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The second question, whether evidence can be received to prove that a promise made in one of the insurgent States, and expressed to be for the payment of dollars, without qualifying words, was in fact made for the payment of any other than lawful dollars of the United States? is next to be considered.

We cannot doubt that such contracts should be | people had, and their use was a matter of almost enforced in the courts of the United States, after absolute necessity; and this use gave them a the restoration of peace, to the extent of their sort of value, insignificant and precarious enough just obligation. The first question, therefore, it is true, but always having a sufficiently definite must receive an affirmative answer. relation to gold and silver, the universal measures of value, so that it was always easy to ascertain how much gold and silver was the real equivalent of a sum expressed in this currency, In the light of these facts it seems hardly less than absurd to say that these dollars must be regarded as identical in kind and value with the dollars which constitute the money of the United States. We cannot shut our eyes to the fact that they were essentially different in both respects; and it seems to us that no rule of evidence properly understood requires us to refuse, under the circumstances, to admit proof of the sense in which the word dollar is used in the contract before us. Our answer to the second question is, therefore, also in the affirmative. We are clearly of opinion that such evidence must be received in respect to such contracts, in order that justice may be done between the parties, and that the party entitled to be paid in these Confederate dollars can recover their actual value at the time and place of the contract in lawful money of the United States.

It is quite clear that a contract to pay dollars, made between citizens of any State of the Union, while maintaining its constitutional relations with the national Government, is a contract to pay lawful money of the United States, and cannot be modified or explained by parol evidence. But it is equally clear, if in any other country coins or notes denominated dollars should be authorized of different value from the coins or notes which are current here under that name, that, in a suit upon a contract to pay dollars, made in that country, evidence would be admitted to prove what kind of dollars were intended, and, if it should turn out that foreign dollars were meant, to prove their equivalent value in lawful money of the United States. Such evidence does We do not think it necessary to go into a denot modify or alter the contract. It simply ex-tailed examination of the evidence in the record plains an ambiguity, which, under the general rules of evidence, may be removed by parol evidence.

in order to vindicate our answer to the third question. It is enough to say that it has left no doubt in our minds that the note for $10,000, to enforce payment of which suit was brought in the circuit court, was to be paid, by agreement of the parties, in Confederate notes.

We have already seen that the people of the insurgent States, under the Confederate government, were, in legal contemplation, substantially in the same condition as inhabitants of districts of a country occupied and controlled by an invading belligerent. The rules which would apply in the former case would apply in the latter; and as in the former case the people must be regarded as subjects of a foreign power, and contracts among them be interpreted and enforced with reference to the conditions imposed by the conquerer, so in the latter case the inhabitants must be regarded as under the authority of the insurgent belligerent power actually established as the government of the country, and contracts Susan P. Hepburn and Henry H.P. Hepburn pl'ffs in error, made with them must be interpreted and enforced with reference to the condition of things created by the acts of the governing power.

It follows that the decree of the circuit court must be reversed, and the cause remanded, for further hearing and decree, in conformity with this opinion.

It is said, indeed, that under the insurgent government the word dollar had the same meaning as under the Government of the United States; that the Confederate notes were never made a legal tender, and, therefore, that no evidence can be received to show any other meaning of the word when used in a contract.

But it must be remembered that the whole condition of things in the insurgent States was matter of fact, rather than matter of law, and, as matter of fact, these notes, payable at a future and contingent day, which has not arrived and can never arrive, were forced into circulation as dollars, if not directly by the legislation, yet indirectly and quite as effectually by the acts of the insurgent government. Considered in themselves, and in the light of subsequent events, these notes had no real value, but they were made current as dollars by irresistible force. They were the only measure of value which the

On the Constitutionality of Legal-Tender Clause as relates to Contracts made prior to its adoption.



Henry A. Griswold.

In error to the court of appeals of the State of Kentucky.

(1.) Construed by the plain import of their terms and the manifest intent of the legislature, the statutes of 1862 and 1863, which make United States notes a legal tender in payment of debts, public and private, apply to debts contracted before as well as to debts contracted after enactment.

(2.) The cases of Lane County vs. Oregon, Bronson vs. Rodes, and Butler vs. Horwitz, in which it was held that, upon a sound construction of those statutes, neither taxes imposed by State legislation nor dues upon contracts for the payment or delivery of coin or bullion are included by legislative intent under the description of debts, public and private, are approved and reaffirmed.

(3.) When a case arises for judicial determination, and the decision depends on the alleged inconsistency of a legislative provision with the Constitution, it is the plain duty of the Supreme Court to compare the act with the fundamental

law, and if the former cannot, upon a fair con- | United States, except duties on imports, and of struction, be reconciled with the latter, to give all claims and demands against the United States effect to the Constitution rather than the statute. of every kind whatsoever, except for interest (33.) There is in the Constitution no express upon bonds and notes, which shall be paid in grant of legislative power to make any descrip- coin; and shall also be lawful money and a legal tion of credit currency a legal tender in payment tender in payment of all debts, public and priof debts. vate, within the United States, except duties on imports and interest as aforesaid."*"

(4.) The words "all laws necessary and proper for carrying into execution" powers expressly granted or vested have in the Constitution a sense equivalent to that of the words: laws, not absolutely necessary indeed, but appropriate, plainly adapted to constitutional and legitimate ends, which are not prohibited, but consistent with the letter and spirit of the Constitution; laws really calculated to effect objects intrusted to the Government.

(5.) Among means appropriate, plainly adapted, not inconsistent with the spirit of the Constitution, nor prohibited by its terms, the legislature has unrestricted choice; but no power can be derived by implication from any express power to enact laws as means for carrying it into execution unless such laws come within this descrip


(6.) The making of notes or bills of credit a legal tender in payment of pre-existing debts is not a means appropriate, plainly adapted, or really calculated to carry into effect any express power vested in Congress, is inconsistent with the spirit of the Constitution, and is prohibited by the Constitution.

This clause has already received much consideration here, and this court bas held that, upon a sound construction, neither taxes imposed by State legislation, † nor demands upon contracts which stipulate in terms for the payment or delivery of coin or bullion, are included by legislative intention under the description of debts public and private.

We are now to determine whether this description embraces debts contracted before as well as after the date of the act.

It is an established rule for the construction of statutes that the terms employed by the legislature are not to receive an interpretation which conflicts with acknowledged principles of justice and equity, if another sense, consonant with those principles, can be given to them.

But this rule cannot prevail where the intent is clear. Except in the scarcely supposable case, where a statute sets at naught the plainest precepts of morality and social obligation, courts must give effect to the clearly ascertained legislative intent, if not repugnant to the fundamental law ordained in the Constitution.

(7.) The clause in the acts of 1862 and 1863 Applying the rule just stated to the act under which makes United States notes a legal tender consideration, there appears to be strong reason in payment of all debts, public and private, is, for construing the word debts as having referso far as it applies to debts contracted before the ence only to debts contracted subsequent to the passage of those acts, unwarranted by the Con-enactment of the law. For no one will question stitution.

that the United States notes, which the act makes (8.) Prior to the 25th of February, 1862, all a legal tender in payment, are essentially unlike contracts for the payment of money, not expressly in nature, and, being irredeemable in coin, are stipulating otherwise, were, in legal effect and necessarily unlike in value, to the lawful money universal understanding, contracts for the pay-intended by parties to contracts for the payment ment of coin, and, under the Constitution, the of money made before its passage. parties to such contracts are respectively entitled to demand and bound to pay the sums due, according to their terms, in coin, notwithstanding the clause in that act, and the subsequent acts of like tenor, which make United States notes a legal tender in payment of such debts.

Mr. Chief Justice Chase delivered the opinion of the court.

The question presented for our determination by the record in this case is, whether or not the payee or assignee of a note, made before the 25th of February, 1862, is obliged by law to accept in payment United States notes, equal in nominal amount to the sum due according to its terms, when tendered by the maker or other party bound to pay it.

And this requires, in the first place, a construction of that clause of the first section of the act of Congress passed on that day which declares the United States notes, the issue of which was authorized by the statute, to be a legal tender in payment of debts.

The entire clause is in these words: "And such notes, herein authorized, shall be receivable in payment of all taxes, internal duties, excises, debts, and demands of every kind due to the

The lawful money then in use and made a legal tender in payment consisted of gold and silver coin.

The currency in use under the act, and declared by its terms to be lawful money and a legal tender, consists of notes or promises to pay, impressed upon paper prepared in convenient form for circulation, and protected against counterfeiting by suitable devices and penalties.

The former possess intrinsic value, determined by the weight and fineness of the metal; the latter have no intrinsic value, but a purchasing value, determined by the quantity in circulation, by general consent to its currency in payments, and by opinion as to the probability of redemption in coin.

Both derive, in different degrees, a certain additional value from their adaptation to circulation by the form and impress given to them under national authority and from the acts making them respectively a legal tender.

Contracts for the payment of money, made before the act of 1862, had reference to coined money, and could not be discharged, unless by

gon, 7 Wall., 71. Bronson vs. Rodes, 7 Wall., 229; Butfer vs. Horwitz, 7 Wall., 258.

12 United States Stats., 345. † Lane County vs. Ore

consent, otherwise than by tender of the sum due in coin. Every such contract, therefore, was in legal import a contract for the payment of coin.

There is a well-known law of currency, that notes or promises to pay, unless made conveniently and promptly convertible into coin at the will of the holder, can never, except under unusual and abnormal conditions, be at par in circulation with coin.

It is an equally well-known law that depreciation of notes must increase with the increase of the quantity put in circulation and the diminution of confidence in the ability or disposition to redeem. Their appreciation follows the reversal of these conditions. No act making them a legal tender can change materially the operation of these laws.

Their force has been strikingly exemplified in the history of the United States notes. Beginning with a very slight depreciation when first issued, in March, 1862, they sank in July, 1864, to the rate of two dollars and eighty-five cents for a dollar in gold, and then rose until recently a dollar and twenty cents in paper became equal to a gold dollar.

Admitting, then, that prior contracts are with in the intention of the act, and assuming that the act is warranted by the Constitution, it follows that the holder of a promissory note, made before the act, for a thousand dollars, payable, as we have just seen, according to the law and according to the intent of the parties, in coin, was required, when depreciation reached its lowest point, to accept in payment a thousand note dollars, although with the thousand coin dollars, due under the contract, he could have purchased on that day two thousand eight hundred and fifty such dollars Every payment, since the passage of the act, of a note of earlier date, has presented similar, though less striking, features.

ernment, and may be fairly considered, independently of considerations belonging to the law of contracts for the delivery of specified articles, as sanctioning special private contracts for like payments, without which, indeed, the provisions relating to government payments could hardly have practical effect.

This consideration, however, does not apply to the matter now before us. There is nothing in the terms of the act which looks to any difference in its operation on different descriptions of debts payable generally in money, that is to say, in dollars and parts of a dollar. These terms, on the contrary, in their obvious import, include equally all debts not specially expressed to be payable in gold or silver, whether arising under past contracts and already due, or arising under such contracts and to become due at a future day, or arising and becoming due under subsequent contracts. A strict and literal construction, indeed, would, as suggested by Mr. Justice Story,* in respect to the same word used in the Constitution, limit the word "debts" to debts existing; and, if the construction cannot be accepted because the limitation sanctioned by it cannot be reconciled with the obvious scope and purpose of the act, it is certainly conclusive against any interpretation which will exclude existing debts from its operation.

The same conclusion results from the exception of interest on loans and duties on imports from the effect of the legal-tender clause. This exception affords an irresistible implication that no description of debts, whenever contracted, can be withdrawn from the effect of the act, if not included within the terms or the reasonable intent of the exception.

And it is worthy of observation in this connection that in all the debates to which the act gave occasion in Congress, no suggestion was ever made that the legal-tender clause did not apply as fully to contracts made before as to contracts made after its passage.

Now, it certainly needs no argument to prove that an act compelling acceptance in satisfaction of any other than stipulated payment alters These considerations seem to us conclusive. arbitrarily the terms of the contract and impairs We do not think ourselves at liberty, therefore, its obligation, and that the extent of impairment to say that Congress did not intend to make the is in the proportion of the inequality of the pay-notes authorized by it a legal tender in payment ment accepted under the constraint of the law to of debts contracted before the passage of the act. the payment due under the contract. We are thus brought to the question whether Congress has power to make notes issued under its authority a legal tender in payment of debts which when contracted were payable by law in

Nor does it need argument to prove that the practical operation of such an act is contrary to justice and equity.

It follows that no construction which attrib-gold and silver coin. utes such practical operation to an act of Congress is to be favored, or indeed to be admitted, if any other can be reconciled with the manifest intent of the legislature.

What, then, is that manifest intent? Are we at liberty, upon a fair and reasonable construction of the act, to say that Congress meant that the word "debts" used in the act should not include debts contracted prior to its passage?

In the case of Bronson vs. Rodes we thought ourselves warranted in holding that this word, as used in the statute, does not include obligations created by express contracts for the payment of gold and silver, whether coined or in bullion. This conclusion rested, however, mainly on the terms of the act, which not only allow, but require, payments in coin by or to the Gov

The delicacy and importance of this question has not been overstated in the argument. This court always approaches the consideration of questions of this nature reluctantly; and its constant rule of decision has been, and is, that acts of Congress must be regarded as constitutional unless clearly shown to be otherwise.

But the Constitution is the fundamental law of the United States. By it the people have created a government, defined its powers, prescribed their limits, distributed them among the different departments, and directed, in general, the manner of their exercise.

No department of the Government has any other powers than those thus delegated to it by

*1 Story on Const., 921.

the people. All the legislative power granted by | nied, that the plaintiff was entitled to judgment the Constitution belongs to Congress; but it has according to his claim, unless bound by a constino legislative power which is not thus granted. tutional law to accept the notes as coin. And the same observation is equally true in its application to the executive and judicial powers granted respectively to the President and the courts. All these powers differ in kind, but not in source or in limitation. They all arise from the Constitution and are limited by its terms.

It is the function of the judiciary to interpret and apply the law to cases between parties as they arise for judgment. It can only declare what the law is, and enforce, by proper process,

the law thus declared.

But, in ascertaining the respective rights of parties, it frequently becomes necessary to consult the Constitution; for there can be no law inconsistent with the fundamental law. No enactment not in pursuance of the authority conferred by it can create obligations or confer rights. For such is the express declaration of the Constitution itself, in these words:

"The Constitution, and the laws of the United States which shall be made in pursuance thereof, and all treaties made, or which shall be made, under the authority of the United States, shall be the supreme law of the land; and the judges of every State shall be bound thereby, anything in 'the constitution or laws of any State to the contrary notwithstanding."

Not every act of Congress, then, is to be regarded as the supreme law of the land; nor is it by every act of Congress that the judges are bound. This character and this force belong only to such acts as are "made in pursuance of the Constitution."

When, therefore, a case arises for judicial determination, and the decision depends on the alleged inconsistency of a legislative provision with the fundamental law, it is the plain duty of the court to compare the act with the Constitution, and if the former cannot, upon a fair construction, be reconciled with the latter, to give effect to the Constitution rather than the statute. This seems so plain that it is impossible to make it plainer by argument. If it be otherwise, the Constitution is not the supreme law; it is neither necessary nor useful, in any case, to inquire whether or not any act of Congress was passed in pursuance of it; and the oath which every member of this court is required to take, that he will administer justice without respect to persons, and do equal right to the poor and the rich, and faithfully perform the duties incumbent upon him to the best of his ability and understanding, agreeably to the Constitution and laws of the United States," becomes an idle and unmeaning form.

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The case before us is one of private right The plaintiff in the court below sought to recover of the defendants a certain sum expressed on the face of a promissory note. The defendants insisted on the right, under the act of February 25, 1862, to acquit themselves of their obligation by tendering in payment a sum nominally equal in United States notes. But the note had been executed before the passage of the act, and the plaintiff insisted on his right,under the Constitution to be paid the amount due in gold and silver. And it has not been and cannot be de

Thus two questions were directly presented: Were the defendants relieved by the act from the obligation assumed in the contract? Could the plaintiff be compelled by a judgment of the court to receive in payment a currency of different nature and value from that which was in the contemplation of the parties when the contract was made?

The court of appeals resolved both questions in the negative, and the defendants in the original suit seek the reversal of that judgment by writ of error.

It becomes our duty, therefore, to determine whether the act of February 25, 1862, so far as it makes United States notes a legal tender in payment of debts contracted prior to its passage, is constitutional and valid or otherwise. Under a deep sense of our obligation to perform this duty to the best of our ability and understanding, we shall proceed to dispose of the case presented by the record.

We have already said, and it is generally, if not universally, conceded, that the Government of the United States is one of limited powers, and that no department possesses any authority not granted by the Constitution.

It is not necessary, however, in order to prove the existence of a particular authority to show a particular and express grant. The design of the Constitution was to establish a government competent to the direction and administration of the affairs of a great nation, and, at the same time, to mark, by sufficiently definite lines, the sphere of its operations. To this end it was needful only to make express grants of general powers, coupled with a further grant of such incidental and auxiliary powers as might be required for the exercise of the powers expressly granted. These powers are necessarily extensive. It has been found, indeed, in the practical administration of the government, that a very large part, if not the largest part, of its functions have been performed in the exercise of powers thus implied.

But the extension of power by implication was regarded with some apprehension by the wise men who framed and by the intelligent citizens who adopted the Constitution. This apprehension is manifest in the terms by which the grant of incidental and auxiliary powers is made. All powers of this nature are included under the description of "power to make all laws necessary and proper for carrying into execution the powers expressly granted to Congress or vested by the Constitution in the government or in any of its departments or officers."

The same apprehension is equally apparent in the Xth article of the Amendments, which declares that "the powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States or the people."

We do not mean to say that either of these constitutional provisions is to be taken as restricting any exercise of power fairly warranted by legitimate derivation from one of the enumerated or express powers. The first was undoubtedly introduced to exclude all doubt in respect

to the existence of implied powers; while the
words "necessary and proper were intended to
have a "sense," to use the words of Mr. Justice
Story, "at once admonitory and directory," and
to require that the means used in the execution
of an express power "should be bona fide appro-
priate to the end."*
The second provision was
intended to have a like admonitory and directory
sense, and to restrain the limited government
established under the Constitution from the exer-
cise of powers not clearly delegated or derived
by just inference from powers so delegated.

It has not been maintained in argument, nor, indeed, would any one, however slightly conversant with constitutional law, think of maintaining, that there is in the Constitution any express grant of legislative power to make any description of credit currency a legal tender in payment of debts.

We must inquire then whether this can be done in the exercise of an implied power.

standard of value by which all other values may be measured, or, in other words, to determine what shall be lawful money and a legal tender, is in its nature and of necessity a governmental power. It is in all countries exercised by the government. In the United States, so far as it relates to the precious metals, it is vested in Congress by the grant of the power to coin money. But can a power to impart these qualities to notes, or promises to pay money, when offered in discharge of pre-existing debts, be derived from the coinage power, or from any other power expressly given?

It is certainly not the same power as the power to coin money. Nor is it in any reasonable or satisfactory sense an appropriate or plainly adapted means to the exercise of that power. Nor is there more reason for saying that it is implied in, or incidental to, the power to regulate the value of coined money of the United States, or of foreign coins. This power of regulation is a power to The rule for determining whether a legislative determine the weight, purity, form, impression, enactment can be supported as an exercise of an and denomination of the several coins, and their implied power was stated by Chief Justice Mar-relation to each other, and the relations of forshall, speaking for the whole court, in the case eign coins to the monetary unit of the United of McCullough vs. The State of Maryland,† and States. the statement then made has ever since been accepted as a correct exposition of the Constitution. His words were these: "Let the end be legitimate, let it be within the scope of the Constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consistent with the letter and spirit of the Constitution, are constitutional." And in another part of the same opinion the practical application of this rule was thus illustrated: "Should Congress, in the execution of its powers, adopt measures which are prohibited by the Constitution, or should Congress, under the pretext of executing its powers, pass laws for the accomplishment of objects not intrusted to the government, it would be the painful duty of this tribunal, should a case requiring such a decision come before it, to say that such an act was not the law of the land. But where the law is not prohibited, and is really calculated to effect any of the objects intrusted to the government, to undertake here to inquire into the degree of its necessity would be to pass the line which circumscribes the judicial department, and tread on legislative ground."

It must be taken then as finally settled, so far as judicial decisions can settle anything that the words "all laws ne essary and proper for carrying into execution" powers expressly granted or vested, have in the Constitution a sense equivalent to that of the words: laws not absolutely necessary indeed, but appropriate, plainly adapted to constitutional and legitimate ends; laws not prohibited, but consistent with the letter and spirit of the Constitution; laws really calculated to effect objects intrusted to the government.

The question before us, then, resolves itself into this: Is the clause which makes United States notes a legal tender for debts contracted prior to its enactment a law of the description stated in the rule?

It is not doubted that the power to establish a 2 Story on the Const., p. 142, 1253. †4 Wheaton 421. +4 Wheat., 423.

Nor is the power to make notes a legal tender the same as the power to issue notes to be used as currency. The old Congress, under the Articles of Confederation, was clothed by express grant with the power to emit bills of credit, which are in fact notes for circulation as currency; and yet that Congress was not clothed with the power to make these bills a legal tender in payment. And this court has recently held that the Congress under the Constitution, possesses as incidental to other powers, the same power as the old Congress to emit bills or notes; but it was expressly declared at the same time that this decision concluded nothing on the question of legal tender. Indeed, we are not aware that it has ever been claimed that the power to issue bills or notes has any identity with the power to make them a legal tender. On the contrary, the whole history of the country refutes that notion. The States have always been held to possess the power to authorize and regulate the issue of bills for circulation by banks or individuals, subject, as has been lately determined, to the control of Congress, for the purpose of establishing and securing a national currency; and yet the States are expressly prohibited by the Constitution from making anything but gold and silver coin a legal tender. This seems decisive on the point that the power to issue notes and the power to make them a legal tender are not the same power, and that they have no necessary connection with each other.

But it has been maintained in argument that the power to make United States notes a legal tender in payment of all debts is a means appropriate and plainly adapted to the execution of the power to carry on war, of the power to regulate commerce, and of the power to borrow money. If it is, and is not prohibited, nor inconsistent with the letter or spirit of the Constitution, then the act which makes them such legal tender must be held to be constitutional.

Let us, then, first inquire whether it is an appropriate and plainly adapted means for carry

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