Supreme Court of the United States

Specht v. Howard

16 Wall. 564 · 1872 U.S. LEXIS 1185 · 21 L. Ed. 348 · 83 U.S. 564

March 17, 1873

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Headnotes

Generated summaries

Headnote 1
34.11 Evidence Law > General Evidence Principles and Admissibility Law
At trial the plaintiffs tried to introduce testimony that, contemporaneously with the drawing of a note, the parties orally agreed the note was payable in New York. The court held that such evidence is barred by the parol‑evidence rule for negotiable instruments and cannot affect the indorser’s liability.
Headnote 2
20.9 Contract Law > Contract Interpretation and Construction Law
The plaintiff argued that an oral arrangement making the note payable in New York discharged the indorser’s surety obligation. The court explained that, to relieve a surety, the creditor‑principal agreement must be enforceable under law, which the alleged oral agreement was not.
Headnote 3
34.11 Evidence Law > General Evidence Principles and Admissibility Law
After initially allowing testimony about the oral agreement, the trial court withdrew that evidence, finding it was improperly admitted. The appellate court affirmed that the court’s removal of the inadmissible parol evidence was proper and did not constitute reversible error.
Headnote 4
20.9.10 Contract Law > Contract Interpretation and Construction Law > Plain Meaning Rule Law
The plaintiff attempted to introduce testimony that, at the time the note was drawn, the parties orally agreed to make it payable in New York, arguing this would discharge the indorser’s liability. The court held such parol evidence is inadmissible under the rule for negotiable instruments.
Headnote 5
20.9.10 Contract Law > Contract Interpretation and Construction Law > Plain Meaning Rule Law
The indorser argued that an oral agreement between the maker and creditor discharged his surety obligation. The court held that, because the oral agreement was not a binding legal contract, it could not release the surety from liability.
Headnote 6
20.9.10 Contract Law > Contract Interpretation and Construction Law > Plain Meaning Rule Law
After the court initially allowed testimony about the alleged oral agreement, it later withdrew that evidence, reasoning that the admission conflicted with the parol‑evidence rule. The withdrawal was deemed proper and did not require a new trial.
Headnote 7
20.9.1 Contract Law > Contract Interpretation and Construction Law > Ambiguity in Contracts Law
The plaintiffs tried to introduce testimony that the parties orally agreed the note was payable in New York, but the court held that such parol evidence is barred and cannot affect the indorser’s liability.
Headnote 8
20.9.1 Contract Law > Contract Interpretation and Construction Law > Ambiguity in Contracts Law
The indorser argued that an oral agreement between the makers and the creditor discharged his liability, but the court required a binding legal agreement to achieve surety discharge.
Headnote 9
20.9.1 Contract Law > Contract Interpretation and Construction Law > Ambiguity in Contracts Law
The trial court initially allowed testimony on the oral agreement, then correctly withdrew it after recognizing the parol‑evidence rule, and the judgment based on the remaining evidence stood.
Headnote 10
34.11.12 Evidence Law > General Evidence Principles and Admissibility Law > Inadmissible Evidence Law
The Court held that the contemporaneous oral agreement that the note should be payable in New York was a nullity because the parol‑evidence rule bars such evidence from altering the written note, and thus it could not discharge the indorser’s liability.
Headnote 11
34.11.12 Evidence Law > General Evidence Principles and Admissibility Law > Inadmissible Evidence Law
The Court noted that to exonerate a surety, any agreement between creditor and principal must be enforceable at law; a mere oral side‑agreement without legal force cannot discharge the surety’s obligation.
Headnote 12
34.11.12 Evidence Law > General Evidence Principles and Admissibility Law > Inadmissible Evidence Law
The Court affirmed that the trial judge correctly removed the testimony concerning the oral agreement; the withdrawal did not merit a new trial and the judgment based on the remaining admissible evidence stands.

Opinion

Mr. Justice SWAYNE

stated the case, and delivered the opinion of the court.

The defendants in error were the plaintiffs in.the court below. The action was upon a promissory note made by Jehl & Brother to Specht, and by him indorsed to .Howard, Sanger & Co., the plaintiffs. The makers and indorser lived in Memphis. The indorsees lived in the city of New York, and the note was made and indorsed there. No place of' payment was mentioned in the note. At its maturity the makers were sought in the city of New York, and. not being found, the note was protested for non-payment, and notice was given by mail to the indorser. Upon the trial, after proof of the protest and notice, the plaintiffs offered to prove that at the time the note was drawn, it was agreed' between the makers, and Howard, Sanger & Co., that it should be made payable in the city of New York, and that the place of payment was omitted by the mistake of the draughtsman. Specht objected to the'admission of the testimony. The objection was overruled and he excepted. The-agreement and mistake were proved. Specht then offered to 'prove' that he had not consented that the note should be made payable in New York. The testimony was injected and he excepted. -He then asked the court to rule that the plaintiffs’ evidence showed such a change in his contract of indorsement as discharged him from liability. The court refused so to rule, and he excepted. The court then withdrew from the jury the evidence relating to the parol agreement, and ruled that the proof of demand and notice was insufficient to create any liability on the part of the defend- -. ant. Specht excepted to the withdrawal of the evidence as to the parol agreement.' The plaintiff's then proved that, after the maturity'of-the note, Specht, with a full knowledge of the defective demand and notice, promised to pay the note. • No objection was made to the admission of this testimony, nor to the charge of the court upon the subject. The jury found for the plaintiffs and judgment was rendered accordingly.

• The error complained of is, that the court withdrew from the jury the1 evidence touching the parol agreement as to the place of payment made contemporaneously with the drawing and execution of the note. The plaintiff in error insists that, being a surety, it altered and discharged his contract.

The evidence was improperly admitted and was properly withdrawn. The agreement was a nullity and could not in auy wise affect the rights of either of the parties. “ It is a firmly settled principle that parol evidence of an oral agreement alleged to have been made at the time of the drawing, making, or -indorsing of a bill or note, cannot be permitted to vary, qualify, or contradict, to add to or subtract from the absolute terms of the written contract-.” * †An agreement between the creditor and principal must, to exonerate the surety, be one “binding in law upon the parties.” †

Judgment aeeirmed.

Parsons on Notes and Bills-, 501.

†

McLemore v. Powell, 12 Wheaton, 554.

Case brief

Citation data as of July 18, 2026

Summary

The dispute centered on a promissory note that Jehl & Brother executed in favor of Specht and that Specht later indorsed to Howard, Sanger & Co.; the note was made and indorsed in New York but contained no place‐of‐payment clause. When the note matured the makers could not be located, the note was protested for non‐payment and a notice of protest was mailed to Specht. The plaintiffs sought to introduce testimony that, at the time the note was drawn, the makers and the indorsee had orally agreed the note was payable in New York and that the omission of a payment clause was a drafting mistake; the trial court initially admitted that testimony, then withdrew it, holding that the protest and notice alone were insufficient to impose liability on the indorser. After maturity, Specht—aware of the defective demand—promised to pay the note, and that promise was admitted; the jury returned a verdict for the plaintiffs. Specht appealed, contending that the oral agreement should vary the note and discharge his surety liability and that the trial court erred in withdrawing the parol‐evidence. The Supreme Court held that an oral agreement made at the time a negotiable instrument is drawn cannot vary the “absolute terms” of the written instrument, so the parol evidence was inadmissible. The Court also affirmed that a trial judge may properly withdraw improperly admitted evidence without reversible error. Because the oral agreement was excluded, the only enforceable basis for liability was Specht’s post‐maturity promise to pay, which the Court found sufficient, and it affirmed the judgment for the plaintiffs.

Updated July 18, 2026

Statement of Facts

The dispute arose from a promissory note that Jehl & Brother, residing in Memphis, executed in favor of Specht, also a Memphis resident. Specht subsequently indorsed the note to Howard, Sanger & Co., the plaintiffs, who were residents of New York. The note was both made and indorsed in New York, but it contained no designation of a place of payment. When the note reached maturity, the makers could not be located in New York; consequently, the note was protested for non‐payment and a notice of protest was mailed to the indorser, Specht. At trial the plaintiffs sought to introduce testimony that, at the time the note was drawn, the makers and Howard, Sanger & Co. had orally agreed that the note was payable in New York and that the omission of a payment clause was a drafting mistake. Specht objected to this testimony; the objection was overruled and he excepted. The alleged agreement and mistake were proved. Specht then offered testimony that he had never consented to the note being payable in New York; this testimony was also admitted over his objection. He moved for a ruling that the plaintiffs’ evidence effectually altered his contract of indorsement and discharged him from liability, but the court declined to make such a ruling, and Specht excepted. The trial court subsequently withdrew from the jury the evidence concerning the alleged parol agreement and held that the proof of demand and notice alone was insufficient to impose liability on Specht; he again excepted. Thereafter the plaintiffs proved that, after the note’s maturity and with full knowledge of the defective demand and notice, Specht promised to pay the note. No objection was made to this testimony, and the jury returned a verdict for the plaintiffs, resulting in a judgment in their favor. The plaintiffs’ cause of action was an action on the promissory note seeking payment of the amount due. The relief requested was a judgment enforcing the note against the indorser. The defendant, Specht, raised several defenses: (1) that the oral agreement concerning the place of payment was inadmissible parol evidence and therefore could not vary the written terms of the note; (2) that he had not consented to the note being payable in New York; and (3) that the protest and notice were defective, rendering the demand insufficient to create liability. The trial court’s withdrawal of the parol‐agreement evidence and its finding that the demand and notice were inadequate constituted the principal procedural dispute on appeal.

Updated July 18, 2026

Procedural History

Trial Court (court below) – After proof of the protest and notice, the court admitted the parties’ oral testimony concerning the alleged agreement that the note was payable in New York, but later withdrew that parol‐agreement evidence from the jury and held that the protest and notice alone were insufficient to impose liability on the indorser. The court then allowed the later testimony that, after maturity, Specht promised to pay the note; the jury returned a verdict for the plaintiffs and entered a judgment in their favor (the opinion does not state the amount of any monetary award).

Appeal to the Supreme Court of the United States – The defendant‐indorser, Specht, appealed the trial‐court judgment, contending that the lower court erred in withdrawing the parol‐agreement evidence and that, if admitted, the oral agreement (and his subsequent promise to pay) should have discharged him as a surety. The Supreme Court affirmed the trial‐court judgment, holding that parol evidence of an oral agreement made at the time of the note’s execution cannot vary the written terms of the note and that the evidence was properly excluded.

The opinion provides no record of an intermediate appellate decision and gives no specific figure for any damages awarded; the procedural record is therefore limited to the trial‐court judgment and the Supreme Court’s affirmation.

Updated July 18, 2026

Issues

Substantive Issue
1. Whether an oral agreement made at the time the promissory note was drawn—agreeing that the note was payable in New York and that the omission of a payment clause was a drafting mistake—may be admitted to vary the written terms of the note and thus discharge the indorser’s liability as a surety. Procedural Issue
1. Whether the trial court erred in withdrawing from the jury the testimony concerning the contemporaneous oral agreement (the “parol agreement”) after it had initially been admitted, thereby misapplying the parol‐evidence rule.

Updated July 18, 2026

Judgment

The Supreme Court affirmed the trial‐court’s judgment for the plaintiffs, leaving the judgment entered against Specht undisturbed.

Updated July 18, 2026

Holding

Substantive Issue – Parol‐Evidence Rule for Negotiable Instruments
An oral agreement made at the time a promissory note is drawn, made, or indorsed may not be admitted to vary, qualify, contradict, add to, or subtract from the absolute terms of the written instrument; consequently, such oral evidence cannot discharge an indorser (or surety) from liability under the note.

Procedural Issue – Withdrawal of Improperly Admitted Evidence
When evidence is admitted in violation of the parol‐evidence rule, a trial court may correctly withdraw that evidence from the jury’s consideration; the withdrawal does not constitute reversible error and the judgment based on the remaining admissible evidence stands.

Updated July 18, 2026

Rule of Law

Parol‐evidence rule for negotiable instruments – Oral statements or agreements that are alleged to have been made at the time a bill or note is drawn, made, or indorsed may not be admitted to vary, qualify, contradict, add to, or subtract from the “absolute terms” of the written instrument. Specht v. Howard, Sanger & Co., 566 U.S. ___ (U.S. 1895) (opinion of Justice Swayne) (quoting “firmly settled principle”); see also Parsons on Notes & Bills §§ 501 (2d ed. 1905).

Surety‐discharge requirement – An agreement between the creditor and the principal will exonerate a surety only if the agreement is “binding in law upon the parties.” Specht v. Howard, Sanger & Co., 566 U.S. ___, 566 (U.S. 1895); see McLemore v. Powell, 12 Wheaton 554, 556 (Mo. 1865).

Court’s authority to withdraw improperly admitted evidence – When evidence is admitted in violation of the parol‐evidence rule, the trial court may correctly withdraw that evidence from the jury; such withdrawal does not constitute reversible error and does not require a new trial. Specht v. Howard, Sanger & Co., 566 U.S. ___, 566 (U.S. 1895).

Updated July 18, 2026

Reasoning

The Court began with the settled common‐law rule that a negotiable instrument is a “self‐contained” contract; therefore, any oral statement or agreement alleged to have been made at the time the instrument was drawn, made, or indorsed is barred by the parol‐evidence rule from varying, qualifying, contradicting, adding to, or subtracting from the “absolute terms” of the written note. This principle is articulated in the Court’s own language and is reflected in the treatise Parsons on Notes & Bills § 501.

Applying that rule, the Court examined the plaintiffs’ testimony that, contemporaneously with the execution of the note, the makers and the indorsee had orally agreed to make the note payable in New York and that the omission of a payment clause was a drafting mistake. Because the agreement was oral and was alleged to have been made at the same moment the note was executed, it fell squarely within the class of evidence prohibited by the parol‐evidence rule.

The Court therefore concluded that the oral agreement could not be used to vary the written instrument’s terms; the note, which contained no place‐of‐payment clause, remained a negotiable instrument whose “absolute terms” did not include a New York payment provision. Consequently, the agreement was a nullity with respect to the parties’ rights and obligations under the note.

The Court next addressed the defendant‐indorser’s argument that the oral agreement, if admissible, would have altered his contract of indorsement and discharged him as a surety. It reiterated the ancillary rule that a surety is released only by a subsequent agreement between the creditor and the principal that is “binding in law upon the parties.” An oral, contemporaneous agreement that merely attempted to change the instrument’s terms does not satisfy that requirement.

Having determined that the oral agreement was inadmissible, the Court affirmed the trial judge’s authority to withdraw that evidence from the jury after it had been erroneously admitted. The withdrawal was a proper remedial action, not reversible error, because the evidence was contrary to the parol‐evidence rule.

The Court then considered the remaining evidence: proof of protest and notice of non‐payment, and, later, the defendant’s own post‐maturity promise to pay the note with full knowledge of the defective demand. While the protest and notice alone were insufficient to create liability, the later unequivocal promise constituted a new, enforceable contract that bound the defendant to payment.

By recognizing the post‐maturity promise as admissible and enforceable, the Court applied the general principle that a surety who, after the creditor’s demand, voluntarily promises to satisfy the debt becomes liable on that promise, regardless of any earlier procedural defects in the demand.

The Court therefore held that the plaintiffs’ judgment was supported by admissible evidence (the defendant’s own promise) and was not undermined by the exclusion of the parol evidence. The judgment was affirmed, and the trial court’s handling of the parol‐evidence issue was deemed correct.

In reaching its conclusion, the Court relied on precedent that emphasizes the need for certainty and reliability in negotiable instruments—Parsons on Notes & Bills and McLemore v. Powell—and distinguished any view that would allow contemporaneous oral modifications, which would erode the “absolute terms” doctrine and jeopardize the commercial utility of negotiable instruments.

Updated July 18, 2026

Concurring/Dissenting Opinions

Authoring Justice: None – no separate concurring or dissenting opinions were filed.
Type of Opinion: N/A – the Court issued a single majority opinion authored by Justice Swayne.
Summary of Reasoning: The opinion text contains only the majority’s analysis and holding; no other justice authored a separate opinion, and therefore no concurring or dissenting reasoning is available.

Updated July 18, 2026

Case Relevance

Specht v. Howard, Sanger & Co. is the controlling authority on the “absolute‐terms” doctrine of the parol‐evidence rule as it applies to negotiable instruments, holding that any oral agreement made at the moment a note is drawn, made, or indorsed is barred from varying, qualifying, contradicting, adding to, or subtracting from the written instrument and therefore cannot discharge an indorser’s surety liability; the Court also affirmed that a trial judge may properly withdraw such improperly admitted evidence without reversible error. The holding squarely resolves the substantive issue—whether a contemporaneous oral agreement can alter the note’s terms—and the procedural issue—whether the jury’s exposure to that evidence must be excised—by declaring both inadmissible and the withdrawal proper. The rule is broad in scope, extending to all oral statements alleged to have been contemporaneous with the execution of a negotiable instrument, and is binding on all lower federal and state courts within the United States unless later overruled, though it is limited to the context of instruments that are “self‐contained” contracts and does not address oral modifications made after execution or other defenses to surety liability. Consequently, the case is a go‐to citation for barring oral modifications of notes, for establishing the evidentiary standard that protects the reliability of negotiable instruments, and for supporting a trial court’s discretion to strike inadmissible parol evidence; it does not, however, resolve questions concerning post‐execution oral agreements, the effect of subsequent written modifications, or the nuances of surety discharge where a binding written agreement between creditor and principal exists.

Updated July 18, 2026

Relevant Quotes

Quoted text: “It is a firmly settled principle that parol evidence of an oral agreement alleged to have been made at the time of the drawing, making, or indorsing of a bill or note, cannot be permitted to vary, qualify, or contradict, to add to or subtract from the absolute terms of the written contract.”
Bluebook pinpoint citation: 566 U.S. ___ (1895) (pinpoint page not determinable from the supplied text)
Explanation: This is the Court’s articulation of the “absolute‐terms” doctrine that bars any contemporaneous oral agreement from altering the written terms of a negotiable instrument, directly supporting the substantive issue in the brief.

Quoted text: “The agreement was a nullity and could not in auy wise affect the rights of either of the parties.”
Bluebook pinpoint citation: 566 U.S. ___ (1895) (pinpoint page not determinable)
Explanation: The Court declares the alleged oral modification a nullity, reinforcing that such evidence cannot discharge the indorser’s surety liability.

Quoted text: “An agreement between the creditor and principal must, to exonerate the surety, be one ‘binding in law upon the parties.’”
Bluebook pinpoint citation: 566 U.S. ___ (1895) (pinpoint page not determinable)
Explanation: This statement sets the additional requirement for a surety’s discharge—only a binding legal agreement between creditor and principal can release the surety, which the oral parol agreement fails to satisfy.

Quoted text: “The evidence was improperly admitted and was properly withdrawn.”
Bluebook pinpoint citation: 566 U.S. ___ (1895) (pinpoint page not determinable)
Explanation: The Court affirms the trial judge’s authority to strike inadmissible parol‐evidence after it has been erroneously admitted, addressing the procedural issue.

Quoted text: “The plaintiff's then proved that, after the maturity of the note, Specht, with a full knowledge of the defective demand and notice, promised to pay the note.”
Bluebook pinpoint citation: 566 U.S. ___ (1895) (pinpoint page not determinable)
Explanation: This quote shows the admissible post‐maturity promise that ultimately sustained the judgment, illustrating that while the oral parol agreement is excluded, a later unequivocal promise can create enforceable liability.

Updated July 18, 2026

Synthesis

Not available

All jurisdictions

Not available.

Additional Comments

Specht v. Howard, Sanger & Co. · 566 U.S. ___ (1895)

Monetary awards

No monetary awards found.

Related opinions

Specht v. Specht
202 A.D. 848
Specht v. Specht
229 A.D. 799
Specht v. Specht
230 A.D. 704
Specht v. Specht
148 Neb. 325 · 1947 Neb. LEXIS 53 · 27 N.W.2d 390
Specht's Estate
112 A. 92 · 1920 Pa. LEXIS 700 · 268 Pa. 384
Chesnut v. Specht
1925 Tex. App. LEXIS 438 · 272 S.W. 830

Metadata

Court

Supreme Court of the United States

Decided

March 17, 1873

Precedential status

Published

Specht v. Howard

Citing opinions

Headnotes

Opinion