Case ID: us-ct-cl_8/html/0545-01.html
Source: Caselaw Access Project
Author: {"author": "Drake, Ch. J.,", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

SAVAGE’S CASE. Sarah Chauncey Savage, Executrix of William L. Savage, v. The United States.
    
      On the Proofs.
    
    
      The Act 17th July, 1861, (12 Stat. L.,p. 250,) authorises the Secretary of the Treasury to have hoolcs opened for subscriptions for a national loan, under such rules and regulations as he may prescribe, and upon giving notice in the public newspapers. Coupon bonds or Treasury notes are to beissued therefor. The Secretary reguests Jay Cooke to open books for such subsaiptions, requiring payments to be made in “lawful coin.” Jay Cooke advertises that the Treasury notes or bonds which idll be issued ivill be “ payable in. gold.” They are not in terms made payable in gold, but simply in dollars. In March, 1866, they are paid in legal-tender notes to the holder when gold is worth a premium.of thirty-two per cent. The holder protests and claims payment in gold.
    
    Where Treasury notes issued in August, 1861, having three years to run, are in terms payable in dollars, without designating the kind of money in which they shall be paid, they may be paid, under the decision of the Supreme Court in the Legal-Tender Cases, (12 Wall. R., p. 457,) at maturity in the money known as “ legal tender,” and the fact that the agents of the Treasury, authorized to receive subscriptions for the loan, advertised that payment would he made in gold, being- without authority of law, does not control the case.
    
      The Reporters’ statement of the case:
    The court found the following facts:
    In pursuance of the authority contained in the “ Act to authorize a national loan and for other purposes," approved July 17,1861, (12 Stat. L., p. 250,) Jay Cooke, of the city of Philadelphia, Pa., was authorized by the Secretary of the Treasury to open a book for subscriptions for Treasury notes, payable in three years after date, bearing interest at the rate of 7T3o- per centum iter annum, • payable semi-annually; and in reference thereto the said Secretary addressed to said Cooke a circular letter of instructions, in which, among other things, were the following words, in reference to payments to be made by persons making subscriptions to said loan: “AH payments must be made in the lawful coin of the United States f and also the following words: “ Whenever the amount subscribed shall nob be paid within the period prescribed, the first payment shall be forfeited to the United States.”
    In pursuance of the instructions contained in said letter, the said Jay Cooke caused to be published on the 24th of September, 1801, in newspapers in the city of Philadelphia, an advertisement in the following terms :
    “NEW NATIONAL LOAN.
    “Oppice op Jay Cooke & Co., Bankers,
    
      No 114 South Third Street.
    
    “ Pursuant to instructions from the Secretary of the Treasury, the subscription books to the new national loan of Treasury notes, bearing interest at the rate of seven and three-tenths per cent, per annum, will remain open at my office, No. 114 South Third street, until further notice, from 8 a. m. till 5 p. m., and on Mondays till 9 p. m.
    “These notes will be of the denomination of fifty dollars, one hundred dollars, five hundred dollars, one thousand dollars, and five thousand dollars, and aré all dated 19th of August, 1861, payable in gold in three years, “or convertible into a twenty-year sis per cent, loan, at the option of the holder. Each Treasury note has interest coupons attached, which can be cut off and collected in gold at the mint every six months, and at the rate of 1 cent per day on each fifty dollars.
    “ Any explanations required by subscribers will be cheerfully made, and they will, by the plan adopted, be saved from any trouble of writing letters, the undersigned reporting each subscription to the Treasury Department, from whence the' Treasury notes will be sent to each subscriber as soon as possible.
    “Payments of subscriptions may be made in gold or checlcs, or -notes of any of our city banks.
    
    “JAY COOKE,
    “ Siibscription Agent, No. 114 Sotith Third Street.”
    
      After tbe publication of said advertisement, William. L. Savage, tbe claimant’s testator, then in bis life time, became tbe purchaser of Treasury notes to tbe amount of fifteen thousand dollars, of tbe description named in said act and said advertisement; part of which notes, to wit, those amounting in tbe aggregate of principal to twelve thousand five hundred dollars, were dated August 19, 18G1; and tbe remainder, amounting in tbe aggregate of principal to two thousand five hundred dollars, were dated October 1,1861. All of said notes were in tbe following form : “Three years after date tbe United States promise to pay to tbe order of-,-dollars, with interest at 7X30 per cent., payable semi-annually.”
    On tbe 10tb of December, 1864, tbe Secretary of tbe Treasury issued tbe following notice:
    “Treasury Department, December 10, 1864.
    “Notice is hereby given of the readiness of this Department to redeem on presentation, by payment in lawful money, or by conversion into bonds, as authorized by law, the three-years Treasury notes, bearing interest at tbe rate of seven and three-tenths per centum, issued under tbe act of July 17, 1861. Interest will cease on all such Treasury notes, not so presented, after three months from this date, at which time, under the law, the right of conversion ceases.
    “Holders thereof will govern themselves accordingly. -
    [SEAL.] “W. P. FESSENDEN,
    “ Secretary of the Treasury.”
    On the 22d of January, 1866, the claimant’s intestate, along with Moncure Eobinson, addressed to the Secretary of the Treasury a communication insisting upon their legal right to have the said notes paid in gold.
    On the 3d of March, 1866, the claimant’s testator caused the said Treasury notes to be transmitted to Eiggs & Oo. at Washington, D. 0., with instructions to present the same at the Treasury, and ash for the payment of the same, with interest, in gold; and, if this should be refused, to accept the currency under protest.
    On the 6th of March, 1866, Eiggs & Oo. inclosed the said notes to the Secretary of the Treasury in a letter, wherein, after describing the notes, they said as follows:
    
      “We have received these overdue notes from a correspondent in Philadelphia, with instructions to present them at the Treasury Department aud ask for payment of same, with interest, in gold, and, in case of refusal, to accept payment otherwise than in gold under protest. We have already presented the notes at the Treasury Department, asking payment therefor, principal and interest, in accordance with our instructions, in gold, which was refused, and now beg respectfully to present the notes for payment in accordance with the terms proposed by the Treasury Department. At the same time we beg, under our instructions, to enter protest against payment otherwise than in gold.
    On the 10th of March, 1866, the full amount of said notes,, principal and interest, was paid to Biggs & Oo., as follows : Principle, paid in legal-tender notes of the United
    States... $15,000 00
    Last sis months interest due thereou at the maturity of the notes, paid in gold.. 547 50
    Interest accrued on the notes after their maturity, paid in legal-tender notes. 583 -20'
    Total.. 16,130 20
    On the 6th of March, 1866, when the said notes were presented, as aforesaid, by Eiggs & Co. to the Treasury Department for payment, gold coin was worth in the market a premium of thirty-two cents on the dollar over the legal-tender notes of the United States.
    
      Mr. Conway Robinson and Mr. John Selden for the claimants:
    y the 1st section of the Aot 11th July, 1861, (12 Stat. L., p. 259,) the Secretary of the Treasury was authorized to borrow,, on the credit of the United States, and “ within twelve months from the passage” of the act, a sum not exceeding $250,000,000, for which he was empowered to issue coupon bonds or Treasury notes in such proportions as he might deem advisable, the Treasury notes to be of a denomination not less than $50, “to-be payable three years after date, with interest at the rate of seven and three-tenths per centum per annum, payable semiannually,” and to be “ transferable by delivery.” The Secretary was further directed to cause books to be opened for subscriptions to tbe said Treasury notes at such, places as lie might designate in the United States, and under such rules and regulations as he might prescribe, and upon notice to be given in one or more public newspapers published in the several places where subscription-books should be opened. The Secretary was fully authorized, in case he should deem it expedient, before opening such books of .subscription, to exchange for coin, or pay for public dues, for certain other Treasury notes, of the issue of December 23,1857, or for Treasury notes issued and taken in exchange for such notes, any amount of the Treasury notes first above mentioned, not exceeding $100,000,000. By section 9, “the faith of the United States” was “solemnly pledged for the payment of the interest and redemption of the principal of the loan,” and, by section 10, all the provisions of the the act entitled an “ Act to authorize the issue of Treasury notes f approved the 23d of December, 1857, so far as they could or might be applied to the provisions of the enactment whereof that section was part and not therewith inconsistent, were “revived or re-enacted.” The Act December 23,1857, (11 Stat. L., p. 257,) had enacted, among other things, as follows: “ That said Treasury notes shall be receivable by the proper officers in payment of all duties and taxes laid by the authority of the United States, of all public lands sold by said authority, and of nil debts to the United States of any character whatever, which may be due and payable at the time when said Treasury notes may be offered in payment thereof.” With these statutes in force, and on the 4th of September, 1801, the Secretary of the Treasury, by circular instructions, requested Jay Cooke, a banker, at Philadelphia, to open a book-for subscriptions to the Treasury notes authorized by the Act July 17,1861, under the rules and regulations prescribed in the circular, among which were the following: “ All payments must be made in the lawful coin of the United States,” and, “whenever the amount subscribed shall not be paid within the period prescribed, the first payment shall be forfeited to the United States.” In obedience to his said instruction, Jay Cooke “ proceeded immediately to advertise the loan and receive subscriptions thereto.” Among his advertisements, of which some were furnished, and none objected to, by the Treasury Department, was one inserted on the 24th of September, 1861, in the Philadelphia Enquirer, to the effect that the said notes “ are all dated 19fch of August, 1861, payable in gold in three years, or convertible into a twenty year six per cent, loan, at the option of the holder.” Under these advertisements, and while gold was at par, Jay Cooke “ disposed of a large amount of the loan.” On the 30bh of June, 1861, (13 Stat. L., p. 219,) after authorizing the Secretary of the Treasury to issue certain bonds in exchange for Treasury notes theretofore issued bearing seven and three-tenths per centum interest, Congress enacted that the interest on such Treasury notes after maturity should be paid in lawful money, and that they might be exchanged for such bonds at any time within three months from the date of notice of redemption by the Secretary of the Treasury, after which the interest on such Treasury notes should cease. These notes were divided into two series or classes: the first bearing date August 19, 1861, and maturing Sunday, August 19, 1861, when gold on the preceding day was 251J to 256|; and the second dated October 1,1861, and maturing October 1, 1861, when gold was 190 to 193|. On the 10th of December, 1.861, when the price paid for gold was 235, it being at a premium of 135, the Secretary of the Treasury gave notice of the readiness of his Department to redeem, on presentation, by payment in lawful money, or by conversion into bonds, the said Treasury notes, and of the cessation of interest on all notes not so presented after three months from the date of such notice.
    In these causes there is no occasion to re open any of the principles heretofore settled by the Supreme Court of the United States in reference to the Legal Tender Acts. But the plaintiffs are entitled to recover for the plain and simple reason that express contracts payable in gold or silver dollars can only be satisfied by the payment of coined dollars, and cannot be discharged by notes of the United States, though declared to be a legal tender in payment of debts. Bronson v. Rhodes, (7 Wall., 229;) Butler v. llowitz, (Id., 25S;) Bronson v. Kimpton, (8 Id., Ill;) Deuring v. Sears, (11 Id., 379;) Trebilcoc 1c v. Wilson, (12 Id., 687;) See Tyer’s Case, (5 O. Ols., 509.)
    The notes, being commercial paper, are subject, though made by the sovereign, to the ordinary rules of the law merchant. U. S. v. Banlc of Metropolis, (15 Pet., 377;) Bank of the Republic v. Millard, (10 Wall., 152, 158.)
    The advertisements of Jay Cooke are to be treated as written agreements cotemporaneous with the making and delivery of the notes, and as furnishing, together with the latter, the evidence of the contracts, the general term “dollars” contained in the notes being limited and restrained by force of such advertisements, to dollars “ in gold.” Leeds v. Lancashire, (2 Camp., 275;) IlarÜy v. Wilkinson, (4 Id., 127;) Bowerback v. Monteiro, 4 Taunt., 846;) Brown v. Langley, (4 Man. Ur., 470, 43, Eng. O. L.;) Young v. Austen, (L. It. 4 C. P;, 556;) Maillard v. Page, (L. B. 5 Excheq., 320.) Whether there was authority thus to bind the United States to the redemption of the notes in coin will depend upon the just construction of the law under which they were issued. This law enacting in so many words that there should be u interest at the rate of seven-tenths per centum per annum,” and containing no provision that the interest should be paid in a representative of value different from that in which the principal was to be paid, or vice versa, it was a necessary effect of the law that the representative of value in which theone was payable was the representative of value in which the other was payable, for theinterest being on the principal, and being per annum a certain x>er centum of that principal, it could not be said that that precise per centum was paid if there existed as to the principal a right on the part of the creditor to require, or on the part of the debtor to make, payment in a representative of value different from that in which the interest was paid. Now, it is admitted that the interest upon the notes was payable in specie up to the respective dates of their maturity, and notwithstanding the act of Congress of July 17, 1862, it is admitted that such interest in specie was actually paid until the 19th day of August and 1st day of October, 1864.
    What is implied in a statute, pleading, contract, or will, is as much a.part of it as that which is expressed. United States v. Babett, (2 Black, 61;) Gelpekev. Dubuque, (1 Wall, 221;) Oroxall v. Sherrerd, (5 Id., 283;) Buts v. City of Muscatine, (8 Id., 58 ;) See Gladstone v. Chamberlain, (7 Blatchf., 207.)
    Though in action for unliquidated damages the payment and acceptance of a sum of money as a satisfaction may sometimes be a bar, yet there cannot be a good accord and satisfaction of the whole of a liquidated debt by payment of part, unless there be a good consideration for giving up the remainder. Smith v. Bartholomeio, (1 Mete., 278;) Doans v. Powers, (1 W. EL & U., Excheq., 606;) Warren v. Skinner, (20 Conn., 557;) Parke, B., in Gurlewis v. Clark, (3 W. H. & G., Excheq., 377;) Eeeside v. 
      United States, (2 C. 01s., 55;) Bamsdell v. United States., (Id., 507 ;) Livingston’s Case, (3 Id., 131;) Child v. United States., (4 Id., 177.)
    
      Mr. Assistant Attorney-General Goforth for tbe defendant:
    In tbe Act July 17,1861, tbe rules and regulations prescribed in pursuance of this act, and tbe form, words, and substance of tbe Treasury notes issued to the claimants, no promise is made to pay any particular species of money to tbe subscribers of these notes, but merely a promise to pay money; and tbe legal-tender cases (12 Wallace, 457) decided such promises or contracts to pay money, made before tbe passage of tbe Act February 25,1S62, were discharged -by payment in that which was recognized as money when tbe payment is to be made.
    An attempt is made to bind tbe defendant by the action of Jay Cooke & Co., fiscal agents of tbe Government, in advertising tbe Treasury notes to be payable in gold. Their action cannot in any way bind tbe defendants, as Jay Cooke & Go. were special agents appointed to do certain acts prescribed, first, by law; and, secondly, by rules and regulations issued by tbe Secretary of tbe Treasury in pursuance of law. When neither tbe law nor tbe regulations permitted them to promise payment in gold, their action in making such promises was unauthorized and illegal. To make this proposition stronger, it is asserted that tbe Secretary of tbe Treasury could not have promised payment in gold, when tbe law under which be acted did not so provide; then bow much less could a fiscal agent, contrary to tbe law and regulations, make such a contract?
    Tbe claimants received the money and gave up their securities. How can a security voluntarily surrendered and canceled be sued on ? It is the foundation of the action and yet voluntarily canceled. Savage instructed bis agent to protest, but utterly failed to prove that any protest was made at time of payment by any competent evidence. Higgs & Co.’s letter should be stricken out as incompetent. Tbe claim is therefore settled and barred as to both.
   Drake, Ch. J.,

delivered tbe opinion of the court:

There does not seem to be any legal foundation for tbe claim in this case.

The claimant must rely upon the statement of Jay Cooke in his advertisements, that the Treasury notes for which he was authorized to receive subscriptions were “payable in gold.” Neither in law, under which he acted, nor in the instructions from the Secretary of the Treasury to him, was there any provision to that effect. It follows that the only seeming foundation for a claim against the Government must be in those advertisements. And yet it does not appear that the claimant’s testator either subscribed for the notes which he held, or purchased them in reliance upon the statement in the advertisements that the notes were payable in gold. Hence, even if Cooke was authorized to make such a statement, it does not appear that it induced the party to purchase the notes.

But were it otherwise, Cooke could not bind the Government by any such statement. He was, by the law under which he acted, a mere special agent, with clearly defined powers, and whoever dealt with him in the matter of subscribing for Treasury notes was bound to know the scope of his authority and to see that he did not exceed it.

Section 3 of the “ act to authorize a national loan, and for other purposes,” (12 Stat. L., p. 259,) prescribed the powers and duties of such agents as follows:

“ The Secretary of the Treasury shall cause books to be opened for subscrix>tions to the Treasury notes for fifty dollars and upward, at such places as he may designate in the United States, and under such rules and regulations as he may. prescribe, to be superintended by the assistant treasurers of the United States at their respective localities, and at other places by such depositaries, postmasters, and other jiersons as he may designate, notice thereof being given in at least two daily papers of this city, and in one or more public newspapers published in the several places where subscription-books may be opened; and subscriptions for such notes may be received from all persons who may desire to subscribe, any law to the contrary notwithstanding.”

When Cooke was appointed to receive subscriptions for Treasury notes, his authority was comprised in that section, and all who subscribed for those notes were bound to know that fact. It was a mere naked authority to open books for subscriptions, and to receive the subscriptions which might be offered; and the public notice which the law authorized him to give was simply that the books were opened, and that subscriptions would be received. When, therefore, he embodied in the notice the statement that the notes would be payable in gold, he did it without the authority of law, and all men were bound to know that such was the case. There can, therefore, be no'possible ground for holding the Government to make good that statement.

But, aside from the question of the agent’s authority, there is the question whether the notes were, in fact or in law, payable in gold.

There is no pretense that they were so in fact — that is, by their terms. As appears by the form of them, they simply promised to pay dollars, not dollars in gold or silver.

But it is claimed that because, when they were issued, no other dollar than that of gold or silver was known to the laws of the United States, therefore these notes were, in law, to be paid when they matured, in the kind of dollars which were, at the dates of their issue, recognized by those laws as a legal-tender in the payment of debts. This is an attempt to resuscitate a question which we supposed to have gone to its final rest, under the decision of the Supreme Court in the Legal Tender Gases, (12 Wallace R., 457,) holding that the acts of Congress making notes of the United States a legal tender in the payment of debts were constitutional, and applied to debts contracted before, as well as those contracted after, their passage. That decision leaves nothing for the claimant’s case to rest upon, and her petition, therefore, must be dismissed.