Boatman's Sav. Inst. v. Bank of Missouri

• Decision Date: 31 March 1863
• Citation: 33 Mo. 497
• Court: Missouri Supreme Court
• Parties: THE BOATMAN'S SAVINGS INSTITUTION, Respondent, v. THE BANK OF THE STATE OF MISSOURI, Appellant.^a1

33 Mo. 497

THE BOATMAN'S SAVINGS INSTITUTION, Respondent,

v.THE BANK OF THE STATE OF MISSOURI, Appellant.^a1

Supreme Court of Missouri.

March Term, 1863.

Appeal from St. Louis Circuit Court.

Glover, for appellant.

I. The tender which was made by the Bank of Missouri, in the silver coin of the United States, was good. Gold and silver coin, and gold or silver coin, are the constitutional, and therefore the legal tender for the payment of all manner of debts.

The constitution of the United States, art. 1, § 10, provides that no State “shall coin money,” or make anything but gold and silver coin a tender in payment of debts. The evil practices which led to this prohibition in the Federal constitution are enumerated in 3 Story on Cons. 236-8, and are familiar to all who have any acquaintance with our colonial history. It cannot be insisted that any of the abuses enumerated by Story would be less oppressive if enacted by Congress. It was not the source from which they sprung, but the practices themselves which rendered them so odious to the framers of the constitution, and which determined them to raise a barrier against their introduction. The prohibition on the States shows where the power to create these abuses resided had no prohibition been made. The further fact that no grant of power to Congress over this subject is found in the constitution, renders it certain that no such legislation was looked for in that direction. The want of any grant of power to Congress, and the express prohibition on the States to interfere in a named particular, show that the subject of tender was under State jurisdiction.

But if it were so that Congress was not the depository of merely delegated powers, but the fountain of State authority, I insist that the language of the constitution of the United States would be a grant of power to the States to legislate on the whole subject of tender, save in the one particular prohibited. The language “no State shall make anything but gold and silver coin a tender in payment of debts” is substantially this, in effect, that the law of tender is under State jurisdiction, and any State may properly legislate on it; but that, in legislating on it, such State shall not “make anything but gold and silver coin a tender in payment of debts.” The case is one in which the exception proves the rule.

II. If we shall determine that Congress has power to legislate on the subject of tender, under what limitations is the doctrine to be received? Are all the provisions of the common law which Missouri has introduced void? and is Congress to furnish us a code on this subject? Is the power concurrent in Congress and the States, or exclusive in Congress? May Congress say at what time of the day, and at what place, and in what form, a tender shall be made? and what shall be the proof of these facts? If Congress can legislate on the law of tender and the States cannot, how shall we define even the meaning of the word tender? There is nothing in the laws of Congress in regard to it. You must go to the common law for the meaning of the word and the manner of the action, and Congress has not adopted the common law.

III. The act of Congress, February 21, 1853, providing that the silver coin issued under it “should be legal tender in payment of debts, for all sums not exceeding five dollars,” is unconstitutional in as far as it limits the right of payment in silver to sums of five dollars and under, (2 Nott & McCord, 519-20,) because, under the constitution, there can be no distinction between gold and silver; both are made media of tender in payment of debts-- that is, of all debts without dis tinction of dignity or amount. The naming of gold and silver in the constitution generally as media of payment places each on the same footing; neither is disparaged in the constitution, and neither can be disparaged in the law. The constitution makes each unconditionally a medium of payment, and the law cannot attach a condition to either. A right conferred by the constitution generally cannot be made a conditional right by statute. If the right to pay a debt in silver can be limited to the amount of five dollars, the right to pay in gold may be limited to five dollars, or one dollar, or one cent. Silver may be virtually excluded from circulation as a medium of payment, or gold may be so excluded. This is undeniable, provided the statute of February 21, 1853, is valid. Is it at all possible that a proposition to authorize the virtual exclusion of gold or silver from circulation in payment of debts in the discretion of the legislature, could have been incorporated into the constitution? I think not.

IV. But the tender was good under the act of Congress of February 21, 1853. (Brightley's Digest, 153, § 14.) This section provides that “the silver coins issued in conformity to it shall be legal tenders in payment of debts for all sums not exceeding five dollars.” Now, when the bank issued and put into circulation her five dollar notes, it was her duty not only to pay her own liabilities, but to receive from others who had to make payments to her the silver coins in cases in which they were payable. Such is the requirement of the act. Silver coins therefore would accumulate in the vaults of the bank The bank is required to receive all sums of five dollars, and under, in silver, at the will of her debtors. The equity of the statute equally demands that she should be allowed to pay them out for like sums in her pleasure. I admit the statute does not say that the debtor may pay his five dollar notes in silver, but that is certainly the spirit of the act. But the other side contend that the bank may be compelled to receive in silver each five dollar debt she has outstanding; that she can be compelled to pay all her five dollar notes in gold at the pleasure of the holder. The injustice has no sanction in the statute, or in the nature of the case. It is not only unreasonable that the bank should be compelled to receive on one liability what she cannot pay out on the same liability, but more unreasonable that the nature of her liability should be subject to change in the pleasure of the holder. If A. has two five dollar notes on the bank, and presents each separately, the bank may pay each in silver; but if he sees fit to make them payable in gold, he can do so by calling them ten dollars and demanding gold; that is, the nature of the liability of the bank depends upon the will of the holder of her notes. Such cannot be the true construction. The safer rule is to regard the nature of the liability as fixed by the paper itself, and as always the same. This would be to regard the “sum,” which, by the statute, is payable in silver, as the amount mentioned in the face of each note issued by the bank; that is, all five dollar notes are, and each is, a “sum” of five dollars in the meaning of the act, and payable in silver. This would enable the bank to understand its business, which is impossible under any other construction. When she issues five dollar notes she would know how she could pay them; and her silver on hand could be compared with her circulation payable in silver, and she could protect her interests accordingly. (Acts, 1857, p. 22, § 37.) We insist that no other view of the subject is either rational or just. The five dollar notes were separate sums in the meaning of the act of 1853.

1. Each note of five dollars is a separate contract of the bank. 2. Each is issued at a different time, and to a different person. 3. Each may be presented at a different time, and by a different person. 4. The bank may be compelled to pay each at a different time. 5. In law, they are emphatically separate demands, and are so declared on, in this case, in separate counts. 6. The holder has an absolute right to make separate demands of each note in his pleasure, but why so? Why only because they are separate demands, therefore the bank may so pay them.

The case of Suffolk Bank v. Lincoln Bank, (3 Mason, 1,) is not in point. There, in every event, the whole of the bills, and each one of them, were payable in the same money.

V. The tender was good under the contract by which the notes of the Bank of Missouri were issued. The bank charter (see Constitutional Amendments, Acts, 1857, p. 17) provides that the bank might pay in gold or silver coin. Of course the holder took the notes subject to this right. It was part of the agreement between the Bank of Missouri and the holder of the paper that the bank might pay, and the holder would receive, either gold or silver on all its paper. If it had been part of the contract on which the paper was issued that it might be paid in bacon and corn, the tender of bacon or corn would have been good. The defendant did tender payment according to the bank charter. The defendant did offer specifically to perform the contract in its precise terms.

VI. But the suit now pending is brought to recover a penalty. The penalty is given by a law which annexes it on failure by my client to pay in gold or silver coin. If the defendant was ready to pay in either gold or silver coin, there can be no recovery of this penalty. The plaintiff's suit is a qui tam action; as the penalty is given so the plaintiff sues. The State of Missouri had the right to provide on what terms the penalty should be given.

C. F. Burnes, for respondent.

I. Each note constitutes a separate contract. The promise to pay is distinct and complete. To enforce this contract the plaintiff has the right to sue on each note separately, and joining more than one note in the same suit must, as in fact it has done in these suits, set out each in a distinct count and pray for judgment on each count, thereby demanding payment of each note separately. Then it must follow that the defendant has the right to treat each note as a separate contract, otherwise the rights of the parties to the contract are not reciprocal. The contract must be construed the same for each party.

II....