will put itself in the position of the parties.50 If the normal standard were the test, the rule would properly be as it is still not infrequently stated that only where the language is ambiguous on the face of the writing, can the circumstances under which the contract was made be admitted.51

In regard to some of these statements, it may be guessed that the court in denying the admissibility of evidence of surrounding circumstances to vary the meaning of an apparently clear writing, meant no more than that in the particular case the evidence offered would not persuade any reasonable man that the writing meant anything other than the normal meaning of its words would indicate and that therefore it was useless to hear the evidence. On the other hand, in many cases where evidence of surrounding circumstances has been admitted, the language of the contract in question, if given its normal meaning, was in fact ambiguous, so that no necessity arose for the court to decide whether admission of such evidence is dependent upon ambiguity. The correct principle has been well summarized in a recent decision.52 "All the attendant facts constituting the setting of a contract are admissible, so long as

itself, the answer must be found from the terms of the instrument alone." Callender, McAuslan & Troup Co. v. Flint, 187 Mass. 104, 107, 72 N. E. 345; Strong v. Carver Cotton Gin Co., 197 Mass. 53, 59, 83 N. E. 328; Hodgens v. Sullivan, 209 Mass. 533, 95 N. E. 969; Waldstein v. Dooskin, 220 Mass. 232, 107 N. E. 927.

In Zohrlaut v. Mengelberg, 124 N. W. 247, 252, 144 Wis. 564, the court said: "In answer to the contention of counsel that testimony of the circumstances surrounding and leading up to the making of a written contract are always admissible for the purpose of putting the court in the position of the parties at the time the contract was made, this court has said: 'Not So. Where there is no ambiguity in the contract, either in its literal sense, or when it is applied to the subject thereof, it must speak for itself, entirely unaided by extrinsic matters. Where such ambiguity does exist, then evidence of the circumstances under which the contract was made is proper to enable the court, in the light thereof, to read the instrument in the sense the parties intended, if that can

be done without violence to the rules of language or of law.' Johnson v. Pugh, 110 Wis. 167, 170, 85 N. W. 641, 642. Parties cannot use terms with a fixed and certain meaning, and then disclaim such meaning." See also New Brantner Ditch Co. v. Kramer, 57 Col. 218, 141 Pac. 498; Jacobs v. Parodi, 50 Fla. 541, 555, 39 So. 833; Adams v. Gordon, 265 Ill. 87, 106 N. E. 517; Indiana Natural Gas Co. v. Stewart, 45 Ind. App. 554, 559, 90 N. E. 384; Chanute Brick Co. v. Gas Belt Fuel Co., 82 Kans. 752, 109 Pac. 398; Crawford v. Elliott, 78 Mo. 497, 500; Hodgens v. Sullivan, 209 Mass. 533, 95 N. E. 969; United Boxboard, etc., Co. v. McEwan Bros. Co. (N. J. Eq.), 76 Atl. 550, 553; Neal v. Camden Ferry Co., 166 N. C. 563, 82 S. E. 878; Mosier v. Parry, 60 Oh. St. 388, 54 N. E. 364; Burton v. Forest Oil Co., 204 Pa. 349, 355, 54 Atl. 266; Daly v. Old, 35 Utah, 74, 99 Pac. 460; Burt v. Stringfellow, 45 Utah, 207, 143 Pac. 234; McMillan v. Holley, 145 Wis. 617, 627, 130 N. W. 455.

52 Eustis Mining Co. v. Beer, 239 Fed. 976, 985, by Learned Hand, J.

they are helpful; the extent of their assistance depends upon the different meanings which the language itself will let in. Hence we may say, truly perhaps, that, if the language is not ambiguous, no evidence is admissible, meaning no more than that it could not control the sense, if we did let it in; indeed, it might 'contradict' the contract-that is, the actual words should be remembered to have a higher probative value, when explicit, than can safely be drawn by inference from surroundings. Yet, as all language will bear some different meanings, some evidence is always admissible; the line of exclusion depends on how far the words will stretch, and how alien is the intent they are asked to include." Whatever may be the propriety of admitting evidence of extrinsic facts where the meaning of the instrument is apparently clear, there is no question that such evidence is admissible in every jurisdiction where there is no clear apparent meaning. 53 It must be kept in mind, however, that the only purpose for which such evidence is ever admissible in an action on the contract, is to interpret the writing. So far as the evidence tends to show not the meaning of the writing but an intention wholly unexpressed in the writing, it is irrelevant.54

§ 630. Previous negotiations.

The only kind of evidence which may be offered under a rule admitting proof of surrounding circumstances which is likely to cause difficulty, is that relating to previous negotiations between the parties, especially if these negotiations lead to the formation of the subsequent written contract in question. There is an apparent inconsistency in asserting that the interpretation of the writing depends on the meaning of the language contained in it according to a local standard, and yet admitting evidence which may tend to show an intent of the parties at variance with the natural meaning of the words of the writing at the time and place when the writing was made. Such negotiations, however, may be logically relevant for two purposes, the second of which is legally permissible, though the first is not: (1) to prove an actual intent of the 53 See cases in this section pas- 38 Ohio St. 587, 43 Am. Rep. 442. sim, also Quarry Co. v. Clements, 54 See supra, § 610.

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.