Effinger v. Kenney,
Annotate this Case
115 U.S. 566 (1885)
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U.S. Supreme Court
Effinger v. Kenney, 115 U.S. 566 (1885)
Effinger v. Kenney
Argued November 10-11, 1885
Decided December 7, 1885
115 U.S. 566
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.
A statute of Virginia of February, 1867, after declaring that in an action or suit or other proceeding for the enforcement of any contract, express or implied, made between the 1st day of January, 1862, and the 10th of April, 1865, it shall be lawful for either party to show, by parol or other relevant testimony, what was the understanding and agreement of the parties, either express or implied, in respect to the kind of currency in which the same was to be performed or with reference to which, as a standard of value, it was made, provides
"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.
This case comes from the Supreme Court of Appeals of Virginia. It was brought in one of the circuit courts of that state to enforce a vendor's lien claimed by James Kenney, the plaintiff below, defendant in error here, as trustee of one Allen C. Bryan, for the unpaid portion of the purchase money of certain real estate sold to Jacob P. Effinger, the defendant below and plaintiff in error here. The material facts of the
case are these:
On the 7th of January, 1861, Allen C. Bryan and wife conveyed all their estate, real and personal, to James Kenney in trust for the benefit of the wife and creditors of Bryan. The real estate was situated in Rockingham County, Virginia, and a portion of it, consisting of about 100 acres, was known as the "Home Farm" of Bryan. On the 30th of March, 1863, Kenney, the trustee, sold this farm at public auction to the highest bidder pursuant to the deed of trust, and at that sale Effinger became the purchaser at $210 per acre, one-third to be paid in cash and the balance in one and two years from the date of sale, with the privilege of paying in cash the first of these deferred payments. Effinger made the cash payment and the first of the deferred payments, and executed to the trustee his promissory note, or bond, as it is termed in the record, for the second deferred payment, amounting to $7,067.72, payable on the 30th of March, 1865, with interest from date, stating in the instrument that the amount was the deferred payment on the "Home Farm" of Bryan. The trustee and the purchaser were at the time residents and citizens of Virginia. The first and second payments were made in treasury notes of the Confederate states, but after the maturity of the bond, the third payment in such notes was refused by the trustee, and, no payment in any other currency being made, the present suit was brought. The circuit court was of opinion that the sale was made with reference to notes of the Confederate states as a standard of value, that the fair value of the property on the day of sale "was the most just measure of recovery," and that such value was $80 an acre in lawful currency of the United States. This conclusion as to value was drawn from the fact that the land was assessed for taxation at that sum before the civil war, and that during the continuance of the war, its value had not materially depreciated, the court observing that
"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."
It accordingly awarded judgment for one-third the value of the
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.
In adopting the rule stated to arrive at what it deemed the "most just measure of recovery," the court acted in conformity with a statute of Virginia, passed on the 28th of February, 1867, amending and reenacting sections of an act of the previous year "providing for the adjustment of liabilities arising under contracts or wills made between the first day of January, 1862, and the tenth day of April, 1865." This act of 1867 provides:
"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."
"SEC. 2. Whenever it shall appear that any such contract was, according to the true understanding and agreement of the parties, to be fulfilled or performed in Confederate states treasury notes, or was entered into with reference to such notes as a standard of value, the same shall be liquidated and settled by reducing the nominal amount due or payable under such contract in Confederate states treasury notes to its true value at
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.