Black v. Ward

• Decision Date: 29 April 1873
• Citation: 27 Mich. 191
• Court: Michigan Supreme Court
• Parties: James Black and another v. Eber B. Ward

27 Mich. 191

James Black and another v. Eber B. Ward

Supreme Court of Michigan

April 29, 1873

Heard April 23, 1873; April 24, 1873.

Error to Wayne Circuit.

Judgment reversed, with costs, and a new trial granted.

John H Bissell and Douglass & Miller, for plaintiffs in error.

T. C Owen and Pond & Brown, for defendant in error.

OPINION

Campbell J.

Ward was sued as endorser of a note made and endorsed in Michigan, but payable in Canada, expressly in "Canada currency." The circuit court held it was, upon its face, payable otherwise than in money, and not negotiable. This is the only important question before us.

There was some testimony given in the court below upon the meaning of the phrase in question, and the argument in this Court has covered a very wide range, it being claimed on the one hand, that the note is payable only in paper, and on the other, that the word currency is used only to indicate that it is payable in Canadian, instead of in American money, without any reference to paper or coin specifically. It is also insisted that if payable in paper current at the value of cash, it would still be negotiable.

The endorser's contract being governed by the laws of this State, and the note having been made here, its negotiability must in our courts be tested by our own statute; but as that is like the statute of Anne, in requiring the paper to be payable in money, the only inquiry in this regard is, what may be included in that term.

It will be found by examining the authorities, that the word "money" has been used for some purposes in a very wide sense, and for others in a restricted sense. When questions have come up in construing negotiable paper, it has never been extended beyond coin and paper at par value.

In England, in the case of Miller v. Race, 1 Burr. 452, which involved the rights of holders of stolen bank of England bills, the language of Lord Mansfield and of the other judges was so pointed in treating such notes as cash, that, if the question now discussed had been mooted, there can be little doubt how it would have been decided. A series of decisions made afterwards sustained tenders in such bills, where no objection had been made to the medium in which the tender was made.--Polyglass v. Oliver, 2 C. & J., 15, 16; Brown v. Saul, 4 Esp. 267; Wright v. Reed, 3 T. R., 554. And these decisions have been followed universally in this country.

The first time when the negotiability of a bill payable in bank of England notes came up for decision was in the interval between 1797 and 1818, during which the bank was restrained from making specie payments. The statutes containing this restriction provided expressly that if the amount of any debt were tendered in notes, the debtor should not be arrested on the debt.--Tomlyn Law Dic., "Bank of England." It was held in Grigby v. Oakes, 2 B. & P., 526, that under this statute notes were not a legal tender. Reference was made by some of the court to the peculiar terms of the statute, as limiting the effect of the tender to an exemption from arrest. In Ex parte Davison, Buck, 31, and Ex parte Imeson, 2 Rose 225, it was held that notes payable in "cash or bank of England notes," were not negotiable. In 1834 the notes were made a legal tender; but by the present law they are not such in Scotland or Ireland.--Fisher's Dig., "Bank of England," "Tender." No case has since been reported in which any such question was raised; and whether the silence of the courts arises from the change of the law, whereby the notes are made equivalent to coin, or from any custom excluding any mention of notes in drawing up negotiable paper, we have no means of judging. Where the notes are always convertible and at par with gold, and are a legal tender, there does not seem to be any very good reason for holding a bill payable in notes to be any more objectionable than one payable in coin. In this country all paper not payable expressly in gold is impliedly payable in greenbacks; and we cannot conceive that it can change the legal character of any security to express in it precisely what the law implies.

Where a promissory note is payable in anything which is not a legal tender, the authorities are generally, though not universally, against its negotiability. In New York and Ohio, bank-bills issued under State authority, and where the courts hold they are bound to recognize their quality judicially, have been held at par to represent money, so that notes payable in cash or in such notes, have been adjudged negotiable.-- Keith v. Jones, 9 J. R., 120; Judah v. Harris, 19 J. R., 144; Swetland v. Creigh, 15 Ohio 118. But in the same States, paper payable expressly in any other bills, or even in the bills of specified banks of the State, has been held not negotiable.-- Leiber v. Goodrich, 5 Cow 186; Shamokin Bank v. Street, 16 Ohio St. 1; Thompson v. Sloan 23 Wend. 71; Little v. Phenix Bank, 2 Hill 425; 7 Hill 359. Elsewhere, except where there are statutes to the contrary, there is no considerable support for the doctrine that paper payable expressly in the bank-notes of private corporations is negotiable.

Under the laws of this State, bank-bills may be levied on, and may be paid over as cash, if the creditor is willing to receive them; but if he refuses, they must be sold "as other chattels."--Comp. L, § 6096, 6456.

If the term "Canada currency" should be confined to private bank-notes, it would be difficult to hold this paper negotiable. In Thompson v. Sloan, the Supreme Court of New York held that a note payable in Buffalo in "Canada money" was not negotiable. This, however, is not, as we think, in accordance with the general current of decision. Judge Story says, "If it be payable in money, it is of no consequence in the currency or money of what country it is payable. It may be payable in the currency or money of England, France, Spain, Holland, Italy, America, or any country."--Story on Bills, § 43; Chitty on Bills, 153, 158. We cannot with any propriety refuse to recognize the right of every country to fix its currency, and it is impossible for any civilized government to exist without some legal standard of money. The only question here is whether a note payable in "Canada currency" is or is not payable in money.

It is claimed on the one side, and denied on the other, that the term "currency" is confined in our usage to paper which is not money. Upon this question many authorities have been cited, and we have examined each of them, with such other references as we have been able to discover, and we are led to the conclusion that there is no foundation for any such doctrine.

The only cases in which it has been held that "currency" does not mean money (except where it has been qualified by some further definition), are certain cases in Iowa and Wisconsin, all of which rest entirely upon the authority of decisions where the paper in question was expressly payable in bank-notes. None of these decisions supports the idea that "currency" and "bank-notes" are purely convertible terms, and the inference is unwarranted, unless founded on what does not appear in any of those decisions. The decision in Wright v. Hart's Admr., 44 Pa. 454, that paper payable "in current funds at Pittsburgh" was not negotiable, was also rested, without any further discussion, upon the authority of former decisions applicable to paper payable in bank-notes.

In Dillard v. Evans, 4 Ark. 175, the term "common currency of Arkansas" (in which certain paper was made payable), was held designed to point out a different currency from that which was legal, and to refer to depreciated paper, which was then, in fact, the common medium of business. And in Farwell v. Kennett, 7 Mo. 595, it was held that the insertion of the words "payable in currency" indicated a design to change the legal import which would have been found had no such words been inserted. And in Conwell v. Pumphrey, 9 Ind. 135, the use of the term "current funds" was held for the same reason an intentional variation. Subsequent decisions in each of those States have either overruled these cases, or so interpreted them as not to make them apply to a case like the one before this Court. Reference will be made presently to these later decisions.

With these exceptions, the general course of authority is in favor of the negotiability of paper payable in currency or in current funds. And these decisions rest upon the ground that those terms mean "money," as the necessity of having negotiable paper payable in money is fully recognized.

There is, however, some difference in the methods of arriving at this result, and it is proper to refer to the cases which have used careless language, as well as to those which have laid down rules cautiously. The fact that the bills of sound banks have been received promiscuously with the legal money of the country has led here, as in England, to remarks from courts based on the assumption,--which is well founded,--that persons usually do not prefer one to the other, and they sometimes speak of payment in either as amounting to the same thing. It is only where the question is directly presented of a tender actually made in one or the other, that discrimination becomes necessary. Thus in Lacy v. Holbrook, 4 Ala. 88, where a bill of exchange payable in "funds current in the city of New York" was held negotiable, it was so held because deemed to be payable in cash, in gold or silver coin "or its equivalent." So in Bank of Peru v. Farnsworth, 18 Ill. 563; Laughlin v. Marshall, 19 Ill. 390; Swift v. Whitney, 20 Ill. 144; and Hunt v. Divine, 37 Ill. 137, promissory notes or certificates of deposit payable in "currency" were held to be negotiable on the same ground; but there is reference made to the...