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GUARANTY TRUST CO. V. HENWOOD, 307 U. S. 247 (1939)

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U.S. Supreme Court

Guaranty Trust Co. v. Henwood, 307 U.S. 247 (1939)

Guaranty Trust Co. v. Henwood

No. 384

Argued February 8, 9, 1939

Decided May 22, 1939*

307 U.S. 247


Railroad bonds, secured by trust mortgage, which were sold in this country for dollars in 1912, were expressed to be payable here in gold coin of the United States equal to the then standard of weight and fineness or, at the option of the holder, to be payable in several foreign countries, including Holland, in specified amounts of the moneys there current, which amounts were the 1912 exchange equivalents of American dollar value per bond. In a bankruptcy reorganization proceeding, holders of the bonds asserted their option of payment abroad in Dutch guilders, and asked that their claims be allowed at their guilder value, greater in dollars than the face of their bonds.


1. In determining the nature of the obligation, bonds and mortgages must be construed together. P. 307 U. S. 253.

2. The bonds and mortgage are domestic obligations, to be interpreted and enforced according to the law of this country. P. 307 U. S. 254.

3. The bonds are obligations "payable in money of the United States," within the meaning of the Joint Resolution of June 5, 1933, and, under that Resolution, are payable dollar for dollar in present legal tender. P. 307 U. S. 256. chanroblesvirtualawlibrary

Page 307 U. S. 248

The promises of payment, with interest, in alternative currencies were not in barter for commodities. Interest is not paid on commodities, but on monetary obligations. These promises are not separate and independent contracts or obligations, but parts of one and the same monetary obligation of the debtor. P. 307 U. S. 255.

4. The proposition that the obligation was never payable in United States money because the option to receive payment in dollars had never been exercised is rejected. P. 307 U. S. 256.

5. The proposition that the Resolution, if construed to forbid enforcement of the option to demand payment in guilders, nullifies contractual rights in violation of the Fifth Amendment is rejected. P. 307 U. S. 258.

Domestic contracts between private parties cannot create vested rights restricting the exercise of a power of Congress.

98 F.2d 160, 179, affirmed.

Certiorari, 305 U.S. 588, 594, to review decrees of the court below which affirmed orders of the District Court fixing allowances to holders of railroad bonds in a reorganization case. chanroblesvirtualawlibrary

Page 307 U. S. 249

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