in the month of May, 1779, the executors of John Alexander in pursuance of a power contained in the will of their testator, set up to the highest bidder on a ground rent for ever, certain lots of land lying in the town of Alexandria.

.

FAW

V..

MARSTEL-
LER.

date of the contract, in specie, or in other mo.

One of these lots containing half an acre, was struck ney, equivalent off to a certain Peter Wise, at the rent of £26 per an- thereto, is to num, current money of Virginia. Wise bid for Jacob be ascertained by a jury. Sly, a citizen of Maryland, who transferred the lot to Abraham Faw, to whom the same was conveyed in feesimple, by a deed bearing date the 5th of August, 1779, in which the said ground-rent of £26 per annum, current money of Virginia, was reserved.

In the year 1784, Abraham Faw divided the said half acne of ground into eight smaller lots, five of which he has sold, reserving a ground-rent for ever, amounting to £84 12s per annum. One of these lots was conveyed by Faw, to Jacob Hess, in the year 1784, at the groundrent of £25 16s per annum, which lot has been since purchased by Philip Marsteller, the apellee, who has also purchased from the devisee of John Alexander, all his rights in, or issuing from the half-acre lot of ground conveyed to Abraham Faw. Thus Abraham Faw be comes liable to Philip Marsteller, for the rent accruing under the deed of August, 1799, who is himself liable to the said Faw, for the rent accruing on part of the same lot, under the deed executed by Faw to Hess, in November 1784.

In November, 1781, the legislature of Virginia, passed an act, calling paper money out of circulation: and also another act directing the mode for adjusting and settling contracts made in that currency.

The second section of this latter act, after stating, by way of preamble, that "the good people of the State "would labour under many inconveniences for want of "some rule, whereby to settle and adjust the payment " of debts and contracts entered into, or made between "the first day of January, 1777, and the first day of January, 1782, unless some rule should be by law. established for liquidating and adjusting the same, so

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FAW

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MARSTEL

LER.

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"as to do justice as well to the debtor as the creditor;" enacts that from and after the passing of the act, all "debt and contracts entered into or made in the current "money of this State or the United States, excepting, "at all times, contracts entered into for gold and sil66 ve coin, tobacco, or any other specific property, "within the period aforesaid, now remaining due, and unfulfilled, or which may become due at any future "day, or days, for the payment of any sum or sums of money, shall be liquidated, settled, and adjusted a"greeably to a scale of depreciation herein after men❝tioned and contained; that is to say, by reducing the "amount of all such debts and contracts to the true "value in specie, at the days or times the same were "incurred or entered into, and upon payment of said “value so found, in specie or other money, equivalent thereto, the debtors or contractors shall be forever "discharged of and from the said debts or contracts, 66. any law, custom, or usage to the contrary, in any "wise notwithstanding.".

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The fourth section establishes the scale of depreciation which shall constitute the rule by which the value of the debts, contracts, and demands, in the act mentioned, shall be asce tained; and the fifth section enacts, "that "where a suit shall be brought for the recovery of a แ debt, and it shall appear that the value thereof "hath been tendered and refused; or where it shall ap

pear that the non-payment thereof hath been owing to "the creditor; or where other circumstances arise "which, in the opinion of the court, before whom the "cause is brought to issue, would render a determina"tion agreeable to the above table unjust; in either case "it shall and may be lawful for the court to award such "judgment as to them shall appear just and equitable."

The act then empowers the court to direct at what depreciation any judgment shall be discharged on a verdict given for damages, between the first day of January, 1777, and th first day of January, 1782, having "regard to the original injury or contract on which the "damages are founded, and any other proper circum"stance's that the nature of the case will admit."

It was proved in the cause, that the contracts made by the executors of John Alexander excited at the time very great attention, and were the subject of general conversation. The prevailing opinion among the bidders was, that the rents would be paid in paper money so long as paper should be the circulating medium, after which they would be paid in specie. Such too was the opinion of Peter Wise, the purchaser of the particular lot which occasioned the existing controversy, and there is rea son to suppose it was also the opinion of those who were disposing of the property; it was also thought the rent reserved was low, when considered as payable in paper, but high if to be paid in specie.

It was further proved, that a lot not more valuable than that which occasioned the present contest, was sold in 1774, on aground-rent of £13 58 per annum, for ever, and that a lot less valuable was sold in the year 1784, on a ground-rent of £35 per annum. But it appeared from other parts of the testimony, that the lots which were sold in the year 1784, in Alexandria, on ground-rent, were contracted for so much above the value they afterwards bore, that the lessors in very many instances, were under the necessity of reducing the, rents one half below the sum originally stipulated, and in some instances the reduction was still greater.

The circuit court decreed, that the rents which accrued during the existence of paper money should be reduced according to the scale for the time when they became payable, but that the subsequent rents should be paid in specie. From this decree Faw appealed, and the case was now argued by Swann and Mason for the appellant; and by E. J. Lee, Jones, and Key, for the appellee.

For the appellant, it was conterded,

1. That this was a contract within the letter and spirit of the 2d section of the act of assembly of Virginia before mentioned, passed in November 1781, c. 22, (Chancery revision of the laws, p. 147,) and entitled, "an act directing the mode of adjusting and settling "the payment of certain debts and contracts, and for "other purposes;" and therefore,

FAW

MARSTEL

LER.

2. It was not within the 5th section of that act.

1. This is a contract made in current money of the state, within the period contemplated by the act, payable at a future day or days, for the payment of money, and is therefore within the very words of the 2d section of the act. This point was decided by the court of appeals in Virginia, in the case of Watson and Hartshorne v. Alexander, 1 Wash. 340. The object of that section was to provide for contracts in which the fact of depreciation had increased the ideal value of the consideration of the contract. It is proved in the present case, that the rent was high if payable in specie. It is therefore a case within the spirit as well as within the words of the section; for it is reasonable to presume that the high rent was agreed to be given in consequence of the depreciated state of the paper currency.

2. The 5th section could not mean to provide for cases which were within the spirit of the 2d; because that would be to render the latter section a mere nullity. There would be no use in fixing a scale, if the court were to make a rule according to the circumstances of each particular case.

But the 5th section was intended for the benefit of debtors only. Every case of equity in favour of creditors was provided for by the exception in the 2d. The only two cases particularly specified in the 5th section to authorise the equitable interposition of the court, are, where the money has been tendered and refused, or where the non-payment is owing to the creditor. In both these cases, the equity is in favour of the debtor. The act then proceeds, " or where other circumstances " arise, which in the opinion of the court, would render "a determination according to the above table unjust; "in either case it shall be lawful for the court to award "such judgment as to them shall appear just and equi"table." The two cases are only put by way of example, to show the nature of those other circumstances which will justify the court in departing from the ge

neral rule.

In the present case there are no such other circumstances as come within the intention of the legislature ; nothing like the examples which they have stated.

The act of assembly is founded upon the idea that every contract for the payment of current money made within the period described, is to be considered prima facie, a contract for the payment of paper money. This idea is founded in reason, because during that period it was almost the only circulating medium. Gold and silver were scarcely known.

But if the 5th section was intended for the benefit of creditors, as well as debtors, still it authorises the court to interfere only in cases attended with extraordinary circumstances. No such circumstances appear in the present case. It was an ordinary and a common contract not differing from the great mass of cases which the legislature intended to subject to the operation of the scale.

At the time when this contract was made, May, 1779, the parties could have had no idea of a scale of depreciation. It was even in a manner criminal to doubt the faith of the money. It might have appreciated until it gained the par of, gold and silver. It was therefore natural that they should have had an expectation that the rents would at some future time be payable in specie. Such must also have been the expectation of all those who made contracts for the payment of current money at distant future periods, and therefore that circumstance cannot vary this case from all others where the money was to be paid in future. The injury arising from that expectation was the very evil which the Legislature intended to guard against.

Argument, for the Appellee.

1. This case is not within the letter or the spirit of the 2d section of the act.

2. It is within the 5th section.

1. It is not within the spirit or ietter of the 2d sertion.