This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
Since the contract is to be construed as a whole,1 the words of the instrument by which a promise is made must be considered in connection with the form of the signature as determining the nature of the liability which is imposed upon the parties who sign such instrument.2 A note beginning, "We, the trustees of Mus-conetcong Grange, No. 114, known as W. Fleming & Co.," promise, and signed with the word "trustees" and the individual names of the trustees, imposes a personal liability on the trustees.3 So a note beginning, "The directors promise," and signed by the directors, imposes personal liability.4 A note beginning, "We promise" "for the Boston Glass Manufactory," and signed by A, B and C individually, was held to be the individual note of A, B and C.5 A note which begins, "The X Company and we, the undersigned," and which is signed by "The X Company, by A, B and C," is held to be the personal obligation of A, B and C as well as of the X Company.6 A note which begins, "We promise," and which is signed by "The X Company, A," is said to impose a personal liability upon A prima facie,7 and in the absence of evidence to explain the real understanding of the parties, A will be held personally liable.8 A contract which uses the word "I" throughout, except that in one place it provides "that we may run same in our books as remittances for collection," has been held, when taken in connection with the fact that it was written upon a letterhead of the "X Bank, A, president," has been held to show that the contract was not the personal contract of A, but that it was the contract of the bank.9 A contract which begins, "The X Company promises to pay," and which is signed, "The X Company, A, treasurer, B," was held not to impose personal liability upon B, it being shown that B was the secretary of the corporation and that it was not intended to impose a personal liability upon him.10 So an instrument which, in the body thereof purports to be executed by A "for the National Umbrella Company,"11 or by A "of the X Company,"12 imposes in each case a personal liability on A. Similar phraseology is held in other cases not to impose personal liability. Thus a note beginning, "The Howard County Agricultural Association, who execute this note by her directors," "do promise,' and signed "A, secretary; B, C, directors, Howard County Agricultural Association," does not impose personal liability.13 Under the Maine statute, a note beginning, "We, the subscribers for" a certain corporation, signed by the individual names of the makers, imposes liability in the corporation and not on the individuals signing.14 An acceptance, written on a letter bearing the corporation letterhead, and signed by an agent individually, written in reply to a proposition addressed to the corporation, binds the corporation.15 The fact that the instrument contains a promise to perform "jointly and severally," tends strongly to show that the persons whose names are signed beneath that of the principal maker intend to incur a personal liability.16 A direction in an instrument to "charge to the account of" one of the parties whose name is signed thereto, tends to show that the other parties are signing as agents and that they do not incur personal liability,17 although such form of words can not prevent personal liability from attaching where the contract shows on its face a clear intention to incur such liability.18
Arkansas. Bank v. Nimnich, 122 Ark. 316, 183 S. W. 756.
California. Bean v. Pioneer Mining Co., 66 Cal. 451, 56 Am. Rep. 106, 6 Pac. 86.
Illinois. Gillet v. Bank, 7 111. App. 490; Scanlon v. Keith, 102 111. 634, 40 Am. Rep. 624.
Maine. Atkins v. Brown, 59 Me. 90; Castle v. Foundry Co., 72 Me. 167; Gleason v. Milk Supply Co., 93 Me. 544, 74 Am. St. Rep. 370, 45 Atl. 825.
Massachusetts. Draper v. Heating Co., 87 Mass. (5 All.) 338.
Nebraska. English and Scottish American Mortgage and Investment Co. v. Globe Loan & Trust Co., 70 Neb. 435, 6 Am. & Eng. Ann. Cas. 999, 97 N. W. 612.
Hew Jersey. Reeve v. Bank, 54 N. J. L. 208, 33 Am. St. Rep. 675, 16 L. R. A. 143, 23 Atl. 853.
Texas. Latham .v. Flour Mills, 68 Tex. 127, 3 S. W. 462.
Wisconsin. Leibscher v. Kraus, 74 Wis. 387, 17 Am. St. Rep. 171, 5 L. R. A. 496, 43 N. W. 166.
2 Bank v. Nimnich, 122 Ark. 316, 183 S. W. 756; Mathews v. Mattress Co., 87 Ia. 246, 19 L. R. A. 676, 54 N. W. 225; Heffner v. Brownell, 70 Ia. 591, 31 N. W. 947, 75 Ia. 341, 39 N. W. 640. The earlier case of Wheelock v. Wilson, 15 Ia. 464, is overruled.
A signature, "X Co., per A, Sec. & Treas.; A, director; B, director; C, director," imposes a personal liability on A, B and C. Bank of Corning v. Nimnich, 122 Ark. 316, 183 S. W. 756.
3 Exchange Bank v. Schultz, 167 Ia. 136, 149 N. W. 99.
4 Belmont Dairy Co. v. Thrasher, 124 Md. 320, 92 Atl. 766.
5 Germania National Bank v. Mariner, 129 Wis. 544, 109 N. W. 574.
1 See Sec. 2038.
2 Sun Printing and Publishing Co. v Moore, 183 U. S. 642, 46 L. ed. 366; Frambach v. Frank, 33 Colo. 529, 81 Pac. 247; Cutler v. Ashland, 121 Mass. 588; Ellis v. Stone, 21 N. M. 730, L R. A. 1916F, 1228, 158 Pac. 480.
3Vliet v. Simanton, 63 N. J. L. 458, 43 Atl. 738; and see Hypes v. Griffin, 89 111. 134, 31 Am. Rep. 71; Powers v. Briggs, 79 111. 493, 22 Am. Rep. 175.
4McKensey v. Edwards, 88 Ky. 272, 21 Am. St. Rep. 339, 3 L. R. A. 397, 10 S. W. 815. (However, in such a case it is said that the question of the nature of liability imposed must be determined on answer and not on demurrer. McKensey v. Edwards, 88 Ky. 272, 21 Am. St. Rep. 339, 3 L. R. A. 397, 10 S. W. 815 [citing, Pack v. White, 78 Ky. 243].)
5Bradlee v. Glass Manufactory, 32 Mass. (16 Pick.) 347.
6Nunnemacher v. Poss, 116 Wis. 444, 92 N. W. 375.
7 Belmont Dairy Co. v. Thrasher, 124 Md. 320, 92 Atl. 766.
8 Belmont Dairy Co. v. Thrasher, 124 Md. 320, 92 Atl. 766.
9Ellis v. Stone, 21 N. M. 730, L. R. A. 1916F, 1228, 158 Pac. 480.
10MGermania National Bank v. Mariner, 129 Wis. 544, 109 N. W. 574.
11 General Electric Co. v. Gill, 127 Fed. 241.
12 Railway Speed Recorder Co. c. Tool Co., 126 Fed. 223.