If the instrument does not show on its face what its purpose was, extrinsic evidence is admissible to show what that purpose was, if such evidence does not contradict the terms of the contract.1 Thus an instrument conveying title which on its face is absolute may be shown by extrinsic evidence to be given as a mortgage to secure certain liabilities.2 The purpose of any contract which purports only to transfer legal title may thus be shown.3 So the grantee may show that a deed was given to secure certain notes and not in payment of them.4 So a mortgage which recites that it is to secure a certain note may be shown to be an indemnity mortgage.5 So a mortgage to A may be shown to be in part for A's benefit and in part in trust for X.6 So a bill of sale given by a debtor may be shown to have been given with the consent of creditors and for their benefit.7 An assignment of an interest under a contract may be shown by extrinsic evidence to be as security.8 Thus an assignment of a contract to purchase realty,9 a building contract,10 an insurance policy,11 assignment by orders drawn on a debtor,12 or an assignment of accounts13 may in each case be shown to have been made, not absolutely, but merely as security. Extrinsic evidence is admissible to show such facts as create an implied trust of realty.14 Thus the recital in a deed that the consideration was paid by A does not prevent evidence that it was paid by B.15 Neither the parol evidence rule nor the statute of frauds prevent this. Unless such evidence were admissible, no available remedy would be given for much of the fraud that is thus met. Extrinsic evidence is admissible to prove trusts concerning personal property.16 Thus if A gives a note to B, extrinsic evidence is admissible to show that it is charged with a trust in favor of C.17 If the instrument shows its purpose on its face, the rule admitting evidence of the intention of the parties to show the purpose of the instrument does not apply, since such intention would be used in such case to contradict the intention as expressed in the writing.18 Thus extrinsic evidence cannot be received to show that C is the beneficiary intended in a deed of trust which names B as beneficiary.19 So under a conveyance which reserves a life estate to the grantor such reservation cannot be shown to be intended only as security for the performance by the grantee of his contract to support the grantor.20

18 Emery v. Hanna (Neb.), 94 N. W. 973.

19Aultman v. Clifford, 55 Minn. 159; 43 Am. St. Rep. 478; 56 N. W. 593. (Evidence allowed to show a contract as to quality of the article sold.)

20 Perkins v. Brown, 115 Mich. 41; 72 N. W. 1095. (Evidence admitted to show that vendor was to set out the trees and care for them.)

21 Harrison v. McCormick, 89 Cal. 327; 23 Am. St. Rep. 469; 26 Pac. 830.

1Ruiz v. Dow, 113 Cal. 490; 45 Pac. 867; Lamkin v. Mfg. Co., 72 Conn. 57; 44 L. R. A. 786; 43 Atl. 593; Bever v. Bever, 144 Ind. 157; 41 N. E. 944; Hathaway v. Rogers, 112 la. 638; 84 N. W. 674; Raphael v. Mullen, 171 Mass. Ill; 50 N. E. 515; Buhl v. Bank, 123 Mich. 591; S2 N. W. 282; Hillman v. Allen, 145 Mo. 638; 47 S. W. 509; Downes v. Congregational Society. 63 N. H. 151; Weiseham v. Hocker, 7 Okla.

250; 54 Pac. 464; Sheaffer v. Sen-senig, 182 Pa. St. 634; 38 Atl. 473; Meyer v. Elevator Co., 12 S. D. 172; 80 N. W. 189; Bedell v. Wilder, 65 Vt. 406; 36 Am. St. Rep. 871; 26 Atl. 589; Schierl v. Newburg, 102 Wis. 552; 78 N. W. 761.

2 Morgan v. Shinn, 15 Wall. (U. S.) 105; Florida, etc., Ry. v. Usina, 111 Ga. 697; 36 S. E. 928; Zuber v. Johnson, 108 la, 273; 79 N. W. 76; Buhl v. Bank, 123 Mich. 591; 82 N. W. 282; Hillman v. Allen, 145 Mo. 638; 47 S. W. 509; Watkins v. Williams, 123 N. C. 170; 31 S. E. 388; Weiseham v. Hocker, 7 Okla. 250; 54 Pac. 464; Myerstown Bank v. Roessler, 186 Pa. St. 431; 40 Atl. 963; Masterson v. Burnett, 27 Tex. Civ. App. 370; 66 S. W. 90; Schierl v. Newburg, 102 Wis. 552; 78 N. W. 761. Contra, Munford v. Green, 103 Ky. 140; 44 S. W. 419.

3 Lease. Meyer v. Elevator Co., 12 S. D. 172; 80 N. W. 189. Bill of sale. Raphael v. Mullen, 171 Mass. Ill; 50 N. E. 515; Martin v.

Martin, 43 Or. 119; 72 Pac. 639. Assignment of bill of lading. Walker v. Bank, 43 Or. 102; 72 Pac. 635. Assignment of note. Clark v. Ducheneau, 26 Utah 97; 72 Pac. 331. Power of attorney. Coldwa-ter National Bank v. Buggie, 117 Mich. 416; 75 N. W. 1057.

4 Loud v. Hamilton (Tenn. Ch. App.), 45 L. R. A. 400; 51 S. W. 140.

5Honaker v. Vesey, 57 Neb. 413; 77 N. W. 1100.

6 Tapia v. Demartini, 77 Cal. 383; 11 Am. St. Hep. 288; 19 Pac. 641.

7 Neresheimer v. Smyth, 167 X. Y. 202; 60 X. E. 449.

8 Dale v. Gear, 38 Conn. 15; 9 Am. Rep. 353; Jones v. Albee, 70 111. 34; Lovejoy v. Bank, 23 Kan. 331; Kendall v. Assurance Society, 171 Mass. 568; 51 N. E. 464; Ittner v. Hughes, 154 Mo. 55; 55 S. W. 267; Hudson v. Wolcott. 39 O. S. 618; Westbury v. Simmons, 57 S. C. 467; 35 S. E. 764.

9 Hieronymus v. Glass, 120 Ala. 46; 23 So. 674 (disapproving Moseley v. Moseley, 86 Ala. 289; 5 So. 732) ; Gettleman v. Assurance Co., 97 Wis. 237; 72 N. W. 627.

10 Davis v. Water Works Co., 57 Minn. 402; 47 Am. St. Rep. 622; 59 N. W. 482.

11 Kendall v. Assurance Society, 171 Mass. 568; 51 X. E. 464; West-bury v. Simmons, 57 S. C. 467; 35 S. E. 764.

12 Ittner v. Hughes, 154 Mo. 55; 55 S. W. 267.

13 Matthews v. Forslund, 112 Mich. 591; 70 N. W. 1105.

14Champlin v. Champlin. 136 111. 309; 29 Am. St. Rep. 323; 26 N. E. 526; Burden v. Sheridan, 36 la. 125; 14 Am. Rep. 505; Blodgett v. Hildreth, 103 Mass. 484; Livermore v. Aldrich, 5 Cush. (Mass.) 431; Depeyster v. Gould, 3 N. J. Eq. 474; 29 Am. Dec. 723; Smith v. Eckford (Tex.), 18 S. W. 210; Neill v. Keese, 5 Tex. 23; 51 Am. Dec. 746; Deck v. Tabler. 41 W. Va. 332; 56 Am. St. Rep. 837; 23 S. E. 721.

15 Chicago, etc., Ry. v. Bank, 58 Neb. 548; 78 X. W. 1064.

.Sec. 1200. Written evidence.

Since the parol evidence rule applies solely to written contracts, in actions brought to enforce them, it does not forbid the use of extrinsic evidence to contradict written evidence as long as the written evidence is not the written contract on which the action is based.1 Thus if letters written by one of the parties are not a part of a written contract, oral evidence is admissible to contradict the statements made therein.2 So extrinsic oral evidence is admissible to rebut evidence tending to show fraud, even if the latter evidence is in writing. Thus where false statements are contained in an application for insurance, extrinsic evidence is admissible to show that the applicant stated the facts correctly to the agent of the insurance company, and that the latter wrote the application.3 In Michigan such evidence is admissible if the application is signed before the agent writes the answers.4 A memorandum in lead-pencil, made by one party and not intended by both parties as the written contract may be contradicted.5 So a written acknowledgment of a contract6 or a chattel mortgage, prepared by plaintiffs to be executed by defendant, but not in fact executed by him,7 may be contradicted, since neither is a written contract within the meaning of this rule. On the same principle, recitals of fact and receipts may be contradicted even if in writing, and even if in an instrument a part of which is a contract.8 So A loaned B $280 and by mistake B gave his note for $250. B repaid $280 and then sued to recover $30 as paid by mistake. It was held that A could show the real transaction as the action was not on the note.9 The test which determines the admissibility of extrinsic evidence in such cases is this: Is the written provision a contractual term ? In such case the parol evidence rule applies. Or is it merely the written recital of a fact? In such case the parol evidence rule has no application. Illustrations of this distinction will be found in the following sections.

16 Northrop v. Hale, 72 Me. 275; Chace v. Chapin, 130 Mass. 128; Gerrish v. New Bedford Institution, 128 Mass. 159; 35 Am. Rep. 365; Barnes v. Trafton, 80 Va. 524.

17 Thompson v. Caruthers, 92 Tex. 530; 50 S. W. 331.

18Burnes v. Scott, 117 U. S. 582; Dickson v. Harris, 60 la. 727; 13 N. W. 335; Crane v. Bayley, 126 Mich. 323; 85 N. W. 874; Adair v. Adair, 5 Mich. 204; 71 Am. Dec. 779; Gilbert v. Thompson, 14 Minn. 544; Ming v. Pratt, 22 Mont. 262; 56 Pac. 279.

19 American National Bank v.

Harlan, 89 Md. 675; 43 Atl. 756. See to the same effect Holtheide v. Smith (Ky.), 74 S. W. 689.

20 Hall v. Small, 178 Mo. 629; 77 S. W. 733.

1Wise v. Collins, 121 Cal. 147; 53 Pac. 640; Smith v. Mayfield, 163 111. 447; 45 N. E. 157; Parno v. Ins. Co., 114 la. 132; 86 N. W. 210; Dean v. Shepard Co., 95 la. 89; 63 N. W. 582; Gully v. Grubbs, 1 J. J. Mar. (Ky.) 387; German Ins. Co. v. Frederick, 57 Neb. 538; 77 N. W. 1106; Kister v. Ins. Co., 128 Pa. St. 553; 15 Am. St. Rep. 696; 5 L. R. A. 646; 18 Atl. 447.

2 Alexander v. Thompson, 42 Minn. 498; 44 N. W. 534; Abrahams v. Swan, 18 W. Va. 274; 41 Am. St. 692.

3Parno v. Ins. Co., 114 la. 132; 86 X. W. 210; Mutual, etc., Association v. Ogletree, 77 Miss. 7; 25 So. 869; German Ins. Co. v. Frederick. 57 Neb. 538; 77 X. W. 1106; Kister v. Ins. Co., 128 Pa. St. 553; 15 Am. St. Rep. 696; 5 L. R. A. 646; 18 Atl. 447; Bennett v. Ins. Co., 107 Tenn. 371; 64 S. W. 758; Virginia, etc., Ins. Co. v. Goode, 95 Va. 762; 30 S. E. 370.

4 Brown v. Ins. Co., 65 Mich. 306; 8 Am. St. Rep. 894; 32 X. W. 610.

5 Pecos Valley Bank v. Evans-Snider-Buel Co., 107 Fed. 654; 46 C. C. A. 534.

6Burkhart v. Hart, 36 Or. 586; 60 Pac. 205.

7Wise v. Collins. 121 Cal. 147; 53 Pac. 640.

8 See Sec. 1201 et seq.

9 Foster v. Kirby, 31 Mo. 496.