MCCULLOUGH V. VIRGINIA, 172 U. S. 102 (1898)

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U.S. Supreme Court

McCullough v. Virginia, 172 U.S. 102 (1898)

McCullough v. Virginia

No. 3

Argued February 21, 23, 1898

Decided December 5, 1898

172 U.S. 102


On the 29th of May, 1892, the plaintiff below (plaintiff in error here) filed a bill in the Circuit Court of the City of Norfolk, Virginia, to establish the genuineness of certain coupons tendered by him in payment of taxes, and obtained a judgment there in his favor. When the suit was commenced, the highest court of Virginia had often decided against the right to require the state to accept such coupons in payment of taxes. This Court, on the other hand, in a series of decisions reaching from 1880 to 1889, had been uniform and positive in favor of the validity of the act authorizing the issue of such bonds, and of the liability of the state to accept the coupons in payment of taxes. In the present case, the Supreme Court of Appeals of Virginia dismissed the plaintiff's petition on appeal, and awarded costs to the Commonwealth, on the ground that the coupon provision of the act of 1871 was void. In the previous cases, there had been no direct decision by the state court that such provision was entirely void, although the intimation was clear that such was the opinion of the judges then composing the court. It was contended by the state that this Court has no jurisdiction of this case for the reason that the state Court of Appeals does not consider, in its opinion, the subsequent legislation of the state, passed with a view to impair the act of 1871, but limits itself to the consideration of that act, which it adjudges to be void, and also that the repeal of the act of 1882 after the judgment in the trial court below amounts to a withdrawal of the consent of the state to be sued, and is fatal to the maintenance of this action.


(1) That the lawful owner of such coupons has the right to tender the same after maturity in payment of taxes, debts and demands clue the state.

(2) That this Court has the right to inquire and judge for itself with regard to the making of the alleged contract with the holder of the coupons without regard to the views or decisions of the state court in relation thereto.

(3) That the owner's right to pay taxes in coupons is not affected by the consideration that some taxes, other than the ones now in question, were, when the act of 1871 was passed, required to be paid in money.

(4) That while it is true that the state court placed its decision on the ground that the act of 1871 was void insofar as it related to

Page 172 U. S. 103

the coupon contract, the judgment also gave effect to subsequent statutes, and this Court has jurisdiction of the case.

(5) That the rights acquired by the plaintiff under the judgment were not lost or disturbed by the repeal, after judgment, of the act of 1882.

On March 30, 1871, the General Assembly of the State of Virginia passed an act for the refunding of the public debt. Virginia Acts Assembly, 1870-71, p. 378. See also Act of March 28, 1879; Virginia Acts Assembly, 1878-79, p. 264. This act, which authorized the issue of new coupon bonds for two-thirds of the old bonds, leaving the other third as the basis of an equitable claim upon the State of West Virginia, contained this provision:

"The coupons shall be payable semi-annually, and be receivable at and after maturity for all taxes, debts, dues, and demands due the state, which shall be so expressed on their face."

Under this act, a large amount of the outstanding debt of the state was refunded. This provision gave value to the bonds as affording an easy method of securing payment of the interest. This refunding scheme, however, did not prove satisfactory to the people of the state, and since then there has been repeated legislation tending to destroy or impair the right granted by this provision. Among other statutes may be noticed the following: the Act of March 7, 1872, c. 148, Acts of Assembly 1871-72, p. 141, providing that it should not be

"lawful for the officers charged with the collection of taxes or other demands of the state, due now or that shall hereafter become due, to receive in payment thereof anything else than gold or silver coin, United States Treasury notes, or notes of the national banks of the United States."

That of March 25, 1873, c. 231, Acts of Assembly 1872-73, p. 207, imposing a tax of fifty cents on the hundred dollars market value of bonds, and directing that such amount be deducted from coupons tendered in payment of taxes or dues.

At the time the act of 1871 was passed and the new bonds and coupons were issued, the Court of Appeals of the state had jurisdiction to grant a mandamus in any action where the writ would lie according to the principles of the common law, and in

Page 172 U. S. 104

Antoni v. Wright, 22 Gratt. 883, it was held by that court that mandamus was the proper remedy to compel the collector to accept coupons offered in payment of taxes. On January 14, 1882, the assembly passed an act, Acts 1881-82, c. 7, p. 10, which in effect, provided that a taxpayer seeking to use coupons in payment of his taxes should pay the taxes in money at the time of tendering the coupons, and thereafter bring a suit to establish the genuineness of the coupons, which, if decided in his favor, enabled him to obtain from the treasurer a return of the money paid. The various features of this act are specifically pointed out in Antoni v. Greenhow, 107 U. S. 769. At the same session, and on January 26, 1882, Acts 1881-82, c. 41, p. 37, the assembly passed a further act declaring that the tax collectors should receive in payment of taxes and other dues "gold, silver, United States Treasury notes, national bank currency, and nothing else," with a provision for suit by one claiming that such exaction was illegal. The act contained this proviso:

"There shall be no other remedy in any case of the collection of revenue, or the attempt to collect revenue illegally, or the attempt to collect revenue in funds only receivable by said officers under this law, the same being other and different funds than the taxpayer may tender or claim the right to pay, than such as are herein provided, and no writ for the prevention of any revenue claim, or to hinder or delay the collection of the same, shall in anywise issue, either injunction, supersedeas, mandamus, prohibition, or any other writ or process whatever, but in all cases, if for any reason any person shall claim that the revenue so collected of him was wrongfully or illegally collected, the remedy for such person shall be as above provided, and in no other manner."

At the same session, on February 14, 1882, a new funding bill was passed containing a proposition to the bondholders, Act of April 7, 1882, c. 84, Acts 1881-82, p. 88, and again at the same session, on April 7, 1882, an act was passed amending the Code of Virginia in respect to mandamus, which provided:

"That no writ of mandamus, prohibition or any other summary process whatever shall issue in any case of the collection

Page 172 U. S. 105

or attempt to collect revenue, or to compel the collecting officers to receive anything in payment of taxes other than as provided in chapter forty-one, acts of assembly, approved January twenty-six, eighteen hundred and eighty-two, or in any case arising out of the collection of revenue in which the applicant for the writ or process has any other remedy adequate for the protection and enforcement of his individual right, claim and demand, if just."

Acts 1881-82, p. 342.

On March 15, 1884, the General Assembly passed a general act in reference to the assessment of taxes on persons, property, and incomes, Acts 1883-84, c. 450, p. 561, the one hundred and thirteenth section (page 603) of which required that all school taxes should be paid "only in lawful money of the United States."

On January 26, 1886, Acts 1885-86, c. 46, p. 37, an act was passed providing that, in a suit in respect to coupons tendered in payment of taxes, no expert testimony should be receivable, and that the bonds from which the coupons were cut should be produced, if demanded, as a condition precedent to the right of recovery.

Section 399 of the Code of Virginia, which was a revision and reenactment of the general statutes of the state, adopted May 16, 1887, reads:

"It shall not be lawful for any officer charged with the collection of taxes, debts or other demands of the state to receive in payment thereof anything else than gold or silver coin, United States Treasury notes, or national bank notes."

On May 29, 1892, the plaintiff in error filed his petition in the Circuit Court of the City of Norfolk to establish the genuineness of certain coupons tendered in payment of taxes. The proceeding was had under the act of 1882, and no question is made of a full compliance with the terms of that statute. Judgment was rendered in his favor by the Circuit Court of the City of Norfolk, which judgment was, on March 23, 1894, reversed by the Supreme Court of Appeals of the state, 90 Va. 597, and a judgment entered in favor of the commonwealth dismissing the petition of the plaintiff and awarding

Page 172 U. S. 106

to the commonwealth costs. On June 13, 1894, a writ of error was allowed, and the case brought to this Court.

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