Harrell v. Barnes (34 Tex. 413, 1871)

Ogden, J.

In March, 1870, the appellee obtained a judgment in the District Court for Travis county against the appellant, for the sum of $2150, the amount due on a certain promissory note, dated April 13, I860. From this judgment the defendant below has appealed to this court.

The execution and delivery of the note sued on were not controverted, but the defense set up in the district court, and now claimed to be sufficient to require a reversal of the judgment, is payment in Confederate notes, or money, as it was called at the time of the pretended payment.

The facts, as disclosed in the pleadings and evidence on the trial, may be thus briefly stated. The noté sued on became due in April, 1862, when payment was demanded by appellee, the holder and owner of the note, and payment was tendered in Confederate money, and perhaps some Louisiana bank bills. This tender was refused by the appellee, and the appellant then sought and obtained the aid of the then provost marshal of the Confederacy, to compel the acceptance of Confederate money in payment of the debt, and the surrender of the note. The parties were brought before the provost marshal, and were accompanied by their attorneys and witnesses ; and there the appellee was solemnly informed that he must receive Confederate money fer his debt, and surrender his note for cancellation, or go to jail. And in order to preserve his liberty and to avert the indignity of imprisonment, he accepted the Confederate money and surrendered his note, under a verbal: and written protest. And now the appellant claims that he is in law, and especially in equity, entitled toa discharge- from his debt, or at least to a credit for whatever the Confederate money was worth at that time.

If such an outrage to- the intelligence; freedom and rights of man; a disgrace alike- to this people- and. age, can call forth the equitable powers of a court, then we confess we have never known - what equity is. To force from a person, through fear or by brute-power, his property, or the- evidence of his property, is robbery, and to compel another to participate in treason, or to' accept the fruits of treason, is a three-fold crime, for which our laws or language have no adequate terms of condemnation. But when a. party comes into a court of justice, and demands the fruits or results of all these crimes combined, as- a peculiarly equitable- relief, we must most respectfully refer him to. that tribunal which compelled the appellee to receive treasonable paper for a just and. honorable debt. We are of the opinion that there is no error in ■ the judgment of the district court, in so far as it gave no credit for Confederate money received by appellee under compulsion.

There is, then, but one other question raised by the- pleadings-in this bause which it is deemed necessary here to notice. The note sued on was executed in April, I860-, two years before the act of Congress ■ making certain paper money a legal tender for ail debts and demands between individuals. At the time the note was executed, “ it had reference to coined money, and could not be discharged, unless by consent, otherwise than by tender of the sum due in coin,” (Hepburn v. Griswold, 8 Wallace, 608,) and, therefore, the note called for coin as specifically as though it said so.on its face; and it is maintained that neither this court, nor any authority of the State, has any power or authority in any manner to change or impair' the obligations of contracts. This power is reserved from the States.-by; express provision in the Constitution of the United States, and if - t-he courts of this State should exercise any such authority, it must- be by virtue of' some law of the United States, and not by virtue of any State law. We think it will not be contended that a note, made payable in coin, can by law be discharged in currency worth fifty, seventy-five or ninety cents on the dollar, without impairing the obligation of that contract; and, if so, then there is no authority'in the States to pass any such law, nor in the courts of the States to execute such a law, should such a one be passed. It therefore cannot be questioned that this note, payable, as it was when executed, in coin, can be discharged in anything else, unless there is some law of the United States authorizing the same.

The question whether, under the laws of the United States, a note payable in February, 1862, in dollars could (subsequent to the passage of the legal tender act) be discharged in the paper currency ©f the United States, came before the Supreme Court of the United States in the case of Hepburn v. Griswold, reported in 8 Wallace, 603, and after a most thorough investigation, it was decided that the act of Congress passed in February, 1862, known as the legal tender act, so far as it affected pre-existing debts, was unconstitutional,' and that therefore all notes executed before that date were payable in coin, and could be discharged in coin only. The case of Hepburn v. Griswold was taken from the Supreme Court of Kentucky, by writ of error, to the Supreme Court of the United States, demonstrating the fact that the United States Court has a revisory power over this court; and as was said in Jones v. McMahan, 30 Texas, “ because a writ of error will lie to the Supreme Court of the United States in this case, should we decide adversely to this construction of the Constitution and laws of the United States, we afe bound to obey its decision as our superior.” Therefore, according to the authority of the case referred to, we feel authorized, to decide that the court did not err in rendering a judgment for coin; and there appearing no other error on the record to require a reversal of the judgment of the district court, it is affirmed.

Affirmed.

Evans, P. J.

This note which is the foundation of this action fell due in April, 1862.

Harrell tendered the amount of principal and interest in Louisiana bank bills and Confederate money, but Barnes demanded gold and silver. As the note stipulated for twelve per cent, interest,, after demand of payment, Barnes was careful to entitle himself to this interest by making the demand; while Harrell was anxious to discharge the note and so.relieve himself from such high rate of interest.

This was in Confederate times, when there was a great searcity of the precious metals in circulation, and Confederate money and the depreciated paper of the Louisiana banks formed' almost the only currency in circulation.

This currency Barnes did not want,, and insisted on the payment in good money, in accordance with the terms of his contract.

Harrell appealed to the provost marshal; who, in accordance with an order issued by the commanding officer of the military district of Texas, assumed jurisdiction and ordered that Barnes receive the depreciated currency and deliver the note to Harrell fox-cancellation.

Whether a provost marshal, under the authority of the Confederate Constitution, could rightfully exex’cise jurisdiction over the parties and the subject matter in controversy, we do not propose to inquire; but we may safely say that it was not within his competence to impress upon depreciated paper currency the value of gold and • silver.

The law of values is forever- above the reach of governmental power. •

This Barnes very well knew, and so received the paper under-protest, and deposited it with one John T. Miller, with a view of repudiating the action of the provost marshal, and of recovering the-value expressed in the contract, should circumstances prove favorable.

But Barnes afterwards changed his mind, and used the money at what it was then worth. At what rate of discount, or what Barnes received in its use, the record does not disclose, as Harrell was not permitted by the court below to prove the value of Confederate money at that time. We know, historically, however, that it ranged at about 38| per cent, discount. Barnes voluntarily used this depreciated paper, and must have realized about $600 from it, and this amount must be considered as having been received in part payment of his claim upon Harrell, and for which Harrell is entitled to credit upon every principle of reason and of justice.

For, why should this court compel Harrell to pay over to Bames six hundred dollars that he had already received some nine years ago ? To punish Harrell for treason ? If so, why put the fine into the pockets of Barnes, who was alike implicated with him in treason ? Shall this court, in a civil controversy, undertake to discriminate as to the degrees of guilt of parties for participation in rebellion, or shall it allow its just hatred of treason to influence its decisions according to the degree of the supposed guilt or innocence of the parties before it ?

Both Barnes and Harrell were citizens of the Confederate States. The allegiance of both to the United States government had been suspended, and transferred to the new political power which had arisen in the Southern States, and which then, and for three years thereafter, controlled the destinies of this country. This political power had established a government regular in its form, both civil and military, and to this government society looked for protection. It could look to no other.

The provost marshal with his guard was an arm of the government, deemed' essential to the preservation of peace and order in society, and his official acts, performed within the scope of his authority, were as valid as were the acts of any civil officer. And had the official orders of the provost marshal in this very transaction come before the Supreme Court of that day for review, they would doubtless have been upheld as valid and binding; and we, perhaps, should have had in the volume of reports an opinion from that able court affirming the regularity of the whole proceeding.

The provost marshal compelled Barnes to receive $1230 in depreciated paper currency, but this did not extinguish the debt. For Barnes may have kept the paper until it became utterly worthless, and upon the re-opening of the courts after the termination of the military government, have demanded the full amount of his note, principal and interest. But he did not so act; for he used the money at its then value in the market, and received therefor in value about six hundred dollars. His act in passing off this money charges him with whatever responsibility may attach to the circulating of Confederate money.

The issuance of paper money to circulate as a medium of exchange was one of the necessities of the times, demanded by the interests of society. To buy and sell, and to exchange commodities, is as essential to the well-being of society as to plant and reap. To receive and pay out Confederate money was, .then, one of the imperious needs of society, and nothing of immorality or crime can therefore attach to any act of receiving and paying it out.

Whether that form of paper money was well adapted to the ends intended, we can now answer, from the light of a better experience, that it was not—that it proved a great misfortune instead of a blessing to the people. Still it was the only currency available, and to receive and pay it out, in obedience to the wants of society, was no more treasonable than to receive and consume one’s daily food.

■ Barnes committed no crime in using the $1230 of Confederate money. But to appropriate six hundred dollars which he received for this Confederate money, and not allow Harrell credit for it, would be unjust, and on apar with Harrell’s act in endeavoring to discharge a debt in depreciated currency.

Both Barnes and Harrell should be required to obey the rules of common honesty and fair dealing.