Hepburn v. Griswold

• Decision Date: 01 December 1869
• Citation: 19 L.Ed. 513,75 U.S. 603,8 Wall. 603
• Parties: HEPBURN v. GRISWOLD
• Court: U.S. Supreme Court

75 U.S. 603

19 L.Ed. 513

8 Wall. 603

HEPBURN v. GRISWOLD.

December Term, 1869

ERROR to the Court of Appeals of Kentucky, the case being this:

On the 20th of June, 1860, a certain Mrs. Hepburn made a promissory note, by which she promised to pay to Henry Griswold on the 20th of February, 1862, eleven thousand two hundred and fifty 'dollars.'

At the time when the note was made, as also at the time when it fell due, there was, confessedly, no lawful money of the United States, or money which could lawfully be tendered in payment of private debts, but gold and silver coin.

Five days after the day when the note by its terms fell due, that is to say, on the 25th of February, 1862, in an exigent crisis of the nation, in which the government was engaged in putting down an armed rebellion of vast magnitude, Congress passed an act authorizing the issue of $150,000,000 of its own notes,¹ and enacted in regard to them, by one clause in the first section of the act, as follows:

'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 United States, except duties on imports, and of all claims and demands against the United States of every kind whatsoever, except for interest upon bonds and notes, which shall be paid in coin; and shall also 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.'

The note given by Mrs. Hepburn not being paid at maturity, interest accrued on it. And in March, 1864, suit having been brought on the note in the Louisville Chancery Court, she tendered in United States notes issued under the act mentioned, $12,720, the amount of principal of the note with the interest accrued to the date of tender, and some costs, in satisfaction of the plaintiff's claim. The tender was refused. The notes were then tendered and paid into court; and the chancellor, 'resolving all doubts in favor of the Congress,' declared the tender good and adjudged the debt, interest and costs to be satisfied accordingly.

The case was then taken by Griswold to the Court of Errors of Kentucky, which reversed the chancellor's judgment, and remanded the case with instructions to enter a contrary judgment.

From the judgment of the Court of Errors of Kentucky, the case was brought by Mrs. Hepburn here.

The cause was first argued at the Term of December, 1867, upon printed briefs submitted by Mrs. Preston for the plaintiff in error, and Mr. Griswold contra. Subsequently, upon the suggestion of Mr. Stanbery, then Attorney-General, as to the great public importance of the question, the court ordered the cause and other causes involving, incidentally, the same question, to stand over to December Term, 1868, for reargument, with leave to the government to be heard. Accordingly, at that term the constitutionality of the provision in the act making the notes above-described a legal tender, was elaborately argued by Mr. B. R. Curtis (counsel for the plaintiff in error, in Willard v. Tayloe,) and by Mr. Evarts, Attorney-General, for the United States, in support of the provision, and by Mr. Clarkson N. Potter (of counsel for the defendant in error in this case), against the provision.

And the constitutionality of the provision had been argued at different times, by other counsel, in five other cases, which it was supposed by their counsel might depend on it, but four of which were decided on other grounds; to wit, in support of the constitutionality by Mr. Carlisle, Mr. W. S. Cox, Mr. Williams, Mr. S. S. Rogers, Mr. B. R. Curtis, Mr. L. P. Poland, Mr. Howe, and against it by Mr. Bradley, Mr. Wilson, Mr. Johnson, Mr. John J. Townsend, Mr. McPherson, Mr. Wills, in Thomson v. Riggs,² in Lane County v. Oregon,³ in Bronson v. Rodes,⁴ in Willard v. Tayloe,⁵ and in Broderick v. Magraw.⁶ The question was therefore thoroughly argued. And it was held long under advisement.

It is deemed unnecessary here to present the arguments, already in part presented, in some of the cases named, the matter in the present case being fully argued on both sides, from the bench.

The CHIEF JUSTICE 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 clause has already received much consideration here, and this court has held that, upon a sound construction neither taxes imposed by State legislation,⁷ nor demands upon contracts which stipulate in terms for the payment or delivery of coin or bullion,⁸ 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 nought 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.

Applying the rule just stated to the act under consideration, there appears to be strong reason for construing the word debts as having reference only to debts contracted subsequent to the enactment of the law. For no one will question that the United States notes, which the act makes a legal tender in payment, are essentially unlike in nature, and, being irredeemable in coin, are necessarily unlike in value, to the lawful money intended by parties to contracts for the payment of money made before its passage. 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 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 within 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.

Now, it certainly needs no argument to prove that an act, compelling acceptance in satisfaction of any other than stipulated payment, alters arbitrarily the terms of the contract and impairs its obligation, and that the extent of impairment is in the proportion of the inequality of the payment accepted under the constraint of the law to the payment due under the contract. 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 attributes 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...