Case ID: va_62/html/0816-01.html
Source: Caselaw Access Project
Author: {"author": "ANDERSON, J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

*Stover, Assignee, v. Hamilton & al.
    August Term, 1871,
    Staunton.
    Bonds — Payable on Demand — Case at Bar. — On tlie 15th of November 1862, H executed his bond to S, for $600, payable on demand, it being for money borrowed, upon a condition, inserted at the instance of H, that no interest will be required until the money is demanded, and then a reasonable time to be given to pay; interest to run from the demand. The loan was in Confederate money. Held:
    1. Same — Same—When Debt Can Be Paid. — H had the right to pay the debt at any time, though S made no demand.
    2. Same — Payable in Confederate Currency. —It was a debt payable in Confederate currency, and therefore not usurious.
    3. Same — Time of Scaling. — It is payable by H at any time after its date, and therefore the date is the proper period at which to fix the scale of depreciation.
    4. Same — Secret Intention of Obligee — Effect of.— Though S had a secret intention not to make a demand for the money until there was a better currency, as H had the right to pay at any time, this secret intention of S cannot change the construction and effect of the bond.
    This was an action of debt in the Circuit court of Augusta county, brought in June 1866, by Abram Stover, assignee of Jacob Stover, against John R. Hamilton and John Hamilton, to recover the amount of a bond for six hundred dollars, executed by the Hamiltons to Jacob Stover on the ISth of November 1862. The defendants pleaded usury in the bond, and also that the writing was given for a loan of Confederate treasury notes by the plaintiff’s assignor to John R. Hamilton, which notes at the date of the loan were not worth more than one-third or one-fourth of six hundred dollars. On these issues the case was tried; and the parties dispensing *with a jury, submitted the whole matter of law and fact to the court". And the court rendered a judgment for the plaintiff for two hundred and forty dollars, the value of the Confederate notes at the date of the bond, and interest thereon from the 17th of October 1865, the date of the demand of payment. The plaintiff thereupon excepted to the opinion of the court, and on his motion the evidence was certified upon the record; and the plaintiff obtained a supersedeas.
    The bond on which the action is founded, is as follows: $600. On demand, we or either of us, bind ourselves, our heirs, &c., to pay Jacob Stover the just and full sum of six hundred dollars, without interest, it being for money borrowed on the following conditions, that no interest will be required' until the money is demanded, then a reasonable time will be given by said Stover to pay the above sum, when interest will begin and continue from the demand till paid. Given under our hands and seals, this 15th day of November 1862.
    Jacob Stover and John R. Hamilton were the only witnesses. In November 1862, Stover was a farmer living in Augusta, over the military age, and the defendant, John R. Hamilton, was a young man, and a soldier in the Confederate army. Stover having Confederate notes in his possession, which he had taken for hay, which he had sold, and in which he had no confidence; and Hamilton having borrowed some Confederate money which he wished to return, and learning that Stover had some money which he wished to lend, Hamilton applied to Stover to borrow it; and Stover agreed to lend it in Confederate notes. But Hamilton being in the army, feared that Stover might call on him when it would hot suit him to pay, and therefore declined to borrow unless Stover would agree to charge no interest until he demanded the money, and to give him a short or reasonable time after demand, to raise the money; and to this Stover agreed; and this provision of *the bond was inserted at Hamilton’s instance. Hamilton says he received Confederate money, and ^xpected to pay it in a short time in the same currency; but nothing was said by either party, as to the kind of currency in which the borrowed money was to be returned. Stover says he did not expect to get gold or specie, but did not intend to make a demand until the Confederacy failed, or until Confederate notes ceased to circulate, and until good money should prevail; though he did not communicate this intention to Hamilton. At the time he took the bond he intended to take a bond upon which he could demand good money to the same amount of the $600 of Confederate treasury notes; which at the time he knew to be worth only $200 in gold.' He demanded payment of the money on the 17th of October 168S; and in May 1866 Hamilton offered to pay him in legal tenders, what he supposed was the true value of the bond, viz: $200 in gold, converted into legal tender currency; amounting to between $275 and $300, which Stover refused to receive.
    Eultz, for the appellant.
    Cochran, for the appellees.
    
      
       Bonds — Payable on Demand. — In McClung v. Ervin, 22 Gratt. 524. the principal case was cited as authority for the proposition that a contract to pay when the “seller demands the same” is, in legal effect the same as to pay on demand. See also, Bowman v. McChesney, 22 Gratt. 611.
      In Moon v. Richardson, 24 Gratt. 221, the court said: “We think there can be no doubt about the law of the case. It has been plainly settled by recent and repeated decisions of this court, and is no longer open for discussion, that a bond payable ‘on demand’ is payable presently without demand; that the right of the obligor so to pay it, and the duty of the obligee to receive the payment, is not at all impaired by restrictions on the obligee’s right to immediate payment imposed for the benefit of the obligor, either on the face of the bond or by contract He hors thereto: that in all such cases it is at the option of the obligor either to avail himself of the restrictions or to pay the debt at any time after date, as if there were no restriction; and that such bond, if given for a loan of, and solvable in Confederate States treasury notes, must be scaled as of its date. This is now the settled law of this court. Stover, Assignee, v. Hamilton & al., 21 Gratt. 273; Omohundro’s Ex’or v. Omohundro, 21 Gratt. 626; Bowman v. McChesney, 22 Gratt. 609.”
    
    
      
       Same — Time of Scaling. — See foot-note to Moon v. Richardson, 24 Gratt. 219.
      See generally, monographic note on “Bonds."
    
   ANDERSON, J.,

delivered the opinion of the court.

On the 15th day of November 1862, the defendant, John E. Hamilton, borrowed from the assignor of the plaintiff, six hundred dollars in Confederate States treasury-notes, for which he and his father, John Hamilton, gave their joint and several bond. On the 30th of June 1866, the plaintiff in error brought suit against the defendants, upon this bond, in the Circuit court of Augusta, and obtained judgment .for $240, with interest from the 17th of October 1865, and cos^s. And the cause is brought here by the plaintiff upon a writ of error to that judgment.

The plaintiff insists that the Circuit court erred in ^rendering a judgment for less than the face of the bond. He contends that although the consideration of the bond was depreciated Confederate currency, worth at the time in relation to gold as a standard of value, only one dollar for three, upon the authority of Boulware v. Newton, 18 Gratt. it was a contract of hazard, and he is entitled to the sum nominated in the bond in good money.

The defendants insist that it was not a contract of hazard; and contend that if it was a contract not solvable in Confederate money, but for good money, as the face of the bond imports, and the plaintiff claims, it is usurious, and they were entitled to judgment upon the issue made by their plea of the statute of usury. But they say it was a Confederate contract and liable to be scaled.

The first question then which we have to consider is was it a contract of hazard? Does it so appear from the face of the bond? The first clause imports an obligation to pay presently. It is in these words, “On demand we or either of us bind ourselves, our heirs, &c., to pay Jacob Stover the just and full sum of six hundred dollars, without interest, it being for money borrowed. ’ ’ If this were all, if the instrument contained nothing more, it is clearly an obligation to pay six hundred dollars in praesenti; and the obligee could, immediately after the execution of the bond, have demanded payment; and the obligors could have made payment, whether demanded or not. But the bond does not stop there. It proceeds in these words, “On the following conditions, that no interest will be required until the money is demanded, then a reasonable time will be given by said Stover to pay the above sum, when interest will begin and continue from the demand till paid.” What is meant by this provision? Evidently it was intended to subject the obligors to interest after the obligee specially demanded payment; that is when he gave them notice that the money was wanting; which I think is the meaning. It was also intended to inhibit the obligee *from immediately pressing the collection, and to allow the obli-gors reasonable time after such notice was given, to make payment; they being chargeable with interest from the date of the notice.

Does it limit or negative the right of the obligors to make payment, at any time, before it is demanded by the obligee? I think not. It is very plain from the language, that it was not intended to be restrictive of the rights of the obligors, but that was intended for their benefit, and was only restrictive of the rights of the obligee except as to interest. The right of the obligors to make payment an hour, a month, a year, or at any time after the obligation was given, was not changed by this provision; the correlative obligation rested upon the obligee to receive payment whenever they tendered it, whether before or after he made a special demand for it. Such we think is the meaning of the written instrument; such is the natural import of its terms. Is it varied by the parole evidence which has been introduced by permission of the statute in such cases? Erom that it appears that John E. Hamilton, when this loan was negotiated, belonged to the army; and fearing that the plaintiff might call on him when it would not suit him to pay, declined to borrow the money unless the lender would agree to charge no interest until he demanded the money, and to give him a reasonable time, after demand made, to raise the money. To this the obligee agreed; and those conditions were put in the bond at the instance of the defendant, and for his benefit. It is obvious that the lender knew that it was for this purpose they were proposed by the borrower. But it seems that he had, at the time he acceded to them, a secret intention (for it was confined to his own breast), to use them for another and a very different purpose. He intended not to make demand until the Confederacy failed, or until Confederate treasury notes ceased to circulate, and until good money prevailed; vainly imagining that the provision *which had been proposed by the defendant for a purpose so different, might be construed to limit his right to make payment until he had demanded it, and thus to get from the defendant $600 in good money for the Confederate money he loaned "him, which he knew to be worth at the time only $200 in gold; and this intention he concealed from the defendant. But in this he deceived himself; for, as we have seen, the provision will not bear the construction which he secretly gave to it; but imports what was really the intention of the borrower when he proposed it, and what the lender knew to be his intention when he acceded to it. The parole evidence does not, therefore, conflict with the construction and effect which we give to the language of the bond, to wit: that the obligee could not limit and restrict the right of payment by the obli-gors, by delajdng demand of payment. But, on the contrary, the parole evidence shows that those provisions were inserted for a different purpose, and were not designed to limit the obligors in their right to make payment whenever they chose; and are therefore entirely consonant with the language of the bond.

This case is, therefore, not analogous to Boulware v. Newton. In that case the obligation was to pay “on demand, after three months’ notice to pay.” In this, it is to pay on demand;” with condition, only restrictive of the right of the obligee to press the collection until a reasonable time after he had given notice that payment was required. In that case it is expressly stipulated that the obligee “shall not be required to receive the money, except at his pleasure.” He had, therefore! the unqualified right to fix the time of payment, and could wait until there was a better currency, or until the war .closed, though it lasted for ten years or longer, before he made it payable. And it being payable “in current funds,” by its express terms, it was held, that he could demand payment in the currency which prevailed at the time *he elected to make it payable, whether Confederate or Federal, accordingly as the war might result; it being a necessary implication, that such was the evident intention of the parties in the contract. But in this case, as we have seen, the obligee was bound to receive payment whenever offered, whether before, or after, it was specially demanded by him. We do not think, therefore, that the decision in Boulware v. Newton, which turned upon the construction- to be given to the terms of the contract in that case, has any application to this.

We are also of opinion that the contract in this case was entered into, with reference to Confederate notes as a standard of value, and was solvable in' the same kind of currency, and that, therefore, it is not subject to the statute of usury, which is pleaded. And that, as the defendants could have paid at the date of the obligation, according to its terms, and legal effect, the scale should be applied as of that date. This seems to have been the purpose of the court below, though it is forty dollars in excess of what the plaintiff understood the scaled value to be. That being the ascertained value by the learned judge of the Circuit court, who had all the evidence before him; and the error, if any, not being to the prejudice of the plaintiff, this court will not disturb the judgment on that ground.

Upon the whole, we are of opinion that there is no error in the judgment of the court below, for which it ought to be reversed; but are of opinion to affirm it.

Judgment affirmed.