Posted on 03/08/2007 8:05:12 AM PST by Abathar
jerry639, could you please site the statute, case law, or administrative regulation on which you base this? In McFarland v Christoff, 92 N.E.2d 555 (Ind. Ct. App. 1950), the court stated that failure to accept legal tender does not discharge an underlying obligation, but it may, under certain conditions, toll the running of additional charges (interest, etc.). I find no cite overturning that point; do you have one, or is your position based on "common knowledge"? I think you may have meant to say you cannot refuse payment of a debt in all forms of legal tender, unless otherwise agreed, without forfeiting the debt.
Your debt may be discharged if the other party refuses ALL forms of legal tender AND your agreement with the other party does not specify some other form of payment -- either by contract or because you walk up to the counter that says "credit card transactions only" or the like.
You also asked when pennies were not lawful tender for payment of debts. The answer is until the Coinage Acts of 1873 and 1879, as modifed by the Coinage Act of 1965.
With apologies to all, this thread is full of misunderstandings. For example, the term "debt" when used with respect to legal tender is interpreted by courts as a contractual obligation, not repayment of a loan as everyone is presuming. There are appellate cases on that point. The term "legal tender" is not synonymous with "official money." There are cases on that point. There are three famous cases from the 1830s through the 1870s called the "Legal Tender" cases which primarly deal with whether a party could demand gold or silver bullion from the government in lieu of currency or coin. For example, could you purchase a U.S. security and then demand that it be replaced with gold or silver? And that's not even getting into the legal tender laws during the Revolutionary War which dealt with Tories refusing to accept paper issued by Colonial governments.
Simply stated: You don't have to accept pennies in payment. Period. That's the law. Ohio v. Carroll, 1997 WL 118064 (Ohio Ct. App. 1997) is the most recent case I can find on the subject (yes, it's Ohio law, but I cannot find contrary law in any jurisdiction). Basically, payments in pennies are considered "nuisance" payments and you are not required to accept them -- although the tender MAY stop the accrual of interest, as I mentioned.
Similar examples? New York courts have ruled that public transportation systems may refuse five pennies and require $.05 tokens in payment for a ride. Other courts have ruled that laundromats may refuse currency and accept only coins. In 2003, during litigation styled In Re Marriage of Powell, from 2001-2003, a man who tried to pay his $1,000 legal fee in pennies was ordered to pay an additional $533 for the time spent by the attorney and bank in redeeming the pennies, plus court costs. The U.S. 11th Circuit Court of Appeals upheld the ruling. We could keep going forever.
See my Posts, including #70. If I am wrong, then I would appreciate you educating me -- but only by citing a case or administrative ruling, and please not just by saying that you know the law to be different.
Thanks for your reply.
Didn't the government renege on gold-clauses however? That's not a stellar example. Anything more recent than the 1870's or 1930's? I understand the part about contractual obligations, which is why I diverted the discussion to tax liabilities. Presumably the coin of the realm ought to be in some manner acceptable to those levying the taxes. Do you disagree?
As for taxes, the general rule (you almost always have to say "as a general rule," because the law for better or worst generally contains exceptions, exceptions to the exceptions, and exceptions to the exceptions to the exceptions, ad nauseum) as I understand it is that the federal government has to accept all legal tender in payment of TAXES.
Despite the general rule, I'll bet that there is some point at which an outlandish form of payment using legal tender would be enough to make a judge penalize the payer.
As to past taxes, there are a couple of lines of cases that distinguish between tax payments to the government and the payment of license and similar "non-debt" fees, stating that the federal government doesn't have to accept all forms of legal tender in payment of license and non-tax fees. Do they all appear to be consistent? Not to me.
I think you hit it on the head when you said "in some manner acceptable" to those levying the taxes. A governmental body would probably be within its rights to require you to roll your coins, or to make you wait while the coins are counted if you insist in paying with them. Some states, like California, have regulations that say a governmental agency does not have to accept coins. Constitutional? Don't know; I can't find anywhere where that a similar law has ever been tested. My guess is that if the law doesn't pose an unreasonable burden on the payer, it would probably be held constitutional.
The problem with large payments in coin is that they are almost always intended to cause inconvenience to the recipient. Judges see through that. If the inconvenience is too great, there's likely to be some penalty assessed against the person creating the inconvenience.
In a vacuum, many prople don't see a problem with somebody paying in pennies. Sometimes the government NEEDS somebody to stick it to them. Some protests are valid. Some inconveniences are minor. We can all live with those. However, if somebody in front of me at the DMV tried to pay a $478.32 ticket in pennies (my dentist, for example, who honestly believes that dentists and physicians should never be given speeding tickets because of their special status in society) and caused me to wait in line an extra three hours for them to be counted, then I would view her protest in a dim light.
One of the difficult points of the U.S. "common law" system is that lines are constantly being drawn and redrawn, and appellate judges are SUPPOSED to identify why a line is drawn and where.
For example, should you be permitted to pay in currency covered in mayonnaise? What about wet currency that has to be laid out, unstacked, to dry without molding? Shredded currency? Coins frozen in a large block of ice or chili? Should a tax office be required to accept a $10,000 bill (Salmon P. Chase on its face) in payment of a $1.16 tax bill? How about if you take each bill and cut 45% of it off? A bill with over 50% still present is worth its face value. How much should the payer be able to inconvenience the recipient of payment? That's what the laws and restrictions are about.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.