The President, Directors and Company of the Commercial Bank of Cincinnati, Plaintiffs In Error v. Eunice Buckingham Executors, Defendants In Error

• Decision Date: 01 January 1847
• Citation: 12 L.Ed. 169,5 How. 317,46 U.S. 317
• Parties: THE PRESIDENT, DIRECTORS, AND COMPANY OF THE COMMERCIAL BANK OF CINCINNATI, PLAINTIFFS IN ERROR, v. EUNICE BUCKINGHAM'S EXECUTORS, DEFENDANTS IN ERROR
• Court: U.S. Supreme Court

46 U.S. 317

5 How. 317

12 L.Ed. 169

THE PRESIDENT, DIRECTORS, AND COMPANY OF THE COMMERCIAL

BANK OF CINCINNATI, PLAINTIFFS IN ERROR,

v. EUNICE BUCKINGHAM'S EXECUTORS, DEFENDANTS IN ERROR.

January Term, 1847

THIS case was brought up, by a writ of error issued under the twenty-fifth section of the Judiciary Act, from the Supreme Court of the State of Ohio.

The Reporter finds the following statement of the case prepared by Mr. Justice Grier, and prefixed to the opinion of the court, as pronounced by him.

Eunice Buckingham, the plaintiff below, brought an action of assumpsit against the plaintiffs in error in the Court of Common Pleas of Hamilton county, and filed her declaration claiming to recover twenty thousand dollars for bills or banknotes of the Commercial Bank, of which she was owner, and of which demand had been made of the officers of the bank and payment refused, and claiming interest thereon at six per cent. from the suspension of specie payments, and also twelve per cent. additional damages from the time of demand and refusal. The cause was afterwards removed to the Supreme Court of Ohio, who gave judgment in her favor; and thereupon the defendant removed the case by writ of error to the Supreme Court in bank, by whom the judgment was affirmed, and the plaintiffs in error afterwards sued out a writ of error to this court.

The Supreme Court entered on their record the following certificate, which contains a sufficient statement of the points arising in the case:——

'And upon the application of said plaintiffs in error, it is certified by the court here, that the said plaintiffs in error, on the trial and hearing of this case in said Supreme Court for Hamilton county, and also in this court, set up and relied upon the charter granted to them by the General Assembly of the State of Ohio, on the 11th day of February, A. D., 1829; which charter contains the following

provision.—the fourth section provides, 'that said bank shall not at any time suspend or refuse payment, in gold or silver, of any of its notes, bills, or other obligations, due and payable, or of any moneys received on deposit; and in case the officers of the same, in the usual banking hours, at the office of discount and deposit, shall refuse or delay payment in gold or silver of any note or bill of said bank there presented for payment, or the payment of any money previously deposited therein, and there demanded by any person or persons entitled to receive the same, said bank shall be liable to pay as additional damages at the rate of twelve per centum per annum on the amount thereof for the time during which such payment shall be refused or delayed,' and insisted, that, by the provisions above set forth, the said plaintiffs in error ought not to be held liable to pay for interest or damages in case of suspension of specie payments, or upon demand and refusal of payment of their notes or bills, at a greater rate than at the rate of twelve per centum per annum, and the court here overruled the defence so set up, and held, that under and by virtue of the act of the General Assembly of the State of Ohio, passed January 28th, 1824, and of the said charter of the plaintiffs in error, the defendants in error were entitled to the interest and additional damages allowed to the defendants in error by the Supreme Court for Hamilton county, as stated in the bill of exceptions. The first section of the said act of the General Assembly of the State of Ohio, of January 28th, 1824, is as follows:—'That in all actions brought against any bank or banker, whether of a public or private character, to recover money due from such bank or banker, upon notes or bills by him or them issued, the plaintiff may file his declaration for money had and received generally, and upon trial may give in evidence to support the action any notes or bills of such bank or banker which said plaintiff may hold at the time of trial, and may recover the amount thereof, with interest from the time the same shall have been presented for payment, and payment thereof refused, or from the time that such bank or banker shall have ceased or refused to redeem his notes with good and lawful money of the United States.' And the eleventh section of which is as follows:—'That when any bank or banker shall commence and continue to redeem their notes or bills with lawful money, the interest on their notes or bills shall cease from the commencement of such redemption, by their giving six weeks' previous notice, in some newspaper having a general circulation in the county where such bank or banker transacts banking business, of the time they intend to redeem their notes or bills with lawful money.' It was contended and claimed in this court, by said plaintiffs in error, that the said act of the General Assembly of Ohio, of January 28th, 1824, as applied to the said provisions of this charter, impaired the obligation thereof, and violated the provisions of the constitution of the United States; which claim so set up was overruled by the court. And it is further certified by the court here, that on the trial and hearing of this case in this court, the validity of the said act of the legislature before mentioned was drawn in question, on the ground that the same, as applied to the charter of the plaintiffs in error, impaired the obligations thereof, and was repugnant to the constitution of the United States, and that the decision of this court was in favor of the validity of the said act of the legislature as so applied.'

The cause was argued by Mr. Stanberry (Attorney-General of Ohio) and Mr. Gilpin, for the plaintiffs in error, and Mr. Charles C. Convers, for the defendants in error.

As the case went off upon the question of jurisdiction, only so much of the arguments of the counsel is given as relates to that point.

Mr. Stanberry, for plaintiffs in error.

The first question which presents itself is as to the jurisdiction of this court. It is claimed for the plaintiffs in error, that the jurisdiction arises upon that clause of the Judiciary Act of 1789, which provides for the case where the validity of a statute of a State is drawn in question, as repugnant to the constitution of the United States, and the decision of the State court is in favor of its validity.

It appears very clearly in the record, that the validity of a statute of Ohio was drawn in question in the State court, on the ground that the same, as applied to the charter of the plaintiffs in error, impaired the obligation thereof, and that the decision was in favor of the validity of the statute.

The defendants in error are understood to claim, that, inasmuch as this statute was in existence at, and prior to, the granting of the charter, it cannot be held to impair the obligation of the charter; in other words, that this prohibition in the constitution is to be confined to retrospective legislation.

Authority for this distinction is supposed to be found in the opinions of the majority of the judges in Ogden v. Saunders, 12 Wheat., 213.

There is no question that, in Ogden v. Saunders, the majority of the court proceeded upon a distinction between a statute prior and one subsequent to the contract, holding that a statute in force when the contract is made cannot be said to impair the obligation of the contract, for the reason that such pre existing statute being a part of the law of the land at the time of the contract, the parties are supposed to acquiesce in it, and in fact to make it part of their contract.

In the first place, it is to be observed of this case of Ogden v. Saunders, that the distinction it enforces is opposed to the reasoning of the court in Sturges v. Crowninshield, 4 Wheat., 122, and to the language of the court in McMillan v. McNiell, 4 Wheat., 209.

As a general distinction, applicable to all laws, it certainly is not sound, for it would quite set aside this most important restraint upon State legislation. It can only have reference to such laws as provide for the manner of enforcing or discharging future contracts, and which may be said to be in the view of the parties when they afterwards enter into the class of contracts provided for in the previous legislation.

In this view, Ogden v. Saunders perhaps settles a just distinction, as applicable to the sort of statute then before the court. The question there was as to the validity of a State bankrupt law, in reference to a subsequent contract. It might well be said, that the parties tacitly adopted and recognized this law, or this mode of discharging their contract, when it was entered into.

But in the case at bar, no such intendment can be made, and it is impossible to suppose that the statute of 1824 was adopted by the parties, or in any way entered into the contract or charter made in 1829. The charter was wholly independent of the statute.

Again; this charter was granted by the State. It does not stand on the footing of a contract between individuals, who are supposed to be bound by the existing laws as to contracts, and to adopt and acquiesce in them. Here the State is one of the contracting parties, and the contract itself is a law. If the charter granted in 1829 provides, as we claim it does, that in case of refusal to pay its notes in gold and silver the rate of interest shall be twelve per cent., it surely cannot be intended that the parties submitted themselves to the prior law of 1824, so as to increase the rate of interest upon such refusal to eighteen per cent., or six per cent. in addition to the rate stipulated by the charter. In no sense can it be said that the law of 1824 entered into or became part of the charter. If the charter had been silent as to the rate of interest in the particular case of a refusal to redeem, the general law of 1824 would have settled it, and might well have been considered as entering into the charter and constituting one of its terms, for then there would have been no inconsistency or...