corporated in accordance with the laws of this state, we agree to turn over to said company our entire stock of general merchandise, fixtures, and unexpired fire insurance policies, also the coal sheds and scales.

"An invoice of said stock shall be taken by two persons, one chosen by the president of the Co-operative Company and one by me, and the prices allowed for said goods shall be on the basis of present wholesale cost, freight and cartage added.

"The fixtures and such goods as are old, or damaged, shall be appraised by two persons so chosen, and, in case they cannot agree, they to choose a third party.

"We agree to give a clear bill of sale to the Co-operative Company, at the time the valuation is determined, of the stock and fixtures.

"I am to receive in cash and subscription notes such portion of the proceeds of the shares of stock sold and settled for as shall equal the agreed values of the stock and fixtures.

"If there remains any unpaid amount at the time of delivery of said bill of sale, I agree to take a promissory note executed by the directors of said company for the balance of the agreed value of the property thus transferred. membership fees as collected by the company shall be used for organizing expenses, and shall cover all costs for same to said company.

The

"That no member of this company shall hold more than one thousand dollars ($1,000) in shares or have more than one vote.

"In witness whereof I have set my hand this 5th day of October, 1920, at Keeline, Wyo., Niobrara County, state of Wyoming.

"Chas. T. Bushnell."

The number of shares mentioned in the merchants' proposal aforesaid were duly subscribed. The respondent, Roy Elkins, subscribed for one share. On or about December 8, 1920, a corporation under the name of Keeline Co-operative Mercantile

Company was duly organized, as mentioned in the foregoing papers, under the laws of this state relating to co-operative associations, being §§ 5119 to 5134, Wyo. Comp. Stat. 1920, both inclusive. By-laws of the said corporation were duly adopted on December 8, 1920, by the subscribers of the capital stock of the said corporation, and the respondent Elkins gave his promissory note of $200 on that date, in accordance with his subscription. The promissory note is an unconditional agreement to pay, is dated December 8, 1920, and was made due on or before the 8th day of December, 1921. It is given to said corporation, and is indorsed by it, and it was, at the commencement of the action, owned and held by appellant. An invoice of the merchandise held by the latter was duly taken, in accordance with his proposal aforesaid, on December 11, 1920, the property invoicing the sum of $16,564.97, and it was duly transferred to said corporation, which thereupon engaged in the mercantile business, and continued therein until about the time of the trial in this case, when apparently it became insolvent. Neither the appellant nor his agent ever acted as directors of the corporation, organized as aforesaid.

1. It is claimed by the respondent that there was no consideration for the note sued on, for the reason that no stock in said corporation was ever delivered to him. Respondent, however, secured the right to his stock by virtue of his subscription contract and the note which he executed pursuant thereto, and he thereby became a stockholder in the corporation, though no certificate Corporations— was issued to him. The issuance of the

even

subscription to stock-effect of

nondelivery of certificate.

certificate was immaterial, except as evidence of his ownership of a share in the company. Mechanics Sav. Bank v. Gish, 200 Iowa, 463, 203 N. W. 692, and cases there cited. Further, appellant delivered to the corporation, organized as aforesaid, merchandise

to the value of $16,564.97, and the corporation incurred an indebtedness and a liability to that amount, upon the strength of the subscription to the capital stock of said corporation and the execution of a note by respondent and his associates, and respondent is, accordingly, hardly in position, at this time, to claim that there was no consideration for the note.

2. The respondent pleaded and introduced testimony to the effect that, in order to induce him to subscribe to the capital stock of said corporation, and to execute the promissory note aforesaid, appellant and his agent represented that it would be advantageous for respondent to buy his merchandise from the corporation aforesaid; that 8 per cent. of such purchases would be credited upon said promissory note; that the note would be renewed from time to time until such credits of 8 per cent would pay the principal and the interest thereof; and that respondent would never, accordingly, be compelled to pay any part thereof, except in the manner aforesaid. He further pleaded and testified that he relied upon such representations when he executed his subscription and his note. No point is made of the fact that the note was not renewed, because respondent failed to apply for, or refused to execute, a renewal. Counsel for appellant claimed, and now claims, that these promises, if actually made, could not annul or vary the terms of the unconditional promise to pay the note at the time therein stated, and that the admission of the foregoing testimony was in violation of the parol evidence rule. Counsel for respondent contest the applicability of that rule in this case, and further say that no proper objection to the admission of this testimony was made. It appears that counsel for appellant objected to this testimony, upon the trial of the case, at two different times, and we think the attention of the court was sufficiently called to the claim now made by the appellant. Even

51 A.L.R.-2.

if that were not true, however, and though the testimony had been admitted without objection, that would not affect the right or the duty of the court, subsequently, upon motion to direct a verdict, which was made in this case, to disregard such testimony, if in fact

Trial-evidence

ject-effect.

-exclusion.

in violation of the failure to obrule aforesaid. Pitcairn v. Philip Hiss Co. 61 C. C. A. 657, 125 Fed. 110, and cases there cited. This must be so, because, as heretofore stated by this court in the case of Natrona Power Co. v. Clark, 31 Wyo. 284, 297, 225 Pac. 586, the rule mentioned is not in fact a rule of evidence, but a rule of substantive law. Thayer, Ev. p. 397; 5 Wigmore, Ev. 2d ed. § 2400; Chamberlayne, Ev. § 3548; 22 C. J. 1075. When parties have deliberately put their engagements in writing, and such writing is complete on its face, and is certain and definite as to the objects of Evidence-parol their engagement, to vary writing it is conclusively presumed that the whole contract of the parties and the extent and manner of their undertaking was reduced to writing, and cannot be contradicted, altered, added to, or varied, by parol or extrinsic evidence. It has long been recognized by the courts that a different rule would soon render instruments in writing of no value, and the temptations to commit perjury would be increased. 1 Greenl. Ev. § 275; 22 C. J. 1070, 1074. Such parol testimony is not excluded because of no probative value, but because it is against the policy of the law that written contracts should be overturned in that manner. It is rejected, as stated in Thayer in the work aforesaid, page 401, because, if admitted, it could be of no use.

3. We turn, then, to inquire whether the testimony mentioned above was in violation of the foregoing rule. going rule. The note sued on in the case at bar, as heretofore stated, is an unconditional promise to pay. There is nothing in the preliminary written agreements heretofore men

tioned which modify that promise, and we think it clear that such testimony did not show a collateral contract, is not consistent with the terms of the note, but absolutely contradicts and varies it. In the case of Hangen v. Pinkston, 110 Kan. 463, 204 Pac. 675, the defendants, in answer to a suit on a promissory note made by them, alleged that it was in renewal of a note which had provided that it should not be paid in cash, but that the profits and dividends accruing upon a certificate of stock held by defendant in plaintiff corporation should be credited upon the note from time to time until it was paid and satisfied. The court said: "The entire story about the original notes showing on their face that they were to be paid by dividends, . amounts to nothing by way of defense.

An unconditional promise, in writing, to pay a certain sum at a fixed time cannot be defeated by parol evidence of an oral agreement that the obligation was to be paid out of the profits of the business."

In the case of Underwood v. Viles, 106 Kan. 287, 187 Pac. 881, a syllabus in the case is as follows: "In the organization of a corporation, the plaintiff executed to the defendant a promissory note as payment for shares of the capital stock of the company. On its face the note was an absolute and unconditional promise to pay on demand. It was claimed by plaintiff that there was an oral agreement to the effect that the note was to be paid out of the profits of the corporate business and not otherwise. Held, that a recovery on the note cannot be defeated by parol evidence of the oral agreement or understanding, which was in direct con radiction of the terms of the instrument."

Cases to a like or similar effect are Van Fossan v. Gibbs, 91 Kan. 866, 139 Pac. 174; Commercial Nat. Bank v. Hutchinson Box Board & P. Co. 98 Kan. 350, 158 Pac. 44; Commonwealth Trust Co. v. Coveney, 200 Mass. 379, 86 N. E. 895; Apple

by v. Barrett, 28 Pa. Super. Ct. 349; Mechanics' Sav. Bank v. Gish, 200 Iowa, 463, 203 N. W. 687; Davenport v. Mullins, 200 Iowa, 836, 205 N. W. 499; Mantz v. Fischer, 51 N. D. 685, 200 N. W. 795; Timmons v. Bourges Service, 205 App. Div. 600, 200 N. Y. Supp. 133; Faris v. Beck, 74 Colo. 480, 222 Pac. 652; Weiss v. Brown, 201 App. Div. 560, 194 N. Y. Supp. 441; 22 C. J. 1089, 1091, 1094, 1095. Counsel for respondent seem to think that the case at bar may be distinguished from these cases, because there was a promise in the case at bar that respondent should have a discount of 8 per cent on his purchases at all events. That seems hardly the effect of the evidence. Respondent testified that the note in suit should be paid by a discount of 8 per cent, which he would receive on his purchases. He mentions the discount only in connection with the payment of the note. He testified that Payne, Bushnell's agent, represented that "if I would buy $200 worth of stock in the store that I would never be out any money in paying for this stock; that every dollar's worth of stuff that I bought out of the store, 8 per cent of that would be applied on this note until the note was paid for, and that I would have paid-up stock in the store that didn't cost me anything."

It is reasonably clear from the record, we think, that the idea of a discount of 8 per cent arose out of the conversations relating to the laws of Wyoming in reference to co-operative associations, and out of the fact that § 5131, Wyo. Comp. Stat. 1920, provides, among other things, that a corporation organized under the co-operative plan, as was the corporation in question here, is authorized to apportion its profits by declaring "dividends at the rate of eight per cent per annum." In other words, the so-called discount was really to come from the profits of the corporation. But whether that is true or not is not important, for the terms of the note

-as to method

admissibility.

just as effectually

of paying note- by parol testimony that it was to be paid by a discount, as interpreted by counsel for respondent, as by profits from the business.

4. The parol evidence rule, heretofore mentioned, does not, of course, prevent the respondent from showing that the contract entered into was in fact not a contract, or that it was void or voidable for some other reason recognized by law, as, for instance, for fraud or mistake. 22 C. J. 1213, 1215. In the case at bar it is claimed that the contract was void because of the fraud of Bushnell. This is the crux of the case. It is pleaded, in the answer filed herein by respondent, that the representations heretofore mentioned, made by Bushnell and his agent, were "false, fraudulent, and deceitful, and were known to be false, fraudulent, and deceitful by said Charles T. Bushnell when they were so made." We do not, however, think that the representations relied upon herein are of such character as to constitute legal fraud. The authorities upon that point are, we think, clear and decisive. A man cannot defeat the parol evidence rule by simply claiming that the promises made were fraudulent, if they were not so in fact, or not such as the law recognizes as fraudulent. In First Nat. Bank v. Swan, 3 Wyo. 356, 23 Pac. 743, this court used the following language: "A representation which is promissory in its nature, which relates to the future, or which depends upon contingencies which may or may not happen, furnishes no foundation for a claim of fraud or deceit."

In the case of Kulenkamp v. Groff, 71 Mich. 675, 1 L.R.A. 594, 15 Am. St. Rep. 283, 40 N. W. 57, it was held that to obtain the signature on a note under a promise by the payee that the maker should not be liable thereon, and the failure to keep such promise, is not such a fraud as will nullify the note. The court, among other things, said:

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 nonperformance 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."

In the case of Stevens v. Inch, 98 Kan. 306, 158 Pac. 43, the court said: "It does not help the defense to call the statements and promises of Stevens fraudulent. The books teem with cases involving oral promises that notes need not be paid, or are mere memoranda, or will be surrendered without satisfaction, or may be paid out of the profits of a business venture if successful, and need not be paid otherwise. In all such cases the promise is made to induce the maker to sign. the note, and if the promise be not kept it works a fraud. The theory of the law is that more fraud would result if all notes were open to qualification and contradiction by parol