Kulenkamp v. Groff

• Decision Date: 19 October 1888
• Citation: 40 N.W. 57,71 Mich. 675
• Court: Michigan Supreme Court
• Parties: KULENKAMP v. GROFF.

40 N.W. 57

71 Mich. 675

KULENKAMP v. GROFF.

Supreme Court of Michigan

October 19, 1888

Appeal from circuit court, Washtenaw county; EDWARD D. KINNE, Judge.

Action by William Kulenkamp against John Groff and Joseph Lerg. Judgment for plaintiff, and defendant Groff appeals.

MORSE J.

The plaintiff brought suit in justice court upon the following promissory note:

"$116.00.

FREEDOM, March 30, 1886

"One year after date I promise to pay to Charles Kulenkamp, or bearer, the sum of one hundred and sixteen dollars, for value received, at the People's Bank, at Manchester, with use at seven per cent.

F. JOSEPH LERG.

"JOHN GROFF."

He obtained judgment. The defendant Groff thereupon appealed to the circuit court for the county of Washtenaw. Upon the trial in said circuit the defendant Groff gave evidence tending to establish the following facts: On the day the note was executed Charles Kulenkamp, a brother of the plaintiff, held an auction upon his farm for the sale of personal property. The plaintiff at this sale put up a span of horses of his own, and the defendant Groff assisted him in the sale by acting as a "by-bidder" to run the price up. One of these horses was bid in by defendant Lerg for the sum of $116. By the terms of the auction sale the purchaser of property, not paying therefore down in cash, was required to give his note, with a signer or surety thereto. The note in question was drawn up by the auctioneer's clerk. Lerg signed it, and left it with the clerk. He requested Groff to sign it with him, but Groff refused. Afterwards the plaintiff accosted Groff, and requested him to sign it. The defendant testifies as follows in regard to the conversation between himself and plaintiff: "Kulenkamp said I ought to sign the note. He was satisfied with Mr. Lerg for his pay, but he was rather slow, and thought if I would sign it he would get his pay out of it quicker than he would if I was not on, because he would not see me suffer, and I would not be holden on the note. He would see that I would not lose anything or have any trouble about it, and I told him it may be he would go to work and dispose of the note and then where would I be? He agreed to hold the note. He said it was a custom at auctions. If he did not get any signer, some others would want to give notes without signers. He agreed to hold the note, and see that I did not have any trouble. I refused, and after a while I said I would do it but I wanted a witness. Mr. Burtless stood off a little way, and we got him up, and told it before him." The defendant Lerg had no part in obtaining the signature of Groff to the note, and was not present when defendant signed it. Upon this showing, which was not rebutted, the circuit judge ruled that no defense had been made to the note, and instructed the jury to find accordingly. The plaintiff had verdict and judgment for the face of the note, and interest. The counsel for the defendant contend that this oral proof was admissible, and established a perfect defense to the note, if found to be true by the jury, to whom it should have been submitted. They claim that they have the right to show by parol, as between the original parties to the instrument, that it was never to be used or have any being as against Groff; and also that the testimony shows that the signature of Groff was procured by fraud upon the part of plaintiff, which fraud can be shown by parol. It is admitted that the general rule is that oral contemporaneous evidence is not admissible to vary, alter, or contradict the terms of a written instrument. But it is argued that to this rule there are several well-recognized exceptions, when the contest is between the immediate parties to a note. In such case parol evidence is admissible to impeach the consideration to show fraud or illegality in its inception, or that it was delivered conditionally for specific purpose only. See Farwell v. Ensign, 33 N.W. 734. The defendant's counsel insist that their claim, as before set forth, comes within the exceptions as to fraud and a delivery for a specified purpose.

As far as the claim of fraud is concerned it is not tenable. The signature of Groff was not procured by false pretenses, by the statement of any fact as existing which did not exist but upon false promises which have not been performed. It is no more nor less than the non-performance of an oral agreement made at the time the note was signed, and which oral agreement was totally at variance with the terms of the written contract as set forth in the note. This cannot be considered such a fraud as would nullify the note. If proof of this unperformed agreement not to hold Groff upon this note, in plain contradiction to its terms, can be admitted to destroy his liability upon it, then any unperformed oral agreement made at the time a written contract or note is executed may be admitted under the claim of fraud, to defeat the terms and purpose of the written agreement. The maker of a note, as well as the surety or indorser, may say, "It is true, I signed the note, but it was agreed I was not to pay it, and the collection of it is a fraud upon me." Written instruments, under the admission and use of such proof to defeat them, would be of but little value, and altogether uncertain, and of no more strength than oral agreements. See Ortmann v. Bank, 39 Mich. 518, and cases cited, It is insisted that the cases of Bank v. Seymour, 31 N.W. 140, and Farwell v. Ensign, 33 N.W. 736, are authority in favor of the claim of the defendant. In the latter case, Justice CHAMPLIN, in speaking of the general rule, notices the following exceptions: "As between the immediate parties parol evidence is admissible to impeach the consideration to show fraud or illegality in its inception, or that it was delivered conditionally, or for a specified purpose only." As before shown, there was no such fraud or illegality in the inception of this instrument as would vitiate it. Nor can it be claimed to have been delivered conditionally or for a "specified...