Meredith v. Salmon
| Decision Date | 14 March 1872 |
| Court | Virginia Supreme Court |
| Parties | MEREDITH & als. v. SALMON. |
A tract of land worth before the war, not more than $6,000 was, in June 1863, sold by F to S for $30,000; of which $5,000 was paid in cash in Confederate money, and for the remainder, five bonds of $5,000 each were given, to be paid in one, two, three, four and five years, " in current funds," with interest payable semi-annually from their date; and a deed of trust on the land to secure them. The fourth bond was, in July 1863, sold by the agent of F to M who purchased it as commissioner of the court for an investment. In a controversy in equity between S and M as to the amount to be paid upon this bond. HELD:
1. Though M is a bona fide holder of the bond, S may make any defence to it in equity, that he could make in an action upon it by the obligee. M holds the bond subject to every infirmity of consideration--to all the equities attaching to it in the hands of the party to whom it was executed.
2. Though the bond provides on its face, that it " is to be paid in current funds," S may prove, by parol evidence that by agreement with F at the time the bonds were executed he had a right to pay them at any time before they were due in Confederate currency; and that he had so paid the other four bonds to the holders thereof, and in January 1865, offered to pay this bond.
3. The words of the bond that it is " to be paid in current funds," does not necessarily raise the presumption, that it is to be paid in another and more valuable medium; but their proper interpretation depends upon the time when and the circumstances under which they are used.
4. The most just and reasonable interpretation of the words " current funds," is, that they are intended to guard against any contingency of an obligation to pay in coin.
5. The bond constituting one-sixth of the price contracted to be given for the land, it is to be discharged by the payment of one-sixth of the value of the land in United States currency, at the time of the sale.
This was a suit in equity in the Hustings court of the city of Richmond, by Wm. L. Salmon against John A. Meredith, Mary L. Meredith and her children, asking the court to fix the amount the plaintiff should pay in discharge of a bond of $5,000, which was one of five given by him in June 1863, for the purchase money of a tract of land which he purchased of S. R. Fondren. The plaintiff insisted that the contract for the land was made with reference to Confederate currency as the standard of value; and that by agreement with Fondren at the time, he was entitled to pay off the bonds at any time before they fell due; and that he had in fact so paid off the other four bonds.
John A. Meredith answered the bill, and said he was induced to purchase the bond as commissioner of the court, as an investment, because of the length of time it had to run, and that it was to be paid in current funds; and at the time of the purchase, and indeed until January 1865, he had no information that Salmon had a right to pay off the bond before it was due; and if he had been so informed he would not have purchased it. Mrs. Meredith also answered, referring to the answer of John A. Meredith.
The facts as they appear in the record, are substantially as follows:
In June 1863, S. R. Fondren sold to William L. Salmon, a tract of ninety-three acres of land lying about a mile and a half from the city of Richmond. For this land, which before the war was worth about five thousand five hundred or six thousand dollars, Salmon was to pay thirty thousand dollars; of which he paid $5,000 in cash, and executed his five bonds of $5,000 each, for the balance, payable in one, two, three, four and five years from the date, with interest payable semi-annually. The bonds were alike except as to the time of payment, and were in the following form: $5,000. One year after date I promise to pay to Samuel R. Fondren, his executors, adm'rs or assigns, the sum of five thousand dollars, with legal interest thereon from the date hereof until paid, the said interest to be paid half yearly, on the first days of December and June, and to be paid in current funds, for value received. For the punctual payment whereof, I bind myself, my heirs, executors and administrators. Given under my hand and seal, at Richmond, this first day of June 1863.
The first three of these bonds were transferred to Fendall Griffin, from whom Salmon had purchased the land, and were paid to him or his assignee before their maturity; and the fifth was paid in the fall of 1863, to Fondren. The fourth, which is the subject of this suit, was transferred to John A. Meredith as commissioner of the court.
It appears that Mr. Meredith, who had, as commissioner of the court, in June 1863, sold certain real estate belonging to Mrs. Mary L. Meredith and her children, and was directed to invest the proceeds of the sale, applied to Wellington Goddin, who as auctioneer had sold the property, to purchase State stock for him. Failing to procure the stock, Mr. Meredith then enquired if he (Goddin) had any securities other than Confederate bonds in which the investment might be made; and Goddin offered to sell to Meredith the bond in controversy in this suit, and also the one payable in five years. Meredith, with the approval of one of the beneficiaries, purchased the first; and was induced to make the purchase because it was payable four years after date, in current funds, was endorsed by Fondren, who he believed to be responsible, and was secured by a deed of trust on real estate. When he purchased the bond he had no information that Salmon had a right to pay it before it became due.
Wellington Goddin was examined as a witness. He states that at the request of Fondren he wrote the bonds, and that they were written in exact accordance with the instructions of the parties given to him. In answer to a question, he says:
Salmon, who testified in the case, states that there was an understanding between Fondren and himself, the amount of the bonds being so large, that he, Salmon, should have the privilege of taking up any or all of the bonds before maturity, that is, whenever he had the money to take them up with; and that this agreement was made before the bonds were executed. He says he paid the five years bond to Fondren in the fall of 1863; and he took up the bonds assigned to Griffin before they were due. And they received the money because they knew of the understanding, and that he had a right to take them up; and in January 1865 he offered to pay to M. the bond in controversy. There are other witnesses who testify to having heard from Fondren that such was the agreement. Fondren himself was dead when the suit was brought.
The cause came on to be heard on the 22d of June 1868, when the court held that the bond in controversy was a contract entered into with reference to Confederate States treasury notes as a standard of value; and it appearing that on the 1st of June 1863, the date of the contract, seven dollars of said Confederate notes were equal to one of gold, it was decreed that the bond be commuted and reduced to $714.29; and that upon Salmon's paying that amount, with interest from the 1st of June, up to which time the interest had been paid, into the First National Bank of Richmond to the credit of the cause, he should be discharged from all indebtedness by reason of the bond aforesaid. And upon the payment of the said sum and interest into the bank, Goddin, the trustee in the deed of trust to secure the bonds, was directed to release the trust. The Merediths thereupon applied to this court for an appeal from the decree; which was allowed.
Meredith, for the appellants.
Cannon & Courtney, for the appellees.
Although the bond in controversy is in the possession of a bona fide purchaser, the obligor may, notwithstanding, make any defence here he could have made in an action by the obligee. The purchaser holds the bond subject to every infirmity of consideration--to all the equities attaching to the instrument in the hands of the party to whom it was executed. The only question then to be considered is, what did the parties mean by the words " current funds," used in the several obligations executed by the vendee? Did they intend to provide for payment of the debt in the money current, whatever it might be, at the maturity of these obligations, or were they contracting with reference to Confederate money, and its probable continuance as the circulating medium of the country. This question must be decided not alone by the language of the instrument, but by a careful consideration of all the facts and circumstances.
That an individual during the war, having urgent need for...
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