T. J. MILLIKEN et. al., Respondents, v. C. O. SLOAT, Appellant
Milliken v. Sloat
T. J. MILLIKEN et. al., Respondents, v. C. O. SLOAT, Appellant.
T. J. MILLIKEN et. al., Respondents, v. C. O. SLOAT, Appellant.
The Act of the Legislature of the State of Neruda commonly called the “ Specific Contract Act,” is prospective and not retroactive in its operation. (Per Brosnan.)
Said Act is in conflict with an Act of Congress, and therefore void.
Constitutionality of the Act of Congress making United States Treasury Notes a legal tender reaffirmed.
The law of Congress approved March 3, 1863, indirectly licensing contracts for the sale of gold, refers to these gold contracts which are not in form technical debts, and must be enforced by action of covenant or assumpsit, with an assessment and judgment for damages.
The licensing such contracts does not repeal or modify the law of Congress making United States notes a legal tender for all debts except duties, imposts and interest on the public debt.
Appeal from the District Court of the First Judicial District, State of Nevada, Storey County, Hon. Riohabd Bising presiding.
Wm. G. Murphy, David, E. Bañley, Charles E. DeLong, J. Neely Johnson and Nal. Clayton, for Appellant.
Crittenden & Sunderland, Nill/yer ds Whitman, Tod Bolin-son, J. Seely, Thos. Wells, Thos. N. Williams and the Attorney General, G. A. Bourse, for Bespondents.
Murphy & Dailey filed the following points and authorities in behalf of Appellant:
The Court had no power to render a judgment for gold coin as decided by this Court in Maynard v. Newman and Burling v. Goodman.
Tbe Act of Congress being supreme, the State law, which, is in direct conflict, must- be null and void. (Const. United States, 2d clause of Art. VI.) This case must be governed by the decisions of this Court above referred to.
"When Congress has acted on a certain subject within the scope of their authority, a State Legislature cannot legislate on the same subject even in aid, much less in opposition, to the Congressional enactment. (Prigg v. The Commonwealth of P&nnsybvawia, 16 Peters, 411.)
Legislative Acts are never retrospective, unless made so by clear and express language.
"When this debt fell due it might have been discharged in legal tender notes, as this Court has decided. No State law could be passed binding a party to pay more or pay differently from the manner he was bound to pay when the money fell due. (Ogden v. Sanders, 12 'Wheaton, 286.)
The judgment does not follow the contract, the contract being alternative to pay gold or to pay legal tender notes on a certain basis, and is therefore erroneous. (StoeMon v. Beobie, 1 J. J. Marshall, 6.)
The Court erred in refusing to order satisfaction of judgment when the full amount thereof was tendered in legal tender notes.
Thomas H. Williams, for Respondents,
filed the following points and authorities:
In the construction of statutes, the primary object is to ascertain the intention of the Legislature. (Sedgwick on Stat. and Const. Law, pp. 229-30-31; Smith on Stat. and Const. Law, p. 290.)
Statutes similar to ours have been held to apply to past transactions. (Sedgwick, 199, 200-1,410-11-12; 17 Barbour, 368 ; 1 Neman, 281; Beam' River v. Higgins, 27 Cal. 163; 27 New York; Valentine v. Center, 28 Cal.)
Adopting the Act of another State, the interpretation of that Act by the Courts of the State from which it is taken is also adopted. (Smith, 479; Pico v. Coleman, 4 Cal.)
The “ Specific Contract Act” of this State was taken from. California after it bad been construed in that State. (Gallcmd v. Lewis, 24 Cal. 46.)
The section in lieu of which this was enacted has been repealed. (6 Cal. 383.)
Tod Robinson, for Respondents,
filed a brief urging the proposition that the Act of the State Legislature is not in conflict with the Act of Congress, and therefore roid and inoperative.
Courts always enforce contracts which are not immoral, contrary to public policy, nor inhibited by positive enactment.
To refuse to enforce this contract is, in effect, to hold that contracts for gold are illegal.
Cold and legal tender notes are by law put on the same footing. If a contract for payment in gold is illegal and void, then a contract for payment in legal tender notes is equally so. The law makes no distinction between the two kinds of money — both are a legal tender. But does it follow that parties to a contract are prohibited from making a distinction ? The law makes no distinction between ten dollar pieces and twenty dollar pieces of gold as a legal tender, yet we know of no reason why one party might not make a contract to have his debt paid in ten dollar pieces, whilst another should contract that his should only be paid in twenty dollar pieces. Neither contract would be illegal nor contrary to the policy of the law.
These view's were impressed by a train of argument and illustration too long to be inserted in this report.
The Attorney General, JTourse,
filed a written brief, averring, first, that the law of Congress making the United States notes a legal tender was unconstitutional. Second — That even if that Act was not unconstitutional, the State law was not in conflict with the Act of Congress. That the Act of Congress gave to debtors the privilege of paying in either coin or paper. That debtors might, by contract, waive such privilege, and the State might give the Courts power to enforce contracts in which that privilege was waived.
The case, after having been once decided, was opened for reargument.
The original opinion was delivered by
Justice BeosNAN, Justice Beatty
concurring.
The opinion of the rehearing was delivered by Justice Beatty, Justice BeosNAN concurring.
The Chief Justice dissented from both opinions.
Opinion by BbosNAN, J., Beatty, J., concurring, Lewis, C. J., dissenting.
On the 15th day of April, 1864, the appellant executed and delivered to one Rinne his promissory note, payable in gold coin on the 15th day of October following. This note was assigned to the respondents, the plaintiffs below. On the 30th day of January, 1865, more than three months after maturity of the note, suit was brought thereon, a demurrer was interposed and overruled; and a final judgment, no answer having been interposed, was rendered in favor of the plaintiffs on the 17th day of February, 1865.
The judgment demanded payment and satisfaction in United States gold coin.
Execution was issued, whereupon the defendant (appellant) tendered the full amount of the judgment and costs in legal tender notes, commonly called " greenbacks," and moved the District Court to order satisfaction of the judgment entered of record. This motion was denied, and the appeal in this case is taken from the order and from the judgment. Two objections are prominently presented:
First — The appellant contends that the Act of the Legislature of this State, passed January 4, 1865, commonly styled the " Specific Contract Act," is prospective and not retroactive in its operation.
Second — That if the Act be retrospective, it is void because it conflicts with the Act of Congress passed February 25, 1862, which declares that the notes of the United States are a legal tender for the payment of debts, etc.
In our opinion both objections are tenable.
1st. Is this Act of January 4, 1865, retroactive in fact? Does it by express terms, or unavoidable implication, so clearly embrace contracts antecedent to its enactment as not to admit of a different construction?
Retrospective laws have been regarded from remote antiquity as odious and tyranical, and they bave been almost uniformly discountenanced by the Courts of Great Britain and the United States. Bracton, in discussing the subject, adopts the maxim of the civil law in these words: " Nova oonstitutio futwris forma/n debit imponere non prenteritis."
Lord Bacon, in his quaint style, says: " It is in general true that no statute is to have a retrospect beyond the time of its commencement." The Erench code provides expressly that no law can have a retrospective effect. " All laws," says Blackstone, " should be made to commence in fii/uroand the Constitution of New Hampshire declares " retrospective laws to be highly injurious, oppressive and unjust." Thus we find that the power of the Legislature to enact retrospective laws has been stubbornly denied by many able writers.
Sedgwick, in treating of the subject, makes use of the following emphatic language:
" Nothing short of some great paramount emergency of public policy can justify laws of this kind, and it will be well for all engaged in the business of government to understand and remember that the steady and uniform rule should be to make statutes operate prospectively only. No exception should be tolerated but on the ground of a controlling public necessity." (Sedgwick on Stat. and Con. Law, p. 202.)
The foregoing suggestions have been advanced with a view to admonish at least against a loose and latitudinarian construction of a species of legislation objectionable and inaccordant with the fundamental principles of the social compact.
We would not be understood, however, as alleging that retrospective legislation is not within the scope of the lawmaking power.
The settled and approved doctrine at this day is, that such power exists outside of an express and positive constitutional inhibition in certain enumerated cases (as for instance,, laws of a criminal nature, or laws impairing the obligation of contracts, which are positively inhibited), and that the only check upon this power seems to be, that the Courts will not give a retrospective interpretation to statutes unless tbe intention oí the law-makers is so plain, either by express words, or by unavoidable implication, as not to fairly admit of the opx>osite construction. To state the proposition with all the clearness we can command, and to avoid misapprehension, our understanding- of the law on this subjeet.as now settled is, that the primary rule of construction is to give a statute a prospective effect, but that the rule must yield if the retroactive intention is so plainly expressed or manifest as to leave no doubt upon the mind. And this is confined to cases where no constitutional objection interposes, as before stated.
Ve will instance some cases wherein laws, though confessedly retrospective, have been held by the judiciary to be unobjectionable. Such are statutes declaring valid acts of officers illegally elected or appointed; confirming the acts of towns and corporations, municipal or otherwise; correcting and ratifying assessments irregularly made; extending the time for the collection of taxes, and confirming the informal levying of the same, and altering and amending the modes of procedure in judicial matters.
In these and other such instances the laws clearly retro act, and individuals may sometimes suffer thereby, but such laws are supported solely upon the principle that the interests of the public are involved and deemed paramount to those of individuals, a principle which cannot, we apprehend, be invoked in favor of the respondent in the case at bar.
In support of the doctrine that, in order to give the statute a retroactive effect, the law itself must so state in express terms, or such intention must be otherwise clearly manifest; we will refer to authorities. When imprisonment for debt prevailed in the State of New York, if a person incarcerated for that cause merely stepped beyond the jail liberties, it was held to be an escape, and a right of action instantly accrued therefor against the Sheriff, and a return or recapture before suit brought was no defense to the action. To remedy this harsh rule the Legislature passed an Act declaring that a return or recapture before suit should be a good defense. An action was instituted against a Sheriff for an escape. During the pending of this .action the above mentioned statute was passed, and on the trial it was contended that the Sheriff was entitled to its benefits (a recapture having been pleaded), on the ground that the statute operated retrospectively. There were no express words to denote a retroactive intention.
The Court held it did not so act, and Thompson, J., in his opinion said: " It may in general be truly observed of retrospective laws of every description, that they neither accord with sound legislation nor the fundamental principles of the social compact. How unjust, then, the imputation against the Legislature that they intend a law of that description unless the most clear and unequivocal expressions are adopted." (Dash v. Van Vleeck, 7 J. R. 477.) Indeed the authorities uniformly speak the same language. ( Vide Bailey v. Mayor, etc., 7 Hill, 147; People v. Carval, 2 Seld. 463 ; Palmer v. Conley, 4 Denio, 376.) There is no need of multiplying authorities to this point.
We are of the opinion that when a statute is silent as to past time and events, Courts are bound to apply it only prospectively. (Jarvis v. Jarvis, 3 Ew. Ch. 462; Palmer v. Conley, 4 Denio, 376.)
It may be further observed as a general rule, that a statute affecting rights and liabilities, should not be so construed as to act upon those already existing. To give it that effect the statute should in express terms declare such to be the intention. (Johnson v. Burrell, 2 Hill, 238.)
Now at the time the note in this case was made and matured, the defendant had a legal right to pay the amount stipulated in legal tender notes. That was the law; it entered into and was a part of the contract. Without determining, however, at this time, whether this was such a " vested right " as the Legislature had not the power to overtkow, it was certainly such as ought not to be presumed defeated by their action, inasmuch as they have not declared that intention by express retrospective terms.
Laws of this character partake of the mischiefs of ex post facto laws; and when they affect contracts or property, would be equally unjust as ex post facto laws when applied to crimes.
We have not overlooked the case upon which the respondent so confidently relies, viz: that of Galland v. Lewis, decided in the Supreme Court of California, in which the same question presented here was decided. That Court holds that the California statute, which is precisely like ours, is retrospective and embraces antecedent contracts. While we have the highest respect for the learning and ability of the Judges who at present grace the bench of our sister State, we are compelled to say that we me not satisfied with the reasoning or authority marshaled in support of that decision.
In the first place, Galland v. Lewis does not discuss or decide whether the law was retroactive or only prospective in effect. The learned Judge assumes it to be retroactive, and thence, by a very natural process, argues that it is valid, for the reason that it is not in conflict with any vested right, secured by constitutional guarantee or protected by the principles of universal justice. But the law may be valid, though not necessarily retrosizective, so as to embrace and apply to antecedent contracts.
Then the authorities invoked by the Court are lamentably out of point.
The Kentucky case (Cole v. Ross, 9 B. Monroe, 393), was an action upon a covenant to deliver good merchantable pig metal, at twenty-nine dollars per tozi, to a stipulated amount; when the commodity, by the terms of the contract, was to be delivered, the metal had advanced considerably in price. The defendant tendered the stipulated amount at the rate of twenty-nin e dollars per ton, when it was worth much more. The Court held it was " a contract for pig metal and not for money."
Of course, a tender of the amount at the stipulated price of twenty-nine dollars per ton, when its value had been greatly enhanced by the time the contract was to be discharged, would not meet the terms of the obligation. In such cases the doctrine is settled, that the measure of damages is the value of the property at the time of the breach, and that amount not having been tendered, the defendant's liability still existed. We find no fault with this doctrine, but fail to discover any analogy between that and the case under consideration. The case from Indiana we think less germain to the question, if possible.
We have, therefore, come to the conclusion that the Act of the Legislature, approved January 4, 1865, does not embrace contracts entered into before it wont into effect, and is prospective only in its operations.
2d. We proceed to the consideration of the second question. Does the Act of the Legislature passed January 4-, 1865, conflict with the legislation of Congress which declares the issues of the United States notes to be a legal tender, at their face, in payment of debts ?
The first Act giving the character of legal tender to these notes is that of February 25, 1802. Subsequent statutes contain the same phraseology on this subject. After declaring them payable in all transactions to and from the Government, except customs, dues and interest on the public debt, the Act provides " and shall also be lawful money and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest as aforesaid." (12 Statutes at Large, 845.)
In the case of Maynard v. Newman, this Court adjudged the constitutionality and validity of this law. Being valid, it is supreme. The Constitution of the United States so declares in express and positive terms. " This Constitution, and the laws of the United States which shall be made in pursuance thereof, etc., shall be the supreme law of the land, and the Judges of every State shall be bound thereby, and anything in the Constitution or laws of any State to the contrary notwithstanding." (Const. U. S., Art. VI., Sec. 2.)
Having held the Act of Congress valid, we cannot fail to perceive a repugnancy between it and the Act of the Legislature, and consequently the latter must yield. The one applies to all debts, public and private (other than those specifically excepted), and provides that they may be paid and discharged by legal tender notes. The State law embraces debts, not within the excepted cases; and in effect aims at engrafting other exceptions upon the Act of Congress. It is making the Act to read: except duties on imports, interest on public debt cmd a class of debts payable m gold coin. This will not answer. If the Legislature has the power to make this exception, it can make other exceptions and thereby emasculate the law of Congress so as to render it practically ineffectual.
Tbe demand for wliicb this action was instituted is a debt, as designated in tbe Act of Congress, liable to be liquidated and canceled by payment of legal tender notes at tlieir face value. It makes no difference in tbe eye of tbe law that tbe contract calls for payment in gold coin, tbe legal character of tbe demand, and tbe force and effect of tbe law of Congress still remains impressed upon it. Can a State law withdraw it from tbe operation of tbe paramount law? It is a debt, which in virtue of tbe express mandate of the supreme law may be paid in those issues which that law itself called into existence.
But it is said this statute is merely remedial, and that tbe remedy is strictly just and equitable.
Admitting all this, and conceding, as we do, that every principle of honor and honesty demands that the debtor should discharge his engagements to the letter, still the position we take remains unaffected. As between the parties, it would be strictly equitable and just to compel the performance of the contract according to its express terms, but in the teeth of the legislation of Congress the Court has not the power, and we cannot exercise jurisdiction in the domain of ethics, however ignominiously a debtor may act in refusing to observe a sacred regard for his obligations. The stubborn ever-recurring question is, does this Act conflict with the law of Congress ? If it does, no matter how remedial or equitable it may be, it is void and must disappear before the majesty of the higher law. Was the debt in question within the provisions of the Act of Congress? Yes. Was it of either class exempted by the terms of that Act ? Clearly not. By what power or authority, then, can the Legislature of a State exempt or disenthral it from the embrace and operation of the national edict ? This Act is in derogation of the Act of Congress. All such laws stand in direct and brazen antagonism to the policy of the nation, and, practically extended through several States, during the rayless period of the nation's travail, would have inflicted a wound upon constitutional liberty which the coming ages would not see healed. Such laws in the face of the action of the Congress of the United States, asserts that most abused, because illy understood, doctrine of State rights in its most odious and intolerant aspects
We are told that two kinds of currency exist, and that both are different in intrinsic value. Granted as a i'act; yet in the eye and judgment of the law, for the purpose of discharging debts not excepted in the Act of Congress, they are identical, rather equivalent.
By positive law a legal equality is established between the metallic coinage and the paper currency of the Government, and I hold that judicial inquiry is not admissible to make any distinction between them, where the debt or obligation is expressed in Federal money or currency. Oasuists may attempt to discriminate, but their logic will limp and halt.
Government has the power to reduce the weight or debase the fineness of its metallic currency, yet debts contracted, while the standard of weight is say one hundred grains to the dollar, may be discharged by the new coin, though decreased in intrinsic value to a standard below one hundred ; we presume this will not be denied. Indeed such fact is part of the history of our Government. Yet we have heard no complaints on that ground. We have not read of any objection to the exercise of the power.
The first silver dollars coined in 1194 weighed each four hundred and sixteen grains; in 1837 the standard weight of the silver dollar was reduced to four hundred and twelve and a half grains.
In 1834 the weight of fine gold to the dollar was reduced, and in 1837 the standard of weight was insignificantly advanced to the point at which, we think, it now stands, namely, a nominal fraction over twenty-three grains.
Take an illustration. A borrows from B one thousand dollars in gold, and agrees to pay it in one year, gold coin alone being current, legal tender, the standard weight of the gold dollar at the time of the contract being fixed by law at twenty-five grains, but before the day of payment, Congress by law reduces the standard weight of the dollar to twenty grains, but making it a legal tender, cannot the debtor discharge the debt with the new coin, although of less intrinsic value than the coin he had of his creditor ? We hold that he can; because the creditor is bound to receive the public currency, and bound to receive it at its legal value. Ita lex scripta est. (1 Bouv. L. D. 358.)
On principle, do the creditor's rights or conditions stand upon a different footing, when the same sovereign power which made the dollar of diminished intrinsic value an equivalent in law for the other of greater intrinsic value has declared that its notes of issue shall have the like effect ? We think not.
In this there is nothing startling. It is incidental to the mutations natural in governmental as in commercial affairs. And as debts that may have been contracted while gold and silver were the only legal tender (this debt was not of that kind) may now be discharged in United States notes, so debts incurred during the present state and condition of monetary affairs, though contracted upon a paper basis and calculation, will be paid in gold and silver when the metallic currency shall again become the sole legal tender — a period, we are happy to believe, fast approaching.
We have reached the following conclusion in this case, after much sincere and anxious deliberation: The question discussed in the last point is new, and we had consequently to rely upon our own reflection and judgment, unaided by light from adjudicated cases. It is indeed true that the Supreme Court of California, in Carpentier v. Atherton, 25 Cal. 565, have held a doctrine different from that we here maintain.
It is not from disinclination that we fail to approve the opinion of that learned Court upon so grave a question as the one involved, but a sense of duty and responsibility to our convictions of what we believe the law really is, forces us to a conclusion opposite to that declared by that able and highly respectable tribunal.
Our opinion is that the Act of January 4, 1865, is in conflict with the law of Congress to which we have referred, and that it is therefore void.
The judgment and the order appealed from must be reversed so far as it demands payment in gold coin, and the Court below is directed to enter satisfaction of the judgment upon payment by the appellant, in any legal tender recognized by the laws of the United States, the full amount of the judgment and costs.
The costs of this appeal will be paid by the respondents.
It is accordingly so ordered.