Court Opinion

ID: 7105655
Source: CourtListenerOpinion
Date Created: 2022-07-24 12:20:39.171617+00
Date Added: 2024-06-11T16:13:33.680912
License: Public Domain

Kinne, J.
(dissenting). Under the doctrine announced in the majority opinion in this case, and in other cases on which it is based, it is held that parol evidence of intention of the parties is inadmissible. I am unable to concur in that conclusion. It would be useless to attempt to consider, much less reconcile, all the cases bearing on the question. I shall endeavor to state the law which I believe applicable in this case, and make a brief review of a few of the authorities which support my contention.
If in such a case there is anything on the face of the paper, whether in the body of the note or as á part *250of the signature, which, suggests a doubt as to the party bound, or the character in which any of the signers has acted in affixing his name, parol evidence is admissible between the original parties to establish the real intent; hence while, where one signs as agent of another, the prima facie presumption is that the words are merely descriptio personen, and, therefore, the one so signing is personally bound, yet it may be shown, in an action between the original parties to the instrument, that it was not so intended, and that, in fact, the real intention was to bind the principal whose name was disclosed in the signature of his agent, or who was well known by the payee to be the real party to be bound. Hardy v. Pilcher, 57 Miss. 18; Haile v. Pierce, 32 Md. 327; McClellan v. Reynolds, 49 Mo. 312; Baldwin v. Bank, 1 Wall. 234; Carpenter v. Farnsworth, 106 Mass. 561; Mechanics’ Bank v. Bank of Columbia, 5 Wheat. 326; Means v. Swormstedt, 32 Ind 87. Sometimes the doctrine is stated that, where words which may be either descriptive of the person, or indicative of the character in which he contracts, are affixed to the name of the contracting party, prima facie they are descriptive of the person only; but the fact that they were not so intended by the parties, but were understood as determining the character in which the party contracted, may, as between the original parties, be shown by extrinsic evidence. Pratt v. Beaupre, 13 Minn. 177 (Gil. 187); Bingham v. Stewart, 14 Minn. 214 (Gil. 153); Deering v. Thom, 29 Minn. 120; 12 N. W. Rep. 350; Rowell v. Oleson, 32 Minn. 288; 20 N. W. Rep. 227. A learned author thus states the rule, as being supported by the preponderance of authority: ‘‘Between the immediate parties to a bill or note, parol evidence is admissible to show that, by a course of dealing between the parties, that form of execution has become to be the recognized and adopted form by which the obligation of the principal *251is entered into;” also, that it is admissible to show “that the instrument was, to the knowledge of the parties, intended to be the obligation o'f the principal, and not of the agent, and that it was given and accepted as such.” Mechem, Ag., section 443; Metcalf v. Williams, 104 U. S. 93; Hovey v. Magill, 2 Conn. 680; La Salle Nat. Bank v. Tolu Rock and Rye Co., 14 Ill. App. 141; Gerber v. Stuart, 1 Mont. 172, Bank of Genesee v. Patchin Bank, 19 N. Y. 312; Brockway v. Allen, 17 Wend. 40; Owings v. Grubbs, 6 J. J. Marsh. 31; McClellan v. Reynolds, 49 Mo. 312.
Parsons, in speaking of the manner in which an agent should sign a contract,'says: “But the recent cases and the best reasons are for determining in each instance, and with whatever technical inaccuracy the signature is made, from the facts and the evidence, that a party is an agent or a principal, in accordance with the intention of the parties to the contract, if the words are sufficient to bear the construction.” 1 Pars. Cont., p. 54, and notes. Again, it has been well said: “If, upon the face of the instrument, there are indications suggestive of agency, such as the addition of words of office or agency to the signature, or the imprint of the corporate title on the paper, parol evidence is competent to show who the parties intended should be bound or benefited.” Abb. Tr. Ev. 37. Again, adding the title “Agent” or the like to a signature is notice to the payee that the signer does not intend to be personally liable, and, where the principal is known, he alone is liable. 1 Am. and Eng. Encyclopedia of Law, p. 390, and citations.
A reference may profitably be made to some of the cases wherein the principles above announced have been approved. When a bill of exchange was drawn in the ordinary form, -but signed by one with the word “Treasurer” following his name, it was held parol evidence was admissible to show that it was intended to *252bind tbe principal, and that the facts pleaded (substantially the same as in this case), if true, were sufficient to relieve the party from personal liability. Martin v. Smith, 3 South. Rep. (Miss.) 33; Rowell v. Oleson, 32 Minn. 288; 20 N. W. Rep. 227. In case of a note in the ordinary form, and signed “Pioneer Mining Company. John E. Mason, Supt.,” the note reading, “We promise to pay,” etc., parol evidence was admitted to show that the intention was to bind the company only. The court said Mason’s liability was not to be determined merely by reference to the rules of grammar. “Shall we say that the omission of the word ‘by’ or ‘per’ renders the instrument unmistakably the note of Mason?” Bean v. Pioneer Mining Co., 6 Pac. Rep. (Cal.) 86. An instrument reading: “If the Marsh Harvester don’t work to his satisfaction, he (W. Thom) can return the machine to me, and I will return his notes to him. A. M. Schell, Agent,”— was held open to prove by parol that it was intended to bind his principal, not himself. Deering v. Thom, 29 Minn. 120; 12 N. W. Rep. 350. See, also, Bingham v. Stewart, 13 Minn. (Gil. 96.) 106. In a case where a note in the usual form was signed, “W. T. Boutell, Pres.,” it was held that the prima facie character of the liability might be overcome by parol evidence, and the obligation shown to be that of the corporation. Collender Co. v. Boutell, 45 Minn. 21; 47 N. W. Rep. 261; Peterson v. Homan, 46 N.W. Rep. (Minn.) 303. A note in the usual form was payable to' A. J. Boardman, treasurer, and signed, “Minneapolis Eng. and Machine Works, By A. L. Crocker, Secy.,” and was indorsed, “A. J. Boardman, Treasurer.” It was held parol evidence was admissible to show that Boardman indorsed it in his official capacity, as treasurer of a corporation. Souhegan Bank v. Boardman, 48 N. W. Rep. (Minn.) 1116. In case of a note signed, “John Kean, President Elizabethtown and Jonesville R. R. Co.,” the court *253says: “It is not clear who was the contracting party, whether the obligation was assumed by the agent, or whether he contracted on behalf of his principal. * * * The question is, who is the contracting party —whose language is it?” — and it was held parol evidence was admissible. The court quoted the following language from Lazarus v. Shearer, 2 Ala. 718: “When, however, it is doubtful from the face of the contract whether it was intended to operate as the personal engagement of the party signing it, or to impose an obligation upon some third person as his principal, parol evidence is admissible to show the true character of the transaction.” Kean v. Davis, 21 N. J. Law, 683; Railroad Co. v. Snead, 19 Grat. 354; Rendell v. Harriman, 75 Me. 497.
Cases may be found which go so far as to hold that a note in form like that at bar is on its face unambiguous, and the obligation of the corporation alone. Farmers' & Mechanics’ Bank of Savings v. Colby, 64 Cal. 352, 28 Pac. Rep. 118; Liebscher v. Kraus, 74 Wis. 387, 43 N. W. Rep. 166; Draper v. Heating Co., 5 Allen, 338; Castle v. Foundry Co., 72 Me. 167; Houghton v. Bank, 26 Wis. 663; Ballston Spa Bank v. Marine Bank, 16 Wis. 120; Rockwell v. Bank, 13 Wis. 653; Latham v. Houston Flour Mills, 3 S. W. Rep. (Tex. Sup.) 462. But we are not called upon to go to the extent of the authorities last cited, but may rest on the rule that, as between the original parties, parol evidence is admissible to show the intention of the parties whenever there is anything appearing in the instrument which suggests that it may have been signed by one in an official or representative capacity. The admission of parol evidence in such cases does not violate the general rule prohibiting its admission to alter or change a written contract. The question in such cases is not what the contract is, but whose contract is it? On whose behalf was it executed? Who is the real party *254bound thereby? Such evidence, in that respect, renders that certain which without it is uncertain, and thus enables the court to charge as obligor or payor the person or corporation which it was intended should be bound when the contract was entered into. This rule is not only based upon sound, legal principles, but has the*merit of being equitable and just in its operation, and is befitting the enlightened jurisprudence of the age. I do not undervalue precedents, but, when precedents may be found to support two or more rules, those should be followed which recognize the force and effect of usage and custom in the commercial and business world, when best calculated to effectuate justice.
If John Kapp had added the word “by” or “per” to the signature of the “Dubuque Mattress Company,” and followed it with his own name, he would have unquestionably bound the company only. By signing, as he did, with “Pt.” after his name, the question is at once suggested, did he or did he not. sign this note in an official capacity. To determine this fact, extrinsic evidence may be resorted to. The doctrine announced in the majority opinion seems to be based on the prior holdings of this court, and special stress is given to the fact that in Lee v. Percival, 85 Iowa, 639, the court has furnished a means of escape from the effect of .the-rule, which is purely technical, -by means of re-formation of the instrument in equity. No reason is suggested why a party should be driven to a court of equity except to avoid the necessity of overruling bad precedents. The rule announced in the cases cited in the majority opinion is, as I believe, contrary to the trend of modern decisions, is well calculated to effectuate injustice, and is indefensible from any point of view. The action of the court below in sustaining the demurrer was erroneous, and should be eeveksed.
Gkang-ek, J., concurs in this diss'ent.