Court Opinion

ID: 9442895
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:02:51.438044+00
Date Added: 2024-06-11T17:29:16.308143
License: Public Domain

SWAN, Circuit Judge,
dissenting.
I am not convinced that we are bound by controlling authority to accept the judgment date, rather than the date of the tort, to determine the rate of exchange to be applied in converting pounds into dollars; nor do I agree with my brothers’ view that the judgment-day rule yields a just result in this case.
Die Deutsche Bank Fialiale Nurnberg v. Humphrey, 272 U.S. 517, 47 S.Ct. 166, 167, 71 L.Ed. 383, which my brothers think controlling, was an action to recover damages for breach of a contract by a German bank to pay marks in Germany on demand. The lower courts held that the debt should be translated into dollars at the rate of exchange existing when the demand was made. Writing for the court Mr. Justice Holmes said that the liability was to pay marks “and was open to satisfaction by the payment of that number of marks, at any time, with whatever interest might have accrued, however much the mark might have .fallen in value as compared with other things.” His opinion concluded: “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.” Commentators and lower court decisions are agreed that the reference to “the moment when the suit was brought” was an inadvertence and what was meant was the moment of judgment. This is the source of the judgment-day rule applied by my brothers. The theory of the rule, as I understand it, is that our judgment should be for an amount neither greater nor less but just equal to that which would be rendered under the foreign law. Under the English law, in case of a collision on the high seas, it is held that damages stated in foreign currency (Italian lire) should be converted into sterling at the rate of exchange existing at the date of the loss, i. e. the date of the tort. Celia v. Volturno, 1921, 2 A.C. 554. Had that collision occurred in British territorial waters rather than on the high seas, I cannot conceive that the rule as to the date for converting foreign currency into sterling would have been different. In the case at bar, due to the war, the repairs had to be made in the United States. Todd’s bill was paid in dollars, which the British Ministry of War Transport converted into pounds at the rate of $4.025, the rate at the date of the tort as well as at the date of conversion, and pounds were then collected from the libellant. The rate of exchange at which the dollars to pay Todd’s bill were purchased, was one of the elements of the libellant’s damages. In my opinion the same rate should be used when the pounds paid by the libellant are converted back into dollars in the court’s decree. No authority has been cited to support converting at one rate and reconverting at another. If a change in the rate of exchange must result in a windfall for one of the parties, it seems to me fairer to let the injured party benefit rather than the tort-feasor. An additional reason why this seems fair in the case at bar is that the $4.025 rate was still in effect when the parties agreed to settle the suit and when the partial payment of $100,000 was made. I would reverse the decree and direct recomputation of the amount.