Case Name: KEAN v. DAVIS, ET AL.
Court: New Jersey Supreme Court
Jurisdiction: New Jersey
Decision Date: 1845-05
Citations: 20 N.J.L. 425
Docket Number: 
Parties: KEAN v. DAVIS, ET AL.
Judges: 
Reporter: New Jersey Law Reports
Volume: 20
Pages: 425–435

Head Matter:
KEAN v. DAVIS, ET AL.
1. "Whether a party, in signing an instrument not under seal, has made himself personally responsible, or has signed as an agent only and is free from personal liability, is a question of law to be determined by the court upon the instrument itself, and not one of fact, to be left to the jury.
2. If, by the construction put upon the instrument, a personal liability is established, the defendant will not be permitted by parol evidence, to discharge himself from that liability.
3. Where, from the nature and terms of the instrument, it clearly appears, not only, that the party is an agent, but that he means to bind his principal and act for him, and not to bind himself or act on his own account, he will not be held personally responsible, however inartificial may be the language, used to express the intention.
4. But if the terms of the instrument are not thus explicit, the party will be deemed to have contracted in his personal capacity,; even although he annex tQ his name, his title of office or a statement of his agency.
In Enitoit, to the Circuit Court of the county of Essex.
An action of trespass on the case upon promises was commenced by the plaintiffs below, the defendants in error, against the plaintiff in error, as the drawer of two bills of exchange. Each bill, precisely similar, was drawn upon William Thomson for $500 payable to the order of “ The Elizabethtown and Somerville Rail Road Company,” signed “ John Kean, President, Elisabethtown and Somerville Pail Poad Company,” and endorsed “ The Elizabethtown and Somerville Rail Road Company, by John Kean, President.” The defendant below pleaded the general issue, and the cause was tried at the term of April, 1843. Upon the trial, the defendant below admitted, that the signature “ John Kean, President Elizabethtown and Somerville Rail Road Company,” also the name of John Kean on the back of the bills, and the name of William Thomson, the acceptor, were in their respective handwritings. John Crane a witness produced and sworn on the part of the plaintiffs below, testified that he demanded payment of William Thomson, the acceptor, and presented the bills to him on the day they became payable, and that on the next day at nine o’clock in the morning, he personally served a notice in writing on John Kean of the non-payment by the acceptor.
The defendant, by his counsel, then offered to prove, that the bills of exchange were drawn by him, by and under the direction of the board of directors of the Rail Road Company, an incorporated Company of the State of New Jersey; that, at the time of their date he was President of the Company; that, on the day the bills are dated, the Company had made arrangements with the several individuals to accept the following drafts, to wit: their draft on William E. Dodge for one thousand dollars, their two drafts of $500 each on William Thomson, (the drafts in question,) and their two drafts of $500 each on John Kean, the defendant; all payable to the order of the Company. That the drafts were drawn in pursuance of these arrangements, under a resolution of the board of directors of the Compauy, and were accepted by Dodge, Kean and Thomson, in pursuance thereof; that two of them are the drafts in question, and the others were similarly drawn and signed. That the drafts were delivered by order of the Company to John J. Bryant, their agent, for the-purpose of purchasing iron ; that Bryant offered them to the plaintiffs in the city of New York, in payment of iron, and at the time told the plaintiffs, that the “ Elizabethtown and Somerville Rail Road Company ” were the drawers of the drafts, and also informed them of the before mentioned resolution of the board, under which they were drawn. That, upon being inquired of by the plaintiffs as to the responsibility of the Company, he told them the Company was embarrassed and was not responsible, but that the acceptors were responsible men. That the plaintiffs said they would make inquiries, and if the acceptors wrere responsible, they would take the bills. That they after-wards took the bills upon the responsibility of the acceptors, and with the notice and knowledge that the Company was the drawer. That the drafts in question were intended to be the drafts of the Rail Road Company, and that the plaintiff took them as such.
Objection being made by the counsel of the plaintiffs to the ad j mission of this evidence, the court sustained the objection and overruled the testimony ; to which opinion of the Court the defendant took a bill of exceptions.
The parties having rested, the defendant’s counsel insisted that it was a question for the jury to determine, from the evidence be« fore them and from the bills themselves, whether they were drawn by the Company or by the defendant.
The Court charged the jury, that the bills were the bills of the defendant, who was the drawer; and that, whether they were drawn by the Company or by the defendant was a question of law, and not a question of fact for the jury: to which charge and opinion the defendant also excepted.
The case was submitted to this Court at the term of February last on written arguments of counsel.
B. Williamson, for the'plaintiff in Error.
It is admitted that John Kean is personally liable, as the drawer of these drafts, unless he can show the authority given him by the Company to sign them on their behalf. These drafts, on the face of them are not the drafts of an individual drawn in the usual way.
The parol testimony offered was admissible. Mechanics’ Bank of Alexandria v. Bank of Columbia, 5 Wheat, 326. This was a very strong ease, and turned upon the question, whether parol testimony was admissible to prove the character of a check then in question. See also Brockway v. Allen et al., 17 Wendell 40. The eases of Taft v. Brewster, et al. 9 Johnson Rep. 334, White v. Skinner. 13 Ib. 307, Tippets v. Walker, 4 Mass. Rep. 595, all go to show, that though the agent appears personally liable, prima facie, yet he may show his authority.
The Court erred in charging the jury, that it was not for them to decide whose note it was; and even if the Court was right in overruling the testimony offered, still it was for the jury to inspect the note and say whose note it was.
S. Cassedy, for the defendants in error, cited, Bailey on Bills 70, 76; Vernon 500. Comyn on Contracts 237. Ib. 245. Thomas v. Bishop, Str. 955. 5 Mass. 299, 6 Ib. 58. 11 Ib. 27. 2 South, 828. Taft v. Brewster, 9 Johnson’s Rep. 334, Hills v. Bannister, 8 Cow. 31.
That a written agreement cannot be varied by parol evidence. 1 Cow. 249, 397. 7 Cow. 323.

Opinion:
The opinion of the court, Neviub, J., dissenting, was delivered by
Carpenter, J.
This case was submitted to us, on written arguments of counsel, at the last term. The question may be stated to be, whether the plaintiff in error and defendant below is personally liable as drawer of the two bills or drafts, both of which are precisely similar; and whether that question is to be settled by the court, on the construction of the instruments, as a matter of law; or by the jury, with or without parol testimony, as a question of fact. Is the defendant personally liable on these bills as drawer, in consequence of his signature — "John Kean; President, the Elizabethtown and Somerville Rail Road Company;" and if so prima facie, can he discharge himself, on an issue of non assumpsit, by proving that the agreement was really made by him, by the authority, and as an officer or agent of, an incorporated company; and that the plaintiffs below knew these facts, at the time when these bills were received ?
In regard to the liability of agents, it is true that the question is generally settled by the answer to the same general inquiry— To whom is the credit knowingly given, according to the understanding of both parties ? This inquiry is sometimes a matter of fact, as when the contract is verbal and unwritten, and sometimes a matter of law, as when it depends upon the true construction of the terms of a particular written instrument. Bell v. Bruen, 1 How. 183; Story on Agency, § 63, note. In regard to these written instruments, while the greater strictness of construction is ordinarily applicable to the mode of executing sealed instruments by agents, a more liberal exposition is allowed in cases of less solemn instruments and especially of commercial and maritime contracts, which are usually drawn up in a loose and informal manner. In such cases, if it can, upon the whole instrument, be collected, that its true object and intent are to bind the principal, and not the agent, courts will adopt such construction however informally expressed. Story on Agency, § 154, 160, and 288.
I adopt the opinion of the court below, that the construction of these bills, in order to ascertain the liability or otherwise of the defendant, is matter of law; and of consequence, the further decision of the court, that parol evidence was inadmissible to discharge such liability.
The cases cannot be entirely reconciled, but the weight of authority and the true principle appears to be, that parol testimony is not admissible for the purpose of exonerating an agent, who has entered into a written contract, in which he appears as principal; even though he should propose to show, if allowed, that he mentioned his principal; though such evidence may be admitted for the purpose of charging the principal. Higgins v. Senior, 8 Mees, and Welsby 440; Jones v. Littledale, 6 Adolphus and Ellis, 486. S. C. 33, Eng. C. L. Rep. 122. In the last case, Denman, C. J., in delivering the judgment of the court^ says, " that if an agent contracts in such a form as to make himself personally responsible, he cannot afterwards, whether his principal were or were not known at the time of the contract, relieve himself from that responsibility." Thus, in the analogous case of remedy against a dormant partner, he is liable on a contract relating to the firm, made in the ostensible partner's name alone, because he is taken to have adopted the name of the ostensible partner as his own, for the purpose of such contracts; so that when the ostensible partner signs his name to such contracts, he signs a word, the meaning of which comprehends not himself alone, but his partner also. It is in fact a question of signification ; and here parol evidence is admissible for the purpose of charging the dormant partner, but not for the purpose of discharging the ostensible partner, whose name is on the instrument-.1
The true rule appears to be, that parol testimony is admissible for the purpose of introducing a new party, but not for that of discharging an apparent party to the contract. The admission in the one case does not contradict the written instrument. It does not deny, that it is binding on those, whom, on the face of it, it purports to bind but it shows, that it also binds another, by reason that the act of the agent, in signing the agreement, is also the act of the principal. On the other hand, to allow evidence to be given that the party, who appears on the face of the instrument to be personally a contracting party, is not such, would be to allow parol evidence to contradict the written agreement. 2 Smith Lead, cases 224 et seq. Story on Agency, § 270 and note.
The case of the Mechanics Bank v. Bank of Columbia, 5 Wheaton, 326, cited and principally relied upon by the counsel of the plaintiff in error, is so far as regards the ease itself, consistent with these rales. The object of the evidence admitted in that case was not to discharge the agent, but to charge the principal ; not to discharge the cashier, but to show that the bank of which he was the cashier was liable. But I apprehend that the evidence as to the mode and effect of the cashier's signature, was admissible, under another point of view, not applicable to the present case. In relation to commercial customs, as for example, the usage of banking institutions, 9 Wheaton, 581, extrinsic evidence of such usage is admissible to annex incidents to written contracts, in matters in respect to which they are silent; and this rule applies to commercial contracts, and only when consistent with the terms of the written contract. Under this rule, although such evidence is sometimes admissible to add to or explain, it is never so, to vary or to contradict, either expressly or by implication, the terms of a written instrument. 2 Stephen's N. P. 1547. 1 Smith's Lead. Cs. 305, 309. Story on Agency, § 77. § 114. 1 Greenleaf Ev. § 294. 1 Mees, and Weis R. 474.
The main point in the present case will then recur; by the construction of these instruments is the defendant below personally liable as the drawer thereof ? I have come to the conclusion that, upon the face of these bills, he is personally liable.
The rule unquestionably is, that an agent may be bound by express understanding, though in the contract or covenant he give himself the description of agent. 2 Kent Com. 402. On sealed contracts the following cases are well known authorities. Appleton v. Binks, 5 East. 148. Taft v. Brewster, et al. 9 John 334. Sheldon v. Dunlap, 1 Har. Rep. 245.
-Under the liberal exposition allowable in informal instruments not under seal, if it can on the whole instrument be collected, that the intent is to bind the principal and not the agent, that construction will be adopted, however informally expressed. Doubtless, if the instrument appears to be executed in the name of the principal, the form of the words is not material. Spittle v. Lavender, 2 Brod. and Bing. 452. S. C. 6 Eng. C. L. Rep. 196. Long v. Colburn, 11 Mass. 97. Emerson v. Providence Hat Co., 12 Mass. 237.
So, when a note purported to be a promise by the " Patent cloth manufacturing Company," and was signed " William Shot-well, agent," the agent was held not to be answerable in his individual capacity. Shotwell v. MaKown, South. Rep. 828 But a note drawn thus, " I, A. B., President of the corporation, (naming it), promise to pay," signed "A. B., President," would be deemed the personal note of A. B. and not of the corporation. Story on Agency, § 154; Hills v. Bannister, 8 Cow. 31.
The same principles of construction will apply to cases, where bills are drawn or accepted or endorsed by agents. If, from the nature and the terms of the instrument, it clearly appears, not only, that the party is an agent but that he means to bind his principal, and to act for him, and not to draw, accept or endorse the bill on his own account, that construction will be adopted, however inartificial the language may be, in furtherance of the intention. But if the terms of the instrument are not thus explicit, although it may appear that the party is an agent, he will be deemed to have contracted in his personal capacity. Without, intending to sanction the extent to which the doctrine has been pressed in a case cited, Thomas v. Bishop, Str. 955 ; where a bill, drawn by the principal upon the agent, with the description of his office or agency annexed and directed to be placed to the account of the principal, was, on a general acceptance held to bind him personally; still I take it, that a bill signed by an individual though with his title of office annexed, will be so held binding; and the description treated as a mere designation of the person, and not as a qualification of his personal liability. In such case the question may be put: who is it that undertakes to pay ? Here clearly, " John Kean, President," &c. He styles himself President of the Somerville Rail Road Company ; but, he alone promises to pay. The bill is drawn payable to the order of the Rail Road Company, and signed " John Kean, President," &c. Compare the signature of the drawer, with the endorsement on the part of the company; the endorsement, in the latter case, being " The Elizabethtown and Somerville Rail Road Co., by John Kean, President." In the one case, it is the act of the company by its officer, in the other, the act of the individual officer. I am of opinion that the judgment should be affirmed.
Judgment affirmed.