Case ID: sc-eq_6/html/0490-01.html
Source: Caselaw Access Project
Author: {"author": "Nott, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Allen Gibson v. William B. Watts.
    1826.
    
      Columbia.
    
    A contract towiftíngpre-ciudes all pa-as to such contract.
    The complainant and defendant had been copartners trade in Columbia, South Carolina, and had dissolved on the 25th of May 1825. This was a bill to account, At the dissolution of their copartnership, they had a large parcel of cotton on hand, in the possession of their factor in Charleston, which Watts agreed to buy of the firm, and gave the following receipt for the same to Gibson.
    
    “Cotton on hand, Watts and Gibson, bought by Watts.”
    
    
      The cotton was then set forth in detail, by parcels and bags, amounting in all to 152,1821 pounds.
    The paper then proceeds as follows.
    24 June, 1825.
    
      “ Received of Watts and Gibson the foregoing number of bales of cotton, weighing as mentioned; for which I promise and agree to account to said firm or their credit at twenty-eight cents per pound ; said firm defraying all expenses on it previous and up to the 25th of May; after which time, I incur all responsibility and expense.
    
      William B. Watts.”
    
    No question arose except as to this sale of cotton, which amounted to $42,611.10. On this subject the bill stated, that on the 25th of May 1825 Watts agreed to purchase from the firm of Watts and Gibson a large parcel of cotton which they then owned, to wit 152,182| pounds, at twenty-eight cents; and which at that time was in their factor’s hands in Charleston; and in case Watts did not take the cotton he was to forfeit $2000; and in pursuance of this agreement, on the 24th of fame 1825 Watts received of the firm of Watts and Gibson the cotton on his own individual account, and agreed to account to said firm or their eredit at twenty-eight cents, the firm paying all expenses previous to the 25th of May 1825, after which Watts was to incur all expenses and responsibility ; and that Watts had since sold the cotton, but at what price complainant was uninformed. The bill, did not set out a copy of the contract, or state it to have been in writing. It prayed that Watts might account, for this purchase at twenty-eight cents, &c.
    The answer to this point stated, that about the '25th of May 1825 defendant and complainant agreed that defendant should take all the cotton then on hand (the quantity of which was not- then known) at twenty-eight cents per pound, upon the condition, that after the cotton should be sold and the account sales returned, either party, finding it to his interest, might pay to the other $2,000, and thereby both defendant and complainant would again become equally interested in and entitled to the profits, and equally liable for the losses upon the sales of the cotton : and although defendant did after-wards, on or about the 24th of June 1825, when the quantity of the cotton was ascertained, give his receipt to complainant for about 149,122 pounds, yet he averred that the original contract above stated was never changed, and that either party would be at liberty upon the returns of account sales of the cotton, to pay the other $2,000, and thereby again become equally interested in the profits and losses ■ of the cotton : nor had defendant yet made his election, whether he would pay complainant' $2,000 and again become equally interested with him in profit and loss, or account to complainant for his share of the cotton at twenty-eight cents, as the account sales of s.aid cotton have not yet been fully returned. j
    On the hearing before the Chancellor, Gregg and Holmes, for the defendant, offered parpl evidence to the following points, which were submitted to the Chancellor in writing, viz. >
    1. To prove what Was the contract between the parties on the 25th of May 1825, referred to in the bill, and set forth fully in the answer.
    
      2. And that the sanie contract was continued by the parties, after the date of the receipt.
    3. And that after the date of. the receipt the complainant claimed an interest in the cotton contained in the receipt, and exercised some ownership oyer it.
    4. That the receipt was not intended to vary or change the previous verbal contract, but was intended to be drawn in conformity to it.
    5 That it was not intended to reduce the whole previous verbal contract to writing.
    6. That the great object of the receipt was, to specify-in writing the quantity of cotton that the defendant should account for, according to the terms of the previous verbal contract.
    7. And that after the date of the receipt both parties considered the previous verbal contract still of force, and acted accordingly.
    8. And that the receipt was drawn, as it now appeared, by mistake.
    9. And to enable the Court to put a correct construction on the receipt.”
    
      M’ Cord and De Saussure contended that the evidence was inadmissible.
    De Saussuee, Chancellor.
    The object then of this application is to be permitted to produce parol evidence to prove that by the parol agreement, which it is alleged was made prior to the reduction of the contract to writing, each party was to be at liberty to put an end to it whenever he pleased; and to have the cotton, or its amount sales, brought back into joint stock for the benefit or loss of the concern. - The loss it is stated is very large on the sales of the cotton: and the defendant seeks to establish by parol evidence the existence of such a parol agreement in order to throw the loss on the concern.
    This question has been well and fully argued, and I have considered it carefully.
    It was conceded that there was no fraud on , the part of Mr Gibson; and that he had no hand in procuring the omission of such a clause in the Written receipt or agreement as, it is alleged, ought to have been inserted. But it is stated that Mr Watts himself omitted the clause by accident, or because it was not intended to'supersede the parol agreement and its terms. To this it is answered that Mr Watts himself drew up the whole agree.ment in his own hand writing; that it is not a mere receipt for the cotton in reference to a pre-existing parol agreement; but that the paper goes on to state the terms on which he did receive the cotton; saying, “ which cotton I promise and agree to account for to said firm of Watts and Gibson, or their credit, at twenty-eight cents per pound, said firm defraying all expenses on it previous and up to the 25th of May, after which time I incur all responsibility and expense.”
    The party pen and Stating the terms of the contract will not tohaveTade a mistake ag-amst nm
    It certainly does appear very extraordinary, that the party himself- interested, holding the pen and stating the terms of the contract even to minute expenses, . . _ . ,. • , should omit so vital a clause as the one alleged to have been by him by mistake, or from thinking it unnecessary. The effect of such a clause too would j^ave ^een so extraordinary, as to render it extremely improbable that tvvo men of business, sitting down gravely to make a contract, should consent to a condition which would be sure to destroy the contract altogether; for it required no gift of prophecy to foresee, that if such a condition was made a part of the contract, it would be finally destroyed. If the cotton sold at a loss exceeding two thousand dollars, Mr Watts would be sure to avail himself of the condition, by rescinding the contract, and throwing the loss on the concern. And if it sold to advantage, Mr Gibson would have assuredly rescinded the contract, and claimed an equal share of profit. The statement made by the bill is far more reasonable and probable, which alleges that it was agreed during the verbal communications, which related to and preceded the written agreement, that until the business was perfected by the receipt of the cotton, William B. Watts 
      should be at liberty to put an end to these verbal arrangements on paying $2000. The locus pmnitentim was thus verbally reserved till the actual transfer of the J . cotton, and the reduction of the terms to writing. The real question, however, is not as to these probabilities. It is, whether the defendant is at liberty to produce parol evidence to prove a condition attached to the written contract, which would essentially vary it, and indeed lead unavoidably to its destruction ‘l
    
    I have had occasion, lately to look into this subject fully, and I have considered it since the argument in this cause.
    The rule under the statute of frauds is quite clear, that such parol evidence is inadmissible; and the decided cases very generally illustrate and enforce the statute. It is certainly true, that in some cases exceptions to the rule have been made in practice, founded on the strong desire of the minds of the Judges to get at the whole of the facts and causes; and which have gone far to defeat the statute itself.
    The truth is, the statute of frauds, forbidding parol evidence to establish certain contracts, is a reproach to human nature. It indicates the deepest distrust of.hu-: man integrity, or correctness of recollection. Some nations carry it further, and require not only that all contracts should be made in. writing, but should be made before a public officer, a notary, or Judge; as we require it, in one case — -the renunciation of dower or inheritance by a wife. This distrust is extended to all cases where the persons called to be witnesses — even where parol evidence is admissible — are to be supposed to have any bias. The test of that bias is, by our law, the having pecuniary interest in the cause. We disregard the bias of relationship, however close, except as to husband and wife, and which is surely a stronger cause of partiality than even the pecuniary interest. Other nations have made close relationship a ground of exclusion of witnesses, more wisely perhaps than our rule. We must, however, be guided by our law. That, as we have stated, excludes parol evidence in cases which come within the provisions of the 17th section of the statute of frauds, as this one we are considering clearly does. The counsel for the defendant thinks, that the case before us comes within the exceptions made in practice to the rule laid down in that statute. Upon the best consideration of the case, I am of opinion, that it does not come within any of the exceptions. The parol evidence proposed to.be introduced is evidence to vary the written agreement. It is to shew that by the parol agreement, which preceded the written, there was a condition, that each party might rescind it; and it is to give effect to that parol evidence. The answer given by the decided cases is, that these parol arrangements are merged in and concluded by the written agreement, which, in this case, contains no such clause or condition. It is urged, that the written was not intended to supersede the pa-rol agreement. The law says, the written does supersede the verbal agreement, and no parol evidence shall be received to shew the contrary. It is urged, that it ought to have been inserted. The answer is, that the intentions of the parties must be judged by the written agreement; and that comes with double force, when the party, complaining of the omission drew the instrument, and inserted particularly all the other terms. It is said, that the complainant acted subsequently in such a manner as to shew that he considered himself as having an interest in the property. The acts so spoken of are not distinctly stated to the Court. If true, they might arise out of obvious considerations. Such acts, if established by parol evidence, could not be used to explain the terms of the written agreement. But that would amount to a new agreement, which would require to be in writing. At any rate, such new substantive agreement to rescind must have no reference to, or connection with, the parol agreement of the first contract, which the law forbids us to hear. Besides, no such new and substantive agreement to rescind is set forth or relied on in the answer. The allegata and probata must agree. It is not necessary to examine the decided cases generally. One which was particularly referred to I will notice. It is Hugely v. Davidson, 2 Const. Rep. 33. On examining that case, it does not assist the defendant. On all the points of the case Judges CoXíCook and Johnson were with Judge Cheves in his able argument. On the point of the rejection of the parol evidence, to control the legal effect of the endorsement, Judge Nott concurred with those Judges. Upon the whole, I am of opinion that the parol evidence, offered in this cause to vary the written agreement, must be rejected.
    
      it cannot be ’ proved by pa-rol, that either party had a right to rescind a written contract. The parol arrangements are merged in the written contract.
    
      The defendant appealed on the ground, that the evidence was admissible.
    
      James G. Holmes, for the appellant.
    The bill in this case did not state that the contract was in writing: when the written contract was produced on the trial it was a surprize to them. The complainant, then, by his bill, put himself upon his verbal contract, and not upon a written contract, which he should have set out in his bill. Not having done so, he should not now be allowed to give in evidence the written contract. But this receipt, if it were a contract — which it is denied to be, being only a receipt — was only evidence of the contract made in May, and might be rebutted by shewing that they had superseded that contract by a verbal contract made afterwards. Both were parol contracts, neither being under seal, and there was no distinction between written and unwritten parol contracts. They were of equal rank, and the same evidence might be given as to the one or the other. This was not a case within the statute of frauds. On the 24th of June there was no necessity to reduce the contract to writing, for the writing said “received”; therefore the cotton being already received, it was of course delivered, and no writing was necessary to the validity of the contract. Roberts on Frauds, 61. 3 Atk. 387. Phillips’s Evidence, 496. Dinkle v. Marshall, 3 Binney’s Rep. 587. But this was not a contract, yet the bill stated that they had agreed. This was no agreement. The proof did not correspond with the proof. The answer stated that they had made a contract or agreement, which must have been a different thing from the receipt offered in evidence. Independent facts or contracts may be proved by parol. 15 Mass. Rep. 85. A receipt in full of all demands may be confined to some particular transaction by parol evidence.
    
      W. F. De Saussure, contra.
    The evidence was inadmissible. To admit such evidence would be suffering parts of conversations loosely spoken to affect the solemn agreements of parties. 2 Atk. Rep. 383. 4 Bro. C. C. 219. 7 Ves. 218. 3 Campb. Rep. 426. This is said to be a receipt and not a contract. But it is as good a bill of sale as can be drawn, and is in the usual form. The defendant can not allege a mistake here, for the contract was written by Watts himself. It was not like a mistake made by an agent. The party wished to avoid his own act. It is too late now to pretend a mistake.
    
      M’Cord, on the same side.
    The usurpations of the English Courts, which have been adopted in this country without reason or reasoning in their construction of statutes, have already become a subject of much discus
      sion in England, and it is time that the Courts in this country should look to the correctness of English cases, before they are adopted as law in this country. These observations are led to by noticing the decisions on the statute of frauds, and several others of equal importance, such as the statutes of limitations, uses, the registry act, &c. They have become so ramified, that no one ever thinks of looking to those statutes to see what the legislature intended. To know what is the law you must examine the cases, where the statute is hardly mentioned, and is not to be regarded, if Lord Eldon, Loughborough, Mr Justice Park, or Best said otherwise. But the spirit of the age is in favour of strict construction. Bonurn est secundum literas et leges, et non secundum propriam mentem, judicare. Mr Miller, in his late “ Enquiry into the Present State of the Laws of England,” pp. 269. 301. 313, has reiterated-many complaints urged as early as the reign of Henry VIII. by “ Seinte Jerman,” in his “ Treatise concerning Sutes in the Chauncery by Subpoena.” — “The common law of the realm (he said) was now taken for nothing. It all goes to the conscience of the Chancellor.” “ It is not reasonable, that for a particular man’s cause, which hath hurt himself through his own negligence, and by his own folly, the good common law of the realm, that is this, that matter in writing, without condition, may not be answered but by matter in writing, or by matter of record, should be made void, or be set at nought by the suit of any particular person in the Chancery, or in any other place.” Appendix to Doctor and Student, p. 22.
    “ Moreover, (says the same old author) you speak much of conscience, and though law will, yet whether it will stand with conscience. In my conceit, in this case I may liken my Lord Chancellor, which is not learned in the laws of the realm, to him that stands in the sale of Whitehorse, far from the horse, and holdeth the horse, and the horse seemeth and appeareth to him a goodly horse, and well proportioned in every point, and that if he come near to the place where the horse is, he can perceive no horse, nor proportions of any horse. Even so it fareth by my Lord Chancellor that is not learned in the laws of the realm; for when such a bill is put unto him, it' appeareth to him to be a matter of great conscience, and require the reformation; and the matter in the bill appeareth so to him, because he is far from the understanding and the knowledge of the law of the realm, and the goodness thereof; but if he draw near to the knowledge and understanding of the common law of the realm, so that he may come to the perfect knowledge and goodness of it, he shall well perceive that the matter contained in the bill put to him in the Chancery is no matter to be reformed there, and namely in such wise as is used.” •
    These remarks of “ Seinte Jerman” were thoroughly applicable to so strange an application as this is on the part of the defendant’s counsel. It is attacking the soundest principles of the law. It has been said, that this is not a case within the statute of frauds. No body says it is. But if the contract had not been-reduced to writing, it would have been one of those contracts for goods which would have been void under the 17th section of the statute, as there was no actual delivery; for thé cotton was in Charleston, and the contracting parties in Columbia. The argument on that subject has been misunderstood. What was contended for, and what the Chancellor meant, was, that this was oné of those contracts which had been executed in pursuance of the statute, and was a contract which would have been within the statute, if not reduced to writing, there being no delivery, or change, of possession; and that in all cases where the contract would have-been within the statute if not reduced to writing, as in cases of sales of land, promises to pay the debt of another, &c. and a contract for the sale of goods above £10 without delivery, in such cases if the contract was reduced to writing, that parol evidence, if admissible in other cases, to explain, vary or correct a written contract, would be totally inadmissible in such cases; because the act says such contracts shall be totally void if not reduced to writing, and therefore as no part could be valid but that reduced to writing, even if there were some other stipulations not reduced to writing they would be void, and it would not only be useless, but in the teeth of the statute, to suffer any such evidence to be given. 2 Evans’s Pothier, 203, 204. Wherever originally the contract is required to be in writing, no variation could be made but in writing. 2 Pothier, 204. Lohd. Ed.
    This is clearly the rule at common law. The contract being once reduced to writing can only be varied or explained by writing. Roberts on Frauds, 9. The statute only enhances the duty of caution. This case does not come within any of the rules of exception which have been so prodigally made by the English Courts, and are collected by Roberts in his Treatise on Frauds, from p. 10 to 89 inclusive. The use and intent of an agreement cannot be varied by parol. Rob. 118, n. This was said to be an executor’s contract. If so, there is more necessity for adhering to the rule than in any other cases. Rob. 172. Jt is said some thing was to be done to this cotton, it was to be weighed, &c. and therefore it was not such a case as would have been within the statute. It is only necessary to refer to that class of cases to shew that this was not one. Rob. 171. 174. In Preston v. Merceau, 2 Black. Rep. 1249, no suppletory evidence was held admissible. In Parkhursi v. Van Cm'tlandt, 1 Johns. Cha. Rep. 279, it is said, that where a contract is reduced to writing all previous negotiations resting in parol are resolved into the writing. A contract could not rest partly in writing and partly in parol. Stephens v. Cooper, 1 Johns. Cha. Rep. 425. In Mumford v. M’Pherson, 1 Johns. Rep. 413, it is said, “all previous conversations are merged in the writing.” See cases referred to in Fell on Guarantees, 57. 59. In Vandervoort v. Smith, 2 Caines’ Rep. 154, no evidence was admitted to explain any particular which composed part of the policy. The contract must be silent as to the matter offered to be proved. Here the contract is neither silent as to the quantity, price nor time. All that is necessary to constitute a contract is here stated. The defendant can give evidence of no matter so stated. Nothing but fraud or mistake can induce the Court to admit parol evidence. 2 Caines’ Rep. 160. see also Putnam v. Bowen, 1 Caines’ Rep. 358, and note. So in Meres v. JLnsell, 3 Wils. Rep. 275, the Court said, the rule was the same in law and equity; and refused the evidence in a case, where it was evident the contract did not contain all that was agreed upon. Any pretence of mistake in this case is idle. It was his own act, done upon deliberation, on an important transaction, upon which he must have deliberated, and acted with caution. The statements were his own. The whole in his own hand writing. Even the figures to a very large calculation of various parcels of cotton, the weight of each bale enumerated, amounting to 152,182§ pounds. The party has not been able to state in what particular the mistake occurred, how it was made, or any thing particular. The answer alleged no mistake. None is pretended there; nor is there any charge of fraud. Gibson’s character was beyond the reach of such an imputation. It was defendant’s own act, and therefore the case of Cheriot v. Barker, 2 John. Rep. 351, applied; for there, on the same pretences, the Court refused to admit parol evidence to shew that an insurance of “freight” meant “freight-earned.” See M'Dawall v. Beckly, 2 Const. Rep. 265. Lord Hard-wicke, in Pateriche v. Powlet, 2 Atk. 383, refused the evidence as contrary to the common and statute law. All the cases in the time of Lords Northington and Thureow, reported in Brown, were clearly with him. In Portmore v. Morris, 2 Bro. C. C. 219, Lord Kenyon, Master of the Rolls, rejected evidence to shew that an annuity was intended to be redeemable. In Hare v. Shearwood, Bul-leb, for the Lord Chancellor, supported the same doctrine, though there was an admission by the defendant that such an agreement was made. 3 Bro. C. C. 168.
    
      Gregg, in reply.
    It is not easy to see what this case has to do with the statute of frauds. It is not a case within the statute. There is a distinction between those cases where the statute applies, and where it does not apply. The general rule of law, as it has been stated, is admitted; but even Chancellor Kent has fallen into error in supposing the rules of evidence to be the same in law and equity. The position is denied. It is against the opinion of Spencer and Thompson, Van Cortland v. Parkhurst, 14 Johns. Rep. 15. The proposition is true generally, but not universally. Equity entertains different jurisdiction from that of the Law Courts, and in such respects permits different rules of evidence. By the law cases it would appear that this evidence is not admissible; but it is because those Courts have no jurisdiction of such a case as this. This is the case of a mistake only to be corrected in equity. How can a mistake be corrected in any case but by parol evidence Baker v. Paine, 1 Yes. Sen. 456. Shelburne v. Inchi-quin, 1 Bro. C. C. 3. Marquis of Townshend v. Stangroom, 6 Ves. 333. In equity the defendant is often permitted to give parol evidence, when it is inadmissible on the part of the complainant. The difference was between the resistance to specific perform-anee and enforcement of it. It is admissible in the former. Woollam v. Hearn, 7 Ves. 212. Chancellor Kent himself has decided a case in our favour, or one similar to this. Stephens v. Cooper, 1 Johns. Cha. Rep. 429. Mistake always formed an exception to the general rule. Gillespie v. Moon, 2 Johns. Cha. Rep. 593. The evidence offered was, to prove that the agreement, as stated in the answer, was the true agreement under which the parties acted from the 25th of May till June, and afterwards. The contract stated in the answer is not so absurd as has been contended by counsel, or as the Chancellor thought. It has often been decided, that a bill of sale, absolute on its face, may be shewn by pa-rol to be a mortgage. Marks v. Pell, 1 Johns. Cha. Rep. 594. Strong v. Stewart, 4 Johns. Cha. Rep. 167.
    But the bill in this case has not set out the contract. It has set out a parol contract. It does not state the contract to have been in writing, therefore the probata and allegata do not correspond. The complainant, by his manner of stating the contract, shewed that there was first a parol contract, and therefore laid the case open to parol evidence.
    May 1826.
   CuRiA, per

Nott, J.

It is unnecessary to the determination of the question now submitted to us, to enter into a consideration of the statute of frauds. The first was a parol contract, and being without consideration could not have been enforced even if the statute of frauds had never existed. It was nothing more than a treaty containing the terms of a contract intended to be entered into, from which either party might have receded at any time before it was executed on either side. The contract was afterwards executed by the delivery of the cotton, and a promise to pay a stipulated price would have been obligatory if no writing had been given. The simple question therefore is, whether, according to the rules of the common law, the parol evidence which was offered ought to have been received, to vary the written agreement into which the parties had entered.

mistake has made by ^rs™r™nfr’ calculation, or m¡stake in matter of feet in a written contract,parol be^Tim may Where a

AH parol agreements by tsubse-**1 quent writing,

A bill need contract to be writing,

With regard to the general rule of law there is no doubt. And the cases which are thought to have the most immediate relation to the subject have been referred to in the opinion which has been already delivered in the case of Blakely v. Hamilton. It has there been . . - . shewn, that when a mistake has been made by the conception of a scrivener, or error in calculation, or any other obvious mistake in matter of fact, parol evidence may be let in to shew such mistake. No such mistake is alleged in this case. It is contended, that although B the contract was reduced to writing, it was still understood that the contract should not be changed from tiie original verbal agreement. But it is a very well settled ° „ , , ° ,, , , , , , rule of law, that all parol agreements are concluded by a subsequent writing, and that no parol evidence can be admitted to shew a contract different from what the writing purports. The contract in this case was drawn by the defendant himself, and it was his own fault if he did not insert all the provisions of the agreement.

It is said that the bill does not state an agreement in writing, and that the party was surprized by the production of such an instrument. His counsel may have surprized and ought to have been surprized, that his client had not instructed him more correctly with regard to his defence. But the defendant could not have been surprized at the production of a contract written with his own hand. If the evidence offered in this case might be received, there is no case in which a parol condition might not be annexed to a written agreement. I am of opinion therefore, that the evidence was properly rejected, and that the decree of the Chancellor ought to be affirmed.

Decree affirmed.