The making of notes or bills of credit a legal tender in payment of pre-existing debts, is not a means appropriate, plainly adapted nor really calculated to carry into effect any express power vested in Congress; is inconsistent with the spirit of the Constitution; and is prohibited by the Constitution.
The payee held a promissory note wherein the payor promised to pay a certain amount of dollars. When the note was made, there were no United States notes. After the note was made, the Act was passed that made United States notes a legal tender in payment of debts. The payee brought an action to collect on the promissory note. Defendants, a payor and others, sought to satisfy the note through the payment of United States notes. The payee contended that he was not obliged to accept the notes because the debt was contracted before the date of the Act. The court of appeals found in favor of the payee, and defendants sought reversal of that judgment by writ of error.
Is the payee or assignee of a note, made before the Legal Tender Act of 1862, obliged by law to accept in payment United States notes, equal in nominal amount to the sum due according to its terms, when tendered by the maker or other party bound to pay it?
The Court affirmed the judgment of the court of appeals. The Court held that the payee was not bound to receive from defendants the currency tendered to him in payment of their note, made before the passage of the act of February 25th, 1862. The Court held that the Act was inconsistent with the spirit of the Constitution, and prohibited by the Constitution, because the Act was not really calculated to carry into effect any express power vested in Congress.