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ROBERTS v. COCKE.
held another's money it does not lie in their mouths to say that they derived no benefit from it, and therefore should not be required to pay for the use of it that compensation which they had agreed to pay.
It remains to consider whether the third plea, stripped of the faulty matter which has been passed upon, and the second plea entitled the defendants to the abatement of the interest which they claimed, and which by the judgment of the court was allowed and ordered. The solution of this question depends upon the answer to be given to the main question in these cases : Is the act of the legislature, by force of which only the judgment was rendered, valid as law? Is the act repugnant to the Constitution of the state, or to the Constitution of the United States ?
Section 1, article 5, of the Constitution of this state, is in these words: “ The legislative power of this commonwealth shall be vested in a general assembly, which shall consist of a senate and house of delegates." Whatever power therefore is comprehended in the terms, “ the legislative power of this commonwealth,” is vested in the general assembly by the section aforesaid, subject only to such limitations as are imposed by other parts of the state Constitution and by the Constitution of the United States. Amongst the limitations contained in the latter, section 10, article 1, declares that “no state shall pass any law impairing the obligation of contracts ;” and the same inhibition is put upon the general assembly by the Constitution of the state, article 5, section 14.
Speaking of this clause, Judge Cooley says: “No clause which the Constitution contains has been more prolific of litigation, or given rise to more animated and at times angry controversy. It is but twice alluded to in the papers of the Federalist, and though its great importance is assumed, it is evident that the writer had no conception of the prominence it was afterwards to hold in constitutional discussions, or of the very numerous cases to which it was to be applied in practice.” Cooley's Con. Lim. 273. And Chief Justice Marshall in 1827, in the case of Ogden v. Saunders, 12 Wheat. 213, 335, responding to the question, what is a law impairing the obligation of contracts, said, that " in solving this question all the acumen which controversy can give to the human mind has been employed in scanning the whole sentence and every word in it.”
The numerous and diversified cases which have arisen under this clause of the Constitution from time to time since its adoption have been the occasion of a great multitude of decisions by the supreme court of the United States and the supreme appellate tribunals of the several states.
In the light of these decisions, let us first see what has been the result of judicial inquiry as to the true meaning of the clause, “any law impairing the obligation of contracts,” and we can then determine whether the act of the legislature in question is such a law.
The clearest and most satisfactory construction of this clause is given by Chief Justice Marshall, in 1819, in the opinion pronounced by him in Sturges v. Crowningshield, 4 Wheat. 122, 197.
“ It would seem difficult,” said he,“ to substitute words which are more intelligible or less liable to misconstruction than those which are to be explained. A contract is an agreement in which a party undertakes to do or not to do a particular thing. The law binds him to perform his undertaking; and this is, of course, the obligation of his contract. In the case
ROBERTS 0. COCKE.
at bar, the defendant has given his promissory note to pay the plaintiff a sum of money on or before a certain day. The contract binds him to pay that sum on that day; and this is its obligation. Any law which releases a part of this obligation must, in the literal sense of the word, impair it; much more must a law impair it which makes it totally invalid and entirely discharges it.”
This construction of the clause of the Constitution and interpretation of its words have been followed by the courts ever since they were declared. As it is the law binding to the performance of the contract which constitutes the obligation, it has accordingly been held, and is now thoroughly settled, that the laws which subsist at the time and place of the making of a contract, and where it is to be performed, enter into and form a part of it, as if they were expressly referred to or incorporated in its terms; and this principle embraces alike those which affect its validity, construction, discharge, and enforcement: that the ideas of validity and remedy are inseparable, and both are parts of the obligation guaranteed by the Constitution against invasion ; that while the remedy may be altered or changed by the state, yet it is with the qualification that the change shall not impair substantial rights : and that a law which lessens the duty under the contract on the one side, or abridges the right on the other, whether such law acts directly on the contract or indirectly through the remedy, impairs the obligation, and is void. Bronson v. Kinzie, 1 How. 311; McCracken v. Hayward, 2 Ib. 608; Von Hoffman v. City of Quincy, 4 Wall. 535; White v. Hart, 13 Ib. 646 ; Gunn v. Barry, 15 Ib. 610 ; Walker v. Whitehead, 16 Ib. 314; The Homestead Cases, 22 Gratt. 266; Bank of Old Dominion v. McVeigh, 20 Gratt. 547; Taylor v. Stearns, 18 Ib. 244.
The rule, then, being that the laws in force at the date of a contract enter into and form part of it, it is pertinent to inquire what the laws of Virginia were touching interest prior to the 10th day of April, 1865. For a reference to the early statutes on this subject see note to 1 Revised Code, 373. The subsequent statutes will be found in 1 Revised Code, ch. 102, ch. 128, SS 79, 80 ; Code of 1860, ch. 141, SS 4, 5 et seq., ch. 171, § 44; Code of 1873, ch. 137, ch. 173, § 14, ch. 167, SS 43, 44.
It has always been lawful in Virginia for parties to contract for the payment of interest for the use or forbearance of money within the limits prescribed by statute ; and in the absence of any express agreement for the payment of interest, in obligations for the payment of a certain sum of money on demand or on a given day, interest on the principal sum from the time it becomes payable is “ a legal incident of the debt, and the right to it is founded on the presumed intention of the parties." Chapman's Adm’rs v. Shepherd's Adm'r, fc. 24 Gratt. 377.
Judge Staples, in delivering the opinion of the court in the case just cited, speaking of the defences which may be made to the recovery of interest on such obligations as we have mentioned, says: “It is true that the debtor may sometimes, under peculiar circumstances, avoid the payment of interest; but these are matters of defence, the burden of which is upon him in all cases. They are offered to show that the obligation to pay the interest has been discharged, and not that it did not originally exist. If no valid ground of defence is shown, the judgment is as cer
ROBERTS v. COCKE.
tainly rendered for the interest as for the principal. In contracts of the character just mentioned, it is apparent, therefore, that interest is not given as damages at the discretion of the court or jury, but as an incident of the debt, which the court has no discretion to refuse."
Wherever there is a contract, express or implied, for the payment of legal interest, the obligation of the contract extends as well to the pay. ment of the interest as it does to the payment of the principal sum, and neither the courts nor the juries ever had the arbitrary power to dispense with the performance of such contract, either in whole or in part.
Such being the law binding upon parties to contracts, and upon the courts and juries prior to the 10th day of April, 1865, was it competent for the legislature to change the law, and by giving it a retrospective action to deprive a party to a contract of the benefit to which he was entitled under it? It will not be pretended that the legislature could by a statute, acting either directly upon the contract or indirectly through the remedy, release the principal sum or any part of it; and this because the law binds the debtor to the performance of his undertaking, which is the payment of such principal sum ; and for the same reason it would seem equally clear that the interest, when a part of the contract, and its payment as much a part of the undertaking of the debtor as the payment of the principal, cannot by legislative action, direct or indirect, be remitted, released, or discharged.
If by the laws in force prior to the 10th day of April, 1865, when the contracts were entered into, upon which the Act of April, 1873, is intended to operate, the courts and juries had, as some seem to suppose, absolute control over the subject of interest, and were invested with full power in their discretion to allow or disallow interest in all cases coming before them, what necessity was there for the act of April 2, 1873? Why pass an amendatory act merely to confer upon them a power which they already had under the law without amendment ?
It would be unjust to the general assembly to impute such a purpose to them.
We must conclude, therefore, that the object of passing the act was, and if the acts were valid, its effect would be, to confer upon the courts and juries a power over the subject of interest connected with past transactions not possessed by them under the law at the time such transactions took place, - the power to "remit the interest upon the original debt found to be due, or any part thereof," from the 17th day of April, 1861, to the 10th day of April, 1865. The power to "remit" is a power to release. It is conferred by the act without any limitation except the discretion of those upon whom it is conferred ; a discretion not controlled by the settled principles and established rules of our jurisprudence, but to be exercised according to the pleasure of the courts and juries. In other words, it is an arbitrary power, the exercise of which can hardly be called a judicial inquiry.
The dates, 17th April, 1861, and 10th April, 1865, indicate the commencement and termination of the late war. The first was the day on which Virginia passed her ordinance of secession, and the last the day after that on which General Lee and the Confederate army surrendered at Appomattox Court House. It is to be inferred, therefore, that the re
ROBERTS v. Cocke.
mission of interest was authorized by reason of the existence of the war. But the mere existence of war does not abrogate debts, nor does it ordinarily stop the running of interest on debts, except, as before stated, between alien enemies. To make the war, therefore, the occasion, under all circumstances, for the remission of interest on antecedent debts and contracts, would be giving it a controlling character as a fact in determining the rights of parties which it did not have under the law at the time such contracts were entered into, and would thus substantially impair the obligation of such contracts.
In the case of McCall v. Turner, 1 Call, 133, there are expressions in the opinions of several of the judges which might indicate that, under the law as it then stood, they thought that the juries were invested with discretion to abate interest in all cases during war.
But these expressions are mere dicta, and have no controlling influence as authority. The case decided was a controversy between parties who were considered as occupying the relation to each other of alien enemies during the Revolutionary War, and the interest during the war was therefore properly abated.
Ambler's Ex'ors v. Macon, 4 Call, 605, decided in 1803, contains a dictum of Judge Pendleton, that “interest during the war ought not in justice and equity to have been allowed on debts due to domestic creditors no more than to foreign ; but since it has not been attended to, either in practice or judicial decisions, until so much business has been otherwise adjusted, it would be unjust at this late era to introduce it in a particular case, unless in one attended with peculiar circumstances.” Afterwards, in 1804, came on the case of Hawkins' Ex’or v. Minor, fc. 5 Call, 118, which was an appeal from a decree pronounced by Chancellor Wythe in the high court of chancery. One of the errors assigned on the appeal was, that the chancellor had disallowed interest for the period of the Revolutionary War in a case where both creditor and debtor resided, during the war, in Virginia ; and this court unanimously held that the disallowance by the chancellor of interest for said period was erroneous.
In the case of Crenshaw v. Siegfried, 24 Gratt. 272, one of the questions decided by this court was, that it was error in the court below to deduct interest during the war on a bond given before the war for the payment of a sum of money with interest from date. As the decree by which this deduction was made was pronounced prior to the passage of the act of the legislature, the validity of which is drawn in question in the cases now before us, this court did not in that case pass upon the validity of said act. But Judge Moncure, in delivering the opinion of the court, said: “Certainly the use of money is a valuable and legal consideration for a promise to pay legal interest thereon; and even an act of the legislature passed to annui or impair such a promise would be unconstitutional and void. Of course a decree declaring such a promise to be void, even in the absence of such an act, must therefore be erroneous.'
Our conclusion is, that the act of the general assembly, approved April 2, 1873, entitled “ An act to amend and reënact section 14 of chapter 187 of the Code of 1860, in relation to interest,” so far as said act confers upon courts and juries, in the suits therein mentioned, a power to remit interest, as therein provided, on contracts entered into prior to the 10th day of April, 1865, which said courts and juries did not have under
ROBERTS v. Cocke.
the laws in force at the time such contracts were entered into, is repugnant to the Constitution of the United States, and to the Constitution of this state, and is so far null and void. And we are further of opinion, that the mere existence of the late war between the United States and the Confederate States does not alone furnish any legal ground for the abatement of interest on debts upon contracts during the time such war lasted. We do not mean to say, however, that there may not be special cases, attended with circumstances connected with or growing out of the war, which would furnish legal cause for abatement of interest. When such cases arise, they must be decided according to the law applicable to the peculiar facts and circumstances of each case. We can only lay down the general rule.
It follows from what has been said, that, in our opinion, the judgment of the circuit court of Fauquier County, in Roberts' Adm'r v. Cocke, &c., the first of the cases considered by us, based as it is solely on the act of the legislature aforesaid, is erroneous, and should be reversed and annulled.
Our reasoning in the first case leaves us but little to say in the second.
Blackstone, in his Commentaries, divides contracts of debt into three classes : debts of record, debts by special and debts by simple contract. “A debt of record is a sum of money which appears to be due by the evidence of a court of record. Thus when any specific sum is adjudged to be due from the defendant to the plaintiff in an action or suit at law, this is a contract of the highest nature, being established by the sentence of a court of judicature.” 1 Chitty's Black. book 2, side p.
455. With us decrees for money are of the same nature and dignity as judgments.
Judgments and decrees for money being contracts of the highest character, of course, and for the reasons before stated, to abate any portion of the interest included in them would necessarily impair their obligation. Moreover, by such judgments and decrees the rights of the parties, in whose behalf they were rendered, to the money ordered to be paid, whether principal or interest, have become vested, and cannot be divested, as provided by the act of the general assembly. Griffin's Ex'or v. Cunningham, 20 Gratt. 31.
We therefore conclude, that so much of the act aforesaid as empowers the courts to review judgments and decrees upon motion, and abate interest, as in said act provided, is repugnant to the Constitution of the United States and to the Constitution of this state, and is therefore void ; and it follows that the judgment of the circuit court of Fauquier County in the second case, Murphy v. Gaskins' Adm'r, based upon said act, is erroneous, and must be reversed and annulled.
Judgments reversed. Not sitting : Anderson and Staples, JJ.