Court Opinion

ID: 9443080
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:10:27.758397+00
Date Added: 2024-06-11T17:29:22.038712
License: Public Domain

RIVES, Circuit Judge
(dissenting).
By invoking the law’s delay, defending and ultimately losing this suit, the defendant has gained more than eight thousand dollars, and the plaintiff has lost a like amount, nearly half of its claim.
Whether Deutsche Bank Filiale Nurnberg v. Humphrey, 272 U.S. 517, 47 S.Ct. 166, 71 L.Ed. 383, actually does necessitate such an unjust result is a question requiring the most searching consideration. That was a five to four decision with majority opinion by Justice Holmes, and a strong dissenting opinion by Justice Sutherland. Only one year earlier Justice Holmes had written the opinion in Hicks v. Guinness, 269 U.S. 71, 46 S.Ct. 46, 70 L.Ed. 168, for a unanimous Court, except that Justice Stone took no part in the case. The basis upon which the Deutsche Bank case rests is indicated by Justice Holmes in drawing the distinction between that case and Hicks v. Guinness:1 “In this case, unlike Hicks v. Guinness, 269 U.S. 71, 46 S.Ct. 46, 70 L.Ed. 168, at the date of the demand the German Bank owed no duty to the plaintiff under our law. It was not subject to our jurisdiction and the only liability that it incurred by its failure to pay was that which the German law might impose. It has incurred no additional or other one since. A suit in this country is based upon an obligation existing under the foreign law *964at the time when the suit is brought, and the obligation is not enlarged by the fact that the creditor happens to be able to catch his debtor here.” 272 U.S. 517, 518— 519, 47 S.Ct. 166.
The same thought was emphasized by the concluding sentence of the majority opinion: “Here we are lending our Courts to enforce an obligation (as we should put it, to pay damages,) arising from German law alone and ought to enforce no greater obligation than exists by that law at the moment when the suit is brought.” 272 U.S. 517, 520, 47 S.Ct. 166, 167.
The relief granted by the courts of this Country on an obligation existing under German law alone was to be exactly the same as the relief that would have been afforded by the courts of Germany if the suit had been brought there. When the Deutsche Bank failed to pay the deposit on demand it was not subject to our jurisdiction, and Justice Holmes carefully pointed out that the Bank “hag incurred no additional or other one (liability) since.”
In the case at bar, the defendant was subject throughout to.the jurisdiction of the courts of this country for he was a resident of and operated his business in McAllen, Hidalgo County, Texas. From that place he wrote and mailed to the plaintiff a letter repudiating his contract. The plaintiff, before instituting suit, prepared a detailed statement of the damages it had suffered and demanded payment thereof from the defendant, but the defendant refused. The defendant was still in Texas and that is where the demand and refusal took place. It may be that the plaintiff could have recovered its damages without a prior demand, but nevertheless the defendant owed a duty where the demand was made to pay what the plaintiff was due.
The place where the contract was entered into and was to be performed is not controlling because, prior to the institution of this suit, the contract had been terminated by the defendant’s repudiation and breach thereof. The defendant should not be heard to say that if he had performed his contract he would have paid in Mexican currency, for he did not perform; instead; he repudiated and broke his contract. It then became necessary for the plaintiff to search out the defendant in his home state of Texas, demand redress, and upon refusal, to sue in the federal court in Texas where the judgment must be in dollars and not in pesos.2 The plaintiff’s suit was not to enforce the contract, not for specific performance, not as iii the Deutsche Bank case for money on deposit, but the plaintiff’s suit was for the defendant’s breach of his contract and his refusal on demand to pay the damages suffered by plaintiff from such breach.3
In Hicks v. Guinness, supra, there was a legal duty owed in this Country because the debt was payable in the United States. In the case at bar there was a legal duty owed in this Country because the defendant was in Texas when he repudiated his contract, and was still there when he refused on demand to pay the consequent damages. It seems to me that instead of being controlled by the Deutsche Bank case, this case should be decided in accordance with the following principles stated by Justice Holmes in Hicks v. Guinness: “The debt was due to an American creditor and was to be paid in the United States. When the contract was broken by a failure to pay, the American firm had a claim here, not for the debt, but, at its option, for damages in dollars. It no longer could be compelled to accept marks. It had a right to say to the debtors You are too late to perform what you have promised and we want the dollars to which we have a right by the law here in force. Gould v. Banks, 8 Wend., N.Y., 562, 567. The event has come to pass upon which your liability becomes absolute as fixed by law. Globe Refining Co. v. Landa Cotton Oil Co., 190 U. S. 540, 543, 23 S.Ct. 754, 47 L.Ed. 1171. *965There is no doubt that this rule prevails in actions for a tort, Preston v. Prather, 137 U.S. 604, 11 S.Ct. 162, 34 L.Ed. 788, and in actions for the failure to deliver merchandise. Hopkins v. Lee, 6 Wheat. 109, 5 L.Ed. 218, The principle is the same in a contract for the payment of marks. The loss for which the plaintiff is entitled to' be indemnified is ‘the loss of what the contractor would have had if the contract had been performed,’ Chicago, Milwaukee & St. Paul Ry. Co. v. McCaull-Dinsmore Co., 253 U.S. 97, 100, 40 S.Ct. 504, 64 L.Ed. 801, it happens at the moment when the contract is broken, just as it does when a tort is committed, and the plaintiff’s claim is for the amount of that loss valued in money at that time. The inconveniences and speculations that would be the result of a different rule have been pointed out in arguments and decisions, and on the other hand the momentary interest of the country of the forum may be in favor of taking the date of the judgment, but the conclusion to which we come seems to us to flow from fundamental theory and not to need other support.” 269 U.S. 71, 80, 46 S.Ct. 46, 47.
Also in Sutherland v. Mayer, 271 U.S. 272, 295, 46 S.Ct. 538, 543, 70 L.Ed. 943, the Court held that “ * * * the exchange value of marks in American money is to be taken as of the time when commercial intercourse, and therefore settlement, first became lawful, rather than at the time of the accounting * * *
I therefore respectfully dissent.
Rehearing denied; Rives, C. J., dissents.

. In the subsequent case of Zimmermann v. Sutherland, 274 U.S. 253, 255, 256, 47 S.Ct. 625, 71 L.Ed. 1034, Justice Holmes again distinguished the two cases as follows : “The distinction between the Deutsche Bank Case and Hicks v. Guinness, 269 U.S. 71, 46 S.Ct. 46, 70 L.Ed. 168, is not, as argued, that the plaintiff in Hicks v. Guinness was in the United States, but that, as the court understood the facts, the debt was payable in New York and subject to American law, so that upon a breach of the contract there arose a present liability in dollars.”

. Frontera Transportation Co. v. Abaunza, 5 Cir., 271 F. 199, 202; Shaw, Savill, Albion & Co. v. The Fredericksburg, 2 Cir., 189 F.2d 952, 954; 5 Williston on Contracts, Revised Edition, page 3927.

. After the defendant’s breach of contract had given rise to plaintiff’s cause of action, plaintiff’s rights could not be affected by any subsequent offer of the defendant to perform by paying in pesos. Lima Locomotive & Machine Co. v. National Steel Castings Co., 6 Cir., 155 F. 77, 11 L.R.A.,N.S., 713; 12 Am.Jur. 966, Contracts, sec. 388.