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by Juan Jimenez, 14 Apr 1995
The other day I took possession of a complete collection of the Supreme Court decisions of Puerto Rico, from Vol 1 at the beginning of the century. I was leafing through some of the older volumes when I found a case that might interest you folks.
The case is "Jones, Catholic Bishop of Puerto Rico, vs Caneja, et. al". The decision came down March 24th, 1919, and involved the resolution of debts that were originally owed in a currency which was no longer legal tender in our island (Spanish pesos vs. US dollars). Puerto Rico became a US territory in 1899 after the end of the Spanish-American War, when the Spaniards turned over the island to the US government, allegedly until such time as the island produced enough income to pay the cost of the war.
The Bishop, William Jones, sued Marcos Caneja for a total of $639.45 in US dollars for debt resulting from the sale of a property in 1880 for the sum of $2,842.11 in Spanish coin.
The lawsuit came about because the defendants claimed that the debt after the war was now $1,705.26 in dollars, due to the exchange rate set forth between the Spanish and American currency, and they also claimed that the original debt was $3000 in Mexican pesos, not Spanish coin. (At the time of the sale of the property there was no insular currency--the Puerto Rican coins only showed up in 1895-1896, after the local representation in the Spanish courts obtained an almost complete degree of autonomy from Spain; the decree creating the special provincial coinage for Puerto Rico came down on December 7th, 1895, for those of you that collect this type of trivia.) Additonally, they claimed that since the debt was owed to a church-owned hospital, and since the hospital administration had been gladly accepting the payments under the exchange rate percentage that they had calculated, that the Bishop was now unable to make a claim on what he thought the debt should be based on his calculations.
One interesting fact that surfaces in the transcript is that the Spanish govt on the island had set a value of $4000 Spanish coin for the property in question, but had reduced it to $3000, and then had calculated a final value of $2842.11, based on a standard deduction applied to local circulating coin vs actual Spanish currency in the Iberian peninsula. It appears that the practice of devaluating colonial currency was pretty much widespread in those days, no? Seems to me the British and other European governments did the same thing with their colonies. There is a mention of an additional 10% discount to convert to "peso oro" (gold peso?), but I don't quite understand what that means.
The Bishop's case was centered around the fact that the original valuation and register of the sale specifically stated that the debt would be calculated the same for any reason, even a change of currency (I wonder, were people taking into consideration changes in colonial powers over territories in those days when making legal contracts involving exchange of money?).
The contract called for payment of the debt in the specified currency, and in the event that the debtor was not able to locate enough of the original currency to pay the debt, it was to be made in the silver or gold coinage in legal tender circulation on the island at any given moment.
This paragraph is of special interest. I've translated it from Spanish; it comes from another case, Convento de las Carmelitas vs. Silva, 13 DPR 148:
Even though the circulation of north american (emphasis mine), french and mexican silver coin was authorized in Puerto Rico, and an official exchange rate had been set forth for such coin, they never had the status of legal tender, which was always solely reserved to the 'strong' coin of Spain, whose circulation on the island was authorized by a Royal Decree of 1857, until 1895, when the mexican coin was substituted by the special one created for Puerto Rico and whose value was not the same as the Spanish coin.
Interesting, no? The official legal tender of Puerto Rico, by Royal Decree issued in 1857, was the Mexican coin! I had no idea this was so. But which Mexican coin? Do they mean coinage minted for use in Mexico, or continental coinage which happened to have a Mexican mint mark? A bit confusing, since the above paragraph doesn't clarify that.
Anyway, the Bishop won the case. The facts were pretty clear that this was just a case of someone trying to take advantage of the change in political and legal tender statuses in the island after the Spanish-American War. And if this was an issue at the Supreme Court level (composed at the time of 4 Puerto Ricans and 5 Americans), I can imagine how many people were getting taken for rides by others wanting to take advantage over the confusion, even as much as 20 years after the end of the war.
Juan Jimenez
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