Tooke v. Bonds , 29 Tex. 419 ( 1867 )

Moore, C. J.

The exception to the answer, alleging that a claim of title to the land, in consideration of which the note on which this suit is brought was given, as set up by appellee’s wife, was properly sustained. The insufficiency of this answer is much too plain and obvious for serious argument. Essential averments, as it has been held by often repeated decisions of this court, are wanting to sustain the answer, even if the appellants, instead of holding by deed, were in possession of the land for which the note was given under an executory contract for title. (Herron v. DeBard, 24 Tex., 181; Luckie v. McGlassen, 22 Tex., 282; Hart v. McReynolds, 20 Tex., 595; Cooper v. Singleton, 19 Tex., 260; Moreland v. Atchison, 19 Tex., 303; Taylor v. Johnson, 19 Tex., 353; Lawrence v. Simonton, 13 Tex., 220: Brock v. Southwick, 10 Tex., 65; Johnson v. Long, May, 1860,) [27 Tex., 21.]

Hor did the court err in sustaining the exception to that part of the answer alleging a tender to appellants before the commencement of the suit, in United States “legal-tender” treasury notes, of the amount due him. The answer is not accompanied by a proferí in curia of the amount tendered, and it is not, therefore, pretended by appellants that it can he sustained as a technical plea of tender, although made for the proper amount in coin, instead of currency. (Brock v. Jones, 16 Tex., 461.) It is claimed, however, that the allegation of a tender of the remainder due on the note in currency, and appellee’s refusal to accept the same, in connection with the fact of the previous payment of the principal of the note in gold, in pursuance of the agreement of appellee to receive “legal-tender notes” in discharge of the interest, if appellants would pay the principal in gold, authorized their claiming the difference between the value of gold at the time of its payment and “legal-tender notes,” in which, as they say, except for this agreement, they could legally have paid the full amount of principal and interest of the debt. It is very obvious, however, if the act of Congress making treasury notes a legal tender for debts is constitutional, and the law should be held valid and obligatory, such notes, for the purposes and to the extent to which they are declared a legal tender, must be regarded, in legal contemplation, of equal value with gold and silver coin of corresponding denomination. Whether payment has been made by the debtor in the one or the other, no discrimination can he made by the court, whatever may he their difference in this respect in transactions for their voluntary exchange between individuals. Unquestionably, therefore, the mere fact of the payment of a part of a debt in coin does not entitle the debtor to claim the premium which coin may command in the market over currency.

It is insisted, however, that this rule is modified in the present case by the fact, that the payments were made in coin on an express agreement between the parties that interest might be discharged with legal tender notes. This position may be viewed in two aspects. But whether considered upon the hypothesis of the constitutionality or unconstitutionality of the law, declaring treasury notes a legal tender for debts, will in no way affect the result of this case. If the law is constitutional, appellants are fully and completely protected by it in the right claimed by them, under the agreement with appellee, to pay the balance due on the note in “legal-tender notes.” They stand in precisely the same category as if there had been no agreement upon the subject, and the alleged tender had been made in coin instead of currency. The judgment rendered by the court is precisely the same which must have been given if by the stipulations of the note itself it were to be discharged in “legal-tender notes,” or whether the alleged tender was in such notes or in coin. If the debt could have been discharged in currency, so still may the judgment. And the only injury which has or can result to the appellants, so long as the law continues in force, is, that they may, from their failure to make proferí of their tender with their answer, have rendered themselves liable to the costs of suit and interest upon the amount adjudged against them. If this tender had been properly plead, it would have been necessary for us to determine whether the act making treasury notes a legal tender for debts is, in fact, constitutional; but, as this is not the case, we deem it unnecessary and improper at this' time to intimate any opinion upon the point, especially as, although suggested in the briefs, it has not been argued by counsel.

But it may be said that the law is unconstitutional, and therefore appellee cannot be compelled to receive currency in discharge of the judgment; yet, as he had agreed to accept it, and appellants had tendered it in due time, he should have had judgment only for the value of the currency to which, by the agreement, he was entitled. The answer, however, to this position is, that the agreement to receive currency in discharge of the interest on the note was not a part of the original undertaking, but was made long subsequent thereto, and when appellants were hound to pay, if the law in question is unconstitutional, the whole amount of the debt in coin. Unquestionably, then, the mere payment of part of the debt will not support a promise to receive treasury notes, less valuable than the corresponding amount of money, in payment of the balance.

These views lead us to the conclusion, that there was no error to the injury of appellants in the ruling of the court upon the pleading, or in including the evidence offered by appellants to prove the difference between the value of “ legal-tender notes” and gold at the time the different payments on the note were made.

The instructions given the jury by the court in respect to the calculation of interest, and the application of the payments made upon the note, are believed to be erroneous, and to have lead to an excess in the verdict of the jury. The general rule on this subject is undoubtedly in conformity with the charge of the court, and if the present were not an exceptionable case, no objection could he made to it. This general rule, however, is simply the guide furnished by the law for the application of payments when none has been made by the parties themselves. It is a well-recognized principle, that the debtor is entitled to appropriate the amount paid to either one of several distinct debts or items of an account on which he stands charged.

When, however, the claim of the creditor is a single debt, consisting of principal and interest, the debtor certainly cahnot, as a matter of right,-make partial payments, and appropriate them to the extinguishment of the principal, in advance of the discharge of the interest. If he were permitted to do so, he could, without the consent of the creditor, change the legal effect of the contract, by which the unpaid balance, not including interest, bears interest, until the entire debts are discharged. But there is no reason why this may not be done by the mutual assent of the parties. And although the creditor is not bound to accept such partial payment, yet if the debtor makes it upon the stipulation and agreement that it shall be applied in satisfaction of the principal, and not of the interest, and it is so accepted and appropriated by the creditor, the principal is thereby extinguished and discharged, and the creditor cannot be permitted, without the consent of the debtor, to shift the application of such payment from the principal to the interest; nor will the law do so for him. The credits indorsed by appellees on the note in suit in this case show, unless exjDlained, that the payments made by appellants were applied to the discharge of the principal of the note, and after the last payment there was nothing but interest, which bears no interest, due upon it. It must consequently be held, that the instructions directing the application of the payments first in discharge of the interest is erroneous, and that the verdict for the amount thus ascertained and interest thereon until the trial is excessive.

The judgment is reversed, and the cause

Bemanded.