22 Ind. 282 (Ind. 1864), , Thayer v. Hedges

Citation22 Ind. 282
Opinion JudgePerkins, J.
Party NameThayer v. Hedges and Another
AttorneyA. J. Boone, for the appellant.
Judge PanelPer Curiam.
CourtSupreme Court of Indiana

Page 282

22 Ind. 282 (Ind. 1864)

Thayer

v.

Hedges and Another

Supreme Court of Indiana

May, 1864

APPEAL from the Boone Circuit Court.

The judgment is affirmed, with costs, and 1/4 of 1 per cent. damages.

A. J. Boone, for the appellant.

OPINION

Page 283

Perkins, J.

This suit was instituted upon a promissory note of the following tenor:

"$ 500. March 26, 1862.

"Four months after date we promise to pay to Oel Thayer or order, 500 dollars in gold, value received, without any relief whatever from valuation or appraisement laws.

"John W. Hedges,

Martin C. Kleiger."

The plaintiff prayed for a special judgment for the gold or its equivalent.

The defendant answered, alleging a tender of the amount due, before suit commenced, &c., in legal tender treasury notes, at their face.

A demurrer was overruled to this answer.

Page 284

The plaintiff then replied, showing the depreciation of treasury notes, and the insufficiency of the tender, in amount, on that ground, but the Court held the reply bad, on demurrer.

The Court rendered a general judgment for the plaintiff for the amount of the note, but rendered judgment against him for the costs of suit, on the ground that a valid tender in treasury notes, had been made before suit commenced.

The plaintiff appealed to this Court.

The points upon the rulings below were properly saved by exceptions.

The tender of the paper in question, in discharge of an express contract to pay in gold, was made, and sustained by the Court below, under the first section of the act of Congress, of February 25, 1862, which declares that treasury notes issued pursuant to it, shall "be lawful money, and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest as aforesaid." Acts of Cong. 1862, (L. & B.'s ed.) p. 345.

If this clause of the act mentioned is constitutional, the tender in question was valid. If not, it was not.

We thus arrive at one of the questions that may be decided.

In considering this question, it will be convenient to first ascertain the precise character and purpose of the treasury note law.

It will not be difficult to do this.

In 1857, an act was passed by Congress, providing for the issue of twenty millions of treasury notes, and empowering the Secretary of the Treasury, among other things, "to borrow, from time to time, such sums of money, upon the credit of such notes, as," &c. Acts 1858, p. 257.

In July, 1861, another act was passed, entitled, "An act to authorize a national loan and for other purposes," which authorized the Secretary of the Treasury to borrow 250,000,000

Page 285

dollars, and to issue bonds and treasury notes therefor, &c." Acts 1861, p. 259.

Again, in August, 1861, and again in February, 1862, acts were passed in relation to treasury notes as a means of obtaining loans, &c.; though no clause was inserted in any of these acts making the notes a legal tender.

But, on the 25th of February, 1862, another act was passed, authorizing a further issue of such notes, the act being one of the series upon this subject of treasury notes, it making reference to the previous acts, and treating the notes to be issued under it as a part of the government securities, but adding a provision additional to those in previous acts, making the notes issued under it a legal tender. Acts 1862, pp. 338, 345.

The purpose of the treasury notes, then, was to raise or supply money, and they pledge the government, upon their face, as security to the holder, to pay money for them. This is the form of the notes.

And the question is, could Congress compel creditors to receive paper in payment, generally, of debts due to them. We speak of the creditor and debtor portions of the mass of the people.

The Congress of the United States has, at different times, authorized the issue of three descriptions of paper, viz:

1. Paper by corporations, called banks.

The right to authorize this kind of paper does not come in question in the case at bar. It may, however, be observed in passing, that the Supreme Court of the United States has decided that if a bank of the United States, is a necessary and proper financial agent of the government, it is constitutional, if not, it is not. The experience of the last twenty odd years seems to establish the fact that it is not such an agent. McCulloch v. Maryland, 4 Cond. R. 466.

2. Bonds for money actually borrowed.

Page 286

Of the right to issue this paper there is no doubt. The power to borrow money includes the power to execute a written acknowledgment of the debt created by the act of borrowing, and also a written promise to pay the debt.

3. Paper, in the similitude of bank notes, bills of credit, in fact, designed to circulate as money, as well as to accomplish a loan. See Brisco v. The Bank, &c., 11 Pet. Rep. (U.S.) p. 257.

The right to issue such paper is not free from doubt. See Reynolds v. The Bank, 18 Ind. 457. It is held not to exist by Mr. Curtis in his History of the Constitution, vol. 2, p. 329. But the point need not be decided now. What we are at present considering is, can Congress proceed a step further and make paper issued under its authority, money, legal tender in payment of all debts? The answer to this question must be drawn from an examination of the Constitution of the United States.

And, first, let us ascertain what, exactly, is the operation of the act of Congress in question?

1. It makes an article other than coin, and an article as thus used, of no intrinsic value, legal tender money.

2. It thereby impairs the obligation of contracts by compelling creditors to receive, in discharge of them, less than half their value according to stipulation.

3. It operates as a fraud on the public creditors, and a hardship upon the honest public servants, by depreciating and debasing the currency.

4. In another aspect, it enables the government to make, by indirection, forced loans as actual if not as oppressive as those of Charles I, as they are made without interest, against the will of the lender, and without repayment of but a part of the principal; thus, in this case, as an example. The government desires Thayer to loan it 500 dollars. Thayer expresses his inability or unwillingness to spare the money. The government then goes to Hedges and Kleiger, and says to them,

Page 287

you owe Thayer 500 dollars, which you are about to pay him. The government wants that money, but he will not loan it. You pay it to the government, and it will give you a piece of paper which it will compel him to take of you, instead of the money contracted for, in payment of your debt.

5. It takes from the citizen his property against his consent and without just compensation.

Can the government constitutionally do these things, is the question?

This is a question of the gravest import. To arrive at a correct answer to it, it will be necessary to somewhat thoroughly analyze the legislative department of the Constitution of the United States. That analysis we shall attempt. We shall do it in no partizan spirit. All ought to desire to know aright our Constitution, and discussion and comparison of views are necessary to such knowledge. And especially, in times of difficulty, when the temptation to depart from it may be great, is the duty of watchfulness the more pressing, as the bad precedents of such times become the bad laws of times of tranquillity. Looking forward, as we hopefully do, to the complete suppression of the existing rebellion and the restoration of the Union under our revered Constitution, we are anxious that we may then find it in its integrity, unburdened by bad precedents, dangerous constructions and vicious interpretations.

We do not wish to be understood as intimating that the Constitution is beyond improvement; that progress will not render change necessary; but we do hold that such change, happily provided for in the Constitution itself, should be made in the mode therein prescribed. Ours is either a government of the Constitution, or it is not. If it is a government of the Constitution, then its execution, consistently with the laws made under it, is all the Federal Government that is necessary and proper for the welfare of the nation,

Page 288

and all to which the States and people can be rightfully subjected.

The government of the United States is one whose sovereignty, limited territorially only by the boundaries of the nation, is yet circumscribed as to the objects upon which it can act. It is a government over specified subject matters. Warren v. Paul at this term and case cited, ante, p. 276. Most of the time since the settlement of this country by the whites, the people of the United States have lived under two governments acting upon them within the same territory. During our colonial State, we had the British for our general government, and the colonial, for our local governments. And it was one great source of controversy as to how far the British general government should have a right to exercise powers over the internal affairs of the Colonies, which were foreign and independent as to each other, but domestic and subject as to the British government. It was agreed that there were some matters pertaining to the general welfare of the Colonies as a whole, such as their foreign and inter-colonial trade, their common defence against the Indians and foreign enemies, which should fall within the power of the general government; but their internal, domestic affairs, the general welfare of the people of the several Colonies...

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3 practice notes
  • 23 Ind. 141 (Ind. 1864), , Thayer v. Hedges
    • United States
    • Indiana Supreme Court of Indiana
    • Invalid date
    ...the judgment of the court below in this cause. The opinion, which was pronounced by Perkins, J., on that occasion, is reported in 22 Ind. 283, et seq. On the 26th of November following, an order was entered here setting aside the judgment of affirmance, and Page 142 continuing, under advise......
  • 23 Ind. 18 (Ind. 1864), , Bickle v. Beseke
    • United States
    • Indiana Supreme Court of Indiana
    • Invalid date
    ...amount between the parties? This case does not involve the constitutionality of legal-tender paper. See on that point, Thayer v. Hedges, 22 Ind. 282. Per Curiam. Judgment affirmed, with costs....
  • 22 Ind. 282 (Ind. 1864), , Brumback v. Paul
    • United States
    • Indiana Supreme Court of Indiana
    • Invalid date
    ...282 22 Ind. 282 (Ind. 1864) Brumback v. Paul Supreme Court of Indiana May, 1864 APPEAL from the Elkhart Common Pleas. Robert Lowry, for the appellant. John H. Baker, for the appellee. OPINION Per Curiam. The judgment in this case is reversed, with costs, cause remanded, &c., for the rea......
3 cases
  • 23 Ind. 141 (Ind. 1864), , Thayer v. Hedges
    • United States
    • Indiana Supreme Court of Indiana
    • Invalid date
    ...the judgment of the court below in this cause. The opinion, which was pronounced by Perkins, J., on that occasion, is reported in 22 Ind. 283, et seq. On the 26th of November following, an order was entered here setting aside the judgment of affirmance, and Page 142 continuing, under advise......
  • 23 Ind. 18 (Ind. 1864), , Bickle v. Beseke
    • United States
    • Indiana Supreme Court of Indiana
    • Invalid date
    ...amount between the parties? This case does not involve the constitutionality of legal-tender paper. See on that point, Thayer v. Hedges, 22 Ind. 282. Per Curiam. Judgment affirmed, with costs....
  • 22 Ind. 282 (Ind. 1864), , Brumback v. Paul
    • United States
    • Indiana Supreme Court of Indiana
    • Invalid date
    ...282 22 Ind. 282 (Ind. 1864) Brumback v. Paul Supreme Court of Indiana May, 1864 APPEAL from the Elkhart Common Pleas. Robert Lowry, for the appellant. John H. Baker, for the appellee. OPINION Per Curiam. The judgment in this case is reversed, with costs, cause remanded, &c., for the rea......

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