Essex Co. v. Pacific Mills

Hoar, J.* The contract by which the defendants engaged to deliver two hundred and sixty ounces of silver, of a specified fineness, for each mill power leased to them, on the 1st of March 1865, was a contract for the delivery of a commodity, and not for the payment of money. The alternative which it allowed, to pay or deliver an equivalent in gold, was not adopted ; and if it had been, it merely provided for the substitution of another commodity. There was no stipulation that the gold, any more than the silver, should be in the shape of coined money. If it [397] were true, as the defendants argue, that the only means of ascertaining what amount or weight of gold would be equivalent to the silver is the statute of the United States relating to coinage, it would not alter the case. The payment in either mode was to be in the precious metal as merchandise, and could be satisfied by the delivery of the just quantity, when ascertained, of the requisite fineness, in bars, as well as in coin. That it would have had a value fixed by law, if in the shape of coin, is of no importance, as it was not required to be so delivered. The defendants did not perform their contract, and for a breach of it the usual and ordinary measure of damages is the market value of the goods which they had agreed to deliver, at the time the contract was broken, with interest from that time. We have to determine, therefore, for what sum the damages should be assessed according to this rule, upon the facts agreed. It is agreed that the market value of the silver would be-different, as it should be computed in the gold coins which the law regards as money, or in the treasury notes which the statutes of the United States have made a legal tender for the payment of debts. The defendants insist that the value should be estimated in coin. In support of this proposition, they have submitted a long and able argument to show that congress has no constitutional power to make these notes a legal tender, or to give them the qualities of lawful money. We do not regard it as consistent with the duties of this court to undertake at this time to consider or pass upon this question, as an original question of constitutional right. These notes practically constitute, and for nearly five years have constituted, the money of the country. The pecuniary transactions of the whole people have been adapted to this state of things, and interests of an incalculable amount are affected by it. The validity of the acts of congress under which they were issued has been affirmed, so far as we are aware, by every judicial tribunal in which the question has been presented; and has been recognized in various ways by the action of the state governments. There have been other acts of the national government which, however disputable on original [398] principles, must be taken to be practically settled by public acquiescence, and the magnitude of the interests involved. The duty of deciding the limits of the constitutional powers of congress, where they affect private rights, belongs peculiarly to the supreme court of the United States ; and it is enough for us to say that, in the absence of any decision by that tribunal, it does not seem to us proper for a state court, upon any views of construction which they may entertain, to treat the constitutionality of a statute of the United States, which so deeply affects all the relations of property in the community, and has been so long in operation, as an open question. The difference in public estimation, and therefore as a standard of value, of two kinds of currency which the law makes equal for the payment of debts, but which are of very unequal purchasing power in the market, leads to great practical embarrassment. But the question which this case presents is one which may arise in every case in which damages are to be assessed, or values to be ascertained, by a court or jury. Any two witnesses will differ, and the same witness will express different opinions, in respect to the value of any piece of property, accordingly as they refer to specie or paper as the standard. Perhaps the difficulty arises from allowing any distinction between things which the law treats as equivalent, to be given in evidence, or agreed as a fact. But one or the other must be assumed as the measure of prices, and there is no more theoretical inconvenience in taking one than the other. Whichever is adopted, the course is open to the criticism that the damages may be assessed in one currency, and paid in the other. We must therefore look for the rule which will most commonly produce substantial justice as the result. And we are all of opinion that in estimating damages, when there are different kinds of currency in use, equivalent in law, but differing in public estimation and purchasing power in the market, they should be computed in that which is most common; most easily procured ; by which the debtor can most conveniently and cheaply, and by which it is therefore to be presumed that he will, satisfy the judgment. The same difficulty might have existed when the currency consisted of gold [399] and silver only, if for any reason the relative values of the two kinds of coin in the market were different from the proportion between them established by law. This has been true at some periods, and the coinage has been altered to obviate the inconvenience. In such a case the tendency is for the cheaper coin to exclude the other from common use. If damages are assessed in the currency of higher value, injustice would almost always be done to the creditor, who might be obliged to take the money of less value in payment. On the other hand, when judgment is rendered for a sum computed in the cheaper currency, although it is possible that the debtor might be wronged if the judgment creditor should levy his execution upon the money more appreciated by the community, yet this is a contingency not likely to occur. The party who has broken his contract, if either must take the risk of loss, has the least right to complain, and he may protect himself from it by tendering satisfaction in the less valuable currency, for which he may seasonably exchange the other. The damages are to be computed as of the day when the breach of contract occurred. Fluctuations in the currency after that date cannot of course be regarded; and the gains or losses thereby occasioned are incident to the condition of every person who owes a debt. The plaintiffs are entitled to judgment for the agreed value of the silver which the defendants failed to deliver under their contract, estimated in the notes which were a legal tender by the laws of the United States, with interest from March 1,1865. Nothing has since been tendered or offered in payment by them which was in law or in fact, when it was offered, equivalent to that sum. It has been suggested that a special judgment should be ordered, requiring the plaintiffs to collect their judgment only in the same kind of money. But, without suggesting any doubt of the power of the court to make such an order if justice required it, we can see no reason for it in the present case that does not exist in every case in which judgments are entered. Judgment for the plaintiffs. [400] Judgments were thereupon entered for the plaintiffs, in the first action, for $16,840 and interest; in the second action, for $6702 and interest; and, in the third action, for $9749 and interest. Footnotes [*] Bigelow, C. J., did not sit in this case.