Case ID: wis_129/html/0544-01.html
Source: Caselaw Access Project
Author: {"author": "\n      WiNsnow, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Germania National Bank of Milwaukee, Respondent, vs. Mariner, imp., Appellant.
    
      October 12
    
    November 7, 1906.
    
    
      Bills and notes: Ambiguity as to signature: Officer of corporation: Statutes construed: Parol evidence.
    
    A note read: “Four months after date the Northwestern Straw Works promise to pay,” etc., a.nd was signed.
    “The Northwestern Straw Works,
    “E. R. Stillman, Treas.
    “John W. Mariner.”
    Mariner was the secretary of the corporation, duly authorized to sign the note on its hehalf. Held:
    
    1. The signature of Mariner was not “so placed” on the instrument as to make it doubtful in what capacity he intended to sign, within the meaning of subd. 6, sec. 1675 — 17, of the Negotiable Instrument Law (ch. 356, Laws of 1899), providing that a person whose signature is so placed is to be deemed an indorser.
    2. It appearing 'from the instrument itself that Mariner placed his signature thereon as maker, either individually or in a representative capacity, sec. 1677 — 3 does not apply.
    [3. Whether the note itself showed that Mariner signed on behalf of the corporation and is therefore not personally liable thereon, under see. 1675 — 20, not determined.]
    4. If sec. 1675 — 20 does not apply, the note was ambiguous upon its face as to Mariner, and parol evidence that he signed merely in his representative capacity and as agent for the corporation was admissible, even as against a bona fide purchaser of the note for value before its maturity.
    Appeal from a judgment of the circuit court for Milwaukee county: Opeen T. Williams, Circuit Judge.
    
      Reversed.
    
    For the appellant there was a brief by Van Dyke & Van Dyke, and oral argument by G. D. Van Dyke.
    
    For the respondent there was a brief by Austin, Fehr & GehrZj and oral argument by W. H. Austin.
    
   WiNsnow, J.

Tbe plaintiff sued, tbe appellant and tbe Northwestern Straw Works as makers of tbe following promissory note:

“Milwaukee, January 6, 1905.
“Four months after date tbe Northwestern Straw Works promise to pay to tbe order of E. G. Bigelow ($20,000) Twenty Thousand Dollars at tbe First National Bank, Milwaukee. Value received.
“Tbe Northwestern Straw Works,
“E. R. Stillman, Treas.
“John W. Mariner.”

Tbe defendants answered jointly, alleging that tbe note was tbe note of tbe Northwestern Straw Works (a corporation) alone, and was signed by Mr. Mariner as secretary of tbe corporation and not in bis individual capacity. Tbe case was tried without a jury, and tbe evidence showed without dispute that tbe plaintiff purchased tbe note from tbe payee in due course and for value before due; that it represented a loan made to tbe corporation defendant alone; that tbe bylaws of tbe corporation required its notes to be signed by two officers, either tbe president or treasurer and the.secretary; that Mr. Stillman was tbe treasurer of tbe corporation and Mr. Mariner the secretary; that Mr. Mariner signed bis name thereto simply for tbe purpose of making it tbe note of tbe corporation and not intending to bind himself, but neglected to add tbe word “Secretary” to bis name; that tbe plaintiff bad no information as to tbe capacity in which Mr. Mariner signed tbe note further than that afforded by tbe note itself; and that tbe defendant corporation went into bankruptcy after tbe maturity of tbe note and made a composition with its creditors under which there was paid to tbe plaintiff on tbe note $4,020. There was no proof that tbe corporation bad ever held out to tbe plaintiff or tbe public that Mr. Stillman or any single officer bad authority to execute notes for it. Upon these facts tbe court, upon motion, ordered tbe complaint amended so as to charge Mr. Mariner as indorser, found him liable as such, and entered judgment against him for the balance due upon the note, from which judgment Mr. Mariner appeals.

The question as to the liability of Mr. Mariner under the facts stated is certainly not free from difficulty. The general rule is well supported that when it clearly appears, either in the body of the note or by appropriate words added to the signatures themselves, that a corporation is the party making the promise, there is no individual liability on the part of the signers. 1 Randolph, Comm. Paper (2d ed.) § 135. In an early case in this state, however (Dennison v. Austin, 15 Wis. 334), this principle was in effect modified, as it is modified in some other jurisdictions, by a proviso to the effect that, if the signers in fact had no authority to bind the corporation, they bind themselves'individually. The Negotiable Instrument Law (ch. 356, Laws of 1899) recognizes both the general principle and the proviso, in sec. 1675 — 20j in these words:

“Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized.”

As it appears without dispute in the present case that the signers of the note were authorized to execute it on behalf of the corporation the proviso need not be considered. In the present case the body of the note declares that the “Northwestern Straw Works” (presumably a corporation) is the promisor. It does not say “I” or “we” promise to pay, but specifically names a corporation as the promisor. Hence, so far as Mr. Stillman is concerned, the note itself makes it clear that he signed only on behalf of the corporation. Parol evidence would not be admissible to show that he signed as a joint maker. Liebscher v. Kraus, 74 Wis. 387, 43 N. W. 166. The same claim is forcibly made as to the signature •of the defendant Mariner, and it is not without authority to support it. Shaver v. Ocean M. Co. 21 Cal. 45.

We are not inclined, however, to rest the case upon any •doubtful proposition. Granting that the section does not apply as to the signature of Mr. Mariner, we think it would be •conceded that upon its face it is ambiguous so far as Mr. Mariner is concerned. The instrument says that the “Northwestern Straw Works” promises to pay. The signature of Mr. Mariner is the bare signature of an individual. This is certainly not usual, and should arrest the attention of any one dealing with it at once. People do not ordinarily sign contracts purporting on their face to be contracts of others. If they do, the fact itself suggests at once a doubt as to what they mean by it. In other words, the instrument becomes, .as to such signatures, ambiguous. The Negotiable Instrument • Law, before referred to, contains several provisions with reference to the construction of negotiable instruments bearing the signatures of persons who have not made their intentions clear, and these must be considered. Subd. 6, sec. 1675 — 17, provides that, “where a signature is so placed on ■an instrument that it is not clear in what capacity the person making the same intended to sign, he is to be deemed an in-dorser.” ^This provision, by its very terms, applies only to •a case of doubt arising out of the location of the signature upon the instrument. Names are sometimes placed at the side, on the end, or across the face of the instrument, and thus a doubt arises as to whether the signer intended to be 'bound as a maker or an indorser, or perhaps as a guarantor, and to solve these doubts the section in question was evidently framed. It was to settle a doubt fairly arising from •the ambiguous location of the name, and applies to no other. In the present case there is no doubt of this nature. ■ The signature of Mr. Mariner is placed in the usual and proper, in fact the only proper, place for a maker. The doubt arising is not a doubt whether he intended 40 sign as maker, in-dorser, or guarantor, for it is clear from the location of the name that he did not intend to sign as indorser or guarantor, hut simply a doubt whether he intended to sign in an individual or in a representative capacity as maker. To say that, where it conclusively appears from the instrument that the signer intended to sign as a maker, the statute is intended to make him an indorser, would be little short of .ridiculous. The statute was passed to meet a case where it is doubtful from the instrument whether a man intended to become an indorser, not to make an indorser out of a person who> without doubt, intended to sign as maker, either individually or as representative of anotheivj We have no doubt, therefore, that this section has no application to the present case.

Secs. 1677 — 3 and 1677 — 4 (ch. 356, Laws of 1899) are also referred to as having some bearing on the question. Sec. 1677 — 3 provides that “a person placing his signature upon an instrument otherwise than as maker, drawer or acceptor is deemed to be an indorser, unless he clearly indicates by appropriate words his intention to be bound in some other capacity.” See. 1677 — 4 provides that “where a person, not otherwise a party to an instrument, places thereon his signature in blank before delivery, he is liable as an indorser in accordance with the following rules,” etc. As to the last-named section, it is manifest that it has no application, because Mr. Mariner did not place his signature upon the note in blank. The first-named section is equally inapplicable, because it is certain, from the instrument itself, that he placed his signature thereon as maker, either individually or in a representative capacity; hence the contingency named-in the section has not arisen.. /It seems entirely clear from -y<the language of these two sections, and from the notes thereto, that they were intended to lay down in statutory form the propositions already decided by this court in Cady v. Shepard, 12 Wis. 639, and King v. Ritchie, 18 Wis. 554, and other cases following them. , There are no other sections of the Negotiable Instrument Law which can be reasonably ■claimed to have any material beaidng on the question now under consideration, and it must therefore be determined upon general principles of the common law.

It is elementary that, in case a written contract is ambiguous in its terms, parol proof of the facts and circumstances under which it was executed may be introduced to aid in its construction. This rule applies to commercial paper, even in the hands of third persons, because, where the ambiguity is apparent to a reasonably prudent man on the face of the paper, he is necessarily put upon inquiry. Mechem, Agency, § 443; Hood v. Hallenbech, 7 Hun, 362; 10 Cyc. 1051; 4 Thompson, Corp. § 5141. The parol evidence in the present case showed without dispute that Mr. Mariner’s signature was attached simply in his representative capacity and as agent of the corporation. There being a plain ambiguity in this respect appearing on the face of the note, the evidence was properly received, and the judgment against Mr. Mariner individually was erroneously rendered.

By the Court. — Judgment reversed, and action remanded with directions to dismiss the complaint.