Hackley National Bank v. Barry

The following opinion was filed March 9, 1909: Marshall, T. It is the opinion of the court that the contract is governed by the law of the state of Michigan. Contrary to the law here, by the decisions of the supreme court of such state, the prima facie indication, by the mere fact of the name appearing on the back of the note, was rebutted by proof that it was so signed before delivery. To that extent proof of the circumstances under which the name was signed was admissible. But was the prima facie showing so made, under the Michigan law, that Barry became liable as a joint maker, rebuttable by proof of his mental purpose in signing as he did, not communicated to any one? We fail to find anything in any of the decisions offered in evidence going that far, or anything to that effect in any other decision cited to our attention, or which we have been able to find. True, the law of Michigan is that such a contract as respondent made is ambiguous and that proof of all circumstances of making it may be given in evidence to enable the Court to construe it. The law is that way, generally. There are instances of its having been carried so far, in case of a note of the sort under consideration, as to sanction admission of evidence of what the signer and the person or other parties [99] to tbe transaction of signing said on tbe occasion, bnt there is no instance of the kind in Michigan, so far as we can discover. Proof of the surrounding circumstances of the making of a contract does not mean proof of what the parties said at the time of such making, much less what a party said or thought, in a purely private way. One is evidence to enable the court to construe the contract. The other evidence to vary it. The former is admissible on familiar principles. The latter is not upon principles quite as familiar. This court held in Steele v. Schricker, 55 Wis. 134, 12 N. W. 396, that “Oral conversations had between the parties to a written contract cannot be received as explanatory of the writing. Such conversations do not come within the rule that ‘you may show the facts surrounding the parties at the time, and the situation in which they were placed, in order to interpret the meaning of what they said in their contract.’ . . . ‘Evidence which is calculated to explain the subject of an instrument is essentially different in its character from evidence of verbal communications respecting it.’ ” Our books are replete with statements and applications of that rule. Brittingham & H. L. Co. v. Mans on, 108 Wis. 221, 84 N. W. 183; Blackman v. Arnold, 113 Wis. 487, 89 N. W. 513; Excelsior W. Co. v. Messinger, 116 Wis. 549, 93 N. W. 459; Loree v. Webster Mfg. Co. 134 Wis. 173, 114 N. W. 449. It has been applied in many instances to preclude admission of evidence of what was said between parties to ■commercial paper, at the time of the making thereof, to vary its terms: as that it might be paid in bank notes (Racine Co. Bank v. Keep, 13 Wis. 209) ; or that the note should not be negotiated by the payee (Knox v. Clifford, 38 Wis. 651) ; or that a party purporting to be bound as a payee or indorser should not be so bound (Davy v. Kelley, 66 Wis. 452, 29 N. W. 232) ; or that the indorser placed his name on the note [100] with the understanding that his indorsement should be without recourse (Salon v. McMahon, 42 Wis. 484); and many more like instances. The rule is the same in Michigan. Gumz v. Giegling, 108 Mich. 295, 66 N. W. 48, is quite-like this case. Proof was made that the person who placed his name on the back of the paper, he not being the payee, did so before it was delivered, making him, by Michigan law, a joint maker. He then offered proof that when he signed it was agreed he should not be held liable. The evidence was held inadmissible because it tended to vary the terms of a written contract by parol evidence. The same principle was applied in Phelps v. Abbott, 114 Mich. 88, 72 N. W. 3. The citations are in harmony with the decisions offered in evidence when it is understood that the right to prove the circumstances characterizing the signing of a note does not include proof of what the parties to the contract said at or before the time of signing, or what one said or thought in a private way. It follows that, while respondent would not be held liable-on the note if it were a Wisconsin contract, because in that event his liability would be that of an indorser, it being a-Michigan contract, he is liable as a joint maker, having signed the paper before delivery; that neither by the laws of Michigan nor the laws of Wisconsin can the apparent obligation respondent assumed by signing as he did, be varied by proof of his mental purpose in the transaction, whether communicated to other parties to the note or not. So the motion for a verdict in plaintiff’s favor should have been granted. By the Court. — The judgment is reversed, and the cause remanded with directions to render judgment in plaintiff’s-favor as prayed for in the complaint. A motion for a rehearing was denied April 20, 1909.