Story Case

Gustav Hamil habitually signed his name with a flourish. He signed a contract to work for Dass and Company for three years at the sum of $1,000 a year, in the following form:

"I, Gustav Hamil, promise to work for the firm of Dass & Company for three years for the yearly salary of $1,000.

(Signed) Gustav Hamil".

After his name was a broad stroke of the pen which may have meant to indicate a seal or which may have been only the customary flourish with which he signed.

When he was sued by Dass & Co. on the written promise, Gustav defended on the grounds that Dass & Co. had paid him no consideration for the promise. To this, Dass & Co. replied that this contract was a sealed contract and that therefore no consideration was needed.

Who ought to win the suit?

Ruling Court Case. Osborne Vs. Hubbard, Volume 20 Oregon Reports, Page 318; Volume 11 Lawyer's Reports Annotated, Page 833

A man by the name of C. C. Parker made and signed a note in this manner.

"On or before October 1st, 1884, I promise to pay to the order of D. M. Osborne the sum of ninety dollars with interest.

C. C. Parker, (Seal)".

Before the note was delivered to Osborne it was signed on the back by Hubbard, the defendant in this action. Suit was begun by Osborne on this note against Hubbard.

If the foregoing instrument was negotiable, then Hubbard was only an indorser thereon, and the suit was prematurely brought against him. If the note was not negotiable then he was a joint maker of the note, and suit was not prematurely brought. A seal upon a note, otherwise negotiable, renders it non-negotiable. It was contended by the defendant, Hubbard, that this was not a sealed instrument, that the word "seal" printed after the name of Parker did not make it a sealed instrument, and therefore it was a negotiable instrument, and that he was liable on it as an indorser.

Decision

"In this state, while a seal may be made by a wafer or wax attached to an instrument, it may be also made by a scroll with a pen after the signature to the instrument. Not only was there a scroll, but the word 'seal' was written on it also." Anything which purports to be a seal, if accompanied by an intent to make the instrument a sealed one, is alone sufficient.

Thus it was held that this was a sealed instrument, and not negotiable, and therefore the suit was properly brought, and judgment was given for the plaintiff.

Ruling Law. Story Case Answer

The seal is an impression upon any impressible substance. In early times it was always wax; but a wafer is as good, and so is any other tenacious substance on which an impression is made. In modern times the courts are less strict than formerly in regard to what constitutes a seal. A scroll, or a scrawl made with the pen is generally held sufficient. Even the word "seal" written out after the name is held to be a sufficient device to pass as a seal.

In all these cases there must be an intention that it shall be a sealed instrument. The mere fact that a person makes a scroll or scrawl after his name will not make it a sealed instrument, unless the scroll or scrawl be accompanied by the intention to make the paper which he is signing, a sealed instrument.

In the Story Case, the whole question turned on the intention of Gustav Hamil when he signed the contract with a flourish. If he intended the stroke of the pen as a seal, then no consideration was needed to make the contract binding. If, however, he intended nothing when he made the flourish, the contract was only a simple contract and some consideration must be found or his promise was not binding.