Kauffman v. Citizens State Bank of Loyal
| Decision Date | 26 May 1981 |
| Docket Number | Nos. 80-824,s. 80-824 |
| Citation | 102 Wis.2d 528,307 N.W.2d 325 |
| Parties | Richard KAUFFMAN, Pastor/Trustee, Plaintiff-Appellant, v. CITIZENS STATE BANK OF LOYAL; Vernon W. Loos, individually and as Chairman ofthe Board; Harvey Brussow, individually and as Director; George F. Zuehlke, individually and as Director; and William W. Schwantes, individually and asDirector,Defendants-Respondents. Richard KAUFFMAN, Pastor/Trustee, Plaintiff-Appellant, v. SPENCER STATE BANK; Olaf Manthe, individually and as President; Orville Syring, individually and as Vice-President; and Louis Worchel, individually and asAssistant Cashier, Defendants- Respondents. Richard KAUFFMAN, Pastor/Trustee, Plaintiff-Appellant, v. Alex SWIDERSKI, individually and as owner of Swiderski Implement, Inc.; and TomKutise, individually, and as Sperry New Holland Branch Credit Representative,Defendants-Respondents. 80-826. |
| Court | Wisconsin Court of Appeals |
Richard Kauffman, pro se.
Donald R. Hoerl and Associated Attys., S. C., Marshfield, on brief for defendants-respondents Citizens State Bank of Loyal and Spencer State Bank.
James Kurth and Jerome A. Maeder, S. C., Wausau, on brief for defendants-respondents Alex Swiderski et al.
Before GARTZKE, P. J., and BABLITCH and DYKMAN, JJ.
Richard Kauffman, pastor and trustee of the Life Science Church of Loyal, has appealed from orders dismissing his complaints for judgments declaring that certain notes and a contract are void, and for damages. The appeals have been consolidated. The ultimate issue is whether, as we hold is the case, federal reserve notes are lawful money in this state.
The promissory notes sought to be voided consist of one for $24,616 payable to Citizens State Bank of Loyal and three totaling $138,000 payable to Spencer State Bank, all by the church by Pastor Kauffman. 1 The contract was entered with Alex Swiderski Impl., Inc. and requires total installment payments of $18,099 by Pastor Kauffman. The banks, Swiderski and their officers are defendants. Pastor Kauffman alleges that he executed the notes and the contract but the "dollars" he received under the notes and must repay under the notes and contract are not legal tender. He alleges that to pay "dollars" is a criminal act under the laws of this state. He asserts that defendants' demands for repayment in "irredeemable paper 'money' " constitute numerous wrongs against him, including entrapment and conspiracy to make him commit crimes, for which he demands damages.
Spencer State Bank and Swiderski moved to dismiss the complaints for failure to state claims upon which relief can be granted. The Citizens State Bank action was tried to the court on a brief record. The court ordered the complaints dismissed for failure to state claims.
Appellant contends that the United States Constitution prohibits the state from making anything but gold and silver coin a lawful tender to pay debts. He contends that this state, by sec. 134.15(1), Stats., has made it a crime to pass paper money unless it is "expressly authorized by some positive law of the United States or of some state of the United States ... and (is) redeemable in lawful money of the United States, or current gold or silver coin ...." 2 Congressional Joint Resolution 192, dated June 5, 1933, now 31 U.S.C. sec. 463, suspended the gold standard in the United States and the right of the obligee of a debt to require payment in gold. 3 Congress made federal reserve notes legal tender for all debts, public and private, 31 U.S.C. sec. 392. Conceding that Congress may make federal reserve notes legal tender in transactions involving the federal government, appellant contends that only gold and silver coin, or currency redeemable in such, is lawful as between private persons under this state's laws and the United States Constitution.
Article I, sec. 10 of the United States Constitution, provides in relevant part, "No state shall ... make any thing but gold and silver coin a tender in payment of debts." Article I, sec. 10 prohibits the states from declaring legal tender anything other than gold or silver, but does not limit Congress' power to declare what shall be legal tender for all debts. Juilliard v. Greenman, 110 U.S. 421, 446-50, 4 S.Ct. 122, 128-131, 28 L.Ed. 204 (1884). See also United States v. Rifen, 577 F.2d 1111, 1113 (8th Cir. 1978); Chermack v. Bjornson, 302 Minn. 213, 223 N.W.2d 659 (1974), cert. denied 421 U.S. 915, 95 S.Ct. 1573, 43 L.Ed.2d 780 (1975).
As stated in Norman v. Baltimore & O. R. Co., 294 U.S. 240, 303, 55 S.Ct. 407, 414, 79 L.Ed. 885 (1935), because the constitution was designed to provide the same currency having a uniform value in all of the states:
(T)he power to regulate the value of money was conferred upon the Federal government, while the same power ... was withdrawn from the States. The States cannot declare what shall be money, or regulate its value. Whatever power there is over the currency is vested in the Congress. (Emphasis added.)
Congress has declared that federal reserve notes are legal tender for all debts, public and private. 31 U.S.C. sec. 392. 4 That section is well within the constitutional authority of Congress. United States v. Wangrud, 533 F.2d 495, 495-96 (9th Cir.), cert. denied 429 U.S. 818, 97 S.Ct. 64, 50 L.Ed.2d 79 (1976).
Federal reserve notes are legal tender in Wisconsin, not by any law of this state, but because Congress has made them legal tender throughout these United States. 5 Wisconsin has made no effort to declare that federal reserve notes are or are not, in the words of art. I, sec. 10 of the United States Constitution, a "tender in payment of debts."
Section 134.15(1), Stats., does not make the passing of federal reserve notes a crime in this state. That statute makes criminal the passing of something "as money or as an equivalent for money," unless it is, among other things, "redeemable in lawful money of the United States, or current gold or silver coin." Because 31 U.S.C. sec. 392 makes federal reserve notes legal tender, they are money for purposes of sec. 134.15(1) and are not passed as money or as an equivalent for money. 6
Orders dismissing complaints affirmed.
1 The complaints assume that Pastor Kauffman is personally liable on the notes.
2 Section 134.15, Stats., provides:
(1) Any person who shall knowingly issue, pay out or pass, and any body corporate, or any officer, stockholder, director or agent thereof who shall issue, pay out or pass, or receive in this state, as money or as an equivalent for money, any promissory note, draft, order,...
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