Case Name: Jesse Saunders vs. F. R. Richardson
Court: High Court of Errors and Appeals of Mississippi
Jurisdiction: Mississippi
Decision Date: 1844-01
Citations: 2 S. & M. 90
Docket Number: 
Parties: Jesse Saunders vs. F. R. Richardson.
Judges: 
Reporter: Mississippi Reports
Volume: 10
Pages: 90–107

Head Matter:
Jesse Saunders vs. F. R. Richardson.
S. executed his notes, in payment of Jand and negroes, to R. S., for a certain sum, payable on a fixed day; R. S., in the deed to S. agreed to take bank paper in paj'ment of the notes : Held, that the agreement in the deed formed no part of S.’s contract to pay; but was simply a defeasance, by strict compliance with which S. might avoid the payment of the notes in specie.
In such case, if S. did not tender the bank notes to R. S., at the maturity of his own notes, the contract of defeasance would be at an end, and the principal contract would remain absolute.
In error, from the circuit court of Wilkinson county.
This was an action of assumpsit, founded on a promissory note, for $2000, made by defendant below, payable to R. Singleton, and by him indorsed to F. R. Richardson, the plaintiff below, and payable the 20th of January, 1840.
The defendant below pleaded the general issue and payment, and also a plea alleging a failure of consideration; upon the two first pleas the plaintiff below took issue, and demurred to the third plea, which demurrer was sustained by the court ; the defendant did not plead further, and the case went to the jury upon the general issue and plea of payment.
Upon the trial the defendant Saunders took a bill of exceptions, which shows that the defendant below read in evidence to the jury a deed made by Singleton and himself, by which Singleton agreed to take, in discharge of certain notes therein mentioned, the paper of certain banks named in the deed. Saunders also proved by Avitnesses that the note sued on was one of the notes named in the deed, upon which the defendant below called a witness to prove the value of, or at what dispount the bank notes of the particular banks enumerated were at the time the note sued on fell due, which evidence being objected to by the plaintiff below, and the objection being sustained by the court, the defendant excepted to the decision of the court-in ruling out the testimony. [The clause in the deed on that subject is contained in the opinion of the court, and is therefore not inserted here.] Upon which state of the case the plaintiff in error assigns for error:
1. That the court below erred in sustaining the demurrer to the third plea; and
2. That the court erred in not permitting the defendant below to prove the-value of the paper money named in said deed.
Farish and iSimrctll, for plaintiffs in error.
Although we conceive that the court below erred in sustaining the demurrer to the third plea of the defendant below, yet we will pass over that assignment of error, and examine with some minuteness the second error assigned; and that is,
That the court erred in refusing to permit the defendant below to prove, by C. H. Bulkley, what was the discount, if any, of the several kinds of bank paper, mentioned in the exception, and which bank notes, the indorser, R. Singleton, covenanted with the appellant, to take in satisfaction of the note sued on.
The plaintiffs’ counsel below made no objection to the reading of Singleton’s deed to Saunders, in evidence to the jury, after a foundation had been laid for the admission of that evidence by proof that the note sued on was made contemporaneously with the deed; that it was set out in said deed, and formed a constituent part of the contract between Singleton and Saunders.
Had such an objection been raised, the cases in Comyn’s Contracts, 4th Am. ed.; 5 Pickering’s Mass. Rep. 395; 10th do. 298, — would have put the question at rest.
The result of all of the authorities on this subject is, that you cannot by parol, contradict, or alter the face of a promissory note, or materially change its terms. But that a promissory note may be enlarged or abridged, or in any manner qualified by an instrument of writing, made between the parties, contemporaneously with the note. And that such instrument of writing and note shall, together, be construed as forming the contract between the parties. (Case just cited.) Bayley on Bills, Boston edit. 1836, 523. 5 Vermont Rep. 514.
In the absence of all authority on- the subject, any other rule would be absurd and ridiculous. What then was the whole contract between R. Singleton and Saunders, the appellant, touching this note ? Why Saunders executed this note to Singleton (with others) as the consideration for property sold and conveyed by deed from Singleton to Saunders, and Singleton covenanted with Saunders to take, in satisfaction of this note, (and the others) I quote the language of the deed, “ the paper of the Planters, Commercial and Agricultural Banks, at Natchez, the Woodville Banks, the Union Bank, the Commercial Manchester Bank, or any bank notes as good as that of the aforesaid banks.”
In short, the contract was to take, in discharge of the note sued on, certain bank paper, specially mentioned, or any other bank paper, as good as that mentioned by name. What is the proper construction of this contract 1 In more appropriate language, what was the meaning and intention of the parties? For, in interpreting all contracts, the great purpose is, to get at the understanding of the contracting parties. The familiar rules laid down by all the law-writers, for the solution of contracts, are, first, the subject-matter about which parties are contracting, the circumstances and situation of'things around them, the language in which they express their intention. If in popular language and phrases, to which the community have attached a certain definite meaning, then the courts must give this common and popular construction. These are the ordinary rules of interpretation. There are others. We merely mention the most obvious and prominent, as by the aid of one or all of these, courts, most generally, can arrive at the great object of investigation, the intention, the quo animo, of the parties.
Was this a promise, on Saunders’s part, to pay so many nominal dollars, in bank paper, as would make up the amount of the note, or a promise to pay so much bank paper, which woirld make up in specie the amount of the note, supposing the bank paper to be of less value than the silver?
What was the condition of things to which the parties to this contract must have had an eye, previous to October, 1S39, the time when this contract was made ? All of the banks in this state had suspended specie payments. Not one of them was then redeeming their circulation with the precious metals. It is equally notorious, that, in the year of 1839, bank paper formed almost the exclusive circulating medium of the state. The parties knew also, that, under the constitution of the United States, and the laws of the state, gold and silver were the only legal tender in payment of debts. Under these circumstances the parties agreed, that this note, with the others mentioned in the deed, should be made payable in certain kinds of bank notes, as it would, from the condition of the country, have been almost impossible, or at least very inconvenient, to obtain the specie.
Now, there is nothing in the law which hinders a vendor from contracting to take bank paper, or bank notes, or any other commodity whatever for his property. For the last three years it has become quite common in this state, to make notes payable in bank notes. The judicial history of the United States shows, that, in every period of bank suspension, men have been compelled, or have found it most convenient to make their debts payable in bank paper. We maintain, that so many bank notes must be paid, as will nominally make up the amount of the note; and not so many bank notes, if they be depreciated, as will make up in specie the amount of the note. Such we understand to be the common understanding of the community.- Now if it were .intended that this should be a specie note, or payable in specie, what was the meaning of Singleton, when he agreed to take in its discharge and satisfaction, the kinds of bank paper mentioned? Or, if it were intended that so much bank paper should be paid as would be equal in value to the amount of the note in specie, why not have inserted words to that .effect, in the deed? Or why have said anything in the deed, on the subject of the note, or at all have qualified it. There is a clause in that portion of the deed alluded to, which strongly supports this construction, and to our mind is conclusive. After enumerating several banks by name, Singleton further agrees to take any other bank notes, as good as those of the enumerated banks. The value of the bank notes, by name, is the standard of the worth of any other bank notes which would be taken in discharge of said note; thereby excluding the idea that specie is to be the standard by whicli the value of the bank paper is to be estimated.
We think that the “ words” just alluded to put it beyond all doubt, that the note in question was to be paid at maturity, in so many bank notes, as, counted upon their face, would make up the amount of the note; and not so many more, as would be equivalent to the amount of the note, in specie. A similar construction was given to an instrument of writing in all material points like the one under consideration, by the supreme court of Kentucky, in the case of Anderson v. Ewing, 3 Lit-tell’s Rep. 245. The case cited is ; “ For value received, I bind myself, heirs, &c., to pay eight hundred dollars, on or before the first day of September, 1820, in such bank notes as are received in deposite at that time in the Hopkinsville Branch Bank. Whereof I hereto set my hand and seal, this 12th day of March, 1819. Signed, Jno. S. Anderson.”
The very same question originated in this case, as the one at the bar. On an inquiry of damages, the defendant below, offered to prove that at the maturity of the note or writing,— more properly— notes (bank) of less value than specie, were taken on deposit at the Hopkinsville Bank, which was refused by the court below.
The court above, determined, 1st that the testimony offered was legitimate, and ought to have been admitted.
2d. That the contract, agreeably to the intention of the parties, was to pay, and receive in payment, so many bank note dollars, as when counted, would make $ 800, and not so many as would purchase $ 800 in specie.
, Having ascertained the meaning of this note, qualified as it is, by the clause in the deed, we now proceed to the inquiry, whether the court below erred in stopping the witness, O. H. Bulkley, from answering the question propounded by defendant’s counsel.
Our first position, on this branch of the inquiry is, that bank notes, under the constitution of the United States, are not money, and that a contract to pay a specific sum. in bank notes, is not, in a legal sense, a contract to pay money. Upon principle, aside from adjudications, it seems strange to ns, that there ever should have been any doubt on the subject. Under the constitution of the United States, nothing but gold and silver can be made by the States, a tender in payment of debts. This is a positive prohibition on the state legislatures, from compelling the citizens to take anything but the precious metals, for their debts. The design of this constitutional provision, was not only to give a uniform and stable currency to the whole union, but also to protect the creditor from unwise legislation, for the exclusive benefit of the debtor. Bank notes circulate as money in the community, by legislative authority and the sufferance and consent of the people. The legislature cannot compel the people to take them for debts. The legislature provides the bank notes, and leaves it optionary with the people to take them or not. (We are discussing this point as if the clause in the deed, of which we speak, were upon the face of the note itself.) Its legal effect is precisely the same, as if on the note. Now if this qualification in the deed were upon the face of the note, would the instrument be a promissory note 1 We say not. A promissory note must be for the payment of money only. In England, where gold and silver, by law, constitute the currency, it has been uniformly held, that a note payable in bank paper, is not a promissory note, and not entitled to the privileges which the law attaches to that instrument. Chitty on Bills, 152 and 153, 8th Am. ed. and notes. 3 Kent’s Com. 75, 4th ed. and notes. If we can show that bank notes, in the legal sense, are not money, then we think we have shown that the court below erred in ruling out the testimony offered. And if bank notes be not money, then their value must be proved, just as any other commodity or security. Bank notes, are nothing more than securities for money. They express upon their face to pay a specific amount, and suits may be maintained upon them, for a violation of this promise. Their value and circulation depend upon the ability of the banks to redeem, tifie certainty of redemption on presentation, and the confidence of the community in both of these events.
Why has it been determined in England, that notes payable in bank paper, are not technically promissory notes 1 Because they are not payable in money. Because bank notes, like other commodities, fluctuate in value, and because their worth is to be ascertained by extraneous proof. But the coins carry their value upon their face, ascertained and fixed by law, and have per se an intrinsic value. We are aware that it has been determined, that under a bequest of all of the testator’s money, bank notes were included. But here the court of chancery, merely lent its aid to carry out the intention of the testator, regardless of the technical phraseology of the will. In common parlance, banknotes are regarded as cash — as money. But whenever individuals discriminate between specie and bank notes in their contracts, courts are equally bound to effectuate the intention; and so was it held in Indiana, Wilson v. Hickson, 1 Blackford, 231. The court say, that debt will not lie on a written obligation, for the payment of a certain sum in United States bank notes, or its branches. Covenant is the proper action. The value of these notes fluctuate, and their value is to be ascertained by a jury.
The same doctrine was held in Osborne v. Fulton, I Black. 234. If United States bank notes be money, in the sense of the constitution, then the court was wrong in its opinion. But the supreme courts of Indiana and Kentucky do not stand alone in support of this doctrine.
The courts in South Carolina have held that a promissory note, payable in paper medium, thereby meaning bank paper, is not a note for the payment of money, in a constitutional sense, and for that cause arrested judgment in Lunge v. Kohne, 1 McCord, 115; so in 2 Nott & McCord, 519. In McCord v. Ford, 3 Monroe, 166, the court of Kentucky expressly decide that bank notes are not money. So in Lampion v. Haggard, 3 Monroe, 149, in which case the court somewhat at large, discusses the question. In Clay v. Huston’s Administrator, 1 Bibb’s Ky. Rep. 461, the court construe a promise to pay thirty pounds in militia certificates, to be a contract to pay so many militia certificates, as when counted will make thirty pounds, and not so many as will be equal to thirty pounds specie. And they moreover say that the measure of damages is the specie value of the certificates, at the time they were stipulated to be paid. Williams and alios v. Hall, 2 Dana, 97, Chief Justice Robertson reiterates the same principle. Ib.
Motion against constable for not returning execution upon which plaintiff (under statute of Kentucky) had indorsed that he would take Commonwealth’s Bank paper. Judgment against defendant below, for the amount of execution below, for the specie. There was no proof of the value of the Commonwealth Bank notes. C. J. “In this respect, the judgment is erroneous. The value of the Commonwealth Bank paper, with interest and damages, is the legal measure of responsibility, (if any liability at all be established,) when the execution should have been returned.” This case establishes two propositions, material to the case at bar; that the value of the bank paper must be proved, and that the specie value of such paper, at the time of the breach of duty or promise, is the measure of damages.
Here we will take occasion to remark upon a point strenuously urged by the other side, in the court below; and which had no little weight in the mind of the bench in deciding against the admissibility of this testimony; and that is, that the defendant below could not prove the specie value of the bank notes, unless he had first shown a tender of said bank notes on the day of the maturity of this note — in other words, in all contracts to pay in bank bills, if the bills be not tendered on the day, the law changes the agreement into an obligation for specie, and the defendant is estopped from an inquiry into the value of the bank bills. This proposition seems to us violatory of all principle, and subversive of justice. Why should there be a different rule in this contract from that which obtains in all others? If A. promises to deliver one hundred barrels of corn on the 1st day of January, 1840, and is sued for a default in his contract one year afterwards, though corn, at the time of bringing suit, may be worth twice as much per barrel, yet all admit that the measure of A.’s responsibility is the price at the time when it ought to have been delivered. What is the effect of a tender ? It stops interest, and saves costs. It stops interest, because, from the time of tender until plea, the defendant was ready and prepared to pay his debt, and therefore the money was idle, and yielding him no profit. It saves costs, because it was by the fault of the plaintiff that the defendant did not fulfil his contract. It was agreed on all hands, in the argument in the circuit court, that if the defendant below had tendered these specific bank bills on the day, that then he would have been liable for their specie value alone, without interest, &c. Because a payment of either kind of the bank notes on the day, would have been a discharge of the contract— the note. Suppose that all the bank notes, which Singleton agreed to take in satisfaction of this and the other notes, were on the day twenty per cent, discount under specie; how much would the plaintiff below have received for his note? But eighty dollars in the hundred. By the failure, then, of the appellant to pay this note, the plaintiff below has only sustained damage to that amount. This is a clear proposition. If eighty dollars in the hundred had been paid to him in specie, he could readilyhave exchanged it for one hundred dollars, bank bills.. So far as interest is concerned, it was wholly immaterial to the holder of the note, whether the one hundred dollars, bank bills, or eighty dollars, specie, were paid. But to this reasoning it was answered by the court below, and counsel, that it may be, the plaintiff below might have passed the bank bills at par, in payment of debts, or for other purposes, and therefore they were worth as much to him as so many specie dollars. This argument, aside from its being in direct conflict with the rule of law, asserted in the cases referred to, is at best but flimsy sophistry. If the plaintiff below could have paid his debts, or passed at par these bank notes, and Saunders had paid him eighty dollars in specie on the hundred, it would have been an easy matter, for the plaintiff below to have gone into the market and purchased the $100 bank notes. In fact, then he could have been damaged only to the amount of the specie value of the bank notes. Such reasoning is at best far-fetched, and such as courts should not entertain. With equal plausibility might A. contend, that if his note for $2000 had been paid at maturity, he could have applied the money to a speculation which would have made him $4000 ; but by the defendant’s default, the opportunity has forever gone, and upon making out that state of facts before the jury, insist upon a verdict of $4000 as the amount of his damages.
The rules for assessing damages, in cases similar to the one at bar, are laid down with great precision, in the case of White v. Green, 3 Monroe, 155. We will now proceed to notice some of the decisions of highly respectable courts, in seeming conflict with the cases, in Indiana, Kentucky, and South Carolina, as to whether bank notes shall be regarded, judicially, as cash, as money. In Keith v. Jones, 9 John. 120, it was held, that a note payable in York state bills, or specie, was a note for the payment of money — a cash note. The language of the court is, “ That the bills mentioned mean bank paper, which, in conformity with common usage and understanding, are regarded as cash.” Judah v. Harris, 19 John. 144, the court determined, that a note payable in bank notes, current in the city of New York, was a cash note ; because such bank paper was equal in value to the specie.
The court will perceive, upon a critical examination of these cases, that the court of New York would judicially know the fact, that the funds in which the notes were payable were at par with specie; and, for that reason, in conformity with the popular understanding, considered them cash notes. But in 5 Cowen, 186, Leiber, etal. v. Goodrich, determined four years after the case in 17 John., it was ruled, upon demurrer to the declaration, that a note for Pennsylvania or New York paper currency, was not a cash note. And the court would officially take notice, that the paper was, or might be, of less value than cash. It is worthy of observation, that in all of these cases, the point was raised by demurrer to the declaration; and by that state of pleading the court was required to say, whether or not the notes were payable in' money, in cash. These are the strong est authorities that can be read on the other side. In neither of them was the offer made, to prove the discount of the bank paper; the cases were adjudged upon the record; all of them concur in this — that the bank paper must be at par, to uphold the note ; and that if depreciated, then the note is not for cash. In the- case in Cowen, if we understand it, the court determined, that it was necessary to prove the value of the bank paper. They intimate that it was of less value than specie; and, in saying that, they determine that the specie value must govern the jury in their verdict. If the plaintiff must ultimately recover the face of the note, regardless of depreciation, where is the reason for sustaining the demurrer ? It was an act of folly and supererogation. We extract this principle from the three cases : That notes payable in depreciated bank paper, are not cash notes ; that the court, when the question is raised by demurrer, will determine, judicially, (that is, will travel out of the record, and notice the condition of the currency,) whether or not the paper be depreciated; and most assuredly they recognize the right of the defendant, when the case gets to the jury, of proving, if he can, depreciation. In Jones v. Tales, 4 Mass. 245, the supreme court of Massachusetts would not allow a note payable in foreign bills (meaning bills of country banks,) to be read in evidence to the jury ; because such a note was not for cash ; and, second, because the court would judicially know, that such “ bills ” were of less value than specie, virtually determining, that evidence of the value of “foreign bills” was necessary, to make out the plain case, and to furnish the jury with sufficient materials for a verdict. Chancellor Kent, after reviewing all of the cases, English and American, comes to the conclusion, that the weight of authority and argument is decidedly in favor of the doctrine, as uniformly held in Kentucky, that bank notes are not money, and that notes made payable in such paper are not cash notes. 3 Kent’s Com. 75, 4th edit. In Pennsylvania, the same doctrine has been held, after solemn argument, in McCormick v. Trotter, lOSerg. & Raw. 94. In our investigation of the law, we have been unable to find a single case, where either party has been precluded from proving the discount or depreciation of bank notes. But in every case, where the defendant has offered such testimony, it has been received. And to that effect are the following cases : 3 Monroe, 149, 155. 3 Littell, 245. 1 Blackford, 231. 1 Black. 234. 5 Yerger, 451. 2 Dana, 97.
A word as to whether the depreciation of the bank paper, at the time of making the note, or at its maturity, is the measure of damages. If we never had heard the question mooted, we would esteem it unworthy of an argument. In the contract for the delivery of corn, all admit that the value at the time it should have been delivered, is the measure of damages, without regard to its price, at the time of making the "promise, or the institution of the suit. If the corn had fallen in value, the defendant must reap the advantage; if it had risen, he must pay the market price. Precisely the same risk is run, in a contract to pay bank notes at a future day. The bank paper may be depreciated, which is for the benefit of the promisor; it may have attained to par, for the benefit of the promisee.
In 1839, negroes were sold for twelve or fifteen hundred dollars; yet, twelve months afterwards, when the purchase money became due, the same negroes were not worth more than eight or nine hundred dollars. Yet, whoever supposed that this was a defence to the suit for the price, or that the price agreed upon should be razeed to the value of the negro on the day of payment. The vendor does not warrant that the negroes will be worth as much twelve months hence. But change the contract to a promise to pay what the negroes may be worth twelve months from the day of sale, and then the vendee avails himself of the fall in price, but runs the hazard of a rise. Precisely the same risk is run, in an agreement to pay bank paper; it fluctuates in value, and may be of greater or less value on the day of payment.
This court will judicially know, that the banks mentioned in the deed and exception, were refusing at the time this note was made, and when it fell due, to pay specie. 3 Monroe, 150. Ibid. 166 and 7. 4 Mass. 246. 5 Cow. 186. The same fact is also brought to the knowledge of this court, by legislative enact- meet, authorizing the suspension. The paper was depreciated when the note was made, and it was a fair risk on both parlies, whether this paper would get better or worse, when the note matured; the same risk is incurred in all executory contracts. The cases in 2 Dana, 97, I Bibb, 461, 3 Litt. 245, Hardin, 31, show that the depreciation of the paper, at the time the note was payable, is the measure of damages; and the same cases also show, that it is not necessary to have made a tender of the bank notes; for in the case in 2 Dana, and 3 Litt., there was an inquiry of damages. Defendant had suffered judgment by default, and upon executing the writ of inquiry of damages, such testimony was offered and received.
The equity and justice of this case, is clearly with the appellant. Suppose this" bank paper tweny-five per cent, discount, when the note was made, and at the same discount when due, and both parties knew it: Is it just that the appellant should pay the face of the note in specie? If there be any rule of law working such a hardship, we are ignorant of it. Is it by way of penalty, of punishment, for not fulfilling his engagement ? The law declares, that he shall pay the value of the articles, with interest, &c., for the breach of any contract. In Hardin, 31, the defendant covenanted to deliver a negro girl, or boy, between ten and fourteen years of age. The court say that the measure of damages should have been the value of the negro ten years of age; inasmuch as the tender or delivery of a negro of that age, would have been a discharge of the contract; and arguendo, the court say, that when a promise is made in the alternative, for the performance of one or two things, the criterion of damages is the damages resulting from the non-performance- of that thing least inconvenient to the defendant.
J. A. Walker, for defendant in error.
1. As to the first error assigned, it is conceived that the third plea would have been adjudged bad on general demurrer, for more reasons than one. The third plea is pleaded in bar of the whole action, and only pretends to set up a part failure of con sideration. Again, it attempts to set up a breach of covenant by Singleton, as an excuse for defendant’s breach of contract, without showing that the covenant of Singleton was a condition precedent. The third plea also is clearly bad, because the failure of consideration stated in said plea is, that Singleton did not deliver to said defendant below certain property therein named, by the middle of December, 1839, when it did not appear that he was bound so to do. There are various other causes of demurrer equally fatal, as will appear by reference to the causes stated, one of which is that the deed is not pleaded, nor is any proferí thereof made.
2. Upon the second point, it is humbly conceived, that if the note sued on, was payable in the notes of specified banks, or in any other .Commodity than lawful money, and the defendant wished to avail himself of his right to discharge the same byu payment in such paper, or commodity, then he should have paid the note at its, maturity, or he should have tendered payment. See Smith v. Qoddard, Ohio Rep. Cond. v.ols. 1 to 4, p. 85. S. C. 1 Hammond’s Ohio Rep. 178 and ,179. Morris v. Edwards, Ohio Rep. Cond. vols. 1 to 4, p. 87. .S. C. 1 Ohio Rep. 189. Ohio Rep. Cond. vols. 1 to 4, p. 224. 6 Mass! Rep. 189. 4 Mass. Rep. 253. .1 Yerger’s Rep. 101. 3 Connecticut Rep. 58. The decisions made in the above cases were upon the identical question involved in this, and the question arose in several of them in the same manner, to wi.t, upon objection to the testimony offered to prove the value of the bank bills.
If a note is made for a specific sum of money, payable in bank bills of certain banks, it is the privilege of the maker .to discharge the same in the manner provided for in the note, on the day the note becomes d.ue, by paying the b.ank bills, or tendering the same; but- if he does not choose to avail himself of this right, the note becomes absolute, and js recoverable in lawful money, and the amount -of damages to be recovered, is the amount of money specified in the note, with interest. And it is supposed that the rule is the same, if a note or contract be made, for a specific sum of money to be paid in any species of property at a day certain.
But if the contract be, for the payment or delivery of'any species of property, or commodity, as, for the payment of an hundred bushels of salt, or a horse; then it is necessary to prove to the jury the value of such property át the time the Same was to be paid.

Opinion:
Mr. Chief Justice ShaRKEy
delivered the opinion of the court.
This action was founded on a promissory note for two thousand dollars, made by Saunders, the plaintiff in error', payable to Richard Singleton, who transferred it by indorsement to Richardson, the defendant in error.' The defence set up was that the defendant below was only bound to pay the amount of the note, in the notes of certain banks, which had become greatly depreciated, and that the amount to be recovered should be the circulating value of the bank notes at the time of the maturity of the note sued on. The note on its face contains an absolute promise to pay money only, without qualification or condition, but the defence is raised by proof aliunde. Witnesses were introduced who proved that this was one of a parcel of notes given by Saunders, to secure the purchase money of a tract of land and a quantity of negroes and other property, sold by Singleton to Saunders. The deed to Saunders was then introduced without objection, which contains this clause; " and the said Singleton agrees to and with the said Saunders to take in satisfaction of each and every of the aforesaid notes, the paper of the Planters, Commercial, and Agricultural Bank at Natchez; the Woodville Bank, the Union Bank, the Commercial Manchester Bank, or any bank notes as good as that of the aforesaid banks," and under this clause it is that the defence is attempted to be set up. The defendant introduced a witness, and offered to prove'the discount or depreciation in the value of the notes of these banks; but to this the plaintiff objected, and the objection was sustained, and the witness was not permitted to state what the discount was.
We shall not controvert the rule contended for by the counsel for the plaintiff in error, that where a note on its face contains an agreement to pay so much in the notes of certain banks, that then the defendant is liable only for the current value of such notes as he agreed to make payment in; though on that point even, the decisions in our sister states are somewhat conflicting. Nor is it necessary that we should now decide that to be the true rule, believing that if it even be so,, still this case would not fall within its operation. Taking for the present the law to be as stated, we shall endeavor to draw the distinction between this 'contract, and those which have given rise to the decisions cited. In cases of the description mentioned, the essence of the agreement was the thing to be paid. By common consent bank notes have been substituted as currency. They are necessarily liable to great fluctuation in value, and a note payable in such currency bears a striking analogy to an agreement to pay any other specific article. The extent of the obligation is the thing agreed to be paid. The obligee can only call for the payment of that thing, and the obligor is discharged when he pays it. Such contracts cannot be interpreted so as to enlarge the obligation. A failure to perform entitles the plaintiff to recover the value only, as equivalent to what he would have received on voluntary payment. The extent of the liability or undertaking is limited by the terms of the obligation. But this is not a note for so much, payable in a certain description of currency ; it is an absolute promise to pay so much money, which in legal effect obliged the maker to pay in money, which is gold and silver. The right claimed to pay in the notes of certain banks, or to limit the recovery to their value at the time of payment, is supposed to arise out of an instrument different from the contract to pay; it arises out of the clause in the deed above referred to. Does this clause constitute a part of the contract to pay, or a condition or limitation 1 It does not, as I conceive. Contracts in reference to the same subject-matter, entered into at the same time, are sometimes considered as parts of the same transaction, for the purpose of carrying out the intention of the parties; but these are not necessarily connected, nor does the intention of the party to be favored in the construction of the contract, require that they should be so considered. The agreement to take the bank notes in satisfaction constitutes no part of the defendant's contract to pay. It is an agreement made by Singleton in reference to an existing unconditional obligation, which in effect authorized the defendant below to extinguish that obligation by the payment of a thing different from that called for by the note. By the payment of so much in bank notes, the right to call for so much money was to be defeated. This provision in the deed then was simply a defeasance, by which is meant an instrument which defeats the force and operation of another separate instrument. If the holder of a bond covenant that on a particular day a less sum will be received in payment, this is a defeasance, and so it would be if instead of money he should covenant that some other specific thing should be received. These instances serve to illustrate this case. Singleton takes Saunders's note for the payment of two thousand dollars, but at the same time covenants that in satisfaction he will take depreciated paper of less value than the amount due by the note. His agreement to take that description of paper does not seem to have been an inducement with the defendant below for entering into the contract, or he would not have bound himself to pay so much in money. The fair construction of Singleton's contract is, that he would take, on the day of payment, the bank notes in satisfaction; not that he would hold himself bound to take them at any time afterwards, or that he would consider their current value the measure of his right of recovery if driven to a suit. No other construction can be given to his agreement, a time for payment being specified, and there being no enlargement as to time. A defeasance being for the benefit of the party in whose favor it is given, must be strictly performed, and it amounts to nothing unless the defendant is prepared to plead performance, or an offer to perform. If by the defeasance money is to be paid, the defendant must be prepared to plead a tender, because being but a condition on the performance of which the main contract is defeated, if the condition has not been performed or an offer to perform made, the principal contract remains absolute. 2 Saunders's Rep. 47, note (I). The deduction is that Saunders lost the benefit of Singleton's agreement by failing to pay or to tender the bank notes at the maturity of his note. The court therefore decided correctly in ruling out testimony offered to prove the value of the bank notes, there being no plea of tender.
Judgment affirmed.