Case Name: Farmers' Bank of Virginia v. Reynolds
Court: Supreme Court of Appeals of Virginia
Jurisdiction: Virginia
Decision Date: 1826-05
Citations: 4 Rand. 186
Docket Number: 
Parties: Farmers’ Bank of Virginia v. Reynolds.
Judges: 
Reporter: Virginia Reports
Volume: 25
Pages: 85–86

Head Matter:
Farmers’ Bank of Virginia v. Reynolds.
May, 1826.
Banks — Mutilated Bank Notes — Rights of Holder of.*— Where a bank note is cut in two, and one half sent, by mail and lost, the holder of the remaining half has a right to demand payment at the Bank, upon presentation of the half in his possession, proving-ownership. and giving bond with adequate security for the indemnification of the Bank.
Same — Same—Same.—But if these pre-requisites are not complied with, and the Bank is sued in consequence of refusing payment, the holder shall not recover interest or costs, although he may perform the conditions after the suit is brought.
This was an appeal from the Chancery Court of Richmond.
John Reynolds of Ohio, sent, by mail, to his partner, Isaac Reynolds, in Baltimore, the halves of three notes of the Farmers*' Bank of Virginia, amounting to $210. John Reynolds afterwards sent, by mail, the corresponding halves of the bank notes. The first letter, enclosing the halves of the bank notes, was duly received by Isaac Reynolds;, but the second letter, containing the corresponding halves, never came to hand,, and have never,, been heard of since. The lost halves were advertised in newspapers, of Washington, Cincinnati, and Baltimore.
Reynolds & Co. filed a bill against the’ Farmers’ Bank, setting out the foregoing facts, and charging that the half notes in-their possession had been presented for payment, but that the Bank had refused ; although they offered good and sufficient security to indemnify the said Bank against the future appearance of the corresponding halves, so lost or stolen. They therefore pray that the Bank may be decreed to pay the amount of the said notes, &c.
The Bank, by its proper officers, answered, that the plaintiffs had never proved their ownership of the said notes, except by the affidavits of the parties themselves, which are not admissible evidence: that the Banks in Richmond had adopted a regulation, that they would not pay half notes, except under the decision of some competent tribunal; which regulation they have made public. The answer requires, that the plaintiffs shall give bond with ample *security to indemnify the Bank, and contends, that as the Bank has been in no default, it ought not to be subjected to costs, &c.
A deposition was taken, by which it appeared that the half notes mentioned in the bill, were enclosed, as therein stated, to-Isaac Reynolds, in Baltimore: that they were either lost or stolen ; and immediately advertised.
The Chancellor decreed that the Bank- should pay to Reynolds & Co. the sum of •$210 with interest from the time of the presentation of the half notes at the Bank, until payment, and the costs of this suit; but the effect of the decree to be suspended, until the plaintiffs shall have entered into bond with good security, to the defendants, in the penalty of $420, against the claims of any persons, who might thereafter come against them, in consequence of having the possession of the halves of the said notes.
The defendants appealed.
Nicholas and Leigh, for the appellants.
Bacchus, for the appellees.
The principal case was cited in Moses v. Trice, 21 Gratt. 562; Exchange Bank v. Morrall, 16 W. Va. 551, 552.
See generally, monographic note on “Banks and Banking” appended to Bank v. Marshall, 25 Gratt. 378.

Opinion:
May 6.
JUDGE CABELL
delivered the •opinion of the Court.
The evidence in this cause sufficiently establishes, that the appellees are the bona fide owners of the bank notes in the bill mentioned: that the said notes were •cut into two parts for the purpose of being transmitted by the mail; and that one half of each of the said notes was lost, in consequence thereof. The Chancellor, therefore, was clearly right, according to the case of The Bank of Virginia v. Ward, 6 Munf. 166, in giving to the appellees the amount of the said notes, on their entering into bond with adequate security, for the indemnity of the appellants.
The only questions .are, -as to the propriety of compelling the appellants to pay interest and costs.
^Interest is in the nature of damages for improperly withholding a •debt, beyond the time when it ought to be paid. But the appellants were in no default whatever, in not paying the notes in this case. Banks are under no obligation to seek out their creditors; they are bound to pay only on a demand for payment made at their offices of discount and deposit. And in the case of the presentation of the moiety of a note, the demand for payment at the Bank, must be accompanied with such evidence of the ownership of the note, as ought to satisfy the Bank. The Bank of Virginia v. Ward, 6 Munf. 166. The demand in the case' before us, was unaccompanied by any such evidence. That demand, therefore, imposed no obligation to pay the principal, and of course, oould give no claim for interest. Sufficient evidence of ownership has been exhibited since the institution of this suit; but no' demand of payment has been made at the Bank, since that evidence was taken. The appellees, therefore, are not yet in default, and consequently ought not to pay interest.
The question of costs is still plainer. Costs are given or withheld at the discretion of a Court of Chancery; and the sound exercise of this discretion forbids the imposition of costs on a party, in no wise in the wrong.
The decree, therefore, is affirmed, so far as it directs the payment of the amount of the notes in the bill mentioned, but is to be reversed, so far as it directs the payment of interest'and of costs by the appellants. And the appellants are to recover their costs, both in this Court, and in the Court of Chancery.