Vol. II.] ROGERS v. TULLOS. [No. 4. the restored government permits the lawful equivalent of the currency therein expressed to be shown by parol. Can justice be done without allowing the same principle to apply to the judgments of that jurisdiction? Pending the rebellion, “money meant what was made so by legislation, enforced by the power of the insurgent States. The authority and the currency of the United States were excluded by force. In Thorington v. Smith, it was held that under the insurgent government the word "dollar" did not, during the period of its existence, have the same meaning as under the government of the United States, but that it must be taken to mean such dollar or money as was established as a circulating medium by the insurgent government. In permitting this difference to be explained by parol, the rule in Bailey v. Dilworth, 10 S. & M. 404, is not invaded. It was held in that case, that an account by an administrator reporting a sum certain in dollars and cents due from him, is conclusive that it was due in constitutional currency, and that it could not be shown to be due in depreciated bank notes. The decision was unquestionably sound, but not applicable to Confederate or foreign transactions. The reception of depreciated bank paper by agents and all others acting in a fiduciary capacity, whether as agents, sheriffs, or trustees of any description in payment of debts, was unauthorized. The adjudication was by the courts of the rightful and lawful government, then supreme, with reference to transactions within that jurisdiction. By the law of the land, dollars meant the lawful, constitutional currency of the United States. Under the Confederacy dollars had another and a different significance and value. Proof, in the case cited, that the amount, reported by the administrator was due in depreciated currency, would have had the effect to vary a written contract by parol; to change the obligations of an agent or trustee; and it would not only have changed, but have impaired the obligation of the contract. These observations apply to the cases of Miller v. Johnson, 33 Miss.; Effinger v. Richards, 35 Ib.; Crump v. Geroch, 40 Ib. They were decided correctly with reference to the supreme law, and currency then. prevailing, and to the time, circumstances, and jurisdiction of the transactions. The remark is repeated, that under the United States a dollar has a distinct, legal, constitutional, known value, but under the Confederacy it had another and different meaning and value. The propriety and justice of permitting this difference to be shown by parol, as well in case of judgments, and all legal obligations including judicially approved and recorded reports and accounts of administrators, is all that is con tended for. In the case of Randle v. McFarlane, supra, and Coffin v. Bramlett, supra, the guardians had received for their wards the constitutional currency of the United States. It was, therefore, correctly held, that they could not be allowed to show that their indebtedness to their wards was due in depreciated currency. Good money had been exchanged for bad through the want of foresight and judgment of the guardians, and without authority of law, and their obligations could not be discharged in that way. So far as applicable to the facts, to the reception of par funds in the lawful currency of the rightful government during the existence of the latter and the circulation of its money, the doctrine was correctly an VOL. II.] ROGERS v. TULLOS. [No. 4. nounced, as to the incompetency of parol evidence to explain or contradict or vary the terms of a written instrument, or the statement in an administrator's account, by way of showing, as in those cases, that the sum reported due from them, in money, meant anything else than money of the United States. This was right on the facts, because applicable to the money received, the government existing when received, and the rules regulating the transactions at the time. The subsequent exchange by the lawful guardians of the lawful for the unlawful and worthless money was their fault, which they could not be allowed to plead in excuse. It is axiomatic that all rules of law cease with the reason of them, and when it is shown that the currency is changed by law, or, when a contract or obligation has reference to a currency other than the currency of the country where or time when such contract or obligation is sought to be enforced, the meaning of the term dollars, or other term expressing the value or currency of the contract or obligation, must be interpreted by the rule as changed, or by the meaning of the term as used at the time and place of the contract or obligation. "It is quite clear," says Chief Justice Chase, "that a contract to pay dollars, made between citizens of any state in the Union, while maintaining its constitutional relations with the national government, is a contract to pay lawful money of the United States, and cannot be modified or explained by parol evidence." This is believed to be the limit of the doctrine in that direction, of the cases of Randle v. McFarlane and Coffin v. Bramlett. The further remarks of the learned jurist just cited, following the paragraph last quoted, with reference to foreign contracts, and the evidence by which in a suit on them here, the equivalent values of currency may be determined, are adopted as developing the principle by which the question under consideration ought be solved. There are, on the one hand, the government of the United States - her laws, her currency, her courts, and her rules for the construction of contracts, obligations, and transactions in her currency within her jurisdiction. On the other are the Confederate States, illegal as they were, yet supreme and exclusive for the time, their laws, currency, and courts, for all the purposes of this discussion, foreign to the United States. And this suggests the view now attempted to be presented, to-wit: simply that the rules applied to contracts between citizens of the insurgent States during the rebellion shall be applied to the judgments and other legal obligations involving the payment of money between the same citizens, for the same period, and within the same territory. The final decree pretermits all reference to the charge that the administrators had not accounted for a quantity of cotton sold, and it also ignores the charge of mingling funds. In restating the account of the administrators, the court assumed all the transactions of the administrators to have been in the currency of the United States. The several balances reported in their annual accounts were then brought together, and the aggregate, after deducting commissions, allowed the administrators, was decreed to be the balance due the estate from them. From this decree, the administrators appealed. Vol. II.] PRICE v. GOVER. [No. 4. It is believed the final decree should have proceeded upon the following basis: 1. The administrators should account for the proceeds of the sales of personal property in December, 1861, and January, 1862, in the currency of the United States. Those sales were on a gold basis. They could have been on no other. There was at that date no Confederate currency. And besides, as a general rule, calculations of Confederate currency do not begin until May 1, 1862. Laws of 1867, approved February 19, 1867, p. 373. 2. The hiring of slaves in 1862, 1863, and 1864 were manifestly with reference to Confederate money. 3. It does not appear in what currency debts were paid. This should be inquired into and adjusted accordingly. 4. Receipts after the war were of course in United States currency. 5. There was some evidence of the sale of cotton by the administrators, unaccounted for by them. This should be further investigated, and a decree according to the facts. 6. The record as it is now presented shows the administrators to have loaned the funds of the estate to their friends and neighbors, at a liberal interest, and to have substantially mingled the funds of the estate with their individual funds. This should be further investigated, and the administrators charged with the interest, if justified by the facts. In addition to the foregoing suggestions, it ought, perhaps, to be added that it was the duty of the administrators to pay the debts of the estate, and, if in their power, to use the depreciated money in their hands for that purpose. Good faith required an effort on their part to do this. If they neglected or failed in their duty in this respect, the loss should fall upon them. In view of these suggestions, the decree is reversed, and cause remanded for further proceedings, in accordance with the rules stated herein. PEYTON, C. J. dissented. COURT OF APPEALS OF MARYLAND. (To appear in 40 Maryland.) WHEN PAROL EVIDENCE MAY BE ADMITTED TO SHOW THE TRUE CHARACTER AND PURPOSE OF A MORTGAGE.-MORTGAGE OF INDEMNITY.WHAT CONSTITUTES A SUFFICIENT CARRYING OF STOCK BY A BROKER FOR A CUSTOMER. PRICE v. GOVER. A mortgage executed by P. and wife, recited that P. stood justly indebted to L. & Co. in the full sum of $30,000, upon his six promissory notes, drawn by him to their order, each for $5,000, dated the 1st October, 1857, and payable two of them at six, two at nine, and two at twelve months, and all bearing interets from date, and that the mortgage was executed to secure payment of the said sum of $30,000 and interest, agreeably to the tenor of the said note. After the usual conveyance and defeasance clauses and assent to a decree for a sale, there was the following: "Memorandum - Whereas the Vol. II.] PRICE v. Gover. [No. 4. parties hereto of the second part as copartners aforesaid are the holders of eleven hundred and fifty shares of the capital stock of the Baltimore and Ohio Railroad Company, which they have agreed to carry for and on account of said P. for the period of twelve months from the first day of October, 1857, at forty-five dollars per share; now it is hereby declared to be the express agreement and understanding of the parties hereto, and one of the considerations for making this mortgage, that in case of a sale of said railroad stock or any part thereof during said period of twelve months at an advance over forty-five dollars per share, such advance is to be credited to the said P. on account of the debt secured by this mortgage, and likewise that all dividends received by said parties of the second part on said stock during the period aforesaid is to be credited on account of the said debt hereby secured." This mortgage being assailed for fraud by a bill in equity, filed by the mortgagors against the mortgagees and the trustee appointed to sell the mortgaged property, it was held: 1st. That parol evidence was admissible for the purpose of showing the true character of the instrument, for what consideration it was given, and what purposes the parties to it intended it should subserve. 2d. That it was simply a mortgage of indemnity-its sole purpose being to secure L. & Co. against loss in carrying the eleven hundred and fifty shares of stock to the extent of their sales as low as $45 per share, they taking upon themselves the risk of all additional loss that might be incurred by a sale at a less rate. Where a broker agrees to carry for and on account of a customer, for the period of twelve months, a certain number of shares of railroad stock, at a specified price per share, he is not bound to retain in his possession during the pendency of the carrying contract the identical stock which he agreed to carry; he may sell the whole or any part thereof; all that the law requires of him is, that during the pendency of the contract he should have on hand, in his possession, or under his control, an equal number of other shares of the same stock, ready for delivery when his customer should pay what he owed on account thereof, or to be sold on his account when he should so direct. APPEAL from the superior court of Baltimore city. The case is stated in the opinion of the court. The cause was argued before Bartol, C. J., Grason, Miller, Alvey, and Robinson, JJ. Messrs. Thomas W. Hall, Jr. & S. Teackle Wallis, for the appellants. Messrs. William A. Fisher, Wm. Henry Norris, & I. Nevett Steele, contra. MILLER, J., delivered the opinion of the court. The appellants, on the 6th of October, 1857, executed to the firm of Josiah Lee & Company a mortgage of certain real and leasehold property in the city of Baltimore. This mortgage contains the assent of the mortgagors to a decree for a sale under the Act of 1833, ch. 181, and its supplements, and upon petition of the surviving partners of the firm, a decree to that effect was passed by the superior court on the 3d of May, 1860. The bill in this case filed by the appellants on the 29th of June, 1860, charges that this mortgage is fraudulent and void, and prays that it may be vacated, the decree set aside, and for an injunction against the sale of the property thereunder. The injunction was granted, and after answers and replication, testimony was taken at various times between the 20th of June, 1862, and the 8th of June, 1873. The case was then brought to final hearing, and the superior court, on the 15th of July, 1873, passed a decree dissolving the injunction and dismissing the bill, and from that decree this appeal is taken. In view of the large interest at stake as well as the very able and earnest arguments at bar by counsel on both sides, we have given to the case a full and careful consideration. Especially have we done this in reference to the voluminous testimony in the record, for upon the conclusions to be Vol. II.] PRICE v. Gover. [No. 4. drawn from that, rather than upon the solution of any difficult questions of law, our decision must rest. It cannot however be expected of us that we should in this opinion review in detail all the mass of proof in the case, and comment upon each item of testimony contributing to the formation of our judgment. All that we can do is to state the general features of the case as we find them established by the evidence, and our conclusions upon such controverted questions as are important, and upon which the reversal or affirmance of the decree appealed from must depend. At the time of the transactions in question the appellant, Price, was a man advanced in years, uneducated, being unable to read or to write more than his name, but of good natural capacity and judgment, perfectly capable of contracting, and well able to protect himself in his business operations. He lived in the city of Baltimore, and owned there valuable property, and his credit was good. Lee & Company were doing a large business as bankers and stock-brokers in the same city. In or prior to May, 1857, Price had purchased through Purvis & Co., another firm of brokers, 1,000 shares of Baltimore and Ohio Railroad stock which they were holding for him, and for which he was indebted to them in the large amount of $67,109.90, payable when the transfer books of the company should be reopened, namely, on the 26th of that month. It being inconvenient for him to make this payment, and Purvis & Co. desiring it to be paid, he entered into an arrangement with Lee & Company to carry the stock for him, that is to say, that they should pay Purvis & Co., the amount due on the stock, receive it from them, and retain it for him and on his account, to be delivered to him or sold, whenever by the terms of their agreement a delivery or sale could be required. Lee & Company accordingly, on the 26th of May, 1857, paid to Purvis & Co. the whole $67,109.90, and took the stock into their possession. On that day the stock was selling for $52 per share, so that they advanced $15,109.90 more than its then market value. In June and August following they purchased by his order 550 other shares of the same stock, and agreed to carry 150 of them in the same way as the 1,000 shares, thus bringing 1,150 shares within the terms of the contract. The remaining 400 shares of these subsequent purchases they sold by his order and rendered him an account of sales, which resulted in losses. There is a conflict in the testimony as to how long this stock was to be carried under the terms of the original agreement, whether so long as Price might choose to keep it unsold, or only so long as either party should desire it. It is not important to determine this question, because whatever may have been the terms of the original agreement, they were superseded by the memorandum contained in the mortgage of the 6th of October, 1857, by which a new and definite contract in writing respecting the carrying of these shares was made, and our duty is to decide upon the validity of that instrument. This mortgage recites that Price "stands justly indebted" to the firm "in the full sum of $30,000" upon his six promissory notes drawn by him to their order, each for $5,000 all dated the 1st of October, 1857, and payable two of them at six, two at nine, and two at twelve months, and all bearing interest from date, and that the mortgage is executed to secure the payment of said sum of $30,000 and interest agreeably to the tenor of these notes. Then after the usual conveyance and defeasance clauses and assent to a decree for sale there is the following: |