Buchegger v. Shultz

Cooley J.

Shultz sued Buehegger upon a note given in 1862 for the sum of eight hundred dollars, of which five hundred dollars was to be paid in gold. The Circuit Judge admitted- evidence to show that the ,note was given for money loaned, five hundred dollars of which was in gold, and was agreed to ' be repaid in like money. He also allowed the plaintiff to show that at the time of the trial gold was worth a premium of fifty per cent, in treasury legal tender notes, and rendered judgment against the defendant, computed upon that basis.

The constitutionality of the Legal Tender Act (so called) is not disputed by counsel; hut it is insisted that gold coin, though money, is also an article of traffic in which parties may deal as with other merchandise. And it is also urged that, regarding it as money merely, there is nothing in the law preventing the borrower from *421Stipulating -for its re-payment in kind, and that when he does so he waives, by his contract, the privilege which the statute allows of payment in a depreciated currency, and becomes liable to pay such damages as the other party actually sustains.

As to the first point, it is to. be observed that the contract before us is not for the delivery of gold, in bullion or by the oirnce, or other quantity, but for’ the payment of so many dollars. It is plain, that by it the parties have not undertaken to deal with the gold as merchandise, but as money. We "recognize fully the faet that gold, as an article of traffic, has its value regulated by the supply and demand, and when dealt in as a, metal simply, the laws respecting moneys and legal tenders do not affect the contracts. But when parties undertake to provide for the payment of their debts in, money, their •, contracts are necessarily made subject to the laws of the country prescribing what is money, and also what shall be the legal equivalent for the specific payment which they may have promised. While, therefore, the considerations which have been urged can have no bearing upon this case, neither is the conclusion we have arrived at to be regarded as questioning the validity of such "contracts for gold as we have alluded to.

And it seems to 'US difficult to press the second point with any force, without at the same time, .assailing the legal Tender Act as unconstitutional. Before the passage of that act, all contracts for the payment of dollars generally were payable in gold and silver, because, by the-statutes then in force, coin from those metals could alone, be lawfully tendered in payment; and as parties, are sup posed to make their contracts in reference to the existing law, all prior contracts were to be construed precisely ag. if the words “payable in gold and silver coin” were incorporated therein. And if all such contracts may now be discharged by legal tender notes to the specified. *422amount, we ave unable to see why a contract which includes tins stipulation in its terms is not subject to be discharged in the same way.

The rules which govern this case seem to us few ■and simple. If legal tender laws were designed simply to confer upon debtors a privilege, there would be force in an argument that the class to be benefited might waive the privilege by stipulation in their contracts. But these laws are also based in great measure upon reasons of State policy, which sometimes, to a considerable degree, override and disregard individual interests. The act in question was based exclusively upon reasons ■of a 'public character, which, in the opinion of the lawmaking power, imperatively demanded that treasury notes should be made ■ equal in legal value to coin, and parties have no more right to stipulate that them contracts shall ‘not be governed by it, than those of a particular locality have to agree among themselves that this, or any other law passed by the competent authority, shall not be in force- in such locality.

What shall constitute a dollar in money is fixed by national law, which, as respects this subject, is supreme. The Legal Tender Act not only made treasury notes money, but it made them a lawful tender for all private as well as most public debts. In doing so, it made these notes the legal equivalent for gold and silver coin to the same nominal amount. It • is true that at the •stock boards a difference is recognized, and that the holder of the coin may command a premium for it ’in notes; but this fact lias, no bearing upon the question when presented to the Courts, who must be governed by the law, if it has been enacted by competent authority. Moreover, gold and silver coin are seldom of equal value at the stock boards; and it is impossible for any law fixing a like legal value upon several species of money, to prevent fluctuations in them relative' market *423values, caused by circumstances which no legislation can control. But these circumstances do not authorize the Courts to recognize a distinction between gold and silver, or gold and treasury notes, when the paramount authority has declared their legal value shall be the same.

Assuming, now, that the stipulation for the payment of five hundred of the eight hundred dollars, in gold, is legally binding on the promissor, what is the measure of damages for a failure to fulfill the piomise? The Courts have no power to render a judgment payable in' one species of money only; and, therefore, a judgment rendered upon a note payable in gold cannot be made payable in gold only, but must be for the payment of so many dollars, without specifying the kind. But if it is to be for the payment of dollars generally, then it can be rendered only for the number of dollars mentioned in the note, and interest thereon, since one dollar is legally just as valuable as any other dollar. The legal damages for- a failure to pay five hundred dollars in gold cannot possibly exceed five hundred dollars in any lawful currency ; and when a Court .renders . judgment for ¡any greater damages upon such a contract, it sets aside and disregards the Legal Tender Act altogether.

In the case before us, the Court has not only adjudged one dollar to be worth fifty per cent, more than another dollar, but it has assumed as the basis of its action that its judgment was payable in depreciated currency; whereas' it is payable only in lawful money, whatever that may be. It is no more payable in treasury notes than in gold or silver; and although it may be reasonable to expect that the judgment debtor will pay- in that which he can easiest command, there is no law which authorizes a Court to , act upon that expectation in rendering its judgments. And '.whether the debtor will pay in one or the other will depend upon the law .and the relative value, not when the judgment was rendered, but when *424payment is made. Congress may at any time repeal the Legal Tender Act; and if it had done so the day after the rendition of this judgment, the defendant would have been liable to pay it in coin, at the rate of one. dollar and fifty cents for each dollar of the coin borrowed, although the judgment was rendered as if there were a legal and fixed right to pay in notes. All contracts for the payment of money are subject to such change in the laws respecting the currency as may he made from time to time by the sovereign power; and the hardships which result are hardships from which Courts have no power to relieve.

The Court below erred in rendering judgment for more than the eight hundred dollars and interest. The judgment must he reversed, with costs, aud a new trial ordered.

The other Justices concurred.