Wainwright v. Webster

The opinion of the court was delivered by Bennett, J. It is a principle of law, too well established to need authority, that where a bill of exchange, or note of a third person, is received in payment of a precedent debt, the risk of the insolvency of the maker is upon the party from whom the bill or note is received, unless there is an express agreement between the parties, tho^ the risk of the^ paper, in this respect, is to be the receiver’s, or one is to be implied, from the facts and circumstances of the case ; and the great question is, whether this principle is applicable to paper issued by an incorporated bank.7 If it is true, that upon the payment of a bank bill in satisfaction of a precedent debt, in the absence of all other facts, there is an implied agreement that the insolvency of the bank is at the risk of the party receiving the bill; then it follows that the authorities applicable to bills of exchange, and promissory notes, do not apply to the case under consideration.. It is true, that by common consent, bank bills have, for the purposes of business, been treated as money; but this is a conventional regulation, for the convenience of business, and no! a legal one. No state is authorized to coin money, or pass any law whereby any tiling but gold and silver shall be made a legal tender, in payment of a debt. It was decided at the last term of this court in Rutland county, that a note payable in bank bills was not negotiable. Ante, 268. They cannot be recognized in the legal acceptation of the term as money, but it is wholly conventional. \ This conventional understanding that bank bills are to pass as money, is founded upon the solvency of the bank, and upon the supposition that thS bills are equivalent in value to specie, and are, at any time, convertible into specie, at the option of the holder. Upon no other ground do bank bills, by common consent, pass as money ; and hence, there is an implied agreement of the parties, at the time the bills are passed, that they are equivalent to money; and they are paid by the one party and received by the other, or! that supposition ; and, unless this is the case, the one party does not pay what he supposes he pays, nor the other receive what he intends to receive. [581] From this principle of common consent, that bank bills should pass as money, it is the implied understanding of the parties, that the receiver should take upon himself the risk of all after failures of the bank, but this principle cannot be carried any farther than this conventional regulation extends, and that is, to treat them as money, only so long as the bank, which issues them, continues to redeem them in specie, or at least in other bills equally acceptable as specie to the bill-holder. When, therefore, a bank stops payment, the bills thereof cease, by this conventional arrangement, to be the representative of money; whether the particular bill-holder is apprised of that fact, or not; and, from that time, the bills of such bank resume .their legal character of promissory notes and mere securities for the payment of money. If they are afterwards passed off to a person equally ignorant of the failure of the bank, there can be no implied agreement from this conventional arrangement to treat them as money, so long as they are convertible into specie, that the receiver shall sustain the loss which had then already accrued to the bill-holder. It is difficult to see why there should be. a distinction between bank bills, after they cease to be, fry any conventional arrangement, the representative of money, and other promissory notes. The law is well settled in this and other states, that the payment of a debt in a forged or counterfeit bank bill, is not a satisfaction, though both parties are equally ignorant of the fact. See Markle v. Hatfield, 2 Johns. R. 458, where chancellor Kent reviews the authorities with much ability. The party paying must sustain the loss, or rather is not permitted to shift it upon the other party. The parties, in such case, act upon a mistake ; the thing paid by the one, and received by the other, is not what they suppose it to be ; and it would, indeed, be highly inequitable, that by this mistake the loss should be shifted from him, who had already sustained it, upon the other who was equally ignorant of the fact. In the case now before the court, there was a mutual mistake. The parties supposed the bills, when paid, were then convertible into specie, and equivalent to money ; and both acted upon this supposition., Common justice then forbids that this loss, already sustained, ; should by this mutual mistake, be shifted from the defendant [582] to the plaintiff.- In the state of Alabama, in the case of howrey v. Murrill, 2 Porter’s R. 280, a different doctrine is said to be established, though I have only seen a note of the case. In the case of Young v. Adams, 6 Mass. R. 182, a different doctrine is also incidentally thrown out; but the same question has been before the supreme court, and also the court of errors in the state of New York, in the case of Lightbody v. Ontario Bank, 11 Wendell’s R. 9, and 13 do. 101, where the decision was in conformity with the views of this court, and we think this the better opinion, and well sustained on principle, and calculated to do the most equal justice. It is not the business of the officer, who receives a writ for service, to receive pay on the demand. He is only to serve the writ, and if the debtor pays the demand to the officer, he holds it as agent of the debtor, till he pays it to the creditor. The money in this case being paid to the creditor on the 29th of March, and after the bank had ceased to redeem its bills, is the same as if it had been then paid by the debtor. The statute requires notice to be given of the taking of a deposition, to the adverse party, if living within thirty miles of the place of caption. If he lives more than thirty miles therefrom, and has notice, though the deposition might have been taken ex parte, still this could be no objection to its admissibility. The 3d sect, of the statute, which requires ex parte depositions to be filed with the clerk of the court, thirty days before the session of the court in which the trial is to be had, cannot restrain the admissibility of a deposition taken with notice, though taken in a case where the deposition might have been taken ex parte. We discover no error in the proceedings of the court below, and the judgment is therefore affirmed.