## Facts

- On June 20, 1860, Mrs. Hepburn executed a promissory note to Henry Griswold for $11,250, payable February 20, 1862.
- When the note was made and matured, gold and silver coin were the only lawful tender for private debts.
- Five days after the note’s due date, Congress enacted the first Legal Tender Act (Feb. 25, 1862), authorizing United States notes and declaring them legal tender for “all debts, public and private,” subject to specified exceptions.
- In March 1864, Griswold sued on the note in Kentucky; Hepburn tendered $12,720 in United States notes to cover principal, interest, and some costs.
- Griswold rejected the tender; Hepburn paid the notes into court.
- The Louisville Chancery Court upheld the tender as satisfying the debt, treating the Legal Tender Act as valid.
- The Kentucky Court of Errors reversed, concluding Congress could not constitutionally make United States notes legal tender for this pre-existing debt, and ordered judgment for Griswold.
- Hepburn sought review in the U.S. Supreme Court by writ of error.

## Issues

1. Whether the Legal Tender Acts of 1862 and 1863, properly construed, apply to debts contracted before their enactment.
2. If the Acts apply, whether Congress has constitutional power to make United States notes legal tender for payment of pre-existing private debts.

## Decision

- The Supreme Court affirmed the judgment of the Kentucky Court of Errors for Griswold.
- The Court held the Legal Tender Acts, by their terms and legislative intent, applied to debts contracted before enactment.
- The Court held the legal-tender provision was unconstitutional as applied to debts contracted before the Acts.
- Hepburn’s tender of United States notes did not discharge the 1860 contractual obligation.

## Legal Principles

- Courts must compare a challenged statute with the Constitution and, if irreconcilable, give effect to the Constitution over the statute.
- The Constitution grants Congress power to coin money, but contains no express grant to make paper or credit currency a compulsory legal tender for private debts.
- Under the Necessary and Proper Clause, implied means must be appropriate and plainly adapted to executing enumerated powers and must be consistent with the Constitution’s letter and spirit.
- Compelling acceptance of United States notes to satisfy pre-Act money debts was not an appropriate means to any enumerated power (including war- and finance-related powers) and impermissibly altered pre-existing contractual obligations understood as payable in coin.

## Conclusion

The Court concluded that while the Legal Tender Acts purported to cover pre-existing debts, Congress lacked constitutional authority to require United States notes to be accepted as legal tender for obligations contracted before the Acts, so payment in such notes could not satisfy Hepburn’s earlier promissory note.


Hepburn v. Griswold, 75 U.S. 603 (1870)