after stating the case. The referee found as a fact that when the permanent bond was delivered to the defendant it knew that Goorman was not an employee of *568the plaintiff, and he decided as matter of law that the plaintiff’s written statement of March 15 and the letter of the same date, in which it was enclosed to the defendant, should be considered in connection with the bond, as constituting the contract between the parties, and, when thus considered, those papers together imposed a liability upon the defendant to pay the “honest debt of Goorman,” the act of Goorman in refusing to pay the debt to the plaintiff being an act of fraud or dishonesty within the meaning of the words of the bond. The Oourt below seems to have concurred in this view of the referee. The conclusion is based upon the theory that, as the defendant knew how the plaintiff regarded the transaction, it would be fraudulent to permit the plaintiff to sell goods to Goorman with such an understanding of the contract, and the defendant is consequently estopped to deny its liability. Assuming, notwithstanding what is said in the concluding paragraph of the letter of March 15th, that there is some evidence to charge the defendant with knowledge of the plaintiff’s construction of the contract, the fact remains that, afterwards, the plaintiff received the permanent bond, which secured it only against loss by reason of the dishonesty of Goorman as its agent, and having had this bond in its possession several days, it shipped the goods to him. It dealt with the defendant at arm’s-length and is presumed to have been able to take care of itself in the transaction. When it received the bond its plain duty was to read it, and we must assume that it did. The language of the bond is too clear and explicit to mislead any one. It excludes the idea that the defendant was undertaking to guarantee the payment or collection of Goorman’s debt, and we know of no principle of law which requires us to say that it does so, even when read in connection with the letter and statement. Why did, not the defendant have as much right to rely upon its version *569of tbe contract, that it was merely guaranteeing tbe honesty of an agent, as did tbe plaintiff to act upon its view of tbe transaction, that defendant was guaranteeing tbe payment of tbe debt? Tbe letter and statement of tbe plaintiff to tbe defendant, if we say tbe least of them, were not any more unequivocal in stating tbe plaintiff’s understanding than tbe bond was in setting forth that of tbe defendant. Again we inquire, bow was it any more censurable in tbe defendant to send tbe bond to tbe plaintiff after receiving tbe letter and statement and to permit the latter to sell goods to Goorman, than it was in tbe plaintiff to receive and retain tbe bond without making tbe slightest objection to it and then to sell tbe goods, when it well knew what were tbe contents of tbe bond? In this contention between tbe parties, we are led to believe that tbe advantage is decidedly with tbe defendant. He is relying upon the last written memorial of the contract, which in law is taken to express all that tbe parties intended to put in it, and which merges in itself all prior or cotemporaneous declarations or agreements. Tbe legal effect of a final instrument which defines and declares tbe intentions and rights of tbe parties cannot be modified or corrected by proof of any preliminary negotiations or agreement, nor is it permissible to show bow tbe parties understood tbe transaction in order to explain or qualify what is in tbe final writing, in tbe absence of an allegation of fraud or mistake or unless the terms of tbe instrument itself are ambiguous and require explanation. Meekins v. Newberry, 101 N. C., 17; Bank v. McElwee, 104 N. C., 305; Taylor v. Hunt, 118 N. C., 168; Moffitt v. Maness; 102 N. C., 451. The case of Dellinger v. Gillespie, 118 N. C., 737, is much like our case in principle. It is there said that when tbe defendant received tbe contract be should have repudiated it at once, if it did not conform to the real agreement of the parties, and have acted upon it with full knowl*570edge of its contents. That, if he did not read it, it was his own fault and the law will not relieve him from the consequences of his neglect, and the case therefore must be considered and decided as though he had read it and knew and understood what was in it. The construction of a contract is to be determined, not by what either one of the parties may have understood, but by what they both agreed. Brunhild v. Freeman, 77 N. C., 128; Pendleton v. Jones, 82 N. C., 249; Lumber Co. v. Lumber Co., at this term.
Here we have a solemn instrument embodying the final intention and agreement of the parties, without any allegation of mistake, and we are to construe the same according 'to the legal import of its terms, and upon such legal import there is no room for doubt as to what is the meaning of the writing. We must therefore decide according to the general rule of law that all preliminary negotiations and agreements are to be deemed merged in the final settled instrument of the parties when there is no reasonable showing of mistake. VanNess v. Mayor, 4 Peters, 232; Steamboat Co. v. Steamboat Co., 109 U. S., 672. It is not admissible to add to or engraft upon the contract, as thus ascertained by the law, any new stipulation, nor to contradict those which we find are plainly set forth in it, and the meaning of which is wholly free from any doubt. Oelrichs v. Ford, 23 How., 49; Davis v. Glenn, 76 N. C., 427. If the construction of the letter and statement, as insisted upon by the plaintiff’s counsel, is the correct one, it is directly repugnant to the term;? of the contract as finally -written, and cannot, under the well settled rule, be permitted to overthrow it, for that would be the inevitable result. The plaintiff must be held to have accepted the agreement as finally expressed in the bond and must abide by it. This ruling renders it unnecessary to consider the other exceptions.
The Court erred in giving judgment for the plaintiff upon *571tbe report of - the referee for the amount of the account against Goorman. The judgment should have been the other way, and will be so entered.
Reversed.
PLAIN-TIER'S APPEAL.
This action was brought to recover the amount of accounts for goods sold and delivered to Leopold Goorman and to Lewis Pelton. The referee found in favor of the plaintiff as to the account of Goorman and against him as to the account of Pelton. We have disposed of the case, so far as it relates to the Goorman account, in the decision rendered in the defendant’s appeal. We are now to consider the plaintiff’s exception to the ruling in regard to the Pelton account. There is no substantial difference between the two cases. Whatever difference there may be is unfavorable to the plaintiff. The main question having been decided in the other appeal, it only remains to say with reference to the Pelton account, that the referee found the defendant had no notice as to how the plaintiff construed the bond and that the transaction between the plaintiff and Pelton was not within the scope of the contract of the defendant with the plaintiff. In all other respects the two appeals are substantially alike, and if the ruling in favor of the plaintiff in the other appeal was wrong, the ruling against him in this appeal must be right.
No Error.