Carpentier v. Atherton

25 Cal. 564, 1864 Cal. LEXIS 69

• Court: California Supreme Court
• Decided: July 1, 1864
• Status: Published

Opinions

By the Court, Currey, J.

The defendant made and delivered to the plaintiff his contract in writing, bearing date the 2d of April, 1864, by which, for a valuable consideration, he promised to pay to the plaintiff the sum of five hundred dollars on demand, in United States gold coin. Some time afterwards the plaintiff duly demanded payment of the sum of money due on this contract, in the kind of currency specified therein. The defendant refused to pay in gold coin, but subsequently, and before this action was commenced, tendered and offered to pay to the plaintiff certain United States notes, amounting in the aggregate to the sum of the principal and interest due the plaintiff. The United States notes so tendered were issued under and in pursuance of the Act of the Congress of the United States, entitled “ An Act to authorize an additional issue of United States notes, and for other purposes,” approved July 11,1862. By this Act the notes so tendered were made lawful money and a legal tender in the payment of all debts, public and private, within the United States, except as therein otherwise provided.

The defendant, by his answer, pleaded the tender of these United States notes for the payment of the amount due, and brought the same into Court with his answer, ready to be paid to the plaintiff.

The plaintiff demurred to the answer on .the ground that it did not state facts sufficient to constitute a defense, specifying as causes of demurrer:

1 st. That the United States notes tendered are not money, and the plaintiff was not nor is by law obliged to receive the same in payment of the sum of money due him.

2d. That by the contract on which the action was brought the defendant promised to pay the sum of money due plaintiff in gold coin of the United States, and the defendant does not aver a tender of the amount due in such coin.

The demurrer was sustained, and at the same time leave was granted to the defendant to amend his answer, which he declined to do, whereupon the Court ordered and adjudged that the plaintiff have and recover against the defendant the principal and interest due, and the costs of the action, specifying the amount thereof, payable in gold coin of the United States; and it was further ordered and adjudged that the plaintiff have execution to enforce the collection of such judgment, with the interest which might accrue thereon, and that such execution specify, direct and provide that the judgment and all accruing interest thereon “shall be collectable only in gold coin of the United States.”

The defendant has appealed from this judgment, which brings up the case to be considered upon certain alleged errors, that are assigned in a well drawn bill of exceptions, presenting the whole case upon its real merits.

The exceptions taken to the rulings and judgment of the Court, raise the question as to the validity of the Act of the Legislature of this State passed on the 27th of April, 1863, commonly called the “ Specific Contract Law,” in so far as its provisions relate to the points involved in this controversy. (Laws of 1863, p. 687.)

The second section of this Act provides that: “In an action on a contract or obligation in writing, for the direct payment of money, made payable in a specified kind of money or currency, judgment for the plaintiff, whether the same be by default or after verdict, may follow the contract or obligation, and be made payable in the kind of money or currency specified therein.” The third section of the Act provides that the execution to be issued on such judgment shall state the kind of money or currency in which the judgment is payable, and shall require the Sheriff to satisfy the same in the kind of money or currency in which it is made payable, and that the Sheriff shall refuse payment in any other kind of money or currency; and in case of levy and sale of the property of the judgment debtor, he shall refuse payment from any purchaser at such sale, in any other kind of money or currency than that specified in the execution.

It is a cardinal rule in the construction of statutes that every reasonable intendment is to be made in support of their validity. (Morris v. The People, 3 Denio, 381; Ex parte McCollum, 1 Cow. 564; Fletcher v. Peck, 6 Cranch, 87 ; People v. Supervisors of Orange, 17 N. Y. 241.) But whenever it is clear that the Legislature has transcended its powers, in the passage of an Act which is repugnant to paramount law, it is among the most important duties of the judicial authority to declare the invalidity of the Act so passed. (Adams v. Howe, 14 Mass. 345 ; Fletcher v. Peck, 6 Cranch, 87.)

By the laws of the land, the country is furnished with three kinds of money—gold, silver and United States notes—as a medium of exchanges. Money, made by the coinage of gold or silver, is a legal tender as prescribed by law, in the discharge of obligations, which are to be satisfied by the payment of money, in general terms; and we have held in Lick v. Faulkner, (ante, 405,) and in other cases, that the notes of the United States, issued by the authority of the laws of the National Legislature, are a lawful and authorized currency, and in that sense lawful money and a legal tender in the payment of private debts; but it does not follow that every kind or any kind of money which by law is a legal tender in the payment of debts may be tendered in satisfaction of every obligation capable of performance by the transfer and delivery of property in satisfaction of it.

In Lick v. Faulkner we said, upon good authority, that gold and silver are commodities, the value of which is estimated by the value of other things, in the same manner as that of the latter is estimated by the value of gold and silver. This quality or characteristic of the precious metals is not destroyed by their division into parcels bearing the impress of the mint and possessing a specific value, ascertained and regulated by positive law. If one agrees generally to pay or deliver to another a given number of dollars, he may perform his contract by the payment of the specified sum in any kind of dollars which are recognized as such and made a legal tender for the purpose by the law of the land; for by doing so he fulfils his engagement according to its letter; but if he contracts to pay his debt in -a particular kind of money, his obligation cannot be discharged in accordance with his stipulation by payment in a different kind of money; and though by the unaided rules of the common law he could not be compelled to perform specifically that which he had promised, yet, in morals, his obligation to do so is in no degree diminished.

Courts of equity from an early period have exercised j urisdiction, enforcing the "specific performance of contracts, for the reason that the Courts of common law, though recognizing the obligation of the parties to a contract to perform their respective parts of it according to its terms, could not afford this remedy to the" party injured by the non-performance of the other. At law the party disappointed' by the breach of the contract was compelled to be satisfied with money, as a substitute for the thing for. which he had contracted, and to which he was in justice entitled.

The money recovered in such cases, by way of damages, was considered as a substantial equivalent for the injury sustained by the breach of the contract. But upon this subject Judge Story says: “ It is against conscience that a party should have a right of election whether he will perform his covenant or only pay damages for the breach of it.” (Story on Eq. Jur. 717 a.)

Contracts relating to real property embrace by far the most numerous instances in which the jurisdiction of a Court of equity may be invoked to administer the remedy of specific performance. But this species of remedy has not been limited to the enforcement in terms of agreements relating to lands. It has been in many instances extended to enforcing specifically contracts relating to personal property, and also to the performance of personal acts, though in such cases peculiar circumstances must exist to call forth the remedial agency of the Court. The reason assigned for the universal exercise of this jurisdiction as to contracts respecting lands and not in relation to agreements concerning personal property is not because of any distinction between realty and personalty, but because in the former case damages at law cannot be regarded as a complete and adequate remedy for the breach of the contract, while in the latter a compensation in damages iszdeemed commensurate with the injury sustained. But whenever a violation of a contract relating to personal property cannot be correctly estimated in damages, or whenever, from the nature of the contract, a specific execution of it is indispensable to justice, a Court of equity will not refuse its aid. (Duff v. Fisher, 15 Cal. 381; Willard’s Eq. Jur. 271, 280; Fells v. Reed, 3 Vesey, 70 ; Sullivan v. Tuck, 1 Maryl. Ch. Decisions, 59 ; Waters v. Howard, Id. 112; Barr v. Lapsley, 1 Wheat. 152; Phillips v. Berger, 2 Barb. 608, and 8 Barb. 528; Stuyvesant v. The Mayor of New York, 11 Paige, 414, 427 ; Story’s Eq. Jur., Sections 712 to 720.)

The man who contracts to sell and convey lands is under no greater obligation, morally, to perform his agreement than he who agrees for a valuable consideration received, to deliver to the purchaser personal property which he has sold, is to perform his. If there be any distinction between the two cases, let the learned casuist resolve it, for if on this point we are in error we need to be instructed.

The Act of the Legislature by authority of which the judgment in this case was rendered is remedial in its nature, affording to the party who may be justly entitled to the performance of the contract in terms the means of enforcing it. The right to its enforcement is consistent with good faith, and with the dictates of a scrupulous and exact justice. Then, is the Legislature competent to provide for the creditor a remedy to compel his debtor to do what he has solemnly and deliberately bound himself to do ? On this point there can be no doubt, unless the Act under consideration is in derogation of the laws of Congress making United States notes lawful money and a legal tender in the payment of debts. Upon the solution of this question our judgment must necessarily depend.

Before a Court, duly appreciating the measure of its duty, will declare an Act of the Legislature invalid, as contravening the laws of Congress, a case must be presented in which there can be no rational doubt (Ex parte McCollum, 1 Cow. 564;) for it is not on slight implication and vague conjecture that the Legislature is to be pronounced to have transcended its powers, and its acts to be considered void. (Fletcher v. Peck, 6 Crunch, 87.)

It is insisted on the part of the appellant that, as the Acts of Congress making United States notes lawful money and a legal tender in the payment of private debts is the paramount law, therefore such currency is adequate for the discharge of all debts which are to be satisfied by the payment of money. This is so, as we have already observed, in respect to debts that are payable in money generally; but as to the contract, which is the foundation of the judgment in this case, it is more than a contract for the payment of money merely. It goes to the extent of defining by what specific act the contract shall be performed. By the admitted and settled rules of law, such a contract can be performed, according to the agreement of the parties, only by the payment of the Idnd of money specified. Is there anything in law or morals opposed to such a contract ? If not, what objection can there be to enforcing it in case its voluntary performance is refused ? That a creditor may have uses for money of a particular kind, the Acts of Congress making United States notes lawful money and a legal tender in the payment of debts seem to .have contemplatedi He may have to pay duties on imports and debts beyond the territorial jurisdiction of the United States, and for these uses these Government notes are not a legal tender. Necessities of the kind suggested exist in commercial communities, where United States notes are the usual media of exchanges, as verified by every day’s experience. The importer of merchandise must have gold and silver money to pay the duties imposed by law on his importations. With such means only can he discharge his pecuniary obligations to the Government. He must have metallic money for the purchase of such merchandise, because the paper currency of the Government will not answer his purpose abroad. The importation of goods from foreign countries is a lawful trade, which Congress, under the Constitution, may regulate and has from time to time regulated. By what means is the merchant, who is engaged in this species of trade, to provide for his necessities—that is, for the payment of his debts abroad and his duties on imports at home—unless by securing payment from his debtors in the kind of money which he needs and without which he must abandon the business in which he is engaged ? Perhaps it will be answered that he must sell his goods for ready money, and not upon a credit, and thus secure a price in gold and silver; and the purchaser from him must in his turn also sell for like ready money in order to be furnished with the means to pay the importer; and the consumer must also provide himself with the same kind of money, let it be derived from what source of industry it may, to pay for the goods he may need for consumption.

• If the owner of property may sell the same for metallic money, to be paid concurrently with the sale and delivery of it, we can see no reason why he cannot sell for the same kind of money to be paid at a future day. A sale on credit is, by the customs and laws of trade, recognized as legitimate and is deemed to be consistent with good conscience and sound morals.

It is sometimes argued that the Act of the Legislature under consideration discriminates invidiously, to the discrediting of United States notes. We. are unable to perceive wherein. There is certainly nothing in the Act itself that can justify any such inference. If such a charge were made against the Act of Congress making United States notes lawful money and a legal tender in the payment of certain debts, it might be maintained with more seeming plausibility. Congress itself has bmited the uses to which the notes can be applied, and has provided expressly tfyat in certain cases gold and silver money only shall be used within the United States, for the discharge of pecuniary obligations, and thus, by implication, at least, has recognized an existing necessity for the employment of gold and silver money for the excepted uses. But even in this we cannot perceive that any unjust discrimination is made between the different kinds of money. With the people of some countries trade can be carried on by the use of silver money with greater convenience and advantage than with gold coin; yet it cannot be said that the merchant who furnishes himself with silver money for his purposes thereby discriminates to the prejudice of gold. The argument that the Act in question unjustly distinguishes .between metallic and paper money, if valid as an objection to contracts for the direct payment, of a particular kind of money, upon a credit given, is equally so as to sales made for the same kind of money, paid concurrently with the sale. It would be illogical to hold that the effect in the one case is more or less detrimental to the credit of United States notes than in the other. Arguments of the character which we have here noticed are too obviously fallacious to require even the attention which we have devoted to their refutation.

Again. The man of means, actuated by patriotic motives to aid the Government, or for the purpose of legitimate investment, may desire to accumulate United States notes, with the view of exchanging them for bonds of the Government payable within the time and bearing the rate of interest specified and provided in the Act of Congress. Is there, or can there be, any good reason why he may not provide for the desired supply by securing payment from his debtors in the kind of money that would serve his purpose ? Is not the end which he seeks lawful, and are not the means employed legitimate to the end ?

The Acts of Congress relating to the national currency, comprehending all kinds of money, and the various provisions of those Acts, must be considered and construed in pari materia. By this course it will be readily and at once perceived that while United States notes are by the sovereign behest made lawful money and a legal tender in the payment of debts, except in the instances specified, gold and silver money is equally, by force of positive law, a legal tender in the payment of all debts, and is also recognized as an indispensable currency for purposes to which Government notes cannot be applied; and therefore the inference is logical, if not inevitable, that Congres did not design that these Acts should interfere to prevent men from contracting for any particular kind of money they might need.

Whatever, in the estimation of men engaged in monetary transactions, may be the difference in value between gold and silver money and the paper currency of the Government of the same denominations, we cannot say judicially that a gold or silver dollar is of greater or less value than a United States note of the same denomination, and we doubt if a case could be presented to a Court of justice which would authorize evidence of a difference in the value of the two kinds of money. A Court would be placed in an anomalous and absurd predicament in listening and giving heed to evidence designed to establish as a fact that one dollar is worth more or less than another. (Woods v. Bullens, 6 Allen’s R. 516.)

By an Act of the Congress of the United States, passed in eighteen hundred and fifty-three, silver money, consisting of half dollars, quarter dollars, dimes and half dimes, issued in accordance with the standard of that Act, was made a legal tender in the payment of debts, in sums not exceeding five dollars. Now, if A. should loan to B. one thousand half dollars, coined under the Act of eighteen hundred and fifty-three, and B. should in consideration thereof contract with A. to pay the debt so created in like silver coin, would not a tender of the same kind of money in payment of the debt be a legal tender ? No one, we apprehend, who understands the import of the word tender, would answer otherwise than in the affirmative. Then, if the debtor in such case could discharge his obligation by a voluntary performance of his promise, on what just principle could he escape it if he were so determined ? The duties of the obligor and obligee in such cases must be reciprocal, and they should be commensurable. In the nature of things, that which it is lawful to tender, under the contract supposed, on the one hand, it is lawful to demand on the other. (8 Barb. 528 ; 1 Sim. & Stu. 174 and 607; 2 Edw. Ch. R. 531; Story’s Eq. Jur. Sec. 723.)

The Act of the Legislature under consideration is purely remedial in its nature. It creates no new right in the abstract. It does no more than add to the cases in which it is competent for the Courts to enforce the execution of contracts specifically, and provides the means by which this can be done. In thivá, the Act is in harmony with the doctrines of equity jurisprudence relating to kindred subjects, and at the same time it in no just sense contravenes the laws of Congress making United States notes lawful money, and a legal tender in the payment of debts.

It is alleged, on the part of the appellant, that the Court erred in determining by judgment that the costs and disbursements of the action must also be paid in gold coin.

The second section of the Act provides that judgment for the plaintiff may follow the contract or obligation and be made payable in the kind of money or currency specified therein. The plaintiff was entitled to recover his costs, which became a component part of the judgment and payable in the kind of money specified therein.

The judgment is affirmed.