to cause misapprehension. Confusion seems to have arisen from the broad application of the term of parol evidence rule to several related but distinct topics, especially to the doctrine of estoppel by deed.74 It was a doctrine of the common law that facts recited in a deed could not be contradicted by the parties to the instrument; though even in jurisdictions where seals still retain much of their early significance, this rule has been considerably broken in upon.75 But no such broad rule was ever applied to written unsealed contracts.76 It was part of the doctrine of estoppel by deed that, though the facts recited in the deed could not be contradicted by the parties, they might be contradicted by third persons, "Who, if it were otherwise, might be prejudiced by things recited in the writings, contrary to the truth, through the ignorance, carelessness, or fraud of the parties; and who, therefore, ought not to be precluded from proving the truth, however contradictory to the written statements of others." " At the present day, as recited facts in unsealed writings may generally be shown to be inaccurately stated even between the parties to the writing, there can be no question of the right of third persons to prove the inaccuracy. It is also true in regard to any writing sealed or unsealed that if a transaction is in fraud of the rights of third persons, it may be shown by parol that the written contract is a scheme, or part of a scheme, to defraud them,78 though in S. W. 433; Libby v. Mount Monadnock, etc., Co., 67 N. H. 587, 32 Atl. 772; First Nat. Bank of Plainfield v. Dunn, 55 N. J. L. 404, 27 Atl. 908; Lee v. Adsit, 37 N. Y. 78; Lowell Mfg. Co. v. Safeguard Ins. Co., 88 N. Y. 591; Hankinson v. Vantine, 152 N. Y. 20, 46 N. E. 292; Alexander v. Righter, 240 Pa. 22, 26, 87 Atl. 427; Nashville Interurban Ry. v. Gregory, 137 Tenn. 422, 193 S. W. 1053; Ransom v. Wickstrom, 84 Wash. 419, 146 Pac. 1041, L. R. A. 1916 A. 588. 74 As to this doctrine see Bigelow on Estoppel (6th ed.), pp. 364 et seq. 75 See for example supra, § 115a. As to the limits of estoppel by contract, see Bigelow on Estoppel (6th ed.), 695 et seq. 77 1 Greenleaf, Evidence, § 279. See also King v. Cheadle, 3 B. & Adol. 833; Harts v. Emery, 184 Ill. 560, 56 N. E. 865; Hubbard v. Harrison, 38 Ind. 323; Overseers of New Berlin v. Overseers of Norwich, 10 Johns. 229; Bruce v. Roper Lumber Co., 87 Va. 381, 13 S. E. 153, 24 Am. St. Rep. 657. 78 Burns v. Thompson, 91 Ind. 146; Livingston v. Stevens, 122 Ia. 62, 94 N. W. 925; Highstone v. Burdette, 61 Mich. 54, 27 N. W. 852; National Car, etc., Builder v. Cyclone, etc., Co., 49 Minn. 125, 51 N. W. 657. Indeed much of the law of fraudulent conveyances is based on this principle. A conveyance absolute in terms and indefeasible between the parties, whether made orally, by unsealed writing or an action between the parties the writing might be taken at its face value. Furthermore, it does not follow from the parol evidence rule "that a written contract between A and B, which is conclusive as to them, must be of necessity so, as to the proof of any rights or claims of A against C merely because they grow out of the same business." 79 The effect of the parol evidence rule must also be distinguished from the effect of the requirements of the Statute of Frauds. As has been seen,80 a memorandum under the statute is not necessarily a written contract, and it may be the oral agreement, not the written memorandum making the contract enforceable, which constitutes the contract. So far as concerns third persons, there is a contract between the parties when the oral agreement is made.81 But where the issue in dispute, even between third parties, is what are the obligations of A and B to one another, and those obligations are stated in a written contract, the parol evidence rule is applicable. The written contract represents the truth and the whole truth of the contractual obligations of A and B in whatever way and between whatever parties an inquiry as to such obligations may become important. To admit parol evidence to the contrary which would not be admitted as between the parties, except for the purpose of showing either fraud against the third person, or some invalidating facts which would be available to the parties themselves, is to permit facts to be shown which have no relevancy to the issue of what is the contract between A and B.82 There can be no doubt that if a third person claims in the right of a party to a written contract, by deed, may be attacked by creditors if in fraud of their rights. 79 Evans v. Wells, 22 Wend. 324, 345; Johnson v. Portword, 89 Tex. 235, 34 S. W. 596, 787. 80 Supra, § 567. 81 See supra, § 530. 82 In Walker v. State, 117 Ala. 42, 23 So. 149, criminal proceedings were brought against the defendant, an agent of the Singer Mfg. Co., for embezzling money of the Company. The defendant set up that money which he had retained was due him for com missions and otherwise. The court said, at page 52: "It is obvious, however, that it was not proper for the State to prove by its witness-an agent of the Singer Co.-how much commissions the defendant was entitled to receive on collections. The written contracts regulated that, and were before the court, and there was no question of motive or intent, touching the issues involved in the prosecution, which that witness's views of what the allowable commissions were, would shed any light upon." he is subject to the parol evidence rule.83 But the application of the rule to third persons is not confined to such cases. Though most of the decisions on the subject, however broad the language used, are correctly decided since they merely involved either the contradiction of a recited fact, or the proof of fraud against the rights of a third person, a few decisions cannot thus be explained. In some recent cases 84 against joint tort feasors, the defence has been set up that a release had been given to the other tort feasor. Though perhaps the cases might have been well decided on the ground that the so-called releases when construed as a whole were merely covenants not to sue, the courts did not rest their conclusion on such a construction of the writing taken by itself, but admitted parol evidence of the negotiations between the parties to the release (though conceding that the evidence would not have been admissible between the parties themselves) on the ground that as against a third party the parol evidence rule had no application. The error of such decisions is plain if we assume that the defendant instead of being a joint tort feasor was a surety jointly bound on a contract, the principal debtor of which was released or given time a change which would make no difference in the application of the argument of the court. In the case supposed, if judgment were given against the surety because a construction was given to the release of the principal, which the writing itself would not bear, the surety would thereafter seek to enforce by subrogation a claim against the principal debtor. He would, however, fail because the right to which he sought subrogation did not exist. As between the creditor and the principal debtor, the release would unquestionably be binding according to the terms of the writing; and as the creditor would have no right against the principal debtor, the surety could be subrogated to nothing. "In Libby v. Mount Monadnock, etc., Co., 67 N. H. 587, 32 Atl. 772, the plaintiff was a garnishee creditor, and was held subject to the terms of a written contract between the defendant and the garnisheed party as fully as if the litigation had been between the parties of the contract. Union Mach inery &c. Co. v. Darnell, 89 Wash. 226, 154 Pac. 183. 84 O'Shea v. New York, etc., R. Co., 105 Fed. 559, 44 C. C. A. 601; Johnson v. Von Scholley, 218 Mass. 454, 106 N. E. 17; McKim v. Metropolitan St. Ry. Co. (Mo. App.), 196 S. W. 433; Nashville Interurban Ry. v. Gregory, 137 Tenn. 422, 193 S. W. 1053. Collateral agreements may be added to written contracts by usage. 652 Illustrations of collateral agreements annexed to written contracts by usage.. 653 Implications of fact or law in a writing may be contradicted more extensively by usage than by parol agreements... 654 How far law may be changed by custom... 655 A usage which the parties have indicated an intention not to adopt is ineffective... 656 What is necessary to make a party to a contract chargeable with usage.. 661 662 § 648. Effect of custom and usage. Usage or custom may be important in three different aspects: (1) To aid in the interpretation of the meaning of the express language of a contract; (2) To annex terms to the contract, and thereby to contradict or vary implications which, otherwise, would be drawn from the written or oral expression of the parties; and (3) To create new rules of law. In the first aspect usage becomes important as a means of interpretation. In the second aspect two questions may be involved, first, does the usage show that the parties have agreed on a collateral term of their contract and, second, if so, does the parol evidence rule prevent their agreement from taking effect? In the third aspect, the usage has ripened into customary law. So far as the first use of evidence of usage is concerned, it may be said broadly, that any usage with knowledge of which both parties are chargeable is always admissible to show the meaning of the language employed. Usage is an ordinary means of proving the local or technical meaning of language, and even language which is normally clear and unambiguous may be shown by usage to bear, under the circumstances of the case, a meaning different from its normal sense.1 § 649. Distinction between custom and usage. The terms, custom and usage, are commonly used interchangeably, though there is a recognized distinction in the meaning of the two words. Custom is such a usage as has by long and uniform practice become the law of the matter to which it relates.2 Usage derives its efficacy from the assent thereto of parties to the transaction; custom derives its efficacy from its adoption into the law, and when once established is binding irrespective of any manifestation of assent by parties concerned. Usage is, therefore, of importance only in consensual agreements since it is the assent of the parties which gives it its force. Custom, on the other hand, may be of importance in any department of the law. The custom of gavelkind or of borough English, under which land of a deceased person did not pass to his eldest son as at common law, did not depend for its validity on the assent of the eldest son to be wholly or partly disinherited. The importance of usage except for the purpose of establishing the meaning of words, is comparatively modern. The early law did not give effect to unexpressed implications of fact. The earliest decision of importance recognizing the validity of usage in this respect was decided in the latter half of the eighteenth century by Lord Mansfield. Custom, on the other hand, has from early times been recognized as a source of law, and the customs of different communities in England have been given effect by the courts. In the United States there is less law based on special custom than in England, and this method of developing and changing the law is of decreasing importance. Statutes take its place. ..' See supra, § 609, and infra, § 650. "Strictly speaking custom is that length of usage which has become law." Walls v. Bailey, 49 N. Y. 464, 10 Am. Rep. 407; Eames v. H. B. Claflin Co., 239 Fed. Rep. 631, 152 C. C. A. 465; American Lead Pencil Co. v. Nashville, etc., R. Co., 124 Tenn. 57, 134 S. W. 613, 32 L. R. A. (N. S.) 323. 3 Wigglesworth v. Dallison, 1 Doug. 201. |