Tallant v. Stedman

• Decision Date: 21 June 1900
• Citation: 57 N.E. 683,176 Mass. 460
• Parties: TALLANT v. STEDMAN.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

176 Mass. 460

57 N.E. 683

TALLANT v. STEDMAN.

Supreme Judicial Court of Massachusetts, Suffolk.

June 21, 1900

COUNSEL

H. W. Putnam, for plaintiff.

A. P.

Worthen for defendant.

OPINION

LORING J.

In this case the plaintiff introduced evidence showing that she had been cheated by the defendant out of $1,152.50 in the following way: On the 15th of May, 1884, she gave to the defendant, who was a stockbroker in Boston, but not a member of the Boston Stock Exchange, an order to buy for her 10 shares in the capital stock of the Chicago Burlington & Quincy Railroad. On the next day, between the hours of 8 and half past 8 o'clock in the morning, the defendant called at her house, and told her that he had bought the 10 shares of stock ordered, at 115, and that his commission was one-fourth of 1 per cent., amounting to $2.50. She thereupon paid him $1,152.50. On May 23d the defendant wrote the plaintiff that he could not deliver to her the certificate for this stock because the books were closed, and would not be open until the 5th of June. As a matter of fact the defendant did not buy any shares for the plaintiff on May 15th. The books for the transfer of the stock in question were not closed until the close of the business day of May 24th, nine days later; and the defendant paid the $1,152.50 obtained by him from the plaintiff to T. J. Loud & Co., who were members of the Boston Stock Exchange, and were carrying stocks bought by the defendant for speculation on his own account, to keep his margin on that account good. This account was not kept good, and was subsequently closed out by the sale or purchase of the securities in question. On the 19th of June the defendant wrote to the plaintiff, inclosing $20, 'the dividend on 10 shares C., B. & Q.,' telling her that he had failed, and her money had gone in his failure, while 'waiting for the books to open.' The plaintiff handed this letter to Mr. Jenks (since deceased), who was a cousin of her deceased husband. On July 22d or 23d she received from the defendant a letter thanking her for her kindness, and inclosing an agreement dated May 16, 1884, whereby he promised to pay to her on demand $1,150, with interest at the rate of $80 per annum, payable quarterly, beginning on March 15, 1884; and an agreement, also dated May 16, 1884, to deliver to the plaintiff or her legal representatives 10 shares of the capital stock of the Chicago, Burlington & Quincy Railroad within 12 months from the date thereof, on condition that for each share so delivered $115 should be indorsed on the promissory note of even date,--it being understood that the plaintiff should not be compelled to accept the stock in liquidation of the note, but should have the right to demand payment in money. The plaintiff testified that she had received various payments of interest from the defendant, and 'soon after his last payment to me on April 3, 1891, I received notice that Mr. Stedman was in insolvency. I then took the note and agreement to, and consulted with, my attorney, and afterwards proved the note upon the usual blank in the insolvency court.' It appeared that the defendant received a discharge in the insolvency proceedings. This is a suit in tort or contract, and the plaintiff has filed a special declaration setting forth the facts, and concluding with the averment that the defendant 'wrongfully and fraudulently appropriated and converted to his own use and embezzled said sum,' and a statement that 'the defendant owes the plaintiff the sum of $1,706.59, as shown by said account annexed, as money had and received to her use, with interest thereon from the date of the writ.' The account annexed charges the defendant with $1,152.50, and interest, and credits the defendant with the 10 payments of $20, with interest. 'At the close of the evidence the defendant asked the court to rule that, on all the evidence, the defendant was entitled to a verdict; more specifically that, if the original indebtedness was a fiduciary one, the plaintiff lost the advantages of this character by accepting a note in settlement of the same; and also that, even although the debt were originally fiduciary, by the taking of the note under the circumstances shown, and the proving of it in the insolvency court as a claim against the defendant's estate, the plaintiff has lost any advantage arising from the original character of the indebtedness.'

1. The plaintiff is not, as matter of law, barred from prosecuting this action by accepting the $20 inclosed in the letter of June 19th, the two agreements of May 16th, and nine installments, of $20 each, paid under them. Taking the letter of June 19th as a whole, it cannot be fairly held that the acceptance of the $20 sent in it is an election by the plaintiff to hold the defendant liable to make restitution by transferring to her 10 shares of the Chicago, Burlington & Quincy stock and the amount of the dividends declared thereon until that stock should be handed to her, and to relinquish her right to demand from the defendant the $1,152.50, with interest, until repaid. Though the $20 is spoken of in that letter as 'the dividend on 10 shares C., B. & Q.,' the defendant in the same letter writes that he has tried to borrow the money unsuccessfully, and intends to try to borrow it, 'but if not successful I must ask you to wait till I can earn eno' to pay it back.' It was not true that the $20 was the dividend on 10 shares of the stock, but it was the equivalent thereof. Nor was it true, as the defendant stated in the letter, that the plaintiff's money had been lost 'waiting for the books to open.' In short, taking the letter as a whole, the letter did not undertake to put the plaintiff to her election between these two courses of action, and the facts stated by the defendant in connection with the payment of the $20 in question were not true. She was entitled to much more than $20, and it cannot be said that in accepting the $20 inclosed in that letter she elected to take stock, and barred herself from recovering the money paid.

Neither can it be held that the plaintiff has made such an election by accepting the written promises of May 16th, and the nine installments paid under them. The acceptance of these promises, and of the nine installments of $20 each paid under them, are not inconsistent with the plaintiff's pursuing this action, unless the promises were taken in satisfaction of the original claim. A promise by a wrongdoer to make restitution is a promise to do what the law obliges him to do. The giving of such a promise does not, of itself, raise any presumption that it is taken in satisfaction of the original cause of action against the wrongdoer. It is because the giving of a nonnegotiable promissory note in payment of a debt is nothing more than a promise to do what the law obliges the debtor to do that the rule is established that the giving of a nonnegotiable promissory note is not prima facie payment of the debt for the amount of which the note is given. Shaw, C.J., in Thurston v. Blanchard, 22 Pick. 18, 21; Earle v. Reed, 10 Metc. 387, 390. That the giving of a nonnegotiable promissory note is not prima facie evidence of payment, see Greenwood v. Curtis, 4 Mass. 93; Howland v. Coffin, 9 Pick. 52; Maneely v. McGee, 6 Mass. 143, 145; Greenwood v Curtis, Id. 358, 371. It is open to the defendant in such a case to prove that there was, in fact, an agreement whereby the plaintiff agreed that the nonnegotiable note...