Court Opinion

ID: 5435680
Source: CourtListenerOpinion
Date Created: 2022-01-08 17:54:01.018052+00
Date Added: 2024-06-11T08:31:49.321209
License: Public Domain

By the Court, Currey, J.
In the years 1858 and 1859, the Bear River and Auburn Water and Mining Company—a corporation—became indebted to the plaintiff as trustee for certain owners and holders of bonds issued by the company, amounting, in the aggregate, to the sum of thirty thousand dollars. These bonds were made and issued by the company at different times during the years mentioned. Each of the bonds was in the sum of five hundred dollars. These bonds were drawn and made payable as follows : One third in twelve months, one third in eighteen months, and one third in twenty-four months from the time they were issued, with interest thereon at the rate of two and a half per cent per month, payable quarterly. The debts thus created were secured by a deed of mortgage, executed and delivered on behalf of the corporation to the plaintiff, in trust for the owners and holders of the bonds. The mortgage was duly recorded.
The plaintiff commenced an action in December, 1861, in the District Court of the Eleventh Judicial District, in and for Placer County, to recover judgment for the amount due on the bonds, and to obtain a decree for the foreclosure of the mortgage and for the sale of the mortgaged property, and, in April following, the Court made a decree and judgment in the cause, by which it was ascertained and determined that there was due from the defendant to the plaintiff, as trustee, on the bonds set forth in the complaint, the sum of twenty-eight thousand two hundred and seventy-seven dollars and thirty-five cents, and adjudged that the amount due should bear interest at the rate of two and a half per cent per month from the date of the judgment; and also decreed a foreclosure of the mortgage, and that the mortgaged property be sold according to the practice of the Court in such cases, for the payment of the sum due and the interest to accrue thereon. In April, 1864, the plaintiff caused process—an order of sale of the mortgaged property—to be issued, and placed in the hands of the Sheriff to enforce payment of the amount then *158due on the judgment. After the order of sale had come to the hands of the Sheriff, the defendants tendered to him the amount due on the judgment, and also the interest due thereon, and all costs that had accrued. The kind of money tendered was United States notes, issued under and by authority of the Act of the Congress of the United States, passed on the 25th day of February, 1862, entitled “An Act to authorize the issue of United States notes, and for the redemption or funding thereof, and for funding the floating debt of the United Statesand the Act passed on the 3d day of March, 1863, entitled “An Act to provide ways and means for the support of the Gfovernment.” The Sheriff refused to receive the money tendered, whereupon the defendant paid it into Court for the plaintiff, and then moved the Court that the judgment be declared satisfied, and that the Sheriff be required to return the order of sale then in his hands. The Court thereupon made an order, reciting the facts and directing satisfaction to be entered of judgment and decree, and that the Sheriff return the order of sale. Upon this the Sheriff made Ms return, as directed, and the same was filed in the office of the Clerk of the Court, and satisfaction of the judgment and decree was entered of record. From the order so made the plaintiff has appealed.
The question to be determined is whether or not United States notes issued under and by authority of the Acts of Congress mentioned, were at the time the tender and payment into Court were made, a legal tender in the payment of debts which were created and became due before the passage of those Acts, when the written instrument, which is the evidence of the indebtedness, does not provide in what kind of money the debt shall be paid, otherwise than in dollars generally.
The plaintiff does not question the validity of the Acts of Congress making United States notes lawful money and a legal tender in the payment of debts, but he maintains that this kind of money, by a fair construction of the Acts of Congress, has never constituted a legal tender in the payment of debts contracted before the passage of the Act of the 25th of Feb*159ruary, 1862, and in support of this position is invoked the general doctrine that a statute ought not to be so construed as to give it a retrospective operation so as to affect contracts entered into previous to its enactment, if it will bear any other interpretation. That such is the doctrine of the law, having for its basis principles and reasons which cannot be set aside without at the same time holding that the obligation of contracts maybe impaired and even destroyed, is not to be denied.
A statute which takes away or impairs any vested right acquired under existing laws, or creates a new obligation, or imposes a new duty, or attaches a new disability in respect to transactions or considerations already past, is to be deemed retrospective. (2 Q-allison, 105, 139 ; Sedgwick on Stat. and Const. Law, 188 ; Smith’s Com. on Stat. and Const. Law, Sec. 149.) It is a rule never to apply a statute retrospectively by mere construction. (Jarvis v. Jarvis, 3 Ed. Ch. B. 464.) It was held by Mr. Justice Spencer in Dash v. Van Kleck, 7 John. 447, that all laws are to be construed according to the intention of the Legislature, and in getting at that intention Courts must presume a prospective and not a retrospective operation was meant unless such presumption is repelled by express words ; and in Harkley v. Sprague, 10 Wend. 113, Mr. Chief Justice Savage said all statutes are to be construed prospectively and not retrospectively unless they are otherwise incapable of a reasonable construction. (Jackson v. Van Zandt, 12 John. 174 ; Palmer v. Conley, 4 Den. 376, and 2 Com. 184; Sayre v. Wisner, 8 Wend. 663; Johnson v. Burrell, 2 Hill, 239 ; Berley v. Rampacher, 5 Duer, 183 ; Wood v. Oakley, 11 Page, 403; Sandford v. Bennett, 24 N. Y. 20 ; Taylor v. Terrett, 9 Cranch. 43; Thompson v. Lack, 54 E. C. L. 540.) The rule of construction stated, and which is sustained by an unbroken current of decisions, is one that should be adhered to with undeviating exactness.
The Acts of Congress under consideration making United States notes lawful money and a legal tender in the payment of debts are not laws operating retrospectively but in presentí and prospectively. No new obligations are created nor new *160duties imposed by them; neither do they attach new disabilities in respect to transactions or considerations which had transpired before their passage. They simply provide that the notes issued by their authority shall be lawful .money, and that such money shall be a legal tender in the payment of debts. What debts ? The answer is, all debts public and private within the United States, except duties on imports and interest on the bonds and notes of the United States. The Acts of Congress, so far as they declare that treasury notes shall be a legal tender in the payment of debts, make no reference to the time when the obligation had its inception. They operate directly upon subsisting debts, recognizing the existing relations of debtors and creditors, and declare that a certain kind of money, which is made lawful money by the sovereign authority, shall be a legal tender as well as other kinds of money, in the payment of debts then due, or to become due thereafter while such money may be a lawful currency and a legal tender in the payment of debts. Do they impair the obligations of contracts made or rights acquired and vested under previously existing laws ? If such was their effect we are free to say we should not regard ourselves obliged to lead in upholding them. But is such their effect? To answer this inquiry it is only necessary to refer to the contract in question, made long before the passage of these Acts of Congress, and to understand its import. It is simply an agreement to pay certain sums of money at an appointed time. This was not a contract to pay any particular kind of money other than such as might be a legal tender in the payment of debts at the time thereafter when the debt created should be due and unpaid. Such was the promise or undertaking of the defendant in the case before us, and nothing beyond this; and such being the contract, was it not competent for the defendant to perform it by a literal compliance with its terms ? The defendant’s promise, which the plaintiff accepted, we repeat, was not to pay in any particular kind of money, but in effect to pay a certain number of dollars in any kind of currency that should be or become lawful money and legal tender during the interval *161through which the relation of debtor and creditor should be extended; and when the debtor tendered and paid into Court the amount due, in money which, by the law of the land, was a legal tender in the payment of debts, all that the creditor could exact and enforce under the contract was performed. We cannot sa,y any contract obligation was violated by holding that the payment tendered and made was valid and effective, without first deciding that United States treasury notes are not what the Act of Congress declares them to be. In Lick v. Faulkner, 25 Cal. 404, and other cases, we held the Acts of Congress malting United States notes lawful money and a legal tender in the payment of debts, to be constitutionally valid and binding. If such notes are money in the sense declared in Lick v. Faulkner, the judicial department of the country cannot say a dollar of such currency is worth more or less than a dollar of any other kind of money. Were we to undertake to discriminate between one kind of lawful money and another, in cases where neither the parties contracting nor the laws of the country have made any distinction between them, we should be involved in an inextricable absurdity, besides which our judgment would not be an exposition of the laws as we find them, but would be an exercise of legislative power abrogating the Acts of Congress.
When the tender was made, United States notes were a legal currency, and the obligation of the defendant, by the terms of his contract, was to pay a certain number of dollars generally. In United States v. Robertson, 5 Peters, 660, Mr. Chief Justice Marshall said that an obligation to pay money in general terms may be discharged by payment in legal currency; and in Faw v. Mar stellar, 2 Cranch. 26, the same Judge in a case analagous to the one before us, in answer to a position assumed and maintained by counsel in that case, said : “The position that the value of money at the time of the consideration for which it was to be paid was received, is the standard by which the contract is to be measured, is not the correct one.” In the case of Metropolitan Bank v. Van Dike, decided by the New York Court of Appeals in 1863, (27 N. Y.401,) the identical *162question involved in this case was very elaborately and ably discussed at the bar and considered by the Court, and it was held that United States notes issued under the Act of the 25th of February, 1862, were a valid tender in payment of a debt contracted and due long before the passage of the Act.
If it were admissible in judicial proceedings to open the door to evidence to show, for instance,.that at a particular date a hundred dollars in United States notes were worth only forty dollars in gold coin, not only would the laws of Congress making these notes lawful money and a legal tender be annulled and held for naught, but consequences of a most preposterous and disastrous character would be likely to follow. In after years, when the notes issued under these Acts of Congress may become absorbed, and gold and silver coins shall be the only lawful money in the land, the inquiry would be, what was the difference in the value between the two kinds of money when the contract 'was made ? Then, if it should appear that at the date of the contract, a hundred dollars in United States notes was worth only forty dollars in gold coin, the creditor would be entitled to recover only forty dollars, though his debt- or’s promise was to pay him one hundred dollars. It is needless to add illustrations of the confusions and mischiefs that would result were the Courts to hold that one kind of money is worth more or less than another kind, notwithstanding by sovereign behest there is no difference between them. The laws of Congress place the two kinds of money on an equality, so far as the case at bar is concerned, and therefore it results from existing conditions that the money tendered and paid into Court was as effectual to the discharge of the defendant’s obligation as the same amount of United States gold coin would haye been had the payment been tendered in that kind of money.
The conclusion to which we are forced by the conditions of the subject matter involved is, that the tender of United States notes constituted a legal tender for the payment of the amount *163due, and therefore the order made by the Court was correct and should be affirmed.
Order affirmed.