Phelps v. Town

• Decision Date: 11 July 1866
• Citation: 14 Mich. 374
• Court: Michigan Supreme Court
• Parties: William Phelps and another v. Reuben Town and another

14 Mich. 374

William Phelps and another v. Reuben Town and another

Supreme Court of Michigan

July 11, 1866

Heard April 13, 1866; April 14, 1866 [Syllabus Material] [Syllabus Material] [Syllabus Material]

Error to Wayne circuit.

The plaintiffs in error indorsed two notes made by one T. S Coats, which were given to the defendants in error.

Coats sent to the defendants in error a letter inclosing as a payment a certificate of deposit given by the Western Marine and Fire Insurance company, of Chicago, reciting that Coats "has deposited with this company five hundred dollars in currency, payable to the order of himself on return of this certificate." It was duly indorsed by Coats to defendants in error. This letter and certificate were received by them on the 15th November, 1860; on the same day they acknowledged its receipt, and wrote to him that they would send the certificate to Chicago, and allow him what it was worth; they sent it to their correspondent at Chicago, with directions to collect it and forward exchange on New York. On the 17th, as exchange could not be obtained, the correspondent sent to defendants in error $ 500 of the bills of Illinois and Wisconsin banks. When the bills were received at Detroit, they were at a discount of from seven to ten per cent. On the 30th November the defendants in error informed Coats, by letter, of western money being returned for the certificate, and that it was from eight to ten per cent discount, and asking what they should do with it. On the 12th of December Coats replied that he could not stand any six to seven per cent discount, as he had deposited current funds; that he still owed them, and asked them to wait for it, and he would pay ten per cent.

The defendants in error kept the bills for several months, and not hearing from Coats sold them for $ 275. A portion of the avails they applied to pay the balance due on one note, and indorsed the balance on the note upon which this suit was brought.

The suit was originally commenced in a justice's court. The plaintiff in error pleaded the general issue and paid into court $ 43.60--the balance due on the note, if the transfer of the certificate was a payment of $ 500--and also paid the costs of suit to that time. The case was tried, and the justice rendered a judgment in favor of plaintiffs in error. The cause was then appealed to the circuit court; the justice setting forth in his return that "defendant pleaded the general issue, and payment into court for $ 43.60, and costs to time of payment;" but not returning the money. On the trial, by jury, the defendants in error asked David Preston, a banker in the city of Detroit, "What kind of money is that certificate payable in?" Objection was made, overruled, and an exception taken. The jury brought in a special verdict. The court thereupon ordered judgment to be rendered for the entire balance of the note, deducting only the money indorsed by defendants in error as proceeds of the bills sold, without deducting the money paid into the justice's court.

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

D. C. Holbrook, for plaintiffs in error:

1. The court erred in allowing the witness Preston to answer the question, to wit: "What kind of money is that certificate payable in ?"

The plaintiffs in error contend that this certificate was payable in the legal current coin of the United States, or its equivalent, and that the word currency has a settled meaning, and not open to explanation: 24 N. Y., 548; 20 Ill. 145, 255; 21 Id. 101; 27 Id. 525; 28 Id. 463; 32 Id. 74.

The admission of parol testimony that this certificate was payable in Illinois and Wisconsin currency, or anything that the banks received and paid out as money, other than gold and silver, was erroneous.

2. Judgment was rendered for the whole balance, not allowing the money paid into court. This was clearly error.

The money was paid in without objection being made by defendants in error. Whether according to any established rule or proceeding is a matter of no consequence; no objection being made.

When paid in, it absolutely belonged to defendants in error: Caines' Pr., 174. The plaintiffs in error could never take it out, even though it be paid in by mistake: 2 B. and P., 392; 2 T. R., 645; Barnes, 279-281-284. It must be considered as so much stricken out of the declaration: 2 Cow. 336; 1 Wend. 191; 1 Burrill's Pr., 408.

A plaintiff can only recover the balance over amount paid in; and it is the same as if paid before action brought: 3 T. R., 657; Tidd's Pr., 569-70; Caines' Pr., 174.

Maynard, Meddaugh & Swift, for defendants in error:

On the trial of this cause, in the circuit court, it was claimed by the defendants that the certificate of deposit set forth in the special verdict was, by construction of law, payable only in gold and silver, and that parol evidence was inadmissible, to show that it was payable in anything else.

The court below, however, permitted the plaintiffs to introduce evidence of what was understood among the business men and bankers of Chicago, by the word "currency;" and the witness, Preston, who was a banker, and acquainted with the usages and customs of such business men and bankers, in the course of his examination, was asked the question set forth in the bill of exceptions. He was not asked to give his opinion as a matter of law, but simply to state in what kind of money, according to such usages and customs, said certificate would be payable.

1. The certificate stated that Coats had deposited five hundred dollars in "currency," to be paid on the return of the certificate. Upon its face it showed that something besides gold and silver was intended; otherwise the word "currency" was useless: 9 Ind. 135. By ordinary and fair construction of the word "currency," the certificate in question was payable in funds current, when it was made.

If this be so, then, before it could be determined whether the certificate was payable in the funds which it called for, it was necessary to show what those funds were, and the testimony objected to was admissible.

2. But admitting that, according to the ordinary construction of such an instrument, it was payable in gold and silver, we claim that we have a right to show that the word "currency" had, by the usage and custom of business men and bankers in the place where the certificate was made, acquired a different meaning: 2 Phil. Ev. with Cowen & Hill's notes, 726; 1 Greenl. Ev., § 292; 23 Wend. 71.

The decisions are conflicting as regards the meaning of the word "currency;" but it will be found that they have been influenced by the state of the money market at the time when made. The courts have been disposed to do justice between the parties, rather than lay down an inflexible rule of universal application.

In the following cases it was held that by the word "currency" is meant current bank-notes: 5 Ark. 266; 6 Id. 255; 5 Littell 335; 7 Mis. 595; 20 Ill. 144; 21 Id. 101; 27 Id. 525; 28 Id. 463, 501; 30 Id. 399.

In all these cases the question seems to have been, whether a depositor of "currency" was bound to take the same kind of paper which he had deposited, when it had ceased to be current, and had depreciated so as to be worth no more than 50 or 60 cents on the dollar. In none of the cases was it decided that a tender of funds, current at the time of the demand, would not have been good. On the contrary, it is, if not expressly decided, strongly implied, that such a tender would have been good. And in none of the cases does it appear that the plaintiff was not willing to take such funds; and the only question was, whether he was bound to take depreciated paper.

3. But, admitting that the certificate was payable in gold and silver, the plaintiffs acted upon the supposition that it was payable in western money, and collected in that kind of currency, and so informed Coats, who, instead of objecting to their view, or to what they had done, found no fault with what had been done, and directed the plaintiffs to hold it for him. Under these circumstances, we claim that he is estopped from setting up this claim now.

4. The only remaining question is, whether the sum paid into the justice's court, ought to have been credited to defendants in the circuit court.

According to the practice in courts of record, in such cases, a rule is entered, giving the defendants leave to pay money into court, and providing that, unless the plaintiff will receive the same, with costs to be taxed, in full discharge of his action, said sum shall be struck out of his declaration, and that the same shall be paid out of court to the plaintiff or his attorney: 1 Tidd's Prac., 621; 1 Burrill's Prac., 407; 2 Id. 447; Green's Prac., 313.

And unless the money be paid in under such rule, the plaintiff's right to recover will not be affected, nor can he compel the payment of the money to himself; and the defendant may at any time withdraw it: 1 Wend. 103; 7 Iredell 201; 1 Swan 92; 1 Allen 145.

There being no authority given by statu...