On appeal from a judgment of the District Court of the Fourth Judicial District of the county of Bergen.
For the appellants, James A. Major.
For the respondent, Jesse B. Leslie.
Before Justices Trenchard, Heher and Perskie.
The opinion of the court was delivered by
HEHER, J. Plaintiff sued to recover the commission claimed to be due under an instrument in writing, bearing date June 23d, 1934, purportedly constituting him as defendants' "sole and exclusive agent for the sale, exchange or rental" of a parcel of real estate owned by them, and binding the owners to pay compensation at a specified rate on the sale price, in the event of a sale of the property, within three months from the date thereof, by the "owner, or through any other source." Defendants sold the property during the term thus prescribed, but not through the efforts of plaintiff; the sale was negotiated by another broker. The District Court judge, sitting without a jury, rendered judgment for plaintiff, and defendants appeal.
The single question of law presented by the state of the case is the propriety of rulings by the trial judge overruling questions designed to elicit proof of fraud in the procurement of the contract in suit, in that plaintiff "informed the
defendants that it was not a contract but a mere statement which he had to have before he could list the property with the Bergen County Real Estate Association; that the defendants could retain any broker they wished to sell the property and that the one selling the property would be the one to be paid the commission." The defendant John P. Lalor testified that "at the time he affixed his signature thereto the so-called agreement was in blank."
The District Court judge mistakenly conceived that the parol evidence rule was applicable. He concluded, according to the state of the case, "that if a person could read and write and signed an agreement he could not allege fraud because it was his duty to read the contract before he signed it."
It is true that, ordinarily, one's signature as a party to a written contract raises a conclusive presumption that he read, understood and assented to the terms thereof. But this rule is not applicable where the evidence tends to establish fraud in the execution of the instrument. The parol evidence rule does not come into play until the parties have assented to a certain writing or writings as the statement of a contract between them. Williston on Contracts, § 634. Where the signature was procured by fraud or imposition practiced upon the signer, with intent to deceive him as to the purport of the document to which his signature is appended, it is not his deed. He has not, in such circumstances, assented to the terms of the writing as an expression of a binding contractual obligation. If, through the fraud or imposition thus practiced, he is induced to affix his signature to a paper which he otherwise would not have signed, the parol evidence rule does not operate to bar this defense that denies the reality of consent essential to give rise to a contract, and therefore goes to the very existence of the asserted obligation. Dunstan Litho. Co. v. Borgo, 84 N.J.L. 623; Diamond Rubber Co. v. Feldstein, 112 Id. 514; Alexander v. Brogley, 63 Id. 307. It may therefore be shown, by parol, that the writing was never executed or delivered as a contract. Professor Williston states the distinction thus: "Fraud may induce a person to assent to do something which he would not otherwise have done, or it may induce him to believe that
the act which he does is something other than it actually is. In the first case the act of the defrauded person is effectual though voidable; in the second case the act of the defrauded ...