The supreme court of Mississippi construed these bonds as obligations payable in gold coin, and held that the power to borrow money conferred on the levee board of Mississippi, district No. 1, did not authorize that corporation to borrow gold coin or issue bonds acknowledging the receipt thereof, and agreeing to pay therefor in the same medium, and that the bonds were void for want of power in that particular. If by this adjudication a right possessed by plaintiffs in error, as holders of bonds, under the constitution and laws of the United States, was necessarily denied, then this court has jurisdiction to revise the judgment on writ of error. A definite and distinct issue was raised by the ground of demurrer, on which the decision of the court proceeded, and if that issue was an issue as to the possession of a right under the constitution and laws of the United States, then the denial of that right gives jurisdiction. And it appears to us that such an issue was presented. Plaintiffs in error claimed that the bonds were payable in money of the United States. Defendants claimed they were payable in a particular kind of such money, and, because so payable, were invalid. The issue in either aspect involved the determination of rights of plaintiffs in error under the constitution and laws of the United States, and was disposed of adversely to them.
In Trebilcock v. Wilson, 12 Will. 687, where a note held by plaintiff in error was payable by its terms in specie, and he claimed that he was entitled to have it paid in gold or silver dollars of the United States, which the state court decided he was not, the writ of error was maintained on the ground of the denial of a right under the constitution.
In Maryland v. Railroad Co., 22 Wall. 105, in which the state had made certain advances for the railroad company in gold, and sought judgment accordingly, and the state court held that it was only entitled to recovery in currency, no objection was raised to the jurisdiction of this court to review the judgment.
In the case at bar the inquiry as to the medium in which the bonds were payable, and, if in gold coin, the effect thereof, involved the right to enforce a cont act according to the meaning of its terms as determined by the constitution and laws of the United States, interpreted by the tribunal of last resort, and therefore raised questions of federal right which justified the issue of the writ.
The levee board was created a body corporate, and expressly authorized to borrow money and to issue negotiable instruments therefor. It was thus endowed in order to enable it to effectuate the objects and purposes of its creation. It issued bonds, whereby it acknowledged that it was indebted in so many dollars in gold coin, and promised to pay the specified sums at a designated date, with interest.
The general rule is that those powers which are within the intent and purposes of the creation of a corporation, and essential to give effect to the powers expressly granted, may be exercised as necessarily incident thereto, and that a discretion exists in the choice of the means to accomplish the required result, unless restricted by the terms of the grant. The power to borrow money was expressly granted, unaccompanied by any definition of the word 'money,' which might operate as a restriction on the power; and according to the general rule, if there were more than one kind of money, a discretion as to the particular kind would be necessarily incident to the execution of the power granted, and might be execised by the corporation. At the time these bonds were issued the money of the United States consisted, under the decisions of this court, of gold and silver coin and United States notes. Gold coin was in every respect unlimited in its legal tender capacity, but all were equally valid as money of the United States.
Although the supreme court of Mississippi conceded that gold coin was 'money,' it insisted that when the bonds were issued such coin was 'of much greater value than the circulating medium, consisting of United States treasury notes and national bank notes,' as the court judicially knew; that 'all debts payable in 'dollars' generally were, as now, solvable in legal tenders, but an obligation payable in gold coin can be discharged only according to its terms'; that in authorizing the issue of these bonds, 'and in the use of the term 'money,' the legislature must be supposed to have meant in the act cited that money which constituted the basis of the general business of the country, and was a legal tender for the payment of debts'; and that, consequently, the bonds were void for want of power. Notwithstanding the disclaimer, this conclusion denied the exercise of any discretion by the corporation to borrow one kind of money of the United States on the ground that that particular kind had ceased in fact to be money, and had become a commodity.
Doubtless the word 'money' is often used as applicable to other media of exchange than coin. Bank notes lawfully issued and actually current at par in lieu of coin are treated as money, because flowing, as such, through the channels of trade and commerce without question. Bank v. Georgia, 10 Wheat. 333; Miller v. Race, 1 Burrows, 452. And it would seem that it was in this sense that the supreme court regarded the use of the word, for, though it assumed that the property of being legal tender was an essential attribute of money, yet it included national bank notes, which, though receivable at par in payment of government dues except duties, and payable by the government at par except for interest on the public debt and in redemption of the national currency, and also payable and receivable as between national banks themselves (Rev. St. §§ 5182, 5196), had not been declared legal tender 'in payment of all debts, public and private, within the United States, except for duties on imports and interest on the public debt,' as United States treasury notes had been (Rev. St. § 3588).
These bonds were contracts for the payment of dollars, and not for the delivery of bullion; nor were they made expressly payable in coin.
If the legislature had in terms authorized the corporation to borrow c rrency only, and to issue bonds payable in currency only, that would have presented a different question; but the language used embodied no such express limitation, and there could be no implication that the power was other than the power to borrow money of the United States. But it is said that, as it was held in Judson v. City of Bessemer, 87 Ala. 241, 6 South. 267, that 'express and general power to issue negotiable bonds, in the absence of legislative restriction, carries the implied or incidental power to make them payable generally,-that is, in currency,-which is constitutionally a legal tender, or payable in the particular coin which constitutes the legal and commercial standard by which the value of other kinds of currency is measured,' and that, although the act authorizing the city of Bessemer to issue bonds was silent on the subject, the city had power to make them payable in gold; and by the court of appeals of Kentucky, in Farson v. Board, 30 S. W. 17, that municipal bonds were not void, because the principal and interest were made payable in gold coin of the United States, when the act authorizing their issue and sale did not specify the medium in which they were to be made payable,-so the supreme court of Mississippi was at liberty to hold the contrary in placing a construction on the law of that state. Conceding this to be so, the question of jurisdiction remains unaffected, for in the former cases the right of the holders of municipal obligations to demand under the constitution and laws of the United States payment thereof in money of the United States was recognized, while in this case that right was, in effect, denied.
The supreme court of Mississippi was of opinion that the bonds evidenced an indebtedness created in gold coin, and that they were solvable in the same medium, and held that the legislature intended to limit the power to borrow and to promise to pay to another kind of money of the United States. But this was to impose a limitation on the power, not expressed, but by implication, and that implication involved a federal question. For the power to borrow money simply meant the power to borrow whatever was money according to the constitution of the United States and the laws passed in pursuance thereof, and the power to issue negotiable bonds therefor included the power to make them payable in such money. This the law presumed, and to proceed on an implication to the contrary was to deny to the holders of these bonds, subsequent to their purchase, a right arising under the constitution and laws of the United States.
But it was only by deciding that these bonds were payable in a particular kind of money of the United States, and that this kind, though money in law, had ceased, as the court assumed, to be money in fact, that the state court was enabled to hold them void for want of power, and, if that premise were incorrect, the conclusion, whether in itself right or wrong, would not follow.
Now, these bonds were not expressly payable in gold coin. It is true that, as they acknowledged an indebtedness in gold coin, and as the coupons were payable specifically 'in currency,' the argument is not unreasonable that the corporation intended the purchasers to expect payment in the money in which the indebtedness was stated to have been contracted; but the agreement to pay the designated sums did not specify any particular kind of money, and the obligation was to pay what the law recognized as money when the payment was to be made. The bonds were, therefore, legally solvable in the money of the United States, whatever its description, and not in any particular kind of that money; and it is impossible to hold that they were void because of want of power.
In Bull v. Bank of Kasson, 123 U.S. 105, 112, 8 Sup. Ct. 62, the question was raised whether certain bank checks for the payment of 'five hundred dollars in current funds' were negotiable, and Mr. Justice Field, delivering the opinion of the court, said: 'Undoubtedly it is the law that, to b negotiable, a bill, promissory note, or check must be payable in money, or whatever is current as such by the law of the country where the instrument is drawn or payable. There are numerous cases where a designation of the payment of such instruments in notes of particular banks or associations, or in paper not current as money, has been held to destroy their negotiability. Irvine v. Lowry, 14 Pet. 293; Miller v. Austen, 13 How. 218, 228. But within a few years, commencing with the first issue in this country of notes declared to have the quality of legal tender, it has been a common practice of drawers of bills of exchange or checks or makers of promissory notes to indicate whether the same are to be paid in gold or silver or in such notes; and the term 'current funds' has been used to designate any of these, all being current, and declared by positive enactment to be legal tender. It was intended to cover whatever was receivable and current by law as money, whether in the form of notes or coin. Thus construed, we do not think the negotiability of the paper in question was impaired by the insertion of those words.'
In Maryland v. Railroad Co., 22 Wall. 105, it was held that, although since the legaltender acts, an undertaking to pay in gold might be implied under special circumstances, and be as obligatory as if made in express words, yet that the implication must be found in the language of the contract, and could not be gathered from the mere expectations of the parties.
In this case the language of the contract as to payment created no such obligation, and no doubt as to its meaning was raised by the extraneous fact that gold was not everywhere in circulation when the bonds were issued.
Without pursuing the subject further, it is enough that by their terms these bonds were payable generally in money of the United States, and that, this being so, the conclusion of the supreme court of Mississippi that they were otherwise payable was erroneous. The bonds, therefore, were not void on the ground stated, even assuming that ground to be tenable; and we think the decision as to the medium of payment re-examinable here, because amounting to a denial of the right of plaintiffs in error to be paid in money of the United States, by implying a limitation contrary to the controlling presumption arising under the federal laws and decisions. Under those laws and decisions there was more than one description of money of the United States, and hence the presumption was that, where no one kind of money was specified, the bonds were payable in any kind; but this, and the claim based thereon, was denied.
As the case was determined by the state supreme court on the single ground to which we have referred, we shall not discuss the effect and validity of the subsequent legislation brought under review by the bill, or any of the other questions suggested by counsel. Judgment reversed, and cause remanded for further proceedings not inconsistent with this opinion.
Mr. Justice FIELD, concurring.
I have also some observations to make upon this litigation. The case comes before us on error to the supreme court of the state of Mississippi. The complainants below, the plaintiffs, in error here, commenced a suit in the chancery court of Hinds county, in that state, to enforce a trust and a lien upon certain lands therein, as holders of bonds, of the levee board of the state, district No. 1, by an act of the legislature of March 17, 1871, under which the bonds were issued. The bill of complaint alleged that Amos Woodruff, trustee, the German Bank of Memphis, Tenn., and B. Richmond were owners and holders of a large number of bonds issued by the levee board of the state of Mississippi, district No. 1, and that the bonds were issued and negotiated by the board under the act entitled 'An act to redeem and protect from overflow from the river Mississippi certain lands described, approved March 17, 1871.' The language of the statute authorizing the issue of the bond is as follows:
'Sec. 9. Be it further enacted, that for the purposes aforesaid, and to enable them to carry out the purposes of this act, the said board of levee commissioners shall have power to borrow money, and to that end may issue the bonds of said board to the amount of one million of dollars, in such sums and denominations, not less than one hundred dollars each, as the said board may prescribe; which bonds shall be signed by the president and countersigned by the treasurer of said board, and be made payable to order or bearer, in not less than two nor more than ten years after the first day of January, 1871, and shall bear a rate of interest not exceeding eight per cent. per annum, for which interest coupons may be attached, payable at such time and place as the board may contract. Said bonds shall be negotiated as promissory notes or bills of exchange, and may be sold and negotiated in any market in or out of the state, on the best terms that can be obtained for the same; but in no case shall any of them be negotiated or sold at a greater discount than ten per cent.'
By the act, as stated in the bill, a special tax was levied upon all the lands in said district protected by the levees to be built by the board, and provision was made for its collection.
By section 10 of the act, as also stated in the bill, it was provided 'that the charges and assessments, fixed, levied and made as aforesaid, by this act, shall be, as they are from time to time collected, and they are thereby constituted a special fund and trust, to be used by said board; first, in payment of any bonds that may be sold or used as before provided under this act, and of any money that may be borrowed under its provisions; secondly, for the payment of any other debts or liabilities of said board, and when collected the same shall be paid into the treasury of said board for the purposes aforesaid.'
Under this statute the board of levee commissioners, as stated in the bill, was organized, and issue a large number of bonds, aggregating in amount $600,000, and payable to bearer. The bonds recited the act under which they were issued, and expressly stipulated that the interest coupons attached were payable in the currency of the United States, but the principal of the bonds were payable in gold coin.
The bill was exhibited by complainants as owners and holders of a large number of bonds thus issued and negotiated. It alleged that the act of the legislature referred to imposed a specific tax in rem on each acre of land (with few exceptions) lying in the levee district No. 1, in order to pay the bonds and coupons; that a large amount of the lands were sold under the act for the delinquent taxes in the year 1872 and the succeeding years, until 1876, and, in default of buyers, were struck off to the treasurer of the levee board, and duly conveyed to him as such; that from 1876 to 1883 there were no sales to the treasurer, but all lands sold as delinquent were struck off for the state, county, and district No. 1 levee taxes to the state of Mississippi, and conveyed to it by one deed; that the state of Mississippi, in 1876, abolished the levee board of district No. 1 as constituted, and made the state auditor and treasurer ex officio levee commissioners its successors, and vested the titles of all lands held by the levee board in them to be administered by them. The bill alleged further that all such lands were held by the state in trust for the bondholders, under the act of March 17, 1871.
The bill asked that the trustees who admin istered the trust, and who had not yet accounted, should be required to discover the status of the trust estate, and how it was administered by them, and that upon such discovery relief be granted by enforcing the trust; that the sales and conveyances made by the trustees in violation of the trust be declared void, and that such purchasers be held to an account of the trust estate so far as it had come into their hands, and that the lands be § bjected to the tax chargeable against them under the act of 1871, and the tax be held as a special fund to pay the bonds held by the complainants and others.
The defendants demurred to the bill upon the ground, among other reasons assigned, that the act of the levee board in making the bonds payable 'in gold coin' was ultra vires, and the bonds therefore invalid.
The demurrer was sustained, and the complainants appealed.
I cannot concur in the decision of that court. In my judgment, no transaction of commerce or business, or obligation for the payment of money that is not immoral in its character, and which is not, in its manifest purpose, detrimental to the peace, good order, and general interest of society, can be declared or held to be invalid because enforced or made payable in gold coin or currency when that is established or recognized by the government. And any acts by state authority impairing or lessening the validity or negotiability of obligations thus made payable in gold coin are violative of the laws and constitution of the United States.
Upon this subject I will presume to cite some of the expressions of justices of this court, as to the effect of such obligations, used when questions respecting the currency of the country were under consideration in what are known as the 'Legal-Tender Cases.'
In speaking of the views of the framers of the constitution on the subject of money, it was said that: 'At that time gold and silver, molded into forms covenient for use, and stamped with their value by public authority, constituted, with the exception of pieces of copper for small values, the money of the entire civilized world. It was added that these metals, divided up and thus stamped, always have constituted money with all people having any civilization, from the earliest periods in the history of the world down to the present time. It was with 'four hundred shekels of silver, current money with the merchant,' that Abraham bought the field of Machpelah, nearly four thousand years ago. This adoption of the precious metals as the subject of coinage, the material of money by all peoples in all ages of the world, as further stated, had not been the result of any vagaries of fancy, but was attributable to the fact that they of all metals alone possessed the properties which are essential to a circulating medium of uniform value.'
'The circulating medium of a commercial community,' said Mr. Webster, 'must be that which is also the circulating medium of other commercial communities, or must be capable of being converted into that medium without loss. It must also be able not only to pass in payments and receipts among individuals of the same society and nation, but to adjust and discharge the balance of exchanges between different nations. It must be something which has a value abroad as well as at home, by which foreign as well as domestic debts can be satisfied. The precious metals alone answer these purposes. They alone, therefore, are money, and whatever else is to perform the functions of money must be their representative, and capable of being turned into them at will. So long as bank paper retains this quality, it is a substitute for money. Divested of this nothing can give it that character.' 3 Webst. Works, p. 41.
In accordance with the doctrine thus expressed, I am of opinion, as stated, that no commercial or money transaction, not immoral in its character or detrimental to the general interests of society, can be held or declared to be invalid because it is enforced or made payable in gold coin or currency established or recognized by the government; and, therefore, that the judgment of the supreme court of Mississippi, declaring that the bonds of the levee board made payable in gold coin were, for that reason, invalid, cannot be sustained, and that its judgment to that effect should be reversed.
Mr. Justice PECKHAM dissenting.
Notes edit
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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