Court Opinion

ID: 5461155
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:36:53.803703+00
Date Added: 2024-06-11T08:32:53.481554
License: Public Domain

G-rover, P. J.
(dessenting.) The importance of the principle involved in the present case calls for a brief statement of the reasons which' have led my mind to a different result ■ from that arrived at by my associates. In the first place, it is proper to consider the first position assumed by the counsel of the appellant. That position is, that by the plaintiff’s neglect to appoint a place in the city of Hew York at which payment should be made, the officers of the City Bank in said city became, by the provisions of the contract, the agent of the plaintiff to receive payment thereon, and credit, the same to the plaintiff upon the books of the bank, and that, therefore, any thing received and credited by the bank officers as cash, operated as payment upon the mortgage the same as though received by the plaintiff. The only authority that it is pretended the officers had, was conferred by the contract and default of the plaintiff in appointing another place of payinent. The contract, in that event, provides that, such *635payment, that is the payment called for by the contract, may be made to the City Bank of New York and credited to the plaintiff. It will be seen that no authority is conferred upon the bank officers- to modify the contract in any respect, but only to receive the payment specified in the. contract, and credit the same to the plaintiff. In this way only could they effect a satisfaction of the contract and a discharge of the plaintiff’s lien. Had the bank officers received bonds of any. of the states or of the United States and credited the same in kind to the plaintiff, it would hardly have been contended that it would have operated as payment of the plaintiff’s mortgage; yet the principle of the. counsel’s position is, I think, the same. If the plaintiff, by the contract, could only be paid in gold and silver coin, lawful. money of the United States, he was entitled to have a credit for such coin by the bank, so that he could compel the bank to pay such coin to him. I think if the plaintiff (upon the assumption that the defendant could only be paid in coin) had procured the City Bank to credit the plaintiff with coin so as to render itself- liable to the plaintiff therefor, he would have discharged the obligation to the plaintiff irrespective of the consideration received by the bank for such credit. The defendant procured no such credit by the bank to the plaintiff. This brings us to the important question in the case, which is: “Can the defendant compel the plaintiff to accept payment upon the contract in the present case, in United States lawful tender notes ?” If he can, the judgment appealed from is erroneous, and should be reversed. If not, it is correct and should be affirmed with costs. The first proposition to.be determined, obviously, is whether the various acts of congress declaring treasury notes a lawful tender in payment of all private debts are constitutional and valid; and whether if such acts áre constitutional and valid, they are applicable to contracts made previous to their passage by congress. These questions have been decided against the plaintiff by the Court of Appeals in Meyer v. Roosevelt, (27. N. Y., Rep. 400.) It is *636clear that it is the duty of this Court, in its judicial action, to regard the doctrine held in that case as the law of the land, until reversed by that Court or by the Supreme Court of the United States, although as individuals we might regard the decision as based upon entirely mistaken views of the legislative powers conferred by the constitution upon Congress. The doctrine must at present be regarded as settled, that all private debts, no matter when contracted, if payable in money, without any specification as to kind, may, at the option of the debtor, be paid in lawful tender, government notes, pursuant to the act of congress. The Court of Appeals have, in the case decided, gone to this extent, but not beyond. An examination of the various acts of congress upon the subject of the currency will show that at present we have several kinds of money, all of which are lawful tender in the payment of debts generally. This money consists of the gold coinage of the country of various dates, differing slightly in value, of similar silver coinage varying somewhat in value, and of United States treasury notes, made by act of congress lawful tender in payment of private debts. It is scarcely necessary to remark that the difference in value between the various coinages of gold and silver is wholly attributable to the different quantities of those metals contained in pieces of the same denomination, as it is self evident that gold and silver can not fluctuate in value when compared with the same metal. The fact of this difference in value between coinages of different dates, containing different quantities of the precious metals, proves, (if any proof was wanting,) that the value is intrinsic, and but slightly affected by the stamp of the government, and the fiat of government making it a lawful tender in payment of private or public debts. It is equally evident that the value of the lawful tender government notes is substantially independent of the act of the government declaring them a lawful tender in payment of debts private, and of some public debts. That value depends to a very limited extent, indeed, upon the lawful *637tender quality, but upon the intrinsic value of the notes. That value is the credit of the government that has undertaken to redeem them. It was an ingenious "contrivance making them lawful tender. The effect was, as might readily have been, and by the contrivers was foreseen, to make the government credit the standard of all other values, and thus preserve that credit at apparent par through all the vicissitudes of a long and exhausting war. This was the advantage derived therefrom. It is wholly unnecessary to advert to the evils, if any, as such have no bearing upon the question under consideration. Making this government credit the standard, created great apparent fluctuations in values of every thing else. . Thus gold and silver coin at times, when government credit was high, was at a slight premium as it was called, and in dark hours. when such credit was greatly depressed, it was at a premium of one hundred and eighty, that is, two hundred and eighty of paper was but the equivalent of one hundred of gold. The fluctuation in other commodities was great, but perhaps not equally so, as other elements, to some extent, always affect the price of the latter more or less. This apparent premium upon gold and silver was in reality nothing but the depreciation of the government paper. The question in the present case is, whether parties may in their contracts protect themselves from this depreciation. In other words, whether a man in selling real estate upon a long credit, can, under existing law, protect himself from this depreciation without renouncing all benefit of the coinage, to determine the quantity and fineness of the metal he is to receive in payment. If he can, it must be done, as in the present case, by providing in the contract for payment of a given sum in gold or silver coin. Why may not parties so contract-? Is there any thing unlawful or against public policy in such contracts ? The law provides all the kinds of currency. It makes all a lawful tender in the payment of debts. It follows, it is equally as lawful to deal in one kind of currency as another. Con*638gress has not made dealing in gold or silver coin as a medium of payment unlawful. Hence the advocates of the omnipotency of congress over the question of. currency and lawful tender need not be alarmed at this doctrine; parties having the legal right, in their dealing, to protect themselves against the fluctuation of one kind of currency by providing that payment shall be made in one more stable. The next inquiry is whether these parties did so provide in their contract ? The language in the contract is, for the payment of $1800 in gold or silver coin, lawful money of the United States. This language requires no construction; it can be made no plainer. The counsel for the appellant insists that this can can not be so, for the reason that at the date of the contract no one could have anticipated the making of government notes or any thing but gold and silver coins lawful tender, and that it was therefore a meaningless provision in the contract. The answer to this is, that every one is presumed to know the law of the land in which he resides and transacts business. The constitution of the United States is the supreme law, and these parties must be presumed to have known as well as the present Chief Justice of the United States, that congress possesssed plenary power to make any thing lawful tender which in their opinion might promote the welfare of the country, and that they might lawfully in the exercise of such power, make some lawful tender, which, before the expiration of the credit, would be worth but forty cents on the dollar in gold and silver coin, and that the clause was inserted to protect the plaintiff against such risks. The remaining question is, “whether the contract being lawful, the courts of either law or equity can enforce it so as to effectuate justice between the parties ?” This question must be answered in the affirmative, or it is a reproach upon the law. I know the mind is at first startled by the novelty of the various questions that present themselves. It at once inquires, can a paper dollar, which the- law declares shall be a lawful tender for one dollar, be legally regarded as worth *639less ? Can a gold dollar which the same law declares a lawful tender for a dollar, be legally regarded as worth more ? Can the law recognize a difference in the value of dollars ? These are questions not settled by judicial decision. I say not settled, for the reason that although 'there have been, since 1862, some decisions of courts upon each side, yet there is nothing that prevents the questions being considered entirely original and to be settled upon principle.
In considering these questions, it is necessary to consider what constitutes value. Does this consist' solely of utility in paying debts ? Is its measure to be determined by the answer to the inquiry for how much is it a lawful tender ? If so, wheat has no value, or any of the real and personal property of the country, except the currency made legal tender by law. What is the measure of value ? It is, and must for all commercial and legal purposes, be the amounts of the least valuable lawful tender it will command. An examination of the acts will show that congress has not attempted to determine any value as intrinsically inherent in currency. They have only provided for how much it shall constitute legal tender. We have already seen that all the kinds of currency have an intrinsic value wholly independent of their lawful tender qualities. There have been times when a gold dollar was worth two and eighty-hundreths paper dollars, although the gold dollar was lawful tender but for a dollar, and the paper equivalent for $2.-ñftr.' Of course, this difference is entirely independent of the lawful tender qualities of either. This intrinsic value congress has not attempted to interfere with. I say this to show I am not trenching upon the principles of the strongest advocates of congressional power. I concede, in the fullest manner, that under the decision of the Court of Appeals the paper is lawful tender, and that every dollar will cancel a debt of one dollar, and .that the gold dollars will, as tender, go no further than the paper; but for other purposes, but few are so ignorant at this day as not to know that their respective values are *640widely different, which congress has in no respect attempted to interfere with. What difficulty is there in the way of the courts recognizing this difference in value for purposes other than lawful tender ? Congress has created none, the state legislature has interposed none, and I am right sure that no maxim of the common law, (the perfection of human reason,) will be found in the way. What legerdemain compels courts to ignore in their judgments facts as patent as the meridian sun? I think it clear that courts not only may, but are bound in duty to recognize and act judicially upon the difference. They must do so or utterly fail in administering justice. Surely, had a man borrowed one hundred dollars in gold coin at the time the tender in the present case was made, and agreed to repay it the next day in similar coin, and had taken forty dollars of the coin and had purchased therewith one hundred dollars lawful tender notes and tendered the same to the lender, the law would not adjudge the borrower to have performed his contract and dismiss him from court with costs on the ground that the lender was making a false clamor against him. But how can a court of law furnish an adequate remedy for the breach of a contract to pay in currency of a particular kind ? That question is not directly in the present case, but if law can redress such an injury, much more can equity, where it has cognizance. It has heretofore been considered the glory of the common law, that its principles required the application of right reason to new cases as they arise. By so doing, justice is surely attained between litigants. By a failure so to do and adhering to technical reasoning—that yóu can not recognize and act upon truths known to everybody—right is defeated, the law becomes impotent, and it may truly be' said, by modern probity, if any, justice has fallen in the streets and equity can not enter the courts. The remedy in courts of law for breaches of contract is an award of damages equivalent to the loss occasioned by the breach. The process is the same when the breach consists in failing to deliver - or pay coin, as it is in fixing *641damages in any other case. The lawful tender of least intrinsic value is taken as the standard, and a sufficient amount of this awarded to the injured party to make good the loss sustained by the breach. This is done in all cases of awarding damages for breach of contract. If the action is for breach of any contract to deliver property, the damages are uniformly assessed in the lawful tender of least intrinsic value. That this was the only course to administer justice was so obvious that it was adopted universally without discussion and, almost without consciousness that such a rule was acted on. Ho one ever heard, when the question was as to value of a horse, when the gold dollar was worth two in paper, that damages were assessed upon the gold basis; and yet the same complaint would be equally applicable to all such assessments as is now urged against applying the same rate to cases where the contract is to pay in coin. That complaint is that, by a diminution of the premium on gold, or what I regard as the same thing, an appreciation in the value of public credit, which of course increases the intrinsic value of paper after judgment, the creditor will receive too much. To this it may be answered, that it is equally probable that he will lose by an increase of the premium. The chance of gain or loss is inseparable from the use of lawful tender money of constantly fluctuating intrinsic value. The ignorant believe that it is gold and silver that fluctuates, and that paper is uniform in value; and I think, from their reasoning, that some judges are possessed with that idea. I regard the point too clear to require argument. The debtor can always protect himself from any such loss by prompt payment. It is a great mistake to suppose that the lawful tender paper is in fact of equal value in the payment of debts with gold coin. A man owing $12,000, and having all his property in lawful tender paper amounting to $10,000, is insolvent. The same debtor having the same amount of gold coin can now, by exchanging coin for paper, pay every cent and have something left, and there have been times when his balance would have been *642more than the whole debt owing. It is a legal fiction, contrary to a universally known truth, that paper made lawful tender'by congress is of equal value, with gold coin in the payment of debts. There may have been debtors of that stern integrity who, having received the consideration upon a gold basis, have felt it their duty to pay the debt in something of equivalent value; but I feel sure that there never was one, fool enough to act upon the belief, when gold was at a premium, that gold was of no more value than paper to pay debts, and for that reason to pay his debts in coin. The case is now presented of the country having different kinds of lawful tender money,' differing widely in their intrinsic value. My conclusion is that it is entirely lawful for parties to contract for payment'in any specific kind of this currency, and that when they have so contracted, the rules of law enable, and those of justice require, the court to enforce such contracts and afford adequate redress in case of breach, the same as any other lawful contracts ; and they must do this or there is a failure of justice occasioned by the impotency of the common law, a reproach to which I think that system of jurisprudence not subject.
A point not in this case was somewhat discussed—that is, whether the time of the breach of the contract, or of the trial, was to be taken for the assessment of damages. I think right reason requires that of the trial to be adopted. I am aware that the time of breach is the time at which damages upon contracts generally are assessed. That, in such cases, works out justice. The object is effected by giving an adequate compensation for the injury. In most such cases, the value of commodities change, and therefore value at the time of breach is more likely in the great mass of cases to afford just redress; but when the question is between gold and silver coin and lawful tender paper, the value of the coin does ' not change, that of the paper does. The party injured is entitled to his coin and interest at the time of trial. This precisely compensates his injury, neither less or more. I have *643hitherto considered the present as a case at law; I have not, however, fallen into the mistaken idea that it is so in fact. It is a case where the plaintiff applies for the exercise of equity jurisdiction in his behalf. It is the settled maxim that he is not entitled to this unless equity and good conscience require it. What equity has a man, who, for an adequate consideration, has agreed to pay gold or silver coin and has tendered something of four tenths of the value thereof, as performance ? I can see none. I regard the conscience as any thing but good that will permit its possessor to borrow gold coin and contract to repay in similar coin, and then attempt to discharge the obligation with- the same normal amount of lawful tender notes, worth less than half as much as the coin. Should the government attempt to pay in depreciated paper, debts agreed to be paid in coin, every right thinking man would pronounce its conduct infamous. And will courts of justice pronounce similar conduct of individuals agreeable to equity and good conscience ? I can not so regard it. This is the most important commercial question considered in the courts of this state, except that of the constitutional power of congress to make paper a lawful tender in the payment of debts. The effect of settling the law so that parties can by contract protect themselves from the fluctuating intrinsic value of government paper, can scarcely be appreciated. I regard it fortunate that the question is to be decided in a time of peace, when it can be calmly considered, uninfluenced by any fear .that a decision either way, may be disastrous to the government. The judgment appealed from should be affirmed.
[Erie General Term,
May 7, 1866,
Judgment of the special term reversed, and judgment directed for the plaintiff, adjudging the mortgage paid, and that it be satisfied of, record.
Davis, Grover, Marvin and Daniels, Justices,]