Year: 1867




and far more extended application. II does
not refer exclusively 10 a general assign
ment made by a falling or insolyent bank
ing institution, but 10 all transfers or as
signments. made at any time, Of a note,
bill Of exchange or other evidence OF debt,
as well as a general assignment made in in
solvency.


The provisions Of the statute are exceed
ingly broad and comprehensive, and We
have no discretion but to declare the law
as we find it written What then is its
effect upon the case now under considera-
ton The note was executed and assigned
by the bank after the passage Of the statute,
which was enacted expressly for the gov
eminent and regulation Of all the banks Of
the State, and as to all subsequent contracts
and assignments made by the bank, the act
of 1860, ch. q, becomes part OF the con-
tract itself, and the assignee is a. much
bound 10 receive the currency Of the bank
in satisfaction of any note, bill Of exchange
or other evidence of debt, which he holds
by assignment as the bank itself He stands
under the statute asd assignment, which is
the law of the case, precisely in the same
relation 10 the maker and endOrseTs thatthe
baAk or original holder occupied whilesuch
security was inits custody, with all the equi-
ties open TO the debtors that existed in their
favor while such security was in the hands
Of the bank But the law Wonld be other
wise as to assignments prior to the passage
of the act of 1860. Each endorsement or
assignment is contract, and the statute
can have no application to such cases, and
If applied 10 prior assignments, it would
h.. ,l,lssr.fsgta Of Fha orI
be unconstitutional and void This ques-
tion under analogies, facts and circum-
stances, arose in the case of Dundas et al rs
Bawler ei al. 3 McLean'5 r., 397. That
was bill TO foreclose a mortgage executed
by the defendants the 18th day of July,
1899, and lot in Cincinnati to secure the
payment Of certain sum to one ShOen-
berger, who assigned it, and the accompa-
nying notes for the same amount TO the
Bank Of the United States on the first
Of September following. On the first
Of May l84l, the bank assigned the
mortgage and notes to the complain
ants, in trust with other chooses in action, to
pay certain banks in the city and county of
Philadelphia, for post notes Of the Bank of
the United STATES which they had, amount-
ing in the whole to the sun Of S5,078,-
444 "a. The chooses in action assigned
amounted TO the sum of S7,772,2j0. As
the claims should be collected, payment
pro rata was required to be made to
the creditor banks, and after full pay
ment the trustees were 10 account for
and pay over 10 the Bank of the United
States the surplus that should remain in
their hands. The defendants contended
that under the statute of Ohio, they had
right 10 pay of the mortgage and notes in
the bills Of the Bank of the United States,
which were at 4 considerable discount. The
court held AZ the assignment had been
made in the State of Pennsylvania it was
governed by the laws of that State, and the
statute of Ohio was not applicable TO the
contract Of assignment by the bank. The
law Of the place where the assignment was
made governed it, In discussing the ques-
tion, the learned Judge says at is con
which declares that the equities shall re-
main open between the original parties in
the hands of a bona fde assignee, no nego.
tiation or change Of place can set of this
right Of the maker. 1t is the law Of the
contract, and may be set mp whenever suit
shall be brought. And this holds in all
instances where the local law enters into
the contract and becomes a part OF it," Ii
was further insisted in the argument in that
case, that the act of 1912, which declares
that the true intent and meaning of the
ninth section of the act Of 1924, was and il
TO entitle any debtor of bank or banker
to pay such debt in the notes Of the bank or
banker against such bank or banker or the
assignee Of either, whether such bank or
banker retains an interest in the same, or
has parted with all interest therein" In
answer TO this provision of the statute
which is in Its import and meaning similar
to an act of 1860, ch. D. sec. 30, Judge
Mclean in delivering the opinion said:
"The settled construction of the contract
in the hands Of bona fde assignee
and holder by the Supreme Court Of
the State is, that such holder is not bound
10 receive in discharge of the demand the
notes of the bank. The statute would seem
to be susceptible of no other construction.
How then Goes the act of 1912 affect the
contract? By it the holder is bound to re-
ceive the notes of the bank in payment
This then impairs the obligation of the
contract Ii provides that the contract
shall be discharged by the payment of a
different medium from that which the con-
stitution secures. Every evidence of debt
gives the holder the right to demand in
payment gold and silver, but the above act
declares that the payment shall be made in
bank notes. II the idU had eristed irhea the
contract ,r1s entered into, there lrolld Be no ob-
jelfi0n 10 a. The effect of the law would
have been 10 restrain the negotiability Of
notes given to banks. The assignee under
the law would have had no better right to
demand payment in gold and silver than
the bank, and this being the law, it would
have entered into the contract and consti-
tuted a part of il. II would he nothing
more than having all agents open in suit
brought by the assignee as they would have
been in a suit brought by the bank


The principles of tbs case are recognized
and applied in the case of Woodruff vs..
Trapnall, 10 Howard, l9O-and We think
applicable to and decisive of this case.


Affirm the Judgment


MILIIGAN, JHdge.