Donley v. Tindall

• Decision Date: 01 January 1869
• Citation: 32 Tex. 43
• Parties: S. P. DONLEY v. J. A. TINDALL AND ANOTHER.
• Court: Texas Supreme Court

32 Tex. 43

S. P. DONLEY

v.J. A. TINDALL AND ANOTHER.

Supreme Court of Texas.

1869.

1. There can be no controversy as to the general principle of the admissibility of extrinsic evidence to explain written instruments.

2. The rule that parol evidence, to affect written contracts, must be confined within the strict limits of exposition and interpretation, is based upon the assumption that the written contract has a legal existence and is valid.

3. The general rule that all parol agreements and negotiations between the parties to a written contract, anterior to or contemporaneous with the written contract, are to be regarded as merged in it, is admitted; but this general rule does not exclude parol evidence of subsequent verbal agreements, varying the terms of the written contract.

4. Though the written instrument is thus to be regarded as embracing the entire contract at the time of its execution, yet this is only predicated of contracts which are lawful in their character; and the rule cannot be invoked to cover, protect, enforce or sanction such contracts as may by extrinsic evidence be shown to have been entered into contrary to public policy, or to public morals, or otherwise to be unlawful.

5. With reference to such illegal contracts the distinction is clearly drawn between such as are executory and sought to be enforced and such as are actual conveyances or are already executed. The former may be avoided, but the latter cannot be avoided by the immediate parties to them.

6. The principle inflexibly observed in such cases is, that courts will neither aid in the execution of an illegal executory contract, nor relieve from an illegal contract a party who has executed it.

7. Parties who, during the late rebellion, contracted on the basis of Confederate money, and thus speculated on the chances of the failure of the government, whose authority they contemned, must abide the results; they need not look to the courts to effectuate contracts which, no matter how remotely or contingently, contemplated the destruction of the government.

8. Nor, on the other hand when such a contract has been executed, need a party to it expect the courts to restore to him what he has parted with in pursuance of a forbidden bargain. This is the case to which is applicable the maxim, in pari delicto, potior est conditio defendentis et possidentis.

9. There is no analogy between this class of cases and one in which a party seeks to avoid a conveyance or contract which is fraudulent only as against creditors and which, consequently, is valid as between the parties, though voidable by creditors.

10. The plea in the present case, therefore to the effect that the note sued on was payable in Confederate money, presented a good defense to the action, notwithstanding that the note on its face called simply for “dollars,” and it was competent for the defendant to establish that defense by parol proof.

11. The foregoing rulings are made without reference to the seventh section of ordinance No. 11 of the constitutional convention of 1866. That section of the ordinance conflicts with the constitution of the United States, and is consequently void, for the reason that it seeks to give validity to illegal contracts.

By LINDSAY, J., dissenting:

1. The principle has been too long and too well settled to be now brought into debate, that when there is no ambiguity in the terms of a written instrument, the instrument itself shall be its own interpreter, and the only criterion of the intention of the parties.

2. This principle totally excludes parol evidence to contradict the writing itself, although such evidence might clearly show that the real intention of the parties was at variance with the expressions used in the written instrument. And this principle obtains both at law and in equity.

3. It is conceded that a contract stipulating for performance by the payment of Confederate money was and is illegal, and can have no standing in court.

4. But when a contract is reasonably susceptible of two meanings--one legal and the other not--that interpretation shall be put upon it which will support and give it effect. The presumption of law is always in favor of the legality of a contract.

5. The note sued on being payable in “dollars,” the law will intend that the legal currency of the country is the money contracted for, and therefore the aid of parol testimony is not needed to settle a question which is thus solved by the rules of law. There is no ambiguity to be explained.

6. The note sued on being unambiguous and perfectly legal in all its terms, and the consideration for which it was given (to wit, a saw mill) being also a lawful consideration, a plea that the note was payable in Confederate money should not have been sustained, nor parol evidence have been admitted to establish such a plea, without any allegation of fraud, accident or mistake.

7. This case, therefore, is not analogous to the case of Smith v. Smith, 30 Tex. 754, in which the illegality of the contract and the turpitude of the consideration were apparent on the face of the instrument sued on.

8. Section seven of ordinance No. 11 of the constitutional convention of 1866, providing that parol testimony may be introduced to prove that Confederate money was intended in written contracts executed during the rebellion, is in conflict with the constitution of the United States, and therefore void, for the reason that it impairs the obligation of contracts entered into between parties, and by them reduced to writing.

APPEAL from Cherokee. Tried below before the Hon. Samuel L. Earle.

This suit was brought on the 7th of November, 1865, by S. P. Donley against John A. Tindall and S. E. Campbell. The cause of action was a promissory note, as follows:

“$5,000. On or before the 25th day of December next, we or either of us promise to pay J. M. Brittain, or bearer, the sum of five thousand dollars, value received. Aug. 22, 1863.

JOHN A. TINDALL,

S. E. CAMPBELL,

JOHN TINDALL.”

John Tindall being dead at the institution of the suit, the other makers only were sued.

The only portion of the pleadings necessary to notice is the answer of the defendants setting up the defense referred to in the opinion of the court. That answer alleged that the note was given in consideration of a steam mill at Knoxville, in Cherokee county, purchased by defendant, John A. Tindall, from J. M. Brittain, the payee of the note; and “that it was expressly understood and intended by defendant and said Brittain that said contract and note were made in view of Confederate money, and to be discharged and paid in Confederate money at its face value, and the price of said mill was fixed and agreed upon, and valued in said contract, in Confederate money value; each party to said contract to abide by the uncertainty and fluctuation of said currency, which Confederate money was not worth at that time more than five cents to the dollar.”

The answer further alleged that Brittain held the note until after it fell due, when he transferred it to one Doty, who had notice that it was payable in Confederate money, and similar allegations were made as to all subsequent holders, including the plaintiff Donley.

To this answer the plaintiff excepted, because it proposed to vary the terms of a written contract without any averment that by fraud, accident or mistake the true agreement of the parties was not expressed in the contract as evidenced by the note.

The exceptions to the answer were overruled and the cause proceeded to trial at the spring term, 1868 The plaintiff read the note and rested his case. The defendants introduced Brittain, the original payee of the note, and proved by him that the agreement between him and Tindall was that Confederate money should be taken for the note. The plaintiff objected to this evidence, but his objection was overruled, and he excepted. Brittain further proved that when he transferred the note to Doty he informed the latter that it was payable in Confederate money. This witness also stated that the mill was worth from $800 to $1,000 in coin at the time of the trade, and that Tindall paid him $5,000 Confederate money in cash, besides the note sued on.

Defendants proved by another witness that at the date of the note Confederate money was worth from ten to twelve cents on the dollar.

The plaintiff then read the deposition of J. M. Anderson, who stated that he became the owner of the note in the summer or fall of 1864. He purchased it under the full belief that it was a specie demand. That when he inquired of J. M. Brittain about the consideration, the latter told him that there was nothing said at the time of the transaction about taking Confederate money in payment of the note. Witness transferred it to the plaintiff Donley in payment of specie indebtedness.

The court below instructed the jury that if the note was to be paid in specie or legal tender United States treasury notes, they should find for the plaintiff, but if it was payable in Confederate money, their verdict should be for the defendants.

The verdict was for the defendants, and judgment was entered against plaintiff for costs.

Plaintiff moved for a new trial, which was refused, and he appealed.

S. P. Donley, in proper person.

The appellant contends that without allegation and proof that by fraud, accident or mistake the writing does not state the agreement correctly, that it was not competent by proof to show that the note was payable in a currency other than specie.

The word “dollar” has a certain definite well known meaning; it means a coin, having a certain amount of gold or silver in it. Act of Congress, April 2, 1792; Webster, Dic. The meaning of the word is as certain and unequivocal as if the note had been for a certain amount in weight of gold or silver metal of a certain fineness. And it was not competent by parol evidence to contradict or vary the meaning of the words used in the note, or the legal signification...