Bank of the United States v. Thayer

The opinion of the Court was delivered by

Rogers, J.

This was an action by the holder of certain promissory notes against the maker the Bank of the United States, and comes within the words as well as spirit of the Act of the 28th of March 1835. It is a note or bill for the payment of money, and consequently is such an instrument as falls within the provisions of that Act. If the only object of the plaintiff was to recover the note *447with simple interest, this would not be denied; but, as the plaintiff seeks to recover at an increased rate, it is insisted that the District Court has no power under a fair construction of the Act to enter a judgment for want of a sufficient affidavit of defence. The clause under which the question arises, is the 6th section of the Act incorporating the Bank, which declares, that if the Bank shall neglect or refuse to pay its notes or bills, or moneys deposited, when due, on demand made at the bank during banking hours, the person or persons entitled to the same, shall receive interest thereon at the rate of twelve per cent, a year, until payment be made. The Act of the 28th of March gives the court power to enter judgment by default in all cases, without exception, when the suit is on a bill, a note, or other instrument for the payment of money. There is no restriction, either in express words, or by necessary implication, where the plaintiff asks interest at an increased rate, under the provisions of the law, which gives it to him, in certain specified cases, of the plaintiff’s having complied with the law, and the defendant being shown to be in default. The additional interest is given with a two-fold object: as a penalty on the bank for refusing to comply with the contract, and a compensation to the creditors for the inconvenience and loss which necessarily arise from their non-compliance. The instrument of writing has relation to the payment of money, and the paper itself, without extraneous evidence, imports a direct and absolute undertaking to pay. Montgomery v. Johnson, (1 Miles 324). It is true, without the averment or proof of extraneous facts, simple interest could only be recovered; but this cannot alter the case, for otherwise, in certain cases, as in suits against endorsers, the holders of bills of exchange and promissory notes, would lose the benefit of this provision. But this is not pretended ; and if it be said, as it has been, that such instruments are within the law, by force of its express terms, the same may be said with equal propriety of the notes on which this suit is brought. It must also be remembered that this is a suit against the maker, and not an endorser, and that the reason ñ, fortiori applies to the case. In every adjudication in the Act, which is a remedial Act, and a very beneficial one, we have always held it should be liberally construed. If it be necessary to make averments dehors the instrument on which suit is brought, whether it be a bill, note, or any other instrument for the payment of money, the fact so set forth may be denied in the affidavit. If not denied, it is admitted; and the court can say with certainty whether, taking the statement with the affidavit, the defendant has any defence to the action.

This statement, or N. B., after setting out the notes, in hcec verba, avers that they were duly presented during banking hours, on the 25th of January 1840; that demand of payment was then and there made, and that they [the bank] neglected and refused *448to pay each and every of the notes; and that the plaintiffs [the holders thereof] do claim at the rate of 12 per cent, from the 25th of January 1840, until the notes, or judgment which may be entered in this suit, shall be fully paid and satisfied. It must be admitted, that the statement, or N. B., or whatever it may be called, is marvellously obscure, and inartificially drawn; but still we cannot but understand the pleader, as intending to aver that the plaintiff was, at the time of the presentation of the notes for payment, and is now, viz: when the statement was filed, the holder of the notes, and that he presented them for payment at the bank during banking hours, and that the bank neglected and refused to provide for their payment. If this was not the fact, the defendants could have denied it in the affidavit. And if not averred in intelligible language, the defect being pointed out, the plaintiff would have had leave to amend. But of this obscurity, of which the defendants now complain, it appears no notice was taken in the District Court, and of course he is deprived of an opportunity to amend. And this point is, in effect, conceded; for the defendants put their case in the affidavit, not upon the denial that the plaintiff was, and is the holder of the notes, but objects to judgment being entered for any amount, without the production of the notes by the plaintiff, and depositing them in a place of safety, under the direction of the court. This was the issue he tendered to the plaintiff, and not the one now taken.

The last point the defendants now insist on as error. But we think there is nothing in it. The plaintiff is not bound to part with the notes before judgment. It may be his interest to dispose of them without pursuing the claim against the bank, and may wish the uncontrolled custody of them for that purpose, and the market value, as a circulating medium, would be materially affected by the deposit in court, or elsewhere. There would be something in the argument, if it was necessary to the defendant’s security, but it is not. The court can control its own execution so as to protect them; and this can be readily done by refusing to compel satisfaction until the identical notes described in the statement are delivered to the maker. There is nothing in the judgment of which any reasonable complaint can be made, for it is as favourable, and rather more so, than the defendants had any right to expect. The judgment is for the amount of the notes, with interest at the rate of 12 per cent., computed from the commencement of the suit, instead of an allowance of interest, to which he was entitled, from the 25th of January 1840, when the demand was made. In the argument of causes, many things occur in court of which no notice is taken on the record; and it is very probable, as is alleged, that the demand and refusal at a time immediately before the commencement of the suit, was admitted there, and this may account for the order of the court for the computation of interest only from the commencement of the suit.

*449The principle being settled, the amount due is matter of calculation, and was properly referred by the court to the prothonotary for computation. A writ of inquiry is only necessary to inform the conscience of the court, who may in all cases dispense with it, if they think proper. 1 Ten. 513; Watkins v. Phillips, (2 Whart. 211).