American Nat. Ins. Co. v. de Cardenas, 65-368

• Decision Date: 28 December 1965
• Docket Number: No. 65-368,65-368
• Citation: 181 So.2d 359
• Parties: AMERICAN NATIONAL INSURANCE COMPANY, a Texas corporation authorized to do business in the State of Florida, Appellant, v. Mario de CARDENAS, Appellee.
• Court: Florida District Court of Appeals

Page 359

181 So.2d 359

AMERICAN NATIONAL INSURANCE COMPANY, a Texas corporation authorized to do business in the State of Florida, Appellant, v. Mario de CARDENAS, Appellee.

No. 65-368.

District Court of Appeal of Florida, Third District.

Dec. 28, 1965.

Dixon, DeJarnette, Bradford, Williams, McKay & Kimbrell, Sam Daniels, Miami, for appellant.

Carey, Terry, Dwyer, Austin, Cole & Stephens and Joseph A. McGowan, Miami, for appellee.

Before HENDRY, C. J., and TILLMAN PEARSON and BARKDULL, JJ.

TILLMAN PEARSON, Judge.

The appellant, American National Insurance Company, was defendant in the trial court. The action for declaratory decree was predicated upon plaintiff's claim that he was entitled to the cash surrender value, in United States dollars, of an insurance policy issued by the appellant. The policy called for payment in Galveston, Texas, in Cuban pesos. At the conclusion of the trial, the court entered a final decree for the plaintiff, policyholder, in which it found that he was entitled to $1,948.65. This amount was reached upon a determination that the appellee was entitled to 1984.65 pesos, which the court converted into United States dollars at the rate established by the Cuban government--one dollar for each peso. In addition, the trial judge awarded the plaintiff an attorney's fee, pursuant to section 627.0127, Florida Statutes, F.S.A., in the amount of $750.

This appeal is from the final decree. The appellant, insurance company, presents four points. Points one and two will be hereinafter discussed. Points three and four were decided in Pan-American Life Insurance Company v. Recio, Fla.App.1963, 154 So.2d 197.

The appellant's first point urges that the court erred in finding that one Cuban peso is equivalent to one United States dollar. The record reveals that the value of the Cuban peso at the time of demand may be established in two ways: (1) in Cuba, where the rate of exchange was fixed by decree at one peso for one dollar; or (2) in the United States, where Cuban pesos could be purchased for 15 cents to 18 cents--the variation being based upon the amount purchased. There is no showing in this record that the purchase of Cuban pesos was illegal or against the public policy of this jurisdiction at the time of the demand for payment.

In the present case, the defendant was under a contractual obligation to pay foreign currency in the United States--Cuban pesos in Galveston, Texas. Except for our rules of judicial procedure which require money judgments to be expressed in United States currency, the defendant could discharge its debt by simply paying 1,984.65 Cuban pesos, which it could have bought for less than $300.00.

As stated in Fraenkel, Foreign Moneys in Domestic Courts, 35 Col.L.Rev. 360:

'* * * One basic difficulty is due to the doctrine of Anglo-American law that judgment may not be entered in a foreign currency. If judgment might be entered in the foreign currency, as is possible in many countries of continental Europe, then in many of the situations which have arisen no problem would be presented at all. The court would simply enter judgment for the appropriate amount of foreign money.'

The solution to the problem is likewise stated in Fraenkel's Article as follows:

'* * * It was, however, ultimately recognized that when the value of foreign money became an issue it was to be determined by the facts and not by legislative fiat.' 35 Col.L.Rev. at 361.

The holding below, that the official rate prevails over that of the commercial market, is directly contrary to the views expressed by contemporary authorities. See 5 Corbin on Contracts, § 1005; 5 Williston on Contracts, § 1410A (Rev.Ed.); and the cases collected in 70 C.J.S. Payment § 20b. Corbin states:

'* * * If a contract requires payment in a foreign currency to be made in the United States, that required payment will be valued in dollars in accordance with the prevailing rate of exchange at the date when payment was due--the date of breach.' 5 Corbin on Contracts, § 1005, at page 57.

Research discloses no Florida case which involves a contractual obligation to pay foreign money in the United States. However, in Huntley v. Alejandre, Fla.App.1962, 139 So.2d 911, suit was brought in Florida on an obligation to pay Cuban pesos in Cuba. In affirming a judgment for United States dollars, this Court said:

'The appellants have also urged error in the failure of the trial judge to render judgment in pesos, or its equivalent in American currency. Assuming [which we do not here decide] that the trial court should have entered its judgment in pesos, or its equivalent in American currency [see: Revillon v. Demme...