Blount v. Windley

• Decision Date: 01 October 1877
• Parties: BLOUNT v. WINDLEY
• Court: U.S. Supreme Court

95 U.S. 173

24 L.Ed. 424

BLOUNT v. WINDLEY.

October Term, 1877

ERROR to the Supreme Court of the State of North Carolina.

The facts are stated in the opinion of the court.

Mr. Joseph J. Davis for the plaintiff in error.

Mr. Samuel F. Phillips, contra.

MR. JUSTICE MILLER delivered the opinion of the court.

Under a statute of North Carolina, passed March 12, 1866, to enable the banks of the State to close their business, the plaintiff in error was, by a decree of the proper State court, in the fall of that year, appointed commissioner of the Bank of Washington; and all the real and personal property and choses in action of the bank were by the decree vested in said commissioner for the benefit of those creditors of the bank who should prove their debts within twelve months. As such commissioner, Blount sued and recovered against the defendant in error a judgment on a note given to the bank for borrowed money, on which he was surety. This was in November, 1867. The defendant subsequently procured the circulating notes of the bank, and tendered them i payment of the judgment to plaintiff, who refused to accept them. He then deposited them with the clerk of the court in which the judgment was rendered, who received them, not in payment, but subject to the order of the court.

A motion for new trial in the original suit remained undecided until the spring term, 1872. At the next term of the court after this, the defendant, on due notice, moved the court to have these notes applied in payment of the judgment, and satisfaction of that judgment entered on the record; which motion was granted, and the order made. From this order plaintiff appealed to the Supreme Court of the State, which affirmed the judgment of the court below; and he thereupon sued out the present writ of error.

Two grounds are relied upon in this court to reverse that judgment:——

1. That plaintiff had a right, under the Constitution and laws of the United States, to have his judgment paid in coin or legal-tender notes, and nothing else.

2. That certain statutes of North Carolina under which the defendant was allowed to set off the notes of the bank in satisfaction of the judgment are void, because they impair the obligation of his contract.

We will consider the last ground first, because, if these statutes are valid and authorized the judgment of the court, then the other objection is also answered; for, if the defendant had the right to pay or set off these notes in satisfaction of the judgment, the plaintiff did not have the right to exact payment exclusively in legal-tender money of the United States.

The following acts and parts of acts are those relied on to justify the order of the court in this case.

Act of Aug. 22, 1868:——

'The General Assembly of North Carolina do enact, that where any note or bond has been, or may hereafter be, given as a renewal of any debt or demand due or payable to any bank in this State, whose charter bears date prior to the twentieth day of May, 1861, the bills of said bank shall be a legal set-off to such note or bond, without regard to whether such note or bond be made payable to said bank or to some other party; and the bills of such bank may be offered, and shall be received, to sustain the plea of set-off to any suit brought upon such note or bond in any court of this State, whether such note or bond be made payable to such bank or to any other party.'

Sects. 1 and 4 of an act approved March 17, 1869:——

'SECT. 1. The General Assembly of North Carolina do enact, that an act entitled 'An Act to make bank-bills a set-off,' ratified the twenty-second day of August, A.D. 1868, be so amended as to apply to judgments and executions which may have been obtained on any debt due any of the banks mentioned in the aforesaid act.'

'SECT. 4. The remedy under this act may be by plea of set-off, or by injunction, as the case may require.'

By a statute passed in December of the same year, it was made 'the duty of every court in the State, upon proof that such bills have been delivered or tendered and refused in satisfaction of such judgments to the nominal amounts thereof, to cause an entry of satisfaction of such judgments to be entered of record in the court wherein the same were recovered.'

The proposition of plaintiff in error is, that, when he recovered the judgment against the defendant, he had a right to exact and receive in payment of that judgment gold or silver coin, or the legal-tender treasury notes of the United States, and that defendant had no right to pay him in any thing else; that the judgment was a contract, and the obligation of it is impaired by the statute which authorizes payment in something else. It is undoubtedly true, in some sense and for some purposes, that a judgment has been treated and considered as a contract; and we are not disposed to deny that the judgment in this case is evidence of a contract. But the judgment is only a contract because it is evidence of a debt or obligation on the part of defendant due to plaintiff. The judgment itself presupposes, and is founded on, § me antecedent obligation or contract, and is only a higher evidence of that contract, because it now has the sanction of the judicial determination of its validity and amount by a court of law. The essential nature and character of the contract remains unchanged; and, in deciding how far it may be affected by legislation, we must look mainly to the original contract.

It may be assumed that all debts not solvable by their terms in something else are prima facie payable in legal-tender money, as ascertained by the acts of Congress. And this is true whether the contract be express or implied, and whether it exist in parol, or in a promissory note, or in a judgment. Notwithstanding this general rule, it is a principle of long standing in all systems of jurisprudence that one debt or obligation may be set off or counterbalanced against another, so that while the obligation of both is recognized, both are satisfied in law and discharged without the payment of any money on either; and this is done by the courts without the consent of the party and against his will. This doctrine of set-off in the English law originally could only be called into operation by a defendant who, when sued on an obligation of his own, should by a distinct plea claim a set-off of some demand which he had against the plaintiff of a similar character. But this original statutory doctrine of the right of set-off has been modified, enlarged, and extended in many ways.

1. The courts of common law have long established the principle of set-off as applicable to mutual judgments in the same court. And it is said that this power of setting off judgments not only in the same court, but in different courts, did not depend upon the statutes of set-off, but upon the general jurisdiction of the court over its suitors. See Barker v. Braham, 2 Bl. R. 869; Mitchell v. Oldfield, 4 T. R. 123; 3 Caines's Cases, 190. In Simpson v. Hart, 1 Johns. (N. Y.) Ch. 91, Chancellor Kent refused to set off one judgment against another although the case was otherwise made out, because the jurisdiction was ample at law, and the application had been first made...