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United States Supreme Court

26 U.S. 591

Tayloe  v.  Riggs

WRIT of error to the Circuit Court for the county of Washington.

This suit was instituted by the defendant in error in the Circuit Court for the county of Washington, for the recovery of a sum paid by him to the plaintiff in error, on a purchase of 7462 shares of stock in the Central Bank of Georgetown and Washington; the plaintiff in the suit alleging, that he had paid to the extent of three per centum on the said stock, upon a contract, that if the Bank should not declare a dividend which would repay him the said three per cent., that the same should be refunded to him. The contract had been reduced to writing, and had afterwards been lost, mislaid or destroyed by the plaintiff.

The declaration contained three counts; 1. Stating a conversation between the plaintiff and the defendant, concerning the sale of the stock, held by the defendant in the bank; and that in the conversation it was agreed, that the defendant should sell to the plaintiff the shares held by him at par; that the defendant represented that a dividend would be made on the same, of four per cent., and stated that the plaintiff should advance and pay to the defendant, so much of the dividend as had then been earned by the bank; and that confiding in the said representations, and believing the dividend would be made, he, the plaintiff, agreed to advance the supposed earnings of the stock, which according to a calculation amounted to three per cent., and a memorandum in writing of the agreement was then made; the stock was then transferred to the plaintiff, and he paid the defendant the par price of the same, and advanced or paid to him the sum of $1902, being the supposed earnings of the bank, at the time of the contract-that at the time of the contract, the bank had made no profits on which a dividend could be declared, nor did the bank, on the regular day of declaring the dividend, make any dividend upon the said stock, by means of which the defendant became bound to refund the sum so advanced for the supposed earnings of the bank. 2. Count Indebitatus assumpsit, for money had and received. 3. Court indebitatus assumpsit, for money laid out, &c.

On the trial of the cause, William Hebb was offered and examined, subject to exceptions to his testimony as a witness on the part of the defendant in error, in relation to the contract between the parties. This evidence is fully stated in the opinion of the Court.

The defendant below requested of the Court certain intructions which were refused, and a bill of exceptions to this refusal was allowed by the Court. A verdict and judgment having been given for the plaintiff below, the case was brought by writ of error from this Court.

Mr. Charles Carter Lee and Mr. Jones for the plaintiff in error.

1. The plaintiff below had not laid a sufficient ground for the introduction of the secondary evidence, which he afterwards produced. The written contract described in his affidavit, is not that proved by the parol evidence, but differs from it essentially. As the contract described was an executed contract, that proved by parol testimony was executory.

2. The contract described in the affidavit, was one upon which an action for a tort might be sustained, and that proved was in contract.

3. If the secondary evidence was admissible, William Hebb was not competent to prove the contract; he does not recollect the terms of the contract, and is not therefore a witness to prove it. Fox's lessee vs. Palmer, 2 Dal. 214.

He had not read it, but had heard it read, which, as has been decided, was equivalent only to reading a copy. 1 Camp. 193. 1 Stark. Rep. 167. This uncertainty as to the contents of the contract, and that there was within the process of the Court a witness who had made out a copy, are also objections to his testimony. Nor does the evidence show with any disinctness, an agreement to do what was claimed by the plaintiff below.

4. The evidence was not admissible upon either count of the declaration, as the testimony given varied from the allegata in both; and the effect of the evidence would be to explain a written contract, which cannot be done by parol. This evidence can only be given to explain an ambiguity. Cope vs. Atkins, 1 Price, 143, and also 404 in the same volume.

That evidence also showed the contract to be executory, and not a contract to refund or pay the dividend, for breach of which indebitatus assumpsit will not lie. Cutler vs. Powell, 6 T. R. 320. 2 Petersdoff, 418. Cook vs. Munstone, 4 Bos. & Pull. 351. Leeds vs. Burrows, 12 East, 1.

Nor does the declaration allege a contract to refund the dividend, nor any consideration sufficient to raise such a contract. The judgment being general, if any one count was bad, the judgment must be arrested. 6 T. Rep. 691. A sale of the supposed profits of a bank does not, ex vi termini, include an agreement to refund them, if no profits are made; nor are representations of the prospects of dividends the subjects of an action.

Mr. Swann and Mr. Key for the defendant in error.

After the decision of the Court below, the only question in the case is, what was the agreement of the parties. It was a sale of stock at par, and of the dividends; and the defendant in error did not get the dividends which he had advanced to the plaintiff in error, and there was an implication that they should be repaid. The evidence was contradictory, and was proper for the jury.

As to the admission of parol testimony to explain written evidence, it is an established principle, that the acts of the parties at the time of the making of the contract may be proved by parol. Many cases might be cited to establish this principle.

As to the breach of the contract, and the liability of the plaintiff in error, the books of the bank show that at the time of the sale of the stock, no profits were made; the plaintiff in error having been president of the bank, knew this, and he knew that the three per cent. beyond the par value of the stock was an advance, and must be repaid, and this may be recovered by indebitatus assumpsit.

Mr. Chief Justice MARSHALL delivered the opinion of the Court.--

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This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).