Search Supreme Court Cases
GAVINZEL V. CRUMP, 89 U. S. 308 (1874)
U.S. Supreme Court
Gavinzel v. Crump, 89 U.S. 22 Wall. 308 308 (1874)
Gavinzel v. Crump
89 U.S. (22 Wall.) 308
APPEAL FROM THE CIRCUIT COURT OF THE UNITED
STATES FOR THE EASTERN DISTRICT OF VIRGINIA
In November, 1863, during the rebellion, Confederate notes being then so much depressed in market value that in Richmond, Virginia, $3,260 of them were worth but $204 in gold coin, G., a Swiss, at the time resident in Richmond, but desirous to go to Europe -- to escape to which through the rebel lines was then extremely difficult -- agreed to lend C., an American, resident in Richmond, the said sum of $3,260 in the Confederate notes above mentioned, and C. borrowed the said sum in such notes. C. executed his bond to G., by which it was agreed that the money was not to become due and payable until the civil war should be ended (during which no interest should be chargeable), nor become
payable then unless demand was made for it, and moreover that if C. was not at that time prepared to pay the said sum, he should have a right to retain it for two years longer, when it should become absolutely payable. The bond continued:
"And upon this further condition that at any time after the 1st day of April, 1884, and during the continuance of said war, if the said G., or any attorney in fact duly authorized by him to receive payment of said sum shall be present in person in the City of Richmond, I shall have the right (if I elect to do so) to tender said sum, without interest thereon, to said G. in person or to his said attorney in fact in person in said city in current bankable funds, and upon such tender's being made, the said G. or his said attorney in fact shall be bound to receive the same in full payment and satisfaction of this obligation, and thereupon the said obligation shall be surrendered and cancelled. But said tender is not to be made except to said G. or his said attorney in fact in person in the city aforesaid."
G. went to Europe after the execution of the bond, and did not return till after the war was ended -- that is to say not until June, 1865. He then demanded payment of the $3,260 in lawful money of the United States. C. set up and proved that at all times after the 1st of April, 1864, he had $3,260 "current bankable funds" on hand to pay to G. or to any attorney in fact authorized by G. to receive them, but that neither G. nor any such attorney in fact was ever present in Richmond until after the war was ended, at which time the said funds were worthless. His position thus was that the bond was discharged by his readiness to tender, and that this readiness of his had been rendered of no effect by the fault of G. in not being in Richmond or having an attorney in fact there to receive the money. Held,
1st. That there was nothing in this above-quoted paragraph of the bond which impliedly obliged G. either to be himself in Richmond at any time after the 1st day of April, 1864, and during the continuance of the war or to have an attorney in fact there to receive the money due on the bond.
2d. That there was no ambiguity in the written contract, and therefore no occasion to introduce parol evidence to show that it was part of the contract that after the 1st of April, 1864, the war then continuing, G. should be in Richmond or have an attorney in fact there to receive payment for him of the money due on the bond.
George Gavinzel, M.D., a Swiss, resident in Richmond, Virginia, on the 20th of November, 1863, the rebellion being then flagrant, and "Confederate notes," as they were called -- that is to say, notes issued by the rebel confederacy -- being the only currency common in Richmond, agreed to lend to
Robert Crump, a resident, like himself, of Richmond, and whose family physician he was, the sum of $3,260 in the said notes, the notes at the time having become so far depreciated that the $3,260 lent in them were worth in gold but $204. Gavinzel was at this time contemplating leaving the country for Europe, it being, however, a matter of extreme difficulty to pass through the rebel lines.
In adjusting the terms of the loan, the only difference between the two parties was as to the time when the money should be returned. Gavinzel, though he expected that the war would be ended by the spring of 1864, was desirous of postponing the time of payment till the close of the war, whenever that close might take place. Crump wished to have the privilege, in case the war lasted after April, 1864, of making payment at any time after that day and during its continuance. However, after having discussed the matter for a certain time, one Cannon, an attorney, employed by Gavinzel, drew up a bond in these words, the part in brackets at the close of the instrument being the part on which the question in this suit chiefly arose:
"Know all men by these presents, that I, Robert Crump, of the County of Henrico and State of Virginia, am held and firmly bound unto George Gavinzel, M.D., of the City of Richmond in the said state, in the sum of $3,260, for the payment of which sum, well and truly to be made to the said Gavinzel, his heirs, assigns, and personal representatives, I bind myself, my heirs, executors, and administrators firmly by these presents, as witness my hand and seal this 20th day of November, 1863."
"The foregoing obligation is made subject to the following terms and conditions, to-wit:"
"That the said sum of $3,260 is to be retained by me, and is not to become due and payable until the close of the present war between the Confederate and the United States of America, during which time the said sum shall not bear any interest whatever, nor shall the same become due and payable after the close of the said war until demand for the same shall be made by the said Gavinzel or his legal representatives upon me or my legal representative, and as soon as the war shall have
closed, and said demand shall thereafter have been made, the principal sum of $3,260, without interest thereon, shall be paid. But if at that time I shall not be prepared to pay the said sum, I shall have the right to retain the same in my hands for the space of two years from and after the time when such demand is made, I paying legal interest thereon from such time until the said principal sum if paid; and after the expiration of said two years the said principal sum, with such interest as may have accrued thereon after such demand as aforesaid, shall be absolutely due and payable, and the said Gavinzel, his heirs, assigns, and personal representatives, shall have the right to enforce the payment of the same."
"[An upon this further condition, that at any time after the 1st day of April, 1864, and during the continuance of the war, if the said Gavinzel, or any attorney in fact duly authorized by him to receive payment of said sum, shall be present in person in the City of Richmond, and State of Virginia, I shall have the right (if I elect so to do) to tender said sum, without interest thereon, to said Gavinzel in person, or to his said attorney in fact in person, in said city and state, in current bankable funds, and upon such tender's being made, the said Gavinzel or his said attorney in fact shall be bound to receive the same in full payment and satisfaction of this obligation, and thereupon the said obligation shall be surrendered and cancelled. But said tender is not to be made except to said Gavinzel or his said attorney in fact in person in the city and state aforesaid.]"
"Witness my hand and seal this November 20, 1863."
The instrument having been read over to both parties in the presence of each other, and no objection being made by either party to its terms, nor any alteration being asked for by either, it was executed by Crump on the day on which it was dated.
At the same time with the execution of this obligation and according to previous agreement, Crump executed a deed of trust to Cannon of valuable real estate near Richmond, to become void provided
"that he, the said Crump, should well and truly pay and satisfy to the said Gavinzel the said sum of $3,260, according to the terms and conditions in the said obligation set forth. "
Soon after this -- that is to say, on December 20, 1863 -- Gavinzel got out of Richmond and went to Europe, his escape through the rebel lines having been, according to his own account, almost impossible, attended with greater difficulties than anything which he had ever in his life done.
He left behind him no attorney in fact to collect this debt, but during his absence was wholly unrepresented.
On the 1st of April, 1864, the war then continuing, Crump provided himself with $3,260 current funds, bankable at Richmond, to pay the loan, but found neither Gavinzel nor any attorney in fact of his to receive them. He had these funds in his possession from the date mentioned until the close of the war, by which time they had lost all value.
On the 2d of June, 1865, the war being now ended -- and not till then -- Gavinzel returned from Europe, went to Richmond, and demanded payment in lawful money of the United States of the sum named in his bond, $3,260, which payment Crump refused to make.
Gavinzel thereupon filed a bill in the court below praying a sale of the property conveyed in trust and a payment to him out of the proceeds of the amount which he claimed.
Crump set up in his answer two defenses
1st. That the said $3,260 had no reference to lawful money of the United States; that the loan was made in "Treasury notes of the Confederate states;" that those notes were issued to sustain a rebellion against the United States, and illegal.
2d. That it was part and parcel of the contract between the parties at the time of the loan and the execution of the bond that the obligor should be at liberty at any time during the continuance of the said war, after the 1st day of April, 1864, to discharge said debt and said bond for $3,260, by repayment of that sum, without interest, in current bankable funds to the said Gavinzel or to his agent, and that without such understanding, the obligor would not have received the said $3,260 or any part of it in the said Confederate currency from the said Gavinzel.
The answer further alleged that the respondent had such
money on the 1st of April, 1864, and at all times afterwards till the close of the war, ready to pay, but that neither Gavinzel nor any agent of his was at Richmond to receive them.
Both Gavinzel and Crump were examined, but while both agreed in swearing that at the time when the loan was made, Gavinzel was getting ready to go to Europe if possible, they flatly contradicted each other as to what Gavinzel prior to or at the execution of the bond and deed of trust, said about the fact or the time of his coming back.
Gavinzel was thus examined and thus answered:
"Q. When you left Richmond on the 20th of December, 1863, did you not then expect to return in the spring or summer of 1864?"
"A. I did not expect to live that long, much less to return. I had a severe hemorrhage."
"Q. At the time of the loan to Crump, what was your estimate of the duration of the war?"
"A. I expected that the war would last till the commencement of the next spring, and then be ended."
"Q. Did you intend to be here if the war lasted at that time?"
"A. I did not."
"Q. Did you agree to be present in the City of Richmond or to have an agent to act for you in the City of Richmond after the 1st of April, 1864?"
"A. I did not."
"Q. Was there at the time of the execution of Crump's bond or since, any different agreement in any respect from that contained in the bond?"
Crump was thus examined and thus testified:
"Q. At the time of your negotiation with Dr. Gavinzel, was anything said by him, and if so what, in regard to his departure from Richmond to Europe?"
"A. He said he was getting ready to go. He said that he would certainly be back in April, 1864, and if not he would have someone here to act for him."
The court below decreed that the trust deed should stand
as a security for Crump's paying to Gavinzel $204, lawful money of the United States, with interest &c. (which said sum of $204 was the value in gold of the $3,260 Confederate notes when lent), and that if the said $204 were not paid in two months, with interest, as aforesaid, the property conveyed should be sold. From that decree Gavinzel took this appeal.
MR. JUSTICE DAVIS delivered the opinion of the Court.
The main question in the case arises on the construction of the bond.
The bond is peculiar in its character and unusual in its terms. It is not due until the close of the war of the rebellion, and not even then until specific demand is made for the money. Two things must concur to give the obligee or his representative a right of action: the termination of the war and demand for the money. On demand, if the war has closed, the bond can be discharged by the payment of the principal sum, without interest, but the borrower, if he chooses, can retain the money two years longer by paying legal interest. On the expiration of these two years, the principal sum and accruing interest is absolutely due and payable. So far, the terms of the bond, it is admitted, are plain enough, but there is still another condition on which the chief controversy in the case depends. It is in the concluding words of the instrument. [Footnote 1]
It is proved in the case that the money lent was Confederate notes, although the fact is not so stated in the bond, and that after the 1st of April, 1864, the war then continuing, Crump provided himself with the funds for the return of the loan, but found no one in Richmond who was authorized to receive them, and he kept them ready to pay till they lost all value by the termination of the war.
And it is contended by him, as the tender was prevented by the omission of Gavinzel to appoint an attorney in fact to represent him in his absence, the bond is discharged as completely as if the tender had been actually made and accepted.
This would be so if Gavinzel was in default for not appointing an attorney. But the bond does not require him to make the appointment nor to remain in Richmond. It gives Crump the right to make the tender if the war continued after the 1st of April, 1864, but the tender could only be made in Richmond, and only to Gavinzel or to an attorney in fact in person who was authorized to receive payment. In other words, the money was payable if Gavinzel was in Richmond, or had an agent there to receive it, but was not payable if he was not there or had no agent in the city. Crump may have understood that his right to discharge the bond by the tender was to become absolute if the war lasted (and so long as it lasted) after April 1, 1864, but the contract does not admit of a construction consistent with that understanding. And the court cannot, without evidence authorizing it to be done, import words into the contract which would make it materially different in a vital particular from what it now is. There is no occasion to introduce parol evidence to explain anything in the contract, because there is no ambiguity about it, and it is not competent by this sort of evidence to alter the terms of a contract by showing that there was an antecedent parol agreement or understanding between the parties different in a material particular from that which the contract contained. But if it were competent, the evidence fails to establish any such antecedent agreement. Gavinzel and Crump are the only witnesses, and their statements are inconsistent one with the other. In view of this difference in the recollection of the parties -- to use no harsher term -- how can the court say that Gavinzel agreed either to be in Richmond or to have an agent there to represent him? Both parties were present when the bond prepared by Cannon on the direction of Gavinzel was read to them, and there does not seem to have been any objection to it or any alteration proposed in the draft of it. Nor is there anything in the record to show that the parties did not in this transaction stand on equal ground, with equal intelligence and equal opportunities of judging of the hazard incurred. If so, hard as the bargain is, there is
no good reason in the state of the pleadings why it should not be enforced. The answer sets up only two defenses, the illegality of a contract based on Confederate notes and the inability of Crump to discharge the debt, according to the last condition of the bond, by the neglect of Gavinzel on his departure to Europe, to appoint an attorney in fact to receive the money. But the last defense, as we have seen, is not sustained, and in regard to the first, this Court has held substantially that contracts based on Confederate currency will be enforced when made in the usual course of business between persons resident in the insurgent states, and not made in furtherance of the rebellion.
Whether or not this was a wagering contract, and therefore void, is not a question in the case, as no objection to it on that ground was taken in the answer or on the argument.
The contract was plainly a contract of hazard, mutual hazard. Each party took risks and each received a consideration for the risk thus taken. Manifestly the leading object Gavinzel had in the transaction was to lend his money so that it would not be repaid until the war closed, whether this event occurred before or after the 1st of April, 1864, and this object, on the contingency of his being able to go to Europe, the terms of his contract enabled him to accomplish. If the war ended by April, 1864, as he swears he thought it would, his purpose was attained, whether he went to Europe or not. But if the war continued longer and he was able to get out of the Confederacy, he was in as good condition as if the war had terminated when he expected it would. There were, however, difficulties to be encountered in getting through the lines, represented by Gavinzel in his testimony "as the greatest he ever met with in his life." If unable to overcome these difficulties, he would be obliged to stay in Richmond, and Crump would have the opportunity, if he chose to avail himself of it, of paying back the loan in the currency in which he received it.
The inducements to Crump to enter into the contract were the present use of the money and exemption from interest, with favorable terms of repayment. Besides this, there was
the chance that he might be able to repay the loan in Confederate money. Both parties not only ran the risk of the war closing before or after the 1st of April, 1864, but also of the value of money whenever the war did close, be that sooner or later, and of the ability of Gavinzel to leave the Confederacy. Certainly the wisdom of Crump in entering into a contract which contemplated such hazards cannot be commended, but if parties make contracts where there is no fraud, upon contingencies uncertain to both, with equal means of information, the courts cannot undertake to set them aside.
Confederate currency was a commodity in trade, and the parties risked their judgment upon the future value of it, as they might have done upon any other commodity for sale in the community. But if it be treated in this case as a loan of money, Crump agreed to repay it by a certain time after the termination of the war, in the currency which that termination should bring with it, and onerous as the condition is, he must abide by it.
The views we have taken of this case are sustained by the decision in Brachan v. Griffin. [Footnote 2] In that case, Griffin agreed, in consideration of £25,000 paper money, to be paid him by Willis in the years 1780 and 1781, to pay the latter £2500 in specie in 1790. Griffin brought his bill in chancery for relief against Brachan, the assignee. Fleming, J., denying the relief, said:
"The contract in this case was founded upon speculation on both sides. Griffin thought the present use of the money would be advantageous to him; and Willis that it would be more beneficial to him to receive the specie at a distant day. The contract seems to have been fully understood by the parties, and to have been fairly entered into upon both sides."
The language used by this judge is applicable to this contract, which, after all, was a mere speculation upon the paper currency of the Confederacy. Besides this case from Virginia, decided in 1803, there are recent decisions in that state and Maryland which
uphold contracts of hazard similar in many respects to the one in this case. [Footnote 3]
Decree reversed and the cause remanded to that court with instructions to enter a decree for the complainant in conformity to this opinion.
The concluding words here referred to are the clause on page 89 U. S. 311, supra, containing fourteen lines within brackets. -- REP.
3 Call 375.
Boulware v. Newton, 18 Grattan p. 708; Taylor v. Turley, 33 Md. p. 500.
Official Supreme Court caselaw is only found in the print version of the United States Reports. Justia caselaw is provided for general informational purposes only, and may not reflect current legal developments, verdicts or settlements. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or information linked to from this site. Please check official sources.