Vol. IV.]

"$762.

ROBERTS v. COCKE.

[No. 12.

"Nine months after date, for value rec'd, we, the undersigned, promise to pay to C. M. Roberts, or order, seven hundred and sixty-two dollars, with int. from date.

"Witness our hands and seals this 12th day of Decem'r, 1860. "WILLIAM COCKE, [Seal.] "RICH'D H. CARTER, [Seal.]

(Security.)

The defendants appeared and filed three pleas: 1st, payment; 2d, a plea averring that the bond sued on was entered into prior to the 10th day of April, 1865, and praying judgment that the interest on the bond from the 17th day of April, 1861, till the 10th of April, 1865, be remitted in accordance with the act aforesaid; and 3d, a plea of the like tenor and with the like prayer as the 2d, with the further averment that "the confusion of the business relations of the country incident upon the secession of the State of Virginia from the United States, and the war consequent thereupon between the Confederate States and the United States, was so great and disorganizing that the principal money in said writing obligatory specified was not worth any interest between the periods aforesaid to the defendants, who were citizens of the county of Fauquier, which was occupied from time to time by the federal troops.'

The plaintiff took issue on the plea of payment and demurred severally to the other pleas.

The demurrers were overruled, and, neither party demanding a jury, the whole matter of law and fact was submitted to the court; and the bond sued on being given in evidence, and that being all the evidence, the court gave judgment for the plaintiff for the principal sum specified in the bond, with interest from the time it became payable until the 17th day of April, 1861, and from the 10th day of April, 1865, until payment, and for costs, expressly remitting the interest between the dates afore

said.

In the second case the plaintiff, Frances A. Murphy, in the year 1869, brought an action of covenant in the circuit court of Fauquier County, upon an instrument under seal and of the tenor following:

"Received, Nov'r 26th, 1860, of Frances A. Murphy, five hundred dollars, to bear interest from date. I also agree to and put a negro boy, Abraham, in pond [meaning in pawn] to secure the payment of the same. Whenever the five hundred dollars is paid to Mrs. Murphy, with legal interest, the said boy no longer belongs to the said Mrs. Murphy, but the title returns back to me.

"Given under my hand and seal this the 26th day of November, 1860. "JOHN GASKINS, [Seal.]"

The defendant pleaded to this action "covenants performed "covenants not broken; upon which pleas issues were made up, and neither party demanding a jury, the issues were tried by the court on the 4th day of April, 1872, and judgment was rendered for the plaintiff for the $500 in the covenant specified, with interest from the date thereof, and for costs.

On the 12th day of April, 1873, the personal representative of John

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ROBERTS v. COCKE.

[No. 12.

Gaskins (the defendant in error here), pursuant to notice, made a motion in the circuit court of Fauquier County for a review of the judgment aforesaid, and an abatement of the interest included therein between the 19th day of April, 1861, and the 10th day of April, 1865; and the court rendered judgment accordingly, abating said interest. Upon the hearing of the motion the only evidence adduced was the record of the first judgment, including the covenant on which it was rendered.

We will examine the case of Roberts' Adm'r v. Cocke first, and when we have disposed of that, we shall have but little to say of the other

case.

If, during the late war between the United States and the Confederate States, the defendants Cocke and Carter had resided within the territory under the dominion of one of the belligerent powers, and their creditor had resided in the territory of the other of said powers, they would have been entitled, independently of the statute in question, to an abatement of the interest during the time the war lasted. Such is the rule of the public law applicable to a war between independent nations, and at an early period after the termination of the late war between the states, it was applied by the courts to that war. It was so applied in 1866 by the district court of appeals of Virginia for the first judicial district. See the opinion of the court delivered by Judge Joynes in Tucker v. Watson, McGill & Co. 6 Am. Law Register (N. S.), 220; citing among other authorities McCall v. Turner, 1 Call, 133, and Brewer v. Hastie & Co. 3 Call, 22; and this court recognized the same rule in the case of McVeigh v. The Bank of the Old Dominion, 26 Gratt. 188.

The supreme court of the United States, although at first hesitating as to this application of the rule (Ward v. Smith, 7 Wall. 447), finally sanctioned it by their decision in Brown v. Hiatt, 15 Wall. 177.

If, therefore, Cocke and Carter (the defendants in error) had been alien enemies in respect of their creditor, they would have been entitled to an abatement of the interest on their debt for the period covered by the war, and might have made their defence, certainly under a special plea, and perhaps under the plea of payment, as was allowed to be done in McCall v. Turner, supra.

But as no such defence was made, it is to be presumed, if indeed it may not be inferred from the record, that the facts did not warrant the defence.

The averment which seems to be the gist of the third plea, that the principal money "was not worth any interest to the defendants" during the war, was no bar to the plaintiffs' right to recover. The defendants by their bond had expressly stipulated for continuing interest on the debt without any exception of the period during time of war, should one occur, and the law, as the general rule, makes no such exception where the contracting parties make none. It may be true that the defendants derived no benefit from the use of the principal money during the war. This may have been their fault or their misfortune; but whether the one or the other, the contract was not affected by it. They were at liberty under the contract to discharge the obligation at any time by payment, according to its terms, of the principal sum and accrued interest. They neither paid nor offered to pay any part of either, and while they with

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ROBERTS v. COCKE.

[No. 12.

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

1

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ROBERTS v. COCKE.

[No. 12.

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; Me Cracken 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, §§ 79, 80; Code of 1860, ch. 141, §§ 4, 5 et seq., ch. 171, § 44; Code of 1873, ch. 137, ch. 173, § 14, ch. 167, §§ 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, &c. 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

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ROBERTS v. COCKE.

[No. 12.

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 payment 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