore v. Harris, 45 L. J. C. P. 55. Carver says : " Commercial contracts are generally made on printed forms. The form is filled up in writing, and special written additions or alterations are, perhaps, made to meet the particular case. Thus the form used has usually been framed to suit a large number of cases, and not necessarily in view of the circumstances of the particular case. Moreover, in adapting it, the disposition is to allow clauses which are usual to stand, though they may not altogether apply, rather than to strike them out or recast them. Hence it often happens that printed clauses are found in a contract which do not apply to the case, or which are in conflict with the intention of the parties gathered from other parts of the document, and from a knowledge of the subject and the circumstances. In such a case the rule that effect should be given to all the clauses does not apply." Carriage of Goods by Sea, p. 173. But a case of this kind only arises when it is impossible to reconcile the written and printed portions of the contract. ^ Thus where, under the printed provisions of a charter-party, a ship was to unload at " ■ — -, or as near thereto as she may safely get," and the par- ties wrote the word " Sharpness "I- in the blank, it was held that this written word was qualified by the printed ones which followed it, and that some effect must be given to every portion of the contract. Horsley v. Price, L. R. II Q. B. D. 244. See also Hill v. Miller, 76 N. Y. 32; Wheeling, Pitts- burgh and Baltimore R. R. Co. v. Gourley, 99 Pa. St. 171 ; Alsagar v. St. Katharine's Dock Co., 14 M. & W. 794; Gross v. Pagliano, L. R. 6. Ex. 9; Hunters'. General Mut. Ins. Co. of N. Y., 11 La. Ann. 139. 2 In Clark v. Woodruff, 83 N. Y. 518, it appeared that the written recital in a bond differed from the printed condition, and Finch, J., said: ''This ambiguity it was proper to solve by throwing upon the language used the § 2 1 6.] CONSIDERATION OF WHOLE CONTRACT. 289 § 2 16. Written and printed provisions to be reconciled, if possible. — The extent beyond which courts will not carry their preference for the written portions of a con- tract, and the relation of this rule to the principle that the whole contract must be considered, have been recent- ly made clear by the New York Court of Appeals. In a case coming before that court it appeared that a car- rier received, from one who wrongfully held himself out as a member of a certain firm, thirty barrels for transpor- tation over its road, and upon the receipt of the barrels gave a bill of lading certifying in printed words that it had received " the following described packages in ap- parent* good order (contents and value unknown), con- signed as marked and numbered in the margin." The bill also contained a clause, inserted in writing, which designated the property received as follows : " Articles, thirty bbls. of eggs." In fact, the barrels contained saw- dust and not eggs. The person who received the bill indorsed it in the name of the firm, in whose name he wrongfully acted, and obtained money upon a draft which was innocently accepted and paid upon the faith and security of the bill of lading. Action was thereupon brought against the carrier to recover the amount of the draft so paid, and it was contended that the written words in the bill were conclusive, and amounted to a light of surrounding circumstances. That is a rule of interpretation merely, and does not permit the making of a new contract, or a reformation of it, or a disregard of its terms. It authorizes only a just construction of those terms, and a fair inference as to the common understanding of both the con- tracting parties. Blossom v. Griffin, 13 N. Y. 569; Griffiths v. Hardenberg, 41 Id. 468; Thomas w. Truscott, 53 Barb. 200; Liddle v. Market Fire Ins. Co., 4 Bosw. 179." In Magee v. Lavell, L. R. 9 C. P. 107, Coleridge, J., said : " If a contract be partly printed and partly written, the relative value to be assigned to the parts, on account of their different form, is a question of construction for the court to determine with reference to the particular circumstances." See also Leake's Digest of Contracts, p. 220. 19 290 RULES OF CONSTRUCTION. [§ 2 1 6. representation by the carrier that the barrels contained eggs. But the court held that, taking the whole instru- ment together, it imported only that the carrier had received thirty packages described as containing, or pur- porting to contain, eggs, but the actual contents of which were unknown to it. Andrews, Ch. J., writing the opinion for the court, says : '' It is, no doubt, a principle of construction that in case of repugnancy between written and printed clauses of an instrument, the written clauses will prevail over the printed. But this is a rule which is only resorted to from necessity, when the printed and written clauses cannot be reconciled, and in that res- pect is like the rule applied in the construction of wills where two clauses are repugnant and irreconcilable, in which case the first will be rejected and the subsequent clause will be regarded as indicating the final intention in the absence of any other clue to the interpretation. But it is the imperative duty of courts to give effect, if possible, to all the terms of an agreement. The con- struction is to be made upon a consideration of the whole instrument, and not upon one or more clauses detached from the others; and this principle applies as well to in- struments partly printed and partly written as to those wholly printed or wholly written. Where two clauses, apparently repugnant, may be reconciled by any reason- able construction, as by regarding one as a qualification of the other, that construction must be given, because it cannot be assumed that the parties intended to insert in- consistent provisions. . . . The question in this case, relating as it does to the construction of a commercial instrument in general use, is of considerable practical im- portance. It seems to us that the decision below dogs not give due weight to the rule which requires the con- struction of a contract to be made upon a consideration of all its parts, and that, if possible, no clause shall be § 217.] CONSIDERATION OF WHOLE CO;^TRACT. 29 1 rejected. The volume and methods of the business of transportation by railroads and transportation lines, ren- der it practically impossible in most cases for the carrier to ascertain by examination the contents of packages received for carriage, and when he qualifies his receipt, as in this case, we know of no reason why parties dealing upon bills of lading so qualified shall not be held to notice of the qualification."^ § 2 1 7. How gerieral intent is ascertained. — The gen- eral intent of the contract is ascertained by examining all of the terms of the writing,, and by endeavoring to bring these terms into consonance with the surrounding circumstances. In the examination of the instrument the aim is to reach such a construction as will reconcile all its provisions. But the greatest weight is given to the operative language of the contract. And if a clear and unambiguous intention is discovered from such lan- guage, which accords with the subject-matter of the agreement and the circumstances, that intention will control notwithstanding the fact that recitals in the same instrument are thereby contradicted.^ If, however, the ' Miller v. The H. & St. J. R. R. Co., 90 N. Y. 430, citing Haddon V. Perry, 3 Taunt. 303 ; Shepherd v. Naylor, 71 Mass. 591 ; Vaughn v. Six Hundred Casks of Sherry Wine, 7 Ben. 506 ; Clark v. Barnwell, 12 How. 282 ; The Columbo, 3 Blatchf. 521 ; and Jessel v. Bath, L. R. 2 Ex. 267, in which case the written words of a bill of lading specified the weight of the goods received upon a certain vessel, but there was printed before the signature the words "weight, contents, and value unknown," and Kelly, C. B., said: " The written part of the bill is not entirely inconsistent with the printed. The whole may be reasonably and fairly read as meaning that a quantity of manganese had been received on board, appearing to amount to thirty-three tons, but that the person signing the bill would not be liable for any deficiency, inasmuch as he had not, in fact, ascertained, and therefore did not know the true weight." See further Chadjey v. Guion, 97 N. Y. 333. 2 Bell V. Bruen, I How. 169; Lawrence v. McCalmont, 2 How. 426; Holmes v. Hubbard, 60 N. Y. 183 ; Walsh v. Trevianon, 15 Q. B. 733. " Re- citals in a contract are not strictly any part of the contract, but they may have a material influence in construing the instrument and determining the 292 RULES OF CONSTRUCTION. [§ 2 1 7. operative language is ambiguous, or is broader than the subject-matter of the contract warrants, the recitals are looked to for light.^ So in cases where the meaning is doubtful it is proper to consider memoranda written upon the contract, and to construe the whole as consti- tuting the agreement of the parties.* But, to reach the intent of the parties." Burr v. Amer. Spiral Spring Butt Co., 81 N. Y. 178; S. C. 17 Hun, 190. 1 Holmes v. Hubbard, 60 N. Y. 183. "If there is 'any doubt about the construction of the governing word of that document, the recital may be looked at in order to determine what is the true construction ; but if there is no doubt about the construction, the rights of the parties are governed en- tirely by the operative part of the writing or deed." Brett, L. J., Leggott v. Barrett, L. R. 15 Ch. 311 ; Sherburne v. Goodwin, 44 N. H. 271. " We may consider it settled by authority that where the words of a cov- enant are ambiguous and difficult to deal with, we may resort to the recitals to see whether they throw any light on its meaning." Jessel, M. R., Re Michell's Trusts, L. R. 9 Ch. 9; Walsh v. Trevianon, 15 Q. B. 750; Bes- wick V. Swindells, 3 A. & E. 868 ; Bailey v. Lloyd, 5 Russ. 344. Elphinstone lays down these rules for the interpretation of deeds (pp. 129, 132) : " Where there is a discrepancy between the recitals and the operative part of a deed, the operative, if clear and unambiguous, must be followed." " Where the operative part of a deed is ambiguous, it may be controlled by clear and unambiguous recitals." 2 Bell V. Ins. Co., 8 S. & R. (Pa.) 98; Littlefield v. Coombs, 71 Me. 1 11. In Hutley v. Marshall, 32 Law Times, 186 (1882), the action was for ;£5oo, upon a promissory note in the following form : " Witness, John Hutley. Rivenhall, Oct. 2, i860. Three months' notice I promise to pay Mr. Jona- than Hutley interest ;£5 per cent, per annum for £,'^00 value received. Dan Marshall, Charles Marshall. (5s. stamp.) ;£soo." It was admitted that upon the 2d Oct. ;£soo was advanced by Jonathan Hutley to Dan Marshall, and that Charles Marshall, the defendant, signed as surety for his brother. But it was contended that the note was only for the payment of interest upon £loo. Upon appeal from a judgment for plaintiff, Brett, L. J., said : " One cannot fail to have doubts as to an instrument such as this. But the more reasonable construction seems to me to be that this is a promissory note for ;£5oo. What are the things to be looked at to ascer- tain the meaning of a doubtful instrument } We must look at the admitted facts of the case. Jonathan Hutley had lent to Dan Marshall ^500. It was taken at the trial that that could be proved, and must therefore be taken to have been proved. Then, where the meaning of the writing is doubtful, you may look at the stamp and at the figures at the bottom of the note. You could not look at either if the meaning of the writing was clear. There are § 217.] CONSIDERATION OF WHOLE CONTRACT. 293 real intent of a doubtful contract, it will usually be necessary to resort to extrinsic evidence of the circum- two possible ways of reading tliis document. One is that it is a promissory note for the payment of interest on ;£5oo, and not for the payment of ^500 ; the other that it is a promissory note for the payment of ;£soo and interest. There is an- other matter to be looked at. Dan Marshall and Charles Marshall make the same promise. This cannot be construed as the making of one promise by Dan Marshall and another by Charles Marshall. Charles Marshall may be only a surety, but he has made the same promise as Dan Marshall. If, therefore, Charles Marshall has only promised by this note to pay interest on ;£soo, Dan has only promised by it to pay interest. If so, Dan Marshall has either signed an- other promissory note, which is not suggested, or else he has not signed any in respect of the ;£5oo, which is most improbable. Then if this is only a promise to pay interest, I do not know what stamp it could require, if any. But here you have the exact stamp applicable to a note for ;£5oo ; and if this is to be read as only for the payment of interest, there ought to be no figures at the bottom of the note — certainly not ;£5oo. The figures at the bottom are always the sum to be paid, expressed in words in the body of the note. They may, therefore, be looked at to see what sum is meant by the words used in the body of the instrument. If this was a note for the payment of interest, it would go on to specify at what period it was to cease. This is a most ill- expressed instrument ; but I think that it sufficiently shows that the parties intended that it should be a promissory note for ;£5oo. I do not say that it shows that clearly ; but that is the only way to make business sense of it. The whole instrument shows that it was made by people who do not know how to express themselves, but you can gather that the real meaning of the parties is that this is a promise to pay £soo three months after notice, with interest at £s per cent." Cotton, L. J., said ; " I am of the same opinion. The question is whether this is a promissory note for the payment of ;£soo and interest, or only for payment of interest. The ordinary rule is to look at the grammatical con- struction of the words in order to ascertain the meaning. But here it is ab- surd to talk about grammatical construction ; there is no grammatical con- struction in the document. Having regard to the words " three months' notice," which would only have sense if the ;£5oo was promised to be paid, and having regard to the ^£500 in figures in the corner, I think that this is a promissory note for £500." Holker, L. J., said : " I confess that I have had considerable doubt as to this document. I have some dislike to construing a man to have promised to pay that which he has not in terms promised to pay. But my doubts have been removed in the course of the argument that has taken place. I think that we may look at the facts so as to put ourselves in the position the parties were in when they made this note. Now it appears that on this very day, the 2d Oct., ;£5oo was, in fact, lent by the plaintiff to Dan Marshall. 294 RULES OF CONSTRUCTION. [§ 2 1 8. stances of the case.^ For the subject-matter of the con- tract, the situation of the parties, the time of contract, the department of science, art, trade, or commerce to which it belongs, and the objects of the parties in con- tracting, must all be regarded.^ § 2 1 8. General intent more important than meaning of special words. — While courts strive to give effect to every clause of a contract, they do this upon the assump- tion that the parties have used all the language of the contract intelligibly and for specified reasons. When, therefore, a consideration of the whole contract discloses the fact that words have been used carelessly or un- knowingly, and when the writing viewed in the light of the circumstances shows that one clear intent was in the minds of the contracting parties, and that the difficulty is only with the expression of this intent, the reason for giving a precise meaning to each clause altogether fails. It has been said that an agreement always " ought to receive that construction which will best effectuate the intention of the parties to be collected from the whole of the agreement, and that greater regard is to be had to the clear intention of the parties than to any particular words which they may have used in the expression of their intent."^ And we have seen that the whole aim of There is no trace of any other instrument but the one we have before us. That is signed both by Dan Marshall and by the defendant, and the stamp upon the note is exactly right for a note of the amount of ;£5oo." Compare this case with Saunderson v. Piper, s Bing. (N. C.) 425; supra, n. 2, p. 87. ' Supra, § 81, et seq.; Mobile & M. Ry. Co. v. Jurey, in U. S. 584. ^ Chitty on Contracts, vol. I, p. 117, note y ; United States v. Granite Co., 105 U. S. 37; Hendrick v. Lindsay, 93 U. S. 147. 3 Ford V. Beech, 11 Q. B. 866. See also Cleveland v. Smith, 2 Story, 280 ; Kicker v. Fairbanks, 40 Me. 43; Chapman v. Secomb, 36 Me. 102; Clark 7/. Woodruff, 83 N. Y. 518; Mason v. Ala. Iron Co., 73 Ala. 270; Coldwell i/. Layton, 44 Mo. 220; James v. Lycoming Ins. Co., 4 Cliff. 278 ; Simpson v. Mar- gitson, 1 1 Q. B. 23. Chitty says ; " The whole context must be considered in endeavoring to collect the intention of the parties, even although the immediate § 219-] CONSIDERATION OF WHOLE CONTRACT. 295 construction is the discovery of the thought of the con- tract.^ If then, upon a consideration of the whole agree- ment, it is reasonable to conclude that the intent of the parties is clearly ascertained, the law interprets the con- tract pursuant to such intent. § 219. General intent, therefore, overrides ordinary meaning of particular words. — The rule that words are to be understood in l^heir plain, common, and ordinary sense, must yield, then, to the actual intention of the parties in the use of particular words, whenever this in- tention is clearly expressed.^ If, therefore, an examina- tion of the whole agreement shows that the intent of the parties is clear, and that they have departed in some instances from the proper use of language to express this intent, their contract will be interpreted according to its evident meaning at the sacrifice of special words. Thus, Anson says : " Men will be taken to have meant object of inquiry be the meaning of an isolated clause." Contracts, vol. I, p. 117; Stavers v. Curling, 3 Scott, 740. " In giving construction to a contract the intention of the parties will govern, and words which in their strict legal import are at variance with that intention will be rejected or construed so as to comport therewith." Mintier v. Mintier, 28 Ohio St. 307. In Hart v. Taylor, 82 N. Y. 379, Finch, J., in construing a complicated agreement, says: "The question is thus narrowed down to one of construction and the plain intent of the parties, consistent with the language of the instrument, should be our guide to the result. What then, as gathered from the situation and surround- ing circumstances, was that intent ? What did the parties themselves under- stand to be the purpose and meaning of the obligation upon which this action is founded.'" In Coyne v. Weavery84 N. Y. 386, the same judge said : " The meaning and intention of the assignor is to be gathered from the whole instrument." See also Parshall v. Eggert, 54 N. Y. 18; Hazleton Co. V. Buck Mountain Co. 57 Pa. St. 301. * Supra, § I. 2 Smith, says : " A very little consideration will show that the rule of un- derstanding the words and sentences in their ordinary meaning, when it is not restrained by the context, is perfectly consistent with the rule that the whole context is to be considered, which is, indeed, the just rule of interpretation, and is very conveniently couched in the ancient maxim of the law, Ex antece- dentibus et conscquentibus fit optima interpretatio." Contracts, p. 562. 296 RULES OF CONSTRUCTION. [§ 2 1 9. precisely what they have said, unless from the whole tenor of the instrument, a definite meaning can be col- lected which gives a broader interpretation to specific words than their literal meaning would bear. The courts will not make an agreement for the parties, but will as- certain what their agreement was, if not by its general purport then by the literal meaning of its terms." ^ It is this intention collected from the whole instrument that the court is bound to carry intt) effect, and the literal import of particular words when inconsistent with the ascertained intention may be and frequently has been disregarded.^ And the same principle holds if the inten- 1 Contracts, p. 242. 2 In Hewitt v. The Watertown Fire Insurance Co. 55 Iowa, 323, it appeared that a policy of insurance had been written to cover, inter alia, " grain in stacks and granary on farm," and one hundred and fifty bushels of unthreshed flax in stack on the farm having been destroyed by fire, action was brought on the policy. Upon appeal Seevers, J., said : " The sole question to be deter- mined is whether the word grains, as used by the parties, includes flax-seed. . . . If it be conceded flax-seed is not grain, strictly speaking, or is not so regarded in commercial transactions, this cannot be regarded as decisive of the question before us. For the rule is that this contract, like other con- tracts, must receive the construction which is most probable and natural under the circumstances, so as to attain the object which the parties to it had in contemplation in making it. . . . In the case at bar the parties must, we think, have intended the policy to cover whatever was usually and ordi- narily stacked on the farm or put into a granary. The term grain was used as being sufficient for this purpose. Wheat, rye, oats, and flax, would ordi- narily be stacked together, and from the combustible nature thereof, if the wheat caught fire the flax would ordinarily be burned if the wheat was. The intent of the plaintiff undoubtedly was to insure his crop raised on the farm, and put into stacks or into a granary, and the company must, we think, have so understood and executed the policy with the intent of insuring the property in question. As an abstract question, and with no reference to the intent of the parties, it is difficult to say as a matter of law, in all cases, that flax-steed is not grain or may hot have been included in such term. . . . We, how- ever, are content to ground our opinion upon the rule above stated, and what must be held to be the intent of the parties." So in Decker v. Furniss, 14 N. Y. 611, the question arose whether the written agreement there con- sidered constituted an absolute sale of one-half a certain vessel, the price for which was therefore due ; or was a mere executory contract by which the § 219-] CONSIDERATION OF WHOLE CONTRACT. 297 tion is derived from the writing viewed in the light of appropriate; extrinsic evidence. Thus, words which in entire title remained in the vendor, it was agreed that the specified one-half interest in the vessel should be transferred and accepted upon the perform- ance of certain conditions. The first clause in the contract commenced as follows: "William H. Brown sells to William P. Furniss, the one-half of the steamer ' Rhode Island,' burden one thousand tons or thereabouts, with all her tackle, etc." And Comstock, J., said: "There is no doubt that the phrase which stands at the commencement of the contract, ' William H. Brown sells, etc.,' imports of itself an executed sale. But the books furnish abundant evidence that phrases of this kind are used in a very loose sense, and that their literal signification is often overruled by the tenor and purpose of the whole instrument. So a party to a contract may say ' he agrees to sell,' and yet the intention be entirely manifest that the title shall pass imme- diately. Such phrases are quite inconclusive, and are often made to yield to other terms of the contract evincing a different design. Upon the best consid- eration I can give the case, my conclusion is that the contract was executory." And Wright, J., says : " I am inclined to regard the contract as wholly execu- tory, although the word ' sells ' is used in the first clause, which, if standing alone, would import a present, unconditional sale, and so far an executed agreement. But it is connected with other terms and provisions leaving it quite satisfactory to my mind that it was not the intention of the parties that there should be a joint ownership of the vessel until she was fitted and ready for the joint adventure contemplated by the agreement." In Heseltine v. Siggers, i Exch. 856, it was held that a contract expressed in bought and sold notes was not a sale, but a mere agreement to sell. And in Decatur Bank v. St. Louis Bank, 12 Wall. 294, where the plaintiff accredited B. to the defendant and wrote that " his drafts against shipments of cattle of the extent of $10,000 are hereby guaranteed," it was held that hogs were included within the term cattle, and that a draft drawn by B. against a shipment of hogs, not having been paid, that the plaintiff was liable for the amount thereof. Elphinstone, in the Interpretation of Deeds, pp. 76, 78, lays down this rule : ' ' Where the primary meaning of a word is excluded by the con- text, /. e., by intrinsic evidence, we must affix to that word such of the mean- ings that it properly bears as will enable us to collect uniform and consistent intentions from every part of the deed." Leach, V. C, in Hume v. Rundell, 2 S. & S. 177, says: " In the construction of all instruments it is the duty of the court not to confine itself to the force of a particular expression, but to collect the intention from the whole instrument taken together. But a court is not authorized to deviate from the force of a particular expression, unless it finds, in other parts of the instrument, expressions which manifest that the author of the instrument could not have the intention which the literal force of a particular expression would impute to him. However capricious may be the intention which is clearly and unequivocally expressed, every court is bound by it, unless it be plainly controlled by other parts of the instru- 298 RULES OF CONSTRUCTION. [§ 2 1 9. their strict gramhiatical sense refer to time that is past, may be interpreted so as to include the future if the intention is clear that they were so understood by the parties.^ So the meaning of the words " more ment." See also Kelly z/. Upton, 5 Duer (N. Y.)> 336; Hoffman v. ^tna Fire Ins. Co. 32 N. Y. 405 ; Teutonia Fire Ins. Co. v. Mund, 102 Pa. St. 89; Bent, Rec'r V. Alexander, Rec'r, 1 5 Mo. App. 181 ; Bowerbank v. Monteire, 4 Taunt. 844; Ford V. Beech, 11 Q. B. 852. ' In Agawam Bank v. Strever, 18 N. Y. 502, it appeared that a note for $4,000 had been delivered to a bank with an agreement which read as fol- lows : " The above note is left as collateral security for all liabilities incurred by Isaac S. Doane or Doane & Hoysradt to the Agawam Bank ; signed I. S. Doane, Doane & Hoysradt." In his opinion upon the construction of this agreement, Selden, J., says: " Now it is true that upon a strict gram- matical construction of these terms, they would be held to embrace only liabilities which had been already incurred. The word ' incurred ' being in the past tense, when used without other words to modify its meaning, would in strictness relate exclusively to past transactions. Were this memorandum, therefore, to be construed by itself without the aid of any extrinsic fact or circumstances whatever, I am inclined to think the interpretation contended for by the appellants' counsel the one which should be adopted ; especially as against the defendants, who are mere sureties. But its meaning can hardly be regarded as so entirely clear and unequivocal as to exclude all aid from the circumstances surrounding the parties at the time of entering into the contract. It is not usual to pay a very nice and critical regard to gram- matical rules in the use of language in the ordinary transactions of business ; and no interpretation which depends upon a very rigid application of those rules can well be considered as so satisfactory as not to admit of modification by any species of extrinsic proof. It was proper, therefore, upon the trial, to resort to evidence of the attending circumstances to assist in ascertaining the meaning and intention of the parties. . . . Generally, when extrinsic proof is resorted to for the purpose of aiding in the interpretation of a written contract, the question is taken from the court and transferred to the jury. This is so, however, only where there is some conflict of evidence or at least some question of fact growing out of the extrinsic proof, which may admit of doubt. In this case the parol evidence consisted of a single fact about which no doubt existed ; and assuming this fact, the true meaning of the writing was clear. No jury could properly disregard the evidence or depart from the construction which is established." Compare Haigh v. Brooks, 10 A. & E. 309, and see n. 5, p. 302. Upon the same principle: "The word ' men ' will be interpreted to mean ' mankind,' and to include women (Bro. Abr. Exposition del. Terms, 39), and the word ' bucks ' has been construed to § 220.] CONSIDERATION OF WHOLE CONTRACT. 299 or less," 1 "from," and " until," ^ will ordinarily be deter- mined by the context. And when a sum is stated in a contract as the amount of liquidated " damages," to be paid in case of a breach, the court will examine the con- text and all the circumstances to determine whether such amount was agreed upon as a penalty or as liquidated damages.* § 220. Words restrained by subject-matter. — The lan- guage of a contract is always presumed to be used with reference to the matter in the minds of the parties when they contract; therefore words of broad signification will be interpreted with reference to the subject-matter of the contract, unless the intention is clear that they should be taken in their broad meaning.* And, it is said, if a man should receive ten pounds, and give a receipt for this sum, and thereby acquit and release the person of all actions, debts, duties, and demands, nothing would be released but the ten pounds, because the last words must be limited by those foregoing.^ So, where general words include ' does,' and the word ' horses ' construed to mean ' mares ' (State v. Dunnavant, 3 Brev. 9 ; Packard v. Hill, 7 Cow. [N. Y.] 434)." Parsons on Contracts, vol. II, p. 496. See also Id. p. 501, note t ; Chitty on Contracts, vol. I, p. 120; Leake's Digest of Contracts, p. 224 et seq. * Supra, § 69. ^ Wilkinson v. Gaston, 9 Q. B. 137; Chitty on Contracts, vol. I, p. 118. » Supra, § 93. See also March v. Allabough, 104 Pa. St. 335 ; Dimech v. Corlett 12 Moore's P. C. 199. * Metcalf says : " The subject-matter of an agreement is to be considered in construing the terms of it, which are to be understood in the sense most agreeable to the nature of the agreement." Contracts, p. 278. Compare Chitty on Contracts, p. 120; CuUen z/. Butler, 5 M. & S. 461; Naylor v. Palmer, 22 L. J. (Ex.) 329 ; Lozano v. Jansen, 28 L. J. (Q. B.) 337 ; Gunnestad V. Price, L. R. 10 Ex. 69; supra, § 218. 5 2 Roll. Abr. 409; Parsons on Contracts, vol. II, p. 501, note n. Lord Ellenborough affirmed this proposition in Taylor v. Homersham, 4 M. & S. 426. In this latter case a composition deed recited that the defendant was in- debted to his creditors in the several sums set to their respective names, and that they had agreed to take of him 15s. in the pound thereof; and the creditors 300 RULES OF CONSTRUCTION. [§ 2 20. follow Others of more limited meaning, the former are restrained by the latter, and are held to relate only to matters ejusdem generis} This is upon the theory that the words of the narrower signification define the subject in regard to which the parties contract, and that the gen- eral words are used merely with reference to this particu- lar matter.^ Thus where the condition of a bond is then, in consideration of the said 1 5s. in the pound, paid to them before execut- ing the deed, released the defendant from all manner of actions, debts, claims, and demands in kw and equity which they or either of them had against him, or thereafter could, should, or might have by reason of anything from the be- ginning of the world to the date of the release, it was held that the release did not extend to anything but the respective debts recited, and all actions and demands touching them ; for the general words of the release had reference to the particular recital, and were governed by it. See also Simons v. Johnson, 3 B. & Ad. 175 ; Rich v. Lord, 35 Mass. 325 ; Jackson v. Stackhouse, i Cow. (N. Y.) 122; Lyman v. Clarke, 9 Mass. 235; Munro v. Alaire, 2 Caines (N. Y.), 329; Metcalf on Contracts, p. 280. 1 In Nesbitt v. Lushington, 4 T. !r. 783, the poUcy of marine insurance stated the perils insured against as covering "restraint of kings, princes and people of what nation, condition, or quality soever, " and the word people was construed with reference to the preceding words, and held to mean ruling powers only, and not individuals. In Cullen v. Butler, 4 M. & S. 461, a policy against perils of the sea, and " all other perils and losses that should come to the said goods, ship, etc.," was construed to include only cases of damages of a like kind with those particularly mentioned in the policy. Com- pare Moneypenny v. Moneypenny, 9 H. L. C. 1 14 ; Ashbury Railway Carriage Co. V. Riche, L. R. 7 H. L. 653 ; Gray v. Carr, L R. 6 Q. B. 522 ; Boon v. jEtna Ins. Co., 12 Blatchf. 34. This rule is frequently illustrated in the con- struction of statutes. Thus, in the case of The Queen v. Silvester, 33 L. J. M. 79, it was held that a farmer was not a laborer within an act which pro- vided " that no tradesman, artificer, workman, laborer, or other person what- soever, shall exercise any worldly labor or business of his ordinary calling upon the Lord's Day." Cf. The Queen v. Nevill, 8 Q. B. 452; Wakefield v. Fargo, 90 N. Y. 213; Leake's Digest of Contracts, p. 227, nC- d; Chitty on Contracts, vol. I, p. 120. 2 In Hoffman v. ^tna Fire Insurance Co., 32 N. Y. 405, Porter, J., said: " The matter in hand is always presumed to be in the mind and thoughts of the speaker, though his words seem to admit a larger sense ; and therefore the generality of the words used shall be restrained by the particular occasion." Powell on Contracts, 389; Van Hagen v. Van Rensselaer, 18 Johns. 423. "All words," says Lord Bacon, " whether they be in deeds or statutes, § 221.] CONSIDERATION OF WHOLE CONTRACT. 3OI broader than the recital, the recital will restrain it on the ground that the condition is to be confined to the sub- ject-matter. So the general words of guaranties or let- ters of credit are restrained to the particular case in view of the guarantor in all instances in which such a course is not inconsistent with the terms employed.^ This rule that words are to be understood in a limited sense will, however, yield to the principle that the inten- tion of the parties must govern, and whenever the inten- tion is clear that general words were used in a broad sense, they will be so interpreted.^ § 221. Mistakes in, grammar, spelling, and punctua- tion disregarded. — The same principle which authorizes the court to give to a word the meaning which the con- text supplies, justifies it in disregarding clear mistakes in or otherwise, if they be general and not express and precise, shall be restrained unto the fitness of the matter and the person. . . . Words should not be taken in their broadest import, when they are equally appropriate in a sense limited to the object the parties had in view." Bacon's Law Maxims, Reg. 10. See also Harrison v. Blackburn, 17 C. B. N. S. 678; Teutonia Fire Ins. Co. V. Mund, 102 Pa. St. 89. * Metcalf on Contracts, pp. 280, 283 ; infra Chap. XX. ^ In Emigrant Industrial Savings Bank v. Roche, 93 N. Y. 374, it was said : " It is a rule for the construction of all written instruments conveying property, that if a general clause be followed by special words, the instrument shall be construed according to the special matter ; and in the application of this rule it is held that the general words of an assignment should be restricted by a subsequent clause referring to a schedule annexed for a more full de- scription." Wilkes V. Ferris, 5 Johns. 335 ; Holmes v. Hubbard, 60 N. Y. 183. '' But this rule is subordinate to the paramount and more general rule which requires that all instruments shall be so construed as to give effect to the intention of the parties." And in Metcalf on Contracts, p. 280, it is said : " But if the general words of release stand alone, without any recital or reference to the subject-matter on which it is to operate, the rule does not apply. In such case the release is taken most strongly against the releasor." 302 RULES OF CONSTRUCTION. [§ 221. grammar,^ in spelling,^ and in punctuation.^ The law- prefers a construction according to the strict, accurate, and precise use of language ; * but rarely is a contract, expressed in such a manner, brought before the courts for interpretation. And should courts always insist upon construing contracts pursuant to rules of grammar, the rights of those who are poorly versed in these rules would be sacrificed, and the thought of the contract would be overlooked for the mere expression of the thought. Thus, to carry out the intention, words may be transposed, rejected, or supplied if necessary, and every part of the contract will be made to yield to the one gen- eral intent which is expressed therein.® This principle. 1 Waugh V. Middleton, 8 Exch. 352 ; MoreyT/. Homan, 10 Vt. 565; Gray V. Clark, 11 Vt. 583; Nettleton v. Billings, 13 N. H. 446. Leake says that "where an obvious mistake appears in the terms of a written instrument, as in the case of merely clerical or grammatical errors, misspelling, misnomer, and the like, it may be rectified in construing it by the context without further evidence of the mistake ; and the instrument may be read according to the manifest intention of the parties appearing from the whole instrument." Digest of Contracts, pp. 225, 327. ^ Dodd V. Mitchell, ^^ Ind. 388. " Bad spelling is of no consequence so long as it appears with certainty what is meant." Addison on Contracts, vol. I, p. 182. 3 Osbom V. Farwell. 87 111. 89; Ewing v. Burnet, 11 Pet. -54; English z/. McNair, 34 Ala. 40; White v. Smith, 33 Pa. St. 186; In re Denny, 8 Ir. R. Eq. 427. The court will sometimes supply punctuation marks in order to ascertain the meaning. Wharton on Contracts, § 651 ; Willis v. Martin, 4 T. R. 65. * Parsons on Contracts, vol. II, p. 501 ; Addison on Contracts, vol. I, p. 182 ; Samuel v. Evans, i McL. 474; Spaulding v. Evans, 2 McL. 139. 5 So the rule for the Interpretation of Deeds is as follows : " Omitted words may be supplied, repugnant words may be rejected, words may be transposed, and false grammar or incorrect spelling may be disregarded, if the intention of the parties sufficiently appears from the context." Elphin- stone, Rule 17. In Sheppard's Touchstone, at p. 55. it is said : "Neither is it necessary that the English or Latin whereby a deed is made be true and congruous ; for false and incongruous Latin or English seldom or never hurteth a deed. For the rules are : Falsa orthographza non vitiat chartam, Falsa grammatica non vitiat concessionem." In Coles v. Hulme, 8 B. & C. $68, the § 2 21.] CONSIDERATION OF WHOLE CONTRACT. 3O3 however, must never be carried to the extent of permit- ting the court to make a contract for the parties.^ word "pounds," which had been omitted in the obligation of a bond, was supplied by Lord Tenterden, C. J., from the context. Cf. Phipps v. Tanner, 5 C. & P. 488. The word " not " has been eliminated where a bond provided that it should be void if the obligee did " not " pay the amount named. Wil- son V. Wilson, 23 L. J. C. P. 703. The word " or " has been substituted for " and." Maynard v. Wright, 26 Beav. 285 ; cf. Dumont v. U. S. 98 U. S. 143. And many other similar cases are given in Leake's Digest, p. 327 et seq., and in Elphinstone's Interpretation of Deeds, p. 78 et seq. See also Tucker V. Meeks, 2 Sweeny (N. Y.), 736 ; Sanders v. Betts, 7 Wend. (N. Y.) 287 ; Jackson v. Frost, 5 Cow. (N. Y.) 346 ; Simpson v. Vaughan, 2 Atk. 32 ; Ad- dison on Contracts, vol. I, p. 81, note 5. Where clauses are totally repug- nant, the court will prefer the earlier rather than the latter. Neudecker v. Kohlberg, 3 Daly (N. Y.), 407 ; Parsons on Cont. vol. II, p. 513. ^ Parsons on Contracts, vol. II, p. 495. CHAPTER XVIII. ■ RULES FOR CONSTRUING AMBIGUOUS CONTRACTS. § 222. Nature of such rules. 223. Construction supporting a contract favored. 224. Legal sense of contract preferred to illegal. 225. Reasonable construction to be adopted. 226. Whatever is necessarily implied in language is a part of contract. 227. Construction to be against party using ambiguous terms. 228. Ambiguous promise construed in favor of promisee. 229. Promisors not always the proferentes. 230. How to determine who are X\ie ^roferentes. 231. Rules of interpretation and construction laid down by Lieber. 232. Construction brings no aid after all rules have been applied. § 222. Nature of suck rules. — If after a considera- tion of all the terms of a written contract in the light of the surrounding circumstances, the thought of the con- tract is still obscure, and there is no intention discovered which can be stated to have been the actual intention of the contracting parties, resort may still be had to certain other rules of construction to discover its meaning. These rules, although always of less importance than those thus far considered, frequently give effect to con- tracts which would often be void for uncertainty, and thus aid in the construction of the most obscure contracts. They are, however, to be applied with the greatest care, and should never be carried to such an extent as to authorize the court to make a contract for the parties.^ § 223. Construction, supporting a contract favored. — The construction which supports a contract is taken as the true one, for parties are always supposed to have ' Infra, § 232. § 223-] CONTRACT TO BE SUPPORTED. 30S intended something rather than nothing by what they have said.^ If, therefore, a particular construction in harmony with the words used would render an agree- ment frivolous and ineffectual, and so frustrate the ob- ject which the parties intended to accomplish by it, this construction will be set aside for one which will support the contract.^ A policy of insurance, like any other con- 1 Waldron v. Willard, 17 N. Y. 466. In Story on Contracts, § 781, it is said : " The interpretation and construction of a contract should be favorable and liberal. Unless an agreement be manifestly intended to be frivolous or inconsistent it should be so construed as to give it some effect ; for the parties must be supposed to have intended something by their agreement. . . . If words, therefore, be susceptible of two different senses, they are so to be understood as to have a legal and actual operation ; or if their ordinary and grammatical construction would render the contract frivolous and inopera- tive, when such was evidently not the intention of the parties, they should be construed according to their less obvious meaning." See also Coyne v. Weaver, 84 N. Y. 386; Mosley z/. Vermont Mut. Fire Ins. Co., 55 Vt. 142; Willis V. Hanover, &c., Ins. Co., 79 N. C. 285; Peckham v. Haddock, 36 111. 38 ; Redman v. H. F. Ins. Co. 47 Wis. 89 ; Gano v. Aldridge, 27 Ind. 294 ; Post V. Hover, 33 N. Y. 601 : Benedicts/. Huntington, 32 N. Y. 219; Gray z/. Clark, II Vt. 583; Adams v. Adams, 26 Ala. 272; Evans v. Sanders, 8 Port. (Ala.) 497 ; Brown v. Slater, 16 Conn. 192 ; Brewerw. Hardy, 39 Mass. 376; Steen- spring V. Bennett, 16 La. Ann. 363 ; Jackson v. Bladgett, 16 Johns. (N. Y.) 172 ; Cobb V. Fountaine, 3 Rand. (Va.) 487 ; Stratton v. Pettitt, 1 6 C. B. 420 ; Russell V. Phillips, 14 Q. B. 891 ; Goodtitle v. Bailey, Cowp. 600; Wharton on Con- tracts, I 672; Bishop on Contracts, § 581. "Construction is to be what the common lawyers term favorable, that is, if the terms of an agreement are susceptible of two senses, they are to be understood so as to have an actual and legal operation." Metcalf on Contracts, p. 277. "The court cannot, however, through a desire that there should be a valid contract between the parties, undertake to reconcile conflicting and antagonistic expressions of which the inconsistency is so great that the meaning of the parties is necessarily un- certain. Nor where the language distinctly imports illegality, should they construe it in a different and a legal sense, for this would be to make a con- tract for the parties which they have not made themselves. But where there is room for it, the court will give a rational and equitable interpretation, which, though neither necessary nor obvious, has the advantage of being just and legal, and supposes a lawful contract which the parties may fairly be regarded as having made." Parsons on Contracts, vol. II, p. 505. 2 Thrall v. Newell, 19 Vt. 202. See also CoUis v. Emett, i H. Bl. 313, where a note payable to a fictitious person or order was construed to be pay- able to bearer, as it would otherwise be utterly illusory and null. 20 306 RULES OF CONSTRUCTION. [§§ 224, 225. tract, should be construed so as to give it effect rather than to make it void.^ And it is said to be a well-settled rule in the interpretation of contracts, that when a clause is capable of two significations, it should be understood in that sense which will have some operation rather than in that in which it will have none.'^ § 224. Legal sense of contract preferred to illegal. — Under the foregoing rule therefore a contract which admits of both a legal and an illegal interpretation will be construed in its lawful sense, for the presumption is that the parties act in conformity to law.^ " Whensoever the words of a deed, or of the parties without a deed, may have a double intendment, and the one standeth with law and right, and the other is wrongful and against law, the intendment that standeth with law shall be taken,"* § 225. Reasonable construction to be adopted. — The aim of the court being to support the contract where two constructions are possible, that which is reasonable will be preferred to that which is unreasonable, for it is not to be presumed that the parties intended anything either senseless or absurd.® Thus in one case where a * Harper v. Albany Insurance Co. 17 N. Y. 194; Griffey v. N. Y. Cent. Ins. Co. 100 N. Y. 417. 2 Archibald v. Thomas, 3 Cow. (N. Y.) 284. See also Richardson v. Palmer, 38 N. H, 212; supra, n. i, p. 305; Milliard on Cont., vol. I, p. 287. ' See Story on Contracts, § 782 ; Wharton on Contracts, § 656 ; Leake's Digest, p. 229; Gibbons v. United States, Dev. 46; Noonan v. Bradley, 9 Wall. 407; Crittenden v. French, 21 111. 598; Archibald v. Thomas, 3 Cow. (N. Y.) 284; Many v. Beekman Iron Co. 9 Paige (N. Y.), 188. * Co. Litt. 42. So Lord Lyndhurst in Shore v. Wilson, 9 CI. & Finn. 397, says: "The rule is this, and it is a fair and popular rule, that where a construction consistent with lawful conduct and lawful intention can be placed upon the words and acts of parties, you are to do so, and not unnecessarily to put upon these words and acts a construction directly at variance with what the law prohibits or enjoins; " Wharton on Cont, § 337. 5 Buckingham v. Jackson, 4 Biss. 295. "An agreement or contract shall § 225.] CONSTRUCTION TO BE REASONABLE. 307 shop-keeper agreed to pay a debt of $2,000 in merchan- dise out of his store " No. 44 Maiden Lane," it was held that he was not obhged to keep a stock of goods at that store until the debt had been paid or the statute of limi- tation had run. And Selden, J., said: "The question is not without difficulty — the terms of the note, if rigidly construed according to their literal import, would seem to impose such an obligation. But the law assumes in many cases to give to contracts a reasonable interpreta- tion which, although it may slightly vary from the strict letter of the agreement, preserves, nevertheless, all the substantial rights of the parties. "Thus, the note in this case, although payable on de- mand, without regard to time, could not be demanded at midnight when the store was locked. So a note payable at a bank on a certain date, which in terms permits the holder to select his own hour for presentment, must, nevertheless, be presented within the ordinary banking hours. A party to a contract is bound to pay a reason- able regard to the interests of the other party, although his contract may not in terms require it, as if one cove- nants to indemnify another against all damages which may result to him from a certain event, there is no doubt that the party indemnified would be bound to make reasonable efforts to prevent unnecessary damages. In all these cases, and many others which might be sug- gested, the law departs from the strict letter of the con- tract, because it is required by a just regard to the inter- have a reasonable construction according to the intent of the parties, as if a man agree with B. for twenty barrels of ale, he shall not have the barrels when the ale is spent." Com. Dig. Agreement; Chitty on Contracts, p. io5. The meaning and intention of the parties to a contract is to be ascertained from the face of the instrument and by the application of common sense to the particular case. The court will not confine itself to special words or ex- pressions, but will collect the intention from the whole' instrument. Green v. Town of Dyersburg, 2 Flip. 496. 3o8 RULES OF CONSTRUCTION. [§ 2 26. ests of one of the parties, and does no appreciable injury to those of the other." ^ § 226. Whatever is necessarily implied in language is a part of contract. — It is a further rule of construction that a writing contains all that may fairly be implied from it. Thus, where an agreement was presented for con- struction, which read: "Received of J., by agreement, one thousand shares of St. Joe Lead Stock, for which I have paid him $3,000. The understanding is that I am to give said J. one half of whatever price the same is sold for, when sold over and above that sum," the New York Court of Appeals held that it contained an implied obli- 1 Where a contract bound a ship to carry "all such lawful passengers " as the agent of the other party might think proper to ship, it was held that " all " meant only a reasonable number, and that the ship could not be com- pelled to carry more than could be carried with reasonable comfort and safety. The Ship Hound, 27 Law Rep. (17 N. S.) 34. So the words " pay- able as convenient," cannot be construed to mean not payable at all. Block v. Bachelder, 120 Mass. 171. And when a manufacturer agrees to fill an order for goods " as soon as possible," this means within a reasonable time, con- sidering the manufacturer's ability to make them, and the orders then on hand. It does not require him to give up other work and devote all his means to this order. Attwood v. Emery, I C. B. (N. S,) no. In Rawlinson V. Clarke, 14 M. & W. 187, it appeared that one assigned to another his business of a surgeon and apothecary by deed, and entered into a covenant with him that he would not carry on the practice of a surgeon or apothecary within a specified distance of his former place of business. After the execu- tion of this deed, the defendant, with the knowledge and consent of the plaintiff, and pursuant to his request, and upon his behalf, visited patients within the prescribed limits, and on one occasion was paid for his services. It was held that there was no breach of the warranty, because, looking at the object of the parties, there was no doubt that the true construction of the covenant was, that the defendant should not carry on business on his own account within the prescribed distance, not that he should not do any act within that distance which was a part of the business of a surgeon or apothe- cary. See also Rogers v. Sheerer, 77 Me. 323 ; Blitz v. Union Steamboat Co. 51 Mich. 558; Coghlan v. Stetson, 19 Fed. Rep. 727; Robinson v. Bulloch, 58 Ala. 618; Albrights. Voorhis, 36 Hun, 437; Tebo v. Robinson, 100 N. Y. 27; Worcester Gas Light Co. v. Worcester, no Mass. 353; Funck V. Haskell, 132 Mass. 580. § 226.] IMPLIED OBLIGATIONS OF CONTRACT. 309 gation to re-sell the stock, which could be enforced by the party surrendering it.^ So the law existing at the time and place of contract enters into it and defines the obligations of the parties.^ And where an in- strument, properly signed, read : " Due J. D., or order, $1,619.66, being balance of principal and interest for four years and six months' services. This we will pay as soon as the crops can be sold or the money raised from any other source, payable with interest," Mr. Justice Swayne said : " No time having been specified within which the crops should be sold or the money raised otherwise, the law annexed as an incident that one or the other should be done within reasonable time, and that the sum admit- ted to be due should be paid accordingly. Payment was not conditional to the extent of depending wholly and finally upon the alternatives mentioned. The stipula- tions secured to the defendants a reasonable amount of time within which to procure, in one mode or the other, the means necessary to meet the liability. It could not have been the intention of the parties that if the crops were destroyed, or from any other cause could never be sold, and the defendants could not procure the money from any other source, the debt should never be paid. 1 Jones V. Kent, 80 N. Y. 585. Danforth, J., said: " The only substan- tial question upon this appeal is whether the plaintiff is entitled to have a sale of this stock made by the defendant. The answer must be found in the writ- ten agreements, interpreted in the light of the cardinal rule that a writing contains all that may be implied from it. Potter v. The Ontario and Living- stone Mutual Ins. Co., 5 Hill, 147; Booth v. C. R. Mill, 74 N. Y. 15. And thus read, I think it imports an obligation to sell, the performance of which the plaintiff may enforce." Whatever is necessary to be done to accomplish work specifically contracted for is part of the contract. Currier v. Boston & Maine R. R., 34 N. H. 498. " Everything contained in a written agreement lay necessary implication is as much a part of the instrument as if it were written out in words." Donohoe v. Kettell, i Cliff 144. 2 Supra, %% 21-31. See also Ogden v. Saunders, 12 Wheat. 297. 3IO RULES OF CONSTRUCTION. [§ 226. Such a result would be a mockery of justice."^ So where one promised to slaughter and cure into pork or bacon fifty thousand hogs, for a certain sum per one hundred pounds of net meat produced, it was held that the fair implication of the contract was that the other party agreed to furnish the specified number of hogs.* But where a contract is drawn in technical form, and with obvious attention to details, a covenant cannot be implied in the absence of language tending to a conclu- sion that it was intended to make such a covenant.^ 1 Nunez v. Dantel, 19 Wall. 560; citing Hicks v. Shouse, 17 B. Mon. (Ky.) 487; Ubsdell v. Cunningham, 22 Mo. 124. See also Nave v. Berry, 22 Ala. 382 ; and Abbott's U. S. Digest, Contracts, vol. Ill, p. 450. * Floyd V. United States, 2 Ct. CI. 429 ; cf. Morris v. Litchfield, 14 Brad. Rep. (in. App.) 183; Johnson v. Raylton, L. R. 7 Q. B. D. 438. ' Hudson Canal Co. v. Pennsylvania Coal Co., 8 Wall. 298. In this case Mr. Justice Clifford says : " Undoubtedly, necessary implication is as much a part of an instrument as if that which is so implied was plainly expressed, but omissions or defects in written instruments cannot be supplied by virtue of that rule unless the implication results from the language employed in the instrument, or is indispensable to carry the intention of the parties into effect ; as where the act to be done by one of the contracting parties can only be done upon something of a corresponding character being done by the opposite party, the law in such a case, if the contract is so framed that it binds the party con- tracting to do the act, will imply a correlative obligation on the part of the other party to do what is necessary on his part to enable the party so con- tracting to accomplish his undertaking and fulfill his contract. Churchward V. The Queen, Law Reports, i Q. B. 195. Three other examples are put in the case cited which it may be well to notice as illustrating the general prin- ciple, and as showing its true boundary when properly limited and applied. They were first adduced at the bar, but were subsequently adopted and con- firmed by the court in substance and effect as follows : i. If one person cov- enants or engages by contract to buy an estate of another at a given price, the law will imply a corresponding obligation on the part of such other person to sell, although the contract is silent as to any such obligation, as the person ^contracting to purchase cannot fulfill his contract unless the other party will consent to sell. ' Mclntyre v. Belcher, 14 Common Bench, New Series, 664; Pordage v. Cole, i Williams's Saunders, 319,1 ; Whidden v. Belmore, 50 Maine, 360; Barton v. McLean, 5 Hill, 258. 2. So if one person engages to work and render services which require great outlay of money, time, and trouble, and he is only to be paid according to the work he performs, the con- tract necessarily implies an obligation on the part of the employer to supply § 22/.] CONSTRUCTION AGAINST PROMISOR. 31I § 227. Construction to be against party using ambig- uous terms. — A rule of much value in the interpretation of doubtful contracts is that ambiguous terms are to be taken most strongly against the party who has employed them;^ or, as it is sometimes expressed, construction is to be fortius contra proferentem? This rule, however, should never be resorted to until it is evident that the actual intention of the parties, in the use of the doubtful terms, cannot be ascertained from the admissible extrinsic evidence or from the examination of the whole con- tract.* the work. 3. Persons often contract to manufacture some particular article, and in such cases the law implies a corresponding obligation on the part of the other party to take it when it is completed according to the contract, be- cause if it were not so the party rendering the services and incurring the ex- pense in fulfilling his contract could not claim any remuneration. St. Albans V. Ellis, 16 East, 352; Randall z/. Lynch, 12 East, 179; Shrewsbury w. Gould, 2 B. & A. 489 ; Gerrard v. Clifton, 7 Term, 676 ; Aspdin v. Austin, 5 Q. B. 67 1 ; Great Northern Railway Co. v. Harrison, 12 C. B. 576. But upon a sale of a business, with the good will thereof, there is no implied agreement that the vendor will not carry on the same business in the same locality. Bergamini V. Bastian, 35 La. Ann. 60; S. C. 48 Am. R. 216; cf., Nat. Mer. Bank v. Hampson, L. R. 5 Q. B. D. 177. 1 A written instrument, the true import of which is doubtful, and from the language of which the intention of the parties cannot be determined, will be construed most strongly against the person using the doubtful language, and in favor of him who has been misled and advanced his money upon it. Thus, where one is authorized to draw drafts on another, " at ten or twelve days," with nothing to indicate whether ten or twelve days afterdate or after sight is meant, he may exercise his own discretion and consult his own convenience in that particular. Barney v. Newcomb, 63 Mass. 46. See also Insurance Companies v. Wright, i Wall. 486 ; Noonan v. Bradley, 9 Wall. 394 ; Garrison v. United States, 7 Wall. 688 ; Chase's River Bridge v. Warren Bridge, 11 Peters, 589; Palmer z/. Warren Ins. Co., i Storj-, 369; Wetmore V. Pattison, 45 Mich. 439 ; Evans v. Sanders, 8 Port. (Ala.) 497 ; Livingston V. Armington, 28 Ala. 424 ; Pike v. Munroe, 36 Me. 309 ; Winslow v. Patten, 34 Me. 25 ; Mills v. Catlin, 22 Vt. 98; Hoover v. Miller, 6 La. Ann 204; Hil- liard on Contracts, vol. I, p. 287; Chitty on Contracts, vol. I, p. 136, note, z'. 2 Birrell v. Dryer, 51 L. T. 130; infra, n. 2, p. 316 ; Deblois v. Earle, 7 R. I. ,26; Story on Contracts, § 811 ; Metcalf on Contracts, p. 312; cf. El- phinstone's Interpretation of Deeds. 8 Bacon's Max, Reg., 3; Parsons on Contracts, vol. II, p. 508, n. (p); 312 RULES OF CONSTRUCTION. [§ 22/. On this account it has been customary to attach little significance to the rule.^ But Lord Bacon asserted that it was " drawn out of the depth of reason," and it would seem that there is little propriety in setting it down as of slight value. Doubtless it is "a rule of some strictness and rigor," and " doth not as it were its office, but in the absence of other rules which are of more equity and humanity." ^ Yet it enables the court to give effect to contracts when all the other methods employed hy the law have failed to make clear the meaning of the parties. And, while it is of no value beyond its proper sphere, when resort to it becomes necessary, it furnishes a useful and just method of reaching the probable inten- tion of the parties. It may also be said that it is reasonable and just to conclude that where one of the parties to a contract, in describing his own obligations, uses language susceptible Leake's Digest, p. 230; Fuller w. Giles, 29 Ind. 114; Adams «/. Warner, 23 Vt. 411. 1 Parsons says : " The reason of the rule contra proferentem is that men may be supposed to take care of themselves ; and that he who gives, and chooses the words by which he gives, ought to be held to a strict interpreta- tion of them rather than he who only accepts. But the reason is not a very strong one, nor is the rule of special value." Vol. II, p. 508. And Chitty says : " Another rule is that a deed or other instrument shall be taken most strongly against the grantor or contractor. . . . This rule of construc- tion, however, is clearly subject or subordinate to all those principles of ex- position to which we have before adverted. For, although it is a rule calcu- lated and intended to defeat studied ambiguity of expression, yet it is also considered as a rule of some strictness and rigor, and the last to be resorted to — a rule, in fact, never to be relied upon but where other rules of construc- tion fail. Accordingly, it cannot be applied except in cases of ambiguity; and even then regard must first be had to the apparent intention of the par- ties, as it is to be collected from the whole context of the instrument. And in cases of penalties or forfeitures, or where a harsh construction would work a wrong to a third person, the rule that contracts shall be construed most strictly against the contractors seems not to apply at all." Contracts, p. 137. See also Leake's Digest, pp. 230, 231. ^ Bac. Max. Reg., 3 ; Powell on Contracts, pp. 237, 238. § 228.] CONSTRUCTION AGAINST PROMISOR. 313 of more than one interpretation, the person with whom he is contracting will understand this language in the sense which is most favorable to his own interests. And it is proper that the one who occasions such misunder- standing should bear the consequences which flow from it.^ Upon this principle it is held that where an agent is misled by an ambiguity in the orders of his principal, and adopts the wrong construction of them, he will be exonerated if his act be bona fide? § 228. Ambiguous promise construed in favor of promisee. — This principle is applied where the terms of a promise are ambiguous, and they are interpreted in the sense in which it is reasonable to suppose the promisee understood them. It is said : " The rule in ethics is that ' when the terms of a promise admit of more senses than one, the promise is to be performed in that sense which the promisor apprehended at the time the promisee re- ceived it,' and this is the language of the books, it is to be interpreted in the sense in which the promisor had reason to suppose it was understood by the promisee." ' 1 See Cornish v. Abington, 4 H. & N. 554; Powell on Cont., p. 238; infra. Chap. XX. 2 Story on Contracts, § 782; citing Loraine v. Cartwright, 3 Wash. C. C. 151 ; Courcier v. Ritter, 4 Wash. C. C. 551 ; I Liv. on Agency, 403, 404; De Tastett V. Coronsillat, 2 Wash. C. C. 122 ; Story on Agency, § 74. 8 White V. Hoyt, 73 N. Y. 505. " The true principle of sound ethics is to give the contract the sense in which the person making the promise be- lieved the other party to have accepted it. . . . The modern and more reasonable practice is to give the language its just sense and to search for the precise meaning, and one requisite to give fair effect to the contract without adopting either the rule of a rigid or of an indulgent construction." Kent's Com., vol. II, p. 557- So Barrett, J., in Wright v. Williams, 20 Hun (N.Y.), 320, said : " It is also a familiar rule of law that if it be left in doubt, in view of the general tenor of the, instrument and the relations of the contracting parties, whether given words were used in an enlarged or a restricted sense, other things being equal, that construction should be adopted which is most beneficial to the promisee." See also Hoffman v. ^tna Fire Ins. Co., 32 N. Y. 405; Reynolds v. Com- 314 RULES OF CONSTRUCTION. [§ 228. It has been suggested that this rule must be qualified before it can be considered a sound rule for the interpre- tation of contracts, and that it is only when words which " can be rationally construed as expressing the sense which the promisee attached to them," that they will be interpreted in that sense.^ But the rule itself precludes any construction which the words may not bear, for the promisor could never be held to have had reason to sup- pose the promisee would attach a meaning not justified by the context, the circumstances, or the ordinary use of language. The whole object of the rule is to secure the interpretation of specific words, which are capable of several constructions, in the sense most favorable to the promisee. And the " obligee should have the right to require of the obligor all that a right and natural inter- pretation of the signs made use of would give him." ^ merce Fire Ins. Co., 47 N. Y. 597 ; Barlow ?/. Scott, 24 N. Y. 40; Teutonia Fire Ins. Co. V. Mund, 102 Pa. St. 89; Palmer v. Warren Ins. Co., i Story, 360; Davis V. Boardman, 12 Mass. 80; Morse v. Buffalo F. & M. Ins. Co., 30 Wis. 534; Commonwealth Ins. Co. v. Berger, 6 Wright. (Pa.), 292; Coke's Litt., 183; Bacon's Law Maxims, Reg. 3; Doe v. Dixon, 9 East, 16. But one is not bound to do acts not contracted for merely because he knew that the other party expected and understood he would perform them. John- son V. Sellers, 33 Ala. 265. 1 This qualification is suggested in Parsons on Contracts, vol. II, p. 506; and in Johnson v. The Northwestern National Ins. Co., 39 Wis. 87, it is adopted, the court saying: " It seems to us the rule is only sound in law with such a material qualification." 2 " If it were allowed to take the obligations into which one has entered as he himself would have them, there is no one of which the effect might not be eluded by a claim that the party had in mind an entirely different thing from that understood by the other party. As our thoughts, then, are for ourselves alone, and external signs for others, reason requires that when a contract has been entered into the obligee should have the right to require of the obligor all that a right and natural interpretation of the signs made use of would give him." Puffendorf, Lib. V, c. 12, § 2. After quoting this extract, the learned editor of the second edition of Lieber's Hermeneutics, p. 85, n. 5, says : " It is the intention of the party that binds him ; but what that intention was is to be learned, not from his own assertion or understanding of it, but from the words or signs in which it has been clothed." § 229-] CONSTRUCTION AGAINST PROMISOR. 315 § 229, Promisors not always the proferentes. — But those who appear to be the promisors will not always be the proferentes with regard to the promises contained in a contract. And this may appear from the context, from the subject-matter or from the circumstances sur- rounding the contract. Thus where upon the face of the writing it appears that a penalty has been stipulated for and agreed to, the court, nevertheless, will endeavor to construe this language in favor of the party promising to pay the penalty.^ The reason for this seems to be not only because to construe it against the interest of the promisors would make this rule operate as an inequita- ble exaction upon him, but also because the language would ordinarily, upon a view of the whole agreement, appear to be that of the party stipulating for the penalty. For like reasons stipulations for forfeiture in policies of insurance, in regard to which the insured is the promisor, are construed strictly against the interests of the in- surers.* And in the construction of a proviso or ex- ception in qualification of an agreement, words sus- ceptible of two meanings are to be construed most strongly against the party in whose favor the exception is made.® So while common carriers may provide by contract for exceptions from common law liability, it * Chitty on Contracts, p. 137; Powell on Contracts, p. 239; Story on Con- tracts, § 813; infra, n. 2. ^ Smith V. Nat. Life Ins. Co. 103 Pa. St. 177; Teutonia Fire Ins. Co. v. Mund, 102 Pa. St. 89; Schultz w. Coon, 40 Ohio St. 217; West w. Citizens Ins. Co. 27 Ohio St. i ; Young v. Mutual Life Ins. Co. 2 Saw. 330; Insurance Co. V. Webster, 6 Wall. 129; Rann v. Home Ins. Co. 59 N. Y. 387; Boehen V. Williamsburgh Ins. Co. 35 N. Y. 131 ; Ronton u. Am. M. L. Ins. Co. 25 Conn. 542 ; Shafer v. Ph. Ins. Co. of Brooklyn, 53 Wis. 361 ; Hull v. N. W. McL. Ins. Co. 39 Wis. 397; 95 U. S. 673 ; 93 U. S. 286 ; May on Insur- ance, § 174; Fowkes v. Manchester and London Ass. 32 L. J. Q. B. 153. ^ Boon V. yEtna Fire Ins. Co. 12 Blatchf. 34; Donnell v. Columbian Ins. Co. 2 Sumn. 366; Jackson v. Lawrence, 11 Johns. 191 ; House v. Palmer, 9 Ga. 497 ; Parsons on Contracts, vol. II, p. 508, n. (q). 3l6 RULES OF CONSTRUCTION. [§ 23O. roust be done in clear and unambiguous terms, and the rule that the language of contracts, if ambiguous, is to be construed against the party using it, will be rigidly applied to these contracts.^ § 230. How to determine Tbho are the proferentes. — It is often difficult to decide who are the prof erentes with regard to special words of a contract, but this is to be determined in each case upon an examination of the substance and character of the words, made in the light of the whole contract and the circumstances surrounding it. In a recent English case, where a time policy of Marine Insurance contained the provision, "-warranted No St. Lawrence between the ist October, and the ist April," it was admitted that the ship had navigated the gulf of St. Lawrence during this period, but it was con- tended that this was no breach of the warranty, inasmuch as the River St. Lawrence was alone to be included within the prohibition of the policy. Two of the judges who heard the case on appeal held that there was no breach of the warranty, as the words " no St. Lawrence " were ambiguous and would be construed against the un- derwriters who were the prof erentes with regard to the policy. The House of Lords, however, reversed this decision, and from the whole contract and the circum- stances derived the intention that both the gulf and the river St. Lawrence were within the prohibition of the words, and held that the warrantv had been broken.^ 1 Edsale v. Camden & Amboy R. R. & T. Co. 50 N. Y. 661 ; ^tna Ins. Co. V. Wheeler, 49 N. Y. 616; Babcock v. L. S. M. S. R. R. Co. 49 N. Y. 491. ^ Birrell v. Dryer, 51 Law Times, 130 (1884). A statement of the ques- tion involved in this case, and extracts from the opinions are given, as the decision well illustrates the importance of the rule contra proferentem, the sphere within which it operates, and the necessity- of first striving to de- rive the intention from the whole contract. The respondents, ship-ovmers, claimed against the appellants, the underwriters of a time policy of insurance; § 230.1 CONSTRUCTION AGAINST PROMISOR. 317 Lord Blackburn and Lord Watson, in their opinions, both intimate that these words, describing the limits of as for a total loss and the appellants resisted the claim on the ground of a breach of a warranty in the policy. The warranty was " No St. Lawrence," between certain dates, and it was admitted that the vessel had navigated the Gulf of St. Lawrence within the prohibited time, but the owners contended that the warranty applied only to the river St. Lawrence. It was proved, that the navigation of the gulf was dangerous at that season, but less so than that of the river. On the final decision in the House of Lords the Lord Chancellor said : '' The question on this appeal is whether the words ' war- ranted no St. Lawrence between the ist October and the ist April,' in a time policy on the respondents' ship L. de V. Chipman, effected with under- writers of Glasgow on the 8th June, 1878, for the twelve months from 29th May, 1878, to 28th May, 1879, include the Gulf of St. Lawrence, or are con- fined to the river of that name .' Many witnesses were examined on both sides, to show in what sense they understood these words, and thought that others ought to understand them, but none of those witnesses proved that they bore either the one sense or the other, according to any local or general usage ; nor were they able to refer to any instances in which the question had practically arisen, and had been practically determined. Conflicting opinions of individuals, as to the proper interpretation of words in a written contract, would be entitled to no weight, even if it were clear that they were admis- sible. Your Lordships have, therefore, to consider whether the ordinary rules and principles of construction do, or do not, enable you to ascertain the subject to which these words apply, having regard to those extrinsic facts which are either within your judicial cognizance, or sufficiently established by the evidence. . . . Reading this contract of insurance in the light of the relevant facts, it appears to me that there are two subjects, distinguishable from but closely connected with each other, to both of which the descrip- tive words ' St. Lawrence ' may apply, and that there is nothing to confine them to the one rather than to the other of those subjects. The office of the negative form of expression ' no St. Lawrence ' is not to define, but is to prohibit or exclude. It occurs in a contract for the purposes and objects of which it is reasonable and probable that both the gulf and the river should have been meant to be excluded. The reasons for such exclusion during the prohibited months are applicable to both, though in different de- grees at different times during that period. I agree under these circumstances, with the opinion and conclusion of the Lord Ordinary. I do not think that the evidence discloses any ambiguity or uncertainty sufficient to prevent the application to this case of the ordinary rules and principles of construction ; and, according to those rules and principles, the whole St. Lawrence naviga- tion, both of gulf and river, is, in my judgment, within the fair and nat- ural meaning of these negative words, and is therefore prohibited during the months in question. There does not appear to me to be any necessity for re- sorting to presumptions in favor of or against either party, whether founded 3X8 RULES OF CONSTRUCTION. [§ 23O. the voyage, were to be taken as the words of the assured, and that the underwriters could not be considered as the proferentes in regard to them. on the rule fortius contra proferentem, or on the onus of proving an excep- tion from the general affirmative terms of this contract." Lord Blackburn said: "Reliance was placed by some of the judges be- low on the maxim fortius contra proferentem. I do not think that the dis- trict excluded can be considered as the words of one party more than of the other. The ship-owner, knowing where he is likely to employ his ship, and that he does not intend to use her in some district, generally puts on the ship a description of that district in order to induce the underwriters to agree to a lower premium. I am by no means prepared to say that in some cases, ^wjiere the description of the excepted district is special, it may not be right to say that these are the words of the assured. But where the description is, like this, general, I think that the assured has a right to suppose that the un- derwriters understand that description as they ought to understand it. It is alike for the interest of the assured and the underwriters that the description should be definite, and that is alluded to in the warranty ' no British America between the 1st Oct. and the ist April.' No one could imagine that there was a material difference in the risk between a voyage from the most northern port in the United States and one from the most southern port of British North America, or between a voyage commenced on the last day which is not prohibited and one commenced on the first day which is prohibited ; but a fixed limit is agreed on to prevent disputes. I think that the court should take judicial notice of the geographical position and the general names ap- plied to such districts as this — in short, of all that we see in the admiralty chart of this part of the sea. I do not know whether the first discoverers of America called the Gulf that of St. Lawrence, and then gave the same name to the river, or vice versa, nor do I think it material. The name has for many years been applied to both. I think that, applying the name as we find it used in charts and by geographers to a well-defined district, it includes both the river and the gulf." Lord Watson said, in his opinion: 'Two at least of the three learned judges who formed the majority of the Second Division have held that ' no St. Lawrence ' must have applied to the river only, on the ground that the ex- pression is ambiguous, and that the ambiguity must be solved adversely to the appellants, because ' the underwriters are the proferentes with regard to a policy of insurance.' That the underwriters may be rightly held to be the proferentes with regard to many conditions in a policy, I do not doubt ; whether they ought to be so held depends, in each case, upon the character and sub- stance of the condition. In the present case there are many considerations which lead to the inference that the clause in question is not one constructed and inserted by the appellants alone, and for their protection merely. It was, in point of fact, inserted in the contract by the agent of the respondents; and § 231.] RULES OF CONSTRUCTION. 319 § 231. Rules of interpretation and construction laid down by Lieber. — Many other and elaborate rules for the construction of documents have been put forth by diflFerent writers, but it is believed that those of impor- it is in form a warranty by them that their vessel will not be navigated in cer- tain waters— a matter which it was entirely within their power to regulate. These considerations point rather to the respondents themselves being the Jiroferentes; but I think the substance of the warranty must be looked to, and that in substance its authorship is attributable to both parties alike. The main object of the clause is to define the limits within which the vessel is to be kept while she is navigated under the policy, and that appears to me to be as much the concern of the ship-owners as of the underwriters. To define the limits within which the vessel is to be navigated for the purpose of a time policy is, in principle, precisely the same thing as to describe the voyage for which a vessel is insured under an ordinary policy. In both cases it is a definition of the subject-matter of the insurance, a term of the contract, the settlement of which must, in my judgment, be regarded, in a case like the present, as the deliberate act of both parties. Although the rule of construc- tion contra proferentem may not apply, I think that it was rightly argued for the respondents that, seeing the clause in question occurs in the shape of an •exception from the leading term of the policy which gives the vessel leave to navigate in any waters, it can only receive effect in so far as it is plain and unambiguous. But I am not satisfied that there is any ambiguity, such as will avail the respondents, to be found in the clause when it is read as a whole. The ambiguity, according to the argument of the respondents, con- sists in this, that the words may denote either the river, or both gulf and river, and according to the view taken by Lord Young, consists in their being ap- plicable either to the river or to the gulf, or to both. It is not matter of dispute that the name ' St. Lawrence ' is apphcable to the gulf and also to the river, and that, as suggested by Lord Young, it is equally correct to designate the g-ulf and river as the gulf and river of St. Lawrence ; and if one could con- ceive a case of the words ' St. Lawrence ' standing by themselves in a policy without any qualifying context, they certainly would be ambiguous if not unintelligible. But in the present case any ambiguity which might otherwise have arisen is expelled by the word ' no.' It is a universal negative, and, in my opinion, excludes all navigable waters, salt or fresh, bearing the name of -St. Lawrence,' which can reasonably be held to have been within the con- templation of the parties to the policy. If the river had been the only navi- gable water in North America known as ' St. Lawrence,' and there had been elsewhere a gulf of that name, I might have hesitated to hold that the latter was within their contemplation ; but the gulf and river of St. Lawrence are so intimately connected, and the perils attendant upon their winter navigation so much akin, that I have come to the conclusion that the warranty must be held to exclude both. " 320 RULES OF CONSTRUCTION. [§ 23 1. tance have already been given.^ It is always to be re- membered that the aim of construction is to reach the ^ The following rules laid down by Lieber are frequently referred to and will be found of interest. Rules of Interpretation, Hermeneutics, pp. 108, 109: 1. A sentence, or form of words, can have but one true meaning. 2. There can be no sound interpretation without good faith and common sense. 3. Words are, therefore, to be taken as the utterer probably meant them to be taken. In doubtful cases, therefore, we take the customary significa- tion, rather than the grammatical or classical ; the technical rather than the etymological — verba artis ex arte ; tropes as tropes. In general, the words are taken in that meaning which agrees most with the character of both the text and the utterer. 4. The particular and inferior cannot defeat the general and superior. 5. The exception is founded upon the superior. 6. That which is probable, fair, and customary, is preferable to the im- probable, unfair, and unusual. 7. We follow special rules given by proper authority. 8. We endeavor to derive assistance from that which is more near, before proceeding to that which is less so. 9. Interpretation is not the object, but a means ; hence superior considera- tions may exist. Rules of Construction, id.^ pp. 136, 137: 1. All principles of interpretation, if at all applicable to construction, are valid for the latter. 2. The main guide of construction is analogy, or rather reasoning by parallelism. 3. The aim and object of an instrument, law, etc., are essential, if distinct- ly known, in construing them. 4. So also may be the causes of a law. 5. No text imposing obligations is understood to demand impossible things. 6. Privileges, or favors, are to be construed so as to be least injurious to the non-privileged or unfavored. 7. The more the text partakes of the nature of a compact, or solemn agreement, the closer ought to be its construction. 8. A text imposing a performance expresses the minimum, if the per- formance is a sacrifice to the performer; the maximum, if it involves a sacri- fice or sufferance on the side of the other party. 9. The construction ought to harmonize with the substance and general spirit of the text. 10. The effects, which would result from one or the other construction, may guide us in deciding which construction we ought to adopt. 11. The older a law, or any text containing regulations of our actions, S 231.] HOW LANGUAGE IS INTERPRETED. 32 1 intention of the parties, and that special rules will give way when they interfere with the accomplishment of this though given long ago, the more extensive the construction must be in cer- tain cases. 12. Yet nothing contributes more to the substantial protection of individ- ual liberty, than an habitually close interpretation and construction. 13. It is important to ascertain, whether words were used in a definite, absolute, and circumscribed meaning, or in a generic, relative, or expansive character. 14. Let the weak have the benefit of a doubt, without defeating the . general object of the law. Let mercy prevail if there be a real doubt. 15. A consideration of the entire text or discourse is necessary, in order to construe fairly and faithfully. 16. Above all, be faithful in all construction. Construction is the build- ing up with given elements, not the forming of extraneous matter into a text. In regard to these rules Prof. Hammond, the learned editor of the second edition of Lieber's Hermeneutics (1880), says, inter alia, at p. 289 : ' ' The rules of interpretation and construction which. Dr. Lieber has given at the end of the fourth and fifth chapters of this work, are probably more familiar to the present generation of American lawyers than any other part of his work ; perhaps more so than any part of any other work on the same subject. They have been repeatedly copied, in whole or in part, by other writers, and have been frequently quoted by judges in their decisions of ques- tions to which they are pertinent. They have given an appearance of learn- ing and a tone of exact argument to many disquisitions in which their author- ship was not hinted at. Dr. Lieber's volume has so long been out of print — since a very brief period after the edition of 1839 — that many of those who have been familiar with the rules will learn now for the first time to ■whom they were indebted for their introduction to American law. Their succinct form and clear and simple style have impressed them on the memory of students, wherever thpy might be found, and thus have given them a vitality which has not been shared by the more extended discussions of which, in Dr. Lieber's own pages, they form only the conclusions. Most of them, undoubtedly, have a special value in helping to fix in a student's mind the principal points and topics of the process of interpretation, and thus aiding to train his judgment in applying to particular questions that great mass of general knowledge which is always taken for granted in an opinion of any value upon the construction of a difficult statute or contract, or even upon the meaning of a single word. For even the meaning of a single word must always be determined, in the last resort, by considering the whole class of things or notions to which it belongs. There is no scientific process by which we can extract that meaning from the word, considered alone, without reference to its usage by the whole community, through a greater or less period of time, and to the usage of other words by which it is bounded on 31 322 RULES OF CONSTRUCTION. [§ 23 1. object, unless public policy requires that they should not. It is the fair and true meaning of a contract that courts every side. Our knowledge of this is usually taken for granted, not ex- pressed in discussing its interpretation, but it is none the less an essential prerequisite of the process. And the chief value of the rules above referred to seems to be, in most cases, not that they enable us to dispense with this general knowledge, and decide the question upon a single consideration, but that they eliminate, so to speak, certain factors from the problem, and thus reduce the remainder to more manageable proportions. " Upon a comparison of the three series of rules, it will be seen that some of them are repeated literally, while others appear under slightly different forms, but with substantially the same meaning. The whole number may also be arranged in a few groups of cognate import. Thus, a small number of rules relate to the meaning of words taken apart from the context. . . . The longer I study the subject, the more I am impressed with the truth that the sentence or phrase is usually the unit of interpretation, and that false constructions oftener grow out of the attempt to decide a difficult question by the meaning of a single word, taken by itself, than from any other cause. " A larger group, about a dozen in all, may be formed of the maxims which contain the general principles of interpretation. The fundamental rule here is well stated on page 109 : 'There can be no sound interpretation without good faith and common sense.' By these two terms the author evidently intends to cover that very large part of the entire process which cannot be reduced to more formal rules. Good faith is the moral prerequisite in all interpretation, as it is in every other question of law. . . . " A third group may be formed of the rules which determine the compara- tive force of different modes of expression, and the results of real or seeming conflicts between different statements on the same subject. . . . " The modern freedom of interpretation, appealing for the validity of its results directly to ' good faith ' and ' common sense,' owes its accuracy and safety of judgment to the narrow and technical process of thought which it has now outgrown. And we may infer from this the proper use and value of such formal rules as are still approved. The individual student will find them great helps in the formation of his judgment. Even to the matured mind they will often prove of service in formulating the question that is to be decided. But they will rarely give a safe and decisive answer taken alone. The weight of ' common sense ' upon a question of interpretation so far pre- ponderates now over all other considerations embraced in these formal rules, that even their force (if they all could be combined in a single instance) would not avail against it. " The fourth and last group comprises the rules which relate to the purpose and object of interpretation or construction in any given case. They may be regarded as speciaUzed expressions of what we mean by ' good faith and common sense ' in particular cases, and need not, therefore, be commented § 231.] CONSIDERATION OF WHOLE CONTRACT. 323 seek, and while they will not allow the written lan- guage in which the parties have expressed themselves to be set aside, they strive always in the reading of this language to do justice to the parties, and to save their contract to them.^ And it is interesting to note that Lord Hobart said, nearly three centuries ago,^ " I do ex- on at length, after what has been said already of these two great principles of interpretation. Like all special statements, they are instructive and help- ful in attaining a clear conception of the general term of which they form part, but must be carefully held subordinate to it.'' Compare also the rules for the interpretation of statutes prepared by Mr. Justice Story, and quoted in Story on Contracts, vol. I, p. 792, note 6. • " Parties have a right to make their own contracts, and when they are fairly made and do not contravene any positive law or rule of public policy, they must be carried into effect according to the intention of the parties, to be derived from the language employed, the surrounding circumstances and the subject-matter. Certain rules have been established for the interpretations of contracts, which a learned Commentator says, are the conclusions of good sense and sound logic apphed to the agreement of the parties. Their object is to ascertain with precision the mutual understanding of the contract in the given case, and like other deductions of right reason they have been quite uniform in every age of cultivated jurisprudence." Clifford, J., in Donahoe V. Kettell, I Cliff. 141. " I agree, that in this case, as in others arising upon the construction of written instruments, the courts are to carry into effect the intention of the parties, if, by law, it may be so carried into effect. But, then, how are we to ascertain the intention of the parties ? Certainly not by parol evidence, varying the language, or by mere conjecture ; but by the application of just rules of interpretation to the very language of the instrument itself." Story, J., Cleaveland v. Smith, 2 Story, 286. ■' Clanrickard v. Sidney, Hobart, 277. Parsons says : " Lord Hale quotes and approves these words. Crossing v. Scudamore, i Vent. 141, and Willes, C. J., quoting Hale's approbation, adds his own, Doe v. Salkeld, Willes, 676 ; Roe V. Tranmarr, id. 684. And yet this cannot be sound doctrine ; it cannot be the duty of a court that sits to administer the law, and for no other purpose, to be curious and subtile or astute, or to invent reasons and make acts in order to escape from rigid rules. All that can be true or wise in this doctrine is, that courts should make, not rigid but wise and just rules, and should then, by their help, effectuate a contract or an instrument wherever this can be done by a per- fectly fair and entirely rational construction of the language actually used. To do more than this would be to sacrifice to the apparent right of one party in one case, that steadfast adherence to law and principal which constitutes the only protection of all rights and all parties." Contracts, vol. II, p. 506. 324 RULES OF CONSTRUCTION. [§ 232. ceedingly commend the judges that are curious and al- most subtile astuti (which is the word used in the Prov- erbs of Solomon in a good sense when it is to be a good end) to invent reasons and means to make acts according to the just intent of the parties, and to avoid wrong and injury which, by rigid rules, might be wrought out of the act." § 232. Construction brings no aid after all rules have been applied. — If no intention is discovered after all of the rules of construction have been applied to the contract, the limits of interpretation are reached. The court will not make a contract for the parties.^ It looks to the language, and if that is plain it enforces the con- tract according to its clear meaning.* If, on the other hand, the language by itself or in view of the circum- stances or the subject-matter is capable of different con- structions, then resort is had to admissible parol evidence and to rules of construction to reach the intention of the parties. Should these means of reaching the thought of the contract, however, be of no avail, construction The words of Lord Hobart are, however, again quoted with approval by Porter, J., in Townsendz/. Stearns, 32 N. Y. 209. * Dean ^/. Nelson, 10 Wall. 171; Donahoe z/. Kettell, i Cliff. 141 ; Mich. Coll. of Med. V. Charlesworth, 54 Mich. 522 ; Parsons on Contracts, vol. II, p. 566. * " Where the language of a contract is plain and clear, whether it be a charter-party or other written agreement, it must be understood that parties mean what they have plainly expressed, and in such cases there is nothing left for construction." Clifford, J., in Donahoe v. Kettell, I Cliff. 141. See also Maryland v. Railroad Co. 22 Wall. 113 ; McConnell v. New Orleans, 35 La. Ann. 273, and that one of the parties has misapprehended the effect of the words is no obstacle to the enforcement of the intent they clearly ex- press. Insurance Co. v. Mowry, 96 U. S. 546 ; Strohecker v. Farmers' Bank, 6 Pa. St. 41 ; Johnson v. Hathorn, 2 Abb. Ct. App. Dec. 465 ; Holmes v. Hall, 8 Mich. 66; Furbush v. Goodwin, 5 Fost. (N. H.) 425 ; Baines v. Woodfall, 6 C. B. (N. S.) 657. § 232.] RULES OF CONSTRUCTION. 325 cannot attain it, and the contract must either be re- formed in equity or be declared void for uncertainty.^ * Compare Schreiber v. Butler, 84 Ind. 576 ; Win§low v. Winslow, 52 Ind. 8; Bishop on Contracts, § 581; Parsons on Contracts, vol. II, p. 566; Story's Equity, vol. I, pp. 149, i66. Special Eules for Particular Contracts. CHAPTER XIX. RULES FOR CONSTRUCTION OF WARRANTIES IN INSUR- ANCE POLICIES. § 233. What is meant by special rules for particular contracts. 234. Warranties in contracts of insurance said not to be governed by inten- tion. 235. Warranty in policy to be literally interpreted. 236. Reason for construing warranty literally. 237. The intention determines what statements are warranties. 238. If language doubtful intention controls. — Immaterial statements when not warranties. 239. Statements affecting risk are warranties. 240. Language of warranty will not be extended. 241. If contradictory provisions in whole contract, intent sought for. 242. Moulor V. American Life Insurance Co. 243. Schwarzbach v. Ohio Valley Protective Union. 244. The language of the warranty will be interpreted reasonably. 245. Representations interpreted pursuant to the intent. 246. Warranties to be construed by ordinary rules of construction. § 233. What is meant by special rules for particular contracts. — The scope of this volume will not permit a statement of the construction which has been placed upon individual contracts, nor can any attempt be made to classify particular contracts. Special rules of construc- tion have, however, been applied to certain varieties of mercantile contracts, which seem to require brief consid- eration, as in some instances they appear to be at variance with the rules already presented. It is believed, however, that upon examination these special rules will be found to be fully in accord with the principles already set forth. § 234. Warranties in contracts of insurance said not to be governed by intention. — It has been said that al- § 235-] WARRANTIES IN INSURANCE POLICIES. 327 though, generally speaking, that construction of an insurance policy which best corresponds with the real intentions of the parties ought to be adopted, yet this is not a universal rule, since conditions in a policy, which are construed as warranties, are a remarkable exception to it. And in respect to these, it has been asserted, " a rule of strict and literal interpretation has unfortunately been adopted by which it must be confessed the inten- tions of the parties are liable to be defeated." ^ If such an exception to the fundamental principle for the inter- pretation of contracts, which has been illustrated in this volume, is justified by the authorities, it is of great im- portance that it should be clearly brought out. And if, on the other hand, these warranties are interpreted strictly and literally, merely because it is the intention of the parties that they should be so construed, it is highly un- desirable that they should be classed as an exception to a rule pursuant to which they are themselves interpreted. It is necessary, therefore, to consider the present state of the law upon this point. § 235. Warranty in policy to be literally interpreted. — That every warranty in an insurance policy, whether it be a marine, a fire, or a life policy, should be literally in- terpreted, has been frequently asserted.* And it is well 1 Duer on Insurance, vol. I, p. 158; cf. May on Insurance, § 156. 2 " It has been remarked that the ' strictness and nicety ' as to warranties, adopted in the trial 01 questions on policies of marine insurance, are not, to their full extent, applicable to policies ' made by a mutual fire insurance com- pany, in which the insurers assume the risk on the knowledge acquired by an actual survey and examination made by themselves, and not on the represen- tations made by the assured.' But it seems to be very questionable whether there is any such distinction in the construction of warranties in different descriptions of policies. It certainly has not been marked and defined in the cases. A statement of fact, whether in description or otherwise, is considered to be a warranty in a fire policy no less than a marine one, where the fact is one upon which the parties can be presumed to have proceeded as being essential in making the contract. ... In respect to what constitutes a 328 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 235. settled that where there is a breach of a warranty this will avoid the policy however immaterial may be the matter to which it relates.^ It is in this that war- warranty, and in respect to the rules of construction, there does not appear to be any distinction between marine and fire insurance. " Phillips on Insur- ance, 866, 866a. Compare upon the question of the literal construction of warranties, Park on Marine Insurance, vol.11, p. 660 etseq.; Arnould on Marine Insurance, p. S9o; Lowndes on Marine Insurance, § 99 ; Wood on Fire Insurance, p. 130; Bliss on Life Insurance, § 56; May on Insurance, § 156; Anderson v. Fitzgerald, 4 H. L. Cas. 484. ^ Thus Marshall says : " It is quite immaterial for what purpose or with what view it is made, or whether the assured had any view at all in making- it. Unless there has been a literal compliance the assured can derive no benefit from the policy." Insurance, p. 249. See also Phillips on Insurance, § 755 ; Wood on Fire Insurance, p. 130. Where in a policy on a ship for a voyage from Africa to the British West Indies, the ship was warranted " to have sailed from Liverpool with fifty hands," it was held that the policy was void for breach of warranty because she sailed from Liverpool with only forty-six hands, though six more were taken in off Beaumaris, and though she was as safe between Liverpool and Beaumaris with forty-six as with fifty, and it would not have mattered to the under- writers on the outward voyage if she had been lost. De Hahn v. Hartley, I T. R. 343. It is a first principle of the law of insurance that when a thing is war- ranted to be of a particular nature or description, it must be exactly such as it is stated to be. It is no matter whether it is material or not, " the only question is, as to the mere fact." Lord Eldon in Newcastle Fire Ins. Co. v^ Macmorran, 3 Dow, 255. So, in Schwarzbach v. Ohio Valley Protective Union, 25 W. Va. 622 ; S. C. 52 Am. Rep. 227 (1885), Green, J., says: " What is the construction of this policy ? Were all the answers made by the applicant to the questions pro- pounded on his application warranted to be absolutely true, or could the jury- consider whether the answers g^ven, which were not true in whole or in part, were material or immaterial, and whether they tended in any way to injure the defendant below by misleading it and inducing it to enter into a contract and issue a policy which it might possibly have declined had true answers been given to the questions ? The authorities all agree that if, by the con- tract and policy, the applicant warranted his answers to be true in all respects, then this removes their materiality from the consideration of the jury or of the court ; and if the answers are any Of them untrue, though they be such as the court or jury might believe could not have prejudiced the defendant, nor in any degree influenced the defendant in entering into the contract or issuing the policy, yet the insured, or person for whose benefit the policy was taken, cannot recover upon it. For the parties to the contract have for themselves § 236.] WARRANTIES IN INSURANCE POLICIES. 329 ranties differ from representations, for "while a rep- resentation may be satisfied with a substantial and equitable compliance, a warranty requires a strict and literal fulfillment. What it avers must be literally true ; what it promises must be exactly performed."^ Thus, where the words, " In port on the 20th of July, 1776," were written transversely on the margin of the policy, and the vessel sailed on the i8th of July, held that the un- derwriters were freed from liability.^ In another case, however, where the policy provided that a ship should be safe moored in Portsmouth harbor during the con- tinuance of the insurance. Lord EUenborough held that the policy was not avoided by the ship's being moved from one part of the harbor to another for repairs and to take cargo, she being safely moored in each part of the harbor.* § 236. Reason for construing warranty literally. — The reason why the law places such a literal construction upon warranties made by the insured is because the in- surance is granted upon the faith of the accuracy of his statements. The information called for is particu- larly, and often exclusively, within the knowledge of the insured, and it is but just to the insurer, that when he asks for positive and accurate information upon any matter, he should receive it. It is in reliance upon the facts given that the contract is made, and the purpose in requiring a declared that every question and answer should be regarded as material, and an untrue answer should avoid the policy. See yEtna Ins. Co. v. France, 94 U. S. 561 ; JeflFries v. Life Ins. Co., 22 Wall. 47 ; Foot v. i^tna Life Ins. Co., 61 N. Y. 571 ; Powers v. Northeast Mut. Life Ass'n, 50 Vt. 630; Co-operative Association v. Leflore, 53 Miss. i. 1 Arnould on Marine Insurance, p. 590. « Kenyon v. Berthon, i Doug. 12, note (4). 3 Clarke z/. Westmore, cited in Selw. N. P. 1008, and in Arnould on Marine Insurance, p. 895. 330 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 237. warranty is to dispense with inquiry and cast upon the assured the obligation that the facts shall be as repre- sented.^ It is, therefore, in the nature of the contract, and in the relative position of the parties, that the law finds reason for adopting this rule of literal interpretation of warranties. And it is because this method of under- standing them will best carry out the mutual intention of those who have made the contract that it has been the settled habits of courts to act upon it. The intention of the insured alone is not sought, nor is it the intention of the insurer which is to be enforced. But in every case the just and fair meaning of both parties is to be ascer- tained, and to reach this meaning it has been long recog- nized that warranties must be strictly construed.^ § 237. The intention determines what statements are warranties. — That warranties receive a strict construction, therefore, results from a rule of law which is founded on the principle that the intentions of the parties must con- trol. And we find that in the determination of what are the warranties in a contract of insurance, the law looks ' Commonwealth Mutual Fire Ins. Co. v. Huntzinger, 98 Pa. St. 41. 2 " To say that the underwriter should answer for a loss, notwithstanding the other party has failed in his engagements, would be to make a different rule in this species of contract from that which subsists in every other, al- though this of all other contracts depends most upon the strictest attention to the purest rules of equity and good faith. Indeed the obligation of a strict performance of all promises and conditions in every species of contract may be deduced, as has been truly observed by an elegant moral writer, from the necessity of such a conduct to the well-being or the existence of human society. . . . And though the condition broken be not, perhaps, a material one, yet the justice of the law is evident from this consideration : that it is absolutely necessary to have one rule of decision, and that it is much better to say that warranties shall in all cases be strictly complied with than to leave it in the breast of a judge or jury to say that in one case it shall and an- other it shall not." Park on Marine Ins., vol. II, p. 661. § 237-] WARRANTIES IN INSURANCE POLICIES. 33 1 again to the intention of the parties in each case. If, therefore, it clearly appears from the language used that it was the intention of the parties that a statement should not be taken to be a warranty, it will not be construed as such. Thus Judge Duer says : " If to the positive statement these or equivalent words are added : ' It is, however, understood that this statement is not to be con- strued as a warranty but as a representation merely,' its literal fulfillment is no longer requisite, and unless the variation from its terms be such as plainly to enhance the risks, the insurer continues liable." ^ So, on the other hand, whenever it clearly and unmistakably appears, from the language of the policy, that the parties regarded a statement as a warranty, this intention will always be enforced. And this is the rule, whether the statement be contained in the policy itself or in the written application for the insurance. "It is undoubtedly competent for an insurance contract to be so drawn as that it shall become void if the applicant makes any misrepresentation of fact, no matter how immaterial, and if such is the plain lan- guage it will be enforced."^ ^ Duer on Insurance, vol. II, p. 645. ^ Royce, C. J., Mosley v. Vermont Mutual Fire Insurance Co., 55 Vt. 142, citing Boutelle v. Ins. Co., 51 Vt. 4. If the application is made a part of the policy, and provides that all the statements made therein shall constitute warranties on the part of the in- sured, and there is nothing to indicate a contrary intention, the statements will be construed as warranties. Thus where, in such a case, the insured stated that there were no incumbrances on the insured property, and there was a judgment entered against him which was a lien thereon, it was held the policy was avoided. Blooming Grove Mutual Fire Insurance Co. v. Mc- Anerney, 102 Pa. St. 335 ; cf. Commercial Mutual Fire Ins. Co. v. Hunt- zinger, 98 Pa. St. 41. And where a policy made the statements in the appli- cation warranties, and the following questions and answers were contained therein, " Q. How many acres of land in the place ? A. Sixty. What is the value of land and buildings.' A. Seventeen hundred dollars," the Connecti- cut Supreme Court held that the parties made these matters material, whether they related to the risk or not. Bennett v. Agricultural Ins. Co., 51 332 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 238. § 238. If language doubtful intention controls ; immaterial statements when not warranties. — Fre- quently, however, the language used does not make clear whether or not the parties have intended that cer- tain statements shall be considered as warranties. In cases of this character it now seems settled that the court will endeavor to reach the probable intention of the parties by the application of just principles of construc- tion. Statements therefore which are wholly immaterial to the risk, and therefore can, in no way, enhance it, will not be construed to be warranties in the absence of express words making them so.^ Thus a descriptive Conn. 504; S. C, 50 Conn. 420. See also Thomas v. Fame Ins. Co., 108 lU. 91 ; Howard, &c. Insurance Co. v. Cormick, 24 111. 455. "The intention of the parties, as shown by the language used, decides whether any statement is a warranty or only a representation." Bliss on Life Ins., p. 46. In Foot v. ^Etna Life Ins. Co., 61 N. Y. 571, Earl, C, says: " Parties to insurance contracts have a right to make their own bargains, as in other cases. An insurance policy is to be construed like other contracts, with the view to arrive at the intent of the parties. The rule that an insur- ance policy shall be construed most strongly against the insurer can be resorted to only when, after using such helps as are proper to arrive at the intent of the parties, some of the language used, or some phrase inserted in the policy, is of doubtful import, in which case the rule should be applied be- cause the insurer wrote the policy. \Cf. Mowry v. World Mut. Life Ins. Co., 7 Daly, 321.] Here it is clear that both parties intended that the policy and the application or proposal should constitute the contract between them. They sO expressly agreed, and it is so stated both in the policy and the pro- posal, and the anewers and declarations therein made are made part of the policy. Hence the two papers must be construed as if they were embraced in one. All the representations of the assured, contained in the policy by being written therein, or incorporated therein by reference to the proposal, are warranties, and must be substantially true or the policy will be void. It matters not whether the representations are material or not. The parties have made them material by inserting them, and it matters not if the party insured made the untrue statements, innocently believing them to be true." 1 But in Arnould on Marine Insurance, pp. 589, 590, it is said : " It appears to have been held in the United States, that the mere allegation of a fact in the policy is not a warranty, if it be clear from the terms of the policy itself that the fact alleged in the particular case can have no relation to the risk. In a policy ' on the good British brig called John, ' against sea risks only, this § 239-] WARRANTIES IN INSURANCE POLICIES. 333 Statement merely is not a warranty.^ For it is not rea- sonable to hold the assured to a literal compliance with a statement which is wholly immaterial to the risk, unless the insurer has notified him of his intention so to do. § 239. Statements affecting risk are warranties. — All statements contained in the policy itself, which aflfect the character of the risk, will be Construed to be warranties. Thus, in a case in the New York Court of Appeals,* where a policy of fire insurance, issued to the plaintiffs, stated that the property insured was "contained in their frame storehouse, with slate roof, situate, detached at least one hundred feet on the east side of Lake Cham- plain," it was contended that the words, detached at least, one hundred feet, were merely descriptive of the building, but the court held that they constituted a warranty. In this case Finch, J., says : " We think the statement con- mere description of the ship was held there not to be a warranty that she was British, because that fact could not, on such a policy as this, have affected the underwriter's estimate of the risk (Mackie v. Pleasants, 2 Binn. 63). Mr. Phillips considers this distinction well taken, if rigorously confined to cases of the same character (Phillips on Ins., vol. I, No. 758). But, on the whole, it appears better to avoid entering in any case into the question of the materiality of the fact alleged ; first, because it is a departure from what has hitherto been regarded as a fixed principle of decision with regard to warranties as distinguished from representations, and, secondly, be- cause it calls upon the court and jury to decide upon the impossibility of the underwriter being influenced by the fact thus alleged." And many cases are cited to sustain this position. Compare Baring v. Claggett, 3 B. & P. 301 ; Lothian v. Henderson, 3 B. & P. 499 ; Clapham v. Cologan, 3 Camp. 382 ; Duer on Insurance, vol. II, p. 644, note (6). Mr. Phillips says in regard to the doctrine that a statement evidently immaterial to the risk cannot be taken to be a warranty: "This distinction seems to be just, for though the ma- teriality of the fact stated in the policy is not requisite to constitute a war- ranty, yet there seems to be no reason for considering the statement, a recital of the fact to be a warranty, if it evidently cannot have any relation to the risk." Insurance, No. 758. Cf. Wood on Fire Insurance,! 167; May on Insurance, § 1 56. 1 Schultz V. Merchants Ins. Co. 57 Mo. 331 ; supra, n. 2, p. 331 ; infra^ n. 2, p. 334; May on Insurance, § 181 et seq. 2Bu rleigh v. The Gebhard Fire Ins. Co.-, 90 N. Y. 220. 334 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 239. tained in the policies issued by the defendants, describing the building which contained the personal property in- sured as ' detached at least one hundred feet,' is a war- ranty. We cannot hold it to be a mere description of the building for the purpose of identifying the personal property insured contained within it. The phrase is not adapted to any such purpose. It adds nothing to the identity of the storehouse, already sufficiently described by its ownership and situation on the lake. In Wall v. The East River Mut. Ins. Co.,^ the personal property in- sured was described as ' contained in the brick building with tin roof, occupied as a storehouse, situated on the northerly side of and about forty-two feet distant from their ropewalk at Bushwick.' The court said that the identity of the building was distinctly ascertained by other facts of the description, and that the phrase ' occupied as a storehouse ' related to the risk and could not be other- wise applied. The language in the policies before us, as to the detached character of the building, applies fitly to the risk, and is entirely inappropriate as matter of descrip- tion. We must hold, therefore, what indeed was not denied in the dissenting opinion at General Term, or on the argument at our bar, that the phrase in question is not merely descriptive of identity, but relates to the char- acter of the risk. Thus understood and appearing on the face of the policy, it amounts to a warranty." ^ 1 7 N. Y. 370. ^ Citing Alexander v. Germania Fire Ins. Co., 66 N. Y. 464 ; Richards v. Protection Ins. Co., 30 Me. 273 ; Parmelee v. Hoffman Fire Ins. Co., 54 N. Y. 193- A statement in a policy that the building insured is " occupied as a coun- try store " is a warranty that the building was used at the date of the agree- ment for that purpose. Dewees v. Manhattan Ins. Co., 35 N. J. L. 366. So a description of the place of deposit of personal property is a warranty. Bryce V. Lorillard Ins. Co., 55 N. Y. 240. " To be an express warranty it is not necessary it should be in the body or printed part of the policy. It suffices if it be on the face of the poUcy, in § 241.] WARRANTIES IN INSURANCE POLICIES. 335 § 240. Language of warranty will not be extended. — Again the courts will not extend the language of a war- ranty by construction. For it is fair to conclude that neither party expected that the warranted statement should be taken to include anything except what it specifically stated.^ The insurer stipulates for exactly the information he desires, and the insured gives that information and no other. Thus, although the descrip- tion of a house as a dwelling-house is a warranty that it is a house of that character,^ it is not a warranty that the house is at the time of the insurance occupied as a dwelling-house.^ So it has been held that a statement that there " is $4,000 insurance on the property now " was not a warranty that the insurance covered the inter- est of the assured.* § 241. If contradictory provisions in whole contract, intent sought for. — Whenever provisions are found in the policy itself, or in the application, if that is made by the policy a part of the whole contract of insurance,^ which raise a doubt as to the propriety of construing a statement as a warranty to be literally interpreted, the the margin, or at the foot, and written either in the usual way or transversely." Arnould on Marine Ins., p. 588. 1 Griffey v. New York Central Ins. Co., 100 N. Y. 417; Dilleber v. Home Life Ins. Co., 69 N. Y. 256; Planters' Ins._Co. v. Myers, 55 Miss. 479; Wil- kins V. Ins. Co., 30 Ohio, 318; May on Insurance, §§ 170, 17 r. 2 Merwin v. Star Fire Ins. Co., 7 Hun, 659; aff 'd, 72 N. Y. 603. ' Browning v. Home Ins. Co., 71 N. Y. 508. Compare Dolliver v. St. Joseph Ins. Co., 131 Mass. 39. * Planters' Mutual Ins. Co. v. Deford, 38 Md. 382. And where a ship was warranted to carry twenty guns it was held that the warranty was satisfied, though she had not a-crew to work them. Hyde v. Bruce, 3 Doug. 213. Compare Kemble v. Rhinelander, 8 Johns. Cas. (N. Y.) 130. 5 Where the application is not made a part of the contract of insurance, statements contained in it will not be construed to be warranties. Owens v. Holland Purchase Ins. Co., 56 N. Y. 565; Co-operative Asso. v. Leflore, 53 Miss. I. 336 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 24I. whole context will be considered for the purpose of reaching the intention of the parties.^ And the question to be determined will be whether the contract was made in reliance upon the literal truth of the statements of the insured. In the examination of the language the rule that it shall be construed contra proferentem will be ad- hered to, and if no clear intention is discovered from the contract, the statements will be construed as representa- tions.* ^ Higgins V. Phoenix Mut. Life Ins. Co., 74 N. Y. 26 ; Fitch v. American Life Ins. Co., 59 N. Y. 557. If the application and policy declare that the statements in the application shall be warranties, yet, if other parts of the in- strument show that a strict warranty was not intended, the latter must govern. Fitch V. Am. Popular Life Ins. Co., 59 N. Y. 557; S. C, 17 Am. R. 372; cf. Northwestern Mutual Life Ins. Co. v. Heimann, 93 Ind. 24 ; Goucher v. North Trav. Men's Am. Life Ins. Co., 59 Wis. 162; Ripley v. .(Etna Ins. Co., 30 N. Y. 136; Whitney v. Black River Ins. Co., 9 Hun (N. Y.), 36; Sheldon v. Hartford Ins. Co., 32 Conn. 235; Williams v. Ins. Co., 31 Me. 219; jEtna Ins. Co. V. Grube, 6 Minn. 82 ; Redman v. Hartford Fire Ins. Co., 47 Wis. 39. Judge Duer declared himself in favor of considering no statement a war- ranty which was not written in the policy, and said: '" Notwithstanding the bias we all feel in favor of the system to which we have been accustomed, and in which we have been trained, I have been unable to resist the convic- tion that on the subject of representation and warranty the foreign law of in- surance is, for many reasons, preferable to our own. By the law of France, of Italy, of Hamburgh, and of other parts of Europe, every fact deemed material by the parties must be inserted in the policy, but no such statement is construed as a condition, on the literal truth or fulfillment of which the validity of the entire contract depends, unless the intention that it shall be so construed is expressly and unequivocally declared. In all other cases the statement is deemed a simple notification of the facts to which it relates, and although its substantial truth or performance is still regarded as a condition on which the liability of the insurer depends, it is construed with great liber- ality in favor of the assured." Duer on Insurance, vol. II, pp. 653, 654. s In Mosley v. Vermont Mutual Fire Ins. Co., 55 Vt. 147, Royce, Ch. J., says: ''The defendant's second request was that the court should charge the jury that ' the plaintiff cannot recover because it appears from the evidence he furnished the defendant of his loss, and of his bills and books, that he kept on sale, in said store, intoxicating liquors, turpentine, and gunpowder, which, by the express terms of the contract, rendered the policy void.' The condi- tions in the policy upon which this request is founded have been quoted above. They are conditions of forfeiture, inserted for the benefit and protection ot § 242.] WARRANTIES IN INSURANCE POLICIES. 337 § 242. Moulor V. American Life Insurance Co. — In a recent case in the United States Supreme Court the above principles have been forcibly illustrated.^ There the insurer.' Says Colt, J., in the recent case of Turner z/. Meriden Fire Ins Co., U. S. C. Ct. Dist. of R. I., 22 Am. Law Reg. N. S. 275 : ' We believe the general rule, that conditions in insurance policies, inserted for the benefit of the company, should be strictly construed against it, to be a sound one.' And Hughes, J., in American Basket Co. v. Farmville Ins. Co., U. S. C. Ct. Dist. of Va., 8 Rep. 744, says, 'Policies of insurance differ somewhat from other contracts in respect to the rules of construction to be applied to them. They are unipartite. They are in the form of receipts from the insurers to the insured, embodying covenants to compensate for losses described. They are signed by the insurer only. In general, the insured never sees the policy until after he contracts and pays his premium, and he then most frequently receives it from a distance, when it is too late for him to obtain explanations or modifications of the policy sent him. The policy, too, is generally filled out with conditions inserted by persons skilled in the learning of the insurance law, and acting in the exclusive interest of the insurance company. Out of these circumstances the principle has grown up in the courts that these policies must be construed liberally in respect to the persons insured, and strictly with respect to the insurance company.' See also Ins. Co. v. Wilkinson, 13 Wall. 232; Willis V. Hanover, &c. Ins. Co., 79 N. C. 285; Franklin Fire Ins. Co. v. Undegraff, 43 Pa. 350, and authorities cited. Also the remarks of Powers, J., in Brink v. Merchants' &c. Ins. Co., 49 Vt. 442, on p. 457. The New York Court of Appeals, in passing upon the proposition that a clause in an insurance policy providing that the policy should become void, ' if the property shall hereafter become incumbered in any way,' without consent of the company, covered the case of an incumbrance by way of a judgment in favor of a third person, say : ' To so construe it would defeat the contract of insurance in cases which could not have been contemplated. The defend- ant is claiming a forfeiture. When a clause in a contract is capable of two constructions, one of which will support and the other defeat the principal obligation, the former will be preferred. Forfeitures are not favored, and the party claiming a forfeiture will not be permitted, upon equivocal or doubtful clauses or words contained in his own contract, to deprive the other party of the benefit of the right or indemnity for which he contracted.' Bailey z/. Homestead Fire Ins. Co. [N. Y. 1880], 9 Rep. 578." 1 Moulor V. American Life Insurance Co., iii N. S. 335 (1884). The provisions of the policy and the facts shown are thus set forth by Mr. Justice Harlan : " The seventh question in the application for insurance required the insured to answer Yes or No as to whether he had ever been afflicted with any of the following diseases : Insanity, gout, rheumatism, palsy, scrofula, convulsions, dropsy, small-pox, yellow fever, fistula, rupture, asthma, spitting of blood, 32 338 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 242. it appeared that an applicant for life insurance was re- quired by the company to state whether, among other •consumption, and diseases of the lungs, throat, heart, and urinary organs. As to each, the answer of the insured was No. " The tenth question was ; ' Has the party's father, mother, brothers, or sis- ters been afflicted with consumption or any other serious family disease, such as scrofula, insanity, etc.?' The answer was ' No; not since childhood.' " The fourteenth question was : ' Is there any circumstance which renders an insurance on his life more than usually hazardous, such as place of resi- dence, occupation, physical condition, family histoiy, hereditary predisposi- tions, constitutional infirmity, or other known cause, or any other circumstance or information with which the company ought to be made acquainted ? ' The answer was No. " To the sixteenth question, ' Has the applicant reviewed the answers to the foregoing questions, and is it clearly understood and agreed that any un- true or fraudulent answers, or any suppression of facts in regard to health, habits, or circumstances, or neglect to pay the premium on or before the time it becomes due, will, according to the terms of the policy, vitiate the same and forfeit all payments made thereon ?' the answer was Yes. " At the close of the series of questions, nineteen in number, propounded to and answered by the applicant, are the following paragraphs : " It is hereby declared and warranted that the above are fair and true an- swers to the following questions ; and it is acknowledged and agreed by the aindersigned that this application shall form part of the contract of insurance, and that if there be, in any of the answers herein made, any untrue or evasive statements, or any misrepresentation or concealment of facts, then any policy granted upon this application shall be null and void, and all payments made thereon shall be forfeited to the company. " And it is further agreed, that if at any time hereafter the company shall discover that any of said answers or statements are untrue or evasive, or that there has been any concealment of facts, then, and in every such case, the company may refuse to receive further premiums on any policy so granted upon this application, and said policy shall be null and void, and payments forfeited as aforesaid. " The poUcy recites that the agreement of the company to pay the sum specified is ' in consideration of the representations made to them in the application,' and of the payment of the premium at the time specified; fur- ther, ' it is hereby declared and agreed, that if the representations and an- swers made to this company, on the application for this policy, upon the full faith of which it is issued, shall be found to be untrue in any respect, or that there has been any concealment of facts, then and in every such case the policy shall be null and void.' " The main defense was that the insured had been afflicted with scrofula, asthma, and consumption prior to the making of his application, and that in § 242.] WARRANTIES IN INSURANCE POLICIES. 339 named diseases, he had been afflicted with scrofula, asth- ma, or consumption ; and that in reply to the inquiries the applicant stated that he had not. It also appeared that the policy provided for a forfeiture of the policy in case of untrue and fraudulent answers, and contained a declaration and warranty that the answers should be fair and true. The evidence showed that the insured had been afflicted with the above diseases before the applica- tion for the insurance, but that he did not know or be- lieve that he had ever suffered from any one of them in a sensible, appreciable form. Upon a consideration of the whole policy and the application, it was held that the only condition precedent to a binding contract of insurance was that the insured should observe the utmost good faith towards the com- pany, and make full, direct, and honest answers to all questions, without evasion or fraud, and without suppres- view of his statement that he had never been so afHicted, the policy was, by its terms, null and void. " There was, undoubtedly, evidence to show that the insured had been afflicted with those diseases, or some of them, prior to his application ; but there was also evidence tending to show not only that he was then in sound health, but that, at the time of his application, he did not know or believe that he had ever been afflicted with any of them in a sensible, appreciable form. " Referring to the seventh question in the application, the court, after ob- serving that the answer thereto was untrue, and the policy avoided, if the in- sured had been at any time afflicted with either of the diseases last referred to, instructed the jury : 'It is of no consequence in such case whether he knew it to be untrue or not ; he bound himself for its correctness, and agreed that the validity of his policy should depend upon its being so. Again : That he, the insured, did, not know he was then afflicted, is of no importance what- ever, except as it may bear upon the question, Was he afflicted ? If he was, his answer (for the truth of which he bound himself) was untrue, and his knowledge, or absence of knowledge, on the subject is of no consequence. Further : You (the jury) must determine whether the insured was at any time afflicted with either of the diseases named. If he was, his answer in this respect was untrue, and notwithstanding he may have ignorantly and honestly made it, the policy is void, and no recovery can be had upon it.' To so much of the charge as we have quoted the plaintiff excepted." 340 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 242 sion, misrepresentation, or concealment of facts which the company should know, and that, therefore, it was an erroneous construction of the contract to hold that the company was relieved from liability if it merely appeared that the insured was in fact afflicted with any of the dis- eases named. In the opinion of the court Mr. Justice Harlan says : " Assuming — as in view of the finding of the jury we must assume — that the insured was, at the date of his application, or had been prior thereto, afflicted with the disease of scrofula, asthma, or consumption, the question arises whether the beneficiary may not recover, unless it appears that he had knowledge or some reason to believe when he applied for insurance that he was or had been afflicted with either of those diseases. The Cir- cuit Court plainly proceeded upon the ground that his knowledge or belief as to having been afflicted with the diseases specified, or some one of them, was not an essen- tial element in the contract. In other words, if the assured ever had, in fact, any one of the diseases men- tioned in his answer to the seventh question, there could be no recovery, although the jury should find from the evidence that he acted in perfect good faith, and had no reason to suspect, much less to believe or know, that he had ever been so afflicted. If, upon a reasonable inter- pretation, such was the contract, the duty of the court is to enforce it according to its terms; for the law does not forbid parties to a contract for life insurance to stipulate that its validity shall depend upon conditions or contin- gencies such as the court below decided were embodied in the policy in suit. The contracts involved in Jeffi-ies V. Life Ins. Co., 22 Wall. 47, and ^Etna Life Ins. Co. v. France, &c., 91 U. S. 510, were held to be of that kind. But, unless clearly demanded by the established rules gov- erning the construction of written agreements, such an in- terpretation ought to be avoided. In the absence of ex- § 242.] WARRANTIES IN INSURANCE POLICIES. 34 1 plicit, unequivocal stipulations, requiring such an interpre- tation, it should not be inferred that a person took a life policy with the distinct understanding that it should be void and all premiums paid thereon forfeited, if at any time in the past, however remote, he was, whether con- scious of the fact or not, afflicted with some one of the diseases mentioned in the question to which he was re- quired to make a categorical answer. If those who or- ganize and control life insurance companies wish to exact from the applicant, as a condition precedent to a valid contract, a guaranty against the existence of diseases, of the presence of which in his system he has and can have no knowledge, and which even skillful physicians are often unable, after the most careful examination, to de- tect, the terms of the contract to that effect must be so clear as to exclude any other conclusion. "In National Bank v. Insurance Company,^ which was a case of fire insurance, involving, among others, the question whether the statements as to the value of the property insured were warranties, it was said : ' When a policy of insurance contains contradictory provisions, or has been so framed as to leave room for construction, rendering it doubtful whether the parties intended the exact truth of the applicant's statements to be a condition precedent to any binding contract, the court should lean against that construction which imposes upon the assured the obligation of a warranty. The company cannot justly complain of such a rule. Its attorneys, officers, or agents prepared the policy for the purpose, we shall assume, both of protecting the company against fraud and of securing the just rights of the assured under a valid con- tract of insurance. It is its language which the court is invited to interpret, and it is both reasonable and just > 95 U. S. 673. 342 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 242. that its own words should be construed most strongly against itself.' See also Grace v. American Insurance Company, 109 U. S. 278, 282. These rules of interpre- tation, equally applicable in cases of life insurance, forbid the conclusion that the answers to the questions in the application constituted warranties, to be literally and ex- actly fulfilled, as distinguished from representations which must be substantially performed in all matters material to the risk' — that is, in matters which are the essence of the contract. « " We have seen that the application contains a stipula- tion that it shall form a part of the contract of insurance; also, that the policy purports to have been issued upon the faith of the representations and answers in that appli- cation. Both instruments, therefore, may be examined to ascertain whether the contract furnishes a uniform fixed rule of interpretation, and what was the intention of the parties. Taken together, it cannot be said that they have been so framed as to leave no room for con- struction. The mind does not rest firmly in the convic- tion that the parties stipulated for th^ literal truth of every statement made by the insured. There is, to say the least, ground for serious doubt as to whether the company intended to require, and the insured intended to promise, an exact, literal fulfillment of all the declara- tions embodied in the application. It is true that the word ' warranted ' is in the application ; and, although a contract might be so framed as to impose upon the in- sured the obligations of a strict warranty, without intro- ducing into it that particular word, yet it is a fact, not without some significance, that that word was not carried forward into the policy, the terms of which control when there is a conflict between its provisions and those of the application. The policy upon its face characterizes the statements of the insured as representations. Thus, we § 242.] WARRANTIES IN INSURANCE POLICIES. 345 have one part of the contract apparently stipulating for a warranty, while another part describes the statements of the assured as representations. The doubt as to the intention of the parties must, according to the settled doctrines of the law of insurance, recognized in all the adjudged cases, be resolved against the party whose lan- guage it becomes necessary to interpret. The construc- tion must, therefore, prevail which protects the insured against the obligations arising from a strict warranty."^ * In view of the importance of the question involved, and the clearness, with which the law is presented, other portions of the opinion of Mr. Jus- tice Harlan upon this question are here appended : ' ' But it is contended that if the answers of the assured are to be deemed representations only, the policy was, nevertheless, forfeited if those representations were untrue in respect of any matters material to the risk. The argument is that if the insured was at the time of his application, or had been at any former period of his life, seri- ously or in an appreciable sense, afflicted with scrofula, asthma, or consump- tion, his answer, without qualification, that he had never been so afflicted, being untrue, avoided the policy, without reference to any knowledge or belief he had upon the subject. The soundness of this proposition could not be disputed if, as assumed, the knowledge or good faith of the insured as to the existence of such diseases was, under the terms of the contract in suit, of no. consequence whatever in determining the liability of the company. But is- that assumption authorized by a proper interpretation of the two instruments, constituting the contract ? We think not. " Looking into the application upon the faith of which the policy was issued and accepted, we find much justifying the conclusion that the company did not require the insured to do more, when applying for insurance, than observe the utmost good faith, and deal fairly and honestly with it in respect of all material facts about which inquiry is made, and as to which he has or should be presumed to have knowledge or information. The applicant was required to answer yes or no as to whether he had been afflicted with certain diseases. In respect of some of those diseases, particularly consumption and diseases of the lungs, heart, and other internal organs, common experience informs us that an individual may have them in active form without at the time being conscious of the fact, and beyond the power of any one, however learned or skillful, to discover. Did the company expect, when requiring categorical answers as to the existence of diseases of that character, that the applicant should answer with absolute certainty about matters of which certainty could not possibly be predicated ? Did it intend to put upon him the responsibility of knowing that which, perhaps, no one, however thoroughly trained in the study of human diseases, could possibly ascertain ? 344 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 243. § 243. Schwarzbach v. Ohio Valley Protective Union. — Another recent case in which the doctrine that the intention of the parties as derived from the whole con- tract of insurance will control, and that no statement will be taken to be a warranty unless it appears to have been the intention of the parties that it should be liter- ally fulfilled, is Schwarzbach v. Ohio Valley Protec- " The entire argument in behalf of the company proceeds upon a too literal interpretation of those clauses in the policy and application which declare the contract null and void if the answers of the insured to the questions propounded to him were in any respect untrue. What was meant by ' true ' and ' un- true ' answers ? In one sense that only is true which is conformable to the actual state of things. In that sense a statement is untrue which does not express things exactly as they are. But in another and broader sense the word ' true ' is often used as a synonym of honest, sincere, not fraudulent. Looking at all the clauses of the application in connection with the policy, it is reasonably clear— certainly the contrary cannot be confidently asserted — that what the company required of the applicant, as a condition precedent to any binding contract, was that he would observe the utmost good faith towards it, and make full, direct, and honest answers to all questions, without evasion or fraud, and without suppression, misrepresentation, or concealment of facts with which the company ought to be made acquainted ; and that by so doing, and only by so doing, would he be deemed to have made ' fair and true an- swers.' " If it be said that an individual could not be afiflicted with the diseases specified in the application, without being cognizant of the fact, the answer is that the jury would in that case have no serious difficulty in finding that he had failed to communicate to the company what he knew or should have known was material to the risk, and that, consequently, for the want of ' fair and true answers ' the policy was by its terms null and void. But whether a disease is of such a character that its existence must have been known to the individual afflicted and his answer was or not a fair and true answer, is a matter which should have been submitted to the jury. It was an erroneous construction of the contract to hold, as the court below did, that the company was relieved from liability if it appeared that the insured was, in fact, afflicted with the diseases, or any of them, mentioned in the charge of the court. The jury should have been instructed, so far as the matters here under examination are concerned, that the plaintiff was not precluded from recovering on the policy, unless it appeared from all the circumstances, including the nature of the diseases with which the insured was alleged to have been afflicted, that he knew or had reason to believe at the time of his application that he was or had been so afflicted." § 243-] WARRANTIES IN INSURANCE POLICIES. 345 tive Union.^ In this case contradictory provisions were found in the policy and the application, and the court refused to hold the insured responsible for the breach of a representation, declared by the policy to be a warranty, when there was no intention to de- ceive. Green, J., there says: "In ascertaining whether the answer to questions put to the applicant are warran- ties or representations, it should be borne in mind that when a policy contains contradictory provisions, or is so framed as to render it doubtful whether the parties in- tended that the exact truth of the applicant's statements should be a condition precedent to any binding contract, the construction which imposes on the insured the ob- ligations of a warranty should not be favored.^ The case, Washington Ins. Co. v. Raney,^ was one in which this principle of construction was applied, and the answers of the insured were not regarded as warranted to be ab- solutely true. " There are in this contract and policy certain phrases that, taken by themselves, would be warranties of the absolute truth of the answers by the applicant to the questions propounded to him, whether they were ma- terial or not, while in other portions of it there are pro- visions which seems to qualify or contradict this war- ranty of the truth of these answers without regard to their materiality or the good faith with which they were made. Thus, the policy says it was issued " in considera- tion of the representations, agreements, and warranties made by the insured," and, in the application, the insured says : " I hereby represent and warrant that the state- ments and answers above and herein made, and the statements accompanying, are true and correct, and I 1 25 W. Va. 622; S. C. 52 Am. Rep. 227 (1885). 2 Nat. Bank v. Ins. Co. 95 U. S. 673. 3 10 Kans. 525. 346 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 243, have not concealed, withheld, or misrepresented any ma- terial circumstance or fact of the past or present state of my health, condition, or habits of life which the mana- gers of the Ohio Valley Life Insurance Protective Union ought to be made acquainted with, or which renders me unfit for membership in said association. That these answers or statements not written by me were written on my dictation and at my request, and constitute warranties on my part." But in apparent contradiction of these sweeping phrases there follows directly afterward this language : " And if the same be in any material respect untrue or false, or tend to deceive said association, then this contract shall be void." And in the fourth clause of the policy this application con- taining these phrases is made a part of the policy. It may be regarded as settled that in construing a policy the courts lean in favor of the construction which makes a statement of the insured a representation rather than a warranty, and, when taking the whole policy and papers referred to in it as a part of it, together, it is doubtful whether the parties intended that the statements or answers of the insured should be regarded as representa- tions or warranties, the court will construe them to be representations and not warranties."^ > The court cites to this proposition, Wilkinson v. Conn. Mut. Ins. Co. 30 Iowa, 119; Campbell v. N. E. Mut. Life Ins. Co. 98 Mass. 381 ; Garcelon V. Hampden Fire Ins. Co. 50 Me. 580 ; Hall v. Howard Ins. Co. 14 Wend. 385, and says further in the opinion: "Applying these rules in this case it is true that the applicant in one part of his application says : ' I hereby rep- resent and warrant the answers above are true and correct.' The words by themselves constitute a warranty. But in the same application the applicant states : ' If these answers and statements be in any material respect untrue or false, or tend to deceive the association, this contract shall be void.' This unqualified warranty first set forth in the application of the insured imme- diately following the answers, and also the unqualified warranty with which this application commenced ' that he did thereby declare and warrant that he was then of sober and temperate habits, in good health, of sound body § 244-1 WARRANTIES IN INSURANCE POLICIES. 347 § 244. The language of the warranty will be in- terpreted reasonably. — So, although every warranty will be interpreted strictly and literally if the language used leaves the exact meaning uncertain, it will be interpreted reasonably and according to the probable intention of the parties in view of their whole contract. Thus, in a case where the warranty was that the insured should keep eight buckets filled with water on the first floor where the machinery was run and four in the basement, by the reservoir, ready for use, it was held that if " the jury believe from the evidence that buckets could not be kept in the mill filled with water all the time in accord- ance with the literal provisions of the policy, because of freezing, then a literal compliance with the said pro- visions of the policy concerning buckets, was not re- quired and could not have been in the contemplation of and mind, and that he did usually enjoy good health, and that his age at his next birth-day was fifty-six years,' are to be construed in connection with the statements contained in the latter part of this application, ' if these statements and answers be in any material respect untrue or false, or tend to deceive the association, then this contract shall be void, and any benefit to other persons at the death of the insured shall be forfeited to said association.' When so construed, according to the rules above laid down, they convert what might have been warranties into representations, and require of us to apply the law which belongs to representations and not to warranties to this case. The law, as I understand, is that when a fact is specifically inquired about by this specific inquiry, the insurer shows that he regards this fact as material ; and a misrepresentation contained in an answer to such questions avoids the con- tract though the court or jury may think the inquiry is not in reality material, that is that a true answer would probably have prevented the policy from issuing, or if issued, would have caused the premium demanded to be in- creased (Miller v. Mut. Life Ins. Co. 31 Iowa, 266; s. C. 7 Am. Rep. 132; Campbell v. N. E. Mut. Life Ins. Co. 98 Mass. 381-403). If the answer to a question is untrue the jury has no right to say that the variation from the truth is as to a matter not material (Fitch v. Am. Pop. Life Ins. Co. 2 Thomp. & Cook, 247). But whether a particular inquiry be made as to a fact or not, any statement as to a material fact which is a misrepresentation will avoid the policy (Daniels v. Hudson R. F. Ins. Co. 12 Cush. 416). By a material fact is meant one which would probably have caused the policy not to be issued or caused a change of the terms on which it was issued." 348 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 244. the parties when the policy was made, but all that was required by the plaintiff in order to comply with such stipulation was to have the required number of buckets in good and serviceable condition at the proper places ready for instant use.^ So where one was asked whether he " had ever had disease of the liver," and he replied " no," the court held that, although this was a warranty, the object was to obtain the sense of the words as the parties used them, and that, to do this, the nature of the contract, the objects to be attained, and all the circum- stances, should be considered ; and that the fact that the insured had suffered temporary disorders or functional disturbances not bearing upon his general health, did not affect the truth of his statement.^ And where it was 1 Aurora Fire Ins. Co. v. Eddy, 50 111. 106. It was lurther held, in this case : " It is also urged that there was a breach of the warranty in the policy, that no stoves were used. The question was asked, ' How is the building warmed ? If any stoves or pipes, how are they secured ? To this it was answered, ' No stoves used.' Appellee agreed, in the application, that if any untrue answer was given therein the insurance was to be void, and the policy of no effect. It is not contended that the buildings, or any part of them, were then warmed by a stove, but that one was subsequently used for the purpose, and that this representation was a continuing one, and was a warranty that a stove would not be used for warming purposes. In the case of Schmidt v. The Peoria Fire & Marine Ins. Co. 41 111. 295, a similar rep- resentation was held not to be a continuing warranty that there should be no fire in the tannery, except under the boiler, as represented, during the life of the policy, but only a representation of the condition of the property at the time the policy was issued. We will not give a forced construction to language to enable a party to enforce a forfeiture, but rather adhere to the natural import of the words used. In this case the questions and answers are in the present and not in the future tense. The use, then, of the stove was not a breach of the warranty." 2 Cushman v. U. S. Life Ins. Co. 70 N. Y. 72, Earl, J., says: "In con- struing a policy of life insurance it must be generally true that, before any temporary ailment can be called a disease, it must be such as to indicate a vice in the constitution, or be so serious as to have some bearing upon general health and the continuance of life, or such as according to common under- standing would be called a disease." See also Conn. Mut. Life Ins. Co. v. Union Trust Co. U. S. Sup. Ct. Am. Law Reg., vol. XXIV, 1885; Park on Ins., vol. 11, p. 933; Chattock v. Shawe, i M. & R. 498; Fowkes v. The § 244-J WARRANTIES IN INSURANCE POLICIES. 349 contended that a warranty which stated that a building was " detached at least one hundred feet," was so ambig- uous as to be void, the court held that the words should receive a just interpretation in view of the intention of the parties.^ M. & L. Life Ins. Co. 3 F. & F. 440; Highe v. Guardian Mut. L. Ins. Co. 53 N. Y. 603 ; Cady v. Imperial Ins. Co. 4 Cliff. 203. 1 Burleigli v. The Gebhard Fire Ins. Co. 90 N. Y. 220, and upon this point Finch, J., says: "We do not think the language is so vague or ambig- uous as to make the warranty void. The fair import of the words and the intent of the parties indicated by the terms of their agreement must guide the construction. It cannot be doubted that both parties perfectly under- stood the meaning of the phrase to be that the storehouse stood by itself as a detached or separate building and apart from other buildings at least a dis- tance of one hundred feet. The expression, although brief, is not meaning- less, but to the common understanding, and especially in connection with an insurance against fire, conveys unmistakably the idea we have expressed and must have been so understood by each of the contracting parties. If it did not mean that, it meant nothing, and what was intended as a serious business transaction becomes an idle play with words. But the further con- tention, that the language must be held to mean, detached one hundred feet from any other building of such character as to constitute an exposure and increase the risk, seems to us a sensible and just construction. The brevity of the language requires that something be added to complete and elucidate the meaning. The phrase may mean detached one hundred feet from any other building, whatever its size or character. This would be a rigorous and severe interpretation, most favorable to the insurer and operating harshly upon the insured. So construed it would make anything which would be deemed a building, however small or insignificant, as an ice-house, or privy, or open shed, within the prescribed distance, operate as a breach of the warranty. If a construction so literal or severe is intended by the insurer, he should at least say so by apt and appropriate language, and not ask the courts to supply it by intendment. If it be granted that such small and in- significant structures were not meant, and should be treated as if they did not exist, the question would remain how small and how insignificant must they be to be disregarded, and how large and of what character to justify a conclusion of breach of the warranty, and where and upon what principles is the line to be drawn between buildings strictly such, but proper to be dis- regarded, and those whose presence breaks the warranty. These questions can be wisely answered in but one way. The test must be whether the building within the distance named is or is not an exposure which increases the risk. One which does not can scarcely be supposed to come within the warranty, unless such result is indicated by explicit language which will bear no other reasonable interpretation. No such language is contained in these 350 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 245. § 245. Representations interpreted pursuant to the intent. — In like manner the language of the representation will be interpreted reasonably and according to the in- tention of the parties in its use. If therefore the insurer observes the utmost good faith toward the insured, and there is an absence of all fraud, whether actual or legal, a material misrepresentation will not avoid the policy.^ policies, and when the courts are asked to supply a defect and complete an imperfect phrase, they should remember that the necessity is the fault of the insurer, and construe the language in view of the natural understanding of the parties, and with justice- to both. Declining to hold the phrase in the policy to be meaningless and void, we are compelled to choose between two constructions ; the one rigorous and hard and producing a forfeiture, and the other natural and reasonable and supporting the obligation. We have heretofore decided that in such cases the latter construction is to be pre- ferred (Baley v. Homestead Fire Ins. Co. 80 N. Y. 21 ; 35 Am. Rep. 570). We hold, therefore, that the warranty in this case was that no other building, of such size and character as to constitute an exposure and increase the risk, stood within one hundred feet of the storehouse. Thus construed it is ap- parent that the warranty was not broken." 1 In Schwarzbach v. Ohig Valley Protective Union, 25 W. Va. 622; S. C. 52 Am. Rep. 227 {supra, § 243), Green, J., says, in regard to this question : ■" There has been considerable diversity of opinion as to what constitutes a mis- representation which avoids a policy. Some hold that if the representation is materially untrue, it avoids the policy, even when it is made in good faith and is the result of ignorance (Campbell v. New Eng. Mut. Life Ins. Co. 98 Mass. 381, and Vose v. Eagle Life and Health Ins. Co. 6 Cush. 42). But there are other cases in which it is held that a representation as to a material fact will not necessarily avoid a policy, simply because it is untrue, and that in addi- tion to its untruth, its falsity must be known to the insured (Wheelton v. Hardisty, 8 El. & B. 232 ; Anderson v. Fitzgerald, 4 H. L. Cas. 484; 24 Eng. L. & Eq. I. See also remarks of Lord Mansfield in Ross v. Bradshaw, I Wm. Bl. 313, and in Stackpole v. Lenion, cited in Park Ins. 392. See also Rawlins v. Desborough, 2 Mood. & R. 328, 333 ; Huckman v. Fernie, 3 M. & W. 505 ; Sweete v. Farlie, 6 C. & P. l). It seems to me that no particular or arbitrary rule should be applied to life policies. After a long controversy in England it may now be regarded as well settled there that to make a vendor responsible in damages for a representation, which turns out to be untrue, it must be made mala fide and not in the bona fide belief that it is true. And this is supported by the weight of American authorities. See Crislip V. Cain, 19 W. Va. 471 and 472, where these English cases are all cited. But it should always in this connection be borne in mind, that if one represents as personally known to him what is not true, though he may be- § 245-] WARRANTIES IN INSURANCE POLICIES. 35 1 But where a policy was granted on the life of one, sub- ject to the condition that if any fraudulent or untrue statement was contained in any of the documents ad- lieve it, he has in contemplation of law acted mala fide, and is g^uilty of a legal fraud, though he may in point of fact have acted bona fide; and in such a case he is responsible for any injury resulting from his false represen- tation (Cabot V. Christie, 42 Vt. 121 ; Hammatt v. Emerson, 27 Me. 308, 326; Bennett v. Judson, 21 N. Y. 238; Stone v. Denney, 4 Mete. 151; Hazard w. Irwin, 18 Pick. 95; Fisher v. Mellen, 103 Mass. 506). These cases are cited and this doctrine considered and approved in Crislip v. Cain, 19 W. Va. 491 to 493. " This doctrine has peculiar and special application to policies of life in- surance, for it is obvious that most of the facts set out, especially in the ap- plications now generally attached to the policy, and expressly made a part of it, are facts peculiarly within the knowledge of the insured, and whether he says so or not must be regarded as stated on his own personal knowledge, and hence with reference to most facts, especially when stated in answers to questions propounded to him, he must be regarded as making them on his own personal knowledge, and as being by him intended to be so understood by the insurer. This being the case, if a part of this description is untrue in point of fact, he is guilty of legal fraud, though he may not have intended to ■deceive, and really did not act mala fide in point of fact. But sometimes facts are stated by the insured, which the insurer must, from the nature of the fact stated, have known were not stated as facts absolutely true ■ and within the personal knowledge of the insured. When the fact stated is of this description, on the principles we have laid down, the policy should not be avoided merely because the statements turn out afterward to be in point of fact untrue, if the statement was made in perfect good faith and with the full belief, when the statement was made, that it was true. Of this character would be a statement in an application that the insured was of 'sound body ; ' for of course the insurer must have understood such a statement as ■ made not upon the personal knowledge of the insured, but upon his belief from all the knowledge he had of his constitution. For of course men some- times believe they are of ' sound body,' when in point of fact they have some ' internal disease, ' which in its character, is fatal. When such a statement as this is made in an application for a life policy on the principles we have laid down, the policy is not forfeited, if the statement turns out to be untrue, if, when it was made, the insured believed that he was of ' sound body' and had no suspicion that he was the subject of an 'internal disease' fatal in its character. If, on the other hand, the insured in his application should state in answer to a question, that he had not had a serious illness for seven years, this statement the insurer must have regarded as made on his own personal knowledge ; and if in point of fact it was untrue, on the principles we have stated it must forfeit the policy, though he did not make the statement in 352 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 246, dressed to thg insurers in relation to the insurance, then the policy should be void, and it appeared that the in- sured had stated in reply to questions that he had never had any serious disorder requiring confinement, except one, which was described, and that in fact he had in a subsequent attack of illness been in danger of losing his life, it was held that he made an untrue statement which avoided the policy, although the jury found there was no intention to deceive, and no material information with- held.^ § 246. Warranties to be construed by ordinary rules of construction. — It may therefore be asserted that in the construction of warranties contained in policies of in- surance there is no departure from the principle that the intention of the parties must control. And that the rules for the interpretation of such warranties are in complete accord with the principles for the interpretation of other mercantile contracts.^ point of fact mala fide, that is, with a purpose of deceiving, but only from thoughtlessness or forgetfulness, or because he had forgotten that a serious illness, which he had had, was within seven years. ' ' ' ' I apprehend that the conflict of authorities on the question, whether there must be fraud in a misrepresentation of a fact, in order to avoid a policy, has arisen principally from a failure to distinguish between actual fraud, that is, a misstatement of a fact made with the intention of deceiving, and legal fraud, which is a misstatement of a matter within the personal knowledge of the insured, or of such a character that the insured must have regarded it as within the personal knowledge of the insured. Such a mis- statement of a matter of this character is a legal fraud, though it was not made with intent to deceive. And I apprehend the law to be, that a misrep- resentation of a fact made by the insured, whether such misrepresentation be an actual fraud or a legal fraud, will avoid a policy ; but if there be an absence of all fraud, legal or actual, in the misrepresentation of a fact, such misrepresentation will not avoid a policy." 1 Cazenove v. British Equitable Ins. Co., 6 C. B. N. S. 437 ; S. c. 29 L. J. C. P. 160. 2 See Norrington v. Wright, U. S. Sup. Ct. 1885, 32 Alb. Law Jour. 444, as to the construction of warranties in mercantile contracts. CHAPTER XX. CONSTRUCTION OF GUARANTIES, AND OTHER SPECIAL CONTRACTS. § 247. Question to be considered with regard to guaranties. 248. No occasion for question if contract is clear. 249. Reason for construing other contracts, contra proferentem applies to guaranty. 250. Authorities uphold rule that construction should be against guaran- tor. 251. Authorities questioning or limiting rule. 252. A surety is favored by the law, his contract will not be extended. 253. Contracts of carriers interpreted by ordinary rules. 254. Carriers' exemptions from liability. 355. Intention sought whatever is nature of contract. 256. Meaning of language in different contracts not the same. § 247. Question to be considered with regard to guaranties. — The question has arisen whether the ordi- nary rule of construction that language is to be inter- preted contra proferentem applies to the interpretation of guaranties and other contracts of suretyship. It is therefore proposed to consider how the language of guaranties is to be read and to determine if the courts have adopted any peculiar rule for reaching the probable intentions of the parties who have entered into ambigu- ous contracts of this character. § 248. No occasion for question if contract is clear. — It is to be remembered that this rule of contra profer- entem is not in any case to be invoked until it is impos- sible to discover the actual meaning of the parties from the language viewed in the light of the circumstances.^ In the construction of guaranties, therefore, there is no 1 Supra, § 227. 33 354 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 249. occasion for reference to the rule if the actual intention is clear without it. For if the parties have plainly declared their meaning, courts have but to enforce it. And if the intention is not ascertained from the language alone, the circumstances, and all the light which admissible parol evidence may bring is to be regarded before a resort to the rule becomes necessary.^ If, however, the intention is not discovered with such help the question will arise : How may the court give to this language that meaning which is its just and reasonable meaning ? And to answer this inquiry it is essential to determine whether words shall be taken against the " utterer," or in his favor. § 249. Reason for construing other contracts contra proferentem applies to guaranty.- — We have found that the rule, that ambiguous language shall be construed against the party using it, is adopted as a reasonable method of reaching the probable intention of both the parties to the contract. It may be that this interpreta- tion will defeat the meaning which the promisor hoped to fix upon his words, or it may be that it will give to them a sense which was not in his mind at the time he used them, but having employed them as descriptive of his own obligations, he is held to that meaning which they would convey to a reasonable man called to act upon them. It is this meaning which is to be taken as expressive of the mutual will of the parties. 1 In the Evansville Nat. Bank v. Kaufmann, 93 N. Y. 273, Ruger, Ch. J., says; " When, therefore, the language of a guaranty is ambiguous and does not furnish conclusive evidence of its meaning, we are entitled to look at all of the circumstances pf the case and arrive at the intention of the parties from these sources of information," citing Agawam Bank v. Strever, l8 N. Y. 502; Brandt on Suretyship, io6 ; Walrath v. Thompson, 4 Hill, 200 ; Fell's Law of Guaranty, 43 ; Gates v. McKee, 3 Kern. 232 ; Keate v. Temple, i B. & P. 1 58 ; Springsteen v. Samson, 32 N. Y. 703; KarnmuUer v. Krotz, 18 Iowa, 3,52; Hasbrook v. Paddock, i Barb. 637. See also infra, n, 3, p. 355." § 249'] CONTRACTS OF SURETYSHIP. 355 The same principle applies to thp interpretation of guaranties. The language is that of the guarantor. It is descriptive of his obligations. It is written for his protection. If it does not clearly express his contract he is to blame. On the other hand the creditor has nothing to do with the formation of the contract. It comes to him complete, and he interprets it in the sense most favorable to his own interests, " for every one seeks his own advantage and consequently engages himself to as little inconvenience as possible."^ Moreover the contract of the principal debtor in many cases is the very contract which the guarantor subscribes. What this contract means is, as has been observed, the same question, whether it arises in an action against the princi- pal or the guarantor, and the same rules for reaching its meaning must necessarily apply.^ Although, therefore, effort should be made to reach the actual intention by a resort to every lawful help, if this may not be accom- plished, it is but reasonable and just to construe the lan- guage against the interests of the guarantor.^ ' Powell on Contracts, p. 238. 2 The contract of the surety or guarantor being just as legal as that of the principal, there is no good reason for holding that in arriving at the intention of the parties, one set of rules shall govern when the principal, and another when the surety or guarantor is concerned. To say that a certain set of words in a contract mean one thing when the principal is defendant, and that the same words in the same contract mean another thing, simply because the defendant is a surety or guarantor, is absurd. The meaning of the words is not affected by the fact that the party sought to be charged is principal, surety, or guarantor." Brandt on Suretyship and Guaranty, § 80. ' In Laurance v. McCalmont, 2 How. 426, 449, Story, J., said : " Some remarks have been made, on the argument here, upon the point, in what manner letters of guaranty are to be construed ; whether they are to receive a strict or a liberal interpretation. We have no difificulty whatever in saying that instruments of this sort ought to receive a liberal interpretation. By a liberal interpretation, we do not mean that the words should be forced out of their natural meaning, but simply that the words should receive a fair and reasonable interpretation, so as to obtain the objects for which the instru- ment is designed, and the purposes to which it is applied. We should never 356 , SPECIAL RULES, TARTICULAR CONTRACTS. [§ 25O. § 250. Authorities uphold rule that construction should be against guarantor. — Many authorities now sus- tain the doctrine that in construing the ambiguous lan- guage of a guaranty, it must be taken against the inter- ests of the surety. In a recent case in New York it is said : ^ " Some controversy appears by the case to have forget that letters of guaranty are commercial instruments generally drawn up by merchants in brief language, sometimes inartificial, and often loose in their structure and form; and to construe the words of such instruments with a nice and technical care, would not only defeat the intentions of the parties, but render them too unsafe a basis to rely on for extensive credits. The remarks made by this court in Bell v. Bruen (l How. 169-186), meet our entire approbation. In the latter case the court said: ' We think the court should adopt the construction which, under all the circumstances of the case, ascribes the most reasonable, probable, and natural conduct to the parties.' In the language of this court, in Douglass v. Reynolds (7 Pet. 122), ' every instrument of this sort ought to receive a fair and reasonable interpretation, according to the true import of its terms. It being an engagement for the debt of another, there is certainly no reason for gfiving it an expanded signifi- cation, or liberal construction, beyond -the fair import of its terms.' Or, it is ' to be construed according to what is fairly to be presumed to have been the understanding of the parties, without any strict technical nicety ; as declared in Lee v. Dick (10 Pet. 493). The presumption is, of course, to be ascer- tained from the facts and circumstances accompanying the transaction." It was further said, in the case of Douglass v. Reynolds {supra), "as these instruments are of extensive use in the commercial world, upon the faith of which large credits and advances are made, care should be taken to hold the party bound to the full extent of what appears to be his engagements ; and for this purpose, it was recognized by this court in Drummond v. Prestman (12 Wheat. 515), as a rule in expounding them, that the words of the guaranty are to be taken as strongly against the guarantor as the sense will admit." 1 The Evansville Nat. Bank v. Kaufmann, 93 N. Y. 273. In Rindge v. Judson, 24 N. Y. 64, the guaranty was: " I will be accountable to you that Mr. B. will pay you for a credit on glass, paints, etc., which he may require in his business to the extent of fifty dollars,'' and James, J., said : " The prin- cipal question for adjudication is whether the instrument sued on is or is not a continuing guaranty. As was said by Justice Denio, in Gates v. McKee (3 Kern, 232), ' if this were the first time that an instrument of this character had come before the courts, and we were called upon to construe it without reference to adjudged cases, we would find no difficulty in holding that the limit of fifty dollars had reference to the amount of the defendant's liability rather than the amount of dealing between Butler and Rindge.' " Had the guarantor desired or intended to limit his responsibility to a single transaction, or to several transactions not exceeding that sum in all, it was so § 250.] CONTRACTS OF SURETYSHIP. 357 formerly existed in respect to the rule governing the courts in the construction of guaranties, whether that should apply which entitled a surety to have his contract strictly construed, or that imposing upon a party using easy to have said it in plain and unmistakable terms, that if he has failed to do so, and by equivocal language induced the guarantee to part with goods, he should be held to abide the consequences. " Except to demonstrate principles, not much aid can be obtained from adjudged cases in determining questions of this kind ; because each case must depend mainly upon the terms of the instrument, and it is scarcely possible that two instruments should be precisely alike. The cases upon this question do not all agree upon the principle by which such agreements should be con- strued ; and I think this case must turn mainly upon the question whether the contract is to be strictly construed, or whether it is to be construed Hke other instruments. I had supposed the question disposed of by this court in Gates V. McKee {supra), but as the Supreme Court has seen fit to question the correctness of that decision, it may not be inappropriate to refer again to the cases bearing upon that subject. " The leading English case is Mason v. Pritchard (12 East, 227), where it was laid down by the court that ' the words were to be taken as strongly against the party giving the guaranty as the sense of them would admit.' That case was followed by Hargrave v. Smee (6 Bing. 244), where Chiet Justice Tindal said : ' The question is, what is the fair import to be collected from the language used in this guaranty .'' The words employed are the words of the defendant, and there is no reason for putting on a guaranty a construction different from that which the court puts upon any other instru- ment. With regard to other instruments the rule is, that if the party execut- ing them leaves anything ambiguous in his expressions, such ambiguity must be taken most strongly against himself.' Park, J., said : ' The only question of principle which has been agitated on the present occasion is whether these instruments are to be construed strictly ; and I am not disposed to hold the doctrine which has been imputed to Lord Wynford, that a guaranty ought to receive a strict construction. That was not the principle adopted in Mason V. Pritchard, by Mr. Baron Wood, who tried the cause, and the very learned persons who decided it.'" In Meyer v. Isaac, 6 M. & W. 605, Parke, B., on the argument, referred to the case of Nicholson v. Paget {infra, n. i, p. 360), as " at variance with the general principles of the common law that words are always to be taken most strongly against the party using them." And Alderson, B., delivering the judgment of the case, said: "There is con- siderable difficulty in reconciling all the cases on this subject ; which princi- pally arises from the fact that they are not quite at one on the principle to be followed in deciding questions of this sort, some laying it down that a liberal construction ought to be made in favor of the person giving the guaranty; and others that it ought to be in favor of the party to whom it is given ; which 358 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 250. the language, the liability of having it interpreted most strongly against him, but the weight of authority now seems to favor that construction which shall accord with the apparent intention of the parties in conformity with the rule governing the construction of contracts gen- erally." In a case where a guaranty, contained in an assign- ment of a mortgage, read : " I do hereby guarantee the payment of the said mortgage at the time therein speci- fied, but only upon the failure of the said A. W. to pay the same," it was claimed that the guarantor became responsible only after the exhaustion of the remedy on the bond. The New Jersey Supreme Court would not so construe the contract, and Beasley, Ch. J., said: "The subject of construction of written contracts is regulated by legal principles, and none of them admit of the arbi- trary introduction into these instruments of such stipula- tions as the judicial imagination may suggest as being within the line of the intention of the parties, but which they have failed to express. If the clause in question, viewed in its terms and with reference to the context, is was the rule adopted by the court of Queen's Bench in Mason v. Pritchard. Now the generally received principle of law is, that the party who makes any instrument should take care so to express the amount of his own liability as that he may not be bound beyond what it was his intention that he should be ; and, on the other hand, that the party who receives the instrument and parts with his goods on the faith of it, should rather have a construction put upon it in his favor, because the words of the ifistrument are not his, but those of the other party ; and, therefore, if I were obliged to choose between the two conflicting principles which have been laid down on this subject, I should rather be disposed to agree with that given in Mason v. Pritchard than with the opinion of Bagley, B., in Nicholson v. Paget." See also Union Bank v. Costers' Extrs. 3 N. Y. 203; Dobbin v. Bradley, 17 Wend. (N. Y.)' 422'; Locke w. McVean, 33 Mich. 473 ; Bent 7/. Hartshorn, 42 Mass. 24; White ■V. Reed, 15 Conn. 457; Rapelje z/. Bailey, 5 Conn. 149; Falley z/. Giles, 29 Ind. 114; Tatum v. Bonner, 27 Miss. 760; Brandt on Suretyship and Guar- anty, § 78; De Colyar on Guaranties, etc., p. 211; Story on Contracts, vol. I, § 1 1 22 et seq § 250.] CONTRACTS OF SURETYSHIP. 359 SO obscure or uncertain that the sense of the contracting parties with respect to it is altogether supposition and conceit, then the result is, the clause becomes in law a mere nullity. The first clause of this agreement is per- fectly clear. It is a guarantee that the money will be paid at a time named. The second clause should be equally clear before it is allowed to override and super- sede such plain expression. Neither should it be forgot- ten, in this connection, that this language, whose want of clearness is the cause of embarrassment, is that of the defendant himself, and that, consequently, he is not in a situation to claim an indulgent interpretation of it. 'It may then be considered,' says Mr. Burge in his treatise on suretyship,^ ' that the contract of guarantee or surety will be subject, as every other contract, to the rule that where there is ambiguity or obscurity which the other parts of the instrument do not explain, it is to be con- strued fortius contra proferentem. That is, against the party giving the contract' Applying this rule, it appears to me plain that as the first of these clauses is clear, and the second of them obscure, the former must prevail." ^ And in Wood v. Priestner,® Martin, B., says : " I cannot assent to the opinion expressed by Bayley, B., in Nichol- son V. Paget,* that a contract of guarantee ought to be read in any peculiar way. I think it should be read in the same way as any other contract." It may, indeed, be asserted to be the law, both in England and in this coun- try, that the words of the guaranty are to be taken as strongly against the guarantor as the sense will admit* » Page 46. 2 Hoey V. Jarman, 39 N. J. L. 525. Compare Shine v. The Central Sav. Bank, 70 Mo. 524; The First Nat. Bank v. Edgerton, 56 W^is. 87. 3 L. R. 2 Ex. 70. * I Cr. & M. 52. 5 Mason v. Pritchard, 12 East, 227; Drummond v. Prestman, 12 Wheat. 515- 360 SPECIAL RULES, PARTICULAR CONTRACTS. [§251. § 251. Authorities questioning or limiting rule. — The rule that the construction of the language of a guaranty- should be against the guarantor, although justified in principle and sustained by authority, has been questioned.^ The reason for this seems to have been that the distinc- tion between ascertaining the meaning of the contract and holding the surety to a strict compliance with its terms has not been clearly appreciated.^ This difficulty is apparent in the opinion of Allen, J., in a case in the New York Court of Appeals,^ which, although it clearly shows the propriety of construing a guaranty against the guarantor, seems to suggest that in some cases the con- struction should be in favor of the surety. It is said in the case referred to : "There is no rule exclusively appH- cable to instruments of suretyship, and requiring them to be in all cases interpreted with stringency and critical acumen in favor of the surety and against the creditor, and all ambiguities to be resolved to the advantage of the promisor, and every liability excluded from the operation of the instrument that can, by a strained and refined con- struction, be deemed outside of the agreement. In guar- 1 Thus, in Nicholson v. Paget, J C. & P. 395, Bayley, B., said : "This is a contract of guaranty, which is a contract of a peculiar description ; for it is not a contract which a party is entering into for the payment of his own debt, or on his own behalf. But it is a contract which he is entering into for a third person, and we think that it is the duty of the party who takes such a security to see that it is couched in such words as that the party so giving it may distinctly understand to what extent he is binding himself. ... It is not unreasonable to expect from a party who is furnishing goods on the faith of a guaranty that he will take the guaranty in terms which shall plainly and intelligibly point out to the party giving the guaranty the extent to which he expects that the liability is to be carried." But as to this case, see, supra, n. 3. p- 355- And in Mauran v. Bullus, 16 Pet. 537, Mr. Justice McLean said : "Generally, all instruments of suretyship are construed strictly, as mere mat- ters of legal right." See also Cremer v. Higginson, i Mass. 323; Melville v. Hayden, 3 B. & Aid. 593. 2 Compare The Evansville Nat. Bank v. Kaufmann, 93 N. Y. 273 ; Brandt on Suretyship, § 80; infra, § 252. 8 Belloni v. Freeborn, 63 N. Y. 383. § 252.] CONTRACTS OF SURETYSHIP. 361 antees, letters of credit, and other obligations of sureties, the terms used and the language employed are to have a reasonable interpretation according to the intent of the parties, as disclosed by the instrument, read in the light of the surrounding circumstances and the purposes for which it was made. If the terms are ambiguous, the ambiguity may be explained by reference to the circum- stances surrounding the parties and by such aids as are allowable in other cases; and, if an ambiguity still re- mains, I know of no reason why the same rule which holds in regard to other instruments should not apply, and if the surety has left anything ambiguous in his ex- pressions, the ambiguity be taken most strongly against him. This certainly should be the rule to the extent that the creditor has, in good faith, acted upon and given credit to the supposed intent of the surety. He is not liable on an implied engagement, and his obligation can- not be extended, by construction or implication, beyond the precise terms of the instrument by which he has be- come surety. But in such instruments the meaning of written language is to be ascertained in the same manner and by the same rules as in other instruments; and when the meaning is ascertained, effect is to be given to it." § 252. A surety is favored by the law, his contract will not be extended. — But when once the terms of the contract into which the guarantor has entered are ascer- tained, we are brought to another rule of law, which is frequently mentioned by judges, and which has occasioned the difference of opinion in regard to the manner of con- struing guaranties. This is the rule, that the surety is a favorite of the law and has a right to stand upon the strict terms of his obligation.^ 1 "A rule never to be lost sight of in determining the liability of a surety or guarantor is that he is a favorite of the law, and has a right to stand upon 362 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 252. Kent has said : " This rule is founded upon the most cogent and salutary principles of public policy and jus- tice. In the complicated transactions of civil life, the aid of one friend to another, in the character of surety or bail, becomes requisite at every step. Without these constant acts of kindness and assistance, the course of business and commerce would be prodigiously impeded and disturbed. It becomes, then, excessively important to have the rule established that a surety is never to be implicated beyond his specific agreement."^ When, the strict terms of his obligation when such terms are ascertained." Brandt on Suretyship and Guaranty, § 79. " Though, however, as just pointed out, a guaranty is to be construed most strongly against the party giving it, yet there is a second general rule which must never be lost sight of, and which may, in some instances, restrain the operation of the first. This is the rule, that a surety is not to be charged beyond the precise terms of his engagement." De Colyar on Guaranties, p. 213. See also The Evansville Nat. Bank v. Kaufmann, 93 N. Y. 273; Shine v. The Central Sav. Bank, 70 Mo. 524; Douglas v. Reynolds, 7 Pet. 113; Kingsbury v. Westfall, 61 N. Y. 356; People v. Chalmers, 60 N. Y. 158; Gates V. McKee, 13 N. Y. 232; McCluskeyz/. Cromwell, 11 N. Y. 593; Noyes -v. Nicholas, 23 Vt. 173; Lang v. Pike, 27 Ohio St. 496. 1 Ludlow V. Simond, 2 Cai. Ca. (N. Y.) I. "The surety or guarantor usually derives no benefit from his contract. His object generally is to be- friend the principal. In most cases the consideration moves to the principal, and he would be liable upon an implied contract, while the surety or guarantor is only liable because he has agreed to become so. He is bound by his agree- ment, and nothing else. No implied liability exists to charge him. It has been repeatedly decided that he is under no moral obligation to pay the debt of his principal. Being then bound by his agreement alone, and deriving no benefit from the transaction, it is eminently just and proper that he should be a favorite of the law and have a right to ^stand upon the strict terms of his obligation. To charge him beyond its terms, or to permit it to be altered without his consent, would be, not to enforce the contract made by him, but to make another for him." Brandt on Suretyship and Guaranty, § 80. So Mr. Justice Story, delivering the opinion of the United States Supreme Court in Miller v. Stewart, 9 Wheat. , at page 702, says : " Nothing can be •clearer, both upon principle and authority, than the doctrine that the liability of a surety is not to be extended by implication beyond the terms of his con- tract. To the extent, and in the manner, and under the circumstances pointed out in his obligation he is bound, and no farther. It is not sufficient that he may sustain no injury by a change in the contract, or that it may be for his § 253-] SPECIAL RULES, PARTICULAR CONTRACTS. 363 therefore, the language of the contract has been construed against the guarantor, the full extent of the obligation into which he has entered is defined, and the surety is entitled to the application of the strict rule of construc- tion and cannot be held beyond the precise terms of his contract.^ § 253. Contracts of carriers interpreted by ordinary rules. — The general principles for ascertaining the mean- benefit. He has a right to stand upon the very terms of his contract ; and if he does not assent to any variation of it, and a variation is made, it is fatal. And courts of equity, as well as of law, have been in the constant habit of scanning the contracts of sureties with considerable strictness. The class of cases which have been cited at the bar, where persons have been bound for the good conduct of clerks of merchants and other persons, illustrate this position. The whole series of them, from Lord Arlington v. Merrick, 2 Saund. 412, down to that of Pearsall v. Summersett, 4 Taunt. 593, proceed upon the ground that the undertaking of the surety is to receive a strict interpretation, and is not to be extended beyond the fair scope of its terms. Therefore, where an indemnity bond is given to partners by name, it has constantly been held that the undertaking stopped upon the admission of a new partner. And the only case, that of Barclay v. Lucas, i T. R. 291, note a, in which a more extensive construction is supposed to have been given, confirms the general rule ; for that turned upon the circumstance that the security was given to the house, as a banking-house, and thence an intention was inferred, that the parties intended to cover all losses notwithstanding a change of partners in the house." Cf. Paine v. Jones, 76 N. Y. 274; Rees v. Berrington, 2 Vesey, 540. * The Evansville Nat. Bank v. Kaufmann, 93 N. Y. 273. This distinction is thus clearly stated by Bronson, J., in Dobbin v. Bradley, 17 Wend. (N. Y.) 425 : " Where there is no uncertainty upon the face of the instrument, or when, in cases of doubt, we have ascertained the true meaning of the contract, the liability of a guarantor or surety cannot be extended by implication or otherwise. The case must be brought strictly within the terms of the guar- anty, when reasonably interpreted, or the guarantor will not be liable. The cases speak a uniform language on this subject. Walsh v. Bailie, 10 Johns. R. 180; Lanus v. Barker, Id. 312 ; Wrights. Johnson, 8 Wendell, 512 ; Bacon ■z/. Chesney, i Stark. N. P. R. 192; Bulkeley f. Lord, 2 Id. 406; Combe v. Wonlf, 8 Bing. 156; Myers v. Edge, 7 T. R. 250. In Bacon v. Chesney, Lord Ellenborough said the claim, as against a surety, is strictissimi juris, and it is incumbent on the plaintiff to show that the terms of the guaranty have been strictly complied with. I have met with no case which sanctions a different doctrine." 364 SPECIAL RULES, PARTICULAR CONTRACTS, [§ 253. ing of contracts, already given, apply also to contracts made by common carriers. And, with regard to these con- tracts, the object is to reach the actual intention by read- ing the language ' in the light of the circumstances, and • The maxim expressio unins est exclusio alterius is sometimes applied to the language to assist in reaching the intention. Thus, in Gage v. Tirrell, 91 Mass. 305, Bigelow, C. J., said : " We are to determine, in the first place, whether the defendants are shut out from availing themselves of the exception to the liabilities of common carriers, imposed by the law for loss of goods in- trusted to them caused by public enemies. If they are to be excluded from the benefit of this exception, it must be, as has been already said, on the ground that in the bill of lading they have inserted a special exception exempt- ing themselves from liability for losses happening by dangers of the sea, and cannot now excuse themselves for the non-performance of their contract by the happening of events which are not embraced within the terms of this ex- emption. In other words, the argument is that an express exception excludes all implied exceptions. The maxim expressio unius est exclusio alterius is a cardinal rule of exposition, of familiar application, founded in good sense and sound reason, and aflfording an appropriate method of arriving at the presumed intent of parties to deeds and instruments in which it is not fully expressed. But, as has been justly observed by a learned writer, great caution is requisite in applying the rule lest it may be used for the purpose of defeating instead of subserving the real intent of parties. There can be no doubt that where a party expressly covenants that he will do a certain act, he cannot qualify or restrict the covenant so as to excuse its non-performance by exceptions or limitations arising from implication only. In such cases the inference is rea- sonable that if the parties did not mean that the covenant should be absolute they would have expressed the limitation which they intended to put upon it. . . . The only safe mode of applying the rule is to ascertain whether it can fairly be presumed from that which is expressly stipulated, that the mat- ter sought to be excluded was present to the minds of the parties when the agreement was entered into. The exclusion can reasonably extend no further than to shut out all the implied agreements and stipulations of the same nature or relating to similar matters. Thus, if a party take an express warranty of an article from a vendor, it is reasonable to suppose that the subject-matter of warranty was in his mind at the time of the sale, and that he caused to be in- serted in the contract a promise concerning the nature and quality of the articles sufficiently comprehensive to include all on that subject which the parties intended should form part of the bargain. But if the contract contained no warranty at all, but consisted of stipulations on other matters, the warranty implied by law, if any, would still form part of the contract, and an action for a breach of it could be maintained. Indeed, it may be said generally that the maxim, expressum facit cessare taciturn^ is never to be applied in the con- §25^.] SPECIAL RULES, PARTICULAR CONTRACTS. 365 failing this, to put upon the language its just and reason- able meaning. To this end the rule that the words used struction of contracts, peremptorily and absolutely, so as to exclude from the contract everything not embraced in the stipulations of the parties. Its legit- imate and proper use is to shut out implied agreements on the same or similar subjects as those concerning which the contract speaks. Even such exclusion should be extended only so far as to subserve the plain intent of the parties. If these views are correct, the interpretation of the contract in the present case is free from all difficulty. Giving full effect to the clause in the bill of lading exempting the defendants from liability for losses occasioned by perils of the sea, it does not follow that they thereby assumed all losses which might arise from the capture of the ship and seizure of the cargo by public enemies. The two causes of loss are entirely distinct and diverse, and have no necessary connection with or relation to each other. They belong to entirely different kinds or classes of risks." So, in Scaife v. Farrant, 23 W. R. 469, affi'd 23 W. R. 840 (1875), where one was the agent of 'a railroad company, and also on his own account sent furniture in his own vans to different parts of England, and published a card as follows : " Contracts entered into for removing furniture to or from any part of the kingdom. Estimates given free," and a special contract for car- riage was made, it was held that he was not a common carrier, and that he was not liable for the loss of goods burned without any negligence upon his own part. It was also held that although the only risk specified to be taken by the agent was that of breakages in transit, he would still be liable for the results of his own negligence. Upon the appeal, it was said by Lush, J. : " It does not appear to be necessary to decide the question which was first argued on this appeal, namely, whether the defendant comes within the definition of, or whether in the ordinary course of his bus?ness he incurs the liability of a com- mon carrier, so as to be answerable for damage to the goods not caused by any act or default of himself or his servants. I agree with the court below that the letters and memorandum contained in this case constitute a special contract, and I think that whether without those letters the defendant would have been liable or not for the accident which happened to the goods, the terms of the contract sufficiently show that both parties understood that the risk undertaken by the defendant was of a much more limited nature. The letters written by the defendant, the proposal signed by him inclosing the an- swer to be returned, and which was accordingly returned, signed by the plaintiff, form the contract in this case. The proposal is ; ' I beg to inform you the terms for removal of your furniture will be £p.i los., with the risk of breakages in transit. In the event of your accepting this estimate, be kind enough to return to me the annexed memorandum by which I am liable to the amount specified.' The answer is in these terms: ' I hereby agree to pay you the sumof ;£22 lay., . . . you undertaking risk of breakage (if any), not exceeding ;£5 on any one article.' It was contended by the plaintiff's 366 SPECIAL RQLES, PARTICULAR CONTRACTS. [§ 253. are to be construed contra proferentem, is frequently resorted to in order to give a fair interpretation to excep- tions in the contract in favor of the carrier.^ counsel that these documents should be read as merely limiting the amount which should be payable by the defendant in the event of damage by break- age, leaving him by implication liable to the full extent for all other casualties. It is impossible, I think, to put such a construction on the letters, or to sup- pose that either party so understood them. The fair meaning of them is that the defendant was willing to undertake a particular and no other casualty, and to pay up to ;£5 for any article damaged by that casualty, and this the plaintiff must have understood to be the meaning, and by that contract both parties are bound. I agree that this contract does not exclude liability for such damage as might result from want of due and reasonable care in the packing or the carriage of the goods, but the damage which happened was not caused by any such default, but was, as far as the defendant was concerned, purely accidental." Compare Corwin v. Hood, 58 N. H. 401 ; Wharton on Contracts, § 674. 1 Thus, in Nicholas v. N. Y. C. & H. R. R. R. Co., 89 N. Y. 370, where . it was claimed that the contract exempted the carrier from the consequences of his own negligence, Andrews, Ch. J., said : " We have- recently held, in Mynard v. The Syracuse, Binghamton and New York R. R. Co., 71 N. Y. 180, 27 Am. Rep. 28, that a shipping contract, made by a common carrier for the carriage of live stock, whereby the shipper, in consideration of a re- duced rate for the carriage, agreed ' to release and discharge the carrier from all claims, demands, and liabilities of every kind whatsoever, for, or on account of, or connected with any damage or injury to, or the loss of said stock or any portion thereof, from whatsoever causes arising,' did not operate to exempt the carrier from liability for loss .occasioned by its own negligence. "The words ' from whatsoever cause arising' were as broad and com- prehensive as possible. The court, however, refused to construe them as covering a loss arising from the negligence of the carrier; not, as I understand the decision, because the words, in their ordinary signification and interpre- tation, did not include a loss of this character, but because it is a part of the rule which in this State allows a common carrier to contract against his lia- bility for negligence that the contract must, in terms and expressly, exempt the carrier from liability on this account. " The practice of common carriers making special acceptances exempting them from their ordinary responsibility, though contrary to the policy of the common law, liable to abuse and productive of inconvenience, has obtained too long to be now questioned. In this State it has been extended so as to authorize a special acceptance exempting them from liability for their own negligence. But a contract exempting a bailee for hire from the obligation of care on his part in respect to the goods in his custody is, to say the least, unreasonable ; and while the law does not go to the extent of making it void § 254-] SPECIAL RULES, PARTICULAR CONTRACTS. 367 § 254. Carriers' exemptions from liability. — Although the exceptions in the contract will be construed against the interests of the carrier in cases of doubt, where these exceptions are clearly stated, and there is no question in regard to the meaning of the language used by the par- ties, courts will construe the contract as made. Carriers, however, are only allowed to qualify their common law liability in so far as a sound public policy will permit. No attempt will here be made to determine when exemptions from liability are void as against pub- lic policy, as this would require a statement of the con- flicting views in different localities, and would necessi- tate the discussion of a question relating rather to the validity of contracts, than to their interpretation. We give, however, in the notes, a recent decision of the United States Supreme Court,^ in which Mr. Justice on that ground, yet the qualification that to have that effect it must be plainly and distinctly expressed, so that it cannot be misunderstood by the shipper, is so obviously just, in view of the methods of business and the want of knowl- edge of the force and construction of contracts on the part of the great mass of persons dealing with the transportation lines of the country, that it ought not to be relaxed." See further upon the rule that exceptions will be strictly construed against carrier, Georgia R. R. Co. v. Gann, 68 Ga. 350; Edsall v. Camden, &c. R. R. Co., 50 N. Y. 661; Ayres v. Western R. Co., 14 Blatchf. 9; Lawson's Contracts of Carriers, § 1 50 ; Carver's Carriage of Goods by Sea, § Tj. 1 The case referred to in the text is that of Hart v. The Pennsylvania R. R. Co., 112 U. S. 331 (1884). In this case H. shipped five horses and other property by the defendant, under a bill of lading which, among other things, specified that the shipment was made " on the condition that the carrier as- sumed a liability on the stock to the extent of the following agreed valuation: If horses or mules, not exceeding two hundred dollars each." By the negligence ot the railroad company or its servants, one of the horses was killed and the others were injured. In an action to recover damages, it ap- peared at the trial, that the horses were race horses, and evidence was offered to show that the actual value of the horse killed was $1 5,000 ; that the other horses were worth from $3,000 to $3,500 each, and were rendered compara- .tively worthless. This evidence was excluded, and the judge at the trial charged that under the agreement of the parties two hundred dollars only could be recovered for each horse. And the question at issue upon the ap- 368 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 254. Blatchford clearly states the position of that^ court upon this important subject, and re-asserts the rule that a car- peal was whether the defendant could thus limit its liability for negligence. Upon this question Mr. Justice Blatchford says: "It is the law of this court, that a common carrier may, by special contract, limit his common law lia- bility ; but that he cannot stipulate for exemption from the consequences of his own negligence or that of his servants. New Jersey Steam Nav. Co. v. Merchants' Bank, 6 How. 344; York Co. v. Central R. R. Co., 3 Wall. 107; Railroad Co. v. Lockwood, 17 Wall. 357; Express Co. v. Caldwell, 21 Wall. 264; Railroad Co. v. Pratt, 22 Wall. 123; Bank of Kentucky w. Adams Ex- press Co., 93 U. S. 174; Railway Co. v. Stevens, 95 U. S. 655." In York Co. v. Central Railroad, 3 Wall. 107, a contract was upheld ex- empting a carrier from liability for loss by fire, the fire not having occurred through any want of due care on his part. The court said, that a common carrier may "prescribe regulations to protect himself against imposition and fraud, and fix a rate of charges proportionate to the magnitude of the risks he may have to encounter." In Railroad Co. v. Lockwood, 17 Wall. 357, the following propositions were laid down by this court: (i). A common carrier cannot lawfully stipu- late for exemption from responsibility when such exemption is not just and reasonable, in the eye of the law; (2). It is not just and reasonable in the eye of the law, for a common carrier to stipulate for exemption trom respon- sibility for the negligence of himself or his servants ; (3). These rules apply both to carriers of goods and to carriers of passengers for hire, and with special force to the latter. The basis of the decision was, that the exemption was to have applied to it the test of its justness and reasonable character. It was said, that the contracts of the carrier " must rest upon their fairness and reasonableness," and that it was just and reasonable that carriers should not be responsible for losses happening by sheer accident, or chargeable for valu- able articles liable to be damaged, unless apprised of their character or value. That case was one of a drover traveling on a stock train on a railroad, to look after his cattle, and having a free pass for that purpose, who had signed an agreement talking all risk of injury to his cattle and of personal injury to him- self, and who was injured by the negligence of the railroad company or its servants. In Express Co. v. Caldwell, 21 Wall. 264, this court held, that an agree- ment made by an express company, a common carrier in the habit of carry- ing small packages, that it should not be held liable for any loss or damage to a package delivered to it, unless claim should be made therefore within ninety days from its delivery to the company, was an agreement which the company could rightfully make. The court said : " It is now the settled law, that the responsibility of a common carrier may be limited by an express agreement made with his employer at the time of his accepting goods for transportation, provided the limitation be such as the law can recognize as reasonable and not inconsistent with sound public policy.'' It was held that § 254-] SPECIAL RULES, PARTICULAR CONTRACTS. 369 rier may insert in his contract only such exemptions from liability as are just and reasonable, a rule sustained both by good sense and by numerous authorities. the stipulation as to the time of making a claim was reasonable and intrin- sically just, and could not be regarded as a stipulation for exemption from responsibility for neghgence, because it did not relieve the carrier from any obligation to exercise diligence, fidelity, and care. " On the other hand, in Bank of Kentucky 7/. Adams Express Co., 93 U. S. 1 74, it was held that a stipulation by an express company that it should not be liable for loss by fire could not be reasonably construed as exempting it from liability for loss by fire occurring through the negligence of a railroad company which it had employed as a carrier. "To the views announced in these cases we adhere. But there is not in them any adjudication on the particular question now before us. It may, however, be disposed of on principles which are well established and which do not conflict with any of the rulings of this court. As a general rule, and in the absence of fraud or imposition, a common carrier is answerable for the loss of a package of goods though he is ignorant of its contents, and though its contents are ever so valuable, if he does not make a special acceptance. This is reasonable, because he can always guard himself by a special accept- ance, or by insisting on being informed of the nature and value of the articles before receiving them. If the shipper is guilty of fraud or imposition, by misrepresenting the nature or value of the articles, he destroys his claim to indemnity, because he has attempted to deprive the carrier of the right to be compensated in proportion to the value of the articles and the consequent risk assumed, and what he has done has tendered to lessen the vigilance the carrier would otherwise have bestowed. 2 Kent's Com. 603, and the cases cited ; Relf v. Rapp, 3 Watts & Sergeant, 21 ; Dunlap v. International Steam- boat Co., 98 Mass. 371; Railroad Co. v. Fraloff, loo U. S. 24. This quali- fication of the liability of the carrier is reasonable, and is as important as the rule which it quahfies. There is no justice in allowing the shipper to be paid a large value for an article which he has induced the carrier to take at a low rate of freight, on the assertion and agreement that its value is a less sum than that claimed after a loss. It is just to hold the shipper to his agree- ment, fairly made, as to value, even where the loss or injury has occurred through the negligence of the carrier. The effect of the agreement is to cheapen the freight and secure the carriage, if there is no loss; and the effect of disregarding the agreement, after a loss, is to expose the carrier to a greater risk than the parties intended he should assume. The agreement as to value, in this case, stands as if the carrier had asked the value of the horses, and had been told by the plaintiff the sum inserted in the contract. " The limitation as to value has no tendency to exempt from liability for negligence. It does not induce want of care. It exacts from the carrier the measure of care due to the value agreed on. The carrier is bound to respond 24 370 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 255. § 255. Intention sought whatever is nature of con- tract. — No exact rules can be laid down to determine in that value for negligence. The compensation for carriage is based on that value. The shipper is estopped from saying that the value is greater. The articles have no greater value, for the purposes of the contract of trans- portation, between the parties to that contract. The carrier must respond for negligence up to that value. It is just and reasonable that such a con- tract, fairly entered into, and where there is no deceit practiced on the ship- per, should be upheld. There is no violation of public policy. On the con- trary, it would be unjust and unreasonable, and would be repugnant to the soundest principles of fair dealing and of the freedom of contracting, and thus in conflict with public policy, if a shipper should be allowed to reap the benefit of the contract if there is no loss, and to repudiate it in case of loss. " The decisions in this country are at variance. The rule which we regard as the proper one in the case at bar is supported in Newberger v. Howard, 6 Philadelphia Rep. 174; Squire v. New York Central R. R. Co., 98 Mass. 239; Hopkins z/. Westcott, 6 Blatchford, 64; Belger z/. Dinsmore 51 N. Y. 166; Oppenheimer v. United States Express Co., 69 111. 62; Magnin v. Dinsmore, 56 N. Y. 168, and 62 Id. 35, and 70 Id. 410 ; Earnest v. Express Co., i Woods, 573; Elkins v. Empire Transportation Co., 81 Penn. St. 315; South & North Ala. R. R. Co. V. Henlein, 52 Ala. 606; Samew. Same, 56 Id. 368; Muserw. Holland, 17 Blatchford, 412; Harvey v. Terre Haute R. R. Co., 74 Missouri, 538; and Graves v. Lake Shore Ry. Co., 137 Mass. 33. The contrary rule is sustained in Southern Express Co. v. Moon, 39 Miss. 822 ; The City of Norwich, 4 Ben. 271; United States Express Co. z*. Backman, 28 Ohio St. 144; Black V. Goodrich Transportation Co., 55 Wis. 319; Chicago, St. Louis & N. O. R. R. Co. V. Abels, 60 Miss 1017; Kansas City, &c.. Railroad Co. V. Simpson, 30 Kansas, 645 ; and Moulton v. St. Paul, &c., R. R. Co., 31 Minn. 85. We have given consideration to the views taken in these latter cases, but are unable to concur in their conclusions. Applying to the case in hand, the proper test to be applied to every limitation of the common law liability of a carrier — its just and reasonable character — we have reached the result indicated. In Great Britain, a statute directs this test to be applied by the courts. The same rule is the proper one to be applied in this country, in the absence of any statute. . . . ' ' The distinct ground of our decisions in the case at bar is, that where a contract of the kind, signed by the shipper, is fairly made, agreeing on the valuation of the property carried, with the rate of freight based on the con- dition, that the carrier assumes liability only to the extent of the agreed valu- ation, even in case of loss or damage by the negligence of the carrier, the contract will be upheld as a proper and lawful mode of securing a due pro- portion between the amount for which the carrier may be responsible and the freight he receives, and of protecting himself against extravagant and §•255-] SPECIAL RULES, PARTICULAR CONTRACTS. 371 whether a contract is entire, severable, or apportionable, for in every case this must depend upon the intention.^ fanciful valuations. Squire v. New York Central R. R. Co., 98 Mass. 239, 245, and cases there cited." Compare, on this question, Rintoul v. N. Y. Cent., &c., R. R. Co., 17 Fed. Rep. 905 ; Alabama Great South. R. R. Co. v. Little, 71 Ala. 611; Scruggs v. Bait. & Ohio R. R. Co., 5 McCrary, 590; Gait V. Adams Express Co., 4 Mac Arthur, 124; s. c. 48 Am. Rep. 742 ; 111. Cent. R. R. Co. v. Jonte, 13 (Brad. Rep.) 111. App. 424. * In Donahoe v. Kettle, I Cliff. 135, it appeared that a vessel was char- tered for a voyage from Boston to Port au Prince and back to Boston. By the terms of the charter-party, the charterers were to pay a round sum for the voyage as well as all foreign port charges, pilotage, and lighterage, and they agreed to advance the master what money he might require to disburse his vessel at Port au Prince ; this, however, not to exceed one half the char- ter. These advances were made. The voyage, however, was not completed, owing to the loss of the vessel on her return trip by a peril of the sea. Upon these facts it was held, inter alia, that no part of the charter-money was due the owners of the vessel, and that none could be recovered from the char- terers. Clifford, J., in his opinion says: "Whether the contract is entire or divisible must depend upon the terms and conditions set forth in the charter- party. . . . Charter-parties are frequently informal instruments, some- times having inaccurate clauses, and on that account must have a liberal construction, such as mercantile contracts usually receive in furtherance of the real intention of the parties and the usages of trade. In the construction of such instruments, as well as other mercantile contracts, the general rule is, that the construction should be liberal, agreeable to the real intention of the parties, and conformable to the usage of trade in general, and of the par- ticular trade to which the contract relates. Raymond v. Tyson, 17 How. 59; Abb. on Ship (5th Am. ed.), 250; 3 Kent's Com. (gth ed.) 276. Where the language of a contract is plain and clear, whether it be a charter-party or other written agreement, it must be understood that parties mean what they have plainly expressed, and in such cases there is nothing left for constrac- tion. But if from a view of the whole instrument the evident intention of the parties is different from the literal import of the terms employed to express their intention in a particular part of the instrument, that intention should prevail, notwithstanding it may appear to be inconsistent with such particular part, for the reason that the construction of the contract in the case supposed ought not to depend on any formal arrangement of the words, but should be collected from every part of the same as applied to the subject-matter to which it relates. Words are to be taken in their popular and ordinary mean- ing, unless some good reason appears to show that they were used in a dif- ferent sense, and the whole instrument is to be viewed and compared in all its parts, so that every part of it may be made consistent and effectual. As a general rule, the delivery of the goods at the place of destination, according to the charter-party, is necessary to entitle the owner of the vessel to freight. 372 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 255. And this intention is to be derived from a consideration of the language used, the subject-matter and the circum- Conveyance and delivery of the cargo form a condition precedent, and must be fulfilled in order to entitle the owner to freight, unless such delivery is prevented by the default of the shipper or his agent. A partial performance, says Chancellor Kent, is not sufficient, nor can a partial payment or ratable freight, be claimed, except in special cases, and those cases are exceptions to the general rule, being such only as are called for by the principles of equity. 3 Kent's Com. (9th ed.)298; The Ship Nathaniel Hooper, 3 Sumn. 542. Still, if the outward and homeward voyages be distinct, in a case like the present, freight is recoverable for the one though the other be not performed. But if by the terms of the contract they be one voyage, and the ship per- formed the outward and fails to perform the homeward voyage, no freight is recoverable. Mackrell v. Simond et al., 2 Chitty's R. 666; 18 Eng. C. L. 454. Upon this subject the law is well settled, that if one entire voyage or whole service is stipulated for the charter-party, the ship-owner cannot recover on the contract, unless the entire voyage or whole service is performed. It was so held by Parsons, Ch. J., half a century ago in Coffin et al. v. Storer, 5 Mass. 252; and such has been the settled law in this district from that period to the present time. In that case the ship was chartered for a voyage from Biddeford, in the State of Maine, to Surinam and a market, and back to Biddeford ; and being wrecked on her homeward passage, it was held that no freight was earned under the charter-party, for the reason that the voyage was an entire voyage, and the hire was not payable until the voyage was com- pleted. That decision was followed by the Supreme Court of Maine in Blanchard v. Bucknam, 3 Me. I, and is still the law in the courts of that State. So in Barker v. Cheriot, 2 Johns. 352, where a vessel was chartered for a voyage from New York to Martinique, and back to New York, it was held that no freight was due, although the vessel delivered the outward cargo, but was captured on her voyage home. Thompson, J., said in that case, which was decided in 1807, that the rule was too well settled to admit of being questioned. Scott v. Libby et al., 2 Johns. 336. Numerous decisions have been made to the same effect since the date of those last cited, and there are none to be found in the books which support the opposite view of the question. All of these cases have recently been reviewed by the Supreme Court of Massachusetts, in the case of Towle v. Kettell et al., 5 Cush. 20, and that court has again affirmed the same doctrine. Most of the adjudged cases were examined by the learned judge, who gave the opinion on that occasion, and those which are now supposed by the counsel for the libellants to be inconsistent with the general doctrine upon the subject were satisfac- torily explained. Those explanations will not be repeated, and under the circumstances any further reference to authorities is deemed unnecessary. In that case the charter-party was for a voyage from Boston to Wilmington, in the State of North Carolina, and from thence to Cape Haytien, in the island of Hayti, and from thence to Boston, the charterers engaging to pay the § 255-J SPECIAL RULES, PARTICULAR CONTRACTS. 373 Stances. Parsons says that when parties enter into a con- tract by which the service to be performed by the one, owner for the charter or freight of the vessel during the voyage in manner following, that is to say, fifteen hundred dollars, payable so much in Hayti as the master might want for the disbursement of the vessel, together with the foreign port charges, lighterage, and pilotage, and the balance on the dis- charge of the cargo in Boston. After arriving at Wilmington and loading, the vessel proceeded to Hayti ; and having discharged her freight there, and taken on board her return cargo, she sailed for Boston, but was lost on the return passage. On that state of facts the court held that the charter-party was for one entire voyage, and as the vessel was lost on her return home the owner was not entitled to recover for the outward freight of the vessel. With- out doing violence to the language of the charter-party, I can form no other conclusion than that the contract in this case is for a voyage from Boston to Port au Prince and back to Boston. For the charter of the vessel to make that voyage, the charterers agreed to pay the round sum of eighteen hundred dollars, and all foreign port-charges, pilotage, and lighterage. By the legal construction of the contract, no part of the charter-money, except what the master might require for the disbursements of the vessel was to be paid until the voyage was completed ; and having made these advances to the master for that purpose, according to the terms of the contract, and the voyage not having been completed, there is nothing remaining due for the charterers to the owners of the vessel." ' In Baeder v. Carnie, 44 N. J. L. 208 C1882), there was a contract to put a vessel in complete repair, and the Chancellor said : " The contract between the parties under which the work was done was that Carnie was to do the work necessary, to put the vessel in complete repair as soon as possible. He proceeded with the work, but did not do it entirely to the satisfaction of Baeder. He admits that the engine was not, when the work was done, in a satisfactory condition. . . . " The contract in question was not an unapportionable one. ' If there be nothing,' says Mr. Chitty, ' in the case amounting to a contract to complete the work before any remuneration shall be due, as in the case of a ship- wright undertaking, in the same way that shipwrights ordinarily do, to put a vessel in repair, the workingmen may, after he has proceeded with a portion of the work, refuse to continue it unless he is paid for the work he has performed, and he may recover to that extent.' Chit, on Cont., 831. In Roberts w. Havelock, 4 B. & Ad. 404, a case in all respects similar to the one in hand, the contract was to put the ship in complete repair, and a dispute arose be- tween the contracting parties before the work was completed ; it was held that the plaintiff was entitled to recover. There was in the case under con- sideration no contract to do the whole work before demanding compensa- tion." In Veerkamp v. Hulburd Canning and Drying Co., 58 Cal. 225; S. C. 41 Am. Rep. 265, Ross, J., said: "The parties to this suit contracted with each 374 SPECIAL RULES, PARTICULAR CONTRACTS, [§ 255. and the consideration to be paid by the other, are made certain and fixed, it cannot reasonably be presumed that they intended that the amount of consideration to be paid should depend upon the amount of service ren- dered ; but, " if the parties wish to make a contract other in writing as follows : ' The said company engage to take and pay for all the fruit raised by the said Francis Veerkarap at the uniform rate of five- eighths (f ) of a cent per pound for all fruit raised and delivered at the works of the above company, in Upper Placerville (excepting mission grapes), and to furnish boxes for packing and hauling the fruit. The said Francis Veer- kamp, on his part, engages to deliver the fruit in good condition, and when in suitable ripeness, and will sell no fruit to other parties excepting one load early.' ' ' The parties could not very well have made their contract more indefinite. The fruit referred to in the written agreement was such as was then growing on land of the plaintiff. As the fruit ripened, the plaintiff delivered and the defendant received it under the contract. After a part had been thus de- livered and accepted, the plaintiff demanded of defendant payment for that delivered at the agreed rate, but the defendant refused to make such payment until the plaintiff should first deliver all of the fruit referred to. Thereupon plaintiff declined to deliver to defendant any more, and sued for the value of that delivered and accepted. The defendant resists the action, on the ground that the delivery of all the fruit referred to in the contract was a condition precedent to the payment of any. We do not think that the proper con- struction of the agreement between the parties. The contract must be con- strued with reference to the subject-matter of it. It was executory in its nature. It could not be known in advance how much of any particular kind of fruit there would be. In the nature of things it ripened at different times, and had to be delivered at different times. The contract fixed the rate per pound at which the defendant was to pay for it, and in our opinion, accord- ing to its true construction, as each lot was delivered to and accepted by defendant there became due and payable from it to the plaintiff the value thereof at the rate per pound fixed in the contract." Compare further Gray V. Hinton, 2 McCrary, 167; Ellsworth t/. N. Y. Life Ins. Co., i Flipp. 92; Steam Packet Co. 7/. Sickles, 10 How. 419; Hale v. Brown, 59 N. H. 551; Fiegel z/. Latour, 8i Pa. St. 448; Filden 7'. Besley, 42 Mich. 100; S. C. 36 Am. Rep. 433; Murphy z/. St. Louis, 8 Mo. App. 483; Marye z/. Strouse, 6 Sawyer, 204; Lutz v. Thompson, 87 N. C. 334; Spear v. Snider, 29 Minn. 463; Branch v. Palmer, 65 Ga. 210; Stokes -v. Boors, 18 Fla. 656; Gill v. Weller, 52 Md. 8; Converse z/. Harzfeldt, n Brad. Rep. (111. App.) 173; Madden w. Smith, 28 Kan. 798; Pope v. Porter, 19 Week. Dig. (N. Y.) 103; Dauchy v. Tutt, Id. 490 ; Williams v. Norton, 51 N. Y. Super. Ct. 506 ; Whit- cher V. Hall, 8 D. & R. 22 ; Taylor v. Laird, i H. & N. 266. § 256.] SPECIAL RULES, PARTICULAR CONTRACTS. 375 which shall be apportionable, there is nothing to hinder their doing so, provided they make their intention suffi- ciently manifest." 1 So it is only by looking to the in- tention that an alternative contract may be properly con- strued.^ And whatever is the nature of the contract the general principles already given apply to its construction. § 256. Meaning of language in different contracts not the same.— From the fact that the same principles of interpretation apply to different contracts it is not to be concluded that the same construction will be given to such contracts. For one of the most important princi- ples of interpretation is that the contract shall be read with reference to its subject-matter, and the purposes to be accomplished by it, and the application of this rule causes great variety in the interpretation of similar lan- guage. Mr. Justice Story has said:^ "The rule which regu- lates losses under policies of insurance, are by no means the same as those which either necessarily or ordinarily govern in cases of common carriers. Each contract has its own peculiarities and principles of interpretation; and it is not safe in many instances, to reason from one to the other. In cases of collision of ships, for ex- ample, the loss is treated as a peril of the seas, whether caused by accident or by the fault of one party, or of ^ Parsons on Contracts, vol. II, p. 521. ^ Wharton on Contracts, § 619; Wing v. Ansonia Clock Co., 20 Week. Dig. (N. Y.) 496; Dorsey v. Packwood, 12 How. 137; Chippendale z/. Thurs- ton, 4 C. & P. 98; Deveill v. Burnell, 8 L. R. C. P. 475. If it is impossible or illegal for the party who has the option to perform one branch of an alter- native he must perform the other. Stevens v. Webb, 7 C. & P. 60 ; Bark- worth w. Young, 26 L. J. Ch. 153. Whether covenants are dependent or independent is determined by the intention. Slater «/. Emerson, ig How. 224; Phila. , &c., R. R. Co. v. Howard, 13 How. 307. And the intention must control with regard to a condition precedent. Roberts v. Brett, 1 1 H. L. Cas. 337. ' King V. Shepherd, 3 Story, 360. 376 SPECIAL RULES, PARTICULAR CONTRACTS. [§ 256. both parties. But whoever heard that a carrier was exempted from any loss caused or occasioned by the negligence of himself or his servants?" While, there- fore, in contracts belonging to the same class the courts will look to decisions to aid in the interpretation, and will endeavor to construe words with uniformity,^ they will never disregard the nature and circumstances of the contract in which the words are employed, or the object to be accomplished by them.^ 1 Supra, §§ 73, 207, 208. Compare Watson v. Insurance Co. of N. A. 2 Wash. 153; Airey v. Merrill, 2 Curt. 9; Elphinstone on "The Limits of Rules of Construction," Law Quarterly Review, October, 1885, vol. I, p. 466. 2 Supra, %%\ et seq. CHAPTER XXI. THE EFFECT OF MATERIAL AND IMMATERIAL ALTERA- TIONS IN A CONTRACT. § 257. Statement of matter for discussion. 258. Division of subject. 259. What is an alteration of a contract. 260. General statement of present rule. 261. Rule applies to all contracts. 262. Recent authority showing broad principle of rule. 263. Immaterial alterations do not avoid contract. 264. This rule always prevalent in America. 265. Fraudulent immaterial alterations will not avoid. 266. Fuller V. Green. 267. What is a material alteration. 368. Extract from opinion in Suffel v. Bank of England. 269. Instances of material and immaterial alterations. 270. Fraudulent material alterations. 271. Innocent material alterations. § 257. Statement of matter for discussion. — It ha.s been assumed throughout this volume, that the writing in which the contract presented for construction is wholly or partially expressed is a genuine document, and it is not proposed to question this assumption or to consider the method of proving written contracts. But, as writings admitted to be genuine often show upon their face in- terlineations, erasures, or other alterations, which must be regarded in construing the contract, it seems proper to consider the effect upon the contract of all alterations, and the manner in which they are to be dealt with by the court. The practical importance of the subject, and the ap- parent conflict in the authorities upon certain branches of it, will necessitate a full statement of the law, which it is 378 EFFECT OF ALTERATIONS. [§§ 258, 259. believed may, with the aid of recent decisions, be simpli- fied and brought within certain well-defined principles. § 258. Division of subject. — For convenience of pres- entation, the subject will be divided into three branches, namely: First. The effect of material and immaterial al- terations in a contract; Second, Burden of proof, and presumptions in regard to alterations ; Third. Alterations by a stranger or by consent of parties. § 259. What is an alteration of a contract. — An alteration of a contract, in the sense in which the phrase is here used, appears to have been made in a contract where there is some change in the signs which apparently were the original signs composing the written contract between the parties. Such an appearance is ordinarily presented when the writing shows upon its face an inter- lineation or other addition to it, an erasure, or a mark drawn through some of its words or phrases. If an apparent change of this character has been made in the writing before the parties have executed it, the original signs which they adopt will be those which remain after the change is made, and there is no alteration in the contract. If, therefore, this fact can be established, no harm will result from the suspicious marks upon the writing. But it is not easy in all cases to show that a change in a writing was made before execution. It is, therefore, a rule, which should be adopted by all contract- ing parties, that no altered contract will be accepted unless every interlineation or erasure appearing upon its face is properly noted to have been made before exe- cution. If it is so noted, all suspicion is removed from the document.^ 1 Greenleaf says, § 564 : " If the alteration is noted in the attestation clause as having been made before the execution of the instrument, it is sufficiently accounted for and the instrument is relieved from suspicion." Taylor on § 26o.] MATERIAL AND IMMATERIAL. 379 § 260. General statement of present rule. — It is ob- vious that when the contracting parties have agreed to express their meaning by certain fixed signs, no material alteration in these signs should subsequently be made by any one of the parties to the contract without the consent of all the others. For whenever there is such a change the language of the writing ceases to be the expression of the thought of the contracting parties, and its effect as evidencing that thought is wholly destroyed. It was at first held to be detrimental to justice that any alteration, whether material or not, should be allowed to go unpun- ished; and even if a stranger to the instrument altered it while it was in the custody of one of the parties, it was necessary, for the prevention of fraud, that the instrument should be declared void.^ A wiser and more liberal rule now prevails, and it is only when a party * to the contract alters it in some material respect that the law will hold the instrument to be invalidated.® Evid. (8th ed.) § 18 19; Wharton on Evid., § 624; Grossman v. Grossman, 95 N. Y. 145, 152; Reformed Dutch Church v. Ten Eyck, 25 N. J. L. 40; Lazier V. Westcott, 26 N. Y. 146. * Pilot's Gase, 1 1 Rep. 27. Compare Sheppard's Touchstone, 69 ; Lewis V. Payn, 8 Cow. (N. Y.) 71; Boalt v. Brown, 13 Ohio St. 364; Parsons on Gont., vol. II, p. 717, note n. 2 "Although, in the last edition of Taylor on Evidence (8th ed. 1885), it is said, § 1820: "The rule of law applicable to this subject is that any material alteration in a written instrument, whether made by a party or a stranger, is fatal to its validity, provided it were made after its execution and without the privity of the party to be affected by it ; and, perhaps, also with the additional proviso that the alteration was made while the instrument was in the posses- sion, or at least under the control, of the party seeking to enforce it." See, however, infra, Chap. XXIII. 3 "If a material alteration be made in a deed, by or with the consent of any party to it after execution, by erasure, interlineation, or otherwise, he can- not afterwards as plaintiff enforce any obligation for his benefit contained in it." Elphinstone's Interpretation of Deeds, p. 19. " Any change in the terms of a written contract which varies its original legal effect and operation, whether in respect to the obligation it imports or to its force as matter of evidence, when made by any party to the contract, is an alteration thereof, unless all the other parties to the contract gave their 380 EFFECT OF ALTERATIONS. [§ 261. § 261. Rule applies to all contracts. — Although the rule in regard to alterations was first asserted in regard to deeds/ it was subsequently extended to writings not under seal,^ and then " to all instruments comprehending words of contract."* And this is manifestly just, as the rule is established for the maintenance of good faith among men, and it is as important that honesty should prevail in one class of contracts as in another.* express or implied consent to such change. And the effect of such alteration is to nullify and destroy the altered instrument as a legal obligation." Daniel on Negot. Inst., § 1373. See also Angle v. N. W. Mutual Life Ins. Co., 93 U. S. 330; Wood V. Steele, 6 Wall. 80; Crawford v. West Side Bank (N. Y. Ct. App. 1885), I Cent. Rep. 253 ; Rogers v. Vosburgh, 87 N. Y. 228 ; Schwarz 'V. Oppold, 74 N. Y. 307; Cape Ann Nat. Bank v. Bums, 129 Mass. 596; Citizens' Bank w. Richmond, 121 Mass. no; Draperz*. Wood, 112 Mass. 315; Wheelock v. Freeman, 30 Mass. 165; Hewins v. Cargill, 67 Me. 554; Brooks -v. Allen, 62 Ind. 250; .^tna Bank v. Winchester, 43 Conn. 391 ; Toomer v. Rutland, 57 Ala. 379; Booth v. Powers, 56 N. Y. 22; Neff ?'. Horner, 63 Pa. St. 327; Moore v. Hutchinson, 69 Mo. 429; Evans v. Foreman, 60 Mo. 449; Charlton v. Reed, 61 Iowa, 166; The Knoxville Nat. Bankf. Clark, 51 Iowa, 264; Harsh v. Klepper, 20 Ohio St. 200; Leake's Digest, p. 810; Parsons on Contracts, vol. II, p. 716; Wharton on Evidence, § 622; Greenleaf on Evid., I 565; Taylor on Evidence (8th ed.), § 1820. ' Pigot's Case, 1 1 Rep. 27. 2 Master v. Miller, 4 T. R. 329. ' Mollett V. Wackerbarth, 5 C. B. 194. See also Davidson v. Cooper, 11 M. & W. 802 ; Taylor on Evid. (8th ed.) § 1820. * Greenleaf says, § 565 : '' Though the effect of the alteration of a legal in- strument is generally discussed with reference to deeds, yet the principle is applicable to all other instruments. The early decisions were chiefly upon deeds, because almost all written engagements were anciently in that form. But they establish the general proposition that written instruments, which are altered in the legal sense of that term, as hereafter explained, are thereby made void. The grounds of this doctrine are twofold. The first is that of public policy, to prevent fraud by not permitting a man to take the chance of committing a fraud without running any risk of losing by the event when it is detected. The other is, to insure the identity of the instrument, and prevent the substitution of another without the privity of the party concerned. The instrument derives its legal virtue from its being the sole repository of the agreement of the parties, solemnly adopted as such, and attested by the sig- nature of the party engaging to perform it. Any alteration, therefore, which causes it to speak a language different in legal effect from that which it orig- inally spoke is a material alteration." § 262.] MATERIAL AND IMMATERIAL. 38 1 § 262. Recent authority showing broad principle of rule. — The proposition tiiat the principle which invali- dates a writing, when material alterations are made in it, applies to all contracts, has been recently asserted in a case coming before the English Court of Appeal.^ In this case Jessel, M. R., says in regard to the rule govern- ing alterations and its wide applicability: " I will first of all consider the general law on the subject, which I take to be settled now beyond dispute. The leading case, and which, from the time of James I, has always been so treated, is Pigot's case;^ and whatever may be said of the first resolution in Pigot's case, no doubt has ever been raised as to the second resolution, which is this, ' that when any deed is altered in a point material by the plaintiff himself, or by any stranger without the privity of the obligee, be it by interlineation, addition, raising, or by drawing of a pen through a line or through the midst of any material word, the deed thereby becomes void.' So that even if a single word which is material is erased, it destroys the instrument. It was next decided that such a rule of law which applied to deeds applied to documents not under seal. The case which decided this was the well-known case of Master v. Miller,* decided in the year 1791. There Lord Kenyon, who was Lord Chief Justice of the Queen's Bench, held that the rule which applied to instruments under seal applied to docu- ments not under seal, ' because,' he said, ' no man shall be permitted to take the chance of committing a fraud without running any risk of losing by the event when it is detected.' . . . Now, the effect of that determina- tion is that a material alteration in a deed causes it no 1 Suffel V. The Bank of England, L. R. 9 Q. B. D. 555. For a statement ot the point involved in this case and other portions of the opinions, see, in- fra, § 268. * II Rep. 27. 3 4 T. R. 329. 382 EFFECT OF ALTERATIONS. [§ 262. longer to be the same deed. Such is the law respecting deeds; but it is said that the law does not extend to the case of a bill of exchange. Whether it does or not must depend on the principle on which this law is founded. The policy of the law has been already stated, namely, that a man shall not take the chance of committing a fraud, and, when that fraud is detected, recover on the instrument as it was originally made. In such a case the law intervenes, and says that the deed thus altered no longer continues the same deed, and that no person can maintain an action upon it. In reading that and the other cases cited, I observe that it is nowhere said that the deed is void merely because it is the case of a deed, but because it is not the same deed. A deed is nothing more than an instrument or agreement under seal, and the principle of those cases is that any alteration in a material part of any instrument or agreement avoids it, because it thereby ceases to be the same instrument. And this principle is founded on great good sense, be- cause it tends to prevent the party in whose favor it is made from attempting to make any alteration in it. This principle, too, appears to me as applicable to one kind of instrument as to another. I have read those portions of the judgments because they state distinctly Mrhat the law is. I may mention that that case of Master V. Miller went to the Exchequer Chamber, and there Eyre, C. J., said : ' When it is admitted that the alteration of a deed would vitiate it, the point seems to me to be concluded, for by the custom of merchants a duty arises on bills of exchange from the operation of law in the same manner as a duty is created on a deed by the act of the parties.' And Macdonald, C. B., added : ' I see bo distinction as to the point in question between deeds and bills of exchange, and I entirely concur with my Lord Chief Justice in thinking there would be more § 263.] MATERIAL AND IMMATERIAL. 383 dangerous consequences follow from permitting altera- tions to be made on bills than on deeds.' The result, therefore, is that the law, as settled by those cases, ap- plied to all instruments in writing, without distinction, for this purpose, between an instrument under seal, which is a deed, and an instrument without a seal, which is not a deed. The only .other case in the Exchequer Chamber, and which is strictly binding on this court, is the case of Davidson v. Cooper,^ where the action was not on a bill of exchange but on a guarantee not under seal. " The doctrine in Master v. Miller,^ has been applied since to various kinds of instruments not under seal, such as bought and sold notes ; and it has been fully recog- nized to be the law of England, and that it is the law is not disputed by the respondent, the plaintiff in this ac- tion." § 263. Immaterial alterations do not avoid contract. — It is now the settled law of England that alterations which are immaterial will not avoid the instrument in which they are made. This was clearly declared in the case of Aldons v. Cornwell,^ where Lush, J., said : " This was an action by the payee against the maker of a prom- issory note, expressed to be payable on demand. The plea denied the making of the note. "At the trial, before the late Mr, Justice Shee, it was proved that the words ' on demand ' were added after the note had been delivered to the plaintiff. It did not ap- pear who made the alteration, but it was assumed to have been made by the plaintiff, and no question was raised as to this fact. The learned judge directed a ver- dict for the plaintiff, reserving the point whether by such 1 II M. & W. 778, in error 31 M. & W. 343. 2 4 T. R. 320. » L. R. 3 Q. B. 573- 384 EFFECT OF ALTERATIONS. [§ 264, an alteration the note was rendered void. No objection having been made to the pleadings, we must consider the case as if the question had been properly raised on the record. " It was admitted, and properly so, on the argument, that the addition of these words did not alter the legal effect of the instrument, but only expressed what the law would otherwise have implied. But it was contended, upon the authority of Pigot's case ^ and Master v. Miller,* that the alteration having been made by the payee and holder, though in a matter not material, avoided the in- strument." After a consideration of the authorities cited to sus- tain the proposition that an immaterial alteration would avoid the contract, the opinion concludes : " This being the state of the authorities, we think we are not bound by the doctrine in Pigot's case or the au- thority cited for it, and, not being bound, we are certainly not disposed to lay it down as a rule of law that the addi- tion of words which cannot possibly prejudice any one, destroys the validity of the note. It seems to us repug- nant to justice and common sense to hold that the maker of a promissory note is discharged from his obligation to pay it because the holder has put in writing on the note what the law would have supplied if the words had not been written." ^ § 264. This rule always prevalent in America. — Parsons, although citing some few cases in which it had been held that an immaterial alteration in an instrument would avoid it,* refused to accept that view of the law 1 1 1 Rep. 27. 2 4 T. R. 329. ' See further, Sanderson v. Symonds, i B. & B. 426; Trew v. Burton, i C. & M. 533 ; Waugh v. Bussell, 5 Taunt. 707 ; Leake's Digest, p. 809. * Parsons, vol. II, p. 718. § 265.1 MATERIAL AND IMMATERIAL. 385 and held that in this country generally, no immaterial alteration would avoid an instrument.^ And this seems always to have been the prevailing rule.^ § 265. Fraudulent immaterial alterations will not avoid. — It is sometimes asserted that an immaterial alter- ation which is made with a fraudulent intent will avoid an instrument.^ But if the alteration comes within the definition of an immaterial alteration it would seem that few cases could arise where it would be possible to show fraud in the making of it, and it may be questioned if in such cases it is desirable to allow any evidence what- soever of the intent of the party. If the instrument has ' Parsons on Contracts, vol. II, p. 720. 2 In Cole V. Hills, 44 N. H. 232, Sargeant, J., said : " An immaterial alter- ation, which does not vary the meaning of an instrument, does not avoid it, though made by the party claiming under it. Bumham v. Ayer, 35 N. H. 354, and cases cited. Alterations in deeds are immaterial where neither the rights nor interests, duties nor obligations, of either of the parties, are in any manner affected or changed. Smith v. Crocker, 5 Mass. 538. An alter- ation or insertion is immaterial, if it is the insertion only of what the law would imply, or the correcting of a mistake, as in such case the assent of the maker or obligor will be presumed. Bowers v. Jewell, 2 N. H. 543 ; Burnham v. Ayer, supra, and authorities. " In the case before us the alteration was only the correction of a mistake, the erasing a middle letter in the name of the payee, which did not belong there ; and the case finds that the promisor did not know whether it be- longed there or not, though he wrote the original note, and intended to make it payable to this plaintiff. " Cushing v. Field, 70 Me. 50 ; Debby v. Thrall, 44 Vt. 414. See also Langdon v. Paul, 20 Vt. 217; Reed v. Kemp, 16 111. 445 ; Hanson v. Crawley, 41 Ga, 303 ; Adams v. Frye, 44 Mass. 103 ; Holr land V. Hatch, 15 Ohio St. 464; Daniel on Negot. Inst, § 1398 et seq. 3 Thus Greenleaf says, § 568 : " It has been strongly doubted, whether ah immaterial.alteration in any matter, though made by the obligee himself, will avoid the instrument, provided it be done innocently, and to no injurious purpose. But if the alteration be fraudulently made, by the party claiming under the instrument, it does not seem important whether it be in a material or immaterial part ; for, in either case, he has brought himself under the operation of the rule established for the prevention of fraud, and, having fraudulently destroyed the identity of the instrument, he must take the peril of all the consequences." 25 386 EFFECT OF ALTERATIONS. ,. [§ 266. not been materially changed lit stands as the original document and no one has been prejudiced. If an act done " is immaterial and can work no injury, it is irrele- vant to inquire into the motives with which it was com- mitted." 1 § 266. Fuller V. Green. — This question arose in a case which recently came before the Wisconsin Supreme Court.^ There it appeared that the judge at the trial had charged the jury in substance, that if the addition of the name of an attesting witness to a note, after its execution, was made with a fraudulent intent, it would be a material alteration and would avoid the note, and the court held that the charge was erroneous, the alter- ation being wholly immaterial, as it did not in any way alter the effect of the note or of the obligations arising upon it. In this case Taylor, J., says: "After a careful con- sideration of the authorities, and the reasons for holding that alterations of written contracts, after they are exe- cuted, destroyed such contracts as to parties not assent- ing to such alteration, we are of the opinion that the instruction excepted to was erroneous and should not have been given. The old rule of law in England that any alteration, whether material or immaterial, and whether made by a party interested in the contract, or by a stranger, rendered the contract void, was long since abandoned ; and the reasonable rule has now be- come firmly established, that an alteration of a contract which will render it void must be made by a party there- to, or with his knowledge or consent ; and, further, the alteration must be material ; that is, the alteration must in some way change the legal effect thereof as between 1 Moge V. Herndon, 30 Miss. 120; Daniel on Negot. Insts., § 1416. 2 Fuller V. Green, 25 N. W. Rep. 907 (1885). § 266,] MATERIAL AND IMMATERIAL. 387 the parties thereto. The insertion or addition of words in or to a contract, or the erasing of words therefrom, which do not change the legal effect thereof in any re- spect, does not render the contract void, and is an imma- terial alteration.^ " The affixing of the name of Fredericks as an attest- ing witness to the note in question does not change the liability of the maker thereof in any respect. It has no effect in extending his liability under the statute of limi- tations, nor does it under our laws facilitate or interfere in any way with its proof. Under our law the produc- tion of the note proves its execution, unless the signature be first denied under oath by the maker. When there is no dispute as to the genuineness of the maker's signa- ture, and therefore no necessity for the person claiming under it making proof of its execution, the fact that the note has or has not an attesting witness is wholly imma- terial. " The possibility that the maker of the note, and the attesting witness, might both die before an action was brought upon it, and in such case the execution of the note might be proved by proving the handwriting of the attesting witness, is too remote and uncertain to be in- voked for the purpose of basing a claim that the addition of such attesting witness is a material alteration of the contract. It seems to me the fact that a person who affixes his name as an attesting witness to a contract, ' Citing, Williams v. Starr, 5 Wis. 534 ; Schwalm v. Mclntyre, 17 Wis. 240 ; Matteson v. Ellsworth, 33 Wis. 488 ; North v. Henheberry, 44 Wis. 306, 319, 320 ; Kroupskop v. Shontz, 51 Wis. 204-206 ; S. C. 8 N. W. Rep. 241 ; Palmer V. Largent, 5 Neb. 223 ; Aldous v. Cornwall, 9 Best & S. 607 ; Marson v. Petit, I Camp. 82 ; Trapp v. Spearman, 3 Esp. 57 ; Sanderson v. Sympnds, I Brod. & B. 426; s. C. 4 Moore, 42; Catton v. Simpson, 8 Adol. & E. 136; Gardner ?/. Walsh, 5 El. & Bl. 83; Truett ?/. Wainwright, 4 Oilman, 411; 2 Pars. Cont. (6th ed.) 718-720; Railway Co. v. Bacon, 15 Pick. 239; Lang- don w. Paul, 20 Vt. 217; Huntington v. Finch, 3 Ohio St. 445; Nichols w. Johnson, 10 Conn. 192; Humphreys v. Crane, 5 Cal. 173. 388 EFFECT OF ALTERATIONS. [§ 266. when he has not witnessed its execution, cannot, even in the matter of proof of the instrument, be of any effect under any circumstances ; for when it is made to appear that the name was so affixed, or, in other words, when the claimed alteration is proved, the party whose name has been affixed as an attesting witness is no longer such witness, and consequently the proof of his handwriting \vould be no proof of the execution of the contract. If the alteration be w;holly immaterial, and in no way changes the liability of the maker of the note, it seems to us wholly immaterial with what intent such alter- ation was in fact made. The cases cited by the learned counsel for the appellant from Massachusetts and Maine, sustaining the correctness of the instruction,* "were all cases where the name of an attesting wit- ness had been added to a promissory note. In these States, when a note is attested by a witness, it extends the liability of the maker under the statute of limitations, and so in fact changes to some extent the nature of the contract and enlarges its obligation in the law. In this State there is no such law, and consequently no enlarge- ment of the obligation of the contract by reason of the fact that the note appears to be witnessed. The case of Adams v. Frye,^ was an action upon a sealed bond. The case of Marshall v. Gougler,* was an action on a sealed note. Both cases seem to sustain the contention of the appellant, and the correctness of the instruction given by the Circuit Court judge, and may have some weight in those States where the mere production of the note or bond does not prove its execution, and the adding of the name of an attesting witness might, therefore, under ^ Brackett v. Mountfort, 12 Me. 72; Thornton v. Appleton, 29 Me. 298; Homer w. Wallis, 11 Mass. 310, and Smith v. Dunham, 25 Mass. 246. 2 44 Mass. 103. » 10 Serg. & R. (Pa.) 164. § 267.] MATERIAL AND IMMATERIAL. 389, some circumstances, be an advantage to the holder of the note or bond, and a disadvantage to the maker. Under the laws of this State, we can see no advantage to be gained by placing the name of an attesting witness to a note in favor of the holder of the note, and no dis- advantage to the maker, and can conceive of no reason, therefore, why it should render the note void. " We cannot consider the fact that it is possible that an action might be brought upon this note in a State where the law enlarges the statute of limitations because the note is signed by an attesting witness. We can only judge of the materiality of the claimed alter- ation of the note by the application of our own laws. If the alteration be immaterial under the laws of this State, it cannot affect the rights of the parties in our courts ; because, in an action brought upon the note in some other State, the question of the alleged alteration might be adjudged a material alteration under the laws of that State, and possibly a different decision might be had. With that question the court has no concern." § 267. What is a material alteration. — In order to determine whether an alteration in an instrument is material it is necessary to consider the nature of the instrument, and the character of the change made in it. An alteration will be material if the contract is affected by it, and it will also be material if the identity of the particular instrument is affected. It is not apparent that it will be of value to have any more exact rules for the determination of the materiality of an alteration. In each case the real contract of the parties is to be sought, and when this is discovered, and the object and purpose of the writing is taken into consideration, good sense will dictate whether a subsequent change made in it is mate- rial. And as the materiality of an alteration is a question 390 EFFECT OF ALTERATIONS. [§ 268. of law to be decided by the court/ it seems wise to allow each case to be settled largely upon its own peculiar facts. § 268. Extract from^ opinion in Suffel v. Bank of England. — This question was recently considered by the English Court of Appeal in a case where the number of a Bank of England note had been wrongfully altered- In that case Coleridge, C. J., in the Queen's Bench Divi- sion, held that the alteration was immaterial as it did not vary the contract, and that, therefore, the note was not avoided.^ But the Court of Appeal held that the altera- tion was material, and avoided the note even in the hands of a bona fide holder.* In his opinion Jessel, M. R., said : " The only question we have to determine, therefore, is what is a material alteration, it being indisputable, accord- ing to the authorities, that if there be such a material alteration in the instrument, the instrument is avoided as against the person who would otherwise be liable upon it. . . . It is alleged, on the part of the respondent, that, in order to be a material alteration within this rule, the alteration must, in the case of a contract, affect the contract, and that where there is no contract, but rights are conferred otherwise than by way of contract, those rights must be interfered with. Those are the suggested limits. Upon these two questions arise. First of all, whether those limits are in themselves reasonable and such as should be adopted by the Court of Appeal in all cases; and, secondly, whether, if they are reasonable and 1 Cochran v. Nebeller, 48 Ind. 459 ; State v. Dean, 40 Mo. 464 ; Keen's Exrs. V. Monroe, 75 Va. 424; Bowers v. Jewell, 2 N. H. 543; Vance v. Low- ther, L. R. i Ex. D. 176 ; Crawford v. West Side Bank, N. Y. Ct. App. (1885), 2 Eastern Rep. 494. 2 Suffel V. Bank of England, L. R. 7 Q. B. D. 270. 8 L. R. 9 Q. B. D. 555. See also Leeds Bank v. Walker, L. R. 11 Q. B. D. 84. And compare City of Elizabeth v. Force, 29 N. J. (Eq.) 591 ; Com- monwealth z/. Industrial Sav. Bank, 98 Mass. 1 21; Daniel on Negot. Insts. , §§ 1399, 1400. § 268.] MATERIAL AND IMMATERIAL. 39I ought to be adopted, the adoption ought to be limited to the class of cases to which the decisions have been ap*- plied. It does not appear to me to be necessary for us now to decide whether those cases have been rightly decided which limit the materiality in the case of an ordinary commercial contract to the subject which aflfects the contract itself. Whenever it becomes necessary so to decide it will become necessary also to consider whether, in the case of such contract, there is anything which does not affect the contract. An illustration will point out what I mean. In an ordinary case it may be said that the number put on a bill of exchange or on a cheque will not affect the contract, and may not be a material altera- tion. But take the case of a debenture issued by a com- pany, or a bond issued by a turnpike trust or a foreign government, and that the bond is paid according to the number drawn by lot, which is a very common mode of payment. There, though the number would not affect the contract on the face of the instrument, it really would affect the contract in another way; and I should think there would be no doubt in the words that in such a case an alteration in the number would be a material alteration in the instrument. It, therefore, appears to me, before one can consider the question as to whether the alteration is an alteration affecting the contract, one must know ex- actly what the instrument is, and it may well be that in the majority of these cases (although they may not be all rightly decided, for some of them conflict with others), they may be well decided, and yet they may not enable one to decide such a case as this where other considera- tions arise beside the mere question of contract between the parties."^ 1 Upon this point Brett, L. J., said: " I incline to think, but it is not ne- cessary to determine this now, that where an instrument contains only a con- tract, or can only be used as evidence of a contract, no alteration of such an 392 EFFECT OF ALTERATIONS. [§ 269. § 269. Instances of material and immaterial altera- lions. — Many instances of material and immaterial altera- tions have been given by text-writers, and it is not deemed necessary to do more than refer the reader to the works where such instances may be found.^ If the principle is instrument, which does not alter or affect the contract, can be a material alteration." And Cotton, L. J., said: " No doubt there is a long string of cases which do, as a rule, deal with the question whether the contract contained in the instrument has been altered or not, as the test by which to decide whether the alteration be a material one within the rule in Pigot's Case, 1 1 Rep. 26 ; and the plaintiff did, as he was entitled to do, rely on that most strongly. But the question whether an alteration of an instrument is a material one must, in my opinion, depend upon the nature of the instrument and the uses to which it is to be put ; and although in these cases the proper test may have been whether the contract contained was altered or not, it by no means follows, unless it has been so laid down, that the rule is that the alteration in the contract is essential, and that no other alteration will do. In my opinion that conclusion would be incorrect. The question here is whether the alteration, although not an alteration of the contract, is, nevertheless, an alteration of the instrument in a material way. . . . Now, in this case we have a well-known thing, viz., a Bank of England note, which is, under an Act of Parliament, part of the circulating medium of the country, and as re- gards the issue of which the Bank of England is subject to restrictions in its operations. What has been done is this: Certain numbers, which are always stamped on the notes of the Bank of England before they are issued, have been altered by a holder, undoubtedly intentionally and for a particular pur- pose." 1 With regard to negotiable instruments, Daniel says a material alteration consists " in changing (i) its date, or (2) the time, or (3) place of payment, or (4) the amount of principal, or (5) interest to be paid, or (6) the medium or currency in which payment is to be made, or (7) the number or the rela- tions of the parties, or in (8) the character and effect of the instrument as matter of obligation or evidence." And he illustrates, by reference to au- thorities, these different methods in which the contract may be altered. See Daniel on Negot. Insts., § 1375 et seq., and § 1398 et seg., for instances of immaterial changes in the contract. See also Taylor on Evidence (8th ed.), §§ 1822, 1823; Leake's Digest, pp. 807, 809; Wharton on Contracts, § 696; Editor's Note to Neil v. Case, 37 Am. Rep. 907. A preliminary question as to what is the contract will arise in some cases, and this must be determined before it is decided whether the change made is material. Compare Garrard v. Lewis, L. R. 10 Q. B. D. 30. Cf. with this case Saunderson v. Piper, 5 Bing. (N. C.) supra, n. 2, p. 87 ; Johnston Har- vester Co. V. McLean, Sup. Ct. Wis. 1883, 15 N. W. Rep. 177; Carr v. Welch, 46 111. 88 ; Shryon v. Hawkes, 22 Ohio St. 308 ; Benedict v. Cowden, § 270.] MATERIAL AND IMMATERIAL. 393 borne in mind that every alteration in a commercial or trade contract is material if a reasonable man would be entitled to consider it a departure from the original agreement into which he entered, it will not ordinarily be difficult to determine the question in particular cases. For the application of this principle will show what changes in reality affect the contract, and what changes supply only those matters which the law supplies. § 270. Fraudulent material alterations. — A material alteration of an instrument, fraudulently made, not only avoids the instrument, but it precludes recovery upon the original consideration for which the instrument was given. Rapallo, J., of the New York Court of Appeals, has stated the law upon this point in the following language : ^ " Where a note or bill is given for a valuable considera- tion, existing independently of the instrument, it is well settled that the alteration of the note or bill in a material point by the holder, without authority of the maker, prevents a recovery upon the note or bill, whether the alteration be made with or" without fraudulent intent. Cases are cited by the respondent, holding that where, by reason of an alteration of the instrument, a recovery cannot be had thereon, the party receiving it may still recover upon the original consideration. But in none of these cases did it appear that the alteration had been fraudulently made by the party thus seeking to recover. The counsel for the respondent cites, from the opinion of Duller, J., in Master v. Miller,^ that defendant cannot be suffered to pocket the money for which the bill was drawn; ' that he must not get ;^900 by the fraud of an- other.' But it will be found that the opinion in which 49 N. Y. 396; Jones v. Fales, 4 Mass. 245 ; Springfield Bank v, Merrick, 14 Mass. 322. 1 Meyer v. Hu 2 4T.'R. 332. iss. 322. 1 Meyer v. Huneke, 55 N. Y. 412. 2 A T.'R. 1X7.. 394 EFFECT OF ALTERATIONS. [§ 27O. these remarks occur is a dissenting opinion ; that the right to recover on the original consideration was not legitimately in question, and that the plaintiff in the case was unaffected by any fraud. He was a bona fide trans- feree for the value of the bill, and the special verdict found that the alteration was made by some person td the jury unknown. Atkinson v. Hawden,^ is also cited; but there the question arose upon demurrer, and there was nothing to show that the alteration was fraudulent- ly made. There was no allegation of fraud. Speaking of this case in Clute v. Small,^ Cowen, J., says: 'In Atkinson v. Hawden, the question arose upon plead- ing, and, for aught that appeared, the alteration was made under an honest mistake of right. Perhaps that distinction should be adopted.' In Sutton v. Toomer,^ another of the cases relied upon by the respondent, a banker's note was altered by the maker himself in the presence of the pay^e, and the only point decided was that this alteration made a new note of it, which required a new stamp, and that, not being stamped when altered, it was void, and the cus- tomer could recover on the original consideration. This decision was based wholly on the stamp act. There was no wrongful alteration of the note. Not a single case cited, nor have I found any, holds that after a fraudu- lent alteration of the security the holder can remit him- self to the original consideration. '' Neither do I find any controlling authority the other way; but such cases as are to be found in the books are to the effect that a party who fraudulently alters or des- troys the written evidence of his claim cannot recover on the original consideration. Kennedy v. Crandell * holds expressly that where notes are given for the purchase- money of property sold, and are fraudulently altered by 1 2 Adol. & Ellis, 628. 2 17 Wend. 242. ' 7 B. & Cress. 416. * 3 Lans. i. § 270.] MATERIAL AND IMMATERIAL. 395 the payee by adding the words ' with interest,' he cannot recover either upon the notes or the consideration. In that case the action was brought by a transferee of the notes, after maturity, to whom all claims of the payee under the contract of sale were also assigned, and the complaint set forth the contract of sale as well as the notes. The plaintiff was not permitted to recover upon either. In Trow v. The Glen Cove Starch Company^ a written order for advertising had been altered by raising the price to be paid. The plaintiff was not, permitted to recover for the work. In felade v. Noland^ the plaintiff sued for work and labor, and on a note which had been given therefor, alleging the note to have been lost, but it appeared that he had intentionally destroyed it under cir- cumstances from which a fraudulent intent might be in- ferred. He was not permitted to recover. In Hunt v. .Gray,^ and in Lewis v. Schenck,* though the point was not involved, it is assumed that a fraudulent alteration would preclude a recovery upon the consideration. " On principle, regarding the question as an open one, I think no recovery should be permitted in a case where the holder of a written security or evidence of debt has, with intent to defraud his debtor, altered the instrument in a material part to his own advantage. ' To prevent fraud was the obvious policy of the rule which avoids a written contract on account of a fraudulent alteration in a material part. It is apparent that if the party guilty of the fraud may found a claim upon the original considera- tion, the rule itself would be defeated.'^ To allow parties to take the chances of success in fraudu- lently raising the amount of the written obligations of their debtors, without risk or loss in case of detection, 1 I Daly, 280. 2 12 Wend. 172. 3 35 N. J. L. 227. M C. E. Gr. 461. 6 Mills v. Starr, 2 Bailey (S. C), 359- 396 EFFECT OF ALTERATIONS. [§ 27I. would be an encouragement to this description of fraud, which the law should not afford. " It is said, on the other hand, that the debtor has sustained no injury by the fraud, and that he should not be permitted to profit by the unsuccessful attempt of his creditor to defraud him. It is true that where the fraud is detected in season the debtor sustains no pecuniary loss, but he has been intentionally exposed to injury. The alteration may have been so skillfully made as to render detection difficult, or the debtor might have be- come infirm, or died, and the altered instrument success- fully imposed upon his representatives. It is for the pur- pose of discouraging such attempts that the law denies relief to a plaintiff who comes into court with his hands soiled with a fraud so inexcusable. That the effect of such denial will be to benefit the other party is not a suf- ficient ground for overlooking the fraud. It is a conse- quence for which the plaintiff is alone responsible, and which always ensues when the action is founded upon a special contract which has been fraudulently altered. It is conceded that in such a case the plaintiff has deprived himself of all remedy, either upon the contract or the consideration. So, in the case of an altered deed, the grantee loses the land and the grantor is benefited. If the argument now referred to was sound, the plaintiff should be permitted in those cases to recall the alteration and avail himself of the contract or deed in its original and true form, which it is well settled he cannot do." ^ § 2^1. Innocent material alterations. — Where, how- ever, a material alteration is made without a fraudulent intent, although the altered instrument is avoided, recov- 1 See further, Smith v. Mace, 44 N. H. 553; Vogle v. Ripper, 34 111. loo; Eckert v. Pickel, 59 Iowa, 545 ; Trow v. Glen Cove Starch Co., i Daly (N.Y.), 280; Craighead v. McLoney, 99 Pa. St. 211; Daniel on Negotiable Insts., § 1410a/ Smith's Lea. Cases, vol. II, part I, p. 1277. § 271.] MATERIAL AND IMMATERIAL. 397 ery may be had upon the original consideration on which it was based.^ It is sometimes held that such an innocent alteration works a forfeiture of the entire debt, on the ground that this is a protection necessary for the sanctity of written instruments.^ But the weight of au- thority opposes this doctrine. It is, therefore, proper to introduce evidence to show that an alteration was made without fraudulent intent if recovery is sought on the original indebtedness,^ and where such evidence is given » Sullivan v. Rudisill, 18 N. W. Rep. 856 (1884) ; Morrison Bros. v. Hug- gins, 53 Iowa, 76 ; Clough v. Seay, 49 Iowa, in; Sloan v. Rice, 41 Iowa ; Booth V. Powers, 56 N. Y. 22; Gillette ^/. Smith, 18 Hun (N. Y.), 10; Kingw. Stewart, 25 N. W. Rep. 905 ; Hunt v. Gray, 35 N. J. L. 227 ; Atkinson v. Haw- den, 2 Ad. & E. 167; Daniel on Negot. Insts., § 1411. 2 In Bigelow v. Stilphens, 35 Vt. 521, 525, Pierpoint, J., says : " Whether such alteration [material] works a forfeiture of the debt so that there can be no recovery by the party making such alteration for the original consideration for which the obligation was given, in any form of action, is a question on which the authorities are not entirely harmonious. The weight of authority, however, seems to be in favor of the position that in such case there can be no recovery for the original consideration. The forfeiture of the debt is one of the penalties that the law imposes upon the party who alters or tampers with the written evidence which he holds of his claim. The rule is based on considerations of policy, the object beingto deter the holders of written instru- ments from attempting to commit frauds upon the signers by altering them." And, in White v. Haas, 32 Ala. 430, Rice, C. J., says : " To allow the payee, after he had designedly made a material alteration in the note without the assent of the maker, to recover upon the contract for which the note was given, would be to depart from the sound and just principle that no one shall be permitted to take the chance of committing a, fraud without running any risk of losing by the event when it is detected." See Toomer v. Rutland, 57 Ala. 379. * In Booth V. Powers, 56 N. Y. 22, 30, Folger, J., says : " It is suggested that the offer of proof made by the defendants does not cover the case which they sought to make, in that there is no offer to show that the alteration was made with fraudulent intention. It does not need, in such case, to make ex- press proof of that intent. If a note be altered in a material part without authority after execution, that avoids the note. It is not of moment whether it be done with fraudulent intent, save as the existence of such intention affects the right to resort to the origfinal indebtedness ; and then the fact of the un- authorized material alteration is a matter for the consideration of the jury in determining the question of fraudulent intention. We are of the opinion that 398 EFFECT OF ALTERATIONS. [§ 2']\. it is for the jury to determine with what intent the alter- ation was made.^ the alteration named in the offer was a material one ; that the act being proved, it showed that the note was void ; and if the jury had found there- from, and from any other circumstances shown to them that it was done with fraudulent intent, the note would have been unavailable in a resort to the original indebtedness. Hence the note would have been valueless. " The plaintiff was not, however, precluded from further progress. He had the right, after the offered proof had been received in evidence, to rebut the inference of fraudulent intention, or to show a justification or excuse for the act. Sometimes an alteration in a note, seemingly material, and such as may, prima facie, render it void, is innocent, and does not vitiate the instru- ment. So it is, when it is done to correct a mistake in penning the note, or to make it express the real bargain of the parties, or to give the proper legal form to their contract. In such case the payee has a right to enforce it. Again, if the alteration was made without fraudulent intention, the payee may resort to the original indebtedness, if that was independent of the note and has not been discharged by the execution of it, and pursue the maker upon that." 1 Infra, § 284. CHAPTER XXII. BURDEN OF PROOF AND PRESUMPTIONS AS TO ALTER- ATIONS. § 272. Statement of method of treatment. 273. Party producing a writing apparently altered should have burden of freeing it from suspicion. 274. Questions arising as to the making of material alterations are matters of fact. 275. If no contradictory evidence, no question arises for jury. 276. Summary of principles controUing subject. 277. What is meant by burden of proof. 278. Rule that burden is upon party producing advocated by Parsons. 279. Dodge V. Haskell. 280. Wilde V. Armsby. 281. The same rule applies to all contracts. 282. Authorities holding burden on party alleging bad faith if instrument free from suspicion. 283. If alteration not suspicious, but shown prima facie to be subsequent to execution, burden on plaintiff. 284. Questions of fact for jury. 285. Referring questions to jury does not reconcile authorities. 286. If no evidence impeaches writing alteration assumed to be prior to execution. 287. A writing containing no evidence of subsequent alterations to "be ad- mitted at once. 288. Explanatory evidence may be required in first instance if instrument suspicious on its face. 289. Statement of presumptions. § 272. Statement of method of treatment. — It is fre- quently stated that the authorities, in regard to the pre- sumptions which arise with reference to alterations in a contract, are hopelessly at odds, and it must be admitted that many conflicting decisions have been made upon the subject.^ But it is believed that the true rules governing 1 Consult generally upon this subject, Greenleaf on Evidence, § 564 and notes; Stephen's Digest of Ev. (Chase's ed.), pp. 157, 158, 159; Taylor on 400 EFFECT OF ALTERATIONS. [§ 273. the mooted questions are founded in principle and are sustained by the weight of authority. And it will be our object to state what seem to be the important considera- tions which should fix these rules, and then to test the conclusions reached by reference to the authorities. § 273. Party producing a writing apparently altered should have burden of freeing it frotn suspicion. — The most important inquiry, when a writing which shows upon its face a material alteration is presented to the court is, upon whom should rest the burden of removing the suspicion which attaches to it. In order to reply to this question correctly, it is desirable to recall that the reason why the law does not allow one to take advantage from an instrument which he has wrongfully altered, as we have seen, is because the writing no longer expresses the real contract of the parties.^ The paper has been in- validated by the wrongful act of the party who has had possession of it, and it is necessary for the protection of all contracting parties that he should be punished for his wrongdoing. If public policy makes this rule necessary, as it as- suredly does, the intentional alteration of instruments after execution should be discouraged in every manner; and it is but just that courts should adopt rules which will deter those who have control of documents from tampering with their terms, and which will, upon slight evidence, put the burden of explaining any apparent al- Evidence, § 1819; Smith's Lead. Cases, note to Masters. Miller, vol. I, pt. 2, p. 1277; Albany Law Jour., vol. XVI, pp. 64, 80; Wharton on Cont:, § 698 ; Parsons on Cont. vol. II, p. 722 et seq.; Chitty on Cont. p. 1163, note (c),- Lawson's Presumptive Evidence, p. 381 et seq. In Kountz v. Kennedy, 63 Pa. St. 187, Thompson, C. J., said : " There is no subject in the books which has occupied a much larger share of attention than questions of the alteration of writings ; but after all has been said, each case must stand much more on its own facts than upon the rules announced in any given case." 1 Supra, § 260. § 2 73-] BURDEN OF PROOF, PRESUMPTIONS. 4OI terations upon the party producing the writing. It is not desirable or necessary, however, that the law should of its own accord raise any presumption against the va- lidity of an altered writing; and if no evidence which throws suspicion upon it is before the court there is no reason for its rejection. Where, however, there is, either from the instrument itself, from ,the circumstances, or from any of the evidence, />rzma facie proof that the writing has been altered since execution, fairness will re- quire that the burden of clearing the paper from suspic- ion should rest upon the party who has been the custo- dian of it. It is no hardship to put this burden upon him, for, in case the change was made before execution, he took the writing in its disfigured shape, and in case it was made after that time, he has been its guardian.^ Moreover, if the alteration be immaterial, supplying what the law sup- plies or making clear what is elsewhere expressed in the instrument, there will be nothing to explain. And if there be but slight evidence of a change subsequent to execution, and the writing upon its face seems fair, it will do him no injustice to put the burden of proof upon him, for the facts will speak in his favor. On the other hand, to put the burden of proving that an alteration was wrongfully made upon the party so alleging would be to compel him to prove a fact peculi- arly within the knowledge of the other party, and would * In Simpson v. Stackhouse, 9 Pa. St. 186, it was said in regard to the holder of a note : " The very fact that he received it is presumptive evidence that it was unaltered at the time ; and, to say the least, his folly or his knavery raised a suspicion which he ought to remove. The maker of a note cannot be expected to account for what may have happened to it after it left his hands, but a payee or indorsee who takes it, condemned and discredited on the face of it, ought to be prepared to show what it was when he received it." 36 402 EFFECT OF ALTERATIONS. [§§ 274, 275. be favoring the one who has admittedly been guilty of either a negligent or a wrongful act. § 2 74. Questions arising as to the making of material alterations are matters of fact.— The question which arises when there is evidence that a change in a contract has been made since execution is purely one of fact. It is not for the law to presume that an alteration has been made, or that whatever change is apparent was made either before or after the execution of the contract, or that it was or was not made by the party producing it, unless there be a total absence of evidence upon the questions. If the writing itself contains evidence of alteration made subsequent to execution, or if extrinsic evidence is given to show that such a change has been made, the question arises whether, as matter of fact, it has been so made, and this question, if the evidence is in any degree contradic- tory, must be disposed of by the triers of fact. This principle is of great importance to a clear understanding of this subject, and must never be disregarded. So it is to be observed that when a question arises as to whether there has been any change in the writing and the evidence is contradictory, this also is a question of fact ; and whether an alteration has been made with a fraudulent intent is to be settled by the jury upon the evidence. § 275. If no contradictory evidence no question arises for jury. — If, however, there is no evidence in the writ- ing itself, from the circumstances, or from the statements of the parties, which is sufficient to raise an issue of fact upon the question whether there has been an alteration since execution, there is nothing for the party producing the paper to explain. In such a case there is no reason to think that the signs as they appear are not the original signs used by the parties, and the court should presume that the writing represents the real contract. §277-] BURDEN OF PROOF, PRESUMPTIONS. 403 And, upon the other hand, if all the evidence intro- duced throws suspicion upon the document, there would seem to be no question for the jury until this evidence is contradicted. § 276. Summary of principles controlling subject. — The three considerations which it is believed should con- trol the decisions upon this subject may, therefore, be briefly stated thus : The burden of freeing an altered paper from suspicion rests upon the party producing the paper. The questions arising with regard to the making of material alterations are questions of fact. If the evidence presented in regard to these questions is uncontradicted, there is nothing to submit to the jury. The bearing of the authorities upon these conclusions will now be considered. § 277. What is meant by burden of proof. — It is to be noticed that by fixing the burden of proof upon the party producing an instrument, nothing more is required from him than that he shall have the preponderance of proof upon the main issue. He is not called upon to show beyond a reasonable doubt that the alteration was innocently made, but only to satisfy the jury by the weight of evidence that it was so made.^ If, therefore, he has any evidence in his favor he will certainly have his case presented to the jury, who will, as is said in a case subsequently quoted, in ninety-nine cases in every hun- dred, decide the fact upon all the evidence presented, and without regard to any presumption. The result of resting the burden upon the party who produces the paper is, 1 Seyboldt v. N. Y. &c. R. R. Co., 95 N. Y. 562; Steams v. Field, 90 N. Y. 640; N. Y. Guaranty & Indemnity Co. v. Gleason, 78 N. Y. 503; Robin- son V. Randall, 82 111. 521. 404 EFFECT OF ALTERATIONS. [§ 277. then, that when he cannot satisfy'the jury by the weight of evidence that he has not tampered with the writing, the finding must be against him. This burden of proof rests upon the party producing the paper throughout the trial, ^ although, during its pro- gress, the burden is said to shift as each party gives evir dence which raises a prima facie presumption in his favor .^ 1 In Ross V. Gould, 5 Greenl. (Me.) 210, it was said : " Nothing is to be admitted to the jury without the sanction of an oath, unless by consent ex- pressed or implied. A promissory note, offered in support of a declaration upon it, may be read to the jury without any preliminary proof if the defend- ant consents to it. This is the case of express consent. If the nature of a plea in bar be such as not to deny the genuineness of the contract declared on, as, for instance, the plea of general performance, or the plea of seizin at the time of making the covenant alleged, or the plea of payment or release, thisse are cases of implied consent, and for the reasons above mentioned the contract declared on may be read to the jury without any proof of execution. But not so when the issue is upon the plea of non est factum. There must then be some, prima facie proof offered to justify the court in permitting the contract to be read to the jury in evidence and submitted to their considera- tion. And the same principle applies if the contract be offered in evidence and is denied. When it is so admitted the jury are the proper and constitu- tional tribunal to decide the question whether the contract be genuine or not. In the examination of the contested fact the onus probandi may, in the course of a trial, be thrown from one party upon the other several times, according as the complexion of the proof may change. But when it is said, as was stated by the judge at the trial, that the onus probandi is on the party who offers a paper as a genuine deed, under which he claims, the plain, sound, common-sense and legal meaning is that it has reference to all the evidence in the cause respecting the alleged genuineness of the contested paper; or, in other words, it means that the party affirming the paper or instrument to be genume must furnish to the jury so much evidence as to leave a balance of proof in favor of the genuineness of the instrument, after making all due allowance for the influence of the proof adduced on the other side to produce a different conviction in the minds of the jury. The application of these plain principles shows most manifestly that the instructions of the judge to the jury were perfectly correct." £ See Claflin "v. Meyer, 75 N. Y. 260; Heinemann v. Heard, 62 N. Y. 448; Bailey's Onus Probandi, p. 525. After the party upon whom the burden rests " has g^ven evidence which, in the absence of further proof, would be suffi- cient to entitle him to recover, the other party may then give evidence in re- buttal or defense, whereupon the former may need to furnish additional evi- § 278.] BURDEN OF PROOF, PRESUMPTIONS. 405 It is to be noticed that while the party producing the paper has this burden of proof upon him, he is not re- quired to proceed with his proof upon the introduction of the paper in evidence unless it bears marks of suspi- cion upon its face.^ § 278. Rule that burden .is upon party producing advocated by Parsons. — Parsons, notwithstanding the great confusion in the authorities at the time of writ- ing, advocated with characteristic ability the rule that the burden of freeing an altered instrument from sus- picion rested upon the party producing it. He said in regard to this question:^ "One further question has come frequently before the courts, both in England and in this country, upon which the cases are still quite irre- concilable. It is this: Upon which party does the onus of explanation rest, when an altered note or bill is made the foundation of an action ? Does it rest on him who claims under the note as it is, or on him who pleads that he became a party to a different note than the one in suit ? On general grounds, it would seem reasonable to say that the holder of the note is he on whom, prima facie at least, the right, the duty, and the responsibility of possession all rest. The instrument is in his hands ; if it has been tampered with, this has been done either by him, or by his connivance, or by his negligence. This may fairly be presumed ; and unless he can rebut this presumption by adequate explanation and proof, he must take the consequences. And this rule is cer- dence to complete the requisite proof of his allegations. And this successive adducing by each party of evidence in support of his side of the case is virhat is often called ' shifting of the burden.' " Note 3, p. 177, Chase's ed. Steph- en's Digest of Evidence, citing Lamb v. Camden, &c. R. Co., 46 N. Y. 271 ; Ogletree v. State, 28 Ala. 693. 1 Infra, § 287. 2 Parsons on Notes and Bills, vol. II, p. 575 et seq. 406 EFFECT OF ALTERATIONS. [§278. tainly sustained by high authority, as well as by strong- reasons. Such, indeed, appears to be the view, in the main, of all the English cases, and of many decisions in this country. With regard to the former, it has been suggested that the provisions of the stamp laws require a severity towards suspected alterations which would not be exercised at common law. This may be true, and yet it seems clear to us that some of the English decisions, and especially the later ones, which, indeed, seem to tacitly regard the rule as settled, have thrown the onus upon the holder solely upon common law grounds.^ . . "And upon the whole, from the many cases on this subject, which our notes will show to be very numerous, and from the best view of the reason and justice of the matter which we are able to take, we should hold : First, That the materialness and legal effect of an alteration are purely questions of law, for the court ; Secondly, That whether there be an alteration, and the time of it, the manner of it, by whom it was made, with what au- thority, or what design, or on what grounds, are all ques- tions of fact for a jury. But every question that goes to a jury must go with an onus on one party or the other. And we should say, that if the alteration be manifest, or if the defendant can show that there is an alteration, he may stop there ; and the onus is upon the plaintiflF to 1 "Where an alteration appears on the face of a bill or note, it lies on the plaintiff to show that it was made under such circumstances as not to vitiate the instrument. And this rule is most reasonable ; for if it lay on the defendant, on an acceptor for example, sued by an indorsee, to shgw that the alteration was improperly made, it might be a great hardship ; for he may have no means of proving that the bill went unaltered from his hands, or of showing the circumstances of a subsequent alteration. But the burthen of explaining an alteration imposes no hardship on the plaintiff, for if the bill was altered while in his hands, he may and ought to account for it ; if before, then he took it with a mark of suspicion on its face, which ought to have induced him either to refuse it or to require evidence of the circumstances under which the alteration was made.'' Byles on Bills, p. 329. § 278.] BURDEN OV PROOF, PRESUMPTIONS. 407 show that the alteration was made under such circum- stances, in regard to time, or person, or purpose, or justifi- cation, as would prevent its affecting his rights. We do not mean that the burden is a heavy one ; but only that the plaintiff must offer what evidence he can, and the jury will take the question. But they cannot find for the plaintiff who sues on an altered note, unless they are in some legal way satisfied that the note is one on which the action may legally rest. Undoubtedly this rule may sometimes work injustice. If one makes a note, and at the suggestion of the payee adds something to the amount, or alters the date by interlineation and per- haps erasure, before giving it, certainly it would be a great misfortune for the payee to find that his sugges- tion, and the promisor's compliance with it, had made the note valueless. But every one ought to know enough and to think enough of what he is doing, not to take so important an instrument as a note or bill, to the very face of which such a taint as thdt of obvious alteration attaches, without possessing the means of ex- plaining it. And nothing could protect such a party but the opposite presumption, that every alteration was made before the holder and plaintiff became possessed of it, a presumption which, it cannot be necessary to say, would be liable to do great mischief, and to facilitate fraud in an extreme degree. And it could not but cause great embarrassment and uncertainty in the use of these important instruments of business, if he who issued one was liable to have it returned to him with an important alteration as to time or amount, for which he had made no preparation or calculation, but which bound him be- cause he could give no explanation of what had hap- pened to an instrument of which he had neither posses- sion nor control." 408 EFFECT OF ALTERATIONS. [§ 279 § 279. Dodge V. Haskell. — The Supreme Court of Maine, in the case of Dodge v. Haskell/ has also asserted this rule in clear terms. In that case Peters, J., says : " Where a plaintiff declares upon a note, and offers it in evidence against the maker, there is a burden upon him to satisfy the jury that an apparent alteration of the note was made before delivery. This arises from the general burden of proof, which the plaintiff has to sustain, to show that the instrument declared on is the genuine and valid promise of the defendants. Therefore, if there is evidence, each way, upon a question of alteration, the preponderance must be in favor of the plaintiff. The jury are to be satisfied that a note is genuine and not fraudulently altered. " But the paper itself, unaided by other evidence, may satisfy the jury, or it may not. All depends upon cir- cumstances. Alterations are rarely alike. The alteration may be immaterial, or comparatively so, or natural, or beneficial to the maker, or made by the same pen and ink as the body of the instrument, or in the handwriting of the maker (where one maker), or in that of the wit- ness to the instrument ; and in such cases it would not be suspicious. On the other hand, the alteration may present indications of fraud and forgery. Whether it does or not is a question of fact and not of law. It can- not be a question of law to decide whether a note is in two inks or one, or two handwritings or one, or why so written. It is said that alteration prima facie indi- cates fraud. It is sure that it does not in all cases. On the other hand, it is said that fraud is not to be presumed. But it would be extreme to say that an instrument might not be so altered as to show upon its face the grossest attempt at forgery. Therefore, what alteration or degree 1 69 Me. 429, 433. § 28o.] BURDEN OF PROOF, PRESUMPTIONS. 409 or kind of alteration may exist without being suspicious enough to demand explanation, is for the jury to settle. There is no presumption of law, either way. There is much confusion in the cases upon this subject and a* great variety of decisions. There can be no difficulty, prac- tically, in the rule as we here state it. It will rarely happen that a case is to be tried without some evidence aliunde the note, and it cannot be a matter of much con- sequence which side proceeds first.'' . " 1 § 280. Wilde V. Armsby. — So the Massachusetts Supreme Court, in the case of Wilde v. Armsby,^ said, 1 Citing, Crabtree v. Clarke, 20 Maine, 337 ; Boothby v. Stanley, 34 Maine, 515 ; 2.Washb. Real Prop. 555, and cases. ^ 60 Mass. 314, 316. The courts in Massachusetts have since carried forward this doctrine. In Simpson v. Davis, 119 Mass. 269, it was claimed that the words •' six months after date " following the provision as to payment of interest, were inserted after the execution of the note. Endicott, J., says: " The plaintiffs allege in the declaration that the defendant made the note declared on. This the defendant denies, and says that there has been an alteration of the note since it was given. If an alteration was made after its execution and without the defendant's consent, the note declared on is not the note of the defendant. The plaintiffs must establish that it is this de- fendant's note, and on this proposition the plaintiffs have the burden of proof throughout. The plaintiffs rely upon the words of Shaw, Ch. J., in Davis v. Jenney, i Met. 221, 224, 'that an extension of the time was a material alter- ation, and that the burden of proof was upon the defendant to show the alteration.' That the words are not here used in their technical sense, is evi- dent from the paragraph that follows : ' Or perhaps to state this last propo- sition with a little more precision, the proof or admission of the signature of a party to an instrument \s prima facie evidence, that the instrument written over it is the act of the party ; and this prima facie evidence will stand as binding proof, unless the defendant can rebut it by showing, from the ap- pearance of the instrument itself, or otherwise, that it has been altered. In Wilde V. Armsby, 6 Cush. 314, it was held that the burden of proof was on the plaintiff to show that an interlineation was made before the instrument was executed. The same rule applies as when a want of consideration is re- lied on as the defense to a promissory note ; the burden of proof is on the plaintiff, upon the whole evidence, to establish that fact." See also Drum v. Drum, 133 Mass. 566 ; infra. Chap. XXIII. In Page v. Danaher, 43 Wis. 224 (1876), Cole, J., says: "On the part of the defendants it is insisted that the onus was upon the plaintiffs, to explain 4IO EFFECT OF ALTERATIONS. [§ 280. by Metcalf, J. : " This is an action on a written guaranty in which there is an interlineation that alters its legal the alteration, and to show that the words ' after due ' were erased before the note was executed. On the other side it is said that no explanation of the change of the note was necessary ; that there was nothing suspicious in the appearance of the paper which the plaintiffs were bound to remove by evi- dence, the legal presumption being that the alteration was made contempo^ raneously with the execution of the instrument. " The note is a printed form, and it is evident that the words ' after due ' were stricken out with a different ink from that with which the body of the note was filled up. It is said the alteration bears plain marks of having been made with the same pen and ink as the signature ; but this is not obvious from a mere inspection of the writing. The alteration is certainly a material one, and the general appearance of the note raises a suspicion as to its genu- ineness. Under these circumstances we think the plaintiffs were bound to give some evidence to account for the alteration, and which would warrant the inference or conclusion that the alteration was made before the instru- ment became operative. We do not say what that evidence should be, but it should be sufificient to satisfy the jury of that fact. The authorities bearing upon this question are very numerous, and greatly in conflict. It is impos- sible to reconcile them, as some hold to one rule and others to a different rule upon almost the same state of facts. We are, therefore, at hberty to adopt. that rule which appears to us most in accordance with sound principle, and which will most likely promote the ends of justice, and best secure the rights of parties. And we therefore adopt substantially the following remarks of Prof. Greenleaf, as laying down the true rule : ' If, on the production of the instrument, it appears to have been altered, it is incumbent on the party offering it in evidence to explain this appearance. Every alteration on the face of a written instrument detracts from its credit, and renders it suspicious, and this suspicion the party claiming under it is ordinarily held bound to re- move. If the alteration is noted in the attestation clause as having been made before the execution of the instrument, it is sufficiently accounted for, and the instrument is relieved from that suspicion. . . . But if any ground of suspicion is apparent upon the face of the instrument, the law presumes nothing, but leaves the question of the time when it was done, as well as that of the person by whom, and the intent with which the alteration was made, as matters of fact, to be ultimately found by the jury upon proofs to be ad- duced by the party offering the instrument in evidence. ' i Greenl. Ev. sec. 564. This being the view which we adopted upon the subject, it follows that the plaintiffs were bound to account for the change in the note, and should have given some evidence from which the jury might have found that the words ' after due ' were stricken out prior to or contemporaneously with the execution of the note. We are not aware that this point has been directly passed upon by the courts of this State, though the cases of Low v. Merrill, § 280.J BURDEN OF PROOF, PRESUMPTIONS. 411 effect and avoids the instrument if it was made after exe- cution by the defendant and without his consent. The I Pin. 340, and Schwalm v. Mclntyre, 17 Wis. 233, so far as they have a bearing upon the question, are in harmony with the rule above laid down." In Heffner v. Wenrich, 33 Pa. St. 428, Woodward, J., says : "The plaint- iff in error was sued for the balance of a book account, which began 24th June, 1851, and ended October 7th, iSji ; and also for two promissory notes, one dated March 25th or 30th, 1852, and drawn at forty days, for $225; the other dated July 2ist, 1852, at sixty days, for $100. " When the first of the notes was offered in evidence, it was objected to, on the ground that the date had evidently been altered ; but the court over- ruled the objection and admitted the note. The note has not been sent up with the record, as it should have been, for our inspection, but it does not seem to be controverted in argument, that there had been at some time an alteration of the figure 2 into a 3, and of the 5 into a o, making a date which was first written 25 read 30. " It does not appear from the record, on what ground the court overruled the defendant's objection. It could not have been with a view of submitting to the jury the question of alteration or no alteration — and the time of it, whether before or after the issue and delivery of the note — because no such questions were submitted to the jury. " The learned judge told the jury, that the alteration being immaterial did not avoid the note ; and this most likely was his reasdn for overruling the objection to the evidence. He may have thought the alteration beneficial to the defendant, since the effect of it was to postpone payment for five days. Pos.sibly, he went upon the presumption, that the alteration was made before the note was delivered, there being no evidence to the contrary. With whatever views the learned judge admitted the note, without put- ting the holders to explanation of its disfigured appearance, we are to assume,. as the case is presented to us, that an alteration of the date was patent on the face of the note ; or at least, that there was such an appearance of alteration, that the jury would have found it, had the fact been submitted. " And this assumed, we are compelled to say, there was error in the rul- ing of the court. The note should not have been admitted, except in con- nection with evidence tending to explain the alteration ; and then it should have been referred to the jury to say, whether the alteration, if any, was made before or after the defendant parted with the note. "The policy of the law is against all tampering with written instruments, and especially commercial paper. He who takes a blemished bill or note takes it with all its imperfections on its head. The very fact that he received it, is presumptive evidence that it was unaltered at the time. The maker of a note cannot be expected to account for what happened to it after it left his hands, but a payee or endorsee who takes it condemned and discredited on the face of it, ought to be prepared to show what it was when he received it. "Such was the language of this court in Simpson v. Stackhouse, 9 Barr, 412 EFFECT OF ALTERATIONS. [§ 280. question at the trial was, whether the burden of proof was on the plaintiff to show that the interlineation was 188; and although it was predicated of an alteration in the body of the note, and not of its date, yet it was applied in Paine v. Edsell, 7 Harris, 180, to a note altered only in the date. And again in Miller v. Gilleland, Id. 122, the same doctrine was applied to the alteration of the date of a sealed note. So again, in Getty v. Shearer, 8 Harris, 12, though the alteration was not inju- rious to the party charged. " Miller v. Reed, 3 Casey, 247, was not the case of an altered date, and might perhaps have been rested on the special circumstances, that the inter- lineation seemed all fair, and that the payee and endorsee being both dead, there was no party to be put to the duty of explanation. " It follows from the cases I have referred to, and those which they cite, toth English and American, that the maker of negotiable paper is always to be presumed, in the absence of evidence, to have issued it free and clear from all blemishes, erasures, and alterations, whether of the date or the body of the instrument ; and that the burden of showing that it was defective when issued, is upon the holder, even though the alteration be beneficial to the maker. The notion that an altered date may be beneficial to the maker of paper, was met in Miller v. Gilleland, by Judge Gibson's remark, that if the day of payment be accelerated by it, the debtor loses part of the time for which he stipulated, and the computation of interest is affected by it ; if it be re- tarded, the starting of the Statute of Limitations, or the presumption of pay- ment from lapse of time, is also retarded by it. It may be added also, that, the date being a material part of the instrument, any alteration therein, with- out the consent of the maker, destroys the identity of the contract. " It is quite apparent from all this, that the learned judge was in error in placing this note before the jury, with the observation that the change of date was immaterial, and without requiring the holders to explain it. If they could have shown that the change was made before the note was deUvered, or afterward, with the defendant's consent, they would have relieved it of sus- picion. But until they gave evidence to this effect, X\x prima facte presump- tion should have been, that the note came from the hands of the maker in a perfect state, and had been defaced and altered without his consent; so that, whether benefited or prejudiced by the alteration, it was no longer the promise and contract he signed." In Robinson z/. Reed, 46 Iowa, 22 r. Beck, J., says: " After the alteration is established the law imposes upon plaintiff the burden of showing facts sup- porting the sufficiency of the indorsement upon which the action is brought. If such proof is not given, the alteration will be presumed to have been fraud- ulently made by the party attempting to enforce the note. Whitmer v. Frye, 10 Mo. 348; Wheelock v. Freeman, 13 Pick. 165." See further. Greenleaf on Evidence, § 564 ; United States v. Linn, i How. 104 ; Cole v. Hills, 44 N. H. 227 {infra, % 284) ; White v. Haas, 32 Ala. 430 ; Wheat v. Arnold, 36 Ga. 480; Willett V. Shepard, 34 Mich. 106 ; Leykariff v. Ashford, 12 Moore, 281 ; Tay- § 28l.] BURDEN OF PROOF, PRESUMPTIONS. 413 made before the instrument was executed, or on the de- fendant to show that it was made afterwards. The jury were instructed, that the burden of proof was on the plaintiff, and the case comes before us on exceptions to that instruction." And after a review of the English authorities favoring this rule it is said : " We are not pre- pared to decide that a material alteration, manifest on the face of the instrument, is, in all cases whatsoever, such a suspicious circumstance as throws the burden of proof on the party claiming under the instrument. The effect of such a rule of law would be, that if no evidence is given by a party claiming under such an instrument, the issue must always be found against him ; this being the meaning of the ' burden of proof.' i Curteis, 640. But we are of opinion, upon the authorities, English and American, and upon principle, that the burden of proof, in explanation of the instrument in suit in this case, was on the plaintiff It was admitted by his counsel, at the argument, that the words ' and Co.' which were interlined in the guaranty, were in a different handwriting from that of the rest of the instrument, and also in different ink. In such a case, the burden of explanation ought to be on the plaintiff; for such an alteration certainly throws suspicion on the instrument. The instructions which were given to the jury were therefore right, at least so far as they were applicable, or could be applied by the jury, to this case." § 281. The same rule applies to all contracts. — It has at times been suggested that while one who introduced an altered bill or note will be called upon to explain it, a different rule applies to deeds and other written con- lor V. Mosely, 6 C. & P. 273 ; Sibely v. Fisher, 7 Ad. & EI. 444 ; Knight v. Clements, 8 Ad. & El. 215; Clifford v. Parker, 2 Man. & Gr. 909; Beanaan V. Russell, 20 Vt. 205 ; and consult, infra, §§ 287, 288. 414 EFFECT OF ALTERATIONS. [§ 28 1. tracts. Thus, Daniel, after an able review of the authori- ties bearing on the question relative to negotiable paper,^ from which he concludes that the burden of ex- plaining an alteration in a note or bill rests upon the party producing it, says : "A different principle has been applied to deeds and other written contracts, and the ex- ception is made in respect to negotiable paper because being intended for circulation the greater strictness and watchfulness is necessary.^ As warrant for this statement he cites Doe v. Catamore,^ and Hoey v. Jarman.* In the former of these cases Campbell, C. J., said : "A deed cannot be altered after it is executed, without fraud or wrong, and the presumption is against fraud or wrong." But the alteration itself was immaterial, and there was not the slightest evidence from the document itself, or from any other source which cast suspicion upon it. In the case of Hoey v. Jarman, it was merely held that under ordinary circumstances it was not necessary for a party producing a contract which appeared to have been altered to give evidence in the first instance, explanatory of the alteration, following Hunt v. Gray,® where the same rule was applied to an altered note. Moreover, there is no reason in principle for making an exceptional rule in regard to notes and bills. The alteration of one contract is as much to be deprecated as 1 The American editors of Smith's Leading Cases say (vol. I, pt. 2, p. 131 5) : "It would be impracticable in a work of this nature to examine the countless authorities upon the subject of alteration of negotiable instruments. The principles and cases elucidating them are so well set forth by Mr. Daniel, in his work on Negotiable Instruments, that anything that could be said here would be but a repetition of what he has already so well said as to leave nothing to be added." 2 Daniel on Negot. Insts. vol. II, § 141 8. For other instances where this distinction has been taken, see, supra^ n. I, p. 399. 3 16 Q. B. 745. * 39 N. J. L. 524. 5 35 N. J. L. 227. § 28l,J BURDEN OF PROOF, PRESUMPTIONS. 415 the alteration of another/ and the same reasons with perhaps slightly differing force demand that whatever be the nature of the contract produced, the party producing it should have the burden of explaining any alterations in it, and few authorities make any distinction between contracts, while many cases apply the rule prevailing in the case of negotiable paper to other contracts.* " The 1 Supra, § 261. 2 In Ld. Falmouth v. Roberts, 9 M. & W. 471, the agreement bemg in regard to the tillage of land, Parke, B., said : " The general rule undoubtedly is, that where there appears to be an alteration in the document, it lies upon the party producing it to explain it." See also Hemming v. Trenery, 9 Ad. & E. 926; Little 2/. Herndon, 10 Wall. 26; Stephen's Digest ofEv. (Chase's ed.1 p. 1 59. Greenleaf lays down the general rule as follows (Evidence, § 564): " If, on the production of the instrument, it appears to have been altered, it is incumbent on the party offering it in evidence, to explain this ap- pearance. Every alteration on the face of a written instrument detracts from its credit, and renders it suspicious ; and this suspicion the party claiming under it, is ordinarily held bound to remove. If the alteration is noted in the attestation clause as having been made before the execution of the instru- ment, it is sufficiently accounted for, and the instrument is relieved from that suspicion. And if it appears in the same handwriting and ink with the body of the instrument, it may suffice so, if the alteration is against the interest of the party deriving title under the instrument, as, if it be a bond or note, altered to a less sum, the law does not so far presume that it was Improperly made as to throw on him the burden of accounting for it, and, generally speaking, if nothing appears to the contrary, the attention will be presumed to be contemporaneous with the execution of the instrument. But if any ground of suspicion is apparent upon the face of the instrument, the law pre- sumes nothing, but leaves the question of the time when it was done, as well as that of the person by whom, and the intent with which the alteration was made, as matters of fact, to be ultimately bound by the jury, upon proofs to be adduced by the party offering the instrument in evidence." "When a document contains interlineations and alterations on their face, trivial or tend- ing merely to clear an obvious obscurity, the burden of proving bad faith is on the party setting up bad faith. On the other hand, the burden of explaining a suspicious alteration is on the party relying on the document as altered. In negotiable paper this is eminently the case ; the burden being on the party producing such paper on its face altered, to explain the alteration." Whar- ton on Contracts, § 698. In Burgwin v. Bishop, 91 Pa. St. 337, the altera- tion shown was contained in a lease, and it was said : " Among other cove- nants on the part of the lessee, the lease, as originally written, contained the following: ' Also to keep the water pipes and hydrant, etc., in good repair.'' 41 6 EFFECT OF ALTERATIONS. [§ 282. party in default should bear the burden of explaining it and of extricating himself. He must know the circum- stances which induced the alteration, and to require the party wronged to go into his enemy's camp for testi- mony would be to facilitate the invention of frauds."^ § 282. Authorities holding burden on party alleg- ing bad faith if instrument free from suspicion. — Although the principle which has been laid down would require the plaintiff to bear the burden, both in cases where the alteration itself bore marks of suspicion, and in cases where there is any evidence which attacked the writing, yet it must be conceded that a considerable number of authorities hold that the burden should rest upon the party alleging the alteration if the instrument is in itself free from suspicion. Thus it is said by These ^words were evidently erased by drawing a pen several times over them, and thus striking out one of the covenants of the lessee. The erasure was not noted in the attestation clause, nor was there any explanation given as to when, why, or by whom it was done. The plea of non est factum put in issue the execution of the lease, and its continuance without material altera- tion as the deed of both parties to the date of the plea. The alteration was in a material part of the instrument, and manifestly enured to the benefit of the lessee by whom it was produced and offered in evidence more than ten years after his alleged cause of action accrued, and after the decease of the lessor. It is very clear that under the circumstances he should have been re- quired to give some testimony explanatory of the erasure (Jorden v. Stewart, II Harris, 244, and Robinson v. Myers, 17 P. F. Smith, 9). If this had been done it would have been for the jury, under proper instructions from the court, to say whether the alteration was satisfactorily explained or not." Cf. North V, Henneberry, 44 Wis. 306, and Newcomb v. Presbrey, 49 Mass. 406, in each of which cases it was held that the burden was upon the plaintiff to explain alterations shown in the deeds produced, and see Phillips on Evid., vol. II, p. 482. * Daniel on Negot. Insts. § 141 2. It is to be observed, however, that it is not " on every occasion of a party tendering an instrument in evidence, that he is bound to explain any material alteration that appears upon its face ; but only on those occasions, when he is seeking to enforce ,it, or claiming an interest under it." Taylor on Evidence (Eight ed.), § 1824. § 282.] BURDEN OF PROOF, PRESUMPTIONS. 41 7 Wharton : ^ "A party offers in evidence a written instru- ment in which there is a manifest alteration. Was such an alteration made before or after execution .? If after execution, on the principle heretofore stated, it avoids the instrument. But on whom rests the burden, in this re- spect, to prove the period of alteration ? If there is nothing suspicious on the face of the instrument, but the alteration is one which appears to accord with the object of the instrument, then we should say that the burden of proving bad faith in this respect is on the party assert- ing bad faith." And in Cox v. Palmer,* McCrary, J., ^ Evidence, § 629. 2 I McCrary, 331 (1880). In Hayden v. Goodnow, 39 Conn. 164, it was said : " The burden of proof of accounting for an erasure or alteration is not necessarily on the party producing the instrument. It has been so held in some courts, but the law is otherwise in this State (Bailey v. Taylor, ut supra). Each case must depend on its own circumstances, and the triers must be satisfied that the erasure or alteration was fairly made, so as not to effect the validity of the instrument ; and in a case of this sort that it was without any purpose or intent to transfer or change the title or ownership of the instrument.'' " The rule established by the greater weight of authority, both in England and in this country, appears to be that where the alteration is suspicious and beneficial to the holder of the paper, the party seeking to enforce it is required to explain it before he can recover; but where the alteration is not particularly suspicious and beneficial to the holder, the altera- tion will be presumed to have been made either before the execution of the paper or by consent of parties." Huntington v. Finch, 3 Ohio St. 445. In Adm'rs of Beaman v. Russell, 20 Vt. 205, 210, Hall, J., said : " The first question to be considered is, whether the writing of indemnity, offered in evidence by the plaintiff, ought to have been excluded, because of the altera- tion — admitted to be a material one — appearing upon it. " The question, upon whom the burden of proof devolves, when an instru- ment in writing appears to have undergone an alteration, is, upon the authori- ties, involved in considerable confusion and uncertainty. In the following cases, in this country, it is either decided or declared, that such alteration will be presumed to have been made after the contract was executed, and that it lies upon the party producing the paper to explain the alteration : Prevost v. Gratz, Pet. C. C. 369; Morris v. Vanderhn, i Dal. 67; Jackson v. Osborne, 2 Wend. 555; Herrick v'. Malin, 22 Wend. 388 ; Hills v. Barnes, 11 N. H. 395 ; Harrington v. Bank of Washington, 14 S. & R. 405 ; McMicken v. Beauchamp, 2 Miller's Law R. 290. In the following cases this doctrine is either doubted or denied: Clarke v. Rodgers, 2 Greenl. 147; i Shep. 3865- 37 41 8 EFFECT OF ALTERATIONS, [§ 282. said : " There are cases in which it has been held that an. interlineation is presumably an unauthorized alteration Wicks V. Caulk, 5 Har. & J. 41 ; Rankin v. Blackwell, 2 Johns. Cas. 198; Cumberland Bank v. Hall, i Halst. 215 ; Sayre v. Reynolds, 2 South. 737 ; Bailey 2/. Taylor, 11 Conn. 531. In Davis v. Jenny, I Mete. 221, the ques- tion was argued, but left undecided, Chief Justice Shaw observing, that ' The court considered it a question of very great importance.' "It is sufficient, however, for the present purpose, to say, that the single question, upon whom the burden of proof to account for an alteration in a written instrument, with reference to a supposed fraud upon the party, has never been presented to the English courts in any of these cases. It has always been coupled with and been over-ridden by the more extended ques- tion in regard to a supposed fraud upon the revenue. So far as the reasoning of the'judges in these cases may be thought applicable to the naked, question now before us, they are unworthy of consideration ; but as mere authorita- tive decisions, they can be entitled to no weight whatever. "Amidst the conflict of authorities in this country, and with the little aid that can be derived from the modem English cases, I should be disposed to fall back upon the ancient common law rule — that an alteration of a written instrument, if nothing appear to the contrary, should be presumed to have been made at the time of its execution. I think this rule is demanded by the actual condition of the business transactions of this country, and especially of this State — where a great portion of the contracts made are drawn by the parties to them, and without great care in regard to interlineations and alterations. To establish an invariable rule, such as is claimed in behalf of the defendant, that the party producing the paper should in all cases be bound to explain any alteration by extrinsic evidence would, I apprehend, do injustice in a very great majority of the instances in which it should be applied. Such a rule might be tolerated — might perhaps be beneficially adopted — in a highly commercial country, like that of Great Britain, in regard to negotiable paper, which is generally written by men trained to clerical accuracy, and is upon stamped paper, the very cost of which would induce special care in the drawing of it ; but I am persuaded its application here could not be otherwise than injurious. It is not often that an alteration can be accounted for by extraneous evidence; and to hold that, in all cases, such evidence must be given, without regard to any suspicious appearance of the alteration, would, I think, in many instances, be doing such manifest injustice as to shock the common sense of most men." In Paramore v. Lindsey, 63 Mo. 63, 66, Wagner, J., says : " The instruction given tells the jury that the law presumes that an erasure of such character as that which appears on the face of the note sued on, was made either prior to, or at the time of, the execution of the note ; and that the burden of overcoming this presumption devolved on the defendants. The instruction refused asserted the converse of the proposition contained in the above declaration, and stated that the alteration of the note appearing on its face, the burden of proof was on the 282.] BURDEN OF PROOF, PRESUMPTIONS. 419 of the instrument after execution, and that the burden is upon the party offering the instrument in evidence to show the contrary. There are also cases in which inter- lineations have been held to be prima facie bona fide, and that the burden is upon the party attacking the in- strument to show that it was altered after execution; but I think that one rule governs in all these cases, and it is this : If the interlineation is in itself sus- picious, as if it appears to be contrary to the probable plaintiff to explain the same to the satisfaction of the jury. The court had previously instructed that if the erasure or alteration was made subsequent to the execution of the note, the same was thereby rendered void. The only point of difference then between the parties is, whether there was a presump- tion that the alteration was made before or at the time of, or subsequent to, the execution. We are aware that there are authorities which maintain the doctrine laid down in the defendant's instruction ; but the rule, as recognized and adopted in this State, in Matthews v. Coalter (19 Mo. 696), and Lubber- ing V. Kohlbrecher (22 Mo. 596), is directly to the contrary, and is in precise accordance with the instruction given for the plaintiff. In Matthews v. Coalter, the court gave an instruction identical with the one offered by the defendants, and this court reversed the judgment and announced the rule which was followed by the Circuit Court in this case. In the opinion it was said, that the law presumes honesty of purpose and of action, until the con- trary is shown. The ancient rule of evidence was therefore to presume alterations and erasures of written instruments to have been made at the time of, or anterior to, their execution ; and the weight of authority was de- cidedly in favor of the ancient rule. Where an alteration or erasure appears suspicious on its face, as if the ink differ, or the handwriting be that of the holder interested in the alteration, it must be explained. If nothing appears to the contrary the alteration will be presumed to be contemporaneous with the execution of the instrument. But if any ground of suspicion is apparent upon the face of the instrument the law presumes nothing ; but leaves the question of the time when it was done, as well as the person by whom, and the interest with which the alteration was made, as matters of fact to be ulti- mately found by the jury, upon proofs to be adduced by the party offering the instrument in evidence (i Greenl. Ev. sec. 564). " The appearance of anything suspicious on the face of the instrument is a preliminary matter, to be determined on an inspection by the court. The court looked at the writing and found nothing suspicious in the character of the alteration or erasure; and under these circumstances, the instruction that it gave was in conformity with the long established law of this State." See also Sharpe v. Orme, 61 Ala. 263. 420 EFFECT OF ALTERATIONS. [§ 283. meaning of the instrument as it stood before the inser- tion of interlined words, or if it is in a handwriting dif- ferent from the body of the instrument, or appears to have been written with a different ink, in all such cases, if the court considers the interlineation suspicious on its face, the presumption will be that it was an unauthorized alteration after execution. On the other hand, if the in- terlineation appears in the same handwriting with the original instrument, and bears no evidence on its face of having been made subsequent to the execution of the instrument, and especially if it only makes clear what was the evident intention of the parties, the law will pre- sume that it was made in good faith and before execu- tion." § 283. If alteration not suspicious, but shown prima facie to be subsequent to execution, burden on plaintiff, — But there is no hardship in making the party producing the writing bear the burden of explanation if there is no- thing suspicious about the alteration itself. He is the proper party to account for every alteration. And if evidence of any kind is introduced to show that the alter- ation was made subsequent to execution, he should be called upon to give a preponderance of evidence in favor of the truth of the writing, and in this he will be aided by the character of the alteration, if it is fair upon the face of the instrument. It is to be noted that the ques- tion here is not, shall the party who introduces such a writing be called upon, in the first instance, to explain the alteration ; but it is, who must satisfy the jury by a preponderance of evidence after all the testimony has been given .? In regard to this latter question, it is be- lieved to be the wisest, most consistent, and best-support- ed course to put the burden upon the plaintiff.^ So, al- 1 Parsons says, Notes and Bills, vol. II, p. 578 : " It has been stated that § 284.J BURDEN OF PROOF, PRESUMPTIONS. 42 1 though it is held that when the alteration is not apparent on the face of the instrument the fact of the alteration must be shown by the party alleging it; yet, when he has made 2i prima facie case showing this fact, the party who produces the writing should bear the burden of clearing this document from suspicion.^ § 284. Questions of fact for jury. — It is now gen- erally admitted that there is no presumption in regard to where an alteration is against the interest of the party claiming under it, then, at all events, the law will not throw upon him the burden of accounting for it, since it would be an unreasonable presumption, in case of doubt, that a party acted against his interest. But, according to the. opinion already expressed, we cannot think that this additional circumstance will always shift the burden of proof It may be that the plaintiff intended and expected the alteration to enure to his benefit. Besides, as we have repeated more than once, the ques- tion will frequently turn not so much upon injury or benefit as upon alteration or no alteration. We think, therefore, that the case must go to the jury as before, though the evidence which shows the alteration to be against the party's interest would probably greatly influence them to decide that he did not make it." See Hewins v. Carg^ll, 67 Me. 554; Van Home z/. Belle, 11 Iowa, 465. All the more recent authorities which maintain that the burden rests upon the plaintiff to show the genuineness of his contract may fairly be cited to this proposition of the text. See, su-f>ra, §§ 279, 280, and compare with §§ 287, 288, infra. Daniel concludes his discussion upon the subject of the burden of proof in cases of alteration as follows: " The question as to the burden of proof in respect to alterations is generally affected by all the surrounding circumstances, and one fact or another shifts it to and fro, the jury being left to weigh the testimony and determine the issue with all the lights that can be thrown upon it. Very slight circumstances may operate to shift the burden of proof, and it has been well said by Horton, C. J., in Kansas, that ' it is impossible to fix a cast-iron rule to control in all cases.' Neil v. Case, 25 Kans. 510. When all the facts are undisputed some presumption must arise, and that presump- tion must be conformable to the experience of mankind, and according to what that experience shows to be most probably the truth of the matter. The authorities are every way, and generally each case must rest largely on its own peculiar surroundings." Negot. Insts., § 1421a. * Compare United States v. Linn, i How. 104; Meikel v. St. Sav. Ins., 36 Ind. 357; Cochran v. Nebeker, 48 Ind. 459; Pullenv. Hutchinson, 12 Shepley (Me.), 254; Brown v. Phelon, 2 Swan (Tenn.), 629; Muckleroy 57. Bethany, 27 Tex. 551 ; Herrick v. Malin, 22 Wend. (N. Y.) 388; Jackson v. Osborn, 2 Id. 555. 422 EFFECT OF ALTERATIONS. [§ 284. alterations which in any way takes the place of the find- ing of the jury upon the questions of fact. It is, there- fore, for the jury to say whether there has been an altera- tion, and if so, at what time it was made ; who made it ; and, when the question becomes material, whether it was made with a fraudulent intent.' To decide these matters 1 The law upon this point was thus ably expressed by Sargent, J., of the New Hampshire Supreme Court, in Cole v. Hills, 44 N. H. 232 : " Although in this State we hold the presumption to be that an alteration, if unexplained by evidence, or by circumstances, or the appearance of the paper itself, was made after the execution and delivery of the instrument, yet the whole ques- tion is for the jury ; not only the fact as to whether there has been any altera- tion at all where there is doubt upon that point, but also the time when the alteration was made, whether before, at the time of, or subsequent to its exe- cution and delivery, by whom it was made, and, in certain cases, whether fraudulently made or otherwise. The presumption is only one of fact, to be made by the jury, and not one of law, to be applied by the court. Bowers v. Jewell, 2 N. H. 543. " In Maine and in many other States it is held that the presumption will be, in the absence of all proof or circumstances tending to show how the facts were, that the alteration was made before the execution of the instru- ment. Gooch v. Bryant, i Shep. 390. And in Vermont it is held in the like case that the presumption should be that the alteration was made at the time of the execution,' and it is said that this is according to the rule of the com- mon law. Beaman v. Russell, 20 Vt. 205. But it is held in both these cases, that the whole question is one for the jury upon all the facts, to settle where the alteration was made. " In New York the courts hold the doctrine to be nearly the same as in this State. In Jackson v. Osbom, 2 Wend. 559, it is said that where nothing appears but the fact of an erasure or interlineation in a material part of the deed, of which no notice is taken at the time of the execution, it is a suspicious circumstance which requires some explanation by the party prdducing it ; and it is the province of the jury to say whether the explanation is satisfactory. To the same effect is Jackson v. Jacoby, 9 Cow. 125, and Herrick v. MaUn, 22 Wend. 388. But in Smith v. McGowan, 3 Barb. (S. C.) 404, it is held that although an alteration appearing on the face of the deed is a suspicious cir- cumstance requiring explanation, yet it is not enough to exclude the instru- ment -when offered as evidence ; and though ink of different colors was used in the same deed, and though there was an erasure of one name and the sub- stitution of another as grantee, yet that these circumstances would not be enough to authorize the court as matter of law to exclude the instrument as evidence. "It is held in Massachusetts (Ely 7/. Ely, 6 Gray, 439) that there is no legal presumption either way as to the time when the alteration was made. § 284.] BURDEN OF PROOF, PRESUMPTIONS. 423 the jury has before it the instrument itself, and all the evidence of the surrounding circumstances, and the testi- tut that the burden of proof was on the plaintiff to show that it was made before the execution and delivery of the instrument. The alteration may be of such a character that he may safely rely upon the paper itself and the sub- ject-matter as authorizing the inference that the alteration was made before the execution, or he may introduce some very slight evidence to account for the apparent alteration. See also the well-considered opinion of Metcalf, J., in Wilde v. Armsby, 6 Cush. 314. " An alteration in a deed may be of such a kind and made in such a way as to explain itself, and remove all doubts from the minds of the jury without any other evidence. Some alterations may be greatly to the disadvantage of the holder or party setting up the instrument. Shall there be the same pre- sumption that he made the alteration in that case as in a case where the al- teration was greatly to his advantage ? That would hardly be claimed. So when the instrument may have been in the possession of some third person ■ever since its execution, and when the party now claiming under it has had no opportunity to erase or alter it. " It seems to us that the proper rule is that the instrument, with all the cir- cumstances of its nature, its history, the appearance of the alteration, the possible or probable motives of the alteration, or against it, on the part of all persons connected with it, or in whose possession it may have been, and the effect of th& alteration upon the rights and obligations of the parties, respec- tively, ought to be submitted to the jury, who should find from all these •whether the alteration was made before or after its execution ; and if after, whether it was with the assent of the adverse party, and consequently whether it rendered the instrument invalid or not. Whether the handwriting of the alteration is the same with that of the signature, whether the ink is the same or different, whether, from the appearance, the body of the instrument and the alteration were written at the same time or at different times, whether the party claiming or the party sought to be charged is to be benefited by it, whether the alteration was made before or after its execution, and if after, by whom, and for what purpose, are all questions of fact for the consideration of % jury. It could serve no good practical purpose for the court to go into these inquiries first to determine whether a party has made a prima facie case. " Upon the usual proof of the execution of the instrument, it should, with- out reference to the character of any alteration upon it, be admitted in evi- dence, leaving all testimony in relation to such alteration to be given to the jury, with proper instructions upon the facts in each case. Beaman v. Rus- sell. 20 Vt. 205, Bailey y. Taylor, 11 Conn. 531. In ninety nine cases in every hundred the jury would be able to settle the questions readily upon a preponderance of the evidence, where they should consider the paper in con- nection with all the circumstances above stated. But if they should not be able to do so, and could not find any preponderance of the evidence as to when 424 EFFECT OF ALTERATIONS. [§ 284. mony of the parties ; and in weighing this evidence it is proper for the jury to consider that the burden rests upon the plaintiff to present a preponderance of proof. the alteration was made, or if there is an entire absence of evidence and ot circumstances, both in the instrument and in the evidence aliunde, from which an inference can be legitimately drawn as to the time when it was ac- tually made, then the presumption arises that the alteration was made after the execution of the instrument ; and this is a presumption of fact which the jury are to make, under proper instructions from the court, where they shall be unable to find the fact from any evidence or circumstances in the case. That is clearly the doctrine of our decisions. Hills v. Barnes, n N. H. 395; Burnham v. Ayer, 35 N. H. supra. " The result of the application of the rule as held in New York, in Massa- chusetts, and in this State, will thus be seen to be the same ; and whether it be said that the presumption is against the plaintiff, or that the burden of proof is upon him, it amounts to the same thing, since in both cases the in- strument is to be used as evidence, and may afford sufficient evidence in it- self to rebut and overcome the presumption in one case, or to make a prima facie case for the plaintiff in the other." In Beaman v. Russell, 20 Vt. 205, it was said : " If it were admitted that the onus of explaining the alteration were upon the party producing the in- strument, it might still be a question whether the explanation should first be given to the court or at once to the jury. No testimony is to go to the jury- but upon oath, and therefore some evidence must be given of the execution of the written instrument before it can be submitted to them. The court necessarily determines, in the first instance, on the sufficiency of the proof; but whether a writing has been executed by the party sought to be charged is a question of fact, and when the writing is admitted in evidence the jury may decide, over the head of the court, upon the same evidence, that the ex- ecution of the instrument is not proved ; or, perhaps, it is more accurate to say the court determines that there is legal evidence tending to prove the execution of the instrument, and therefore submits it to the jury for them to weigh and decide upon its sufficiency. Whether an alteration appearing upon an instrument was made before or after its execution, and if after, by whom, and for what purpose, are also questions of fact for the jury. Coke Lit. 225, b; Shep. Touchstone, 69; Bishop v. Chambre, 3 C. & P. 55; Emer- son V. Murray, 4 N. H. 171 ; Bailey v. Taylor, 11 Conn. 531 ; Jackson v. Os- borne, 2 Wend. 555 It is a matter of fact, and not of law, whether the handwriting of the alteration is the same with that of the body of the instru- ment, whether it is the same with that of the signature, whether the ink is the same or different, whether, from the appearance of the alteration and the body of the instrument, both were written at the same time or at different times, whether the party claiming or the party sought to be charged, or a stranger, has made the alteration; in short, every possible circumstance that would have a tendency to show the alteration to have been fraudulent or § 285.] BURDEN OF PROOF, PRESUMPTIONS. 425 § 285. Referring question to jury does not reconcile authorities. — It has sometimes been suggested that the difficulties surrounding this subject might be obviated by thus submitting these questions to the jury; ^ but it is otherwise. It can serve no good practical purpose for the court to go into these inquiries to determine whether the party has made a prima facie case. " On the usual proof of the execution of the instrument, it should, without reference to the character of any alteration upon it, be admitted in evidence, leaving all testimony in relation to such alteration to be given to the jury. It will doubtless be the duty of the court to give the jury proper instructions upon any given state of facts. But any instructions in regard to the burden of proof should, I apprehend, be founded upon a supposed finding of the jury in regard to the alteration rather than upon any assumption of the court in regard to it, because I thinli the character of the alteration, whether suspicious or otherwise, is matter of fact for the jury and not of law for the court. It is not, however, necessary to go into that question in this case. But, generally, the whole inquiry, whether there has been an alteration, and if so, whether in fraud of the defending party or otherwise, to be determined by the appearance of the instrument itself, or from that and other evidence in the case, is for the jury. The whole is matter of fact, and they must determine it from all the testimony before them." See also Newman v. Wallace, 121 Mass. 323; Far- mers' Ins. Co. V. Blair, 82 Pa. St. 33 ; Robinson v. Myers, 67 Pa. St. 9 ; Com- stock V. Smith, 26 Mich. 306; Pringle v. Chambers, i Abb. Pr. (N. Y.) 58; ■ Crabtree v. Clark, 20 Me. 337; McCormick v. Fitzmorris, 39 Mo. 34; Presi- dent, &c. V. Hall, 6 N. J. L. 215; Hunt v. Gray, 35 N. J. L. 227; S. C. 10 Am. Rep. 232; Bailey z/. Taylor, 11 Conn. 531 ; Cochran v. Nebeker, 48 Ind. 459; Gillett V. Sweat, 6 111. 475; Whitfield v. CoUingwood, i C. & K. 325; Artizans' Bank v. Backus, 31 How. Pr. 242; affi'd, 36 N. Y. 100. See au- thorities cited, infra, n. 3, p. 432. ^ Thus, in Maybee v. Snififen, 2 E. D. Smith, 7, Woodruff, J., reviews the authorities, and says: "But upon the question whether, when such alteration appears upon the face of the instrument, it is to be presumed, in the absence of explanation, to have been made before or after signing and delivery, the authorities are divided. " In Rankin v. Blackwell, 2 Johns. Ca. 198, it is said that an alteration appearing on the face of a note, unsupported by proof, is alone insufficient to avoid the note. " In Jackson v. Jacoby, 9 Cow. 125, that an alteration appearing on the face of an instrument in a different ink from the residue, and not noted as made at or prior to the signing, is, perhaps. suflBcient to call for explanation from him who would support it as genuine. " In Jackson v. Osborne, 2 Wend. 559, it is said that when nothing ap- pears but the fact of an erasure or interlineation in a material part of the deed, of which no notice is taken at the time of the execution, it is a suspic- 426 EFFECT OF ALTERATIONS. [§ 285. manifest that if the questions go to the jury they must go with the burden upon one or the other of the parties, ious circumstance which requires some explanation by the party producing it. But the jury are to say whether the explanation is satisfactory. And held, therefore, that a charge to the jury that a party seeking to invalidate a deed for an erasure appearing thereon, must show affirmatively that such erasure was improperly made was erroneous. " In Smith v. McGowen, 3 Barb. Sup. Ct. Rep. 404, a majority of the court held that although an alteration appearing on the face be a suspicious circumstance requiring explanation, it is not enough to exclude the instru- ment when offered as evidence. The explanatory evidence might be given afterwards, and be entirely satisfactory. " In Prevost v. Gratz, Pet. C. C. R. 369, and Morris v. Vandam, i Dall. 67, it was held that the legal presumption from an alteration apparent on the face of the instrument is that it was made after the execution. " In Johnson v. The Duke of Marl, 2 Stark. 278, the plaintiff was required to prove that an alteration (apparent on the face of the instrument) in the date of a bill was made before acceptance, otherwise the bill would be deemed void for want of a new stamp. And a like case is found in 8 Adolph. & El. 215, Knight z/. Clements. And see also Downes v. Richardson, 5 Barn. & Adolph. 674; 2 D. & R. 332. " In Henman v. Dickinson, 5 Bing. 183, in an action also on a bill of ex- change, with an alteration in the amount appearing on its face, the court held that the party producing the bill must show that the alteration was made by consent of parties or before issuing the bill. 2 Moore and Payne, 289. And in Clifford v. Parker, 2 Man. & Gr. 909 (3 Scott N. R. 233), it is said that when the date of a will has been altered, it is the duty of the plaintiff to give some evidence of the circumstances under which the alteration was made. " The like proposition is stated in 3 Carr. & P. 55, Bishop v. Chambers; tut although the plaintiff gave no account, etc., it is left for \!ci^jury to say if an alteration was made after the completion of the instrument. And in Doe ex dem. Tatham v. Catamon, 5 Eng. L. & Eq. R. 349 (15 Jur. 728), the Court of Queen's Bench in England said that the presumption is that an erasure or interlineation in a deed was made at the time of the execution of the deed, and that although no evidence was given to show when the alterations were made, it was held that it was a question for the jury whether the alterations were made before the execution of the deed. (See the authorities collected in a note to this case in the American edition.) " In this country it was held, in Hills v. Berms, 11 N. Hamp. 395, and in Humphrey v. Guillon, 13 lb. 385, that the alteration of a note, apparent on its face, must be presumed to have been made after execution and delivery. But it is said, in the first case, that the jury may be satisfied in some cases, from an i-ispection of the paper itself, that the alteration was before the sign- ing. § 285.] BURDEN OF PROOF, PRESUMPTIONS. 427 and it is in reference to this burden of proof and the con- sequent presumptions that th^re has been the most dis- " (See also, to a similar purport, Commercial & Railroad Bank v. Lum, 7 How. [Miss. R.] 414, and i How. 104.) " So, as to the erasure of the name of one of several obligors in a bond, the obligee must account for the alteration. Harrington v. Bank of Wash- ington, 14 S. & R. 405. " But in Simpson v. Stackhouse, 9 Barr, 186, the court hold that the onus of showing that an alteration in a negotiable instrument was lawfully made is on the holder, but that in other instruments it seems the presumption is in favor of the validity of the instrument until the contrary appears. " In Gooch V. Bryant, i Shep. 386, held that an alteration of a figure in the date of a note was not of itself evidence that the alteration was made after execution and delivery. It is a question of evidence to be submitted to the jury. " In Cumberland Bank v. Hall, i Halst. 215, it was held that the law ■would not presume sxi alteration which is apparent on the face of the instru- ment to have been made after its execution. But that it is a question for the jury. " Davis V. Carlisle, 6 Ala. 707, is to the same purport. "In Crabtree v. Clark, 7 Shep. 337, it is said to be a question for the jury, though no explanation is offered. And an instruction by the court that the note is void, if the alteration be not accounted for by the plaintiff, is erroneous. " In Fallen v. Shaw, 3 Dev. 238, it is said that if an alteration in a bond "b^ prejudicial to the obligee, it will be presumed to have been made before the execution. "And in Matthews v. Coatlin, 9 Missouri, 705, held that the X^yN presumes an erasure or interlineation to have been made before it was signed, unless the instrument is suspicious on its face. When it is so considered by the court, then no presumption arises, but it is left to the jury. '' In Wilson v. Henderson, 9 S. & M. 375, it is held to be a question for the jury whether the alteration was before or after delivery ; and in determin- ing this fact they may consider the nature of the alteration as whether advan- tageous to the holder or not. " And in Beaman v. Russell, 20 Berm. R. 205, it was held that an altera- tion, if nothing to the contrary appears, should be presumed to have been made at the time of the execution and delivery ; but that generally the whole inquiry whether there has been an alteration, and whether in fraud of the other party, to be inferred from the face of the instrument or from other proof, is to be left to the jury. See also Bailey v. Taylor, 1 1 Comst. 531. " In this conflict of opinion it appears to me that the sensible rule, and the rule most in accordance with the decisions of our own State, is that the in- strument, with all the circumstances of its history, its nature, the appearance of the alteration, the possible or probable motives to the alteration or against it, and its effect upon the parties respectively, ought to be submitted to the jury ; 428 EFFECT OF ALTERATIONS. [§ 286. cussion. In every case where there is a conflict of evi- dence the jury must act, and their decision will override every presumption and be final upon the questions sub- mitted to them. Important, therefore, as the functions of the jury are, it is not proper to hold that because they must decide the questions of fact, no presumptions arise. § 286. If no evidence impeaches writing alteration assumed to be prior to execution. — If a writing offered in evidence presents upon its face no marks of suspicion, although there have been some apparent changes in the language used to express the contract of the parties, there is no reason why it should not be accepted by the court. And it is in such a case that the presumption in favor of honesty and fair dealing arises.^ When, there- and that the court cannot presume, from the mere fact that an alteration ap- pears on the face of the instrument (whether under seal or otherwise), that it was made after the signing. " Some alterations may be greatly to the disadvantage of the holder or party setting up the instrument. Shall it be presumed that he made them unlawfully against his own interest f Others may be indifferent as to him and favorable to some other. No presumption in such case can exist against him." So in Gillett v. Sweat, 6 111. 489, it is said : " If any ground of suspicion is apparent upon the face of the instrument, the law presumes nothing, but leaves the question of the time when it was done, as well as that of the per- son by whom it was done, and the intent with which the alteration was made, as matters of fact to be found by the jurj'.'' ^ This seems to be the only case in which the law will presume an alter- ation to have been made prior to execution, although it is not so stated in many of the cases where the question is raised. In Jordan v. Stewart, 23 Pa. St. 246, the true basis of the presumption is thus stated by Woodward, J. : '' When we look at a written instrument containing an interlineation or era- sure, without reference to contested rights, the natural and fair presumption doubtless is that the alteration was made before signature, because if altered after execution it would be forgery, which is never to be presumed. Instru- ments of writing executed with the solemnities appointed by law are like the men who made them, to be presumed innocent until some circumstance is shown to beget a counter presumption. But when a contest occurs, and the mstrument is offered in evidence, the question at once arises whether the § 286.] BURDEN OF PROOF, PRESUMPTIONS. 429 fore, such a document is presented the alteration is pre- sumed to have been made before execution. But the moment evidence is offered which makes a prima facie case that the alteration was subsequent to execution from whatsoever source the evidence comes, then as we have seen, the burden is put upon the party producing the paper to clear it from suspicion.^ alteration is beneficial to the party offering it ; if it be not, as in the instance of a bond or note altered to a less sum, Xh& prima facte presumption is un- changed ; if it be, as was the case here, we do not presume a forgery, but we hold the party offering it in evidence and seeking advantage from it bound to explain the alteration to the satisfaction of the jury. The initiative and burden of proof are thrown on him." Lawson lays down the following rules, pp. 381, 389: "Alterations, era- sures, and interlineations appearing on the face of writings, whether under seal or not, are presumed to have been made before their execution or com- pletion. "But where the alteration is in a different handwriting from the rest of the instrument ; or in a different ink ; or is in the interest of the party setting it up ; or is suspicious on its face ; or the execution of the instrument is de- nied under oath, the burden of proof rests on the party producing the instru- ment to explain it to the satisfaction of the tribunal." And Taylor says (Evidence, eighth ed.), § 1819: "It was formerly a pre- sumption of law, that an interlineation, if nothing appeared to the contrary, had been made contemporaneously with the execution of the instrument ; and this presumption still prevails in the case of a deed, because a deed cannot be altered without fraud or wrong, and fraud or wrong is never assumed with- out some proof. Indeed, it may be laid 4own as a general rule, that when- ever it is an offense to alter a document after it has been completed the law presumes, prima facte, that any alteration apparent on it was made at such a time and under such circumstances as not to constitute an offense. With respect, however, to a bill of exchange, or a promissory note, the law pre- sumes nothing, but leaves the jury to decide, first by inspecting the instru- ment itself, whether any alteration has been made, and thea on considering the extrinsic evidence offered, at what time, and under what circumstances, such alteration, if any, was made. (Compare, supra, § 281.) These last questions cannot be solved by the jury on the mere inspection of the writing, for juries must decide not on conjecture, but on proof." (Compare, infra, §§ 287, 288.) " Alterations and interlineations in a deed are presumed, in the absence of evidence to the contrary, to have been made prior to execution." Elphin- stones' Inter, of Deeds, p. 17. See also Stephen's Dig. of Evid. Art. 89. 1 In First Nat. Bank of Parsons v. Franklin, 20 Kans. 264, 268, Brewer, 430 EFFECT OF ALTERATIONS. [§ 286. It has been denied in Massachusetts that there is any presumption that an alteration was made before execu- tion in the absence of all proof upon the subject, but the opinion itself, wherein this doctrine was asserted, admits that the altered instrument may, in some cases, be suffi- cient evidence to justify the inference that the alteration was made before execution.^ And as it is believed that J., said: "In respect to alterations, the general rule is thus laid down in Greenleaf on Evidence, sec. 564, note 3 ; ' It is also generally agreed, that in- asmuch as fraud is never to be presumed, therefore, if no particular circum- stances of suspicion attach to an altered instrument, the alteration is to be presumed innocent, or made prior to its execution.' And in support of this, many authorities are citfed. And the rule is a reasonable one. Nearly every one can write, and written instruments are as abundant as the leaves of the forests. They are prepared by all sorts of persons — those skilled in the law, and those not — and cover all sorts of transactions. Pending negotiations, the original draft is subject to constant changes, and is as often signed with all the changes, erasures, and interlineations, as it is copied for execution. The hurry of business will not wait for perfect copies without erasures or interlineations. The law must take things as it finds them, and adjust its rules to the facts of every-day life. To require in every case of change, proof that the change was made before execution, before the instrument is admis- sible in evidence, would tend to prevent rather than accomplish justice. It will be borne in mind that the more important the transaction, the more like- lihood of parties waiting for a perfect copy, and of remembering the circum- stances, or noting the fact of any alteration, while the less important the transaction, the less likelihood of waiting, or noting, or of remembering. Hence, evidence would be more accessible in the former than in the latter case, and at the same time less likely to be needed. So that the presump- ■ tion, in the absence of suspicious circumstances, that the change was innocent and made before execution, runs parallel with the actual experience of busi- ness, and tends to uphold those transactions, which stand in most need of such help." See also Grossman v. Grossman, 95 N. Y. 145, where the New York Gourt of Appeals refused to hold that there was any presumption against the validity of an instrument containing an alteration fair upon its face. Boothlyt/. Stanley, 34 Me. 315; Ramsey's Admtrs. v. McCiie, 21 Gratt. 349; Munroe v. Eastman, 31 Mich. 283; Sirrine v. Briggs, Id. 445; Hill v. Gooley, 46 Pa. St. 259; Runnion v. Crane, 4 Blackf. (Ind.)466; Artizans' Bank v. Backus, 31 How. Pr. (N. Y.) 252; Williams v. Ashton, i J. & H. 118; Doe V. Gatamore, 16 Q. B. 745; Simmons v. Rudall, i Sim. (N. S.) 136; Phillipps on Evidence, vol. I, p. 606. 1 Ely V. Ely, 72 Mass. 439. Here Dewey, J., said : ' ' Upon the question of interlineation, the judge rightly instructed the jury that the burden of proof § 28;.] BURDEN OF PROOF, PRESUMPTIONS. 43! only where this is true will the presumption arise, this decision does not seriously interfere with the rule we have stated. § 287. A writing containing no evidence of subse- quent alterations to be admitted at once. — It follows from the rule that fraud or wrong will not be presumed with- out evidence that an altered document, showing upon its face no marks of wrongdoing, should be received in evidence without any explanatory testimony. And this is so held by the authorities. Thus in Hoey v. Jarman,^ Beasley, Ch. J., says : " At the trial the assignment of the mortgage, which contained the guarantee on which this action rests, upon being in- spected, had manifestly been altered in a material part. There was no extraneous evidence explanatory pf this was upon the plaintiff to show that it was made before the execution and de- livery of the mortgage. "But the further instruction that, in the absence of all proof to the con- trary, the presumption of law was that the interlineations and alterations were made prior to or contemporaneously with the execution of the mortgage, was wrong. There is no such legal presumption. If it were so, the party setting up the instrument might always introduce the instrument as a genuine one, and it would stand as such if no evidence was introduced by the other party to show that it was in fact altered after the execution. Now the burden is on the party offering the instrument, to prove the genuineness of the in- strument, and that the alterations apparent on the same were honestly and properly made. To what extent he shall be required to introduce evidence will depend upon the peculiar circumstances of each case. The alterations may be of such a character that he may safely rely upon the paper itself, and the subject-matter, as authorizing the inference that the alteration was made before the execution, or he may introduce some very slight evidence to ac- count for the apparent interlineations. But there is no presumption of law, either that the alterations and interlineations apparent on the face of a deed were made prior to the execution of the instrument, or that they were made subsequently. The question is to be settled by the jury, upon all the evidence in the case offered by the parties, and the surrounding circumstances, in- cluding, of course, the character of the alterations and the appearance of the instrument alleged to have been altered. Upon this ground, the exceptions m the second case must be sustained, and a new trial had." 1 39 N. J. L. p. 524. 432 EFFECT OF ALTERATIONS. [§ 287. alteration, which was not noted, and, on this ground, the reception of the instrument was objected to, and it being admitted a bill of exceptions was sealed. But the ques- tion thus raised cannot, it seems to me, be considered an open one in this State. It has been repeatedly adjudged that the party oifering an altered paper need not, under ordinary circumstances, explain such alteration by evi- dence aliunde. The latest case thus ruling is that of Hunt V. Gray,^ and the other decisions to the like effect will be found collected in Stewart's Digest,^ title " alter- ation." That this result accords with the judgments in the English courts, and with the major part of those in this country will be apparent on a reference to the recent work of Mr. Wharton on the " Law of Evidence."* But > 6 Vroom, 227. 2 Vol. I, p. 23. ' Vol. I, p. 629. In Hunt v. Gray, 35 N. J. L. 227, the same justice said: " There was a material interlineation apparent on the face of the note in suit in this case, and the first question which arose at the trial was, whether the plaintiff was bound to explain such circumstances before resting his case. " Professor Parsons, in his Treatise on Contracts, vol. II, p. 228, says: ' That, in the absence of explanation, evident alteration of any instrument is generally presumed to have been made after the execution of it, and conse- quently it must be explained by the party who relies on the instrument, or seeks to take advantage of it.' This doctrine is assuredly sustained by many authorities, but the learned author, just referred to, admits that the opposite view has an equal sanction in judicial opinion. In England there are several cases to the effect that if a bill or note exhibit the appearance of alteration, the holder must account for it. But these decisions are all of a recent date, and appear to be based as much on reasons derived from the policy of the stamp acts as from considerations resting in the general principles of the law. On the other hand, a large number of the authorities in this country adopt the rule that where an alteration exhibits itself on the face of an instrument, it must be submitted to the jury with the attendant circumstances, and that there can be no judicial presumption, founded on inspection, that the change was made after the execution of the paper, whether under seal or otherwise. The cases on both sides of this question are collected, with much fullness, in the notes to the last edition of Smith's Lead. Cas. vol. I, part 2, p. 1168. " But whatever the rule of law in this respect may Tdc elsewhere, the prac- tice in this State has always been to refer, under ordinary circumstances, the question as to the time of the alteration of a written instrument, to the con- § 288.] BURDEN OF PROOF, PRESUMPTIONS. 433 in Putnam v. Clark.^ while it is admitted that this is the ordinary rule, it is said : " That the appearance of the alteration itself, or slight circumstances connected there- with, may exhibit indicia of unfairness, which, while fall- ing short of proof thereof, would throw upon the pro- pounder of the instrument the burden of showing that the alteration was fairly made, and that a failure on his part to make such proof would support a finding against the validity of the instrument." § 288. Explanatory evidence may be required in first instances if instrument suspicious on its face. — Whether the writing is suspicious upon its face is for the judge to determine, and it rests in his discretion to call for such sideration of the jury. The mere fact that the writing presents symptoms or evidence that a change has been made in the language employed, does not of itself create a legal intendment that such alteration was effected subse- quently to the perfection of the contract. So far as I am aware, the usual course of proceeding has been to take the opinion of the jur>' upon the point. . . . " A written instrument, not attested by a subscribing witness is sufficiently proved to authorize its introduction by competent proof, that the signature of the party, whose name is undersigned, is genuine. The party producing it is not required to proceed further upon a mere suggestion of a false date, when there are no indications of falsity found upon the paper, and prove, that it was actually made on the day of the date. After proof that the signature is genuine, the law presumes, that the instrument in all its parts is genuine, also, when there are no indications to be found upon it to rebut such a pre- sumption." Shepley, J, in Pullen v. Hutchinson, 25 Me. 254. " The proof or admission of the signature of a party to an instrument is /r/wza/aczV evidence, that the instrument written over it is the act of the party ; and this prima facie evidence will stand as binding proof, unless the defendant can rebut it by showing, from the appearance of the instrument itself, or otherwise, that it has been altered." Shaw, C. J., in Davis v. Jenny, 42 Mass. 224. Compare Beaman v. Russell, 20 Vt. 205; Milliken v. Marlin, 66 111. 13; Welch V. Coulbord, 3 Houst. (Del.) 647; Greenleaf on Evidence, § 564. The mere use of different kinds of ink in the writing of an instru- ment does not render it suspicious. Feig v. Meyers, 102 Pa. St. 10 ; Wilson V. Harris, 35 Iowa, 507, and the erasure of certain portions of a printed blank has been regarded as a change free from suspicion. Corcoran v. Doll, 32 Cal. 82; Bank of Cass County v. Morrison, 52 Am. Rep. 417, infra^ n. i, p. 434. 1 33 N. J. Eq. 338. 38 434 EFFECT OF ALTERATIONS. [§ 288. explanatory evidence as he shall desire.^ The court, however, would not, it is believed, be justified in refus- ' In Bank of Cass County v. Morrison, 17 N. C. 341, 52 Am. Rep,, 417, Reese, J., says: "It is claimed by the plaintiff that as there is nothing in the alteratiomvhich renders the erasure suspicious, the burden is upon the defend- ant to show by a preponderance of proof that the change was made without his consent after the delivery of the note. It is insisted by defendant that the presumption is that the change was made after delivery, and that the burden was upon plaintiff to establish by a preponderance of testimony that it was not. " The authorities upon this question are not uniform, and hence each party is fortified by a number of decisions sustaining his view of the case. ''InNeillz/. Case, 25 Kans. 510; S. C. 37 Am. Rep. 259, the Supreme Court of Kansas, by Chief Justice Horton, in discussing the question of the burden of proof in cases of this kind, said : ' This is a vexed question, and the books are full of diverse decisions. Four different rules are generally stated : First. That an alteration on the face of the writing raises no presump- tion either way, but the question is for the jury. Second. That it raises a presumption against the writing, and requires therefore some explanation to render it admissible. Third. That it raises such a presumption when it is suspicious, otherwise not. Fourth. That it is presumed in the absence of explanation to have been made before delivery, and therefore requires no ex- planation in the first instance. . . . Generally, the instrument should be given in evidence, and in a jury case should go to the jury upon ordinary proof of its execution, leaving the parties to such explanatory evidence of the alteration as they may choose to offer. If there is neither intrinsic nor extrin- sic evidence as to when the alteration was made, it is to be presumed, if any presumption is said to exist, that the alteration was made before or at the time of the execution of the instrument. Perhaps there might be cases where the alteration is attended with such manifest circumstances of siftpicion that the court might refuse to allow the instrument to go before the jury until some explanation, but this case is not one of that character." In Paramore v. Lindsey, 63 Mo. 67, it is said : " If nothing appears to the contrary, the alteration will be presumed to be contemporaneous with the execution of the instrument. But if any ground of suspicion is apparent on the face of the instrument, the law presumes nothing, but leaves the question of the time when it was done, as well as the person by whom and the interest with which the alteration was made, as matters of fact to be ultimately found by the jury upon proof to be adduced by the party offering the instrument in evidence." " The record in the case at bar shows that the note was written upon a printed blank, and that the words " after maturity " were printed in the blank, that the alteration was made by drawing a pen through these words and thus erasing them. As to whether the ink with which this erasure was made was the same as that used in filling the body of the note, the testimony is § 288.] BURDEN OF PROOF, PRESUMPTIONS. 435 ing to admit the instrument, in any case where there was sufficient explanatory evidence given to sustain a finding of a jury in favor of the validity of the instrument. It is therefore only in those extreme and evident cases of sub- silent. In Corcoran v. Doll, 32 Cal, 89, it is said : ' When printed forms are used they frequently have to be altered to suit the terms of the contract, and where an alteration is made only as to the printed matter, the presumption is that it was made prior to the execution of the contract, and made to suit it to the terms agreed upon between the parties.' But it seems to us that there must be many exceptions to this rule if it is to be adopted as applicable to cases where the printed matter is only changed. There may be many indicia upon the face of the note itself, even in such cases. Features, may present themselves which would at once impress the mind with the idea that the change has been made out of the usual way ; so that while it may do to say that ordinarily the rule laid down in the California case may be a safe one, yet each case must stand upon its own merits. As is said in Neil v. Case, supra : ' It is impossible to fix a cast-iron rule in all cases.' In ordinary cases the alteration perhaps ought not to raise a presumption against the note, because the law will not presume wrong. If the instrument, when offered in evidence, shows upon its' face anything which to the trial court is suspicious, and presents to the mind of the court a reasonable question as to whether the change was made in the usual and ordinary course of business, then upon objection, proof sufficient to owexcora^ prima facie the suspicious appearance should be required before overruling the objection. But if the. change con- sists in nothing more than the erasure of printed matter in the blank used — without interUneation— the instrument should be admitted in the first in- stance. Upon this point much should be left to the discretion of the trial court. " The instrument having been admitted in evidence, with or without the preliminary proof, the question of the alteration, whether made before or after its execution, becomes a question of fact like all other questions in issue, to be tried by the court or jury hearing the cause. Neil v. Case, supra. "If any material alteration, whether apparently advantageous to the holder or not, appears on the face of the paper, or in the indorsements on which his action depends, he should be prepared with at least some evidence tending to explain it. The question whether the alteration is such that the absence of an explanation excludes the paper, is one for the court. If there is nothing suspicious about the alteration, it is not error to admit the paper without explanation. If there is anything suspicious the court should require explanation, and the evidence offered for this purpose which may include all the circumstances of its history, its nature, the appearance of the alteration, the possible or probable motions for the alteration or against it, and its effect upon the parties respectively, ought to be submitted to the jury with the paper itself.'' Abbott's Trial Evidence, p. 406, and compare with id., p. 696. 436 EFFECT OF ALTERATIONS. [§ 288. sequent alteration, where there would be nothing to properly submit to the jury, the instrument being void upon its face, that a judge could reject the instrument altogether.^ In Evans v. Deming,^ the action was upon the following note : $150. Mat 14th, 1879. For value received we jointly and severally agree to pay to Maria Evans $150; seventy-five dollars 60 days from date. Signed . It appeared from the face of the note that the date had been altered from the 12th to the 14th, that the figure one in the numbers stating the amount of the note had been changed from the figure seven, and that the cipher had been added in a lighter ink. The defendant ' In Stoner v. Ellis, 6 Ind. 1 59, it was said : " Where the alteration is of such a character as to defeat entirely the operation of the instrument for any purpose, as in case of the erasure of the signature and seal to a deed, or other instrument, so that admitting all to be true that appears upon the instrument when produced, it would be void in law, it should be explained in the first instance before it should be permitted to go to the jury. In other cases the instrument should be given in evidence, and should go to the jury, upon the ordinary proof of its execution, although an alteration may appear in it, leaving the parties to make such explanatory evidence as they may choose to offer. But if there is neither intrinsic nor extrinsic evidence as to when the alteration was made the presumption of the law is, that it was made before or at the execution of the instrument. There are some considerations of public policy which seem to us to have weight in inducing this conclusion. With us, the business of conveyancing does not pertain to the legal profession exclusively. Where estates are large, and lands are held by the compara- tively few, titles are seldom passed without great consideration, while with us the ownership of lands in fee is almost universal, and real estate is, like mer- chandise, a subject of traffic. Deeds are drawn by justices of the peace, and almost by any person of ordinary intelligence, who will observe usually much less accuracy and precision than where the business is in the hands of a branch of the legal profession. The same may be said in regard to all sorts of traffic so common among our people, in which notes, agreements, and other contracts are executed with little regard to professional accuracy. To declare all these prima facie fraudulent and void, we are satisfied would be generally indulging in a presumption against the facts, and that it would pro- duce more injustice than to hold them valid." 2 N. Y. Sup. Ct. Fifth Dept. 20 W. D. 71 (1884). § 288.] BURDEN OF PROOF, PRESUMPTIONS. 437 objected to the reception of the note in evidence without explanatory evidence, but the trial court ad- mitted it. Upon appeal this was held to be error, as in such a case the plaintiff was bound in the first instance to give evidence in explanation of the alteration.^ If, 1 In Tillou V. The Clinton and Essex Mutual Ins. Co. 7 Barb. 568, Barculo, J., says : " It has long been a disputed point whether the burden of explaining an alteration apparent upon a paper devolved upon the party seeking to en- force it, or the party sought to be charged. It virould seem that, in some of the States, an alteration, not peculiarly suspicious, must be presumed to have been made before execution (11 Conn. Rep. 531 ; i Halstead, 215; Cowen & Hill's Notes, 298,1 317, etc.). But when the alteration is suspicious, and beneficial to the holder of the paper, the more sensible rule prevails, at least in this State and in England, that the presumption is against the party who sets up the paper ; and he is required to explain it before he can recover ( 2 Wend. 555 ; vide also note to Waring v. Smyth, 2 Barb. Ch. Rep. 119). " But it is contended that the case should have been submitted to the jury. This would have been true, if the plaintiff had offered evidence which afforded 3l prima facie explanation of the mutilation, or if the fact of mutilation had come out on the part of the defense, after the plaintiffs had made out their case. But no explanation was given, or offered. The evidence which pro- fessed to explain, or rather to deny the alteration, tended strongly to estab- lish the fact and confirm the declaration of the secretary. " As I understand the rule, it is always a question for the court to decide, whether a paper is proper to be read in evidence to the jury. The reason of the rule is most emphatically applicable to the present case ; for the alteration ■was of such a character as that the law pronounces the paper absolutely void, until explained. If, therefore, the case had been submitted to the jury and a verdict found for the plaintiffs on that evidence, this court would have been compelled to set aside the verdict ; and in all such cases it is the obvious duty of the judge to direct a nonsuit ; even if both parties have given testimony (Graham on New Trials, 280). It is not unusual for the judge to reject the altered paper, and direct a nonsuit. In the case of Penny v. Corwithe (18 John. 499), a submission to arbitrators was offered in evidence, but it appearing that a black line had been drawn through the name of one of the parties, since its execution, the judge refused to permit it to be read in evi- dence, unless the plaintiff showed that the erasure had been made by the con- sent of the parties. The plaintiff then offered to prove the fact, but the judge rejected all evidence on that point, except that of the subscribing witness, and nonsuited the plaintiff, and for this last ruling of the judge, a new trial was granted. So in the case of the Adm'rs of Price v. Adm'rs of Tallman (I Coxe, 447), a bond was produced, and the subscribing witness stated that there had been a writing at the foot of the bond, which had been cut off. The court would not permit the bond to be read in evidence, although the 438 EFFECT OF ALTERATIONS. [§ 288. therefore, no evidence is found in the instrument itself, in the circumstances, or in the statements of the parties which explain the suspicious alterations, as the onus is upon the party offering them, the alterations will be pre- sumed to be made subsequent to execution, and the in- strument will be avoided.^ plaintiff offered to prove the contents of the writing torn off, and to satisfy the jury that it was immaterial. The plaintiff was nonsuited. In Knight v. Clements (8 A. & E. 215), a bill of exchange was offered by the plaintiff, but it appeared that the word " three " had been blotted, and " two " written upon it. The court held that the plaintiff was bound to ex- plain it by evidence, and that the jury could not infer from the appearance of the bill that the alteration had been made when the bill was drawn, and a nonsuit was ordered. (See also 2 Starkie's Rep. 313 ; 5 Bing. 183.) That it is a question for the court, when objection is made to the admis- sibility of the evidence, is shown by the cases of Ross v. Gould (5 Greenl. 204, cited I Greenl. Ev. 599). 1 In Clark v. Eckstein, 22 Pa. St. 507, the judge left it to the jury to say whether there was an alteration madfe in the note presented, and charged that if one had been made it would avoid the note unless shown by the evi- dence to have been made before the execution of the instrument, or with de- fendant's consent if made subsequent to that time. The court on appeal sustained the charge, saying, by Knox, J., "Where a promissory note clearly shows upon its face that it has been altered in some material part, such as its date, it is incumbent upon the party producing it to account forthe alteration, and if no explanatory evidence is given, it would be error in the court to refer it to the jury as matter of fact to determine whether the alteration preceded delivery or otherwise. The onus in such case is upon the party alleging the legality of the instrument. But the preliminary question whether there has been an alteration is for the jury." Thus in Walters v. Short, 10 111. 256, Trumbull, J., says : " First. Is it a presumption of law that the interlineation or alteration of a written instrument was made after its execution ; and if so, was it incumbent on Short, in this case, to explain by evidence dehors the writing, the interlineations apparent upon it ? " Some courts have held that, if nothing appears to the contrary, the altera- tion will be presumed to have been made contemporaneous with the execu- tion of the instrument (13 Maine, 390; 6 Ala. 708; i Mete. 223). The reason given by the courts that have so decided is, that the law will never presume wrong, and that to hold an alteration to have been made after the execution of the instrument would be to presume the holder guilty of forgery. This reason has no foundation in this State so far, at least, as relates to in- struments of writing upon which suits are brought, or which are set up by way of defense or set-off, the execution of which, by the fourteenth section of the ^eighty-third chapter of the Revised Statutes, a party is not permitted to § 289.] BURDEN OF PROOF, PRESUMPTIONS. 439 § 289. Statement of presumptions. — From the fore- going review of the authoritie s it appears that the fol- deny except on oath. When such denial is made on oath, as in the present case, the law will presume quite as great wrong in assuming that the party making oath that the instrument was not his, had been guilty of perjury, as in assuming that the holder of the instrument had altered it after its execu- tion. But we are not satisfied of the soundness of the rule independent of the statute. " By the common law, a party offering in evidence a written instrument is always bound to prove its execution, and as well might it be said, that the law which requires such proof presumes the holder to have been guilty of for- gery, as to say that a party in offering in evidence a writing showing upon its face that it had been altered, was presumed to be guilty of forgery because he was required to explain such alteration. Written instruments are sup- posed to be the repositories of the intentions of the parties, but they would surely be very unsafe repositories of such intentions, if the party having pos- session of the instrument was at liberty to alter it at pleasure, and then call upon the other party to show that the alteration was made after its execution, or else be bound by its contents. Admitting that a note had been altered after its execution, how is the maker to show that fact .? The note has, of course, been in the possession of the payee— is often in his handwriting, and it will be a mere accident if the maker can procure evidence to show how the note was written. Which is the more reasonable, to require the holder of an instrument which has been altered to explain the alteration, or to require that he who executed and never saw it afterwards should show that the alteration had been made since its execution ? It is easy for a party taking an instru- ment that has been interlined or altered, to have the interlineation or altera- tion noted in the attestation clause so as to show its existence at the time of execution, while it is very difficult for a party who has been out of possession of the instrument to prove that the interlineation was made after he signed it. " The rule is well settled in England and in many of the courts of this country, that it is incumbent on the party offering in evidence an instrument which appears to have been altered to explain such alteration, and that in the absence of all evidence, either from the appearance of the instrument itself, or otherwise, to show when the alteration was made, it must be presumed to have been subsequent to the execution and delivery of the instrument (11 N. H. 395 ; 13 N. H. 386; 5 Bing. 183; 2 Manning & Granger, 909 ; 2 Harring- ton, 396; 22 Wend. 393; 2 Kelly, 128; i Green). Ev. sec. 564). Such we believe to be the true rule. The case of Knight v. Clements, 8 Adol. & Ellis, goes still farther, for in that case it was held that the alteration was not suf- ficiently explained by the appearance of the instrument alone, upon inspection of which the jury had found that the alteration was made at the time of ex- ecution, but that some other proof dehors the writing was necessary. We are not prepared to go that far, but think the alteration may often be suffi- ciently explained by inspection of the instrument itself. In this very case, the Circuit Court may have been satisfied from an inspection of the writing, that 440 EFFECT OF ALTERATIONS. [§ 289. lowing presumptions arise upon the production of altered instruments : First. When an instrument containing alterations is duly proved the presumption in the mind of the court is that everything appearing on its face was there before execution. Second. If upon examination of the instrument any evidences of fraud are found, the presumption of inno- cence is rebutted, and the burden of clearirig the instru- ment from suspicion is put upon the party producing it ; and with this burden remaining upon him the facts are given to the jury. Third. If the instrument shows no evidences of alteration since execution, upon prima facie proof that it has been so altered, the presumption of innocence is likewise rebutted, and the burden is put upon the party producing the writing with the like effect. Fourth. If upon examination the altered writing shows nothing to arouse suspicion, and no evidence is given of alteration since execution, the court will conclu- sively presume that the alteration was prior to execution. Fifth. If the instrument is suspicious on its face, or is shown to be so by extrinsic evidence, and there is no evidence in the case to show that the alteration was made before execution, the court will presume the altera- tion to have been made since execution. the body of it and the interiineations were written in the same handwriting and with the same ink, or that they were both in the handwriting of the maker. If so, the finding of the Circuit Court upon this point was correct. Had the case been tried by a jury, Walters might have called upon the court to instruct that in the absence of any evidence, as to when the interlineation was made, it must be presumed to have been subsequent to the execution of the instrument ; and if so, the interlineation being material would render it void, a refusal to give which instruction would have been error, but when the case is tried by the court, there is no way of preserving such a question, as there is no means of knowing by what principles of law the court may have been guided in arriving at its conclusion." See also Cole v. Hills, 44 N. H. 232. CHAPTER XXIII. ALTERATIONS BY A STRANGER, AND BY CONSENT. § 290. Law of England and America in conflict. 291. Rule in England as stated by Mr. Justice Stephen. 292. Davidson v. Cooper. 293. Other English cases following Davidson v. Cooper. 294. English rule well but not fully established. 295. Criticism on rule. 296. Rule in America. 297. Drum V. Drum. 298. Alterations by mistake. 299. Alterations by consent. 300. When filling of blanks in negotiable paper is not alteration. 301. Question arising with reference to complete bills or notes with blank spaces. 302. Law of England on question. 303. American authorities following Young v. Grote. 304. American authorities holding that maker is not liable. 305. Grounds upon which maker is said to be liable. 306. These grounds do not make genuine bill. 307. Maker of such note not liable for negligence. 308. Other grounds insufficient for holding maker. § 290. Law of England and America in conflict. — Upon the question of the effect upon a contract of an alteration made by a stranger, the law of England differs materially from the law of this country. And as in both countries the courts rest their decisions upon the prin- ciples of the common law, it is desirable to ascertain, if possible, which rule is sustained by reason and justice. To this end we shall first consider the English cases bear- ing upon the question, and the reasons upon which they are founded, and shall then state the prevalent rule in this country, which it is believed will appear to be the just rule applicable to this subject. 442 EFFECT OF ALTERATIONS. [§ 29I. § 291. Rule in England as stated by Mr. Justice Stephen. — Mr. Justice Stephen, in his Digest of Evi- dence,^ has laid down the rule in regard to alterations as follows : " No person producing any document which, upon its face, appears to have been altered in a material part, can claim under it the enforcement of any right created by it, unless the alteration was made before the completion of the document or with the consent of the party to be charged under it, or his representatives in interest. " This rule extends to cases in which the alteration was made by a stranger whilst the document was in the custody of the person producing it, but without his knowledge or leave." It is now asserted that this has been the law of England ever since the decision in Pigot's case.* But before the decision of the case of Davidson V. Cooper ® there was no clear statement of the law, and high authorities doubted if the early rule had not been abandoned.* And in one case Mr. Baron Alderson re- ^ Art. 89. 2 II Co. 27. 3 II M. & W. 778; 13 M. & W. 343. * See Sugden on Powers, p. 603. In Rees v. Overbaugh, 6 Cow. (N. Y.) 746, Sutherland. J., thus reviewed the English cases upon this question: " The ancient doctrine that an alteration or spoliation of a deed by a stranger, or by accident or mistake, without the privity or consent of the party inter- ested, destroys it, has been materially modified, if not substantially exploded, by modern decisions. Henfree v. Bromley, 6 East, 309 ; Master v. Miller, 4 T. R. 339, perBuUer, J.; 3 T. R. 151, 153, note. . . . In Whelpdale's case, 5 Coke, 119, it is said, 'that in all cases where the bond was once the deed of the defendant, and afterwards, before the action was brought, be- comes no deed, either by erasure or addition, or other alteration of the deed, or by breaking off the seal, the defendant may safely plead non est factum ; for, without question, at the time of the plea, which is in the present tense, it was not his deed.' And the case of one Hawood is there mentioned, in which, in an action of debt on bond, he had pleaded non est factum, and be- fore the day of appearance of the inquest (or trial), by the negligence of the clerk in whose custody it was, rats did eat the label by which the seal was fixed, the justices charged the jury that if they should find that it was the deed of the defendant at the time of plea pleaded, they should give a spe- § 291.] ALTERATIONS BY STRANGER, 443 marked : " It is difficult to understand why an alteration by a stranger should in any case avoid the deed. Why cial verdict ; which was done, and the plaintiff recovered (Dy. 59 a; S. C. and notes; id. 111 a). " Mr. Justice Buller, in Master v. Miller, 4 T. R. 338-9, considers this doctrine as having owed its origin very much to the technical forms of plead- ing applicable to deeds alone. The plaintiff in such cases must make a pro- fert of the deed under seal, and the deed or profert produced must agree with that stated in the declaration, or the plaintiff must fail. A profert of a deed without a seal will not support the allegation of a deed with a seal. But he remarks that it is not universally true that a deed is destroyed by an alter- ation or by tearing off the seal. In Palm. 403, a deed which had erasures in it, and from which the seal was torn, was held good, it appearing that the seal was torn off by a little boy. So in any case where the seal is torn off by accident after plea pleaded. And in these days he continues, I think, even if the seal were torn off before the action brought, there would be no difficulty in framing a declaration which would obviate every doubt upon that point by stating the truth of the case. It was not settled in England that a deed which had been lost or destroyed by time or accident could be pleaded, ac- cording to the truth of the case, without profert, until the case of Read v. Brookman, 3 T. R. 151, and Gross, J., dissented from that decision. Vid. Soresby v. Sparrow, 2 Str. 11 86; Whitfield v. Faugset, I Ves. 387; Totly v, Nesbitt and Mattison v. Atkinson, 3 T. R. 153, note c. " Lord Kenyon, in Read v. Brookman, says, that which was supposed to be the old law was founded on a mistake, and that the law of the country has, in this respect, in modern times, been better adapted to general conven- ience. " If a deed may be rendered available to a party, notwithstanding its total destruction, upon what principle can he be deprived of the benefit of it when it has suffered a partial injury, either from accident or the act of a stranger, over which he had no control ? Lord Kenyon, in Master v. Miller, 4 T. R. 329, 330, seems to admit that an alteration in a deed, by accident, would not destroy it. " In Henfree v. Bromlee, 6 East, 309, Lord EUenborough expresses a decided opinion upon this point. The question there was whether an award was void in consequence of an alteration made by the umpire in the amount awarded after he signed the award and delivered it to his attorney for the purpose of being delivered to the parties. The alteration consisted in run- ning his pen through the £57, the amount originally awarded, and inserting the sum of ;£66, leaving the £Y], however, still legible. It was contended by Erskine and Pooley that the alteration in the award vitiated it altogether, and they referred to the second resolution in Pigot's case, 11 Coke, 27, in support of their argument. But Lord EUenborough, for the whole court, said : ' I consider the alteration of the award by the umpire, after his authority was at ail end, the same as if it had been made by a stranger, a mere spoliator ; and I still read it with the eyes of the law, as if it were an award of £t^T, such as it 444 EFFECT OF ALTERATIONS. [§ 292. the tortious act of a third person should affect the rights of the two parties to it, unless the alteration goes the length of making it doubtful what the deed originally was or what the parties meant." ^ § 292. Davidson v. Cooper. — In the case of Davidson V. Cooper, which was an action on a written guaranty, to which it was pleaded a stranger had affixed a seal, the former decisions bearing on the question were, however, considered, and the Court of Exchequer adhered to the rules announced in Pigot's case.^ Upon appeal to the Court of Error this decision was affirmed, and Lord Denman, C. J., said: "After much doubt we think the judgment right. The strictness of the rule on this subject, as laid down in Pigot's case, can only be explained on the principle that a party who has the custody of an instru- ment made for his benefit is bound to preserve it in its orig- inal state. It is highly important, for preserving the pu- rity of legal instruments, that this principle should be borne in mind, and the rule adhered to. The party who may suf- fer has no right to complain, since there cannot be any alteration except through fraud or laches on his part." ^ originally was. If the alteration had been made by a person who was inter^ €Sted in the award, I should have felt myself pressed by the objection ; but I can no more consider this as avoiding the instrument than if it had been, obliterated or cancelled by accident." See also United States v. Spalding, 2 Mason, 482. 1 Hutchins v. Scott, 2 M. & W. 8(4. 2 13 M. & W. 352. ^ When this case was before the Court of Exchequer, 1 1 M. & W. 778, Lord Abinger, C. B., said : " This was an action of assumpsit against the defendant on a written guarantee not under seal. The defendant pleaded, among other pleas, that after the guarantee had been given to the plaintiff, and while it was in his hands, it was altered in a material particular by some person to the defendant unknown, and without his consent, by affixing a seal so as to make it appear to be the deed of the defendant, by reason of which alteration the said guarantee became void in law. . . . '• There is no doubt but that, in the case of a deed, any material altera- tion, whether made by the party holding it or by a stranger, renders the in- strument altogether void from the time when such alteration is made. This § 293-] ALTERATIONS BY STRANGER. 445 § 293. Other English cases following Davidson v. Cooper. — The case of Davidson v. Cooper has been sev- was so resolved in Pigot's case, and though it was contended in argument that the rule has been relaxed in modern times, we are not aware of any au- thority for such a proposition, when the altered deed is relied on as the found- ation of a right sought to be enforced. . . . " The principle thus recognized in Pigot's cas.e with respect to deeds was, in the case of Master v. Miller, 4 T. R. 320, established as to bills of exchange and promissory notes ; and the ground on which the decision in that case was put by the Court of Error was that in all such instruments a duty arises analogous to the duty arising on deeds. . . . "But the decisions do not stop there. In Powell v. Divett, 15 East, 29, the Court of King's Bench extended the doctrine to the case of bought and sold notes, holding that a vendor who, after the bought and sold notes had been exchanged, prevailed on the broker, without the consent of the vendee, to add a term to the bought note for his (the vendor's) benefit, thereby lost all title to recover against the vendee. The' ground on which the court pro- ceeded was that the bought note, having been fraudulently altered ^by the plaintiff, could not be received in evidence for any purpose, and as no other evidence was admissible, the plaintiff had no means of asserting any claim whatever. The court considered that Master v. Miller expressly decided the point before them, and Mr. Justice Le Blanc, taking, it should seem, his view of that case, not from the judges in the Exchequer Chamber, but from the wider line of argument adopted by Lord Kenyon in the court below, expressly stated that Master v. Miller was not confined to negotiable securities. Now, the case of Powell v. Divett was decided more than thirty years ago, and has ever since been treated as law ; and therefore, although we certainly feel that there are difficulties in the extent to which it carries the doctrine of Pigott's case, yet we do not feel it epen to us, if we were inclined to do so, to act against that authority. And the only question, therefore, is whether there is any real distinction in principle between this case and that of Powell V. Divett. The only difference is that in Powell v. Divett the alteration was made by the plaintiffs, who held the written instrument, whereas in this case it is not ascertained by whom the alteration was made, the jury finding that the alteration was made by some person to them un- known whilst the document was in the hands of the plaintiff. " After much reflection, we are of opinion that this does not create any real distinction between the two cases. The case of Powell v. Divett was decided on the ground that written instruments, constituting the evidence of contracts are within the doctrine laid down in Master v. Miller as applicable to negotiable securities ; and the doctrine established in Master v. Miller was that negotiable securities are to be considered, no less than deeds, within the principle of the law laid down in Pigot's case. That law is that a material alteration in a deed, whether made by a party or a stranger, is fatal to its validity; and applying that principle to the present case, it is plain that there 446 EFFECT OF ALTERATIONS. [§ 293. era! times followed in England. In Crookwit v. Fletch- er^ it appeared that a charter-party was signed, and sent by the person signing it to his agent for delivery to the other contracting party. While it was in the hands of the agent he inserted, after a provision fixing the time of sailing as the 15th of March, "wind and weather per- mitting," and the court held this to be a material altera- tion which avoided the instrument. In this case Martin, B., announcing more fully the doctrine of Davidson v. Cooper, said " It is, no doubt, apparently, a hardship, that where what was the original charter-party is perfectly clear and indisputable, and where the alteration or addi- tion was made without any fraudulent intention, and by a person not a party to the contract, that a perfectly in- nocent man should thereby be deprived of a beneficial contract ; but, on the other hand, it must be borne in mind, that to permit any tampering with written docu- ments would strike at the root of all property, and that it is of the most essential importance to the public interest that no alteration whatever would be made in written contracts, but that they should continue to be and remain in exactly the same state and condition as when signed and executed, without addition, alteration, erasure, or obliteration. But upon this point the case of Davidson V. Cooper is conclusive. No case can possibly be en- titled to more weight than this. Lord Abinger, in giving judgment, stated that the court had arrived at their judg- ment after much reflection; and Lord Denman, in giving is no real difference between this case and that of Powell v. Divett. There the alteration was made by a party, here by a stranger ; but this, according to Pigot's case, is immaterial. And, indeed, in this respect, the present case resembles Master v. Miller, for there the jury did not find by whom the altera- tion was made, but only that it was made by some person to them (the jurors) unknown whilst the instrument was in the hands of Williams and Cooke, the payees and first indorsers." 1 26 L.J. 153. § 293-] ALTERATIONS BY STRANGER. 447 the judgment of the Court of Error, stated that the court had arrived at their conclusion after much doubt, and the judgment is that a party having the custody of an instru- ment for his own benefit is bound to preserve it in its original state. It was then said Mr. Hearn was a stranger to the plaintiff. He certainly was not, for he was the agent of the plaintiff to deliver the charter-party to the defendant. But, even if he was, the rule in Pigot's case is that where any deed is altered in a material part, by the plaintiff himself, or by any stranger, without the priv- ity of the obligee, be it by interlineation, addition, eras- ing, or by drawing a pen through a line, or through the middle of any material word, the deed has thereby be- come void; and Lord Denman, in his judgment, stated that Pigot's case had never been overruled, but, on the contrary, extended to unsealed documents." ^ ' In the Bank of Hindos., China, and Japan v. Smith, 36 L. J. C. P. 241, where it appeared that several members of the bank signed a document where- by they severally undertook to pay a sum of money to the bank, the intention, however, being that they should only be bound each for a proportion of the amount, and S. paid his proportion, and his name was thereupon stricken from the paper by the secretary, without the knowledge of S., it was held, in an action brought against him to recover the whole amount secured, that as the document was in the custody of the bank as distinguished from the indi- vidual directors, the alterations in it avoided it as against the defendant. And Bovill, C. J., said: "There is no doubt that the alteration was made as alleged, and it has not been contended that it was made with the knowledge of the defendant. It is conceded that this alteration was material, but the case presented is, first, that on the facts the document was not in possession of the plaintiffs ; and, secondly, that what was done was done by mistake. As to the question of possession, which is the main contention, it is said that, being in the hands of the secretary and under the control of the directors, the document must be taken to be in the possession of the defendant. But those who signed it were not identical with the body of directors, and the secretary was the servant of the company, who now seek to enforce it. On the facts the document appears to have been in the hands of the secretary as a docu- ment of the plaintiffs, and this being so, we cannot distinguish this case from Davidson v. Cooper, 11 M. & W. 778, and other cases. " Montague Smith, J., said : " The action was founded on a document, and the plaintiffs must recover on it in the State in which it now is. Whether there be a remedy in 448 EFFECT OF ALTERATIONS. [§ 294. § 294. English rule well but not fully established. — While, therefore, the House of Lords has not given its adherence to the rule as laid down in Davidson v. Cooper, and the Court of Appeal is not committed to it, the recent decisions announce the law of England to be as it was there stated, and so it is taken to be by eminent writers. Thus in the latest edition of Taylor on Evidence it is deprecatingly said : ^ " However, since the case of equity for breach of trust we need not determine, for the action is on the special contract contained in the document. The result of the evidence is that the alteration reduced the document, as to the defendant, to the obliga- tion originally intended ; and the question is whether, in the events which have happened, the defendant is released from liability. No doubt in terms the obligation obliged each obligor to pay all the money, but when the docu- ment is sued on it appears that the defendant's signature is erased, and also the signatures of two others, and it is scarcely denied that if this had been done in an ordinary case either by the plaintiffs themselves or a stranger when the document was in their control, the security would be at an end ; for, much as I regret the length to which the case of Davidson v. Cooper, 1 1 M. & W. 778, has gone, yet we are bound to treat it as law. This case, however, does not go so far. The alteration is material, and the question arises whether it was made when the document was in the custody of the plaintiffs. The main question is whether it was in the possession of the plaintiffs as a banking company when the alteration was made, or, as has been contended, in that of the defendant. It seems to me it was not in that of the defendant, for although he was a director, yet he was separate as to this matter from the body of directors." It is to be noticed that Jessel, M. R., in his opinion in the case of Suffel V. Bank of England, L. R. 7 Q. B. D. 270, affirms the aHithorities of Pigot's case, except in respect to the law there laid down with regard to im- material alterations. Supra, § 262. See also Pattinson v. Luckley, L. R. 10 Ex. 330; Burchfield v. Moore, 3 E. & B. 687; Thompson on Bills, no; Daniel on Negot. Insts., 1373 a. 1 Eighth edition, § 1828. See also supra, § 291 ; Leake's Digest, p. 806. It is to be noticed, however, that Leake, after stating the English rule on this question, says : " An alteration caused by accident will not affect the liability, provided that the accident can be proved, and that evidence can be given of the original state of the instrument, as if the seal of a deed be torn off by a cfiild, or eaten off by rats," and to this proposition he cites Sheppard's Touchstone, by Preston, 69; Argall v. Cheney, Palm. 403, cited in Bolton v. Bp. Carlisle, 2 H. Bl. 263. Elphinstone says : " There is considerable difference of opinion as to the effect of a material alteration made by a stranger, i.e., a person who is not a party to the deed." Interpretation of Deeds, p. 31. And he refrains from stating more positively the law upon the question. 294-] ALTERATIONS BY STRANGER. 449 Davidson v. Cooper, it appears to be clearly established in England, that no party can rely on a document which has been altered while in his custody, though he be in a position to prove most positively that the alteration was the eflfect of pure accident or mistake, or was made with- out his privity or consent by some person over whom he could exercise no control." It will be observed that under this doctrine an alteration by a stranger is only fatal when the instrument is in the custody of the party who relies upon it, and that to this extent the decision of Davidson v. Cooper is an advance upon Pigot's case, and that it is not strictly accurate to say that the law re- mains as it was asserted in the last mentioned case. The old rule, as thus modified, has been approved by Whar- ton, who says : ^ " Whether an alteration of a document made by a stranger vitiates the document, so far as con- cerns the party in whose custody the document at the time was, has been much discussed. In England it has been held that the document becomes thereby avoided as to such party, even though he was entirely ignorant of the alteration, and though it was done by an entire stranger. It was said by Lord Denman, that in such case the ' party who may suffer has no right to complain, since there 'cannot be any alteration except through fraud or laches on his part' As thus guarded, the doctrine may be sustained, since it does not go to avoid documents which were altered by a stranger without any laches on the part of the custodian." ^ 1 Evidence, § 627. ^ And in Marcy v. Dunlap, 5 Lans. (N. Y.) 365, the rule was stated sub- stantially as it now exists in England, but the facts in that case did not re- quire the statement of so broad a doctrine, for the alteration in the instru- ment there considered was constructively made by the party; and in Smith v. Fellows, 41 N. Y. Super, Ct., the case was correctly cited as holding " that a material alteration made in a mortgage without the consent of the mortgagor, either by the mortgagee or a third party at his instance, avoids the instru- ment." 39 450 EFFECT OF ALTERATIONS. [§ 295. § 295. Criticism on rule. — The English rule as stated in the preceding section has not escaped without home criticism/ and it seems almost incredible that it should be allowed to stand as a part of the common law of Eng- land. The only justification for the strict rule which avoids an altered instrument, and so in many cases relieves a party, who has not received actual injury, from the obliga- tions into which he has entered, is found in the fact that he who has altered the instrument has done a wrong and must therefore be punished. Such an one by his action has forfeited his right to rely on the instrument. He has violated the trust which, has been reposed in him, and the law will not stop to inquire whether his action has prejudiced the other party. If he has made a ma- terial alteration in the terms of the contract, the instru- ment no longer speaks the mutual will of the parties, and it has lost its legal effect. But when the parties to an instrument have done no wrong, when neither actually nor constructively have they interfered with the terms of the writing, why should the law seek to punish the one and so, necessarily, reward the other .? It is said " that it is of the most essential importance to the public interest that no alteration what- ' Taylor, after stating the doctrine of the English courts {supra, § 294), ;says (Eighth ed., § 1828) : ''Yet this doctrine accords but little with common notions of justice and equity, and is, moreover inconsistent, not only with several old cases decided in conformity with the customs of merchants, in which it has been held that the cancellation by mistake of a cheque or bill •does not invalidate the instrument (Raper v. Birkbeck, 15 East, 17; Fer- Tiandey v. Glynn, i Camp. 426; Wilkinson z/. Johnson, 3 B. & C. 428; NoreUi v. Rossi, 2 B. & Ad. 755; Warnick v. Rogers, 5 M. & Gr. 340); but ^Iso with the express provisions of the Bills of Exchange Act, 1882 (45 & 46 v., 61, § 63, subs. 3)." Mr. Taylor refers also to the cases of Lady Argoll V. Cheney, Palm. 402, and Henfrey v. Bromley, 6 East, 309, which •oppose the doctrine, and instances the law of Ireland and America as supporting the rule that no alteration by a stranger will avoid an instrument. See also swpra, § 291, and opinion of Montague Smith, J., n. i, p. 447. § 295-] ALTERATIONS BY STRANGER. 45 1 ever should be made in written contracts, but that they should continue to be and remain in exactly the same state and condition as when signed and executed, with- out addition, alteration, erasure, or obliteration." ^ Un- questionably this is so ; but the punishment of the par- ties to written instruments assuredly will not deter strangers from altering them, and because courts declare that writings must not be obliterated, the happening of accidents will not thereby be averted. Lord Denman, in Davidson v. Cooper, said : " The party who may suffer has no right to complain, since there cannot be any alteration except through fraud or laches on his part."^ If the rule laid down is interpreted as Taylor interprets it, this cannot be true, for accidents might frequently happen which were in no degree due to the carelessness of the party having the custody of the instrument. But even if it were true it would be no justification for the rule avoiding the instrument, because, first, it would be highly unreasonable to require men to take such extraordinary care of every paper held by them, as would be necessary to guard against ordinary accidents, and secondly, it would punish a man for his negligence without regard to the damage which he there- by caused. Indeed there seems to be no reason for the present English rule upon this subject,^ and the courts of this country have always stood in united opposition to it. 1 1 Martin, B., in Crookwit v. Fletcher, 26 L. J. 163; supra, § 293. 3 13 M. & W. 352. See also Burchfield v, Moore, 3 E. & B. 687. ' " The supporters of this doctrine contend that it creates no real hardship since the party whose right of action is defeated by the alteration has his remedy by an action against the spoliator ; but this argument is entitled to little weight since the spoliator may either be a child or other irresponsible agent, or be utterly incompetent to pay any damages." Taylor on Evid, (Eighth ed.) § 1827. 452 EFFECT OF ALTERATIONS. [§ 2g6. § 296. Rule in America. — ^The rule on this subject which obtains in this country is that the alteration of an instrument by a stranger is a mere spoliation of it which in no way affects the writing so long as its mean- ing may be ascertained.^ This doctrine received substantial aid from Judge Story,, who said : " It seems to have been held that a material alteration of a deed by a stranger, without the privity of either obligor or obligee, avoided the deed ; and * "A distinction, however, is to be observed between the alteration and the spoliation of an instrument as to the legal consequences. An alteration is an act done upon the instrument, by which its meaning or language is changed. If what is written upon or erased from the instrument has no tendency to produce this result or to mislead any person, it is not an altera- tion. The term is, at this day, usually applied to the act of the party entitled under the deed or instrument, and imports some fraud or improper design on his part to change its effect. But the act of a stranger, without the par- ticipation of the party interested, is a mere spoliation or mutilation of the instrument, not changing its legal operation, so long as the original writing remains legible and, if it be a deed, any trace remains of the seal. If, by the unlawful act of a stranger the instrument is mutilated or defaced, so that its identity is gone, the law regards the act, so far as the rights of the parties to the instrument are concerned, merely as an accidental destruction of primary evidence compelling a resort to that which is secondary ; and, in such case, the mutilated portion may be admitted as secondary evidence of so much of the original instrument. Thus, if it be a deed, and the party would plead it, it cannot be pleaded with a profert, but the want ot profert must be excused by an allegation that the deed, meaning its legal identity as a deed, has been accidentally and without the fault of the party destroyed. And whether it be a deed or other instrument, its original tenor must be substantially shown, and the alteration or mutilation accounted for in the same manner as if it were lost.'' Greenleaf on Evidence, § 566. See also Martin v. Tradesmen's Ins. Co. 2 Cent. Rep. 514, N. Y. Ct. Ap. March, 1886; Casoni v. Jerome, 58 N. Y. 321 : The Sodus Bay and Corning R. R. Co. v. Hamlin, 24 Hun (N. Y.), 290; Rees v. Overbaugh, 6 Cow. (N. Y.) 746; Robertson v. Hay, 91 Pa. St. 242; Neffz/. Horner, 63 Pa. St. 327; Condict v. Flower, 106 III. 105; Brooks V. Allen, 62 Ind. 401; Buckler v. Huff, 53 Ind. 474; State w. Berg, 50 Ind. 496; Piersol v. Grimes, 30 Ind. 129; Union Nat. Bank v. Roberts, 45 Wise. 373 ; Ames v. Brown, 22 Minn. 257 ; Clapton v. Elkin, 49 Miss. 95 ; Langenberger v. Kroeger, 48 Cal. 147 ; Blakey v. Johnson, 13 Bush (Ky.), 197; Lubbering v. Kohlbrecher, 22 Mo. 596; Nichols v. Johnson, 10 Conn. 192. § 296.] ALTERATIONS BY STRANGER. 453 by parity of reasoning th'C destruction or tearing off the seal either by a stranger or by accident. A doctrine so repugnant to common sense and justice which inflicts on an innocent party all the losses occasioned by mistake, by accident, by the wrongful acts of third persons, or by the providence of heaven, ought to have the unequivocal support of unbroken authority, before a court of law is bound to surrender its judgment to what deserves no better name than a technical quibble."^ And the in- justice of punishing a party to an instrument for any act which could not be called his own, has been always re- cognized here, and the rule that an alteration by a stranger will not vitiate a document, is adhered to as the true doctrine of the common law upon the subject. * > United States v. Spalding, 2 Mason, 482. 2 In Hunt V. Gray, 35 N. J. L. 227, Beasley, Ch. J., says: "The altera- tion was a material one, and it is alleged that it was made by the agent of the plaintiff. The question then is presented, as to the effect of such an alteration of a written contract. I have no doubt any legal instrument is, as a. means of evidence, annulled by such an act. This was the doctrine, as ex- tracted from the Year Books, expounded in Pigot's case, 1 1 Rep. 27. The law, as resolved in this celebrated decision was, that when any deed is altered in a point material, by the plaintiff himself, or by any stranger, with- out the privity of the obligee, be it by interlineation, addition, raising, or by drawing a pen through a line, or through the midst of any material word, that the deed thereby becomes void. And in the recent case of Davidson v. Cooper, 1 1 M. & W. 778, 1 2 lb. 343, Lord Abinger, in delivering the judg- ment of the Court of Exchequer, said : " There is no doubt but that, in the case of a deed, any material alteration, whether made by the party holding it or by a stranger, renders the instrument altogether void from the time when such alteration is made." In Master v. Miller, 4 T. R. 320, this principle was adjudged to be applicable to promissory notes, and upon grounds of public policy, which would extend it so as to embrace all written contracts. ' To the €xtent that a legal instrument will be avoided by an alteration made, either directly or indirectly, by the party claiming an interest under it, this doctrine has been repeatedly recognized by this court, and, as a principle of our legal system, is not to be questioned. Price's Adm'r v. Tallman's Adm'r, Coxe, 447; Den v. Wright, 2 Halst. 175 ; Bell v. Quick et al, i Green, 312. " The reasons for this rule are obvious and of the most solid character. In its absence the inducement to fraud would be very strong, and public policy requires that, in the language of Lord Kenyon, "no man shall be permitted 454 EFFECT OF ALTERATIONS. [§ 297. § 297. Drum V. Drum. — In a recent Massachusetts to take the chance of committing a fraud without running any risk of losing by the event when it is detected." Even immaterial alterations are fatal, as the rule, to be efficacious, cannot permit a person to tamper, in any degree, with the written contract of another in this possession \cf. §§ 263, 264]. If the instrument has been altered by the mistake of the party holding it, relief must be sought in a court of equity. Within this limit I do not find that the legal principle has been seriously called in question. " The law prohibits a party from altering a written contract, ex Tnero motu, whatever his design may be, whether good or bad. The alteration of the note, in this case, destroyed it, if such alteration, in legal intendment, is to be ascribed to the plaintiff. " But here, I think, intervenes one oi the infirmities of the decree. The alteration of this note was not the act of the plaintiff, because the person who made it was not his agent for that purpose. These were the facts : John T. Hunt was the agent who sold the plaintiff's horse for him ; in that transac- tion he took the note in dispute and carried it to the plaintiff; he then took It to the bank and had it discounted, the proceeds going to the plaintiff. From these circumstances an authority to alter this note cannot be inferred. It was not an act that properly appertained to the transaction to which the agency related. It could not have been within the contemplation of either the principal or the agent at the time of the creation of the agency. Conse- quently the act must be regarded as though done by a stranger, without the concurrence, express or implied, of the plaintiff. The question is, will an alteration of a note by a stranger vitiate the note ? " It will be observed that the rule, as stated by Lord Coke in the case cited from his reports, answers this inquiry in the affirmative, and that seems to be, after some fluctuation of sentiment, the present prevailing opinion in the English courts. But the doctrine rests, I think, rather on ancient dict Leas V. Walls, loi Pa. St. 57. In this case Green, J., said: " The court below left to the jury the question whether the defendant exercised care and prudence against alterations of the note in suit. If he did he was not liable, but if he did not he was. It is difficult to see what error there was in this. It is precisely what we held in Brown v. Reed, 29 P. F. S. 370. The present chief justice very clearly pointed out in that case the distinction between it and Phelan v. Moss, 17 P. F. S. 59, and Garrard v. Haddan, Id. 82. On page 372 he said : ' These cases do not decide that the maker would be bound to a bona fide holder on a note fraudulently altered, however skillful that altera- tion might be, provided that he had himself used ordinary care and precau- tion. He would no more be responsible upon such an altered instrument than he would upon a skillful forgery of his handwriting.' And again he said r ' Whether there was negligence in the maker was clearly a question of fact for the jury.' In the present case the plaintiffs are not satisfied with having the question of negligence on the part of the defendant submitted to the jury. They insist that the court should have held that the defendant was guilty of negligence as matter of law in not taking such precautions as would certainly have prevented the alteration of the note. The alteration consisted in adding- a single letter 'y' to the word 'eight,' so as to make the note read as for eighty dollars instead of eight. The instrument was a printed blank with an open space for the insertion of the amount, the word ' dollars ' being printed at the end of the space. The word ' eight ' was filled in at the beginning of the space, and all the rest of the blank to the word ' dollars ' was filled with an elongated scroll. It happened that a very slight space, about an eighth of an inch, was left between the end of the word ' eight ' and the beginning of the scroll. In that diminutive spot the letter ' y ' was inserted in such a way as to appear quite natural. The alteration was made by the principal debtor, the defendant being the surety. There were other alterations of the note made after the surety signed it, but they are not material to be considered, since without the one we are discussing they would have been of no avaiL In these circumstances, to hold that the defendant was so palpably guilty of negligence in not taking sufficient precautions against forgery as that the jury could not be permitted to determine the question, and the court must deter- mine, is, as matter of law, would be equivalent to holding that the maker of a negotiable instrument must so execute it as to prevent the possibility of al- teration in any event. Such a doctrine would be monstrous, and contrary to every legal principle. It has never been announced by any court, and it is scarcely credible that it ever will be. The word ' eight ' is perhaps the only one that can be altered so as to express a larger sum by the addition of a. single letter, and was probably selected by the forger in this case for that reason. Other words require either two letters, as ' ty ' in ' sixty,' ' seventy,' and 'ninety,' or an additional word. The defendant testified that when he signed the note the scroll was in the open space on the note, just as it was at § 304-] ALTERATIONS BY CONSENT. 47 1 § 304. American authorities holding that maker is not liable. — But notwithstanding the high authorities holding the doctrine set forth in the preceding section, it is be- lieved that they are opposed upon this point by the weight of authority and by the true principles applicable to the question. It has already been shown that the law of England is tending against the decision in the case of Young V. Grote, and that, at all events, there is no pro- priety in making that case the groundwork of a general doctrine upon this subject. In this country, in several opinions written with great care and dbility,^ the theory the trial. The jury has found that there was no lack of ordinary care in not observing that a single letter might be added in the very small space immediately following the letter ' t ' in the word ' eight,' and in this we quite agree with them. In the common experience of men very few persons write their words so closely together that a single letter cannot be added at the end of one of them without attracting attention." See further, as sustaining this view of the law, Harvey v. Smith, 55 111. 224; Siebel v. Vaughan, 69 111. 257; Yocum v. Smith, 63 111. 321 ; Young v. Lehman, 63 Ala. 519; Blakey 2/. Johnson, 13 Bush (Ky.), 204; Thomson on Bills, p. 42. * Greenfield Savings Bank v. Stowell, 123 Mass. 196. Gray, C. J., said: " It is agreed that the note is upon a blank printed form ; that, as originally prepared and signed by Bardwell, and signed by the defendants at his request, it was a note for $67 ; and that Bardwell afterwards, without the authority, or knowledge, or expectation of the defendants, fraudulently prefixed the figure '4' to the figures '67,' and the words 'four hundred and' to the words 'sixty-seven,' and in that form, and with no mark or indication of alteration, negotiated it to the plaintiff, who lent him $467 thereon. " The plaintiff contends that the defendants were negligent in signing the note with such blanks as enabled the fraudulent alterations to be made with- out danger of detection, and are therefore liable to an innocent holder for value upon the note as so altered. But after deliberate advisement, and care- ful examination of the authorities cited in the learned arguments at the bar, we are of opinion that this position cannot be maintained. " The maker of a promissory note holds no such relation to the indorsees thereof as a customer does to his banker. The relation between banker and customer is created by their own contract, by which the banker is bound to honor the customer's drafts. Marzetti v. Williams, I B. & Ad. 415 ; Bank of the Republic v. Millard, 10 Wall. 152; Carr z/. National Security Bank, 107 Mass. 45. And if the negligence of a customer affords opportunity to a clerk 472 EFFECT OF ALTERATIONS. [§ 304. of that case, as applied to bills and notes, has been repu- diated. In Angle v. North Western Mutual Life Ins. or other person in his employ to add to the terms of a draft, and thereby mis- lead the banker, the customer may well be held liable to the banker. But, even as between customer and banker, the former has not been held liable for an unauthorized alteration or addition by a stranger. And that the signer of a note, complete upon its face, and not intrusted by him to any person for the purpose of being filled up or added to, but afterwards altered, without his authority or assent, by the insertion of additional words in blank spaces there- in, should be. held to have contracted with every subsequent innocent holder who may be thereby defrauded, and to be liable to him in an action on the note in its altered form, is unsupported by any English decision of which we are aware, and appears to us to be inconsistent with the weight of American authority, and unfounded in principle. " In Fay v. Smith, I Allen, 477, it was held by this court that an alteration by the payee, though without fraudulent intent, of a promissory note, by add- ing at the end the words ' with interest,' did not bind the maker, because he never made nor authorized to be made the note which the payee accepted ; and that, by reason of such alteration, the note was wholly void as against the maker, even in the hands of a bona fide indorsee. A similar decision was made in Draper v. Wood, 112 Mass. 31 5, in which a joint promisor, before the delivery of the note, added the words 'at twelve per cent.' without the au- thority of his co-promisor. It is true that, in the last case, the point that the defendant should be held liable because he had carelessly signed the note in such form as admitted of the alteration afterwards made was not taken at the trial, and therefore was not considered by this court. " But in Wade v. Withington, i Allen, 561, a similar question upon facts more closely resembling those now before us was considered. The defense that a note for one hundred dollars had been fraudulently altered, after it had been signed, by inserting the words ' and forty,' was sustained against a bona fide indorsee, although the alteration could not be detected upon the most care- ful scrutiny. And Chief Justice Bigelow distinguished the cases of Young v. Grote and Putnam v. Sullivan, above cited, upon the ground that in those cases the instruments were filled up and put in circulation by agents to whom the parties had intrusted them, signed in blank for that purpose. The same distinction was again taken in Ives v. Farmers' Bank, 2 Allen, 236, 241 ; in Sewall V. Boston Water Power Co., 4 Allen, 277, 282; and in Belknap v. National Bank of North America, 100 Mass. 376, 381. ''The fact that, in the present case, the alteration was made before the note was delivered to the payee, and by one of the makers, at whose request and for whose accommodation the others had signed it, does not enlarge their liability. He had no authority from them, express or implied, to alter or add to the terms of the note. Wood v. Steele, 6 Wall. 80 ; Agawam Bank v. § 304-] ALTERATIONS BY CONSENT. 473 Co.,^ the Supreme Court of the United States, after stat- ing the general rule which permits one who is intrusted with an instrument containing blanks, says : " But the authority implied from the existence of the blanks would not authorize the person intrusted with the instrument to vary or alter the material terms of the instrument by erasing what is written or printed as part of the same, nor to pervert the scope and meaning of the same by fill- ing the blanks with stipulations repugnant to what was plainly and clearly expressed in the instrument before it was delivered." And the New York Court of Appeals has recently held that where a complete note is made and delivered, the filling in of spaces existing between words will avoid the note even in the hands of a bona Jide. holder for value.^ In the case presenting this question Finch, J., says: " The first question, therefore, presented by the appeal, is whether the delivery of the note in blank authorized Lewis to add to it the clause fixing a rate of ten per cent, interest after maturity. The general doctrine appears to be that one who signs and delivers a note in blank, to be used as a security, authorizes the holder to fill the blanks in respects essential to the completeness of the note as a note. The transaction implies that the indorser meant to become liable as such upon a completed and perfected note; and so far as the same is, at the time of his signa- ture, an incomplete and imperfect instrument, he must be held to have authorized the filling of such blanks by the agent intrusted with the note for use. The date, the amount, the name of the payee, and place of payment, Sears, 4 Gray, 95; Draper v. Wood, 112 Mass. 315; Waterman v. Vose, 43^ Maine, 504." See also The Knoxville National Bank v. Clark, 51 Iowa, 264; tnfra, n. i, p. 479; Cronkhite v. Nebeker, 81 Ind. 319; infra, n. 2, p. 487. 1 92 U. S. 331. '^ Wyerhauser v. Dun, i East. Rep. 720 (1885). 474 EFFECT OF ALTERATIONS. [§ 304, may be inserted in their appropriate blanks.' But in all the cases cited there was a blank so left in the body of the note as to indicate to the eye of the indorser, when it left his hand, that something needed to be supplied which was necessary to be inserted to make the instrument operate as the note for which it was intended. The form of the note in question, as signed by the indorsers, gave no indication that it was to draw interest at all, and left no blank for that purpose. At its commencement, in the place usually occupied by a date, a blank was left be- tween the word 'Indianapolis' and the figures '1875,' which the indorser would expect, and so authorize to be filled by completing the imperfect date. Another blank existed at the beginning of the note before the words ' after date.' The length of time the note should run be- fore maturity was here indicated and properly filled by inserting the words 'four months.' The printed form ran on in the usual way until a remaining blank was left between the words ' to the order of and the words 'dol- lars,' which ended the body of the note. The words ' to the order of indicated, and so authorized, the insertion of the name of the payee, and the word 'dollars' per- mitted the prefix in the blank of the principal sum to be paid. In that blank, and between those printed words, nothing else was indicated or authorized. Nothing else can be said to have been within the intention or expecta- tion of Griggs, or within his authority — he standing as a mere accommodation indorser, and ignorant of the par- ticular purpose or precise debt to which the completed note was to be applied. To go further than that would be to break down prudent barriers, and reach beyond any 'reasonable inference to be derived from the presence of the blanks. In this case, matters wholly foreign to the 1 Paige V. Merrill, 3 Keyes, 117; Van Duzer 7/. Howe, 21 N. Y. 531; Kitchen v. Place, 41 Barb. 465; Angle v. N. W. Ins. Co., 92 U. S. 339. § 304-] ALTERATIONS BY CONSENT. 475 indicated words of completion, and needless for such completion, was inserted, and crowded in for want of sufficient room. Such matter consisted of a special agreement that the note, from and after its maturity, should draw ten per cent, interest. That was a material alteration of the note from its terms as authorized by the indorsement and delivery of Griggs. It was a stipu- lation in no manner essential or necessary to the note as a completed instrument. It altered the alleged rule as to damages for a breach, looked to a new liability beyond the maturity of the contract, and imposed upon the in- dorser an added risk and burden, which nothing in the record shows that he ever contemplated or deemed pos- sible. We think the courts below were right in saying that the alteration was material, and discharged the in- dorser, not authorizing or ratifying it." We have seen that the later decisions of the courts of Pennsylvania have upheld the doctrine that a bona fide holder of a carelessly drawn note can recover upon it,^ but the contrary position was taken in the case of Worrall v. Gheen, decided by the Supreme Court of that State in i86i.^ The note there was upon a printed form and was filled in so as to read ; "$50. October 14th, 1857. Thirty days after date I promise to Pay to the order of Levi A. Gheen, At the Bank of Chester County, Fifty i^ Dollars. without defalcation, for value received, credit the drawer, C. M. Layman." This note was taken by the maker to the payee who thereupon indorsed it and wrote his name under the 1 Supra, n. i, p. 469. 2 39 Pa. St. 388. 476 EFFECT OF ALTERATIONS. [§ 304. words " credit the drawer." The maker then took the note away and fraudulently altered it so that it read as follows : "$150. October 14th, 1857. Thirty days after date I promise to Pay to the order of Levi A. Gheen, At the Bank of Chester County, One Hundred & Fifty ioo Dollars, without defalcation, for value received, credit the drawer, Levi A. Gheen. C. M. Layman." The alterations were so skillfully made that the appear- ance of the note was not such as to excite the suspicions of a man in ordinary business, although it could be detected that the words " One Hundred &" were in- serted in a different colored ink from the other written portions of the note. The case was fully argued, and Young V. Grote,^ with several Scotch cases, were brought to the attention of the court. But, in delivering the opinion, Lowrie, C. J., said : " We are not able to follow the cases of Pagan v. Wylie and Graham v. Gillespie,^ in the principle point decided there. And yet we would not be understood as denying the case of Young V. Grote, in the same book.^ It may be that a check on a banker so written as to be easily altered by the bearer of it, ought to be treated in the same manner as instruc- tions sent by a principal to his agent, wherein the latter is not allowed to suffer from the carelessness of the former. Thus, probably, alterations in checks may be properly^ distinguished from those in bills, notes, and other contracts. We doubt it, however. " This is a case of a printed form of a promissory note 1 4 Bing. 253. ^ Ross on Bills and Notes, p. 194. ' Ross on Bills and Notes, p. 187. § 304-] ALTERATIONS BY CONSENT. 477 filled up by the maker and then indorsed for his accom- modation by another, and then altered by the maker to a larger sum by taking advantage of some vacant space left in the form. If the sum had been left entirely blank, the inference would have been that the parties author- ized the holder to act as their agent in filling it in, and they would have been bound accordingly. But where a sum is actually written, we can make no such inference from the fact that there is room to write more. This fact shows carelessness ; but it was not the carelessness of the indorser, but the forgery of the maker that was the proximate cause that misled the holder. And we know not how we can say that a man can be chargeable with a contract because he did not use proper precaution in guarding against forgery in any of the thousand forms it may take. We know of no way of saving purchasers of negotiable paper from the necessity and the conse- quences of relying on the character of the man they buy it from, if they do not take the trouble of inquiring of the original parties."^ ^ In Gerrish v. Glines, 59 N. H. 9, Gushing, C. J., said : '' The note for $250, when issued by the defendant, was qualified by a condition annexed to it, and referring to it in such mode as to show that it was intended to remain attached to it so long as it was in force, and probably until it was detached by consent of the defendant. The payment of the note was then dependent upon a contingency, and therefore the note was not negotiable (Fletcher v. Blodgett, 16 Vt. 26; Fletcher v. Thompson,, 55 N. H. 308, and cases there cited. . . . When the note was issued by the defendant it was not negotiable, and could not be made so without his consent. It appears to have been altered by tearing oft the condition after it came into the posses- sion of the original payee. It is not, therefore, the note which the defendant gave. He has a right to say non in haec fmdere vent. I did not make this bargain. It is plain enough, in reason, as well as in authority, that the in- dorsee in this case is in no better condition than the original payee. The maker of a negotiable note is bound by that note as he makes it, and against an innocent indorsee his defenses are much restricted; but it is only the note which he actually made, and not a different note, which binds him in this way." In Cape Ann Nat. Bank v. Burns, 129 Mass. 596, where a note similarly written had been added to, Gray, C. J., said: "The unauthorized 4/8 EFFECT OF ALTERATIONS. [§ 305. § 305. Grounds upon which maker is said to be liable. — Having shown, as is believed, that the doctrine of alteration of the note which v.'as complete upon its face, and which had not been intrusted by the defendant to any one for the purpose of being filled up or added to, could not make him liable to an action upon the note in its altered form." In Frank v. Lilienfeld, 33 Graft. (Va.) 377, Burks, J., said: " In the case before us the paper at the time it was indorsed was not wholly blank (except as to signature) as in the case of Orrick v. Colston (7 Graft. 189), but it was an incomplete note. There is no doubt that when Mrs. Lilienfeld wrote her name across the back of it she intended her signature to represent an indorser in a commercial sense. She says she ' indorsed a negotiable note.' And I incline to think that the paper, before it was per- fected as a note, had enough upon it to apprise the complainants of the character of the indorsement. The signature was in the place appropriate for the indorser of a negotiable instrument, and the paper itself was the printed formula in common use, of a negotiable note, with the blanks before mentioned. It was proper, therefore, if not indispensable, to bind Mrs. Lilienfeld, that the blanks should be filled so as to preserve the negotiability of the note." In Bruce v. Westcott, 3 Barb. (N. Y.) 374, the action was assumpsit on a promissory note in writing as follows : " Six months from date I guaranty to pay J. K. Averill, or his order, one hundred and eighty dollars without interest," which was properly signed and indorsed, and which in the due course of trade came into the hands of the plaintiff. At the trial the de- fendant offered to prove that at the time he executed and delivered the paper in question to J. K. Averill, the words " or his order " were not written therein, and that they had been since added without his knowledge or consent. This evidence was objected to on the ground that if the paper was originally written without the words " or his order," the fact that there was a sufficient blank spacfe in the paper to easily insert the words, gave an implied authority to Averill to insert the words "or his order," and justified his act, and that although the words were inserted without the defendant's knowledge or con- sent, he was liable to a bona fide holder for value. The judge refused to admit the evidence, holding as matter of law, that the maker of the note having left a sufficient blank space in the note for the insertion of the words "or his order," was liable upon it. But upon appeal the judgment was reversed. And Hand, J., says upon this question: " The defendant offered to show that the words ' or his order,' had been added to this note without his knowledge or authority. This would make it void as to him, unless he is estopped because the addition was written upon a blank space left in the note ; upon which ground, it seems, the plaintiff recovered. . . . I find no case that decides that a space may be filled up in a bill already complete, without any mistake, omission, or authority, being shown. It is already ' in the shape of a bill.' After the instrument is completed and delivered, no alteration can be made but by consent of parties. . . . The fact that there was room for the words ' or his order,' did not alone, and as § 305'] ALTERATIONS BY CONSENT. 479 Young V. Grote is opposed by the weight of authority, it is desirable to consider the various general grounds upon which it is endeavored to support that doctrine, in order that we may discover if there is any principle which will justify the courts in holding a party liable upon a note or bill of the character under discussion.^ matter of law, authorize their insertion by Averill ; and consent or authority, after that, must be shown to sustain the note." See also Cronkhite v. Nebeker, 8i Ind. 319; Hert v. Oehler, 80 Ind. 83; The Knoxville Nat. Bank ■V. Clark, 51 Iowa, 264; McGrath v. Clark, 56 N. Y. 36; Reeves v. Pierson, 23 Hun (N. Y.), 187; Bradley v. Mann, 37 Mich, i; Miller v. Finlay, 26 Mich. 249; Holmes v. Trumper, 22 Mich. 427; Washington Sav. Bank z/. Ecky, 51 Mo. 272; Ivory v. Michael, 33 Mo. 398; Lisle v. Rogers, 18 B. Mon. (Ky.) 528: Waterman v. Vose, 43 Me. 504. * In the Knoxville National Bank v. Clark, 51 Iowa, 264 (1879), Seevers, J., said: "When the note was presented to the defendant and executed by him it contained the blank spaces, and was as follows : '%\o. Franklin, March 19, 1877, ' Six months after date I promise to pay to the order of C. H. Huff ten dollars, at the bank of . Value re- ceived, with interest at ten per cent, per annum. 'John Clark. ' , witness.' " When the note was assigned to the plaintiff it was in all respects like the foregoing, except that ' one hundred and ' had been written before ' ten, ' and the figure l written after the dollar mark, so that it appeared to be a note for one hundred and ten dollars. The words ' Knoxville Nat.' had been written in the blank which preceded 'bank,' and ' Knoxville, Iowa,' in the blank following the word ' of.' The bank had no knowledge of these altera- tions and there was nothing on the face of the note tending to show them. It was assigned to the bank by a person purporting to be the payee thereof. '■ There is a class of cases holding that the payee has authority to fill a blank in a promissory note left for the purpose of designating the place of payment (Reddich v. Doll, 54 N. Y. 234) : and there is another class which holds, where a negotiable promissory note is intrusted to another for use, that there exists an implied authority to fill blanks therein. " In the note in the present case the blank for the amount was partly filled, and the serious question is whether the maker is responsible for an unauthorized alteration or addition thereto. As to this question there is a conflict in the authorities. . . . " The question under consideration must be regarded as an open one in this State. The authorities cited by the appellee, and the whole doctrine on that side, rests on Young v. Grote as its foundation stone. Ever since that decision has been made, there has been an apparent struggle to find some 480 EFFECT OF ALTERATIONS. [§ 305, The questions to be considered are : Is such a party negligent ? solid foundation upon which it could rest. In casting about for some prin- ciple on which it could be based several have, at various times, been sug- gested. They are — " I. That the plaintiff owed a duty to his banker, and their peculiar rela- tions justified the court in sustaining the payment made by the banker. " 2. The fact that the check was written by the plaintiff's clerk, and in- trusted to him to draw the money, and by whom the alteration was made, justified the decision. '• We are not called upon to either affirm or deny the sufficiency of either of the foregoing reasons. " 3. That the plaintiff was estopped from showing the truth. But this has been exploded in both England and this country. The plaintiff had not done or omitted to do anything upon which an estoppel could be based, un- less he owed a duty to his banker, and that is not applicable to the case at bar. Besides what has been said it may be remarked the decision was not placed on the ground the plaintiff was estopped. "4. Negligence of the drawer of the check in leaving a blank partly filled. On this ground the court proceeded and the decision is based on the reasoning of the civil lawyers. But could it be anticipated that such negli- gence would cause another to commit a crime, and can it be said a person is negligent who does not anticipate and provide against the thousand ways through or by which crime is committed ? Is it not requiring of the ordinary business man more diligence than can be maintained on principle, or is prac- ticable, if he is required to protect and guard his business transactions, that he cannot be held liable for the criminal acts of another. If so, why should not the negligence of the owner of goods which are stolen excuse the bona fide purchaser ? " Can it be fairly said that the negligence of the drawer of the check or maker of the note was the proximate cause of loss to the holder ? It seems to us the proximate cause of the loss is the forgery, and this the maker had no reason to anticipate. "5. In some of the cases following Young z/. Grote the rule has been invoked that, when one of two innocent persons must suffer by the wrongful act of another, he must suffer who placed it in the power of such third per- son to do the wrong. It seems to us such a rule can have no application to this class of cases. It has never, we think, been carried to the extent of mak- ing one person civilly liable for the crime of another, and, on principle, we think it cannot be. As far as courts have gone in this direction is to make one person civilly liable for the fraudulent acts of another, whereby some third person has sustained a loss, the fraud being made possible by the acts and conduct or negligence of the person charged. Douglass v. Matting, 29 Iowa, is of this character. " Lastly, it has been said the free interchange of negotiable paper requires § 305-] ALTERATIONS BY CONSENT. 48 1 Has he, though innocent, enabled the fraud to be committed ? the establishment of the rule adopted by the court below. At the present day negotiable paper is not ordinarily freely received from unknown persons. Forgeries, however, are not confined to such. But the necessities of trade and commerce do not require the law to be so construed as to compel a per- son to perform a contract he never made, and which it is proposed to fasten on him because some one has committed a forgery or other crime. " It should be borne in mind that much negotiable paper is executed by parties who have not in any just sense ordinary business capacity. Relying on this fact, advantages are taken which courts are asked to sustain because of the rules long established for the protection of good faith holders of nego- tiable paper. We can but think courts have gone as far in this direction as can be safely done. We are not prepared to say any steps backward should be taken, but no such advance should be taken as to validate siich paper as that in the case at bar. The interests of legitimate trade do not require that this should be done." In the London and Southwestern Bank Lt. v. Wentworth, L. R. 5 Ex. D. 104, it was said : " In many of the cases and text-books in which the liability of the acceptor of a bill of exchange under circumstances similar to those which occurred in the present case has been discussed, it has been rested upon the ground of estoppel ; and with reference to this, Bramwell, L. J., has recently said with great force, in the case of Baxendale v. Bennett, 3 Q. B. D. 325, at p. 529: 'Estoppels are odious, and the doctrine should never be ap- plied without a necessity for it. It never can be applied except in cases where the person against whom it is used has so conducted himself, either in what he has said or done, or failed to say or do, that he would, unless estopped, be saying something contrary to his former conduct in what he has said or done, or failed to say or do. ' This language might be not improperly applied to the present case, but, for our own part, we should prefer not to use the word estoppel, which seems to imply that a person by hia conduct is excluded from showing what are the true facts, but rather to say that the question is whether, when all the facts are admitted, the acceptor is not liable upon the well known principle that where one of two innocent persons must suffer from the fraud of a third, the loss should be borne by him who enabled the third person to commit the fraud. Looking at the case from this point of view, the law as laid down in Young v. Grote, 4 Bing. 253, where the court held that the drawer of a cheque who so carelessly fills it up as to enable the holder of it to add figures making it payable for a larger amount is liable to the banker who honors it, is in favor of the plaintiff, and although many observations have been made since that case with reference to the grounds upon which it was decided, which are mostly collected in the judgment of the Common Pleas Division in Arnold v. Cheque Bank, I C. P. D. 587, the principle we have alluded to has always been upheld." 31 482 EFFECT OF ALTERATIONS. [§§ 306, 307. Does the peculiar character of negotiable paper re- quire that he should be liable ? § 306. These grounds do not make a genuine bill. — Before, however, considering these questions jri detail, it may be observed that if every one of them is answered in the affirmative, this is not sufficient to authorize a recovery upon the note or bill itself. Because one has negligently written a negotiable instrument or has so issued it as to enable another to commit a fraud, or be- cause it is desirable that negotiable paper should freely circulate, does not make the particular instrument upon which suit is brought, the bill or note of the original writer. If the signs which appear upon the face of the paper were not put there by him, or by some one who was intrusted by him with the completion of the instrument, in no true sense can it be said that the note is his note, or the bill his bill. No contract has been made to pay any such instrument as that presented to the court and the law surely will not imply such a contract from the criminal act of a holder of the paper. The bill or note, therefore, is an altered instrument, and no recovery should be had upon it as a valid paper. § 307. Maker of such note not liable for negligence.— It is, however, claimed that he who has attached his name to such paper has been negligent, that he has violated his duty to the public, that if one offers his notes upon the market he must see to it that they are so made that a fraud cannot be easily perpetrated upon them. It is mainly upon this ground that the authorities stand which hold that if one is so negligent in the writing of a note or bill as to allow the insertion of an additional amount, he will be held for the amount so inserted.^ And in order Supra^ \% 302, 303. § 307-] ' ALTERATIONS BY CONSENT. 483 to allow recovery on the altered note or bill, it is said that the defendant is estopped by his negligence from showing the original terms of the instrument.^ This doctrine was, however, in the words of Chief Justice Gray, in Greenfield Savings Bank v. Stowell,* " disposed of by Chief Justice Cockburn, with his charac- teristic clearness and vigor," as follows: " The case of Young V. Grote, on which so much reliance has been placed, and which is supposed to have established this doctrine of estoppel by reason of negligence, when it comes to be more closely examined, turns out to have been decided without reference to estoppel at all. Neither the counsel in arguing that case, nor the judges in decid- ing it, refer once to the doctrine of estoppel. The ques- tion arose on a disputed item in an account between a banker and his customer, which had been referred to arbi- tration, and the question raised by the arbitrator was on whom the loss which had arisen from payment of a check, in which, by the carelessness of the customer, an opportunity had been afforded for increasing the amount, should fall. It was held, not that the customer was estopped from denying that the check was a forgery, but that as the loss, which would otherwise fall on the banker who had paid on a bad check, had been brought about by the negligence of the customer, the latter must sustain the loss. As the question arose on an account submitted to arbitration, the matter was decided without reference to any technicality ; but I am disposed to think that the matter technically looked at would stand thus : The customer would be entitled to recover from the banker the amount paid on such a check, the banker having no voucher to justify the payment ; the banker, on the other hand, would be entitled to recover against 1 Supra, § 303. * 123 Mass. 200. 484 EFFECT OF ALTERATIONS. [§ 307. the customer for the loss sustained, through the negli- gence of the latter. Possibly to prevent the circuity of action, the right of the banker to immunity in respect of the loss so brought about would afford him a defense in an action by the customer to recover the amount."^ But is there liability for negligence .? This question must be answered in the negative, because, first, if there is negligence, it is not the proximate cause of the dam- age. Bramwell, L. J., in Baxendale v. Bennett,^ where a blank but accepted bill was stolen from the unlocked drawer of the acceptor, and afterwards fraudulently altered, held that even if the acceptor was negligent, " this negligence is not the proximate or effective cause of the fraud. A crime was necessary for its completion." If a man attaches his name to a 'carelessly written bill or note, it is not reasonable to say that one of the consequences which he is bound to foresee is that a forgery will be committed upon the paper. He is en- titled to believe that men will act honestly and innocent- ly; and if that were not his actual belief, being honest himself, he would not put his name to the paper. The commission of the crime, then, not being a result, one would expect to follow a negligent act of this character. The negligence is, as was said by Bramwell, L. J., not the proximate cause of the damage.^ * Swan V. North British Australasian Co., 2 H. & C, 189. See also opinion, Bramwell, L. J., in Baxendale v. Bennett, L. R. 3 Q. B. D. 529; Halifax Union v. Wheelwright, L. R. 10 Ex. 183; London and Southwestern Bank Lt. v. Wentworth, L. R. 5 Ex. D. 104. 2 L. R. 3 Q. B. D. 530. See also opinion Lowrie, C. J., in Worrall v. Gheen, 39 Pa. St. 388 ; supra, § 304, p. 475. * See Shearman & Redfield on Negligence, §§ 10, 11 ; Thompson on Neg- ligence, vol. II, pp. 1084, 1085. This question was discussed in the case of Arnold v. The Cheque Bank, L. R. i C. P. D. 578, where it appeared that evidence had been offered and rejected at the trial to show that the negligence of the plaintiff in the custody and transmission of a draft, they having violated the ordinary custom of sending, besides the letter containing the remittance. § 307-] ALTERATIONS BY CONSENT. 485 Again, it is not the proximate cause, for the crime it- self has occasioned the loss. " One of the most valuable a letter of advice by the same or the next mail, had afforded facilities for a subsequent theft of the draft. Upon the appeal the court held that this evi- dence was properly excluded, and that negligence, to amount to an estoppel, must be in the transaction itself, and be the proximate cause of the injury to the innocent party. Coleridge, C. J., however, in his opinion, seems to hold that even if the plaintiffs were negligent in the custody or transmission of the draft, in the case before the court, this negligence could not be considered as the proximate cause of the damage, but that in Young v. Grote, supra, , I 302, the negligence of the drawer of the check was the proximate cause of the loss, a conclusion not to be readily accepted. In his opinion he says : " Reliance was placed by the defendants on the case of Young v. Grote (4 Bing. 254). That case, no doubt, must be considered as well decided {cf. supra, § 302) ; but various opinions have been expressed as the real ground of the decision. In the judgment of Parke, B., in Robarts v. Tucker, 16 Q. B. 560, it was put oii the ground that the customer had, by signing a check, ^ven authority to any one in whose hands it was to fill it up in whatever way the blank permitted. But we have only to look at the case itself to see that it really proceeded on the authority of the extract from Pothier, cited in the judgment of Best, C. J , which makes the inability to recover depend upon the fault of the drawer of the check in the mode of drawing it, and is entirely consistent with the rule laid down and explained, on fuller consideration, in subsequent cases, viz., that negligence, in order to estop, must be negligence in the transaction itself. See per Blackburn, J., in Swan v. North British Australasian Co., 2 H. & C. [81. Indeed, in a later case, Bank of Ireland v. Trustees of Evans' Charities, 5 H. L. C. 389, this is stated by Parke, B., him- self to be the true ground of decision. . . . The rule which is expressed by Ashhurst, J., in Lickbarroww. Mason, 2 T. R. 70, 'we may set it down-as a broad general principle that whenever one of two innocent parties must suffer by the act of a third person, he who has enabled such person to occa- sion the loss must sustain it,' was, though not expressly referred to, observed and acted on in Young v. Grote. And it has received illustration and expla- nation in subsequent cases on the subject, which show that the words ' en- abling a person to occasion the loss ' must be understood to mean by some act, conduct, or default in the very transaction in question. See Freeman v. Cooke, 2 Exch. 654. " The correct rule seems to us to be that which is thus stated by Black- burn, J., in his judgment in Swan v. North British Australasian Co., supra, where, referring to the judgment of Wilde, B., below, he says ' that he omits to qualify the rule (he had stated) by saying that the neglect must be in the transaction itself, and be the proximate cause of leading the party into that ■mistake; and also must be the neglect of some duty that he is owing to the person led into that belief or, what comes to the same thing, to the general public, of whom that person is one, and not merely neglect of what would be 486 EFFECT OF ALTERATIONS. [§ 3O7. of the criteria furnished us by the authorities is to ascer- tain whether any new cause has intervened between the fact accomplished and the alleged cause. If a new force or power has intervened, of itself sufficient to stand as the cause of the mischief, the other must be considered too remote." ^ And in Wharton on Negligence,^ it is said : " Sup- posing that if it had not been for the intervention of a 'responsible third party the defendant's negligence would have produced no damage to the plaintiff, is the defend- ant liable to the plaintiff? This question must be an- swered in the negative, for the general reason that casual prudent in respect to the party himself, or even of some duty owing to third persons, with whom those seeking to set up the estoppel are not privy.' . . . . No authority whatever was cited to us for the contention that negli- gence in the custody of the draft will disentitle the owner of it to recover it or its proceeds from a person who has wrongfully obtained possession of it.. Here there was nothing in the draft or the indorsement with which the plaint- iff had anything to do calculated in any way to mislead the defendants. It was regularly indorsed, and was then inclosed in a letter to the plaintiffs' cor- respondents, to be sent through the post. There could be no negligence in relying on the honesty of their servants in the discharge of their ordinary duty, that of conveying letters to the post ; nor can there be any duty to the general public to exercise the same care in transmission of the draft as if any or every servant employed were a notorious thief. It may be said here, as in the case of Bank of Ireland v. Evans' Charities (supra), merely substituting for the ' custody of the seal ' ' the posting of the letter,' and for ' the act of transfer ' ' the receipt of the draft by the defendants.' ' If there was negli- gence in the custody of the seal, it was very remotely connected with the act of transfer. The transfer was not the necessary, or ordinary, or likely result of that negligence. It never could have been but for the occurrence of a very extraordinary event, that persons should be found so dishonest or so careless as to testify, on the face of the instrument, that they had seen the seal duly affixed.' We are of opinion, therefore, that there was no neglect proved suf- ficient to disentitle the plaintiff from relying on the forgery of the indorse- ment." It is believed that the reasoning of this case, when followed to its legiti- mate outcome, overthrows the doctrine of Young v. Grote, and sustains the theory so strongly upheld by the American cases referred to in a preceding section. 1 U. S. Supreme Court, Insurance Co. v. Tweed, 7 Wall. 44. ' % 134. § 307-] ALTERATIONS BY CONSENT. 487 connection between negligence and damage is broken by the interposition of independent responsible human action. I am negligent on a particular subject-matter. Another person, moving independently, comes in, and either negligently or maliciously, so acts as to make my negligence injurious to a third person. If so, the person so intervening acts as a non-conductor, and insulates my negligence, so that I cannot be sued for the mischief which the person so intervening directly produces. He is the one who is liable to the person injured. I may be liable to him for my negligence in setting him into difficulty, but I am not liable to others for the negligence which he alone was the cause of making operative." Secondly. It may be doubted if there is any duty rest- ing upon those who put their names to notes or bills which requires that they shall score blank spaces, or see to it that the instrument is so written that it cannot be easily altered. They are not acting as detectives for possible purchasers of the paper. The law does not ordinarily • relieve purchasers who buy negotiable paper, the amount in which has been raised by forgery.^ As the purchaser must, therefore, be satisfied with the genuineness of the note or bill, he is himself negligent if he does not inves- tigate whether the paper is a forgery, and there is no hardship in holding him responsible if he has failed to do this.^ The maker or drawer cannot protect himself ' Daniel on Negot. Insts., § 1408. Chitty on Bills, p. 297 ; Hall v. Fuller, S B. & C. 750; ^tna Nat. Bank v. Winchester, 43 Conn. 391 ; Van Duzer v. Howe, 21 N. Y. 531 ; Trigg v. Taylor, 27 Mo. 245. 2 The note upon which action was brought, and the decision of the court in Cronkhite v. Nebeker, 81 Ind. 319 (1882), is thus set forth in the opinion of Woods, J. : "$75. September 6th, 1877. " Twelve months after date, I promise to pay to the order of G. H. Fitz- maurice, at Covington, Indiana, seventy-five dollars, value received without any relief from valuation or appraisement laws, with interest at ten per cent. per annum, from date, and ten per cent, attorney's fees. The drawers and 488 EFFECT OF ALTERATIONS. [§ 30/. against the forgery of others in all cases, therefore he takes upon himself no obligation to do this in any case, indorsers severally waive presentment for payment, protest and notice of protest and non-payment of this note. (Signed) "Levi A. Cronkhite.'' The note was prepared by the payee upon an ordinary printed blank, which was so arranged that there was one line in the blanlc in which there was no printed word except the word " at '' printed at the left hand end of the line, and beginning about the middle of said line there were written the words " Covington, Ind.," leaving a space sufficient to insert the words " The Farmers Bank," in a handwriting corresponding with the written parts of the note. At the time of making the note, the appellant objected to its being made payable at a bank, and thereupon the words " Covington, Ind.," were written in by the payee, who filled up the written parts of the instrument with pen and ink which he carried with him. After the execution of the note by the appellant, and without his knowledge or consent, Fitzmaurice inserted the words " The Farmers Bank " before the word " Covington, " in such a manner as to afford no indication of an alteration of the note after its execution, and in that condition indorsed it before maturity to the appellees who paid value therefor, without notice or intimation of the alteration. "The exact question presented in this record is, whether the maker of a non-negotiable promissory note, perfect in its terms, by leaving a blank space in the body of the note wherein words of negotiability may be so inserted as not to furnish an indication of the alteration having been irregularly made," gives an implied authority for the making of the alteration, which, as against a bona fide purchaser, he may not deny. •' The case of Marshall v. Drescher, 68 Ind. 359, was essentially the same in its facts, and was decided upon the same ground as Gillespie v. Kelley, supra. The cases of Cornell v. Nebeker, 58 Ind. 425 ; Gothrupt v. William- son, 61 Ind. 599, and other decisions of this court referred to in these cases, all arose upon facts quite distinguishable from those now before us. "There are cases in actual and in seeming conflict with the foregoing; but they are, in most instances, cases where the notes, as executed, were im- perfect, the unfilled blanks being in such connection with the words used as to require the insertion of other words in order to complete the instrument as executed ; or they turn upon a misapplication of the maxim that, " If one of two innocent persons must suffer," etc. ; as if any man could, or was bound, to endeavor to protect the world against the commission of forgeries upon his obligations. If he owes the public any duty whatever, in this respect, the measure of that duty must be the utmost care which, in each case, can rea- sonably be employed; and the inquiry in each case of unauthorized alteration will be, not whether the party sought to be charged made the obligation, but whether he might, by greater care, have so constructed the instrument which he did execute, as that an alteration of it would have been impossible § 307-] ALTERATIONS BY CONSENT. 489 and it would be unwise to impose upon him a duty which would operate to lessen the watchfulness against forgery on the part of purchasers of negotiable paper.^ In Holmes v. Trumper,^ it was said: "The argument or more difficult. Such a doctrine, instead of giving stability and credit to commercial paper, would lead to uncertainties quite inconsistent with the character which such paper ought, and is generally supposed, to bear. Be- sides, if the maxim referred to can apply at all, it applies as well to non-com- mercial as to commercial paper ; and, to be consistent, we should be driven to hold that the maker of a note, not payable in bank, is estopped as against an innocent purchaser, from pleading an alteration made by filling blank spaces carelessly left at the time the paper was issued. " The simple and fair rule for all is, that the purchaser of paper, whether negotiable by the law merchant or not, is put upon inquiry as to the genuine- ness of the paper in all its material parts, by the mere fact that it is offered for sale ; and if he sees fit to omit making inquiry of the maker, he buys at his own risk and upon the faith of his immediate indorser, or other parties, if any, against whom he may have recourse." * In Scofield v. Ford, 56 Iowa, 370 (1881), it was held that where a nego- tiable note is materially altered it is not valid, even in the hands of an inno- cent purchaser for value before maturity, and if there is a memorandum or contract written on the same paper which qualified the terms of the note, and such memorandum or contract is severed, the note is thereby materially altered. In the opinion in the case, however, Adams, Ch. J., said: "While this is so we are hot prepared to say that under some circumstances the note thus altered by severance of written qualifying provisions should not be deemed valid. If the maker were guilty of gross carelessness it may be that he ought to be precluded from setting up the invalidity of the note as against a ^o«a_/frf^ holder for value. This point we do not determine. If a liability in such a case could be declared the general rule would still hold, that a con- tract cannot be enforced against a person who is not properly a party to it. Where, therefore, an action is brought to enforce a contract against such a person, we think it incumbent upon the plaintiff to show facts which would take the case out of the general rule. This, we think, the plaintiff has failed to do. The abstract contains no evidence whatever. There was the fact, to be sure, disclosed by the defendant's answer, that the defendant attached his signature to a paper which contained words and figures constituting a nego- tiable note, and while the terms of the note were qualified by a contract con- nected with it upon the same paper, yet that contract was capable of sever- ance. The plaintiff relies upon this fact as showing carelessness. But in our opinion it does not necessarily have that effect. We can conceive that the paper might have presented such an appearance or that the defendant's sig- nature might have been obtained in such a way that the mere fact of signing the paper could not be declared to be carelessness." ^ 22 Mich. 434. 490 EFFECT OF ALTERATIONS. [§ 307. amounts simply to this : That by the maker's awkward- ness or negligence his note was issued by him in a shape which rendered it somewhat easier for another person to commit a crime than if he had taken the precaution to erase the word ' at,' and to draw a line through the blank which followed it ; and that a forgery committed by filling this blank would be less likely to excite suspicion than if committed in some other way. " But how such a crime, whether committed in this or in any other way, could create a contract on the part of the maker, we confess ourselves unable to compre- hend ; nor are we satisfied that a forgery committed in this way would be any less liable to detection than if committed in many other ways. The negligence, if such it can be called, is of the same kind as might be claimed if any man, in signing a contract, were to place his name far enough below the instrument to permit another line to be written above his name in apparent harmony with the rest of the instrument ; or as if an instrument were written with ink, the material of which would admit of easy and complete obliteration or fading out by some chemical application which would not affect the face of the paper ; or by failing to fill any blank at the end of any line which might happen to end far enough from the side of the page to admit the insertion of a word." '' Whenever a party in good faith signs a complete promissory note, however awkwardly drawn, he should, we think, be equally protected from its alteration by for- gery, in whatever mode it may be accomplished ; and, unless, perhaps, when it has been committed by some one in whom he has authorized others to place confidence as acting for him, he has quite as good a right to rest upon the presumption that it will not be criminally altered, as any person has to take the paper on the presumption that it has not been : and the parties taking such paper § 308.] ALTERATIONS BY CONSENT, 49 1 must be considered as taking it upon their own risk, so far as the question of forgery is concerned, and as trust- ing to the character and credit of those from whom they receive it, and of the intermediate holders. " If promissory notes were only given by first-class business men, who are skillful in drawing them up in the best possible manner to prevent forgery, it might be well to adopt the high standard of accuracy and perfection which the argument in behalf of the plaintiff 'in error would require. But for the great mass of the people, who are not thus skillful, nor in the habit of frequently drawing or executing such paper, such a standard would be altogether too high, and would place the great ma- jority of men, of even fair education and competency for business, at the mercy of knaves, and tend to encourage forgery by the protection it would give to forged paper." § 308. Other grounds insufficient for holding maker. — Again it is said that if the maker is not negligent he at least has enabled the fraud to be committed, and " where one of two innocent persons must suffer by the acts of a third, he who has enabled such third person to occasion the loss must sustain it."^ But in no legal sense is this true. By issuing a note at all, a maker oc- casions the possibility of fraudulent alterations in it, but he has no expectation that such alterations will be made and it is only when he gives authority to some one to put terms into the instrument that he so far contributes to a fraud, as to be held responsible for its results. More- over, this principle does not apply to this question, be- cause the parties are not both innocent, the purchaser having neglected to satisfy himself in regard to the genu- ineness of the paper. In McGrath v. Clark,^ it appeared that the defendant 1 Broom's Legal Maxims, p. 669. * 56 N. Y. 34. 492 EFFECT OF ALTERATIONS, [§ 308. had indorsed a promissory note with the time and place of payment in blank and delivered it to the maker who filled the blanks and added the words " with interest," and the court held that the addition of the words " with interest " invalidated the note. In this case, Church, Ch. J., said: "When the note was indorsed by the defendant and delivered to the maker, the only blanks in it were the time and place of payment. These blanks the maker had an implied authority to fill up by inserting any time and place he chose, but he had no authority to make any material alteration in the note. The General Term af- firmed the judgment upon the authority of Van Duzer V. Howe.^ In that case an acceptance was delivered to the drawer of a bill with the amount left blank, which the drawer filled up with a larger amount than was agreed upon between him and the acceptor, and the court very properly held that a bona fide holder could recover the amount. The indorsement and delivery to the maker of a blank note, carries with it an authority to fill up the note for any amount. In the language of Lord Mansfield, the indorsement of the blank note is a letter of credit for an indefinite sum.* But this well settled principle does not reach this case. Here the amount of the note was fixed ; the note was not blank in respect to the amount. It is only the blank portions of the note which may be filled up. The rule that ' whenever one of two innocent parties must suffer by the acts of the third, he who has enabled such third person to occasion the loss must sustain it,' is not appli- cable for the reason that the indorser did not, in any legal sense, enable the maker to make the alteration. He indorsed the note for a specific sum, which, as we have seen, conferred no authority upon the maker to change ^ 21 N. Y. 531. 2 Doug. 516. § 308.] ALTERATIONS BY CONSENT. 49*3 or alter it. If it did, indorsers would occupy a perilous position."^ 1 In Holmes 7/. Trumper, 22 Mich. 427; S, C. 7 Am. Rep. 661, it was said: " We think the courts have gone quite far enough in sustaining instruments executed in blank, and the implied authority to fill them up, and we are not disposed to take a step in advance in that direction. . . . The general prin- ciple that ' where one of two innocent parties must suffer,' etc., upon which the plaintiff in error relies as stated by us in Burson v. Huntington, 21 Mich. 41 5, is one which, in its appUcation, is namely confined to cases where the third person whose act or default has occasioned the loss, has been in some sense or to some extent, the agent of the party who is made to sustain the loss, or when the latter, by his acts or negligence, has authorized the other party to consider him as such ; and in all the cases (unless this is an excep- tion) where, upon the general principle relied upon, a party has been held liable upon a written contract on the ground of negligence -alone, without reference to such agency, he has only been held liable upon it in the shape in which he allowed it to go from his hands, and not as criminally altered by another." The case of Van Duzer v. Howe, 21 N. Y. 531, illustrates the proper a:pplication of the rule. There, Denio, J., says : ' ' The defendants wrote their acceptance on the bill and intrusted it to Webb, while it was in blank as tO' the amount, relying upon his promise that he would not fill the blank for a greater sum than $1,000. He violated his promise by inserting $1,200, and causing it to be negotiated for that amount. The plaintiff discounted it with- out any knowledge of the fraud, and paid the whole proceeds to the agent of Webb ; and the question now is (if it can be said to be a question), which party is to suffer on account of the misplaced confidence reposed in Webb. It was the defendants who by intrusting their blank acceptance to the dis- position of Webb enabled him to commit the fraud. Thejaintiff relied upon the defendants' genuine signature, attached to an instrument of a definite legal character. No want of caution is attributable to him, for it is the con- stant practice of business men to rely upon the genuine handwriting of others, when found attached to commercial paper, without inquiring as to the cir- cumstances under which it was written. Upon general principles therefore, the defendants ought to encounter the loss, rather than the plaintiff." After citing many cases which uphold this doctrine. Judge Denio calls attention to "several adjudications in the criminal courts of England, in each of which it was held that a person, having a blank signature of another which he was authorized to fill up with a check or bill for a limited' amount, and who wrote it for a larger amount, was guilty of forgery." And in explanation of the incongruity of allowing a recovery in a civil action upon a forged instrument he says : " The positions of the two classes of cases can only be reconciled by holding the authors of the blank signatures estopped from setting up against a /5(7«a/rf^ holder, who has paid value, that the paper was not his genuine act." Cf. Benedict v. Cowden, 49 N. Y. 396. 494 EFFECT OF ALTERATIONS. [§ 308. In Goodman v. Eastman/ it appeared that one signed a note for $20 as a surety for the maker, who tdok it for the purpose of delivering it to the payee. While the maker had it in his possession he altered it to a note for $120, and the note having been transferred it was claimed that the surety was liable upon it, as he had enabled the fraud to be committed. With regard to the rule upon which this claim was founded, Richardson, C. J., said : " We are inclined to think, that the true rule to be ex- tracted from all the cases is, that where one man reposes in another a special confidence, and a loss arises from an abuse of that confidence, if the question, who shall bear the loss, arises between an innocent third person and him who reposes the confidence, the law will throw the loss upon the latter. " It remains to be considered, whether this principle is applicable in the case now under consideration. And, on this question, it seems to us no doubt can be enter- tained. For this defendant reposed no confidence in Harford, which can or ought to render him liable to pay this note. All he did was to put his name to a note for twenty dollars, as a surety for Harford. From the very nature of thejcase, Harford was entitled to the possession of the paper mx the purpose of passing it to the payee. What confidence was reposed in Harford by this defend- ant .? Not any, which every man who sends out a nego- tiable security into the world, and which every bank that issues bills, does not repose in all those into whose hands they may come. The confidence he reposed in Harford was the confidence which all who issue negotiable paper repose in the public— a confidence that the paper will not be feloniously altered, and if this defendant can he held in this case, the principle by which he must be held M N. H. 461. § 308.] ALTERATIONS BY CONSENT. 495 chargeable will render every man who signs and sends into the world negotiable paper, and every bank which issues bills, answerable to innocent holders for any sum to which they may be altered feloniously. For, we re- peat it, this defendant has reposed no confidence in Har- ford which every one who sends abroad his name upon negotiable paper does not repose in all those into whose hands it may come. This view of the subject seems to us to be decisive. The payee has been deceived and defrauded, not by any abuse of the confidence which the defendant reposed in Harford, and for which the defend- ant ought to be responsible, but by a forgery, for which he is not responsible." ^ Finally, it is said that it is necessary to hold the one who puts forth negotiable paper carelessly written, liable for alterations which do not arouse suspicion, in order to secure the free circulation of commercial paper. This reason would apply also to an altered note without spaces in which words might be inserted. But it is obvious at once, that to hold the maker liable upon a note skillfully made, the amount of which has been raised by forgery, in order to promote the free circulation of negotiable paper, would be most injust. And to visit the results of the crime of another upon the head of one who has done no wrong, for a like reason, seems equally improper. The public policy which demands that bills and notes should pass readily from hand to hand, does not require that forged notes should thus circulate ; on the contrary, the more obstacles are put in the way of the transfer of such paper the more the ends of a wise public policy will be subserved. " While the negotiability of commercial paper should not be unduly hampered, it is not desirable to encourage 1 Hall V. Fuller, 5 B. & C. 75o- 496 EFFECT OF ALTERATIONS. [§ 308. dealing with entire strangers and irresponsible persons on the faith that every genuine signature is binding on its maker in spite of fraud and forgery."^ It is, therefore, concluded that none of the suggested grounds will authorize a recovery on a bill or note which has been materially altered without the donsent of the party sought to be charged, and that the wise and fair rule which should govern the question which has been considered, is that every purchaser of bills and notes, is put upon inquiry as to the genuineness of the paper in all of its material parts, by the fact that it is offered for sale, and if he sees fit to neglect inquiry from reliable parties he buys at his own risk.^ ^ Campbell, J., in First Nat. Bank of Sturgis v. Deal, 55 Mich. 592. ^ Compare, Cronkhite v. Nebeker, 81 Ind. 319; supra, n. 2, p. 487. INDEX 32 INDEX. (References are to pages.) A. ACCEPTOR. See Negotiable Paper. ACCIDENT. alterations by, 546, 547. See Alterations. » ADMISSIBILITY OF PAROL EVIDENCE. See Parol Evidence. AGENCY. one signing as principal cannot avoid liability on ground of, 238. but parol proper to show, to hold principal, 239. or to enable principal to recover on contract, 239. AMBIGUOUS CONTRACTS. rules for construing, 304-325. ALTERATIONS. reason for considering, 377. importance of subject, conflict of authorities, 377. subdivision of subject, 378. effect of material and immaterial, 378-399. in what consists, 378. original signs must be changed to make, 378. noting, removes suspicion, 378. result of making material, 379. present rule stated, 379. 500 References] INDEX. [are to pages. ALTERATIONS— 198- questionable decision of New York Court of Appeals, 199. all prior negotiations merged therein, 245, 246. writing conclusive as to matters expressed, 246, 247. 512 Refe7ences\ INDEX. \iire to pages. CONDITIONAL CONTRACTS. parol evidence admissible to show contract conditional on future event, 218. always may show existence of oral agreement which makes condition precedent to existence of written contract, 219. principle recognized in early case, 219. bond given to subscribing witness to be delivered on happen- ing of condition, 218. written agreement of purchase may.be shown to have been executed on condition that others should approve, 219, 220. in such a case no intention that writing should express con- tract until approved, 220. evidence of this nature shows there was no such contract made, as writing expresses, 220-222. principle justifying reference to such evidence applies to all contracts, 223. terms of writing are not contradicted, 223. presence of seal of writing does not affect principle, 223. authority holding that deed may not be delivered in escrow, 224, 225. strong presumption that complete deed delivered to party, is present conveyance, 224. convincing evidence required to overcome it, 224. but if there was no intention to make legal delivery this fact may be established, 225. contradictory expressions of opinion on this subject, 225, n. in one case stated that delivery to grantee as between the parties, vests the title, although contrary to intentions, 225. this doctrine not supported by best and recent authorities, 226, 227. if writing delivered as valid contract, conditions not to be attached, 228. but contract conveying property may be shown to be condi- tional, 228, 229, 230. References] INDEX. \_are to pages. 5^5 CONDITIONAL CO^TViKCT^— continued. in such cases courts look beyond the instrument to real con- tract, 228, 229. rule of equitable origin, 229. held in Massachusetts that a formal bill of sale acknowledg- ing consideration cannot be shown conditional in ceurt of law, 229, 230. CONSENT. See Alterations. CONSIDERATION. parol evidence may show want of, if contract unsealed, 259. rule if contract sealed, 260-261. may always be explained by parol, 262, 263. CONSTRUCTION. defined, i. object of, 2, 319-321. suggested difference between interpretation and construc- tion, 3. used synonymously with interpretation, 3, 4. meaning of language determined by, 4. furnishes uniform methods of reading contract, 5. remedies defects in language, 6. removes ambiguities, 7. is remedial and promotes good faith, 7. principles of, apply to all contracts, 8. treated with reference to mercantile contracts, 8. limits of, 324, 325. new contract not made by, 9. mistake or fraud not remedied by, 9. See Judge and Jury; Law Governing Construc- tion; Parol Evidence; Rules of Construc- tion; Intention; Negotiable Paper. CONTRACTS OF CARRIERS. See Common Carriers. CONTRA PROFERENTEM. See Fortius contra proferentem. 33 514 Seferences] INDEX. [are to pages. CONTRADICTORY PAROL EVIDENCE, discussion of, 233-265. See Parol Evidence. ' COURT AND JURY. See Judge and Jury. CUSTOM. See Usages. D. DECISIONS. effect of, on meaning of words, 116, 176, 277, 376, n. DEED. may be shown to have been given to party conditionally, 224- 228. may be shown to be mortgage, 230. DRAWER OF BILL. See Negotiable Paper. EIGHMIE V. TAYLOR. decision of. New York Court of Appeals in 1885, 208. supports Chapin v. Dobson, 208. See Chapin v. Dobson. holds that where a writing is formal and complete, parol matters within its terms not to be added thereto, 208, 209. this the recognized doctrine, 195, 196. opinion in, suggests new ground for supporting Chapin v. Dobson, 209. ground suggested that warranty in that case was of peculiar character, 209. References] INDEX. [are to pages. 515 EIGHMIE V. TAYLOR— continued. doctrine advanced that if a parol warranty is not as to pre- sent condition it may be shown though writing is com- plete, 209-211. this the new question raised in Eighmie ». Taylor, 211. such a doctrine not supported by reason or authority, 211. the only test of admission or exclusion is completeness of writing, 211. warranties relating to future condition also relate to present condition, 212. many warranties must of necessity relate to the future, 212. if admitted in proof writings would thereby be seriously af- fected, 212. such warranties relate to the terms of sale, and are a part of the entire contract, 212. doubtful if this doctrine finds support in Chapin v. Dobson, 212-214. no authorities cited in support of doctrine, 214, 2r5. doctrine opposed by many cases, 215, 216. general rules governing collateral parol contracts not affected by Eighmie v. Taylor, 216, 217. See Chapin v. Dobson ; Collateral Parol Con- tracts. EJUSDEM GENERIS. general words following special, relate only to matters, 300. ENTIRE CONTRACT. whether contract is, depends on intent, 370-375. terms of contract, subject-matter and circumstances exam- ined for intention, 372, 373. by clear language parties may make, 374, 375. EXAMINATION OF WHOLE CONTRACT. necessary, to reach intention, 280, 281. several instruments when construed as one contract, 281, 282. intention controls, 282, 283. how to reach intention, 283, 284. Cl6 References'^ INDEX. [are to pages. EXAMINATION OF WHOLE CONTRACT— cowimwerf. writings incorporated in main contract a part thereof, 284, 285. effect to be given to whole contract, 285, 286. all provisions to be reconciled if possible, 286. if irreconcilable, main intent controls, 286, 287. written and printed provisions to be construed together, 287, 289-291. in cases of conflict, intent sought, 288. intent more likely te be expressed in written words, 287, 288. surrounding circumstances examined to reconcile, 288. general intent sought from whole contract, 291-294. what portions of contract entitled to greatest weight, 291, 292. office of recitals, 291, 292. parol evidence generally necessary to show intent, 293, 294. general intent supersedes meaning of particular words, 294, 295- instances where intent has overridden special words, 298, 299. subject-matter of contract may restrain words, 299-301. if intent clear, mistakes in use of language disregarded, 301- 3°3- contract to be supported if possible, 304, 305. legal meaning preferred to illegal, 306. construction to be reasonable, 306, 307. EXPERTS. testimony of, to show meaning of words, 20. cannot take construction of foreign law from court, 28. See Language. EXPLANATORY PAROL EVIDENCE. discussion of, 91-180. See Parol Evidence. EXPRESSIO UNIUS EST EXCLUSIO ALTERIUS. illustratien of maxim, 364, 365. References\ INDEX. [are to pages. 517 FOREIGN LAW. who construes contract governed by, 26. jury determines what law exists, 27. judge interprets law, 28. law of England in regard to contract governed by, 28, 29. See Law Governing Construction. FOREIGN WORDS. evidence to explain meaning of, 91, 92, loi, 102. See Parol Evidence. FORMAL CONTRACT. See Complete Contract. FORTIUS CONTRA PROFERENTEM. when construction to be, 311. value of rule, 311, 312. reasonableness of rule, 312, 313, 314, n. party using doubtful language responsible therefor, 3x1, n. ambiguous promise, how construed, 313, 314. who are proferentes, 315, 316. how to determine question, 316-318. statement in insurance policy if not clearly warranty, a rep- resentation, 336. conditions in insurance construed, 337. rule applies to construction of guaranties, 353. never resorted to if intention is clear, 353, 354. how reconciled with rule that claim against surety is strictis- simi juris, 354-363- rule applied to contracts of carriage, 366. See Guaranties. FRAUD. parol evidence always admissible to show, 259. rule in Pennsylvania as to parol stipulations inducing con- tract, 230-232. ei8 References^ INDEX. [me to pages. G. GENERAL WORDS. when following special words are restrained thereby, 300. such words are general only with reference to subject- matter of the contract, 300, n. of guaranties restrained by subject-matter, 301. of condition in bond restrained by recitals, 301. intention may give broader meaning to general words, 301, n. GRAMMAR. mistakes of, when disregarded, 301-303. GUARANTIES. made where finally completed as contracts, 38. parol, may supplement written contract, 185, 186, 200. but not if writing complete repository of intention, 197, 198. decision in Chapin v- Dobson, 199-208. question as to construction of, 353. rule that words to be taken contra proferentem applies to, 353- when rule to be applied, 353, 354. reason for following rule, 354, 355. language used, that of one party, 355. if guarantor uses ambiguous terms construction to be against him' ZSh 359- guarantor responsible for use of such terms, 355. creditor reads contract in sense favorable to himself, 355. should be protected in so doing, 355. contract of principal debtor often same contract as that of guarantor, 355. language of, has same meaning against each, 355. actual intention sought, if not discovered signs interpreted reasonable, 314, n., 355, n, rule that language should be interpreted against surety well supported, 356-360. References-\ INDEX. \_are to pages. 519 GUARANTIES— f^«A««^fl'. no reason for adopting other rule, 357, «., 359. when clauses are inconsistent this rule will aid in reaching probable intention, 358, 359. rule questioned because surety favored by law, 357, «., 360, 361. this principle only applies after meaning of terms used is as- certained, 361, 363. importance and meaning of rule that surety is favored, 361, 362. surety derives no benefit from contract, 362, n. no implied liability exists to charge him, 362, n. no moral obligation rests upon him, 362, n. his obligations are entirely stated in language used, 362, 363- this language will, however, be reasonably and fairly inter- preted, 355, «., 363, n. I. ILLEGALITY. parol evidence always admissible to show, 259. IMPLIED OBLIGATIONS. controlled by language if contract complete, 246, 247. everything necessarily implied a part of contract, 308-311. \zxi^d,g& cox^sXxVL^d. contra prof erentem, 311, 353. conditions working forfeiture must be clearly expressed, 315, 366. warranties not extended by implication, 327, 330. contracts of suretyship not so extended, 361-363. INCOMPLETE CONTRACT. when supplemented by parol, 183, 184. warranty added to, 184-186. no presumption that manifestly informal writing contains contract, 187. 520 References^ INDEX. [are to pages. INCOMPLETE CO^I'SiKCT— continued. mode of determining whether writing expresses full contract, i88, 189. INDORSER. See Negotiable Paper; Alterations. INFORMAL CONTRACT. See Incomplete Contract. INSURANCE POLICIES. made where the contract is completed, 38. exclude prior parol agreements, 195, 238. assignment of, may be shown to be conditional, 230. warranties in, how interpreted, 326-353. representations interpreted pursuant to intent, 350-352. distinction between warranties and representations, 327-329. See Warranties. INTENTION. object of construction, to reach, i. means by which law reaches, 2, 3, 8. actual sometimes yields to legal, 5, 236, 237, 358. parties presumed to have some definite, in contracting, 7, 306. determines what law governs, if ascertainable, 30, 31. if language clear, intention disclosed followed, 30. rules for ascertaining probable, not then necessary, 30. contract to be read in light of circumstances for, 31-36. every rule for reaching law governing construction yields to intention, 31, 44-48. contracts of drawer and indorser construed with reference to probable intention of parties, 52-59. conflict between . rules for reaching, in Federal and State courts, 59-63. parties held to incorporate general rules of commercial law, 64-68. importance of regarding parol evidence as means of reaching, 69-75. written evidence preferred to oral because a deliberate state- ment of, 77-79. References'] INDEX. [_are to pages. 52 1 liHTE'i'iTlO^— continued. parol evidence explains intention with which words are used, 91-97. technical use of words referred to, to reach, 92. usage referred to to carry out intention of parties, 99-101, 142, 143, 145, 146. local meaning of words regarded to reach, loi. if contract discloses intention in use of words, this is fol- lowed, III. usage only incorporated in contract when reasonable to pre- sume both parties so intend, 114, 115, 164-169. parol may explain indefinite words to reach, 117, 121, 123. surrounding circumstances examined to accurately under- stand, 124. written language, however, not to be disregarded, 134, 135, 150-158. supplementary parol evidence resorted to to carry out intent, 180, 181. if contract informal, parol proper to show full intention, 184. limit of complete contract determined by reference to prob- able intention, 188, 190-199, 245, 246. parol admitted to show contract conditional, to reach inten- tion, 218, 223-231. whether deed is given to party in escrow depends on inten- tion, 226, 228. parol evidence excluded from contradictory writing to reach intention, 233, 236. clear and certain written words best evidence of intention, 236, 237. not desirable to look elsewhere for, 238, 239. rule excluding parol limited so as to effectuate intention, 252-254. ordinary rule for interpreting words founded on intention of parties in their use, 268, 269. technical sense adopted to carry out, 271-276. all the terms of contract to be examined to reach, 280, 281. several instruments making one transaction to be examined for, 281, 282. ^22 References] INDEX. [are to pages. INTENTION— n. but not unless meaning of parties is ascertainable from con- tract and circumstances, 305, n. Heferences] INDEX, \_are to pages. 54I RULES FOR CONSTRUING, inc.— continued. clauses in contracts to be understood in sense giving them operation, 306. legal sense of contract preferred to illegal, 306. Construction which is reasonable favored. language to be interpreted in a reasonable sense, 306, 307. strict sense of words not to control intent, 306, 307. whatever is necessarily implied in language a part of con- tract, 308, 309. law existing at time and place of contract defines obliga- tions, 309. nothing not fairly within meaning of terms will be implied, 310, n. Construction to be fortius contra proferente7n. value and importance of rule, 311-313. ambiguous promise, how construed, 313, 314. promisors not always proferentes, 315, 316. how to determine who are proferentes, 316-319. Rules of construction and interpretation laid down by Lieber, 319- 324- analysis of these rules, 321, 322. object of all rules to reach intention, 322, 323. limits of construction reached when all rules applied, 324, 325- SEAL. presence of, does not affect meaning of contract, 8. contracts with, held cannot be delivered conditionally, 224. rule that deed may not be delivered to party in escrow, 224. does not now maintain, 226, 227. intention controls, 226. seal conclusive evidence of consideration at common law, 260, 261. Kd.2 References\ INDEX. \are to pages. SEA L — continued. rule abrogated in some States, 261. presumptive evidence only, 261. effect of documen^t with, cannot be contradicted, 262. SEVERABLE CONTRACT. whether contract is, depends on intent, 370-375. intent derived from language, subject-matter and circum- stances, 372-374. SPECIAL RULES FOR PARTICULAR CONTRACTS. what is meant by these rules, 326. contracts said to be exceptional to general rules alone con- sidered, 326. warranties said not to be controlled by intention, 326, 327. importance of considering this question, 327. warranty literally interpreted, 327-329. reason therefor, 329, 330. intention of parties in contract determines method of con- struction and meaning, 330-335. all provisions of contract examined for intent, 345-347- language interpreted reasonably, 347. warranties construed by ordinary rules of construction, 352. guaranties subject to ordinary rules of construction, 353- 363- contracts by carriers also so interpreted, 363-370. See Contracts by Carriers. intention sought whatever is nature of contract, 370-377. See Warranties ; Guaranties ; Rules of Con- struction. STATE LAW. statutes of State not assumed to be like those of forum, 49. common law taken to be alike, 49. United States courts, when do not follow State decisions,. 59-63- when one State court will not follow decisions of another,. 64. References\ INDEX. \_are to pages. 545 STATUTE OF FRAUDS. how affects question of admissibility of parol in construc- tion, 181, 182. STRANGER. rule excluding parol does not apply to stranger to writing, 255-258. See Alterations by Stranger. SUPPLEMENTARY PAROL EVIDENCE, discussion of, 180-232. See Parol Evidence. SURETY. ambiguous language to be construed against, 353-360. obligation of strictissimi juris, 360-363. See Guaranties. SURROUNDING CIRCUMSTANCES. proof of, does not always make question for jury, 15, 16. importance of facts brought to the attention of the court by, . 70. commercial and trade contracts unintelligible without resort to, 70. necessary to occupy position of parties, 71, «. this preliminary knowledge indispensable, 71, «. means of ascertaining actual intention of parties, 71, «. important and essential aid of parol evidence in showing, 124. ordinary conversation only intelligible upon reference to, 71, n., 125. subject-matter, and standpoint of parties, brought to atten- tion of court by, 125. general rule as to proof of, 126. surrounding circumstances defined as "circumstances of the case," 126. many authorities support general reference to circumstances, 126, n. what facts included within, 126, 127. identification of parties within term, 127. KAA References\ INDEX. [are to pages. SURROUNDING CIRCUMSTANCES— 133- References] INDEX. \are to fages. 545 SURROUNDING CIRCUMSTANCES— rtf«A««^^. if any fact tends to throw light or correct interpretation of contract, it is admissible, 133, n, great liberality to be shown to this class of testimony, 133, *34- impossible for courts to have exact light of parties, 134. court not ordinarily allowed to look to prior verbal commu- nications, 134. expressed language of greater importance, 134. no fact not legitimately within expression, surrounding cir- cumstances, to be brought before the court, 134. interpretation derived from surrounding circumstances cannot con- tradict writing, 135. new contract not to be made by circumstances, 135. circumstances to be referred to only when doubt exists as to meaning of parties, 135. circumstances may aid the writing, 136. construction harmonizing both with writing and circum- stances adopted if possible, 136, 137. all parts of the contract examined for the purpose of recon- ciling the writing with the facts, 137. apparent meaning of particular words yields to such con- struction, 138. other instances of the effect of such construction, 138. if writing vague, or incomplete, circumstances may show real contract, 138. instances of such effect, 139. evidence of practical construction of parties, within surround- ing circumstances, 140. such evidence admissible if language doubtful, 140. but never received to contradict plain language, 140. See Parol Evidence. T. TECHNICAL TERMS. to be interpreted in technical sense, 271-276. See Language. 35 246 References] INDEX. Yare to pages. TRADE USAGES. See Usage. u. UNITED STATES COURTS. when not bound by interpretation adopted by State courts, 59-64- USAGE. necessity of reference to, in order to reach intention, 74, 97, 141, 14s, 146. to be divided into two classes, 97, 141. See Usages Annexing Incidents ; Usages Showing Meaning of Words, words " usage " and " custom " used synonymously, 142, n. essential requisites of every trade, 158. must be established at time of contract, 158. must be presumptively known to contracting parties, 158. need not be ancient, 158. may exist in modern trade, 159. or may be recent usage of an old trade, 159. i to be established must have been the general custom of trade at time and place of contract, \'^^. how long should be established, 159, n., 160. must be so universal as to create presumption of knowledge, 159, n., 165, n. existence of, throughout two-thirds of a trade not sufficient, 160. must be definite and certain, 160. particular practices of an individual or house do not make, 160, 169. these never bind parties who have not actual knowledge of them, 160, 160, n. if actual knowledge of them exists they frequently enter into contracts, 161, 161, ». previous dealings of parties show acquiescence therein, 161, References^ INDEX. [are to pages. KA'J U SAGE — continued. usage of trade must be proved to exist as matter of fact, 162. opinions as to existence not important, 162. usage depends on acts of merchants, 162. instances thereof should be given, 162. the fact of the existence of the usage in the particular busi- ness to be shown, 162, 163. any witness having knowledge of this existence competent, 163. he must speak as to particular trade of contract, 163. evidence of usage among all mechanics of city shows usage of special mechanics there, 163. evidence of usage in London colonial market admitted to show usage in fruit market, 163. this only admitted as corroborative testimony, 163. danger from admitting testimony of this character, 163, 164. such evidence should not be received, 164. former doctrine was that one witness could not show usage, 164. but now generally permitted to do so, 164. the jury decides as to its existence upon all the facts, 20, 164. when a usage is presumptively known, 164. if established, presumptively known to parties in trade, and not beyond sphere of, 164. existence of usage does not alone raise presumption of knowledge, 164, 164, n. contract must be within jurisdiction of, 165. all the parties to be within jurisdiction of, 165, n. presumptive knowledge must be shown by party alleging, 165, n. evidence must tend to show that parties contracted with reference to usage, 165, 165, n. extent of usage not material if parties within sphere of, 165, 165, n. only presumptively known when reasonable to conclude that parties regarded, 165. if parties not all engaged in same trade, this conclusion not reasonable, 166, 166, n. 548 References] INDEX. [are to pages. USAGE — continued. if parties not all within locality of usage, this conclusion not reasonable, 166. rule if occupation requires familiarity with many trades, 166. underwriters required to know usages of every trade insured, 166, 167. but this rule does not apply to local usages, 167. if all the parties are within sphere of usage they are bound to be aware of them, 167, 168. the law in such a case raises conclusive presumption of knowledge, 167, 168. actual knowledge need not then be shown, 168, 168, n. ignorance of the existence of such usage no aid to party contracting, 168, n, statements contra, 168, n. this rule essential to correct reading of contracts of trade, 169, 169, n. party relying on fact of usage entitled to show, 169. such person not, required to speak of usage, 169. ignorance of other party causes his injury if any, 169. particular practices of individuals never raise conclusive presumptions of knowledge, 169, n. recent illustration of rule that actual knowledge is not re- quired, 170, 171. rule if one enters special market, 171. what is meant by special market, 171. where right to deal in a market is obtained on special condi- tions, party dealing bound by its usages, 171, 172. these, do not bind if inherently unjust, 172. other essentials of usages annexing incidents, 172. See Usages Annexing Incidents; Usages Showing Meaning of Words. USAGES ANNEXING INCIDENTS. one of the prominent classes of usage, 141, 141, n- usages of trades alone considered, 142, n. words " usage " and " custom " used synonymously, 142, n. References\ INDEX. \are to pages. ■ 549 USAGES ANNEXING INCIDENTS— f^«A««tf^. theory upon which courts admit proof of, 142. whole contract not expressed, 142, 143. in contracts of trade many terms are silently incorporated, 142, 143. merchants tacitly assume that they contract with reference to the usages of the trade, 143, n. Judge Story's caution as to extending doctrine, 143, 144. dislike of courts for usages, 145. not now prevalent, 145, 146, n. essential requisites of usages to be clearly defined, 145. See Usage. but within proper limits usage of utmost importance in reaching intention, 145, 146. trade contracts not intelligible without aid from, 146. incidents annexed, alike in different trades, 146. English authorities illustrating nature of such incidents, 147, 148. American illustrative cases, 148-150. incidents must not contradict writing, 150. importance of determining whether they do so, 150. this question does not arise as to usages showing meaning of words, 150, n. necessity of noting this distinction, 150, «., 151, n. if writing speaks as to usage this final, 150-152. instances where writing has excluded proof of customary incidents, 152, 153. difficulty of determining when usage contradicts writing, 153, iS4> 157. »■ if usage established and presumptively known, assumed to enter into contract, 154. burden therefore on writing to exclude, 154. this to speak' clearly, .154. unless usage irreconcilable with writing not excluded, 153, n. 154- apparent inconsistency not sufScient, 154, 155. 55© References^ INDEX. Yare to pages. USAGES ANNEXING l^QlYiYMl!^— continued. test for determining whether irreconcilable inconsistency- exists, 155, 156. a usage which qualifies only does not contradict, 156, 156, «., 157. usages annexing incidents to be established and presumptively known, 158. See Usage. other requisites of such usages, 172. must be reasonable, 172. when unreasonable, 172, 173. instances of unreasonable usages, 173, 174. must be consistent with rules of law, 172, 174. when they contradict rules of law. 174. meaning of this rule differently understood, 174, n. Duer says usage cannot control rules of law which parties cannot, 175. parties, however, have much greater freedom than usage has, I7S- parties speak for one contract, 175. usage for many contracts, 175. public policy prevents usage from abrogating general rules of law, 175. general principles of law not to be affected by usage, 175, 176. must be applicable to the principal contract, 172, 177. nature of original contract not to be changed by usage, 177. incidents annexed must be ancillary to this contract, 177. instances where incidents would make new contracts, 177- 179. USAGES SHOWING MEANING OF WORDS. no method of reaching meaning of mercantile contract un- less trade sense of words regarded, 97. evidence to give to words such meaning always received, 97, 161, n. such evidence received to reach meaning of original signs in contract, 97, 98. References^ INDEX. \_are to pages. 55 1 USAGES SHOWING MEANING OF yNQ)^V>'&— continued. American and English authorities illustrating rule, 97, n. apparent meaning of word no guide to its trade meaning, 98. inquiry relates only to the interpretation of marks on the writing, 98. question, therefore, differs from that arising when evidence of usage to annex incidents is given, 98, 99. importance bf regarding distinction, 99. See Usages Annexing Incidents. words to be understood as parties intended, 99, 99, n. ordinary rule for reading not to be used to thwart intention, 100. if reasonable, to conclude that parties have given word special sense this to be taken, 100. local meaning of words regarded, loi, n. meaning prevailing at place of contract to be adopted, loi. English word in English contract construed pursuant to usage in England, 102, 103, 103, n. authorities holding that plain word cannot be controlled by usage, 103, 103, n. contrary rule sustained by best authorities, 103-105. instances where words with exact ordinary meaning have ac- quired special meanings, 105, 106. sometimes asserted that to allow usage to control ordinary meaning contradicts writing, 106. this not true, 106. provisions of contract to be ascertained before they may be contradicted, 106. rejection of evidence to control meaning of words "prime ' singed bacon," improper, 107, n. instance in New York where cuslomary meaning was al- lowed to control ordinary, 108. See Bend v. Georgia Ins. Co. context of contract may define meaning of word, in, 112. instances where examination of whole contract showed usage excluded, in, 112. if writing tends to exclude, convincing evidence required to admit, 112, 113. 552 References] INDEX. \are to pages. USAGES SHOWING MEANING OF yNO^Vt's,— continued. to give trade meaning to word, distinct evidence that it has such meaning required, 113, 114. question whether both parties have used words in special sense, 114. what evidence of usage must show, 114, 115. when statutory and legal meaning not to be contradicted by usage, 115, 116. how usage may affect such words, 116. See Usage; Usages Annexing Incidents. V. VERBAL CONTRACTS. jury to ascertain terms of^ 24. but the construction and effect of these terms for judge, 24, n. w. WARRANTIES. oral may be proved when writing is informal, 184-186. but not if writing complete repository of intentions, 193- 198, 249. of future condition, not distinct from formal contract of sale, 210-217. See Chapin v- Dobson ; Eighmie v. Taylor ; Parol Evidence. in insurance policies said not to depend on intention, 326, 327. such contracts said to be construed by rule liable to defeat intentions, 327. importance of determining accuracy of this statement, 327- RefereHces\ irJDEX. {are to pages. 5 5, '3 WARRANTIES— f(?«AK«^(/, these contracts to be construed pursuant to language used, 327- this rule applicable to all contracts of insurance, 327, n. language to be literally complied with, 328, 328, n. unless such compliance with warranty, policy avoided, 328, n. not importa;nt if warranty relates to immaterial matter, 328, «., 329. reason for so construing warranty, 329. parties intend it shall be so construed, 329, 330. nature of contract requires this construction to reach mean- ing of both parties, 330, n. if language plainly makes a warranty, the intention must be followed, 329-331. every statement made a warranty by the parties must re- ceive strict construction, 331, 331, n. if language doubtful, intention sought, 332. allegation in policy as to immaterial matters not assumed to be warranties, 332, «., 333. statements affecting risk in absence of clear language show- ing intent, held warranties, 333, 334. language of warranty not to be extended, 335. this rule founded on intention, 335. whole contract examined for intention of parties if doubtful whether statement a warranty, 335-346- language of warranty to be reasonably interpreted, 347- 349- distinction between warranties and representations, 328. representations determined pursuant to intent, 350-352. warranties to be construed by ordinary rules of construction, 352- See Collateral Parol Contracts; Parol Evi- dence ; Rules of Construction ; Special Rules of Construction. 86 554 Reference5\ INDEX. \aie to pages. WITNESS. one, sufficient to show existence of usage, 164. See Usage. WORDS. See Language; Rules of Construction; Usages Showing Meaning of Words. WRITTEN AND PRINTED PROVISIONS. relative importance of, 287-291. See Examination of Whole Contract ; Rules of Construction. Whole Number of Pages, 596.