Pillow v. Brown

Story, Special C. J. In September, 1865, Pointer filed his bill against Pillow and Coolidge, in which he alleged that, on the 28th day of December, 1860, he sold to Pillow eighty-five negroes, which Pillow took into possession, for the sum of one hundred and nine thousand two hundred and six dollars and twenty-five cents, to secure the payment of which sum Pillow executed his four writings obligatory, payable on the first days of Januay, 1862, 1863-64 and ’65, and on the same day executed, jointly with Mary E. Pillow, his wife, a mortgage in favor of Pointer upon two of his plantations, known as the “Defeat Cane” and “Lake” places, and forty-three of the slaves purchased of Pointer. Pointer further alleged that, on the 16th day of April, 1862, after the recording of the above mentioned mortgage, Pillow made a contract of sale with Henry P. Coolidge, whereby he sold to Coolidge his four plantations, known as ’“Defeat Cane,” “Lake,” “River,” and “Mound” places, together with all of his slaves, cotton and other personal property, for the sum of $575,000, which sum was payable in five equal installments, and for which Coolidge executed his five hills of exchange. The contract recites that “ there is a mortgage on the ‘ Defeat Cane ’ and ‘ Lake ’ places, and about forty-three of the ■negroes, in favor of John Pointer, of Giles county, Tennessee, for the purchase money of eighty-five of the negroes, which is ■on record in Phillips county. This sale is made subject to this mortgage and all of said Pillow’s existing debts, which said Coolidge will pay out of the cotton crop now on hand, and subsequent crops, or out of the purchase money, and when so paid, the same will be credited to the purchase money due from said Coolidge, and allowed accordingly.” Pointer also alleged, that the property covered by the mortgage of Pillow and wife to him, was not sufficient to pay the debt due from Pillow to him, the property having greatly depreciated in value during the war, and prays that Coolidge may he declared to be a trustee charged with the payment of all of Pillow’s debts; that the stipulation of the 16th of April may be declared to be a lien in favor of the complainant, for the payment of the debt upon all of the property mentioned in the contract; that the defendants, or one of them, may be required to pay the debt; that the mortgage may be foreclosed, and the usual prayer for general relief. Pillow filed his answer, in which he admits the purchase by him of eighty-five negroes from Pointer ; that he gave a mortgage, jointly with his wife, to secure the purchase money; that, a contract of sale of all his slave property, real estate, cotton on hand, etc., was made to Ooolidge, and that it was recorded; but he denied that there was any intent to sell the property, or to make Ooolidge a trustee for the benefit of his creditors, and alleged that it was intended to create in Ooolidge an agency simply for the management of Pillow’s property, and that there was no trust, either in fact or in law, created thereby, and in proof thereof, sets forth a duplicate of the stipulation of April 16, 1862, which contains the following additional provision: “This article of agreement witnesseth, that the said Pillow, or his heirs or legal representatives, may, at any time, purchase all said property so sold as aforesaid, by the re-delivery of said Coolidge’s bills which he has executed for said purchase money; and when the said bills are returned and delivered to said Ooolidge or his representatives, he obligates and binds himself, his heirs and legal representatives, to re-eonvey the same by deed or conveyance, cancelling the contract aforesaid; and Pillow hereby obligates himself, his heirs and legal representatives, neither to collect or demand the amount of said bills, or any part of them, and to return them lor the purpose of cancelling said contract; ” and the stipulation further provided that Ooolidge should not be responsible for the slaves, but that he was to have the general care of all Pillow’s property, and was to receive as “ reasonable compensation as would be proper for an agent.” Pillow further alleged that the duplicate of the contract of April 16, 1862, was made contemporaneous with the original, and supports this allegation by the testimony of a subscribing witness _ Pillow also alleged that Pointer covenanted that the negroes sold by him to Pillow were slaves for life, and that the title was good; that the slaves were all lost by emancipation, and that there was, therefore, a total failure of consideration for the notes; that notes given for slaves were for a consideration which was illegal, and were, therefore, void. Pillow pleaded, at a later term of the court, that he was a Confederate officer from the beginning to the end of .the war; that Pointer resided in Giles county, Tennessee, before and during the war, and that that part of Tennessee was within the Federal lines from May, 1862, to the end of the war. Coolidge filed an answer and cross-bill, in which he alleged that the contract of April 16, 1862, was not intended for a sale, but simply to create an agency in him for the management of Pillow’s property; alleged the contemporaneous execution of the- duplicate contract, with the additional provisions, as we have given them above, and prayed that said contract might be annulled, the bills re-delivered, and that if the court should hold that a trust had been created, it should attach to the lands described in said contract, and not upon the supposed debt due to Pillow from him.' At the fall term, 1865, the death of Pointer was suggested, and suit was revived in the name of Brown & Childress, as •executors of Pointer, deceased. The chancellor decreed a foreclosure of the mortgage, with an abatement of interest during a part of the war, and that the two articles of April 16,1862, and five bills of exchange be- delivered up and cancelled. Both parties appealed. The questions for consideration are: First. The power of the courts to adj udicate upon this class •of contracts. Second. Did slavery exist simply by force of the positive laws of the States, having no power outside of the limits of the States, except so far as enforced by the Federal Constitution, being- recognized as purely a right of the State, and not protected by the Constitution of the United States, except on demand of the State, evidenced by existing laws, and therefore not within the provision of the Federal Constitution, prohibiting States from impairing the obligation of contracts ? Third. Is Pillow entitled to an abatement of interest during the war ? Fourth. The effect of the two articles of April 16, 1862. The first and second questions have been passed upon by the court in Jacoway v. Denton, and later cases, and whatever may be the individual opinion of the special judge, it is proper, in the midst of ever recurring conflict of opinion, to a^dopt the rule of Stare cledsis. A question of some difficulty is presented by the allegation in Pillow’s cross-bill, that Pointer resided, during the entire war, inside of the Federal lines, and that he, Pillow, was a-Confederate officer, residing inside of the Confederate lines,' and prays for abatement of interest for that period of time. This question first arose in the United States shortly after the war of 1776, and it was held that on contracts made before the war, where the parties belong within the opposing forces, the debt was suspended, and that interest did not run unless the creditor enemy, either in person or by agent, placed it within the lawful power of the debtor to pay the debt. This position was very ably vindicated by Mr. Jefferson, then secretary of State, in his celebrated reply to Mr. Hammond, the British minister plenipotentiary, and has been repeatedly confirmed by later decisions, made by the United States circuit courts and courts of the different States. In France, early in the seventeenth century, it was held that, during a war prescriptions did not run, and that impossibility of communication, caused by the war, excused a failure to protest a bill of exchange. The Supreme Court of the United States say that the time during which the courts in the lately rebellious States were closed to citizens of loyal States, is, in suits brought by them since the war, to be excluded from the computation of the time fixed by the statute of limitations within which suits may be brought. It is true that the learned judge in that case remarked, that unless the rule be so, then the citizens of a State may pay their debts by entering into an insurrection or rebellion against the government of the Union, if they are able to close the courts, and to successfully resist the laws until the bar of the statute becomes complete; and it is urged upon us here, that to refuse to allow interest, during the time the parties were separated by the opposing forces, is to punish Pointer for his loyalty, and to reward Pillow for having engaged in a rebellion against the Federal government. In reply to this, we must say that we do not consider tbe argument as sound that finds a person liable to the citizens of an opposing power, on account of tbe individual influence be may bave bad in determining tbe policy of his government, for such would be tbe result, if we should bold to tbe rule as "advocated by counsel. In other words, if there is any principle of law whereby debtors, who are separated from their creditors by opposing forces, are remitted from tbe payment of interest during that time, then it surely will not be insisted, that because Pillow was a Confederate officer, be is outside of that principle. Pillow was responsible to tbe Federal government, and not to her citizens, for bis course during tbe late rebellion. The Supreme Court of tbe United States, in a late decision, held that tbe rule that interest is not recoverable on debts between alien enemies, during a war between their respective countries, (if applicable under any circumstances to citizens of tbe States in rebellion and citizens of tbe States adhering to tbe national government,) does not apply where there is a known agent, appointed to receive tbe money, resident within tbe same jurisdiction as tbe debtor. Chief Justice Chase, in Shortlege v. Mason, held that interest should be allowed, but afterwards, in Bigler v. Waller, refused it. Tbe decisions are conflicting, being evidently based upon tbe apparent equities of tbe different cases, and it is difficult to discover any general principle running through all. During war all intercourse between enemies are prohibited, and wherever tbe law forbids a party from doing an act, not malum, in se, nor, at tbe time of entering into tbe agreement to do tbe act, ?nalum prohibitum, it excuses him from all penalties arising from a failure to perform bis contract. This, we think, furnishes a just reason for tbe abatement of interest, during war, on debts due to tbe subjects of a belligerent power, from tbe time tbe party is entitled to make payment, which would only be at and after maturity, until tbe return of peace. Tbe principle is a general one and may be stated in these words: Whenever tbe debtor, without fault on his part, is prevented from paying the debt, at and after maturity, through the act of the creditor or the law, interest should be abated during the time he is so prevented. It is the duty of the debtor to seek his creditor and to pay his debt. He must show by affirmative proof that it was not through his neglect, accident or misfortune, the debt was not paid at maturity; that he was ready and willing to pay, but that through the act of the creditor or the law, he was prevented. Hoare v. Allen, 2 Dallas, 102; Bouvier Law, Dic. Int.,s. 12 and 18; Yeaton v. Berney, 3 Legal New. 82; Bigler v. Waller, Ib. 26; Conn. v. Penn, 1 Pet. c. c. 496; Ward v. Smith, 7 Wal. 452. Pillow has shown no effort to comply with the terms of this contract, and under the above rule is not entitled to an abatement of interest. Pointer prays that the recorded articles of April 16, 1862, may be held to be a conveyance, in trust, for the benefit of the creditors of Pillow, while both Pillow and Coolidge pray that the two articles may be construed together as one entire agreement— that said contract may be annulled and the bills ré-delivered. It is well settled that “when a transaction is endorsed by two papers, the connection between which is established by their contents, without any necessity of referring to other matter to connect them together, they will be taken as one entire agreement.” Clearly, both of these articles are, under this rule of law, to be construed together. They both refer to the same subject matter — bear date on the same day — were evidently intended, by the contracting parties, to be construed together, and were undoubtedly made for the purpose alleged in the answer of Pillow and cross bill of Coolidge, viz: to create a secret agency in Coolidge for the management of Pillow’s estate. Trusts are either express or implied. Express trusts are those which are created by the direct and positive acts of the parties, by some writing, or deed, or will. Construing the two articles of April 16, 1862, together, it is evident that an express trust was not created. Implied trusts are those “which are deducible from the nature of the transaction, as a matter of clear intention, although not found in the words of the parties» or which are superinduced upon the transaction by operation of lato, as matter of equity, independent of the particular intention of the parties.” A trust is never presumed or implied, as intended by the parties, unless taking all of the circumstances together, that is the fair and reasonable interpretation of the acts and transactions, except it be forced upon the conscience o’f the party by operation of law, on account of some meditated fraud, imposition, notice of an adverse equity, or other cases of a •similar nature. We think a fair construction of the two articles will show that it was contrary to the intention of •either Pillow or Coolidge to create a trust, and the only serious question for us to pass upon, is, whether Pointer has been so misled and injured by the recording of the first article or stipulation of April 16, 1862, that to refuse to declare it created a trust in Coolidge for the payment of Pillow’s debts, would •operate as a fraud upon the rights of Pointer. We cannot discover, from a careful.examination of the bill, that he has been thus injured, and we know of no reason why the prayer of Coolidge should not be granted. Nick’s heirs et al. v. Rector, 4 Ark. 278; Story’s Eq. Jurisprudence, s. 980 and 1195. It is therefore considered that the decree of the court below be set aside; that the mortgage be foreclosed and the property •sold — that the plaintiffs recover the amount of said notes and interest, and that the two stipulations of April 16,1862, and the five bills of exchange, given by Coolidge to Pillow, be delivered up and cancelled, and that a decree be entered in this court accordingly.