Court Opinion

ID: 6412436
Source: CourtListenerOpinion
Date Created: 2022-06-25 11:53:42.39182+00
Date Added: 2024-06-11T15:51:24.992793
License: Public Domain

Hoar, J.
The various exceptions taken by the plaintiff in the course of the trial become immaterial, if the final ruling upon which he submitted to a verdict was correct.
It was decided in Wall v. Lakin, 13 Met. 167, that the provisions of the St. 1841, c. 124, § 3, did not apply to the case of the payment of a debt in money; and that such a payment could not be set aside by the assignees of an insolvent debtor, nor the money paid be recovered back for distribution among his creditors, although the payment was made under circumstances which would have made “ any assignment, sale, transfer or conveyance, either absolute or conditional, of any part of his estate” void and invalid as against the assignees. As this case *361arises under and must be governed by the St. of 1841, the only question which we have to determine is, whether a payment by means of a check upon a bank, received by the debtors as money, and taken, treated and received in payment by the defendant as money, in the ordinary course of business, and according to the common commercial practice and usage, is to be regarded as a payment in money, in the application of the doctrine settled by Wall v. Lakin. And we are all of opinion that it ought to be so regarded.
It is true that a check drawn upon a deposit in a bank is not in itself money. It is an order for the payment of money, and somewhat resembles a bill of exchange. But so bank bills are not money. They are promissory notes, payable to the bearer; a peculiar kind of promissory notes, intended for circulation as money, usually treated as money, and discharging many of the offices of money, but deriving all their title to be called or regarded as money merely .from the consent of those who use them. Among merchants it is almost as common to pay obligations by means of bank checks, especially in large transactions, as by means of bank notes. In our cities, a very common, if not the most common, mode of payment is for the debtor to draw a check, which the creditor receives and deposits in the bank where he keeps his account; and the bank receives the deposit as if it were money, and collects it of the bank upon which the check is drawn, as it would the bills of that bank if they had been deposited instead. By commercial usage, a check thus drawn in payment of a pecuniary obligation is not regarded as a negotiable instrument assigned to the party who takes it, depending upon the general credit or solvency of the drawer; but as importing that the money is on deposit in the bank, ready to be paid on the presentment of the check, so that it is substantially equivalent to the present possession of the money itself, while it may be more convenient to both parties than the actual manual delivery of bank bills or cash. So in some parts of the country ingots of gold, bearing the stamp of the government assay, or, for small transactions, post-office stamps and treasury notes, are treated and used as a currency.
*362The reason of the exception of a payment in money of a debt from the operation of the statute of 1841 has nothing to do with the kind of currency in which the debt is paid. It would not extend to a payment in merchandise, or securities, in which there must be an appraisal of the value of the thing given in payment, and so a new contract made for the sale or transfer of property of the debtor. But it was intended to allow, as lawful, payments made in the ordinary course of business, and made in a manner intended and understood by the parties as payments in money, that is, payments according to the terms of the contract, in the usual manner in which such payments are made. If the drawer of the check had no funds in the bank, and the real nature and purpose of the transaction were to substitute for the original liability a new liability of the debtor or of a third person, the result might be different. But a check upon an actual deposit in a bank, where the money is at the command of the creditor from the time the check is delivered, and is actually received by him as soon as it suits his convenience, paid and received as money by the parties according to the ordinary course of business, is, in our judgment, equivalent to a payment in money, in its relation to the provision of the statute now before us. Exceptions overruled.