La Grande National Bank v. Blum

Opinion by Mr. Justice Bean. The contention for the plaintiff is that the allegations of the answer, and the evidence tending to support it, violated the well-settled rule of law that a written contract cannot be contradicted or varied by parol evidence. This rule is not questioned, but the answer and evidence excluded did not contradict the terms of the promissory note sued on; they merely tended to show that it was delivered to take effect as an unconditional binding obligation upon the defendants only in the event of Blum’s failure to comply with his agreement to account for the Ramsay notes, or their proceeds. In other words, according to the answer and the evidence excluded, the promissory note sued on was not intended, except in case of Blum’s default, to become a binding obligation on the part of the [52] defendants to pay plaintiff the sum of money named therein. Evidence of such an agreement, and Blum’s compliance therewith, would show a want of consideration for the note, and would in no sense be in contradiction of its terms. The terms of the note are that defendants will pay plaintiff the sum of money named, at a time fixed, with interest; while the answer alleges a distinct and independent agreement, constituting the consideration for the promise, which in no sense changes or adds to the terms of the writing, and was not intended to do so. It is a common business transaction for one contract to be the consideration for another, and it has never been supposed that proof of the contract which is the consideration adds to or varies the terms of the other: Daniel on Negotiable Instruments, §81a; Burke v. Dulaney, 14 Sup. Ct. 816; Howard v. Stratton, 64 Cal. 487, 2 Pac. 263; Dicken v. Morgan, 54 Iowa, 684, 6 N. W. 145; Hazzard v. Duke, 64 Ind. 220. If the note was given to secure the performance of Blum’s contract to collect and pay over to the plaintiff the proceeds of the Ramsay notes, or to return them if not collected, and Blum has performed his agreement, such performance would manifestly operate as a failure of consideration, and payment of the note ought not to be enforced. And, as was said by Mr. Justice Cooley in Maltz v. Fletcher, 52 Mich. 486, 18 N. W. 228, ‘ ‘ No rule or policy of the law is violated by allowing proof to be made of the purpose for which negotiable paper was given, or that the purpose does not require that payment should be enforced.” There is nothing in the record to show that the contract referred to in the answer was made with the cashier of the plaintiff, and hence the question argued in the brief, as to his authority to make such a contract, is not presented by this record or considered. It follows that the judgment of the court below must be reversed and a new trial ordered. Reversed.