Massie v. Byrd

• Decision Date: 19 February 1889
• Citation: 87 Ala. 672,6 So. 145
• Parties: MASSIE v. BYRD.
• Court: Alabama Supreme Court

6 So. 145

87 Ala. 672

MASSIE v. BYRD.

Supreme Court of Alabama

February 19, 1889^[1]

McClellan & McClellan and White & White for appellant.

Pettus & Pettus, for appellee.

CLOPTON J.

The suit, which is brought by appellant, is founded on a promissory note made by the testator of appellee, of which the following is a copy: "$4,500.00. One day after date I promise to pay Sarah Massie forty-five hundred dollars, and will pay the interest annually, punctually, and the principal on thirty days' notice. April 20, 1866. W. M. BYRD." The seventh and eighth special pleas allege that in 1863 and 1864 defendant's testator, as the agent of the plaintiff collected about $4,500, in Confederate treasury notes, and on April 20, 1866, paid her $300, and executed the note sued on for and in consideration of the Confederate treasury notes so collected, without any other consideration. The pleas further aver that the real value of the treasury notes when collected was $1,000, and that payments exceeding that amount were made on the note during the life-time of the testator. The defense thus set up is want of consideration as to a part, and payment of the balance of the note.

In general, the consideration of a note is open to inquiry, and parol evidence of the actual consideration may be received for the purpose of determining its legality or sufficiency to support the contract. The note is evidence that it was made on sufficient consideration, but it may be impeached by plea. Code 1886, § 2769. When the consideration of a contract in writing is divisible, when two or more distinct things or matters enter into and constitute the consideration, inquiry may be made as to either one of such things or matters, for the purpose of determining its sufficiency, and a recovery may be had for the part of the contract supported by sufficient consideration, and defeated as to the balance. Holland v. Adams, 21 Ala. 680, and Dickinson v. Lewis, 34 Ala. 638, afford illustrations of this rule. Inadequacy of consideration is not of itself a ground of relief against a contract, unless it is so gross as to amount to fraud or undue advantage. Parties sui juris may determine, in making their contracts, the adequacy of the consideration, and if of real value it need not be adequate in order to support a contract deliberately made with knowledge of the facts. In the absence of circumstances of fraud, imposition, or undue advantage or influence, there can be no inquiry into, and no adjustment of, the value of the consideration, if valuable. When such circumstances are wanting, and the consideration is entire and indivisible, its extent and value are not subjects of inquiry in an action at law to enforce the contract, for the purpose of determining its partial sufficiency, and to defeat a proportional recovery. Bolling v. Munchus, 65 Ala. 558; 1 Pars. Cont. 436.

But appellee invokes the rule as to a past or executed consideration. The general rule is that an executed consideration will not support an express promise, unless induced at the instance or request of the party promising, or the past transaction is of such a nature that the law will imply a promise. When the promise is implied from the character of the executed transaction, a subsequent promise is supported and will be enforced only so far as co-extensive with the amount or value of the past consideration. If the prior promise, whether express or implied, is to pay a determinate sum or value for the definite ascertainment of which the contract or the law furnished the standard, a subsequent promise to pay a larger sum is unsupported by a sufficient consideration as to the excess. But when the amount of a past unliquidated demand is ascertained and agreed on by the parties, a new promise to pay the amount so ascertained is supported by a sufficient consideration. The pleas show that the consideration of the note is valuable, and entire and indivisible, consisting of a liability or indebtedness on account of Confederate treasury notes collected by the maker as agent of the plaintiff, which he had failed to pay over or to account for until the execution of the note. The duty and obligation of an agent, who collected Confederate treasury notes during the war, was to pay them over to his principal. On his failure to do so, and their appropriation to his own use, the law did not imply a promise to pay only their value in the currency of the United States. There was neither an express nor implied promise to pay any determinate sum or value other than their face amount. The demand was unliquidated in respect to the amount that should be paid after the close of the war. It is true that since then the courts generally have enforced such contracts only to the extent of their just obligation, and that the measure of recovery is the value in lawful money of the United States, at the time of making the contract, of the Confederate dollars agreed to be paid. Whitfield v. Riddle, 52 Ala. 467; Wyatt v. Evins, 52 Ala. 285; Thorington v. Smith, 8 Wall. 1. But these and similar decisions rest, not on a partial want of consideration, but on an agreement or understanding of the parties that the note was to be paid in Confederate dollars. If no such agreement or understanding was proved, the amount of the note was collectible. Cook v. Lillo, 103 U.S. 792; Confederate Note Case, 19 Wall. 548. It may be, had the present action been founded on the original indebtedness of defendant's testator, the plaintiff could have recovered only the value of the Confederate money collected. But when, after the restoration of peace, he deliberately, and with knowledge of the facts and his rights, executed the note sued on payable in lawful money of the United States, he waived the right to limit plaintiff's recovery to the value of Confederate money in a suit on the note. This may often work a hardship, and probably the ends of justice would be better accomplished, if, on any sound principle, the recovery could be measured by the value of the consideration. But a different rule would open the consideration of every contract in writing to investigation and adjustment in exact proportion to its real value. Trustees v. Turner, 71 Ala. 429.

The sixth plea of defendant sets up the statute of limitations, and raises the question, at what time did the statute begin to run against the note? The language of the statute is, "Civil suits must be commenced after the cause of action has accrued, within the periods prescribed in this chapter, and not afterwards." Code 1876, § 3223. Under the statute, the question is, when did the cause of action accrue on the note? Counsel for the appellee insist that the note became due and payable, by its terms, one day after date, and that plaintiff could then have commenced an action without any demand being previously made. In the construction of all written contracts, the fundamental rule is the ascertainment of the intention and mutual understanding of the parties. Their condition, the terms and nature of the contract, and the objects in view, all are to be regarded. The substantial purpose and purport, as collected from the entire instrument, will control the separate parts intended as the means of its accomplishment. The note consists of two promises,-one to pay one day after date: the other to pay the interest annually, and the principal on 30 days' notice. It was given about a year after the restoration of peace, in consideration of an antecedent indebtedness, created by the collection of Confederate notes without claiming any reduction. Considering the circumstances and the language of the note, it is evident that the parties intended and contemplated delay, probably long delay, in the payment of the principal, but annual payment of the interest. In construing the note, some effect should be given to each word and phrase. Looking to all the provisions of the note and the circumstances, the words "one day after date," it seems, were intended and used to fix the time from which interest should begin to run, and after which the payee might, at any time, give notice to pay the principal; and the other provisions were intended to qualify the general operation of these words, and fix the times when the interest and principal should be payable, respectively. It is not an unconditional and absolute promise to pay principal and interest one day after date. This construction accomplishes the evident purpose of the parties, and gives effect to each part of the note. Jameson v. Jameson, 72 Mo. 640. As to the principal, the note has the same effect and operation as a note payable 30 days after demand or notice.

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