Galliano v. Leon Pierre & Co.

Court: Supreme Court of Louisiana
Date filed: 1866-01-15
Citations: 18 La. Ann. 10
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Lead Opinion
InsLEY, J.

The present action was instituted by the master of theSardinian brig Nuestra Señora Del Buen Camino, against the defendants, to recover from them, in gold, either coined or native, the sum of thirteen hundred and ninety-nine dollars and forty-four cents, for freight of certain merchandize, shipped in the port of Havana, on the said brig, by one Louis Petit, the charterer thereof, and consigned to the defendants in New Orleans.

The plaintiff also claims the additional sum of eight hundred dollars in gold, being the stipulated penalty for non-compliance with the contract of charter party, and interest thereon from the 20th October, 1862, with Special privilege on the property sequestered.

The defendant excepted to the plaintiff’s right of action for want of alleged interest in the claim sued for, and because ho is not. the agent of the owners of the brig, and has no authority or power to prosecute the suit, and has not given the names of his constituents, the real plaintiffs in interest, as such. This exception was overruled by the Court below, but, as our attention is not specially called to the exception, we presume it is waived.

No objection is made to the plaintiff’s claim for freight, as to amount, but the defendants contend that they arc only bound by the bills of lading, and not by the charter party; and that what they do owe, is onlyexigible in the national currency of the United States (treasury notes), which they have offered to pay.

This case must be goverened by the law of Louisiana, for, although the contract of affreightment was entered into in Havana, it was, by its terms, to be executed here. See the case of Beirne v. Patton, 16 L. 589.

As a general rule, the validity and effect of a contract are to be determined by the law of the place where it was made; if it is valid there, it is, under the general law of nations, valid everywhere, by the implied consent of the parties. C. C. 10; Groves et al v. Nutt and wife, 13 A. 117.

But the rule is subject to the exception that no nation is bound to recognize or enforce contracts injurious to its own citizens or subjects ; and the enforcement, by one nation, of contracts made under the laws of another, rests on a principio of comity, which cannot be so far extended.

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as to violate the positive legislation of the former. Mary v. Brown, 5 A. 269.

Yiewed, then, as a local contract, it is, we think, immaterial whether the defendants’ obligation is to be controlled by the charter party or by the bills of lading. Whether by agreement it' is to be satisfied in one-species of currency or in another, it is sufficient reason for courts which recognize the laws of the United States as paramount, to refrain from specifying, in their judgments, in what particular kind of currency moneyed obligations are to be satisfied.

United States treasury notes, by the act of Congress of 25th February, 1862, are not only made money, but they are a lawful tender for all species of debts, private as well as public, with some exceptions in the latter; and, were courts to decide that nothing but one kind of currency, whether metallic or paper, should be received in satisfaction of their judgments, they, would thus, by sustaining agreements to that effect, over-ride and disregard the very letter of the law.

In some of our sister States, the question now under investigation is-no longer an open one, either as to the constitutionality of the law above referred to, which we shall not question, or to the practical operation of the legal tender act.

In the Supreme Court of Michigan, in the case of Buchegger v. Schultz, very lately decided and not yet reported, the whole subject -involved in the present inquiry underwent a very careful and critical examination; and, as the view we entertain is therein upheld with great clearness and logical accuracy, we refer to*it, as an exposition of the law, applicable to the present case.

The action alluded to was on a note given in 1862, for the sum of eight hundred dollars, of which, five hundred were to be paid in gold. The contract was proved, as also the fact that, at the time of the trial, gold was worth a premium of fifty per cent, in treasury legal tender notes ; and judgment was rendered by the Circuit Judge against the defendant, computed upon that basis.

The ruling of the Supreme Court, on the ajDpeal, was to the following effect:

1. That a contract for a certain number of “dollars," though stipulated to be paid in gold, is not a contract for gold as bullion or merchandize, but as money, and, therefore, j>ayable in any lawful money.

2. The acts of Congress, called the legal tender acts, do not merely confer a privilege on debtors for their benefit, but are measures of public policy, and the right under them to pay in any lawful money, cannot be waived, even by express consent. ' -

3. The measure of damages for non-performance to pay money, is the number of legal dollars, without regard to the stipulations, as to the kind of money by which the contract is to be discharged.

The correctness of the conclusion reached by the Court, that a contract for a delivery of so much gold in bullion, or by the ounce, or other quan

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tity, must not be confounded with, one for the payment of so many dollars in coin from that metal, is so palpably evident as to need no argument to support it, and it is, therefore, needless for us to dwell longer on this point.

In support of the doctrine taught in the second point, the Court remarks :

Before the passage of the legal tender 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 supposed to make their contracts in reference to the existing law, all prior contracts were to be construed precisely as 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 specific amount, we are, unable to see why a contract which includes this 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 chiefly to confer upon debtors a privilege, there would be force in an argument that the class to be benefitted might waive the privilege of stipulation in their contracts. But these laws are also based in a great measure upon reasons of State policy, which, sometimes, to a considerable degree, control and disregard individual interest.

The act in question was based exclusively upon reasons of a public character, which, in the opinion of the law-making power, imperatively demanded that treasury notes should be made equal in legal value to coin; and parties have no more right to stipulate that their 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 the national law, which, as respects the 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 dues. 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 has no bearing upon the question when presented to the Courts, which 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 sever'al species of money, to prevent fluctuations in their relative market values, 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 that their legal value shall be the same.

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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 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 a stipulated amount in gold, cannot possibly exceed that amount 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.

It is unnecessary to determine how such a stipulation, if made in a contract having a date anterior to that of the legal tender act, would be affected by that act; and whether it were competent for Congress to pass a law which would violate the obligation of a contract. It suffices, in this case, that the contract was passed whilst the statute alluded to was in force; and, to give it the effect claimed for it by the plaintiff, would virtually be to make the law yield to the contract, and not the contract to the law.

For reasons, different from those assigned by the Judge of the lower Court, we affirm the judgment rendered by him.

It is therefore ordered, adjudged and decreed, that the judgment of the lower Court be affirmed, and that the .plaintiff and appellant pay the costs of appeal.

Howniiii, J., recused.