Source: https://supreme.justia.com/cases/federal/us/195/510/
Timestamp: 2019-04-22 08:19:35+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 195 › San Juan v. St. John's Gas Co., Ltd.
Under both the common and the civil law, in the absence of a stipulation to the contrary, the character of the money current at the time fixed for performance of, and not at the time of making, a contract is the medium in which payment may be made.
sum, although accepted in full satisfaction of a larger liquidated amount, is not binding as to the excess for want of consideration is inapplicable.
of the gold. In addition, the gas company was debited with certain fines imposed and other charges, and was moreover debited in Porto Rican money with two sums aggregating $8,836.88, amounting, if paid in gold, to $5,332.13. These two debits, it was recited in the account, were the sums in Porto Rican money or its equivalent in gold, which the city was bound to pay to the firm of Mullenhoff & Korber, to which firm the gas company, with the consent of the city, had transferred a portion of its claims against the city in Porto Rican money, to be paid in its equivalent in gold. By the result of the debits against the gas company, the items credited to it were extinguished, and the account balanced. Thus, the substantial difference between the two accounts arose from the fact that one stated the debt to be payable in gold or United States money, the other treated it as payable in Porto Rican currency.
Subsequently, the city pleaded that it had paid to Mullenhoff & Korber the sum of $5,196.80 in United States gold, and was entitled to due credit therefor, and it was thereafter agreed between counsel that this amount had been paid under the transfer in question. As will hereafter appear, $4,337.32 of the sum was paid as the equivalent of $7,228.20 in Porto Rican currency, the amount due for street lighting up to June 1, 1900, if estimated in Porto Rico, while the balance of $859.48 was paid as satisfying the charge made for street lighting in the month of June, 1900, also consisting of a larger sum in Porto Rican money.
items embraced in the suit and stated in both accounts, it was undisputedly shown that they were made in United States gold. There was proof tending to show that the city, in making them, insisted that the gold should extinguish its equivalent amount in Porto Rican currency, whilst the company claimed that the payments should only extinguish a sum equal to the face value of the United States gold.
"I, Ramon Negron Flores, Secretary of the City Council of the City of San Juan, hereby certify, that at the meeting held by the City Council of San Juan, on the eighteenth day of this month, the following resolution was passed:"
"20. -- The President of the City Council declared that Mr. Scott, the contractor of the public lighting for the city, and Mr. Korber, a member of the firm of Mullenhoff and Korber of this city, had called on his office and stated that the amount of seven thousand two hundred and twenty-eight pesos and eighty-seven cents, Porto Rican currency, total amount of the credit due to Mr. Scott, on account of his services as contractor from November of the year one thousand eight hundred ninety-nine, to last May, being deducted the amounts already collected by the said contractor, should be delivered to the above said firm, to the credit of which Mr. Scott wishes this amount to be passed."
thirty-seven dollars and thirty-two cents in favor of the firm Mullenhoff & Korber, being therefore the municipal corporation relieved from any compromise with Mr. Scott concerning the said amount, without any prejudice to the resolutions to be passed some time in the future, about the claims previously filed by the said contractor."
"And to begin the respective proceedings, I write and sign this declaration in San Juan of Puerto Rico this twenty-second day of June of the year one thousand nine hundred."
"On twenty-second June, being present Mr. Scott and Mr. Korber, the latter acting as representative of the firm, of which he is a partner, I notified them the above resolution, and they affixed their signature as a proof of their acquiescence to the same, declaring at the same time, that the amount of the account of the month of June of this year should be recognized as due to the same firm, to which the said amount must be paid. I certify it."
"(Signed) (Signed) L. A. Scott"
"San Juan, June 19th, 1900"
"Let it be done. The Mayor, Egozcue."
it provided for payment in foreign money, exclusive of Spanish gold, which was current in the island at the time the contract was made. The court further instructed that the payments made by the City of Mullenhoff & Korber in gold should be debited to the city at the face value of those payments, unless the jury found that the minds of the parties had met on a new contract to substitute Porto Rican currency for the foreign current money stipulated by the contract. The court, moreover, refused the request of the city to charge that, if at the time of the transfer to Mullenhoff & Korber, there was a compromise entered into between the parties by which the payment to the firm of a given amount in United States currency should extinguish a larger amount of the debt due the company in Porto Rican money, that the parties were bound thereby, as to such payment. Besides, the jury were instructed that, as there was no proof concerning the fines imposed by the city upon the company, as stated in the account of the city, such items must be disregarded, and that interest, as calculated in the account of the city, not being exigible under the local law, must also be disregarded.
There was a verdict and judgment thereon against the city for $8,761.35, and this writ of error was prosecuted.
items as to fines charged by the city against the gas company, because no proof was offered on the subject. Whilst it is true, as asserted in the argument, that some reference was made to such fines in the testimony of one or more of the witnesses, such reference in no sense tended to establish that the fines had been legally imposed. As to the assignment of error relating to the refusal of the court to allow testimony for the purpose of showing that, even if, under the contract, payment in foreign current money was required, the contract was tacitly modified, we deem it unnecessary to express an opinion, for the following reasons: the record shows that, subsequent to the ruling complained of, without objection, testimony was admitted establishing that, although all the payments made up to the first of the items embraced in the claim in suit, were made by the city to the gas company in Porto Rican money, nevertheless that such payments were only received by the gas company under protest, asserting its right to be paid in foreign current money. However conclusive on the gas company may have been the receipt by it of payment in a different medium from that which it asserted the contract required, the fact of the protest operated to prevent the inference that the medium actually received was admitted to be the one in which future payments should be made.
With the questions just referred to out of the way, it is apparent from the statement which we have made of the case that the record requires us to decide only two questions: first, in what money were the sums due under the contract payable? and, second, the effect of the agreement concerning payment made by the city to Mullenhorf & Korber.
1st. In what currency were the sums due under the contract payable?
The contract, of which only a translation is in the record, was passed before a notary, and is voluminous, containing in minute detail a recital of all the occurrences which took place from the date of the first steps taken to make a contract, and its consummation.
"The present appraisement amounting to 78,709.10 pesetas, or $31,741.82 of the currency in commerce."
"Porto Rico, 26th of May, 1875"
"will be made in the circulating foreign money in commerce for the value that it is received without any premium that will equalize it to the Spanish official current money,"
$9,000, to be secured by first mortgage on a house in the city, satisfactory to the municipality. Many details were provided in the conditions as to the manner in which the contractor should perform his duties, as to fines to be imposed by the city for neglect in the quality and character of the light furnished, and for various other delinquencies, and it was also provided "the penalties for faults in the service and supply of gas to the public will be imposed by the alcalde without appeal."
"Mr. Steinacher expresses himself disposed to the acquisition of the said buildings, etc., as published in the Official Gazette of the 8th of June last, for the amount of thirty-one thousand seven hundred and forty-one dollars 82 cents in currency, and to take under his charge the public light at three dollars monthly for each lamp at same currency, according to the price published."
and the city under the prior contract, and by this liquidation it was established that Steinacher owed the city $203 in "foreign currency," which he paid. To ascertain whether the value of the houses was equal to the requirements of the city, they were appraised by the city officials in Porto Rican money, and this sum was reduced to foreign currency, and, as the amount in foreign currency equaled the $9,000 required by the conditions of the city, the houses were accepted and a new mortgage for that amount was given. Under these proposals and acceptance, the contract was executed, conforming in all respects to the proposals and bids as modified by the proceedings which we have narrated.
the payments were to be made. The general rule, under both the common and the civil law, is that, in the absence of a stipulation to the contrary, the character of money which is current at the time fixed for performance of a contract is the medium in which payments may be made. Butler v. Horwitz, 7 Wall. 258; Willard v. Tayloe, 8 Wall. 557; Trebilcock v. Wilson, 12 Wall. 687; Commercial Code of Porto Rico, Art. 312; Spanish Civil Code of Porto Rico, Arts. 1091, 1157, 1170; Code Napoleon, Art. 1246; Aubrey & Rau, vol. 4, p. 158; Mourlon, vol. 2, p. 749.
There was therefore error in instructing that the time of making the contract was to be alone considered in determining the foreign current money for which the contract provided. We think, however, such error was in no sense prejudicial. This follows because it was conceded that, if foreign current money was required by the contract, money of the United States current at the time the contract was made was within the contemplation of the parties, and that such money was also current in the island at the time when performance was due. From this it results that the rights of the parties were in no way affected by the erroneous ruling.
2d. The effect of the agreement concerning the payment made by the city to Mullenhoff & Korber.
On the face of the written agreement between the city and the gas company, it undoubtedly appears that a stated sum of money, to be paid in United States currency, was to extinguish a larger sum in Porto Rican money.
at the time should be extinguished by the payment of the lesser amount, the parties were bound. This request was refused and excepted to. The court, in its general charge, in the fullest manner instructed the jury that, as the medium of payment required by the contract was foreign current money, payment in that money extinguished simply the amount paid in foreign money, unless it was found that the minds of the parties had met on an agreement engendering an entirely new contract, substituting Porto Rican money for foreign currency.
It is urged by the city that error to its prejudice resulted from refusing to give the requested instruction. To sustain this proposition, the doctrine is invoked that, where one receives in payment a different thing or medium from that called for in the contract, such receipt is binding. Undoubtedly the general rule obtains, and is based on the premise that the discharge of a contract in a different thing from that for which the contract provides necessarily is an accord and satisfaction as to the particular payment concerning which the different thing is received. Sheehy v. Mandeville, 6 Cranch 263; Very v. Levy, 13 How. 357; Bull v. Bull, 43 Conn. 455; Neal v. Handley, 116 Ill. 418; Dimmick v. Sexton, 125 Pa. 334.
True also is it that it has been settled by this Court, Savage v. United States, 92 U. S. 382, that this doctrine is applicable to the receipt under protest, in discharge of a particular payment, of a different money medium from that which was required by the contract. Whilst we have not been referred to any Spanish authority showing that these principles obtained under the law in force in Porto Rico, as the doctrine rests upon principles known to the Roman law (L. 17, C. De Solut.) enforced under the Code Napoleon (Journal de Palais Repertoire v. 10, verbo paiement, p. 10, No. 117; Toulier, t. 12, p. 355; Duranton, t. 12, Nos. 79 and 80), we cannot hesitate to conclude that the doctrine in question prevailed also in the Spanish civil law in force in Porto Rico. Whether it is applicable to the facts of this case is, then, the question.
"that, where a liquidated sum is due, the payment of a less sum in satisfaction thereof, though accepted as satisfaction, is not binding as such, for want of consideration."
Chicago, M. & St.P. R. Co. v. Clark, 178 U. S. 364, and authorities there cited.
company, although protesting, accepted the city's view of the contract, and, by taking a different medium, bound itself as to those payments despite its protest. When the period arrived when the company was no longer willing to so act, and stood upon its rights as it understood them, naturally the city stood upon its asserted rights, and thus the parties were at arm's length, disputing their respective rights. If there had been no agreement, the solution would have required judicial action. When, in view of this dispute, an agreement was reached that the payment should be made in United States currency, and that the payment should extinguish a larger amount estimated in Porto Rican currency, there was necessarily a compromise and settlement as to that payment which put the transaction so settled exactly in the position which had resulted from the action of the parties concerning the payments made during the preceding period of more than twenty years.
It follows from the foregoing that the court below erred to the prejudice of the city in refusing the instruction asked by it as to the result of the compromise, and that this error was not cured by the general charge, which instructed the jury that the compromise evidenced by the agreement must be treated as inefficacious as to the particular items to which it related unless it was found that the minds of the parties had met on an entirely new and independent contract.
The judgment of the court below is reversed, and the cause is remanded with directions to set aside the judgment, and grant a new trial.

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