Richard v. American Union Bank , 241 N.Y. 163 ( 1925 )

Judgment has been rendered dismissing the complaint on the ground that it did not set forth a cause of action. It contains two purported causes of action. In the first of these, in addition to necessary formal allegations, the complaint alleges that the plaintiffs made a contract with the defendant's predecessor, and whose liabilities the defendant has assumed, whereby in consideration of the payment of a substantial sum of money said bank agreed to establish for the benefit of plaintiff in Bucharest a credit for two million lei by a certain date; that the bank did not establish said credit at said date but did so at a considerably later date, plaintiffs then accepting and taking advantage of the credit; that in the meantime the "market value" of lei had declined and plaintiffs seek to recover damages for the alleged delay of the bank in establishing said credit, measured by said alleged decline in the market value of lei.

The second cause of action involves similar facts, it there being stated that the same bank in consideration of the payment of a certain sum of money agreed to establish for the benefit of plaintiffs with a banking institution in Agram, Jugo Slavia, credit for a certain amount of kronen by a certain date; that it failed to make timely performance of its contract but did thereafter establish said credit which plaintiffs accepted and took advantage of and there is alleged to have been a decline in the market value of kronen for which plaintiffs seek to recover damages.

The two causes of action present precisely similar questions of law and, therefore, in our discussion, merely for convenience, we shall consider the first purported cause of action relating to lei.

The contract alleged, whereby a credit was to be created in plaintiffs' favor for a certain number of lei in Bucharest, was an executory contract which was to be performed at the place where the credit was to be created. (Equitable Trust Co. ofN Y v. Keene, 232 N.Y. 290; Gravenhorst v. Zimmerman,236 N.Y. 22.)

The well-established rule is that a breach of an executory contract is to be allocated to the place where the contract is to be performed and in accordance with this rule the breach of contract occurred in Bucharest.

Another rule is that damages for such a breach are to be measured by the standards of value which prevail where the breach occurs which, in this case, would be Bucharest where lei were the national currency and standard of value. Nothing else than this was decided in Hoppe v. Russo-Asiatic Bank (235 N.Y. 37), where it was simply held that when a plaintiff was entitled to recover damages for breach of contract which would be primarily expressed in money of the country where the breach occurred, the rate of exchange prevailing at the date of the breach would be adopted as the one by which to convert the foreign money into our domestic money and fix the amount of the judgment in dollars.

So far as we are aware, there is no decision which, under the allegations of this complaint, makes a rule different than those above stated applicable in determining the alleged decline in market value of the lei which plaintiffs were to obtain. It may be that in certain cases we would use the standard of dollars in determining damages on the breach of a contract in the foreign country but we find nothing which warrants that procedure in this case. Therefore, we have the plaintiffs engaged in an attempt to prove that there was a decline in the "market value" of lei in a country where lei were the national currency and the standard by which to determine values in damages. It seems to us that this attempt is impossible of achievement. During all the times in question lei continued to be the same monetary unit and plaintiffs obtained on the deferred date the same number of lei to which they were entitled on the due date and it is impossible to say that lei, measured by lei, had declined in market value.

If it be thought that this decision rests upon somewhat narrow grounds and possibly may not afford the plaintiffs compensation for damages which they have really suffered, the answer is that we are governed by the allegations of their complaint and that they have elected to attempt to rest their causes of action upon alleged decline in market value of something which by its very nature could have no market value at the place where the contract was to be carried out. Presumably the plaintiffs when they made a contract to obtain foreign money or credit abroad intended to use it as money in the country where it is the recognized medium of exchange. Fluctuations in the value of the money when measured by currency of this or any other country may not affect the use for which plaintiffs are presumed to have intended it. In the absence of special circumstances we will not assume either that the parties contemplated a liability for damages to one intending to use the lei in the markets of Roumania because there might be a depreciation in the value of the lei when measured by our currency, or that in fact such depreciation did cause the plaintiffs any damage. For damages actually suffered the law afforded other remedies to the plaintiffs. On failure of defendant's predecessor to establish the credit as agreed plaintiffs might have rescinded their contract and recovered the money which they had paid for the proposed credit to be established in their favor. Again, on the breach of contract occasioned by the default of defendant's predecessor they might have brought an action for breach of contract and damages in which recovery would have been based on the value of lei at the time of the breach of contract. (Hoppe v. Russo-Asiatic Bank, supra.) They might have sued to recover special damages if any such they suffered and possibly they would have been entitled to bring an action alleging that on the belated day when the credit was created and they elected to receive the specific number of lei, its value for the purposes contemplated by the parties had so diminished as to cause them actual damage. But they did none of these things. They elected to give to their complaint a form which, as we think, deprives them of relief which they might otherwise have secured.

We do not overlook the argument which may be made based on the case of Winter v. Am. Aniline Products, Inc. (236 N.Y. 199), where it was in substance held that in the case of a complaint alleging a breach of contract and ensuing damages, there is no requirement of law that the measure of damages alleged to have been sustained shall be stated in the complaint and if the complaint states facts from which damages can be properly inferred it is sufficient without specifically enumerating the items of damages or the rules of law controlling the damages; that if necessary an amendment of the complaint may be had upon the trial to correct an incorrect theory of damages and that the complaint should not be dismissed where this can be done. While recognizing the application of this rule under many circumstances, it is to be borne in mind, first, that in theWinter case, in addition to other differentiating circumstances, we were restricted in our consideration to giving answers to specific questions certified which is not the case here, and, second, that in our opinion it may be argued with considerable force that the present plaintiffs have debarred themselves of the right to invoke it. The Appellate Division in its decision condemning plaintiffs' complaint as insufficient for the reasons in substance which we have outlined, gave to them the right to serve an amended complaint and of which right they declined to avail themselves. The plain meaning of this seems to be that they are satisfied with the form of complaint and do not desire to give any other form to their claim for relief. Having, therefore, elected to stand on the complaint as it is now written, there is no reason why the court should attempt to give to their pleading some form and theory which they themselves are unwilling to adopt.

For these reasons we think that the judgment should be affirmed, with costs.