Court Opinion

ID: 8199336
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:23:01.721247+00
Date Added: 2024-06-11T16:40:52.013930
License: Public Domain

The following opinion was filed April 27, 1937:
Fairchild, J.
{dissenting). All but one of the original parties to the agreement are before the court. The absent party is a defunct corporation, but just what was agreed to and on whom the liability was to rest are known. The corporation can neither be helped nor harmed by being made a party now. The right of no innocent third-party is here involved. Evidently four papers were executed at the time: A deed conveying lánd to a corporation; a mortgage back from the corporation which is still owned by plaintiff; a letter containing a statement of account; and a note. The deed ran to the corporation; the mortgage to • the grantor was signed by the corporation by its officers. The letter was the letter of the corporation and subsequent payments were made by the corporation. When it came to signing the note, the name of the corporation was, by inadvertence, omitted and *30the note contains only the officers’ names with their official designation. It was to have been the corporation’s note; it is plainly marked a mortgage note and is a part of the transaction. Thorp v. Mindeman, 123 Wis. 149, 101 N. W. 417. Under these facts, I cannot agree to a ruling that a clear mistake, that is, the omission of the name of the corporation above the signatures of the officers, must so control as to visit the liability upon the individuals who happened to be officers of the corporation.
A careful examination of the cases referred to in the majority opinion demonstrates that in the factual situation here presented, namely, where the original payee is suing an individual who has signed as agent, without disclosing his principal on the note, the number of jurisdictions excluding parol evidence of intention is so nearly equal to that of those admitting it that the distinction of being the majority rule may be assigned to neither. Sec. 116.24, Stats., was not intended to eliminate all possibility of reconstructing an actual transaction and correcting mistakes or preventing fraud where the instrument, without, doing violence to anyone’s rights may be judicially amended to represent the actual agreement. The parol-evidence rule was not repealed, and with qualifications and limitations is applicable to bills and notes sufficiently to meet the needs, it seems to me, of the cases similar to the one now before us. The parol-evidence rule presupposes the existence of a valid written contract, and the contract in this case was that the corporation would pay the debt-evidenced by the note and mortgage. The question as to whether the writing is the complete contract of the parties, while usually determined from the writing itself, where the writing suggests questions or ambiguity or doubtful completeness, then is properly decided, at least between the original parties, by reading the contract in the light of surrounding circumstances and thus bringing before the court by *31parol evidence the entire contract, for the purpose of visiting liability upon the proper parties and excusing from liability those who by mistake have been made to appear to be responsible. An agreement which by mistake in transcription results in the creation of an instrument evidencing a different agreement ought not, while the original parties only are involved, to be permitted to become an instrument of injustice. The case of Germania Nat. Bank v. Mariner, 129 Wis. 544, 109 N. W. 574, seems to me to commit Wisconsin to the proposition that an ambiguity or omission may exist when an officer of a corporation has not described himself as such officer and consequently would be authority for the proposition that an ambiguity arises where he signs the note with the designation, “Pres.,” and another officer of the same corporation signs the note with his name with the designation, “Sec. & Treas.” Of course in the Mariner Case, the note in its body promised that the corporation would pay the debt, but the defendant signed his individual name without any attempt at description or declaration that he was doing SO' for the corporation. The terms of the note were there held to be sufficiently ambiguous to apprise a purchaser for value without other notice of the possibility that Mariner was not intended to be personally liable. Here the question is of an ambiguity sufficient to permit the introduction of parol evidence of the true intention of the parties, between the parties themselves. The two things may be different. In one case there is the policy of safeguarding the circulability of paper and requiring that ambiguity on the face of the instrument be marked enough to be notice, to the stranger to the transaction who may wish to buy. Where the original parties to a written contract are involved, the policy is merely to require them to stand by what they have written unless they have written something which is equivocal. The stranger is entitled to assume what the original party is not. Evi*32dence was admitted in the Mariner Case to explain the purpose of the individual signature. The doctrine of that case so far as ambiguity is concerned and in the case of Thorp v. Mindeman, supra, seems to me authority for ruling here that sec. 116.24 does not preclude the defendants from the defense of no liability and to- warrant under the circumstances of this case a resort to sub. (8) of sec. 116.21, Stats., which reads:
“Where several writings are executed at or about the same time, as parts of the same transaction, intended to accomplish the same object, they may be construed as one and the same instrument as to all parties having notice thereof.”
I do not find that the law which applies to' this situation gives to the plaintiff who knows all the facts a right to rely upon a mistake and secure a judgment against those to whom it was never intended to charge liability. There is enough of omission apparent in this note to warrant referring to the other instruments executed at the same time in the same transaction.
A leading case permitting establishment of a defense by parol evidence is Megowan v. Peterson, 173 N. Y. 1, 65 N. E. 738. There the original payee sued as an individual one Peterson who had signed a note, “Charles G. Peterson, Trustee.” Peterson was trustee for the purpose of liquidating a partnership. Parol evidence of the intention of the parties was admitted and the court held that sec. 20, N. I. L. (sec. 116.24, Stats.), was not—
"designed to change’the common-law rule in this regard, which is to the effect that, as between the original parties and those having notice of the facts relied upon as constituting a defense, the consideration and the conditions under which the note was delivered may be shown.”
This case is expressly approved in New Georgia Nat. Bank v. Lippmann, 249 N. Y 307, 164 N. E. 108, where Metcalf v. Williams, 104 U. S. 93, was also cited. In the *33latter case a check was signed, “E. P. Aistrop, Sec’y. W. G. Williams, V. Pres’t.” The plaintiff had knowledge of the fact that this was meant by the parties to„be a check of the Montpelier Female Humane Association. The court gave effect to the instrument according to that intention. Other cases permitting the introduction of parol evidence as a defense to personal liability in similar situations are: Haslett v. Willaume, 76 Fla. 514, 80 So. 309; Tampa Investment & Securities Co. v. Taylor, 272 Ill. App. 541; G. C. Riordan & Co. v. Thornsbury, 178 Ky. 324, 198 S. W. 920; Huntington Finance Co. v. Young, 105 W. Va. 405, 143 S. E. 102. In a Wisconsin case, Shearer v. Pringle, 203 Wis. 164, 233 N. W. 623, reformation of an instrument extending time of payment of note signed, “Nora Mae Pringle, Admx.,” was allowed, relieving Mrs. Pringle from individual liability.
Whether we say the omission apparent in the note amounts to an ambiguity between the original parties or their representatives, or rest on the proposition that a mistake was made in transcribing the agreement, my position is that, at least until this decision, no^ rule governing the administration of justice in this state required, under circumstances such as are here, a holding, when the original parties only are involved, that at no time after the mistaken signature is attached to the note, any right or remedy exists to protect the one mistakenly bound from the effects of the mistake. It was the intention of all the parties to bind the corporation to pay the note and the corporation only.
A motion for a rehearing was denied, with $25 costs, on Mav 25, 1937.