parties at variance with the words of the writing when those words are given their appropriate local meaning; and, (2) to prove the meaning of the written words not by showing that the parties intended them to mean something different from what other persons at the same time and place, and dealing with the same subject-matter would attach to them, but to prove that the parties were dealing in regard to a matter or to secure an object, or under circumstances where local usage would give a particular meaning to the language; or in case the local meaning is ambiguous, to show that the parties attached one appropriate meaning to their words, rather than another equally appropriate meaning.55 If the parties were dealing in regard to rabbits, and locally at that time when rabbits were in question, 1,000 bore the meaning of 1,200, it could be shown

55 Birch v. Depeyster, 1 Stark. 210. (By his contract a ship captain was to receive certain pay instead of "privilege and primage." Evidence was held admissible of a conversation before the writing was made relating to the right of the captain to use the cabin for transporting goods. This evidence explained the meaning otherwise doubtful of the quoted words); Macdonald v. Longbottom, 1 El. & El. 977 (prior conversation between the parties was admitted to prove that the words "your wool" included not only wool from the plaintiff's own sheep, but also wool that the plaintiff had contracted for); Mumford Gething, 7 C. B. (N. S.) 305. (The word "ground" was proved to mean the midland district in order to determine whether the contract in question was in restraint of trade); Bank of New Zealand v. Simpson, [1900] A. C. 182. (oral preliminary negotiations admitted to show the meaning of "total cost"); Thorington v. Smith, 8 Wall. 1, 19 L. Ed. 361. ("Dollars" was proved to mean confederate money by proof of contemporaneous agreement); Kelly v. Fejervary, 111 Ia. 693, 83 N. W. 791 (negotiations were

V.

admitted to prove whether "liquidated damages" provided for were in reality a penalty); Blair v. Corby, 37 Mo. 313 (the meaning to the parties of "hard-pan" was shown by oral agreement not to include hardened earth); Almgren v. Dutilh, 5 N. Y. 28 (conversation was permitted to prove that "necessary" in a contract did not mean indispensable). See also Merriam v. United States, 107 U. S. 437, 27 L. Ed. 531, 2 S. Ct. 536; English v. Shelby, 116 Ark. 212, 172 S. W. 817; Millikin v. Starr, 79 Ill. App. 443, 448; Stoops v. Smith, 100 Mass. 63, 97 Am. Dec. 76, 1 Am. Rep. 85; Sweat v. Shumway, 102 Mass. 365, 3 Am. Rep. 471; Smith v. Vose & Sons Piano Co., 194 Mass. 193, 200, 80 N. E. 527, 9 L. R. A. (N. S.) 966, 120 Am. St. Rep. 539; Putnam-Hooker Co. v. Hewins, 204 Mass. 426, 430, 90 N. E. 983; Tufts v. Greenewald, 66 Miss. 360, 6 So. 156; Field v. Munson, 47 N. Y. 221; Quarry v. Clements, 38 Ohio St. 587, 43 Am. Rep. 442; McMillin v. Titus, 222 Pa. 500, 503, 72 Atl. 240; Hart v. Hammett, 18 Vt. 127; Ganson V. Madigan, 15 Wis. 144, 82 Am. Dec. 659; Beason v. Kurz, 66 Wis. 448, 29 N. W. 230.

to explain a written contract which did not name the kind of animals to which it related that the oral negotiation of the parties related to rabbits, though it could not be shown, had they been dealing in regard to horses, that they specially agreed that as between themselves 1,000 should bear the meaning of 1,200. The importance of facts existing at the time when the written contract was entered into, as an aid to the interpretation of the writing, will generally be dependent on the knowledge by the parties of these facts. This may be shown by their previous negotiations; 56 though if the facts are of general notoriety the parties' knowledge of them will be presumed.57 If, then, facts known to the parties to the agreement may be shown, it may be urged that not only are the negotiations and agreements between the parties prior to the formation of the written contract in question facts like any others but that their intentions orally manifested as to the meaning of their contract are also facts and may therefore be shown. It is true that even such intentions are facts within

5 In Smith v. Vose & Sons Piano Co., 194 Mass. 193, 200, 80 N. E. 527, 9 L. R. A. (N. S.) 966, 120 Am. St. Rep. 539, the court said: "When the parties by the language they have employed leave their meaning obscure and uncertain when applied to the subjectmatter, then the expressions and general tenor of speech used in the previous negotiations, even if coming as they usually must from one or the other of the parties themselves, are admissible to show the conditions existing at the time the transaction was under consideration."

In Laclede Construction Co. v. Moss Tie Co., 185 Mo. 25, 84 S. W. 76, the court said: "Now, the words, 'the ties you may need' during 1899, or 'ties as needed,' while plain words, are susceptible of various meanings according as the context in which they appear may throw light upon them or the subject-matter with respect to which they are used. We instinctively ask, 'needed' for what? Merely for

repairs of the railway then constructed, or 'needed' for new extensions which were made known to defendant when it contracted to furnish them, or 'needed' in the sense of all ties to the number of one million that the plaintiff might elect to purchase for general commercial purposes? We think clearly it was competent to show the circumstances in which the contract was made and the declaration of plaintiff's president as to the purpose for which he would need them.

In Ward's Adm'r v. Preferred Accident Ins. Co., 80 Vt. 321, 67 Atl. 821, 822, the court said: "In the construction of contracts, the circumstances in which the parties contract may be looked at, and their common knowledge and understanding is sometimes, and is here, such a circumstance."

57 Anse La Butte Oil, etc., Co. v. Babb, 122 La. 415, 425, 47 So. 745; Woodruff v. Woodruff, 52 N. Y. 53; McMillin v. Titus, 222 Pa. 500, 503, 72 Atl. 240.

the natural meaning of that word, but the law distinguishes such facts from other facts surrounding the transactions. Their value from the standpoint of logical relevancy is merely to indicate by the oral statements of the parties themselves the terms of the contract they intended to make when they entered into the written contract. It is a consequence of the parol evidence rule that such intentions are ineffectual. The writing merges the prior oral agreements, 58 and evidence of them is

inadmissible subject to three exceptions (1) If reformation or rescission of the writing is in question. (2) If the words of the writing will express equally well the intention shown by the oral negotiations, and another intention. The negotiations. may then be used to show the actual intention of the parties not to subject them to a contract not expressed in the writing, but to show that the words of the writing bear a particular meaning.59 (3) Where the writing is not a complete integration of the parties' agreement, and the oral agreement is intended to retain an independent collateral existence. The limits of this principle are hereafter considered.

§ 631. Parol evidence rule.

The interpretation or construction of writings cannot be fully discussed without reference to the parol evidence rule. That rule, in spite of its name, is not only not a rule of evidence, as has been abundantly shown by Thayer and Wigmore, but is not a rule of interpretation or of construction. It is a rule of substantive law which, when applicable, defines the limits of a contract. It fixes the subject-matter for interpretation, though not itself a rule of interpretation.60 Except in suits for the rescission or reformation of contracts, or where a suit for specific performance is resisted on the ground of mistake, the rule is as fully applicable to suits in equity as to actions at law,61

820, 67 L. R. A. 756, 106 Am. St. Rep. 989.

59 See supra, § 613.

Goldenberg v. Tagliano, 218 Mass. 357, 359, 105 N. E. 883; Glackin v. Bennett, 226 Mass. 316, 115 N. E. 490. A contract, said Pollock, C. B., in Nichol v. Godts, 10 Exch. 191, 194, "must be read according to what is written by the parties, for it is a wellknown principle of law, that a written contract cannot be altered by parol. If A. and B. make a contract in writing, evidence is not admissible to show that A. meant something different from what is stated in the contract itself, and that B. at the time assented to it.

If that sort of evidence were admitted, every written document would be at the mercy of witnesses who might be called to swear anything." See also Bank of Australasia v. Palmer, [1897] A. C. 540, 545.

61 Martin v. Pycroft, 2 DeG. M. & G. 785, 795; Sawyer v. Hovey, 3 Allen, 331, 333, 81 Am. Dec. 659; Ferry v. Stephens, 66 N. Y. 321, 324. In Vermont Marble Co. v. Eastman, 91 Vt. 425, 101 Atl. 151, 161, the court said: "This action [a bill in equity to settle boundaries] does not involve the reformation of any instrument of conveyance given by Mead; and it can serve no good purpose to conjec

Most commonly the rule is invoked when suit is brought upon the written contract in order to preclude an attack upon the terms of the writing as the complete statement of the contract, but the rule also denies validity to a subsidiary agreement within its scope if sued on as a separate contract, although except for the parol evidence rule, the agreement fulfils all the requisites of a valid contract.

62

In a discussion of the parol evidence rule a distinction should be observed between

1. Contracts under seal;

2. Contracts required by law to be in writing;

3. Contracts which are in fact in writing but not under seal, or required by law to be written.

It was a rule long established of the English law and accepted in the United States that a contract under seal could not subsequently be varied either by oral agreement or by written unsealed agreement. This rule persisted until recently, and to some degree still persists in some jurisdictions.63 Moreover, a rule, relics of which still remain, estopped the maker of a deed to deny the truth of its recitals.64 In many jurisdictions even to-day, a conveyance must be under seal, and so must releases or promises made without consideration. The effect of parol promises upon such instruments may be governed by the circumstance that they are under seal, not merely in writing.

ture why, in making the description of the land in the bonds and in the deeds given pursuant to the bonds, the survey and the plan made by Brown were not followed. The departure therefore in each instance is so material and so marked as to indicate a change of purpose. The descriptions adopted show unusual care and precision in their framing. Whatever may have been previously done or said by the parties to the transactions, relative to that survey and plan, such acts and declarations were merged in the written instruments subsequently executed on the one hand and accepted on the other; and neither the survey nor the plan can have any force in this

case, beyond what bearing it may have, if any, by reason of its subsequent use by the parties in connection with the asserted recognition of, or acquiescence in, the line now claimed by defendants. Extrinsic evidence is not admissible to show that, by mistake, one tract of land instead of another was inserted in either of those deeds, thereby really establishing a different contract. McDuffie v. Magoon, 26 Vt. 518; Pitts v. Brown, 49 Vt. 86, 24 Am. Rep. 114."

62 See, e. g., O'Malley v. Grady, 222 Mass. 202, 109 N. E. 829, and cases cited infra, § 643.

63 See infra, § 1849.

64 See supra, § 115a, infra, § 647.