CHAPTER IX. MEDIUM OF PAYMENT. § 266. Primitive substitutes for money | § 274. Contract payable in a foreign country in currency of that country. Exchange. 276. Contract payable in mercantile 277. Alternative medium. 279. 280. 281. Cases allowing recovery of the value of the commodity. § 266. Primitive substitutes for money. The ordinary medium of payment is, and in modern times has almost universally been, money. In primitive societies, before the introduction of money, one of the commonest measures of value appears to have been cattle. In Greece, as appears from the Homeric poems, (*) oxen were the measure of value. So in the early ages of Rome, certain fines were payable in sheep and oxen; but in the fourth century of the city money was substituted. () The same was true in the early Celtic and Saxon times,() and even as late as the seventeenth century, the colonies in this country were forced by the scarcity of specie to (a) Iliad, bk. 23, vs. 1815. (†) Aul. Gell. xi. 1; see also Cic. de Rep. II. 36; 1 Niebuhr, Hist. of Rome, p. 223. (c) See § 10. adopt other standards of value. So in Massachusetts, on Dec. 18, 1631, it was ordered "that corne shall pass for payment of all debts at the usuall rate it is solde for except money or beaver be expressly named."(") And on March 4, 1634, "ordered that muskett bullets of a full bore shall pass currently for a farthing apeece provided that noe man be compelled to take above xiid at a tyme in them."() In Virginia while a colony, tobacco was at one time a measure of value. "Virginia was then not only throughout a slave-holding, but a tobaccoplanting Commonwealth. You can't open the Statute Book-I mean one of the old Statute Books-not those that have been defaced by the finger of Reform-and not see that tobacco was in fact the currency as well as the staple of the State. We paid our Clerks' fees in tobacco; verdicts were given in tobacco and bonds were executed payable in tobacco."(©) At the present day, payment is to be made in money unless some other medium is stipulated in the contract. That this is still sometimes the case will be seen in this chapter. But all verdicts must now be given in money, all damages are pecuniary, and a study of the medium of payment becomes practically a study of the value of money. 267. Medium in which a payment may be made.-In case of a contract to pay a specified sum of money there is usually no difficulty in estimating the amount to be paid. The monetary system of a country may, however, between the time of contract and the date of payment, be disturbed and altered in one of two ways: the cur () I Col. Rec. 92. () 1 Col. Rec. 137. () Mr. Randolph in the Virginia Convention, Nov. 14, 1829. Proceedings of the Virginia State Convention, p. 375. $268. rency may become depreciated, or a new standard may be adopted. In such cases the contract will be discharged by a due payment in any coin which by law is made of equivalent value at the time of payment.' ADOPTION OF A NEW STANDARD OF VALUE. 395 § 268. Adoption of a new standard of value.-Where an entirely new standard of value is adopted by the government, the amount to be paid is found by giving such a sum in the new currency as shall be declared by law equal in value to the amount due in the old currency. A notable instance occurred in the change in this country to the decimal system of coinage, when an arbitrary ratio between the old and the new standards was adopted in each State. A new standard may be adopted more indirectly by the issue of a paper currency, nominally but seldom actually equal to the gold standard. If the government does only this, without making the new money legal tender for the payment of existing debts, it would seem that the creditor should be able to enforce payment on the earlier standard; for it is really a case of adoption of a new standard of value. Where rent was reserved in "current money of Virginia," and the legislature of Virginia debased the currency in the way just described, it was held that the value of the rent reserved at the time of the lease should be found in gold or other stable medium, and judgment be given for that amount.(") 1 Story on Notes, & 390, where the opinion of the continental jurists will be found. Case of Mixed Moneys, Sir John Davies' Reports, 18, s. c. 2 Bligh 98 Pilkington v. Commissioner for Claims on France, 2 Knapp 7, 18; Cockerell v. Barber, 16 Ves. 461, 465: Story on Con. of Laws, § 312; on (*) Faw v. Marsteller, 2 Cranch 10. $269. Adoption of a new legal tender-Double standard.— The most important question, however, because the case is the commonest, arises when the government not only issues a new sort of money, but makes it a legal tender for the payment of debts. This question was presented during the civil war by the passage of the Legal Tender Acts. Congress, early in the war, passed a law declaring certain Treasury notes, to be issued by virtue of the law, a legal tender in payment of debts,(") the principle of which was again repeatedly acted on by Congress. () Until this legislation, gold and silver coin had been the only legal tender known to the law, and had been not only understood by the profession and the public, but also assumed by high authority to be the only one sanctioned by the Constitution of the United States.(©) Indeed, subject to the constitutional restriction against impairing the obligation of contracts, the rights under them and the remedies upon them had been always regarded as matters exclusively for State regulation and control. But the exigencies of the civil war led to the expedient of giving to the notes of the government the same legal efficacy with gold and silver coin in the discharge of debts; and after a sharp and general controversy in the State courts, which, with rare exceptions, upheld the constitutionality of these laws, they were at last sustained by the highest tribunal in the land. () These decisions, however, so far as they applied to contracts made before the passage of the acts, overruled one made shortly be (*) Act of February 25, 1862, ch. 33; 12 U. S. Stat. at Large, 345. () 12 Stat. at Large, 709 (Act of March 3, 1863); 13 Stat. at Large, 218 (Act of June 30, 1864). (c) See Gwin v. Breedlove, 2 How. 29. (d) Knox v. Lee, Parker v. Davis (Legal Tender Cases), 12 Wall. 457 ; Dooley v. Smith, 13 Wall. 604. § 269. ADOPTION OF A NEW LEGAL TENDER. 397 fore by the same court, in which, by a majority of five to three, the law had been declared unconstitutional as to such contracts. (*) They were brought about, moreover, not by an alteration in the opinions of the original majority, but by a change in the members of the court. One of the justices (Mr. Justice Grier), who had concurred with the majority, having resigned, and the number of judges in the court having, by an act of Congress, which took effect on the first Monday of December, 1869, been increased from eight to nine, the two vacancies thus created were supplied by judges who united with the previous minority of the court in overruling, by a vote of five to four, the principle of the former decision. Nevertheless, the later decision was again affirmed, and the constitutionality of the act finally settled, by the case of Juilliard v. Greenman. () The result of making paper money a legal tender was to establish two standards of money. Money of either sort was held to pay a debt, and money of neither sort to overpay. In the ordinary case the debtor being anxious to pay the debt as cheaply as possible tendered the less valuable sort of money. Cases arose, however, where the more valuable was tendered. In Hancock v. Franklin Ins. Co.() a pledgee held a gold bond as security for a debt not specifically payable in gold. Having collected the bond, he applied a certain proportion to his debt, as though the debt were payable in gold (gold was at 174,-i. e., 74 per cent. premium). He was required to account to the debtor, in an action for money had and received, only for the surplus after paying the debt in gold, the court saying that gold was still legal tender, and did not overpay a debt though (*) Hepburn v. Griswold, 8 Wall. 603. (c) 114 Mass. 155. () 110 U. S. 421. |