Morgan v. United States, 113 U.S. 476 (1885), was a case involving several judgments of the United States Court of Claims in four cases against the United States for the payment of United States bonds known as "five-twenty bonds."
Consols of 1865, issued in pursuance of the authority conferred upon the Secretary of the Treasury by the Act of Congress approved March 3, 1865, entitled "An act to provide ways and means for the support of the government." Twenty bonds of the denomination of $1,000 each and sixteen of $500 each were embraced in the suits. The controversy relates to the title only, all of them being claimed by the Manhattan Savings Institution, and ten of each denomination by J.S. Morgan & Co., and the others, being ten of $1,000 each and six of $500 each, by L. Von Hoffman & Co. The bonds having been called in for redemption, were presented at the Treasury for that purpose by the holders, respectively, J.S. Morgan & Co. and L. Von Hoffman & Co., but payment was refused by the United States on account of the adverse claim of the Manhattan Savings Institution, and the claims of the several parties to the proceeds were Treasury, March 12, 1880, pursuant to § 1063, Revised Statutes. Judgments were rendered by that court in favor of the Manhattan Savings Institution, and against the other claimants respectively. 18 Ct.Cl. 386. The several appeals bring up all the cases as they stood in the Court of Claims; the United States appealing from the judgment in favor of the Manhattan Savings Institution, the other parties from the judgments dismissing their respective petitions. The controversy is wholly between the claimants, the United States being merely in the position of a stakeholder, not denying its liability to pay to the true owners of the bonds.
The act of Congress in pursuance of which the bonds in question were issued, being "An act to provide ways and means for the support of the government," approved March 3, 1865, 13 Stat. 468, c. 77, provided:
The bonds issued under this act were called the consolidated debt or consols of 1865, because, in addition to the loan of six hundred millions of dollars authorized by it, the Secretary of the Treasury was empowered to permit the conversion, into any description of bonds authorized by it, of any Treasury notes or other obligations, bearing interest, issued under any act of Congress.
The bonds were only different only in numbers and denomination, and were in the following form:
~165,120] [165,120
"[Consolidated debt. Issued under act of Congress approved March 3, 1865. Redeemable after five and payable twenty years from date.]"
"1,000] [1,000"
"It is hereby certified that the United States of America are indebted unto the bearer in the sum of one thousand dollars, redeemable at the pleasure of the United States after the first day of July 1870, and payable on the first day of July 1885, with interest from the first day of July 1865, inclusive at six percent per annum, payable on the first day of January and July in each year, on the presentation of the proper coupon hereunto annexed. This debt is authorized by act of Congress approved March 3, 1865."
"Washington, July 1, 1865."
"J. LOWERY"
"For Register of the Treasury"
"Six months' interest due July 1, 1885, payable with this bond."
"(Thirteen coupons attached from and including coupon for interest due January 1, 1879, to and including coupon for interest due January 1, 1885.)"
The bonds were known as "five-twenty bonds," because they were redeemable after five years but not payable until twenty years after July 1, 1865.
The Act of July 14, 1870, "to authorize the refunding of the national debt," 16 Stat. 272, authorized the issue of three classes of bonds, according as they bore interest at the rates of five percent, 4½ percent, and 4 percent per annum, amounting in the aggregate to $1,500,000,000, which the Secretary of the Treasury was, by the second section of the act, authorized to sell and dispose of at not less than their par value in coin, and "to apply the proceeds thereof to the redemption of any of the bonds of the United States outstanding, and known as five-twenty bonds at their par value," or, the act continues, "he may exchange the same for such five-twenty bonds, par for par."
By the fourth section of this act, it was provided:
By an Act passed January 20, 1871, 16 Stat. 399, the foregoing act was amended so as to authorize the issue of five hundred millions of five percent bonds instead of two hundred millions, as limited by the Act of July 14, 1870, but not so as to permit an increase of the aggregate of bonds of all classes thereby authorized.