The Marine Bank of Chicago v. Chandler

• Decision Date: 30 April 1862
• Citation: 27 Ill. 525,81 Am.Dec. 249,1862 WL 3249,17 Peck 525
• Parties: THE MARINE BANK OF CHICAGO, Appellant,v.CHAS. CHANDLER, Appellee.
• Court: Illinois Supreme Court

27 Ill. 525
1862 WL 3249 (Ill.)
81 Am.Dec. 249
17 Peck (IL) 525

THE MARINE BANK OF CHICAGO, Appellant,
v.
CHAS. CHANDLER, Appellee.

Supreme Court of Illinois.

April Term, 1862.

APPEAL FROM THE SUPERIOR COURT OF CHICAGO.

Where it appears that a bank received for a customer by collecting or by receipt of deposits, funds, which were current, and passed as money in general business transactions, without directions to hold the identical funds, it will have to account to the owner for the sums so received, without diminution or discount, notwithstanding the bills received by the bank were at the time or have since depreciated in value.

The special custom of bankers in a particular locality, cannot change values as fixed by law; and if some persons have been in the habit of receiving depreciated paper in payment of dues, the right to enforce payments in such paper does not exist. Such a right can only arise by contract.

A general agreement to receive depreciated paper in business transactions, may be abandoned by common consent, and when this appears, a party who disregards such agreement cannot hold another to it.

THIS was an action of assumpsit for money had and received, money lent, money due upon account stated, and money paid, etc., commenced in the Superior Court of Chicago, to the July term thereof, 1861, by defendant in error, against the appellants, for damages laid at $20,000.

The declaration is in the usual form, containing only the money counts, attached to which is a copy of the account upon which the suit is brought, and is for an alleged deposit of $20,000--by the defendant in appeal, with the plaintiffs as bankers.

Defendants below filed the plea of the general issue, and the trial took place before the court and a jury.

The trial took place at the November term of said court, A. D. 1861, when the jury rendered a verdict for the plaintiff below, and assessed the damages at the sum of $16,375.83.

Whereupon, defendants moved for a new trial, which was overruled by the court.

The court entered a judgment upon the verdict.

Thereupon, defendants prayed the appeal herein taken, to the Supreme Court, which was allowed.

The substance of the testimony of Lewis C. Ellsworth, and that of Mr. Dox, the cashier of the Marine Bank, is given.

Mr. Ellsworth says: “I am a banker of the firm of H. A. Tucker & Co., and one of the partners of said firm. I have been engaged in the business of banking in Chicago for several years past.”

Plaintiff's counsel here showed the witness a draft, of which the following is a copy:

[27 Ill. 526]

WISCONSIN FIRE AND MARINE INSURANCE COMPANY'S BANK,

+---------------------------------------+
                ¦$957.¦Milwaukee, April 11 th, 1861.¦
                +---------------------------------------+
                

At sight of this first of exchange, (second unpaid,) pay to the order of Jacob L. Platner, nine hundred and fifty-seven dollars, in current Bk. notes, on account of this Bank.

+---------------------------------------------+
                ¦ ¦ ¦(Signed) ¦
                +------------------------------+-+------------¦
                ¦TO MESSRS. H. A. TUCKER & CO.,¦)¦D. FERGUSON,¦
                +------------------------------+-+------------¦
                ¦Chicago, Ill. ¦)¦Cashier. ¦
                +---------------------------------------------+
                

On the back of which draft are the following indorsements: “Jacob J. Platner,” “Jacob Strader,” “Pay to Marine Bank, Chicago. Charles Chandler & Co., per J. B. Pearson.”

“This draft was paid by H. A. Tucker & Co., to defendant, on the 19th of April last.

I have personal knowledge of the payment of the draft on 19th of April. The draft was paid in the daily exchange between the two banks. It was paid in Illinois currency, which at that time was current bank notes of Illinois banks, organized under the laws of the State. The exchanges at that time, of the banks with each other, were made in bills of the Illinois banks. The exchanges were made every day, by defendant sending in all checks and drafts against H. A. Tucker & Co., and H. A. Tucker & Co. would make up their account of all checks and drafts against defendant, and the difference, if any existed in favor of either, was paid in Illinois bank notes. The bills of all the banks in the State were then current, except nine banks discredited or thrown out in November previously (1860), and thirty banks thrown out and discredited on the 30th of March, 1861, and these notes had ceased to pass current. After these banks had ceased to be current, the bills of all the other banks were the currency in circulation in April, 1861. These bills or notes were used at this time in all the transactions of business, and were such as paid debts to H. A. Tucker & Co., and were received by others in payment of debts. In April and May the entire circulation was made up of Illinois banks. On the 19th of April, 1861, there was a difference between the value in market of these bills and coin. It is my impression that coin was worth ten or fifteen per cent. in these bills. Nominally it was ten, but really it was fifteen per cent. I think it cost that to convert the bills into coin. The bills of these banks continued to circulate as money until the 18th of May, 1861, and down to that day almost the entire circulation was made up of these notes. These notes or bills continued to decrease in value from the 19th of April to the 18th of May, 1861.

I have been about ten years engaged in the banking business in Chicago, as paying and receiving teller most of the time. It is the general usage and custom of banks, to keep their customers' money or funds in one common, not

[27 Ill. 527]

separate, fund. This is the custom of all banks here, and has been. Everything received in the ordinary course of business is put into one common fund.

I have been in the State since the free banking has been in force, and been engaged as a banker during the last ten years. The bills of these banks have made up the principal part of the circulation here. There were some Wisconsin bills circulated here. The bills of Eastern banks and coin have always been treated by bankers as worth more than our bills, the difference being from one to forty and fifty per cent., down to the 18th of May last. The bills which have been in common use here, buying goods and paying debts, have been bills of Illinois banks.

If a deposit was made in Eastern bills or bank funds of Eastern banks, or in gold, and no premium was paid to the depositor, it was the custom of the bankers to credit coin or Eastern funds as such, and if the party wished to draw for coin or Eastern funds, it was specially called for in the checks. He drew out like funds to those deposited, if he was paid no premium to reduce the deposit to currency, the same as other funds in general circulation.

I resided here in June last, and was engaged in the banking business; had means of knowing the value of Illinois bank notes at that time. The average value of all the bills of all the banks which were in circulation after the 1st of April, 1861, was, on 21st of June, 55 to 60 cents on a dollar. On the 18th of May, the Illinois banks ceased to circulate as money, and became the subject of barter as a commodity, and so continued to the present time. I include, in making this average, the entire body of bills, good, bad and indifferent, which were in circulation. In the spring of 1861, the currency was composed of the poorer class of the banks. The bills of the same banks which were in circulation in April and May, 1861, were in circulation in 1860, except those rejected in November and March previously.

Currency depreciated from the 20th of April till the time it went out of circulation, and till the 1st of June. In April and May the depreciation was from ten to twenty per cent., compared with coin, and in June the depreciation was from ten to sixty per cent. The bills of no bank, except the Marine Bank, were in circulation at par in June. The bills which were in circulation in the winter of 1860, and spring of 1861, were the same that were in circulation in April and May, and they were used previous to the 18th of May in the payment of debts and in business as money. They composed the currency almost exclusively at that time; they were received on deposit.

[27 Ill. 528]

Where a deposit was made, generally, it was credited as currency; if in coin or Eastern currency, it was so noted. Where a check was drawn, payable generally, it was paid in Illinois bank bills. Up to the time when bills were thrown out in November and April, the bills of those banks had circulated as money after the rejected bills had ceased to circulate as money. Illinois bank bills have constituted the principal part of the currency for some nine or ten years. I think those bills have been as near par, from time to time, as one-half per cent. since the passage of the law. In November, the banks here had on deposit and in their vaults, the bills of the banks which were then rejected.

When the thirty banks were thrown out in March, the banks here had the bills of those banks on deposit right with the common fund of their depositors, but they did not undertake to pay them out on the checks of their depositors. The banks entered into an agreement not to pay out the bills of those banks on account of their depreciation. They ceased to be current after the banks here rejected them, but they were current to the time of rejection.

For one or two years there was a large amount of Georgia bank bills in circulation. The issues of the Wisconsin banks have constituted a part of the circulation during the last ten years, sometimes for some months quite a large amount of them. The bank notes of the Bank of Iowa constituted a very small portion of the circulation previous to the 19th of April. Some of those notes, and also of banks of Kentucky, Ohio and Indiana, also constituted a part of the circulation in April last and previously. When I speak of Eastern currency, I mean New York and the New England States. There were also some bills of Michigan and Pennsylvania in circulation...