continuing, delivered the opinion of the court.

The Court of Appeals placed their judgment upon two distinct grounds. In the first place, they reviewed the former judgments of that court which had sustained the act of March 30, 1871, as a valid and constitutional enactment and binding upon the State as a contract with the bond and coupon holders under the same. The court were of opinion that these decisions were based upon a mistaken assumption. that the State had received a consideration for the issuing of the bonds created by the act aforesaid. They argued and attempted to show that the State had not received any consideration whatever, but that the issuing of the bonds under the act of 1871 was a mere gratuity on the part of the State, and was not binding upon it so as to prevent the' legislature from abrogating the conditions of that act.. Ye have already indicated our views with regard to this position taken by the Supreme Court of Appeals, and have referred to the decisions made by this court sustaining the validity of the act of 1871, which decisions of this court we regard as binding upon us.

*717The other ground on which the Court of Appeals placed its decision was, that the act of 1871, as applied to the moneys due and payable to the “ literary fund,” or fund for the maintenance of public free schools, was contrary to the constitution of the State, adopted in 1869. The 7th and 8th sections of the eighth article of that constitution declare as follows:

“Sec. 7. The General Assembly shall set apart, as a permanent and perpetual literary fund the present literary funds of the State, the proceeds of. all public lands donated by Congress for public school purposes, of all escheated property, of all waste and unappropriated lands, óf all property accruing to the State by forfeitures, and all fines collected for offences committed against the.State, and such other sums as the General Assembly may appropriate.

“Sec. 8. The General Assembly shall apply the.annual interest on the literary fund, the capitation tax provided for by this constitution for public free school purposes, and an annual tax upon the property of the State of not less than one mill nor more than five mills on the dollar, for the equal benefit of all the people of the State. ...” 2 Constitution and Charters, 1968.

The court, in its opinion, held that in view of these constitutional, provisions. the legislature, had no power to declare, or contract, that the moneys due to ^the, literary fund might be paid in coupons attached to the bonds authorized by the act of 1871; and that such a payment would be repugnant to the very nature of the fund. It might well be added, that coupons thus paid into the fund would be of no value whatever to it, for as soon as paid'', into the treasury they would become valueless as if cancelled and destroyed, unless some provision were made for their reissue, and the putting of them into renewed circulation. This would be opposed to the whole tenor of the act, would.be unjust to the coupon holders themselves, and would probably be contrary to the acts of Congress in reference to the creation of paper currency. We- think that the position of the Court of Appeals in this case is well taken, that coupons could not be made receivable as a portion of the’ literary fund; and that, if they could not be received as a part *718of the fund, they could not properly be made receivable for the taxes laid for the purpose of .maintaining said fund. For several years after the constitution was adopted, and after the law of 1871 had been passed, the taxes for the benefit of free schools were mingled in the assessment and collection of taxes, and in the treasury when received, with the other taxes and funds raised for the support of the state government. As long as this state of things continued the collecting officers could not object to receiving coupons in payment of'taxes, because the share due to the school fund could easily be paid from the treasury, to the credit of that fund, out of the lawful moneys received. But by the tax act of March 15,1881, it was provided that all taxes assessed on property, real or personal, by that act, and dedicated by it to the maintenance of the public free schools of the State, should, be paid and collected only in the lawful money of the United States, and should be paid into the treasury to the credit of the free school fund, and úhould be used for no other purpose whatsoever, and to this end the auditor of public accounts should have the books of the commissioner of the revenue prepared with reference to the separate assessment and collection of said school tax, and the several treasurers of the Commonwealth should have the tax bills in their counties and corporations so made out as to specify the amount of the tax due from each taxpayer to the public free school fund, including the capitation taxes of whatever kind or nature, and should keep said capitation tax and school tax separate and distinct from all other taxes or revenues so collected by him, and forward the same, thus separate and distinct, to the. auditor of public accounts, which should be kept separate and distinct by him from all other taxes or revenues until paid to the public free schools. Since the passage-of this act, and in -pursuance thereof, the taxes and other .revenues raised for the purpose of maintaining public schools, and' belonging under the Constitution to the literary fund, have been kept separate and distinct from the other taxes raised for t,he general support of the state government. This the practice when the case of Vashon v. Greenhow arose, and in our judgment the law requiring the school tax to be *719paid in lawful money of the "United States was a valid law, notwithstanding the provisions of the act of 1871; and that it was sustained by the sections of the Constitution referred to, which antedate the law of 1871, and override any provisions therein which are repugnant thereto.

In Paup v. Drew, 10 How. 218, a decision was made,by this court in a case not very different in principle from the one now under consideration. It had been decided in Woodruff v. Trapnall, 10 How. 190, at about the same time, that the law of Arkansas which chartered the Bank of the State of-Arkansas, (the' whole capital of which belonged to the State,) and provided that the bills and notes of said institution should be received in all payments of debts due to the'State, was valid and irrepealable, and that, although this provision was subsequently in terms repealed, the notes of the bank which were in, circulation at the time of the repeal .were not affected by it; and that the undertaking- of the State to receive the notes of the oank constituted a contract between the State and the holders of' these notes which the State was not at liberty to break or impair, although notes issued by the bank after the repeal were not within the contract and might be refused. After this decision' the case of Paup v. Drew came up, in which it was held that, although the notes.of the bank were receivable in payment of all debts due to the State in its own right, and could not be refused, yet where the State sold lands which were held by it in trust for the benefit of a seminary, .'and the terms of the sale were that the debtor should pay in specie or its equivalent, such debtor Was not at liberty to tender the notes ,of\the bank in payment. The question' arose in this way : Congress in, 1827.had passed an act “'Concerning a seminary of learning in the Territory of Arkansas,” by which two entire townships of land were directed to be set aside and reserved from sale, out of the public, lands, within the said territory, for the use and support of a university within the said territory. In 1886, Congress passed another act entitled “An act supplementary to the act entitled ‘An act for the admission ,of the State of Arkansas into the Union", and to provide for the due execution of the laws of the United *720States within the same, and' for other purposes,’ ” by which -last act the lands so reserved for the use and support of a university were vested in the State of Arkansas. On the 28th of December, 1840, the legislature of Arkansas passed an act entitled “ An act to authorize the governor to dispose of th.e seminary lands and in 1842 the then governor of the State sold to John W. Paup the right to enter and locate 640 acres of said land, and received from him therefor bonds payable at different dates'in specie or its equivalent. In 1847 the governor of the State brought a suit upon these bonds, and the defendants brought into court the sum of $6050 in notes of the Bank of the State of Arkansas, and pleaded a tender of the same in discharge of the debt. The plaintiff demurred on the ground that the proceeds of the bonds were part of a trust fund committed to the State by Congress for .special purposes, over which the State had no power except to collect and disburse the same in pursuance of the objects of the grant, and the State had no power to apply said funds to the payment of ordinary liabilities, and ivas not bound to accept in payment of such bonds any depreciated bills, bank paper, or issues, even though she might be ultimately liable to redeem them. This demurrer was sustained and judgment given that the fund was a trust fund held by the State of Arkansas for the purposes to which it was devoted, and therefore the State could not properly contract to receive other' than lawful money for property disposed of belonging to said fund.

“We think that the principle of this case sustains the decision of the Court of Appeals of YirginiaAn the case now under consideration, and the judgment of that court is

Affirmed.

It may be argued that the principle involved in the last case is equally applicable to all taxes raised for the support of the state government; inasmuch as the funds necessary for that purpose, as well as those raised for the purpose of maintaining public free schools, are required to be paid in cash. But there is this difference, that the tax for school purposes is set apart for that specific use, under the express requirement, of the consti*721tution, whüst the general tax for carrying on the government is, or should be, adequate to meet not only the actual expenses of the government itself, but also the outstanding debts and obligations that may be due and payable during the fiscal year, of which the coupons are themselves a part. If the tender of tax-receiving coupons to any considerable amount is apprehended, the rate of taxation should be raised so as to produce a sufficient surplus over and above such coupons to meet the expenses of the government. If the influx of coupons should be so uncertain that no safe calculation could be made on the subject, an arrangement could probably be made with the coupon holders, for limiting the proportion of tax which would be received in coupons. It is certainly to be-wished that some arrangement may be adopted which will be satisfactory to all the parties concerned, and relieve the courts as well as the Commonwealth of Virginia, whose name and history recall so many interesting associations, from all further exhibitions of a controversy that has become a vexation and a regret.