Case ID: va_1/html/0475-01.html
Source: Caselaw Access Project
Author: {"author": "LYONS J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Wilson and M’Rae v. Koeling.
    October Term, 1793.
    Paper Money — Scale of Depreciation — Case at Bar. — In April. 1778, a sum of paper money was lent, not to be repaid In less than twelve months thereatter. The money was tendered shortly after the expiration of the twelve months, and was refused. A mortgage having been given to secure the debt, the mortgagee brought an ejectment, and recovered possession of the mortgaged premises. Upon a bill filed for relief, the mortgagee will be decreed to recovery upon payment of the debt according to the scale of depreciation, of the day when the money was lent (notwithstanding he had received the identical money in discharge of a specie debt, and notwithstanding the mortgagor employed the same in the discharge of a special debt) without interest from the time of the tender, to that of a new demand.
    This was an appeal from the High Court of Chancery — Keeling, the plaintiff in that Court, borrowed from M’Rae in April 1778, a sum of paper money amounting to £422: 18, not *to be repaid in less than twelve months thereafter, which money, (the answer states,) belonged to the ward of M’Rae, being so much received by him in discharge of a specie debt due to the ward. Keeling conveyed to Wilson as a. trustee for M’Rae, certain property by way of mortgage, to secure this loan— after the money became due, but noton the very day, Keeling tendered the debt, in paper money, to Wilson the trustee, who refused to receive it. An ejectment being brought, to recover possession of the mortgaged premises, a judgment was thereupon obtained. Keeling filed his bill in the High Court of Chancer3r praying an injunction, and liberty to redeem, upon paj'ing according to the scale of depreciation, at the time when the money was lent. The answer states, that the money was borrowed by Keeling, for the purpose of discharging a specie debt, and that it was actually so applied. The Chancellor being of opinion, that the debt in question for money borrowed and secured by mortgage, might be discharged in the same manner, as a debt created and secured by a pact in any other form; and that by refusal of the money tendered, the right to interest, between the time when the tender was made and the time when the debt was demanded by M’Rae, was’ extinguished, decreed a reconveyance to the plaintiff upon his paying to the defendants, ,£84: 11: 8, with interest thereupon, from the time of the loan, until that of the tender, and from the 1st day of September 1784, (when a demand was made,) until payment of the principal debt, with the costs of the suit at law, and his costs in defending this suit; but upon his failing to do this, the court decreed a foreclosure and sale, in the usual manner.
    Campbell for the appellants.
    The appel-ant M’Rae, having gained the legal title to the mortgaged property, has thereby obtained an advantage, of which a Court of Chancery will never deprive him, without forcing the party, who seeks its aid, to retribute the other party by doing compleat equity. This is an over-ruling maxim in that court. If the appellee shall be found to sustain no injury, or to be deprived of no equitable right by paying the nominal amount of debt in specie, what is it, that shall warrant the interposition of a court of equity to deprive the mortgagee of the full benefit of his judgment at law? Keeling cannot lose any thing, by paying the full amount of the loan in specie, because he made a specie use of the money. On the other hand, M’Rae is injured, by applying the scale of depreciation to the debt; because the money *lent, tho’ it consisted of paper bills, was the representative of so much specie, as it was received by him in discharge of a specie debt.
    M’Rae is to be considered in this court, a.s standing in the shoes of the person, to whom Keeling paid the sum he had borrowed, in the same manner, as if that debt had'actually been assigned to him. That the parties considered this as a specie contract, is evident, from the value of the property mortgaged.
    But the decree is surely erroneous, so far as it stops the interest from the tender of the money, to the time of the subsequent demand, since the present case cannot be likened to that, of a tender made in specie. In the latter case, the money always continuing of the same value, no injury can arise, if it be not tendered on the day ' of payment. But in the case of paper money, its value was continually lessening, and .therefore it ought to have been tendered on the very day, as the lender, (relying on the punctual payment of the money,) might have made contracts, providing for the immediate application of it, and might'lose the benefit of such contracts by disappointment.
    Marshall for the appellee, wras stopped by the court.
    
      
      Paper Money — Scale of Depreciation. — On this question, the principal case is cited, in 1 fearing v. Rucker, 18 Gratt. 465 (see foot-note): White v. Atkinson, 2 Wash. 103; Bierne v. Brown, 10 W. Va. 761; Gilkeson y. Smith. 15 W. Va. 60. See also, Nicholas v. Tyler, 1 Hen. & M. 332.
    
   LYONS J.,

delivered the opinion of the court. The case is too clear to be argued. This is a downright attempt to evade the law, directing the mode of settling debts contracted in paper money, without a single circumstance to countenance it.

In the case of Wily and Panky, in the General Court, it was determined, that the creditor who concealed himself in his house, to evade a tender, should sustain the loss by the depreciation of the money.

Decree affirmed.