Auburn City Bank v. Leonard

By the Court, Johnson J. If the instrument on which the action was brought was in legal effect a promise by the defendant to pay the indebtedness of Smith to the plaintiff, personally, the action is well brought and the judgment must be affirmed, unless there was some erroneous ruling in the course of the trial. (Burr v. Beers, 24 N. Y. Rep. 178. Lawrence v. Fox, 20 id. 268.) The terms of the undertaking are “ I agree to cancel said T. W. Smith’s indebtedness to the said Auburn City Bank.” This is not in explicit terms a promise to pay the indebtedness, but if the undertaking is, as upon its face, and by its terms, it would seem to be,, the individual personal undertaking of the defendant, it can be regarded as nothing else than a promise to pay. As a stranger having no interest in the indebtedness, the only way in which he could cancel it would be by payment; and the agreement to cancel must be held to include the promise to do whatever should be necessary to effect the cancellation. To cancel is to blot out or obliterate; to annul or destroy, and as this could only be accomplished lawfully by a third person, by payment, it is clearly an undertaking to pay. By no other construction. can any effect be given to the obvious intention of the parties ; and the written undertakings of parties are always to be construed so as to be upheld and enforced, instead of rendering them nugatory, if it can be done without violence to the terms employed. The proper office of construction is to ascertain and determine the intention of the parties ; and this is arrived at by considering the character in which the party undertakes, the nature and subject of the- undertaking, and the terms employed in the instrument. If it appeared clearly, or could legitimately be. made to appear, that the defendant in the transaction was acting solely as the agent of the plaintiff, and entered into the undertaking in that character only, doubtless an entirely different meaning should be given to the terms “ to cancel.” In [135] that case the terms would obviously import simply an undertaking by the plaintiff to accept whatever its agent had received on its account and in its behalf, in satisfaction and extinguishment of Smith’s indebtedness. But upon its face it is no such instrument. It does not appear to have been made by or in behalf of the plaintiff, in any respect. There is nothing, either in the body of the instrument or the signature to it, to indicate that the plaintiff , had any interest in it, or relation to it, other than than that of a mere promisee. On the contrary, upon its face and by its terms, it is the plain personal instrument and undertaking of the defendant, complete and perfect in all its parts, importing a valid legal obligation against him to the plaintiff. The question then arises, whether parol evidence is admissible to vary and change this undertaking, not in some particulars, but in its entire legal character and scope. In short, to make it another and different undertaking, entirely, from what it appears to be upon its face, and by the clear, legal import of its terms. The defendant’s counsel contends that such evidence is admissible in a case like this, where the defendant claims to have been acting as the agent merely of the plaintiff. But to maintain this he assumes that the action is between parties who are not parties to the undertaking, or that the defendant at least is neither party nor privy to it. Of course, if the defendant acted as agent only, and within the scope of his authority, his act was the act of the plaintiff, and as between him and Smith he was not a party; but the plaintiff was the party on the one side, and Smith on the other. On the contrary, if the defendant was acting for himself and for his own personal benefit and advantage, then both himself and the plaintiff are parties ; the defendant as promissor and the plaintiff as promissee. For the rule now is, undoubtedly, that when such a promise as this apparently is, has been adopted by the creditor, it is regarded in law as a promise to him, as will appear by the two cases above [136] cited:' So" the case comes "back to this precise question: "whether an instrument which is apparently the personal obligation of the one by whom it is signed, may by parol, be shown to be the obligation of another, for whom the person signing was acting as agent. There is a class of cases in which it has "been held that this may be done. But the rule will be found to apply, I think, exclusively to cases in which it appears in the body of the instrument, or from the signature of the person by whom' it is executed, that he was acting for another, and intended to bind such other, and not himself personally. Of this character are the cases of Mechanics’ Bank of Alexandria v. The Bank of Columbia, (5 Wheat. 326 ;) Brockway v. Allen, (17 Wend. 40 ;) Pentz v. Stanton, (10 id. 275 ;) Randall v. Van Vechten, (19 John. 60 ;) Becker v. Lamont, (13 How. Pr. R. 23.) In such cases, where the party to whom the obligation is given understands the character in which the party giving it is acting, parol evidence may, it seems, be given to show that the maker, or obligor^ was. acting in the matter as agent merely. But where there is nothing of that kind either in the body of the instrument, or attached to the signature, to indicate that it was intended to be any thing other than a personal obligation, such evidence is inadmissible. (Lincoln v. Crandell, 21 Wend. 101. Newcomb v. Clark, 1 Denio, 226. Chappell v. Dann, 21 Barb. 17. Stackpole v. Arnold, 11 Mass. Rep. 27.) This case clearly belongs to the latter class, and the referee was right in excluding the parol evidence from consideration, in deciding the case. The principle is in "no respect different, as I conceive, in this case, from what it would be were the action between the defendant and Smith, upon the same instrument. In either case the question would be whether in law it was the defendant’s personal undertaking. The plaintiff having adopted the promise is a party to it, and the action is directly between the parties, as much as it would be between Smith [137] and the defendant. There is no ambiguity in the instrument as a whole; nor are there any terms employed in it which might not be properly employed as they are if the defendant intended to bind himself personally. Parol evidence should never be allowed to create an ambiguity where none exists. The undertaking is to cancel the indebtedness of Smith to White and to Bostwick, as well as to the plaintiffs, and this shows pretty conclusively that the term “ to cancel” was used in the sense of to pay and cancel; because even if this was the undertaking of the plaintiff, the indebtedness to White and Bostwick could only be canceled by payment. [Monroe General Term, September 7, 1863. The case was properly disposed of by the referee, and the judgment must be affirmed. E. Darwin Smith, J. C. Smith and Johnson, Justices.]