Boatman's Savings Institution v. Bank of Missouri

Dryden, Judge,

delivered the opinion of the court.

This was a suit brought by the respondent against the appellant to recover the amount of a large number of bank notes issued by the appellant for circulation, together with the interest thereon, at the rate of twenty per cent, per annum, from the 4th day of June, 1859. The notes sued on were of the denominations of tens, twenties and fifties, and amounted in the aggregate to <153,650. The petition contained a count on each note in which a demand and refusal of payment of each at the place where payable were averred, and judgment was asked for the amount of the note, with damages at the rate of twenty per cent. The appellant answered, averring a tender and offer to pay, and the refusal of the respondent to accept payment at the time and place of the demand. The case was tried upon the following agreed statement of the facts, to-wit:

“ The plaintiff, on the 4th day of June, 1859, presented at the defendant’s branch bank at Palmyra, in this State, all the bank notes described in the plaintiff’s amended petition together, and at one and the same time, and demanded payment thereof from the proper bank officers, and thereupon the defendant offered to pay five dollars on each and every of the notes in the silver coin of the United States, issued after the first day of June, 1853, in conformity with the act of Congress of the 21st February, 1853, and the residue of each and every note in the gold coin of the United States, which the plaintiff declined to receive, and the notes still remain unpaid.
The production in court of the money tendered in the defendant’s answer is waived by the plaintiff, and, so far as the question of tender in the answer is concerned, the case shall be tried and determined as though the sum tendered by the answer had been deposited in court when the answer was *518filed and had remained in the custody of the court during the litigation and until the final determination of the case.”

The Circuit Court rendered judgment for the plaintiff for the amount of the notes and interest, computed at the rate of twenty per cent, per annum from and after the 4th of June, 1859, and the defendant appealed to this court. In case of the reversal of the judgment, we are asked to give such judgment as the court below ought to have given.

The main question in this case is whether, underAhe facts agreed, the offer of the defendant to pay five dollars in silver and the remainder in gold on each note was a tender in compliance with the act of Congress of 21st February, 1853, relating to the coinage of silver.

The first section of the act provides for a reduction of the weight of the silver coins to be issued after the 1st of June, 1853, and the second section then enacts “ that the silver coins issued in conformity with the above section shall be legal tenders in payment of debts for all sums not exceeding five dollars. (10 U. S. Stats, at L. 160.)

In order to overthrow the tender sot up by the defendant, by showing that too large a proportion of silver coin was offered, the plaintiff assumes the ground that the whole of the notes held and presented by it at one and the same time constituted but one single debt, and not many debts, as insisted by the defendant, and upon the soundness of this position the main question depends.

Mr. Justice Blackstone, (3 Bl. Com. 154,) says: The legal acceptation of debt is a sum of money due by certain and express agreement, as by a bond for a determinate sum; a bill or note,” &c. According to this definition of the term, when the various notes in this case were first put out into as many hands, it may be, as there were notes, the debts of the bank were as numerous as were its notes. Did the concentration of the notes in the hands of the plaintiff effect the consolidation of the debts ? If the debts became thus consolidated — if the many debts became one — then the plaintiff, in demanding payment, was obliged to demand the whole at *519one and the same time, and could not demand parts of the whole at different times ; for neither is the creditor bound to receive nor the debtor to pay his debt in parcels. Now, can it be denied that the plaintiff could lawfully have demanded payment of one of the notes it held, one day, reserving the rest for another day ? And in such case, would the bank have been justified and exonerated from the penalty of twenty per cent, imposed by its charter, in refusing payment, on the ground that the demand was for apart only of a larger debt? Would such a defence bo tolerated for one moment? and yet if each note is not a several debt, the defence is good.

When the plaintiff came to sue, it was obliged, upon this doctrine of consolidation, to declare for the entire debt in one and the same count. It would not have beep competent to have parcelled out the entirety and counted separately on the several parts. Yet, in looking into the petition, it is seen that, in the face of the plaintiff’s own theory, there are as many counts as notes, each count being based on a distinct note.

The statute of limitations commenced running against the plaintiff’s right of action from the time of the refusal of the defendant to pay, supposing there was a refusal. Now, suppose that, within the time limited for bringing suit, a partial payment had been made by the defendant, and endorsed by the plaintiff, on one of the dishonored notes ; would such partial payment relieve the remaining notes from the operation of the statute ? It would upon the idea there was but one debt; otherwise it would not.

Suppose, when the notes in this case, amounting to $53,650, were presented for payment, the bank had had but $58,000 in coin in its vaults, and had then produced this coin, and, in terms, offered it to the plaintiff in payment of all except thirteen of the notes of fifty dollars each, can it be said this would not have been a good tender as to all except the thirteen notes ? If good, it is only because the several notes were distinct and independent debts, and not the whole one single • debt. To deny the validity of the supposed tender is to deny *520the well settled law that a debtor has the right, not only to prefer one creditor over another, but also to provide for one debt to the exclusion of another owing to the same creditor.

In practice, banking institutions, for the sake of convenience and the dispatch of business, ordinarily pay their notes as a unit when presented collectively; but the question is not whether they may, but whether they are bound, thus to pay on such presentment.

A case in 4th Mich. R. 350, is the only authority to which we have been referred bearing upon the question whether the notes, as presented, constituted one or many debts. This was a case in which payment of thirty bank notes, of five dollars each, payable to bearer on demand, had been demanded at one and the same time, at the counter of the bank, and a tender and offer of payment of the notes had then and there been made wholly in silver half dollars of the coinage under the act of February, 1853. The arguments of the counsel in the case were directed exclusively to the question whether there was one debt or more, and the court, without giving the reasons upon which its opinion was based, decided briefly that the tender was sufficient. The court, in coming to the conclusion at which it arrived, necessarily assumed that each one of the thirty notes was a several debt.

It is the privilege of the debtor to pay his debts separately in such media of payment as the law makes applicable — a privilege with an eye to the advantages of which he is supposed to enter into his contracts, and of which he cannot bo deprived at the mere option of the creditor. If the law were otherwise, banks would be forced to exclude altogether from their vaults the silver coins of the country, to the great detriment of commerce and the inconvenience of the people, or be constantly exposed to the danger of being run upon by speculators in gold, and of consequent suspension of payment; and corresponding to this privilege of the debtor is the right of the creditor to demand separate payment of his several debts.

*521"We are therefore of opinion, as well upon principle as upon authority, that each of the several notes, at the time of their presentment by the plaintiff for payment, was a single and distinct debt within the meaning of the act of Congress ; and further, that the offer of payment of said notes made by the defendant, at her branch at Palmyra, at manner and form as agreed, was a valid and sufficient tender, in conformity to the provisions of said act of Congress.

Another question of great moment was ably discussed by the eminent counsel in the case; that is, whether the provision in the second section of the act of Congress, which assumes to limit the tender of the coinage under the first section to sums of five dollars and under, is not unconstitutional; but we refrain from expressing any opinion on the question, since the view we have taken of the first point disposes of the case.

The judgment of the Circuit Court will be reversed, and a judgment will be entered in this court in behalf of the plaintiff for $53,650, the aggregate amount of the notes sued on, which may be discharged by the payment of that sum by the defendant in the kinds of coin, and in the proportions tendered by the defendant at her branch at Palmyra on the 4th of June, 1859. The defendant will recover costs in both courts.

Judge Bay concurs.