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Clemons v. Nolting, 42 Phil 702
The Acting Governor-General of the Philippine Islands, cabled the Secretary of War of the United States, appointing Robert Clemons (petitioner), a citizen of the US, for the position of mechanical and electrical engineer in the Philippine Bureau of Public Works. The Secretary of War wrote Clemons, confirming the agreement that Clemons is under a special contract at a salary of $4,000 per annum. Clemons received the letter and immediately replied in writing, accepting employment by the Philippine Government and promptly sailed to Manila.
The chief accountant of the Bureau of Public Works of the Government of the Philippine Islands tendered Clemons a warrant on the Treasurer of the Philippine Islands in the sum of P666.66, Philippine currency, in full payment of his salary for the month of January, 1921. However, that time the prevailing exchange rate of $333.33 ($4,000 divided by 12 months) is P739.99. Clemons declined to accept the said sum and insisted that under his contract with the Philippine Government he was and is entitled to receive each month as compensation for his services the sum of $333.33 in United States currency, or a sum in Philippine currency sufficient to enable him to purchase the sum of $333.33 in United States currency at the rates of exchange prevailing on the date of each payment, and demanded that he be paid an additional sum of P73.33. Clemons demands for a warrant on the Treasury of the Philippine Islands for the payment of the sum of P73.33 to complete the payment of his salary, which the chief accountant issued.
Clemons caused the said warrant o be presented to the defendant herein, William T. Nolting, for audit by him in his official capacity as Auditor of the Philippine Government but Nolting refused to audit the said warrant or to countersign the same, upon the ground that notwithstanding the terms of plaintiff's contract with the Philippine Government, his salary is payable in Philippine currency at the rate of two pesos for each dollar in United States currency due plaintiff regardless of the real value of such pesos or the rate at which they may be exchangeable into United States currency. Unless Nolting countersigns the said warrant the same will not be paid by the Treasurer of the Philippine Islands.
The respondent contends that under the laws in force in the Philippine Islands a debt of the Government, payable in "dollars," may be paid in Philippine currency at the rate of two to one even though the debt grew out of a special contract which provided that the same should be paid in "dollars."
Whether or not the stipulation in the contract to pay in “dollar” may be impaired by the Government by paying in Philippine currency at the rate of two to one.
No. The contention on the part of the respondent that the Philippine paper peso is a legal tender for the payment of a contract debt, when some other specie has not been provided, is not tenable for the reason that it violates the terms of the express contracts.
A contract to pay a certain sum in money, without any stipulation as to the kind of money in which it shall be paid, may always be satisfied by payment of that sum in any currency which is lawful money at the place and time at which payment is to be made. That is the general rule, under both the common and the civil law. But when the contract stipulates the specie or kind or character of money for the performance of the contract, it must be satisfied in the medium of payment mentioned in the contract.
For all of the foregoing facts and the law, we are fully persuaded that the remedy prayed for should be, and is hereby, granted. And it is hereby ordered and decreed that the writ of mandamus be issued to the defendant herein, commanding him to countersign, or cause to the countersigned the original of the warrant set forth in paragraph 9 of the complaint, and to deliver the same to the plaintiff so that he may present it to the Treasurer of the Philippine Islands and receive payment of said sum of P73.33 due him as averred in the complaint; and without any finding as to costs. So ordered.