Hepburn v. Griswold
8 Wall. 603 (1869)
Rule of Law:
The Legal Tender Act of 1862 is unconstitutional when applied to debts contracted before its passage, as forcing a creditor to accept depreciated paper currency in place of coin impairs the obligation of the contract and constitutes a deprivation of property without due process of law in violation of the Fifth Amendment.
Facts:
- Before February 25, 1862, Griswold executed a promissory note to Hepburn, promising to pay a certain sum of money.
- At the time the contract was formed, the only form of legal tender recognized by law was gold and silver coin.
- On February 25, 1862, during the Civil War, Congress passed the Legal Tender Act, authorizing the issuance of United States notes (paper money).
- The Act declared these notes to be legal tender for all debts, public and private.
- When the note came due, Griswold offered to pay the debt to Hepburn using the newly issued United States notes.
- Hepburn refused to accept the paper notes as payment and demanded to be paid in gold and silver coin, which had a greater actual value.
Procedural Posture:
- Hepburn sued Griswold in a Kentucky state court of first instance to enforce payment on a promissory note.
- Griswold's defense was a tender of payment in United States notes, which Hepburn had refused.
- The Kentucky trial court entered a judgment in favor of Hepburn, requiring payment in coin.
- The Court of Appeals of Kentucky, then the state's highest court, affirmed the trial court's judgment.
- Griswold, as plaintiff-in-error, appealed the decision to the Supreme Court of the United States.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does Congress have the constitutional authority, through its express or implied powers, to make United States notes a legal tender for debts that were contracted prior to the enactment of the law?
Opinions:
Majority - The Chief Justice Chase
No, Congress does not have the constitutional authority to make United States notes a legal tender for debts contracted before the law was passed. While the statute was intended to apply retroactively, such an application is not a constitutional exercise of congressional power. The power to make paper notes a legal tender is not expressly granted in the Constitution, nor is it an appropriate and plainly adapted means to execute any enumerated powers, such as the power to wage war, regulate commerce, or borrow money. Forcing a creditor to accept a depreciated currency for a pre-existing debt arbitrarily alters the contract and is inconsistent with the spirit of the Constitution, which aims to establish justice. Furthermore, it directly impairs the obligation of contracts and deprives a person of property without due process of law, contrary to the Fifth Amendment, as it takes the value differential between coin and paper from the creditor.
Dissenting - Justice Miller
Yes, Congress does possess the constitutional power to make its notes legal tender for pre-existing debts. This authority is a necessary and proper means for executing its enumerated powers to declare war, raise and support armies, and borrow money, especially during a national crisis like the Civil War. The court should apply a broad interpretation of the Necessary and Proper Clause, as established in McCulloch v. Maryland, and defer to Congress's judgment that this measure was essential to fund the war effort and prevent the nation's financial collapse. The majority's arguments regarding the 'spirit of the Constitution' and the indirect effects on property value are too abstract for judicial application and improperly substitute the court's policy views for the legislature's reasoned determination of necessity.
Analysis:
Hepburn v. Griswold represents a significant, albeit short-lived, judicial check on the expansion of federal power during the Civil War. The majority's holding prioritized the protection of private property and contract rights, interpreting the Fifth Amendment's Due Process Clause as a substantive limit on federal economic regulation. This decision was highly controversial and was famously overturned just one year later in the Legal Tender Cases (Knox v. Lee), highlighting the intense political and economic pressures on the Court concerning the scope of federal monetary and war powers. The reversal demonstrates the malleability of constitutional interpretation in times of national exigency.
Gunnerbot
AI-powered case assistant
Loaded: Hepburn v. Griswold (1869)
Try: "What was the holding?" or "Explain the dissent"