Auburn City Bank v. Leonard. transfer to him of $500 of the capital stock of said Auburn City Bank. (3.) Orders for $1357 of the bills or currency of said bank of Dalton, $700 of which was then in the hands of David B. Smith, and $657 was then in the said Auburn City Bank. All of these transfers were made nominally to said defendant individually, it being arranged between said defendant and said Sheldon that the name of the bank was not to appear in the transfers, and thereupon the said defendant executed and delivered to said Smith, the receipt or instrument set out in said complaint. The said receipt was drawn up by the defendant, and its terms understood by him and the other parties to the arrangement at the time of its execution. It was part of said arrangement that the consent of other parties interested in the Bank of Dalton should be procured to the transfer of said one tenth to the defendant, and such consent was afterwards procured, of which the defendant and plaintiff had notice. It was agreed at the time, between Sheldon and the defendant, that the stock of the Auburn City Bank should be transferred by the defendant to the plaintiff, and the same was soon afterwards transferred to it, and is now held by plaintiff. It was also agreed between them, that the plaintiff should pay $200 in cash, which Smith required before he would make the arrangement above specified; which amount was paid by the defendant for the bank. It was the design of all the parties to said arrangement, that when consummated it should be a full discharge of Smith from his indebtedness to said bank, although the notes and drafts were not and have not yet been delivered up to Smith, except the name of Torrey was erased upon the drafts; and the plaintiff has received nothing from said arrangement except the said scrip of $500 of its own stock. The defendant has not transferred nor offered to transfer the stock of said Bank of Dalton or the bills of said bank, received from Smith as aforesaid. Upon the facts the referee found, as matter of law: "1. It. is not competent to contradict the written instrument by Auburn City Bank v. Leonard. parol testimony, or to show by such testimony that the defendant did not intend to bind himself, individually, by the receipt or instrument executed as aforesaid by him. 2. The plaintiff is therefore entitled to receive of the defendant, the amount of T. W. Smith's indebtedness to the plaintiff, after deducting $500, the value of its own stock, and the said sum of $200, so paid by the defendant as above stated, leaving the sum of $7407.78, (seven thousand four hundred and seven dollars and seventy-eight cents,) for which sum the plaintiff is entitled to judgment." The defendant excepted to the findings of the referee. He also excepted to the report because the referee had declined to pass upon the material issues of the cause, viz: 1. Whether or not the said defendant did undertake, promise or agree to and with said Smith to pay and cancel the said indebtedness. 2. Whether the defendant received any consideration whatever for the undertaking, promise and agreement set forth in the complaint. 3. Whether or not the agreement then and there made, was between the plaintiff, represented by the defendant as cashier and said Sheldon as president thereof, of the one part, and said T. W. Smith and Torrey of the other part. 4. Whether or not each and every of the transfers made by Smith and Torrey or either of them upon said agreement, were made really to the said defendant for the use and benefit of the said plaintiff, and whether they were received as such by the defendant. 5. Whether or not the said plaintiff, the Auburn City Bank was, by the true agreement then and there made, to cancel and release the said indebtedness set forth in the complaint. 6. Whether or not the said paper writing or receipt was designed, executed or received by the parties thereto to set forth or embody the agreement which had been made; or whether it was intended or understood by any of the parties concerned, to represent, or to set forth the true agreement. 7. Whether or not the defendant throughout the whole of that transaction acted in good faith as agent and cashier of the said bank Auburn City Bank v. Leonard. and with a view to its interest alone, or whether he dealt on his own account individually. Cox & Avery for the appellant. The principal questions here presented are: 1st. Whether, when a third party (the bank) sues on an apparent undertaking of A. made in his. contract with B. the defendant is (as to the plaintiff) estopped by the apparent undertaking, and forbidden to show the truth in his defense? 2d. Whether the word "cancel," assume used in such an agreement, can be held to mean and pay?" 3d. When the parties to an agreement admit and agree as to what was intended, the plaintiff, being a third party, and a stranger to it, can insist upon and maintain against one of the parties a meaning and construction never intended by the parties? Or, whether, in such case, the defendant may contradict, impeach or overturn the apparent undertaking to cancel, or even to pay the plaintiff ? 4th. Whether, when in truth the defendant acted only as agent of the plaintiff in the business, yet assuming ostensibly to act in his own name, and that for the interest and protection of his principal, such principal can turn around and in the face of all equity, hold him to his apparent individual undertaking? We are to assume in this case, that the defendant Leonard acted in fact throughout, only as agent, and that he did not intend to bind himself at all to his principal; that this transaction was in fact between the bank, and Smith and Torrey; because the evidence tends strongly to establish it. Both parties so understood it at the time; and the referee has refused to decide these issues raised by the pleadings, holding the facts to be immaterial. It is not intended here to controvert the established rule that when parties commit an agreement to writing it shall be held to be the highest evidence of the agreement, and (as between them) to exclude all parol evidence to alter, vary or Auburn City Bank v. Leonard. contradict it; although this rule has many modifications and exceptions. But we claim, I. This rule obtains in reference to all questions arising between the parties to the agreement; but never prevents strangers from contradicting and even overthrowing the writing by parol evidence, when it is introduced against such strangers. (3 Stark. Ev. 1017, note 1, 1018, 1043, 1046 to 1053. 2 id. 635. 1 Greenl. Ev. § 279. Parsons' Merc. Law, 24, note 1. Addison's Contracts, p. 2, note 1. Id. 839, 840. Cowen & Hill's Notes, 1436, 1438, 1444-8. Gresley's Eq. Ev. 288. Whitbeck v. Whitbeck, 9 Cowen, 270. Rex v. Laindon, 8 Durnford & East, 382. Champlin v. Butler, 18 John. 169. Evans v. Wells, 22 Wend. 344, &c. overruling Stackpole v. Arnold, 11 Mass. 27. Mech. Bank v. Bank of Columbia, 5 Wheat. 327. Taylor v. Baldwin, 10 Barb. 587.) 1. And because estoppels must be mutual, even parties as against strangers, may vary, contradict, &c. their own writings. Even in case of deeds. (Rex v. Laindon, 8 Durnf. & East, 382. Rex v. Scammonden, 3 T. R. 474. Champlin v. Butler, 18 John. 169. Cowen & Hill's Notes, No. 965. Evans v. Wells, 22 Wend. 344.) Opinion by Verplanck, sustained by court of errors. (1 Phil. Ev. 387, 8th Eng. ed. Johnson v. Blackman, 11 Conn. 351, 353, 342, 357. Fuller v. Acker, 1 Hill, 475-6, and cases cited. Johns v. Church, 12 Pick. 559. Sparrow v. Kingman, 1 Comst. 250; overruling 2 Hill, 303; 17 Wend. 164. Gaunt v. Wainman, 3 Bing. N. C. 69. Coke Litt. 352, Estoppel. Jewell v. Harrington, 19 Wend. 471. Parsons' Merc. Law, 24, note 1 and cases. Right v. Bucknell, 2 Barn. & Ad. 278.) As to who are "strangers," we insist, every body except parties and privies. (Kingman v. Sparrow, 1 Comst. 250. Jewell v. Harrington, 19 Wend. 471. Barker v. Binninger, 14 N. Y. Rep. 271. The sheriff may disprove his own return. (Roberts v. Austin, 5 Whart. 313.) 2. And in case of less solemn and deliberate instruments like this receipt, a fortiori. (3 Stark. Ev. 1051.) The rule Auburn City Bank v. Leonard. as stated by Starkie is, "Next where one of the contending parties was not a party to the record or other instrument. **Here, however admissible, the writing is not conclusive. evidence, and parol evidence is admissible to prove the fact, in contradiction of the record." "It seems to be a general rule, that in all these cases parol evidence of the facts would still be admissible; in other words, the instrument could never conclude the party by estoppel, or otherwise." (Addison on Cont. 3, and cases. Skaife v. Jackson, 3 Barn. & Cr. 423. Lampson v. Coke, 5 Barn. & Ald. 611. Stackpole v. Arnold, 11 Mass. 27. Graves v. Key, 3 B. & Adol. 318. Berkley v. Watling, 7 Adol. & Ellis, 22. Farrar v. Hutchinson, 9 id. 641. Evans v. Wells, 22 Wend. 344. Scovill v. Griffith, 2 Kern. 509.) 3. And because Smith (to whom this receipt was given) knew at the time, that the whole was done by Leonard in fact as cashier and agent of the bank, Leonard might prove that fact in his own defense, even in an action by Smith against him on this receipt and contract. (2 Cowen & Hill's Notes, 1465 and cases. Brockway v. Allen, 17 Wend. 41. Randall v. Van Vechten, 19 John. 60. Chit. on Cont. 106 and cases. Champlin v. Butler, 18 John. 169. 5 Whart. 298, 313.) 4. With stronger reason may Leonard do this when perfidiously attacked by his principal. "Indeed it may be asserted as a general rule, that in all cases where an agent has contracted within the sphere of his agency, and the principal is not bound by the form of the contract at law, a court of equity will enforce it against the principal, upon principles ex æquo et bono." (Story's Agency, § 162 and cases.) And this, although the form of the contract may add the personal responsibility of the agent to the rights of the other party. (Id. p. 153, note. Evans v. Wells, 22 Wend. 345.) 5. Nor is it sound for the principal here to deny that this contract was within the sphere of Leonard's agency; they might deny it as against Smith; but it is a sufficient answer to the bank in this action, for Leonard to say that he did it |