1. Courts, in the construction of contracts, look to the
language employed, the subject matter, and the surrounding
circumstances, and may avail themselves of the same light which the
parties enjoyed when the contract was executed. They are
accordingly entitled to place themselves in the same situation as
the parties who made the contract in order that they may view the
circumstances as those parties viewed them, and so judge of the
meaning of the words and of the correct application of the language
to the things described. Hence, where flour intended to
Page 72 U. S. 690
be sent to Boston was sold at Neenah, upon Lake Michigan, in
midwinter, and the letter of sale stated that the flour was sold
"free on board steamer at Neenah," and was now "stored," the
inference would be that the flour was to remain in the storehouse
where it was until the navigation opened in the spring, and that it
was to be withdrawn and delivered on board a steamer at Neenah,
free of charge to the purchasers, before the spring season of
navigation closed [which was May 31]. Accordingly, a sale such as
above described will support a declaration (the flour not being
delivered) alleging a sale of flour stored at Neenah and an
agreement to deliver the same, when requested, free of charge to
the purchasers on board of a steamer to be procured or furnished by
the vendors at the place where it was stored after navigation
should open, and a reasonable time before the 31st day of May
following, to be conveyed to the purchasers, at Boston in the
ordinary manner of transportation.
2. Proof of a sale and payment by a sight draft, duly paid, will
support a declaration of a sale for so much "in hand paid."
3. Receiving the price of goods sold and to be delivered, the
refusal to deliver, and a conversion of the goods constitute
plenary evidence of an implied promise to refund the price paid for
them, and an action for money bad and received is an appropriate
remedy for the vendee on such refusal to deliver.
4. Where an agent has entered into a written contract in which
he appears as principal, parol evidence is inadmissible to show,
with a view of exonerating him, that he disclosed his agency and
mentioned the name of his principal at the time the contract was
executed.
5. Where a party pays money on a consideration which fails and
in equity should be refunded -- as for goods deliverable
in
futuro but not delivered -- the measure of damages on the
recovery back is the sum paid and interest upon it, not as
ex.
gr. in the case above, the value of the goods sold at the time
when by the contract they were to have been delivered.
Towne & Washburne, of Boston, Massachusetts, bought of Nash
& Chapin, of Milwaukee, Wisconsin, in February, 1863, a
thousand barrels of flour and paid for them by a sight draft. The
flour was not delivered, and the purchasers, Towne & Washburne,
aforesaid, brought assumpsit for the nondelivery. The declaration
contained a special count and also the common counts.
The former set forth:
"That the defendants, on the 5th of February, 1863, at
Milwaukee,
Page 72 U. S. 691
in Wisconsin, in consideration of $5,500 dollars to them
in
hand paid, sold to the plaintiffs one thousand barrels of
flour, then at Neenah, in the said state, of the value of $5,500,
and agreed that they, the defendants, on the request of the
plaintiffs,
after navigation at Neenah aforesaid should open in
the spring of 1863 and a reasonable time before the 31st day of
May, 1863, would procure, furnish, or provide a steamer on
which to ship said flour, and ship the same to the plaintiffs at
Boston, in the State of Massachusetts,
and deliver the same on
such steamer at Neenah, where said flour then was, free of charge
to said plaintiffs, and to be transported in the ordinary
manner and with necessary and customary transshipments to the
plaintiffs at Boston."
Plea, the general issue.
On the trial the plaintiffs offered in evidence a letter from
the defendants to the plaintiffs dated at Milwaukee, February 5,
1863, as follows:
"Your Mr. W. left here yesterday, and before going off, we sold
him one thousand barrels round hoop flour, Empire Mills, Iowa,
free on board steamer at Neenah, for $5.50, for which find
bill enclosed. We have the flour
stored and insured, . . .
and will value on you at sight for the amount."
Enclosed in that letter was this bill of sale:
"Messrs. Towne & Washburne,"
"Bought of Nash & Chapin, general commission merchants,
1,000 barrels of flour, Empire Mills, Iowa, round hoop, 5 1/2,
$5,500."
"Received payment, sight draft,"
"NASH & CHAPIN"
This evidence was objected to by the defendants because it
tended to prove a different contract from the one declared on. The
court, however, overruled the objection.
The plaintiffs then offered the sight draft with evidence of its
payment, and that it was drawn in payment of this flour. This too
was objected to as variant from the declaration, but the objection
was overruled.
The plaintiffs then read two warehouse receipts, one dated
January 31, 1863, as follows, and the other February 5, 1863.
Page 72 U. S. 692
"NEENAH, January 31, 1863"
"Received in store of Nash & Chapin, five hundred barrels
Empire, Iowa, r.h. flour, to be delivered, on return of this
warehouse receipt, free, on board steamer."
"S. G. BURDICK"
"Endorsed: NASH & CHAPIN"
They then brought witnesses who proved that the defendants had
allowed this Burdick to take the flour from his storehouse at
Neenah, where it was stored, and to sell it to other persons (so to
prove a conversion by the defendants to their own use), and that
they refused to deliver it; setting up that the plaintiffs at the
time of the sale of the flour agreed to take the warehouse receipts
of S. G. Burdick, just above referred to, in lieu of the
defendants' responsibility for the flour, and had requested the
defendants to hold the receipts for them, which they the defendants
had done.
In the course of proving this, they asked a witness who had
inquired of the defendants, in behalf of the plaintiffs, why the
flour was not delivered &c., this question:
"What was said by the defendants as to where the flour described
in the letter and bill was stored; whether it had been delivered,
and if not, as to why it had not been delivered?"
To the admission of that question the defendants objected that,
inasmuch as the plaintiffs had failed to prove the special count in
their declaration and had proved an existing contract to deliver
flour to the plaintiffs, it was not competent for the plaintiffs to
prove any other contract than the one set out, nor to prove a
breach of such other contract under the other counts in the
declaration. But the court overruled the objection.
The defendants, on their side, offered to prove that in selling
the flour, they had acted as agents for Burdick, above named, and
so told the plaintiffs at the time of the sale, and that they paid
over the money, the proceeds of the sale, to Burdick. This was
objected to by the plaintiffs because it
Page 72 U. S. 693
was conversation prior to or contemporaneous with a written
contract (the bill of sale and letter), and would modify or
contradict it, and alter the liability of the defendants under that
contract. The objection was sustained and the ruling excepted
to.
They set up also that the warehouse receipts of Burdick were
accepted by the plaintiffs in lieu of their responsibility for the
flour, a matter which went to the jury on the evidence.
The court charged:
"1. That if the jury found that the plaintiffs had paid money to
the defendants for a consideration which had failed, and which in
equity the defendants ought to pay back, their verdict must be for
the plaintiffs. And if they found that the defendants executed the
bill of sale and letter or contract read in evidence, and the
plaintiffs paid them for the flour specified, $5,500, and the
defendants afterwards failed and refused to deliver the flour when
demanded, then their verdict should be for the plaintiffs for the
amount paid by them and interest unless the defendants delivered to
and the plaintiffs accepted the warehouse receipts in evidence in
lieu of the flour."
At the request of the defendants below, it also charged:
"2. That the plaintiffs cannot recover in this cause against the
defendants damage for the conversion of that flour without proof
that the defendants have, after such conversion, sold the flour and
received pay for it, and in that case for only the amount actually
sold and paid for and only the price paid to them."
And added:
"The converse of such instruction is also true -- that if the
jury find from the evidence that the defendants had sold said one
thousand barrels of flour or any part of it and had received the
money therefor or the benefit of such sale and payment thereof,
then their verdict should be for the amount so received by said
defendants unless they had delivered to the plaintiffs and the
plaintiffs had accepted the warehouse receipts as a delivery of the
flour. "
Page 72 U. S. 694
Verdict and judgment having gone for the plaintiffs, the case
was now here on exception to the ruling of the court admitting the
testimony, and to its instructions to the jury.
Page 72 U. S. 696
MR. JUSTICE CLIFFORD delivered the opinion of the Court.
Controversy in this case grew out of a contract for the
purchase, sale, and delivery of one thousand barrels of flour, and
the parties concur that the flour was never delivered by the
original defendants. Special count, as amended, alleged in
substance and effect that the defendants, on the fifth day of
February, 1863, at Milwaukee, in the State of Wisconsin, in
consideration of five thousand five hundred dollars, sold to the
plaintiffs one thousand barrels of flour, stored at Neenah in that
state and agreed to deliver the same, when requested, free of
charge, to the plaintiffs on board of a steamer to be by them
procured or furnished at the place where it was stored, after
navigation should open, and a reasonable time before the
thirty-first day of May following, to be conveyed to the
plaintiffs, at Boston, in the ordinary manner of transportation.
They also alleged demand and refusal to deliver the flour as
agreed, and claimed damages for the nonfulfillment of the contract.
Declaration also contained the common counts as set forth in the
record.
Plea was the general issue, and the verdict and judgment were
for the plaintiffs, and the defendants excepted and sued out this
writ of error. Exceptions were taken by the defendants to certain
rulings of the court during the trial and to certain instructions
of the court as given to the jury after
Page 72 U. S. 697
the testimony was closed, which will be considered in the order
they are exhibited in the record.
I. Plaintiffs produced and offered to read in evidence, to prove
the issue on their part, a certain letter dated Milwaukee, February
5, 1863, and written by the defendants to the plaintiffs, and a
bill of sale of the flour, executed at the same time and place and
signed by the defendants, and which was enclosed in the letter of
the defendants so offered in evidence. Material parts of the letter
were as follows:
"Your Mr. W. left here yesterday, and before going off we sold
him 1,000 barrels round hoop flour, Empire Mills, Iowa, free, on
board steamer at Neenah, for $5.50, for which find bill enclosed.
We have the flour stored and insured, . . . and will value on you
at sight for the amount."
Enclosed in that letter was the following bill of sale, which
was also signed by the defendants:
"Messrs. Towne & Washburne:"
"Bought of Nash & Chapin, general commission merchants,
1,000 barrels of flour, Empire Mills, Iowa, round hoop, 5 1/2,
$5,500."
"Received payment, sight draft."
"[Signed] NASH & CHAPIN"
Such being all the evidence offered by the plaintiffs under the
special count, the defendants objected that the evidence was not
admissible in the case, because it tended to prove a different
contract from that set out in the declaration, but the court
overruled the objection and the letter and bill of sale were read
in evidence to the jury.
Defendants excepted to the ruling of the court, and that
exception raises the first question presented for decision in the
record. Obviously the exception involves the construction of the
special count, and of the contract exhibited in the letter and bill
of sale offered in evidence.
Argument of the defendants is that the contract offered in
evidence varied from the allegations of the special count in two
particulars:
1. That it differed from the declaration as to the time when the
flour was to be delivered.
Page 72 U. S. 698
2. That it also differed from the declaration as to the shipment
of the flour, and because it contained no agreement to furnish a
steamer.
Undoubtedly the rule is that the proofs must correspond with the
allegations in the declaration, but the requirement in that behalf
is fulfilled if the substance of the declaration is proved.
1. Allegations of fact in the pleadings, affirmed on one side
and denied on the other, must in general be tried by a jury, and
the purpose of the rule which requires that the allegations and the
proofs must correspond is that the opposite party may be fairly
apprised of the specific nature of the questions involved in the
issue. Formerly, the rule in that respect was applied with great
strictness, but the modern decisions are more liberal and
reasonable. Decided cases may be found, unquestionably, where it
has been held that very slight differences were sufficient to
constitute a fatal variance. Just demands were often defeated by
such rulings until the Parliament interfered, in the parent
country, to prevent such flagrant injustice. [
Footnote 1]
Federal courts have possessed the power, from their organization
to the present time, to amend such imperfections in the pleadings
except in cases of special demurrer set down for hearing, and are
directed to give judgment according to law and the right of the
cause. [
Footnote 2]
Recent statutes in the states also confer a liberal discretion
upon courts in allowing amendments to pleadings, and those
statutes, together with the change they have superinduced in the
course of judicial decision, may be said to have established the
general rule in the state tribunals that no variance between the
allegations of a pleading and the proofs offered to sustain it
shall be deemed material unless it be of a character to mislead the
opposite party in maintaining his action or defense on the merits.
[
Footnote 3]
Page 72 U. S. 699
Irrespective of those statutes, however, no variance ought ever
to be regarded as material where the allegation and proof
substantially correspond. Contract in this case was executed in
midwinter, when the navigation was closed and both parties knew
that the flour could not be transported until the navigation opened
in the spring. "Free on board the steamer at Neenah" meant that the
defendants should deliver the flour on board the steamer without
charge to the plaintiffs. Time of delivery is not specified, but it
was to be on board a steamer at Neenah, and it would be
unreasonable to suppose that the parties contemplated that it
should be withdrawn from the warehouse where it was stored in
safety and insured and deposited in a steamer, even if one was
there, before the navigation opened in the spring.
Courts, in the construction of contracts, look to the language
employed, the subject matter, and the surrounding circumstances.
They are never shut out from the same light which the parties
enjoyed when the contract was executed, and in that view they are
entitled to place themselves in the same situation as the parties
who made the contract, so as to view the circumstances as they
viewed them, and so to judge of the meaning of the words and of the
correct application of the language to the things described.
[
Footnote 4]
Applying those rules to the case, it is quite clear that the
parties did not contemplate that the flour should be withdrawn from
the warehouse, where it was safely stored and insured, until the
navigation opened in the spring, because the withdrawal of the same
before that time would have been worse than useless, as it could
not be earlier transported to the place of destination, and if
withdrawn and delivered, it would involve unnecessary expense and
the necessity of re-warehousing it and procuring a new insurance.
Plain inference, therefore, is that it was to remain in the
storehouse where it was until the navigation opened in the
spring,
Page 72 U. S. 700
but that it was to be withdrawn and delivered on board a steamer
at that place, free of charge to the plaintiffs, before the spring
season of navigation closed.
Such being the true construction of the contract as to the time
the delivery of the flour was to be made, it is evident that the
objection that there is a variance in that respect between the
proofs offered in evidence and the special count cannot be
sustained. Averment of demand and refusal in the count is not
unusual in such cases, and, even if not strictly necessary, it
certainly can afford no ground to support the present
exception.
2. Second objection taken at the argument is that the contract,
as proved, does not support the allegation that the defendants
agreed to procure or furnish a steamer at the place of delivery, or
to ship the flour on board a steamer free of charge to the
plaintiffs, as alleged in the special count.
Express words of the contract are "free on board steamer at
Neenah," and the terms of the contract also show that the flour, at
the date of the contract, was safely stored in a warehouse at the
place where it was to be delivered. Those words necessarily imply
that the flour was in the possession and under the control of the
defendants, and that the delivery was to be made in the future.
Terms of the contract also imply as clearly that the place of
delivery was on board a steamer at that port as they do that the
delivery was to be made by the defendants. Freight was to be paid
by the plaintiffs, but the delivery on board the steamer was to be
made by the defendants, and it follows, in the absence of any
stipulation to the contrary, that the defendants were to procure or
select the steamer to transport the flour down the bay, and to the
place of transshipment, over the usual route. Our conclusion is
that the allegations of the special count and the proofs given in
evidence were substantially the same, or in other words that the
differences between them, if any, were not of a character which
could have misled the defendants at the trial, and therefore the
objection must be overruled.
Page 72 U. S. 701
II. Evidence was also introduced by the plaintiffs showing that
the defendants drew on them for the whole amount of the purchase
money in a sight draft, and that they paid the draft, as given in
evidence, when it was presented.
Exceptions were taken by the defendants to the rulings of the
court in admitting that evidence, but the rulings of the court were
so clearly correct that it seems unnecessary to remark further upon
the subject.
III. Plaintiffs also proved that the flour, at the date of the
contract, was stored in a railroad warehouse at Neenah, and that
the defendants had admitted that it had been sold and delivered to
a third person prior to the commencement of the suit. They went
further and proved demand and refusal, and showed that the
defendants, at the date of the contract, had but one thousand
barrels of flour stored in that warehouse and that the whole of
that parcel was sold and delivered prior to the suit, with the
defendants' knowledge and consent.
Witnesses were examined on the subject, and in the course of
their examination two other exceptions were taken by the defendants
to the rulings of the court in admitting testimony. Substance of
the testimony objected to and introduced was that the flour was
withdrawn from the warehouse where it was stored at the date of the
contract under the orders of the defendants, and deposited in
another place, and finally delivered to other parties in part
fulfillment of a much larger contract. Testimony previously
introduced showed that the plaintiffs accepted the sight draft and
paid the same for the purchase money, and that the defendants
refused to deliver the flour, and the evidence objected to was
doubtless offered to show that they had converted the flour to
their own use, and, in our judgment, it was properly admitted for
that purpose. Where the seller of goods received the purchase money
at the agreed price, and subsequently refused to deliver the goods,
and it appeared at the trial that he had converted the same to his
own use, it was held at a very early period that an action for
money had and received would lie to recover back the money, and it
has never been
Page 72 U. S. 702
heard in a court of justice since that decision that there was
any doubt of its correctness. [
Footnote 5]
Assumpsit for money had and received is an equitable action to
recover back money which the defendant in justice ought not to
retain, and it may be said that it lies in most if not all cases
where the defendant has moneys of the plaintiff which,
ex aequo
et bono, he ought to refund. Counts for money had and received
may be joined with special counts, and where, as in this case, the
special counts are for damages for the nondelivery of goods, it is
perfectly competent for the plaintiff, if the price was paid in
money or money's worth, to prove the allegations of the special
counts and introduce evidence to support the common counts; and if
it appears that the defendant refused to deliver the goods and that
he has converted the same to his own use, the plaintiff, at his
election, may have damages for the nondelivery of the goods, or he
may have judgment for the price paid and lawful interest. Evidence
in this case was clear not only that the plaintiffs paid the price
in money, but that the defendants refused to deliver the flour and
converted the same to their own use by selling and delivering it to
other persons. [
Footnote 6]
Such a reception of the price, refusal to deliver, and
conversion of the goods constitute plenary evidence of an implied
promise to refund the price paid, and an action for money had and
received is an appropriate remedy for the plaintiffs.
Principal defense was that the flour belonged to one Samuel G.
Burdick, and that the defendants, in negotiating the sale, acted
merely as the agents of the owner of the flour, and that they,
during the negotiation for the sale, informed the plaintiffs of
their agency and gave to them the name of their principal as the
owner of the flour. They also claimed that the plaintiffs agreed at
the sale of the flour to take the warehouse receipts of their
principal for the flour,
Page 72 U. S. 703
and that the defendants merely held those receipts at the
request of the plaintiffs and for their benefit, and were therefore
under no obligations to deliver the flour.
Such was the theory of the defendants, but there was no proof of
any such agreement except that one of the plaintiffs testified that
the defendants, when the demand was made for the delivery of the
flour, claimed that such was the understanding of the parties at
the date of the contract. Defendants introduced no testimony, but
offered to prove that in negotiating the sale, they acted as
agents, and that they so informed the plaintiffs and gave them the
name of their principal. Plaintiffs objected to the testimony, and
it was excluded by the court, and the defendants excepted. They
still insist that the ruling of the court in that behalf was
erroneous, but they admit the general rule that parol evidence is
not admissible to supply, contradict, enlarge, or vary the words of
a written contract, and it is equally well settled that when a
contract is reduced to writing, all matters of negotiation and
discussion on the subject antecedent to and
dehors the
writing are excluded as being merged in the instrument. [
Footnote 7]
Parol evidence can never be admitted for the purpose of
exonerating an agent who has entered into a written contract in
which he appears as principal, even though he should propose to
show, if allowed, that he disclosed his agency and mentioned the
name of his principal at the time the contract was executed.
[
Footnote 8]
Where a simple contract other than a bill or note is made by an
agent, the principal whom he represents may in general maintain an
action upon it in his own name, and parol evidence is admissible,
although the contract is in writing, to show that the person named
in the contract was an agent and that he was acting for his
principal. Such evidence, says Baron Parke, does not deny that the
contract binds those whom on its face it purports to bind, but
shows
Page 72 U. S. 704
that it also binds another, and that principle has been fully
adopted by this Court. [
Footnote
9]
Cases may be found also where it is held that the plaintiff may
prove by parol that the other contracting party named in the
contract was but the agent of an undisclosed principal, and in that
state of the case, he may have his remedy against either, at his
election. [
Footnote 10]
Evidence to that effect will be admitted to charge the principal
or to enable him to sue in his own name, but the agent who binds
himself is never allowed to contradict the writing by proving that
he contracted only as agent, and not as principal. [
Footnote 11]
Exceptions were also taken to the charge of the court, but they
involve, for the most part, the same questions as are presented in
the objections taken to the admissibility of the evidence, and
therefore do not require to be further answered. Slight as the
evidence was to show that the plaintiffs accepted the warehouse
receipts in lieu of the flour, still the court left that question
to the jury, and their finding upon the subject is conclusive.
Complaint is also made that the rule of damages given to the jury
was not correct, but the complaint is so clearly without merit that
we forbear any further comments upon the subject.
Judgment affirmed with costs.
[
Footnote 1]
1 Taylor on Evidence § 173, p. 187.
[
Footnote 2]
1 Stat. at Large 91.
[
Footnote 3]
3 Phillips on Evidence 4th Am. ed. 148;
Harmony v.
Bingham, 1 Duer 210;
Catlin v. Gunter, 1 Kernan
368.
[
Footnote 4]
Barreda v.
Silsbee, 21 How. 161;
Shore v. Wilson, 9
Clark & Finnelly 569; Addison on Contracts 846.
[
Footnote 5]
Anonymous, 1 Strange 407; 2 Greenleaf on Evidence
124.
[
Footnote 6]
Allen v. Ford, 19 Pickering 217;
Jones v.
Hoar, 5
id. 285.
[
Footnote 7]
2 Kent's Com., 11th ed. 746; 1 Greenleaf on Evidence 12th ed., §
275. p. 312.
[
Footnote 8]
Higgins v. Senior, 8 Meeson & Welsby 844.
[
Footnote 9]
New Jersey Steam Nav. Co.
v. Merchants' Bank, 6 How. 381;
Ford
v. Williams, 21 How. 289;
Oelricks
v. Ford, 23 How. 63.
[
Footnote 10]
Thomson v. Davenport, 9 Barnewall & Cresswell
78.
[
Footnote 11]
Jones v. Littledale, 6 Adolphus & Ellis 486; 1
Parsons on Contracts, 5th ed. 64;
Titus v. Kyle, 10 Ohio
N.S. 444; 2 Smith's Leading Cases, 6th Am. ed., 421.
