The decisions
Hartman v. Greenhow, 102 U.
S. 672;
Antoni v. Greenhow, 107 U.
S. 769;
Virginia Coupon Cases, 114 U.
S. 269;
Barry v. Edmunds, 116 U.
S. 550;
Chaffin v. Taylor, 116 U.
S. 567;
Royall v. Virginia, 116 U.
S. 572;
Sands v. Edmunds, 116 U.
S. 585;
Royall v. Virginia, 121 U.
S. 102;
In re Ayers, In re Scott and
In re
McCabe, 123 U. S. 443, are
reviewed, and, without committing the Court to all that has been
said or even all that has been adjudged in those cases on the
subject of the Act of the Legislature of Virginia of March 30,
1871, to provide for the funding and payment of the public debt,
and the issue of coupon bonds of the state under its provisions, it
is now
held:
(1) That the provisions of the act of 1871 constitute a contract
between the Commonwealth of Virginia and the lawful holders of the
bonds and coupons issued under and in pursuance of said
statute.
(2) That the various acts of the Assembly of Virginia passed for
the purpose of restraining the use of said coupons for the payment
of taxes and other dues to the state and imposing impediments and
obstructions to that use, and to the proceedings instituted for
Page 135 U. S. 663
establishing their genuineness do in many respects materially
impair the obligation of that contract, and cannot be held to be
valid or binding insofar as they have that effect.
(3) That no proceedings can be instituted by any holder of said
bonds or coupons against the Commonwealth of Virginia, either
directly by suit against the commonwealth by name or indirectly
against her executive officers to control them in the exercise of
their official functions as agents of the state.
(4) That any lawful holder of the tax receivable coupons of the
state issued under the act of 1871 or the subsequent act of 1879,
who tenders such coupons in payment of taxes, debts, dues, and
demands due from him to the state, and continues to hold himself
ready to tender the same in payment thereof, is entitled to be free
from molestation in person or goods on account of such taxes,
debts, dues or demands, and may vindicate such right in all lawful
modes of redress by suit to recover his property, by suit against
the officer to recover damages for taking it, by injunction to
prevent such taking where it would be attended with irremediable
injury, or by a defense to a suit brought against him for his taxes
or the other claims standing against him; that no conclusion short
of this can be legitimately drawn from the series of decisions
reviewed by the Court without wholly overruling that rendered in
the
Coupon Cases and disregarding many of the rulings in
other cases, which the Court would be very reluctant to do, and
that to this extent, the Court feels bound to yield to the
authority of its prior decisions whatever may have been the former
views of any member of the Court.
In
McGahey v. Virginia, Bryan v. Virginia, and
Cooper v. Virginia, it is now
held:
(1) That the provision in the Act of the General Assembly of
Virginia of January 26, 1886, which imposes upon the taxpayer the
duty of producing the bond from which the coupons tendered by him
in payment of taxes were cut at the time of offering the coupons in
evidence in court, is an unreasonable condition, in many cases
impossible to be performed, so onerous and impracticable as not
only to affect but to destroy the value of the instruments in the
hands of the holder who had purchased them, and is repugnant to the
Constitution of the United States.
(2) That the provision in the act of that Assembly of January
21, 1886, which prohibits expert testimony in establishing the
genuineness of coupons so offered in evidence, is in like manner
unconstitutional.
(3) That it is questionable whether the act of that assembly of
May 8th, 1887, which authorizes and requires a suit to be brought
against the taxpayer who tenders payment of his taxes in coupons,
as well as the acts which require their rejection, are not laws
impairing the obligation of the contract.
In
Ellett v. Virginia, it is
held that in
tendering coupons in payment of a
Page 135 U. S. 664
judgment recovered by the state for taxes and costs of suit, the
taxpayer is entitled to tender coupons in payment of the costs, as
well as of the taxes.
In
Cuthbert v. Virginia, it is
held that the
special license required by the Act of March 15, 1884, as amended
by the Act of May 23, 1887, for the right to offer tax-receivable
coupons for sale was a material interference with their
negotiability, and impaired the contract.
In
Brown's Case, it is
held that whether the
passage of a new statute of limitations, giving a shorter time for
the bringing of actions than had existed before, as applied to
actions which had accrued, so affected the remedy as to impair the
obligations of the contract within the meaning of the Constitution,
depends upon whether a reasonable time is given for bringing such
actions; that no one rule can be laid down for determining as to
all cases alike whether the time allowed was or was not reasonable;
that that fact must depend upon the circumstances in each case; and
that under the circumstances of this case and the peculiar
condition of the securities in question, the limitation prescribed
by ยง 415 of the Code of Virginia of 1887 with regard to the
obligations of the state is unreasonable, and impairs the
obligations of the contract.
In
Hucless v. Childrey, it is
held that the
requirement by the laws of Virginia that the tax for a license to
sell, by retail, wine, spirits, and other intoxicating liquors
shall be paid in lawful money of the United States does not impair
the obligation of the contract made by the state with the holders
of the coupons of its bonds that they shall be received in payment
of taxes.
In
Vashon v. Greenhow, it is
held that the
statute of Virginia requiring the school tax to be paid in lawful
money of the United States was valid notwithstanding the provision
of the act of 1871, and was not repugnant to the Constitution of
the United States.
These cases, all of which grew out of the legislation of the
State of Virginia regarding its tax-receivable coupons, were argued
together, and, although having distinguishing features, it has been
found by the Court more convenient to treat them together in this
opinion.
MR. JUSTICE BRADLEY, on behalf of the Court, prefaced the cases
in detail by a general review of the previous action of the Court
in this matter. He said:
These cases, like the
Virginia Coupon Cases, decided in
April, 1885, and reported in
114 U. S. 269, and
like
Barry f. Edmunds and other cases argued at the same
time, decided in February, 1886, and reported in
116 U.
S. 550, etc., arise upon certain tax-receivable coupons
attached to bonds of the State
Page 135 U. S. 665
of Virginia issued in reduction and liquidation of the state
debt under the acts of March 30, 1871, and March 28, 1879. The
present appeals are a continuation of the controversy arising upon
said coupons as receivable and tendered in payment of taxes and
other state dues.
The origin of these bonds and coupons has been fully explained
in former cases, but the proper disposition of the cases now to be
considered will be greatly facilitated by presenting a connected
resume of the legislative acts relating to and affecting the said
securities and of the decisions heretofore made in reference to
said acts.
The state debt of Virginia amounted, prior to the late civil
war, to more than thirty millions of dollars. After the war, it
became a matter of great importance to arrange this debt in such
manner as to bring it within the control and means of the state.
West Virginia had recently been separated from the parent state and
had participated in the advantages of the money raised by the issue
of the state securities. It was supposed by those who were best
qualified to know the facts that at least one-third of the state
resources was lost by this excision of territory, and the
Legislature of Virginia deemed it nothing more than equitable that
the new state should bear one-third of the state debt. A
proposition was therefore made to the bondholders of the state to
receive two-thirds of the amount due them in new bonds payable
thirty-four years after date, with coupons attached thereto
receivable, after becoming due, in payment of taxes and other
claims and demands due to the state. This scheme was formulated by
the Act of March 30, 1871, entitled "An act to provide for the
funding and payment of the public debt," and was acquiesced in by
the public creditors, or the great majority of them, who accepted
and received the bonds provided for in the act, which were looked
upon as a favorite security in consequence of the value attached to
the coupons as legal tender instruments in the payment of taxes and
public dues. The act, amongst other things, provided as
follows:
"SECTION 2. The owners of any of the bonds, stocks or interest
certificates heretofore issued by this state which are
recognized
Page 135 U. S. 666
by its constitution and laws as legal [except certain specific
securities named] may fund two-thirds of the amount of the same,
together with two-thirds of the interest due or to become due
thereon to the first day of July, 1871, in six percentum coupon or
registered bonds of this state . . . to become due and payable in
thirty-four years after date, but redeemable . . . after ten years,
the interest to be payable semiannually on the first days of
January and July in each year. The bonds shall be made pay able to
order or bearer and the coupons to bearer, and registered bonds
payable to order may be exchanged for bonds payable to bearer, and
registered bonds may be exchanged for coupon bonds, or
vice
versa at the option of the holder. The coupons shall be
payable semiannually, and be receivable at and after maturity for
all taxes, debts, dues and demands due the state, which shall be
expressed on their face. . . ."
Provision was made in the third section of the act for the issue
of certificates for one-third part of the debt which was not funded
in said bonds, the payment of which certificates it was declared
would be provided for in accordance with such settlement as should
thereafter be had between the states of Virginia and West Virginia
in regard to the public debt of the state existing at the time of
its dismemberment.
By the fourth section, the treasurer was authorized and directed
to cause to be prepared engraved or lithographed, registered bonds
and bonds with coupons, and certificates of the character mentioned
in the second and third sections, and, when prepared, to commence
the issuance of the same. It was further enacted that the bonds and
certificates should be signed by the treasurer and countersigned by
the auditor; that the coupons should be signed by the treasurer, or
that a facsimile of his signature should be stamped or engraved
thereon. The bonds were to be issued in series, and those of each
series to be numbered from one upwards, as issued, and the coupons,
in addition to the number of the bond to which they were attached,
were to be numbered from one to sixty seven. The surrendered bonds
were to be cancelled and deposited in the office of the state
treasurer.
Page 135 U. S. 667
By section 5, certain assets belonging to the state, when
realized or converted into money, were to be paid into the treasury
to the credit of a sinking fund created for the purchase and
redemption of the bonds issued under the act, and, after 1880,
inclusive, a tax of two cents on a hundred dollars of the assessed
valuation of all property in the state was to be applied in like
manner. The treasurer, the auditor of public accounts, and second
auditor were appointed commissioners of the sinking fund.
It has always been contended on the part of the bondholders that
this statute created a contract between them and the state, firm
and inviolable, which the legislature had no constitutional right
to violate or impair, and such was, for several years, the uniform
holding of the Supreme Court of Appeals of Virginia.
See Antoni
v. Wright, 22 Grattan, 833, November term, 1872;
Wise v.
Rogers, 24 Grattan 169;
Clarke v. Tyler, 30 Grattan
134. A different view, however, has since been taken by the Court
of Appeals, which now holds that the act of 1871 was
unconstitutional from its inception, being repugnant to certain
provisions of the constitution of the state adopted in 1869. An
elaborate argument to this effect is contained in the opinion of
the court tendered in one of the cases now before us,
Vashon v.
Greenhow, decided January 14, 1886. In ordinary cases, the
decision of the highest court of a state with regard to the
validity of one of its statutes would be binding upon this Court,
but where the question raised is whether a contract has or has not
been made the obligation of which is alleged to have been impaired
by legislative action, it is the prerogative of this Court, under
the Constitution of the United States and the acts of Congress
relating to writs of error to the judgments of state courts, to
inquire and judge for itself with regard to the making of such
contract, whatever may be the views or decisions of the state
courts in relation thereto.
The decisions of this Court, therefore, in reference to the
question whether a valid contract was made by the statute in
question between the State of Virginia and the holders of the bonds
authorized by said act, are to be considered as binding
Page 135 U. S. 668
upon us, although a contrary view may have been taken by the
courts of Virginia, and in view of this principle of constitutional
law and of the decisions made by this Court, we have no hesitation
in saying that the act of 1871 was a valid act, and that it did and
does constitute a contract between the state and the holders of the
bonds issued under it, and that the holders of the coupons of said
bonds, whether still attached thereto or separated therefrom, are
entitled, by a solemn engagement of the state, to use them in
payment of state taxes and public dues. This was determined in
Hartman v. Greenhow, 102 U. S. 672,
decided in January, 1881; in
Antoni v. Greenhow,
107 U. S. 769,
decided in March, 1883; in the
Virginia Coupon Cases,
114 U. S. 269,
decided in April, 1885, and in all the cases on the subject that
have come before this Court for adjudication. This question
therefore may be considered as foreclosed and no longer open for
consideration. It may be laid down as undoubted law that the lawful
owner of any such coupons has the right to tender the same after
maturity in absolute payment of all taxes, debts, dues, and demands
due from him to the state. The only question of difficulty which
can arise in any case is as to the mode of relief which the owner
of such coupons is entitled to in case they are refused when
properly tendered in making his payment or as to the cases which
may be excepted from the operation of his right.
For, almost from the start, the Legislature of Virginia has from
time to time enacted various laws calculated to embarrass the
holders of said coupons in the free use of them for the payment of
taxes and other dues. As early as March, 1872, an act was passed
prohibiting the officers charged by law with the collection of
taxes from receiving in payment anything else than gold and silver
coin, United States treasury notes, and notes of the national
banks, and repealing all other acts inconsistent therewith. This
law was under consideration in the case of
Antoni v.
Wright, 22 Grattan 833, before referred to, and the Supreme
court of Appeals of Virginia decided that in issuing these bonds,
the state entered into a valid contract with all persons taking the
coupons to
Page 135 U. S. 669
receive them in payment of taxes and state dues, and that the
act of 1872, so far as it conflicted with this contract, was
void.
In
Clarke v. Tyler, 30 Grattan 134, decided in 1878, it
was said that this decision in
Antoni v. Wright "must be
held to be the settled law of this state."
By an act passed March 25, 1873, it was declared that every
officer charged with the collection of taxes should deduct from the
matured coupons which might be tendered to him in payment of taxes
or other dues to the state the tax upon the bonds from which the
coupons were cut, which tax was declared to be fifty cents on the
hundred dollars market value of said bonds. This law was repeated
in the act of 1876, and bore oppressively upon the holders of the
coupons, inasmuch as it compelled them to pay the tax due on bonds
of which they were not the owners, and of the owners of which they
had no knowledge. It was a clear impairment of the obligation of
the contract with the holders of the coupons. The validity of this
act came before this Court for consideration in the case of
Hartman v. Greenhow, 102 U. S. 672,
102 U. S. 685,
and it was held to be unconstitutional. MR. JUSTICE FIELD, speaking
for the Court in that case, said:
"We are clear that this act of Virginia of 1876 requiring the
tax on her bonds issued under the funding Act of March 30, 1871, to
be deducted from the coupons originally attached to them, when
tendered in payment of taxes or other dues to the state, cannot be
applied to coupons separated from the bonds and held by different
owners, without impairing the contract with such bondholders
contained in the funding act, and the contract with the bearer of
the coupons."
By an Act of the Legislature of Virginia approved on the 28th of
March, 1879, another plan for the settlement of the public debt was
promulgated. By the first section it was enacted,
"That to provide for funding the debt of the state, the governor
is hereby authorized to create bonds of the state, registered and
coupon, dated the 1st day of January, 1879, the principal payable
forty years thereafter, bearing interest at the rate of three
percent per annum for ten years, and at the
Page 135 U. S. 670
rate of four percentum per annum for twenty years, and at the
rate of five percentum for ten years, payable in the Cities of
Richmond, New York, or London, as hereinafter provided, on the 1st
days of July and January of each year, until the principal is
redeemed. . . . The coupons on said bonds shall be receivable at
and after maturity for all taxes, debts, dues, and demands due the
state, and this shall be expressed on their face. The holder of any
registered bond shall be entitled to receive from the treasurer of
the state a certificate for any interest thereon due and unpaid,
and such certificate shall be receivable, etc. All obligations
created under this act shall be forever exempt from all taxation,
direct or indirect, by the state or by any county or corporation
therein, and this shall be expressed on the face of the bonds. . .
. The bonds hereby authorized shall be issued only in exchange for
the outstanding debt of the state, as hereinafter provided."
Bonds were issued under this act in conformity with its
requirements, and some of the coupons thereon are the subject of
controversy in one or more of the suits now before us for
consideration. The questions relating to their receivability for
taxes and other public dues, and to the validity of subsequent laws
passed in derogation or obstruction thereof, are the same as those
which arise under like circumstances upon the coupons of the bonds
issued under the act of 1871.
At the session of the General Assembly held in 1882, still
another scheme for funding and reducing the state debt was
formulated by an act approved February 14th of that year which
specified the amount of each class of indebtedness supposed to be
obligatory upon the State of Virginia in relation to the
corresponding obligation of the State of West Virginia, and the
rate of percentage at which new bonds were proposed to be issued to
the public creditors according to the different classes of the
debts. These new bonds were to be dated July 1, 1882, and payable
July 1, 1892, with interest at three percent per annum. The
commissioners of the sinking fund were authorized to issue them
either as registered or coupon bonds, but no security was proposed
for the payment of the bonds or coupons except the pledged faith of
the state. This
Page 135 U. S. 671
act was called the "Riddleberger Act," and was declared to be
the final proposition which the state would make to its creditors.
Of course, it was not to be expected that those who held bonds
issued under the acts of 1871 or 1879, with coupons invested with
the quality of legal tender for the payment of taxes and other
public dues, would willingly surrender their bonds in exchange for
the bonds to be issued under the Riddleberger Act, and for the
purpose, apparently, of creating motives to induce such bondholders
to make the exchange, several ancillary bills were passed at the
same session, calculated to discourage and hamper the use of the
tax paying coupons of 1871 and 1879. One of these bills, approved
the 14th of January, 1882, recited in full in
Antoni v.
Greenhow, 107 U.S.
107 U. S.
771-774, required that whenever any taxpayer should
tender to any person whose duty it was to collect or receive taxes,
debts, or demands due the commonwealth, any papers purporting to be
coupons detached from bonds of the commonwealth issued under the
act of 1871 in payment of any such taxes, debts, and demands, the
person to whom such papers were tendered should receive the same,
giving the party tendering a receipt stating that he had received
the same for the purpose of identification and verification, but
that he should at the same time require such taxpayer to pay his
taxes in coin, legal tender notes, or national bank bills, and give
him a receipt therefor. In case of his refusal to pay, the taxes
should be collected as all other delinquent taxes were collected.
The act then provided for a proceeding in the county court or
hustings court of the city to ascertain whether the coupons
tendered were genuine legal coupons receivable for dues or not.
This proceeding was to be instituted by the petition of the
taxpayer, and defended by the commonwealth's attorney, and the
matter was to be tried by jury. If the decision should be in favor
of the taxpayer, the judgment was to be certified to the treasurer,
who thereupon was required to receive the coupons for taxes and
refund the money paid by the taxpayer out of the first money in the
treasury. The law further provided that if any taxpayer should
apply for a mandamus to compel the collector to receive his coupons
for taxes, a similar proceeding should take
Page 135 U. S. 672
place for the purpose of ascertaining the identity and validity
of the coupons, and, when found to be genuine, a mandamus might
issue. The suggestion upon which this law was based, as recited in
the preamble thereof, was that many spurious, stolen, and forged
bonds were in circulation, which made it imprudent to receive
coupons in payment of taxes without an investigation first had with
regard to their genuineness and validity. It is apparent that such
a cumbrous mode of proceeding was a very awkward substitute, so far
as the taxpayer was concerned, for the reception of his coupons as
so much money when presented.
Another act, approved on the 26th of January, 1882, provided
that in case of proceedings instituted against a taxpayer for the
collection of his tax notwithstanding his tender of coupons in
payment thereof, he should be authorized to pay the tax under
protest in lawful money, and might within thirty days thereafter
sue the officer for the amount and, if it should be determined that
it was wrongfully collected, the amount should be returned, and it
was declared that no writ of injunction, supersedeas, mandamus,
prohibition, or other writ whatever should be issued to hinder or
delay the collection of tax.
Another act, approved on the 7th of April in the same year,
changed the general law of mandamus to coincide with the provisions
of the act of January 26th.
The validity of these acts came before this Court for
consideration in the case of
Antoni v. Greenhow, and the
question in that case was whether they so far affected the remedy
of the holder of coupons as to impair the obligation of the
contract made by the state to receive them for taxes and other
dues. This was the general question presented, although it is true
that the particular question in that case was whether the
proceeding by mandamus to compel the acceptance of the coupons in
payment of taxes and other dues was unconstitutionally obstructed.
The case was instituted by Antoni, a taxpayer, by a petition to the
Supreme Court of Appeals of Virginia for a mandamus against
Greenhow, the Treasurer of the City of Richmond, to compel him to
accept a coupon tendered
Page 135 U. S. 673
by the petitioner in part payment of his taxes. The treasurer
answered that he was ready to receive the coupon as soon as it had
been legally ascertained to be genuine, and by law receivable,
referring, of course, to the law as it then stood, prescribing the
special proceedings before mentioned for ascertaining the
genuineness and validity of coupons. To this answer a demurrer was
filed. Upon the hearing, the court was equally divided on the
questions involved, and denied the writ. The judgment was brought
by writ of error to this Court, and the precise question was
whether the acts of 1882 unconstitutionally impeded the remedy by
mandamus. The court, in discussing the question, discussed the
general effect of the said statutes, and came to the conclusion
that they did not interpose any material obstructions to the
proceeding, so as to be obnoxious to the charge of impairing the
obligation of the contract.
Under all the obstacles with which the holders of coupons now
had to contend in utilizing those instruments in the payment of
taxes and public dues (the only way in which any satisfaction
thereof could be obtained), they still succeeded in disposing of
many of them, and more stringent legislation was finally resorted
to, for the evident purpose of suppressing their use altogether. In
the session of 1884, several acts of the General Assembly were
passed to this end. By an act approved March 12, 1884, it was made
the duty of the attorneys for the commonwealth to defend the suits
brought by taxpayers, and, if decided against the commonwealth, to
carry the case to the higher courts by appeal; to defend all suits
brought in the federal courts, and to carry judgments against the
commonwealth or the collector of taxes by appeal to the Supreme
Court of the United States. An act approved March 13, 1884,
declared that no action of trespass or on the case should be
brought or maintained against any collecting officer for levying
upon the property of any taxpayer who had tendered in payment, in
whole or in part, any coupons cut from bonds of the state for such
taxes, and who should refuse to pay his taxes in gold, silver,
United States treasury notes, or national bank notes. Another act,
approved on the 15th of
Page 135 U. S. 674
March, 1884, required all licenses to be paid in lawful money of
the United States. Still another act, approved March 19, 1884,
required that all coupons received for taxes beyond what they would
have been exchanged for under the Riddleberger Act, should be
charged to the bond from which they were clipped as a payment on
the principal of the bond. Finally, by the tax act approved March
15, 1884, section 65, it was declared that no person should sell
tax receivable coupons from bonds of the State of Virginia without
a special license, for which privilege he should pay $1,000 for
each office or place of business kept for that purpose, and in
addition thereto a tax of twenty percentum upon the face value of
all tax receivable coupons sold by him, and should give to the
purchaser a certificate stating that he had sold such coupons to
the purchaser, naming him, and specifying the number and amount of
the coupons and date of sale; and, whenever such coupons should be
tendered for taxes, the broker's certificate should be delivered to
the collector. This section was subsequently amended by an act
passed May 23, 1887, so as to include in the prohibition not only
the selling, or offering to sell, tax receivable coupons, but the
tendering, passing, or offering to tender or pass for another any
such coupons, without a special license therefor, and the license
fee was made $1,000 for the privilege of selling, or offering to
sell, coupons in each county, city, or town of over 10,000
inhabitants, and $500 for each county, city, or town of under
10,000 inhabitants, and the privilege was confined to selling,
tendering, and passing such coupons to taxpayers residing, or
owning property subject to tax, within the county, city, or town in
which the license was obtained, and it was declared that any person
violating this provision should be deemed guilty of a misdemeanor,
and upon conviction should be fined at the discretion of a jury,
not less than $500 nor more than $2,000. Section 91 declared that
every attorney at law should pay an annual license fee of fifteen
dollars if under five years' practice, and twenty-five dollars if
over five years' practice, but that no attorney thus licensed
should be allowed to bring suit against the commonwealth, or any
treasurer or collector of
Page 135 U. S. 675
taxes, for the recovery of money for coupons tendered for taxes,
unless he took out a special license therefor, for which privilege
he should pay a specific license tax, in addition to the tax before
required, of two hundred and fifty dollars.
In April, 1885, after the passage of these various acts, the
Virginia Coupon Cases, so called, reported in
114
U. S. 266,
et seq., came before this Court for
consideration. There were eight of these cases. One of them,
Poindexter v. Greenhow, the leading case in the report,
was an action of detinue brought by Poindexter, a taxpayer, against
Greenhow, Treasurer of Richmond, for a desk of the plaintiff, of
the value of thirty dollars, seized and taken by Greenhow on the
25th or April, 1883, for the purpose of raising the taxes due from
the plaintiff after he had tendered coupons in payment thereof.
Upon an agreed statement of facts, no dispute being raised as to
the genuineness of the coupons, judgment was given in the Hustings
Court of Richmond for the defendant on the ground that the
plaintiff should have paid his tax in lawful money and pursued the
remedy pointed out in the acts of 1882. As this was the highest
court in the state in which a decision in the case could be had,
the judgment was brought by writ of error to the Supreme Court of
the United States, and the question was now directly raised whether
the restraining acts passed by the Legislature of Virginia were of
such force and validity as to prevent the taxpayer from suing the
collecting officer for taking his goods in satisfaction of taxes
after a tender of coupons for the payment thereof, without adopting
the proceedings required by the said acts. This Court held that the
acts were unconstitutional so far as they prohibited the collector
or receiver of the taxes from accepting coupons issued under the
act of 1871 in payment of taxes, according to the contract
contained in said act, and imposed upon the taxpayer the circuitous
and onerous proceeding of establishing the genuineness of his
coupons in court; that the tender of the coupons was equivalent to
the tender of legal money in payment of the tax, and exonerated the
taxpayer from further molestation in respect thereof, and that if
he continued to hold himself in readiness to pay said tax in the
coupons tendered, his
Page 135 U. S. 676
property could not lawfully be taken in satisfaction of the
same.
The Court distinguished this remedy of the taxpayer from that
which was in question in the case of
Antoni v. Greenhow in
that, in the latter case, the proceeding by mandamus alone was
under consideration, and that from of proceeding for relief was
held not to be materially obstructed by the acts of 1882, and it
was held that nothing in the decision of that case concluded the
rights of taxpayers and coupon holders in reference to other
remedies which the law gave them for the unlawful seizure of their
property in satisfaction of the tax, after having duly tendered
coupons in payment thereof. Therefore, without expressly overruling
the case of
Antoni v. Greenhow, the Court decided that the
acts referred to were unconstitutional so far as they had the
effect of depriving the taxpayer of his remedy by detinue or
trespass or case, or other proper action, for unlawful seizure of
his goods after tendering tax receivable coupons in payment of his
taxes. The judgment of the hustings court was therefore reversed.
The question was very fully and elaborately discussed by MR.
JUSTICE MATTHEWS in delivering the opinion of the Court, although
there was a dissenting opinion on the part of the Chief Justice and
three of the Associate Justices.
Two other of the
Coupon Cases, White v. Greenhow and
Chaffin v. Taylor, were cases of trespass for taking the
property of the taxpayers in payment of taxes after they had
tendered coupons in payment thereof, and were in all substantial
respects similar to the case of
Poindexter v. Greenhow,
and were decided in the same way. In one of them (
Chaffin v.
Taylor), the Act of March 13, 1884, which expressly forbids an
action of trespass or case against a collecting officer, was
referred to and relied on by the defendant in the action.
A fourth case, that of
Baltimore & Ohio Railroad
Co., Auditor of Accounts of the State of Virginia, was a bill
for injunction, filed in the circuit court of the United States, to
prevent the defendant from seizing the cars and other personal
property of the complainant in satisfaction of taxes alleged to be
due, for the payment of which the railroad company had
Page 135 U. S. 677
tendered tax-paying coupons. An injunction was granted by the
circuit court to prevent the seizure of the complainant's property,
and the decree was affirmed by this Court upon the same grounds
which were taken in the case of
Poindexter v.
Greenhow.
The fifth case (
Carter v. Greenhow) was an action
brought in the circuit court of the United States, and founded upon
section 1979 of the Revised Statutes of the United States, by which
every person who, under color of any statute, etc., of any state or
territory, subjects a citizen of the United States, or other person
within the jurisdiction thereof, to the deprivation of any rights,
privileges, or immunities secured by the Constitution and laws of
the United States shall be liable to the party injured in an action
at law, suit in equity, or other proper proceeding for redress. The
plaintiff in said action set forth that in May, 1883, he tendered
certain tax paying coupons of the state in payment of taxes due
from him to the defendant Greenhow, Treasurer of the City of
Richmond, who refused to receive the same in payment, and
unlawfully entered upon plaintiff's premises, and seized and took
certain property of the plaintiff to sell the same in payment of
said taxes; that the plaintiff had a right under the Constitution
of the United States to pay his said taxes in the coupons referred
to, and the defendant refused to receive the same under the color
of, and by the command of, the Act of Assembly of the State of
Virginia, approved January 26, 1882, which forbids collectors of
taxes due the state to receive in payment thereof anything except
gold, silver, etc., and that he levied on said property under the
command of the eighteenth section of another Act of Assembly
approved April 1, 1879, and of other statutes enacted by the
General Assembly of the State of Virginia, which statutes he
alleged to be repugnant to the Constitution of the United States
and void. The amount of damages claimed in the action was less than
$500, and therefore was not within the jurisdiction of the circuit
court of the United States unless it should be sustained by the
section of the Revised Statutes referred to. Judgment was given for
the defendant, and was affirmed by this Court on the ground
Page 135 U. S. 678
that the case did not come within section 1979 because the right
claimed was not one of the rights referred to in that section.
The sixth case,
Pleasants v. Greenhow, was a bill for
injunction, filed in the circuit court of the United States, to
restrain the defendant Greenhow from levying on plaintiff's
property for taxes after coupons were tendered therefor. The amount
of taxes being less than $500, relief was prayed for on the same
ground of deprivation of rights which was preferred as the cause of
action in the case of
Carter v. Greenhow. The bill was
dismissed by the circuit court, and its decree was affirmed by this
Court for the same reason which prevailed in that case.
The seventh case was
Marye v. Parsons. Parsons, a
citizen of New York, filed a bill in equity in the circuit court of
the United States against Marye, Auditor of the Commonwealth of
Virginia; Greenhow, Treasurer of the City of Richmond; Hill,
Treasurer of the City of Norfolk; Dunnington, Treasurer of the City
of Lynchurg; Munford, Commissioner of Revenue of Richmond; Price,
Commissioner of Lynchurg, and Langley, Commissioner of Norfolk. He
alleged that he was the owner of a large amount of coupons cut from
bonds of Virginia issued under the act of 1871 and receivable by
that act in payment for taxes, debts, and demands due the state, a
list of which coupons was appended to the bill. He claimed that
they constituted a contract with the state, and, after setting
forth the laws which had been passed by the State of Virginia for
preventing or interfering with the use of such coupons in the
payment of taxes and other state dues, which laws he alleged to be
unconstitutional and void, he prayed that the defendants, as
officers of the state, might be compelled specifically to perform
the contract of the state with regard to said coupons and to
receive them in payment of taxes and other dues, and that a
mandatory injunction for that purpose might be issued. The
defendants filed a demurrer, plea, and answer to the bill, and a
perpetual injunction, as prayed for, was awarded by the circuit
court. The complainant did not allege that he owed
Page 135 U. S. 679
any taxes or other demands to the State of Virginia for which he
had offered coupons in payment, but his ground of action was that
the coupons held by him were valueless so long as the officers of
the state, in obedience to its laws, refused to receive such
coupons in payment of taxes, and hence he sought the relief prayed
for in his bill. This Court reversed the decree of the circuit
court, holding that the injury complained of was of an abstract
nature,
damnum absque injuria, and that the bill should
have been dismissed on that ground, and that none but taxpayers, or
those who are indebted to the state upon some other claim or
demand, are in a position to complain of the refusal of the
officers of the state to receive coupons in payment of such taxes
and demands.
The remaining case was that of
Moore v. Greenhow, being
a petition for a mandamus to compel the defendant to receive
coupons in payment of a license tax as a sample merchant, the
petitioner not having pursued the course pointed out by the Act of
January 14, 1882, for establishing the genuineness of the coupons
tendered by him. The petition was denied by the Circuit Court of
Richmond, and its decision was affirmed, in conformity with the
conclusion arrived at in the case of
Anotoni v. Greenhow,
that the Act of January 14, 1882, as applicable to the remedy of
mandamus, did not violate the Constitution of the United
States.
Several other coupon cases came before this Court in October
term, 1885, and were decided in February, 1886. They were
Barry
v. Edmunds,;
Chaffin v. Taylor, 116 U.
S. 567;
Royall v. Virginia, 116 U.
S. 572, and
Sands v. Edmunds, 116 U.
S. 585. These cases do little more than repeat the views
of the Court contained in the coupon cases decided in the previous
year, except perhaps in deciding, in the case of
Royall v.
Virginia, that the license tax of a practicing lawyer was a
tax within the meaning of the act of 1871, and payable in coupons
attached to bonds issued under that act.
In another case,
Royall v. Virginia, 121 U.
S. 102, it appeared that an information was filed
against Royall for practicing as a lawyer without first having
obtained a revenue license. He pleaded payment of the license fee
partly in a
Page 135 U. S. 680
coupon cut from a bond issued under the act of 1871, and partly
in cash. The commonwealth demurred to this plea, and it was held
that the demurrer admitted that the coupon was genuine, and bore on
its face the contract of the state to receive it in payment of
taxes, etc., and that this showed a good tender, and brought the
case within the ruling in
Royall v. Virginia, 116 U.
S. 572.
In the session of the General Assembly of Virginia of 1886,
several additional acts were passed, all having for object the
imposition of further obstructions and impediments in the way of
using the tax-paying coupons. An enumeration of these acts, with a
general indication of their purport, is all that it is necessary to
state. By the Act of January 21, 1886, it was declared that expert
evidence shall not be received of the genuineness of any paper or
instrument made by machinery, or in any other manner than by the
actual or personal handwriting of the party to be charged, or his
agent. By the Act of January 26, 1886, it was declared that, in the
trial of any issue involving the genuineness of a coupon purporting
to have been cut from any bond authorized by law to be issued by
the state, or by any city, county, or corporation, the defendant
may demand the production of the bond, and thereupon it shall be
the duty of the plaintiff to produce such bond, with proof that the
coupon was actually cut therefrom. On the same day, another act was
passed, declaring that any person who shall solicit or induce any
suit or action to be brought against the State of Virginia, or any
citizen thereof, by verbal representations or by writing or
printing, shall be deemed guilty of the offense of champerty, and
subject to fine and imprisonment. By the Act of March 1, 1886, it
was declared that any person licensed to practice law in Virginia
who shall solicit or induce any suit or action to be brought
against the state, or any citizen thereof, by verbal
representations, or by writing or printing, shall be deemed guilty
of barratry, and, if found guilty, it is made the duty of the court
to revoke his license, and disbar him forever from practicing law
in the commonwealth. By an Act of March 4, 1886, it was declared
that all license fees required for the transaction of any
business
Page 135 U. S. 681
in the state shall be paid in coin, legal tender notes, or
national bank bills, and if coupons shall be tendered in payment
thereof, they shall be received by the officer for identification
by the proceedings prescribed in the act of 1882, but no license
shall issue to the applicant, nor shall he have the right to
conduct business or pursue his profession until said coupons have
been verified in the manner prescribed by said act, and by another
act, passed February 27, 1886, it was declared that after the 1st
day of July, 1888, no petition shall be filed or other proceeding
instituted to try the question whether any paper purporting to be a
coupon detached from any bond of the state is genuine, and legally
receivable for taxes and other state dues, except within one year
from said 1st day of July, 1888, if such coupon first became
receivable prior to that time, and within one year from the time
the coupon becomes receivable, if it becomes receivable after that
date. This law became incorporated in the Code of 1887 as ยง 415.
Finally, as, according to the decisions of this Court in 1885 and
1886, the collecting officers were liable to action for proceeding
against the property of the taxpayers who had tendered coupons in
payment of their taxes, on the 12th of May, 1887, an act was passed
authorizing suits to be brought against such taxpayers for taxes
due from them, which suits were to be in the name of the
commonwealth, and to be commenced by a notice served on the party
liable for the tax, or on the agent of such party who may have
tendered the coupons. It the defendant relies upon the tender of
coupons as payment, he shall plead the same specifically in
writing, and file the coupons tendered with the clerk, and the
burden of proving the tender and genuineness of the coupon shall be
on the defendant. If established, the judgment shall be for the
defendant on the plea of tender. If the defendant fail in his
defense, there shall be judgment for the commonwealth for the taxes
due, and interest and costs, and execution shall issue thereon as
in other cases, and if judgment be against the defendant, a fee of
ten dollars is allowed to the attorney for the commonwealth as part
of the costs in the case, but the commonwealth is not to be liable
for any fees or costs. The act is set forth in full in the case
In re Ayers, 123 U. S.
451.
Page 135 U. S. 682
Since the passage of this act, the cases
In re Ayers, In re
Scott, and
In re McCabe, 123 U.
S. 443, have come before this Court for consideration.
They were decided in December, 1887. These cases came before us on
applications for habeas corpus directed to the Marshal of the
United States for the Eastern District of Virginia, who held the
applicants -- one of them the Attorney General of Virginia, another
the auditor of the state, and the third the commonwealth's attorney
for Loudoun County -- who had been committed for contempt by the
circuit court of the United States for disobedience to a
restraining order. The case in which said order was made was this:
James P. Cooper and others, subjects of Great Britain, filed their
bill of complaint in the circuit court of the United States for the
District aforesaid against Marye, Auditor of the State of Virginia,
Ayers, Attorney General thereof, and the treasurers of counties,
cities, and towns in the state, and the commonwealth's attorneys of
counties, cities, and towns therein, in which bill it was alleged,
among other things, that the complainants, on the faith of the
decisions of this Court that the State of Virginia could not impair
the value of the coupons issued under the acts of 1871 and 1879 as
a tender for taxes, had bought a large quantity of said coupons in
open market in London and elsewhere, amounting to more than
$100,000, for the purpose of selling said coupons to the taxpayers
of Virginia, believing that they would be able to sell them at
considerable advance. The bill then set forth the act of assembly
of May 12, 1887, authorizing and requiring suits to be brought in
the name of the commonwealth against taxpayers who should have
tendered coupons in payment of their taxes. It further alleged that
this act is repugnant to the Constitution of the United States for
the reason that, taken in connection with the Act of January 26,
1882, it first commands the state's officers to refuse to receive
those coupons, and then commands them to bring suits against those
who have tendered them, as well as against those who have tendered
spurious coupons; that it imposes upon the defendants heavy costs
and fees, etc. It further set out the provisions of various other
acts, before referred to, tending to
Page 135 U. S. 683
embarrass the holders of coupons in the use of the same, and in
the proceedings for establishing their genuineness. The bill prayed
that the defendants might be restrained and enjoined from bringing
or commencing any suit provided for by the said Act of May 12,
1887, or from doing any other act to put said statute into force
and effect, and that until the hearing of a motion for said
injunction, a restraining order might be made to that effect. A
restraining order was accordingly made by the court in pursuance of
the prayer of the bill, and it was for disobedience to this order
that the parties in the cases of
Ayers, Scott, and
McCabe were committed for contempt. This Court, after a
very full and careful examination of the questions arising in the
cases, decided that the suit of Cooper and others against Marye,
Ayers, and others, in which the said restraining order and order of
commitment for contempt were made, was virtually, and in effect, a
suit against the State of Virginia, and therefore in violation of
the Eleventh Amendment of the Constitution of the United States,
which declares that the judicial power of the United States shall
not be construed to extend to any suit in law or equity commenced
or prosecuted against one of the United States by citizens of
another state, or by citizens or subjects of any foreign state, and
the judgment of the court was that the circuit court had no
jurisdiction to entertain said suit, and that its acts and
proceedings were void, and the petitioners, Ayers, Scott, and
McCabe were discharged. The cases in which the question has been
considered in this Court as to when a proceeding against the
officers of a state may be considered as a proceeding against the
state itself, or only as a proceeding against the officers for a
violation of a clear duty imposed upon them by law, were carefully
reviewed and distinguished in the elaborate opinion of the court
delivered by MR. JUSTICE MATTHEWS, and may be referred to as
throwing much additional light upon that vexed and interesting
question, but it is particularly referred to here, in connection
with the other cases cited, for the purpose of showing the
conditions, circumstances, and aspects in which the questions
arising on these tax paying coupons have presented themselves to
the court.
Page 135 U. S. 684
Without committing ourselves to all that has been said or even
all that may have been adjudged in the preceding cases that have
come before the Court on the subject, we think it clear that the
following propositions have been established:
First. That the provisions of the act of 1871 constitute a
contract between the State of Virginia and the lawful holders of
the bonds and coupons issued under and in pursuance of said
statute.
Second. That the various acts of the assembly of Virginia passed
for the purpose of restraining the use of said coupons for the
payment of taxes and other dues to the state, and imposing
impediments and obstructions to that use, and to the proceedings
instituted for establishing their genuineness, do in many respects
materially impair the obligation of that contract, and cannot be
held to be valid or binding insofar as they have that effect.
Third. That no proceedings can be instituted by any holder of
said bonds or coupons against the Commonwealth of Virginia, either
directly, by suit against the commonwealth by name, or indirectly,
against her executive officers, to control them in the exercise of
their official functions as agents of the state.
Fourth. That any lawful holder of the tax receivable coupons of
the state issued under the act of 1871, or the subsequent act of
1879, who tenders such coupons in payment of taxes, debts, dues,
and demands due from him to the state and continues to hold himself
ready to tender the same in payment thereof is entitled to be free
from molestation in person or goods on account of such taxes,
debts, dues, or demands, and may vindicate such right in all lawful
modes of redress -- by suit to recover his property, by suit
against the officer to recover damages for taking it, by injunction
to prevent such taking where it would be attended with irremediable
injury, or by a defense to a suit brought against him for his taxes
or the other claims standing against him. No conclusion short of
this can be legitimately drawn from the series of decisions which
we have above reviewed without wholly overruling that rendered in
the
Virginia Coupon Cases and disregarding many of the
rulings
Page 135 U. S. 685
in other cases, which we should be very reluctant to do. To the
extent here announced, we feel bound to yield to the authority of
the prior decisions of this Court, whatever may have been the
former view of any member of the Court.
There may be exceptional cases of taxes, debts, dues, and
demands due to the state which cannot be brought within the
operation of the rights secured to the holders of the bonds and
coupons issued under the acts of 1871 and 1879. When such cases
occur, they will have to be disposed of according to their own
circumstances and conditions.
It was earnestly contended in the dissenting opinion in the
Coupon Cases that the defense of a tender of coupons set
up by a taxpayer, when prosecuted for the payment of his taxes, was
in the nature of a set-off, and could not be enforced against a
state any more than a suit could be prosecuted against it -- in
other words, that a set-off is in reality a cross-suit, and as such
subject to the prohibition of the Eleventh Amendment. But the
majority of the Court held, and perhaps with better reason, that
where a set-off or counterclaim is made by virtue of an agreement
or contract between the parties, it no longer has the character of
a mere set-off, but becomes attached to the primary claim as
pro tanto a defeasance thereof. At all events, such was
the decision of the Court, and it is not our purpose to question
the authority of that decision so far as it may apply to the cases
now before us.
It remains to apply the law as we conceive it to be to the
several cases now under consideration.
Bryan v. Virginia
Cooper v. Virginia
McGahey v. Virginia
With regard to three of these cases,
Bryan v. Virginia,
Cooper v. Virginia, and
McGahey v.
Page 135 U. S. 686
Virginia, we have very little hesitation or difficulty
in coming to a conclusion. They are suits brought by the
Commonwealth of Virginia against the persons severally named under
the Act of May 12, 1887, for the recovery of taxes due from them
respectively. The proceedings in the last-named case may be
described as a sample of them all. The case was instituted in the
Circuit Court of Alexandria, Virginia, in the name of the
commonwealth by the following notice:
"To John McGahey:"
"Take notice that on the 23d day of March, 1888, in accordance
with the statutes in such cases made and provided, I shall move the
Circuit Court of Alexandria City for a judgment against you in
favor of the Commonwealth of Virginia for the sum of $12.60, with
interest on $6.40, part thereof, from the 15th day of December,
1886, till paid, and on $6.20, the residue, from December 15, 1887,
till paid, that being the sum due by you to the said Commonwealth
of Virginia for taxes, together with the penalty thereon, in
payment of which papers or instruments purporting to be coupons
detached from bonds of the State of Virginia have been tendered and
not accepted as payment, and which taxes have not been otherwise
paid, due on certain real and personal property in the City of
Alexandria, the said taxes being the same assessed according to law
by the Commonwealth of Virginia for the years 1886 and 1887 upon
the property aforesaid."
"LEONARD MARBURY"
"
For the Commonwealth of Virginia"
To this notice the defendant filed the following plea:
"For a plea in this behalf, the defendant says that the
plaintiff ought not to maintain its action because he says that
heretofore,
viz., on the 1st day of December, 1886, and on
the 1st day of December, 1887, when the taxes sued for became
respectively due and payable, and prior to the commencement of this
action in said city, he was willing and
Page 135 U. S. 687
ready to pay, and then and there tendered and offered to pay, to
the plaintiff, tax receivable coupons, then due and payable, cut
from bonds issued by the plaintiff under the Act of the General
Assembly of Virginia approved March 30, 1871, entitled 'An act to
provide for the funding and payment of the public debt,' together
with lawful money of the United States, as follows,
viz.,
for the said tax of $6.40, one (1) coupon, No. 23, cut from bond
No. 5,684, due January 1, 1883, for $3; one (1) coupon, No. 23, cut
from bond No. 4,213, due January 1, 1883, for $3, and forty cents
(40c.) lawful money of the United States."
"And for the said tax of $6.20, one (1) coupon, No. 29, cut from
bond No. 1,048, due January 1, 1886, for $3; one (1) coupon, No.
28, cut from bond No. 2,899, for $3, due July 1, 1885, and twenty
cents (20c.) lawful money of the United States, to receive which
the plaintiff then and there refused."
"And the defendant further says that always from the times when
the said taxes became respectively due and payable, hitherto, he
has been ready and willing to pay, and is still ready and willing
to pay, to the plaintiff the said tax receivable coupons and lawful
money, and he now brings into court here said coupons and lawful
money, ready to be paid to the plaintiff if it will accept the
same, and this he is ready to verify. hereupon he prays
judgment,"
etc.
Upon the issue thus joined, a trial by jury was had and a
verdict given for the commonwealth for $13.96, and judgment entered
thereon, with costs. A bill of exceptions was taken at the trial,
which shows that the defendant first moved to quash the notice of
motion and dismiss the cause on the ground that the Act of May 12,
1887, entitled "An act to provide for the recovery by motions of
taxes and certain debts due the commonwealth," etc., is repugnant
to Section 10, Article I, of the Constitution of the United States,
which motion was overruled. The defendant then, to maintain the
issue on his part, proved that when said taxes became respectively
due and payable, he tendered in payment thereof to the proper
collecting officer the coupons and lawful money described in and
filed with his plea, which coupons on their face purported to
have
Page 135 U. S. 688
been originally attached to bonds issued by the State of
Virginia under the Act of March 30, 1871, being then respectively
due and payable, and having each upon its face the following
language: "Receivable at and after maturity in payment for all
taxes, debts, and demands due the state," which said coupons and
money the officer refused to receive. The said coupons were then
offered in evidence, and are in the form following, printed wholly
from an engraved plate:
"Receivable at and after maturity for all taxes, debts, and
demands due the state. The Commonwealth of Virginia will pay the
bearer three dollars' interest, due 1st January, 1883, on bond No.
4,213. GEORGE RYE, Treasurer of the Commonwealth Virginia."
The other coupons offered were of similar form in all respects.
The defendant further proved that he never owned the bonds from
which the coupons were cut, and knew nothing whatever in respect to
their ownership; that the coupons when purchased by him were
already detached from the bonds, and that he bought them in open
market as genuine coupons, and without any reason to doubt their
genuineness. He further proved that prior to September 1, 1879, the
state had issued bonds of the kind and in the form authorized by
said act to the amount of many millions of dollars; the coupons
thereon being wholly printed from engraved plates, and not signed
manually. He further offered to prove the denominations and numbers
of the bonds issued under the Act of March 30, 1871, and the Act of
March 28, 1879. He offered and read in evidence to the jury Senate
Document 15, Senate journal 1881-82, which contained a report of H.
H. Dixon, Second Auditor of the Commonwealth of Virginia, directed
to the President of the Senate, in answer to certain questions
which had been proposed to him by the Senate for its information,
in which report, among other things, the said second auditor
stated:
"I have the honor to report that I have no knowledge of any
spurious or forged bonds or coupons issued, or purporting to have
been issued, under either of the said acts. As to any bonds or
coupons that may have been stolen, I have heard of none issued
under the Act of March 28, 1879, nor have I any knowledge of any
issued under the Act of
Page 135 U. S. 689
March 30, 1871, except such information as may be contained in
the report made to the legislature March 30, 1874, by the joint
committee to investigate the sinking fund, in which a deficiency of
$15,939.89 of bonds and of $1,325.45 of interest is stated."
Another report of said auditor was offered in evidence by the
defendant, in which he stated as follows:
"I have the honor to report that no counterfeit or forged
obligations, bonds, coupons, or certificates of the State of
Virginia have in any way come to my knowledge."
The defendant then offered to prove by the testimony of an
expert witness that the coupons issued were genuine coupons, but
the court refused to receive such testimony or to allow it to go to
the jury, because of the Act of the General Assembly approved
January 21, 1886, to which ruling the defendant excepted on the
ground that said act was repugnant to the Constitution of the
United States. The defendant then rested, and thereupon the
commonwealth demanded of the defendant the production of the bond
from which the coupons tendered purported to have been cut, with
proof that said coupons were actually cut therefrom. The defendant
moved the court to overrule and disallow such demand on the ground
that the Act of Assembly approved January 26, 1886, under which the
demand was made, was repugnant to the Constitution of the United
States, and void. But the court overruled said motion and sustained
the demand, to which the defendant excepted. The evidence being
closed, the defendant prayed the court to instruct the jury that
the production of the bonds from which the coupons in issue were
cut, together with proof that the coupons were cut therefrom, was
not necessary to establish the genuineness of the coupons, and that
the act requiring this to be done is contrary to the Constitution
of the United States. But the court refused this instruction, and
instructed the jury that such production of bonds and proof, when
demanded, was necessary to establish the genuineness of the
coupons, to which ruling the defendant excepted. The defendant
further prayed the court to instruct the jury that if the jury
believe from the evidence that the State of Virginia issued her
bonds with tax receivable interest coupons thereto attached, which
coupons
Page 135 U. S. 690
were made payable to bearer and were printed from engraved
plates, and not signed manually by any officer of the state, and if
they further believe that the defendant purchased the coupons filed
with his plea of tender in open market, in good faith, as genuine
coupons of said state, then the burden is upon the state to prove
said coupons spurious, and that the Act of May 12, 1887, placing
upon the defendant the burden of proving them genuine, is repugnant
to the Constitution of the United States. This instruction was also
refused by the court, and the defendant excepted. The judgment in
the case was removed by writ of error to the Supreme Court of
Appeals of the State of Virginia, and was affirmed. The present
writ of error brings this judgment before us for consideration.
Page 135 U. S. 693
MR. JUSTICE BRADLEY, continuing, delivered the opinion of the
Court in these cases.
The question is therefore presented to us whether the acts of
assembly of the State of Virginia which required the production of
the bond in order to establish the genuineness of the coupons, and
prohibiting expert testimony to prove the said coupons, are or are
not repugnant to the Constitution of the United States. On this
subject we think there can be little doubt. It is well settled by
the adjudications of this Court that the obligation of a contract
is impaired, in the sense of the Constitution, by any act which
prevents its enforcement or which materially abridges the remedy
for enforcing it which existed at the time it was contracted, and
does not supply an alternative remedy equally adequate and
efficacious.
Bronson v.
Kinzie, 1 How. 311;
Woodruff
v. Trapnall, 10 How. 190;
Furman v.
Nichol, 8 Wall. 44;
Walker v.
Whitehead, 16 Wall.
Page 135 U. S. 694
314;
Von Hoffman v.
Quincy, 4 Wall. 535;
Tennessee v. Sneed,
96 U. S. 69;
Memphis v. United States, 97 U. S.
293;
Memphis v. Brown, 97 U. S.
300;
Howard v.
Bugbee, 24 How. 461. We have no hesitation in
saying that the duty imposed upon the taxpayer of producing the
bond from which the coupons tendered by him were cut at the time of
offering the same in evidence in court was an unreasonable
condition, in many cases impossible to be performed. If enforced,
it would have the effect of rendering valueless all coupons which
have been separated from the bonds to which they were attached, and
have been sold in the open market. It would deprive them of their
negotiable character. It would make them fixed appendages to the
bond itself. It would be directly contrary to the meaning and
intent of the act of 1871 and the corresponding act of 1879. It
would be so onerous and impracticable as not only to affect, but
virtually destroy, the value of the instruments in the hands of the
holder who had purchased them. We think that the requirement was
unconstitutional.
We also think that the prohibition of expert testimony in
establishing the genuineness of coupons was in like manner
unconstitutional. In the case of coupons made by impressions from
metallic plates, as these were, no other mode of proving their
genuineness is practicable, and that mode of proof is as
satisfactory as the proof of handwriting by a witness acquainted
with the writing of the party whose signature it purports to be.
One who is expert in the inspection and examination of bank notes,
engraved bonds, and other instruments of that character is able to
detect almost at a glance whether an instrument is genuine or
spurious, provided he has an acquaintance with the class of
instruments to which his attention is directed. It is the kind of
evidence resorted to in proving the genuineness of bank notes. It
is the kind of evidence naturally resorted to to prove the
genuineness of coupons, and other instruments of that character. To
prohibit it is to take from the holder of such instruments the only
feasible means he has in his power to establish their validity.
Page 135 U. S. 695
In addition to these objections to the proceedings, we question
very much whether the Act of May 12, 1887, which authorizes and
requires a suit to be brought against the taxpayer who tenders
payment in coupons, as well as the other acts which require their
rejection, are not themselves laws impairing the obligation of the
contract. They make no discrimination between genuine and spurious
coupons. A bank which should refuse to receive its bills in payment
of a note due from one of its customers, but should sue him on his
note, and leave him to establish the genuineness of the bills by
suit against the bank, would not be regarded with much favor in a
business community. It is the duty of its cashier or receiving
teller to judge of the genuineness of the bills offered, and to
refuse them as spurious on his peril, or rather on the peril of the
bank itself. So, in regard to these coupons, instead of relegating
the taxpayer to a course of litigation, the officers of the state
charged with the duty of collecting the taxes should themselves
decide on the genuineness of the coupons offered. Penalties for
knowingly offering spurious coupons, or using them in any way, for
sale or otherwise, would probably be as effective in preventing
their circulation as like penalties are in suppressing counterfeit
bank bills and other negotiable instruments.
In the case of
Bryan v. Virginia, the coupons that were
tendered for the payment of the tax sued for purported to have been
cut from bonds issued under the Act of March 30, 1871, and the same
obstacles to the proof of their genuineness were interposed as in
the case of McGahey, by requiring the production of the bonds from
which the coupons were cut, and by excluding expert testimony. The
same also is true of the proceedings in the case of
Cooper v.
Virginia. We are of opinion, therefore, that
The judgments in these three cases ought to be reversed, and
the records severally remanded for the purpose of such proceedings
as may be required in due course of law, according to this
opinion.
Page 135 U. S. 696
Ellett v. Virginia
The case of
Ellett v. Virginia was a suit brought to
recover the amount of a judgment previously rendered against Ellett
in the Circuit Court of Richmond for taxes and costs, the amount of
taxes being $39.52 and the costs being $24.49. Execution having
been issued upon this judgment, the defendant, Ellett, tendered to
the sheriff, in payment thereof, coupons for the whole amount,
lacking $1.49, which he tendered in lawful money. The coupons
purported to be cut from a bond issued under the Act of March 30,
1871, and were overdue, and each bore upon its face a contract of
the State of Virginia that it should be received in payment of all
taxes, debts, and demands due to her. The defendant pleaded this
tender, and averred that the sheriff refused to receive the said
coupons and money, alleging that he was forbidden to do so by the
Act of May 12, 1887, and that he (the defendant) has always been
ready and willing since said tender to deliver said coupons and
money to the sheriff in payment of said execution, and was still
ready and willing to do so, and brought the same into court for
that purpose. This plea was rejected by the court. A verdict was
given for the plaintiff, and judgment rendered thereon, which was
affirmed by the Supreme Court of Appeals of the State of
Virginia.
Page 135 U. S. 697
The point made in this case is that the costs included in the
judgment on which the present suit was brought were not a debt due
to the State of Virginia in her own right, but were due to the
officers in whose favor they were taxed, and whose services they
were to compensate. We think that this point is untenable. The
costs were recovered by the State of Virginia in the original
action to compensate her for the fees which she had to pay to the
officers for their services. The demand of the officers for their
costs was a demand against the State of Virginia, and not against
the defendant, and, by reason of this demand against, her, she was
entitled to recover the amount against the defendant. So that in no
legal sense can it be said that the costs included in the judgment
belonged to the officers, and not to the state. They were recovered
by
Page 135 U. S. 698
her in form, and they belonged to her, when recovered, in
substance. We are of opinion, therefore, that this judgment must
also be reversed and the record remanded for the purpose of such
proceedings as may be required in due course of law in accordance
with this opinion.
Cuthbert v. Virginia
The next case to be considered is that of
Cuthbert v.
Virginia. This was a presentment found against Cuthbert in the
Hustings Court of the City of Petersburg, Virginia, charging that
he did on the 1st day of November, 1888, and had continuously from
day to day since that time, in said city, unlawfully sold and
offered to sell, and unlawfully tendered and passed to divers
persons (naming them) tax receivable coupons from the bonds of the
State of Virginia, without having previously obtained a special
license, as required by law, authorizing him (said Cuthbert) to
sell and offer to sell, and to tender and pass, such coupons, he,
in doing the same, acting as the agent and broker for another
person or persons to said jurors unknown, contrary to the act of
assembly in that behalf. The presentment contained two other
counts, which were abandoned. The defendant tendered a special plea
in writing, to which the commonwealth demurred, and the court
sustained the demurrer. The defendant then pleaded not guilty. The
jury, under the rulings of the court, found him guilty and assessed
a fine of $500. On the trial, the case was submitted to the jury
upon an agreed statement of facts. The principal facts shown by
this statement were that on the 1st day of November, 1888, the
defendant sold and offered to sell, and tendered and passed, and
offered to tender and pass, for another, as charged in the
presentment, tax receivable coupons from bonds of the State of
Virginia which were overdue and bore upon their face the contract
of said state that they should be received in payment
Page 135 U. S. 699
of all taxes, debts, and demands due said state from taxpayers
owing taxes to the said state, and that he did not have the special
license therefor required by the Act of May 23, 1887, and had not
paid the license tax of $1,000 provided by said act for the
privilege of selling the same, nor the state tax of twenty
percentum upon the face value of the same; also that the defendant,
Cuthbert, was a member of a firm doing business in Petersburg as
insurance agents, representing various foreign insurance companies,
all of which had paid to the state all license taxes assessed upon
them; also that the defendant was not engaged in any business upon
which a license tax is charged by the state, except the business of
selling tax receivable coupons from bonds of the state, and had not
been so engaged. Upon this agreed statement of facts, the defendant
moved the court to instruct the jury that the act under which the
presentment was found is repugnant to Section 10 of Article I of
the Constitution of the United States and therefore void, and that
they must acquit the defendant. The court refused to give this
instruction, but instructed the jury that the said act is not
repugnant to the Constitution, and the defendant excepted. After
the verdict was rendered, the defendant moved the court to set it
aside upon the same grounds, which motion was overruled. The cause
was carried to the Supreme Court of Appeals, and by that court the
judgment was affirmed, and its decision is now here for review. The
question in this case is whether the act requiring a license tax
for the sale of coupons was or was not in violation of that clause
of the Constitution of the United States which relates to impairing
the obligation of contracts.
Page 135 U. S. 700
It is manifest from the terms of the act of 1871, as well as
that of 1879, under which tax receivable coupons were authorized to
be and were issued, that said coupons were intended to circulate
from hand to hand, being expressly made payable to bearer, and
being made receivable for taxes, debts, dues, and demands due to
the state. Any undue restraint upon the free negotiability of these
instruments therefore would be a violation of the clear
understanding and agreement of the parties. That the license
required by the sixty-fifth section of the tax Act of March 15,
1884, as amended by the Act of May 23, 1887, was a very material
interference with such negotiability, is most manifest. If
sustained as a valid act of legislation and carried
Page 135 U. S. 701
into effect, it would prevent the negotiation of such coupons by
any holder thereof. The enormous license fee of $1,000 in towns of
more than 10,000 inhabitants and of $500 in other counties and
towns, with the exaction of twenty percent of the face value on
every coupon sold, was absolutely prohibitory in its effect. A
material quality of the coupons -- their negotiability -- was
thereby destroyed. The point cannot be made any clearer by argument
than it appears by the mere statement of it. This follows whether
the law is construed as applicable to the sale by a coupon holder
of his own coupons, or to the sale or passing by any person of
coupons for another. An owner of coupons residing in New York or
London, under the operation of the law, if the coupons were not
paid by the state when they became due, would be obliged to go in
person to Virginia in order to dispose of them to those who might
be able and willing to use them in the payment of taxes.
The judgment in this case must also be reversed, and the
record remanded for the purpose of such proceedings to be had as
law and justice may require in accordance with this
opinion.
In re Brown
The next case to be considered is that of
Ex Parte
Brown, which was an application of the petitioner, Brown, to
the Circuit Court of the United States for the Eastern District of
Virginia, to be discharged from imprisonment in the custody of R.
A. Carter, the sergeant of said city and
ex officio jailer
thereof. The petition sets forth that the petitioner was sentenced
by the hustings court of the City of Richmond to pay a fine of
$25.00 and costs, amounting to $26.70, and to remain in the jail of
the said city until the same should be paid, in the custody of the
said sergeant; that on the 3d of July, 1889, he tendered W. P.
Lawton, clerk of the hustings court, in payment
Page 135 U. S. 702
of said fine, eighteen dollars in coupons and $8.70 in lawful
money of the United States; that each of said coupons was cut from
a bond issued by the State of Virginia under the Act of March 30,
1871, and was overdue, and bore upon its face the contract of the
state that it should be receivable in payment of all taxes, etc.;
that the clerk refused to receive said coupons and money in payment
of said fine and costs because certain acts of the General Assembly
of Virginia forbade him so to receive them; that thereafter, on the
same day, he tendered the same coupons and current money to Carter,
sergeant as aforesaid, and demanded his release from custody; that
said sergeant also refused to receive said coupons and money in
payment of said fine and costs, and he refused the same because the
coupons so tendered by the petitioner became due prior to the 1st
day of July, 1888, and because section 415 of the Code of Virginia
of 1887 prohibits the receipt of any coupons of said state which
became due prior to July 1, 1888, as those tendered did; that said
section 415 is repugnant to the Constitution of the United States,
and that the petitioner is therefore detained in said jail, and in
custody of said sergeant, in violation of the said Constitution.
The petitioner therefore prayed a habeas corpus to be directed to
the said Carter, sergeant aforesaid, and that he be discharged from
custody. The writ being issued, Carter made return thereto in
substance as follows: he annexed to said return a copy of the
judgment and order of the Hustings Court of Richmond committing the
petitioner to the jail of the city until he should pay a certain
fine imposed upon him, as stated in the petition. He admitted that
on the 3d of July, 1889, the petitioner tendered the coupons and
money set out and described in his petition to the clerk (Lawton),
who refused to receive the same, and that on the 3d of July, 1889,
the petitioner tendered to him (Carter) $8.70 in current money of
the United States, and eighteen dollars in coupons purporting to be
detached from bonds of the State of Virginia, but he denied that
they were genuine coupons, legally receivable. He further stated in
his return that by section 415 of the Code of Virginia of 1887, it
is provided that no petition shall
Page 135 U. S. 703
be filed or other proceeding had to try whether any paper
printed, written, engraved, or lithographed, purporting to be a
coupon detached from any bond of said state, is a genuine coupon
legally receivable for taxes, debts, or demands of the state where
said coupon became due prior to July 1, 1888, unless said petition
was filed or proceeding had within one year from July 1, 1888, and
he charged the fact to be that the coupon held by the petitioner
became due prior to July 1, 1888. The court below refused to
discharge the prisoner, holding that section 415 of the Code of
1887 is not repugnant to the Constitution of the United States. The
petitioner thereupon appealed to this Court, and the question is as
to the constitutionality of the section referred to.
We have already set forth the provisions of this law in a former
part of this opinion, it being the Act passed February 27, 1886,
and afterwards incorporated into the Code of 1887 as section 415.
Under the operation of this act, after the 1st day of July, 1889,
of course, all coupons that were then more than a year past due
were absolutely precluded from being used in payment of dues to the
state, as provided for in the act of 1871. Concerning the obstacles
which had been interposed in the way of their use for that purpose,
it is not difficult to imagine that a very large proportion of the
coupons attached to the bonds of 1871 had not been presented, or,
if presented, had not been received for taxes, prior to the date
referred to.
Page 135 U. S. 705
The passage of a new statute of limitations, giving a shorter
time for the bringing of actions than existed before, even as
applied to actions which had accrued, does not necessarily affect
the remedy to such an extent as to impair the obligation of the
contract within the meaning of the Constitution, provided a
reasonable time is given for the bringing of such actions. This
subject has been considered in a number of cases by this Court,
particularly in
Terry v. Anderson, 95 U. S.
628,
95 U. S. 632,
and
Koshkonong v. Burton, 104 U.
S. 668,
104 U. S. 675,
where the prior cases are referred to. In
Terry v.
Anderson, Chief Justice Waite, speaking for the Court,
said:
"This Court has often decided that statutes of limitation
affecting existing rights are not unconstitutional if a reasonable
time is given for the commencement of an action before the bar
takes effect.
Hawkins v. Barney, 5 Pet.
457;
Jackson v. Lamphire, 3 Pet.
280;
Sohn v. Waterson, 17 Wall.
596;
Christmas v. Russell, 5
Wall. 290;
Sturges v. Crowninshield, 4
Wheat. 122. It is difficult to see why, if the legislature may
prescribe a limitation where none existed before, it may not change
one which has already been established. The parties to a contract
have no more a vested interest in a particular limitation which has
been fixed than they have in an unrestricted right to sue. . . . In
all such cases, the question is one of reasonableness, and we have
therefore only to consider whether the time allowed in this statute
is, under all the circumstances, reasonable. Of that the
legislature is primarily the judge, and we cannot overrule the
decision of that department of the government unless a palpable
error has been committed."
The Court in that case held that the period of nine months and
seventeen days, given to sue upon a cause of action which had
already been running nearly four years, was not unconstitutional.
The liability in question was that of a stockholder under an act of
incorporation for the ultimate redemption of the bills of a bank
which had become insolvent by the disaster of the civil war. The
Legislature of Georgia on the 16th of March, 1869, passed a statute
requiring all actions against stockholders in such cases to be
brought by or before the 1st of January, 1870.
Page 135 U. S. 706
In the case of
Koshkonong v. Burton, the suit was
brought upon bonds of the Town of Koshkonong issued January 1,
1857, with interest coupons attached. The coupons matured at
different dates from 1858 to 1877. The action was brought on the
12th of Nay, 1880, and the question was whether the action as to
the coupons maturing more than six years before the commencement of
the suit was barred by the statute of limitations of Wisconsin. In
March, 1872, an act was passed to limit the time for the
commencement of actions against towns, counties, cities, and
villages on demands payable to bearer. It provided that
"No action brought to recover money on any bond, coupon,
interest warrant, agreement, or promise in writing made by any
town, county, city or village, or upon any installment of the
principal or interest thereof, shall be maintained unless the
action be commenced with six years from the time when such money
has or shall become due, when the same has been made payable to
bearer or to some person or bearer, or to the order of some person,
or to some person or his order,
provided that any such
acting may be brought within one year after this act shall take
effect."
his Court, speaking by MR. JUSTICE HARLAN, said:
"It was undoubtedly within the constitutional power of the
legislature to require, as to existing causes of action, that suits
for their enforcement should be barred unless brought within a
period less than that prescribed at the time the contract was made
or the liability incurred from which the cause of action arose. The
exertion of this power is, of course, subject to the fundamental
condition that a reasonable time, taking all the circumstances into
consideration, be given by the new law for the commencement of an
action before the bar takes effect. Whether the first proviso of
the act of 1872, as to some causes of action, especially in its
application to citizens of other states holding negotiable
municipal securities, is or is not in violation of that condition
is a question of too much practical importance and delicacy to
justify us in considering it unless its determination be essential
to the disposition of the case in hand, and we think it is
not."
The case was decided without determining the question referred
to.
Page 135 U. S. 707
A question of the same nature frequently arises upon statutes
which require the registry of conveyances and other instruments
within a limited period prescribed, and making them void, either
absolutely or in their operation as against third persons, if not
recorded within such time. Such laws, as applied to conveyances and
other instruments in existence at the time of their passage, are of
course retrospective in their character, and may operate very
oppressively if a reasonable time be not given for the registry
required. This subject was discussed in the case of
Vance v.
Vance, 108 U. S. 514, Mr.
Justice Miller delivering the opinion of the Court, where the prior
cases were adverted to and commented upon. The same rule applies to
those cases as in reference to statutes of limitation -- namely,
that the time given for the act to be done must be a reasonable
time; otherwise it would be unconstitutional and void.
It is evident from this statement of the question that no one
rule as to the length of time which will be deemed reasonable can
be laid down for the government of all cases alike. Different
circumstances will often require a different rule. What would be
reasonable in one class of cases would be entirely unreasonable in
another.
It is necessary, therefore, to look at the nature and
circumstances of the case before us, and of the class of cases to
which it belongs. The primary obligation of the state with regard
to the coupons attached to the bonds issued under the act of 1871
was to pay them when they became due, but if they were not paid at
maturity, the alternative right was given to the holder of them to
use them in the payment of taxes, debts, dues, and demands due to
the state. The very nature of the case shows that much an
application of the coupons could not be made immediately or in any
very short period of time. If all the bonds were of the
denomination of one thousand dollars each, it would require twenty
thousand of them to make up the funded debt of twenty millions of
dollars. These 20,000 bonds would be likely to be scattered and
dispersed through many states and countries, and it would be
impracticable for the holders of them to use the coupons
Page 135 U. S. 708
which the state should fail to pay in cash in the alternative
manner stipulated for in the contract unless they had a reasonable
time to dispose of them to taxpayers. No limitation of time was
fixed by the act within which the coupons should be presented or
tendered in payment of taxes or other demands. The presumption
would naturally be that they could be used within an indefinite
period, like bank bills. Under this condition of things, a statute
of limitation giving to the holders thereof but a single year for
the presentation in payment of taxes of the coupons then in their
possession, perhaps never severed from the bonds to which they were
attached, and comprising all the coupons which had been originally
attached thereto, seems, even at first blush, to be unreasonable
and oppressive. Probably not one-tenth, if even so large a
proportion, of the bondholders were taxpayers of the State of
Virginia. The only way in which they could, within the year
prescribed, utilize their coupons -- the accumulation, perhaps, of
years -- would be to sell and dispose of them to the taxpayers. How
this could be done, especially in view of the onerous laws which
were passed with regard to the sale of coupons in the state, it is
difficult to see. Under all the circumstances of the case and the
peculiar condition of the securities in question, we are compelled
to say that in our opinion, the law is an unreasonable law, and
that it does materially impair the obligation of the contract.
We have spoken of the act as limiting indifferently the time of
tendering the coupons and the time of commencing proceedings to
ascertain their genuineness. Its terms relate only to the latter,
and as this proceeding cannot be instituted until the coupons have
been tendered, the effect is to make a tender necessary before the
expiration of one year, which can often be done only within a few
days, or even hours, since the taxes may become due in that short
period, and not become due again until a year afterwards. This puts
the unconstitutionality of the act beyond question. Without further
discussion of the subject, we conclude that
Page 135 U. S. 709
The judgment of the circuit court must be reversed, and the
same is reversed, accordingly, and the cause remanded for the
purpose of such proceedings as may be required by law and justice
in conformity with this opinion.
Hucless v. Childrey
The next case which we shall consider is that of
Hucless v.
Childrey, which was an action of trespass on the case, brought
in the Circuit Court of the United States for the Eastern District
of Virginia by Hucless, a citizen of the State of Virginia,
residing in Richmond, against Childrey, the Treasurer of Richmond,
and as such collector of taxes and license taxes due to the state,
to recover damages for the refusal of the said Childrey to receive
tax receivable coupons in payment or part payment of a license tax
payable for a license to sell by retail wine, spirits, and other
intoxicating liquors, whereby the plaintiff was prevented from
pursuing the said business, which was a lawful business, and
sustained damage by reason thereof to the extent of $6,000. The
declaration stated in substance that the plaintiff desired and
intended to open and conduct the business aforesaid at 405 West
Leigh Street, in said City of Richmond, for one year from the 1st
of May, 1889; that he was a fit person, and intended to keep a
orderly house, and that the place was suitable, convenient, and
appropriate for that purpose; that by the statute law of Virginia,
a person desiring and in tending to conduct such business must
apply to the commissioner of revenue for the city or county for a
license therefor, who shall ascertain the amount to be paid, and
give the applicant a certificate specifying the same, and such
person shall make a deposit therefor with the treasurer or
collecting officer of the city or county of the amount so
ascertained, and shall take from him a receipt for such deposit
endorsed on the certificate, or otherwise he shall deposit with the
treasurer the amount of tax assessed by law
Page 135 U. S. 710
for the license tax on said business. Thereupon he shall make
application in writing for a license for such business to the
commissioner of the revenue for such city or county, accompanied by
said certificate, and the person so desiring to conduct said
business is forbidden by said statutes to conduct the same until he
has appeared before the judge of the corporation or county court,
and has proved that he has made such deposit, and is a fit person
to conduct such business, etc.; that the license tax imposed by the
laws of Virginia to be paid for the business of selling by retail,
for one year, wine, ardent spirits, malt liquors, or any of them,
in cities of more than 1,000 inhabitants, is $125; that on the 3d
of May, 1889, plaintiff applied to the Commissioner of Revenue of
Richmond to ascertain the amount to be paid by him as his license
tax for selling by retail as aforesaid, and the commissioner gave
to him a certificate specifying the same as $125; that on the same
day the plaintiff presented said certificate to Childrey, the
defendant, treasurer as aforesaid, and tendered to him, in payment
of said license tax, $123 in coupons and $2 in lawful money, and
demanded a receipt stating that he had deposited with him $125 in
said coupons and money; that Childrey refused to receive said
coupons and money, and refused to give plaintiff said receipt; that
each of said coupons was cut from a bond issued by the State of
Virginia under the Act of March 30, 1871, and each bore upon its
face the contract of the state that it would be received in payment
of all taxes, debts, dues, and demands due to the state; that
thereafter, on the 3d day of May, 1889, the plaintiff stated to
said Childrey that he desired and intended to conduct the business
aforesaid at 405 West Leigh Street, and then tendered to him, in
payment of the license tax due to the state on said business for
one years, $123 in coupons and $2.75 in lawful money, and demanded
of him a certificate of such deposit, but Childrey refused to
receive said coupons and money, and refused to give such
certificate, and refused to receive said coupons and money in both
cases, because sections 399, 536, and 538 of the Code of Virginia
of 1887 forbade him to receive them, and the plaintiff averred that
said sections are repugnant to Section 10,
Page 135 U. S. 711
Article I, of the Constitution of the United States, which the
said Childrey well knew; that he (Childrey) obeyed the command of
said sections, and declined to follow the mandate of the
Constitution; that by force of the statute law of Virginia, the
plaintiff would have been liable to indictment and severe penalties
if he had proceeded to open and conduct his said business before he
had satisfied the judge of the corporation or the Hustings Court of
the City of Richmond that he was a fit person to conduct said
business, that he would keep an orderly house, and that the place
was a suitable one, and that the plaintiff could not apply to said
court to enter on said inquiries until he presented to said court a
receipt from said Childrey for said deposit endorsed on the
certificate furnished by the commissioner of the revenue, or the
certificate of the commissioner endorsed on the receipt of said
Childrey. To this declaration the defendant filed a demurrer, which
was sustained by the circuit court, and judgment rendered for the
defendant, which judgment is brought here for review.
Page 135 U. S. 712
The law under which the treasurer justified his action in
refusing to receive the coupons tendered by the plaintiff is set
forth in the declaration with sufficient accuracy and fullness for
the disposal of the case, except that it should be added that the
license fee to be deposited with the treasurer was required to be
in lawful money of the United States as a condition precedent to
the granting of the license.
We are of opinion that the requirement that the license fee
shall be paid in lawful money of the United States does not, as
contended, impair the obligation of the contract made by the state
with the holders of the coupons referred to. Licenses for the sale
of intoxicating liquors are not only imposed for the purpose of
raising revenue, but also for the purpose of regulating the traffic
and consumption of these articles, and hence the state may impose
such conditions for conducting said traffic as it may deem most for
the public good. Instead of a license fee of $125, it might have
imposed a license fee of $250, or any other amount, or it might
have prohibited the sale of intoxicating liquors altogether, as is
admitted by the counsel for the plaintiff in their brief. They
concede that the state might, in her discretion, absolutely abolish
the sale of spirituous liquors, or prescribe on what terms they
shall be sold. In this view there does not seem to be any violation
of the obligation of the state in requiring the tax which is
imposed to be paid in any manner whatever -- in gold, in silver, in
bank notes, or in diamonds. The manner of payment is part of the
condition of the license intended as a regulation of the traffic.
It would be very different if the business sought to be followed
was one of the ordinary pursuits of life, in which all persons are
entitled to engage. License taxes imposed upon such pursuits and
professions are imposed purely for the purpose of revenue, and not
for the purpose of regulating the traffic or the pursuit. For these
considerations, we are clearly of opinion that
The judgment of the circuit court was right, and it is
therefore affirmed.
Page 135 U. S. 713
Vashon v. Greenhow
The remaining case which we have to consider is that of
Vashon v. Greenhow. This case arose upon the refusal of
Greenhow, Treasurer of the City of Richmond, to receive from Vashon
tax receivable coupons in payment or part payment of taxes due from
him, including a certain amount due for school taxes for the
maintenance of the public free schools of the state. Upon this
refusal, Vashon filed a petition for a mandamus in the Hustings
Court of the City of Richmond stating that he was taxpayer of the
said city and was indebted to the state for state taxes of 1884 to
the amount of $35.63, and tendered to Greenhow, the said treasurer,
in payment therefor, certain coupons cut from the bonds of the
state issued under the Act of March 30, 1871, one of the
denomination of $30 and one of the denomination of $3, said coupons
being past due, and being presented to the court with the petition;
that he at the same time offered to pay the treasurer the whole of
said tax in legal tender notes and coin, and demanded that the
treasurer receive said coupons, along with said legal tender notes
and coin, for the purpose of identification and verification in
manner and form as required by the Act of January 14, 1882. The
petition further alleged that by virtue of the state's contract to
receive said coupons in payment of said taxes, and by virtue of the
act of assembly aforesaid, he was entitled, upon the payment of his
said tax in money, to have his said coupons received for
identification and verification, and pay his tax therewith,
wherefore he prayed a writ of mandamus commanding said Greenhow,
treasurer of said city, to receive the said money and also the said
coupons, and commanding him to forward said coupons to the court
for identification and verification according to law. A rule to
show cause having been granted, the treasurer filed his answer to
the petition, in which he stated the truth to be that Vashon was
indebted to the state for taxes for the
Page 135 U. S. 714
year 1884, as follows, to-wit, for tax on property, the sum of
$35.63, being $9.66 for the maintenance of public free schools, as
per exhibit attached to the answer. He further stated and admitted
that the petitioner offered to pay the said tax in money at the
same time that he demanded the respondent to receive the coupons
mentioned in the petition for the purpose of identification and
verification. The answer then proceeds as follows:
"Your respondent avers that he was willing to receive the
payment of said tax in money, but refused to receive and receipt
for so much of the coupons as were offered in payment of that
portion of the tax set aside by law, and dedicated to the
maintenance of the public free schools of the states."
"Your respondent assigns the following reasons for such
refusal:"
"(1) The Constitution of Virginia provides in section 7 of
article 8 what specific sums shall be set apart as a permanent and
perpetual literary fund, and includes in it such other sums as the
General Assembly may appropriate."
"(2) Section 8 of the same article provides that the General
Assembly shall apply the annual interest on the literary fund, and
an annual tax upon the property of the state of not less than one
mill nor more than five mills on the dollar, for the benefit of the
public free schools."
"(3) In pursuance of this constitutional authority the General
Assembly has provided, in acts of 1883-1884, p. 561, that on tracts
of lands and lots a tax of ten cents on every hundred dollars of
the assessed value thereof shall be levied, which shall be applied
to the support of the public free schools of the state."
"(4) Again, the last General Assembly, in acts of 1883-1884, p.
603, have provided that all taxes assessed on property, real or
personal, and dedicated to the maintenance of the public free
schools of the state, shall be paid and collected only in lawful
money of the United States, and shall be paid into the treasury to
the credit of the free school fund, and shall be used for no other
purpose whatsoever. Your respondent avers that to have forwarded
such of the
Page 135 U. S. 715
coupons as were offered in payment of the tax dedicated to the
public free schools would have been a violation of the constitution
and the laws above referred to. For these reasons, your respondent
insists that he ought not to have forwarded, for the purpose of
identification and verification, so much of the coupons as were
tendered in payment of that portion of the tax dedicated to the
public free schools. He therefore prays that the writ of mandamus
may be denied, and the petition dismissed, with costs."
To this answer the petitioner entered a demurrer, which was
sustained by the court, and a peremptory mandamus was awarded
pursuant to the prayer of the petition. The case being carried to
the Supreme Court of Appeals of Virginia, the judgment was
reversed, and this judgment of reversal is now before us for
review.
Page 135 U. S. 716
The Court of Appeals placed their judgment upon two distinct
grounds. In the first place, they reviewed the former judgments of
that court, which had sustained the Act of March 30, 1871, as a
valid and constitutional enactment, and binding upon the state as a
contract with the bond and coupon holders under the same. The court
were of opinion that these decisions were based upon a mistaken
presumption that the state had received consideration for the
issuing of the bond created by the act aforesaid. They argued, and
attempted to show, that the state had not received any
consideration whatever, but that the issuing of the bonds under the
act of 1871 was a mere gratuity on the part of the state, and was
not binding upon it so as to prevent the legislature from
abrogating the conditions of that act. We have already indicated
our views with regard to this position taken by the Supreme Court
of Appeals, and have referred to the decisions made by this Court
sustaining the validity of the act of 1871, which decisions of this
Court we regard as binding upon us.
Page 135 U. S. 717
The other ground on which the court of appeals placed its
decision was that the act of 1871, as applied to the moneys due and
payable to the "literary fund" or fund for the maintenance of
public free schools, was contrary to the constitution of the state
adopted in 1869. The seventh and eighth sections of the eighth
article of that constitution declare as follows:
"SEC. 7. The General Assembly shall set apart, as a permanent
and perpetual literary fund, the present literary funds of the
state, the proceeds of all public lands donated by Congress for
public school purposes, of all escheated property, of all waste and
unappropriated lands, of all property accruing to the state by
forfeiture, and all fines collected for offenses committed against
the state, and such other sums as the General Assembly may
appropriate."
"SEC. 8. The General Assembly shall apply the annual interest on
the literary fund, the capitation tax provided for by this
constitution for public free school purposes, and an annual tax
upon the property of the state of not less than one mill nor more
than five mills on the dollar, for the equal benefit of all the
people of the state."
The court, in its opinion, held that in view of these
constitutional provisions, the legislature had no power to declare
of contract that the moneys due to the literary fund might be paid
in coupons attached to the bonds authorized by the act of 1871, and
that such a payment would be repugnant to the very nature of the
fund. It might well be added that coupons thus paid into the fund
would be of no value whatever to it, for, as soon as paid into the
treasury, they would become valueless, as if cancelled and
destroyed, unless some provision were made for their reissue, and
the putting of them into renewed circulation. This would be opposed
to the whole tenor of the act, would be unjust to the coupon
holders themselves, and would probably be contrary to the acts of
Congress in reference to the creation of paper currency. We think
that the position of the court of appeals in this case is well
taken -- that coupons could not be made receivable as a portion of
the literary fund, and that, if they could not be received as a
part
Page 135 U. S. 718
of the fund, they could not properly be made receivable for the
taxes laid for the purpose of maintaining said fund. For several
years after the constitution was adopted and after the law of 1871
had been passed, the taxes for the benefit of free schools were
mingled in the assessment and collection of taxes, and in the
treasury when received, with the other taxes and funds raised for
the support of the state government. As long as this state of
things continued, the collecting officers could not object to
receiving coupons in payment of taxes, because the share due to the
school fund could easily be paid from the treasury, to the credit
of that fund, out of the lawful moneys received. But by the Tax Act
of March 15, 1884, it was provided that all taxes assessed on
property, real or personal, by that act, and dedicated by it to the
maintenance of the public free schools of the state, should be paid
and collected only in the lawful money of the United States, and
should be paid into the treasury to the credit of the free school
fund, and should be used for no other purpose whatsoever, and to
this end the auditor of public accounts should have the books of
the commissioner of the revenue prepared with reference to the
separate assessment and collection of said school tax, and the
several treasurers of the commonwealth should have the tax bills in
their counties and corporations so made out as to specify the
amount of the tax due from each taxpayer to the public free school
fund, including the capitation taxes of whatever kind or nature,
and should keep said capitation tax and school tax separate and
distinct from all other taxes or revenues so collected by him, and
forward the same, thus separate and distinct, to the auditor of
public accounts, which should be kept separate and distinct by him
from all other taxes or revenues until paid to the public free
schools. Since the passage of this act and in pursuance thereof,
the taxes and other revenues raised for the purpose of maintaining
public schools, and belonging under the constitution to the
literary fund, have been kept separate and distinct from the other
taxes raised for the general support of the state government. This
was the practice when the case of
Vashon v. Greenhow
arose, and in our judgment the law requiring the school tax to
be
Page 135 U. S. 719
paid in lawful money of the United States was a valid law
notwithstanding the provisions of the act of 1871, and that it was
sustained by the sections of the constitution referred to, which
antedate the law of 1871, and override any provisions therein which
are repugnant thereto.
In
Paup v. Drew,
10 How. 218, a decision was made by this Court in a case not very
different in principle from the one now under consideration. It had
been decided in
Woodruff v.
Trapnall, 10 How. 190, at about the same time, that
the law of Arkansas which chartered the Bank of the Arkansas -- the
whole capital of which belonged to the state -- provided that the
bills and notes of said institution should be received in all
payments of debts due to the state, was valid and irrepealable, and
that, although this provision was subsequently in terms repealed,
the notes of the bank which were in circulation at the time of the
repeal were not affected by it, and that the undertaking of the
state to receive the notes of the bank constituted a contract
between the state and the holders of these notes which the state
was not at liberty to break or impair, although notes issued by the
bank after the repeal were not within the contract, and might be
refused. After this decision, the case of
Paup v. Drew
came up, in which it was held that although the notes of the bank
were receivable in payment of all debts due to the state in its own
right, and could not be refused, yet where the state sold lands
which were held by it in trust for the benefit of a seminary, and
the terms of the sale were that the debtor should paying specie or
its equivalent, such debtor was not at liberty to tender the notes
of the bank in payment. The question arose in this way: Congress in
1827 had passed an act "concerning a seminary of learning in the
Territory of Arkansas," by which two entire townships of land were
directed to be set aside and reserved from sale, out of the public
lands within the said territory, for the use and support of a
university within the said territory. In 1836, Congress passed
another act entitled
"An act supplementary to the act entitled 'An act for the
admission of the State of Arkansas into the union, and to provide
for the due execution of the laws of the United
Page 135 U. S. 720
States within the same, and for other purposes,'"
by which last act the lands so reserved for the use and support
of a university were vested in the State of Arkansas. On the 28th
of December, 1840, the Legislature of Arkansas passed an act
entitled "An act to authorize the governor to dispose of the
seminary lands," and in 1842, the then governor of the state sold
to John W. Paup the right to enter and locate 640 acres of said
land, and received from him therefor bonds payable at different
dates in specie or its equivalent. In 1847, the governor of the
state brought a suit upon these bonds, and the defendants brought
into court the sum of $6,050 in notes of the Bank of the Arkansas,
and pleaded a tender of the same in discharge of the debt. The
plaintiff demurred on the ground that the proceeds of the bonds
were part of a trust fund committed to the state by Congress for
special purposes, over which the state had no power except to
collect and disburse the same in pursuance of the objects of the
grant, and the state had no power to apply said funds to the
payment of ordinary liabilities, and was not bound to accept in
payment of such bonds any depreciated bills, bank paper, or issues,
even though she might be ultimately liable to redeem them. This
demurrer was sustained, and judgment given that the fund was a
trust fund held by the State of Arkansas for the purposes to which
it was devoted, and therefore the state could not properly contract
to receive other than lawful money for property disposed of
belonging to said fund.
We think that the principle of this case sustains the decision
of the Court of Appeals of Virginia in the case now under
consideration, and the judgment of that court is
Affirmed.
It may be argued that the principle involved in the last case is
equally applicable to all taxes raised for the support of the state
government, inasmuch as the funds necessary for that purpose, as
well as those raised for the purpose of maintaining public free
schools, are required to be paid in cash. But there is this
difference: that the tax for school purposes is set apart for that
specific use, under the express requirement of the
constitution,
Page 135 U. S. 721
while the general tax for carrying on the government is, or
should be, adequate to meet not only the actual expenses of the
government itself, but also the outstanding debts and obligations
that may be due and payable during the fiscal year, of which the
coupons are themselves a part. If the tender of tax receiving
coupons to any considerable amount is apprehended, the rate of
taxation should be raised so as to produce a sufficient surplus
over and above such coupons to meet the expenses of the government.
If the influx of coupons should be so uncertain that so safe
calculation could be made on the subject, an arrangement could
probably be made with the coupon holders for limiting the
proportion of tax which would be received in coupons. It is
certainly to be wished that some arrangement may be adopted which
will be satisfactory to all the parties concerned, and relieve the
courts, as well as the Commonwealth of Virginia, whose name and
history recall so many interesting associations, from all further
exhibitions of a controversy that has become a vexation and a
regret.