Gilkeson v. Smith

GreeN, PRESIDENT,

delivered the opinion oí the Court:

The answers in this case controvert the authority of John W. Jones to sell the house and lot, the subject of controversy, and dispute the validity of the probate of the will of William Smith by the county court of Bedford, and the validity of the qualification, as his executor, of John W. Jones before that court. This question was expressly decided in favor of his authority in the case of Smith et al. v. Henning, 10 W. Va. 596 . It is true that in that case this Court decided that the authority conferred by William Smith’s will on his executor, John W. Jones, conferred simply a power to sell and not a power coupled with an interest; and that this power was conferred simply to pay debts, and for no other purpose ; and that if under this power John W. Jones as executor of William Smith, sold his leal estate to raise money to be applied to any other purpose, and the purchaser had notice thereof, such sale would be constructively fraudulent as to the devisees. There is not however in this case the least evidence to show that the purchaser, Gil-keson, had any notiee that this sale was not made for the purpose of paying William Smith’s debts. And though the validity of the sale was controverted by the answer, this question was afterwards abandoned by the defendants. The contract of sale was in this case in writing; and the plaintiff, Gilkeson, was put into the possession of the property ; and it is now admitted, that on his compliance with the terms of the contract he was entitled to a deed for this property.

The question really in controversy now is, whether he had paid the entire purchase-money, or tendered the same ; and if not, how much he has paid, and how any *53 balance that may be due from him is to be scaled, if the contract and sale according to the true understanding of the parties was made with reference to Confederate notes as a standard of value, or was to be paid in Confederate notes.

The circuit court decided that the plaintiff, Gilkeson, was entitled to a credit of $715.00 paid on the day of sale September 12, 1863, and to a further credit of $1,050.00 deposited in the Farmer’s Bank of Fineastle on November 18, 1863, to the credit of J. W. Jones as executor of Wm. Smith. It is admitted that the first credit of $715.00 was properly given. The second credit of $1,050.00 was also properly allowed. It is proved by Joel McPherson that on the day of sale Jones suggested that the residue of the purchase-money of this house and lot should be deposited in some bank in Fineastle; ana Gilkeson assented to this proposal. Jones in his letter to Gilkeson speaks of the deposit in the bank at Fineastle and in the absence of all evidence we must assume that there was but one bank there, and that it was the Farmers’ Bank of Fineastle in which it was agreed that the after-payments should be deposited. That this deposit of $1,050.00 was actually made there to the credit of Jones is not controverted; but it is claimed he was not notified thereof. If such notice was deemed essential it is supplied by the letter of Jones to Gilkeson, which shows that in March, 1864, he was informed by the agent of Gilkeson that a deposit had been made in the bank to his credit. It is true, in this letter he says he never authorized or sanctioned this deposit; but this letter was written after the controversy between the parties had arisen; and it- cannot outweigh the sworn statement of McPherson. Indeed the mere fact, that a deposit was made by Gilkeson in a bank distant from his residence, itself renders the statement of McPherson highly probable. It is difficult to conceive why this deposit should be made in a distant bank to the credit of Jones, unless it was made pursuant to an understanding between the *54 parties. It is said however, McPherson testifies that the residue of the purchase-money was to be deposited in this bank, and this authorized only the deposit of the whole residue, and not a part of it. This would, it seems to me, be an unreasonable inference as to what was the agreement, more especially as Jones does notin his letter dispute the validity of this payment because it was only a part of the balance. He does not base hi's assertion, that this deposit was not authorized, apparently on such giounds; but he denies generally that he authorized any deposit in this bank. McPherson proves the contrary; and the court properly allowed this credit.

The decree entered by the circuit court is based on the assumption, that no legal tender of the balance of the purchase-money was made. This assumption of the court, it seems to me, was necessitated by the fact that the pleadings in the cause did not put in issue the Syllabus 5. question, whether any legal tender was made. Whenever a party relies on a tender as a discharge of a debt, he must bring the money into court; and when the pleading setting up the tender is filed, he must offer the money to his creditor. Without now considering the proper form of making this offer, it is clearly essential, if a party relies on a tender, that ho should bring the money into court and offer it to his creditor. It is true that this is not required, if the defense offered is-a tender of ponderous goods, for obviously this would be impracticable. See Co. on Litt. 250 b ; Peytoe’s Case 9 Co. 79 a; Stingerland v. Morse, 8 Johns. 478 ; Jones v. Stevenson, 5 Munf. 1 . But this bringing the money into court, unless waived, is always required, when a debt is claimed to have been discharged by tender of money; for otherwise the creditor, if the tender was proved, would lose his debt; whereas in the case of goods, if the tender is established,.the goods belong to the creditor, and the party in possession of them is regarded as his bailee. See Pelter v. Shelton, X Strange 638; Bray v. Booth, Barnes 252; Chapman v. Hick, 2 Cromp. & M. 633; *55 Eddy v. O'Harra, 14 Wend. 224 ; Brooklyn Bank v. DeGraw, 23 Wend. 394 ; Chaflin v. Hawes, 8 Mass. 261 . And if the money is not brought into court, the defense of tender is disregarded by the court, as these cases show.

This rule is not at all relaxed, when by the contract the debt may be paid in money or notes which, when the defense is set up, is uncurrent, depreciated or not a legal tender, with this modification, that the debtor may then bring into court the identical money or notes which he tendered. But if he fails to do so, or to bring into court legal tender money, his defense of a tender will not be received or considered. See Pong v. DeLindsay, &c., 1 Dyer 82 a, where the plea set up a tender of uncurrent money, which was current when the debt fell due, but which offered the identical money which had been tendered ; and the court held the plea good; and Dowman v. Dowman’s ex’r, 1 Wash. 26 , where the plea was rejected, because it did not bring into court, and offer to the plaintiff, the Virginia notes called for in contract tendered, which were not current when this defense was made.

It seems to me that the requirement, that the identical notes tendered should be brought into court 'when at the time the defense is made they are uncurrent or valueless, is essential to justice ; for otherwise the debtor may have used the notes tendered, when they had a value, and obtained to present to the court the same amount of notes when they became uncurrent and valueless. But be this as it may, it is certainly necessary that the party relying on the tender must bring into court the amount he alleges he tendered, and offer it to his creditor, or his defense will be disregarded by the court. In the present case before us the plaintiff, Gilkeson,>when he filed his bill, did not bring the money he alleged he tendered into court, or any other money. He did not even allege the amount he so tendered, or that he had kept it since the tender for his creditor, or make any offer of it to him. All that he alleges in his bill is “that the balance of the *56 purchase-money be sent to Jones, and bad tbe same tendered to him within twelve months. The tender was made in March, 1864, he refused to receive, as he wrote the plaintiff, because it was the old issue of Confederate notes, when in fact at that time there was no new issue of such money.”

The rules we have stated, though found in common law cases, are equally" applicable to chancery causes. They are based on reasons which apply to one court, as well as the other, and are not technical in their character; and it is obvious that the plaintiff’s bill does not in this case come up to the requirements of the law. No money was brought with his bill into court; and no offer to pay the amount tendered to the plaintiff". It is not improbable that the necessary allegations to make this tender available were not made, because the plaintiff knew that he could not bring the identical notes he claims to have tendered into court; and this he may have regarded as essential to make his tender of any avail to him before the court. But whatever may have been his reason, and whether it was absolutely essential to produce these identical notes or not, it is certain that he did not offer his claim to be exempt from the payment of the balance of this purchase-money, because of this alleged tender, in a manner which justified the court as regarding it, even if it had been proven. His bill did not in a legal manner offer an issue on the question of this tender; and it not being put in issue, any evidence in reference to it was irrelevant to the case, and could not be properly considered by the court. See Hunter’s ex’rs v. Hunter et al., 10 W. Va. 321 .

I shall not therefore consider the questions discussed by counsel, whether Gilkeson was a competent witness to testify on this subject after Jones’s death, or whether his testimony, if competent, and that of Captain Moorman taken in connection with the letter of Jones established the fact, that a tender of $2,150.00 was made in March, 1864. This testimony related to a matter not in issue, and for *57 that reason must be disregarded. I am of opinion that the circuit court did not err in refusing to allow this credit of $2,150.00. The true balance then due by the plaintiff, Gilkeson, on the purchase of this house and lot was $2,068.91 with interest thereon from the 8th day of November, 1863.

It only remains to enquire whether this balance is to be scaled, and if so, at what date shall it be scaled, and what is the proper, mode of scaling it. That it should be scaled is perfectly apparent. The sale of this house and lot took place in 1863, in Greenbrier county, which it is admitted was during the whole war under the military and civil control of the government of Virginia, at Richmond, and that Confederate notes was the currency in circulation then in that county. This alone would make it necessary and proper to scale this debt, unless there was proof that the sale was made on the basis of gold; and so far from this being shown, it is expressly proven that when it was made, Jones, the party making the sale, proclaimed that Confederate notes was as good money as he wanted. Our statute of April 7, 1873, “providing for the adjustment of certain liabilities arising under contracts made between the 1st of May, 1861, and thelstof May, 1865,” Syllabus 2. provides, that “ whenever it shall appear that such contract was, according to the true understanding and agreement of the parties, to be fulfilled or performed in Confederate States treasury notes, or was entered into with reference to such notes as a standard of value, the same shall be liquidated and settled by reducing the nominal amount due and payable under such contract in Confederate States treasury notes, or Virginia treasury notes, to its true value at the time they were respectively made and entered into, or at such other time as may to the court, oi’, if it be a jury case, to the jury, seem right in the particular case.” Acts of 1872-3, ch. 116, p. 307.

That this contract comes within this act and should be scaled is obvious. But whether the scaling under it should be as of the date of the contract, September 10, *58 1863, or at a subsequent day is not so obvious. The circuit court scaled this contract as of the 5th of March, 1864. The time of the scaling of the contract must depend upon “what was the true understanding and agreement of the parties, either expressed or implied, in respect to the kind of currency in which it was to be fulfilled, or performed, or with reference to which as a standard of value it was made and entered into.” To show this the first section of this act permitted the introduction in any case of parol or other relevant testimony. If a note, which under this act should be scaled, was payable on demand, of course the scaling must be as of Syllabus 3. the date of the note. If such note was given payable at a future day, if upon all the evidence it appeared to have been given simply with reference to Confedérate notes as a standard of value, the scaling should be as of the date of the note, and not as of the time when the note became payable. .But if on the other hand the evidence shows Syllabus 4. that the note was not simply given with reference to Confederate notes as standard of value, but that the parties in executing the note or making the contract, the basis of the note, had in contemplation the change in value of Confederate notes between the date of the note and the time it was payable, and intended that it should be paid in Confederate notes at the time the note was payable, no matter how much they might then be depreciated, the scaling must in such case be as of the time when the note became payable.

These views were expressed by me in the case of Bierne v. Brown’s adm’r and on further consideration of the subject I see no reason to change them. I there say, see 10 W. Va. p. 759: “If a contract required the payment of Confederate dollars, or if by parol proof it was shown that this was the express understanding of the parties to the contract, this would have been a contract of hazard, and the obligee would have had to receive, in payment of such an obligation, the number of Confederate dollars named in the contract, no matter *59 how depreciated they might have been when they were to be paid under the contract. But if the contract did' not require the payment in ‘ Confederate dollars/ and the parol proof did not show the express understanding of the parties was that the payment was to be made in Confederate dollars, but only showed that the contract was entered into with reference to Confederate currency as a standard of value, then such contract ought not to be regarded as a contract of hazard, and it ought not to be held that payment was to be made in Confederate dollars,-no matter how much depreciated when the money' became payable, as the parties to such contract must have known, what none could fail to observe, that Confederate notes were constantly and rapidly depreciating. The fair inference to be drawn from the simple fact that the contract was to be fulfilled in Confederate notes as a currency would be, not that the contract was to be fulfilled in Confederate notes calling for the number of dollars named in the contract, which the parties knew would be much more depreciated at the day of payment, but rather that the then vahe (i. e. thp value at the date of the contract) of the number of dollars required to be paid, estimated as Confederate dollars, should be paid, when by the contract they became due, in the currency, whatever it might be, in circulation when it was to be paid.

“The contract so interpreted would have no sort of reference to the currency in which it was to be fulfilled; but the Confederate notes would be regarded simply as a standard of value, which the parties had reference to, whose then value was to be paid at a future time. So understood, a contract made during the war, when and where Confederate notes were the sole currency, in the absence of proof must be regarded as made with reference to Confederate notes as a standard of value. But such a contract ought not, in the absence of proof, to be regarded as a contract of hazard, as it would be if it was interpreted that it was to be fulfilled by the payment of *60 the number of dollars called for in so many Confederate dollar notes. The more recentand sounder Virginia' decisions are really based on this construction of the statute, though it is not so avowed. See Stearns v. Mason, 24 Gratt. 493 ; Myers v. Whitefield, 22 Gratt. 780 . These latter decisions too accord with the decisions of the Court of Appeals of Virginia under the act of 1781, which was very similar to our act, and was passed to remedy the same evils arising during the revolutionary war out of the depreciation of the then currency of the State. See Pleasants v. Bibb, 1 Wash. 8 ; Wilson & McRae v. Keeling, 1 Wash. 194 ; Ambler v. Wyld, 2 Wash. 36 ; White v. Atkison, 2 Wash. 94 ; and the review of these cases by Judge Moncure in Dearing’s adrn’r v. Rucker, 18 Gratt. 465 , in which he gives the substance of the act of 1781.”

Syllabus l.a In applying these principles to the case now before the court, we must determine, whether in point of fact the bond given for the residue of the purchase money was on its face made expressly payable in Confederate notes. The bill expressly alleges that it was payable on or before twelve months from its date, and that it was on the face of the bond expressly stipulated that it might be discharged by the payment of Confederate notes within that time. The answer denies that the sale was made for Confederate notes; but it admits that the purchaser, Gilkeson, executed his bond for the payment of the residue of the purchase-money, and that it was payable twelve months after date. But the answer does not say whether or not it was payable in Confederate notes, though perhaps from the denial that the sale was made for Confederate notes, it may be inferred, that the answer did not mean to admit the statement of the bill that this bond was payable on its face in Confederate notes. And the burden was thrown on the plaintiff to prove this allegation;

The only proof on the subject is the letter of obligee in this bond, John W. Jones, written to the plaintiff, Gilkeson, and written about three weeks before the bond *61 became due. In this letter he says: “My understanding of the meaning of the bond in giving you the privilege' of paying in Confederate money, within twelve months, does not extend beyond that time. I have been willing to take the amount of the bond at any time from the time it was executed to the present time in current Confederate paper or notes, or money as you please to call the currency, and still am willing, and will be till the expiration of the twelve months from the timé the bond was executed.” This bond is in the possession of the defendants or one of them, it is to be presumed, and might have been produced. Not having been produced, this letter I think sufficiently proves that it was on its face expressly payable in Confederate notes.- How exactly it was worded it may be difficult or rather impossible to determine, but even if the interpretation put upon this bond by the obligee had been expressly stated on its face, and it had only given the obligee a right to pay off this bond in Confederate notes at any time before it be7 came due, and had further said that after that time it would not be paid off in Confederate notes, still this would have been obviously a contract of hazard during this twelve months; and as at the expiration of that time it would, as admitted by the obligor, have been his duty under this bond to have received Confederate notes to the amount called for by the bond on its face in full discharge thereof, all the injury which resulted to him by the failure of the obligor to make this payment is the value of this number of Confederate notes at the time they were required to be paid by the note, that is the value of these Confederate notes on the 10th day of September, 1864. The scaling therefore should have been in this case made as of the time this note became^ due, September 10, 1864, and the circuit court erred in scaling it as of March 5, 1864.

The court also erred in the mode adopted by it of sealing this debt. It reduced it to one twenty-third part of the nominal amount due on the bond, because one dollar *62 in gold sold for twenty-three dollars of Confederate notes in Richmond on March 5, 1864, when the court decided the scaling was to be made. This mode of scaling is expressly condemned by this court in Bierne v. Brown’s adm’r et al., 10 W. Va. 748 , decided since the rendition of the decree in this case by the circuit court. According to the rule laid down in that case, and which must be followed in this, the balance due on the purchase of this house and lot on September 10, 1864, was $2,193.00. The value of this amount of Confederate notes on the 10th day of September, 1864, must be ascertained, and when the plaintiff, Giikeson, has paid this value with interest thereon from September 10, 1864, a deed should be made to him for this house and lot; and if he fails to pay it in a reasonable time, this house and lot should be sold to pay this debt; and the proceeds of the sale after the payment of this debt should be paid to the plaintiff.

The value of $2,193.00 in Confederate notes on the 10th day of September, 1864, must be ascertained in the manner prescribed by this court in the case of Bierne v. Brown, 10 W. Va., p. 748, that is, the depreciation of the purchasing value of this $2,193.00 of Confederate notes should be ascertained by the circuit court by determining the average apparent appreciation in value on September 10, 1864, of property, real and personal, in Greenbrier county as compared with prices just prior to the war. The injustice of the rule of scaling adopted by the circuit court is well illustrated in this case. If the scaling had been done by the rulé of the circuit court as of the date of sale, the reduction of the value of the Confederate notes would have been to about one-twelfth part of their nominal amount, that is, to $172.41 in gold; whereas by the correct rule the reduction as of September 10, 1863, would have been probably to about $650.00. What the reduction will be as of date September 10, 1864, must be determined on the evidence taken after this case is remanded to the circuit court.

The decrees of June 19, 1875, and October 30, 1875, *63 must therefore be reversed and annulled ; and the appellants must recover of the appellee, Samuel Gilkeson, their costs expended in this Court; and this cause must be remanded to the circuit court of Greenbrier county to be there further proceeded with according to the principles laid down in this opinion and further according to the principles and rules governing courts of equity.

Judges Haymond and Johnson Concurred.

Decrees Reversed. Cause Remanded.