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accord with the generally accepted meaning of the term "money or "currency." It would seem that if the instrument shows on its face that it was payable in coin, bank notes, government notes, or other paper which would properly come within the ordinary definition of money, it is negotiable. So that if the term " current funds" or "currency as used in the instrument means money, there can be no doubt of its negotiability. It is probable that this question is not so important at the present time, as formerly, when, in each State, bank notes were issued by State banks and individual bankers under a system established pursuant to State statutes; in each State more or less protected and guaranteed by provisions made in such statutes, and always more or less dependent upon the individual credit of the bank or banker. State currency as distinguished from United States currency no longer exists, resulting partly from our comprehensive national banking system, and partly from the restrictions imposed by means of a tax upon circulating notes issued by State banks. The elimination of State bank notes from the monetary field has limited the meaning of the term "money so that it now includes national bank notes, United States notes, and gold and silver coin. All of these except national bank notes are declared by statute to be legal tender in the payment of all private debts; and national bank notes are lawful money.25 Drawers of bills of exchange, or checks, or makers of promissory notes have frequently, since the passage of the so-called legal tender acts, indicated whether payment should be made in government notes or in gold or silver; and the term "current funds " has been used to designate any of these, all being current and declared by positive enactment to be legal tender. Such a term is intended to cover whatever is receivable and current by law as money, whether

tender as money, unless specially objected to; and, as Lord Mansfield observed in Miller v. Race, 1 Burr. Rep. (Eng.) 457, they are not, like bills of exchange, considered as mere securities or documents for debts."

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It may execute its obligations, but cannot, against the will of Congress, make them money. The tax is on the notes paid out, that is, made use of as a circulating medium. Such a use is against the policy of the United 24. U. S. Rev. Stat., § 3412. States. Therefore, the banker who In speaking of the tax imposed by helps to keep up the use by paying this section upon circulating notes them out, that is employing them as used and paid out by a bank, Chief the equivalent of money in discharging Justice Waite said in the case of Mer- his obligation, is taxed for what he chants' Nat. Bank v. United States, does. The taxation is no doubt in101 U. S. 1, 25 L. Ed. 979: "The tended to destroy the use; but that, as tax thus laid is not on the obliga- has just been seen, Congress has the tion, but upon its use in a certain power to do." As against the United States, a State municipality has no right to put its notes in circulation as money.

way.

25. Woodruff

v. Mississippi, 162 U. S. 291, 300, 16 Sup. Ct. 820, 40 L. Ed. 973.

in the form of notes or coin.26 It has been observed that the cases holding that a bill or note payable in "current funds," or "current bank notes," or " in currency,” was not negotiable, were invariably decided when the paper money circulating in the several States was of a very heterogeneous character, and it is intimated that the cases might have been so decided in view of the unsatisfactory condition of such money. We have cited in the note a number of cases holding that instruments payable in current funds and in current bank notes are not negotiable. An early case in New York was to the effect that a note payable in “ York State bills or specie " is payable in lawful money and is a negotiable promissory note under the statute.3 30 There are a number of other New York cases and also of other States to the same effect.3 There has

26. Bull v. Bank of Kasson, 123 40 Neb. 484, 58 N. W. 1016, 42 Am. U. S. 105, 8 Sup. Ct. 62, 31 L. Ed. 97. St. Rep. 683, 24 L. R. A. 444, where In this case a bank check for the pay- the court said: "It is next said that ment of "five hundred dollars in cur- the amount of payment is uncertain, rent funds" was held payable in what- and the instrument is for that reason ever is current by law as money, and nonnegotiable. This argument is predito be a bill of exchange. See also cated upon the provision that the cerWright v. Morgan (Tex. Civ. App.), tificate is payable “in current funds." 37 S. W. 627. We are aware that mary courts have held that such a clause does not require payment in money, and destroys the negotiability of the instrument. The cases so holding are either cases arising at a time when many forms of bank notes and bills were in use, varying in their values, or cases decided upon the authority of that class of cases, without regard to changed conditions." See also Hatch v. First Nat. Bank, 94 Me. 348, 80 Am. St. Rep. 401, 47 Atl. 908.

27. Klauber v. Biggerstaff, 47 Wis. 551, 3 N. W. 357, 32 Am. Rep. 773, where Ryan, Ch. J., has said in respect to a number of early cases decided in Wisconsin holding the nonnegotiability of such instruments: "These cases were decided respectively, in 1862, 1863, and 1864, when the paper money, circulating in the State de facto, was of a very heterogeneous character. How much influence this fact had on those decisions, or on similar decisions elsewhere, it is impossible to say. It is perhaps not altogether an uncommon infirmity of judicial rules, that they are made in view of exceptional conditions of things presently existing. Passing evils or exigencies should have little weight in general rules of decision. Judicial rules ought properly to be placed upon the general condition of society, and to be broad enough to meet occasional derangements incident to it."

28. A certificate of deposit made payable in current funds is not negotiable. National State Bank v. Ringel, 51 Ind. 393; Johnson v. Henderson, 76 N. C. 227; Platt v. Sauk County Bank, 17 Wis. 222; Lindsey v. McClelland, 18 Wis. 481, 86 Am. Dec. 786. But see contra, Kirkwood v. First Nat. Bank,

29. Current bank notes.-See Fry v. Rousseau, Fed. Cas. 5,141, 3 McLean, 106; Irvine v. Lowry, 39 U. S. 293, 10 L. Ed. 462; Little v. Phenix Bank, 2 Hill (N. Y.), 425, affd. in 7 Hill (N. Y.), 359; State v. Corpening, 32 N. C. 58; Lackey v. Miller, 61 N. C. 26; McCormick v. Trotter, 10 Serg. & R. (Pa.) 94: Gray v. Donahue, 4 Watts (Pa.), 400; Kirkpatrick v. McCullough, 3 Humph. (Tenn.) 171, 39 Am. Dec. 158; Simpson v. Moulden, 43 Tenn. 429; Wolf v. Tyler, 1 Heisk. (Tenn.) 313.

30. Keith v. Jones, 9 Johns. (N. Y.) 120.

31. The negotiable character of a certificate of deposit issued by a bank is not destroyed by a provision therein making it payable in current bank

always been enough conflict of authority as to the negotiability of such paper to support the statement that there never has been a well-established doctrine in respect thereto. Finally, in our opinion, the better and more reasonable doctrine, as a result of the existing condition of monetary and mercantile affairs in this country, is to hold that wherever the terms currency" or current funds" are used in commercial transactions as the expression of the medium of payment, they should be construed to mean current money, funds which are current by law as money; and when so construed, an instrument made payable in such a manner should be deemed negotiable.32

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d. Payable in foreign money. Story says: note be for the payment of money it is wholly immaterial in the money or currency of what country it is made payable. It may be payable in the currency or money of England, or France, or Spain, or Holland, or Italy, or of any other country. It may be payable in coins, such as guineas, ducats, doubloons, crowns, or dollars, or in the known currency of the country, as in pounds sterling, livres, tournoises, francs, florins, etc., for in all these and the like cases, the sum of money to be paid is fixed by the par of exchange, or the known denomination of the currency, with reference to the par." 33 But where an instrument is made payable generally in the money of a foreign country, without specifying the kind or denomination of the coin or money, so that payment may be made in our own coin of equivalent value as determined by the par of exchange, it is not negotiable, according to a leading case

33. Story on Promissory Notes, § 17; Story on Bills, § 43.

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notes instead of money. Pardee v. Fish, 60 N. Y. 265, 19 Am. Rep. 176. See also Judah v. Harris, 19 Johns. Pounds sterling. In the case of (N. Y.) 144; Sweetland v. Creigh, 18 King v. Hamilton, 12 Fed. 478, the Ohio, 118, where it was held that a court cited with approval the extract promissory note payable "in current from Story on Bills of Exchange, and Ohio bank notes" is for a sum of said: "It follows that a note payable money certain, and therefore negotia- in pounds sterling or British sovereigns ble; Howe v. Hartness, 11 Ohio St. is payable in “ money just as much 449, 78 Am. Dec. 312; Besancon v. and as certainly as if it was payable Shirley, 17 Miss. 457; Laird v. State, in dollars. The case is different from 61 Md. 309, where it was held that a note made payable in " currency," words current funds" in a bill of which may be " money" only convenexchange, are equivalent to "current tionally, but not legally. But where money,' and do not destroy the ne- a note is made payable in a particular gotiability of the bill. denomination of foreign money, as pounds sterling, it is payable in money the same as if it was payable in a denomination of domestic money."

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32. Hatch v. First Nat. Bank, 94 Me. 348, 80 Am. St. Rep. 401, 47 Atl. 908.

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in New York upon this question.34 This is not invariably the rule, for in a Michigan case a note payable in "Canada currency was held negotiable, and the New York case already referred to was disapproved;35 and a promissory note payable in Mexican silver dollars has been held negotiable.36

e. Payment in money optional.— Among the requisites of a negotiable bill or note is that it be for the payment of money only, and not for the performance of some other act, or in the alternative.37 Hence a promissory note payable in cash or in certain specified articles is not negotiable.38 And where a written agreement was made whereby the subscriber promised to pay another a sum of money on demand, with interest, and added, "but no demand is to be made as long as the interest is paid;" it was held that it was an alternative agreement to do a certain thing, or pay a sum of money, and was not, therefore, a negotiable promissory note. So a note for money which may be discharged by the delivery of cotton is not negotiable; 40 nor is a note payable in "bank stock or lawful money of the United States." 41 It may be

39

66

35. Black v. Ward, 27 Mich. 193, 15 Am. Rep. 162.

36. Hogue v. Williamson, 85 Tex. 553, 22 S. W. 580, 34 Am. St. Rep. 823, 20 L. R. A. 481.

34. Canada money.- Thompson v. note payable in pounds, shillings and Sloan, 23 Wend. (N. Y.) 71. In this pence, made in any country, is but case a note was made payable in another mode of expressing the amount Canada money." The court said: "It in dollars and cents; and is so underis not pretended that coins current in stood judicially. The course, thereCanada are, therefore, so in this State. fore, in an action on such an instruAs gold and silver they might readily ment is to aver and prove the value be received; and so might the coin of of the sum expressed, in our own tenany foreign country, Germany or Rus- derable coin." sia, for instance; but the creditor might, and in many cases doubtless would, refuse to receive them, because ignorant of their value. In law they are all collateral commodities, like ingots or diamonds, which though they might be received and be in fact equivalent to money, are yet but goods and chattels. A note payable in either would, therefore, be no more negotiable than if it were payable in cattle, or other specific articles. The fact of Canada coins being current here is not, at any rate, so notorious that we can judicially notice them as a universally customary medium of payment in this State;

*

"This view of this case is not incompatible with a bill or note payable in money of a foreign denomination, or any other denomination, being negotiable, for it can be paid in our own coin of equivalent value, to which it is always reduced by a recovery. A

37. Cook v. Satterlee, 6 Cow. (N. Y.) 108.

38. Matthews v. Houghton, 2 Fairf. (Me.) 377; Johnson v. Baird, 3 Blackf. (Ind.) 153; Howell v. Todd, Fed. Cas. 6,783.

39. Seacord v. Burling, 5 Den. (N. Y.) 444. Such an instrument was declared to be a contract "that the promisor at his election will pay the interest on five thousand dollars annually, or decline to do so, and to pay the principal on demand. A promise to pay money or perform an act is not a good promissory note."

40. Lawrence v. Dougherty, 5 Yerg. (Tenn.) 434.

41. Alexander v. Oaks, 2 Dev. & B. (N. C.) 513.

stated, then, as a rule of universal application that if there appears upon the face of the instrument any contingency which would make it payable in anything other than money, it does not possess the negotiable qualities of a promissory note or bill of exchange, and becomes a mere contract. It is an alternative to pay a sum of money or do some other act. But where the option rests with the holder of the note the case is different. The promisee may insist and the promisor is bound to pay absolutely the amount stated; but the promisee may, at his option, require the fulfilment of the alternative promise, and no choice is left to the promisor. There being an unconditional and absolute promise to pay money, the instrument is not deprived of its negotiable quality.2 The Negotiable Instruments Law provides that the negotiable character of an instrument otherwise negotiable is not affected by a provision which gives the holder an election to require something to be done in lieu of payment of money." There are cases to the effect that a note payable in money or a specified commodity to be delivered on a certain day, becomes an absolute promise to pay money if the commodity is not delivered on that day."

43

f. Act in addition to payment of money.—An instrument which contains an order or promise to do any act in addition to the pay

42. Hosstatter v. Wilson, 36 Barb. in stock. The court said: "The in(N. Y.) 307. In this case a promis- strument is a promissory note. It is sory note in the following form: for the unconditional payment of "Four months after date, I promise to pay to the order of M. W. Wilson, fifty-five dollars, at my store, No. 134 4th street, (or in goods on demand) value received" was held to be a negotiable promissory note. The court said: "In the present case the debtor promises to pay in money. He has no election to do anything else. If the holder chooses he may surrender the note and receive goods; but that rests entirely with him self, and no choice is left to the debtor."

money, at a specified time, to the payee's order. It was not optional with the makers to pay in money or stock, and thus fulfil their promise in either of two specified ways; in such case the promise would have been in the alternative." And again, "Although the election was given to the promisees upon a surrender of the instrument to exchange it for stock, this did not alter its character, or make the promise in the alternative, in the sense in which that word is used respecting promises to pay." See also Dinsmore v. Duncan, 57 N. Y. 573, 15 Am. Rep. 534; Mosely v. Walker, 84 Ga. 274; Dennett v. Goodwin, 32 Me. 44.

43. Neg. Inst. L. (N. Y.), § 24. For same section in statutes of other States see Appendix.

Option resting with holder of note. - In the case of Hodges v. Schuler, 22 N. Y. 114, it was held that the note of a corporation, for a specific sum, with a fixed time for payment, and containing the condition that the holder might within a given time surrender the note, and receive stock 44. Baker v. Todd, 6 Tex. 273, 55 in lieu thereof, was a promissory note. Am. Dec. 775; Fleming v. Nall, 1 Tex. This was no other than a note for 246; Grant v. Burleson, 38 Tex. 214; money, or, in case the holder elected Van Hooser v. Logan, 3 Scam. (I.) within the time specified, to be paid 90.

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