Source: https://supreme.justia.com/cases/federal/us/115/566/
Timestamp: 2019-04-23 10:04:31+00:00

Document:
Contracts made in the insurgent states during the late civil war between residents of those states with reference to Confederate notes as a standard of value, and not designed to aid the insurrectionary government, may be enforced in the national courts, and the value of the contracts is to be determined by the value of the Confederate notes in lawful money of the United States at the time when and place where such contracts were made.
"that when the cause of action grows out of a sale or renting or hiring of property, whether real or personal, if the court, or, when it is a jury case, the jury, think that under all the circumstances, the fair value of the property sold or the fair rent or hire of it would be the most just measure of recovery in the action, either of these principles may be adopted as the measure of the recovery instead of the express terms of the contract."
Held that the statute in this provision sanctions the impairment of contracts, which is not, under the federal Constitution, within the competency of the legislature of the state. Accordingly, in a suit to enforce a lien for unpaid purchase money of real estate sold during the war, for which a note was given payable in dollars, but shown to have been made with reference to Confederate notes, a decision that the plaintiff was entitled to recover the value of the land at the time of the sale, instead of the value of Confederate notes at that time, was erroneous.
"while the war had a tendency to impair the value of all kinds of property, yet as to lands that tendency was counteracted by the fact that they were not liable to be destroyed, and therefore afforded a safer means of investment than any other kind of property."
land at the time of sale, estimating it to have been worth $80 an acre in lawful currency, with interest on the sum thus adjudged to be due, and decreed a sale of the property to pay the amount unless the same was paid within a time designated.
"SEC 1. That in any action or suit or other proceedings for the enforcement of any contract, express or implied, made or entered into between the first day of January, eighteen hundred and sixty-two, and the tenth day of April, eighteen hundred and sixty-five, it shall be lawful for either party to show by parol or other relevant testimony what was the true understanding and agreement of the parties thereto, either express or to be implied, in respect to the kind of currency in which the same was to be fulfilled or performed or with reference to which as a standard of value it was made or entered into, and in any action at law or suit in equity it shall not be necessary to plead the agreement specially in order to admit such evidence, provided that when the cause of action grows out of a sale or renting or hiring of property, whether real or personal, if the court (or when it is a jury case, the jury) think that, under all the circumstances, the fair value of the property sold, or the fair rent or hire of it, would be the most just measure of recovery in the action, either of these principles may be adopted as the measure of the recovery instead of the express terms of the contract."
the time they were respectively made or entered into or at such other time as may to the court, or if it be a jury case, to the jury, seem right in the particular case."
The judgment of the circuit court was affirmed by the Supreme Court of Appeals of the state, and to review the judgment of the latter court this writ of error was brought.
insurgent. They are transactions in the ordinary course of civil society, and though they may indirectly and remotely promote the ends of the unlawful government, are without blame except when proved to have been entered into with actual intent to further invasion or insurrection. We cannot doubt that such contracts should be enforced in the courts of the United States after the restoration of peace to the extent of their just obligation."
were meant, to prove their equivalent value in lawful money of the United States,"
p. 75 U. S. 12; that such evidence does not modify or alter the contract, but simply explains an ambiguity which, under the general rules of evidence, may be removed by parol evidence. And the court added that the people in the insurgent states under the Confederate government were, in legal contemplation, substantially in the same situation as inhabitants of districts of a country occupied and controlled by an invading belligerent; that contracts among them must be interpreted and enforced with reference to the condition of things created by the acts of the ruling power, and that in their light it was hardly less than absurd to say that the dollars used in the insurgent states should be considered identical in kind and value with the dollars constituting the money of the United States.
It being thus held that a contract made during the war in one of the insurgent states between parties residing therein payable in Confederate notes is not for the reason invalid, and that parol evidence is admissible to show that by "dollars," used without qualifying words in a contract of that character thus made, those notes were intended, it becomes important to ascertain and lay down some definite rule, if possible, to determine their value when the enforcement of such a contract is sought in a federal court or damages are claimed for its breach.
In Thorington v. Smith, above cited, the Court held that the plaintiff was entitled to recover the actual value of the Confederate notes at the time and place of contract in lawful money of the United States.
"in no other mode could the contract as made by the parties be enforced. To have allowed any different rule in estimating the value of the contracts and ascertaining damages for their breach would have been to sanction a plain departure from the stipulations of the parties and to make for them new and different contracts."
"A provision of law of that character, by constituting the jury a revisory body over the indiscretions and bad judgment of contracting parties, might in many instances relieve them from hard bargains, though honestly made, upon an erroneous estimate of the value of the articles purchased, but would create an insecurity in business transactions which would be intolerable. It is sufficient, however, to say that the Constitution of the United States interposes an impassable barrier to such new innovation in the administration of justice, and with its conservative energy still requires contracts, not illegal in their character, to be enforced as made by the parties, even against any state interference with their terms."
P. 91 U. S. 5. The judgment was accordingly reversed.
In Stewart v. Salamon, 94 U. S. 434, the Court held that the amount in actual money represented by a promissory, note, executed during the war in the insurgent states, payable in Confederate treasury notes, was to be determined by the value of those notes in coin or legal currency of the United States at the time when and the place where the promissory note was made.
"It is equally well settled that if a contract entered into under such circumstances, payable in dollars, was, according to the understanding of the parties, to be paid in Confederate dollars, upon proof of that fact, the party entitled to the payment can only recover the value of Confederate dollars in the lawful money of the United States."
Pp. 103 U. S. 792-793.
"It is settled by the decisions of this Court that a contract, made within the so-called Confederate states during the war of the rebellion, to pay a certain sum in dollars, without specifying the kind of currency in which it was to be paid, may be shown by the nature of the transaction and the attendant circumstances, as well as by the language of the contract itself, to have contemplated payment in Confederate currency, and if that fact is shown in an action upon the contract, no more can be recovered than the value of that currency in lawful money of the United States,"
p. 105 U. S. 140, citing the cases of Thorington v. Smith, 8 Wall. 1; The Confederate Note Case, 19 Wall. 548, and Wilmington & Weldon Railroad Co. v. King, 91 U. S. 3. In The Confederate Note Case, the doctrines of the previous decisions were also stated and approved, but the bonds there in suit were distinguished from obligations payable in Confederate notes.
residents of those states with reference to Confederate notes as a standard of value and were not designed to aid the insurrectionary government, they may be enforced in our courts, and that the value of the contracts is to be determined by the value of the Confederate notes in lawful money of the United States.
The measure of valuation adopted by the court below was not in conformity with this rule. It allowed a recovery for the value of the land instead of treasury notes, which was nothing less than substituting for the contract of the parties a new and different one. The statute of the state which permitted this estimate, whenever the court might think that the fair value of the property would be "the most just measure of recovery," and pursuant to which the court acted, sanctions the impairment of contracts, which is not, under the federal Constitution, within the competency of the state legislature. It follows that the judgment must be reversed, and the case remanded for a new trial in which the plaintiffs will be permitted to recover the value of the Confederate notes in lawful money of the United States, and not the value of the land at the time of sale.
Confederate currency, can be recovered. In the case of contracts maturing after the overthrow of the Confederacy, no value whatever can be given to that currency.
In some of the cases decided by this Court to which we have referred, it is said that the value of the Confederate notes was to be estimated at the date and in the locality of the contract. Such is the language used in Thorington v. Smith; Wilmington & Weldon Railroad Co. v. King, and Stewart v. Salamon. In the first case, the note was payable one day after date. In the second case, it does not appear that the time of payment was fixed. But in the third case, the note was payable one year after date, and the Court is careful to state that the value of the Confederate currency was to be estimated in lawful money of the United States at the time when and the place where the note was made. And this rule was prescribed in estimating the value of the Confederate currency for the balance due on the note after its maturity.
receivable in contracts not designed to further the insurrection. They were receivable in such contracts because imposed as a currency upon the community by irresistible force. Their intrinsic value was nothing, but their exchangeable value, by reason of their enforced circulation, was the estimate of them at the time in lawful money of the United States. The relation between them and coin and other lawful money was well known in the community, as it was only with coin or other lawful money as a standard of value that commerce was conducted between the insurgents and persons outside of the Confederacy. Persons then parting with lands and goods for Confederate notes or for the promise of them attached to them this exchangeable value, and expected to receive it then or afterwards. They did not intend to surrender or suppose they were surrendering their property without any consideration if the Confederacy should fail and its notes lose this exchangeable value. They expected an equivalent in any event. Therefore, as having the value thus given to them at the time and place of their receipt, or the promise of them, the national courts will treat them, but not as having a value at any other time or place. Any other rule would involve considerations of inextricable difficulty, and would be inconsistent with justice in determining the value of contracts thus payable, where they matured near the close or after the overthrow of the Confederacy.
It follows, therefore, that on the new trial, the plaintiff will be allowed to recover for this exchangeable value of Confederate notes, in which the bond was payable, estimated at the time and place of its execution in lawful money of the United States.
Decree reversed and cause remanded for further proceedings.

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