United States v. Gurney
8 U.S. 333 (1808)

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U.S. Supreme Court

United States v. Gurney, 8 U.S. 4 Cranch 333 333 (1808)

United States v. Gurney

8 U.S. (4 Cranch) 333

Syllabus

B. in Philadelphia, agreed to pay to A's agent one hundred and seventy thousand guilders in Amsterdam on 1 March, and if he should fail so to do, then to repay to A. the value of the said guilders at the rate of exchange current in Philadelphia at the time demand of payment is made, together with damages at twenty percent in the same manner as if bills of exchange had been drawn for the said sum, and they had been returned protested for nonpayment, and lawful interest for any delay of payment which may take place after the demand. B. paid the one hundred and seventy thousand guilders in Amsterdam, to the agent of A. on 13 May instead of 1 March. A. is not entitled to the twenty percent damages, but may, in a suit upon the bond given to perform the contract, recover interest on the one hundred and seventy thousand guilders from 1 March to 13 May.

It is not a good plea for the defendants to say that they paid the one hundred and seventy thousand guilders to A.'s agent, for the use of A. at Amsterdam, on 13 May, without averring it to be the whole sum then due.

It is a known rule that a demurrer brings all the pleadings before the court, and in consequence of which judgment may be rendered against him who committed the first fault, or which will most generally produce the same result, for him who upon the whole record shall appear to be entitled to the judgment.

Contracts are always to be construed with a view to the real intention of the parties.

If the reservation of damages in the condition of the bond is in law only a double penalty, then interest is the legal compensation for the breach of covenant contained in the bond.

This case was certified from the Circuit Court for the District of Pennsylvania, the judges of that court being divided in opinion upon the question whether, upon the state of the pleadings, the judgment ought to be rendered for the plaintiffs.

It was an action brought by the United States against Gurney and others upon a bond conditioned to comply with a certain written agreement between them and the Secretary of the Treasury of the United States of the same date

"to pay the sum of 500,000 guilders at Amsterdam . . . in the manner and form, and on or before the particular days and times in the said agreement mentioned; or in case the said sums shall not be paid as aforesaid, at either of the said places, then to repay to the United States the value of the said 500,000 guilders, at the rate of exchange current in Philadelphia at the time demand of payment is made, together with damages at 20 percent, in the same manner as if bills of exchange had been drawn for the said sum, and they had been returned protested

Page 8 U. S. 334

for nonpayment, and lawful interest for any delay of payment which may take place after the demand."

After oyer of the bond and condition, the defendants set forth the written agreement, by which, in consideration of $205,000, to be immediately advanced to them by the United States, the defendants agree to pay to the bankers of the United States at Amsterdam 500,000 guilders, in manner following, viz., 230,000 guilders on or before the first of February; 170,000 guilders on or before the first of March; and 100,000 guilders on or before the first of June, 1803; and in case the said payments shall not be made at the times and in the manner aforesaid, they will pay to the United States

"20 percent damages for their noncompliance with this agreement, for the whole of the sum so agreed to be paid, or such parts thereof as they shall not actually pay at the times, place and manner aforesaid, together with interest from the day of demand of repayment on behalf of the United States . . . in the same manner as for bills of exchange returned with protest for nonpayment."

The defendants then pleaded that on 1 February, 1803, they paid at Amsterdam to Willink & Van Staphorst, bankers of the United States, to and for the use of the United States, the said 230,000 guilders, and on 13 May the said 170,000 guilders, and on 16 May the said 100,000 guilders, in the said articles of agreement mentioned, "and this they are ready to verify," &c.

To this plea the United States replied that although the defendants, on 1 February, 1803, paid to the said Willink & Van Staphorst, bankers of the United States, for the use of the United States, the said sum of 230,000 guilders, in the said articles of agreement mentioned, and although the defendants, on the said 13 May, at Amsterdam, paid to the said Willink & Van Staphorst, bankers of the said United States, to and for the use of the said United States, the sum of 170,000 guilders, and although the defendants, at Amsterdam, on the said 16 May, paid to the said Willink & Van Staphorst, bankers of the said United States, to and for the use of the said United States, the further sum of

Page 8 U. S. 335

100,000 guilders, in the said articles of agreement mentioned; yet the said United States deny that the said last mentioned sum of 170,000 guilders, so as aforesaid paid by the defendants to the said Willink & Van Staphorst, bankers of the United States at Amsterdam, on the said 13 May, was, by the United States, accepted, received and allowed in payment and satisfaction of the said sum of 170,000 guilders, which, by the said agreement, the defendants were bound to pay on or before 1 March, 1803, and this the said United States pray may be inquired of by the country. And the said United States in fact say that the defendants did not pay or cause to be paid to the said Willink & Van Staphorst, bankers of the United States at Amsterdam, to and for the use of the said United States, the said sum of 170,000 guilders, in the said articles of agreement mentioned, on or before the said 1 March, 1803, being the time prescribed by the said articles of agreement for payment of the same.

Nor have the defendants at any time since 1 March, 1803, paid to the United States 20 percent damages for their noncompliance with the said agreement for the payment of the said sum of 170,000 guilders, part of the said sum of 500,000 guilders in the said agreement mentioned, to the said Willink & Van Staphorst, bankers of the said United States at Amsterdam, to and for the use of the said United States, on 1 March, 1803, together with interest from the day of demand of repayment on behalf of the United States, in the same manner as for bills of exchange returned with protest for nonpayment, although afterwards, viz., on 14 June, 1803, at Philadelphia, demand of repayment of the said sum of 170,000 guilders, together with the said 20 percent damages, was made on behalf of the said United States, by Albert Gallatin, Secretary of the Treasury of the United States, from the defendants, but to pay the aforesaid sum of 170,000 guilders, together with 20 percent damages, and interest on any part or parcel thereof, to the said United States, the defendants have hitherto refused, and still refuse, contrary to the form and effect of the said condition of the said writing obligatory, and the agreement therein referred to, and in the plea set

Page 8 U. S. 336

forth, and this the said United States are ready to verify, wherefore they pray judgment, &c.

To this replication the defendants demurred specially.

1st. For duplicity.

2d. Because they could not take issue on the replication without a departure from their plea; and,

3d. Because the United States have by their replication endeavored to put in issue matters foreign and irrelative to said plea.

This demurrer was joined on the part of the United States.

Page 8 U. S. 341

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