110 U.S. 421 (1884), The Legal Tender Cases

Citation:110 U.S. 421, 4 S.Ct. 122, 28 L.Ed. 204
Case Date:March 03, 1884
Court:United States Supreme Court

Page 421

110 U.S. 421 (1884)

4 S.Ct. 122, 28 L.Ed. 204





United States Supreme Court.

March 3, 1884

In Error to the Circuit Court of the United States for the Southern District of New York.

FIELD, J., dissenting.


Page 422

[4 S.Ct. 123] Wm. Allen Butler and Geo. F. Edmunds, for plaintiff in error.

Page 435

Thos. H. Talbot and Jas. McKeen, for defendant in error.



Page 421

Juilliard, a citizen of New York, brought an action against Greenman, a citizen of Connecticut, in the circuit court of the United States for the Southern district of New York, alleging that the plaintiff sold and delivered to the defendant, at his special instance and request, 100 bales of cotton, of the value and for the agreed price of $5,122.90; and that the defendant agreed to pay that sum in cash on the delivery of the cotton, and had not paid the same or any part thereof, except that he had paid the sum of $22.90 on account, and was now justly indebted to the plaintiff therefor in the sum of $5,100; and demanding judgment for this sum, with interest and costs. The defendant in his answer admitted the citizenship of the parties, the purchase and delivery of the cotton, and the agreement to pay therefor, as alleged; and averred that, after the delivery of the cotton, he offered and tendered to the plaintiff, in full payment, $22.50 in gold coin of the United States, 40 cents in silver coin of the United States, and two United States notes, one of the denomination of $5,000 and the other of the denomination of $100, of the description known as United States legal tender notes, purporting by recital thereon to be

Page 422

legal tender, at their respective face values, for all debts, public and private, except duties on imports and interest on the public debt, and which, after having been presented for payment, and redeemed and paid in gold coin, since January 1, 1879, at the United States subtreasury in New York, had been reissued and kept in circulation under and in pursuance of the act of congress of May 31, 1878, c. 146; that at the time of offering and tendering these notes, and coin to the plaintiff the sum sum of $5,122.90 was the entire amount due and owing in payment for the cotton, but the plaintiff declined to receive the notes in payment of $5,100 thereof; and that the defendant had ever since remained, and still was, ready and willing to pay to the plaintiff the sum of $5,100 in these notes, and brought these notes into court, ready to be paid to the plaintiff, if he would accept them. The plaintiff demurred to the answer, upon the grounds that the defense, consisting of new matter, was insufficient in law upon its face, and that the facts stated in the answer did not constitute any defense to the cause of action alleged. The circuit court overruled the demurrer and gave judgment for the defendant, and the plaintiff sued out this writ of error.

Page 436

The amount which the plaintiff seeks to recover, and which, if the tender pleaded is insufficient in law, he is entitled to recover, is $5,100. There can, therefore, be no doubt of the jurisdiction of this court to revise the judgment of the circuit court. Act Feb. 16, 1875, c. 77, § 3, (18 St. 315.) The notes of the United States, tendered in payment of the defendant's debt to the plaintiff, were originally issued under the acts of congress of February 25, 1862, c. 33; July 11, 1862, c. 142; and March 3, 1863, c. 73, passed during the war of the rebellion, and enacting that these notes should 'be lawful money and a legal tender in payment of all debts, public and private, within the United States,' except for duties on imports and interest on the public debt. 12 St. 345, 532, 709. The provisions of the earlier acts of congress, so far as it is necessary for the understanding of the recent statutes to quote them are re-enacted in the following provisions of the Revised Statutes:

'Sec. 3579. When any United States notes are returned to the treasury, they may be reissued, from time to time, as the exigencies of the public interest may require.

[4 S.Ct. 124] 'Sec. 3580. When any United States notes returned to the treasury are so mutilated or otherwise injured as to be unfit for use, the secretary of the treasury is authorized to replace the same with others of the same character and amounts.

'Sec. 3581. Mutilated United States notes, when replaced according to law, and all other notes which by law are required to be taken up and not reissued, when taken up shall be destroyed in such manner and under such regulations as the secretary of the treasury may prescribe.

'Sec. 3582. The authority given to the secretary of the treasury to make any reduction of the currency, by retiring and canceling United States notes, is suspended.'

'Sec. 3588. United States notes shall be lawful money, and a legal tender in payment of all debts, public and private, within the United States, except for duties on imports and interest on the public debt.'

The act of January 14, 1875, c. 15, 'to provide for the resumption

Page 437

of specie payments,' enacted that on and after January 1, 1879, 'the secretary of the treasury shall redeem in coin the United States legal tender notes then out-standing, on their presentation for redemption at the office of the assistant treasurer of the United States in the city of New York, in sums of not less than fifty dollars;' and authorized him to use for that purpose any surplus revenues in the treasury and the proceeds of the sales of certain bonds of the United States. 18 St. 296. The act of May 31, 1878, c. 146, under which the notes in question were reissued, is entitled 'An act to forbid the further retirement of United States legal tender notes,' and enacts as follows: 'From and after the passage of this act it shall not be lawful for the secretary of the treasury or other officer under him to cancel or retire any more of the United States legal tender notes. And when any of said notes may be redeemed or be received into the treasury under any law, from any source whatever, and shall belong to the United States, they shall not be retired, canceled or destroyed, but they shall be reissued and paid out again and kept in circulation: provided, that nothing herein shall prohibit the cancellation and destruction of mutilated notes and the issue of other notes of like denomination in their stead, as now provided by law. All acts and parts of acts in conflict herewith are hereby repealed.' 20 St. 87.

The manifest intention of this act is that the notes which it directs, after having been redeemed, to be reissued and kept in circulation, shall retain their original quality of being a legal tender. The single question, therefore, to be corsidered, and upon the answer to which the judgment to be rendered between these parties depends, is whether notes of the United States, issued in time of war, under acts of congress declaring them to be a legal tender in payment of private debts, and afterwards in time of peace redeemed and paid in gold coin at the treasury, and then reissued under the act of 1878, can, under the

Page 438

constitution of the United States, be a legal tender in payment of such debts. Upon full consideration of the case, the court is unanimously of opinion that it cannot be distinguished in principle from the cases heretofore determined, reported under the names of the Legal-tender Cases, 12 Wall. 457; Dooley v. Smith, 13 Wall. 604; Railroad Co. v.Johnson, 15 Wall. 195; and Maryland v. Railroad Co. 22 Wall. 105; and all the judges, except Mr. Justice FIELD, who adheres to the views expressed in his dissenting opinions in those cases, are of opinion that they were rightly decided.

The elaborate printed briefs submitted by counsel in this case, and the opinions delivered in the Legal-tender Cases, and in the earlier case of Hepburn v. Griswold, 8 Wall. 630, which those cases overruled, forcibly present the arguments on either side of the question of the power of congress to make the notes of the United States a legal tender in payment of private debts. Without undertaking to deal with all those arguments, the court has though it fit that the grounds of its judgment in the case at bar should be fully stated. No [4 S.Ct. 125] question of the scope and extent of the implied powers of congress under the constitution can be satisfactorily discussed without repeating much of the reasoning of Chief Justice MARSHALL in the great judgment in McCulloch v. Maryland, 4 Wheat. 316, by which the power of congress to incorporate a bank was demonstrated and affirmed, notwithstanding the constitution does not enumerate, among the powers granted, that of establishing a bank or creating a corporation,

The people of the United States by the constitution established a national government, with sovereign powers, legislative, executive, and judicial. 'The government of the Union,' said Chief Justice MARSHALL, 'though limited in its powers, is supreme within its sphere of action;' 'and its laws, when made in pursuance of the constitution, form the supreme law of the land.' 'Among the enumerated powers of government, we find the great powers to lay and collect taxes; to borrow money; to regulate commerce; to declare and conduct a war; and to raise and support armies and navies. The sword and

Page 439

the purse, all the external relations, and no inconsiderable portion of the industry of the nation, are intrusted to its government.' 4 Wheat. 405-407. A constitution, establishing a frame of government, declaring fundamental principles, and creating a national sovereignty, and intended to endure for ages, and to be adapted to the various crises of human affairs, is not...

To continue reading