Re: Interesting little court case i ran across....
[QUOTE=toasty;885032]I don't think the argument he was trying to make would fly, no. When something fails for lack of consideration, it means that there was no actual exchange of value that occurred. A (very rudimentary, and overly simplistic) example:
-X agrees to give his bike to Y. If X later changes his mind, Y can't sue for breach of contract because there was no exchange of value, just an empty promise.
Similarly, if X were to agree to sell his bike to Y in exchange for a clump of grass, that agreement would also likely fail for lack of consideration because the clump of grass is effectively worthless, and is thus no consideration at all.
In the context of a home mortgage, regardless of whether or not the money given to pay for the home was backed by legal tender the bank had on hand at the time, provided the lender did, in fact, fund the loan, it's hard to say it didn't live up to its end of the bargain by exchanging something of value, which is what "consideration" is all about. It's a clever argument, but a loser IMO because it just flies in the face of the inescapable fact that the bank did, in fact, fund the loan.
Actually, it says that [I]states[/I] can't do that, because the ability to do that, coin money, etc. are powers reserved to the [I]federal [/I]government. In other words, the drafters of the constitutional didn't want each state to have its own currency. Here's the whole clause:
If anything, this clause entrenches the familiar greenback as the currency of choice for most transactions, rather than mandating the use of gold and silver. I'm pretty OK with this, incidentally -- I don't even like carrying around change, let alone bars of gold and silver. :)[/QUOTE]
but now read this...
quote]Furthermore we are faced with the fact that the Constitution forbids the states to make anything but gold and silver coin a tender in payment of debts. If we respect this mandate, how can we possibly believe that the federal government has the power to compel them to use anything else? To believe that the federal government has the right to compel the states to violate the Constitution is against all reason.
But if any further proof is needed that the Federal has no constitutional power to “emit bills of credit,” or print and circulate paper as money, it may be found in the debates of the Constitutional Convention. A proposal was made therein to give the Congress this very power and it was rejected by a vote of nine to two.
In a footnote explaining his vote in favor of denying the power, James Madison says:
[b]This vote in the affirmative by Virginia was occasioned by the acquiescence of Mr. Madison, who became satisfied that striking out the words would not disable the government from the use of public notes, as far as they could be safe and proper; and would only cut off the pretext for a “paper currency,” and particularly for making the bills a “tender” either for public or private debts.” (Madison’s notes on the Federal Convention, Aug. 16, 1787)[/b]
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[quote]
It will be noted that three things had been established before the Constitution was adopted:
1.That the official money of the United States would be precious metals--silver and gold.
2.That the basic unit of value would be called a "dollar" and consist of 375 and 64/100s grains of fine silver.
3.All other coins, both foreign and domestic, would be evaluated in terms of this official silver dollar.
All of this was already part of the law of the land when the Constitution was adopted. Therefore, the Founders wrote the following provisions in the Constitution concerning money based on the above statutes which had previously been adopted as the official monetary system.
[/quote]
[quote]
As indicated earlier, the original draft of the Constitution authorized Congress to "emit bills of credit." This had reference to debt money or currency which would be redeemed with gold or silver. [b]After an extensive discussion the Founders decided they couldn't risk it. There would be no United States debt currency or bills of credit. As for fiat money, this was so abhorrent to the Founders they didn't even discuss it. [/b]
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notice the bold part below?
[quote]The United States Constitution does not mention paper money by that name. Nor does it refer to paper currency or fiat money in those words. There is only one direct reference to the origins of what we, and they, usually call paper money. It is in the limitations on the power of the states in Article I, Section 10. It reads, “No State shall . . . emit Bills of Credit . . . .” [b]Paper that was intended to circulate as money but was not redeemable in gold and silver was technically described as bills of credit at that time.[/b][/quote]
BAM
[quote]BILL OF CREDIT
It is provided by the Constitution of the United States, Art. I, Sec. X, that no state shall 'emit bills of credit, or make anything but gold and silver coin a tender in payment or debts.' Such bills of credit are declared to mean promissory notes or bills issued exclusively on the credit of the state, and for the payment of which the faith of the state only is pledged. The prohibition, therefore, does not apply to the notes of a state bank drawn on the credit of a particular fund set apart for the purpose. Bills of credit may be defined to be paper issued and intended to circulate through the community for its ordinary purposes as money redeemable at a future day.
"Bill Of Credit" Defined
[url]http://www.lectlaw.com/def/b099.htm[/url]
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The constitution does not allow the federal government to emit bills of credit, in fact, the original constitution did, but the founders removed it(feel free to look it up urself). since the power is not given to them, it falls to the state, where CLEARLY it states that the states can not emit bills of credit either.
And the PROOF is the aug 6 draft of the constitution, article 7 section 1(it's all not in order either)
August 6 Draft of the Constitution - The U.S. Constitution Online - USConstitution.net
[url]http://www.usconstitution.net/draft_aug6.html[/url]
[quote]Article 7
Section 1. The Legislature of the United States shall have the power to lay and collect taxes, duties, imposts and excises;
To regulate commerce with foreign nations, and among the several States;
To establish an uniform rule of naturalization throughout the United States;
To coin money;
To regulate the value of foreign coin;
To fix the standard of weights and measures;
To establish Post-offices;
To borrow money, [b]and emit bills on the credit of the United States;[/b]
To appoint a Treasurer by ballot;
To constitute tribunals inferior to the Supreme Court;
To make rules concerning captures on land and water;
To declare the law and punishment of piracies and felonies committed on the high seas, and the punishment of counterfeiting the coin of the United States, and of offenses against the law of nations;
To subdue a rebellion in any State, on the application of its legislature;
To make war;
To raise armies;
To build and equip fleets;
To call forth the aid of the militia, in order to execute the laws of the Union, enforce treaties, suppress insurrections, and repel invasions;
And to make all laws that shall be necessary and proper for carrying into execution the foregoing powers, and all other powers vested, by this Constitution, in the government of the United States, or in any department or officer thereof
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so it was in the draft, and after discussing it more, it was decided to get pitched.............meaning it was then passed to the state, which CAN NOT emit bills of credit.