Opinion
June Term, 1825.
1. For many purposes bank notes are to be considered as money; they are so considered in an action for money had and received where the plaintiff had received a counterfeit bank note in exchange for genuine bank notes.
2. A payment in a counterfeit bank note is a nullity, and plaintiff may recover back the amount.
3. An indorsement on a bank bill of itself signifies nothing in the way of contract.
ACTION for money had and received, tried by Norwood, J., at WARREN. The plaintiff alleged that he had exchanged $100 in notes of the banks of this State for a note of $100 of the Bank of Pennsylvania, and that the note so received by him was a counterfeit; and he gave evidence that he, by his agent, received the note of the defendant. The note had indorsed on it the name D. Matthews. The plaintiff's agent swore that at the time of the exchange defendant said that, being unacquainted with the notes of that bank, he had refused to receive it from Matthews without his indorsement; but on being asked by the agent if he, defendant, would also indorse it, he refused to do so. The agent also swore that he did not exchange for the note on account of the indorsement of Matthews thereon. The note was sent to the north, and soon returned as a counterfeit. Within a few weeks afterwards the agent had two conversations with the defendant, in which he informed him that the note was counterfeit and requested him to take it back; the note was proved not to be genuine. This was the plaintiff's case.
Badger in support of the rule.
Seawell contra.
The defendant offered evidence to show that at the time of the exchange he told the agent that he must take the note on his own risk, for that he, defendant, did not know whether it was good or bad; and also proved that, some time after the plaintiff had demanded of him the amount of the note, D. Matthews had been applied to for payment of it by the plaintiff, and refused. (569)
The court instructed the jury that if a bank note was indorsed it was to be presumed that it was received both on the credit of the bank and of the indorsement; and added that it seemed to be admitted that Matthews had indorsed the note.
The jury found a verdict for the defendant, and the case stood before this Court on a rule to show cause why a new trial should not be granted.
This is an action for money had and received, in which the first question to be decided is whether the bank bills paid by the plaintiff are to be considered as money. It is certain that the spirit of modern decisions is to consider securities which are the current representation of money as money for all civil purposes; for in Barclay v. Gooch, 2 Esp., 571, where the person to whom the plaintiff had become surety for the defendant had consented to take the plaintiff's promissory note in payment as money, the taker was allowed to recover against his principal in an action for money paid. It was afterwards held that a bond and warrant of attorney given by the plaintiff could not be considered as money; but the Court do not deny the propriety of the decision in Barclay v. Gooch, but distinguish between a bond (not then negotiable) and other securities which are so. 3 East, 172. In Longchamp v. Renney it was held that an action for money had and received lay against a person who had received a masquerade ticket from the plaintiff, who had been instructed to sell it, and who had paid the owner for it under the threat of arrest; for as the defendant did not produce the ticket, it was a fair presumption that he had sold it. 1 Doug., 138. The case of Israel v. Doyles went to the length of deciding that the action for money had and received would lie on an accepted order which (570) the acceptor refused to pay. 1 H. Bl., 239. But this was probably extending the doctrine too far, and might not again be sanctioned. 5 East, 172. It seems, however, to be clearly settled, in respect to bank notes, that they shall be considered as cash in the ordinary dealings of men unless they show by their contract that they do not so treat them. On this subject the language of Lord Mansfield is peculiarly strong. He says that bank notes do not resemble and ought not to be compared to goods, securities, or documents for debt; that they are not esteemed as such, but are treated as money, as cash in the ordinary transactions of business by the general consent of mankind, which gives them the credit and currency of money to all intents and purposes. They are as much money as guineas themselves are, or any other current coin that is used in common payments as money or cash; they pass by a will which bequeaths all the testator's money or cash, and are never considered as securities for money, but as money itself. On payment of them, whenever a receipt is required, the receipt is always given as for money, not as for securities or notes. Miller v. Race, 1 Burr., 455. In pursuance of the same principle, bank notes form a good consideration for an annuity, though the act requires a consideration of money; and that if a tender is made in bank notes, and no objection is made on that account, the courts have constantly considered such a tender as good. 3 Term, 554. In the recent case of Pickard v. Bankes an action for money had and received was held to lie against a stakeholder who had received county bank notes as money, and paid them over wrongfully to the original staker after he had lost the wager, the Court clearly deciding that if the defendant received them as money, and all parties agreed to treat them as such at the time, he shall not now turn round and say they were only paper and not money; as against him it is so much money received by him. 13 East, 20. From these cases I collect that the law is now settled that for the purpose of this (571) action bank notes are to be considered as money; and the policy of such a rule is infinitely more applicable in this State than in the county where it has been established; for it may be said that it forms here almost exclusively the only circulating medium.
In considering the other question, whether the case was properly submitted to the jury, it is not to be controverted, since Hargrove v. Dusenbury, 9 N.C. 326, that a payment in a counterfeit bank bill is a nullity, and that the person receiving it may recover the amount. This being the general rule, it is incumbent on the defendant to show that the parties have, by an express contract, restrained its operation in this particular case, and that the plaintiff agreed to discharge the defendant from the risk. There was evidence in the case applicable to this inquiry, and it is precisely the one that the jury should have been instructed to make. If the jury, omitting this line of investigation, discharged the defendant because they adopted the presumption stated by the court, that a person receiving a bank bill that was indorsed took it on the credit of the bank and the indorsement, they did so, in my opinion, on improper grounds. An indorsement upon a bank bill does not necessarily imply a guarantee of the bill, for it may be made, and generally is made, for various purposes unconnected with the paper's responsibility. It is most frequently made to be able to identify the note in case it is lost or stolen, and it is sometimes made by the receiver in the name of the person who passed to him a suspicious note, that he might be enabled to trace it if it should turn out to be a counterfeit. In truth, if ever intended as a guarantee, it is done under very peculiar circumstances, and such as may be and ought to be proved to take it out of the general rule; for this I take to be law, that an indorsement on a bank note of itself signifies nothing in the way of contract. (572) I think it very probable that the jury were diverted from the proper inquiry by the abstract proposition stated to them by the court, and that, instead of considering whether the plaintiff had taken the note upon his own risk, they hastened to the conclusion that he had taken it upon the responsibility of the indorser. Upon the merits of the case, as they may be evolved by the testimony, I do not presume to give any opinion. But I decidedly think that the case has not been laid before the jury in such a way as to enable them to decide the question really in controversy. On that account I am in favor of a new trial.
HALL and HENDERSON, JJ., being of this opinion, also,
PER TOTAM CURIAM. New trial.
Cited: S. c., 12 N.C. 445; S. v. Corpening, 32 N.C. 60; Page v. Einstein, 52 N.C. 149.