Deutsche Bank Filiale Nürnberg v. Humphrey, 272 U.S. 517 (1926)
Case details
Citation
272 U.S. 517
Full caption
DEUTSCHE BANK FILIALE NÜRNBERG v. HUMPHREY.
Country
United States
Jurisdiction
Federal
Court
Supreme Court of the United States
Decided
Nov. 23, 1926
DEUTSCHE BANK FILIALE NÜRNBERG v.
HUMPHREY.
CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE
NINTH CIRCUIT.
No. 224. Submitted October 12, 1926.—Decided November 23, 1926.
1
An obligation in terms of the currency of a country takes the risk of currency fluctuations and whether creditor or debtor profits by the change the law takes no account of it. P. 519.
2
In an action brought here on a debt arising from a deposit made in Germany and payable there on demand, in marks, it is erroneous to translate the amount due into dollars at the rate of exchange existing when demand was made, the mark having depreciated thereafter. P. 519. 7 F. (2d) 330, reversed. Certiora ri (269 U. S. 547) to a judgment of the Circuit Court of Appeals which affirmed a judgment of the District Court in a suit brought by Humphrey against the Deutsche Bank, under the Trading with the Enemy Act, to collect a debt contracted and payable in Germany. Mr. Amos J. Peaslee for the petitioner, submitted. Messrs. William Grant, William P. Hubbard, and John B. Zimdars for the respondent, submitted. Solicitor General Mitchell filed a brief on behalf of the Alien Property Custodian and the Treasurer of the United States. Mr . Justi ce Holmes delivered the opinion of the Court. This is a suit to reach and apply to a debt due from the Deutsche Bank Filiale to Humphrey money seized by the Alien Property Custodian and paid into the Treasury of the United States. Humphrey, an American citizen, deposited money, payable on demand, in a German Bank in Germany, and demanded it, as the Courts have found, on or about June 12, 1915. The money was not paid, and this suit was begun on July 9, 1921, under the Trading with the Enemy Act; October 6, 1917, c. 106; 40 St. 411. The debt was a debt of German marks. The Courts below held that it should be translated into dollars at the rate of exchange existing when the demand was made. 7 Fed. (2d) 330. The value of the mark fell after that date and a writ of certiorari was granted by this Court to determine whether the time fixed for the translation into dollars was correct. 269 U. S. 547. In this case, unlike Hicks v. Guinness, 269 U. S. 71, at the date of the demand the German Bank owed no duty It is well settled, I think, that, where the cause of action for a tort or breach of contract to deliver goods accrues in a foreign country and is sued on here, the time for fixing the value of foreign money in dollars is the date when the wrong was Committed or the breach occurred. This Court has recently applied the same rule to the case of a simple debt payable in this country, Hicks v. Guinness, 269 U. S. 71, and to the settlement of partnership accounts, where the partnership funds were partly here and partly abroad, Sutherland v. Mayer, 271 U. S. 272. The majority opinion rests upon the distinction that APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS. No. 296. Argued October 13, 1926.—Decided November 23, 1926. 1. Semble that there is no inconsistency between the Daylight Saving Acts of Massachusetts and the Act of Congress of March 19, 1918, § 2, which fixes standard time with relation to the acts of federal officers and departments and the accrual and determination of rights and performance of acts by persons subject to the jurisdiction of the United States. P. 527.'
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to the plaintiff under our law. It was not subject to our jurisdiction and the only liability that it incurred by its failure to pay was that which the German law might impose. It has incurred no additional or other one since. A suit in this country is based upon an obligation existing under the foreign law at the time when the suit is brought, and the obligation is not enlarged by the fact that the creditor happens to be able to catch his debtor here. Davis v. Mills, 194 U. S. 451. See Western Union Telegraph Co. v. Brown, 234 U. S. 542,. We may assume that when the Bank failed to pay on demand its liability was fixed at a certain number of marks both by the terms of the contract and by the German law—but we also assume that it was fixed in marks only, not at the extrinsic value that those marks then had in commodities or in the currency of another country. On the contrary, we repeat, it was and continued to be a liability in marks alone and was open to satisfaction by the payment of that number of marks, at any time, with whatever interest might have accrued, however much the mark might have fallen in value as. compared with other things. See Société des Hotels le Touquet Paris-Plage v. Cummings, (1922) 1 K. B. 451. An obligation in terms of the currency of a country takes the risk of currency fluctuations and whether creditor or debtor profits by the change the law takes no account of it. Legal Tender Cases, 12 Wall. 457, 548, 549. Obviously, in fact a dollar or a mark may have different values at different times but to the law that establishes it it is always the same. If the debt had been due here and the value of dollars had dropped before suit was brought the plaintiff could recover no more dollars on that account. A foreign debtor should be no worse off.
There has been so little discussion of what we regard as the principles that ought to govern this question that
Sanford, J. J., dissenting
we refrain from citing the many cases that have touched upon it and content ourselves with stating what seems to us the proper rule, only adding a few words as to Sutherland v. Mayer, 271 U. S. 272. That case concerned the settlement of accounts of a German partnership having one member in America, and dealt with his claim to funds in America in the hands of the Boston branch until seized by the United States. With regard to the Boston partner’s lien upon that fund the partnership contract fairly might be regarded as subjecting the German partners to American law and warranting a settlement as of the date when it first became legal after the war, taking the mark at its value at that time. Hicks v. Guinness, 269 U. S. 71. It was held that in an equitable proceeding where it was hard to lay down any logical rule substantial fairness warranted that result, referring to cases that arose after the Civil War. Here we are lending our Courts to enforce an obligation (as we should put it, to pay damages,) arising from German law alone and ought to enforce no greater obligation than exists by that law at the moment when the suit is brought.
Decree reversed.
Mr . Justi ce Sutherl and , dissenting.
517 Sutherland, McReynolds, Butler, and
Sanford, J. J., dissenting
the debt upon which recovery here is sought was payable in Germany. The distinction, I think, is fallacious, and proceeds from a very narrow view of the principles applied in Hicks v. Guinness and Sutherland v. Mayer.
It is said that when the bank failed to pay on demand, its liability was fixed by German law at a certain number of German marks, and in marks only; that it continued to be a liability in marks only and was open to satisfaction by the payment of that number of marks at any time, however much the mark might have fallen in value as compared with other things; citing Société des Hotels le Touquet Paris-Plage v. Cummings, [1922] 1 K. B. 451. And that, of course, is true if the payment be made in Germany, where marks remain legal tender at all times irrespective of their fluctuating value when measured by their purchasing power or by the money of other countries. And this is all that is held in Société des Hotels, etc. v. Cummings, supra. See pp. 458, 461, 464. It, likewise, may be assumed that if suit had been brought in Germany, a judgment at any time for the number of marks called for by the obligation would have satisfied the requirements of German law, since there marks were not only the things to be delivered but the lawful money with which to satisfy a breach of an obligation to deliver them. But if suit be brought in a court of this country, where marks are not money but things only, the judgment must be in dollars and cannot be in marks any more than it could be in wheat if the broken contract related to that commodity.
The view that the judgment date should govern puts undue emphasis upon the character of the thing to be delivered and ignores completely the all-important element of the time when the delivery should have been made. In respect of that element, I see no good reason for making a distinction between marks and wheat. In either case, if suit be brought in Germany, the injured
Sanford, J. J., dissenting
party is entitled to recover the amount of his loss in marks and in marks only. In the one case, the subject matter (wheat) must be translated into money; but not so in the other, for the subject matter is money already. In the case of wheat, therefore, the date of the breach must be considered because, presumably in Germany as here, it is the value of the wheat in marks at that time which fixes the amount of recovery. In the case of marks, however, the element of time is of no consequence since, in Germany, the value of a mark can be measured only by itself.
But in an action brought here to recover upon a failure to deliver marks in Germany, the question of time becomes material; for here a mark is not money, but a commodity; and if plaintiff is to be compensated in dollars for his loss, we must inquire, When did the loss occur? just as we must make that inquiry in order to fix in dollars the value of wheat in a suit to recover for the non-delivery of that commodity. To me it seems clear that, in the one case as in the other, the basis of recovery must be the value in dollars of the thing lost at the time of the loss. In this respect, a simple debt payable in marks and an obligation to deliver goods in Germany stand upon the same footing. In either case, the injured party is entitled to have in the money of this country the value of what he would have obtained if the contract had been performed at the stipulated time. Lord Eldon, in Cash v. Kennion, 11 Ves. 314, 316, expressed the applicable principle when he said: “ I cannot bring myself to doubt, that, where a man agrees to pay £100 in London upon the 1st of January, he ought to have that sum there upon that day. If he fails in that contract, wherever the creditor sues him, the law of that country ought to give him just as much as he would have had, if the contract had been performed.”
The date for conversion adopted by this Court after the Civil War in respect of obligations payable in p. 523517 Sutherland, McReynolds, Butler, and
Sanford, J. J., dissenting
Confederate currency was the date, and not the maturity, of the obligation, upon the ground that such currency never had been lawful; but in a dictum by Mr. Justice Field in Effinger v. Kenney, 115 U. S. 566, 575, it is clearly recognized that, if the foreign currency involved be lawful, the date for conversion is that of the maturity of the contract. In that case, “The damages recoverable for a breach of the contract are to be measured by the value of the currency at its maturity.”
To take the date of judgment for determining the value is to adopt for the measurement of a loss a test resting upon the fluctuating chances of a court calendar instead of upon an event already fixed,—that is, to put aside certainty for uncertainty. The date of the breach, whether of a contract to deliver goods or to pay money, marks the essential event which gives rise to the cause of action and bears a necessary relation to the wrong sought to be redressed; while the date of the rendition of judgment bears no relation whatever to the wrong complained of and has nothing to do with the cause of action. The cases are not agreed; but an examination of them convinces me that the conclusion I have indicated by the foregoing is supported by the great weight of authority. See for example, Page v. Levenson, 281 Fed. 555, 558; Dante v. Miniggio, 298 Fed. 845; Wichita Mill & E. Co. v. Naamlooze, etc., Industrie, 3 F. (2d) 931; Hoppe v. Russo-Asiatic Bank, 235 N. Y. 37, 39, affirming 200 App. Div. 460, 465; Simonofj v. Granite City Nat. Bank, 279 Ill. 248, 254; Grunwald v. Freese, (Cal.) 34 Pac. 73, 76; Manners v. Pearson & Son, [1898] 1 Ch. 581, 587-588, 592-593; Société des Hotels v. Cummings, [1921] 3 K. B. 459, 461 (reversed on another point, [1922] 1 K. B. 451, 455, 463, 465), Uliendahl v. Pankhurst Wright & Co., 39 Times L. R. 628; Peyrae v. Wilkinson, [1924] 2 K. B. 166; Barry v. Van den Hurk, [1920] 2 K. B. 709, 712; In
Sanford, J. J., dissenting
re British American Continental Bank, [1922] 2 Ch. 589, 594r-598.
The case last cited was a winding-up proceeding, and the question arose over the conversion into English money of the amount of a debt payable in Belgium in Belgian currency. The court adopted as the date for conversion into English money the date when the debt was payable in Belgium, saying (p. 595) : “ . . . this mode of computation and thus converting the one currency into the other is based upon damages for the breach of contract to deliver the commodity bargained for (i. e., the foreign currency) at the appointed time and place ; consequently the date for conversion is the date of breach and not the date of the judgment.” After reviewing the prior cases, including both decisions in Société des Hotels v. Cummings, supra, the court concluded that “ the principle in no way depends either upon the nationality of the creditor or upon the fact that the place of payment is in the creditor’s own country as distinguished from some other country, but applies, if at all, to every case where an action is brought in England for the recovery of a debt payable in some other currency than English money.”
The same principle is announced in Lebeaupin v. Crispin, [1920] 2 K. B. 714, 723, in an action for breach of contract to deliver salmon. The court said: “If the damages are fixed at the date of breach where the contract is wholly to be performed in England, such also, I think, should be the result where the breach is out of England. There should not be varying rules in such a case. If the damages are once crystallized at the date of breach, then a definite date is given for the ascertainment of exchange, and the amount found payable at the hearing is awarded without regard to the fluctuations of the possible date of trial.”
I think it is extremely desirable that the rule established should be one capable of uniform application. To take the date of the judgment is to establish a rule which does not meet this requirement. The amount of the recovery will depend upon whether suit is promptly brought or promptly prosecuted; whether the defendant interposes dilatory measures; whether the call of the docket is largely in arrears or is up-to-date; and, perhaps, upon whether there is a successful appeal and a new trial with the consequent annulment of the old judgment and the rendition of a new one. Under these circumstances it may well happen that, in one case, where judgment is not delayed, the plaintiff will recover a substantial sum, while in a precisely similar case, where judgment is delayed until the foreign currency has greatly depreciated, the sum recovered by comparison may be altogether insignificant. See Page v. Levenson, supra, pp. 558-559; Lebeaupin n . Crispin, supra, p. 722-723.
I am of opinion, therefore, that the judgment below should be affirmed.
Mr . Justi ce Mc Reynolds , Mr . Just ice Butle r and Mr . Justi ce Sanford concur in this opinion.
MASSACHUSETTS STATE GRANGE v. BENTON, ATTORNEY GENERAL.
2. No injunction should issue from a federal court to restrain state officers from enforcing a state law, unless in a case reasonably free from doubt and when necessary to prevent great and irreparable injury. P. 527. 3. A court of the United States should not intervene between a State and a town of the State’s creation to determine how far the town should share in the State’s benevolence. P. 528. 4. Distinction explained between want of “ jurisdiction ” in equity—e. g., want of a fitting case for an injunction—and want of jurisdiction, i. e., power, in the court. P. 528. 10 F. (2d) 515, affirmed.
Appe al from a decision of the District Court dismissing a bill brought by The Massachusetts State Grange, The Inhabitants of the Town of Hadley, the Brotherhood of Locomotive Engineers, and others, to enjoin Jay R. Benton, Attorney General of Massachusetts, Frederick W. Cook, Secretary, Payson Smith, Commissioner of Education, et al., from performing official acts in execution of the Daylight Savings Acts of that State.
Mr. Frank W. Morrison for appellants.
Messrs. Jay R. Benton, Attorney General of Massachusetts, and Lewis Goldberg were on the brief, for appellees.
Mr . Just ice Holmes delivered the opinion of the Court.
This is a bill brought by different parties having different and unconnected interests seeking a declaration that the Daylight Saving Acts of Massachusetts, Acts of 1920, c. 280, Acts of 1921, c. 145, are inconsistent with the Act of Congress of March 19, 1918, c. 24; 40 St. 450; (see Act of August 20, 1919, c.* 51; 41 St. 280,) and unconstitutional, and asking an injunction to prevent the several defendants from doing their respective official parts to carry out the Massachusetts law. It was heard by three p. 527judges in the District Court, and upon motion it was dismissed. 10 F. (2d) 515.
The Act of Congress, § 2, fixes the standard time and provides that “ In all statutes, orders, rules, and regulations relating to the time of performance of any act by any officer or department of the United States, whether in the legislative, executive, or judicial branches of the Government, or relating to the time within which any rights shall accrue or determine, or within which any act shall or shall not be performed by any person subject to the jurisdiction of the United States, it shall be understood and intended that the time shall be the United States standard time of the zone within which the act is to be performed.” The Massachusetts statute advances tiie standard time thus fixed by one hour; and provides that the time shall be the United States standard eastern time so advanced, in all laws, regulations, &c., relating to the time of performance of any act by any officer or department of the Commonwealth or of any county, city, &c., thereof, or relating to the time in which any rights shall accrue or determine, or within which any act shall or shall not be performed by any person subject to the jurisdiction of the Commonwealth, and in all the public schools and institutions of the Commonwealth, &c., and in all contracts or choses in action made or to be performed in the Commonwealth.
The Court below found no inconsistency between the two Acts and we have seen no sufficient reason for differing from it upon that point. But it also went on the important rule, which we desire to emphasize, that no injunction ought to issue against officers of a State clothed with authority to enforce the law in question, unless in a case reasonably free from doubt and when necessary to prevent great and irreparable injury. Cavanaugh v. Looney, 248 U. S. 453, 456. Hygrade Products Co. v. Sherman, 266 U. S. 497, 500. Fenner v. Boykin, 271 p. 528U. S. 240. No such necessity is shown here. The corporations other than the Town of Hadley do not even allege any direct interest. The Town of Hadley makes a case that concerns none of the other plaintiffs, and complains only that by failure to comply with the Massachusetts statute it will be held to have lost its claim to certain State aid for its schools. It is said that in fact Hadley has received its share and has no further interest in the case, but in any event it is plain that a Court of the United States would not intervene between a State and a town of the State’s creation to determine how far the town should share in the State’s benevolence. Of the individual plaintiffs, Mann alleges that the statute makes it more costly for him to employ labor at the first hours of the day, that he owns land on both sides of the New Hampshire line and has to travel to and fro between them, that New Hampshire and the railroad keep to the standard eastern time, and that to adjust himself to the two standards causes him worry and pecuniary loss. The plaintiff Snow alleges that her children have to get up an hour earlier to go to school and so lose an hour’s sleep, and that women who have husbands employed by the railroads as well as children have to keep two standards of time in their heads, and other matters that do not concern her. The plaintiff Clarke alleges nothing that needs mention. Evidently this is not a case for an exception to the general rule.
Courts sometimes say that there is no jurisdiction in equity when they mean only that equity ought not to give the relief asked. In a strict sense the Court in this case had jurisdiction. It had power to grant an injunction, and if it had granted one its decree, although wrong, would not have been void. But upon the merits we think it too plain to need argument that to grant an injunction upon the allegations of this bill would be to fly in p. 529525 Opinion of McReynolds, J.
the face of the rule which, as we have said, we think should be very strictly observed.
Decree affirmed.
The separate opinion of Mr . Justi ce Mc Reynolds .
Unless much said in Ex parte Young, 209 U. S. 123, is trivial or nonsense, this is a suit against Massachusetts and beyond the possible jurisdiction of federal courts, as expressly declared by the Eleventh Amendment. “The judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by citizens of another State or by citizens or subjects of any foreign State.” Accordingly, the trial court had no jurisdiction and should have dismissed the proceeding for that reason.
It is well to remember that the Massachusetts Daylight Saving Act is not a criminal statute, that no penalty is prescribed for non-observance, that no defendant was charged with the duty of enforcement, that no proceeding against any complainant could be instituted thereunder and none was in contemplation.
The bill discloses a bald purpose to secure an adjudication in respect of the constitutionality of a state statute. In no just sense did it seek protection of any property right threatened with unlawful invasion by an officer claiming to proceed under a void enactment. Fitts v. McGhee, 172 U. S. 516, as construed in Ex parte Young, supra, pp. 156, 157, ought to be followed and treated as controlling. “In making an officer of the State a party defendant in a suit to enjoin the enforcement of an Act alleged to be unconstitutional 'it is plain that such officer must have some connection with the enforcement of the Act, or else it is merely making him a party as a representative of the State, and thereby attempting to make the State a party.”
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