Opinion
Argued May 21, 1873
Decided September 23, 1873
Martin W. Cooke for the appellant. Geo. W. Miller for the respondent.
We cannot find room for any doubt as to the meaning of the parties to the agreement of August 5, 1864. At the time it was made, there existed two kinds of currency. One was coin and the other notes of the United States government, known as legal tender notes. These two currencies had different relative values, and parties were at liberty to contract for payments in either coin or paper currency ( 43 N.Y., 209; 12 Wall., 687), or to exchange one for the other at different rates. The government itself was authorized by law to enter into those transactions (act of March 19, 1862, 12 Stat. at Large, 370), and contracts of that description, made by individuals, were required by act of Congress to be in writing. (Act of March 3, 1863, 12 Stat. at Large, 719, § 4). Contracts to receive on deliver either description of currency at a price expressed in dollars or fractions of dollars, or at a specified percentage, must, of necessity, be construed as payable in the other currency; otherwise they would be wholly insensible. It is not to be supposed that rational men would contract for the delivery of a given amount of current coin or paper currency, in consideration of receiving a lesser amount of the same coin or paper. The obvious meaning of a contract to sell either description of currency at a price named in dollars or fractions, or at so much per cent, is that the price is payable in the other currency. Our courts cannot close their eyes to the fact that the commercial community in which they dwell, and the government under which they live, are constantly engaged in such dealings. The meaning of the contract under consideration cannot be misunderstood, when read in the light of the public events of the time. The parties by a deliberate agreement in writing, signed by both of them, mutually agreed, one that he would deliver and the other that he would receive $10,000 of current funds of the United States at fifteen cents on the dollar, in ten months after the date of the contract. The term, "current funds of the United States," clearly describes those notes which had been issued by the government to meet the emergencies of war, and which Congress had sought to assimilate to money by constituting them a legal tender in payment of debts, and were generally known as United States currency. That the percentage agreed to be paid therefor by the plaintiff was to be payable in coin, is as clear as if stated in those words. It is apparent from the nature and context of the contract. The defendant when entering into it was doubtless wanting in confidence in the ability of the government to maintain itself in the struggle in which it was then engaged, and expected that the paper currency would, in the course of ten months, decline in value to such a degree that it could be obtained at a rate of less than fifteen per cent in coin. Had his expectations been realized he would have been entitled to demand, and it is to be presumed that he would have demanded of the plaintiff $1,500 in coin, on tendering to him $10,000 of United States currency. The result having been different, and the currency which he contracted to deliver having increased instead of diminishing in its value relatively to coin, it is but just that he should bear the ensuing loss. In the absence of any law prohibiting such contracts, they must be enforced like other executory contracts for the delivery of goods or stocks.
The judgment should be reversed and a new trial ordered, with costs to abide the event.
All concur; CHURCH, Ch. J., not sitting.
Judgment reversed.