Marine Bank v. Chandler

Walker, J. In determining this case, it will be proper, first, to determine, whether the deposits made by appellee were a bailment only, for safe keeping by the bank, or were made to be passed to appellee’s credit, in the usual course of banking business. If for the former purpose, then the appellee must be responsible for any depreciation in the value of the funds which occurred, before a demand was made, if appellant in good faith preserved the identical funds placed in the hands of the bank. If the relation of the bank to appellee, was simply that of a bailee for safe keeping, and the identical funds were preserved, and a loss ensued by depreciation, no rule of law, principle of reason or justice, can hold the bank liable for such a loss. Such a liability would be inconsistent with the undertaking, which would only require a return of the thing deposited, uninjured by the acts or neglect of the bailee. The fact that the deposit consisted of bank bills, would not distinguish it from a deposit for safe custody, of articles of property, in the rights, duties and liabilities incurred by the parties. If, on the contrary, the deposits were designed by the parties to have become a loan to, or indebtedness by the bank, the relation of the parties would have been that of any other debtor and creditor. Banks, in the transaction of their business, may occupy either of these relations. But, when the funds are deposited to be held and returned in the same bills or coin, the deposit becomes a special one, entirely different from a general one, which authorizes the bank to use the funds in the course of their business. In this case, the evidence shows, that the deposits arose from collections, made by the bank, for the appellee. The latter, at various times, forwarded to the former, perhaps without an exception, bills, notes and checks, which, when collected, were placed to appellee’s credit. The funds thus received were placed in the general fund of the bank, and paid out indiscriminately in the course of the business of the bank. The evidence likewise shows, that these funds when collected were current, and passed as money in the payment of debts, and the various other business transactions. They at that time answered all the purposes of money, and appellee was credited by them as money. From all of the evidence in the case, it appears, that the parties considered and treated it as money, until the 18th of M.ay, when it became so much depreciated that it ceased to circulate as such, and was thenceforth considered and treated as a commodity, bought and sold by the banks and brokers at a heavy discount. Sor was there any evidence tending to show, that the bank had any directions to hold the identical funds received at the risk of appellee. • Kor is there any pretense that the bank has lost a farthing, on the money collected. It went into the common fund of the bank, and for aught that appears, every dollar may have been paid out at par, before it ceased to circulate as money. But as the relation, of the parties to each other, was that of debtor and creditor, even if no portion of the funds had been disposed of by the bank, the liability would have been the same. As well might the purchaser of a horse, of grain or other commodity, when called on to pay, insist that the article had depreciated in value, since the purchase, and that he should be relieved from paying the amount of the depreciation. No one would ever suppose, that if a merchant were to purchase a quantity of grain or other produce, and give the seller a credit at the market price, and it afterwards declined in the market, that the loss would fall upon the seller, or that he should receive the same quantity and quality of grain. The same is true of almost every character of business transactions involving a sale. To establish as a rule, that in cases of that character, the loss by depreciation in price, or otherwise, should fall upon the seller and not the buyer, and give it a practical operation, would well nigh revolutionize every description of business, and would produce incalculable injustice and wrong. The proof of the depreciated value of the paper when received, cannot change the liability of the debtor for bank bills, any more than if it had been for produce, at a higher rate than its market value. Nor can the special custom of banks in a particular locality, change the laws of the land, regulating the value of the currency and fixing the standard value of the current coins. That parties may contract to receive any commodity, in lieu of money, in payment of indebtedness, is undeniably true. This can only be done by special agreement and not by usage. No custom can compela creditor, in the absence of a special agreement, to receive anything but the constitutional currency of the country. The fact that the business men of the particular place, have been in the habit of receiving depreciated paper money in payment of their demands, by no means proves that all creditors in that locality have agreed to receive the same, much less a person residing hundreds of miles distant. To have such an effect, a special agreement must be proved. The doctrine of agency has no application to a case of this character. There is nothing to show, that the bank was the agent of appellee, beyond the fact that it collected the money. But even if it did appear that the bank acted as the agent of appellee, it also appears that the former appropriated the funds when collected, to its own use, and made itself debtor for the amount, by passing it to the credit of appellee, and by mingling the funds thus collected with those of the bank, and using them as its own. The proof shows, that it was the custom of the bank to so appropriate such funds, and to pay when called for by the creditor. It would hardly be contended, if an attorney were to collect a debt for a client, in bank bills, and appropriate them to his own use, that if the bank after-wards failed, that he would be exonerated from payment. Eo difference is perceived in the two cases. It is further insisted, as appellee signed the agreement to receive and pay out the bills of Illinois banks, during the continuance of the present war, that he was bound to receive such paper in discharge of this debt in June, when he made the demand of payment. The testimony shows, that after the 18th of May, 1861, appellant, and all the other parties to that agreement, refused to receive such funds. From this fact it may be reasonably inferred, that by mutual consent this agreement was ended, and all parties released from its further observance. When appellant and all of the parties to this agreement disregarded its stipulations, no reason is perceived why appellee should be bound by its provisions. Appellant has no right to enforce an observance of the agreement against appellee, when all other parties to it are released. Eo error is perceived in giving appellee’s instructions, or in refusing those asked by appellant. The verdict is warranted by the evidence, and the judgment is affirmed. Judgment affirmed.