Morris v. Edwards , 1 Ohio 189 ( 1823 )

Judge Hitchcock:

This case presents two questions to the consideration of the court:

1. Whether the sum of two thousand dollars, mentioned in the contract, with the interest due thereon, shall be recovered?

2. If, in the opinion of the court, this sum can not be recovered, whether the damages are to be ascertained by proof of the value of “current bank notes of the city of Cincinnati,” on the day the contract was entered into, or on the day when the payment fell due?

That the first question may be correctly decided, it is necessary to ascertain what character is to be attached to bank notes. If they are considered as money, then this contract is a contract for money; *if not, it is a contract for the payment of a certain sum in specific articles. By the term money, we generally understand that which is the lawful currency of the country — that which may be tendered, and must be received in discharge of a subsisting debt. With this understanding of the term, it can not be contended- that bank notes are, ain themselves, considered money. They are not a lawful tender. No person is bound to receive them in discharge of a debt, unless in pursuance of a previous contract. But for certain purposes, and in fact for every purpose, in the ordinary transaction of business, bank notes, it is believed, ever have been and still are considered as money.' They do not come'under the denomination of goods, wares, and .merchandise. Evidence of the receipt of bank notes will support an action for money had and received. The delivery and receipt of them, in discharge of a debt, will be considered as payment of so much money, not as accord and satisfaction. By the .universal consent of mankind, when they pass from one to another, they pass as money. In the course of business, they are charged and credited as cash, as money. They have been estimated as money, not only by men of business, but by courts of justice. Lord Mansfield, in speaking of bank notes, says, “ They are not esteemed as goods, securities, nor documents of debt; but are located as money, as cash in the ordinary course and transaction of business, by the general consent of mankind; which gives them the credit and currency of money to all intents and purposes.” “They pass by a will which bequeaths all the testator’s money or cash, and are never considered as securities for money, but as money itself.” 1 Bur. 457. The Supreme Court of the State of New York say that bank notes are considered as money — that a note for a certain sum payable in bank paper is a note for mon'ey, and of course a promissory note within their statute. 9 Johns. This court, in the case of Smith v. Houston, submitted in Licking county, in the year 1820, in giving a construction to the “act to prohibit the issuing and circulating of unauthorized bank paper,” after a consultation of all the judges, decided that bank notes must be considered as money. 14 Stat. 10. The statute law of this state, entitled “an act making certain instruments of writing negotiable,” provides, “that all bonds, promissory notes, bills of exchange> foreign and inland, drawn for any sum or sums of money certain, and made payable to any person or order,” etc., shall be negotiable by indorsement thereon, etc. Yol. 18, p. 163. In giving a construction to this statute, we hold that a note drawn for a sum certain, payable in bank paper, *is negotiable. This opinion can be justified upon no other ground than by considering bank notes .as money.

Apply these principles to the case under consideration, and what will be the result? Edwards, for a valuable consideration, promises to pay Morris or order, on a certain day, two thousand dollars, with interest annually. The payment is to be made “ in current bank notes of the city of Cincinnati.” Such are the terms of the contract. When the day of payment arrives, there is no offer to pay — there is no tender of bank notes. Had the note been •transferred, by indorsement, to a third jmrson, that third person, as indorsee, might have maintained an action against Edwards as maker of a promissory note. We should not have hesitated to •render a judgment in favor of the indorsee. And why? Because the note would have been considered as a note for money. If it be a note for money, as I think it must be considered both upon principle and authority, there can, I apprehend, be no doubt that the .plaintiff is entitled to a judgment for the full amount of two ■thousand dollars, with the interest.

But suppose we take another view of the case, and consider ■bank notes, not as money, but as specific articles — will this lead to a different conclusion? Or will the plaintiff be compelled to receive a sum less than that named in the note? Where a contract is entered into for the payment of one hundred bushels of wheat, at a certain time, and the wheat is not delivered, the rule of damages will bo the value of the wheat when it should have been delivered. If, however, the contract be for the payment of one hundred dollars, in wheat, or of one hundred bushels of wheat at one dollar per bushel, and payment be not made, it will not be doubted but that a plaintiff, seeking to recover damages upon such contract for its violation, would be entitled to one hundred dollars. It would at once be said that the damages were liquidated or agreed upon by the parties. In the case under consideration, Edwards promises to pay two thousand dollars “ in current banknotes of the city of Cincinnati.” This promise is not performed — < the bank notes are not paid. What must be the rule of damages? I would suppose, if bank notes are considered in the same light, and as possessing the same character as other specific articles, wa must say at once, that the parties had fixed the rule of damages, and that the plaintiff must recover the amount named in the contract. I am sensible that it has been urged in argument, that in the contract under consideration, the word in must be interpreted to mean of, and that this contract should *be considered the same as if it had been for the payment of two thousand dollars of current bank notes. Is there anything, however, in the contract itself that would justify this interpretation, or justify the court in changing the meaning of words ? It appears to me that there is not, unless we attach a character to bank notes different, in some respects at least, from that which we attach to specific articles.

Counsel for the defendant insist, that whether we consider bank notes as money, and this contract a money contract, or whether we consider it as a contract for a certain sum payable in specific articles, injustice is done to him, inasmuch as such could not have been the intention of the contracting parties. In interpreting contracts, the great object always is to arrive at the intention ; and if in giving the construction to the contract, before the court, which I am disposed to give, injustice is done to either party, I sincerely regret it. The law, however, has fixed and established certain rules, by which all contracts are to be interpreted; and it would be dangerous to depart from these rules to accommodate a particular case or class of cases. No principle can be better settled than this, that- in the interpretation of contracts, the words or terms made use of, taken in connection with the subject matter, are the only things which can be looked to. You shall collect the meaning of parties by their words; every contract must be interpreted by itself. Resort can not be had to parol or extrinsic evidence, except where there is an ambiguity not apparent upon the face of the contract. If there is an apparent ambiguity, even this can not be explained. The contract before the court is very explicit. If the parties had intended this as a promise to pay two thousand dollars of bank notes numerically, it could have been easily exj>ressed. If they intended that, in the event of the failure-of the defendant to pay the bank notes, he should be discharged by the payment of a less sum in money or specie, this intention could with equal ease have been expressed. As neither is expressed, I must infer that such was not the intention, and am of opinion that parol evidence can not be received by way of explanation to lead to a different conclusion. In fact, the effect of such testimony, if received, would not be to explain this contract, but to prove one materially variant in its terms and conditions. Counsel for the defendant do not deny that it would be improper to receive this species of evidence.

It is contended, however, that this contract was predicated upon a particular state of business in the country where it was made, to-*which the terms of the note refer, and that the amount which the defendant is bound to pay must be determined by giving to the terms used in the note an interpretation connected with the history of the times in which it was made.

The contract was made in Cincinnati, and bears date in the year 1819. It is said, in substance, that in the course of that year the paper of the banks of that place had depreciated — that there was a difference between its real and numerical value — that this depreciated paper was the principal circulating medium of exchange — ■ •that it was in common parlance denominated “ currency,” or “ current bank paper,” to distinguish it from that description of bank paper whose real and numerical value was the same — that the term “current,” which, when applied to money, has been understood to mean that which is lawful, and when applied to bank paper that which is equal to specie, was here understood to mean paper which was depreciated — that contracts similar to this were made with the understanding that they should be discharged with this depreciated paper, which is denominated currency, or in specie of equivalent value, and in fact that the character of bank notes was changed; that they were no longer considered as money, but similar to any other specific article, and that a promise to pay two thousand dollars in this kind of property or paper, was understood to be a promise to pay that amount of it according to its numerical value. And it is further contended, that the court are bound to-know these facts as matters of public history, and apply them in the construction of the contract under consideration. The argument raised upon this state of facts is entitled to great consideration, and if the case was a new one would undoubtedly have much influence. But before we adopt the principle contended for, it may bo well to examine a little as to consequences. These facts can not be proved by parol, because they would lead to a construction of the contract different from what its terms justify; yet the court are bound to know them as matters of public history. Public history, not of the state at large, but of á particular town or -city. It is to bo recollected that contracts similar to the one before the court have been frequently made in this state, especially .since the year 1812. Makers of notes have promised to pay certain sums “-in-current bank notes,” in “eastern or western bank notes or paper,” in the notes of a particular bank or of the banks of a particular place. Almost every variety of expression has been •adopted that could be thought of. This mode of transacting business grew out of the state of the circulating medium, and was adopted ^sometimes for the accommodation of the creditor, but more generally for the accommodation of the debtor. These .promises have not always been complied with, and suits have been brought to compel judgment. Judgments have been recovered and enforced by execution. This court have in cases of default without hesitation assessed the damages without the intervention of a jury, and in every instance, previous to the year 1822 it is believed the rule of damages has been the sum named in the contract, together with the interest. This has been the practice, not in one particular county, but throughout the state. So far as a uniform .course of decisions, when any particular subject can settle the law upon that subject, it would seem that the rule of law, or the law itself, applicable to this subject, was well settled. It must be recollected, also, that this court, in giving construction to contracts, can not interpret the same terms, or words made use of in contracts, to mean ■one thing in one part of the state and a different thing in another. The rule of law must be uniform with the whole body of the people. The same words used in a grant would convey an estate- of inheritance in the county of Trumbull or Hamilton; and it will be contended that if by general consent the inhabitants of the ■county of T.rumbuli should attach a meaning to those terms which in a grant convey an estate of inheritance, different from that which the law attaches, that the court would be justified in changing the interpretation of those terms to meet the feelings, wishes, or general consent of the people in that particular section •of country. In interpreting contracts, the law of the place where the contract is made is to govern. But in what does the law of ■Cincinnati and its vicinity .differ from the law in Cleveland or Steubenville? Previous to the year 1819 it is not contended that there was any difference as to the ¡principles applicable to the cases similar to the one before the court. We are called upon, however, to know certain facts which have transpired since that period, as matters of public history which must go to change these principles in that particular section of country, so that a rule of law is to-prevail different from that which prevails in other parts of the-state. If this be correct, may not the same innovation be made by every town or village in the state; and may we not be left iu> this predicament, that agreements containing precisely the same terms, and relating to the same subject matter, must be construed to mean different things, according to the understanding of the people in the various counties, or even towns, in which they shall be executed ? It does appear to me that this is carrying the rule that *the lex loci must govern toan unreasonable length. True, the citizens of Cincinnati, as well as the citizens of any other incorporated town or village, may, according to their acts of incorporation, establish rules for their own internal regulations; but. can they contravene the general law of the land — can they change-the law of contracts?

As was before observed, if this were a new ease, and of the first, impression, the argument'of the defendant would undoubtedly have great weight. But I conceive that the law on the subject has been long settled ; that the rules for the interpretation of this species of contract were well understood previous to the year 1819;. and that the circumstance that a fictitious medium of exchange was then thrown upon a particular section of our country can not change these rules. It is better that a temporary or partial inconvenience should be sustained, than that the general and well-established principles of law should be violated or even changed.

But we may well inquire whether these facts constitute such matters of history that courts are bound to take notice of them*Certain facts, which are properly matters of history, have been long since transacted, and of which no person can give testimony, may be proved by ancient history of the times in which they were-transacted. Neale v. Fry, cited Salkeld, 281. But a particular custom can not be thus proved. The reason why public history is admitted as evidence seems to be, that the facts necessary to be-established are properly subjects of history, and because of the extreme difficulty or utter impossibility of establishing those facts by any other testimony. But the facts which the court are called upon to know in the present case are such as have recently transpired, and must be in the knowledge of those persons who were in* business at the time.

It is urged in argument, that if in the present ease we allow the plaintiff to recover any more than the specific value of two thousand dollars of depreciated bank paper, at the time the contract was made, injustice will be done, because he will receive a greater value than the consideration which he gave. This argument is raised upon the supposition that property at the time was estimated to be worth a greater nominal amount, in proportion as the paper of the banks had depreciated. But if this consideration is 'to influence the court, the argument may be urged with equal .force, in estimating the damages in another class of contracts. Property contracts are as well known and understood in different parts of the state as currency contracts can be in any particular section. The owner of any specific article of property is willing to sell that property for a certain *sum in money, or he will sell it for a sum twenty-five or thirty per cent, greater, and receive his pay in property of the same or a different description. The purchaser, •consulting what he conceives to be his interest, agrees to take the property offered for sale, at the advanced price, and pay in specific articles. The bargain is completed, and the vendee contracts to pay the vendor a certain sum in these specific articles. This contract is not complied with. The articles are not delivered, nor even tendered, at the time when due. Suit is commenced and judgment recovered. The damages uniformly assessed are the amount specified in the contract, without reference to the specific or money value of the property transferred, which was the consideration of the contract. The defendant is compelled to pay twenty-five or thirty per cent, more than the amount for which he could in the first instance have obtained the property which he purchased. Is not his case hard ? Yet he can obtain no relief. If he complains he will be told: “ You might have contracted differently; if it was understood that in the event of your failure to deliver the specific articles you were to pay a less sum in money, it should have been so expressed; as it is not, you have by your contract agreed upon the amount you must pay. True, you had your election to pay this amount in property; but as you have not complied with your contract, you must pay it in money.”

If these principles are correct when applied to property contracts, they must be equally so when applied to currency contracts. The loss which a defendant in either case sustains is not attributable ■to the plaintiff; it is not attributable to the law, but to his own neglect, to his carelessness in not performing, or perhaps, in some instances, to his misfortune in not being able to perform his engagements. Upon the whole, whether I consider the note in suit as a note for money, on the principle that bank notes have been and still are considered as money, or whether I consider it a note for a certain sum, payable in specific articles, I must come to this conclusion, that the plaintiff is entitled to judgment for the amount named in the note, together with the interest which remains unpaid.

Entertaining this opinion, it seems unnecessary to examine the second question raised in the case, that is, whether, admitting that the plaintiff is not entitled to recover the full amount of two thousand dollars, but merely the specific value of two thousand dollars of “ current bank paper of the city of Cincinnati,” the damages shall be ascertained by proof of the value of that paper when the contract was made, or when the payment became due. If the same character *is attached to bank notes as is attached to other specific articles, the same rules of law must be applied in interpreting a contract which by its terms is to be discharged by the payment of this paper, as if it were to be discharged by the delivery of any other article of property. It will not do to treat it as money for one purpose and as property of a different description for another. In cases of contracts for the delivery of specific articles, one hundred bushels of wheat, for instance, to be delivered on a certain day, the law has said that the rule of damages shall be, not the value of the wheat on the day the contract was made, but on the day the wheat should have been delivered. If bank notes are considered as specific property, why should not the same rule be applied as to them ? I am aware that it is said, when property is sold and payment is to be made in’ bank notes, either at the time of sale or at a future day, reference will be had to the value of those notes on the day of sale, and not to the value which may be attached to them at a future period. This is undoubtedly true, but the same reference is had to the value of wheat, or of any other specific article, at the time of contracting, provided the payment is to be made in wheat or such other specific articles. It is, however, to the contracting parties that the value of the article may be increased or diminished, and they contract possessing this knowledge. Still no change of value in the property can change the rule of damages, and if it were necessary in the present ease to express an opinion on this question, I should say that the value of the “ current bank notes ” named in the contract, or on the day of payment, must be the rule by which a court would be governed in assessing damages.