¹ Also [1960] 2 W.L.R. 969; and, sub nom. Re United Railways of the Havana and Regla Warehouses Ltd., in [1960] 2 All E.R. 332. The case will hereafter be referred to as the Havana case. Page references are to the report in [1961] A.C.

The writer is greatly indebted to the works of Mann, F.A., The Legal Aspect of Money (2nd ed., 1953)Google Scholar and Nussbaum, A., Money in the Law, National and International (2nd ed., 1950)Google Scholar—which will hereafter be referred to as Mann and Nussbaum, respectively.

² As in Di Ferdinando v. Simon, Smits [1920] 3 K.B. 409; Celia v. Volturno [1921] 2 A.C. 544; Madeleine Vionnet v. Wills [1940] 1 K.B. 72.

³ As in Barry v. Van der Hurk [1920] 2 K.B. 709; Lebeaupin v. Crispin [1920] 2 K.B. 714.

⁴ As to which cf. Lord Mansfield in Deering v. Parker (1760) 4 Dall. xxiii; the Chinese decision Bartashevitch v. Banque Russo-asiatique, cited by Mann 246, n. 4; Rashba, Evsey S., “Debts in Collapsed Foreign Currencies” (1944) 54 Yale L.J. 1, 15CrossRefGoogle Scholar.

⁵ Viscount Simonds, having referred in Havana (at 1044) to a case where the money was apparently contracted to be paid in London, continued: “The result could not have been different if it had been payable in Hamburg under a Hamburg bond.”

⁶ Note the sweeping formulation of the question by Viscount Simonds at 1043.

⁷ P. O.Lawrence, J., in In re British American Continental Bank, Ltd.: Credit General Liegeois' Claim [1922] 2 Ch. 589, 597Google Scholar: “…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 than English money.” And see Lord Reid in the Havana case, at 1051.

⁸ Viscount Simonds, at 1044; Lord Radcliffe, at 1060. And see Lord Reid, at 1051.

The disregard of the proper law blocks a possible avenue of escape from the breach-date rule, hinted at earlier by McCardie J. in Lebeaupin v. Crispin [1920] 2 K.B. 714, 723 and by Atkin L.J. in Société des Hôtels Le Touquet v. Cummings [1922] 1 K.B. 451, 463–65.

⁹ Twisden J. in Malverer v. Redshaw (1670) 1 Mod. 35.

¹⁰ Rifkind, , “Money as a Device for Measuring Value” (1926) 26 Col. L.R. 559, 565CrossRefGoogle Scholar.

¹¹ N. 7 supra and p. 298, post.

¹² Manners v. Pearson [1898] 1 Ch. 581, 592; Celia v. Volturno [1921] 2 A.C. 544; Note on “Conversion Date of Foreign Money Obligations” (1965) 65 Col. L.R. 490–501, at n. 4. And is, indeed, declared by Lord Parmoor ([1921] 2 A.C. at 559) to depend “not on any technical rule of English procedure but on the principle of securing to the injured party, as far as possible, the full measure of compensation to which he is entitled.” See also n. 76, post.

¹³ Celia v. Volturno [1921] 2 A.C. 544.

¹⁴ Di Ferdinando v. Simon, Smits [1920] 3 K.B. 409 and other cases. Di Ferdinando, frequently cited on the rate of conversion in contract, is (also) a case of tort.

¹⁵ Cf. a Note by Professor O. Kahn-Freund on the Havana case in the Court of Appeal in (1959) 22 Mod. L.R. 309, at 313. See also an earlier Note by the same writer in (1952) 68 L.Q.R. 163; Mann 319–20; Dicey's, Conflict of Laws (7th ed., 1958) 917.Google Scholar

¹⁶ In Havana, Viscount Simonds refers (at 1043) approvingly to the argument that “in any case convenience demanded that the same rule should obtain.”

On the “convenience” of uniformity in rates of conversion see, however, Fraenkel, , “Foreign Moneys in Domestic Courts” (1935) 35 Col. L.R. 360, 365–66CrossRefGoogle Scholar. And see n. 75, post.

¹⁷ See e.g. Nussbaum 373. Nevertheless, it has also been pointed out that when there is one rule for all cases, then “whether the injured party is placed in an equal, a better or a worse position becomes a matter of chance.” (Evan, , “Rationale of Valuation of Foreign Money Obligations” (1956) 54 Mich. L.R. 307, 317.)CrossRefGoogle Scholar For others who doubt the wisdom of a “lawyer's single-rate Utopia”, see Rifkind, op. cit. (n. 10 supra) at 587; and Drake, , “The Proper Rule in Fluctuating Exchanges” (1930) 28 Mich. L.R. 229, 237CrossRefGoogle Scholar.

¹⁸ At 1052.

¹⁹ At 1053. Cf. also n. 104 and pp. 285–86, post: the Court of Appeal, by necessary implication, refer to the rule as unfair and unreasonable.

²⁰ See Viscount Simonds, at 1038; Lord Radcliffe, at 1062; Lord Denning, at 1062. McNair J. has since referred to it as “a case of immense complexity”: Rossano v. Manufacturers Insurance [1962] 2 All E.R. 214, 218.

The discussion hereafter will relate to this simplified synopsis, rather than to the full facts of the Havana.

²¹ The rate on the day of the actual payment is generally preferred in civil-law countries, because only thus does the creditor receive his due, no more and no less. See Nussbaum 362; Lerebours-Pigeonnière, , Dr. Int. Privé (7th ed., 1959) 593, n. 3Google Scholar; 3 Rabel, , The Conflict of Laws (1950) 27 and n. 30.Google Scholar

Nussbaum (371–73) advocates conversion “as of the day of collection”. Since, however, this solution may be thought to leave the judgment not sufficiently definite, and would moreover relegate the duty of converting from one currency into another to the sheriff, “at least the judgment-date rule should be substituted for the breach-date rule in the event that the local currency has depreciated after the day of breach.” He thinks that it is in any event “unjustifiable to impose upon the creditor a loss through depreciation caused by the debtor's default”—i.e. as in Havana.

Nussbaum's view is favoured by the Supreme Court of Israel. See in particular Witkon J. in Rivlin v. Wallis (1958) 12 P.D. 85, 93–94.

Apart from the operation of specific rules on rates of conversion, tender at a rate unfavourable to the creditor is sometimes held to fall short of what “faith and credit” require: French C.C., §§ 1134, 1135; German BGB, §§ 157, 242.

²² For example, Mann passim; Nussbaum 371–73; Kahn-Freund, n. 15, supra.

²³ Sixth Report of the Committee, March 1962, Cmnd. 1648, p. 3; and see pp. 4, 13.

²⁴ See passage from Viscount Simonds' speech, p. 301, post.

²⁵ Denning, L.J. in Treseder-Griffin v. Cooperative Insurance Soc. Ltd. [1956] 2 Q.B. 127, 144.Google Scholar

²⁶ For example; Holmes, J. in Deutsche Bank Filiale Nurnberg v. Humphrey (1926) 272 U.S. 517, 519Google Scholar; Scrutton L., J. in The Baarn (No. 1) [1933] P. 251, 265Google Scholar; Lord Reid, , in the Havana case, at 1051Google Scholar; Lord Denning, Ibid., at 1069–70.

²⁷ For example, In re Chesterman's Trusts [1923] 2 Ch. 466; Anderson v. Equitable Assurance (1926) 134 L.T. 557.

²⁸ Not all cases are careful to distinguish between the two propositions. This appears to be notably so in Gilbert v. Brett (1604) Davis 18; 80 E.R. 507 (“Le case de Mixt moneys”), considered by many the English locus classicus on nominalism.

²⁹ Cited in n. 26 supra.

³⁰ Again in the language of Holmes J.: cf. the passage quoted at pp. 271–72 post.

³¹ In an early apology for the breach-date rule, W. Lennox McNair seeks to excuse its “apparent hardship” with the argument that “the profit and loss arising from the movement of the exchanges is as purely fortuitous as is the rise and fall of the market after breach in a case of a ‘sale of goods’ claim.” (“Rate of Exchange in English Judgments” (1921) 37 L.Q.R. 38, 44.) This, however, precisely recalls the overlooked distinction. Whereas a creditor of money must be content with tender made even many years after maturity, a buyer of goods is not obliged to accept after a long delay: and this right of non-acceptance incidentally furnishes protection against post-diem decline in the value of the goods.

³² P. 259 ff. post.

³³ In Havana, at 1070. See also his similar words in Treseder-Griffin v. Cooperative Insurance Soc. Ltd. [1956] 2 Q.B. 127, 144 (and reiterated verbatim in Havana, at 1069): “Sterling is the constant unit of value by which in the eye of the law everything else is measured.”

³⁴ Lord Denning appears, however, to have overlooked the consideration that the basis on which “our” transactions are measured is not necessarily relevant to a Pennsylvanian transaction, as in Havana. Infra.

³⁵ See Feist v. Société Internationale Belge [1934] A.C. 161; Treseder-Griffin v. Cooperative Insurance Soc. Ltd. [1956] 2 Q.B. 127; Mann, F. A., “The Gold Clause in Domestic Contracts” (1957) 73 L.Q.R. 181Google Scholar.

In Israel, see Silberg, J.'s leading judgment in Rosenbaum v. Sager (1955) 9 P.D. 533Google Scholar; Levin v. Ashag Ltd. (1956) 10 P.D. 759. Cf. also Marasha Ltd. v. Masri (1957) 11 P.D. 126; Bechar v. Bidermann (1963) 17 P.D. 886, 893.

³⁶ In Di Ferdinando v. Simon, Smits [1920] 3 K.B. 409, 416. And cf. Mehmet Dogan. Bey v. Abdeni & Co. Ltd. [1951] 2 K.B. 405.

³⁷ Bowen, L.J. in Cobb v. Gt. Western Rly. (1893) 62 L.J. (Q.B.) 335Google Scholar, 337 and quoted by Lord Sumner, in Weld-Blundell v. Stephens [1920] A.C. 956, 979.Google ScholarCf. Overseas Tankship v. Morts Dock [1961] A.C. 388, 426. “Damages for the breach of a contract can be said to be too remote and contingent only when it can be said that at the time of entering into the contract such damages were not in contemplation of the parties thereto. Whether such damages were in contemplation of the parties depends upon the contract itself and the facts and circumstances surrounding its execution.”: Bishop, J. in National Bank of Cleburne v. Pittman Roller Mill (1924) 265 S.W. 1024Google Scholar; 36 A.L.R. 1405, 1407 (breach of contract to make a loan). Cf. also n. 43 post.

³⁸ P. 255 and n. 27 supra.

³⁹ In Havana the proper law was American. See p. 266 post.

⁴⁰ The Baarn (No. 1) [1933] P. 251, 265.

⁴¹ Briggs v. Calverly (1800) 8 Term Rep. 629; Moffat v. Parsons (1814) 5 Taunt. 307. See also 1 Wms. Saund. (ed. 1871) 39(e) and n. 144, post.

⁴² See Page v. Newman (1829) 9 B. & C. 378; Flechter v. Tayleur (1855) 17 C.B. 21; Brit. Columbia v. Nettleship (1868) L.R. 3 C.P. 499; Prehn v. Royal Bank of Liverpool (1870) 5 L.R. Exch. 92; Wallis v. Smith (1882) 21 Ch. D. 243; and London Chatham & Dover Rly. Co. v. S. E. Rly. Co., both at [1892] 1 Ch. 120 (C.A.) and at [1893] A.C. 429 (H.L.).

⁴³ Trans Trust S.P.R.L. v. Danubian Trading Co. Ltd. [1952] 2 Q.B. 297, 307. See also Denning L.J.: “the only real ground on which damages can be refused for non-payment of money” is where the loss is not contractually foreseeable. (Ibid., at 306). And cf. n. 37 supra.

In Westesen v. Olathe State Bank (1925) 78 Colo. 217, there was a breach of contract by a bank to make a loan, planned, to the knowledge of the bank, to enable the plaintiff to go to California. The question was whether plaintiff was entitled to damages for “humiliation and mental suffering” in addition to his loss and expenses. “In the circumstances”, said the Court (Allen C.J., Dension and Whitford JJ. concurring), “the breach was the proximate cause of the mental suffering and humiliation, for it resulted in more than the mere dishonor of a check. The breach deprived the plaintiff of funds after he got to California, where defendant knew he was going, having borrowed the money or made the agreement solely in order to be able to make the trip. In California, plaintiff was away from home and among strangers. The defendant's breach of the contract left him without financial resources or credit. Under such circumstances, to learn his check to be worthless would naturally result in humiliation and mental suffering. In the instant case, humiliation and mental suffering was properly an item of damage …”

⁴⁴ See Evan, op. cit. (n. 17 supra) pp. 307–08, n. 3, and Transamerica General Corp. v. Zunino (1948) 82 N.Y.S. (2d) 595. Cf. also Perry v. United States (1935) 294 U.S. 330; Rashba, op. cit. (n. 4, supra) at 31.

⁴⁵ Cook v. Fowler (1874) L.R. 7 H.L. 27, per Lord Hatherley, at 36. And see 1 Wms. Saund. (ed. 1871) 205; Ledeboter v. Hibbert [1947] 1 K.B. 694. This is equally so where the interest awarded is identical in rate with the agreed interest: per Lord Selborne in Cook v. Fowler, supra, at 37–38. See also Lord Tenterden C.J. in Page v. Newman (1829) 9 B. & C. 378, 381; Lord Mansfield, , in Robinson v. Bland (1760) 1 Black. W. 234, 256Google Scholar; 96 E.R. 129, 141.

⁴⁶ Arbitrators and umpires are also given this power: Arbitration Act, 1950, sec. 20.

⁴⁷ In Di Ferdinando v. Simon, Smits [1920] 2 K.B. 409, 416 Scrutton L.J. said that he had not been able “to find that interest by way of damages has ever been allowed to cover alteration in the exchange, and counsel have also been unable to find any such case.”

⁴⁸ It must again be pointed out that no such rule would have justified the actual decision in Havana. In the circumstances of that case the crystallization principle could only apply on the assumption that crystallization occurred in pounds: whereas it could only have occurred (if at all) in dollars. See pp. 258–59 supra and pp. 266–267, 300 post.

⁴⁹ [1921] 2 A.C. 544, 563.

The “cow illustration” is borrowed (but in modified form) by Lord Reid in Havana. See pp. 263–64 post.

⁵⁰ Greening v. Wilkinson (1825) 1 C. & P. 625; Williams v. Archer (1847) 5 C.B. 318; Owen v. Routh & Ogle (1854) 14 C.B. 327, in which last-cited case Jervis C.J. said (at 339–40): “Mr. Lush has very properly conceded that he is bound by the authorities on the question as to the proper measure of damages in this case,—which are to be estimated at the time of the trial.” (Italics added.)

⁵¹ Rosenthal v. Alderton [1946] K.B. 374; Sachs v. Miklos [1948] 2 K.B. 23; Munro v. Willmott [1949] 1 K.B. 295; Paton, , Bailment in the Common Law (1952) 404 ff.Google Scholar Furthermore, when, in personal injury cases, the courts take into consideration such prospective probabilities as diminution of earnings and shortened expectation of life, they consider developments which can only, in the nature of things, take place subsequently to the accrual of the cause of action. Indeed, even the duty of the court, in assessing damages for false imprisonment, to consider the defendant's persistence in aggravation and his apologies in mitigation (see e.g. Walter v. Alltools, Ltd. (1944) 61 T.L.R. 39) is a duty to consider developments which are subsequent to the accrual of the cause of action. “The dicta of Lord Wrenbury … that the date is always the date of the tort are erroneous”: Prof.Street, H., “Supervening Events and the Quantum of Damages” (1962) 78 L.Q.R. 70, 85.Google Scholar

It is true that, in an action of detinue, giving the higher value is not necessarily inconsistent with the idea of crystallization: because the cause of action is the continuous deprivation of plaintiff's property, down to verdict. Cf. Diplock L.J. in General & Finance; etc. v. Cooks Cars [1963] 2 All E.R. 314, 319.

The kind of injustice that can come from the doctrine of crystallization is well illustrated by Nederlansch-Amerikansche Stoomvart v. Royal Mail Lines [1958] 1 Lloyd's Rep. 412.

⁵² Cf. Abbott C.J., in Greening v. Wilkinson (n. 50 supra) at 626.

⁵³ At 1050–51.

⁵⁴ This assumption can only apply where delivery “at the stipulated date” was made an essential condition breach of which by the seller would entitle the buyer to “treat the contract as repudiated”: Sale of Goods Act, 1893, secs. 10, 11.

⁵⁵ Sale of Goods Act, 1893, sec. 51(2).

The sub-rule in sec. 51(3), which refers to the market price of the goods “at the time or times when they ought to have been delivered”, should not, it is submitted, as long as the plaintiff acts with reasonable promptitude, be construed to extend to a case where the goods increase in value after the date “when they ought to have been delivered”. Otherwise, sec. 51(3), which only lays down a presumption expressly declared to apply “prima facia”, would derogate from the rule enunciated in sec. 51(1), in that the plaintiff would not be compensated sufficiently to cover the “loss directly and naturally resulting in the ordinary course of events from the seller's breach of contract.” Cf. Sally Wertheim v. Chicoutimi Pulp Co. [1911] A.C. 301, 307.

It is submitted that Ogle v. Earl Vane (1868) L.R. 3 Q.B. 272 and Wilson v. London & Globe Finance Corporation (1897) 14 T.L.R. 15 combine to show that when the plaintiff acts reasonably in all the circumstances of the case in purchasing on the market after an interval, rather than immediately upon non-delivery to him, and the price of the goods on the latter date is higher than it was on the former, he is entitled to be credited with the higher price. Cf. also Collard v. S.E. Rly Co. (1861) 7 H. & N. 79. There must be limits to favouring the defaulter at the expense of his victim. “The duty of the plaintiff to mitigate damages at his peril,” says the author of a learned Note in (1921) 37 L.Q.R. at 7–8, “is harsh enough in theory and practice not to require extension.”

⁵⁶ See further the passage from Lord Reid, quoted at pp. 303–4 post. Lord Reid concedes (Havana, at 1051) that “in theory, it might seem” that the rule should not be so where in America one person lends dollars to another. In such case “there can be no question of an American going into the market and buying dollars to replace those which the debtor failed to deliver.” (Ibid., 1051–52.) Since, then, the “cow illustration” is thus virtually rejected and since, as Lord Reid says (Ibid. 1052, quoted post, p. 304), he really joins his voice in favour of the breach-date rule on a “primarily procedural” ground, it is not easy to understand why he should resuscitate Lord Wrenbury's cow—approvingly, it seems—in the third paragraph of his speech.

⁵⁷ See esp. p. 270 ff. post.

⁵⁸ N. 48 supra.

⁵⁹ In re British American Continental Bank, Ltd.: Goldzieher & Penso's Claim [1922] 2 Gh. 575, 583 (approved by the Court of Appeal). The non-sequitur is indicated by the italicized word “therefore”.

⁶⁰ Sally Wertheim v. Chicoutimi Pulp Co. [1911] A.C. 301, per Lord Atkinson, at 307. And see Robinson v. Harman (1848) 1 Ex. 850; Asquith L.J. in Victoria Laundry v. Newman Industries [1949] 2 K.B. 528, 539.

⁶¹ See n. 21 supra.

A reading of the various speeches in the Celia v. Volturno [1921] 2 A.C. 544 shows that what is really mooted under guise of the proper rate of exchange, are the substantive principles of liability in tort, in particular the doctrine that damages crystallize at infliction of loss.

Mann (at 285) proposes to determine the rate in each case “as a matter of construction” “thise approach will make it possible” he says (at 285–86) “to weigh the circumstances of each case, to give effect to the implied or imputed intentions of the parties and thus to do justice is cases which would be beyond the reach of a rule of a less flexible character.” It is this view of Mann that appears to be the best; and the present writer believes that the theme of this paper, which builds on the distinction between money-currency and money-commodity, as effectuating the intentions of the parties, is largely but the spelling out of that view.

In Khoury v. Khayat [1943] A.C. 507, 512, Lord Wright said: “…there are at least four different alternative rules which might be adopted. The rate of exchange might be determined as at the date at which payment was due, or at the date of actual payment, or at the date of the commencement of proceedings to enforce payment, or at the date of judgment.” (Also quoted by Viscount Simonds in Havana, at 1044–45.) It is believed that these solutions are certainly not “alternative” in the sense that we should commit ourselves to one of them for all cases irrespective of circumstances.

The suggestion to take the rate as of the commencement of proceedings (or the “writ-date rate”) was dismissed by Lord Buckmaster in the Celia v. Volturno [1921] 2 A.C. 544. The suggestion is, however, backed by the authority of Lord Ellenborough in Houriet v. Morris (1812) 3 Camp. 303; 170 E.R. 1390. It is also expressly preferred by Holmes J. in Deutsche Bank v. Humphrey (1926) 272 U.S. 517. There is, however, a controversy at to whether Holmes J. did not, in fact, mean the rate at judgment. Nussbaum 367, n. 31, Rifkind, op. cit. (n. 10, supra), p. 585 and Sutherland J. in his dissent in the same case read him as having so meant. Viscount Simonds and Lord Reid, in Havana, at 1048 and 1052, read him to have meant what he literally said, viz. “the moment when the suit is brought.” (The statement in the Note at (1965) 65 Col. L.R. 495 n. 31 that Holmes J. “has been universally interpreted to mean the judgment day rate” is unjustifiably sweeping. The Note incidentally disregards most English authorities, including Havana.) In Havana, Lord Radcliffe conceded (at 1060) that the date of commencement of proceedings has “a certain attractiveness”, but nevertheless proceeded to reject it. While the respective merits, such as they are, of the writ date and the judgment date are almost evenly balanced, so that it is by a narrow margin at most that the judgment date appears to be preferable, there can be little doubt that (in a money-currency obligation) either of these alternatives is altogether superior to the breach date. Cf. n. 255 post.

It has also been suggested that the creditor should have an option to claim either the rate at breach or, if he prefers, a later rate. The “later rate” adopted by the international Uniform Statutes on Bills and Notes and on Cheques is that prevailing on the day of payment, whereas in Havana Lord Radcliffe, in the course of mentioning this possibility (at 1061), adopts as a later rate that prevailing at the commencement of proceedings. Furnishing the creditor with such an option does not, however, appear to be right. If the money has declined since breach, the creditor should (in a money-currency obligation) be bound by its lower value: as he would have been entitled to benefit from appreciation after breach. Had he sued in the forum monetae, he would not have been privileged to enjoy such an “option”. On the other hand, and for the same reason, the debtor has no ground to complain where the money in obligatione has appreciated between breach and the issue of the writ.

⁶² Pace Lord Wright's, sweeping assertion (Legal Essays and Addresses (1939) 149)Google Scholar that “in law the credit theory of money must supplant the commodity theory”; and that the latter is “now an anachronism”. See the several speeches in Banco de Portugal v. Waterlow & Sons [1932] A.C. 452.

⁶³ “Money as currency, and not as medals,” said Darling J., “seems to me to have been well defined … as ‘that which passes freely from hand to hand throughout the community in final discharge of debts and full payment for commodities, being accepted equally without reference to the character or credit of the person who offers it and without the intention of the person who receives it to consume it or apply it to any other use than in turn to tender it to others in discharge of debts or payment for commodities‘”: Moss v. Hancock [1899] 2 Q.B. 111, 116. It was held in this criminal case that a £ 5 gold piece, presented to its owner and kept by him as a medal or curio, and stolen and sold for five gold sovereigns (whereas its actual value was somewhat higher than five separate sovereigns), was in fact not taken by the purchaser as money in circulation—this notwithstanding that, by Royal Proclamation, the piece had been declared current coin and legal tender, and was, nominally, no more than the equivalent of five separate sovereigns. This is a good illustration of the proposition that, intrinsically, money is neither currency nor commodity but that it is thinking and using that make it the one or the other. And see Miller v. Race (1758) 1 Burr. 452; 1 Sm. L.C. (13th ed., 1929) 524.

⁶⁴ Cf. also Chemical National Bank v. Equitable Trust Co. (1922) 194 N.Y. Supp. 177; Safian v. Irving National Bank (1922) 196 N.Y. Supp. 141.

⁶⁵ A man who stipulates for money which he plans to resell for profit, or merely to change into his personal currency, intends to put such money to a use other than “in turn to tender it to others in discharge of debts or payment for commodities.” Hence, under the practical test of Moss v. Hancock (supra), such man does not take the money as currency. And see ProfessorGraveson, R. H., “The Discharge of Foreign Monetary Obligations in the English Courts” (in Lectures on the Conflict of Laws and International Contracts, Ann Arbor, Michigan, 1951, p. 112)Google Scholar at 113–14 and Evan, op. cit. (n. 17 supra) at 314.

⁶⁶ Sec. 20 of the Monetary Act of 1792 (see 1 Stat. 250, 31 U.S.C. (1959) § 371).

⁶⁷ This view has found its way into § 423 of the Restatement of the Law of Conflict of Laws (1934). See Comment a. to § 423. Also, in the Deutsche Bank case (p. 274, post), Mr. Justice Sutherland, in his dissenting opinion, assumes (at 272 U.S. 520–21) that the distinction drawn by the majority between that case and Hicks v. Guinness rests on the difference in place of payment. Cf. Note in (1965) 65 Col. L.R. 490, 491, 495–96. Again, in a Note in (1962) 11 Int'l & Comp. L.Q. 1216, 1217, Professor O. Kahn-Freund says: “The United States Supreme Court does indeed convert foreign currency into dollars according to the rate of exchange at the date of judgment, but only if, as in Deutsche Bank v. Humphrey, the debt is payable in the United States, and not if it is payable elsewhere, as in Hicks v. Guinness.” (This, incidentally, appears to be a slip of the pen: it was in the Deutsche Bank case that the debt was payable outside the United States, in Hicks v. Guinness that it was payable in the United States.)

⁶⁸ Or an option given the creditor as a mere convenience to him, as in Bonython v. Commonwealth of Australia [1951] A.C. 201, 219.

⁶⁹ Cf. the explanation of Graumann v. Treitel [1940] 2 All E.R. 188 by Morton, L.J. in Re Parana [1946] 2 All E.R. 214, 219Google Scholar; and see ProfessorKahn-Freund, O. in (1940) 4 Mod. L.R. 149Google Scholar, and (1945) 8 Mod. L.R. 177, 190.

⁷⁰ Mr. Justice Holmes' judgment in another case, Zimmermann v. Sutherland (1927) 274 U.S. 253, lends some support to this construction.

Cf. Nussbaum 367, n. 31; (1965) 65 Col. L.R., loc. cit. and at 496–97. And see Lord Reid, in the Havana case (at 1051)Google Scholar: “When dealing with an English contract it may be right to treat foreign currency as a commodity …”.

⁷¹ This also appears to be Drake's view, op. cit. (n. 17 supra), esp. at 246.

⁷² P. 273 supra.

⁷³ This is so in German law: cf. Mann 142. But even if it were not, German law should have been deemed, in the absence of proof to the contrary, to be similar in this respect to the lex fori.

⁷⁴ Pp. 271–72 supra.

⁷⁵ See also Havana—Lord Reid, at 1052; Lord Radcliffe, at 1060.

The argument of “inconvenience” may be set up against a proposed interim ruling, or in matters of procedure and machinery, such as the appointment of receivers or the grant of temporary injunctions; but it should not be allowed to defeat substantive rights. Cf. Lord Herschell L.C., in London, Chatham & Dover Rly Co. v. S.E. Rly. Co. [1893] A.C. 429, 440.Google Scholar And see n. 16 supra; nn. 183, 255 post.

⁷⁶ At 1069.

The identical reasoning, couched in substantially the same words, had already previously been invoked by Denning, L.J. (as he then was) in Cummings v. London Bullion Co. Ltd. [1952] 1 K.B. 327, 335–36.Google Scholar

And cf. Parmoor, Lord in the Celia v. Volturno [1921] 2 A.C. 544, 559.Google Scholar

⁷⁷ See also, in general, the present writer's “Debt and Contract in the Common Law” (1966) 1 Is. L.R. 60–98.

⁷⁸ Cf. pp. 264–65 supra: where the money is a commodity the “cow illustration” is, on the whole, applicable; and so are the plaintiff's duty of mitigation and hence the doctrine of crystallization of loss.

⁷⁹ See p. 299 ff. post. Lord Reid and Lord Radcliffe rejected the “commodity view”. See pp. 303–04 post.

⁸⁰ P. 271 supra.

⁸¹ Western Wagon v. West [1892] 1 Ch. 271. The promisee may, by the application of the Hadley v. Baxendale principle, get more than interest, as in Trans Trust v. Danubian Trading Co. [1952] 2 Q.B. 297; or, on the other hand, the damages may be merely nominal. A lender relies on his pre-existing property: a would-be borrower can only rely on contract. This is reflected in the refusal of equity to decree specific performance of a contract to make (or to take) a loan (Rogers v. Challis, 27 Beav. 175; Sichel v. Mosenthal, 30 Beav. 371; Larios v. Gurety, L.R. 5 P.C. 346; South African Territories v. Wallington [1898] A.C. 309), whereas the duty to repay a debt is enforced specifically—and at common law. See n. 84 post.

⁸² It may be objected that, as in a loan of money or other fungibles for consumption the creditor cannot rely on his property in the objects claimed, he can only rely on the defendant's promise; and that, therefore, analytically every such loan (unless granted by deed) sounds in assumpsit—regardless of the historic sequence and formulary hierarchy whereunder debt preceded indebitatus assumpsit.

Even so, it does not follow that damages for breach should be assessed according to Hadley v. Baxendale, which settles the principles of assessment in unliquidated contractual claims. Where the parties have genuinely pre-estimated the foreseeable damages, their assessment prevails. And it can certainly be posited of every loan that the parties intended the creditor should receive not less than the quantity and quality lent, regardless both of fluctuations in monetary value (cf. n. 87 post) and of cost of “replacement” to himself. (Cf. p. 282 and nn. 90, 91 post.)

⁸³ See second Dialogue of Doctor and Student, Ch. XXXVIII, quoted in part in South Australian Insurance Company v. Randell (1869) L.R. 3 P.C. 101, 112; SirJones, William, An Essay on the Law of Bailments (3rd ed., 1823) 63–64Google Scholar; Story, Commentaries on the Law of Bailments (9th ed., 1878) §§ 228, 283, 284. In a loan by way of mutuum the lender cannot, because of the consumable quality of the thing(s) lent, retain his property in that which is lent. Nevertheless while Paton, , Bailment in the Common Law (1952) 147Google Scholar considers mutuum as falling outside his subject, because the specific res is not returned, both Sir William Jones and Story consider mutuum sufficiently akin to bailment proper to deal with it in their works on the subject. Buckland, and McNair, , Roman Law and Common Law (2nd. ed., 1952) 279CrossRefGoogle Scholar think that when a fungible other than money, such as corn, is advanced by way of mutuum English Law appears “to regard the transaction as sale (or at any rate as a transfer of property for value) and not bailment.” Yet they point out (Ibid., n. 3) that the evidence for this proposition is “scanty and unsatisfactory” and that it is “not easy to reconcile” with sec. 1 of the Sale of Goods Act, 1893. It is submitted that “not easy to reconcile” is something of an understatement: the definition of sale in sec. 1 as “a contract whereby the seller transfers…the property in goods to the buyer for a money consideration, called the price” excludes mutuum from “sale”. It is a quasi-bailment.

In spite of the transfer of property to the borrower, the law speaks of “returning” the lender “his” bushels of wheat or bottles of sherry. See the wording of C.C., § 1902, BGB, § 607. Similar expressions abound in English cases: for example, Lord Brougham in Foley v. Hill (1848) 2 H.L.C. 28, 43.

In some circumstances the condition of a lender in mutuum, who ceases to “own” the res, is more precarious than that of a bailor proper. Thus in the borrower's bankruptcy he must compete as a mere creditor. In other circumstances his position is actually less vulnerable. For example, he is not affected by destruction of the object lent, or of a replacement earmarked by the borrower for return, because genera non pereunt and the obligation survives intact.

In assessing the juridical nature of mutuum it is a material consideration that the parties do not make this transaction because they prefer it to bailment proper but because with consumables no other form of loan for use is possible. A mutuum is made necessary by the consumable attribute of the res; it is made possible by its fungible attribute. See in particular Langdell, A Summary of the Law of Contracts (1880) 123–24.

⁸⁴ See Pothier, , Tratté du Prêt de Consomption, 5 Oeuvres (ed. 1847) 49Google Scholar: “Le contrat de prêt, mutuum, est de la classe des contrats réels, puisqu'il ne peut se former que par la tradition de la chose qui en fait l'objet…”. What makes a transaction “real” is that it entails “delivery” or conveyance of proprietary rights. Therefore the quality of mutuum as contracted re places it in the same class with commodatum, depositum and pignus though it differs from them in that the ownership in the res is transferred.

In the history of English law debt belongs to this “real” class. It was “a writ of right for chattels,” “which by the Register is an action of Property,” than which assumpsit is “much inferior and ignobler”: Vaughan C.J. in Edgcomb v. Dee (1670) Vaughan 89, 101; 124 E.R. 984, 990. (See also n. 199, post.) It was an action “not to enforce a promise, but to get something conceived as already belonging to the plaintiff…”: Pollock on Contracts (13th ed., 1950), pp. 109–10. Cf. Winfield, , The Province of the Law of Tort (1931) 44 ff., 207Google Scholar; 2 Holdsworth, H.E.L., 368. And see Holdsworth's quotation (Ibid., n. 6) from the Register, ff. 138b, 140: “pur ceo que le debt suppose propertie…”. See also 8 H.E.L., 1; 71–72. Like the writ of right, on which it was modelled, debt was a praecipe quod reddat and the sum of money demanded was described as one of which the defendant “deforces” the plaintiff. Debt was “not conceived of as raised by a promise” (Holmes, , The Common Law, 1881, p. 264)Google Scholar: the idea of purely promissory liability not having arisen within the common law until considerably later. See Raymond Negus, E., “Rate of Exchange in Reference to Foreign Debts and Debts Expressed in Foreign Currency” (1924) 40 L.Q.R. 149, 161Google Scholar.

The “reality” of debt, though no longer considered as resting on the creditor's abiding “property”, is by no means an outworn concept. It underlies the recuperatory nature of proceedings to enforce repayment and furnishes the only intelligible explanation of the important rule (cf. Western Wagon v. West [1892] 1 Ch. 271, esp. 277; South African Territories v. Wallington [1897] 1 Q.B. 692, esp. 695; [1898] A.C. 309, esp. 314, 315) that no debt is created by a promise, however unconditional, to give a loan of money, but that the breach of such promise sounds only in contractual damages. Why is this so? Surely because a promise to make a loan—as distinct from one to repay a loan—is no part of an executed “real” transaction. An intending borrower does not own the promised money; he is only entitled to use it (see n. 81 supra and (1966) 1 Is. L.R. at 90).

The “reality” of debt is, furthermore, what accounts for the fundamental dissimilarity between real obligations and those which are only promissory in the effect upon the obligation of a valid tender. A contractual promisee of (say) personal services, who has refused tender of those services, can no longer sue, the promiser being innocent of breach; indeed, it is the promisee who may be liable for his repudiation. But the lender of money, who has refused a good tender, while he can no longer sue for breach of the promise to pay, the promise not having been broken by the debtor, continues to be entitled to his principal “in debt”, even after his contract is gone. The mere promisee, who only had an executory contract, is left with nothing: the lender, similarly bereft of his contract, can still cling to his debt. In this respect the lender's position in mutuum is similar to that of the owner in commodatum, who will have detinue (or “property”) even where he cannot sue in contract because, contractually, the other party has not been in the wrong. (Cf. also n. 222 post and (1966) 1 Is. L.R. at 91–92.)

See Lord Maugham L.C., in New Brunswick Rly. Co. v. British & French Trust Corporation [1939] A.C. 1, 23Google Scholar; Holt C.J. in Giles v. Hartis (1698) 1 Ld. Raym. 254; 91 E.R. 1066. Cf. 20 Viner's Abridgment, tit. Tender (2nd ed., 1793) at 193.

The “real” or “recuperatory” nature of debt is also tellingly revealed in the distinction between suing a man on his own principal debt and suing him to secure a “collateral” undertaking, such as his liability as guarantor or his own liability to pay a larger sum by way of penalty if a smaller is not duly paid. In all these cases, in which the claim is not for a return of what has been given, a valid tender is pleadable in complete bar of the entire claim: whereas if a man is sued for his own principal debt, a valid tender does not extinguish plaintiff's right to the debt itself. Cf. 20 Viner's Abridgment, ibid., p. 195; and under tit. Tout temps prist, p. 307.

⁸⁵ In the positive law of England a borrower's duty to pay is considered to arise both re and consensu. This is the effect of the historic settlement in Slade's Case (1602) 4 Co. Rep. 92a. One of the questions resolved after argument and re-argument “before all the Justices of England and Barons of the Exchequer,” was “that the plaintiff in this action on the case on assumpsit should not recover only damages for the special loss (if any be) which he had, but also for the whole debt…” (at 94b). It will be noted that this the plaintiff is to recover “in this action on the case on assumpsit”: so that the alleged non-availability of a writ of debt is immaterial.

It never entered the heads of the judges that because a creditor asked to be compensated for the unjust detention from him of his principal, therefore he should receive less than in case he sued only for his principal, without also claiming compensation. Even in that ringing denunciation of Slade's Case, Edgcomb v. Dee (1670) Vaughan 89; 124 E.R. 984 (in which the former case is spoken of as “that illegal resolution … grounded upon reasons not fit for a declamation, much less for a decision of law,” and as “a false gloss”: Vaughan, 101), while it is insisted that in an assumpsit upon a debt, the jury proceed “by way of damage, and not as a debt is recovered,” Vaughan C.J., nevertheless concedes that what “the jury give in damages regularly” is “the money promised to be paid”. (Ibid.) For a more recent case in which it was held that though the claim could not be in debt nevertheless the measure of damages was the exact amount owing, see Schlesinger v. Mostyn [1932] 1 K.B. 349. Cf. also Carr v. Roberts (1833) 5 B.,& Ad. 78; Ashdown v. Ingamells (1880) 5 Ex. D. 280.

The error springs from confounding the liquidated damages recovered where money lent is sued for (even under the form of assumpsit) with the damages at large recoverable in actions of pure case—the mistake, as Lord Mansfield said (Robinson v. Bland (1760) 1 Black. W. 256, 264; 96 E.R. 141, 144), of “looking upon an action of assumpsit as merely an action of trespass.”

⁸⁶ As the object adjudged to be given by the defendant to the plaintiff, viz. money, is the same as would have been adjudged had the claim been for unliquidated damages, the “real” nature of the award, the specific enforcement, tends to become blurred.

In Robinson v. Bland (1761) Lord Mansfield said: “But we all know that in actions upon contracts for the payment of money, the damages are nominal; the true relief consists in the specific performance.” (1 Wm. Bl. 256, 263; 96 E.R. 141, 143.) He proceeded to add the illuminating observation: “When money is given as damages, it is where the money is not itself the specific demand, but is used as a common measure, to ascertain the amount of the injury.” And see Evan, op. cit. (n. 17 supra), n. 173; Sheppard's Touchstone (6th ed., 1791) 386.

⁸⁷ See Domat, 1 Les loix civiles, etc. (1776 ed.)76: “Dans le prêt du bled, du vin & des autres choses semblables, dont le prix augmente, ou diminue, le débiteur doit la même quantité qu'il a empruntée, & ni plus ni moins, soit que le prix en soit augmenté ou diminué…”. Thus also French C.C. § 1897. Pothier states the reason for this rule: that it is not to the value of the thing, but to the thing, that the parties had regard. Op. cit. (n. 84 supra), p. 46.

Direct English authority for the above proposition is apparently furnished by a case of the reign of Edward, I, referred to in Le Case de Mixt Moneys (1604) Davis 18Google Scholar; 80 E.R. 507, 515. And see in 8 Viner's Abridgment, tit. “Detinue” (2nd ed., 1791) 40.

^88. See Maule, J. in Deacon v. Gridley (1854) 15C.B. 295Google Scholar, 303–04 and his statement in Owen v. Routh & Ogle (1854) 14 C.B. 327, 338: “Debt lies for fish … or for a gown, and the like …”.

Debt was, on the whole, “the appropriate action in transactions of the nature of mutuum, detinue in transactions of the nature of commodatum.” 2 Holdsworth, , H.E.L., 368Google Scholar; 2 Pollock, and Maitland, , H.E.L., 206Google Scholar. The statement, frequently encountered, that debt was the action for recovery of money, detinue for recovery of chattels, is inaccurate. The relevant dichotomy was not money versus chattels but generic chattels (including money) versus specific chattels. Holdsworth at 3 H.E.L., 420 must be considered a relapse from his more exact statement at 2 H.E.L., 367 ff.: just as the note at Fitzherbert's Nat. Brev. (9th ed., 1794) to 138A saying that detinue “was for the recovery of a chattel, the other of money” should be read together with the statement which follows that “Debt lieth in some cases for a chattel”. And see 7 Viner's Abridgment, tit. “Debt” (2nd ed., 1791) 324, 363; 8 Viner's Abridgment, tit. “Detinue”, p. 21. Money “delivered to be redelivered” should be sued for in debt when the money “cannot be known and therefore the property is altered”; but if the money is “Portugalls or other money that may be known”, there detinue lies: Bretton v. Barnet (1599–1600) Owen 86.

⁸⁹ The consumption of money is anomalous in that it consists not in its destruction but in its alienation or loss to the owner. This, however, is without importance to our context.

⁹⁰ Cf. p. 289 post.

⁹¹ Lord Atkin, , in Banco de Portugal v. Waterlow & Sons Ltd. [1932] A.C. 452, 490.Google Scholar And cf. France v. Gaudet (1871) L.R. 6 Q.B. 199.

⁹² A fairly similar situation arises where a man's rights are violated because his goods are unlawfully detained from him. Cf. 8 Viner's Abridgment, tit. “Detinue” (2nd ed., 1791) 25: “Either an action upon the case of trover and conversion, or an action of detinue at the election of the plaintiff may be brought for goods detained from him (22 Car.I. B.R.) for it is but justice that the party should recover his goods detained in specie, if they may be had, or else damages sustained for detaining them, at his election; for the defendant is not injured thereby…”. (Italics added.) See, in general, Viscount Simonds in United Australia v. Barclay's Bank [1941] A.C. 1, 19 for the proposition that “[t]he same set of facts entitles the plaintiff to claim either form of redress”.

⁹³ At 463–65.

⁹⁴ He added, however, that the question of the rate of exchange—as distinct from the effect of an executed discharge—“seems to require very full consideration”, and that he personally would desire to reserve it.

⁹⁵ At 455.

⁹⁶ Pp. 265–66, 270, 273 supra.

⁹⁷ C.C. § 1895: “L'obligation qui résulte d'un prêt en argent n'est toujours que de la somme numérique énoncée au contrat…”.

⁹⁸ See Scrutton L.J.'s pointed remark at 460.

⁹⁹ Cf. Blackburn Bobbin v. Allen [1918] 2 K.B. 467.

¹⁰⁰ See n. 97 supra.

¹⁰¹ It was French: Scrutton L.J. at 460.

¹⁰² “Courts of law constantly profess to be guided by considerations of justice,” says Negus. “It is repellant to our elementary notions of justice to suppose that in … the Le Touquet case, the creditor should obtain more or less in a foreign tribunal than in a tribunal of the place the law of which is the proper law of the contract.” Negus, op. cit. (n. 84 supra) at 162. And see p. 293 post.

¹⁰³ Per Clauson L.J., at 77. Clauson L.J.'s judgment was delivered for the Court, consisting besides himself of Scott and Du Parck L.JJ.

¹⁰⁴ So, in the Havana case, the breach-date rule was upheld though “anomalous” and a rule which “may in some cases be artificial [and] may even be unjust.” See p. 252 supra.

Cf. Drake's criticism, op. cit., (n. 17 supra) at 236, made before the Madeleine Vionnet case but which has gained in relevance since, that the breach-date rule was reached “simply by following the precedents rather than by appealing to any rational principle of law or justice.”

In the coming pages it is sought to show that even the consolation of following precedent it largely illusory.

¹⁰⁵ Ibid.

¹⁰⁶ P. 283 supra.

¹⁰⁷ At 78.

¹⁰⁸ At 79.

¹⁰⁹ See n. 7, supra.

¹¹⁰ In Manners v. Pearson there was a debt of Mexican money from one English firm to another. The creditor presumably needed his Mexican dollars at the appointed time and place, which makes it reasonable to assume that the parties contemplated that if he did not receive them from the defendant he would have to purchase them on the market, i.e. to treat that debtor's breach as if it were failure to deliver a commodity. “If this is so”, said Vaughan Williams L.J. (at 592), “it follows that the date as of which this value must be ascertained is the date of the breach, and not the date of the judgment.” Provided due weight is accorded the qualifying words “if this is so”, the statement is unobjectionable. It also ceases to be relevant to a case, such as the Havana, where the money was not regarded as a commodity.

In Scott v. Bevan there was a judgment-debt of £ 1836.10s.8d “current money of the island of Jamaica”. While the case had not decided that the date of the Jamaica judgment should be preferred to any subsequent date, that it did so decide is perhaps suggested by the headnote summary. Scott v. Bevan turned not on rates of exchange conflicting in time (breach-date as against some later date) but on rates conflicting in place (the rate in Jamaica as against the rate in England). It was held, in effect, that the defendant (the judgment-debtor) had been right in paying in England less English money because he was entitled to credit himself with the expense that the plaintiff would have incurred, had payment been made in Jamaica, of transmitting the money to England. In those days (c. 1830), before telegraphic transfers and bankers' airmail orders, before even the introduction on many sea lanes of steam navigation, the question whether creditor or debtor should bear the risk and expense of forwarding money was of considerable importance. A substantial commission or premium had to be paid for a ninety days' sight bill (which was, apparently, a usual method of transfer: p. 81), and this expense would presumably have fallen on the creditor if he had been paid in Jamaica. No facts are recorded from which it can be deduced that the plaintiff would or would not have transmitted the money to England. Counsel urged (p. 80) that “the plaintiff was not bound to take bills on England; if he had had his money in Jamaica, he might have invested it there, in the purchase of land or goods…”. Unfortunately the decision was later taken for authority that the rate at the time of the Jamaican judgment (which was the cause of action sued upon in England) was controlling (as if it had been pleaded that a higher or a lower rate prevailed at any other material time).

Much mischief would have been avoided had the clear and highly relevant authority of Lord Eldon L.C., in Cash v. Kennion (1805) 11 Ves. 314Google Scholar been cited to the Court. Virtually the same question had been considered in Cash v. Kennion, but on the intelligible footing of which of the two, creditor or debtor, had to bear the expense of forwarding the money.

On Cash v. Kennion and Scott v. Bevan see also McNair, op. cit. (n. 31 supra), at 38–39; Gluck, , “The Rate of Exchange in the Law of Damages” (1922) 22 Col. L.R. 217, 224CrossRefGoogle Scholar; Negus, op. cit. (n. 84 supra), at 149–52. In the Havana case counsel for the creditors appears to have argued for a truer reading of Scott v. Bevan: see [1961] A.C., at 1030—as to which Viscount Simonds (at 1046) said that “it has from time to time been suggested, and was strenuously urged by counsel, that [Scott v. Bevan] does not decide a point which it obviously does.” Viscount Simonds then proceeds to give a summary of the case—and to at least one reader it appears doubtful from that very summary that Scott v. Bevan has decided in favour of the breach-date rule, let alone that it has done so “obviously”. (None of the above-mentioned references conducive to a better reading of Scott v. Bevan appears to have been brought to the attention of the House; at any rate none of them is mentioned in the judgment, which is also silent on the factual background of that case: transfer expenses, etc.)

¹¹¹ Lawrence J. disregarded Le Touquet because he thought (at 596) that in that case the payment in France “amounted to accord and satisfaction” and was for this reason a good defence to the action. In this he erred: in Le Touquet the Court of Appeal expressly held that there had not been accord and satisfaction: [1922] 1 K.B.—Scrutton L.J., at 460; Atkin L.J., at 464. Hence Le Touquet is authority that payment sufficient in the eye of the proper law is sufficient in English law. Had Lawrence J. thus correctly read Le Touquet, it is quite likely that the much more recent and much more direct authority of it would have swayed him to a different conclusion.

¹¹² In Havana Viscount Simonds, after referring to the inability of counsel in Madeleine Vionnet to point to a distinction between debt and damages, says (at 1048): “I may without disrespect say that learned counsel for the respondents on the present appeal, greatly though he assisted the House, suffered in this respect from the same infirmity.” And See Lord Radcliffe, Ibid., at 1060; Bailhache J. in Peyrae v. Wilkinson [1924] 2 K.B. 166, 167.

Yet, as Negus observes, “It is unsatisfactory to assume that, when the application of a principle to questions of damages for breach of contract has not been discussed with reference to questions of debt, such application can equally well be made …”. Op. cit. (n. 84 supra), at 152.

¹¹³ N. 84 supra. “Recuperatory,” in Maitland's language: Lectures on the Forms of Action at Common Law. Lecture V (1932 ed., p. 357).

¹¹⁴ Cf. Kant's observation on a creditor who receives “that for which he bargained”, quoted by Drake, op. cit. (n. 17 supra), ftn. 39 at pp. 242–43.

¹¹⁵ Celia v. Volturno [1921] 2 A.C. 544, per Lord Buckmaster, at 548.

¹¹⁶ “The very duty to pay is inchoate until determined by a judgment”: Rifkind, op. cit. (n. 10 supra), at 576.

The uncertainty, the “nonliquidity”, extends even farther. The amount of damages ultimately determined to be payable may depend on the forum before which litigation takes place. If an action of tort is brought in England damages are assessed as in English domestic law and not in accordance with the lex loci delicti. (Machado v. Fontes [1896] 2 Q.B. 231; Kohnke v. Karger [1951] 2 K.B. 670.) Also, the judicial “liquidation” of the claim may well depend on the availability and quality of testimony, which, in turn, may vary with the place and certainly with the time of trial—neither of which can be known with certainty when the cause of action accrues. It is small wonder that unliquidated claims (in tort) are not provable in, or dischargeable through, bankruptcy. These uncertainties do not normally surround debts.

(On the possible link between the “creative” aspect of adjudication in claims in tort and the applicability thereto of the lex fori, see ProfessorKahn-Freund's, challenging observations in The Growth of Internationalism in English Private International Law (1960) 64–65.Google Scholar)

¹¹⁷ This is not to deny that the value of a particular currency at a particular time may enter the picture and affect the final award if such value happens to constitute one of the heads of damage. It can never, however, be material on the ground that it is the very thing by which the parties agreed to abide.

¹¹⁸ In assessing unliquidated damages there is no ground for ignoring fluctuations of the value of the pound even in England and between Englishmen. Cf. Hart v. Griffith-Jones [1948] 2 All E.R. 729; but see also Bishop v. Cunard [1950] P. 240.

¹¹⁹ Following collision at sea, the defendants became liable for damages in tort. The plaintiffs stated or estimated their loss in Italian lire, and it therefore became necessary to convert those lire into English money.

Was this process indistinguishable from an action upon a debt of Italian lire? Lord Sumner thought not. At 553 he described the presentation of the case as being “in substance a claim by the owners of the Volturno for a sum contractually due from the owners of the Celia in lire” as one of two “falacious suggestions”. On the same page he said that the “compensation was not recoverable in any particular currency.” He added: “The essential thing to remember, which the appellants somewhat ignored, is that the sum in question here is only an item in a general claim for damages for a wrong done at sea, which was the subject of compensation just as naturally in British as in Italian currency” (italics added).

¹²⁰ At 270.

¹²¹ I.e. the Celia v. Volturno. (N. 115 supra.)

¹²² At 271.

¹²³ For another attempt, again unsuccessful, to remove a case “from the category of claims for damages and converting it into a quasi-contractual claim for a liquidated sum”, see Jenkins, J. in Re Rickett [1949] 1 All E.R. 737, 742Google Scholar.

¹²⁴ At 274.

¹²⁵ If it were so clear that debt occupied exactly the same juridical niche as unliquidated damages, then, as Negus says, “it is a little difficult to appreciate the care with which many learned Judges, past and present, have distinguished cases of debt from cases of breach of contract or tort.” Op. cit. (n. 84 supra), at 154. He refers (154–55) to a number of instances. Thus, Lord Sumner in the Celia v. Volturno [1921] 2 A.C. at 557. Again, Sir William Grant M.R., in Pilkington v. Commissioners of Claims on France (1821) 2 Knapp 7; 12 E.R. 381 (at Knapp 19–20). In Di Ferdinando v. Simon, Smits [1920] 2 K.B. 704, 706 counsel for plaintiff conceded in argument: “In all cases cited the claim has been for money and it is obvious that in these cases the exchange at the time of the judgment must be adopted, for otherwise the plaintiff might get more or less money than he claimed.” And Roche J. (Ibid., at 708) accepted the view that such cases formed a class apart. See also Lord Sterndale M.R., in In Re British, etc.: Lisser, & Rosenkrantz's Claim [1923] 1 Ch. at 291Google Scholar: “I think it is quite a fallacy to say that there was any debt of this 4,330,000 marks in the sense of being an ordinary debt as distinguished from the ascertainment of damages for breach of contract…”. And Warrington L.J. Ibid., at p. 292 (italics added).

As Negus observes (Ibid.), if the rate of exchange for foreign debts is to be settled on an analogy for damages for non-delivery of a commodity, then “[t]hese and similar remarks appear to be devoid of significance,” and it would also appear that “the unanimous decision of the Court of Appeal in [the Le Touquet case] must either be regarded as wrong or else distinguished upon grounds so highly technical as to appear almost frivolous.” See also Graveson, op. cit. (n. 65 supra) at 119.

¹²⁶ Such as those relating to: provability in bankruptcy; availability of summary, as distinct from ordinary, procedure; attachability; assignability; satisfaction by paying a smaller for a larger sum; set-off; the effect of acknowledgment upon revival of statute-barred liability. See (1966) 1 Is. L.R. at 90–98.

¹²⁷ Lindley, L.J. in Davys v. Richardson (1888) 21 Q.B.D. 202, 205Google Scholar: “…you cannot…set up a defence of tender in answer to a claim for unliquidated damages.” See also Lord Denman C.J., in Dearie v. Barrett (1834) 2 A. & E. 82, 83–84Google Scholar; tender cannot be pleaded “to any count for unliquidated damages.” And see 20 Viner's, Abridgment, tit. Tender (2nd ed., 1793) 198.Google Scholar

¹²⁸ See Barry v. Van den Hurk [1920] 2 K.B. 709. Cf. also Lebeaupin v. Crispin [1920] 2 K.B. 714; and, particularly, the argument of Serjt. Byles in Owen v. Routh & Ogle (1854) 14 C.B. 327, 336–37, and the remarks of Cresswell J. at 337–38.

¹²⁹ Cf. n. 116 supra.

¹³⁰ See Kahn-Freund, O., “Foreign Money Debts—Conversion into Sterling” (1940) 3 Mod. L.R. 228–30.Google Scholar

While, indeed, the two cases differ in that in the one payment was into court, in the other out of court; in the one it was made in England, in the other in France; in the one in English pounds to the equivalent value of the owed francs, in the other actually in francs—these differences fail to add up to a significant distinction in justice or in reason. As Professor Kahn-Freund remarks elsewhere (in a Note, (1952) 68 L.Q.R. 163, 166), the “combined result” of these cases “does not look believable” and the writer is forced to accept them “with a resigned credo quia absurdum”.

¹³¹ Cf. n. 102 supra. In Israel also nominalism is the normal rule. See judgment of the Supreme Court in Bechar v. Bidermann (1963) 17 P.D. 886, per Sussmann J.

¹³² In his speech in the Havana, at 1070. Apart from other considerations, examined hereafter, Lord Denning's advice is inapplicable to a defendant who denies liability altogether.

¹³³ See p. 292 and n. 127 supra. In this context “payment” and “tender” are interchangeable.

¹³⁴ See p. 299 ff. post.

¹³⁵ Lord Radcliffe, at 1060 : “… the date at which legal proceedings are begun in this country … is the date which marks the creditor's decision to convert his claim in foreign money into a sterling judgment.” And cf. New Brunswick Rly. Co. v. British & French Trust Corporation [1939] A.C. 1; Somervell, L. J. in Cummings v. London Bullion [1952] 1 K.B. 327, 335.Google Scholar Sussmann J., speaking in the Supreme Court of Israel with reference to the rule that an English court adjudicates in English money exclusively, said that it followed that “as of the institution of proceedings the debt is converted, regardless of the creditor, into a debt in local currency.” Arison v. Reis (1956) 10 P.D. 1713, 1718.

See also nn. 136, 137 post.

¹³⁶ Cf. Lord Maugham L. C., in New Brunswick Rly. Co. v. British & French Trust Corporation [1939] A.C. 1., 24.Google Scholar

The idea that the issue of the writ immobilizes the rights of the parties may be partly responsible for another error: that as of this event the creditor decides “to convert his claim in foreign money into a sterling judgment” (cf. n. 135 supra), and that thenceforth an offer of non-sterling should be disregarded. See n. 139 post.

¹³⁷ Cf. Co. Litt. 344 b; Bellamy v. Sabine (1857) De G. & J. 566.

¹³⁸ Cf. Wolff, , Private International Law (2nd ed., 1950) 247–48.Google Scholar See also Attorney General v. Vernazza [1960] 3 All E.R. 97.

“The matter” which properly passes “into the domain of the court” is the procedure of pleading tender (or, as may be, payment or accord and satisfaction). Thus, the rule that with a defence of tender before action the money alleged to have been tendered must be brought into court (New Brunswick Rly. Co. v. British & French Trust Corporation [1939] A.C. 1, per Lord Maugham L.C., at 23, and see R.S.C., O. 22, r. 1.; 20 Viner's, Abridgment, tit. Tout temps prist (2nd ed., 1793) 310Google Scholar; Kinnaird v. Trollope (1889) 42 Ch. D. 610) may possibly apply even where the debt is foreign and no such requirement is imposed either by the proper law or by the law of the place of payment.

It is also arguable that, whichever currency was actually offered in tender, the money paid into court in England must be English money. Cf. Lord Porter, in Pyrmont v. Schott [1938] A.C. 145, 156.Google Scholar The Notice of Payment into Court (Form 3, Appendix B Pt. II to R.S.C.) carries the £ symbol in the space to be filled in with the amount paid.

¹³⁹ The payment was moreover of French francs: the authority of this decision being thus available against the error referred to in n. 136 supra.

¹⁴⁰ Potter v. Brown (1804) 5 East 124.

¹⁴¹ Ralli v. Dennistoun (1851) 6 Ex. 483; Ellis v. M'Henry (1871) L.R. 6 C.P. 228; Gibbs v. Soc. Industrielle des Métaux (1890) 25 Q.B.D. 399; Swiss Bank Corporation v. Boehmische Industrial Bank [1923] 1 K.B. 673; In re Helbert Wagg [1956] Ch. 323. See also p. 297 and n. 146 post.

¹⁴² Read's Trustee v. Smith [1951] Ch. 439; Farquharson v. Pearl Assurance Co. [1937] 3 All E.R. 124.

¹⁴³ Lord Maugham L.C., , in New Brunswick Rly Co. v. British & French Trust Corporation [1939] A.C. 1, 23Google Scholar says that tender has the effect of “entitling the debtor to the costs of an action to recover the debt.” This, however, is not all. As the debtor is, and has throughout been, in the right, he is entitled to have the action against him expressly dismissed. His is the position of a defendant who makes out his defence: Cockburn, C.J. in James v. Vane (1860) 29 L.J. (Q.B.) 169Google Scholar; Roxburgh, J. in Read's Trustee v. Smith [1951] Ch. 439Google Scholar; 1 Annual Practice (1965) 1999/256. Not having broken his contract, there is no cause of action against him in contract. And there is no longer a cause of action against him for detention of the debt: he having (along with his plea of tender) brought the debt into court. The plaintiff is of course entitled to his money in court; but he does not require the authority of a judgment in personam against the debtor in order to draw that money out.

For other metamorphoses which the liability undergoes in consequence of tender, see (1966) 1 Is. L.R. at 91 n. 148.

¹⁴⁴ Bac. Abr. Tender (D.); New Brunswick Rly. Co. v. British & French Trust Corporation [1939] A.C. 1, 24, 29, 34; 1 Wms. Saund. (ed. 1871) 39. And see n. 41 supra. Also, if the debtor refused to pay when duly requested, on any previous occasion, he can no longer plead that he had at all times been ready and willing; and if thereafter he makes an offer, even before action, that offer is no longer technically legal tender. Bennett v. Parker [1867] Ir. R. 2 C.L. 89, 95; Poole v. Tunbridge (1837) 2 M. & W. 223; Johnson v. Clay (1817) 7 Taunt. 486; 1 Wms. Saund. (ed. 1871) 40; 20 Viner's Abridgment tit. Tout temps prist (2nd ed., 1793)307.

However, even in earlier days it was not considered fair that interest should run against a debtor after a just offer to pay, even where that offer fails to amount to strict tender (20 Viner's, Abridgment, tit. Tender (2nd ed., 1793) 192)Google Scholar; and, in general, the law has been moving in the direction of Serjeant Levinz's invention that the debtor can make payment into court by way of “amends” at any time after appearance and that thereafter the plaintiff proceeds at his peril. (R.S.C., O. 22, r. 1; 1 Wms. Saund. (ed. 1871) 45. See Holt, C.J. in Giles v. Hartis (1698) I Ld. Raym. 254, 255Google Scholar; 91 E.R. 1066.) Such payment is not a defence to the action but it is “an offer to dispose of the claim on terms” (Devlin, L.J., in French v. Kingswood Hill [1960] 3 All E.R. at 252Google Scholar) and the court will have regard to it.

The Supreme Court Costs Rules, 1959, in providing (r. 5) that in exercising its discretion as to costs the Court shall “take into account” “any payment of money into Court and the amount of such payment,” refer to money paid into court not only with a defence o tender proper but also by way of “amends”. And see Hultquist v. Universal Pattern [1960] 2 Q.B. 467.

¹⁴⁵ Story, Joseph, Commentaries on the Conflict of Laws (8th ed., 1883) 477–78.Google Scholar

If, and to the extent that, New Brunswick Rly. Co. v. British & French Trust Corporation [1939] A.C. 1 lends itself to the proposition that the substantive validity or adequacy of tender is to be tested by the lex fori, as a matter of procedure, even in respect of a foreign obligation, then it is submitted that such an (to borrow a phrase from Professor Kahn-Freund in (1940) 3 Mod. L.R. 231) “encroachment by the lex fori on the lex causae,” is not defensible. Cf. MANN, esp. at 301; and see, in general, Morris, J. H. C., “The Eclipse of the Lex Loci Solutionis—A Fallacy Exploded” (1953) 6 Vanderbilt L.R. 505.Google Scholar See also n. 244 post.

¹⁴⁶ Lord Denning, at 1067: “A discharge in accordance with the proper law is valid; but a discharge which is not in accordance with the proper law is invalid”. This aspect of the case is more comprehensively dealt with in the two instances before the House of Lords. See Wynn-Parry J. at [1958] 1 Ch. 747, 756–58; Jenkins L.J. at [1960] 1 Ch. 86, 91.

¹⁴⁷ Lord Denning, at 1068: “…the Railway Company was at all material times under an obligation to pay the rentals to the respondents in full in dollars in the United States of America…” (italics added).

¹⁴⁸ 1 Wms. Saund. (ed. 1871) 118, n.; Dicey's, Conflict of Laws (7th ed., 1958) 996.Google Scholar

¹⁴⁹ Cf. Wolff, op. cit., 272; Batiffol, , Droit International Privé (3rd ed., 1959) 826, 856Google Scholar; Lerebours-Pigeonnière, , Dr. Int. Pr. (7th ed., 1959) 503Google Scholar; 3 Arminjon, , Dr. Int. Pr. (2nd ed., 1952) 297 ff.Google Scholar; Walker, , Internationales Privatrecht (4th ed., 1926) 214 ff.Google Scholar

¹⁵⁰ Such cases as Taylor v. Hollard [1902] 1 K.B. 676 notwithstanding. These lay down that a partially successful plaintiff, held by a foreign court entitled on the merits to a smaller sum than he claims, and recovering abroad the fruits of the judgment, cannot sue for the balance in England. They thus merely apply the evident proposition that where the amount of the obligation has become res judicata between the parties, the debtor is entitled to avail himself of the estoppel.

¹⁵¹ Harris v. Quine (1869) L.R. 4 Q.B. 653; In re Low [1894] 1 Ch. 147, 162; Warner v. Buffalo Drydock Co. (1933) 67 F. (2d) 540.

¹⁵² At 1043. (Italics added.)

¹⁵³ At 1052.

¹⁵⁴ At 1069.

¹⁵⁵ At 1070.

¹⁵⁶ The facts of Havana. See p. 253 supra.

¹⁵⁷ The date of breach is presumably intended.

¹⁵⁸ See also Lord Radcliffe, at 1061.

¹⁵⁹ Cf. Willams, Glanville, Learning the Law (7th ed., 1963) 27.Google Scholar

¹⁶⁰ See, in particular, Atkin L.J.'s remarks quoted in n. 198, post, at end.

¹⁶¹ Pp. 269–70 supra.

¹⁶² N. 160 supra.

¹⁶³ See n. 48 and pp. 266–67 supra.

¹⁶⁴ One of the more bizarre consequences of taking foreign money to be in every case a commodity is that an ordinary sale between two foreigners in their own country would always be, in the eye of English law, a barter. See Graveson, op. cit. (n. 65 supra), p. 113. See also Fraenkel op. cit. (n. 16 supra), p. 365.

Another astonishing result would be that a loan of foreign money could not carry interest. Needless to say, this has never been suggested, let alone acted upon. Cf. Dr. F.A. Mann, in Sixth Report of the Private International Law Committee, March 1962, Cmnd. 1648, p. 17.

Yet another fundamentally wrong corollary of “no debt for foreign money” is that different causes of action would arise in different countries on the very same facts. At least as between common-law jurisdictions such a state of affairs would be amazing. Thus if an Australian bank refuses payment in Australia of a claimed sum of Australian money and suit is brought against the bank in London (where it has offices), the cause of action in London would not be the same as, on these very facts, it would be in Australia. Cf. Richardson v. Richardson [1927] P. 228, 234.

¹⁶⁵ Pp. 281–82 supra—with reference to cases in which money is a commodity because so regarded by the contracting parties. What was there said is equally applicable to loans of foreign money which are assimilated to contracts for the delivery of chattels on the sweeping (and, as submitted, incorrect) ground that all non-English money is in law chattels—in any event, even where the parties have not so regarded it.

¹⁶⁶ Such as: defendant's right to wager of law (not abolished until the 3 & 4 Will. 4, c. 42, in 1833); or summoning the defendant rather than attaching him. For other differences see Viscount Simonds L.C. in United Australia v. Barclays Bank [1941] A.C. 1, 13.

¹⁶⁷ To Viscount Simonds the answer to the question “what in old days was the form of action” appeared (at 1043) to be “extremely enlightening if not decisive”.

From the eager séance with some of the familiar spirits of the common law one is grateful to turn to Lord Atkin's refreshing admonition concerning the “requirements of the law as to forms of action which have now disappeared” and which “should not in these days be allowed to affect actual rights.” “When these ghosts of the past stand in the path of justice clanging their medieval chains,” he said, “the proper course for the judge is to pass through them undeterred.” (United Australia v. Barclays Bank [1941] A.C. 1, 29.) And see Viscount Simon L.G.'s words Ibid., at 21, about unjust results “based upon a misreading of technical rules, now happily swept away.”

¹⁶⁸ At 1043.

¹⁶⁹ Note the word “deliver”, used rather than “repay” or “return”. The real, or “recuperatory,” aspect of the transaction, the fact that the borrower has received the res and still detains or retains it after it has become due, is overlooked. The terminology employed (“a contract to deliver”) evokes the very different image of a contract of sale or of a promised loan, with the debtor miscast in the role of vendor or lender, who has not himself already received the object but is about to confer it on the other party, the creditor—who is consequently miscast in the role of a buyer or prospective borrower. The lender is treated as the banker and exchange dealer in the hypothetical case at p. 277 ff. supra.

¹⁷⁰ Cf. nn. 16 and 75 supra.

¹⁷¹ (1626) Latch 77; 82 E.R. 283.

¹⁷² The report at [1960] 2 All E.R. 340 reads “Charles II”. This must be a mistake. Latch appears to have been published in 1661 or 1662, but it reports cases “come ils estoyet adjudgees es Trois Premiers Ans du Raign du feu Roy Charles le Premier,” i.e. 1625–28; and Ward v. Kidswin was in all probability decided c 1625.

¹⁷³ [1943] A.C. 507.

¹⁷⁴ At 1046.

¹⁷⁵ At 1048–49.

¹⁷⁶ At 1069. (Italics are textual.)

¹⁷⁷ Contrast the old common-law view of transitory claims: debitum et contractus sunt nullius loci, 7 Co. 61 (cf. 1 Wms. Saund. (ed. 1871) 96, n. 2); and the opinion of the Supreme Court of the United States that “The obligation of the debtor to pay his debt clings to and accompanies him wherever he goes” (in Harris v. Balk (1904) 198 U.S. 215); and the statement of Atkin L.J. in the Le Touquet case ([1922] 1 K.B. 451, 463): “Inasmuch as the obligation to pay to the plaintiffs in France Frs. 18,035 was a personal obligation, the plaintiffs would also have been entitled to sue the defendant in the courts of any country where they found her…”.

¹⁷⁸ Here Lord Denning presumably intimates that if two Frenchmen make a loan which is in no way connected with England, but which is expressed in pounds sterling, suit thereon in England would lie in debt.

¹⁷⁹ At 1071.

¹⁸⁰ In which currency he must recover is besides the point: the question is how much of that currency.

Incidentally, the statement is not accurate. In nearly all of the countries of Europe (listed by MANN, 307–09) writ as well as judgment may issue in terms of money foreign to the forum. (See Castrique v. Imrie (1870) L.R. 4 H.L. 414 for a French judgment ordering the payment of a sum of English money.) As to the United States, however, see n. 66 supra.

¹⁸¹ He expressed (at 1086) his “agreement with the reasoning” of his “noble and learned friend on the Woolsack”, but without touching on this point.

¹⁸² At 1070.

¹⁸³ Echoing Lord Sumner's dictum in the Celia v. Volturno ([1921] 2 A.C., at p. 558): “Waiting to convert the currency till the date of judgment only adds the uncertainty of exchange to the uncertainty of the law's delays.” Cf. also Sutherland, J. in Deutsche Bank Filiale Nurnberg v. Humphrey (1926) 272 U.S. 517, 523.Google Scholar But see n. 255 post.

¹⁸⁴ At 1051.

¹⁸⁵ At 1051–52 (Italics added).

¹⁸⁶ This amounts to a total rejection of the “cow analysis” started in the Celia v. Volturno (pp. 261–62 supra) and resuscitated in Havana (pp. 263–64 supra).

Cf. Sussmann, J. in the Supreme Court of Israel: “When a person lends something on condition that something similar should be returned—the transaction called mutuum in Roman law—we cannot say to that person: You have the money in hand, go into the market and buy to your heart's content.” Kur Gavish Ltd. v. Pettigreu (1956) 10P.D. 1370, 1373.Google Scholar

¹⁸⁷ The “procedural reason” is thus stated, in words which immediately follow (p. 1052): “A plaintiff cannot sue in England for payment of dollars…. So, at best, he could have the dollars converted to sterling at the date of judgment. Owing to appeals or difficulties of enforcement, a long time may elapse between judgment and getting his money, and the rate of exchange may have altered substantially during that time.” And Lord Reid proceeds to mention another “practical difficulty,” viz. that of ascertainment of the rate—an imaginary difficulty, it is believed, against the background of modern banking and information facilities. (On the first difficulty see n. 255 post.)

¹⁸⁸ At 1059–60 (italics added).

¹⁸⁹ A “contract to settle a debt” is a pregnant phrase. It connotes the precedent or independent existence of a debt and the superimposition of a promissory undertaking to settle it. Had this duality been consistently adhered to Havana would not have gone astray.

¹⁹⁰ P. 301 supra.

¹⁹¹ (1626) Latch 77; 82 E.R. 283.

¹⁹² [1943] A.C. 507. The other authorities which he mentions (Section 72 of the Bills of Exchange Act, 1882 and the Celia v. Volturno) are not invoked on this point. Section 72 does not reflect any “commodity theory” (it is rather inconsistent with it, in view of the statutory definition of a promissory note, which requires that a note be for “money”); the Celia v. Volturno does perhaps have to do with this theory but, unlike Ward v. Kidswin and Khoury v. Khayat, was not a case of debt: p. 286 supra.

¹⁹³ Sic. This appears from Latch 4 (“En debt le plaintiff declare sur un bill…”) as also from Latch 84 (“Debt fuit port pur certaine summ de Hamburgh money…”). This may have been overlooked, because the only reference to Ward v. Kidswin in Havana is to the report at Latch 77, which begins “Ward port un action versus Kidswin en le detinet…” without specifically using the word “debt” at the outset of the report. However, that the action was one of debt is quite clear even from Latch 77: not only because “detinet” (along with “debet & detinet”) is one of the forms of debt (n. 199 post), but also because the objection to the writ is thus reported: “Un auter exception fuit prise, quia le debt pur Hamburgh money fuit en le detinet solement…”. Viscount Simonds refers (at 1044) to Ward v. Kidswin as “an action in detinet”. With respect, it appears from the context that he misread in detinet as synonymous with in detinue. See n. 200 post.

¹⁹⁴ Ward v. Kidswin differs from Havana in that the creditor was English; in that the contract was presumably English; in that the place of payment was in England; in that (possibly) the bond itself stated the value in English money of the foreign money in obligatione—all material points when evaluating the question whether the foreign money is currency or commodity. All of these indications, which may well sway a court to hold that the foreign money was a commodity, point the other way in Havana, which is as clear a currency case as was Le Touquet. Viscount Simonds' saying (quoted at p. 301 supra) that in Ward v. Kidswin arose “the exact point” of the form of action appropriate to the facts of Havana is not perhaps exact.

¹⁹⁵ Latch 5.

¹⁹⁶ Latch 5; 77; 84.

¹⁹⁷ It is, however, by no means the only authority. Earlier authority is provided by Bagshaw v. Playn (c. 1590) Cro. Eliz. 536; 78 E.R. 783, a debt for Flemish money, reversed in error, but without questioning the propriety of an action of debt; by Draper v. Rastal (c. 1602) Cr. Jac. 88; 79 E.R. 75, a successful action of debt where the money in obligatione was “sixty-six pounds monetae Flandriae”. This last case is not, perhaps, very satisfactory because the Flemish money is referred to in the declaration as “ad tunc currant in Middleburgh,” and therefore might have been of dubious foreignness. The utmost purist will, however, acquiesce in Rands v. Peck (c. 1622) Cro. Jac. 618; 79 E.R. 527, also earlier than Ward v. Kidswin, and in which the action of debt was successfully brought for “six hundred guilders monetae Poloniae”, not alleged to have been at any time current coin anywhere in England. The last case is also significant because the value of the six hundred guilders Polish was stated to have been 220 pounds “at the time of the bill, and now”.

¹⁹⁸ And surprisingly not referred to in Havana. See in particular Lloyd Royale Belge v. Louis Dreyfus (1927) 27 L1. L.R. 288 in which is was held that debt could not lie for a sum of foreign money. The obligation, however, was not one to repay a loan. It was followed by Richardson v. Richardson [1927] P. 228, where Hill J. thought (at 234) that the Court of Appeal has made it clear that the cause of action upon refusal to pay in a foreign currency is for damages and not for debt.”

The next reverberation of the “no debt for foreign money” theory occurs in an isolated sentence by Atkin, Lord in Rhokana Corporation v. Inland Revenue Commissioners [1938] A.C. 380, 388Google Scholar: “in my opinion there can be no debt in this country of an amount in foreign currency”—these words not being preceded, or followed, by any discussion of the question, nor supported by citation of any authority whatsoever, nor supplemented, or their content reiterated, in any of the other speeches in the House.

How astonishing that the few words above fell from the lips of the judge who, some sixteen years earlier, as Atkin L.J., had said: “The plaintiffs…have the right to sue the defendant in the English courts to recover the debt of Frs. 18,035 due to them in France…. The action would be for a debt due in France just as, if the debt were due in England, it would be for uch a debt. The legal position appears to me to be the same …. It appears to me that she was sued here for a French debt…” (Société des Hôtels Le Touquet Paris-Plage v. Cummings [1922] 1 K.B. 451, 463–64).

¹⁹⁹ The two varieties of pleading debt, “in the debet & detinet” and “in the detinet”, differed chiefly in that only the latter was appropriate where the claim was not based on immediate contractual privity (as where one at least of the original parties was no longer alive) and also where the claim was for anything other than current coin of the realm. See Fitzherbert's, Nat. Brev. (9th ed., 1794) 119 H.I.M. and esp. 152 C.Google ScholarCf. also 2 Holdsworth, H.E.L., 368; 2 Pollock and Maitland, H.E.L., 174, 206–07; 2 Viner's, Abridgment (2nd ed., 1791) 363.Google Scholar

It may seem as though the above two species of the “detinet” variety are unrelated. Pollock and Maitland (Ibid., 206) say that “this is very curious”. It is submitted, however, that the case of Rands v. Peck (c. 1622) Cr. Jac. 618; 79 E.R. 527 suggests a common denominator and a clue. Where the original debtor is dead and the action is brought against the executor, the latter is answerable “only according to the assets he hath in his hands”. Therefore the exact amount eventually recoverable is not known at the commencement of suit. But such is also the case where what is claimed is anything (chattels, as also foreign money) other than current coin of the realm: “…inasmuch as he is not to recover the guilders, but the value of them found by the jury…”.

As there is no question that debt lay not only for money but also for the recovery of unascertained fungible chattels (n. 88 supra), it appears that in all such cases the appropriate variety of debt was the one “in the detinet”.

Of both varieties Vaughan C.J. said that “actions in the debet, and also in the detinet, are actions of property,” whereas “by a breach of promise” “no man hath property… but must be repair'd in damages.” (Edgcomb v. Dee (1670) Vaughan 89, 101.)

²⁰⁰ N. 193 supra.

²⁰¹ 8 Viner's, Abridgment (2nd ed., 1791) 23Google Scholar: “A detinue implies a property in the plaintiff…”.

²⁰² Jarvis v. Williams [1955] 1 W.L.R. 71, in particular per Evershed M. R., at 75.

²⁰³ Cf. (1966) 1 Is. L.R. esp. at 84.

²⁰⁴ [1943] A.C. 507. The respondent (creditor) did not appear before the Privy Council.

²⁰⁵ P. 302 supra.

²⁰⁶ At 509.

²⁰⁷ At 511. (Italics added.)

²⁰⁸ Just as, in Havana, the dollars in obligatione were currency in the United States, where the creditors were resident.

²⁰⁹ A fortiori if (as in Havana) the country in which the money is not currency is merely the country of litigation.

²¹⁰ Note the terminology: Lord Wright does not say “in proceedings to recover damages” —even though the claim is in respect of foreign money.

²¹¹ At 512 (italics added).

²¹² P. 302 supra.

²¹³ At 513.

²¹⁴ See n. 14 supra.

²¹⁵ [1921] 2 A.C. 544; see n. 119 supra.

²¹⁶ At 513.

²¹⁷ This appears to be the high-water mark of the leaning of Khoury v. Khayat in the direction of “the commodity theory of a debt in foreign currency”, as Viscount Simonds calls it in Havana (at 1047).

²¹⁸ It is curious that Lord Wright chose to embark on the laborious effort of eliciting the rule for foreign debts inferentially, from cases not directly concerned therewith, when he could have availed himself of the then recent decision of the Court of Appeal in Madeleine Vionnet v. Wills [1940] 1 K.B. 72 (p. 285 ff. supra) which had directly settled the very point. It is also curious that the decision of Lawrence J. in the Liegeois' Claim (n. 7 supra), then already over twenty years old, which had likewise directly settled the point, is equally not mentioned.

In view of his own reasoning, which simply extends to foreign debts rules laid down for breaches of contract and for torts, perhaps it would have been more felicitous to start with these latter cases and from them to proceed to debt, rather than to reverse the order and to say, as Lord Wright says, that English law has adopted the rule not only in regard to debts but “also” for breaches of contract and for tort. Cf. Negus' observation quoted in n. 112 supra. In assessing the weight of Khoury v. Khayat it may be borne in mind that the hearing was ex parte: n. 204 supra.

²¹⁹ P. 288 ff. supra.

²²⁰ Which came after both Lloyd Royale Belge v. Dreyfus and Richardson v. Richardson (see n. 198 supra) and duly considers them.

²²¹ At 190. Or, again, as summed up by Atkinson J., at 192: “that it is not true to say that an action for debt can be brought in this country to recover a sum payable in another country in a foreign currency, that the true view is that only an action for damages for breach of contract can be brought, and that there was no breach of contract in Berlin, because payment could not lawfully be made there. Therefore,” he says, “the plaintiff cannot succeed in this action.” (Italics added.)

²²² As also cases where repayment of the debt on time is made illegal but the debt itself continues (Arab Bank v. Barclays Bank [1954] A.C. 495; and cf. Re Helbert Wagg [1956] Ch. 323; Ledeboter v. Hibbert [1947] 1 K.B. 964). For some purposes it may be all-important to know whether a debt was in existence on a certain date, regardless of whether or not there existed on that date a contractual cause of action againt the debtor. Cf. also Schering Ltd. v. Stockholms Enskilda [1946] A.C. 219.

Another class of case where the defendant is no longer under a promissory liability but continues nevertheless to be indebted to the plaintiff is illustrated by Rekstin v. Severo [1933] 1 K.B. 47 and 58. And so it is in all cases where plaintiff has not fulfilled a condition precedent (such as making demand, in respect of a balance due under a current account), so that defendant is not in breach of contract, yet the debt continues. Cf. Joachimson v. Swiss Bank Corporation [1921] 3 K.B. 110; Arab Bank v. Barclays Bank, supra. And see n. 84 supra.

²²³ It may be objected that in such cases the plaintiff is entitled in quasi-contract. This may be readily conceded: the categories of “quasi-contract” and of “debt” are not mutually exclusive. “The action of Debt… remained in use as an alternative method of enforcing quasi-contracts”: Anson, , Law of Contract (20th ed., 1952) 428.Google Scholar See Winfield, , The Law of Quasi-Contracts (1952) 5, and (1966) 1 Is. L.R., pp. 63, 66, 67, 78–79.Google Scholar

²²⁴ In Richardson v. Richardson, n. 198 supra.

²²⁵ [1940] 2 All E.R. at 197.

²²⁶ At 199.

²²⁷ Re Rickett [1949] 1 All E.R. 737.

²²⁸ Bankruptcy Act, 1914, Sched. I, para. 9: “A creditor shall not vote at any such meeting in respect of any unliquidated or contingent debt, or any debt the value of which is not ascertained.”

²²⁹ At 743.

²³⁰ For example: Huber v. Steiner (1835) 2 Bing. (N.C.) 203; Re Kloebe (1885) 28 Ch.D. 175; Liegeois' Claim (n. 7 supra); Re Lorillard [1922] 2 Ch. 638; Hicks v. Guinness (1925) 269 U.S. 71; Deutsche Bank v. Humphrey (1926) 272 U.S. 517; Zimmermann v. Sutherland (1927) 274 U.S. 253; The King v. International Trustee [1937] A.C. 500; East India v. Carmel Exporters [1952] 2 Q.B. 439; Jabbour v. Custodian [1954] 1 W.L.R. 139; In re Russian, etc. Bank [1955] 1 Ch. 148. In the Havana case itself “a debt due in a foreign currency” is spoken of (Lord Reid, at 1053); as also “a debt… payable in France in francs” (Lord Denning, at 1070).

The old rule in bankruptcy (not changed by the Act of 1914) is that a foreign creditor can proceed in England against a foreign debtor in respect of a foreign debt (Ex parte Pascal: In re Myer (1876) L.R. 1 Ch. 509). Are we now to add the gloss “provided always the debt is one of English money”

²³¹ See Bullen, and Leake, , Precedents of Pleadings (3rd ed., 1868)Google Scholar, 194 n. (a) and the count on a judgment of a French court, at 194–95. (Note, incidentally: “which is equivalent in English money”—not “which was, when tendered, equivalent in English money.”) Cf. also 1 Wms. Saund. (ed. 1871) 118, n. (g); Dicey's Conflict of Laws (7th ed., 1958) 984, 1033, 1035. In Beatty v. Beatty [1924] 1 K.B. 807, Sargant L.J., after saying that alimony orders of the State of New York were there unalterable in respect of accrued arrears, said: “Therefore the effect of an order for alimony in that State is that it affords clear evidence of a definite debt, and as such … it can be enforced by action.”

²³² According to M.R., Brett, in Grant v. Easton (1883) 13 Ch.D. 302Google Scholar, “An action upon a foreign judgment may be treated as an action debt or assumpsit…”. (Thus also Lord Abinger, C.B. in Russell v. Smyth (1842) 9 M. & W. 810, 817Google Scholar; as also apparently Lord Ellenborough, C.J. in Hall v. Odber (1809) 11 East 118, 124Google Scholar, and Le Blanc J. therein, at 126).

²³³ For example, in Nouvion v. Freeman (1889) 15 App. Cas. 1, Lord Herschell L.C. repeatedly refers to the judgment of a Spanish court as establishing “in this country… the existence of a debt.”

²³⁴ Negus, op. cit. (n. 84 supra), at 160. He adds (Ibid.): “In the Stamp Act, 1891 (s. 122), ‘money’ includes foreign currency, and section 6 of the Coinage Act of 1870 contemplates the tender in this country of foreign currency as money.” And see Graveson (n. 65 supra) at 113–14. Incidentally, on the theory that foreign money was only recoverable as upon breach of contract, it would appear to follow that foreign money was not recoverable at all throughout the long period before the rise of assumpsit, except perhaps where it was due upon a covenant.

²³⁵ Holmes-Pollock Letters (1940) 90–93, quoted in Cheatham, , Dowling, , Goodrich, and Griswold, , Cases and Materials on Conflict of Laws (2nd ed., 1941) 539–41.Google Scholar

²³⁶ P. 274 ff. supra.

²³⁷ Mr. Justice Sutherland's dissenting view on this matter is at 272 U.S. 522.

²³⁸ Cf., in general NUSSBAUM 159. And see BGB § 288(2); Swiss C. Obl., § 106; Austrian Com. C., § 283; new (1942) Italian C., § 1224(2); Russian (RSFSR) C., §§ 117 and 121. According to Mann (pp. 86–87) the courts in Germany, Austria and other Continental countries have been compensating creditors also in respect of loss from depreciation post diem. There are distinctions as to which one of the parties ought to sustain the burden of proof that loss in fact ensued from the depreciation. In particular, it has been held in Germany that a foreign creditor, whose personal currency remained stable, was entitled to the benefit of a presumption that he would have avoided loss by promptly converting the Reichsmarks into his personal currency. This is a common-sense or factual presumption.

On damages, or interest, as compensation for non-payment of money on time see also: French C.C. § 1153 and addition thereto in 1900; old (1865) Italian Code, § 1231; Spanish and Brazilian Codes C.C., § 1061 and C. Com., § 249; Austrian Civ. C., § 1333; Danish Law of 6 April 1855, §3; Dutch C.C., § 1286; new (1949) Egyptian C.C. §§ 226, 228, 231.

²³⁹ Cf. Note in (1916) 28 Hrvd. L.R. 873.

²⁴⁰ See his letter, cited n. 235 supra.

²⁴¹ See n. 8, supra.

²⁴² See p. 298, supra.

²⁴³ Cf. n. 7 supra.

²⁴⁴ Thus in Manners v. Pearson [1898] 1 Ch. 581, 588 Lindley M. R. clearly assumes that any duty to pay interest by way of damages on a debt governed by Mexican law depends on Mexican law. Again, Sir F. Pollock in his letter to Holmes (quoted at p. 313 supra) implies that “if German law allowed unliquidated damages to be recovered for the detention of a debt”, this would be followed in a suit in England. And now D'Almeida v. Sir Frederick Becker [1953] 2 Q.B. 329 furnishes authority for the general proposition that the right to, and extent of, contractual damages is governed by the proper law of the contract: a view also advocated in the seventh (though it was not in the sixth) edition of Dicey's, Conflict of Laws, p. 871Google Scholar; by Cheshire, (Pr. Inter. Law, 6th ed., 1961, p. 704 ff.)Google Scholar; by Wolff, (Pr. Inter. Law, 2nd ed., 1950, pp. 242–44Google Scholar) and generally held by foreign jurists. See, e.g. Arminjon, , Pr. de Dr. Inter. Pr. Commercial, 1948, p. 237.Google Scholar

That one form of damages, that by way of interest, is governed by the proper law has been assumed since earlier days. See Robinson v. Bland (1760) 1 Black. W. 232; 96 E.R. 129, and older authorities cited at 1 Black. W. at 236; Fergusson v. Fyffe (1841) 8 Cl. & F. 121; Arnott v. Redfern (1852) 2 C. & P. 88; Re Fried Krupp Act [1917] 2 Ch. 188; Mount Albert Borough Council v. Australasian Temperance [1938] A.C. 224.

It is submitted that the question how much a man recovers must be in principle one of substance, not of procedure. Cf. Morris, op. cit. (n. 145 supra); at 530.

²⁴⁵ The three alleged principles of the English law of obligations (summarized at pp. 254–55 supra); the failure to distinguish between a contractual duty to pay a fixed sum and liability to unliquidated damages (pp. 288–92 supra); and the conception of a debt of foreign money as in every case a contract to deliver commodities (pp. 265–66, 299 ff. supra.)

For convenience, the Havana position can be summarized as follows:

A. (1) The obligation of a debtor of foreign money is analogous to an obligation to deliver chattels.

(2) Therefore, and also for historic reasons, the creditor cannot sue “in debt” for the stipulated amount but only “in damages” as for non-delivery of goods.

B. Upon the creditor's suit for damages as above, the following rules must be applied—

(1) The creditor's loss is taken to have crystallized at the moment of the debtor's breach by non-repayment. It is, moreover, taken to have crystallized in pounds sterling. The loss was of $ 100; these were then worth £ 25. The compensable loss is therefore £ 25.

(2) Subsequent decline in the value of the £ 25 must be ignored—not only in compliance with the principle of crystallization, but also because in the eye of the law the decline never really happened, as “a £ is a £”.

(3) Apart altogether from the principle of crystallization and from the principle that “a £ is a £”, the loss to the creditor flows from non-payment of money on time. For this species of loss the law does not allow general damages.

²⁴⁶ N. 244 supra.

²⁴⁷ See p. 303 supra.

²⁴⁸ For a virtually uniform use of to own by the “mature legal systems,” see e.g. Honoré, A. M., in Guest (ed.), Oxford Essays in Jurisprudence (1961) at 108.Google Scholar

²⁴⁹ These include claims for declaratory relief, cases of conversion from English to foreign money, or from foreign to foreign money: in short, every case other than that of judicial conversion from foreign into English money. Cf. e.g., Kornatzki v. Oppenheimer [1937] 4 All E.R. 133.

There are also statutes which expressly adopt a different rule: s.139 of the Merchant Shipping Act, 1894 and s.1(5) of the Carriage by Air Act, 1932. On the other hand, s.2(3) of the Foreign Judgments (Reciprocal Enforcement) Act, 1933, is not (pace Cheshire, Pr. Inter. Law (6th ed., 1961) 709; Wolff, Pr. Inter. Law (2nd ed., 1950) 462) an exception to the breach-date rule: the judgment there referred to is the foreign judgment, and that judgment is, when sued upon in England, an independent cause of action or source of obligation. The foreign judgment “matures” on the day it is pronounced and, if not satisfied, is at once “breached”.

²⁵⁰ A series of cases decided in the main between 1956 and 1958 manifest an express preference for the judgment-date rule over the breach-date rule and sanction, in effect, rejection of the authority of Khoury v. Khayat (pp. 302, 308–10 supra) formerly established in Palestine by decision of the Privy Council. See Kur Gavish Ltd. v. Pettigreu (1956) 10 P.D. 1370; Arison v. Reis, ibid. 1713; Shachaf Ltd. v. Malta Steamship Co. Ltd. (1957) 11 P.D. 1420; Rivlin v. Wallis (1958) 12 P.D. 85.

Cf. n. 21 supra.

²⁵¹ Cf. n. 61 and pp. 267–69 supra.

²⁵² But cf. p. 260 and n. 44 supra.

²⁵³ Mann suggests (at 327) that the courts could be so authorized “by adding a few simple provisions to the Rules of the Supreme Court.”

²⁵⁴ Which is substantially equivalent to a judgment in terms of the foreign money.

²⁵⁵ Cf. n. 21 supra.

The objection that, in such case, the sum adjudged depends on the accidents of parties and of courts, which sometimes hasten and sometimes retard the day of judgment (cf. p. 303 and n. 183 supra), is misconceived: English money is not in obligatione, whereas the stipulated amount of the foreign money remains owing and constant in spite of fluctuations in the exchange between it and any other money.

Another objection is that “a long time may elapse between judgment and getting his money, and the rate of exchange may have altered substantially during that time.” (Cf. n. 187 supra.) This objection, which addresses itself to the possibility of fluctuations after judgment, is equally misconceived—and for the identical reason. In any event, the objection cannot possibly aid conversion as of the breach date: between which date and “getting his money” an even longer time must, of necessity, elapse.