Hepburn v. Griswold
Case Date: 11/25/1870
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Hepburn v. Griswold, 75 U.S. 603 (1870), was a Supreme Court of the United States case in which the Chief Justice, Salmon P. Chase, speaking for the Court, declared certain parts of the legal tender acts to be unconstitutional. This included the issuance of greenbacks, which he was responsible for overseeing during his tenure as Secretary of the Treasury.
The lawsuit originated when one Mrs. Hepburn attempted to pay a debt due to one Henry Griswold on a promissory note, which was made five days prior to the issuance of United States notes that this case questioned. Griswold sued Hepburn in the Louisville Chancery Court on the note and refused Mrs. Hepburn's tender of United States notes to satisfy his claim. She then tendered the notes into the chancery court, which declared her debt satisfied.
The Court of Errors of Kentucky reversed the chancery court's judgment, and Mrs. Hepburn appealed to the United States Supreme Court, which in this opinion affirmed the judgment of the Court of Errors.
The Supreme Court acknowledged that the Constitution of the United States is the highest law of the land and that the national government was powerless to do something that it was not authorized to do by the people. The Federal government holds the power to do things that are not expressly granted in the Constitution, so long as they are incidental to it.
The Court went on to explain how the United States Congress has the power to coin money. However, the Court held that the power to coin money was distinctly different from the power to make paper legal tender. The Court discussed that the government holds the power to carry on war and since greenbacks were issued to finance the American Civil War, perhaps Congress could make these notes legal tender under that power. Nevertheless, the Court reasoned that making notes legal tender was not necessary to carry on war.
The Court also talked about how the Constitution prohibits the several states from impairing the obligations of contracts, but it found that although there is no such express prohibition against the national government, it would violate the spirit of the Constitution for the government to do so. Since compelling somebody to accept something other than what was contracted for was a taking of property, the Court found that making notes legal tender was a taking without just compensation and without due process of the law.
The dissent argued that the government was threatened by the war and making the notes legal tender provided the government with the necessary supplies to continue to fight the war. Therefore, the dissent generally rested its hat on the claim that making notes legal tender]was legitimate as it was incidental to the power to carry on war.
The holding in this case was explicitly overruled by Knox v. Lee and other Legal Tender Cases, 79 U.S. (Wall. 12) 457 (1871), in which Chase dissented.
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