Opinion of the Court.

tion that it is his written agreement, and if, in fact, he did sign the paper animo contrahendi, the terms contained in it were conclusive, and could not be varied by parol evidence, yet, if it were proved that in fact the paper was signed with the express intention that it should not be an agreement, the other party could not fix it as an agreement upon those so signing. "The distinction in point of law," he said, "is that evidence to vary the terms of an agreement in writing is not admissible, but evidence to show that there is not an agreement at all is admissible." p. 374. Crompton, J., said that he knew of no rule of law estopping parties from showing that a paper, purporting to be a signed agreement, was in fact signed on the terms that it should not be an agreement till money was paid or something else done. "The parties," he observed, "may not vary a written agreement, but they may show that they never came to an agreement at all, and that the signed paper was never intended to be the record of the terms of the agreement; for they never had agreeing minds. Evidence to show that does not vary an ageeement, and is admissible." pp. 374, 375. Lord Campbell, C. J.: "I agree. No addition to or variation from the terms of a written contract can be made by parol; but in this case the defence was that there never was any agreement entered into. Evidence to that effect was admissible; and the evidence given in this case was overwhelming. It was proved in the most satisfactory manner that before the paper was signed it was explained to the plaintiff that the defendants did not intend the paper to be an agreement till Abernethie had been consulted, and found to approve of the invention; and that the paper was signed before he was seen only because it was not convenient to the defendants to remain. The plaintiff assented to this, and received the writing on those terms. That being proved, there was no agreement." See also Lindley v. Lacey, 17 C. B. (N. S.) 578, 585; Clever v. Kirkman, 33 L. T. (N. S.) 672; Gudgen v. Besset, 6 El. & Bl. 986; 2 Taylor's Ev. (8th ed.) § 1135.

The case of Wilson v. Powers, above cited, was an action. brought by the payee against the sureties in a promissory note. The defence was that the sureties had been discharged

Opinion of the Court.

from liability by a written agreement between the payee and the principal, which was delivered to the principal, whereby the time of payment was extended. To this the plaintiff replied, and sustained his position by proof, that the writing signed by him, and which was relied upon as discharging the sureties, was delivered as a proposition merely, and upon the agreement that it should become binding only upon the assent of the sureties. The Supreme Judicial Court of Massachusetts said: "The manual delivery of an instrument may always be proved to have been on a condition which has not been fulfilled, in order to avoid its effect. This is not to show any modification or alteration of the written agreement, but that it never became operative, and that its obligation never commenced." 131 Mass. 539, 540.

In Benton v. Martin, 52 N. Y. 570, 574, the principle is thus stated: "Instruments not under seal may be delivered to the one to whom upon their face they are made payable, or who by their terms is entitled to some interest or benefit under them, upon conditions, the observance of which is essential to their validity. And the annexing of such conditions to the delivery is not an oral contradiction of the written obligation, though negotiable, as between the parties to it, or others having notice. It needs a delivery to make the obligation operative at all, and the effect of the delivery and the extent of the operation of the instrument may be limited by the conditions with which delivery is made. And so, also, as between the original parties and others having notice, the want of consideration may be shown." To the same effect are Juilliard v. Chaffee, 92 N. Y. 529, 535, and Reynolds v. Robinson, 110 N. Y. 654, in the latter of which it was said that the rule was now well established that "parol evidence is admissible to show that a written paper which, in form, is a complete contract, of which there had been a manual tradition, was, nevertheless, not to become a binding contract until the performance of some condition precedent resting in parol."

The same doctrine was announced in McFarland v. Sikes, 54 Connecticut, 250, 251, 252. That was an action upon a

Opinion of the Court.

note, which, the defendant alleged, had been executed and delivered to the plaintiff upon an agreement that it should be cancelled under certain named circumstances, and in the event he demanded, by a named day, that it be returned to him. The trial court having ruled that the facts relied upon by the defendant did not constitute a defence, the Supreme Court of Errors of Connecticut, reversing the judgment, said: "The error was in applying to the case the familiar and wellestablished rule that parol evidence is inadmissible to contradict or vary a written contract. A written contract must be in force as a binding obligation to make it subject to this rule. Such a contract cannot become a binding obligation until it has been delivered. Its delivery may be absolute or conditional. If the latter, then it does not become a binding obligation until the condition upon which its delivery depends has been fulfilled. If the payee of a note has it in his possession, that fact would be prima facie evidence that it had been delivered; but it would be only prima facie evidence. The fact could be shown to be otherwise and by parol evidence. Such parol evidence does not contradict the note or seek to vary its terms. It merely goes to the point of its nondelivery. The note in its terms is precisely what both the maker and the payee intended it to be. No one desires to vary its terms or to contradict them."

For the reasons stated, and without considering the case in other aspects, we are of opinion that it was error to exclude the evidence offered by the defendant tending to show that the writing sued on was not delivered to or received by Dulaney as the promissory note of the defendant, binding upon him as a present obligation, enforcible according to its terms, but was delivered to become an obligation of that character when, but not before, the defendant examined and, by working them, tested the mining properties purchased by the plaintiff, and elected to take the stipulated interest in them. According to the evidence so offered and excluded the writing in question never became, as between Burke and Dulaney, the absolute obligation of the former, but was delivered and accepted only as a memorandum of what Burke

Statement of the Case.

was to pay in the event of his electing to become interested in the property, and from the time he so elected, or could be deemed to have so elected, it was to take effect as his promissory note, payable according to its terms. His election, within a reasonable time, to take such interest, was made a condition precedent to his liability to pay the stipulated price. The minds of the parties never met upon any other basis, and a refusal to give effect to their oral agreement would make for them a contract which they did not choose to make for themselves.

The judgment is reversed and the cause is remanded, that a new trial may be ordered, and further proceedings had in conformity with this opinion.

CALIFORNIA v. SOUTHERN PACIFIC COMPANY.

ORIGINAL.

No. 9. Original. Submitted March 12, 1894. - Decided April 30, 1894.

Depositions placed in the custody of the clerk as taken in this case may be opened and filed, as well as map exhibits, and an order is made for the taking of further testimony, and for the receiving of such documents and maps as the city of Oakland may offer touching its title to the lands in dispute, and for the opening and filing of the same when returned to the clerk.

THE State of California filed its bill in this suit November 6, 1893, and its amended bill March 5, 1894, in which it contests the claims of ownership set up by the Southern Pacific Company to lands under water in the harbor of Oakland, opposite to San Francisco. On the 5th of March, 1894, the city of Oakland prayed leave to intervene in the suit, which motion was denied on the 12th of March, 1894, but leave was given it to file briefs, accompanied by documents and maps, illustrative of its alleged title.

On the same 12th day of March the Attorney General of the State made the following motion in the case:

Statement of the Case.

To the Honorable Chief Justice and the Associate Justices of the Supreme Court of the United States:

The plaintiff moves the court as follows:

First-That the court make an order directing that the depositions heretofore taken upon notice and the stipulation of the parties in the above entitled action, now in the custody of the clerk of this court, be opened and filed in this cause, and the same be printed as a part of the record whenever said record shall be printed; and that the map exhibits now in the custody of said clerk, referred to by the witnesses in their several depositions, be also filed by said clerk in said cause; and that said depositions and map exhibits may be used as evidence upon the hearing of said case, subject to the objections therein specified, in the same manner as if the same had been regularly taken and returned in pursuance of the order herein applied for, a printed copy of which testimony and of the map exhibits has been deposited with the clerk of this court, to which I respectfully refer.

Second-That this honorable court make an order designating one of its members, or some other person or officer, to take, in the State of California, such further testimony and evidence in the above entitled cause as may be offered by either of the parties hereto.

Third-That the person or officer designated to take such testimony as aforesaid, have the power and be instructed to return such testimony as may be offered by either of the parties to said action, and to receive and return such documents and maps illustrative of the alleged title of the city of Oakland as said city may deem proper to offer, pursuant to the order of this court made on March 12, 1894, and that said officer so appointed notify the respective parties and the city of Oakland of his appointment; and thereupon either of the parties shall be authorized, within ten days thereafter, or as soon as convenient, to proceed before said officer or person to take additional evidence, and said person or officer to receive and take such documents and maps as may be offered by said city of Oakland under the said order of March 12, 1894, as herein before specified; and that the taking and re