Opinion of the Court, per RAPALLO, J.

G. W. Soren for the appellant. The words of the contract imposed upon plaintiffs an obligation to complete the vessel in accordance with the contract for construction. (Wilson v. Turner, 7 Bosw. Law R., 1st series, p. 517; U. M. Co. v. Lounsbury, 42 Barb., 127.) If the terms of the letter are ambiguous, then the referee should have received proof to show how it was understood by the parties. (Beach v. Raritan R. R. Co., 37 N. Y., 457.) The letter alone was not a contract, and will not sustain a verdict. (Hough v. Brown, 19 N. Y., 111,) Even if considered as a complete contract, yet parol evidence was clearly admissible to show it was not so intended by the parties. (Greenham v. Gray, 3 Irish Jurist, N. S., 9; Wallis v. Littell, 11 Com. Bench, N. S., 369; Pym v. Campbell, 6 Ellis & Blackburn; Phila., etc., R. v. Howard, 13 How. U. S. Rep., 308; Beach v. R. B. R. R. Co., 37 N. Y., 463; Stuckley v. Bailey, 1 H. & C., 405; Lockett v. Micklin, 2 Ex. R., 100.) To make the acceptance of a proposal binding, it must be either communicated to the party, or some overt act manifesting an intent to communicate it, must be shown. (Trevor v. Wood, 36 N. Y., 309; Bently v. Columbia Ins. Co., 17 id., 423; Mactier v. Frith, 6 Wend., 103.)

Henry Nicoll for the respondents.

RAPALLO, J. We are of opinion that the evidence was sufficient to sustain the finding of the referee, that the letter of Sept. 11, 1866, constituted the contract between the parties. Although the resolution of the board of directors of the defendant, ratifying the purchase of the steamship by Mr. Webb, on the terms and conditions set forth in the letter, may not have been communicated to the plaintiffs, yet, after the receipt of the letter by Mr. Webb, the defendant took possession of the vessel without any dissent from the terms stated in the letter. This constituted an acceptance of and acquiescence in the terms expressed in the letter, and the plaintiffs had the right to rely upon it as an assent to those

Opinion of the Court, per RAPALLO, J.

terms. The resolution was competent evidence of the authority of Mr. Webb.

The clause of the letter which states that the defendant is to have all the benefit which the contracts with the engine makers and the builder bestow, in regard to work remaining to be done about the engines and hull, is obscure and ambiguous. Facts existing at the time of the making of the contract may, therefore, be properly considered, for the purpose of interpreting this language; but no evidence of the language employed by the parties in making the contract can be resorted to, except that which is furnished by the writing itself. (1 Green. Ev., § 277.) The referee, therefore, properly excluded evidence of verbal agreements preceding the writing of the letter.

The construction of the clause claimed by the defendant is that it was an undertaking on the part of the plaintiffs that all work on the vessel called for by the contracts of the engine makers and builder, and undone at the time of the sale, should be completed. In no other manner, it is contended, could the defendant obtain all the benefit which the contracts bestowed, in regard to such work. On the other hand the plaintiffs claim that the clause imports no obligation on their part to answer for the default of the engine makers and builder, but entitled the defendant only to the benefit of the contracts so far as they remained unperformed, and that the plaintiffs did not assume any liability beyond that of paying what remained unpaid of the contract price of the work. The referee adopted the construction claimed by the plaintiffs. After a careful examination of the whole letter, in view of the facts existing and known to the parties at the time, we think that the construction adopted by the referee was correct, and that the benefit intended to be conferred was the benefit of the contracts, and not of the work therein stipulated to be done.

The judgment should, therefore, be affirmed, with costs. All concur.

Judgment affirmed.

Statement of case.

CHARLES B. BENEDICT et al., Appellants, v. GILES COWDEN, Respondent.

A memorandum upon a note made cotemporaneously with, and delivered with it, and intended as a part of the contract, is a substantive part of the note and qualifies it the same as if inserted in the body of the instrument, and with it constitutes a single contract. (Saunders v. Bacon, 8 J. R., 485, and 7appan v. Ely, 15 Wend., 362, distinguished and explained.) Where such a memorandum is an essential part of the note, modifying the obligation the severence of it from the note without the consent of the maker is a material alteration, and destroys the note even in the hands of an innocent indorsee for value.

(Argued April 24, 1872; decided May 21, 1872.)

APPEAL from judgment of the General Term of the Supreme Court in the fourth judicial department, affirming a judgment in favor of defendant entered upon a verdict.

The action was brought upon a promissory note; defence, a material alteration of the note.

Defendant was applied to to become agent for "George N. Palmer's Rake and Tedder." He consented, and it was agreed that he should sign a note for $200, with a contract in it that the note should be paid out of the profits of the machines when sold. A note was presented for $200 and interest, payable to George N. Palmer, or bearer, one year from date. At the bottom of the note were these words: "The above note to be paid from the profits of machines when sold." There was not room below this to sign; defendant was advised that it would be the same if he signed above as below this memorandum; he thereupon signed above it, and delivered the note with the memorandum thereon. Subsequently this memorandum, without the knowledge or consent of defendant, was cut off, and the note sold to plaintiffs for value, without notice. The judge submitted to the jury the question whether the words at the bottom were designed by the parties as a part of the contract. They found for the defendant.

¿? rin,

Statement of case.

L. W. Thayer for the appellants. Whether the memorandum at the foot of the note constituted a part of the note itself was purely a question of law, and should have been decided by the court. (2 Par. on Contracts, 4.) The memorandum at the bottom of the note was a distinct and separate writing, and constituted no part of the note. (Dow v. Tuttle, 4 Mass., 414; Shedd v. Pierce, 17 id., 627; Haywood v. Perrin, 10 Piet., 228; Masters v. Baretts, 8 C. B., 433; Sunder- 0 tin v. Judge, 2 H. Bl., 509; Prince v. Mitchell, 4 Camp., 200; Williams v. Warring, 10 Barn. & Cress., 2; Ex'r v. Russell, 4 M. & S., 505; Knowles v. Hill, 25 Ill., 288; Carr v. Welch, 46 Ill., 88; Elliott v. Livings, 54 Ill.; A. M. L. Reg. V., 2, No. 11; Odiorne v. Sargent, 6 N. H. 401; Sanders v. Bacon, 8 Johns., 379; Tappan v. Ely, 15 W., 362; 2 Parsons N. & B., 146; Barnard v. Cushing, 4 Met., 280; Bk. of America v. Woodworth, 19 John., 391; 18 id., 321; Nazro v. Fuller, 24 W., 374; Wheelock v. Freeman, 13 Pick., 165; Haywood v. Perrin, 10 id., 228; Johnson v. Heagan, 23 Me., 329; Fletcher v. Blodgett, 16 Vt., 26; Henry v. Coleman, 5 id., 402; Leed v. Lancashire, 2 Camp., 127.) When one or two innocent persons must suffer by the wrongful act of a third, that one must suffer who put it in the power of the third to commit the fraud. (Putnam v. Sullivan, 4 Tyng., 45; Van Dusen v. Howe, 21 N. Y., 531; Thurston v. McKown, 6 Tyng., 428.) The memorandum being repugnant to the note, could not affect its express provisions, whether a part of it or not. (2 Parsons on Cont., 26; Shep. Touch., 88; Cother v. Merrck, Hardw., 94; Doe v. Briggs, 2 Taunt., 109; Cope v. Cope, 15 Simcoe, 118; Sukley v. Buller, Hob., 168, 172, 173; Jackson v. Ireland, 3 W., 99; Wells v. Wright, 2 Mod., 161; Wells v. Trequison, 2 Salk., 463; Stockton v. Turner, 6 J. J. Marsh, 192.) The colloquium, or verbal negotiations leading to a contract, which was consummated by reducing to writing, cannot be proved. (1 Greenleaf Ev., 316, 321; Averill v. Taylor, 4 Seld., 44; Blossom v. Griffin, 13 N. Y., 569.)

Statement of case.

B. Healy for the respondent. The memorandum was as much a part of the contract as if written in the body of the instrument above the defendant's signature. (Wheelock v. Freeman, 13 Pick., 165; Heywood v. Perrin, 10 id., 228; Johnson v. Heagan, 10 Shep., 329; Fletcher v. Blodgett, 16 Vt. R., 26: Reed v. Drake, 7 Wend., 345; Wait v. Pomeroy, to be reported in 20 Mich. Rep., 425, and cited in Albany Law Journal, vol. 4, 267; State v. Stratton, 1 Am. R., 282, and 27 Iowa, 420; Bank of America v. Woodworth, 19 John., 392, 421; Dewey v. Reed, 40 Barb., 16; Nazro v. Fuller, 24 Wend., 374; Platt v. Smith, 14 John., 368; Tillou v. The Clinton and Essex Mutual Ins. Co., 7 Barb., 564; Springfield Bank v. Merrick, 14 Mass. R., 322; Jones v. Fales, 4 id., 245; Coolidge v. Inglee, 13 id., 32; Makepeace v. Harvard College, 10 Pick., 298; Warrington v. Early, 2 Ellis & B., 763; Emerson v. Murray, 4 N. H., 171 ; 2 Parsons on Bills and Notes, 540, 545, 546; Burchfield v. Moore, 25 E. L. & Eq. R., 123; Reed v. Drake, 7 W., 345; Merritt v. Clason, 12 John., 102; Clason v. Bailey, 14 id., 484; Johnson v. Dodgson, 2 M. &. W., 653; Penniman v. Hartshorn, 13 Mass., 87; 2 Pars. on Cont., 3d ed., 287, and note.) The words at the bottom were a material part of the contract, and gave it a different legal effect from what it otherwise would have had. (Wheelock v. Freeman, 13 Pick., 165; Heywood v. Perrin, 10 id., 288; Fletcher v. Blodgett, 16 Vt. R., 26; Johnson v. Heagan, 10 Shep. [Me.] R., 329; State v. Stratton, 1 Am. R., 282; S. C., 27 Iowa, 420; Wait v. Pomeroy, 20 Michigan R., 425; Springfield Bank v. Merrick, 14 Mass., 322; Jones v. Fales, 4 id., 245; 2 Pars., B. & N., 545, 546, 580, 581, 582; Worden v. Dodge, 4 Denio, 159; De Forrest v. Frary, 6 Cow., 151; Cota v. Buck, 7 Met. [Mass.] R., 588; Cook v. Satterlee, 6 Cow., 108; Carlos v. Fancourt, 5 Term R., 482; Hill v. Halford, 2 Bos. & Pul., 413; Chitty on Bills, 10th Am. ed., 135, 137, 138; Alexander v. Thomas, 16 Ad. & Ell. [N. S.], 333; 1 Wait's Law and Prac., 494; 1 Pars. on B. & N., 37, 43, 48; Bruce v. Wescott, 3 Barb., 474; Scott v. Walker, Dudley, Ga., 243;