Kirtland v. Molton

A. J. WALKER, C. J. This action is founded upon three promissory notes, dated the 8th December, 1861; one payable in February, one in April, and the other in July, 1865. There was proof conducing to show, that it was understood and agreed between the parties that the notes should be discharged by a payment in Confederate currency. The material question presented in the case is, what is the measure of damages for the breach of the contract of payment of the respective notes, a part of which became due before the overthrow of the Confederate government in Alabama, when the Confederate currency was worth something, and a part became due afterwards, when such currency was worthless as money. The question is to be determined in reference to both classes of contracts. The third section of the ordinance of the convention, adopted the 28th September, 1865, (Revised Code, 59,) is in the following words : “ In all suits upon contracts made between the first of September, 1861, and the first of May, 1865, parol evidence shall be admissible, to prove what was the consideration thereof, and whether or not the parties thereto understood, or agreed, that the same should be discharged in Confederate currency, or treasury-notes; and if so, or if it appears so from the contract, then to show what was the real or true value of the consideration of the said contract, and what amount the plaintiff is legally, justly, and equitably entitled to receive, according to the contract, by the judgment of the said court.” In the case of Tarleton v. Southern Bank, at the present term, it was contended, that the section of the ordinance above quoted impaired the obligation of written contracts, in authorizing the admission of parol evidence of an agreement or understanding for the discharge of the contract in the specified currency. This court overruled this proposi — 559 — tion, maintaining the constitutionality of the clause authorizing the admission of such evidence, upon the ground that it merely swept away a rule of evidence, which the policy of the law prescribed, and which prevented the ascertainment of the real and true obligation of the contract through the agency of parol evidence. In that point of view, the clause did not impair the obligation of the contract, but facilitated its ascertainment. The supreme court of North Carolina, in Woodfin & Patton v. Erwin Sluder, at its January term, 1867, decided the same question, as this court has done. The decision in Tarleton v. The Southern Bank,supra, vindicates the constitutionality of the clause, upon the ground that the stipulation as to the currency in which payment was to be made was really a part of the contract, and that the ordinance only removes a difficulty in the way of proving the fact that it was a part of the contract. The notes, if the jury believe that the understanding or agreement stated in the ordinance is proved, are to be read as if they were promises to pay so many dollars in Confederate currency. The measure of damages, for a failure to fulfill such a contract on the part of the promisor, is, and has long been, well established in this State ; and the rulings of this court upon the subject are in harmony with the decisions generally in the United States.—Jolley v. Walker, 26 Ala. 690 ; Williams v. Sims, 22 Ala. 512; Wilson v. Jones, 8 Ala. 536; Young v. Scott, 5 Ala. 475 ; Blair v. Rhodes, 5 Ala. 648; Jackson v. Waddell, 1 Stew. 579 ; Robinson v. Noble, 8 Peters, 181; Lanier v. Trigg, 6 Sm. & Mar. 641; Gordon v. Parker, 2 ib. 485; Bonnell v. Co ington, 7 How. (Miss.) 322; Smith v. Dunlap, 12 Ill. 184 ; Hixon v. Hixon, 7 Humph. 33 ; Phelps v. Riley, 3 Conn. 266 ; Anderson v. Ewing, 3 Litt. 245 ; Van Vleet v. Adair, 1 Blackf. 346. The measure of damages, thus established, is the value of the Confederate currency at the time of payment, when the breach was committed by a failure to pay the stipulated amount of such currency. This was the law at the time when the contracts which are the subject of suit in this case were made. The value of the consideration, upon which the contract — 560 — was made, is not an element to be considered in the ascertainment of the damages due upon a breach. The standard of their measure is the value of the currency or thing to be paid or delivered. There can be no question that the right to recover damages according to this standard is of the essence of the contract, and is guarded by the prohibition against imparing the obligation of contracts, contained in the constitution of the State of Alabama and of the Confederate States, which were in force in this Stato when the contract was made, as well as in the constitution of the United States. So, on the other hand, the obligation of the promisor to pay damages according to that exact standard, and according to it alone, is guarded by the same constitutional provision. Any legislation, which would increase or lessen the measure of the recovery for the breach of the contract, impairs its obligation, and must be void.—McCracken v. Hayward, 7 Howard, 608; Grantly’s Lessee v. Ewing, 3 Howard, 707; Curran v. State of Arkansas, 15 Howard, 319. Therefore, if the ordinance of the convention be understood to substitute the value of the consideration, for which the notes were given, for the value of the Confederate money to be paid, it impairs the obligation of the contract. So, also, if it should make the value of the consideration an element to be regarded in ascertaining the extent of damages, it would violate the constitution; for the prohibition of the constitution does not look to the degree of impairment, but is as intolerant of the smallest, as of the greatest infringement of the obligation of a contract.—Ex parte Pollard, 40 Ala. 77, opinion of Walker, C. J. And the prohibition applies as well to a State convention, as to a State legislature.—Dodge v. Woolsey, 18 Howard, 331. The third section of the ordinance may be divided into two clauses; the first of which declares, that evidence of what was the consideration, and of the understanding or agreement as to payment in Confederate money, should be admissible; and the latter of which prescribes, that if there appears to have been an understanding or agreement for payment of Confederate currency, the value of the consideration, and the amount to which the plaintiff might — 561 — be legally, justly, and equitably entitled, could be shown. The first clause, in permitting the ascertainment of the stipulation for payment of Confederate currency, is susceptible of a complete execution, upon legal principles, without the aid of the latter. When, under its authority, proof is admitted of the additional term as to Confederate currency, the established and pre-existing law meets the exigency of the case, and restricts the s recovery of the value of the stipulated number of dollars of Confederate currency. It is obvious, therefore, that this (the first) clause can stand, and be enforced, without the latter; and even if the latter be unconstitutional and void, it is susceptible of enforcement by the courts, and should be enforced, according to the principles which are herein before laid down.—Mobile & Ohio Railroad Company v. State, 29 Ala. 573. The value of the consideration can not influence the measure of recovery, when the promise is to pay a fixed amount of Confederate currency, at a specified time ; because the law of the contract, which the constitution protects from impairment, does not permit it. We are required, upon an established principle of interpretation, to strive to find some other operation for the provision as to proof of the value of the consideration, and to avoid, if it can reasonably be done, a construction which places the law in conflict with the constitution. The ordinance of the convention is applicable not merely to written contracts for the payment of a specified amount of the Confederate money, but to all contracts to be discharged in such money, whether the amount is specified or not. Eor example, if services have been rendered, or goods sold, upon a contract to be paid for in Confederate money, without any specification of the amount, the contract would properly be the subject of a quantum meruit, or quantum valebat count. Under such a count, proof of the value of the consideration would be appropriate and necessary. There are, doubtless, other cases also, in which such proof would be proper and admissible. The objection may be made, that this view gives no effect to the provision of the ordinance as to proving the value of the consideration, because such evidence would be com — 562 — petent without the aid of the ordinance. To this objection there are two replies: that the courts are bound to lmow, that legislative provisions are sometimes rather cautionary than necessary, and adopted more from an apprehension of their necessity, than an enlightened legal conviction of it; and that cases may possibly arise, in which the consideration is so stated in a written contract, as to preclude free and unembarrassed investigation by parol evidence as to what the consideration was, and as to its value. "We may, therefore, find for the adoption of the provision as to the proof of the consideration and its value a reason in abounding caution, and also in the possible necessity of it in some cases, in order that an inquiry into the consideration might be had, unaffected by the rule which prohibits the varying of a written instrument by parol evidence. To hold that the convention intended, by the second clause of the section, to set aside the established law applicable to the contract, as to the measure of recovery, and substitute the value of the consideration, would make the clause itself inconsistent. It permits the party to show the value of the consideration, and what amount the plaintiff is entitled to receive “ according to the contract.” There is an obvious repugnancy in the clause, if it be understood to contemplate a recovery measured by the plaintiff’s right “ according to the contract” and to contemplate the rejection of the plaintiff’s legal right under the contract, and the adoption of the value of the consideration in place of it. The difficulty of finding an office for all the words of the section, consistently with the constitutional restraint upon State legislation, is acknowledged. It is a judicial duty to seek for such a construction ; and we think we have suggested one tolerated by the rules of intepretation. Be that, however, as it may, the first clause is entirely free from constitutional objection ; and under its operation, without the last, the plaintiff’s recovery, in this case, is to be ad-measured by the value of Confederate money at the time when the respective notes fell due. The construction which we have suggested for the last clause, and which harmonizes it with the constitution, avoids any conflict with the — 563 — law-appointed measure of the plaintiff’s recovery, when the additional stipulation as to Confederate money is proved. We realize and sympathize with the hardship which must arise in those cases where the maturity of the note was at a time when the Confederate money was of but little value; or was after the surrender of the Confederate armies, when such money was of no value. In the former class of cases, the recovery would be very small; in the latter, it would be restricted to nominal damages. The promisee having contracted for payment in a currency of fluctuating value, subject to the vicissitudes of war and politics, must submit to the depreciation, as he would have received the benefit of any appreciation, had the order of events been reversed. The hardship here is striking in its degree, but the same in kind with that which is of frequent occurrence in trade and commerce. An analogous case would be presented, if a promise were accepted for the payment of cotton, upon a basis of value of thirty cents per pound, and, at the time of payment, its value should be reduced to six or ten cents. Confidence would be destroyed, and trade paralyzed, if the obligation of contracts were made to yiejd to hardships, incident to the fluctuations of values and currencies. The sanctity of contracts is consistent with true policy, and exacted by the constitution. A party, acting fairly and lawfully, has a right to stand upon his contract; and has a right to the benefit of a good bargain, if superior sagacity, caution, or forecast, has enabled him to make one. If each one of two persons buys, at a fair sale, the same article, at the same time, one agreeing to give double the value, and the other one-half, each must pay according to his contract; and there is no principle of law, which would graduate the liability of either by the value of the thing bought. If the events which occurred after the making of the contracts in this case, have developed a good bargain to the promisor, he is entitled to the benefit of it, and can not be required; for the relief of a hardship, to pay the value of the things bought. Such a requirement would violate the constitution. The value of the consideration is competent proof, on account of its pertinency to the question, whether the parties understood, or agreed, that payment of Confederate — 564 — money should be made. But it was admissible in no other point of view in this case. The measure of damages in this case is fixed by the law, and could not be left to be determined by the jury, according to their sense of equity and justice under all the circumstances. The decision in Sheible v. Bacho, at the present term, settles the point, that the contracts in this case are not illegal and void. Reversed and remanded. BYRD, J. I am inclined to the opinion, that the convention was not clothed with any legislative power, and that the exercise of it in the adoption of the ordinance of the 28th September, 1865, (No. 26,) is unauthorized, and the ordinance void.—Jameson on Constitutional Conventions, 309, 310, et seq. The constitution of the State then in force clothed the general assembly and the executive with all legislative powers; and that constitution must be held to be in force until the new one is substituted in its place. And the new one has the same provision, in this respect, as the old one. I do not say that, if the new constitution provided for the validity of such ordinances, they would not be valid ; nor that, if they were submitted to a vote of the people, and ratified, they would not be valid. But neither was done by the convention of 1865. Its power was limited to the formation of a State constitution, and no legislative power was conferred on it by any competent authority, nor have its ordinances been ratified by the people. Be this as it may, my brethren hold that the ordinance is valid and constitutional; and to this I yield in my judicial action. I do not think that the ordinance referred to is constitutional, in so far as it may seek to interpolate a stipulation in contracts which, when they were made, was not by the law of the land a part of the contract. To give it such an interpretation, would be violative of that provision of the national constitution which inhibits a State from impairing the obligation of contracts. In the case of Ex parte Pollard, decided at the June term, 1866, of this court, Walker, C. J., in delivering an — 565 — opinion, in which I concurred as to the portions hereafter cited, said: “The prohibition of the constitution is as to the impairment of the obligation. This must not be confounded with destruction; it may be impaired, and yet not destroyed. * * * The obligation is impaired, when it is made worse; diminished in quantity, value, excellence, or strength. The objection to a law can never depend upon the extent of the change which the law effects in it.” And again: “One of the tests that a contract has been impaired is, that its value has by legislation been diminished. It is not, by the constitution, to be impaired at all. This is not a question of degree, or manner, or cause, but of encroaching in any respect on its obligation, or dispensing with any part of its face.” And again: “ As the legislature cannot directly impair the obligation, a fortiori it cannot by indirect means.” In the language of Chief-Justice Marshall, “The principle in the contemplation of the framers of the constitution was the inviolability of contracts, and this principle was to be protected in whatever form it might be asserted.” And he further quotes from an opinion of Mr. Justice Trimble, approvingly, as follows : “ Whether the law professes to apply to the contract itself, to fix a rule of evidence, a rule of interpretation, or to regulate the remedy, it is equally within the true meaning of the constitution, if it in effect impairs the obligations of the contract.” This ordinance, tested by the principles thus laid down in the opinion of the Chief-Justice in the case of Ex parte Pollard, is clearly violative of the Federal constitution, if it means to allow the interpolation of a new stipulation in the contract by parol evidence, where by the principles of the common law such a stipulation could not be inserted, except by an application to a court of equity to reform the contract; or if it means to change the contract, by allowing the “ true value of the consideration” of the contract to be recoverable, instead of what the parties agreed was the value thereof; or if it means that the value of Confederate money at the time the contract is due and payable is recoverable; or if it means that the creditor can only recover the value of Confederate treasury-notes at the time the contract falls due by its terms, in cases where the con — 566 — tract is not upon its face dischargeable in such notes, or by some agreement which makes it so, and which is, by the principles of the common law, or by the doctrine of courts of equity, binding upon the parties to the contract. Mr. .Justice Judge, in the case of Ex parte Pollard, in his opinion holds the same doctrine as Chief-Justice Walker, above quoted; for in his opinion he says : “The obligation is the law which binds the parties to perform their agreement, according to its essence, nature, construction, and extent.” And in speaking of the power of the legislature over the remedy, he says: “ That this power is subject only to the restriction, that it cannot be exercised so as to take away all remedy upon the contract, or to impose upon it new burdens and restrictions, which materially impair the value and benefit of the contract.” Now, if the legislature allows the contract to be materially changed, whether by the instrumentality of evidence which by law is inadmissible, or by any other indirect or direct means, it would effectually “ impair the value and benefit of the contract.” If the contract, at the time it was made, and when the ordinance was adopted, -had a certain and fixed obligation, which bound one party in law to pay a certain amount of money, and the other to receive it, in discharge of the contract, this right is protected by the constitution of the United States, as much in favor of the one party as the other; and no State action can diminish the amount the payee is entitled to receive, or enlarge the amount the payer is obligated to pay. An understanding, not expressed in a written contract, is no part of it; and if parties thereto were to agree that it was to be paid in Confederate treasury-notes, and the agreement was left out of it by the consent of both parties ; or if it was not contained therein, for any reason for which a court of equity would refuse to reform it; then it would not be a part of the contract, or binding on either party.—Leslie v. Langham’s Executors, 40 Ala. 521. And to give such an understanding validity, would be directly violating the obligation of the contract, by the interpolation of a new term in it, which diminishes the amount due by its terms at the time of its execution. — 567 — In my opinion, the only constitutional operation which can be given to the ordinance, is to allow a party, in a court of law, to prove an agreement that the debt was discharge-able in Confederate currency, where it would be allowable to do so in a court of equity, on a bill to so reform the contract, and to fix thereby the measure of damages. But I doubt whether that was the intention of the convention. For the ordinance, construed by the language contained therein, clearly indicates that the intention of the convention was to make the “ true value of the consideration” of the contract, the measure of damages. It was not its intention to make the value of Confederate money at the date of the contract, or at its maturity, the measure of damages. The former intention is clear from the use of the phrases, the “ true value of the consideration of the said contract,” and “ according to the contract.” If the convention had meant the value of the Confederate money, it would not have used the words “ true value of the consideration.” If it had meant the value of Confederate money at the maturity of the contract, it would not have used the words “of said contract,” and “ according to the contract;” but would have used, in the first instance, the phrase “of said understanding or agreement;” and in the latter, “according to the understanding or agreement.” The word contract, in both instances, refers to the words “ contracts” and “ contract,” used in the foregoing part of the same section. It is so clear from the language of the statute, when construed by legal rules of interpretation, that the convention intended by the ordinance to make the “ true value of the consideration,” and not the value of the thing in which that consideration was dischargeable, the measure of damages, that it is impossible for me to give any other construction to the ordinance. Where two constructions can fairly and legitimately be given to a statute, it is the duty of the court to adopt the one which is constitutional, if one is so and the other not, although the one adopted is not the one which the language would most naturally suggest. But this follows from another rule, which requires the court to give some effect to a statute, if it can be done according to — 568 — the rules of law. But those rules do not require a court to adopt an interpretation, which is in direct conflict with the language of the statute and the intention of the legislature, when the language is clear and explicit in expressing an intention which is inconsistent with the constitution. "We cannot give effect to a law by a strained construction, when the natural import of the language is clearly repugnant to such a construction. In such a case, the legislative intent must be declared unconstitutional, and the courts cannot supply it with one which is constitutional. If so, then a court could always avoid declaring a law unconstitutional, by casting out a drag-net, and fishing, up an intention which would answer the purposes of the occasion. I cannot, according to my views of legal principles, supply an intention, which is not only not expressed, but is clearly negatived by the language of the convention; and that, too, when, in my opinion, the supplied intention is as unconstitutional as the one expressed. The ordinance is unconstitutional, in attempting to make a contract, which, upon its face, is payable in Confederate currency, recoverable on the value of its consideration, instead of upon the value of the currency in which it is dischargeable. In my opinion, the third section of ordinance No. 26 is wholly unconstitutional, unless it is allowable under it for a contract to be reformed in a court of law, and a recovery had on it according to law as so reformed. I would freely, if I could, give an interpretation and enforce it, which would relieve parties from the hardships that may flow from the doctrine which, in my opinion, is established law. But, a contrary doctrine will produce many hardships, and possibly greater than those which will flow from the law as it is laid down in this opinion. Be this as it va&j, it is my duty to follow the law, whatever may be the consequences. A people make their own laws, and they appoint judges to interpret and enforce them; and when we do this faithfully, we have fulfilled the part assigned us in the great drama of social and political progress and advancement. The words “understood” and “ agreed,” connected by the word “or,” although they may not have been used as synony — 569 — mous or equivalents by the convention, yet I am satisfied that no understanding between the parties to a contract, which did not amount to an implied or express agreement, could be enforced in a court of law; nor did the convention intend to make a contract for the parties out of an understanding which did not amount to such an agreement. Note by Beporter. — On a subsequent day of the term, in response to an application for a re-hearing, made by the appellee’s counsel, the following opinion was delivered: The word “ agreed,” as used in the ordinance, is to be taken in the sense of stipulated, or stipulating by way of settling differences, or determining a price or mode of payment. It is the consenting of the mind of the parties contracting to certain things to be done, or left undone, by them or some one of them. To suppose or hold that the convention intended to make a contract, or any part of one, out of a nudum pactum., would be discreditable to any judicial tribunal; and would be attributing to the convention a degree of mental inanition or moral obliquity highly derogatory to any legislative body. To hold that the value of Confederate treasury-notes at the maturity of the contract is to be taken as the measure of the damages, leaves no field of operation for that clause of the ordinance which authorizes the parties “ to show what was the real and true value of the consideration of the contract, and what amount the plaintiff is legally, justly, and equitably entitled to recover according to the contract, by the judgment of the said court.” In my opinion, the result attained by a majority of the court is in violation of the ordinance, and abhorrent to law and justice. These views are expressed in this cause, but are to be taken as applicable to all cases now pending in this court involving questions herein noticed; and this will relieve me from dissenting in each case. JUDGE, J. The counsel for appellee, in their petition for a re-hearing, have fallen into an error, which a majori — 570 — ty of the court deem it proper to correct. The counsel assume the position, that the case comes within the influence of the rule applicable to a note payable in money, but with condition that it may be discharged, at the option of the maker, by a payment in some article or commodity, other than money. A few words may suffice to show the error of this position. If it be shown by parol evidence, under the ordinance of September 28th, 1865, that the parties to a contract, at the time of its execution, “understood or agreed that, the same should be discharged by a payment in Confederate currency, or treasury-notes,” such a contract is clearly not one payable in money, with a condition that it may be discharged by a payment either in money, or in Confederate States treasury-notes, at the option of the payor ; and the difference between the two cases is so patent, that it cannot be made clearer by argument. In the one case, the obligation of the contract, which is protected and required to be enforced by the constitution, as well as authority and the analogies of the law, all constrain us to adopt the conclusion, that the measure of damages, in a suit upon the contract, is the value of the Confederate States treasury-notes, at the time the contract required them to be paid; while in the other case, it has long been the settled law of this State, that, if the payor neglects to avail himself of the privilege inserted for his benefit, according to its terms, the contract becomes an absolute promise to pay money.—See Weaver v. Lapsley, decided at the present term. We attained our conclusion, after the most careful study and investigation, and with a full appreciation of all the difficulties and inequalities which might result from it; our view of the constitution and the law leaving us no alternative. The application for a re-hearing is overruled.