I. The right of Congress " to coin money, and to regulate the value thereof," did not give the General Government the right to engage in banking business, to issue paper money, or to make Government notes legal tender for the general use of the nation.
No torture of words can construe " the right to coin money" into the right to emit paper currency, and make it a legal tender in all the transactions of the nation, in payment of debts existing, of obligations to mature, obligations to foreign citizens, duties or debts owing to the differentStates.
This power was expressly disclaimed by the framers of the Constitution, and has never been affirmatively asserted, as I can find, by any authority.
The attorneys in this case have not placed their argument upon the basis assumed by the advocates of the measure in the Congress of the United States.
The claim of power was rested on a broader basis. It was asserted that the right to declare war, to borrow money, to maintain an army, support a navy, coin money, and regulate the value thereof, and the further grant of power necessary to carry these express powers into effect, by implication, vested Congress with power to create any kind of money, or do anything else necessary to carry on, preserve and maintain the Government; that this issue of notes, with the legal tender clause, was a " war measure; " that the crisis demanded the exercise of all powers necessary to preserve the Government; that, as money was indispensable to the maintenance of an army in the field, a navy in efficient service, Congress had the power to make money, and in order to give that money value, declare it a " legal tender."
This was an argument arising from the necessity of the Government; it was addressed to the patriotism of the members of Congress, and it was carried as a war measure.
As a question of financial policy, we are unable to see how the legal tender clause could have been expected to aid the Government in its necessities. It could have paid its own debts without the clause. It gained nothing to itself by working a loss on matured obligations between citizens. All new obligations between individuals, and all transactions between citizens and the Government, will be entered into after calculation of the character of the currency in which they may be liquidated. This view of the subject is only important if this act shall be maintained as a war measure.
The Secretary of the Treasury admitted his doubts of the law; but the pressure of the financial necessity determined his course, and a majority of Congress undoubtedly acted from what they supposed was demanded by the exigencies of a great financial crisis.
II. Our State is sovereign to control her own domestic affairs, and without discussing the question of the validity of these treasury notes, for all ordinary transactions of business, the State has the undoubted right, in dealing with herown citizens, to exact from them such measures of tribute, and in such kind of currency, as may be deemed best for her own interest.
That, for the sake of the argument, admitting these treasury notes, with their legal tender clause, as legal, as valuable as the gold and silver minted coin of the United States, nevertheless our State Legislature has the right to say--" We will exact from our own citizens payment in coin."
If no other motive governed the Legislature than mere caprice, yet the law, which directs the collection of revenue in gold and silver coin, is to be respected and sustained.
The Court will, however, presume a higher motive. Our State owes, in round numbers, $ 4,000,000; our obligations are held by the citizens of foreign Governments; our coupons are in the hands of other people, who contracted with us while coin was our only mode of payment. Foreigners, and citizens of other States, who, having no part in the creation or countenance of the troubles in which we are involved, should be required to support none of the burdens of our war.
Every consideration of honor and good faith requires us to pay our foreign bond holders their interest in coin; we must collect in coin to enable us to do so.
The power of taxation is a sovereign power in the State, and must carry with it the right to determine in what currency taxes shall be receivable.
Our State has, on more than one occasion, for certain taxes, determined to receive Controller's warrants.
The Tax Collector is now receiving certain city scrips for delinquent taxes; judgments against the city have been so received.
Gold dust, grain, or any other article of value, might be exacted for taxes.
The citizens owes the obligation to the State to aid in bearing the burdens of State government, and it is for the State, acting through her Legislature, to prescribe the kind and measure of that support.
III. The Act does not intend to enforce the collection of State taxes in " legal tender notes; " if so, taxes would have been particularly designated.
The Supreme Court has not decided, in the case of The People v. Seymour, that taxes are debts due the State, in the sense in which the word debts is used in the Act of Congress.
JUDGES: Field, C. J. delivered the opinion of the Court. Norton, J. and Cope, J. concurring.
OPINION
FIELD, Judge
This is an application for a mandamus to compel the defendant, as Tax Collector of the city and county of San Francisco, to accept from the relator two hundred and seventy dollars and forty-five cents, in the " United States notes," tendered in payment of State and county taxes, assessed upon his property for the present year, and to execute and deliver to him a good and sufficient receipt for the taxes. The " United States notes" were issued pursuant to an Act of Congress, passed the twenty-fifth day of February, 1862, which declares that they " shall be receivable in payment of all taxes, internal duties, excises, debts and demands, of every kind, due to the United States, except duties on imports, and of all claims and demands against the United States, of every kind whatsoever, except for interest upon bonds and notes, which shall be paid in coin; and shall also be lawful money, and a legal tender in payment of all debts, public and private, within the United States, except duties on imports and interest as aforesaid."
The general Revenue Act of this State, of May 17th, 1861, declares that all taxes for State or county purposes " shall be paid in the legal coin of the United States, or in foreign coin at the value fixed for such coin by the laws of the United States; " with a proviso that county taxes levied in accordance with any special Act, may be collected in such funds as the special Act may designate. (Sec. 2.) The Act also declares that every tax levied under its provisions or authority shall be a lien upon the property assessed, which shall attach on the first Monday in March of each year, and shall not be satisfied nor removed until the tax is paid, or the property has absolutely vested in a purchaser under a sale for the same (sec. 3); and that upon the payment of any tax, the collector shall mark the word " paid," and the date of payment, in the duplicate assessment roll, opposite the name of the person, or the description of the property liable for the tax, and shall give to the tax-payer a receipt therefor, specifying the amount of the assessment, the amount of the tax, and a description of the property assessed. (Sec. 33.) As will be perceived, the tax-payer, upon the payment of his tax, or what is equivalent, a tender of payment, in the coin designated, is entitled to a receipt from the collector, and it is the duty of that officer to execute and deliver the same. It is a duty which the law specially enjoins upon him, and its performance may in consequence, under our statute, be enforced by mandamus. (Prac. Act, sec. 467.) The tax-payer is not obliged to trust to parol evidence of his payment, which is liable to loss; he is entitled to a record of the fact on the books of the collector, and to written evidence of the fact in his own possession. Such evidence will show that the lien which follows the property, no matter in whose hands it may pass, has been removed, and will furnish a ready answer to inquiries generally made as to the payment of the tax, when a transfer of the property is desired. If, then, " United States notes" are receivable for the taxes of the relator, in place of the legal coin of the United States, or foreign coin at its legalized value, mandamus is his appropriate remedy.
The question then presented for determination is this: Are the notes of the United States thus receivable for State and county taxes under the Act of Congress? On the argument, the question whether it is within the constitutional power of Congress to make these notes a legal tender in payment of debts, was ably and elaborately argued by counsel; but from the construction we give to the Act of Congress, this question is not before us. The question is one of great magnitude and importance, upon which the first legal minds of the country differ; and until it is legitimately and directly before us, we have no disposition--nor indeed would it be proper--to express or even intimate an opinion upon it. The Act does not, in our judgment, have any reference to taxes levied under the laws of the State. It only speaks of taxes due to the United States, and distinguishes between them and debts. Its language is, " for all taxes, internal duties, excises, debts and demands of every kind due to the United States," the notes shall be receivable. When it refers to obligations other than those to the United States, it only uses the term " debts; " the notes it declares shall be " a legal tender in payment of all debts, public and private." Taxes are not debts within the meaning of this provision. A debt is a sum of money due by contract, express or implied. A tax is a charge upon persons or property to raise money for public purposes. It is not founded upon contract; it does not establish the relation of debtor and creditor between the taxpayer and State; it does not draw interest; it is not the subject of attachment; and it is not liable to set-off. It owes its existence to the action of the legislative power, and does not depend for its validity or enforcement upon the individual assent of the taxpayer. It operates in invitum. If authority for the distinction is required, it will be found in the cases of The City of Camden v. Allen, (2 Dutcher's New Jersey R. 398); Pierce v. The City of Boston, (3 Met. 520); and Shaw v. Pickett, (26 Vt. 482).
The term debt, it is true, is popularly used in a far more comprehensive sense, as embracing not merely money due by contract, but whatever one is bound to render to another, whether from contract or the requirements of the law. But the legal technical meaning of the term, as used in statutes, and in the Constitution both of the United States and of this State, is as we have defined it. (Const. U.S. art. 1, secs. 8 and 10; art. 6; Const. of Cal., art. 8.) No one would pretend that an act providing for the collection of debts would include, by force merely of the term debts, the collection of taxes also.
The cases of Moore v. Patch, (12 Cal. 270) and People v. Seymour, (16 Id. 340) are supposed to hold that a tax is strictly a debt due to the State. There are expressions in the opinions of the Court which, taken by themselves, disconnected from the facts, give a color to this view; but the real purport and effect of the decisions in those cases is this: that taxes levied under the laws of this State constitute not merely charges upon the property assessed, but personal charges against the taxpayer; and if from defect of proceedings in the assessment, the property cannot be sold for the payment of the taxes, it is constitutional for the Legislature to legalize the assessment, or to authorize a personal action for their recovery: in other words, that the obligation to pay the taxes is not discharged by a defective assessment of the property. In the latter case, the Court said it was immaterial to consider whether taxes were " debts in the sense of money obligations existing by contract. The Government has the same right to enforce a duty as a debt, and may enforce it in the same way; the circumstantial difference between the two classes of obligations is nothing, so far as the power of the Government is concerned, between a man voluntarily binding himself to pay money to the Government, and the Government binding him to do so, when he has no option but to obey." (16 Cal. 344.)
But whatever view may be taken of taxes under our statute--whether in the provisions for their enforcement they can be treated as debts due the State--the question still recurs: What did Congress intend by the act under consideration? And upon this question we are clear that it only intended by the terms " debts, public and private," such obligations for the payment of money as are founded upon contract.
Judgment affirmed.