Mervine v. Sailor

Error, to the District Court of Philadelphia.

The plaintiff declared on a ground-rent deed dated March 27th 1839, conveying a lot of ground on James street, Philadelphia, to the defendants, they “ yielding and paying therefor and there-out the yearly rent of $570, lawful silver money of the United States, each dollar weighing seventeen pennyweights and six grains at least, in half-yearly payments;” and averred, that the defendants covenanted to pay the rent as aforesaid, and, by virtue of the deeds, entered upon said lot: that on the 1st of April 1863, the sum of $285 in the above-mentioned silver money, each dollar weighing, &c., with interest, was due and unpaid, &c.

The plaintiff replied, that the defendants did not tender the rent “ in lawful silver money,” &c., but “ in promissory notes, or paper money, of the United States, issued under the Acts of Congress of February 25th and July 11th 1862, to the nominal amount on their face of the said sum of $285 — the same not being of equal exchangeable value with the silver dollars aforesaid,” &c.

The court gave judgment for the defendants on the demurrer: the plaintiff removed the case by writ of error.

1. Entering judgment for the defendants on the demurrer to the replication of the plaintiff.

2. Not entering judgment on the demurrer in favour of the plaintiff.

Then, it is contended that,

1. Congress cannot issue paper money; but

2. If they can, they cannot make it a tender.

3. If they can do so in regard to contracts made after the passage of the act, they cannot do so with regard to those made before.

4. Congress has no power to alter or nullify contracts made in a state by the citizens thereof.

5. If a contract made in a state by its citizens requires payment in a particular kind of money, Congress cannot compel the creditors to receive less than the market value of the money called for by the contract.

1 and 2. Congress has no powers except those expressly granted or necessarily implied: 1 Kent’s Com. 243, 313; 1 Story on Const. 382-442. Article I. § 8 of the Constitution contains an enumeration of the powers of Congress. The only power given as- to the subject-matter, is to “ coin money, regulate the value thereof and of foreign coin.” “ To coin” refers to metallic money. “ To regulate the value,” refers to the money coined, both from the position of the words and from the subsequent expression, “foreign coin:” United States v. Marigold, 9 How. 560; Fox v. Ohio, 5 Id. 432; Ogden v. Saunders, 12 Wheat. 213. No power can necessarily be inferred to be granted to Congress, because prohibited to the states. Congress has express power to coin money. Coin, therefore, was the only thing which the States could make a legal tender. As the money coined by authority of Congress furnishes the means by which debts can be compulsorily paid, there is no need to infer a power to make other money. Congress can make laws necessary to carry into execution the granted powers. Although this does not mean laws absolutely necessary: Commonwealth v. Lewis, 6 Binn. 270 ; McCullough v. Maryland, 4 Wheat. 413 ; yet it does not refer to the powers themselves, but to the moans of carrying them out.

The power to tax, to pay debts, and to borrow money, has no natural reference to making money. The power to regulate commerce relates to superintending the interchange of commodities, &c., not to creating a medium of exchange. The issuing of paper money as an evidence of indebtedness, and as embraced under a liberal signification of tbe power to borrow money, has no con-nection with the power to make that money a legal tender. The power assumed to make paper money a tender, implies a power to make anything a tender irrespective of the terms of private contracts.

3, 4 and 5. It is a dangerous doctrine, that Congress may modify or annul private contracts. A contract to pay silver is essentially modified, if not annulled, where a party is compelled to accept something else. The dictum of Judge Washington in Evans v. Peters, Peters C. C. Rep. 337, that the Constitution does not forbid Congress to pass laws violating the obligation of a contract, has not been affirmed by any decision of the Supreme Court. There may be a difference between the constitutionality of a law which Congress has a clear power to pass, and of a law which impairs the obligation of a contract relating to a matter not clearly within its power: Ex parte Klein, 1 How. 277 in note. The obligation of a contract is impaired, if it cannot be enforced by virtue of some legislative enactment: McCracken v. Hayward, 2 How. 608.

It is an unwarrantable stretch of language to assert that the legal tender clause of the Act of Congress makes a paper dollar equal to the silver dollar of this deed. Congress has sanctioned by enactment a difference between paper and silver money; paper cannot be offered for duties. Interest on some loans is payable in gold — on others in paper. The United States buys and sells gold in exchange for paper, and pays and receives the proportionate difference.