Nash v. Towne,
72 U.S. 689 (1866)

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U.S. Supreme Court

Nash v. Towne, 72 U.S. 5 Wall. 689 689 (1866)

Nash v. Towne

72 U.S. (5 Wall.) 689


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the flour was to remain in the storehouse where it was until the navigation opened in the spring, and that it was to be withdrawn and delivered on board a steamer at Neenah, free of charge to the purchasers, before the spring season of navigation closed [which was May 31].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,"


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."


"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

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