Such a course was not calculated to promote harmony, and to secure a continuance of the union. If, in questions of this kind, or if in any cases, the character of a sovereign state shall be made the subject of such imputation; this peaceful tribunal would not be enabled to procure the submission of the states to its jurisdiction; and contests about civil rights would be settled amid the din of arms, rather than in these halls of national justice.
The act of the legislature of Missouri, 'establishing loan offices,' had no purposes to accomplish by which injury could be sustained by any one. The deficiency of currency in the state, and the expenses which attended its new organization, made the arrangements proposed and authorised by the act convenient and beneficial to the citizens of the state. The state, when it directed that the certificates should be issued, made sufficient and certain provision for their redemption and payment. The permanent continuance of the circulation of the certificates was prohibited by an effective regulation in the bill: the twenty-fourth section of the law provided for the gradual extinction of the certificates as they should come in; and power was given to the governor, by the twenty-ninth section of the law, to negotiate a loan of gold and silver for their redemption. Thus, the certificates were issued upon ample means for their discharge; and their discharge to their full value must soon take place.
These certificates were not made a legal tender. They are not directed to pass as 'money:' and while there is no obligation imposed by the law, that they shall be taken by the citizens of the state; it declares that the state shall take them in payment for taxes, for salt, and for fees of office.
When examined, these certificates will be found to be nothing more than evidences of loans made to the state; and for the payment of which she has given specific and available pledges.
It will not be contended that the states have not power to borrow money: and what other form of certificate of a loan, than that which was adopted by the state of Missouri, can be devised, when this power is exercised. In every state of the union loans have been negotiable; and certificates of the amount due by the state to the individual lenders are issued.
The certificates which were the consideration of the note, were therefore not 'bills of credit,' in the constitutional acceptation of such instruments.
An examination of the legislation of the states in which such bills were issued, and the proceedings under those laws, will clearly show that the condition of things in the view and recollection of the convention which formed the constitution, was different, in every essential feature, from that which was created by the law of Missouri. Massachusetts, in 1690, issued bills of credit to pay taxes and other debts due to the state treasury; but the soldiers, to whom they were offered, would not receive them. 1 Hutchinson's Hist. 402, 404. In 1714 and 1716, other issues were made, and they were directed to pass as money, and made a tender. In 1749 the issuing of such bills was discontinued.
During the revolution, the 'bills of credit' which were issued by the authority of the states, and by that of congress, were in most cases made a tender; and this was the objectionable feature in them. So long as no objection to receive them is imposed by the law which directs or authorises their emission, they can injure no one. Free to refuse them, the citizen may protect himself from loss by their depreciation, by rejecting them.
The bills issued under the Missouri law have not this vice. That part of the law which obliges the officers of the state to receive them for salaries and fees, is not before the court. The notes in this suit were given voluntarily; and thus, in reference to the case of the plaintiffs in error, it cannot be said that the certificate given for the note had the character of 'a legal tender.'
In reference to the duty imposed on the lessees of the salt springs owned by the state, it should be known to the court, that when the 'act for the establishment of loan offices' was passed, no leases had been given for those salt springs. If it was to be made a condition of the lease, to which the lessee would consent, that these certificates should be received for salt: it cannot therefore be said that any obligation was imposed on him, of which he could complain.
While, therefore, in every aspect of this case, those who consented to take these certificates could not be affected to their injury by their depreciation, they might be benefited by it; they could pay them to the state for taxes, for fees of office, and for salt at their nominal or par value.
An examination of the proceedings of the convention which formed the constitution of the United States, will show that the prohibition which is now supposed to operate on the law of Missouri, was carried by a majority of one vote. Journal of the Convention, 302. It should not be presumed, that this clause of the constitution was intended to extend to such issues as those authorised by the act of Missouri. The language of the constitution should be strictly construed; as it is a limitation on the sovereignty of a state.
All bank notes issued under state charters are equally within the constitutional prohibition, if the construction assumed by the counsel of the plaintiffs in error is correct. The 'wolf scalp' certificates, by which the flocks and herds of the west are protected from the devastations of those destructive and numerous animals; the 'crow certificates,' the rewards of those who save the fields of the husbandman from the spoils of their worst enemies; are all receivable for taxes; and all are equally obnoxious to the exceptions taken to the certificates issued under the law of Missouri.
The consideration for the note which is the subject of this suit was a good and valuable consideration; and the note is binding on the parties to it, by the express terms of the sixteenth section of the law. The note furnished the parties with the means of paying their taxes, and was a benefit to them. All the certificates have been redeemed by the state.
Congress is not authorised to issue bills of credit. The states may do all that is not prohibited; while congress can do nothing which is not granted by the constitution. Congress had no express authority to issue treasury notes, but they were issued. These notes were precisely like the Missouri certificates.
The treasury notes were not bills of credit; for they were not made, by the act under which they were issued, a legal tender. They were freely circulated throughout the United States without objections; and they were most useful instruments in the financial operations of the government during the last war.
This court has not jurisdiction of the case. It is not within the requirements of the twenty-fifth section of the judiciary act. The validity of the state law was not drawn in question before the courts of Missouri; and no decision was made in those courts upon the validity of the objection now set up under the constitution of the United States.
The pleadings do not show that the law was drawn in question; they only deny the promise charged in the declaration. Upon the matters thus presented, and on no others, did the courts of Missouri decide.
Mr Sheffey, in reply. The whole argument on the part of the state of Missouri is founded on the assumption that the certificates are not bills of credit, because they are not made a legal tender.
The provision of the constitution was introduced to prevent a mischief; one of the most fatal effects on the property of the citizens of the United States: and thus considered, it is to be construed liberally. A strict construction, and particularly one which would render it inoperative, or feeble in its influence, would not be justifiable.
The evils are the same; and the notes will circulate as freely and as extensively, whether they are made a tender or not. Whatever paper promise is circulated on the credit of the state, is a bill of credit; and is within the sense of the constitution.
This provision in the constitution was introduced to prevent the states from resorting to state necessity as an apology for the issue of paper. The states are not allowed to 'coin money;' and the object clearly was to prevent any thing being made by the states which would serve as a circulating medium.
The word 'emit' is a peculiar expression. The states may borrow money, and give notes; but that is not coining money, nor is it emitting bills of credit; and so 'wolf and crow scalp certificates' are only evidence that the counties in the states which authorise them owe so much money for meritorious and beneficial services.
It is denied that the power of the United States to issue bills of credit, is the same which has been claimed by the state of Missouri under this law. It does not follow, that because the United States may issue such bills, the states may do so. The states are specially prohibited such issues by the constitution.
The proposition which was made in the convention to give to congress the power to issue bills of credit, may have been rejected because that power had been already given in the power to coin money, and regulate its value. Congress has this power, as an incident: like the power to issue debentures; which is exercised as an incident to the power to regulate commerce.
Mr Chief Justice MARSHALL delivered the opinion of the Court: Justices THOMPSON, JOHNSON, and M'LEAN dissenting.
This is a writ of error to a judgment rendered in the court of last resort, in the state of Missouri; affirming a judgment obtained by the state in one of its inferior courts against Hiram Craig and others, on a promissory note.
The judgment is in these words: 'and afterwards at a court,' &c. 'the parties came into court by their attorneys, and, neither party desiring a jury, the cause is submitted to the court; therefore, all and singular the matters and things being seen and heard by the court, it is found by them, that the said defendants did assume upon themselves, in manner and form, as the plaintiff by her counsel alleged. And the court also find, that the consideration for which the writing declared upon and the assumpsit was made, was for the loan of loan office certificates, loaned by the state at her loan office at Chariton; which certificates were issued, and the loan made in the manner pointed out by an act of the legislature of the said state of Missouri, approved the 27th day of June 1821, entitled an act for the establishment of loan offices, and the acts amendatory and supplementary thereto: and the court do further find, that the plaintiff has sustained damages by reason of the non-performance of the assumptions and undertakings of them, the said defendants, to the sum of two hundred and thirty-seven dollars and seventy-nine cents, and do assess her damages to that sum. Therefore it is considered,' &c.
The first inquiry is into the jurisdiction of the court.
The twenty-fifth section of the judicial act declares, 'that a final judgment or decree in any suit in the highest court of law or equity of a state, in which a decision in the suit could be had, where is drawn in question' 'the validity of a statute of, or an authority exercised under any state, on the ground of their being repugnant to the constitution, treaties or laws of the United States, and the decision is in favour of such their validity,' 'may be re-examined, and reversed or affirmed in the supreme court of the United States.'
To give jurisdiction to this court, it must appear in the record, 1. That the validity of a statute of the state of Missouri was drawn in question; on the ground of its being repugnant to the constitution of the United States. 2. That the decision was in favour of its validity.
1. To determine whether the validity of a statute of the state was drawn in question, it will be proper to inspect the pleadings in the cause, as well as the judgment of the court.
The declaration is on a promissory note, dated on the 1st day of August 1822, promising to pay to the state of Missouri, on the 1st day of November 1822, at the loan office in Chariton, the sum of one hundred and ninety-nine dollars ninety-nine cents, and the two per cent, per annum, the interest accruing on the certificates borrowed from the 1st of October 1821. This note is obviously given for certificates loaned under the act, 'for the establishment of loan offices.' That act directs that loans on personal securities shall be made of sums less than two hundred dollars. This note is for one hundred and ninety-nine dollars ninety-nine cents. The act directs that the certificates issued by the state shall carry two per cent interest from the date, which interest shall be calculated in the amount of the loan. The note promises to repay the sum, with the two per cent interest accruing on the certificates borrowed, from the 1st day of October 1821. It cannot be doubted that the declaration is on a note given in pursuance of the act which has been mentioned.
Neither can it be doubted that the plea of non assumpsit allowed the defendants to draw into question at the trial the validity of the consideration on which the note was given. Every thing which disaffirms the contract, every thing which shows it to be void, may be given in evidence on the general issue in an action of assumpsit. The defendants, therefore, were at liberty to question the validity of the consideration which was the foundation of the contract, and the constitutionality of the law in which it originated.
Have they done so?
Had the cause been tried before a jury, the regular course would have been to move the court to instruct the jury that the act of assembly, in pursuance of which the note was given, was repugnant to the constitution of the United States; and to except to the charge of the judges, if in favour of its validity: or a special verdict might have been found by the jury, stating the act of assembly, the execution of the note in payment of certificates loaned in pursuance of that act; and referring its validity to the court. The one course or the other would have shown that the validity of the act of assembly was drawn into question, on the ground of its repugnancy to the constitution; and that the decision of the court was in favour of its validity. But the one course or the other, would have required both a court and jury. Neither could be pursued where the office of the jury was performed by the court. In such a case, the obvious substitute for an instruction to the jury, or a special verdict, is a statement by the court of the points in controversy, on which its judgment is founded. This may not be the usual mode of proceeding, but it is an obvious mode; and if the court of the state has adopted it, this court cannot give up substance for form.
The arguments of counsel cannot be spread on the record. The points urged in argument cannot appear. But the motives stated by the court on the record for its judgment, and which form a part of the judgment itself, must be considered as exhibiting the points to which those arguments were directed, and the judgment as showing the decision of the court upon those points. There was no jury to find the facts and refer the law to the court; but if the court, which was substituted for the jury, has found the facts on which its judgment was rendered; its finding must be equivalent to the finding of a jury. Has the court, then, substituting itself for a jury, placed facts upon the record, which, connected with the pleadings, show that the act in pursuance of which this note was executed was drawn into question, on the ground of its repugnancy to the constitution?
After finding that the defendants did assume upon themselves, &c. the court proceeds to find 'that the consideration for which the writing declared upon and the assumpsit was made, was the loan of loan office certificates loaned by the state at her loan office at Chariton; which certificates were issued and the loan made, in the manner pointed out by an act of the legislature of the said state of Missouri, approved the 27th of June 1821, entitled,' &c.
Why did not the court stop immediately after the usual finding that the defendants assumed upon themselves? Why proceed to find that the note was given for loan office certificates issued under the act contended to be unconstitutional, and loaned in pursuance of that act; if the matter thus found was irrelevant to the question they were to decide?
Suppose the statement made by the court to be contained in the verdict of a jury which concludes with referring to the court the validity of the note thus taken in pursuance of the act; would not such a verdict bring the constitutionality of the act, as well as its construction, directly before the court? We think it would: such a verdict would find that the consideration of the note was loan office certificates, issued and loaned in the manner prescribed by the act. What could be referred to the court by such a verdict, but the obligation of the law? It finds that the certificates for which the note was given, were issued in pursuance of the act, and that the contract was made in conformity with it. Admit the obligation of the act, and the verdict is for the plaintiff; deny its obligation, and the verdict is for the defendant. On what ground can its obligation be contested, but its repugnancy to the constitution of the United States? No other is suggested. At any rate, it is open to that objection. If it be in truth repugnant to the constitution of the United States, that repugnancy might have been urged in the state, and may consequently be urged in this court; since it is presented by the facts in the record, which were found by the court that tried the cause.
It is impossible to doubt that, in point of fact, the constitutionality of the act, under which the certificates were issued that formed the consideration of this note, constituted the only real question made by the parties, and the only real question decided by the court. But the record is to be inspected with judicial eyes; and, as it does not state in express terms that this point was made, it has been contended that this court cannot assume the fact that it was made or determined in the tribunal of the state.
The record shows distinctly that this point existed, and that no other did exist; the special statement of facts made by the court as exhibiting the foundation of its judgment contains this point and no other. The record shows clearly that the cause did depend, and must depend, on this point alone. If in such a case, the mere omission of the court of Missouri, to say, in terms, that the act of the legislature was constitutional, withdraws that point from the cause, or must close the judicial eyes of the appellate tribunal upon it; nothing can be more obvious, than that the provisions of the constitution, and of an act of congress, may be always evaded; and may be often, as we think they would be in this case, unintentionally defeated.
But this question has frequently occurred; and has, we think, been frequently decided in this court. Smith vs. The State of Maryland, 6 Cranch, 286. Martin vs. Hunter's Lessee, 1 Wheat. 355. Miller vs. Nicholls, 4 Wheat. 311. Williams vs. Norris, 12 Wheat. 117. Wilson and others vs. The Black Bird Creek Marsh Company, 2 Peters, 245, and Harris vs. Dennie in this term; are all, we think, expressly in point. There has been perfect uniformity in the construction given by this court to the twenty-fifth section of the judicial act. That construction is, that it is not necessary to state, in terms, on the record, that the constitution, or a treaty or law of the United States has been drawn in question, or the validity of a state law, on the ground of its repugnancy to the constitution. It is sufficient if the record shows that the constitution, or a treaty or law of the United States must have been construed, or that the constitutionality of a state law must have been questioned; and the decision has been in favour of the party claiming under such law.
We think, then, that the facts stated on the record presented the question of repugnancy between the constitution of the United States and the act of Missouri to the court for its decision. If it was presented, we are to inquire,
2. Was the decision of the court in favour of its validity?
The judgment in favour of the plaintiff is a decision in favour of the validity of the contract, and consequently of the validity of the law by the authority of which the contract was made.
The case is, we think, within the twenty-fifth section of the judicial act, and consequently within the jurisdiction of this court.
This brings us to the great question in the cause: Is the act of the legislature of Missouri repugnant to the constitution of the United States?
The counsel for the plaintiffs in error maintain, that it is repugnant to the constitution, because its object is the emission of bills of credit contrary to the express prohibition contained in the tenth section of the first article.
The act under the authority of which the certificates loaned to the plaintiffs in error were issued, was passed on the 26th of June 1821, and is entitled 'an act for the establishment of loan offices.' The provisions that are material to the present inquiry, are comprehended in the third, thirteenth, fifteenth, sixteenth, twenty-third and twenty-fourth sections of the act, which are in these words:
Section the third enacts: 'that the auditor of public accounts and treasurer, under the direction of the governor, shall, and they are hereby required to issue certificates, signed by the said auditor and treasurer, to the amount of two hundred thousand dollars, of denominations not exceeding ten dollars, nor less than fifty cents (to bear such devices as they may deem the most safe), in the following form, to wit: 'This certificate shall be receivable at the treasury, or any of the loan offices of the state of Missouri, in the discharge of taxes or debts due to the state, for the sum of $_____, with interest for the same, at the rate of two per centum per annum from this date, the ___ day of _____ 182.'
The thirteenth section declares: 'that the certificates of the said loan office shall be receivable at the treasury of the state, and by all tax gatherers and other public officers, in payment of taxes or other moneys now due to the state or to any county or town therein, and the said certificates shall also be received by all officers civil and military in the state, in the discharge of salaries and fees of office.'
The fifteenth section provides: 'that the commissioners of the said loan offices shall have power to make loans of the said certificates, to citizens of this state, residing within their respective districts only, and in each district a proportion shall be loaned to the citizens of each county therein, according to the number thereof,' &c.
Section sixteenth. 'That the said commissioners of each of the said offices are further authorised to make loans on personal securities by them deemed good and sufficient, for sums less than two hundred dollars; which securities shall be jointly and severally bound for the payment of the amount so loaned, with interest thereon,' &c.
Section twenty-third. 'That the general assembly shall, as soon as may be, cause the salt springs and lands attached thereto, given by congress to this state, to be leased out, and it shall always be the fundamental condition in such leases, that the lessee or lessees shall receive the certificates hereby required to be issued, in payment for salt, at a price not exceeding that which may be prescribed by law: and all the proceeds of the said salt springs, the interest accruing to the state, and all estates purchased by officers of the said several offices under the provisions of this act, and all the debts now due or hereafter to be due to this state; are hereby pledged and constituted a fund for the redemption of the certificates hereby required to be issued, and the faith of the state is hereby also pledged for the same purpose.'
Section twenty-fourth. 'That it shall be the duty of the said auditor and treasurer to withdraw annually from circulation, one-tenth part of the certificates which are hereby required to be issued,' &c.
The clause in the constitution which this act is supposed to violate is in these words: 'No state shall' 'emit bills of credit.'
What is a bill of credit? What did the constitution mean to forbid?
In its enlarged, and perhaps its literal sense, the term 'bill of credit' may comprehend any instrument by which a state engages to pay money at a future day; thus including a certificate given for money borrowed. But the language of the constitution itself, and the mischief to be prevented, which we know from the history of our country, equally limit the interpretation of the terms. The word 'emit,' is never employed in describing those contracts by which a state binds itself to pay money at a future day for services actually received, or for money borrowed for present use; nor are instruments executed for such purposes, in common language, denominated 'bills of credit.' To 'emit bills of credit,' conveys to the mind the idea of issuing paper intended to circulate through the community for its ordinary purposes, as money, which paper is redeemable at a future day. This is the sense in which the terms have been always understood.
At a very early period of our colonial history, the attempt to supply the want of the precio is metals by a paper medium was made to a considerable extent; and the bills emited for this purpose have been frequently denominated bills of credit. During the war of our revolution, we were driven to this expedient; and necessity compelled us to use it to a most fearful extent. The term has acquired an appropriate meaning; and 'bills of credit' signify a paper medium, intended to circulate between individuals, and between government and individuals, for the ordinary purposes of society. Such a medium has been always liable to considerable fluctuation. Its value is continually changing; and these changes, often great and sudden, expose individuals to immense loss, are the sources of ruinous speculations, and destroy all confidence between man and man. To cut up this mischief by the roots, a mischief which was felt through the United States, and which deeply affected the interest and prosperity of all; the people declared in their constitution, that no state should emit bills of credit. If the prohibition means any thing, if the words are not empty sounds, it must comprehend the emission of any paper medium, by a state government, for the purpose of common circulation.
What is the character of the certificates issued by authority of the act under consideration? What office are they to perform? Certificates signed by the auditor and treasurer of the state, are to be issued by those officers to the amount of two hundred thousand dollars, of denominations not exceeding ten dollars, nor less than fifty cents. The paper purports on its face to be receivable at the treasury, or at any loan office of the state of Missouri, in discharge of taxes or debts due to the state.
The law makes them receivable in discharge of all taxes, or debts due to the state, or any county or town therein; and of all salaries and fees of office, to all officers civil and military within the state; and for salt sold by the lessees of the public salt works. It also pledges the faith and funds of the state for their redemption.
It seems impossible to doubt the intention of the legislature in passing this act, or to mistake the character of these certificates, or the office they were to perform. The denominations of the bills, from ten dollars to fifty cents, fitted them for the purpose of ordinary circulation; and their reception in payment of taxes, and debts to the government and to corporations, and of salaries and fees, would give them currency. They were to be put into circulation; that is, emitted, by the government. In addition to all these evidences of an intention to make these certificates the ordinary circulating medium of the country, the law speaks of them in this character; and directs the auditor and treasurer to withdraw annually one-tenth of them from circulation. Had they been termed 'bills of credit,' instead of 'certificates,' nothing would have been wanting to bring them within the prohibitory words of the constitution.
And can this make any real difference? Is the proposition to be maintained, that the constitution meant to prohibit names and not things? That a very important act, big with great and ruinous mischief, which is expressly forbidden by words most appropriate for its description; may be performed by the substitution of a name? That the constitution, in one of its most important provisions, may be openly evaded by giving a new name to an old thing? We cannot think so. We think the certificates emitted under the authority of this act, are as entirely bills of credit, as if they had been so denominated in the act itself.
But it is contended, that though these certificates should be deemed bills of credit, according to the common acceptation of the term, they are not so in the sense of the constitution; because they are not made a legal tender.
The constitution itself furnishes no countenance to this distinction. The prohibition is general. It extends to all bills of credit, not to bills of a particular description. That tribunal must be bold indeed, which, without the aid of other explanatory words, could venture on this construction. It is the less admissible in this case, because the same clause of the constitution contains a substantive prohibition to the enactment of tender laws. The constitution, therefore, considers the emission of bills of credit, and the enactment of tender laws, as distinct operations, independent of each other, which may be separately performed. Both are forbidden. To sustain the one, because it is not also the other; to say that bills of credit may be emitted, if they be not made a tender in payment of debts; is, in effect, to expunge that distinct independent prohibition, and to read the clause as if it had been entirely omitted. We are not at liberty to do this.
The history of paper money has been referred to, for the purpose of showing that its great mischief consists in being made a tender; and that therefore the general words of the constitution may be restrained to a particular intent.
Was it even true, that the evils of paper money resulted solely from the quality of its being made a tender, this court would not feel itself authorised to disregard the plain meaning of words, in search of a conjectural intent to which we are not conducted by the language of any part of the instrument. But we do not think that the history of our country proves either, that being made a tender in payment of debts, is an essential quality of bills of credit, or the only mischief resulting from them. It may, indeed, be the most pernicious; but that will not authorise a court to convert a general into a particular prohibition.
We learn from Hutchinson's History of Massachusetts, vol. 1, p. 402, that bills of credit were emitted for the first time in that colony in 1690. An army returning unexpectedly from an expedition against Canada, which had proved as disastrous as the plan was magnificent, found the government totally unprepared to meet their claims. Bills of credit were resorted to, for relief from this embarrassment. They do not appear to have been made a tender; but they were not on that account the less bills of credit, nor were they absolutely harmless. The emission, however, not being considerable, and the bills being soon redeemed, the experiment would have been productive of not much mischief, had it not been followed by repeated emissions to a much larger amount. The subsequent history of Massachusetts abounds with proofs of the evils with which paper money is fraught, whether it be or be not a legal tender.
Paper money was also issued in other colonies, both in the north and south; and whether made a tender or not, was productive of evils in proportion to the quantity emitted. In the war which commenced in America in 1755, Virginia issued paper money at several successive sessions, under the appellation of treasury notes. This was made a tender. Emissions were afterwards made in 1769, in 1771, and in 1773. These were not made a tender; but they circulated together; were equally bills of credit; and were productive of the same effects. In 1775 a considerable emission was made for the purposes of the war. The bills were declared to be current, but were not made a tender. In 1776, an additional emission was made, and the bills were declared to be tender. The bills of 1775 and 1776 circulated together; were equally bills of credit; and were productive of the same consequences.
Congress emitted bills of credit to a large amount; and did not, perhaps could not, make them a legal tender. This power resided in the states. In May 1777, the legislature of Virginia passed an act for the first time making the bills of credit issued under the authority of congress a tender so far as to extinguish interest. It was not until March 1781 that Virginia passed an act making all the bills of credit which had been emitted by congress, and all which had been emitted by the state, a legal tender in payment of debts. Yet they were in every sense of the word bills of credit, previous to that time; and were productive of all the consequences of paper money. We cannot then assent to the proposition. that the history of our country furnishes any just argument in favour of that restricted construction of the constitution, for which the counsel for the defendant in error contends.
The certificates for which this note was given, being in truth 'bills of credit' in the sense of the constitution, we are brought to the inquiry:
Is the note valid of which they form the consideration?
It has been long settled, that a promise made in consideration of an act which is forbidden by law is void. It will not be questioned, that an act forbidden by the constitution of the United States, which is the supreme law, is against law. Now the constitution forbids a state to 'emit bills of credit.' The loan of these certificates is the very act which is forbidden. It is not the making of them while they lie in the loan offices; but the issuing of them, the putting them into circulation, which is the act of emission; the act that is forbidden by the constitution. The consideration of this note is the emission of bills of credit by the state. The very act which constitutes the consideration, is the act of emitting bills of credit, in the mode prescribed by the law of Missouri; which act is prohibited by the constitution of the United States.
Cases which we cannot distinguish from this in principle, have been decided in state courts of great respectability; and in this court. In the case of the Springfield Bank vs. Merrick et al. 14 Mass. Rep. 322, a note was made payable in certain bills, the loaning or negotiating of which was prohibited by statute, inflicting a penalty for its violation. The note was held to be void. Had this note been made in consideration of these bills, instead of being made payable in them, it would not have been less repugnant to the statute; and would consequently have been equally void.
In Hunt vs. Knickerbocker, 5 Johns. Rep. 327, it was decided that an agreement for the sale of tickets in a lottery, not authorised by the legislature of the state, although instituted under the authority of the government of another state, is contrary to the spirit and policy of the law, and void. The consideration on which the agreement was founded being illegal, the agreement was void. The books, both of Massachusetts and New York, abound with cases to the same effect. They turn upon the question whether the particular case is within the principle, not on the principle itself. It has never been doubted, that a note given on a consideration which is prohibited by law, is void. Had the issuing or circulation of certificates of this or of any other description been prohibited by a statute of Missouri, could a suit have been sustained in the courts of that state, on a note given in consideration of the prohibited certificates? If it could not, are the prohibitions of the constitution to be held less sacred than those of a state law?
It had been determined, independently of the acts of congress on that subject, that sailing under the license of an enemy is illegal. Patton vs. Nicholson, 3 Wheat. 204, was a suit brought in one of the courts of this district on a note given by Nicholson of Patton, both citizens of the United States, for a British license. The United States were then at war with Great Britain; but the license was procured without any intercourse with the enemy. The judgment of the circuit court was in favour of the defendant; and the plaintiff sued out a writ of error. The counsel for the defendant in error was stopped, the court declaring that the use of a license from the enemy being unlawful, one citizen had no right to purchase from or sell to another such a license, to be used on board an Emerican vessel. The consideration for which the note was given being unlawful, it followed of course that the note was void.
A majority of the court feels constrained to say that the consideration on which the note in this case was given, is against the highest law of the land, and that the note itself is utterly void. In rendering judgment for the plaintiff, the court for the state of Missouri decided in favour of the validity of a law which is repugnant to the constitution of the United States.
In the argument, we have been reminded by one side of the dignity of a sovereign state; of the humiliation of her submitting herself to this tribunal; of the dangers which may result from inflicting a wound on that dignity: by the other, of the still superior dignity of the people of the United States; who have spoken their will, in terms which we cannot misunderstand.
To these admonitions, we can only answer: that if the exercise of that jurisdiction which has been imposed upon us by the constitution and laws of the United States, shall be calculated to bring on those dangers which have been indicated: or if it shall be indispensable to the preservation of the union, and consequently of the independence and liberty of these states: these are considerations which address themselves to those departments which may with perfect propriety be influenced by them. This department can listen only to the mandates of law; and can tread only that path which is marked out by duty.
The judgment of the supreme court of the state of Missouri for the first judicial district is reversed; and the cause remanded, with directions to enter judgment for the defendants.
This cause came on to be heard on the transcript of the record from the supreme court of the state of Missouri, for the first judicial district, and was argued by counsel; on consideration whereof, this court is of opinion, that there is error in the rendition of the judgment of the said court in this, that in affirming the judgment rendered by the circuit court for the county of Chariton, that court has given an opinion in favour of the validity of the act of the legislature of Missouri, passed on the 27th of June 1821, entitled 'an act for the establishment of loan offices,' which act is, in opinion of this court, repugnant to the constitution of the United States; whereupon it is considered by the court, that the said judgment of the said supreme court of the state of Missouri for the first judicial district ought to be reversed and annulled; and the same is hereby reversed and annulled; and the cause remanded to that court, with directions to enter judgment in favour of the defendant to the original action.
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This work is in the public domain in the United States because it is a work of the United States federal government (see 17 U.S.C. 105).
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