Burlington free press. [volume] (Burlington, Vt.) 1827-1865, 1839-11-29
ALFRED WArNwRranT J
VS.. 7
vxr--.~
! Bennett, i. delivered the opinion of the Court

Bennett, y. delivered the opinion of the Court.
Tho important question in this case is, whether bills
of an insovcnt bank when paid to satisfy precedent
debt and at the time and place Of payment in full
credit and the parties to tho transaction are equally
ignorant Of such insolvency. Uhe bills having been Of
fcrcd to be returncd) arc in point of law sasiac-
ton, iCprevous to such paymen, the bank has in fact
become nsovent and ceased to redeem its bills at its
counter, that the bills had ceased to have any
currency in the immediate vicinity ofthe bank though
this unknown 10 either of tho parties at the tmo
Of payment.
1t is principle of law, too well established to need
authority, that where bill Of exchange or note eta
third person is received in payment of precedent
debt, the risk of tho insolvency of the maker is upon
the party from whom the bill or note is received unless
there is eTpress agreement between the parties
that the risk of the paper, in this respect is 10 be tho
receivers, or one is TO be implied from the facts
and circumstances of the case; and the great
question is, whether this principle is applicable, to
the case Of incorporated bank. fit is true that upon
the payment Of bank bill in satisfaction of precedent
debt, Tin the absence Of other acts,) there is an
implied agreement that the insolvency Of the bank is
at the risk of the party receiving the bill; then it fol-
lows that the authorities applicable to bills Of exchange
and promisory notes. do not apply TO the under
consideration. Ii is true that by common consent,
bank bills have for the purposes Of business been
treated as money; but this is conventional regula
ton, for the convenience ofbusiness, and not legal
one. No state is authorised to coin money, pass
any law whereby any thing but gold and silver shall DO
made legal tender in payment of debt. 1t was
decided at the last term Of this Court in Rutland
County, that note payable in bank bills was not
sotiabe. They can not be recognized in the legal ac
ceptaon OF tho term as money; but it is wholly con-
vontional. This conventional understanding, that
bank bills arc to pass money, is founded upon the
sovency otho banks and the supposton that the bills
equivalent in value to specie, and at any time
convertible into specie at the option Of the holder
Upon no other ground do ban! bills pass, BY common
consent, as money, and hence there is an implied
agreement of the parties, at the time the bills are
passed, that they equivalent to money, and they
paid by the party and received by the other on
that suppo5ition and unless this is the case, the ono
party does not pay what he supposes he pays tho
other party receive what he intends 10 receive. From
this principle Of common consent that bank bills should
pass money, it is the implied understanding of the
parties that the receiver should take upon himself the
risk ofal after failures ofthe bank but this principle
can not be carried any farther than this conventional
arrangement extends, AMI that is, to treat them as
money only SO long the bank which Issues them
continues to redeem them in specie, or in other bills
equally acceptable with specie to the bill holder
When therefore bank stops payment the bills there
ofcease by this conventional arrangement to be tho
representative Of money whether the particular bill
holder is apprizcd Of the fact or not and from that
time the bills of such bank resume their legal character
ofpromissory notes, and mere securities for the pay
ment Off money. Ifhey are afterwards passed off to
4 person equally ignorant Of the failure Of the bank
! there can be no implied agreement from this conven-
tiona arrangement 10 treat them money long as
they convertible into SPECIE that the receiver shall
sustain the loss which had then already accrued to tho
bill holder. It is difficult to why there should be
distinction between bank bills after they to be
by any conventional arrangement the representative
Of money, and other promisory notes. The law is
well settled in this and other States, that the payment
Of debt in forged or counterfeit bank bill, is not
satisfaction though both parties equally ignorant Of
the fact Sec 2. Johnson, r. 45S, Murkle vs. Hatfield,
| where Chancellor Kent reviews the authorities with
much ability. The party paying must sustain the loss,
or rather is not permitted TO shift it upon the other
party. The parties in such case act upon mistake;
the thing paid by the one and received by the other,
is not what they supposed to be; and it would be
highly inequitahc that by this mistake the loss should
be shifted from him who had already sustained it, upon
the other, who equally ignorant of the fact. In
the case now before tho Court, there was mutual
mistake. The parties supposed the bills when paid
were then convertible into specie, and equivalent 10
money, and both acted on this supposiiion. Common
ustce then iobids that this loss, already sustained,
should by this mutual mistake be shifted from the de-
PENDANT to the plaintiff. In the state Of Alabama, in
inc cIsC Oh liOWFcy vs. Niurrell, - IorterS IT, cU
different doctrine is said to be established though
have only seen n note Of tho case. In the case Of
| Young V. Adams, G. Mass. r. Isl, different doc
trine is also incidentally thrown out. But the same
question has been before the Supreme Court, and also
the Court Of Errors in the State Of New York, in the
case Of Lighlbody vs. Ontario Bank H. Wendell 8,
and 10. Wend l0l, where the decision was in con-
formity with the views of this Court and think
this the better opinon-well sustained on principles
and calculated to do the most equal Justice.
1t is not the business Of the officer who receives
writ for service TO receive pay the demand. He is
only to serve the wr and if the debtor pays the de-
mand to the officer he holds agent ofhe debtor till
he pays it to the creditor. The money in this case
being paid to the creditor on the goth March, and
after the BAN; had ceased to redeem its bills, is the
same as if it had been then paid by the debtor. The
objection to the deposition of George b. Green, is
without foundation. The judgment below is therefore
! affirmed.
| Within the past year Albany has lost