The question of the application of the rule is generally raised by objection to the admission of oral evidence to show the intention of the parties. The parol evidence rule was in its origin applied to sealed contracts, and forbade varying them by parol.1 The combination of the use of the term "parol" with the fact that, at modern law, questions which arise under this rule are generally raised by objection to the introduction of evidence, has caused the rule in which it is sought to embody these principles to be known as the parol evidence rule. It has. however, nothing to do with the law of evidence.2 Any rule of substantive law can be stated in terms of the admissibility of evidence; and this is perhaps the best known illustration of the systematic statement of a rule of substantive law in the form of a rule of evidence.

15 Arkansas. Graves v. Bodcaw Lumber Co., 129 Ark. 354, 196 S. W. 800.

Iowa. Houge v. St. Paul Fire & Marine Ins. Co., 174 Ia. 607, 156 N. W. 862; Armstrong v. Cavanagh, - Ia. - , 166 N. W. 673.

Kentucky. Citizens' Trust & Guaranty Co. v. Farmers1 Bank, 166 Ky. 234, 179 S. W. 29; Scott v. Spurr, 169 Ky. 575, 184 S. W. 866; Kreitz v. Gal-lenstein, 170 Ky. 16, 185 S. W. 132; Gabbard v. Sheffield, 179 Ky. 442, 200 S. W. 940.

Michigan. Lake Erie Land Co. v. Chilinski, 197 Mich. 214, 163 N. W. 929; Kerwin Machine Co. v. Baker, 199 Mich. 122, 165 N. W. 625; Boston Piano & Music Co. v. Pontiac Clothing Co., 199 Mich. 141, 165 N. W. 856.

Minnesota. Virginia & Rainy Lake Co. v. Helmer, 140 Minn. 135, 167 N. W. 355.

Nebraska. Roden v. Williams, 100 Neb. 46, 158 N. W. 360.

New Mexico. Locke v. Murdoch, 20 N. M. 522, L. R. A. 1917B, 267, 151 Pac. 298; Gooch v. Coleman, 22 N. M. 45, 159 Pac. 945.

North Carolina. American Potato Co. v. Jenette Bros. Co., 172 N. Car. 1, 89 S. E. 791; Caffey v. Oak Furniture Co., 175 N. Car. 387, 95 S. E. 619.

Oklahoma. Gish v. Insurance Co., 16 Okla. 59, 13 L. R. A. (N.S.) 826, 87 Pac. 869; J. M. Hoard, Jr., Co. v. Grand Rapids Showcase Co., - Okla. - , 173 Pac. 844.

Oregon. Mercer v. Germania Fire Insurance Co., 88 Or. 410, 171 Pac. 412.

Vermont. Jones v. Campbell, - Vt. - , 102 Atl. 102.

West Virginia. Paxton v. Benedum-Trees Oil Co., 80 W. Va. 187, 94 S. E. 472.

"Its positive terms, being expressed in writing, can not be contradicted or varied by parol evidence." Walker v. Price, 62 Kan.'327, 333, 84 Am. St. Rep. 392, 62 Pac. 1001 [citing, Rodgers v. Perrault, 41 Kan. 385, 21 Pac. 287; Willard v. Ostrander, 46 Kan. 501, 26 Pac. 1017].

16 See Sec. 2188 et eeq.

17 See Sec. 2060.

A few illustrations will suffice to show that this is not a rule of evidence: (1) In its original form the rule was stated as a rule of pleading3 - namely, that the legal effect of a sealed instrument could not be aided on behalf of the pleader by averment. (2) While the written contract usually acts substantially as a merger of prior or contemporaneous oral negotiations,4 it also operates as a merger of prior written negotiations,5 as where it merges prior letters between the parties,6 or a prior written instrument not made part of the subsequent contract.7 Thus a term of an accepted bid which is not carried into the complete written contract subsequently entered into between the parties, is no part of their contract.8 The real objection to the evidence, therefore, is not that it is oral as distinguished from written, but that it is extrinsic - that is, that it tends to prove what is not a term of the contract. (3) If a contract is made and to be performed in one jurisdiction, and suit is brought in another, the law of the former jurisdiction applies in determining whether oral agreements are merged by the written contract.9 If the rule were really one of evidence the law of the forum would apply. Being really a rule of substantive law, the law of the place of performance ordinarily controls. Accordingly, there is a strong tendency at modern law to treat the parol evidence rule as a rule of substantive law.10

1 Butcher v. Butcher, 1 Bob. & P. N. R. 113; Blake v. Marnell, 2 Ball & B. 35 [affirmed, 4 Dow. 248; Palmer v. Newell, 20 Beav. 32].

2 Pitcairn v. Philip Hiss Co., 125 Fed. 110.

"While the rule known as the parol evidence rule is usually referred to as a rule of evidence, it is more properly a rule of substantive law." Andersonian Investment Co. v. Wade, - - Wash. - , 184 Pac. 327.

3 Rutland's Case, 5 Coke 25.

4 See Sec. 2137 and 2144.

5 Illinois. Graham v. Sadlier, 165 111. 95, 46 N. E. 221.

Kentucky. Berlin Machine Works v. Jefferson Woodworking Co., 173 Ky. 347, 191 S. W. 82.

Massachusetts. N. J. Magnan Co. v. Fuller, 222 Mass. 530, 111 N. E. 390.

Michigan. John D. Gruber Co. v. Smith, 195 Mich. 336, 162 N. W. 124.

Rhode Island. Stern v. Chagnon, 39 R. I. 567, 99 Atl. 592.

Washington. Farley v. Letterman, 87 Wash. 641, 152 Pac. 515. Thus a deed merges a prior written contract. Neal v. Hopkins, 87 Md. 19, 39 Atl. 322. See Sec. 1354 and 2557.

6 United States. South Boston Iron Works v. United States, 34 Ct. Cl. 174.

Illinois. Graham v. Sadlier, 165 111. 95, 46 N. E. 221; Christopher, etc., Co. v. Yeager, 202 111. 486, 67 N. E. 166 [affirming, 105 111. App. 126].

Indiana. Ralya v. Atkins, 157 Ind. 331, 61 N. E. 726.

Kentucky. Berlin Machine Works v. Jefferson Woodworking Co., 173 Ky. 347, 191 S. W. 82.

Massachusetts. X. J. Magnan Co. v. Fuller, 222 Mass. 530, 111 N. E. 399.

Michigan. John D. Gruber Co. v. Smith, 195 Mich. 336, 162 N. W. 124.

Nevada. Gage v. Phillips, 21 Nev. 150, 37 Am. St. Rep. 494, 26 Pac. 60.

Rhode Island. Stern v. Chagnon, 39 R. I. 567, 99 Atl. 592.

Washington. Farley v. Letterman, 87 Wash. 641, 152 Pac. 515.

Wisconsin. Hunter v. Hathaway, 108 Wis. 620, 84 N. W. 996.

The rule is frequently referred to as a rule of evidence,11 and it is justified by reasons which apply rather to the law of evidence than to substantive law.12

7 Brown v. Markland, 16 Utah 360, 67 Am. St. Rep. 629, 52 Pac. 507. Still less can the meaning of a contract between A and B be affected by a similar clause in a contract between A and X. Commonwealth Roofing Co. v. Leather Co., 67 N. J. L. 566, 52 Atl. 389.

8 McCrary v. Trust Co., 97 Tenn. 460, 37 S. W. 543.

9Bank v. Talbot, 154 Mass. 213, 13 L. R. A. 53, 28 N. E. 163.

10 Pitcairn v. Philip Hiss Co., 125 Fed. 110.

11 American Potato Co. v. Jenette Bros. Co., 172 N. Car. 1, 89 S. E. 791.

12 "There is no rule of evidence better settled than that prior negotiations and treaties are merged in the written contract of the parties, and the law excludes parol testimony offered to contradict, vary, or add to its terms as expressed in the writing. Moffitt v. Maness, 102 N. Car. 457, 9 S. E. 399. The principle lies at the very foundation of all contracts, and if permitted to be violated, the ultimate injury to the commercial world and to society generally, would be incalculable and certainly far-reaching. It is unfortunate that loose dicta in occasional and ill-considered cases are to be found which seem to be hostile to this safe and sound axiom of the law, because they have strained the law in order to defeat or circumvent some suspected fraud, perhaps gross and vicious, but the method of preventing the consummation of the wrong will be far more disastrous in its results than a steady adherence to the rules of the law, although in special cases actual imposition or fraud may be perpetrated. The rules of law are and must needs be universal in their application, this being essential to certainty in business transactions and to the integrity of contracts; for otherwise 'commerce may degenerate into chicanery, and trade become another name for trick,' Rearick v. Rearick, 15 Pa. St. 66. It is true that Cicero in his eloquent defense of the poet Archias, denied the superiority of the record, or the written memorial, over the spoken word, upon the ground that the witness is subjected to an oath and cross-examination, with other safeguards against falsehood, while the record has no such tost to assure its accuracy; but his plausible argument has never been accepted by the wiser sages of the law, who have consistently adhered to the safer rule, and so arranged the degrees of proof as to give decided preference to written over unwritten evidence. Chief Justice Taylor, in referring to this view of the law, believed that the fallibility of human memory weakens the effect of oral testimony to such an extent that even the most upright mind, though awfully impressed with the solemnity of an oath, perfectly honest and sincere in its processes, and aiming solely to a disclosure of the truth, may still err, and thereby unconsciously substitute falsehood for it. He said that: 'Time wears away the distinct image and clear impression of facts, and leaves in the mind uncertain opinions, imperfect notions, and vague surmises.' It is better, therefore, to rely upon the written word as less apt to deceive or falsify. Smith v. Williams, 5 N. Car. 426, 4 Am. Dec. 564." American Potato Co. v. Jenette Bros. Co., 172 N. Car. 1, 89 S. E. 791.

In South Carolina the parol evidence rule has been treated rather as a role of evidence. It was held that a demurrer to a complaint, based on a note signed by "A, agent," who was alleged to have executed the instrument as the agent of B, was improperly sustained, even though no evidence in support of the allegations of agency could have been introduced.13 It was, however, sug, gested that the evidence might show that the principal was doing business in the name of the agent.

The actual result of the parol evidence rule, whether it is to be explained as a rule of substantive law or as a rule of evidence, is to cause a written, simple contract to operate in law as a sort of a formal contract. This, of course, is a contradiction in terms, but it can be justified by the authorities which are discussed in the following sections which show that the effect of a valid, complete, unambiguous, written contract is to exclude all consideration of the actual agreement of the parties in actions at law, and to have the same effect in suits in equity except those in which reformation is sought. Such a contract is a simple contract in that it requires a consideration;14 but it is like the formal contract of the common law in that, the actual intention of the parties ceases to have any legal significance and that the legal effect of the instrument depends entirely upon the written words thereof, except as far as their meaning may be modified by evidence of surrounding circumstances, trade customs, and the like, which are admissible under the ordinary rules of construction.

13Tarver v. Garlington, 27 S. Car. 107, 13 Am. St. Rep. 628, 2 S. E. 846. "Upon the face of the paper, unexplained by parol testimony, the jury would have been compelled under the cases above to answer (the question of agency) in the negative. But before the judge, with the agency not even disputed, it seems to us error to hold that there was no cause of action."

14 See Sec. 537 et seq.