1. A bond, given in December, 1851, for payment of a certain
sum, in gold and silver coin, lawful money of the United States,
with interest also in coin, at a rate specified, until repayment,
cannot be discharged by a tender of United States notes issued
under the Loan and Currency Acts of 1862 and 1863, and by them
declared to be lawful money and a legal tender for the payment of
debts.
2. When obligations made payable in coin are sued upon, judgment
may be entered for coined dollars and parts of dollars.
The facts shown by the record were these:
In December, 1851, one Christian Metz, having borrowed of
Frederick Bronson, executor of Arthur Bronson, fourteen hundred
dollars, executed his bond for the repayment to Bronson of the
principal sum borrowed on the 18th day of January, 1857,
in
gold and silver coin, lawful money of the United States, with
interest, also in coin, until such repayment, at the yearly rate of
seven percent
To secure these payments, according to the bond, at such place
as Bronson might appoint, or, in default of such appointment, at
the Merchants' Bank of New York, Metz executed a mortgage upon
certain real property, which was afterwards conveyed to Rodes, who
assumed to pay the mortgage debt, and did, in fact, pay the
interest until and including the 1st day of January, 1864.
Subsequently, in January, 1865, there having been no demand of
payment, nor any appointment of a place of payment by Bronson,
Rodes tendered to him United States notes to the amount of fifteen
hundred and seven dollars, a sum nominally equal to the principal
and interest due upon the bond and mortgage. These notes had been
declared, by the acts under which they were issued, to be lawful
money and a legal tender in payment of debts, public and private,
except duties on imports, and interest on the public debt.
[
Footnote 1]
Page 74 U. S. 230
At the time of the tender by Rodes to Bronson, one dollar in
coin was equivalent in market value to two dollars and a quarter in
United States notes.
This tender was refused; whereupon Rodes deposited the United
States notes in the Merchants' Bank to the credit of Bronson, and
filed his bill in equity, praying that the mortgaged premises might
be relieved from the lien of the mortgage, and that Bronson might
be compelled to execute and deliver to him an acknowledgment of the
full satisfaction and discharge of the mortgage debt.
The bill was dismissed by the supreme court sitting in Erie
County; but, on appeal to the supreme court in general term, the
decree of dismissal was reversed, and a decree was entered,
adjudging that the mortgage had been satisfied by the tender, and
directing Bronson to satisfy the same of record; and this decree
was affirmed by the Court of Appeals. The case was now brought here
by Bronson for review.
Page 74 U. S. 245
THE CHIEF JUSTICE delivered the opinion of the Court.
The question which we have to consider is this:
Was Bronson bound by law to accept from Rodes United States
notes equal in nominal amount to the sum due him as full
performance and satisfaction of a contract which stipulated for the
payment of that sum in gold and silver coin, lawful money of the
United States?
It is not pretended that any real payment and satisfaction of an
obligation to pay fifteen hundred and seven coined dollars can be
made by the tender of paper money worth in the market only six
hundred and seventy coined dollars. The question is does the law
compel the acceptance of such a tender for such a debt?
It is the appropriate function of courts of justice to enforce
contracts according to the lawful intent and understanding of the
parties.
We must therefore inquire what was the intent and understanding
of Frederick Bronson and Christian Metz when they entered into the
contract under consideration in December, 1851.
Page 74 U. S. 246
And this inquiry will be assisted by reference to the
circumstances under which the contract was made.
Bronson was an executor, charged as a trustee with the
administration of an estate. Metz was a borrower from the estate.
It was the clear duty of the former to take security for the full
repayment of the money loaned to the latter.
The currency of the country, at that time, consisted mainly of
the circulating notes of state banks, convertible, under the laws
of the states, into coin on demand. This convertibility, though far
from perfect, together with the acts of Congress which required the
use of coin for all receipts and disbursements of the national
government, insured the presence of some coin in the general
circulation; but the business of the people was transacted almost
entirely through the medium of bank notes. The state banks had
recently emerged from a condition of great depreciation and
discredit, the effects of which were still widely felt, and the
recurrence of a like condition was not unreasonably apprehended by
many. This apprehension was, in fact, realized by the general
suspension of coin payments, which took place in 1857, shortly
after the bond of Metz became due.
It is not to be doubted, then, that it was to guard against the
possibility of loss to the estate, through an attempt to force the
acceptance of a fluctuating and perhaps irredeemable currency in
payment, that the express stipulation for payment in gold and
silver coin was put into the bond. There was no necessity in law
for such a stipulation, for at that time no money, except of gold
or silver, had been made a legal tender. The bond without any
stipulation to that effect would have been legally payable only in
coin. The terms of the contract must have been selected, therefore,
to fix definitely the contract between the parties, and to guard
against any possible claim that payment, in the ordinary currency,
ought to be accepted.
The intent of the parties is, therefore, clear. Whatever might
be the forms or the fluctuations of the note currency, this
contract was not to be affected by them. It was to be paid, at all
events, in coined lawful money.
Page 74 U. S. 247
We have just adverted to the fact that the legal obligation of
payment in coin was perfect without express stipulation. It will be
useful to consider somewhat further the precise import in law of
the phrase "dollars payable in gold and silver coin, lawful money
of the United States."
To form a correct judgment on this point, it will be necessary
to look into the statutes regulating coinage. It would be
instructive, doubtless, to review the history of coinage in the
United States, and the succession of statutes by which the weight,
purity, forms, and impressions of the gold and silver coins have
been regulated; but it will be sufficient for our purpose if we
examine three only, the Acts of April 2, 1792, [
Footnote 2] of January 18, 1837, [
Footnote 3] and March 3, 1849. [
Footnote 4]
The act of 1792 established a mint for the purpose of a national
coinage. It was the result of very careful and thorough
investigations of the whole subject, in which Jefferson and
Hamilton took the greatest parts; and its general principles have
controlled all subsequent legislation. It provided that the gold of
coinage, or standard gold, should consist of eleven parts fine and
one part alloy, which alloy was to be of silver and copper in
convenient proportions, not exceeding one-half silver; and that the
silver of coinage should consist of fourteen hundred and
eighty-five parts fine, and one hundred and seventy-nine parts of
an alloy wholly of copper.
The same act established the dollar as the money unit, and
required that it should contain four hundred and sixteen grains of
standard silver. It provided further for the coinage of
half-dollars, quarter-dollars, dimes, and half-dimes, also of
standard silver, and weighing respectively a half, a quarter, a
tenth, and a twentieth of the weight of the dollar. Provision was
also made for a gold coinage, consisting of eagles, half-eagles,
and quarter-eagles, containing, respectively, two hundred and
ninety, one hundred and thirty-five, and sixty-seven and a half
grains of standard gold, and being
Page 74 U. S. 248
of the value, respectively, of ten dollars, five dollars, and
two-and-a-half dollars.
These coins were made a lawful tender in all payments according
to their respective weights of silver or gold; if of full weight,
at their declared values, and if of less, at proportional values.
And this regulation as to tender remained in full force until
1837.
The rule prescribing the composition of alloy has never been
changed; but the proportion of alloy to fine gold and silver, and
the absolute weight of coins, have undergone some alteration,
partly with a view to the better adjustment of the gold and silver
circulations to each other, and partly for the convenience of
commerce.
The only change of sufficient importance to require notice, was
that made by the act of 1837. [
Footnote 5] That act directed that standard gold, and
standard silver also, should thenceforth consist of nine parts pure
and one part alloy; that the weight of standard gold in the eagle
should be two hundred and fifty-eight grains, and in the half-eagle
and quarter-eagle, respectively, one-half and one-quarter of that
weight precisely; and that the weight of standard silver should be
in the dollar four hundred twelve and a half grains, and in the
half-dollar, quarter-dollar, dimes, and half-dimes, exactly
one-half, one-quarter, one-tenth, and one-twentieth of that
weight.
The act of 1849 [
Footnote 6]
authorized the coinage of gold double-eagles and gold dollars
conformably in all respects to the established standards, and,
therefore, of the weights respectively of five hundred and sixteen
grains and twenty-five and eight-tenths of a grain.
The methods and machinery of coinage had been so improved before
the act of 1837 was passed, that unavoidable deviations from the
prescribed weight became almost inappreciable; and the most
stringent regulations were enforced to secure the utmost attainable
exactness, both in weight and purity of metal.
Page 74 U. S. 249
In single coins, the greatest deviation tolerated in the gold
coins was half a grain in the double-eagle, eagle, or half-eagle,
and a quarter of a grain in the quarter eagle or gold dollar;
[
Footnote 7] and in the silver
coins, a grain and a half in the dollar and half-dollar, and a
grain in the quarter-dollar, and half a grain in the dime and
half-dime. [
Footnote 8]
In 1849, the limit of deviation in weighing large numbers of
coins on delivery by the chief coiner to the treasurer, and by the
treasurer to depositors, was still further narrowed.
With these and other precautions against the emission of any
piece inferior in weight or purity to the prescribed standard, it
was thought safe to make the gold and silver coins of the United
States legal tender in all payments according to their nominal or
declared values. This was done by the act of 1837. Some regulations
as to the tender, for small loans, of coins of less weight and
purity, have been made; but no other provision than that made in
1837, making coined money a legal tender in all payments, now
exists upon the statute books.
The design of all this minuteness and strictness in the
regulation of coinage is easily seen. It indicates the intention of
the legislature to give a sure guaranty to the people that the
coins made current in payments contain the precise weight of gold
or silver of the precise degree of purity declared by the statute.
It recognizes the fact, accepted by all men throughout the world,
that value is inherent in the precious metals; that gold and silver
are in themselves values, and being such, and being in other
respects best adapted to the purpose, are the only proper measures
of value; that these values are determined by weight and purity;
and that form and impress are simply certificates of value, worthy
of absolute reliance only because of the known integrity and good
faith of the government which gives them.
The propositions just stated are believed to be incontestable.
If they are so in fact, the inquiry concerning the legal import of
the phrase "dollars payable in gold and silver
Page 74 U. S. 250
coin, lawful money of the United States," may be answered
without much difficulty. Every such dollar is a piece of gold or
silver, certified to be of a certain weight and purity, by the form
and impress given to it at the mint of the United States, and
therefore declared to be legal tender in payments. Any number of
such dollars is the number of grains of standard gold or silver in
one dollar multiplied by the given number.
Payment of money is delivery by the debtor to the creditor of
the amount due. A contract to pay a certain number of dollars in
gold or silver coins is therefore in legal import, nothing else
than an agreement to deliver a certain weight of standard gold, to
be ascertained by a count of coins, each of which is certified to
contain a definite proportion of that weight. It is not
distinguishable, as we think, in principle, from a contract to
deliver an equal weight of bullion of equal fineness. It is
distinguishable, in circumstance, only by the fact that the
sufficiency of the amount to be tendered in payment must be
ascertained, in the case of bullion, by assay and the scales, while
in the case of coin it may be ascertained by count.
We cannot suppose that it was intended by the provisions of the
currency acts to enforce satisfaction of either contract by the
tender of depreciated currency of any description equivalent only
in nominal amount to the real value of the bullion or of the coined
dollars. Our conclusion, therefore, upon this part of the case is
that the bond under consideration was in legal import precisely
what it was in the understanding of the parties, a valid obligation
to be satisfied by a tender of actual payment according to its
terms, and not by an offer of mere nominal payment. Its intent was
that the debtor should deliver to the creditor a certain weight of
gold and silver of a certain fineness, ascertainable by count of
coins made legal tender by statute, and this intent was lawful.
Arguments and illustrations of much force and value in support
of this conclusion might be drawn from the possible case of the
repeal of the legal tender laws relating to coin,
Page 74 U. S. 251
and the consequent reduction of coined money to the legal
condition of bullion, and also from the actual condition of partial
demonetization to which gold and silver money was reduced by the
introduction into circulation of the United States notes and
national bank currency; but we think it unnecessary to pursue this
branch of the discussion further.
Nor do we think it necessary now to examine the question whether
the clauses of the currency acts, making the United States notes a
legal tender, are warranted by the Constitution.
But we will proceed to inquire whether, upon the assumption that
those clauses are so warranted, and upon the further assumption
that engagements to pay coined dollars may be regarded as ordinary
contracts to pay money rather than as contracts to deliver certain
weights of standard gold, it can be maintained that a contract to
pay coined money may be satisfied by a tender of United States
notes.
Is this a performance of the contract within the true intent of
the acts?
It must be observed that the laws for the coinage of gold and
silver have never been repealed or modified. They remain on the
statute book in full force. And the emission of gold and silver
coins from the mint continues; the actual coinage during the last
fiscal year having exceeded, according to the report of the
director of the mint, nineteen millions of dollars.
Nor have those provisions of law which make these coins a legal
tender in all payments been repealed or modified.
It follows that there were two descriptions of money in use at
the time the tender under consideration was made, both authorized
by law, and both made legal tender in payments. The statute
denomination of both descriptions was dollars; but they were
essentially unlike in nature. The coined dollar was, an we have
said, a piece of gold or silver of a prescribed degree of purity,
weighing a prescribed number of grains. The note dollar was a
promise to pay a coined dollar; but it was not a promise to pay on
demand nor at any fixed time, nor was it in fact convertible into a
coined dollar. It was impossible in the nature of things
Page 74 U. S. 252
that these two dollars should be the actual equivalents of each
other, nor was there anything in the currency acts purporting to
make them such. How far they were, at that time, from being actual
equivalents has been already stated.
If, then, no express provision to the contrary be found in the
acts of Congress, it is a just if not a necessary inference, from
the fact that both descriptions of money were issued by the same
government, that contracts to pay in either were equally sanctioned
by law. It is indeed difficult to see how any question can be made
on this point. Doubt concerning it can only spring from that
confusion of ideas which always attends the introduction of varying
and uncertain measures of value into circulation as money.
The several statutes relating to money and legal tender must be
construed together. Let it be supposed then that the statutes
providing for the coinage of gold and silver dollars are found
among the statutes of the same Congress which enacted the laws for
the fabrication and issue of note dollars, and that the coinage and
note acts, respectively, make coined dollars and note dollars legal
tender in all payments, as they actually do. Coined dollars are now
worth more than note dollars; but it is not impossible that note
dollars, actually convertible into coin at the chief commercial
centers, receivable everywhere, for all public dues, and made,
moreover, a legal tender, everywhere, for all debts, may become, at
some points, worth more than coined dollars. What reason can be
assigned now for saying that a contract to pay coined dollars must
be satisfied by the tender of an equal number of note dollars,
which will not be equally valid then, for saying that a contract to
pay note dollars must be satisfied by the tender of an equal number
of coined dollars?
It is not easy to see how difficulties of this sort can be
avoided, except by the admission that the tender must be according
to the terms of the contract.
But we are not left to gather the intent of these currency acts
from mere comparison with the coinage acts. The currency acts
themselves provide for payments in coin. Duties on imports must be
paid in coin, and interest on the public
Page 74 U. S. 253
debt, in the absence of other express provisions, must also be
paid in coin. And it hardly requires argument to prove that these
positive requirements cannot be fulfilled if contracts between
individuals to pay coin dollars can be satisfied by offers to pay
their nominal equivalent in note dollars. The merchant who is to
pay duties in coin must contract for the coin which he requires;
the bank which receives the coin on deposit contracts to repay coin
on demand; the messenger who is sent to the bank or the custom
house contracts to pay or deliver the coin according to his
instructions. These are all contracts, either express or implied,
to pay coin. Is it not plain that duties cannot be paid in coin if
these contracts cannot be enforced?
An instructive illustration may be derived from another
provision of the same acts. It is expressly provided that all dues
to the government, except for duties on imports, may be paid in
United States notes. If, then, the government, needing more coin
than can be collected from duties, contracts with some bank or
individual for the needed amount, to be paid at a certain day, can
this contract for coin be performed by the tender of an equal
amount in note dollars? Assuredly it may if the note dollars are a
legal tender to the government for all dues except duties on
imports. And yet a construction which will support such a tender
will defeat a very important intent of the act.
Another illustration, not less instructive, may be found in the
contracts of the government with depositors of bullion at the mint
to pay them the ascertained value of their deposits in coin. These
are demands against the government other than for interest on the
public debt; and the letter of the acts certainly makes United
States notes payable for all demands against the government except
such interest. But can any such construction of the act be
maintained? Can judicial sanction be given to the proposition that
the government may discharge its obligation to the depositors of
bullion by tendering them a number of note dollars equal to the
number of gold or silver dollars which it has contracted by law to
pay?
Page 74 U. S. 254
But we need not pursue the subject further. It seems to us clear
beyond controversy that the act must receive the reasonable
construction, not only warranted but required by the comparison of
its provisions with the provisions of other acts, and with each
other; and that upon such reasonable construction it must be held
to sustain the proposition that express contracts to pay coined
dollars can only be satisfied by the payment of coined dollars.
They are not
"debts" which may be satisfied by the tender
of United States notes.
It follows that the tender under consideration was not
sufficient in law, and that the decree directing satisfaction of
the mortgage was erroneous.
Some difficulty has been felt in regard to the judgments proper
to be entered upon contracts for the payment of coin. The
difficulty arises from the supposition that damages can be assessed
only in one description of money. But the act of 1792 provides
that
"the money of account of the United States shall be expressed in
dollars, dimes, cents, and mills, and that all accounts in the
public offices, and all proceedings in the courts of the United
States, shall be kept and had in conformity to these
regulations."
This regulation is part of the first coinage act, and doubtless
has reference to the coins provided for by it. But it is a general
regulation, and relates to all accounts and all judicial
proceedings. When, therefore, two descriptions of money are
sanctioned by law, both expressed in dollars and both made current
in payments, it is necessary, in order to avoid ambiguity and
prevent a failure of justice, to regard this regulation as
applicable alike to both. When, therefore, contracts made payable
in coin are sued upon, judgments may be entered for coined dollars
and parts of dollars; and when contracts have been made payable in
dollars generally, without specifying in what description of
currency payment is to be made, judgments may be entered generally,
without such specification.
We have already adopted this rule as to judgments for
Page 74 U. S. 255
duties by affirming a judgment of the Circuit Court for the
District of California, [
Footnote
9] in favor of the United States, for thirteen hundred and
eighty-eight dollars and ten cents, payable in gold and silver
coin, and judgments for express contracts between individuals for
the payment of coin may be entered in like manner.
It results that the decree of the Court of Appeals of New York
must be
Reversed and the cause remanded to that court for further
proceedings.
[
Footnote 1]
See the history of these notes, and of the acts under
which they were issued, particularly set out in the opinion of the
Chief Justice, in
Lane County v. Oregon, supra, pp.
74 U. S.
74-75.
[
Footnote 2]
1 Stat. at Large 246.
[
Footnote 3]
5
id. 136.
[
Footnote 4]
9
id. 397
[
Footnote 5]
5 Stat. at Large 137.
[
Footnote 6]
9
id. 397.
[
Footnote 7]
9 Stat. at Large 398.
[
Footnote 8]
5
id. 140.
[
Footnote 9]
Cheang-Kee v. United
States, 3 Wall. 320.
MR. JUSTICE DAVIS.
I assent to the result which a majority of the Court have
arrived at that an express contract to pay coin of the United
States, made before the Act of February 25, 1862, commonly called
the legal tender act, is not within the clause of that act which
makes Treasury notes a legal tender in payment of debts; but I
think it proper to guard against all possibility of misapprehension
by stating that if there be any reasoning in the opinion of the
majority which can be applicable to any other class of contracts,
it does not receive my assent.
MR. JUSTICE SWAYNE.
I concur in the conclusion announced by THE CHIEF JUSTICE. My
opinion proceeds entirely upon the language of the contract and the
construction of the statutes. The question of the constitutional
power of Congress, in my judgment, does not arise in the case.
MR. JUSTICE MILLER, dissenting.
I do not agree to the judgment of the Court in this case, and
shall, without apology, make a very brief statement of my reasons
for believing that the judgment of the Court of Appeals of New York
should be affirmed. The opinion just read correctly states that the
contract in this case, made before the passage of the act or acts
commonly called the legal
Page 74 U. S. 256
tender acts, was an agreement to pay $1,400 "in gold and silver
coin, lawful money of the United States." And I agree that it was
the intention of both parties to this contract that it should be
paid in coin. I go a step farther than this, and agree that the
legal effect of the contract, as the law stood when it was made,
was that it should be paid in coin, and could be paid in nothing
else. This was the conjoint effect of the contract of the parties
and the law under which that contract was made.
But I do not agree that in this respect the contract under
consideration differed, either in the intention of the parties, or
in its legal effect, from a contract to pay $1,400 without any
further description of the dollars to be paid.
The only dollars which, by the laws then in force, or which ever
had been in force since the adoption of the federal Constitution,
could have been lawfully tendered in payment of any contract simply
for dollars, were gold and silver.
These were the "lawful money of the United States" mentioned in
the contract, and the special reference to them gave no effect to
that contract, beyond what the law gave.
The contract then did not differ in its legal obligation from
any other contract payable in dollars. Much weight is attached in
the opinion to the special intent of the parties in using the words
gold and silver coin, but as I have shown that the intent thus
manifested is only what the law would have implied if those words
had not been used, I cannot see their importance in distinguishing
this contract from others which omit these words. Certainly every
man who at that day received a note payable in dollars, expected
and had a right to expect to be paid "in gold and silver coin,
lawful money of the United States," if he chose to demand it. There
was therefore no difference in the intention of the parties to such
a contract, and an ordinary contract for the payment of money, so
far as the right of the payee to exact coin is concerned. If I am
asked why these words were used in this case I answer, that they
were used out of abundant caution by someone not familiar with the
want of power in the states to make legal tender laws. It is very
well known that
Page 74 U. S. 257
under the system of state banks, which furnished almost
exclusively the currency in use for a great many years prior to the
issue of legal tender notes by the United States, there was a
difference between the value of that currency and gold, even while
the bank notes were promptly redeemed in gold. And it was doubtless
to exclude any possible assertion of the right to pay this contract
in such bank notes, that the words gold and silver coin were used,
and not with any reference to a possible change in the laws of
legal tender established by the United States, which had never,
during the sixty years that the government had been administered
under the present Constitution, declared anything else to be a
legal tender or lawful money but gold and silver coin.
But if I correctly apprehend the scope of the opinion delivered
by THE CHIEF JUSTICE, the effort to prove for this contract a
special intent of payment in gold, is only for the purpose of
bringing it within the principle there asserted, both by express
words and by strong implication, that all contracts must be paid
according to the intention of the parties making them. I think I am
not mistaken in my recollection that it is broadly stated that it
is the business of courts of justice to enforce contracts as they
are intended by the parties, and that the tender must be according
to the intent of the contract.
Now if the argument used to show the intent of the parties to
the contract is of any value in this connection, it is plain that
such intent must enter into, and form a controlling element, in the
judgment of the court, in construing the legal tender acts.
I shall not here consume time by any attempt to show that the
contract in this case is a debt, or that when Congress said that
the notes it was about to issue should be received as a legal
tender in payment for
all private debts, it intended that
which these words appropriately convey. To assume that Congress did
not intend by that act to authorize a payment by a medium differing
from that which the parties intended by the contract is in
contradiction to the express language of the statute, to the sense
in which it was acted on by
Page 74 U. S. 258
the people, who paid and received those notes in discharge of
contracts for incalculable millions of dollars, where gold dollars
alone had been in contemplation of the parties, and to the
decisions of the highest courts of fifteen states in the Union,
being all that have passed upon the subject.
As I have no doubt that it was intended by those acts to make
the notes of the United States to which they applied a legal tender
for all private debts then due, or which might become due on
contracts then in existence, without regard to the intent of the
parties on that point, I must dissent from the judgment of the
Court, and from the opinion on which it is founded.
[
See the
74 U. S. ]