In the District Court of the City of Philadelphia. MCCREEDY VS. CALLAHAN. The cost of the stamp required by the U. S. Internal Revenue Act, to be affixed to a deed, is properly a part of the expense of making the deed, and is to be paid by the party paying for the deed. It being the custom in Philadelphia, in the absence of express contract, for the purchaser to pay for the deed, he is also chargeable with the cost of the stamp. Case stated. The defendant purchased at public sale a certain property, at the price of $90,000, plaintiff having previously contracted with him to "execute a good and sufficient deed in fee simple." The deed of conveyance was prepared, and presented to plaintiff to execute, but a question having arisen as to which party should pay for the stamps required by law to be attached to the deed, the cost in this instance being $180, a case was stated for the opinion of the court. The opinion of the court was delivered by SHARSWOOD, P. J.-The question presented now is, whether the vendor or vendee, under a contract "to execute a good and sufficient deed in fee simple," is bound to pay for the stamps. The case states that "it has for many years been the custom in this city that purchasers of real estate furnish the deed." The contract here is not that the vendor shall prepare, but execute the deed. If it had been the former it would have overridden the custom. But as it does not, we see no reason to refuse full weight to such a usage. It is a reasonable custom. It saves all dispute as to the style, manner, and verbiage of the deed, whether it shall be written or printed on parchment or paper, whether the searches shall be more or less minute. Eventually we know that all taxes and expenses attending the transfer of property fall on the seller. The purchaser, if he calculates closely, includes the expenses of obtaining the title, in his estimate of the price, which he will give for the property. A recently published opinion of the Commissioner of Internal Revenue, as VOL. XII.-16 Judgment for plaintiff, $180. to the party chargeable with payment for the stamps affixed to a deed, (Phila. Legal Intelligencer, vol. 20, p. 358), has invited attention not only to the subject specially treated of in the letter of Commissioner Lewis, but also to the precise weight and authority to which such opinions may be entitled in law. I. By the Act of 1 July 1862, sect. 1, the office of Commissioner of Internal Revenue was created "for the purpose of superintending the collection of internal duties, stamp duties, licenses, or taxes imposed by this Act, or which may be hereafter imposed, and of assessing the same;" and by the same section his duties are defined to be "preparing all the instructions, regulations, directions, forms, blanks, stamps, and licenses, and distributing the same or any part thereof, and all other matters pertaining to the assessment and collection of the duties," &c. By these and other provisions, it clearly appears that he is an executive officer, and is charged only with executive duties, except in sect. 103, which provides that if the Commissioner be of opinion that an instrument presented to him is not chargeable with stamp duty, he shall affix to it a stamp denoting that fact, and every such instrument shall then "be deemed to be not so chargeable, and shall be received in evidence in all courts of law or equity not withstanding any objections made to the same, as being chargeable with stamp duty, and not stamped to denote the same." This section, however, though imposing a qualified judicial duty on the commissioner, may be considered as designed merely to estop the Government from claiming a stamp duty after the opinion of its authorized officer that none is due, and to declare that the party so protected against the Government itself shall not suffer any of the collateral punishments provided by the Act for those who neglect the payment of proper stamp duties. That this is the sole object of the provision appears from the fact that the opinion of the Commissioner, should he decide that the instrument requires a stamp, is not made conclusive on the other party, who may still have his resort to the proper judicial tribunal. The Commissioner, therefore, is an executive officer merely, and his decisions are to be received not as authoritative expositions of the law, but as indicating the practice of the department which will, if acquiesced in, become authoritative by force of custom. II. In regard to the special subject under discussion in the case before us, we think the Commissioner's letter open to a good deal of criticism. 1. He says: "The 94th section of the Act of Congress of July 1st, 1862, requires, that the stamp shall be paid for by the person or party who shall make, sign, or issue' the instrument, or for whose use the same shall be made, signed, or issued.' "The 95th section of the same Act, provides, that if any person shall make, sign, or issue, or cause to be made, signed, or issued, any instrument, without being duly stamped, such person shall incur a penalty of fifty dollars, and the instrument shall be deemed invalid." From these he proceeds to argue that it is necessary that the grantor shall affix a stamp to his deed, and that the grantee is not bound to accept it unless properly stamped. He further adds that the grantor is bound by the law to see that his deed is properly stamped, and is liable to the penalties of the Act unless it is done. He must do it himself or cause it to be done; although the expense, as between the parties, may be shifted by contract, their private arrangements cannot affect the obligations of either to the Government, and where there is no contract, the party who makes the deed, is bound to make one 66 that will be recognised, and admitted as an instrument of evidence, which it cannot be till a stamp is purchased or procured, affixed and cancelled." Admitting this to be correct, (though we think the statement of sect. 94 by no means unobjectionable), it would be a fair argument in favor of the duty of the vendor to pay the expenses of the conveyance, were that an open question, but we submit that it is foreign to the present purpose. The question is not who shall affix and cancel the stamp, but who shall pay for it. There is no doubt of the duty of the grantor to sign a deed, and in Pennsylvania to acknowledge it before a justice so that it may be recorded, yet the custom of this state makes the grantee pay the justice's fee for the grantor's acknowledgment, as a part of the general expenses of the conveyance. And the Commissioner, when he says "the expense as between the parties may be shifted by contract," concedes the very point he has been arguing against, for if it may be the duty of the vendee under a special contract to pay for the stamp, why may it not also in the absence of special contract under a custom which constitutes the general law of such cases? It would seem, therefore, that the expense of the stamp does not necessarily fall always upon the vendor or always on the vendee, but depends upon the contract of purchase, or, failing any special provision in that, upon the law established by custom as to the payment of the expenses of the conveyance. 2. The Commissioner next proceeds to discuss the custom established by conveyancers for the vendee to pay for the stamp, as follows: "In some locali ties, it is said that conveyancers have established a rule, that the cost of stamps is to be borne by grantees, and I am asked to say, whether contracts for the purchase and sale of real estate in such localities, may not be properly considered as having been made in reference to such a rule, and thus to have incorporated it. No contract can be properly construed in reference to a rule of conveyancers, until such rule has become a recognised custom, and it is impossible that a custom should exist in the face of a statute less than a year old." With deference to the Commissioner, we again submit that this is no answer to the question asked, or if the inquiry was put in this form it was very inartificially done. The question really presented was not whether conveyancers have made a custom in regard to payment for stamps, which are of recent introduction, but whether the cost of stamps comes within the general custom of conveyancers, already established, that the grantee shall pay the expenses of the convey ance. This is the point decided by the principal case, and though we do not think there was much doubt upon it among the profession previous to the publication of the Commissioner's letter, yet we are glad to see it settled by the opinion of a court of the ability and authority of the District Court of Philadelphia. Of course in other states where the custom is understood to be that the vendor pays the expenses of the conveyance, the principle of the decision would cast upon him the duty of paying for the stamps. J. T. M. In the Supreme Court of Pennsylvania. WILLIAM E. DODGE et al. vs. JOHN N. BACHE. An agent's liability to his principal for negligence by which a third person has been injured, is only contingent, while it is direct and certain to the party injured. An action against the principal by the party injured is res inter alios acta as to the agent, and the record is not admissible in evidence against him, except as to the amount of damages. Therefore the rule that excludes an agent from testifying for his principal in such an action, is not founded in clear reason, and should not be extended; and his testimony should not be rejected, except upon the quantum of damages, unless his liability over has been clearly proved. Bache, plaintiff below, was the owner of a parcel of saw-logs lying in Pine Creek, a navigable stream and public highway, about four miles below Marsh Creek Pond. This pond was also on a navigable stream and public highway, and was kept up by Dodge & Co., plaintiffs in error, for the purpose of running the saw-mill thereto attached, and also for the purpose of a harbor for sawlogs. It was so constructed that about eight feet of head could be let off at once, thereby making a flood in the creek below. These logs were put into the creek for the purpose of being floated to a mill about one mile below. McDougall was the agent of Dodge & Co., and had the general supervision of their business about this mill and pond, and had notice that these logs were in the creek below, and liable to be washed away by a flood from this pond. He took no precautions to guard against it, but let the pond off without any notice to Bache, and washed the logs away. Thereupon Bache brought his action on the case against Dodge & Co. for the negligence of their agent McDougall. On the trial defendants offered the deposition of McDougall, the agent, showing that the act complained of was not done by him. To this offer plaintiff objected on the ground of interest in the witness, and the court sustained the objection. This is the point assigned as error in this cause. Pierce and Wilson, for plaintiffs in error.-The deposition of McDougall was rejected upon the ground that he was interested in the event of the cause. A recovery against the defendants below would not necessarily have entitled them to a recovery against him. To exclude his testimony the plaintiff must make out a case for the defendants against him: Me Credy vs. The Schuylkill Navigation Co., 3 Whart. 441; Smith vs. Seward, 3 Barr 342. Henry Sherwood, for defendant in error.-The deposition of McDougall went directly to throw the responsibility off the shoulders of the witness and put it on to others, and thus relieve himself of all responsibility to his principals, the defendants below. For this purpose he is not a competent witness: 1 Stark. Ev. 149; 1 Greenl. Ev. 540, § 417; McDowell vs. Simpson, 3 Watts 135; Juniata Bank vs. Beale, 1 W. & S. 229; Plumer vs. Alexander, 2 Jones 81; Dorance vs. Commonwealth, 1 Harris 160, 165; Schuylkill Co. vs. Harris, 5 W. & S. 28; Orphans' Court vs. Woodburn, 7 Id. 166; Gilpin vs. Howell, 5 Barr 51. The witness was not released. He was not a competent witness until he was. The declaration charges the negligence of the witness while acting as the agent of the plaintiffs in error. That negligence was the gist of the action; the evidence sustained the declaration. The opinion of the Court was delivered by STRONG, J.-The rule which excludes an agent from testifying for his principal, in actions brought against the principal for alleged negligence of the agent, though recognised in many cases, is not founded in clear reason. He is held generally incompetent, because, in the event of a recovery against his principal, he would be liable over, and the judgment recovered would be admissible in evidence against him. His liability to his principal is, however, but contingent, while it is direct and certain to the party injured by his negligence. Satisfaction recovered from his principal exonerates him from this certain liability, and leaves his responsibility over still only contingent. But it is said the judgment |