244 A.D. 634 | N.Y. App. Div. | 1935
Lead Opinion
TMs is an appeal from an order, entered at Special Term, wMch granted summary judgment to the plaintiff. In its answer the defendant set up the Federal statutes wMch were recently enacted and now m force, govermng the question of currency.
There is little, if any, dispute between the plamtiff and the defendant. as to the facts. We must determine on this appeal the effect of the gold clause resolution adopted on June 5, 1933, in so far as it pertams to tMs controversy.
The plaintiff was organized under the laws of the State of New York, and the defendant was created by and under the laws of the State of Pennsylvania. The action is at law and is based upon the refusal of defendant to pay to the plaintiff a sum in excess of $1,500 to cover sixty coupons wMch were detached from certain of the defendant’s bonds issued in 1912. The defendant is engaged in
We believe that the points made by the appellant are sound and that the judgment should be modified.
In stating our reasons we do not think it necessary to refer to the history leading up to the enactment of the various statutes and the executive orders of the Federal government, since they are so ably covered in the comprehensive and exhaustive opinions of Mr. Chief Justice Hughes in the gold clause cases {Norman v. Baltimore & Ohio Railroad Co., 294 U. S. 240; Nortz v. United States, Id. 317; Perry v. United States, Id. 330). Perhaps it might not be amiss, however, to quote from the opinion of the Chief Justice in order to understand the basis of our decision. In Norman v. Baltimore & Ohio Railroad Co. {supra, 315) he said, in part: “ The devaluation of the dollar placed the domestic economy upon a new basis. In the currency as thus provided, States and municipalities must receive their taxes; railroads, their rates and fares; public utilities, their charges for services. The income out of which they must meet their obligations is determined by the new standard. Yet, according to the contentions before us, while that income is thus controlled by law, their indebtedness on their * gold bonds ’ must be met by an amount of currency determined by the former gold standard. Their receipts in this view, would
The bonds and coupons which were issued by the appellant are obligations payable in the money of the United States. While they provide for payment in sterling or guilders, they are, nevertheless, within the spirit and intent of the joint resolution. It is not contended by the appellant that the holders of these coupons, who are subjects of England and Holland, respectively, are governed by the terms of the joint resolution. In fact, the affidavits show that all payments have been made to bona fide holders in foreign countries in accordance with the terms of the agreement. It is claimed, however, and rightfully so, that the citizens of our country are controlled by the terms of the joint resolution particularly where, as here, the bonds were purchased in the United States by citizens thereof, and the parties who purchased them expected to be paid in dollars, the value of which was not to be governed by the currency of any other country. It would be exceedingly unjust to compel the appellant to meet its obligations on the basis of the old standard, when the entire income from its business is received in the existing currency.
We do not believe that it should be the policy of our courts in a litigation bétween two of our citizens to. construe that part of the resolution which is applicable to this case in a manner which may tend to nullify and destroy the legislative intent. Equity and justice demand that all who live under and enjoy the benefits of our government and its laws should be placed upon an equal footing, at least
The judgment and order appealed from should be modified by reducing the amount of the judgment as entered to the sum of $1,500, and as so modified affirmed, with costs of this appeal to the appellant.
Martin, P. J., and Townley, J., concur; Merrell, J., dissents and votes for affirmance.
Dissenting Opinion
I am unable to agree with the opinion of Mr. Justice Glennon, writing for a majority of the court, for reversal of the order and judgment appealed from herein. Unless we are to brush aside and ignore the plain and unambiguous provisions of the contract between the parties, the order and judgment appealed from were right, and should be affirmed. The undisputed facts are as follows:
Plaintiff, as trustee of certain express trusts, held sixty coupons issued by the defendant, which, by their terms, became due and payable on November 1, 1933. Each coupon held by plaintiff was in the following form:
“ On the First day of November, 1933, unless the bond hereinafter mentioned shall have been called for previous redemption, Bethlehem Steel Company will pay to Bearer at its office or agency in the City of New York, U. S. A. Twenty-five Dollars $25 00 United States Gold Coin, or in London, England, Five £5 2 10 Pounds, Two Shillings Ten Pence, or in Amsterdam, 62.25 Holland, Sixty-two Guilders, Twenty-five Cents, being Guilders six months’ interest then due on its First Lien and Refunding Mortgage Five Per Cent. Thirty-Year Gold Bond, Series A, No. [Number of bond to which coupon was attached.]
“ B. H. JONES
“ $25 Treasurer.” No. 43
On November 17, 1933, plaintiff caused the said coupons to be presented at the office of the defendant in Amsterdam, Holland, and demanded payment as to each coupon in the sum of 62 guilders and 25 cents, or, in all, 3,735 guilders. On the day of presentation the guilders were of the total value of $2,437.09. The last-mentioned sum the court, in the judgment appealed from, awarded to plaintiff, with interest and costs.
Only questions of law are presented upon this appeal. It is the contention of the defendant, appellant, that by virtue of the
“ (Public Resolution — No. 10 — 73d Congress)
“ (H. J. Res. 192)
“ Joint resolution
“ To assure uniform value to the coins and currencies of the United
States.
“ Whereas the holding of or dealing in gold affect the public interest, and are therefore subject to proper regulation and restriction; and
“Whereas the existing emergency has disclosed that provisions of obligations which purport to give the obligee a right to require payment in gold or a particular kind of coin or currency of the United States, or in an amount in money of the United States measured thereby, obstruct the power of the Congress to regulate the value of the money of the United States, and are inconsistent with the declared policy of the Congress to maintain at all times the equal power of every dollar, coined or issued by the United States, in the markets and in the payment of debts. Now, therefore, be it
“ Resolved by the Senate and House of Representatives of the United States of America in Congress assembled,
“ That (a) every provision contained in or made with respect to any obligation which purports to give the obligee a right to require payment in gold or a particular kind of coin or currency, or in an amount in money of the United States measured thereby, is declared to be against public policy; and no such provision shall be contained in or made with respect to any obligation hereafter incurred.
“ (6) As used in this resolution, the term ‘ obligation ’ means an obligation (including every obligation of and to the United States, excepting currency) payable in money of the United States; and the term ‘ coin or currency ’ means coin or currency of the United States including Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations.
“ Sec. 2. The last sentence of paragraph (1) of subsection (b) of Section 43 of the Act entitled ‘An Act to relieve the existing national economic emergency by increasing agricultural purchasing power, to raise revenue for extraordinary expenses incurred by reason of such emergency, to provide emergency relief with respect to agricultural indebtedness, to provide for the orderly liquidation of joint-stock land banks, and for other purposes/ approved May 12, 1933, is amended to read as follows:
“All coins and currencies of the United States (including Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations) heretofore or hereafter coined or issued, shall be legal tender for all debts, public and private, public charges, taxes, duties, and dues, except that gold coins, when below the standard weight and limit of tolerance provided by law for the single piece, shall be legal tender only at valuation in proportion to their actual weight.
“Approved, June 5, 1933, 4:40 p. m.”
Under subdivision (b) of the first section of the resolution it appears that the Congress was dealing only in the coin or currency of the United States. With this in mind, it will be seen that the resolution related only to obligations payable in the money of the United States in gold or a particular kind of coin or currency of the United States, or in an amount in money of the United States measured thereby, and which was declared to be against public policy. The resolution further states that every obligation (payable in money of the United States) heretofore and hereafter incurred, whether or not any such provision is contained therein or made with respect thereto, shall be discharged upon payment,
“ Whereas the existing emergency has disclosed that provisions of obligations which purport to give the obligee a right to require payment in gold or a particular kind of coin or currency of the United States, or in an amount in money of the United States measured thereby, obstruct the power of the Congress to regulate the value of the money of the United States, and are inconsistent with the declared policy of the Congress to maintain at all times the equal power of every dollar, coined or issued by the United States, in the markets and in the payment of debts. Now, therefore, be it * * * ”
The resolution itself is clear and unambiguous and should not be extended by interpretation or construction to include any reference to obligations other than those which are payable in money of the United States. Under well-recognized constitutional limitations the Congress had no power to extend the scope of the resolution so as to give it extraterritorial effect. Section 8 of article 1 of the Constitution invests the Congress with the power “ to coin money, to regulate the value thereof, and of foreign coin, and fix the standard of weights and measures.” It was by virtue of such constitutional provision that the Gold Coin Resolution was passed. There is no other provision of the Constitution justifying the adoption of the resolution than that referred to. The preamble of the resolution clearly indicates the purpose of the Congress to enact the legislation in question. In the preamble reference is made to “ the power of the Congress to regulate the value of the money of the United States.” (Italics are the writer’s.) Neither the power of the Congress to regulate the value of the money of the United States nor “ the declared policy of the Congress to maintain at all times the equal power of every dollar, coined or issued by the United States, in the markets and in the payment of debts,” has any application to the contract here involved, which
It seems to me that the payment in guilders was, in fact, a satisfaction of the coupons by the delivery of a commodity. The appellant in its brief recognized that the agreement to deliver Dutch guilders was an agreement to deliver commodities, citing Hicks v. Guinness (269 U. S. 71, 80). The same view has been adopted by this court (Gross v. Mendel, 171 App. Div. 237, 240; affd., 225 N. Y. 633). It seems to me the great difficulty in the appellant’s position lies in the fact that the Gold Clause Resolution relates only to contracts “ payable in money of the United States,” or' obligations which are, in fact, payable in money of the United States. Nowhere does the resolution refer to contracts conferring an option upon an obligee to require payment in money of the United States or in a foreign jurisdiction, or to obligations which would become payable in money of the United States if certain events should happen. The Congress did not attempt to legislate on any such hypothetical contracts. The only question here is whether the contract in
The appellant makes no claim that the coupon itself is. ambiguous. There is no contention made that it was not the purpose and intent of the defendant corporation to provide for payment of the bonds and coupons in guilders if presented at the office or agency of the defendant at Amsterdam, Holland. Unquestionably, at the time the bonds were issued the defendant thought that the dollar was more stable than sterling or guilders and thát the inclusion of sterling and the guilder alternatives in the contract would not adversely affect the company. In this assumption the defendant was disappointed,' but the disappointment of the defendant should not alter the construction or interpretation of the perfectly plain and unambiguous contract. If the contract had been that the coupons in question were to be payable, either in money of the United States or in sterling in England, or if, upon presentation of the coupons, in payment of each thereof the defendant would deliver to the holder a bushel of bulbs, of which Holland is the world’s greatest producer, would there be any question that upon the maturity of the coupons the holder could present the same at Amsterdam, Holland, and demand the delivery to him of his bushel of bulbs? Certainly not, and even though at the time that demand for the bulbs was made the market price thereof was far in excess of what the plaintiff would be entitled to receive if bis coupons were presented in the United States or in England. Under the plain and unambiguous terms of the contract of the defendant, I see no escape from the defendant’s being required to meet its obligation and to pay the coupons in Holland guilders.
The order and the judgment entered thereon should be affirmed, with costs to the plaintiff, respondent, against the defendant, appellant.
Judgment and order modified by reducing the amount of the judgment as entered to the sum of $1,500, and as so modified affirmed, with costs of appeal to the appellant.