Meyer v. Roosevelt

By the court, Ingraham, P. Justice. The defendant was the holder of a bond and mortgage executed in 1854, to secure the payment of money loaned at that time. The bond and mortgage were made payable prior to 1862, “ in lawful money of the United States.” The plaintiff being the owner of the equity of redemption in the premises mortgaged, on the 11th June, 1862, tendered to the defendant the amount due for principal and interest, in treasury notes of the United States issued under the act of 25th February, 1862, and demanded a satisfaction of the mortgage. This the defendant refused to accept, claiming that he was entitled to be paid in specie. An arrangement was made between the parties to accept them on account, subject to the liability of the plaintiff to pay a further sum as agreed upon between them, if the court should be of the opinion that the said notes were not a legal tender. It is difficult to conceive of a question that can be submitted to the adjudication of the courts in a matter affect — 99 — ing property, that involves more momentous and important consequences than are connected with the proper decision as to the powers of congress in making the treasury notes of the government a legal tender. The interests of the country and of individuals, to an almost unlimited extent, are affected by it, and its importance is not lessened by the consideration that it involves the construction df the powers granted by the constitution of the United States. Although this case was fully and ably argued before us by the learned counsel engaged therein, I do not deem it necessary, for the disposition thereof, to pass upon all of the questions so argued, and unless absolutely necessary for the decision of the case before us, a particular examination of them at this time will not be required. At the time when the.contract which forms the subject-matter of this action was made, and at the time when it became due, there was no lawful money of the United States, except gold and silver coin, that could be used as a legal tender, and it cannot be pretended that any other could then be used for that purpose. Under such circumstances the contract had been made, had matured, and the rights of the creditor under it had become perfect. It was after this that congress passed the act of Feb. 25, 1862, by which "it was provided that the treasury notes authorized thereby “ shall 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 on the public debt.” The principle has been long since settled, that in construing the constitution of the United States, no powers are to be assumed as possessed by the government, except those which were granted by the states, and that all other powers are reserved to the states. These powers are either granted directly in the constitution, or are implied under that clause which authorizes the passage of “ all laws which shall be necessary and pro — 100 — per for carrying into execution the foregoing powers, and all other powers vested by this constitution in the government of the United States,” &c. I think it cannot be doubted that this clause does not confer any powers which are not necessary for the carrying into effect the powers expressly conferred by the constitution. The intent of the clause was not to confer any new powers, but to authorize the passage of laws “ which shall be necessary to carry the powers granted thereby into execution.” Congress was authorized by this provision to pass all laws that should be necessary for this purpose, but beyond that authority it had no force. These laws, therefore, must be in relation to such powers, and if they are not for the purpose of carrying such powers into execution, they are unauthorized. Unless they are necessary and proper for, or conduce to that purpose, they do not come within the limits of that section—unless the laws so passed aid in carrying out some expressly granted power, they cannot be sustained. It was said by Mr. Madison in regard to this clause, “ that if it had been omitted, the government would have possessed all the particular powers requisite as a means of executing the general powers conferred by unavoidable implication,” showing that he understood the clause as conferring no greater powers than the government would have possessed without it, and, therefore, that its operation was to be limited to such laws as were necessary to carry the granted powers into execution. In Martin agt. Hunter, (1 Wheat., 304,) it was said “ that the government of the United States could claim no powers which are not granted by the constitution, and the powers actually granted must be such as are expressly given or given by necessary implication.”. The words are to be taken in their natural and obvious sense, and not in a sense unreasonably restricted or enlarged. And in Mc — 101 — Cullough agt. The State of Maryland, (4 Wheat., 316,) if tlie end be legitimate, and within the scope of the constitution, all the means which are appropriate and plainly adapted to that end, and not prohibited, may be constitutionally adopted. The means thus to be used must be such as are connected with and have a relation to the end to be attained, or, in the language of Chief Justice Marshall, “ which are in fact conducive to the exercise of a power expressly granted by the constitution.” I shall take it for granted, in the further examination of this case, that congress has power to issue paper money. The discussions in the convention, and the subsequent discussions and decisions upon the power of congress to charter a bank, seem to concede this power. (See Craig agt. State of Missouri, 4 Peters, 410 ; Briscoe agt. Bank of Kentucky, 11 Peters, 257 ; Thorndike agt. United States, 2 Mason, p. 1.) If congress has the power to issue such paper as money, it follows that the same would be lawful money of the United Slates. It is made payable for all debts due the United States, and by the act it is declared to be lawful money of the United States. The exception as to receiving it for duties may rest on an entirely different basis. The amount of duties to be paid on the importation of goods is not a debt, but is a payment for the privilege of introducing goods into the United States. Congress having the power to fix the amount of duties, has also the right to say in what such duties shall be payable, and the provision that duties shall be paid in gold, is not a provision for paying a debt in gold, but one fixing the mode in which duties are to be collected. The question then arises whether congress has the power to declare such paper money to be a legal tender ? The tenth section of the first article of the constitution left to the states the power to regulate the law of tender, — 102 — subject to the restriction that they should make such tender to consist only of gold and silver coin. Under those provisions the state could say what coins should or should not be used for such purpose. The states were bound by the restriction in the federal constitution to use gold and silver coin as the medium of payment, and they were to take the coins so used at the value fixed by congress; but further than that the constitution gave to congress no express power to interfere. Notwithstanding this, it appears from the acts of congress, beginning with the act of 1793, and afterwards on various occasions, that congress has by statute declared what foreign coins should or should not be used for such a purpose. It is also to be observed that in this state no act has at any time been passed by the legislature of the state since the adoption of the constitution of the United States, declaring what should constitute a legal tender. ■ Still, I suppose the power to legislate on this subject within the restriction in the constitution of the United States, remains with the states. If the legislature should pass a law on the subject, they have the power to allow other foreign coins than those specially, defined by congress to be used for such a purpose at the value fixed by congress therefor, but they could not declare these notes of the government of the United States to be a legal"tender for debts. Any such provision would be a violation of the constitutional provision above referred to. It is difficult to adopt the conclusion that the framers of the constitution intended that congress should have authority to provide that a tender might be made in any other money than the constitution of the United States permitted the states to designate by law for that purpose. On the contrary, the presumption from this restriction on the legislation of the states is, that it was intended to make coin and nothing else the medium to be used for a legal tender in payment of debts. Any other would lead to the strange anomaly, that while the — 103 — states provide by law that nothing but gold and silver should be a legal tender for debts, congress could pass a law providing a substitute for coin, which if the state directed should be so received, their legislation would be void, as directly violating the constitution of the United States. Nor do I see that there is any necessary connection between compelling individuals to receive the notes of the United States in payment of debts due them, with the isssue of them by the government for the payment of the debts of the government. Congress has the power to adopt such measures as may be necessary to pay the debts incurred in any manner for the government, but it by no means follows that to give such notes a higher value, they may compel individuals to receive them in exchange for property or debts due them without their consent. The same argument would allow congress to take from the banks or from individuals the coin necessary to pay the interest on the public debt, and to repay therefor the notes issued by the government. It is just as necessary to maintain the credit of the government, that the interest should be paid in coin, as it is to give credit to the notes issued by the government by compelling individuals to receive them in payment of debts. This question seems to have been a subject of discussion in the convention that formed the constitution. As originally reported, the clause giving the power to coin money contained the words, “ and emit bills on the credit of the United States.” A motion was made to strike out these words, and it was opposed by others, as possibly necessary in some emergencies. Mr. Madison suggested that it would be sufficient to prohibit making them a legal tender. The striking out was urged both to prevent their being made a legal tender, and — 104 — to remove the possibility of an issue of paper money by the government. The words were stricken out by a vote of nine states to two. If the arguments of the members of the convention were entitled to weight in the decision of this question, it would seem to establish that the intent was not to confer such a power' on the government. (Madison’s Papers, 3d vol., p. 1344.) This idea was also fully stated by Mr. Webster, when he said, “ most unquestionably there is, and there can be no legal tender in this country, under the authority of this government or any other, but gold and silver. This is a constitutional principle, perfectly plain and of the very highest importance. The states are expressly prohibited from making anything but gold and silver a tender in payment of debts; and although no such express prohibition is applied to congress, yet as congress has no power granted to it but to coin money and to regulate the value of foreign coins, it clearly has no power to substitute paper or anything else for coin as a tender in payment of debts and to discharge contracts.” * * * The constitutional tender is the thing to be preserved, and it ought to be preserved sacredly under all circumstances. (ithvol. Webster’s Works, p. 211.) And again he says : I am of "the opinion, then, that gold and silver, at rates fixed by congress, constitute the legal standard of value in this country, and that neither congress nor any state has authority to establish any other standard, or to displace this. (4th vol. Webster’s Works, p. 280.) ■It was argued on the part of the plaintiff, that the section which confers authority on the government of the United States to coin money, regulate the value thereof, and of foreign coins, was sufficiently comprehensive to include the power to make paper money a legal tender. I am not able to adopt that conclusion. The coining of money has never been construed as including the issue of a paper — 105 — currency. Coin and coinage are understood to be the stamping of metal in some way so as to give them currency, but is not applied to any other material; and to regulate its value merely applies to the fixing the value of that which has been so coined, whether it be domestic or foreign coin. I can see no connection between the right and power to coin money and regulate its value, and the power to compel persons to take paper money on discharge of a contract; and there is no ground upon which the act of congress can be sustained in connection with this power. It has been suggested that this power might be exercised under the powers necessary to be resorted to in time of war, for the support of the army and' navy and the protection of the country against invasion. But there is nothing under this head giving any more authority than for the support of the government under any other department. If the government in time of war needed individual property, and took possession of it by force, the owner would be entitled to full compensation therefor from the government. But for such a purpose the government could no more transfer the property of one man to another for less than its value, than they could do so to provide means for carrying the mails or paying the ordinary expenses of government. There may be another view, however, of this question, which, as" applied to contracts made after the passage of the law, might make these bills a proper medium of payment. The act declares them to be lawful money of the United States, and as such they might be used in the payment of debts which were payable in such lawful money, and probably in all debts contracted after the passage of the act, in the absence of any statutory provision of the state prescribing what should be a legal tender for debts. I do not deem it necessary, however, to decide upon this question in the present action, as there are other reasons — 106 — which relieve me from the farther examination of this branch of the case. Conceding that congress has power to pass a law making paper money a legal tender, is this statute retrospective in its operation ? It is a settled principle in the construction of statutes, not to give them such an interpretation as will make them retrospective, unless the act declares that it shall have such an effect, or it is so worded it can have no meaning unless it is so applied. The provisions of this statute would be satisfied by holding it to be simply prospective in its operation. Upon contracts made after its passage, less injustice would be done by enforcing its provisions. They were known when such contracts were made, and we may conclude that they were made in reference to the statute. But to apply them to contracts made previous to its passage, might work gross injustice, and should require in the statute a clear expression of the intent of the legislature before such a construction is adopted. A reference to the present condition of the currency will show at once such injustice. Contracts which were made when gold and silver were the only legal means of paying debts, would, under an application of those provisions, be payable in a currency much less valuable in the market, and in many instances, especially of contracts made abroad, would result in serious loss, if not ruin. In this state there have been repeated decisions that acts of a legislature should be construed as only operating prospectively, unless they clearly show that a contrary interpretation should be given them. In Dash agt. Vankleeck, (7 John. R., 417, 503,) Ch. J. Kent says : “ It is a principle in the English common law, as ancient as the law itself, that a statute even of its omnipotent parliament is not to have a retrospective effect. This was the doctrine as laid down by Bkacton and Coke, — 107 — and in Gilmore agt. Shuter, (2 Mod., 310,) it received a solemn recognition in the court of King’s Bench. Various cases are cited by the chief justice in that case, and among others the case of Calder agt. Bull, (3 Dallas, 386,) in which the judges of the supreme court of the United States spealc in strong disapprobation of all laws operating retrospectively, and that of Ogden agt. Blackledge, (2 Cranch, 272,) where they considered it plain that a statute could not retrospect so as to take away a vested right. In Quackenbush agt. Danks, (1 Denio, 128, 130,) Bronson, Ch. J., says, when laws are made to act upon past transactions, they cannot fail to work injustice. And again, it is a well-established rule that a statute shall not be construed so as to give it a retrospect beyond the time of its commencement, and there are many cases in the books where general words,- as comprehensive as those under consideration, have been restricted in their influence so as not to.reach past transactions. In Kunfer agt. Kohns, (5 Hill, 317,) the same rule is recognized as follows : “ I admit the value of the rule that general words in a statute which may be satisfied by being allowed to operate on contracts made subsequent to its passage, should, in their application, be limited to the latter.” And in a later case, that of Palmer agt. Cosely, (4 Denio, 374,) it is said to be a doctrine founded upon general principles of law, that no statute shall be construed to have a retrospective operation without express words to that effect, either by an enumeration of the cases in which the act is to have such retrospective operation, or by words which can have no meaning unless such a construction is adopted. This latter case was affirmed in court of appeals, (2 Comst., p. 182.) These cases from our own courts fully establish the position that a statute must not be construed so as to be retrospective in its operation, if it will bear any — 108 — other interpretation. (See also Whitman agt. Hapgood, 10 Mass., 437; Medford agt. Learned, 16 Mass., 215.) There is nothing in this act of congress malting it retrospective. The provisions of the law will be fully carried out by confining its operation to contracts made after the passage of the law, if it should be held that, such a power is possessed by congress to make paper money, 'under any circumstances, a legal tender for the payment of debts, or if these bills, being made lawful money of the United States, become thereby the medium of payment of indebtedness created after the passage of the statute. As the contract in this case was made, and the payment under it matured before the passage of the act of February 25, 1862, the same is not affected by the provisions of that statute. The tender, therefore, was not sufficient, and the defendant is entitled to judgment. Leonard, Justice. The primary question here is, whether congress may substitute treasury notes, or the promises of the government, in the place of gold and silver- coin as money and a legal tender for. the payment of debts between private persons ? Another equally important question is also involved. It is, whether congress may make such substituted medium for the payment of debts retroactive, so that the obligation of a contract may be impaired by the compulsory liability of a creditor to accept from Iiis debtor a new and reduced standard of currency in discharge of his debt ? Either of these questions being decided in the negative, the. judgment of this court must be against the right of the plaintiff to require a discharge of the mortgage held by the defendant. It is not insisted that there is any express power given to congress, by the constitution of the United States, to pass such a law. It would be in vain to search in that instrument for any language granting such an express — 109 — power. It is believed by the counsel for the plaintiff, and I may add, by many learned judges and lawyers, as well as by senators and representatives, that the power to pass a law of the character indicated, is justly and properly to be implied in order to carry into execution other powers of legislation expressly granted to congress by the constitution. It must be conceded that the express powers given to congress by that instrument, have been greatly enlarged by the admission of others by implication. It is not proposed to enter into any extended consideration, here, of the express powers conferred upon congress by the constitution. The subject has been fully and satisfactorily reviewed in the opinions of my learned associates in this case. I entirely concur with them in their reasons, as well as in their conclusions ; but in respect to a question of such momentous bearing upon the property and personal rights of the people, there seems to be a propriety that some, at least, of the reasons which have controlled me should be indicated, although I can hope to add but little to the argument. The highest judicial tribunals concur that the authority to pass laws in congress cannot be implied, except for the purpose of carrying into execution some express power which might otherwise fail of its full effect. The authority for the exercise of powers by implication is expressly given by the constitution, and, I may add, it is there limited, as well as defined. The language there used is, “ to make all laws which shall be necessary and proper for carrying into execution the foregoing powers.” The implied powers to make laws cannot, however, be invoked, when the act proposed is prohibited, or is inconsistent with some other provision. The implied power to pass the act in question has been referred to various express powers, according to the ingenuity or learning of its advocates. — 110 — It has been attributed to the power to borrow money—to that authorizing congress to raise and support armies— to provide and maintain a navy—to erect forts, &c., for war purposes—to impose taxes, &c.—to 'regulate commerce —to coin money and regulate its value—to provide for the common defence and general welfare of the United States— to every power that authorizes the expenditure of money. ' It would not be difficult, I think, to show that these powers can be fully executed, as they have been for years, without any necessity or propriety for an act of congress making governmental promise's to pay money a legal tender for the payment of debts between private persons. • The most vigorous and plausible arguments offered have defended the act in question under the war power, and the power to regulate commerce. But neither of these powers, “ for the necessary and proper execution thereof,” require the interference of government to compel private persons to accept treasury notes in settlement of their transactions between themselves. The constitution has enjoined upon congress a plain duty, which is wholly inconsistent with the results necessarily to be produced by the act in question. I refer to the obligation to furnish'a uniform currency. The power to coin money and regulate its value is one of the express powers conferred upon congress, while to the states it is prohibited to exercise it. The'several states are restricted , in the passage of laws directing whaí¿ shall be a legal tender for the payment of debts, to gold and silver, while no express authority whatever is delegated by.the federal constitution to congress upon that subject. The object to-be attained by the arrangement of these provisions, it is well settled, was the establishment of a uniform currency, (Story’s Com. on the Const., §§ 548, 689, 694, &c., abridged ed.) Treasury notes are in no sense a uniform currency. The act has now been in force .over one year, and during all that time it has been the value of gold or silver coin, esti — 111 — mated in treasury notes, which has regulated the price of commodities. The price of commodities shrinks or swells as the price of coin advances or recedes, compared with treasury notes. Ever since the formation of the government, money has been coined from gold and silver, under the authority of laws enacted by congress, and such coin has hitherto constituted the standard currency of the country. That currency is still in use as money, not forbidden by any law. It has been and still is a uniform currency. While coin is still in lawful use as money, the act of congress has declared that treasury notes shall also be money, and a legal tender for the payment of private and public debts. The two kinds of money do not hold the same relative value. Are treasury notes the money of which the value is to be regulated by congress under the constitution ? In my opinion they are not. The government may “ coin money and regulate the value thereof.” It is not notes or promises to pay money that is here referred to. The question need not be argued that these two kinds of money furnish no uniform currency. Nor is it necessary to examine dictionaries to define the conventional meaning of the words “ coin ”. and “ money.” Coin possesses intrinsic value when made of the precious metals known to commerce. Money, in the sense in which it is used in commercial transactions, may be coin, or the printed and written promises to pay money, made by the government, or by banking institutions, or bankers of known credit, which the community believe may be converted into coin at a known or probable market rate. Such promises, when of well known and accredited character, do pass by consent as money. But they are not the money mentioned in the constitution, which the general government alone is authorized to coin, and to regulate the value thereof, and which it is forbidden to the several states to fabricate. The distinction between the two kinds of money is easily perceived. The treasury note is but a promise to pay money, upheld — 112 — alone in its currency by the ability of the government to redeem it, and perhaps also by the lawfulness of the attempt to compel it to be received in payment of private debts. Coin is not a promise or an obligation, but is itself the thing called money. The stamp announces the denomination of the coin, and it passes and has credit for the value or sum declared and stamped upon its face. When it is coined and issued, the government have parted with a thing of actual value, which has cost about the sum impressed upon it. When the government satisfy the people that the revenue will be sufficient to insure the redemption of the notes, no law will be required to compel the private creditor to accept them in payment from his debtor. If the government have no such resources of revenue, immediate or prospective, as will justify the reasonable hope of the public that the treasury notes will be redeemed, they can possess no uniform credit or currency. The question is not whether government may emit or issue treasury notes. The right to do so is conceded to he one of the important powers which the government may exercise by implication. But it can afford no argument to sustain the act compelling these notes to be received in payment for private debts, that this conceded power by implication to issue notes will be aided by implying a power to make them a legal tender. There would be no boundary to implied powers, if this position were admitted, and a written constitution would cease to be of any importance. Written constitutions are not to be wrenched from their natural import by casuistry, or to suit the temporary convenience of the times. Certainly not when their interpretation is submitted to the judiciary. If our constitution is in any respect to be wrested from the Obvious meaning attributed to it for seventy years, let it be done by the military alone, when civil jurisdiction is suspended, and not under the pretence of enacting a law. — 113 — Powers are implied, as before observed, only when they are “ necessary and proper for carrying into execution some express power not for the purpose of executing an implied power. The purpose for which the legal tender provision was adopted may be a good criterion by which to ascertain the proper express power under which the power sought to be implied must be exercised, if at all. The object, so far as it relates to private debts, was, I think, to secure for the treasury notes a currency which would supersede the necessity of borrowing money or coin for the use of the government. By declaring treasury notes to be money, if it can legally be done, the necessity for borrowing is overcome, and the government can make it in billions at a trifling expense, as compared with the slow and expensive process-of acquiring and coining the precious metals. The object was not to regulate commerce, nor to coin money, nor to raise or borrow money. The relation of treasury notes to the regulation of commerce, or to borrowing money, is indirect and consequential, if any exist. The government neither borrow or raise money, nor is it directly benefited by compelling its citizens to accept treasury notes in payment of private debts. The private creditor loses, but the government do not receive what he has lost. If the loss of the private creditor were received by the government, it would be a forced loan. Although unlawful, the hope of repayment would then remain, because, having received the consideration, the government would be under an equitable obligation to make payment. The power to regulate the currency, if it exists, is an implied power, derived from the provision authorizing the coinage of money and the regulation of the value of the coin, and the prohibition to the states of the right to make anything but gold and silver coin a legal tender for the payment of debts. These powers were incorporated into the federal constitution to impose the duty upon the gov114 eminent of furnishing a uniform currency, and, in effect, thereby to regulate it, so far as it is or can be regulated by uniformity. It seems to me idle to attempt any demonstration of the position that the printing of treasury notes, or the promises of the government to pay money, is not, in any reasonable sense, a coinage of money. Upon such a principle, if acknowledged, the government might in a short time find it desirable, and would, perhaps, claim the right, under some implied constitutional prerogative, to restrain all banking institutions from issuing any promissory notes to circulate as money, in order to preserve the currency of the treasury notes with the public. Treasury notes do not constitute a uniform currency. Two kinds of money are now in circulation. One, the hard money known to the constitution; the other a paper money, deriving its character as money solely from a statute that forfeits the rights of the private creditor, whenever he insists upon payment in the coin mentioned as money by the constitution. The value of treasury notes fluctuates from day to day, as the prospect of the amount required to be issued for the convenience of the government increases or diminishes, or as the probable- resources of the government keep pace with its growing liabilities. The right of the private creditor to insist upon his time-honored and guaranteed privilege under the constitution to be paid in coin, has been violated. The creditor is despoiled for the benefit of the debtor. The currency of the country, if such it be, is debased. Commerce is paralyzed, for the trader, the manufacturer or the contractor knows not what price the merchandise which he contracts to-day to purchase, make or deliver, will bear a month hence. It seems clear to me that the act in question is incon — 115 — sistent with the duty imposed by the constitution upon the government to furnish a uniform currency. The power to make such a law cannot be implied. It has no existence. Laws can be enacted only for the general welfare. This one operates injuriously upon the creditor portion of oúr citizens. It gives to the debtor advantages for which he affords to his creditor no equivalent. Congress may not weigh or balance its discretion in the exercise of implied powers, except where they are necessary or proper for the execution of express powers. None are given, in my opinion, which can sustain this act by implication, because it is subversive of the paramount obligations to furnish a uniform currency. I concur fully in the opinion of Justice Ingraham, in this case, in respect to the operation of the act of congress upon prior contracts. It clearly impairs the obligation of such contracts. That branch of the case has been so fully considered by him, that I deem it unnecessary to add anything to what has been already so well said. Reference is due to the decision recently made by the justices of this court, in the seventh district, where those learned justices have arrived at a different judgment upon this question, although the decision is not yet to be found in any volume of reported cases.* While I concede that uniformity of decision throughout the state is desirable, and that the leading decision upon a new question ought generally to be regarded as the ruling precedent until it has been reversed or overruled, it is obvious that the right of dissenting from an erroneous decision cannot reside only with the justices of the district where it was pronounced. The circumstance that the leading opinion in .this case was prepared before the decision in the seventh district was pronounced, and my conviction that the principles upon which that case has been decided are wholly untena — 116 — ble, impels me to concur with my brethren who heard this case, in disregarding that decision as controlling authority here. The defendant must have judgment, with costs. Footnotes [*] Since reported, ante, p. 17.