A deed was made for land in the year 1779 rendering an annual
rent in current money of Virginia forever.
Held that the
rent is to be paid in specie or other money equivalent thereto at
the date of the deed, and the same is not to be reduced at the
scale of depreciation.
A contract for the payment of distinct sums of money at
different times is very much in the nature of distinct contracts,
and an action of debt lies for each sum as it becomes due.
The rule which forbids a deed to be contradicted by parol
evidence is a salutary one, and the Court is not disposed to impair
it.
In the construction of a statute, positive and explicit
provisions, comprehending in terms a whole class of cases, are not
to be restrained by applying to those cases an implication drawn
from subsequent words unless that implication be very clear,
necessary, and irresistible.
Where a case is shown to be out of the mischief intended to be
guarded against or out of the spirit of the law, the letter of the
statute will not be deemed so unequivocal as absolutely to exclude
another construction.
It is said the case ought to be an extraordinary one, that the
circumstances ought to be uncommon, which would warrant a departure
from the general principles established for the government of
contracts. This is true, and the Court would certainly not feel
itself at liberty to exercise on a common occasion a discretionary
power limited only by the opinion entertained of the naked justice
of the case.
Page 6 U. S. 11
In the month of May, 1779, the executors of John Alexander, in
pursuance of a power contained in the will of their testator, set
up to the highest bidder on a ground rent forever certain lots of
land lying in the Town of Alexandria.
One of these lots containing half an acre was struck off to a
certain Peter Wise at the rent of 26 per amount, current money of
Virginia. Wise bid for Jacob Sly, a citizen of Maryland, who
transferred the lot to Abraham Faw, to whom the same was conveyed
in fee-simple, by a deed bearing date the 5th of August 1779, in
which the said ground rent of �26 per annum, current money of
Virginia, was reserved.
In the year 1784, Abraham Faw divided the said half-acre of
ground into eight smaller lots, five of which he has sold,
reserving a ground rent forever, amounting to ground-84 12s. per
annum. One of these lots was conveyed by Faw to Jacob Hess in the
year 1784 at the ground rent of ground-25 16s. per annum, which lot
has been since purchased by Phillip Marsteller, the appellee, who
has also purchased from the devisee of John Alexander all his
rights in or issuing from the half-acre lot of ground conveyed to
Abraham Faw. Thus Abraham Faw becomes liable to Philip Marsteller
for the rent accruing under the deed of August, 1779, who is
himself liable to the said Faw for the rent accruing on part of the
same lot, under the deed executed by Faw to Hess in November,
1784.
In November, 1781, the Legislature of Virginia passed an act
calling paper money out of circulation and also another act
directing the mode for adjusting and settling contracts made in
that currency.
The second section of this latter act, after stating, by way of
preamble, that
"the good people of the state would labor under many
inconveniences for want of some rule whereby to settle and adjust
the payment of debts and contracts entered into or made between 1
January, 1777, and 1 January, 1782, unless some rule should be by
law established for liquidating and adjusting the same so
Page 6 U. S. 12
as to do justice as well to the debtor as the creditor,"
enacts that from and after the passing of the act
"all debts and contracts entered into or made in the current
money of this state or the United States, excepting at all times
contracts entered into for gold and silver coin, tobacco, or any
other specific property within the period aforesaid now remaining
due and unfulfilled or which may become due at any future day or
days for the payment of any sum or sums of money, shall be
liquidated, settled, and adjusted agreeably to a scale of
depreciation hereinafter mentioned and contained -- that is to say
by reducing the amount of all such debts and contracts to the true
value in specie at the days or times the same were incurred or
entered into, and upon payment of said value so found, in specie,
or other money equivalent thereto, the debtors or contractors shall
be forever discharged of and from the said debts or contracts, any
law, custom, or usage to the contrary in any wise
notwithstanding."
The fourth section establishes the scale of depreciation which
shall constitute the rule by which the value of the debts,
contracts, and demands in the act mentioned shall be ascertained,
and the fifth section enacts
"That where a suit shall be brought for the recovery of a debt
and it shall appear that the value thereof hath been tendered and
refused, or where it shall appear that the nonpayment thereof hath
been owing to the creditor, or where other circumstances arise
which in the opinion of the court before whom the cause is brought
to issue would render a determination agreeable to the above table
unjust, in either case it shall and may be lawful for the court to
award such judgment as to them shall appear just and
equitable."
The act then empowers the court to direct at what depreciation
any judgment shall be discharged on a verdict given for damages
between 1 January, 1777, and 1 January, 1782, having "regard to the
original injury or contract on which the damages are founded, and
any other proper circumstances that the nature of the case will
admit."
Page 6 U. S. 13
It was proved in the cause that the contracts made by the
executors of John Alexander excited at the time very great
attention and were the subject of general conversation. The
prevailing opinion among the bidders was that the rents would be
paid in paper money so long as paper should be the circulating
medium, after which they would be paid in specie. Such too was the
opinion of Peter Wise, the purchaser of the particular lot which
occasioned the existing controversy, and there is reason to suppose
it was also the opinion of those who were disposing of the
property; it was also thought the rent reserved was low, when
considered as payable in paper, but high if to be paid in
specie.
It was further proved that a lot not more valuable than that
which occasioned the present contest was sold in 1774 on a ground
rent of �13 5s. per annum forever, and that a lot less valuable was
sold in the year 1784 on a ground rent of �35 per annum. But it
appeared from other parts of the testimony that the lots which were
sold in the year 1784 in Alexandria on ground rent were contracted
for so much above the value they afterwards bore that the lessors
in very many instances were under the necessity of reducing the
rents one-half below the sum originally stipulated, and in some
instances the reduction was still greater.
The circuit court decreed that the rents which accrued during
the existence of paper money should be reduced according to the
scale for the time when they became payable, but that the
subsequent rents should be paid in specie. From this decree Faw
appealed.
Page 6 U. S. 22
MR. CHIEF JUSTICE MARSHALL, after standing the case as above,
delivered the opinion of the Court.
This suit was instituted to recover the rent in arrear under the
deed executed in August, 1779, a part of which rent had accrued
during the circulation of paper money.
The circuit court decreed that the rents which became payable in
the year 1780 and 1781, should be adjusted by the scale of
depreciation, when they respectively became due, and that the rents
accruing afterwards should be discharged in specie.
From this decree Faw appealed to this Court, and it is alleged
that the decree of the court below is erroneous, because
1. The contract of August, 1777, is within the second section of
the act of the Virginia Assembly, which has been cited. And if
so,
Page 6 U. S. 23
2. That it is not within the fifth section of that act.
The descriptive words of the act of assembly are
"all debts and contracts entered into, or made in the current
money of this state, or of the United States, now remaining due and
unfulfilled, or which may become due at any future day or days, for
the payment of any sum or sums of money."
These words, it is urged, comprehend in express terms the very
contract now before the Court. That contract is an engagement
entered into within the time specified by the act to pay several
sums of current money in future. To make the case still stronger,
contracts for gold and silver coin, tobacco, or any other specific
property are expressly excepted out of the operation of the law.
When those who introduced these exceptions were so very cautious as
expressly to take a contract for tobacco or other specific property
out of the operations of a law made solely for money contracts,
they are additional inducements to believe that every possible
contract, not included within the exceptions, was designed to be
comprehended in the general rule.
It is admitted in argument by the counsel for the appellee that
the terms used in the first part of the section are such that if
they stood alone, they would include in their letter the case at
bar, but it is contended that there are subsequent words which
limit those just quoted so as to restrain their operation to
contracts capable of being extinguished. These words are that upon
payment of what was the value of the debt or contract at the time
it was entered into, "the debtors or contractors shall be forever
discharged of and from the said debts or contracts." These words,
it is said, can only apply to temporary contracts such as may be
completely fulfilled and from which the debtors or contractors may,
in the language of the law, "be forever discharged."
It will not be denied that there is much weight in this
argument, but it does not appear to the Court to be strictly
correct. In searching for the literal construction of an act, it
would seem to be generally true that positive and explicit
provisions, comprehending in terms
Page 6 U. S. 24
a whole class of cases, are not to be restrained by applying to
those cases an implication drawn from subsequent words unless that
implication be very clear, necessary, and irresistible. In the
present case, the implication does not appear to the Court to be of
that description. A contract for the payment of distinct sums of
money at different periods is very much in the nature of distinct
contracts. An action of debt lies for each sum as it becomes due,
and when that sum is paid, the debtor or contractor is forever
discharged from the contract to pay it. To understand in this sense
the words of the act which are considered as restrictive does not
appear to the Court to be such a violence to their natural import
as to be inadmissible, and to understand them in this sense
reconciles the different parts of the clause with each other.
But although the counsel for the appellee may not have
established the literal construction for which they insist, yet so
much weight is admitted to be in the argument that if they succeed
in showing the case to be out of the mischief intended to be
guarded against or out of the spirit of the law, the letter would
not be deemed so unequivocal as absolutely to exclude the
construction they contend for.
It is urged that the mischief designed to be guarded against is
confined to temporary contracts, and that by the spirit of the law
and the construction it has received, the time when the
consideration on which the debt is founded moved from the creditor
is the real date of contract.
But the Court perceives no sufficient ground for saying that
this case is taken out of the mischief or spirit of the law by
either of the circumstances which have been relied on.
The only real reason for supposing that the law might not be
designed to comprehend interminable contracts is that as paper
money must unavoidably cease to circulate during the continuance of
the contract, the parties must have measured their agreement by a
more permanent standard.
Page 6 U. S. 25
Very great respect is certainly due to this argument, but it
cannot be denied that an agreement which is to subsist for a very
great length of time, as for a thousand years, would be entered
into with precisely the same sentiments as an agreement to subsist
forever. The contracting parties would be as confident in the one
case as in the other that the agreement would subsist after the
paper currency would cease to circulate. Yet an agreement for a
thousand years would be within the very words and the spirit of the
law, which plainly comprehends engagements for different sums of
money to become due in future at different periods. To suppose a
distinction to have been contemplated between two such cases is to
suppose a course of reasoning too unsubstantial, and too finely
drawn for the regulation of human action. It seems to be the date,
and not the duration of the contract, which was regarded by the
legislature. The act is applied directly to the date of contract,
and the motive for making it was that contracts entered into during
the circulation of paper money ought in justice to be discharged by
a sum differing in intrinsic value from the nominal sum mentioned
in the contract, and that when the legislature removed the delusive
standard by which the value of the thing acquired had been
measured, it ought to provide that justice should be done to the
parties.
That the time when the consideration was received constitutes
the date of contract according to the intention of the act seems
not to be a correct opinion; nor, if correct, would it affect the
present case.
If, for example, a contract had been entered into in 1779, to be
executed in 1789, whereby a specific sum in current money was to be
given for property then to be delivered, no doubt would be
entertained but that the case would come within the law although
the thing sold would pass out of the vendor after 1 January, 1782;
yet the contract to pay the money was entered into in 1779, and in
the general legislative view of the subject the value of the money
at the date of the contract is supposed to have regulated the price
of the article.
Page 6 U. S. 26
If in the case of rents this argument of the counsel for the
appellees was correct, it would follow that rents accruing during
the circulation of paper money, or leases made before 1 January,
1777, were within the operation of the act. If enjoyment is the
consideration for which the rent becomes payable, and the date of
the consideration is in the spirit of the act the date of contract,
then rents accruing between 1 January, 1777, and 1 January, 1782,
or leases made prior to the former period, would be payable
according to the scale of depreciation, and rents accruing after 1
January, 1782, or leases made for a short term of years, when the
depreciation was actually at the rate of 500 for one, would be
payable in specie at their nominal sum. These consequences follow
inevitably from the construction contended for, and yet it is
believed that no person would admit an exposition which he
acknowledged to involve them.
The position then, that the value of the money at the time the
consideration for which it was to be paid was received is the
standard by which the contract is to be measured is not a correct
one, and if correct, it would not apply to this case, because the
real consideration is found in the contract itself, by which the
right to enjoy the premises is conveyed from the grantor to the
grantee. This right was defeated by subsequent events, but does not
originate in those events.
The case cited from 1 Washington 8 by no means conflicts with
this opinion. In that case, it was decided that where a written
instrument discloses on its face any matter which proves that the
contract itself was of a date anterior to the paper by which it is
evidenced, as when a bond carries interest from a past day, the
contract shall be considered as of a date antecedent to its
execution, and the scale of that antecedent date shall be applied
to it. The reason of this decision is that the price of the article
sold was measured in nominal money according to its value at the
date of the original contract, and not according to its value when
the instrument of writing was executed.
Page 6 U. S. 27
It is then the opinion of the Court that the contract of 5
August, 1779, comes within the second section of the act,
"directing the mode of adjusting and settling the payment of
certain debts and contracts and for other purposes."
It remains to inquire whether it is a case proper for the
interposition of that equitable power which is conferred on the
court by the fifth section of that act, and if so in what manner
and to what extent that power ought to be interposed.
It is contended by the counsel for the appellant that this case
does not come within the fifth section of the act because
1. That section is designed only for the benefit of debtors.
2. No testimony out of a written contract can be admitted to
explain it.
3. If the testimony be admitted, it does not prove one of those
extraordinary cases which will be entitled to the benefits of that
section.
1. The fifth section is designed only for the benefit of
debtors.
That the provisions of an act for the regulation of contracts
should be designed uniformly to benefit one of the parties only is
at first view a proposition replete with so much injustice that the
person who would maintain in must certainly show either that the
words of the act will admit fairly of no other construction or that
legislative aid on one side only was requisite in order to do right
between the parties.
The counsel for the appellants endeavor to maintain both these
propositions, and if they succeed in either, the case is clearly
with them.
In reasoning from the words of the law, they say that the two
cases put are by way of example, and as
Page 6 U. S. 28
they are both cases where the scale established by the act is to
be departed from for the benefit of the debtor, the general power
afterwards given to the court ought to be considered as designed to
furnish a remedy in other similar cases not occurring at the time
to the legislature.
The words of the section are
"That where a suit shall be brought for the recovery of the debt
and it shall appear that the value thereof hath been tendered and
refused, or where it shall appear that the nonpayment thereof hath
been owing to the creditor, or where other circumstances arise
which in the opinion of the court before whom the cause is brought
to issue would render a determination agreeable to the above table
unjust, in either case it shall and may be lawful for the court to
award such judgment as to them shall appear just and
equitable."
The terms used in the third member of the sentence are certainly
very comprehensive, and their general natural import does not
appear to be so restrained by their connection with other parts of
the section as necessarily to confine their operation to cases
where debtors only can derive advantage from them.
The legislature was performing a very extraordinary act. It was
interfering in the mass of contracts entered into between 1
January, 1777, and 1 January, 1782, and ascertaining the value of
those contracts by a rule different from that which had been
adopted by the parties themselves. Although the rule might in the
general be a just one, yet that it would often produce excessive
injury to one or other of the parties must have been foreseen. It
was therefore in some measure necessary to vest in the tribunals
applying this rule a power to relax its "rigor" in such
extraordinary cases. This sentiment might produce the fifth
section, and if it did, the general terms used ought to be applied
to the relief of the injured party, whether he was the creditor or
the debtor.
The opinion that the creditor could not in the contemplation of
the legislature be the injured party, because
Page 6 U. S. 29
the scale of depreciation gave him the full value of his
contract, does not seem to be perfectly correct. According to the
law of the contract, all moneys accruing under it which were not
received during the currency of paper would be payable in such
other money as might be current at the time of payment. It is
impossible to say by any general rule what influence the knowledge
of this principle might have on the parties in every case where the
contract was continuing and was to be fulfilled at future very
distant periods. Unless the rule applying to such cases possessed
some degree of flexibility, it is apparent that the one or the
other of the parties would often be injured by the interference of
the legislature with their contract, and this injury would most
generally be sustained by the creditor in all cases like that at
bar, because in all such cases the conviction that a more valuable
medium than that circulating at the time would return during the
continuance of the contract must have had considerable influence on
the parties in fixing the sum of money agreed to be paid.
There appears, therefore, nothing in the state of the parties to
be affected by the fifth section of the act which should prevent
its application either to creditors or debtors, as the real justice
of the case may require.
But admitting the correctness of this opinion, it is contended
that no circumstances can be given in evidence to explain a written
contract, and therefore it is said that the judgment of the Court
in this case must be governed absolutely by the deed of August,
1779, unless other subsequent and independent events should control
that deed.
The rule which forbids a deed to be contradicted or explained by
parol testimony is a salutary one, and the Court is not disposed to
impair it. The application of that rule to this case, however, is
not perceived. The testimony which brings this contract within the
fifth section neither contradicts nor explains the deed. It is not
pretended that the deed was not executed on the consideration
expressed on the face of it. But according
Page 6 U. S. 30
to the law which existed when the deed was executed, that
consideration would be payable only in gold and silver coin when
gold and silver coin should become the only currency of the
country. The law changing the nominal sum of money, by which the
debt should be discharged, and giving a general rule, by which a
different sum, from that agreed on by the parties, is to be paid
and received, authorizes a departure from the rule where
circumstances shall arise which render a determination agreeable to
it unjust. The examination of these circumstances is not entered
into for the purpose of contradicting or explaining the deed, but
for the purpose of determining which of two rules given by the
statute altering the law of the contract does really govern the
case.
The argument that the exception, if it receives the construction
which the court seems inclined to give it, would destroy the rule
must be founded on a supposition that in every case the
circumstances would be looked into, and a slight injustice in the
application of the scale of depreciation to the contract would be
deemed a sufficient motive for departing from it. But this is not
the opinion of the Court, and it may very readily be perceived that
the great mass of contracts made during the circulation of paper
money may be decided by a general scale estimating the value of
those contracts, although there may be very strong features in some
few cases which distinguish them as of such peculiar character that
they are embraced by the clause which measures their value by the
standard of justice.
But although the just construction of the fifth section of the
law admits a creditor who would be greatly injured by the
application of the general rule to his case, to show circumstances
which authorize a departure from that rule, it is contended that
such circumstances have not been shown in the cause under
consideration.
It is said that the case ought to be an extraordinary one, that
the circumstances ought to be uncommon, which would warrant a
departure from the general principle established for the government
of contracts generally.
Page 6 U. S. 31
This is true, and the Court would certainly not feel itself at
liberty to exercise on a common occasion a discretionary power
limited only by the opinion entertained of the naked justice of the
case.
But this appears to the Court to be an extraordinary case. The
evidence goes a great way in proving that the parties to the
contract believed that the sums becoming due under it would at no
distant period be payable in specie only. This testimony is the
more to be credited because it is not easy to conceive any other
motive for disposing of the property on the terms on which it was
parted with, and still more because such was the operation of the
existing law on the contract when it was entered into. Under this
impression, an impression warranted by the law of the land, a very
valuable property has been conveyed away for what would have been,
under the then existing law, a full consideration but which a
subsequent act of the legislature has reduced certainly to a tenth,
perhaps to a twentieth, of the real value of the estate disposed
of.
Such a case is, in the opinion of the Court, an extraordinary
case which is completely entitled to the extraordinary relief
furnished by the act which has occasioned the mischief.
In inquiring to what extent this relief ought to be afforded,
or, in the words of the law, what "judgment will be just and
equitable," the Court can perceive no other guide by which its
opinion ought in this case to be regulated but the real value of
the property at the time it was sold. The record does not furnish
satisfactory evidence of this value. It is proved that a lot not
superior to that which occasioned the present contest rented in the
year 1774 for �13 5s. per annum, and that other lots, perhaps not
equal to it, rented in 1784 for �25 per annum. It is even proved
that a small part of the very lots, about the value of which the
inquiry is now to be made, rented in the year 1784 on a ground rent
forever for �25. 16s. per annum. These are very strong
circumstances in support of the decree of the circuit court fixing
the rent at �26 per annum,
Page 6 U. S. 32
the nominal sum mentioned in the lease. But a majority of the
judges are of opinion that the value must be ascertained by a less
erring standard.
Neither the value in 1774 nor in 1784 ought to regulate the
rent. The value at the date of the contract must be the sum which
in equity and justice the lessee ought to pay, and as this value is
not ascertained by the testimony in the record, it ought to be
found by a jury. In finding this value, however, the jury ought not
to be governed by the particular difficulty of obtaining gold and
silver coin at the time, but their conduct ought to be regulated by
the real value of the property if a solid equivalent for specie had
been made receivable in lieu thereof. On these principles, the
Court has directed the following decree:
This cause, which was abated by the death of the appellee and
was revived in the name of his administrator, came on to be heard
on the transcript of the record and was fully argued by counsel. On
consideration whereof the Court is of opinion that there is error
in the decree of the circuit court in this, that the rents reserved
in the lease in the proceedings mentioned, bearing date 5 August,
1779, and which were in arrear and unpaid were decreed to be paid
at their value according to the scale of depreciation when the same
became due, and that those rents which accrued after 1 January,
1782, are decreed to be paid according to the nominal sum mentioned
in the lease, whereas the annual rent reserved in the said lease
ought to be reduced to such a sum in specie, as the property
conveyed was, at the date of the contract, actually worth, to
ascertain which, the evidence of the cause not being sufficient for
that purpose, an issue ought to have been directed according to the
verdict on which, if satisfactory to the court, the final decree
ought to have been rendered.
This Court is therefore of opinion that the decree rendered in
this cause, in the Circuit Court for the County
Page 6 U. S. 33
of Alexandria ought to be reversed, and it is hereby reversed
and annulled, and the Court, proceeding to give such decree as the
circuit court ought to have given, doth decree and order that an
issue be directed between the parties, to be tried at the bar of
the said circuit court in order to ascertain what was the actual
annual value in specie, or in other money equivalent thereto, of
the half-acre lot of ground which was conveyed, by the executors of
John Alexander, deceased, to Abraham Faw, on 5 August, 1779, and
that in the account between the parties, in order to a final
decree, the representatives of said Philip Marsteller be allowed a
credit for the rent which has accrued and which remains unpaid,
estimating the said annual rent at such sum as the verdict of a
jury, to be approved of by the said circuit court, shall ascertain
the half-acre lot of ground before mentioned to have been fairly
worth at the date of the contract under which the same is claimed
by the said Abraham Faw.