Swanson v. Cooke , 45 Barb. 574 ( 1866 )

(a) The following decision of the Supreme Court, made at a general term, held in the first district, in January, 1866, (Justices Geo, G. Barnard, Clerke and Ingragam present,) as to the value of the pound sterling, and the allowance of exchange, may be profitably read in this connection, and will .be found useful in other cases.

Guiteman us, Davis.

By the Court, Clerke, J.

The rule as to damages on a bill of exchange payable in England in pounds sterling, is, we think, to estimate the pound at $4.44. To this is to be added the rate of exchange between this country and England at the time of trial, and the difference to be added, with interest. Where the bill is drawn in this state and returned unpaid, the damages are fixed by statute. The principle is, to allow the creditor what it would cost Mm to place the amount of the hill in the place of payment, or to allow him for re-exchange. For ordinary commercial purposes $4.44 is the par; for revenue purposes of the general government, $4.84. TMs is fixed hy congress to avoid the daily fluctuations in the value; but it does not extend beyond payments to the treasury of the United States.

If the defendant had contracted to make good an amount of sterling here there might be some reason in taking the fluctuating speculative rate, in the -mere gold market, on some day or any day, of a pound sterling, But there is no law, nor,- it is believed, any decision which justifies or requires such a basis—if basis it may be called which is merely transitory and of a loose gambling character; where a sterling debt originated in and was j) ay able in a foreign land.

II. When an order in an equity suit directs a computation of principal and interest on a fixed amount, it is to be calculated from the day of the date of the order. And this is the more necessary if the fluctuating rate of gold is to be the medium through which an amount of currency is to be arrived at. How in this case, the order is dated the 9th of October, 1865 ; whereas the referee makes his calculation as of the 25th of November.

The rule above stated is adopted in England. (Scott v. Brown, 2 B. and Ad. 78. Cash v. Kennion, 11 Vesey, 314.) The same rule has been adopted in the courts of Pennsylvania and Massachusetts, and in the courts of the United States. The general principles may be found in Story on Promissory Notes, sections 396 to 400.

The rule is different if the bill is drawn abroad, and made payable here. In such a case, the holder is only entitled to receive the amount named in the bill, without exchange. (Story on Confl. of laws, § 310. Story on Prom. Notes, § 398.) There are cases where it is said if the coin of the place of payment is reduced by the sovereign, after the bill has been drawn, the creditor is to be allowed the difference; but that does not apply to tMs case; as the law was not altered, in respect to the currency, between the date of the hill and the time of payment. In tMs case, the plaintiff is not entitled to any allowance for exchange.

The parties stipulated, at the trial, that the value of the pound sterling was fixed by the United States statute, and that the court should take such value by inspection of the statute. Although this value is fixed by the United States for revenue purposes only, yet, as the parties agreed that the value should be taken as the par value of the pound sterling, they can not now object that it has been estimated at $4.84, instead of $4.44.

The judgment should be affirmed.

III. Nor does the report show how much was allowed for payments, “ allowing for all payments nor at what rate, nor from what time, nor whether any interest was credited thereon.

IV. The report should have had a schedule annexed, clearly showing the amount of sterling, on which its result is based; (there is no mention whatever in the report, nor even in the order, of such" amount;) and also the rate; as well as showing from what time interest is calculated, as well as the rate at which the interest is calculated. No doubt it was made at seven per cent, which, if it so appeared, would, of itself, be exceptionable, as this British matter could only bear the British rate of interest, namely five per cent. In all the above particulars the report is deficient.

According to the present calculation, the amount of principal is . .'...........$12,648 85

Whereas at the United States statute rate it - would be only........... 8,666 36

Difference,..............$2,982 49

There is the same rate of difference in the interest.

Ingbaham, J.

The plaintiff, when she comes into this court to enforce the payment of moneys due her, must seek such redress according to our laws. She can not, because the debt, if paid abroad, would, have been paid in a currency equal to gold, ask the courts here to add to the nominal amount a sum sufficient to enable her to take it back to the place where it was payable, and replace it there in gold. If it were an ordinary debt, payable in dollars, the parties, on resorting to our courts, must fare as citizens suing for debts due here would fare. In such a case they would only recover the nominal amount of dollars with interest.

So if the debt is for so many pounds' sterling, the recovery, can only be for that sum converted into dollars, at the rate which the pound sterling bears to a dollar, without any regard to the rate of exchange between the two countries, owing to the want of a specie currency here. The defendant concedes that amount to be at the rate of #4.84 for a pound sterling. The parties both agree upon that rate as the nominal value of a pound sterling. 'Although I have some doubt on that point, I shall take that rate as the proper one; and as they both agree as to what the sum would be at that rate, there is no need of sending the case back to the referee. The allowance of a premium on the amount was improper.

[New York Special Term, March 5, 1866.

The plaintiff may take judgment for #8863.60 for principal, and #1751.11 for intere'st, directing the payment of the same into court, to abide the order of the court, with costs.

Ingraham, Justice,]