The Levee Board of Mississippi, being authorized by a statute of
the state to borrow money and to issue their bonds therefor, to be
negotiable as promissory notes or bills of exchange, issued and
sold to the amount of $500,000 principal bonds of $1000 each,
payable "in gold coin of the United States of America," with
semi-annual interest coupons, payable
Page 162 U. S. 292
"in currency of the United States." In a suit to enforce a trust
and lien upon certain lands in the state created in favor of the
bondholders by an act of the legislature of the state, the supreme
court of the state construed the bonds as obligations payable in
gold coin, and held that the power to borrow money conferred by the
statute upon the levee board did not authorize it to borrow gold
coin or issue bonds acknowledging the receipt thereof and agreeing
to pay therefor in the same medium, and that the bonds were void
for want of power in that respect.
Held
(1) That the inquiry as to the medium in which the bonds were
payable, and, if in gold coin, the effect thereof involved the
right to enforce a contract according to the meaning of its terms
as determined by the Constitution and laws of the United States,
interpreted by the tribunal of last resort, and therefore raised
questions of federal right which justified the issue of the writ of
error, and gave this Court jurisdiction under it.
(2) That the bonds were legally solvable in the money of the
United States, whatever its description, and not in any particular
kind of that money, and that it was impossible to hold that they
were void because of want of power to issue them.
(3) That as, by their terms, these bonds were payable generally
in money of the United States, the conclusion of the Supreme Court
of Mississippi that they were otherwise payable was erroneous.
FIELD, J., concurring. No transaction of commerce or business,
or obligation for the payment of money that is not immoral in its
character and which is not in its manifest purpose detrimental to
the peace, good order, and general interest of society can be
declared or held to be invalid because enforced or made payable in
gold coin or currency when that is established or recognized by the
government, and any acts by state authority impairing or lessening
the validity or negotiability of obligations thus made payable in
gold coin are violative of the laws and Constitution of the United
States.
Plaintiffs filed their bill in the chancery court of Hinds
County, Mississippi, to enforce a trust and lien upon certain lands
created in their favor as holders of bonds of the Levee Board of
the State of Mississippi, District No. 1, by an act of the General
Assembly of Mississippi approved March 17, 1871, under which the
bonds were issued. The bill alleged that the obligation of the
bonds and the security provided for their payment by the act of
1871 had been impaired, in contravention of the Constitution of the
United States, by several subsequent acts of the Legislature of
Mississippi, which were set forth in the bill.
Defendants demurred to the bill upon the ground, among
Page 162 U. S. 293
others, that the bonds were invalid because the levee board had
made them payable in gold coin, and that there was therefore no
contract to be impaired. The demurrers were sustained by the
chancery court on that ground solely, and the bill was thereupon
dismissed and that decree was affirmed by the supreme court of the
state on the same ground. 66 Miss. 298.
Thereupon a writ of error was taken out from this Court.
Section 1 of the Act of Mississippi of March 17, 1871, c. 1,
Laws Miss. 1871, p. 37, created a body corporate to be known as the
"Levee Board of the State of Mississippi, District No. 1," to
consist of five members, to reside one each in the Counties of
Tunica, Coahoma, Tallahatchie, Panola, and De Soto, to be elected
by the board of supervisors of their respective counties, with
power to sue and be sued, to have a corporate seal and perpetual
succession, to make such bylaws and regulations and alter and
change the same as they might deem proper, and to do all acts and
things, not inconsistent with the act and the laws of the state,
that might be proper to effect the purposes and objects of the
act.
Section 3 gave the board power and required them
"to construct, repair, and maintain a levee on or near the east
bank of the Mississippi River, extending from the base of the hills
on or next said bank of said river in the State of Tennessee . . .
to the southern boundary of Coahoma County, . . . in order
effectually to protect and reclaim the lands in the district
hereinafter designated from overflow by the waters of the
Mississippi River,"
etc.
Section 7 declared that all the bottom lands, designating the
boundaries, in the Counties of De Soto, Tunica, Coahoma,
Tallahatchie, and Pontotco, and six townships in the County of
Sunflower,
"shall be, and constitute, as aforesaid, Mississippi Levee
District No. 1, which it is the purpose of this act to protect and
reclaim as aforesaid, by the agency of said board of commissioners,
and the lands embraced and included in said levee district shall be
and are hereby declared to be and are made chargeable and liable as
hereinafter declared for all the costs, outlays, charges and
expenses to be incurred or made
Page 162 U. S. 294
for the levees, works and improvements provided for and
contemplated by this act, or in maintaining the same."
By section 8, for the purpose of building and maintaining levees
and works and carrying the act into effect, a uniform charge and
assessment of two percent per annum on the value of every acre of
the land in the district was levied, which it was provided should
continue and be collected in each and every year for twelve
successive years from the date of the act, and should be due and
payable annually on or before the first day of September in each
year for said period, and the value of every acre of unimproved
land and of every acre of improved and cultivated land, and every
acre of land improved and fenced, but not cultivated, was fixed,
except the lands in Sunflower and Tallahatchie Counties.
Section 9 read as follows:
"That for the purposes aforesaid, and to enable them to carry
out the purposes of this act, the said board of levee commissioners
shall have power to borrow money, and to that end may issue the
bonds of said board to the amount of one million of dollars, in
such sums and denomination not less than one hundred dollars each,
as the said board may prescribe, which bonds shall be signed by the
president and countersigned by the treasurer of said board, and be
made payable to order or bearer in not less than two nor more than
ten years after the first day of January, 1871, and shall bear a
rate of interest not exceeding eight percent per annum, for which
interest coupons may be attached, payable at such time and place as
the board may contract. Said bonds shall be negotiable as
promissory notes or bills of exchange, and may be sold and
negotiated in any market in or out of the state, on the best terms
that can be obtained for the same; but in no case shall any of them
be negotiated or sold at a greater discount than ten percent. Said
board shall fix a place or places for the payment of the principal
and interest of said bonds and coupons, and said bonds or coupons
shall be receivable after maturity at par, in payment of any charge
or assessment fixed, levied or made by this act. . . . All moneys
borrowed by said board or arising from negotiations or sale of
any
Page 162 U. S. 295
of said bonds shall be promptly paid into the treasury of said
board, and shall constitute a levee fund, and be used and applied
to carry into effect the objects and purposes of this act."
By section 10, it was provided that the charges and assessments
levied by the act should constitute, as they were from time to time
collected, a special fund and trust, to be used by the board
firstly in payment of any bonds that might have been sold or used
under the act and of any money that might be borrowed under its
provisions, and secondly in payment of any other debts or
liabilities of said board, and that the
"charges and assessments by this act fixed, levied, and made as
aforesaid on said lands shall not be subject to repeal, alteration,
or suspension during the time for which they are fixed and levied,
as aforesaid, until all the bonds, obligations and liabilities of
said board shall be first paid and discharged."
Provision was also made in case of noncollection for application
by the holders of any bond or obligation overdue to the circuit or
chancery court of any district included for a mandamus to compel
the board to collect and pay over, or for the appointment of
commissioners to do so.
Subsequent sections provided for a tax collector of the board
and for sale on delinquency, bidding in by the board, etc.
By section 20, it was made the duty of the board
"to invest and keep invested in public securities of the United
States until required to pay any of the bonds or liabilities of
said board, [and] all such part of the funds and moneys of said
board as may not at any time be required for present use in paying
the matured debts and liabilities of said board, or in carrying
into effect the purposes of this act."
It was further provided that in case the charges and assessments
made by the act should be adjudged and held inoperative, the board
should have power to proceed through commissioners to have just and
legal rates, charges, and assessments made on any lands in the
levee district sufficient in amount, when collected year by year,
to pay all such bonds, loans, debts, and liabilities, and enable
the board to carry the act
Page 162 U. S. 296
into effect, and also that the collection of state and county
taxes assessed upon any lands that might be purchased by or be
vested in the levee board should be suspended so long as the lands
were held as assets of the board.
Section 29 provided that all taxes levied and assessed under the
act be and the same were declared to be a tax
in rem
against the lands embraced therein, which lands should be subject
to sale without further assessment in each and every year, and that
such sale should vest in the purchaser a good and valid title to
the lands against the claims of every person having claims or title
thereto subject to redemption as provided.
The bill averred that the bonds and coupons held by complainants
"were negotiated by said district No. 1, and in course of trade
came into the hands of these complainants by delivery," and a list
of the bonds and coupons held by each of complainants was filed
with and made part of the bill. These bonds were in the following
form, all being the same, with the exception of the dates, numbers,
and amounts:
"No. 309 $1000"
"
Mississippi Levee District No. 1"
"
United States of America, State of
Mississippi"
"
Eight Per Cent Bond"
"One of a series of five hundred bonds of one thousand dollars
each, numbered from one to five hundred, consecutively, issued by
the levee board of the State of Mississippi, district No. 1, in
pursuance of and by the authority granted in an Act of the
legislature of the State of Mississippi, approved March 17th, 1871,
entitled 'An act to redeem and protect from overflow from the river
Mississippi certain bottom lands herein described.'"
"Know all men by these presents that the Levee Board of the
State of Mississippi, District No. 1, under and by authority of the
law mentioned in the caption hereof, hereby acknowledge themselves,
for value received, indebted to the bearer in the sum of one
thousand dollars in gold coin of the United States of America,
which said sum the said levee board of the State of Mississippi,
District No. 1, for themselves and their successors, do hereby bind
themselves and engage well and truly to pay to the bearer on the
first day of January, A.D. 1878, at the banking house of the
National Park Bank, in the City of New York, and the said Levee
Board of the
Page 162 U. S. 297
State of Mississippi, District No. 1, for themselves and their
successors, do hereby engage to pay an interest thereon of eight
percentum per annum, payable semi-annually on the first days of
January and July in each and every year ensuing the date hereof
until the maturity and payment of this bond at the place of payment
mentioned in the coupons hereto annexed, upon the delivery of said
coupons as they severally become due."
"In testimony whereof, the president of the Levee Board of the
State of Mississippi, District No. 1, has signed, and the treasurer
of said board has countersigned, these presents, and the president
has caused the seal of the said board to the affixed hereto, the
first of January, in the year of our Lord one thousand eight
hundred and seventy-two."
[Seal]
"[Signed] M. S. Alcorn,
President"
"[Signed] A. R. Hown,
Treasurer"
Upon each bond were printed as an endorsement sections 7, 8, 9,
10, 20, and 29 of the act of 1871.
Attached to the bonds were coupons, of which the following was
the form, all being alike except in amounts, numbers, and dates of
maturity:
"The Levee Board of the State of Mississippi, District No. 1,
will pay to the bearer on the first day of January, 1879, at the
National Park Bank of New York, twenty ($20) dollars in currency of
the United States, being the semiannual interest on bond No.
52."
"[Signed] A. R. Howe,
Treas. "
Page 162 U. S. 298
MR. CHIEF JUSTICE FULLER, after stating the facts in the
foregoing language, delivered the opinion of the Court.
The Supreme Court of Mississippi construed these bonds as
obligations payable in gold coin, and held that the power to borrow
money conferred on the Levee Board of Mississippi, District No. 1,
did not authorize that corporation to borrow gold coin or issue
bonds acknowledging the receipt thereof, and agreeing to pay
therefor in the same medium, and that the bonds were void for want
of power in that particular. If by this adjudication a right
possessed by plaintiffs in error, as holders of bonds, under the
Constitution and laws of the United States, was necessarily denied,
then this Court has jurisdiction to revise the judgment on writ of
error. A definite and distinct issue was raised by the ground of
demurrer, on which the decision of the court proceeded, and if that
issue was an issue as to the possession of a right under the
Constitution and laws of the United States, then the denial of that
right gives jurisdiction. And it appears to us that such an issue
was presented. Plaintiffs in error claimed that the bonds were
payable in money of the United States. Defendants claimed they were
payable in a particular kind of such money, and, because so
payable, were invalid. The issue in either aspect involved the
determination of rights of plaintiffs in error under the
Constitution and laws of the United States, and was disposed of
adversely to them.
In
Trebilcock v.
Wilson, 12 Wall. 687, where a note held by
plaintiff in error was payable, by its terms, in specie, and he
claimed that he was entitled to have it paid in gold or silver
dollars of the United States, which the state court decided he was
not, the writ of error was maintained on the ground of the denial
of a right under the Constitution.
Page 162 U. S. 299
In
Maryland v. Railroad
Company, 22 Wall. 105, in which the state had made
certain advances for the railroad company in gold, and sought
judgment accordingly, and the state court held that it was only
entitled to recovery in currency, no objection was raised to the
jurisdiction of this Court to review the judgment.
In the case at bar, the inquiry as to the medium in which the
bonds were payable, and, if in gold coin, the effect thereof
involved the right to enforce a contract according to the meaning
of its terms as determined by the Constitution and laws of the
United States, interpreted by the tribunal of last resort, and
therefore raised questions of federal right which justified the
issue of the writ.
The levee board was created a body corporate, and expressly
authorized to borrow money and to issue negotiable instruments
therefor. It was thus endowed in order to enable it to effectuate
the objects and purposes of its creation. It issued bonds whereby
it acknowledged that it was indebted in so many dollars in gold
coin, and promised to pay the specified sums at a designated date,
with interest.
The general rule is that those powers which are within the
intent and purposes of the creation of a corporation, and essential
to give effect to the powers expressly granted, may be exercised as
necessarily incident thereto, and that a discretion exists in the
choice of the means to accomplish the required result, unless
restricted by the terms of the grant. The power to borrow money was
expressly granted, unaccompanied by any definition of the word
"money," which might operate as a restriction on the power, and
according to the general rule, if there were more than one kind of
money, a discretion as to the particular kind would be necessarily
incident to the execution of the power granted, and might be
exercised by the corporation. At the time these bonds were issued,
the money of the United States consisted, under the decisions of
this Court, of gold and silver coin and United States notes. Gold
coin was in every respect unlimited in its legal tender capacity,
but all were equally valid as money of the United States.
Page 162 U. S. 300
Although the Supreme Court of Mississippi conceded that gold
coin was "money," it insisted that when the bonds were issued, such
coin was "of much greater value than the circulating medium,
consisting of United States treasury notes and national bank
notes," as the court judicially knew; that
"all debts payable in 'dollars' generally were, as now, solvable
in legal tenders, but an obligation payable in gold coin can be
discharged only according to its terms;"
that in authorizing the issue of these bonds,
"and in the use of the term 'money,' the legislature must be
supposed to have meant in the act cited that money which
constituted the basis of the general business of the country, and
was a legal tender for the payment of debts;"
and that consequently the bonds were void for want of power.
Notwithstanding the disclaimer, this conclusion denied the exercise
of any discretion by the corporation to borrow one kind of money of
the United States on the ground that that particular kind had
ceased in fact to be money, and had become a commodity.
Doubtless the word "money" is often used as applicable to other
media of exchange than coin. Bank notes lawfully issued and
actually current at par in lieu of coin are treated as money,
because flowing as such through the channels of trade and commerce
without question.
United States Bank v. Bank of
Georgia, 10 Wheat. 333;
Miller v. Race, 1
Burrows 452. And it would seem that it was in this sense that the
supreme court regarded the use of the word, for, though it assumed
that the property of being legal tender was an essential attribute
of money, yet it included national bank notes, which, though
receivable at par in payment of government dues except duties, and
payable by the government at par except for interest on the public
debt and in redemption of the national currency, and also payable
and receivable as between national banks themselves, Rev.Stat.
�� 5182, 5196, had not been declared legal tender "in
payment of all debts, public and private, within the United States,
except for duties on imports and interest on the public debt," as
United States treasury notes had been, Rev.Stat. � 3588.
These bonds were contracts for the payment of dollars, and
Page 162 U. S. 301
not for the delivery of bullion; nor were they made expressly
payable in coin.
If the legislature had in terms authorized the corporation to
borrow currency only, and to issue bonds payable in currency only,
that would have presented a different question; but the language
used embodied no such express limitation, and there could be no
implication that the power was other than the power to borrow money
of the United States. But it is said that as it was held in
Judson v. City of Bessemer, 87 Ala. 241, that
"express and general power to issue negotiable bonds, in the
absence of legislative restriction, carries the implied or
incidental power to make them payable generally -- that is, in
currency -- which is constitutionally a legal tender, or payable in
the particular coin which constitutes the legal and commercial
standard by which the value of other kinds of currency is
measured,"
and that, although the act authorizing the City of Bessemer to
issue bonds was silent on the subject, the city had power to make
them payable in gold, and by the Court of Appeals of Kentucky, in
Farson v. Boar of Commissioners, 30 S.W. 17, that
municipal bonds were not void because the principal and interest
were made payable in gold coin of the United States, when the act
authorizing their issue and sale did not specify the medium in
which they were to be made payable, so the Supreme Court of
Mississippi was at liberty to hold the contrary in placing a
construction on the law of that state. Conceding this to be so, the
question of jurisdiction remains unaffected, for in the former
cases the right of the holders of municipal obligations to demand
under the Constitution and laws of the United States payment
thereof in money of the United States was recognized, while in this
case, that right was in effect denied.
The Supreme Court of Mississippi was of opinion that the bonds
evidenced an indebtedness created in gold coin, and that they were
solvable in the same medium, and held that the legislature intended
to limit the power to borrow and to promise to pay to another kind
of money of the United States. But this was to impose a limitation
on the power, not expressed, but by implication, and that
implication involved a federal
Page 162 U. S. 302
question. For the power to borrow money simply meant the power
to borrow whatever was money according to the Constitution of the
United States and the laws passed in pursuance thereof, and the
power to issue negotiable bonds therefor included the power to make
them payable in such money. This the law presumed, and to proceed
on an implication to the contrary was to deny to the holders of
these bonds, subsequent to their purchase, a right arising under
the Constitution and laws of the United States.
But it was only by deciding that these bonds were payable in a
particular kind of money of the United States, and that this kind,
though money in law, had ceased, as the court assumed, to be money
in fact that the state court was enabled to hold them void for want
of power, and, if that premise were incorrect, the conclusion,
whether in itself right or wrong, would not follow.
Now these bonds were not expressly payable in gold coin. It is
true that as they acknowledged an indebtedness in gold coin, and as
the coupons were payable specifically "in currency," the argument
is not unreasonable that the corporation intended the purchasers to
expect payment in the money in which the indebtedness was stated to
have been contracted; but the agreement to pay the designated sums
did not specify any particular kind of money, and the obligation
was to pay what the law recognized as money when the payment was to
be made. The bonds were therefore legally solvable in the money of
the United States, whatever its description, and not in any
particular kind of that money, and it is impossible to hold that
they were void because of want of power.
In
Bull v. Bank of Kasson, 123 U.
S. 105,
123 U. S. 112,
the question was raised whether certain bank checks for the payment
of "five hundred dollars in current funds" were negotiable, and MR.
JUSTICE FIELD, delivering the opinion of the Court, said:
"Undoubtedly it is the law that, to be negotiable, a bill,
promissory note, or check must be payable in money, or whatever is
current as such by the law of the country where the instrument is
drawn or payable. There are numerous cases where a designation of
the payment of such instruments in
Page 162 U. S. 303
notes of particular banks or associations, or in paper not
current as money, has been held to destroy their negotiability.
Irvine
v. Lowry, 14 Pet. 293;
Miller v.
Austen, 13 How. 218,
54 U. S.
228. But within a few years, commencing with the first
issue in this country of notes declared to have the quality of
legal tender, it has been a common practice of drawers of bills of
exchange or checks or makers of promissory notes to indicate
whether the same are to be paid in gold or silver or in such notes,
and the term 'current funds' has been used to designate any of
these, all being current, and declared by positive enactment to be
legal tender. It was intended to cover whatever was receivable and
current by law as money, whether in the form of notes or coin. Thus
construed, we do not think the negotiability of the paper in
question was impaired by the insertion of those words."
In
Maryland v. Railroad
Company, 22 Wall. 105, it was held that, although
since the legal tender acts, an undertaking to pay in gold might be
implied under special circumstances, and be as obligatory as if
made in express words, yet that the implication must be found in
the language of the contract, and could not be gathered from the
mere expectations of the parties.
In this case, the language of the contract as to payment created
no such obligation, and no doubt as to its meaning was raised by
the extraneous fact that gold was not everywhere in circulation
when the bonds were issued.
Without pursuing the subject further, it is enough that by their
terms, these bonds were payable generally in money of the United
States, and that, this being so, the conclusion of the Supreme
Court of Mississippi that they were otherwise payable was
erroneous. The bonds therefore were not void on the ground stated,
even assuming that ground to be tenable, and we think the decision
as to the medium of payment reexaminable here, because amounting to
a denial of the right of plaintiffs in error to be paid in money of
the United States, by implying a limitation contrary to the
controlling presumption arising under the federal laws and
decisions. Under those laws and decisions, there was more than one
description
Page 162 U. S. 304
of money of the United States, and hence the presumption was
that where no one kind of money was specified, the bonds were
payable in any kind; but this, and the claim based thereon, was
denied.
As the case was determined by the state supreme court on the
single ground to which we have referred, we shall not discuss the
effect and validity of the subsequent legislation brought under
review by the bill, or any of the other questions suggested by
counsel.
Judgment reversed, and cause remanded for further
proceedings not inconsistent with this opinion.
MR. JUSTICE FIELD, concurring.
I have also some observations to make upon this litigation. The
case comes before us on error to the Supreme Court of the State of
Mississippi. The complainants below, the plaintiffs, in error here,
commenced a suit in the Chancery Court of Hinds county in that
state to enforce a trust and a lien upon certain lands therein, as
holders of bonds, of the levee board of the state, district No. 1,
by an act of the legislature of March 17, 1871, under which the
bonds were issued. The bill of complaint alleged that Amos
Woodruff, trustee, the German Bank of Memphis, Tennessee, and B.
Richmond were owners and holders of a large number of bonds issued
by the Levee Board of the State of Mississippi, District No. 1, and
that the bonds were issued and negotiated by the board under the
act entitled "An act to redeem and protect from overflow from the
River Mississippi certain lands described, approved March 17,
1871." The language of the statute authorizing the issue of the
bonds is as follows:
"SEC. 9.
Be it further enacted that for the purposes
aforesaid, and to enable them to carry out the purposes of this
act, the said board of levee commissioners shall have power to
borrow money, and to that end may issue the bonds of said board to
the amount of one million of dollars, in such sums and
denominations, not less than one hundred dollars each, as the said
board may prescribe, which bonds shall be signed by the
Page 162 U. S. 305
president and countersigned by the treasurer of said board, and
be made payable to order or bearer in not less than two nor more
than ten years after the first day of January, 1871, and shall bear
a rate of interest not exceeding eight percent per annum, for which
interest coupons may be attached, payable at such time and place as
the board may contract. Said bonds shall be negotiated as
promissory notes or bills of exchange, and may be sold and
negotiated in any market in or out of the state, on the best terms
that can be obtained for the same, but in no case shall any of them
be negotiated or sold at a greater discount than ten percent."
By the act, as stated in the bill, a special tax was levied upon
all the lands in said district protected by the levees to be built
by the board, and provision was made for its collection.
By section 10 of the act, as also stated in the bill, it was
provided
"that the charges and assessments, fixed, levied and made as
aforesaid by this act shall be, as they were from time to time
collected, and they are thereby constituted a special fund and
trust, to be used by said board, first in payment of any bonds that
may be sold or used as before provided under this act, and of any
money that may be borrowed under its provisions; secondly for the
payment of any other debts or liabilities of said board, and when
collected, the same shall be paid into the treasury of said board
for the purposes aforesaid."
Under this statute, the board of levee commissioners, as stated
in the bill, was organized and issue a large number of bonds,
aggregating in amount $600,000, and payable to bearer. The bonds
recited the act under which they were issued, and expressly
stipulated that the interest coupons attached were payable in the
currency of the United States, but the principal of the bonds were
payable in gold coin.
The bill was exhibited by complainants as owners and holders of
a large number of bonds thus issued and negotiated. It alleged that
the act of the legislature referred to imposed a specific tax
in rem on each acre of land (with few exceptions) lying in
the Levee District No. 1 in order to pay the
Page 162 U. S. 306
bonds and coupons; that a large amount of the lands were sold
under the act for the delinquent taxes in the year 1872 and the
succeeding years until 1876, and, in default of buyers, were struck
off to the treasurer of the levee board, and duly conveyed to him
as such; that from 1876 to 1883 there were no sales to the
treasurer, but all lands sold as delinquent were struck off for the
state, county, and District No. 1 levee taxes to the State of
Mississippi, and conveyed to it by one deed; that the State of
Mississippi, in 1876, abolished the Levee Board of District No. 1
as constituted, and made the state auditor and treasurer
ex
officio levee commissioners its successors, and vested the
titles of all lands held by the levee board in them to be
administered by them. The bill alleged further that all such lands
were held by the state in trust for the bondholders, under the Act
of March 17, 1871.
The bill asked that the trustees who administered the trust, and
who had not yet accounted, should be required to discover the
status of the trust estate, and how it was administered by them,
and that upon such discovery relief be granted by enforcing the
trust; that the sales and conveyances made by the trustees in
violation of the trust be declared void, and that such purchasers
be held to an account of the trust estate so far as it had come
into their hands, and that the lands be subjected to the tax
chargeable against them under the act of 1871, and the tax be held
as a special fund to pay the bonds held by the complainants and
others.
The defendants demurred to the bill upon the ground, among other
reasons assigned, that the act of the levee board in making the
bonds payable "in gold coin" was
ultra vires, and the
bonds therefore invalid.
The demurrer was sustained, and the complainants appealed.
I cannot concur in the decision of that court. In my judgment,
no transaction of commerce or business, or obligation for the
payment of money that is not immoral in its character, and which is
not, in its manifest purpose, detrimental to the peace, good order,
and general interest of society, can be declared or held to be
invalid because enforced or made payable in gold coin or currency
when that is established or recognized
Page 162 U. S. 307
by the government. And any acts by state authority impairing or
lessening the validity or negotiability of obligations thus made
payable in gold coin are violative of the laws and Constitution of
the United States.
Upon this subject I will presume to cite some of the expressions
of justices of this Court as to the effect of such obligations,
used when questions respecting the currency of the country were
under consideration in what are known as the legal tender
cases.
In speaking of the views of the framers of the Constitution on
the subject of money, it was said that:
"At that time gold and silver, molded into forms convenient for
use and stamped with their value by public authority, constituted,
with the exception of pieces of copper for small values, the money
of the entire civilized world. It was added that these metals,
divided up and thus stamped, always have constituted money with all
people having any civilization, from the earliest periods in the
history of the world down to the present time. It was with 'four
hundred shekels of silver, current money with the merchant,' that
Abraham bought the field of Machpelah nearly four thousand years
ago. This adoption of the precious metals as the subject of
coinage, the material of money by all peoples in all ages of the
world, as further stated, had not been the result of any vagaries
of fancy, but was attributable to the fact that they of all metals
alone possessed the properties which are essential to a circulating
medium of uniform value."
"The circulating medium of a commercial community," said Mr.
Webster,
"must be that which is also the circulating medium of other
commercial communities, or must be capable of being converted into
that medium without loss. It must also be able not only to pass in
payments and receipts among individuals of the same society and
nation, but to adjust and discharge the balance of exchanges
between different nations. It must be something which has a value
abroad as well as at home, by which foreign as well as domestic
debts can be satisfied. The precious metals alone answer these
purposes. They alone therefore are money, and whatever else is to
perform the functions of money must be their representative, and
capable
Page 162 U. S. 308
of being turned into them at will. So long as bank paper retains
this quality, it is a substitute for money. Divested of this,
nothing can give it that character."
3 Webster's Works, p. 41.
In accordance with the doctrine thus expressed, I am of opinion,
as stated, that no commercial or money transaction not immoral in
its character or detrimental to the general interests of society
can be held or declared to be invalid because it is enforced or
made payable in gold coin or currency established or recognized by
the government, and therefore that the judgment of the Supreme
Court of Mississippi, declaring that the bonds of the levee board
made payable in gold coin were for that reason invalid, cannot be
sustained, and that its judgment to that effect should be
reversed.
MR. JUSTICE PECKHAM dissenting.
I find myself unable to concur in the opinion of the Court
herein as to our power to review the judgment of the state court,
and I must therefore dissent from the conclusion arrived at in this
case.
The Legislature of Mississippi gave certain authority to the
levee commissioners to borrow money and to issue bonds therefor.
They issued bonds by virtue, and solely by virtue, of that act.
They so worded the bonds as to render it a matter of controversy
whether the principal was, on the face of the bonds, payable only
in gold coin or in any lawful money of the United States. The state
court held that the legislature did not, in the statute passed by
it, authorize the levee commissioners to issue bonds payable in
gold coin, and that these bonds were so payable, and were therefore
void as unauthorized by the legislative enactment. This seems to me
a matter of local law only, and I cannot see that its decision
involves any federal question. This Court has held that parties may
contract for the payment of an obligation in gold or in any other
money or commodity, and it must then be paid in the medium
contracted for.
Bronson v.
Rodes, 7 Wall. 229;
Page 162 U. S. 309
Trebilcock v.
Wilson, 12 Wall. 687. This right applies to a state
or municipality as well as to an individual.
If the legislature had in terms provided that the bonds should
only be issued payable in legal tenders, there could, as it seems
to me, be no pretense that such a provision would be illegal or
involve a violation of any federal right.
The corporation was the creature of the state and had only such
functions as the state chose to confer on it. Although it be true
that the state is absolutely without power to control the right of
individuals to contract for such lawful money of the United States
as may seem to them best, certainly no such want of authority
obtained with reference to the right of a state in granting a
charter to a corporation to affix such restrictions as it deemed
best. As the individual could exercise his right to contract for
any lawful money of the United States free from state control, so
the state had the like freedom of action in making her own
contracts. It follows that, in delegating to one of its creatures
the power to contract, the state could limit that power to such
kind of lawful money as was considered wise. The exercise by the
State of this unquestioned authority in creating her own
corporation deprived no one of an existing right and interfered
with no federal authority. The mere decision of the state court
that the corporation had misused or exceeded its powers under its
charter was a purely state question. Had the state court given
force to any subsequent law, which it was claimed impaired the
obligations of the contract, a different view would control. But as
it did not, as it solely held that the corporation had exceeded its
authority under the state law, I am at a loss to see the slightest
federal question.
The Mississippi court construed the bonds as obligations payable
in gold coin, and it also held that the levee commissioners were
not authorized to issue bonds so payable. Whether the meaning of
the contract was arrived at from the plain language of the bonds,
or was an inference or implication to be drawn from all the
language used therein, the decision was, in either case, nothing
but the decision of a question of contract in regard to which the
state court
Page 162 U. S. 310
had the right to finally decide, and we are bound by that
decision.
It is said that if by this adjudication a right possessed by
plaintiffs in error as holders of bonds, under the Constitution and
laws of the United States, was necessarily denied, then this Court
has jurisdiction to review the judgment on writ of error. This may
be admitted, but I deny that the case at bar presents any such
feature. The argument that plaintiffs in error make is that they
claimed the bonds were payable in money of the United States, while
defendants claimed they were payable in a particular kind of money,
and, because so payable, were invalid. The grounds of demurrer to
the bill of plaintiffs in error were that the bonds were void as
calling for payment in gold coin, and that the levee board had no
power to issue them in that form. The question was as to the power
of the board to issue bonds payable in gold coin, which depended
upon the statute of the state, and the question whether the bonds
were so payable was one of construction of the language used in the
bonds. Simply to claim that money due under a contract is payable
in money of the United States does not make a claim under the
Constitution or laws of Congress. What kind of money the contract
is payable in depends upon its language, and that raises no federal
question.
The case of
Trebilcock v. Wilson, (supra,) does not aid
the plaintiffs in error. In that case, the defendant claimed a
right under the Constitution to demand and receive payment of his
note in specie according to the contract, and this was denied him,
and a decree entered canceling the mortgage given as collateral
security for the note. This Court reviewed the decision on the
ground that a right claimed by the defendant under the Constitution
was decided against him by the state court.
In
Maryland v. Railroad
Co., 22 Wall. 105, the question of jurisdiction was
not raised or noticed. The opinion puts the rights of the parties
entirely upon the language of the contract, and there was no claim
that the meaning of the contract was governed by any law of
Congress or by any provision of the Constitution.
Page 162 U. S. 311
All the arguments as to the powers of corporations to borrow
money or to give bonds, or as to the meaning of the state statute
and the extent of the power it granted by the authority to borrow
money, are arguments as to the construction of the state statute
and the authority of this corporation, and are not in any
particular, as it seems to me, of a federal nature.
Again, it is said that the power to borrow money simply means
the power to borrow whatever is money according to the Constitution
of the United States and the laws passed in pursuance thereof, and
the power to issue negotiable bonds therefor includes the power to
make them payable in such money. This, it is urged, the law
presumed, and to proceed on an implication to the contrary, founded
upon language contained in the bonds themselves, which it is said
was indefinite, was to deny to the holders of these bonds,
subsequent to their purchase, a right arising under the
Constitution and laws of the United States. Whatever presumption
the law may make, based upon the grant of a power to borrow money,
as to the right to make the obligation given therefor payable in
lawful money generally, the presumption is of no force in the face
of a contract to pay only in some particular medium, and whether
that contract is to be found expressed in so many words and in
plain and perfectly unambiguous language, or is to be inferred or
implied from all the language which is used in the contract, is
unimportant and immaterial. That it may be implied has been held in
Maryland v. Railroad
Co., 22 Wall. 105. Whether the implication does
arise from the language used is not a federal question, and the
decision of the state court is final.
We may think the power given by the State of Mississippi to its
corporation by the language it used was of a general nature,
authorizing the corporation to make payment in any money, yet the
state court decides that the language employed gave no authority to
issue bonds payable in gold coin. There is no claim under an act of
Congress or of the Constitution in such case, and no claim under
either was in any way denied.
We come back to the proposition, therefore, that when
parties
Page 162 U. S. 312
make a contract on that subject, it is for the court to say what
the contract means, and it seems to me that is not a federal
question, although the court is only able to arrive at a conclusion
as to what the contract means by an examination of its whole
language and by drawing inferences or implications therefrom as to
what its true meaning is. The nature of the question does not
change according as the contract upon which the right rests is
plainly or ambiguously stated. Nor does the right to construe the
state statute depend upon the condition that the state court shall
construe it, as we think, correctly. It is the same kind of a
question at all times, and that is what do the statute and contract
mean? What they mean is a question for the state court alone.
While under the laws of Congress there are several kinds of
money, gold and silver coin and legal tender notes, yet the
decision of the state court does not deny this or refuse to give
effect to those laws. The decision is in entire harmony with them,
and proceeds upon the assumption of their validity.
When it is said that the power to borrow money was expressly
granted, unaccompanied by any definition of the word "money" which
might operate as a restriction on the power, such statement is, of
course, based upon the language used in the statute. It is not
necessary that the definition of the word "money" need be given in
so many words. Whether, upon the whole language of the statute (if
there were more than one kind of money), there was a discretion
given to the commissioners to say as to which particular kind of
money the bonds should be payable in is a question as to what power
the commissioners were granted by that statute, and that question
is to be determined by the state court, which decides as to the
meaning of the state law, and there is no question of any right
dependent upon the federal Constitution or upon any of the laws of
Congress. The state court has denied no right derived from either.
It has simply construed a statute of its own state. In holding that
the implication to be derived from the act of the state was that
the power was to borrow money of the United States, is it not plain
that this Court assumes to construe the meaning of the state
statute, and
Page 162 U. S. 313
in a manner differing from that given it by the state court? How
would it be a different question if the legislature had in terms
authorized the corporation to borrow currency only? In either case,
the question would simply be a construction of the state statute,
in the one case from plain language used therein and in the other
from a reading of the whole act and a decision derived therefrom as
to the actual meaning of the state law. In both cases, the decision
is entirely the same in its nature, and in both it is a decision of
a local question into which there does not enter any feature of a
federal question. The decision of this Court that the bonds were on
their face solvable in money of the United States, whatever its
description, and were therefore valid, seems to me so plainly a
decision as to the meaning of a contract in opposition to that
taken by the state court, where the decision of the latter tribunal
is conclusive upon us, that I cannot give assent to it.
I think the writ should be dismissed.
