omission therefrom,76 or misrepresentation of the nature of the instrument.77

While in an action on a note, if the only tendency of the parol evidence offered to avoid the note is to show a promise on the part of the payee not to enforce it, the same is of no avail, yet the maker of a note delivered upon such a promise is not barred by the rule applicable to the promise, from showing that the note was procured by deceitful practices, of which the note was a part.78 And it has been held that parol evidence tending to show fraud inducing the execution of notes, consisting of a purpose on the part of the payee to obtain the notes under the guise of an agreement not to negotiate the same before maturity, when his intention was otherwise, is not precluded by a stipulation in the notes expressly stating that they were given for a cash

upon the policy of insurance to recover for a loss, and the defense was that the note was overdue and unpaid at the time of the loss, and that thereby the contract was rendered void.

76 In Sistrunk v. Wilson (1911) 98 Miss. 672, 54 So. 89, it was held that one who gave a note for the purchase price of mules, should be permitted to show, in a suit by him to replevin the animals, that the defendant fraudulently omitted from the promissory note given for the purchase price and evidencing the contract of sale, a reservation of title by the seller, the admission of such evidence not violating the principle that the terms of a written instrument may not be varied by parol.

77

See, for example, Stoyell v. Stoyell (1890) 82 Me. 332, 19 Atl. 860, to the effect that the parol-evidence rule does not exclude evidence in an action by the payee against the maker of a note, to show that the former induced the latter to sign the note by falsely representing that it was a receipt instead of a note, and that the latter did not read the paper at the time; such evidence, if true, constituting a defense on the ground of fraud and being permissible between the original parties.

78 Wilbur v. Prior (1893) 67 Vt. 508, 32 Atl. 474.

It was held in Schipfer v. Stone (1928) — Iowa, —, 218 Ñ. W. 568, that in an action on notes, where fraud was

consideration, and that the holder might negotiate the notes before due, and the maker would pay the purchaser in full at maturity; the rule applying that if a written contract is obtained by fraud, all the stipulations thereof fall with it, and the same do not preclude the admission of parol evidence to show the fraud.79

It may be observed that the conclusion reached in some cases that in actions on notes parol evidence is admissible to show a failure of consideration consequent upon a breach of a contemporaneous parol express warranty is based on the ground that the note does not purport to contain the entire agreement of the parties, and hence does not preclude the admission of such evidence, rather than on the ground that the misrepresentations were fraudulently made.80

pleaded as a defense, there was no infringement of the parol-evidence rule by the admission for the defendants, the makers of the notes, of evidence to show, as a part of the alleged fraudulent representations, that at the time of the execution of the notes the makers were told by the party procuring them that they would never be converted into cash, and that the makers would never have to pay them.

79 White v. Fisheries Products Co. (1923) 185 N. C. 68, 116 S. E. 169. The action was for damages for wrongfully negotiating notes of the plaintiff to a holder in due course, in breach of the agreement of the defendant, the payee in the notes, to hold the same until the plaintiff, the maker, had sold a certain farm, and to return the same to the latter if the farm were not sold before the maturity of the notes.

80 See, for example, Pryor v. Ludden & B. Southern Music House (1910) 134 Ga. 288, 28 L.R.A. (N.S.) 267, 67 S. E. 654, in which it was held that, in an action on a note reciting that it was for the purchase price of a piano, the maker of the note might plead, in defense of the action, that the plaintiff represented that the piano was new and capable of being used as a musical instrument, and that the defendant, acting on this representation and warranty, and without actual or constructive knowledge of its true condition,

c. Bonds.

The general rule, that the principle that parol or extrinsic evidence is inadmissible to vary or contradict the terms of a written contract is inapplicable where the issue is fraud in the procuring of the contract, has been applied or recognized in various cases involving bonds.81

bought the same, when in fact it was worse than secondhand, and not capable of use as a musical instrument.

81 Arkansas.-Harrell v. Hill (1857) 19 Ark. 102, 68 Am. Dec. 202.

Georgia. See Ham v. Parkerson (1882) 68 Ga. 830 (recognizing rule). Massachusetts. Holbrook v. Burt (1839) 22 Pick. 546.

New Jersey. Den ex dem. State Bank v. Moore (1819) 5 N. J. L. 470. New York. · Farmers' & M. Bank v. Whinfield (1840) 24 Wend. 419 (misreading).

-

Pennsylvania. Hessner v. Helm (1822) 8 Serg. & R. 178; Miller v. Henderson (1823) 10 Serg. & R. 290; McColloch v. McKee (1851) 16 Pa. 289. See also Schuylkill County v. Copley (1871) 67 Pa. 386, 5 Am. Rep. 441 (misrepresentation as to nature of instrument).

Rhode Island. Phillips v. Potter (1862) 7 R. I. 289, 82 Am. Dec. 598. In this connection see IV. supra, dealing with sealed instruments.

Tinsley v. Jemi

82 United States. son (1896) 20 C. C. A. 371, 38 U. S. App. 665, 74 Fed. 177; Cook v. Sterling Electric Co. (1907) 80 C. C. A. 502, 150 Fed. 766; Hubert v. Apostoloff (1921; D. C.) 278 Fed. 673 (affirmed in (1922; C. C. A. 2d) 285 Fed. 161); Pennok Oil Co. v. Roxana Petroleum Co. (1923; C. C. A. 8th) 289 Fed. 416 (contract for purchase of oil and gas rights).

Alabama.-Paysant v. Ware (1840) 1 Ala. 160; Waddell v. Glassell (1851) 18 Ala. 561, 54 Am. Dec. 170; Bank of Guntersville v. Webb (1895) 108 Ala. 132, 19 So. 14.

Colorado. Sellar v. Clelland (1875) 2 Colo. 532; Johnson v. Cummings (1898) 12 Colo. App. 17, 55 Pac. 269.

are

d. Contracts generally. Various classes of contracts treated separately in the annotation, but attention is called in the footnote 82 to cases of a general or miscellaneous nature which have applied, or at least recognized, the rule permitting the introduction of parol or extrinsic evidence to establish fraud

ity (1855) 17 Ga. 515 (donation to school); Lunday v. Thomas (1858) 26 Ga. 537; McBride v. Macon Teleg. Pub. Co. (1897) 102 Ga. 422, 30 S. E. 999; McCrary v. Pritchard (1904) 119 Ga. 876, 47 S. E. 341 (contract for purchase of insurance business); Chicago Bldg. & Mfg. Co. v. Butler (1913) 139 Ga. 816, 78 S. E. 244; Hayes v. Farmers Bank (1915) 143 Ga. 183, 84 S. E. 442 (agreement acknowledging title to collateral securities in plaintiff signed on misrepresentations as to nature of instrument); Hixon v. Hinkle (1923) 156 Ga. 341, 118 S. E. 874 (assignment of bonds); State Historical Asso. v. Silverman (1909) 6 Ga. App. 560, 65 S. E. 293 (subscription); Thomason & Sons v. Goldman (1911) 9 Ga. App. 349, 71 S. E. 596; Loyless v. Hesse Envelope & Lithographing Co. (1912) 10 Ga. App. 660, 74 S. E. 90 (contract for special envelops).

Indiana.

Illinois. Block v. Wabash, St. L. & P. R. Co. (1884) 111 Ill. 351, 53 Am. Rep. 628 (shipping contract); Barrie v. Frost (1902) 105 Ill. App. 187 (book subscription; statute referred to). Hines v. Driver (1880) 72 Ind. 125 (contract to purchase interest in partnership); Citizens Nat. Bank v. Kerney (1915) 59 Ind. App. 96, 108 N. E. 139 (composition agreement with creditors); Marker v. Outcault Adv. Co. (1919) 69 Ind. App. 344, 122 N. E. 32 (contract for advertising service); Tribune Co. v. Red Ball Transit Co. (1926) 84 Ind. App. 666, 151 N. E. 338 (rehearing denied in (1926) 84 Ind. App. 672, 151 N. E. 836 (advertising contract; rule recognized); Mt. Pleasant Coal Co. v. Watts (1926 Ind. App. -, 151 N. E. 7 (contract of employment).

Iowa. Hunt v. Carr (1852) 3 G. Greene, 581 (contract for carriage of goods); First Nat. Bank v. Hurford (1870) 29 Iowa, 579 (contract of subscription in aid of railroad); Nixon v. Carson (1874) 38 Iowa, 338 (contract for manufacture and delivery of plows); Wilson Sewing Mach. Co. v.

inducing a

written contract, contract, notwithstanding the principle prohib

Sloan (1879) 50 Iowa, 367 (contract for sewing-machine agency); Mann v. Taylor (1889) 78 Iowa, 355, 43 N. W. 220 (contract for agency for patented articles); Burlington Lumber Co. v. Evans Lumber Co. (1896) 100 Iowa, 469, 69 N. W. 558 (written assignment by debtor to creditor); Joseph v. Mangos (1921) 192 Iowa, 729, 185 N. W. 464 (contract of purchase of interest in partnership business). See also The Wisconsin v. Young (1851) 3 G. Greene, 268 (fraud or mistake in bill of lading); Davis v. Dumont (1873) 37 Iowa, 47 (contract of subscription. in aid of railroad).

Kansas. See Bird & M. Map Co. v. Jones (1882) 27 Kan. 177 (contract for map); Hart v. Haynes (1915) 96 Kan. 262, 150 Pac. 530; Outcault Adv. Co. v. Smalley (1917) 101 Kan. 645, 168 Pac. 677 (contract for right to use advertising matter). Kentucky.

Vansant v. Runyon (1898) 19 Ky. L. Rep. 1981, 44 S. W. 949.

Michigan.

Hobbs v. Solis (1877) 37 Mich. 357 (fraud in execution of contract for installation of lightning rods); Rambo v. Patterson (1903) 133 Mich. 655, 95 N. W. 722 (contract to purchase interest in real estate business); Schupp v. Davey Tree Expert Co. (1926) 235 Mich. 268, 209 N. W. 85 (fraud in obtaining signature to contract for treatment of trees).

Minnesota. Vilett v. Moler (1900) 82 Minn. 12, 84 N. W. 452 (contract of apprenticeship in barber college); Silliman v. Dobner (1925) 165 Minn. 87, 205 N. W. 696 (contract for installation of rendering plant; GANLEY BROS. V. BUTLER BROS. BLDG. Co. (reported herewith) ante, 1 (contract to construct highway).

Missouri. Metropolitan Paving Co. v. Brown-Crummer Invest. Co. (1925) 309 Mo. 638, 274 S. W. 815 (fraud inducing assignment of contract); Beck & P. Lithographing Co. v. Obert (1892) 54 Mo. App. 240 (contract for advertising matter); Horne v. John A. Hertel Co. (1914) 184 Mo. App. 725, 171 S. W. 598 (contract of employment); Shallcross Printing & Stationery Co. v. Brown (1916) - Mo.

iting the varying or contradicting of written instruments by parol. App., 185 S. W. 745 (contract to print advertisement in directory).

Montana. Sathre v. Rolfe (1904) 31 Mont. 85, 77 Pac. 431 (contract for sale of business which, through fraud, omitted lease of premises).

New Jersey. Sheldon Co. v. Harleigh Cemetery Asso. (1905) 73 N. J. L. 115, 62 Atl. 189 (misrepresentation that defendant had sent word to his agent to sign contract); Margolis v. Pinnas (1924) 99 N. J. L. 515, 124 Atl. 529 (contract to procure loan).

New York.-Callanan v. Keeseville, A. C. & L. C. R. Co. (1910) 199 N. Y. 268, 92 N. E. 747; Electrical Audit & Rebate Co. v. Greenberg (1907) 56 Misc. 514, 107 N. Y. Supp. 110 (misrepresentation that contract for inspection of electrical installation conformed to oral agreement); Jackson v. State (1924) 210 App. Div. 115, 205 N. Y. Supp. 658 (affirmed on opinion below in (1925) 241 N. Y. 563, 150 N. E. 556) (contract for excavating).

North Dakota.-Dalheimer v. Lucia (1923) 50 N. D. 78, 194 N. W. 925 (cropping contract).

Pennsylvania.

Maute v. Gross (1867) 56 Pa. 250, 94 Am. Dec. 62 (agreement to accept oil as per sample in payment of judgment, induced by fraudulent representations regarding sample); Witte v. Dixon (1878) 35 Leg. Int. 114 (contract for sale of grocery business; evidence admissible of seller's agreement, omitted from writing, not to re-enter business).

Rhode Island. Continental Illustrating Co. v. Longley Motor Sales Co. (1921) 43 R. I. 552, 113 Atl. 870 (contract for advertising matter; misrepresentation as to nearest place which would have similar matter).

The rule has been applied or recognized, for instance, in cases of con

American Cotton Co. v. Collier (1902) 30 Tex. Civ. App. 105, 69 S. W. 1021 (contract for conveyance of gin plant to new corporation which was to be organized for carrying on the business, induced by misrepresentations as to cotton-compress discovery); international Land Co. v. Parmer (1909) 58 Tex. Civ. App. 70, 123 S. W. 196 (promise made without intention of performance to secure extension of note, inducing written contract not specifying this consideration); Southern Badge Co. v. Smith (1911) Tex. Civ. App. 141 S. W. 185 (order for badges or buttons induced by fraudulent representations that president of association who signed order was not to be personally bound); Chicago, R. I. & G. R. Co. v. Howell (1914) — Tex. Civ. App. 166 S. W. 81 (railroad ticket); McCaskey Register Co. v. Mann (1926) - Tex. Civ. App. —, 283 S. W. 544 (contract for installation of bookkeeping system).

Utah. Swanson v. Sims (1917) 51 Utah, 485, 170 Pac. 774 (contract by seller of motion picture theater not to engage in competing business).

Vermont. Cameron v. Estabrooks (1901) 73 Vt. 73, 50 Atl. 638 (contract of employment; misreading of contract).

Virginia. Farmers' Mfg. Co. v. Woodworth (1909) 109 Va. 596, 64 S. E. 986 (contract to manufacture amusement device).

Washington. — Kinnane v. Conroy (1909) 52 Wash. 651, 101 Pac. 223 (assuming rule with regard to contract of employment as real estate broker; misreading of contract); Boynton v. Johnson (1912) 68 Wash. 370, 123 Pac. 522 (railroad-construction contract); Gleason Co. v. Carman (1920) 109 Wash. 536, 187 Pac. 329 (contract to manufacture and install special lighting fixtures); Svarz v. Dunlap (1925) 134 Wash. 555, 235 Pac. 801 (agreement with architect to draw plans for and supervise building induced by fraudulent representation as to cost); Bertelson v. Arthur (1926) 138 Wash. 445, 244 Pac. 695 (contract of sale of apartment-house lease and furniture).

West Virginia.-Corns-Thomas Engineering & Constr. Co. v. County Ct. (1922) 92 W. Va. 368, 115 S. E. 462

tracts which involved advertising,83 although the written contract expressly

(contract for excavation and construction work).

Wisconsin. Hurlbert v. T. D. Kellogg Lumber & Mfg. Co. (1902) 115 Wis. 225, 91 N. W. 673 (contract for cutting and delivery of logs); Creasey Corp. v. Dunning (1924) 182 Wis. 388, 196 N. W. 775 (misrepresentations as to credits to which subscribing member in wholesale grocery association would be entitled; recognizing rule).

England. Hotson v. Browne (1860) 9 C. B. N. S. 442, 142 Eng. Reprint, 174 (contract for advertisements).

83 See cases in note 82, supra, in which, as there indicated, advertised contracts were involved.

It is held in Beck & P. Lithographing Co. v. Obert (1892) 54 Mo. App. 240, that parol evidence is admissible in an action for breach of a contract for advertising matter, purporting to be an order by the defendant from the plaintiff, a lithographing company, for "5 M." display cards, to show that the plaintiff's agent fraudulently represented to the defendant, who had an imperfect knowledge of English, that the terms quoted meant 500, which was the number orally agreed upon, and that the defendant executed the order in reliance upon such false representation.

And. it is held in Shallcross Printing & Stationery Co. v. Brown (1916)

Mo. App., 185 S. W. 745, that evidence of fraudulent representations was improperly disregarded by the trial court on the theory that the same tended to vary and enlarge the terms of the written contract, where an action was brought by the assignee of a contract to insert an advertisement for the defendant in an automobile directory, to recover the agreed price of the same; and it appeared that, although the written contract merely contained the order for the publication and the price, with the words "five thousand edition" printed across the end of the contract, the defendant offered evidence to prove that the party taking the order positively represented that the entire edition of 5,000 copies of the proposed publication had been subscribed for and sold in advance, that the defendant believed and relied on this representation, and did not discover the falsity of the same until the book had been

purported to contain the entire agreement of the parties.84 The same is true with regard to contracts of subscrip

printed and tendered, when payment was refused.

84 In Outcault Adv. Co. v. Smalley (1917) 101 Kan. 645, 168 Pac. 677, it was held that, although the written contract for the exclusive use by the defendant of certain advertising matter to be furnished by the plaintiff provided that "all promises and agreements are stated herein; verbal agreements with salesmen not authorized," -parol evidence was admissible to show false representations by the plaintiff's salesman to the effect that he had made arrangements with newspapers to carry the advertisement at a certain rate. It was held that an instruction was not erroneous that, if the jury found that the salesman made false representations, in order to procure the contract, the clause in question would not apply to the defense interposed, for the reason that a principal may not send out an agent for the purpose of soliciting contracts, and, after a contract has been obtained by false and fraudulent representations, accept the contract and at the same time avoid the effect of such fraudulent statements made to procure it, by incorporating a clause of this kind in the agreement.

And the doctrine that antecedent negotiations are not merged in the written contract when fraud inducing the contract is in issue, and that oral testimony tending to prove fraud is admissible, even though it may vary, add to, or contradict the terms of the written instrument, is recognized in Marker v. Outcault Adv. Co. (1919) 69 Ind. App. 344, 122 N. E. 32, notwithstanding the contract (for advertising service) contained a provision that, "all promises and agreements are stated herein; verbal agreements with salesman not authorized." But the effect of such a provision is not discussed. The alleged fraud consisted in false representations on the part of the seller's agent as to the terms at which advertisements would be carried by a newspaper, and as to another merchant having agreed to order similar advertising matter.

In an action on a written contract for the furnishing by the plaintiff to the defendant of certain cards weekly for advertising purposes, where the 56 A.L.R.-6

tion for books,85 or for a bookkeeping system, notwithstanding special stipulations in the contract.87

defense was fraud in the procuring of the contract, in that the agreement was that the cards would be furnished every two weeks, and the plaintiff's agent at the time the contract was signed pretended to change the contract in this regard, but failed to do so, it was held in Hart v. Haynes (1915) 96 Kan. 262, 150 Pac. 530, that parol evidence of the fraud was not precluded by a recital in the caption of the contract or order to the effect that the plaintiff could not be held responsible for any provisions not embodied in the writing, and that the contract could not be canceled without the written consent of the company, since such a recital did not limit or restrict the rights of the parties in a defense that the contract was procured by fraud.

85 In Jewett v. Carter (1882) 132 Mass. 335, an action on a contract for the price of a book, in which the defense was false representations in procuring the defendant's signature to the contract of subscription, it was held that parol evidence was admissible to show false representations by the plaintiff's agent making the sale as to what the book would contain, notwithstanding it was objected that, as the title of the book (history of a designated county) had a well-defined and unambiguous meaning, parol evidence was not admissible to show in what sense the words were understood by the party.

86 In an action for the purchase price of a bookkeeping system sold by the plaintiff to the defendant, it was held in McCaskey Register Co. v. Mann. (1926) Tex. Civ. App. --, 283 S. W. 544, that the parol-evidence rule was not violated by the admission of evidence on the part of the defendant to show that the real contract between the parties was an oral one whereby the defendant purchased the system on condition that it prove satisfactory after installation by the plaintiff, and that otherwise it would be removed and no charges would be made, and that the written contract was signed by him, without reading it, on false representations by the seller's agent that it embodied the terms of the oral agreement, notwithstanding the fact that the written contract expressly