Jerome Daly

28 East Minnesota Street

Savage, Minn. 55378

February 7, 1969

INTRODUCTION

On May 8, 1964 the writer executed a Note and Mortgage to the First National Bank of Montgomery, Minnesota, which it a member of the Federal Reserve Bank of Minneapolis. Both Banks are private owned and are a part of the Federal Reserve Banking System.

In the Spring of 1967 the writer was in arrears $47.00 in the payments on this Note and Mortgage. The Note was secured by a mortgage on real property in Spring Lake Township in Scott County, Minnesota. The Bank foreclosed by advertisement and bought the property in at a Sheriff's Sale held on June 26, 1967. The writer made no further payments after June 26, 1967 and did not redeem within the 12-month period of time allotted by law after the Sheriff's Sale.

The Bank brought an action to recover the possession to the property in the justice of the Peace Court at Savage, Minnesota. The first 2 Justices were disqualified by Affidavit of Prejudice. The first by the writer and the Second by the Bank. A third one refused to handle the case. It was then sent, pursuant to law, to Martin V. Mahoney, Justice of the Peace, Credit River Township, Scott County, Minnesota, who presided at a Jury trial on December 7, 1968. The Jury found the Note and Mortgage to be void for failure of a lawful consideration and refused to give any validity to the Sheriff's Sale. Verdict was for the writer with costs in the amount d $75.00.

The president of the Bank admitted that the Bank created the money and credit upon its own books by which it acquired or gave as consideration for the Note; that this was standard banking practice, that the credit first came into existence when they created it; that he knew of no United States Statutes which gave them the right to do this. This is the universal practice of these Banks. The Justice who heard the case handed down the opinion attached and included herein. Its reasoning is sound. It will withstand the test of time. This is the first time the question has been passed upon in the United States. I predict that this decision will go into the History Books as one of the great Documents of American History. It is a huge cornerstone wrenched from the temple of Imperialism and planted as one of the solid foundation stones of Liberty.

JEROME DALY

SAVAGE, MINNESOTA

The above entitled action came on before the Court and a Jury of 12 on December 7, 1968 at 10:00 A.M. Plaintiff appeared by its President Lawrence V. Morgan and was represented by its Counsel Theodore R. Melby. Defendant appeared on his own behalf.

A Jury of Talesmen were called, impaneled and sworn to try the issues in this Case. Lawrence V. Morgan was the only witness called for Plaintiff and Defendant testified as the only witness in his own behalf.

Plaintiff brought this as a Common Law action for the recovery of the possession of Lot 19, Fairview Beach, Scott County, Minn. Plaintiff claimed title to the Real Property in question by foreclosure of a Note and Mortgage Deed dated May 8, 1964 which Plaintiff claimed was in default at the time foreclosure proceedings were started.

Defendant appeared and answered that the Plaintiff created the money and credit upon its own books by bookkeeping entry as the consideration for the Note and Mortgage of May 8, 1964 and alleged that the Sheriff's Sale passed no title to Plaintiff.

The issues tried to the Jury were whether there was a lawful consideration and whether Defendant had waived his rights to complain about the consideration having paid on the Note for almost 3 years.

Mr. Morgan admitted that all of the money or credit which was used as a consideration was created upon their books, that this was standard banking practice exercised by their bank in combination with the Federal reserve Bank of Minneapolis, another private bank, further that he knew of no United States Statute or Law that gave the Plaintiff the authority to do this. Plaintiff further claimed that the defendant by using the ledger book created credit and by paying on the note and mortgage waived any right to complain about the consideration and that defendant was estopped from doing so.

At 12:15 on December 7, 1968 the jury returned a unanimous verdict for the defendant.

Now therefore, by virtue of the authority vested in me pursuant to the Declaration of Independence, the Northwest Ordinance of 1787, the Constitution of the United States and the Constitution and laws of the State of Minnesota not inconsistent therewith;

IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

1. That Plaintiff is not entitled to recover the possession of Lot 19, Fairview Beach. Scott County, Minnesota according to the Plat thereof on file in the Register of Deeds office.

2. That because of failure of a lawful consideration the Note and Mortgage dated May 8, 1964 are null and void.

3. That the Sheriff's sale of the above-described premises held on June 26. 1967 is null and void, of no effect

4. That Plaintiff has no right, title or interest in said promises or lien thereon, as is above described.

5. That any provision in the Minnesota Constitution and any Minnesota Statute limiting the Jurisdiction of this Court is repugnant to the Constitution of the United States and to the Bill of Rights of the Minnesota Constitution and is null and void and that this Court has jurisdiction to render complete Justice in this Cause.

6. That Defendant is awarded costs in the sum of $75.00 and execution is hereby issued therefore.

7. A 10-day stay is granted.

8. The following memorandum and any supplemental memorandum made and filed by this Court in support of this Judgment is hereby made a part hereof by reference.

The issues in this case were simple. There was no material dispute or the facts for the Jury to resolve.

Plaintiff admitted that it, in combination with the Federal Reserve Bank of Minneapolis, which are for all practical purposes, because of their interlocking activity and practices and both being Banking Institutions Incorporated under the Laws of the United States, are in the Law to be treated as one and the same Bank, did create the entire $14,000 in money or credit upon its own books by bookkeeping entry. That this was the Consideration used to support the Note dated Mary 8, 1964 and the Mortgage of the same date. The money and credit first came into existence when they created it. Mr. Morgan admitted that no United States Law or Statute existed which gave him the right to do this. A lawful consideration must exist and be tendered to support the Note. See

Anheuser-Busch Brewing Co. v. Emma Mason, 44 Minn. 318, 46 N.W. 558. The Jury found there was no lawful consideration and I agree. Only God can create something of value out of nothing.

Even if Defendant could be charged with waiver or estoppel as a matter of Law this no defense to the Plaintiff. The Law leaves wrongdoers where it finds them. See sections 50, 51 and 52 of Am fur 2d "Actions" on page 584 -"no action will lie to recover on a claim based upon or in any manner depending upon, a fraudulent, illegal, or immoral transaction or contract to which Plaintiff was a party.

Plaintiff's act of creating credit is not authorized by the Constitution and Laws of the United States, is unconstitutional and void, and is not a lawful consideration in the eyes of the Law to support any thing or upon which any lawful rights can be built.

Nothing in the constitution of the United States limits the Jurisdiction of this Court, which is one of original Jurisdiction with right of trial by jury guaranteed. This is a Common Law Action. Minnesota cannot limit or impair the power of this Court to render Complete Justice between the parties. Any provisions in the Constitution and laws of Minnesota which attempt to do so is re1mgnant to the Constitution of the United States and void. No question as to the Jurisdiction of this Court waS raised by either party at the trial. Both parties were given complete liberty to submit any and all facts and law to the Jury, at least in so far as they saw fit.

BY THE COURT

December 9, 1968 MARTIN V. MAHONEY

Justice of the Peace

Credit River Township

Scott County, Minnesota

Note: It has never been doubted that a Note given on a Consideration which in prohibited by law is void. It has been determined, independent of Acts of Congress, that sailing

under the License of an enemy is illegal. The emission of Bills of Credit upon the books of these private Corporations for the purposes of private gain is not warranted by the Constitution of the United States and is unlawful. See Craig v. Mo. 4 Peters Reports 912. This Court can tread only that path which is marked out by duty. M.V.M

December 27, 1968

Mr. Patrick Foley

United States Attorney for Minnesota

United States Court House Bldg.

Minneapolis, Minnesota

Sir:

Re: First National Bank of Montgomery

VS.

Jerome Daly

As you are on my mailing list, at your request, attached kindly find 2 copies of a decision rendered at Credit River Twp. Justice of the Peace Court on December 9, 1968 by Justice Martin V. Mahoney, who by occupation is a dirt farmer and a carpenter and who is not dependent upon the fraudulent Federal Reserve Mob for his sustenance; thus he was able to view the whole fraud, which is Global in scope, with a mind in the settled calmness of impartiality, disinterestedness, and fairness, in keeping with his oath and with a completely friendly feeling toward the Constitution of the United States of America.

In truth and in fact the Justice of the Peace Court is the highest Court in the land as it is the closest to the People. Every Judge who is dependent upon this fraudulent Federal Reserve, National and State Banking System for his sole support is disqualified because of self interest and has no jurisdiction to sit in review of this Judgment. If any Appellate Court, including the Supreme Court of the United States, in the review of this Judgment, perpetrates a fraud upon the People by defying the Constitutional Law of the United States Mahoney has resolved that he will convene another Jury in Credit River Township to try the issue of the Fraud on the part of any State or Federal Judge, and in an action on my part to recover the possession if the Jury decides in my favor, the Constable and the Citizens Militia of Credit River Township will, pursuant to the law,

deliver me back into possession. So you see this Justice of the Peace can keep the peace in Scott County, Minnesota, not with the help of these State and Federal Judges who have fled reality, but in spite of them. Thus Thomas Jefferson's prophesy with reference to Chattel Slavery once again rings true; "God's Justice will not sleep forever.".

One wonders sometimes what the United States, and its leaders, including the Shylock usury element, did to bring on a Pearl Harbor attack on December 7, 1941 with such suddenness and devestation. It could be the Judgment of a Just God giving vent to a stored wrath in retaliation to the money changers. It is ironic in deed that the Jury should return its verdict on the same day 27 years later and the National and International Banking and Oil Mob shudder in their back rooms where they have cornered the money of the World and where they sit pulling the strings; fostering, conniving and perpetrating War with profit to themselves paid for by the blood, sweat, tears and toil of the farmer, the mechanic, the laborer and the humbler members of society; and well they might tremble, for, as they listen they can hear, with ever increasing distinctness, the sound of the waves at low tide as they wash across the lonely decks of the U.S.S. Arizona with over 2,500 men entombed in her hold, with oil still seeping therefrom to the surface.

It is better to be charitable than miserly, honest than dishonest direct than indirect, upright than underhanded, intelligent than unintelligent, to have courage than be a coward, to be free than slave, in body and in mind.

I remain,

Quite Independently Yours,

P.S. Give my best wishes for a New Year to the Boys in the Back Room.

J.D.

STATE OF MINNESOTA IN JUSTICE COURT

COUNTY OF SCOTT TOWNSHIP OF CREDIT RIVER

JUSTICE:

MARTIN V. MAHONEY

The above entitled action came on before the Court and a Jury of 12 on December 7, 1968 at 10:00 A.M. Plaintiff appeared by its President Lawrence V. Morgan and was represented by its Counsel Theodore R. Melby. Defendant appeared on his own behalf.

A Jury of Talesmen were called, impaneled and sworn to try the issues in this Case. Lawrence V. Morgan was the only witness called for Plaintiff and Defendant testified as the only witness in his own behalf.

Plaintiff brought this as a Common Law action for the recovery of the possession of Lot 19, Fairview Beach, Scott County, Minn. Plaintiff claimed title to the Real Property in question by foreclosure of a Note and Mortgage Deed dated May 8, 1964 which Plaintiff claimed was in default at the time foreclosure proceedings were started.

Defendant appeared and answered that the Plaintiff created the money and credit upon its own books by bookkeeping entry as the consideration for the Note and Mortgage of May 8, 1964 and alleged that the Sheriff's Sale passed no title to Plaintiff.

The issues tried to the Jury were whether there was a lawful consideration and whether Defendant had waived his rights to complain about the consideration having paid on the Note for almost 3 years.

Mr. Morgan admitted that all of the money or credit which was used as a consideration was created upon their books, that this was standard banking practice exercised by their bank in combination with the Federal reserve Bank of Minneapolis, another private bank, further that he knew of no United States Statute or Law that gave the Plaintiff the authority to do this.

Bank of Minneapolis, another private bank, further that he knew of no United States Statute or Law that gave the Plaintiff the authority to do this.

Plaintiff's act of creating credit is not authorized by the Constitution and Laws of the United States, is unconstitutional and void, and is not a lawful consideration in the eves of the Law to support any thing or upon which any lawful rights can be built.

Plaintiff further claimed that the defendant by using the ledger book created credit and by paying on the note and mortgage waived any right to complain about the consideration and that defendant was estopped from doing so.

At 12:15 on December 7, 1968 the jury returned a unanimous verdict for the defendant.

5.

Now therefore, by virtue of the authority vested in me pursuant to the Declaration of Independence, the Northwest Ordinance of 1787, the Constitution of the United States and the Constitution and laws of the State of Minnesota not inconsistent therewith;

IT IS HEREBY ORDERED, ADJUDGED AND DECREED:

1. That Plaintiff is not entitled to recover the possession of Lot 19, Fairview Beach. Scott County, Minnesota according to the Plat thereof on file in the Register of Deeds office.

2. That because of failure of a lawful consideration the Note and Mortgage dated May 8, 1964 are null and void.

3. That the Sheriff's sale of the above-described premises held on June 26. 1967 is null and void, of no effect

4. That Plaintiff has no right, title or interest in said promises or lien thereon, as is above described.

5. That any provision in the Minnesota Constitution and any Minnesota Statute limiting the Jurisdiction of this Court is repugnant to the Constitution of the United States and to the Bill of Rights of the Minnesota Constitution and is null and void and that this Court has jurisdiction to render complete Justice in this Cause.

6. That Defendant is awarded costs in the sum of $75.00 and execution is hereby issued therefore.

7. A 10-day stay is granted.

8. The following memorandum and any supplemental memorandum made and filed by this Court in support of this Judgment is hereby made a part hereof by reference.

The issues in this case were simple. There was no material dispute or the facts for the Jury to resolve.

Plaintiff admitted that it, in combination with the Federal Reserve Bank of Minneapolis, which are for all practical purposes, because of their interlocking activity and practices and both being Banking Institutions Incorporated under the Laws of the United States, are in the Law to be treated as one and the same Bank, did create the entire $14,000 in money or credit upon its own books by bookkeeping entry. That this was the Consideration used to support the Note dated Mary 8, 1964 and the Mortgage of the same date. The money and credit first came into existence when they created it. Mr. Morgan admitted that no United States Law or Statute existed which gave him the right to do this. A lawful consideration must exist and be tendered to support the Note. See

7.

Anheuser-Busch Brewing Co. v. Emma Mason, 44 Minn. 318, 46 N.W. 558. The Jury found there was no lawful consideration and I agree. Only God can create something of value out of nothing.

Even if Defendant could be charged with waiver or estoppel as a matter of Law this no defense to the Plaintiff. The Law leaves wrongdoers where it finds them. See sections 50, 51 and 52 of Am fur 2d "Actions" on page 584 -"no action will lie to recover on a claim based upon or in any manner depending upon, a fraudulent, illegal, or immoral transaction or contract to which Plaintiff was a party.

MARTIN V. MAHONEY

JUSTICE OF THE PEACE

CREDIT RIVER TOWNSHIP

SCOTT COUNTY, MINNESOTA

Note: It has never been doubted that a Note given on a Consideration which in prohibited by law is void. It has been determined, independent of Acts of Congress, that sailing

under the

License of an enemy is illegal. The emission of Bills of Credit upon the books of these private Corporations for the purposes of private gain is not warranted by the Constitution of the United States and is unlawful. See Craig v. Mo. 4 Peters Reports 912. This Court can tread only that path which is marked out by duty. M.V.M

On January 6, 1969 this Court filed a Notice of Refusal to Allow Appeal with the Clerk of the District Court, Hugo L. Hentges, for the County of Scott and State of Minnesota, which Is as follows;

TO: Hugo L. Hentges, Clerk of District Court, Plaintiff, First National Bank of Montgomery and Defendant Jerome Daly:

You will Please take Notice that the undersigned Justice of the Peace, Martin V. Mahoney, hereby, pursuant to law, refuses to allow the Appeal in the above entitled action, and refuses to make an entry of such allowance in the undersigned's Docket. The undersigned also refuses-to file in the office of the clerk of the District Court in and for Scott County, Minnesota, a transcript of all the entries made in my Docket, together with all process and other papers relating to the action and filed with me as Justice of the Peace.

The undersigned concludes and determines that M.S.A. 532.38 was not complied with within 10 days after entry of judgment in my Justice of the

Peace Court. Subdivision 4 thereof requires that $2.00 shall he paid within 10 days to the Clerk of the District Court, for the use of the Justice before whom the cause was tried.

Two so-called "One Dollar" Federal Reserve Notes issued by the Federal Reserve Bank of San Francisco L1278283C and Federal Reserve Bank of Minneapolis Serial No. I80410697A were deposited with the Clerk of the District Court to be tendered to me.

These Federal Reserve Notes are not lawful money within the contemplation of the Constitution of the United States and are null and void. Further the Notes on their face are not redeemable in Gold or Silver Coin nor is there a fund set aside anywhere for the redemption of said Notes.

However, this is a determination of a question of Law and Fact by the undersigned pursuant to the authority vested in me by the Constitution of the United States and the Constitution of the State of Minnesota. Plaintiff is entitled to be accorded full due process of Law before the Court in this present determination not to allow the Appeal.

If Plaintiff will file a brief on the Law and the Facts with this Court within 10 days, or if Plaintiff will file an application for a full and Complete hearing before this Court on the determination, a promise at hearing will be set and if plaintiff can satisfy this Court that said Notes are lawful money issued in pursuance of and under the authority of the Constitution of the United States of America

the undersigned will stand ready and willing to reverse himself in this determination.

TAKE NOTICE AND GOVERN YOURSELVES ACCORDINGLY.

BY THE COURT

MARTIN V. MAHONEY

JUSTICE OF THE PEACE

CREDIT RIVER TOWNSHIP

SCOTT COUNTY, MINNESOTA

Dated January 6, 1969

I am bound by oath to support the Constitution of the United States and laws passed pursuant thereto and the Constitution and Laws of Minnesota not in conflict therewith. This is an important Case to both parties and involves issues, apparently, not previously decided before. It is also important to the public. The Clerk of the District Court is an officer of the Judicial Branch of the State of Minnesota. His act is the Act of the State. U. S. Constitution Article 1 Section 10 provides "No State Shall make any thing but Gold and Silver Coin a Tender in Payment of Debts."

The tender of the two Federal Reserve Notes runs counter to the fundamental Law of the land, the Constitution of the United States of America. It appears on the face of it that the Notes are ineffectual for any purpose and that I am not justified in taking any steps toward the allowance of an Anneal in this case.

It is, however, the Order of this Court that the parties are entitled to a full hearing before this Court, and, if requested a full hearing will be granted.

Martin V. Mahoney

Justice of the Peace

Credit River Township

Scott County, Minnesota

January 6, 1969

Minnesota Statutes Annotated 532.38 reauired that the Appellant, First National Bank of Montgomerv deposit with the Clerk of the District Court within ten (10)days, Two ($2.00) Dollars (lawful money of the United States) for payment to the Justice of the Peace before whom the cause was tried. This is one of the conditions for the allowance of an appeal.

Two One ($1.00) Dollar Federal Reserve Notes were deposited with the Clerk of the District Court. One was issued by the Federal Reserve Bank of San Francisco, bearing Serial No. L12782836 and the other on deposit was issued by the Federal Reserve Bank of Minneapolis bearing Serial No. 1804.10697A A specimen, for illustrative purposes, is as follows:

This Court determined that said Notes on their face were contrary to Article 1, Section 10 of the Constitution of the United States and also, based upon the evidence deduced at the hearing on December 7, 1968, the Notes were without any lawful consideration and therefore were void; however, this Court indicated it would give the Plaintiff, First National Bank of Montgomery, a full and complete hearing with reference to this issue.

No hearing was requested by Plaintiff, First National Bank. This Court was ordered to show cause before the District Court. The Order to Show Cause is as follows

STATE OF MINNESOTA IN DISTRICT COURT

COUNTY OF SCOTT FIRST JUDICIAL DISTRICT

First National Bank of Montgomery, Minnesota,

Plaintiff,

Vs ORDER TO SHOW CAUSE

Jerome Daly,

Defendant.

On reading the application for an Order attached hereto, and on Motion and Affidavit of Theodore R. Mellby, Attorney for Plaintiff, due showing having been made that an exigency exists.

IT IS ORDERED, that Martin V. Mahoney, Justice of the Peace, Credit River Township, County of Scott, State of Minnesota, appear in person before the above Court at 10:00 A. M., Friday, January 17, 1969, at the Special Term of Court to be held in the Court House in the City of Shakopee, County of

Scott, State of Minnesota, or as soon thereafter as counsel can he heard, to show cause why he should not file in the office of the Clerk of District Court, First Judicial District, County of Scott, State of Minnesota, a transcript of all the entries made in his docket, together with all process and other papers relating to the above identified cause of action in his possession or the possession of any other Justice of the Peace of the State of Minnesota.

LET THIS ORDER, APPLICATION FOR ORDER, AFFIDAVIT, all heretofore attached, be served on Martin V. Mahoney by leaving with him copies of the same and exhibiting this original ORDER with the signature of the Judge of District Court hereto affixed, service to be made forthwith.

BY THE COURT:

/s/ Harold E. Flynn

Judge of District Court

Dated at Shakopee, Minnesota this 8th day of January, 1969

Therefore, upon Motion of Defendant Jerome Daly, this Court ordered a hearing before this Court on January 22, 1969 for the purposes of making Findings of Fact and Conclusions of Law.

Pursuant thereto, the above-entitled action came on for hearing before this Court on January 22, 1969 at 7-00 P. M. The First National Bank of Montgomery made no appearance although service of the Motion and Order was served, upon

Ralph Hendrickson, its Cashier, on, January 20, 1969. No continuance was requested by Plaintiff or its Attorney.

The Defendant appeared by and on behalf of himself.

After waiting for one hour for the Bank or its representative to appear the Court received the testimony of Defendant bearing upon the issue of the validity of the Federal Reserve Notes.

Now, Therefore, based upon all the files, records and proceedings herein, and the evidence offered, this Court makes the following Findings of Fact, Conclusions of Law, Judgment and Determination with reference to the allowance of an appeal

FINDINGS OP FACT, CONCLUSIONS OF LAW,

JUDGMENT AND DETERMINATION

1. That the Federal Reserve Banking Corporation is a United States Corporation with twelve (12) hanks throughout the United States, including New York, Minneapolis and San Francisco. That the First National Bank of Montgomery is also a United States Corporation, incorporated and existing under the laws of the United States and is a member of the Federal Reserve System, and more specifically, of the Federal Reserve Bank of Minneapolis.

2. That because of the interlocking control activities, transactions and practices, the Federal Reserve Banks and the National Banks are for all practical purposes, in the law, one and the same bank.

3. As is evidenced from the book "The Federal Reserve System: Its Purposes and functions, pages 74 to 78 and 177 and 180, put out by the Board of Governors of the Federal Reserve System, Washington, D. C., 1963, and from other evidence adduced herein, the said Federal Reserve Banks and National Banks create money and credit upon their books and exercise the ultimate Prerogative of expanding and reducing the supply of money or credit in the united states. The actual pages of the Federal Reserve Manual are reproduced herein on page 38 to 46,__ See especially page 75 of the Manual..This creation of money or credit upon the books of the Banks constitutes the creation of fiat money by bookkeeping entry.
4. Ninety percent or more Of the credit never leaves the books of the banks so they need produce no specie as backing
5. When the Federal Reserve Banks and National Banks acquire United States Bonds and Securities, mortgages on private real property and mortgages on private personal property, the said banks create the money and credit upon their books by bookkeeping entry. The first time that the money comes into existence is when they create it on their bank books by bookkeeping entry. The banks create it out of nothing. No substantial fund of gold or silver is back of it or any fund at all.

The mechanics followed in the acquisition of United States Bonds are as follows: The Federal Reserve Bank places its name on a United States Bond and goes to its banking books and credits the United States Government for an equal amount of the face value of the bonds. The money or credit first comes into existence when they create it on the books of the bank. National Banks do the same except they must have One ($1.00) Dollar in Credit on hand for every Four ($4.00) Dollars they create.

The Federal Reserve Bank of Minneapolis obtains Federal Reserve Notes in denominations of one ($1.00) Dollar, Five, Ten; Twenty, Fifty, one Hundred, Five Hundred, one Thousand, Ten Thousand, and One Hundred Thousand Dollars for the cost of the printing of each note, which is less than one cent. The Federal Reserve Bank must deposit with the Treasurer of the United States a like amount of Bonds for the Notes it receives The Bonds are without lawful consideration, as the Federal Reserve Bank created the money and credit upon their books by which they acquired the Bond. With their bookkeeping created credit, National Banks obtain these notes from the Federal Reserve Banks.

The net effect of the entire transaction is that the Federal Reserve Bank and the National Banks obtain Federal Reserve Notes comparable to the ones they placed on file with the Clerk of District Court, and a specimen of which is above, for the cost of printing only. Title 31 U.S.C., Section 462 attempts to make Federal Reserve Notes a legal

The Federal Reserve Notes in question in this case are unlawful and void upon the following grounds:

A. Said Notes are fiat money, not redeemable in cold or silver coin upon their face, not backed by gold or silver, and the notes are in want of some real or substantial fund being provided for their payment in redemption. There is no mode provided, for enforcing the payment of the same. There is no mode 1provided for the enforcement of the payment of the Notes in anything of value.

B. The Notes are obviously not gold or silver coin.

C. The sole consideration paid for the One Dollar Federal Reserve Notes is in the neighborhood of nine-tenths of one cent, and therefore, there is no lawful consideration behind said Notes.

D. That said Federal Reserve Notes do not conform to Title 12, United States Code, Sections 411 and 418. Title 31 USC, Section 462, insofar as it attempts to make Federal Reserve Notes and circulating Notes of Federal Reserve Banks and National Banking Associations a legal tender for all debts, public and private, it is unconstitutional and void, being contrary to Article 1, Section 10, of the Constitution of the

United States, which prohibits any State from making anything but gold and silver coin a tender, or impairing the obligation of contracts.

Now, therefore, by virtue of the authority vested in me pursuant to the Declaration of Independence the Northwest Ordinance of 1787, the Constitution of the United States of America and the Constitution of the State of Minnesota,

MARTIN V. MAHONEY

JUSTICE OF THE PEACE

CREDIT RIVER TOWNSHIP

SCOTT COUNTY, MINNESOTA

Dated: February 5, 1969

The applicable parts of the Declaration of Independence and the U.S. Constitution are as follows:

July 4, 1776

(F. N. Thorpe, ed. Federal and State Constitution, Vol. 1, p. 3 ff. The text is taken from the version in the Revised Statutes of the United States, 1878 ed., and has been collated with the facsimile of the original as printed in the original journal of the old Congress.)

On June 7, 1776, Richard Henry Lee of Virginia introduced three resolutions, one of which stated that the "colonies are, and of right ought to be, free and independent States." On the 10th a committee was appointed to prepare a declaration of independence; the committee consisted of Jefferson, John Adams, Franklin, Sherman and R. R. Livingston. This committee brought in its craft on the 25th of June, and on the 2^nd of July, a resolution declaring independence was adopted. July 4^th, the Declaration of Independence was agreed to, engrossed, signed by Hancock, and sent to the Legislatures of the States. The engrossed copy of the Declaration was signed by all but one signer on August 2. On The Declaration, see C. L Becker, The Declaration of Independence, esp. ch. v with its analysis of Jefferson's draft; II Friedenwald, The Declaration of Independence; J.H. Hazelton, Declaration of Independence; J. Sanderson, lives of the Signers to the Declaration; R. Frothingham, Rise of the Republic, ch. xi.; C.H. Van Tyne, The War of Independence, American Phase.

In Congress, July 4, 1776,

THE UNANIMOUS DECLARATION OF THE

THIRTEEN UNITED STATES OF AMERICA

When, in the Course of human events, it becomes necessary for one people to dissolve the political bands which have connected

Them with one another, an to assume among the Powers of the earth, the separate and equal station to which the Laws of Nature and of Nature's God entitled them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. That to secure these rights, Governments are instituted among Men, deriving their power from the consent of the governed, That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and or powers in such form, as to them shall seem most likely to effect their Safety and Happiness, Prudence, indeed, will dictate that Governments long established should not be Changed for light and transient causes, and accordingly all experience hath shown, that mankind more disposed to suffer, while evils are sufferable, than to right themselves, by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpation's, pursuing invariably the same Object evinces a design to reduce them under absolute despotism, it is their right, it

THE DECLARATION of INDEPENDANCE

21.

is their duty, to throw off such Government, and to provide new Guards for their future security. -Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To Prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their Public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected; whereby the Legislative Powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavored to prevent the population of these States; for that purpose obstructing the Laws of Naturalization of Foreigners; refusing to pass others to encourage their migration hither, and raising the conditions of new Appropriations of Lands,

He has obstructed the Administration of Justice, by refusing his Assent to Laws for establishing Judiciary powers

He has made judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our People, and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the Consent of our legislature.

He has affected to render the Military independent of and superior to the Civil Power.

He has combined with others to subject us, to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their acts of pretended legislation.

For quartering large bodies of armed troops among us:

For protecting them, by a mock Trial, from Punishment for any murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing taxes on us without our Consent:

For depriving us in many cases, of the benefits of Trial by jury:

For transporting us beyond Seas to be tried for pretended offences:

For abolishing the free System of English Laws in a neighboring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies:

For taking away our Charters, abolishing our most valuable Laws, and altering fundamentally the Forms of our Governments:

For suspending our own Legislature, and declaring themselves invested with Power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our Seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large armies of foreign mercenaries to compleat the works of Death, desolation and tyranny, already begun with circumstances of Cruelty & perfidy, scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

22.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavored to bring on the inhabitants of our frontiers, the merciless Indian Savages, whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions we have petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince, whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free People.

We therefore the Representatives of the untied States of America, in General Congress, Assembled, appealing to the

Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemn publish and declare, That these united Colonies are, and of Right ought to be Free and independent States, that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. And for the support of this Declaration, with a firm reliance on the Protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes and our sacred Honor.

JOHN HANCOCK.

24.

To exercise exclusive Legislating in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings; And

To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Office thereof.

SECTION 10

No State shall enter into any treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin money; emit bills of credit; make any Thing but gold and silver coin; Tender in Payment of debts; pass any Bill of Attainder, ex post facto law, or Law impairing the Obligations of Contracts, or grant any Title of Nobility.

ARTICLE III

SECTION I

The judicial Power of the United States, shall be vested in one supreme Court, and in such inferior Courts as the Congress may from time to time ordain and establish. The judges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour, and shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in office.

SECTION 2

The judicial Power shall extend to 211 Cases, in Law and Equity, arising under this Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority; to all Cases affecting Ambassadors, other public Ministers and Consuls; to all Cases of admiralty and maritime Jurisdiction; to Controversies to which the United States shall be a Party; to Controversies between two or more States; between a State and Citizens of another State; between Citizens of different States, between Citizens of the same State claiming Lands under Grants of different States, and between a State, or the Citizens thereof, and foreign States, Citizens or Subjects.

In all Cases affecting Ambassadors, other public Ministers and Consuls, and those in which a State shall be party, the Supreme Court shall have original jurisdiction. In all the Other Cases before mentioned, the Supreme Court shall have appellate Jurisdiction, both as to LAW and Fact, with such Exceptions, and under such Regulations as the Congress shall make.

25. ARTICLE VI

All Debts contracted and Engagements entered into, before the Adoption of this Constitution, shall be as valid against the United States under this Constitution, under the Confederation.

This Constitution, and the Laws of the United States which shall be made in pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.

The Senators and Representatives before mentioned, and the Members of the several State Legislatures, and all executive and judicial officers, both of the United States and of the several States, shall be bound by Oath or Affirmation, to support this Constitution; but no religious Tests all ever be required as a Qualification to any Office or public Trust under the United States.

AMENDMENTS

ARTICLE I

[THE FIRST TEN ARTICLES PROPOSED 25 SEPTEMBER 1789; DECLARED IN FORCE 15 DECEMBER 1791]

THE FEDERAL RESERVE SYSTEM

hold only a fraction of their deposits as reserves and the fact that payments made with the proceeds of bank loan, are eventually redeposited with banks make it possible for additional reserve funds, as they are deposited and invested through the banking system as a whole, to generate deposits on a multiple scale.

The foregoing discussion of the working of the banking system explains an apparent paradox that is the source, of much confusion to banking students. On the one hand, the practical experience of each individual banker is that his ability to make the loans or acquire the investments making up his portfolio of earning assets derives from his receipt of depositors' money. On the other hand, we have seen that the bulk of the deposits now existing have originated through expansion of bank loans or investments by a multiple of the reserve funds available to commercial banks as a group. Expressed another way, increases in their reserve funds are to be thought of as the ultimate source of increases in bank lending and investing power and thus of deposits.

The statements are not contradictory. In one case, the day-to-day aspect of a process is described. In a bank's operating experience, the demand deposits originating in loans and investments move actively from one bank to another in response to money payments in business and personal transactions. The deposits seldom stay with the bank of origin.

The series of transactions is as follows: When a bank makes a loan, it credits the amount to the borrower's deposit account; the depositor writes checks a against his

FUNCTION OF BANK RESERVES

account in favor of various of his creditors who deposit them at their banks. Thus the lending bank is likely to

retain or receive back as deposits only a small portion Of the money that it lent, while a large portion of the money that is lent by other banks is likely to be brought to it by its customers.

From the point of view of the individual bank, therefore the statement that the ability of a single bank to lend or invest rests largely on the volume of funds brought to it by depositors is correct. Taking the banking system as a whole, however, demand deposits originate in bank loans and investments in accordance with an authorized multiple of bank reserves. The two inferences about the banking process are not in conflict; the first one is drawn from the perspective of one bank among many, while the second has the perspective of banks as a group.

The commercial banks as a whole can create money only if additional reserves are made available to them. The Federal Reserve System is the only instrumentality endowed by law with discretionary power to create (or extinguish the money that serves as bank reserves or as the public's pocket cash. Thus, the ultimate capability expanding or reducing the economy's supply of money rests with the Federal Reserve.

New Federal Reserve money, when it is not wanted by the public for hand-to-hand circulation, becomes the reserves of member banks. After it leaves the hands of the first bank acquiring it, as explained above, t he new reserve money continues to expand into deposit money as it passes from bank to bank until deposits stand in some established multiple of the additional reserve funds that

Federal Reserve action has supplied.

THE FEDERAL RESERVE SYSTEM

How the process of expansion in deposits and bank loans and investments has worked out over the years is depicted by the accompanying chart. The curve "deposits and currency" relates to the public's holdings of demand deposits, time deposits, and currency. Time deposits are included because commercial banks in this country generally engage in both a time deposit and a demand deposit business and do not segregate their loans and investments behind the two types of deposits.

Put picture on page 40 here

At this stage of our discussion, three other important aspects of (lie functioning of the banking system must be noted. The first is that bank credit and monetary expansion on the basis of newly acquired reserves takes place only

FUNCTION OF BANK RESERVES

through a series of banking transactions. Each transaction takes time on the part of individual bank managers and, therefore, the deposit-multiplying effect of new bank reserves is spread over a period. The banking process thus affords some measure of built in protection against unduly rapid expansion of bank credit should a large additional supply of reserve funds suddenly become available to commercial banks.

The second point is that for expansion of bank credit to Jake place at all there must be a demand for it by creditworthy borrowers - those whose financial standing is such as to entail a likelihood that the loan will be repaid at maturity - and /or an available supply of low-risk investment securities such as would be appropriate for bank is to purchase. Normally these conditions prevail, but there are times when demand for bank credit is slack, eligible loans or securities are in short supply, and the interest rate on bank investments has fallen with the result that banks have increased their preference for cash. Such conditions tend to slow down bank credit expansion. In general, market conditions for bankable paper and attitudes of bankers with respect to the market exert an important influence on whether, with a given addition to the volume of bank reserves, expansion of bank credit will be faster or slower.

Thirdly, it must be kept in mind that reserve banking power to create or extinguish high powered money is exercised though a market mechanism. The Federal Reserve.

THE FEDERAL RESERVE SYSTEM

Sometimes the forces of initiative work against one another. At times this counteraction may work to avoid an abrupt impact on the flow of credit and money of pressures working to expand or contract the volume of bank reserves. At other times, banks desires to borrow may tend to bring about either larger or smaller changes in bank reserves than are desirable from the viewpoint of public policy, especially in periods when banks willingness to borrow is changing rapidly in response to market forces. The relation between

reserve banking initiative and member bank initiative in changing the volume of Federal Reserve credit was discussed in Chapter 111.

These additional aspects of bank credit expansion are significant because they indicate that in practice we cannot expect bank credit and money to expand or contract by any simple multiple of changes in bank reserves. Expansion or contraction takes place under given market conditions, and these have an influence on the public's preferences or desires for money and on the banks' preferences for loans and investments. Market conditions are modified in the course of credit expansion or contraction, but the reactions of the public and of the banks will influence the extent and nature of the changes in money and credit that are attained.

In managing its reserve balances, an individual commercial bank constantly watches offsetting inflows and outflows of deposits that result from activities of depositors and borrowers. It estimates their net impact on its deposits and its reserve position. It's day-to-day management___

CHAPTER X

An important purpose of the Federal Reserve Act was to provide an elastic supply of currency - one that would expand and contract in accordance with the needs of the public. Until 1914 the currency consisted principally of notes issued by the Treasury that were secured by gold' or silver and of national bank notes secured by specified kinds of U.S. Government obligations, along with gold and silver coin. These forms of currency were so limited in amount that additional paper money could not easily be supplied when the nation's business needed it. As a result, currency would become hard to get and at times command a premium. Currency shortages, together with other related developments, caused several financial crises or panics, such as the crisis of 1907.

One of the tasks of the Federal Reserve System is to prevent such crises by providing a kind of currency that responds in volume to the needs of the country. The Federal Reserve note is such a currency.

The currency mechanism provided under the Federal Reserve Act has worked satisfactorily: currency moves into and out of circulation automatically in response to an increase or decrease in the public demand. The Treasury, the Federal Reserve Banks, and the thousands of local banks throughout the country form a system that distributes currency promptly wherever it is needed and retires surplus currency when the public demand subsides.

Federal Reserve notes are paid out by a Federal Reserve Bank to a member bank on request, and the amount so paid out is charged to the member bank's reserve account. Any Federal Reserve Bank, in turn, can obtain the needed Reserve Agent, a representative of

the Board of Governors of the Federal Reserve System, who is located at the Federal Reserve Bank and has custody of its unissued notes.

The Reserve Bank obtaining notes must pledge with the Federal Reserve Agent an amount of collateral at least equal to the amount of notes issued. This collateral may consist of gold certificates, U.S. Government securities, and eligible short-term paper discounted or purchased by the Reserve Bank. The amount of notes that may be issued is subject to an outside limit in that a Reserve Bank must have gold certificate reserves of not less than 25 per cent of its Federal Reserve notes in circulation (and also of its deposit liabilities). Gold certificates pledged as collateral with the Federal Reserve Agent and gold certifi-

RELATION TO CURRENCY

cates deposited by the Reserve Bank with the Treasury of the United States as a redemption fund for Federal Reserve notes both are counted as a reserve against notes.

(place picture of pg 45 here)

As our monetary system works, currency in circulation increases when the public satisfies its larger needs by withdrawing cash from banks. When these needs decline and member banks receive excess currency from their depositors, the banks redeposit it with the Federal Reserve Banks, where they receive credit in their reserve accounts. The Reserve Banks can then return excess notes

THE FEDERAL RESERVE SYSTEM

to the Federal Reserve Agents and redeem the assets they had pledged as collateral for the notes.

As of mid-1963 the total amount of currency in circulation outside the Treasury and the Federal Reserve was $35.5 billion, of which $30.3 billion - or six-sevenths was Federal Reserve notes. All of the other kinds of currency in circulation are Treasury currency. Such currency includes United States notes (a remnant of Civil War financing), various issues of paper money in process of retirement, silver certificates, silver coin, nickels, and cents. Until 1963, Federal Reserve notes were not authorized for issue in denominations of less than $5. Hence, all of the $1 and $2 bills, as well as some bills of larger denominations, were in other forms of paper money, chiefly silver certificates and United States notes. A law passed in 1963 permits the Federal Reserve to issue notes in denominations as low as $1, and silver certificates will eventually be retired.

All kinds of currency in circulation in the United States are legal tender, and the public makes no distinction among them. It may be said that the Federal Reserve has endowed all forms of currency with elasticity since they are all receivable at the Federal Reserve Banks whenever the public has more currency than it needs and since they may all be paid out by the Reserve Banks when demand for currency increases. In the subsequent discussion reference will be made to the total of currency in circulation rather than to any particular kind.

It has already been stated that the amount of currency in circulation changes in response to changes in the pub---------end.

47. to 48. CONSTITUTIONAL LAW § 177

The general rule is that an unconstitutional statute, though having the form and name of law is in reality no law, but is wholly void, and ineffective for any purpose since unconstitutionality dates from the time of its enactment, and not merely from the date of the decision so branding it," an unconstitutional law, in legal contemplation, is inoperative as if it had never been passed." Such a statute leaves the question that it purports to settle just as it would be had the statute not been enacted."

Since an unconstitutional law is void the general principals follow that it imposes no duties, confers no rights, creates no office, bestows no power for

Del Sardis, 16 NJ 530, 109 A2d 631; Fearon v Treanor. 272 NY 268, 5 NE2d 815, 109 ALR 1229; State v Weddington, Ing NG 6 4:3 125 SE 257, 37 ALR' 573; State v Wiliiams, 146 NG 618. 61 SE 61; Dallicls v Hooter, 139 NC 219, 51 SE 992; State ex rel. Sathre v Board of University & School Lands, 65 ND 6117, 26? NW 60; State v First State Bank, 52 NJ) 231, 202 N%V :391; Wilson v Fargo, 48 ND 447, IFIG NW 263; U'ren v Bagley, 118 Or 77, 245 P 1074, 4G ALR 1173; Temp!cton v Linn Cwino', 22 or 313, 29 P 795; State v Kolincs, 33 111 211 80 A 432; Beaufort Courity v Ja.,I)cr County, 220 SC 469, 68 SE2d 421; Parker v flates, 216 SC 52, 56 SE2d 723; Gaud v Walker, 214 SC 1151, 53 SE2d 31 ; RIO Grandc Lumber Co. V Darkc, 50 Uta Ill. 167 P 241; Shea v Olson, 185 Was 1-13, 53 P2d 615, 111 ALR 998, afTd on r It 106 Ava,h 700, 59 r2d 1103, 111 ALR 1011

Uliden v Greenough. 181 U'ash 412, 4.4 P2d 993, 98 ALR 1181; State v Pitney, 79 Wash 600, 140 P 910: State Road Com. V C,oonty Ct. 112 %V Va 98, 163 SE 815; Booten v Pinson, 77 %V Va 412, 89 SE 985; Van Dyke v Tax Com. 217 Wis 528, 259 NW 700, 90 ALR 1332.

A reasonable doubt in favor of the validity of a statute is enough to sustain it. McGlaughlin v Watfield, 180 Itild 75, 23 A2d 12.

A discriminatory law is, equally with the other laws offensive to the constitution, no law at all. Quong Ham Wah Co. V Industrial Acci. Com. 184 Cal 26, 192 P 1021, 12 ALR 1190, error disind 255 US 445, 65 L ed 723, 41 S Ct 373.

As to the effect of unconstitutionality of statutes creating and defining crimes, see CRIMINAL LAW (Ist ed 1307).

9. Fit parte Royall, 117 US 241, 29 1, ed 860, 6 S Ct 734; Ex parte Siel,cild , 100 US 371, 25 L ed 717; Colien v Virginia 6 Wheat (US) 264. 5 1. Ed 257; State ex rei. Nuvren v Greer, 80 Fla 249, 102 So 739, 37 ALR 1290; Commissioners of Roads & Revenues v Davis, 213 Ga 792. 102 SE2d 100; Grayson Robinson Stores, Inc. V Oneida, Ltd. 209 Ga 613, 75 SE2d 161, cert (fell 346 US 823, 98 L ed 318, 74 S Ct 39; Hi I [man v Poca tello, 74 Idaho 69, 256 P2d 1072; hender son v Lieber, 175 Ky 15, 192 SW 830, 9 ALR 620; Flournoy v First Nat. Batik, 197 " 1067, 3 So 2d 244; Opinion of Justices, 269 Mam 611, 163 NE 536, 66 ALR 1477: Michigan State Bank v Hastings, I DougI (Mich) 225; Garden of Eden Drainage Dist. V Bartlett Trust Go. 330 Mo 554, 50 SW2d 627, 84 ALI( 1078; Anderson v Lchmkuhl, 119 Neb 451, 229 NW 773; State v Tufly, 20 New 427, 22 P 1054; State v Williams, 146 NC 616, 61 SE 61; Daly v Beery, 45 ND 287, 178 NW 10-1; Atkinson v Southern Exp. Co. Sit SC 444, 70 SH 516; Ex parte Hallman, 79 SC 9, 60 SE 19; Henry County v Standard Oil Co. 167 Tenn 485, 71 SW2d 6113, 93 ALR 1-183; Pray v Nolan, 157 Term 222, 7 SW2d 815, 60 ALR 408; Miller v Dav;s, 136 Tex 299, 150 SW2d 973, 136 ALR 177; Almond v Day, 197 Va 419, 89 SE i ?d 851; Miller v State Entomologist (Miller v Schorne) 146 Va 175, 135 SE 813, 67 ALR 197, affd 276 LIS 272, 72 L "1 568, 48 S Ct 2-16; Servonitz v State, 133 Wis 231, 113 NW 277. Unconstinitionality is illegality of the bighest order. Board of Zoning Appeals v Dccaor Company of Jehovah's Witnesses. 233 1 ad 83, 117 NE&I 115.

10, State , One Oldsmobile Two-Door Sedan, 227 Minn 200, 35 NW2d 525,CoM pare Swift v Calnan, 102 Iowa 206, 71 NW 233, holding that while no right may be based upon an unconstitutional statute, part of its provisions may be considered in construing other provisions confessedly good, in arriving at the correct interpretation of the latter.

11. State ex rel. Miller v O'Malley, 342 Mo 641, II7-SW2d 319.

12. Chicago, 1. & L. R. Co. V Hackett, 228 US 559, 57 L ed 966, 33 S Ct 581; Norton v Shelby County, 110 US 425, 30 L ed 173, 6 S Ct 1121; Louisiana v Pilsbury, 105 US 2711, 26 L ed 1090; Gutin v Barry, 15 Wall (US) 610, 21 1. Ed 212; Hirsh v Block, 50 App DC 56, 267 F 614, 11 ALR 1238, cert drii 254 US 6,10, 65 L rd 452, 41 S Ct 13; Morgait v Cook, 211 Ark 755, 202 SW2d 355; Texas Co. V State, 31 Ariz 485, 254 P 1061), 53 ALI' 258; Connecticut Baptist Convention v McCarthy, 128 Corin 701, 25 A2d 656; Commissioners of Roads St Revenues v

13. Commissioners; of Roads & Rrvriues v Davis, 213 Ga 792, 102 SF.2d 180; Grayson Robinson Stores, Inc. V Oneida, Ltd 209 Ga 613, 75 SE2d 161, rert drn 316 US 1123, 911 L ed 31n, 7-1 S Ct 39; Flourlv,y v First Nat, Bank, 197 La 1067, 3 So 2d 24,11; Clark v ~;rand Iodge, B. It. T. 323 hio 1084, 43 SW2d 404, 38 ALR 150.

179 picture here and page 48

§ 177 CONSTITUTIONAL LAW 16 Am Jur 2d

Authority on anyone, affords no protection, and justifies no acts performed under it. A contract which rests on an unconstitutional

statute creates no obligation to be impaired by subsequent legislation.

No one is bound to obey an unconstitutional law and no courts are bound to enforce it!

A void act cannot be legally inconsistent with a valid one." And an unconstitutional law cannot operate to supersede any existing valid law.

Indeed. insofar as a statute runs counter to the fundamental law of the land it is supercede thereby. Since an unconstitutional statute cannot repeal or in any way affect an existing one,' if a repealing statute is unconstitutional, the statute which it attempts to repeal remains in full force and effect. And where a clause repealing a prior law is inserted in an act, which act is unconstitutional and void, the provision for the repeal of the prior law will usually fall with it and will not be permitted to operate as repealing such prior law.

The general principles stated above apply to the constitutions as well as to the laws of the several states insofar as they are repugnant to the Constitution and laws of the United States. Moreover, a construction of a statute which brings it in conflict with a constitution will nullify it as effectually as if it had, in express terms, been enacted in conflict therewith.

The actual existence of a statute prior to a determination that it is unconstitutional is an operative fact and may have consequences which cannot justly be

ignored; when a statute which has been in effect for some time is declared unconstitutional, questions of rights claimed to have become vested, of status, of prior determinations deemed to have finality and acted upon accordingly, and of public policy in the light of the nature both of the statute and of its previous application, demand examination." It has been said that an all-inclusive statement of a principle of absolute retroactive invalidity cannot be justified.

The general rule is that an unconstitutional act of the legislature protects no one. It is said that all persons are presumed to know the law, meaning that ignorance of the law excuses no one; if any person acts under an unconstitutional statute, he does so at his peril and must take the consequences."'

Rights acquired under a statute while it is duly adjudged to be constitutional are valid legal rights that arc protected by the constitution, not by judicial decision. But rights acquired under a statute that has not been adjudged validly

Standard Oil Co. 167 Tenn 485, 71 SW2d 683, 93 ALR 1483; State v Candland, 36 Utah 406, 104 P 285.

15. Chicago, 1. & L. R. Co. v Hackett. 228

US 559, 57 L ed 966, 33 S Ct 581; Norton v Shelby County, 118 US 425, 30 L ed 178, 6 S Ct 1121; Hirsch v Block, 50 App DC 56, 267 F 614, 11 ALR 1238, cert den 254 US 640, 65 L ed 452, 41 S Ct 13; Smith v Costello, 77 Idaho 205, 290 P2d 742, 56 ALR2d 1020; Security Sav. Bank v Connell, 198 Iowa 564, 200 NW 8, 36 ALR 486; Flournoy v First Nat. Bank, 197 La 1067, 3 So 2d 244; Carden of Eden Drainage Dist. v Bartlk!tt Trust Co. 330 Mo 554, 50 SW2d 627, 84 ALR 1078; St. Louis v Polar Wave Ice & Fuel Co. 317 Mo 907, 296 S%V 993, 54 ALR 10132; Watkins v Dodson, 159 Neb 743, 68 NW2d 508; Henry County v Standard Oil Co. 167 Tenn 485, 71 SW2d 683, 93 ALR 1483.

16. Norton v Shelby County, 118 US 425, 30 L ed 178, 6 S Ct 1121; Security Siv. Bank v Connell, 198 Iowa 564, 200 NW 8, 36 ALR 486; Flournoy v First Nat. Bank, 197 La 1067, 3 So 2d 244.

17. Felix v Wallace County, 62 Kan 832, 62 P 667; Henderson v Lieber, 175 Ky 15, 192 SW 830, 9 ALR 620; Flournoy v First Nat. Bank, 197 La 1067, 3 So 2d 244; Anderson v Lehmkuhl, 119 Neb 451, 229 NW 773; Daly v Beery, 45 ND 287, 178 NW 104.

18. H4ntinRton v Worthen, 120 US 97, 30 L ed 588, 7 S Ct 469; Norton v Shelby County, 118 US 425, 30 L ed 178, 6 S Ct 1121; Smith v Costello, 77 Idaho 205, 290 P2cI 742, 56 ALR2d 1020; Highway Comrs. v Bloomington, 253 111 164, 97 NE 280; Security Sav. Bank v Connell, 198 Iowa 564, 200 NW 8' 36 ALR 486, Flournoy v First Nat. Bank, 197 La 1067, -3 So 2d 244; St. Louis v Polar Wave Ice & Fuel Co. 317 Mo 907, 296 SW 993, 54 ALR 1082; Anderson v lehmkuhl, 119 Nch 451, 229 NW 773; State v Wilfiams. 146 NC 618, 61 SE 61; Daly v Beery, 45 ND 287, 178 NW 104; Atkinson v Southcrn Exp. Co. 94 SC 444, 78 SE 516, State v Candland, 36 Utah 406, 104 P 285; Bonnett v Vallier, 136 Wis 193, 116 NW 885.

As to the limitations to which this rule is subject, see 1 178, infra.

20. A contract executed solely for the purpose of complying with the provisions of an unconstitutional statute is not valid, and the person who under its terms is obligated to comply with the provisions of the unconstitutional act is entitled to relief. Cleveland v Clements Bros. Constr. Co. 67 Ohio St 197, 65 NE 835; Jones v Columbian Carbon Co. 132 W Va 219, 51 SE2d 790.

Generally, as to the application to invalid contracts of the obligation of contracts guaranty, see § 439, infra.

1. Flournoy i, First Nat. Bank, 197 La 1067, 3 So 2d 244; State ex rel. Clinton Falls Nursery Co. v Steele County, 181 Minn 427, 232 NW 737, 71 ALR 1190; St. Louis v Polar Wave Ice & Fuel Co. 317 Mo 907, 296 SW 993, 54 ALR 1082; Anderson v Lehmkuhl, 119 Nels 451, 229 NW 773; Amyot v Caron, 88 NH 394, 190 A 134; State v.Williams, 146 NC 618, 61 SE 61; Daly v Beery, 45 ND 287, 178 NW 104.

2. Chicago, 1. & L. R. Co. v Hackett, 228 US 559, 0 L ed 966, 33 S Ct 581; United States v Realty Co. 163 US 427, 41 L ed 215 ' 16 S Ct 1120; Payne v Griffin (DC Ca) 51 F Supp 588; Hammond v Clark, 136 Ga 313, 71 SE 479; Flournoy v First Nat. Bank, 197 La 1067, 3 So 2d 244; Anderson v Lchmkuhl, 119 Ncb 451, 229 NW 773; State v Williams, 146 NC 618, 61 SE 61; Daly v Beery, 45 ND 287, 178 NW 104.

Only the valid legislative intent becomes the law to be enforced by the courts. State ex rel. Clarkson v Phillips, 70 Fla 340, 70 So 367; Flournoy v First Nat. Bank, 197 La 1067, 3 So 2d 244.

3. Re Spencer, 228 US 652, 57 L ed 1010 ' 33 S Ct 709; Board of Managers v Wiln"11ton, 237 NC 179, 74 SE2d 749.

4. Chicago, 1. & L. R. Co. v Hackett, 228 US 559, 57 L ed 966, 33 S Ct 581; Berry v Summers, 76 Idaho 446, 283 P2d 1093; Board of Managers v Wilmington, 237 NC 179, 74 SE2d 749; State V Savage, 96 Or 53, 184 P 567, 189 P 427.

5. Thiede v Scandia Valley, 217 Minn 218, 14 NW2d 400. '

6. State v One Oldsmobile Two-Door Sedan, 227 Minn 280, 35 NW2d 525.

7. State v One Oldsmobile Two-Door Sedan, supra.

8. See J 185, infra.

9. Gunn v Barry, 15 Wall (US) 610, 21 L ed 212; Cohen v Virginia, 6 Wheat (US) 264, 5 L ed 257.

10. Flournoy v First Nat. Bank, 197

1067, 3 So 2d 244; Gilkeson v Missouri P. P_ Co. 222 Mo 173, 121 SW 138; Pcay v Nolan, 157 Tenn 222, 7 SW2d 815, 60 ALR 408.

11. Chicot County Drainage Dist, v B-ixter State Bank. 308 US 371, 84 L ed 329, 60

S Ct 217, reh den 309 US 695, 84 L ed 1035, 60 S Ct 581.

12. Chicot County Drainage Dist. v Baxter State Bank, supra

13. 1 177, supra.

14. Sumner v. Beeler, 50 Ind 341.

ly and lawfully current in commercial transactions as the equivalent of legal tender coin and paper money.

§ 8. "Currency;" "Specie;" "Current Funds` "Dollar." The term "currency" has been held to include bank bills, and has been limited, in some jurisdictions, to bank bills or other paper money which passes at par as a circulating medium in the business community as and for the constitutional coin of the country.19 It has also been held, however, that it includes both coin and paper money and is practically synonymous with "money," and that, the only practical distinction between paper money and coined money, as currency, is that coined money must generally be received, paper money may generally be specially refused in payment of debt, but a payment in either is equally made in money.

The word "specie" means gold or silver coins of the coinage of the United States."

The term "current funds" means current money, par funds, or money circulating without any discount, and is intended to cover whatever is receivable and current by law as money, whether in the form of notes or coin.

The term "dollar" means money, since it is the unit of money in this country, and in the absence of qualifying words, it cannot mean promissory notes or bonds or other evidences of debt. The term also refers to specific coins of the value of one dollar.

§ 9. Bank Notes. The courts are not agreed whether bank notes are to be classed as money, but the weight of authority and the better reason supports the rule that bank notes constitute a part of the common currency of the country and ordinarily pass as money. They are a good legal tender as money unless specially objected to. They are not, like bills of exchange, considered as mere securities or documents for debts, and generally, they are classed as money even in criminal proceedings, where, as a rule, the greatest strictness of construction prevails. However, notwithstanding the generally prevailing rule that bank notes are money, there is considerable authority, especially among the earlier cases, which maintains the rule that bank notes are not to be classed as money."

Even under the majority rule, all bank notes are not necessarily money. They circulate as such only by the general consent and usage of the community. This consent and usage is based upon the convertibility of such notes into coin, at the pleasure of the holder, upon their presentation to the bank for redemption. The fact is the vital principle which sustains their character as money. As long as they are in fact what they purport to be, payable on demand, common consent gives them the ordinary attributes of money. But, upon the failure of the bank by which they were issued, when its doors are closed, and its ability to redeem its bills is openly avowed, they instantly lose the character of money, their circulation as currency ceases with the usage and the consent upon which rested, and the notes become the mere dishonored and depreciated evidences of debt.

The power of states to make bank notes legal tender is discussed in a subsequent section."

§ 10. Certificates of Deposit, Negotiable Instruments, etc.-Certificates of deposits or other vouchers for money deposited in solvent banks, payable on demand, are a most convenient medium of exchange, and are extensively used in commercial and financial transactions to represent the money thus deposited, and as the equivalent thereof, and are considered in most transactions as money." Similarly, a certified check, while not a legal medium of payment, is a substitute for money which is commonly and generally used in business and commercial transactions and likewise in legal proceedings and may be considered as so much money. Thus, it has been held that under a statute authorizing a money deposit in lieu of an undertaking, the deposit of a certified check is a sufficient compliance with the statute," and it has also been held that where the question involved is whether negotiable paper was purchased with money, an uncertified check received and presently paid in cash is equivalent to money."

16 See supra § 2

17 Howe v. Hartness. 11 Ohio St 449, 71 Am Dee 312.

18 Woodruff v. Mississippi. 162 US 291. 40 L ed 973. 16 S Ct $20: Galena Ins. CO. T. Kupfer. 28 111 332, 81 Am Dee 284.

19. KIauber v. Biggerstaff, 47 Wis 561. 1 NW 357. 32 Am Rep 773.

Generally as to bank notes an money. Pee Infra. 1 9.

20. Belford Y. 'Woodward. Is$ 111 122, 41 NE 1097. 29 LRA 593.

1. Galena Ins. Co. Y. Kupfer, 28 111 332. At Am Dec 294: Klauber v. Bilteerstaff. 47 Wis 651, 3 NW 357. 32 Am Rep 173.'

2. Woodruff v. hilanfissippl. 191 US 291. 40 L ed 973. 16 S Ct 920.

At one time, shortly after the first issue In this country of notes declared to have the Quality of legal tender, It was a common practice of drawers of bills of exchange of checks, or makers of promissory notes, to Indicate wbether the same were to be paid In gold or silver or in such notes: and the term "current funds" was used to designate any of these, all being current and declared by positive enactment to be legal tender. Ibid.

3. see supra. 1 6.

4. 27 Ohio Jur pp. 125. 126.s/3.

5. United States v. Van Auken. 96 us 366. 24 L ed 852.

6. Bank of United State v. Bank of Georgia. 10 Wheat(US) 333, 6 L ad 334: Howe v. Hartness. It Ohio St 449. 78 Am Dec 312; Vick v. Howard. 139 Va 101, 116 BE 465. 31 ALR 240; Klauber v. Biggerstaff. 47 Win $51, 3 NW 357. 32 Am Rep 773.

Anno: 4 Ann Cos 630.

See PAYMENT (Also 21 RCL p. 39, 1 36).

7 Bank of United States v. Bank of Georgia. 10 Wbeat(US) 333. 6 L ed 334. Howe v. Hartnens, 11 Ohio St 449, 78 Am Dec 312: Crutchfield v. Robins. 5 liumph (Tenn) 16. 42 Am Dee 417: Ross v. Burlington Bank. I Alk(Vt) 43. 15 Am Dee 664: Klauber v. Biggerstaff, 47 W18 651. 3 NW 367. 32 Am Rep 773.

Anne: 4 Ann Cos 639.

Bank notes lawfully issued and actually current at per In lieu of coin are treated as money because they flow as such through the channels of trade and commerce without question. Woodruff v. Mississippi. 162 US 291. 40 1. ed 973. 16 S Ct 920; Klatiber v. Biggerstaff. 47 Wis 551. 3 NW 357. 32 Am Rep 773. Anno: 4 Ann Cos 630.

Bank notes are reqarded as money to the extent that they will pass by a bequest of cash Anne; 52 Am Dec 448.

9. Bank of untied States v, Bank of Georgia 10 Wheat(tlS) 3Z3. 6 L ed 334, Klauber v. Biggerstaff 47 Avis 651. 3 Nii 357. 31 Am Rep 771.

Generally as to bills of exchange. see 7 Am Jur 790. BILLS AND NOTES, §6.

10. State v. Finnegean, 127 Iowa 296, 103 NW 155. 4 Ann Cos 629; State v. Kube. 20 Win 217. 91 Am Dec 390.

Anno: 4 Ann Can 630.

See 18 Am Jur 674. EMBEZZELMENT. § 6, 32 Am Jur 997. LARCENY, § 77.

11. Hamilton v. State, 60 Ind 193. 29 Am Rep 653.

Anno: 4 Ann Cos 630.

12. Klauber v. BiggerStaff, 47 Wis 651. 3 NW 357. 32 Am Rep 773.

westfall v. Braley. 10 Ohio St 188. 76 Am Dec 509.

14 Howe v. Hartness. 11 Ohio St 449, 78 Am Dec 312; Westfall v. Braley. 10 Ohio St 18. 75 AM Dec 509.

Money includes only such bank notes as are current de jure et de facto at the locus in quo; that is, bank notes which are issued for circulation authority of law, and are in actual and general circulation at par with coin, as a substitute for coin, Interchangeable with coin; bank notes which actually represent dollars and cents, and are paid and received for dollars and cents at their legal standard value. Whatever is at a discount--that Is, whatever represents less than the standard value of coined dollars and cents at par-does not properly represent dollars and cents, and is not money. Klauber v. BiggerstAff. 47 Wis 551, 1 NW 367, 32 Am Rep 773.

14. Is Weatfall v. Braley. 10 Ohio St 118, 75 Am Dec 509.

17 See Infra, 1 13.

19 Allibone v. Ames, 9 SD 74. 62 NW 195, 33 1 RA 595 : State v. McFetridge, 14 Wis 472 64 NW 1. 999. 20 LRA 223.

anno: Ann Cos 1912C 364.

Generally as to the definition and nature of certificates of deposit. see 7 Am Jur 351, BANKS. § § 491 et seq.

19 Smith v. Field, 19 Idaho 658. 114 P 661. Ann Cos 1912C 364..

10.Poorman v Woodward. 21 How(US) 266, 16 L ed 151.

The issuance of bank notes is discussed under another title.

§ 12. By Federal Government.-In order that money throughout the United States may be uniform, the Federal Government is given, by the Constitution of the United States, the exclusive power to coin money and regulate its value and the value of foreign coin. Congress has the power to make all laws which shall be necessary and proper to carry into effect these powers. Hence, Congress may establish a uniform national currency, declare of what it shall consist, endow that currency with the character and qualities of money having a defined legal value, by requiring its acceptance at its face value as legal tender in the discharge of all debts, and regulate the value of such money, unless by so doing property is taken without due process of law. Moreover, Congress, under its power to provide a currency for the entire country, may deny the quality of legal tender to foreign coins, and may provide by law against the imposition on the community of counterfeit and base coin, and may restrain by suitable enactment's circulation as money of any notes not issued under its own authority.

§ 13. By States.-By the Constitution of the United States, the several states are prohibited from coining money, emitting bills of credit, or making anything but gold and silver coin a tender in payment of debts. Thus, states have no power to make bank notes legal tender, except in payment of debts and dues owing the state.

As a general rule, the extent of a state's power as to currency is limited to the right to establish banks, to regulate or prohibit the circulation, within the state, of foreign notes, and to determine in what the public dues shall be paid,"' and inasmuch as a state is prohibited from coining money, the money which it may coin cannot be circulated as such. A creditor will be under no obligation to receive it in discharge of his debt; and if any statutory provision of the state is framed, with a view of forcing the circulation of such coin, by suspending the interest or postponing the debt of a creditor where it is refused, such statute is void, because it acts on the thing prohibited and comes directly in conflict with the Constitution." Similarly, applying the prohibition against making anything but gold or silver coin a legal tender in the payment of debts, a state statute providing that a creditor must, on penalty of delay, endorse his consent on an execution, to receive property in payment of his debt, is invalid."

§ 14. By Municipalities.-It seems well established that a municipal corporation in a state in which it is against public policy, as well as express law, for any person or corporate body to issue small bills to circulate as currency has no implied power to issue such bills. Moreover, such power is not conferred by a clause in the city charter, authorizing the borrowing of money.

§ 15. Value of Coin.-The power to regulate the value of coin may be exercised by Congress from time to time as the value of the metal changes, for the power to regulate the value of money coined, and of foreign coinage, is not exhausted by a single initial regulation. Thus, it has been held that Congress may issue coins of the same denominations as those already current by law, but of less intrinsic value than those, by reason of containing a less weight of the precious metals, and thereby enable debtors to discharge their debts by the payment of coins of the lesser real value.

1. See infra, it 12 et seq.

3. See supra, I fi.

4. See 7 Am Jur 284, BANKS, 1 402.

457. 20 L ed 945; Legal Tender Cases. 12 Wall-JUS) 457. 20 L ed 231; Veazle Bank v. Fenno, 9 Wall.(US) 533, 19'L ed 482; United States v. Marigold. 9 How.(US) 660. 13 L ed 257: Federal Land Bank v. Wilmarth. 218 Iowa 339. 252 NW 607, 94 ALR , 338.

Authority to impose requirements of uni. formity and parity to an essential 4eature of the control over the currency vested in Congress Norman v ' Baltimore & 0. R. 4 J,. Co. 29 9 24 0 79 L ed 885, 55 S Ct 407, 95 ALR 1352. i~,mlng 265 NY 3T, 191 NE 726. 92 ALR 1523.

As to the power of the Federal Govern. ment to regulate the value of coin. generally, see Infra, 1 15.

As to powers of the Federal Government with respect to matters of revenue. finance, and currency, generally. see UNITED STATES [Also 26 RCL p. 1426. 1 17).

6. Legal Tender Case, 110 US 421, 28 L ed 204. 4 S Ct 122; Norman v. Baltimore A 0. R. Co. 265 NY 37, 191 NE 726, 92 ALR 1523, affirmed In 294 US 240. 79 L ed 836. 65 S Ct 407. 95 ALR 1362.

As to what money constitute& legal tender. see Infra, 1 18.

7 Legal Tender Case. 110 US 421, 28 L ed 204. 4 S Ct 122: Veazle Bank V. Fenno, I Wall-(US) 533. 19 L ed 482.

It is against public policy to allow Individuals or corporations to Issue notes a" a common currency or circulating medium without express legislative sanction. Thom. as v. Richmond. 12 Wall.(US) 349, 20 L ed 463.

8. Norman v. Baltimore & 0* R. Co. 294 US 240. 79 L ed 995, 55 S Ct 407. 95 ALR 2362, Legal Tender Case, 110 US 421. 29 L e~ 204, 4 S Ct - 122; Craig v. Missouri, 4 Pet.(US) 410, 7 L ed 903.

Anno: 31 ALR 246.

9. See Intra. 1 17.

10. Legal Tender Case, 110 US 421. 29 L ed 204, 4 S Ct 122; Sturges v. Crowninshield. 4 Wheat.(US) 122, 4 L ed 529; Townsend v, Townsend, Peck(Tenn) 1, 14 Am Dec 722.

Anno, 31 ALR 246.

The states cannot declare what shall be money, or regulate its value, since whatever power there is over the currency Is vested In Congress Norman v. Baltimore & 0. R. Co. 294 US 240. 79 L ed 885. 55

ALR 1352. affirming 265 NY 37, 191 NE 726, 92 ALR 1523.

if a state establishes a tender law It must be for coin the value of which Is regulated by Congress. Anno: 31 ALR 246.

11 Markle v. Hatfield, 2 Johns.(NY) 455. 1 Am Dec 44f: Westfall v. Braley, 10 Ohio .It 198 ' 75 Am Dec 509: Tharp v. Werefarth. 56 Pa 92. 93 Am Dec 799; Bayard v. Shunk. I Watts & S(Pa) 92. 37 Am Dec 441; Wainwright v. Webster, 11 Vt 57G. 34 Am Dec 707; Tancil v. Seaton, 29 Gratt(Va) 601. 26 Am Rep 380.

It Woodruff v. Trapnall. 10 How(US) 190. 13 L ed 383.

ISWoodruff V. Trapnall, 10 How(US) 190. 13 L ed 383. S Ct 407. 95

The expression "intended to circulate as money," as used in provisions of some state Constitutions to the effect that "the legislature shall. in no case, have power to Issue treasury warrants. treasury notes, or Paper of any description intended to circulate an money." implies that the paper in question must have a fitness for general circulation as a substitute for money In the common traniiactions of business; it does not apply to warrants made payable to an Individual to whom the state Is Indebted, although the state may direct Its officers to receive such warrants In payment of debts due the state. Houston & T. C. R. Co. v. Texas. 177 US 66. 44 L ed 673, 20 S Ct 645.

14 Craig v. Missouri, 4 Pet.(US) 410. 7 L ed 903.

The prohibition of Art- I, § 10. oli-A-0n the United States Constitution, expressly for bidding states to coin money or make anything but gold and silver legal tender for the

payment of debts. taken from the paper of state banks all coercive circulation, and

leaves it to stand on the credit of the banks. Veazie Bank v. Fenno. 9 WaIIJUS) 533, 1 L ed 482. Anno: 31 ALR 246. 15 Bally v. Gentry. I Mo 164, 13 Am Dec 484.

IgThomas v. Richmond, 12 Wall.(US) 349, 20 L ed 453.

A-s to the right of municipal corporations generally to borrow money or Incur indebtedness. see MUNICIPAL CORPORATIONS [Also 19 VCL p. 779. 1 94).

17Legal Tender Cases. 12 WaIIJUS) 457, 20 L ed 297.

18 Legal Tender Case, 110 US 421, 29 L ed 204. 4 S Ct 122: United States V. Ballard. 14 Wall.(US) 457, 20 L ed 845.

the same rule has been applied with regard to an option to purchase property at the price offered to the optionor by a third person.

G. CONSIDERATION

1. IN GENERAL; Necessity

Technically, consideration is defined as some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken by the other." Again, consideration for a promise is defined as an act or a forbearance; or the creation, t7todifiLation, or destruction of a legal relation; or a return promise bargained for and given in exchange for the promise." Consideration is, in effect, the price bargained and paid for a promise that is, something given in exchange for the promise. " In some jurisdictions consideration is defined by statute."

Generally, considerations are classified as "good" and "valuable." A "good" consideration, sometimes called a "meritorious" consideration, is such as that of blood, or of natural love and affection, or of love and affection based on kindred by blood or marriage," whereas a "valuable" consideration is generally understood as money or something having monetary value."

Although historically the terms "quid pro quo" and "nudum pactum" applied only with regard to contracts which were at common law enforceable by an action of debt, these terms are now generally used with regard to the consideration for contracts generally-that is, consideration is referred to as the "quid pro quo," and any promise not supported by consideration is said to be "nudum pactum."" Consideration is, however, not identical with quid pro quo. The policy of the courts in requiring a consideration for the maintenance of a contract action appears to be to prevent the enforcement of gratuitous promises. It is said that when one receives a naked promise and such promise is broken, lie is no worse off than he was; he gave nothing for it, lie has lost nothing by it, and on its breach he has suffered no damage cognizable by courts. No benefit accrued to him who made the promise, nor was any injury sustained by him who received it. Such promises are not made within the scope of transactions intended to confer rights enforceable at law." This argument loses much of its force because of the rule that the courts do not ordinarily inquire into the adequacy of the consideration, and any consideration, however slight, is legally sufficient to support even an onerous promise.' In view of this rule it has been said that consideration is as much a form as a seal at common laws.

At common law, a seal was deemed to dispense with, or raise a presumption of, consideration.' In most jurisdictions now, however, private seals have been abolished by statute and are declared to be without effect.' In addition, in jurisdictions which have adopted the Uniform Commercial Code," the provision in the Code article on "Sales" that the affixing of a seal to a writing evidencing a contract for sale or an offer to buy or sell goods does not constitute the writing a sealed instrument applies, and the law with respect to sealed instruments does not apply to such a contract or offer.

It is well settled, as a general rule, that consideration is an essential element of, and is necessary to the enforceability or validity of, a

contract! It fol-

specified sum and as much more than such sum as such stock may be sold for to any other person, was held in Houston v Harrington, 58 Wash 51, 107 P 874, to be too indefinite and uncertain, as to the price, to be enforced.

9. Slaughter v Mallet Land & Cattle Co. (CA5 Tex) 141 F V11, rest den 201 US 646, 50 1, ed 903. 26 5 Ct 761 ; Marske v Mardi 169 111 276, 48 NE 290; Hayes v O'Brif"' 149 111 403, 37 NE 73; Levy v Peabody, 230 1 ass 164, 130 NE 261; Nu-Way Service Stati ns v Vandenberg Bros. Oil Co. 283 Mich 551 278 NliV 683; Driebe v Ft. Penn Realty Co.' 331 Pa 314, 200 A 62, 117 ALR 1091; Peerless Dept. Stores v George NI. Snook Co' 123 W Va 77, 15 SE2d 169, 136 A1.R 130Goerke Motor Co. v Lonergan, 236 Wis 544: 295 NNV 671.

Annotation: 136 ALR 139, 140.

10. Becker v Colonial Life Ins. Co. 153 App Div 382, 138 NVS 491.

58 Columbia L Rev 929 et seq.

It is said that the most widely used definition of "consideration" is a benefit to the promisor or a loss or detriment to the prom. isee. Test v Ileallerlin, 254 Iowa 521. 118 NW2d 73.

11. B)-erly v Duke Power Co. (CA4 NC) 217 F2d 803, citing Restatement, CoNTPActs 175.

12. La Flarnme v Hoffman, 148 Me 444, 95 A2d 802; Re Sadler's Estate, 232 Miss 349, 98 So 2d 863; Coast Nat. Bank v Bloom, 113 NJL 597, 174 A 576, 95 ALR 528.

13. Howard College v Turner. 71 Ala 429; Re Sadler's Estate, 232 Miss 349, 98 So 2d 863; Coast Nat Bank v Bloom. 113 NJL 597, 174 A 576, 95 ALR 528.

14. Phoenix Mut. L. Ins. Co. v Raddin, 120 US 1133, 30 L ed 644, 7 S Ct 500, Re Sadler's Estate, 232 MW 349, 98 So 2d 863; James v Fulcrod, 5 Tex 512.

15. Wilson v Blair, 65 Mont 155, 211 Is 289, 27 ALR 1235; Clemenu v Jackson County Oil & Gas Co. 61 Okla 247, 161 P 216

16. 77hompson v Thompson, 17 Ohio St 649.

18. 195, infest.

19. Contracts which were at common I 1w enforceable by an action of debt generally derived their obligatory force from a duty imposed by law. This duty was based either onothe form of the contract or on what was is n w n as quid pro quo. By this was meant t ha t tile person owing the duty had received from tire person to whom the duty was due something wiLich he was bound to return or pay for. In the absence of quid pro quo, the engaRement, except in the case of formal contracts, was termed "nuclum pactuni"-a phrase cirrived from the cisil law. When the EnRlish courts finally declared that an action of assumpsit might he maintained for the nonperforniance of a simple promise, they limited tile right of action to cases in which there existed an element which came to be kn,,,,n as "consideration." Ans, limmi,te wit supported by a consideration tile-/ likewii- trrnic(l "widuin pacturn." 'I lie ter in "t unsideration" is thus in some respects analogous to the (ausa of the civil law and to quid pro quo in (14 bt. In fact the latter term has sometimes been treated as though it were synonymous with consideration. Sharkleford v fletidley, I AK Marsh (Ky) 496; Todd v Weber, 95 NY 181 ; justice v Lang, 42 NY 493.

Williston, Contracts 3d ed 1199 et seq., 103.

For translation of legal phrases and maxims, see Am Jur 2d DESK BOOK , Document 185.

The consideration, in the legal sense of the word, of a cohtract is the quid pro quo, that which the party to %hom a promise is made does or agrcri to do in return for the promise. Phoenix Mut. L. Ins. Co. v RAddin, 120 US 183, 30 L ed 641, 7 S Ct 500.

2. Davis v Morgan, 117 Ga 504, 43 SE 732; Storiestri-et v Southern Oil Co. 226 NC 261, 37 6K2d 676.

3. § 102, infra

4 2. Holmes, J., in Yrell v Codn2an, 154 Mau 54, 28 NE 578.

5. See Am Jus, 2d Dess: Boost, Doctimela 130 (and supp).

6. Uniform Commercial Code 12-203.

7. Tilley v Cook County (Tilley Q Chicago) 103 US 155, 26 1. ed 374; fleryford • Davis, 102 US 235, 26 1, eff 160; Farrington v Tennessee, 95 US 679, 24 1, rd 558; Chorpenning

v United States, 94 US 397, 24 L ed 126; Byerly v Duke Power Co. (CA4 NC) 217 F2d 803; Lewis v Ogram, 149 Cal 505, 87 P 60; Davis v Seymour, 59 Conn 531,

21 A 1004; Porter v Title Guaranty & S. Co. 17 Idaho 164, 106 P 299; Leopold v Salkey, 89 111 412; Bright v Coffman, 15 Ind 371; Caylor v Caylor, 22 Ind App 666, 52 NE 465;

Stewart v Todd, 190 Iowa 283, 173 NW 619, 20 ALR 1272, reh den -190 Iowa 296, 327, 180 NW 146. 20 ALR 1301; Neal v Collum, 92 Me 139, 42 A 348; I-1a,p,r v Davi,,

115 1111 141, 80 A 10 12; Hills v Snell, 104 MAss 173; De Moss v Robinion, 46 Mich 62, 8 NW 712; Wilion v Blair, 65 Mont 155, 211 P 289, 27 ALR 1235;

11 Am Jur 2d BILLS AND NOTES § 215

seal"' or bond or specialty," and the NIL does not destroy the significance of a seal" in states where a seal imparts a special quality to a writing. The mere fact, however, that a corporate instrument bears a seal does not necessarily establish the instrument as a specialty as in the case of an individual, since in such case the seal may be used only as a mark of genuineness. The Commercial Code-Commercial paper, declares that an instrument otherwise negotiable is within this article even though it is under a seal, with the intent to place scaled instruments on the same footing as any other commercial paper without affecting any other statutes or rules of law relating to scaled instruments except so far as they arc inconsistent."

Certain obligations for the payment of money come under the laws imposing stamp taxes, but instruments omitting required revenue stamps are valid unless the statute expressly invalidates them. The revenue stamp is no part of a promissory note, and the omission of the stamp or failure to cancel the stamps does not affect its negotiability.

This portion of the article treats of the necessity, sufficiency, and legality of consideration for a bill or note or an obligation: thereon. Treated elsewhere are matters of consideration, or "value," for a transfer of a bill or note, consideration for an extension or modification, as distinguished from a renewal instrument, the effect of executory consideration on the unconditional nature of an order or promise, the effect of the presence or absence of a statement of consideration, and notice of, or from, the consideration."

Like any other contract, a negotiable instrument requires a consideration as between the original parties, or a recognized substitute therefor," but such an instrument is presumed to have been issued for a valuable consideration."

17. Alropa Corp. v Myers (DC Del) 55 F 1upp 936; Clarke v Pierce, 215 Mass 552, 102 NE 1694.

18. Alropa Corp. v Myers (DC Del) 55 F Supp 936; Wooleyhan v Green, 34 Del 503, 155 A 602.

19. Balliet v Fetter, 314 Pa 284, 171 A 466.

20. Sigler v Mt. Vernon Bottling Co. (DC Dist Col) 158 F Supp 234, affd 104 App DC 260, 261 F2d 378.

1. Uniform Commercial Code 13-113.

2. Comment to Uniform Commercial Code 13-113.

See Otto v Powers, 177 Pa Super 253, 110 A2d 847.

3. Practice Aids.-Provision as to payment for revenue stamps. 2 Ami Jus, LXGAL FoRms 2:748.

4. See stamp taxes (Ist ed If 12 et seq., 29).

5. Goodale v Them, 199 Cal 307, 249 P It; Newhall Sav. Bank v Buck, 197 Iowa 732, 197 NW 936; Farmers Sav. Bank v Neel, 193 Iowa 685; 187 NW 555, 21 ALR 1116; Currie-McGraw

Co. v Friedman, 135 Miss 701, 100 So 273; Batik of High Hill v Rockey (Mo App) 277 SW 573; Security State Bank v Brown, 110 Neb 237, 193 NW 336. 334 et #eq. infra.

7. if 302 et seq., infra.

8. 1141, supra.

9. if 90, 145, 188, 189, supra.

10. if 432 et seq., infra.

11. g 237, infra.

12. See Vol. 12.

13. See CONTRACTS (Ist ed If 75 et seq.).

14. Flores v Woodspecialties, Inc. 138 Cal App 2d 763, 292 P2d 626.

Under the heading, "What Constitutes consideration," the NIL declares that value is any consideration sufficient to support a simple contract. Negotiable Instrument Law s/25. Compare Negotiable Instrument Law 1191 , which states that "value" means valueable consideration.

Apart from the "except!' clause relating to an antecedent obligation, other obligations on an instrument are subject to the ordinary rules of contract law relating to contracts not under sea], with respect to the necessity or sufficiency of consideration. Comment 3 to Uniform Commercial Code 13-408.

15. Sullivan v Sullivan, 122 Ky 707, 92 SW 066; Campbell v Jefferson, 296 Pa 368, 145 A 912, 63 ALR 1180 (slight loss,- inconvenience, or benefit is valuable); Re Smith, 226 Wis 556,277 NW 141.

Courts often speak of "good" consideration in the sense of a sufficient or valuable consideration, rather than "good" in the technical and limited sense.

16. Philpot v Gruninger, 14 Wall (US) 570, 20 L ed 743; United Beef Co. v Childs, 306 Mass 187, 27 NE2d 962; Suske v Straka, 229 Minn 408, 39 NW2d 745 (while preexisting indebtedness would constitute consideration for a note, this is not so where plaintiff testified that the note was "a present"); Leach v Treber, 164 Neb 419, 82 NW2d 544 (detriment to promisee); First Nat. Bank v Chandler (Tex Civ App) 58 SW2d 1056, error dismd; Good v Dyer, 137 Va 114, 119 SE 277.

Consideration is the price voluntarily paid for a promisor's undertaking. Philpot v Gruninger, 14 Wall (US) 570, 20 L ed 743; coast nat bank 113 NIL 597, 174 A 576, 95 ALR 328 (bargained for and paid).

Consideration is a matter of contract, and that which is claimed to be such must be within the express or implied contemplation of the parties. Van Houten v Van HQuten, 202 Iowa 1085, 209 NW 293.

It is a question of fact for the jury whether a note given by a practically helpless in valid to his nurse was a 'gift, or compensa tion for services rendered. Meginnes v Me Chesney, 179 Iowa 563, 160 NW 50.

17. Irwin v Lombard University, 56 Ohio St 9. 46 NE 63.

18. Howard v Tarr (CA8 Mo) 261 F2d 561 (~Pplying Ohio law); Hance Hardware /Co. v UoZardl 40 Del 209, 8 A2d 30; Tegt meyer Ord und 259 111 App 247; Kelley, Glover 8~lVale, Ync, v

Heitman, 220 Ind 625, &44 2d 981, cert den 319 US 672, 8' L ed 17 k v Will!3, 63 S Ct 1320; First State Bank v williams, 143 Iowa 177 121 NW 702 Br yan Glass, 6 La Ann 74b; Amherst ademy

Co. v Lewis, 196 NC 51_144 SE 545, 62 ALR 1474; City Trust & Sav. Bank v Schwartz, 68 Ohio App 80, 22 Ohio Ops 176, 39 NE241 548; First ' Nat. Bank v Boxley, 129 Okla 159, 264 P 184,

64 ALR 588Van Bebber v Vechill, 166 Or 10, 109 P2d 1046; Campbell v Jefferson, 296 Pa 368, 145 A 912, 63 ALR 1180; Shayne of Miami, Inc. v Greybow, Inc. 232 SC 161, 101 SE2d 486.

A valuable consideration in the sense of the law may consist either in some right, interest, profit, or benefit accruing to one party, or some forbearance, detriment, loss, or responsibility given, suffered, or undertaken

promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing something, the consideration being the act, abstinence, or promise. It has been said generally that to give a consideration value for the supporting of a promise, it must be such as deprives the person to whom the promise is made of a right -which he possessed before, or else confers upon the other party a benefit which he could not otherwise have had."

Consideration may be given to the promisor or to sonic other pet-son. It matters not from whom the consideration moves or to whom it goes. If it is bargained for as the exchange for the promise, the promise is not gratuitous., Consideration need not move from the promisee," and it need not be pecuniary or beneficial to the promisor.' Consideration moving to the promisor may be a benefit to a third person' or a detriment incurred on his behalf.

The law concerns itself only with the existence of legal consideration for a bill or note. Mere inadequacy of the consideration is not within this concern, in the absence of fraud, mistake, and undue influence," mental incapacity of the obligor, or a statute requiring the quantum of consideration to be weighed." The adequacy in fact, as distinguished from value in law, is for the parties to judge for themselves." It is ordinarily immaterial that the consideration for a bill or note is inadequate as compared with the amount of the order of promise," or that the obligor, knowing the circumstances or having an opportunity to inform himself, is disappointed in his expectations."'

Legal or valuable consideration may be of slight value, is or it may be a trifling benefit, loss, or act, or it may be of value only to the promising party. It may be of indeterminate value such as property the value of which is incapable of reduction to any fixed sum and is altogether a matter of opinion, the good will of a business, or an act which affords the promising party pleasure or gratification, pleases his fancy, or otherwise merits, in his judgment, his appreciation. However, it is obvious that in the case of a pecuniary or property consideration, there is a more objective standard by which the law can judge the nonexistence or gross satisfaction of desire or fancy.

FOOTNOTES:

by the other. Howard v Tarr (CA~ Nfo) 261 F2d 5fil (applying Ohio la~~ 1; Currie v Mi%a (Eng) LR 10 Exch 153; See Seth v Lew Iling, 123 Cal App 7129, 14 P2d 537, 15 P2d 190, which also sets forth a statutory definition.

20. Westmont Nat. Batik v Payne, 108 NJL 133, 156 A 652.

8. Lorher v Toolcy, 47 Cal App 12d 47, 117 r2d -121.

Inadequecy sufficient to shock the conscience constittutes in itseIf a badge of fraud. Harshbarger v Eby, 28 Idaho 53, 1.56 P 619: Ue!i,,rd v Po,,crs, t5 Ind 291; Hannon v Fink, 66 Okla 11.5. IG7 P 1152: Ra-ch-abakh v NtcL)anicl's E,ta(e, 1?2 W Va 632, 11 SE42d 352t

10. Rauschenbach v McDaniel's Estate, supra.

I I. Herbert v Lankershim, 9 Cal 2d 409, 71 P2d 220 (statute providing that moral obligation is good consideration to the extent of the obligation but no further).

12. Philpot v Grunin ger, 14 Wall (US) 570, 20 1, ed 743; Price v Jones, 105 Ind 543, 5 NE 683; Amherst Academy v Cowls, 6 Pick (hilass) 427; Re Ilore's Estate, 220 Minn 374, 19 NW2d 783, 161 ALR 1166- Ballard v B,jrton, 64 Vt 387, 24 A 769; Go~d v Dyer, 137 Va 114, fig sE 277; Ranschenbach v MeDaniel's Estate, 122 W Va 612, 11 SE2d 852 (purely a matter for the de,cased maker to have determined, and his estate must pay the note); llatten's Estate, 233 %Vi3 199, 288 NW 278; Sheldon v Blackman, 108 Wis 4. 205 NW 486.

There is no rile by which the courts can be guided if they undertake the determination of such adequacy. Wolford v Powers, 85 Ind 294.

13. Littlegreen v Gardner, 208 Ga 523, 67 SE2d 713; Re Ifore's Estate, 220 Minn 374, 19 NW2d 783, 161 ALR 1366 (personal services may constitute sufficient consideration re.jardlesi of their economic value as compared to the amount of the note); Miller v McKenzie, 95 NY 575; Shorket v Fickling, 229 SC 412, 93 SE2d 203; Hatten's Estate, 233 Wis 199, 288 N%V 278.

A note is valid as founded on suffi,;ent consideration where, for a loan of $1,500 in gold coin, made at a tinic when that arnotint of gold ,oold be worth $2,500 in paper currency, the note was executed for $2,500, without specifying in what kind of money it was payat'le. Cox v Sinith, I Nev 161. Compare Turner v Yo in g, 27 Ind 373.

Appreciation of the way in whicti medical scrN,irrs are pri-fornird will soi,port a imtr to a d4,ttnr for an anionnt excevding -I-t ~- , t,l , -1 -1 .; ~ I,, tbe value of service inadequacy of value than in the case of Foxworthy v Adams, 136 Ky 403, 124 SW 381.

Valid consideration supporting a note need not be of balanced value with the instronicrit. Rauschenbach v McDaniel's Estate, 122 W Va 632, 11 SE2cI 852.

14. Philpot v Gruninger, 14 Wall (US) 570, 20 1, ed 743; Ilarsliberger v Eby, 2R Idaho 753, 156 P 619; Smock v Pierson, 63 Ind 405; Hannon v Fink, 66 Okla 115, 167 P 1152.

15. First Nat. Bank v Trott, 236 111 App 412; SFnoc.k v Pierson, 60 Ind 405; Good v Dyer, 137 Va 114, 119 SE 277.

Slight loss or itironvenirrice to the pron6scr upon his entering into the contract, or like benefit to the promisor, is deemed a valuable consideration Canipbril v Jefferscin, 296 Pa 368, 145 A 912, 63 AI.R I 180. in Ballard v Burton, 64 Vt 387, 24 A 769; 61~:d v Dyer, 137 Va 114, 119 SF 277.

17. Smock v Pierson, 68 Ind 405.

I8. Price v Jones, 105 Ind 543, 5 NE 693; Smock v Pierson, 68 Ind 405; Miller v Finley 26 Plich 249; Sheldon v Blackman, 188 Wi; 4, 205 N1,V 486.

19. Mi!Ier v Finley, 26 Mich 249,

20. Ifarshbarger v Eby, 28 Idaho 751, 156 P 619 (bosiness, property, anti good will); Sinock v Pierson, 68 Ind 405 (even though btisiness proves unsuccessfill).

In Mage, v Pope, 231 Iklo App 191, 112 S%v2,I 891, it ,as held that th,~ practice and good will of a physician ,as not a salabl,! item and did not constitlite consi&ration a-I the ninlxr %%as rntitird to (ancellation of a /note given thercfor.

 

1. Wolford v Po%%crs, n5 Ind ?91; Fo-orthy v Adanti, 136 Ky 403, 121 S~V 3111; flatten's Estate, 233 Wis 199, ViO NW 278.

Edwards v. Kearnzey

U. S., XX., 685); Gunn v. Barry, 15 Wall., 610 (82 U. S., X X 1., 212); Walker v. Whitehead, 16 Wall., 314 (83 U. S., XXI., 357).

As to the position taken by the advocates of the "homestead exemption." that the

State can exempt articles of necessity as against antecedent contracts, and that the amount of the exemption must necessarily be a matter of legislative discretion, we must admit that there would be great force in the second branch of this proposition, if the first were sound and could be successfully maintained. But it is completely answered by the cases already herein cited. A State cannot minister, even to the most pressing necessities of her citizens, by impairing the obligation of subsisting contracts. Whatever power a distinct civic community may have, in this respect, to the States of this Union it is prohibited by the express language a of the National Constitution. In our view, the true doctrine, sustained by the great weight of authority is that such property as was subject to execution at the time the debt was contracted, must continue subject to execution until the debt is paid, so long as it remains in the hands of the debtor.

Mr. A. W. Tourgee, for defendant in error:

The remedy embraces everything that the creditor may lawfully do or have done, in his behalf, upon a violation of the contract. All that is included in a suit or action, from the issue of process to the satisfaction of judgment, Is a part and parcel of the creditor's remedy. If the term obligation includes the whole of the remedy, then any change in the conduct of an action or the enforcement of a judgment which tends, in any degree, to prevent, hinder, delay or render in any manner less speed), and efficacious, any part of the remedy, would be violative of the constitutional inhibition.

2 Kent, Com., 397; 3 Story, Com., Bee. 1392, 268; Sturges v. crowninshield, 4 heat.,122, 6~. 201: Mason v. Haile, 12 Wheat., 370; Beer* v. Haughlon, 9 Pet., $29, 359; Cook v. Moral, 5 How., Ilm

Again; if a creditor has a right to subject the property of the debtor to the satisfaction of his claim, he has the right to subject the whole of it, not exempt at the date of his contract. Yet, in Bronson v. Kinzie, 1 How., 815, Chief Justice Taney, delivering the opinion of the court, says: "Undoubtedly, the State may regulate the mode of proceeding in its courts at pleasure, both as to past and future contracts, It may, for example, shorten the periods within which claims may be barred. It may, if it think proper, direct that the necessary implements of agriculture or the tools of the mechanic, or articles of necessity in household furniture, like wearing apparel, be not liable to execution on judgments." This language has been several times cited with approval Gunn v. Barry, 15 Wall.,610(82 U. S., XXI., 212). There is no human subtility which can distinguish between an exemption from execution against the person, and an exemption from execution against property. Both are a part of the remedy. If the State has power to exempt certain articles because they are necessaries, the power to define what are necessaries must be admitted. There are certain decisions of the Supreme Court of some of the States, which take the broad ground that the remedy is not within the obligation of a contract, to any extent whatever, and is, consequently, within the absolute control of the State. According to these, it IS inconsistent to hold that the State cannot exempt from execution, property which the debtor has an undoubted right to sell or incumber, up to the very hour of lien obtained by the creditor.

The most important of these cases are: 11arse v. Goold, 11 N. Y., 281; Jacobs v. Smallwood, 63 N. C.. 112; Hill v. Kessler. 63 N. C., 437; Garrett v. Chesire, 69 N. C., 396; Wilson v. Sparks, 72 N. C., 288; Edwards v. Kearzey, 75 N. C.. 409.

The effect of what is termed the homestead provision of North Carolina is not to deny the right, but to regulate the manner in which it shall be enforced. It does not prevent him from holding big debtor liable, but simply says that a certain portion of the debtor's real estate shall not be subject to Bale during his life nor until the majority of his youngest child. It is not so much for the ease and comfort of the debtor, as for the benefit of the State that it was enacted; not to favor the debtor, but to prevent the evils of almost universal pauperism. The purpose of the provision is to prevent pauperism, ignorance and crime, by assuring the citizen sufficiency to prevent absolute want during his lifetime; not for his sake nor to prevent his creditor from having his due, but because the public weal demanded that the scath of the years of revolution should not fall upon unprotected heads, and the State be burdened with an unnumbered host of hopeless paupers, in consequence.

It affects the remedy of the creditor only incidentally, in the performance of a high public behest. The safety and health of the Common' wealth are above- private right. The sacredness 9f private property disappears before the imperious demands of public necessity. When two rights are in conflict, the greater must prevail.'

See, Munn v. Rl. (ante, 77); R R. Co.v. Iowa (ante, 94); Peik v. R. R. Co. (ante. 97).

Mr. Justice Swayne delivered the opinion of the court:

The Constitution of North Carolina of 1868 took effect on the 24th of April in that year. Sections 1 and 2 of article X., declare that personal property of any resident of the State, of the value of $500, to be selected by such resident, shall be exempt from sale under execution or other final process issued for the collection of any debt: and that every homestead, and the buildings used therewith, not exceeding in value $1,000, to be selected by the owner, or, in lieu thereof, at the option of the owner, any lot in a city, town or village, with the buildings used thereon, owned and occupied by any resident of the State, and not exceeding in value $1,000, shall be exempt in like manner from sale for the collection of any debt under final process.

On the 22d of August 1868, the Legislature passed an Act, which prescribed the mode of laying off the homestead, and setting off the personal property so exempted by the Constitution. On the 7th of April 1869, another Act was passed, which repealed the prior Act, and prescribed a different mode of doing what the prior Act provided for. This latter Act has not been repealed or modified.

Three several judgments were recovered against the defendant in error: one on the l5th of December, 1868, upon a bond dated the 25th of September, 1865; another on the 10th of October, 1868, upon a bond dated February 27, 1866; and the third on the 7th of January, 1868, for a debt due prior to that time. Two of these judgments were docketed, and became liens upon the premises in controversy on the 16th of December 1868. The other one was docketed, and became such lien on the l8th of January. 1869. When the debts were contracted for which the judgments were rendered, the exemption laws in force were the Acts of January 1, 1854, and of February 16th, 1859. The first named Act exempted certain enumerated articles of inconsiderable value, and " such other property as the freeholders appointed for that Purpose might deem necessary for the comfort and support of the debtor's family, not exceeding in value $50, at cash valuation. By the Act of 1859, the exemption was extended to fifty acres of land in the country, or two acres in a town, of not greater value than $500.

On the 22d of January 1869, the premises in controversy were duly set off to the defendant in error, as a homestead. He had no other real estate, and the premises did not exceed $1.000 in value. On the 6^th of March, 1869, the Sheriff, under executions issued on the judgments, sold the premises to the plaintiff in error, and thereafter executed to him a deed in due form. The regularity of the sale is not contested.

The Act of August 22, 1868 was then in force. The Acts of 1854 and 1859 had been repealed. Wilson v. Sparks, 72 N. C., 208. No point is made upon these Acts by the counsel upon either side. We shall, therefore, pass them by without further remark.

The plaintiff in error brought this action in the Superior Court of Granville County, to recover possession of the premises so sold and conveyed to him. That court adjudged that the exemption created by the Constitution and the Act of 1868 protected the property from liability under the judgments, and that the sale and conveyance by the sheriff were, therefore, void. Judgment was given accordingly. The Supreme Court of the State affirmed the judgment. The plaintiff in error thereupon brought the case here for review. The only federal question presented cord is, whether the exemption was valid as regards contracts made before the adoption of the Constitution of 1868.

The counsel for the plaintiff in error insists upon the negative of this proposition. The counsel upon the other side, frankly conceding several minor points, maintains the affirmative view. Our remarks will be confined to this subject.

The Constitution of the United States declares that "No State shall pass any law

impairing the obligation of contracts." contract is the agreement of minds, upon a sufficient consideration, that something specified shall be done, or shall not be done. The lexical definition of "Impair" is "to make worse; to diminish in quantity, value, excellence or strength; to lessen in power: to weaken; to enfeeble; to deteriorate. "--Webster, Dic.

" Obligation " is defined to be " the act of obliging or binding; that which obligates; the binding power of a vow, promise, oath or contract," etc. Webster, Dic.

" The word is derived from the Latin word obligatio tying up; and that from the verb obligo, to bind or tie up; to engage by the ties of a promise or oath, or form of law; and obligo is compounded of the verb ligo, to tie or bind fast, and the preposition ob. which is prefixed to increase its meaning." Blair v. Williams, 4 Litt., 35, and Lapsley v. Bra.ihear8, 4 Litt.,47. [Opinion in above cases, 4 Litt., 63].

The obligation of a contract includes every thing within its obligatory scope. Among these elements nothing is more important than the means of enforcement. This is the breath of its vital existence. Without it, the contract, as such, in the view of the law, ceases to be, and falls into the class of those "imperfect obligations," as they are termed, which depend or their fulfillment upon the will and conscience of those upon whom they rest. The Ideas of right and remedy are inseparable. " Want of right and want of remedy are the same thing." I Bac. Abr.. tit. Actions in General, letter B

In Von Hoffman v Quincy, 4 Wall., 535 [71 U. S., XVIII., 403], it was said: "A statute of frauds embracing pre-existing parol contracts not before required to be in writing would affect its validity. A statute declaring that the word 'ton' should, in prior as well as subsequent contracts, be held to mean half or double the weight before prescribed would affect its construction. A statute providing that a previous contract of indebtment may be extinguished by a process of bankruptcy would involve its discharge; and a statute forbidding the sale of any of the debtor's property under judgment upon such a contract would relate to the remedy,"

It cannot be doubted, either upon principle or authority, that each of such laws would violate the obligation of the contract, and the last not less than the first. These propositions seem to us too clear to require discussion. It is also the settled doctrine of this court, that the laws which subsist at the time and place of making a contract enter into and form a part of it, as if they were expressly referred to or Incorporated in its terms. This rule embraces alike those which affect its validity, construction, discharge and enforcement. Von Hollman v. Quincy (supra), McCracken v. Hayward,2 How., 608.

In Green v. Biddle, 8 Wheat., 1, this court said, touching the point hereunder consideration: "It Is no answer, that the Acts of Kentucky now in question are regulations of the remedy, and not of the right to the lands. If these Acts so change the nature and extent of existing remedies as materially to impair the rights and interests of the owner, they are just as much a violation of the compact as if they overturned his rights and interests."

"One of the tests that a contract has been impaired is, that its value has by legislation been diminished. It is not by the constitution to be impaired at all. This is not a question of degree or manner or cause but of encroaching in any respect on its obligation

dispensing with any part of its force." Bk. v. Sharp, 6 HOW., 801.

It is to be understood that the encroachment thus denounced must be material. If it be not

EDWARDS v. KEARZEY.

material, It will be regarded its of no account. These rules are axioms in the jurisprudence of this court. We think (hey rest upon a solid foundation. DO they not cover this case; and are they not decisive of the question before its?

We will, however, further examine the subject.

It is the established law of North Carolina that stay laws are void, because they are in conflict with the national Constitution. Jacob. v. Smallwood, 63 N. C., 112; Jones v. Chittenden. I L. Repos. (N. C.), 383: Barnes v. Barnett, 8 Jones. L. 366. This ruling is clearly correct. Such laws change a term of the contract by postponing the time of payment. This impairs its obligation making it less valuable to the creditor. But, it does this solely by operating on the remedy. The contract is not otherwise touched by the offending law. Let us suppose a case. A party recovers two judgements -one against A, the other against B-each for the sum of $1.500, upon a promissory note. Each debtor has property worth the amount of the judgment, and no more. The Legislature thereafter passes a law declaring that all past and future judgments shall be collected "in four equal annual installments" At the same time, another law is passed, which exempts from ex-ecution the debtor's property to the amount of $1,500. The court holds the former law void and the latter valid. Is not such a result a legal solecism? Can the two judgments be reconciled? One law postpones the remedy, the other destroys it; except in the contingency that the debtor shall acquire more property a thing that may not occur and that cannot occur if he die before the acquisition is made. Both laws involve the same principle and rest on the same basis. The must stand or fall together. The concession that the former is invalid cuts away the foundation from under the latter. If a State may stay the remedy for one fixed period, however short, it may for another, however long. And if it may exempt property to the amount here in question, It may do so to any amount. This, as regards the mode of Impairment we are considering, would annul the inhibition of the Constitution, and set at naught the salutary restriction it was intended to impose.

The power to tax involves the power to destroy. McCulloch v. Md 4 Wheat., 416. The power to modify at discretion the remedial part of a contract is the same thing.

But it is said that Imprisonment for debt may be abolished in all cases, and that the time Prescribed by a statute of limitations may be abridged.

Imprisonment for debt is a relic of ancient barbarism. Cooper's Justinian. 658; 12 Tables. Tab. 3. It has descended with the stream of time. It is a punishment rather than a remedy. It is right for fraud, but wrong for misfortune. It breaks the spirit of the honest debtor, destroys his credit, which is a form of capital, and dooms him, while it lasts, to helpless idleness. Where there is no fraud, it is the opposite of a remedy. Every right-minded man must rejoice when such a blot is removed from the statute book.

But upon the power of a State, even in this class of cases, see the strong dissenting opinion of Washington J., in Mason v. Haile, 12 Wheat., 370.

Statutes of limitation are statutes of repose.

They are necessary to the Welfare of society; the lapse of time constantly carries with it the means of proof. The public as well as individuals are interested in the principle upon which they proceed. They do not impair the remedy, but only require its application within the time specified. If the period limited be unreasonably short, and designed to defeat the remedy upon pre-existing contracts, which was part of their obligation, we should pronounce the statute void. Otherwise, we should abdicate the performance of one or our most important duties. The obligation of a contract cannot be substantially impaired in any way by a state law. This restriction is beneficial to those whom it restrains, as well as to others. No community can have any higher public interest than in the faithful performance of contracts and the honest administration of justice. The inhibition of the Constitution is wholly prospective. The States may legislate as to contracts thereafter made, as they may see fit. It is only those in existence when the hostile law is passed that are protected from its effect.

In Bronson v. Kinzie, I How., 311, the subject of exemptions was touched upon but not discussed. There a mortgage had been executed in Illinois. Subsequently, the Legislature passed a law giving the mortgagor a year to redeem after sale under a decree, and requiring the land to be appraised, and not to be sold for less than two thirds of the appraised value. The law was held to be void in both particulars as to pre-existing contracts. What is said as to exemptions is entirely obiter; but, coming from so high a source, it is entitled to the most respectful consideration. The court, speaking through Chief Justice Taney, said: "A State may, if it thinks proper, direct that the necessary implements of agriculture, or the tools of the mechanic, or articles of necessity in household furniture, shall, like wearing apparel, not be liable to execution on judgments. Regulations of this description have always been considered in every civilized community as properly belonging to the remedy to be executed or not by every sovereignty, according to its own views of policy and humanity." He quotes with approbation the passage which we have quoted from Green Y. Biddle. To guard against possible misconstruction, he Is careful to say further: "Whatever belongs merely to the remedy may be altered according to the will of the State, provided the alteration does not impair the obligation of the contract. But, if that effect is produced, it is Immaterial whether it is done by acting on the remedy, or directly on the contract itself. In either case, it is prohibited by the Constitution.

The learned Chief Justice seems to leave had in his mind the maxim, "De minimis," etc. Upon no other ground can any exemption be justified. "Policy and humanity" are dangerous

guides in the discussion of a legal proposition. He who follows them far is apt to bring back the means of error and delusion. The prohibition contains no qualification, and we have no judicial authority to interpolate any. Our duty is simply to execute it.

Where the facts are undisputed. It is always the duty of the court to pronounce the legal result. Merch, Bk. v. St. Bk.. 10 Wall., 604 [77 U.S.

. XIX , 1008] Here there is no question of legislative discretion involved. With the constitutional prohibition, even as expounded by the late Chief Justice, before us on one hand and on the other the State Constitution of 1868, and the laws passed to carry out its provisions, we cannot hesitate to hold that both the latter do seriously impair the obligation of the several contracts here in question. We say, as was said in Gunn v. Barry, 15 Wall.,622[82 U. S.,XXI. 214], that no one can cast his eyes upon the new exemptions thus created without being at once struck with their excessive character, and hence their fatal magnitude. The claim for the retrospective efficacy of the Constitution or the laws cannot be supported. Their validity as to contracts subsequently made admits of no doubt. Bronson. v. Kinzie. supra.

The history of the National constitution throws a strong light upon this subject. Between the close of the War of the Revolution and the adoption of that instrument, unprecedented

pecuniary distress existed throughout the country.

"The discontents and uneasiness arising in a great measure from the embarrassment in which a great number of individuals were involved, continued to become more extensive. At length two great parties were formed in every State, which were distinctly marked, and which pursued distinct objects with systematic arrangement." 5 Marshall I. Of Washington,75. One party sought to maintain the inviolability of contract, the Other to impair or destroy them. "The emission of paper money, the delay of legal proceedings, and the suspension of the collection of taxes, were the fruits of the rule of the latter, wherever they were completely dominant 5 Marshall, L. of Washington, 86.

"The system called justice was, in some of the States, iniquity reduced to elementary, principles, to **. In some of the States, creditors were treated as outlaws. Bankrupts

were armed with legal authority to be persecutors and, by the shock of all confidence,

society was shaken to its foundations." Fisher Ames' Works; ed. of 1859. 120.

"Evidences of acknowledged claims on the public would not command In the market more than one fifth of their nominal value. The bonds of solvent men, payable at no very distant day, could not be negotiated but at a discount of thirty, forty or fifty per cent, per annum. Landed property would rarely command any price; and sales of the most common articles for ready money could only be made at enormous and ruinous depreciation.

State Legislatures, in too many instances, yielded to the necessities of their constituents, and passed laws by which creditors were compelled to wait for the payment of just demands, on the tender of security, or to take property at a valuation, or paper money falsely purporting to be the representative of specie." RAMSEY, HIST U.S 77.

"The effects of these laws interfering between debtors and creditors were extensive. They destroyed public credit and confidence between Man and Man, injured the morals of the people, and in many instances insured and aggravated the ruin of the unfortunate debtors for whose temporary relief they were brought forward." 2 Ramsey, Hist. S. C., 429.

Besides the large sums of continental money, nearly all the states issued their own bills of credit. In many instances the amount was very large. 2 Phillips' Hist. SKETCHES of Am. Paper Currency, 29. The depreciation of both became enormous. Only one per, of the 'continental money' was assumed by the new government, Nothing more was ever paid upon it. Act of Aug. 4. 1790, sec. 4. 1 Stat. at L.. 140. 2 Phillips' Hist. American

Paper Currency 194. It is needless to trace the history of the emissions by the States

The Treaty of Peace with Great Britain declared that "The creditors on either side shall meet with no lawful impediment to the recovery or the full amount in sterling money of all bona fide debts heretofore contracted, The British Minister complained earnestly to the American Secretary of State of violations of this guaranty, Twenty two instances of laws in conflict with it in different States were specifically named. 1 Am. St. Papers, pp. 195, 196 199, and 237. In South Carolina, "laws were passed in which property of every kind was made a legal tender in payment of debts, although payable according to contract in gold and silver. Other laws installed the debt, so that of sums already due, only a third and afterwards only a fifth, was securable in law," 2 Ramsey, Hist. S. C., 429. Many other States passed laws of a similar character. The Obligation of the contract was as often invaded after judgement as before. The attacks were quite as common and effective in one way as in the other. To meet these evils in their various phases, the national Constitution declared that "No State should emit bills of credit, make anything but gold and silver coin a legal tender for payment of debts, or pass any law Impairing

the obligation of contract." All these provisions grew out of previous abuses. 2 Curt. Hist. of The Const. 366. See also the Federalist. Nos. 7 and 44. In the number last

mentioned, Mr. Madison said that such laws were not only for bidden by the Constitution, but were "contrary to the first principles of the social compact, and to every principle of sound legislation."

The treatment of the malady was severe, but the cure was complete.

"No sooner did the new government begin its auspicious course than order seemed to arise out of confusion. Commerce and industry awoke, and were cheerful at their labors,

for credit and confidence awoke with them. Everywhere was the appearance of prosperity, and the only fear was that its progress was too rapid to consist with the purity and simplicity of ancient manners." Fisher Ames' Works, supra, 122,

"Public credit was reanimated. The owners of property and holders of money freely parted with both, well knowing that no future law could impair the obligation of the contract." 2 Ramsey, Hist. Sup. 433.

Chief Justice Taney, in Bronson v, Kinzie, supra, speaking of the protection of the remedy, said: "It is the protection which the clause of the Constitution now in question mainly intended to secure."

first made and judicially decided under the Constitution in that case. Its novelty was admitted by Chief Justice Marshall, but it was and conclusively answered in his opinion.

We think the views we have expressed carry out the intent contracts and the intent of the Constitution. The obligation of the former is placed under the safeguard of the latter No state can invade it; and congress is incompetent to authorize such invasion. Its position is impregnable, and will be so while the organic law of the nation remains as it is. The trust touching the subjectr with which this court charged is one of magnitude and

delicacy. We must always be careful to see that I here is neither non-feasance nor misfeasance on our part.

The importance of the point involved in this controversy induces us to restate succinctly the conclusions at which we have arrived, and which will be the ground of our judgment.

The remedy subsisting in a State when and where a contract is made and is to be performed Is a part of its obligation, and any subsequent law of the State which so affects that remedy as substantially to impair and lessen the value of the contract is forbidden by the Constitution, and is, therefore, void.

Mr. Justice Clifford, concurring:

I concur in the judgment in this case, upon the ground that the state law, passed subsequent to the time when the debt in question was contracted, so changed the nature and extent of the remedy for enforcing the payment of the same as it existed at the time as materially to impair the rights and interests which the complaining party acquired by virtue of the contract merged in the judgment.

Where an appropriate remedy exists for the enforcement of the contract at the time it was made, the State Legislature cannot deprive the party of such a remedy, nor can the Legislature append to the right such restrictions or conditions as to render its exercise ineffectual or unavailing. State Legislatures may change existing remedies, and substitute others in their place; and, if the new remedy is not unreasonable, and will enable the party to enforce his rights without new and burdensome restrictions, the party is bound to pursue the new remedy, the rule being, that a State Legislature may regulate at pleasure the modes of proceeding in relation to past contracts as well as those made subsequent to the new regulation.

Examples where the principle is universally accepted may be given to confirm the proposition. Statutes for the abolition of imprisonment for debt are of that character, and so are statutes requiring instruments to be recorded, and statutes of limitation.

All admit that imprisonment for debt may be abolished in respect to past contracts as well as future; and it is equally well settled that the time within which a claim or entry shall be barred may be shortened, without just complaint from any quarter. Statutes of the kind have often been passed; and it has never been held that such alteration in

such a statute be impaired the obligation of a prior contract unless the period allowed in the new law was so short and unreasonable as to amount to a substantial denial of the remedy to enforce the right. Ang., Lim., 6th ed., see. 22; Jackson v. Lamphire, 3 Pet. 280.

Beyond all doubt, a State Legislature may regulate all such proceedings in its courts at pleasure, subject only to the condition that the new regulation shall not in any material respect impair the just rights of any party to a preexisting contract. Authorities to that effect are numerous and decisive; and it is equally clear that a State Legislature may, if it thinks proper, direct that the necessary implements of agriculture, or the tools of the mechanic, or certain articles of universal necessity in household furniture, shall, like wearing apparel, not be liable to attachment and execution for simple contract debts. Regulations of the description mentioned have always been considered in Every civilized community properly belonging to the remedy, to

Be exercised or not by every sovereignty, according to its own views of policy and humanity.

Creditors as well debtors know that the power to adopt such regulations reside in every State, to enable it to secure its citizens from unjust, merciless and oppressive litigation, and protect those without other means in their pursuits of labor, which are necessary to the wellbeing and the very existence of every community.

Examples of the kind were well known and universally approved both before and since the Constitution was adopted, and they are now to be found in the statutes of every State and Territory within the boundaries of the United States; and it would be monstrous to hold that every time some small addition was made to such exemptions, that the statute making it impairs the obligation of every existing contract within the jurisdiction of the State passing the law.

Expressions are contained in the opinion of the court which may be construed as forbidding all such humane legislation, and it is to exclude the conclusion that any such views have my concurrence that I have found it necessary to

state the reasons which induced me to reverse the judgment of the state court.

Mr. Justice Hunt.

I concur in the judgment in this case, for the reasons following:

By the Constitution of North Carolina of 1868, the personal property of any resident of the State, to the value of $500, is exempt from sale under execution; also a homestead, the dwelling and buildings thereon, not exceeding In value $1,000.

The debts in question were incurred before the exemptions took effect. The court now holds that the exemptions are invalid. In this I concur, not for the reason that any and every exemption made after entering into a contract is Invalid, but that the amount here exempted is so large, as seriously to impair the creditor's remedy for the collection of the debt.

I think that the law was correctly announced by Chief Justice Taney, in Bronson v Kinzie,

when he said: "A State may, if it thinks proper, direct that the necessary Implements of agriculture, the tools of a mechanic, or articles of necessity in household furniture, like wearing apparel, be not liable to execution on judgments."

The principle was laid down with the like accuracy by Judge Denio, in Morse v. Goold, 11 N. Y., 281, where he says: "There is no universal principle of law that every part of the property of a debtor is liable to be seized for the payment of a judgment against him. * * * The question is, whether the law which prevailed when the contract was made has been so far changed that there does not remain a substantial and reasonable mode of enforcing it in the ordinary and regular course of justice. Taking the mass of contracts and the situation and circumstances of debtors, as they are ordinarily found to exist, no one would probably say that exempting The team and household furniture of a householder to the amount of $150, from levy or execution, would directly affect the efficiency of remedies for the collection of debts." Mr. Justice Woodbury lays down the same rule in the Bk. v. Sharp, 6 How., 301.

In my judgment, the exemption provided for by the North Carolina Constitution is so large, that, in regard to the mass of contract and the situation and circumstances of debtors as they are ordinarily found to exist, it would seriously affect the efficiency of remedies for the collection of debts, and that it must, therefore, be held to be void.

Dissenting. Mr. Justice Harlan.

Cited-96 U. S.,637; 102 U.S. 419 ; 107 U S., 233, 750, 798; 108 u.s.,65; 5 Dill., 193,213,315,418;,1 McCrary, 527; 66 Ind., 408, 509.

COUNTY OF RAY, Plf. in Err.,

V.

HORATIO D. VANSYCLE.

(See S. C., 6 Otto, 675-688)

Missouri Constitution-estoppel as to county bonds.

 

1. The section of the Constitution of Missouri relating to municipal subscriptions, Is a limitation upon the future power of the Legislature, and was not Intended to retroact so as to have any controlling application to laws in existence when the constitution was adopted.

1. When a county, oil Issuing its bonds to a railroad company, received payment therefor in stock of the company, which it continues to hold, and has paid interest on such bonds for several years, It is estopped from repudiating the acts of Its agents in

Issuing the bonds, as against a bona fide holder thereof

[No. 216.]

Argued Feb. 8, 1875. Decided Apr. 1.5, 1878.

IN ERROR to the Circuit Court of the United States for the Western District of Missouri.

Statement by Mr. Justice Harlan.

This was an action by Vansycle to recover the amount due on various interest coupons attached to bonds, issued in the year 1869, in the name of the County of Ray, Missouri, whereby that County acknowledged itself indebted to the St. Louis and St. Joseph Railroad Company in the sum of $ 1,000, which it promised to pay to that company or bearer, at the American Exchange Bank in New York, on the first day of January. 1879, with 8 per cent. interest, payable annually, upon the presentation and delivery of the coupons.

Each bond contained these recitals:

"This bond being issued tinder and pursuant to an order of the County Court of Ray County, made under the authority of the Constitution of the State of Missouri and the laws of file General Assembly of the State of Missouri,and authorized by a vote of the people of said County at a special election held for that purpose.

In testimony whereof the said County of Ray has executed this bond, by the presiding justice of the County Court of said County, under the order of said court, signing his name thereto, and by the clerk of said court, under order, thereof, attesting the same, and affixing there the seal of said court. This done at the Tow of Richmond, County of Ray, aforesaid, this second day of--, 1869,

(L. S.) C. W. NARRAMORE,

Presiding Justice of the County Court of Ray County, Missouri.

Attest: Geo. N. MCGEE,

Clerk of the County Court of Ray County, Missouri. '

Vansycle was a lawful holder for value of the bonds, and received THEM without actual notice or knowledge of any defects or irregularities in their issue.

The main facts connected with the Issue of the bonds, and out of which this suit arises, cover a period of more than ten years, commencing with the year 1859.

An Act of the General Assembly of the State of Missouri, approved December 5, 1839, and amended January 5, 1860, incorporated the Missouri River Valley Railroad Company, with power to construct a railroad from any point on the North Missouri Railroad in Randolph County, by way of Brunswick, in Chariton County; thence, through Carroll, Ray, Platte and Clay Counties, to Weston, in Platte County; and authorized the county court of any county in which any part of such railroad might be, to subscribe to the stock of the company to invest its funds in such stock, and raise the funds by tax to be voted by the legal voters of the county, in such manner as the county court might prescribe for the purpose of paying such stock. It was declared that the provisions of the general-----end.

The general principles stated above apply to the constitutions as well as to the laws of the several states insofar as they are repugnant to the Constitution and laws of the United States- Moreover, a construction of a statute which brings it in conflict with a constitution will nullify it as effectually as if it had, in express terms, been enacted in conflict therewith.

The Minnesota cases of Cook v. Iverson and State v. Sutton correctly set forth the binding effect of a constitutional provision.

L.O. COOKE v. SAMUEL G. IVERSON 108 Minnesota Reports

P. 388

Reported in 122 N.W. 251

" Every officer under a constitutional government must act according to law and subject to its restrictions, and every departure therefrom or disregard thereof must subject him to the restraining and controlling power of the people, acting through the agency of the judiciary; for it must be remembered that the people act through the courts, as well as through the executive or the legislature. One department is just as representative as the other, and the judiciary is the department which is charged with the special duty of determining the limitations which the law places upon all official action."

If a member of the executive department of the state is subject to the control of the judiciary in the discharge of purely ministerial duties, it logically follows that he is subject to such direction if he is threatening to execute an unconstitutional statute, to the irreparable injury of a party in his person or property.

Rippe v. Becker, 56 Minn. 100, 57 N.W. 331, 22 L.R.A. 857. If a statute be unconstitutional it is as if it never had been. Rights cannot be built up under it, and, if an executive officer attempts to enforce it, his act is his individual and not his official act, and he is subject to the control of the courts as would be a private individual. Cooley, Const. Lim. 250; Ex parte Young, 209 U.S. 123, 28 Sup. Ct. 441, 52 L. Ed. 714.

The pivotal question then is: Can the language of this constitutional prohibition be fairly construed as excepting therefrom the building by the state of free highways, Including bridges? If it can be, it is our duty so to construe it. But it cannot be assumed that the framers of the constitution and the people who adopted it did not intend that which is the plain import of the language used. When the language of the constitution is positive and free from all ambiguity, all courts are not at liberty, by a resort to the refinements of legal learning, to restrict its obvious meaning to avoid the hardships of particular cases. We must accept the constitution as it reads when its language is unambiguous, for it is the mandate of the sovereign power. State v. Sutton, 63 Minn. 147, 65 N.W. 262, 30 L.R.A. 630, 56 Am. St. 459; Lindberg v. Johnson, 93 Minn. 267, 101 N.W. 74.

STATE ex rel. 11. W. CHILDS, Attorney

General v. JOHN B. SUTTON

63 Minnesota Reports

P. 147

Reported in 65 N.W. 262

In treating of constitutional provisions, we believe it is the general rule among courts to regard them as mandatory, and not to leave it to the will or pleasure of a legislature to obey or disregard them. Where the language of

Gunn v-Barry, 16 Wall (US) 610, 21 L ed 2112; Cohen v Virginia, 6 Wheat (US) 264, 5 L ed 257.

10 Flournoy v First Nat. liank, 197 La. 1067, 3 So 2d 244; Gilkeson v Missouri P. R Co. 222 Mo. 173,121 SW 138; Peay v Nolan, 157 Tenn. 222,7 SW 2d i15.60 ALR 408.

The Federal Reserve banks are authorized, with the approval of the Secretary of the Treasury, to act as depositaries, custodians, and fiscal agents for the Home Owners Loan Corporation. (Apr. 27, 1934, ch. 168, § 8, 48 Stat. 646.)

Abolishment OF HOME OWNERS' LOAN CORPORATION

For dissolution and abolishment of the Home Owners' Loan Corporation, referred to In the section, by act June 30. 1953. ch. 170. § 21, 67 Stat. 126, see note under section 1463*of this title

§395. Federal reserve banks as depositaries, custodians and fiscal agents for Commodity Credit Corporation.

The Federal Reserve banks are authorized to Act as depositaries, custodians, and fiscal agents for the Commodity Credit Corporation. (July 16, 1943, ch. 241, 13. 57 Stat. 566.)

TRANSFER or FUNCTIONS

Administration of program of Commodity Credit Corporation was transferred to Secretary of Agriculture by 1046 Reorg. Plan No. 3, 1 501, eff. July 16. 1946, 11 F. R. 7877, 00 Stat. 1100. See note under section 713 of Title 15, Commerce and Trade.

EXCEPTIONS FROM TRANSFER OR FUNCTIONS

Functions of the Corporations of the Department of Agriculture, the boards of directors and officers of such corporations; the Advisory Board of the Commodity Credit Corporation; and the Farm Credit Administration or any agency, officer or entity of, under, or subject to the supervision of the Administration were excepted from the functions of officers, agencies and employees transferred to the Secretary of Agriculture by 1953 Reorg. Plan No. 2, 1 1. eff. June 4, 1953. 18 F. R. 3219, 67 Stat. 6.33, set out as a note under section 511 of Title 5. Executive Departments find Government officers and Employees.

FEDERAL RESERVE NOTES

§ 411. Issuance to reserve banks; nature of obligation; redemption.

Federal reserve notes, to be issued at the discretion of the Board of Governors of the Federal Reserve System for the purpose of making advances to Federal reserve banks through the Federal reserve agents as hereinafter set forth arid for no other purpose, are authorized. The said notes shall be obligations of the United States and shall be receivable by all national and member banks and Federal reserve banks and for all taxes, customs, and other public dues. They shall be redeemed in lawful money on demand at the Treasury Department of the United States, in the city of Washington, District of Columbia, or at any Federal Reserve bank. (Dec. 23, 1913, ch. 6, 1 16, 38 Slat. 265; Jan. 30, 1934, ch. 6, .4 2 (b) (1). 48 Stat. 337; Aug. 23. 1935. ch. 614, 1 203 (a). 49 Stat. 704.)

REFERENCES IN TEXT

Phrase "hereinafter set forth" Is from section 16 of the Federal Reserve Act, Set Dec. 23, 1913. Reference probably means as set forth in sections 17 et seq, of the Federal Reserve Act. For distribution of the sections in this code see note under section 226 of this title, and the Tables.

CODIFICATION

Section Is comprised of first per. of section 16 of act Dec. 23. 1913. Pars. 2--4. 5 and 6, 7. 8-11. 13 and 14 of section 16. and pars. 1518 of section 16, As added June 21, 1917, ch. 32, 18. 40 Stat. 238. are classifted to sections 41" 14, 415, 416. 418-421, 360, 248 (o) and 467. respectively, of this title.

Par. 12 of section 16, formerly classified to section 422 of this title, was repealed by act June 26, 1934, ch. 756, 1 1. fS Stat. 1225.

AMENDMENTS

1934-Act Jan. 30. 1934, omitted provision permitting redemption in gold, from last sentence.

CHANGE OF NAME

Act Aug. 23, 1935, changed the name of the Federal Reserve Board to Board of Governors of the Federal Reserve System.

CROSS REFERENCES

Gold coinage discontinued, see section 315b of Title 31, Money And Finance.

Any Federal Reserve Bank may make application to the local Federal Reserve agent for such amount of the Federal Reserve notes hereinbefore provided or as it may require. Such Application shall be accompanied with a tender to the local Federal Reserve agent of collateral in amount equal to the a of the Federal Reserve notes thus applied for and issued pursuant to such application. The collateral security thus offered shall be notes, drafts, bills of exchange, or acceptances acquired under the provisions of sections 82, 342-347. 347c. and 372 of this title, or bills of exchange endorsed by a member bank of any Federal Reserve district and purchased under the provisions of sections 348a and 353-359 of this title, or bankers' acceptances purchased under the provisions of said sections 348a and 353--359 of this title, or gold certificates, or direct obligations of the United States. In no event shall such collateral security be less than the amount of Federal Reserve notes applied for. The Federal Reserve agent shall each day notify the Board of Governors of the Federal Reserve System of All issues and withdrawals of Federal Reserve notes to and by the Federal Reserve Bank to which he is accredited. The said Board of Governors of the Federal Reserve system may at any time call upon a Federal Reserve bank for Additional security to protect the Federal Reserve notes issued to it. (Dec. 23, 1913, ch. 6. § 16, 38 Stat. 265; Sept. 7, 1916, ch. 461, 39 Stat. 754; Julie

,21, 1917, ch. 32, § 7, 40 Stat. 236; Feb. 27, 1932, ch. 58, 1§ 3, 47 Stat. 57; Feb. 3. 1933. ch. 34, 47 Stat. 794; Jan. 30, 1934, ch. 6, § 2 (b) (2), 48 Stat. 338; Mar. 6,

1934, ch. 47, 48 Stat. 398; Aug. 23, 1935, ch. 614, 1201 ~a), 49 Stat, 714; Man 1, 1917, ch, 20, 50 Stat 23; June 30, 1939, ch. 256, 53 Stat.. 991; Julie 30, 1941, ch. 264. 55 Stat. 395; May 25. 1943. ch. 102, 57 Stat. 85; Julie 12, 1045, ch. 186. § 2. 59 Stat. 237.)

CODIFICATION

Section is comprised of second par. of section 16 of act Dec. 23, 1913. For classification to this title of other paragraphs of section 16, see note under section 411 of this title.

AMENDMENTS

1945--Act of June 12. 1945. Substituted ", or direct obligations Of the United States." for proviso following "gold certificates" in first sentence which limited period during which direct obligations of the United States could be accepted as collateral security.

1943---Act May 25, 1943. Substituted "until June, 30, 1945" for "until June 30, 1943," In proviso.

1941, -Act June 30, 1943. substituted "until June 30, 1943" for "until June 30. 1941" in proviso.

1939-Act June 30, 1939, substituted "until June 30, 1941" for "until June 30. 1930" in proviso.

1937-Act Mar. 1, 1937, extended until June 30. 1939, the period within which direct obligations of the United

the Secretary of the Treasury under section 913 of Title 31. Federal Reserve notes so deposited shall not be reissued except upon compliance with the conditions of an original issue. (Dec. 23, 1913, ch. 6. 1 16. 38 Stat. 267; June 21, 1917, ch. 32, J 7, 40 Stat. 236. Aug. 23, 1935, ch. 614, J 203(a), 49 Stat * 704; June 30, 1961. Pub. L. 87-66, 1 8(b). 75 Stat. 147.)

CODFICATION

Section Is comprised of seventh par. of section 16 of act Dec. 23. 1913. For classification to this title of other para. graphs of section 16. see note under section 411 of this title.

AMENDMENTS

l96l-Pub. L. 87--86 provided for recovery of collatecal upon payment of notes of series prior to 1928 and removed requirement of reserve cor redemption fund for such notes.

CHANGE OF NAME

Act Aug. 23. 1935, changed the name of the Federal Reserve Board to Board of Governors of the Federal Reserve System.

TRANFER or FUNCTIONS

All functions of all of0cers of the Department of the Treasury, and all functions of all agencies and employees of such Department, were transferred. with certain exceptions. to the Secretary of the Treasury. with power vested in him to authorize their performance or the performance of any of his functions. by any of such officers. agencies. and employees, by 1950 Reorg. Plan No. 26. if 1. 2. eff. July 31, 1950, 15 P. R. 4935, 64 Stat. 1280, 1281, set out in note under section 241 of Title 5, Executive Departments and Government Officers and Employees. The Treasurer of the United States. referred to In this section, Is an officer of the Treasury Department.

§ 417. Custody and safe-keeping of notes issued to and collateral deposited with reserve agent. ,

All Federal Reserve notes and all gold certificates and lawful money issued to or deposited with any Federal Reserve agent under the provisions of the Federal Reserve Act shall be held for such agent. under such rules and regulations as the Board of Governors of the Federal Reserve System may prescribe, in the joint custody of himself and the Federal Reserve bank to which he is accredited. Such agent and such Federal Reserve bank shall be jointly liable for the safe-keeping of such Federal Reserve notes, gold certificates, and lawful money. Nothing herein contained, however, shall be construed to prohibit a Federal Reserve agent from depositing gold certificates with the Board of Governors of the Federal Reserve System, to be held by such Board subject to his order, or with the Treasurer of the United States, for the purposes authorized by law. (June 21, 1917, ch. 32, § 7, 40 Stat. 236; Jar,. 30, 1934. ch. 6, 12 (b) (6), 48 Stat. 339; Aug. 23, 1935. ch. 614. 1 203 (a), 49 Stat. 704.)

REFERENCES IN TEXT

For distribution of the Federal Reserve Act, referred to In the text. In this code, see section 226 of this title and note thereunder.

AMENDMENTS

1934-Act Jan. 30, 1934. dropped the word "gold" wherever It appeared before words "gold certificates."

CHANGE OR NAME

Act Aug. 23. 1935 changed the Came of the Federal Reserve Board to Board of Governors of the Federal Reserve System.

TRANSFER OF FUNCTIONS

All functions of all officers of the Department of the treasury, and all functions of all agencies and employees of such department were transferred, with certain exceptions, to the Secretary of the Treasury, with power vested In him to authorize their performance or the performance of any of his functions, by any of such officers. agencies, and employees, by 1950 Reorg. Plan No. 26, It 1. 2. eff. July 31. 1950, 15 F. R. 4935. 64 Stat. 1280, 1281. set out In note under section 241 of Title 6, Executive Departments and 06vernment Officers and Employees. The Treasurer of the United States, referred to in this section, to an officer of the Treasury Department.

CROSS REFERENCES

Gold coinage discontinued, see section 316b of Title 31. Money and Finance.

In order to furnish suitable notes for circulation as Federal reserve notes, the Comptroller of the Currency shall, under the direction of the Secretary of the Treasury, cause plates and dies to be engraved In the best manner to guard against counterfeits and fraudulent alterations. and shall have printed therefrom and numbered such quantities of such notes of the denominations of $1, $2, $5, $10, $20, $50. $100, $500. $1,000. $5,000, $10,000 as may be required to supply the Federal reserve banks. Such notes shall be in form and tenor as directed by the Secretary of the Treasury under the provisions of this chapter and shall bear the distinctive numbers of the several Federal reserve banks through which they are issued. (Dec. 23, 1913. ch. 6, § 16, 38 Stat. 267; Sept. 26, 1918, ch. 177, J 3, 40 Stat. 969: June 4, 1963, Pub. 1& 8848, title 1, 13, 77 Stat. 54.)

REFERENCES IN TEXT

In the original "this chapter" reads "this Act." meaning the Federal Reserve Act, act Dec. 23. 1913. For distribution of the Federal Reserve Act In this code, see note under section 228 of this title.

CODIFICATION

Section Is comprised of eighth par. of section 16 of act Dec. 23, 1913. For classification to this title of other paragraphs of section 16, see note under section 411 of this title.

AMENDMENTS

1963-Pub. L. 83-36 inserted -61. 62." following "notes of the denominations of".

EXCEPTION AS TO TRANFER OR FUNCTIONS

Functions vested by any provision of law In the Comptroller of the Currency, referred to in this section, were not included in the transfer of functions of officers, agencies and employees of the Department of the Treasury to the Secretary of the Treasury, made by 1950 Reorg. Plan No. 26. 1 1. eff. July 31, 1950. 15 F. R. 4935, 64 Stat. 1280. set out In note under section 241 of Title 5. Executive Departments and Government Officers and Employees.

§ 419. Place of deposit of notes prior to delivery to banks.

When such notes have been prepared. they shall be deposited In the Treasury. or in the designated depositary or mint of the United States nearest the place of business of each Federal reserve bank and shall be held for the use of such bank subject to the order of the Comptroller of the Currency for their delivery, as provided by this chapter. (Dec. 23. 1913, ch. 6, 1 16. 38 Stat. 267; May 29. 1920, ch. 214. 1 41 Stat. 654.)

REFERENCES IN TEXT

In the original "this chapter" reacts "this Act." meaning the Federal Reserve Act. act Dec. 23. 1913. For distribution of the Federal Reserve Act in this code, see note under section 228 of this title.

CODIFICATION

Section Is comprised of ninth Par. of section 16 of act Dec. 23, 1913. For classification to this title of other paragraphs of section 16, see note under section 411 of this title.

EXCEPTION AS TO TRANFER OR FUNCTIONS

Functions vested by any provision of law In the Comp. troller of the Currency, referred to In this section, were not included in the transfer of functions of officers, agen. cies and employees of the Department of the Treasury to the Secretary of the Treasury, made by 1950 Reorg. Plan No. 26, j 1. eff. July 31, 1950, 15 IF. R. 4935, 64 Stat. 1280, set out In note under section 241 of Title 5, Executive Departments and Government Ollicers and Employees.

§420. ontro and direction of plates and dies by comptroller; expense of issue and retirement of notes paid by banks.

The plates and dies to be procured by the Comptroller of the Currency for the printing of such circulating notes shall remain under his control and direction, and the expenses necessarily incurred in executffkg the laws relating to the procuring of such notes, and all other expenses incidental to their issue and retirement, shall be paid by the Federal reserve banks, and the Board of Governors of the Federal Reserve System shall include In its estimate of expenses levied against the Federal reserve banks a sufficient amount to cover the expenses provided for in sections 411-416 and 418-421 of this title. (Dec. 23. 1913, ch. 6, 116, 38 Stat. 267; Aug. 23, 1935, ch. 614, 1203 (a), 49 Stat. 704.)

REFERENCES IN TEXT

In the original "Provided for in sections 411-416 and 418-421 of this title" reads "herein provided for."

CODIFICATION

Section Is comprised of tenth par. of section 16 of act Dec. 23, 1913. For classification to this title of other paragraphs of section 16, see note under section 411 of this title.

CHANGE OR NAME

Act Aug. 23. 1935, changed the name of the Federal Reserve Board to Board of Governors of the Federal Reserve System.

EXCEPTION AS TO TRANFER OR FUNCTIONS

Functions vested by any provision of law In the Comptroller of the Currency, referred to in this section, were not included In the transfer of functions of o0cers, agencies and employees of the Department of the Treasury to the Secretary of the Treasury, made by 1950 Reorg. Plan No. 26, 11, eff. July 31, 1950. 15 F. R. 4936, 64 Stat. 1280 set out In note under section 241 of Title 5, Ewcutl;~ Departments and Government Officers and Employees.

§421. Examination of plates and dies.

The examination of plates, dies, bed Pieces, and so forth, and regulations relating to such examination of plates, dies, and so forth. of national-bank notes provided for in section 108 of this title, is extended to include notes provided for in sections 411-416 and 418-421 of this title. (Dec. 23.1913,eh.6, 116, 38 Stat. 267.)

REFERENCES IN TEXT

In the original "Provided for In sections 411--416 mud 418--421 of this title" reads "herein provided for.,'

CODIFICATION

Section Is comprised of eleventh par. of section 16 of act Dec. 23. 1913. For classification to this title of other paragraphs oC section 16, we note under section 411 of this title.

§ 422. Repealed. June 26, 1934, ch. 756, § 1, 48 Stat. . 1225.

Section, act Dec. 23, 1918, ch. 6, 1 16, 88 8tat. 267, made permanent appropriations for printing notes besides authorizing the use of certain printing stock on hand December 23, 1913. See section 725 (b) of Title 31, Money and Finance. ,

CIRCULATING NOTES AND BONDS SECURING SAME

§ 441. Retirement of circulating notes by member banks; application for sale of bonds securing circulation.

At any time during a period of twenty years from December 23, 1915, any member bank desiring to retire the whole or any part of its circulating notes may file with the Treasurer of the United States an application to sell for its account, at par and accrued Interest, United States bonds securing circulation to be retired. (Dec. 23, 1913. ch. 6, 1 18,

38 Stat. 268.)

CODIFICATION

Section Is comprised of first par. of section Is of act Dec. 23, 1913. Pars. 2 and 3, 4. 5, and 7-9 of section 18 are classified to sections 442, 443. 444, and 44&-448 of this title, respectively. Par. 6 of section 18. which was classified to section 445 of this title, was repealed by act June 12. 1945, ch. 186. 13. 59 Stat. 238.

TRANFER OR FUNCTIONS

All functions of all officers of the Department of the Treasury, and all functions of all agencies and employees of such Department, were transferred, with certain exceptions, to the Secretary of the Treasury, with power vested in him to authorize their performance or the performance of any of his functions. by any of such oMcers, agencies, and employees, by 1950 Reorg. Plan No. 20, 11 1, 2, eff. July 31, 1950, 15 IF. R. 4935, 64 Stat. 1280. set out in note under section 241 of Title 5, Executive Departments and Government Officers and Employees. The Treasurer of the United States, referred to in this section, In an olncar of the Treasury Department.

§ 442 Purchase of bonds by reserve banks.

The Treasurer shall, at the end of each quarterly period, furnish the Board of Governors of the Federal Reserve System with a list of such applications, and the Board of Governors of the Fedelal Reserve System may, in its discretion, require the Federal reserve banks to purchase such bonds from the banks whose applications have been filed with the Treasurer at least ten days before the end of any quarterly period at which the Board of Governors of the Federal Reserve System may direct the purchase to be made: Provided, That Federal reserve banks shall not be permitted to purchase an amount to exceed $25,000,000 of such bonds in any one year, and which amount shall include bonds acquired under sections 301-308 and 341 of this title by the Federal reserve bank.

Provided further, That the Board of Governors of the Federal Reserve System shall allot to each Federal reserve bank such proportion of such bonds as the capital and surplus of such bank shall beAr to the aggregate capital and surplus of all, the Federal reserve banks. (Dec. 23, 1913. ch. 6, § 18, 38 stat. 268; Aug. 1935, ch 614, §203 (a), 49 stat 704.)

CODIFICATION

Section is comprised of second and third pars. Of section 18 of the Act Dec, 1913. For classification to this title of other paragraphs of section 18, see note under section 441 of this title.

DERIVATION

Act Feb. 31. 1851. ch. 56, 13. 11 Stat. 163.

CROSS REFERENCES

All coins and currencies of the United States to be legaA tender for all debts. see sections 462 and 821 of this title

§457. Gold coins of United States.

7be gold coins of the United States shall be a legal tender In all payments at their nominal value when not below the standard weight and limit of tolerance provided by law for the single piece, and. when reduced in weight below such standard and tolerance, shall be a legal tender at valuation In proportion to their actual weight. (R. S. 1 3585.)

DERIVATION

Act Feb. 12. 1873. ch. 131. 1 14. 17 Stat. 420.

CROSS REFERENCES

Acquisition and use of gold In violation of law to subject the gold to forfeiture and subject person to penalty equal to twice the value of the gold. we Section 443 of this title.

All coins and currencies of United States as legal tender, see sections 402 and 821 of this title.

Gold coinage discontinued and existing gold coins with. drawn from circulation, see section 315b of this title.

Provisions requiring obligations to be payable In gold declared against public policy. see section 463 of this title.

§ 458. Standard silver dollars; paid in silver.

Silver dollars coined under the Act of February 28, 1878, ch. 20, 20 Stat. 25, 26, together with all silver dollars coined by the United States, of like weight and fineness prior to the date of such Act. shall be a legal tender, at their nominal value, for all debts and dues public and private, except where otherwise expressly stipulated in the contract. But nothing In this section shall be construed to authorize the payment In silver of certificates of deposit Issued under the provisions of sections 428 and 429 of this title. (Feb. 28, 1878, ch. 20, § 1, 20 Stat. 25.)

CODIFICATION

Section Is from the first section of the Bland-Allison Coinage of Silver Act.

Portions of the original text omitted here provided for the coinage of silver dollars of the weight of 4121/1, grains !rroy of standard silver with the devices and superscriptlons provided by act Jan. 18. 1837. ch. 3. 5 Stat. 137; and for the purchase of bullion to be -coined Into silver dollars. The provision for the purchase of bullion was repealed by act July 14. 1890. ch. 708. 15, 26 Stat. 289. The provision for the coinage of silver dollars was omitted as superseded or obsolete.

CROSS REFERENCES

All coIN and currencies of the United States. Including Federal Reserve notes and circulating notes of Federal Reserve banks and banking associations. to be legal tender for payment of public debts, public charges, taxes, duties, and dues. see sections 462 and 463 of this title.

Obligations payable in any coin or currency which at the time is a legal tender notwithstanding a provision for payment in a particular kind of coin or currency. see section 483 of this title.

§459. Subsidiary siiver coins.

The silver coins of the United States in existence June 9. 1879, of smaller denominations than $1 shall be a legal tender in all sums not exceeding $10 in full payment of all dues public and private. (June 9, 1879, ch. 12, 13, 21 Stat. 8.)

CODIFICATION

Prior to its incorporation into the Code. this section read as follows: "The present silver coins of the United states of smaller denominations than One dollar SHall hereafter be a legal tender In all sums not exceeding ten dollars In full payment of all dues public and private."

The twenty-cent piece, the coinage of which was authorized by act Mar. 3, 1875. ch. 143. 1 1. 18 Stat, 478. was made a legal tender at its nominal value for any amount not exceeding five dollars In any one payment, by section 2 of that act. The act was repealed by act May 2. 1878, ch. 79, 20 Stat. 47.

CROSS REFERENCES

All coins and Currencies of the United States. Including Federal Reserve notes find circulating notes of Federal Reserve banks and banking associations. to be legal tender for payment of public debts, public charges. taxes. duties. and dues, see sections 462 and $21 of this title.

§460. Minor coins.

The minor coins Of the United States shall be a legal tender at their nominal value for any amount not exceeding 23 cents in any one payment. (R. S. J 3587.)

DERIVATION

Act Pali. 12. 1873, ch 131. 1 IS.,17 Stat. 427.

CROSS REFERENCES

All coins and currencies of the United States including Federal Reserve notes and circulating notes of Federal Reserve banks and banking associations, to be legal tender for payment of public debts, public charges, taxes, duties, dues. See Sections 462 and 821 of this title.

§461. Commemorative coins.

CODIFICATION

Section, making certain enumerated cominemorative coins legal tender, is omitted As executed in view of section 376a. of this title discontinuing coinage and Issuance of Commemorative coins under act& enacted prior to Mar. 1. 1939.

Section was from acts Apr. 13. 1904. ch. 1253. § S. 33 Stat. 178: June 1. 1918. ch. 91. § §, 40 Stat. 694; May 10, 1920. ch. 176. §1. 41 Stat. 596; May 10. 1920. ch. 177. §1, 41 Stat. 595: May 12, 1920, ch. 182. §1. 41 Stat. 597; Mar. 4. 1921, ch. 153, §1, 41 Stat. 1363: Feb. 2. 1222. ch. 45. 42 stat. 362: Jan. 24. 1023. ch. 38. §1, 42 Stat. 1172: Feb. 26, 1923. ch. 113. §1, k2 Stat. 12a7; Mar. 17. 1924. ch. 58. § 1 , 43 Suit. 23: Jan. 14. 1925. ch. 79, §5. 43 Stat. 749; Feb. 24. 1925. ch. 302. §§ 1---3. 43 Stat. 965, 966; Mar. 3, 1925. ch. 482. § 4, 43 Stat. 1254; May 17. 1928. ch. 307. § 1. 44 Stat. 559; Mar. 7. 1928. ch. 135. § 1. 45 Stat. 198: JuNe 15. 1933, ch. 82. § 1. 48 Stat 149: May 9. 1934. ch. 285, §§ 1-4. 48 Stat. 679; May 14. 1934. ch. 286. §§ 1-3. 48 Stat. 776: May 26. 1934, ch. 355, §§ 1--4. 48 Stat. 807: June 21, 1934, ch. 695. §§ 1-4. 48 Stat. 1200; maY 2, 1935. ch. 88, §§ 1--6. 49 Stat. 165. 166; May 3. 1935, ch. 90. §§ 1--4. 49 Stat. 174: June 6. 1935. ch. 176, 49 Stat. 324: Mar. 18. 1936. ch. 149. §§ 1-5. 49 Stat. 1165: Mar. 20, 1936. ch. 1,64. §§ 1-3, 49 Stat. 1187; Apr. 13. 1936, ch. 212, §§ 1-3. 49 Stat. 1205: May 5. 1936. ch- 300. §§ 1-3-49 Stat. 1257; May 6, 1936. ch. 304. §§ 1-3. 49 Stat. 1259: May 6. 1936. ch. 331, §§ 1-3. 49 Stat. 1262, 1263: May 15. 1936. Ch. 399. §§ 1--3. 49 Stat. 1278; May 15. 1936. ch. 402, §§ 1-3. 49 Stat. 1277. 1278: May 15. 1936. ch. 406. if 1-3, 49 Stat. 1352, 1353; May 28, 1936. ch. 466, §§ 1-3. 49 Stat. 1387. 1388: June 10, 1936. ch. 583. §§ 1--3. 49 Stat. 1522; June 16. 1936, ch. 584, §§ 1--3. 49 Stat. 1523: June 16, 1936. ch. 58d. §§ 1-3. 49 Stat. 1524; June 24, 1938. ch. 760, §§ 1-4. 49 Stat. 1911; June 26. 1936. ch. 835. if 1-3. 49 Stat. 1972: June 26. 1936. ch. 837, §§ 1--3. 49 Stat. 1973: June 24, 1937, ch. 377, §§ 1-3, 50 Stat. 306; June 28, 2937. ch. 384, §§ 1-3, 50 Stat. 322. 323.

§462. Coins and currencies.

All coins and currencies of the United States (including Federal Reserve notes and circulating notes of Federal Reserve banks and national banking associations) heretofore or hereafter coined or issued, shall be legal tender for all debts, public and private. public charges, taxes, duties, and dues, except that gold coins, when below the standard weight and Limit of tolerance provided by law for the single---end.