Lane County v. Oregon

• Decision Date: 01 December 1868
• Citation: 74 U.S. 71,19 L.Ed. 101,7 Wall. 71
• Parties: LANE COUNTY v. OREGON
• Court: U.S. Supreme Court

74 U.S. 71

19 L.Ed. 101

7 Wall. 71

LANE COUNTY v. OREGON.

December Term, 1868

ERROR to the Supreme Court of Oregon. The case was this:

Congress, February, 1862, authorized the issue of $150,000,000 in notes of the United States, and enacted that they should 'be receivable in payment of all taxes, internal duties, levies, debts, and demands due to the United States, except duties on imports; and of all claims and demands of any kind whatever against the United States, except interest on bonds and notes, which shall be paid in coin; and shall also be lawful money and legal tender in payment of all debts, public and private, within the United States, except duties on imports.' A subsequent act, authorizing a further issue, contained an enactment very similar, as to the legal characteristics of the notes, when issued. A third act, authorizing a yet further issue, enacted simply that they should be lawful money or a legal tender. Under these three acts, a large amount of notes of the United States, which circulated as money, were issued.

Subsequently to this, the legislature of Oregon passed a statute, enacting that 'the sheriff shall pay over to the county treasurer, the full amount of the State and school taxes, in gold and silver coin;'¹ and that 'the several county treasurers shall pay over to the State treasurer the State tax in gold and silver coin.'²

In this condition of statute law, Federal and State, the State of Oregon, in April, 1865, filed a complaint against the County of Lane, in the Circuit Court of the State for that county, to recover $5460.96, in gold and silver coin, which sum was alleged to have become due, as State revenue, from the county to the State, on the first Monday of February, 1864.

To this complaint an answer was put in by the county, alleging a tender of the amount claimed by the State, made on the 23d day of January, 1864, to the State treasurer, at his office, in United States notes, and averring that the lawful money, so tendered and offered, was, in truth and fact, part of the first moneys collected and paid into the county treasury, after the assessment of taxes for the year 1862.

To this answer there was a demurrer, which was sustained by the Circuit Court, and judgment was given that the plaintiff recover of the defendant the sum claimed, in gold and silver coin, with costs of suit. This judgment was affirmed, upon writ of error, by the Supreme Court of the State.

The case was now brought here by writ of error to that court.

Mr. Williams, for Lane County, plaintiff in error, laid down and pressed upon the attention of the court, seeking to maintain them by argument and authority, these two propositions:³

1st. That the laws of Oregon did not require the collection, in coin, of the taxes in question, and that the treasurer of the county could not be required to pay the treasurer of the State any other money than that in which the taxes were actually collected.

2d. That the tender of the amount of taxes made to the treasurer of the State, by the treasurer of the county, in United States notes, was warranted by the acts of Congress authorizing the issue of these notes, and that the law of the State, if it required collection and payment in coin, was repugnant to these acts, and therefore void.

Mr. Johnson (a brief of Mr. Mallory being filed), contra.

The CHIEF JUSTICE delivered the opinion of the court.

Two propositions have been pressed upon our attention, ably and earnestly, in behalf of the plaintiff in error.

The first of them will be first considered.

The answer avers, substantially, that the money tendered was part of the first moneys collected in Lane County after the assessment of 1863, and the demurrer admits the truth of the answer.

The fact therefore may be taken as established, that the taxes for that year, in Lane County, were collected in United States notes.

But was this in conformity with the laws of Oregon?

In this court the construction given by the State courts to the laws of a State, relating to loca affairs, is uniformly received as the true construction; and the question first stated must have been passed upon in reaching a conclusion upon the demurrer, both by the Circuit Court for the county and by the Supreme Court of the State. Both courts must have held that the statutes of Oregon, either directly or by clear implication, required the collection of taxes in gold and silver coin.

Nor do we perceive anything strained or unreasonable in this construction. The laws of Oregon, as quoted in the brief for the State, provided that 'the sheriff shall pay over to the county treasurer the full amount of the State and school taxes, in gold and silver coin;' and that 'the several county treasurers shall pay over to the State treasurer the State tax, in gold and silver coin.'

It is certainly a legitimate, if not a necessary inference, that these taxes were required to be collected in coin. Nothing short of express words would warrant us in saying that the laws authorized collection in one description of money from the people, and required payment over of the same taxes into the county and State treasuries in another.

If, in our judgment, however, this point were otherwise, we should still be bound by the soundest principles of judicial administration, and by a long train of decisions in this court, to regard the judgment of the Supreme Court of Oregon, so far as it depends on the right construction of the statutes of that State, as free from error.

The second proposition remains to be examined, and this inquiry brings us to the consideration of the acts of Congress, authorizing the issue of the notes in which the tender was made.

The first of these was the act of February 25, 1862, which authorized the Secretary of the Treasury to issue, on the credit of the United States, one hundred and fifty millions of dollars in United States notes, and provided that these notes 'shall be receivable in payment of all taxes, internal duties, excises, debts and demands due to the United States, except duties on imports, and of all claims and demands against the United States of every kind whatsoever, except interest on bonds and notes, which shall be paid in coin; and shall also be lawful money and legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest as aforesaid.'

The second act contains a provision nearly in the same words with that just recited, and under these two acts two-thirds of the entire issue was authorized. It is unnecessary, therefore, to refer to the third act, by which the notes to be issued under it are not in terms made receivable and payable, but are simply declared to be lawful money and a legal tender.

In the first act no emission was authorized of any notes under five dollars, nor in the other two of any under one dollar. The notes, authorized by different statutes, for parts of a dollar, were never declared to be lawful money or a legal tender.⁴

It is obvious, therefore, that a legal tender in United States notes of the precise amount of taxes admitted to be due to the State could not be made. Coin was then, and is now, the only legal tender for debts less than one dollar. In the view which we take of this case, this is not important. It is mentioned only to show that the general words 'all debts' were not intended to be taken in a sense absolutely literal.

We proceed then to inquire whether, upon a sound construction of the acts, taxes imposed by a State government upon the people of the State, are debts within their true meaning.

In examining this question it will be proper to give some attention to the constitution of the States and to their relations as United States.

The people of the United States constitute one nation, under one government, and this government, within the scope of the powers with which it is invested, is supreme. On the other hand, the people of each State compose a State, having its own government, and endowed with all the functions essential to separate and independent existence. The States disunited might continue to exist. Without the States in union there could be no such political body as the United States.

Both the States and the United States existed before the Constitution. The people, through that instrument, established a more perfect union by substituting a national government, acting, with ample power, directly upon the citizens, instead of the Confederate government, which acted with powers, greatly restricted, only upon the States. But in may articles of the Constitution the necessary existence of the States, and, within their proper spheres, the independent authority of the States, is distinctly recognized. To them nearly the whole charge of interior regulation is committed or left; to them and to the people all powers not expressly delegated to the national government are reserved. The general condition was well stated by Mr. Madison in the Federalist, thus: 'The Federal and State governments are in fact but different agents and trustees of the people, constituted with different powers and designated for different purposes.'

Now, to the existence of the States, themselves necessary to the existence of the United States, the power of taxation is indispensable. It is an essential function of government. It was exercised by the Colonies; and when the Colonies became State, both before and after the formation of the Confederation, it was exercised by the new governments. Under the Articles of Confederation the government of the United States was limited in...