Woodruff v. Mississippi

Me. Chief Justice Fullee,

after stating the base, delivered the opinion of the court.

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 Wall. 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.

*299In Maryland v. Railroad Company, 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 contract 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 exercised 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.

*300Although 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. United States Bank v. Bank of Georgia, 10 Wheat. 333; Miller v. Race, 1 Burrow, 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. Stat. §§ 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. Stat. § 3588.

These bonds were contracts for the payment of dollars and *301not for the delivery of bullion; nor were they made expressly payable in coin.

If the legislature had in terms authorized the corporation to borrow currency 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 Alabama, 241, 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 of Commissioners, 30 S. W. Rep. 17, that municipal bonds were not void, because the principal and interest was 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 *302question. 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, 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 be 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 *303.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 Company, 22 Wall. 105, it was held that, although since the legal tender 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 reexaminable 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 *304of money of tbe 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 hot 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.