indorsement or negotiation would make any of the parties liable apparently who have been already discharged.1

11

§ 1241. Cases in which drawer or indorser may reissue bill or note. In all other cases a drawer or indorser may reissue the bill or note.12 Thus, where A. drew a bill upon B., who accepted it, and it was payable to the drawer's order, and by him indorsed to C., and by C. to D., and on being dishonored by the acceptor was paid by the drawer to D., who struck out his own and C.'s indorsements, it was held that A. might reissue the bill, and the holder could recover against the acceptor. 13 In the event that the bill were drawn by A. payable to C.'s order, and C.'s indorsement were canceled, it might be contended that a holder could not trace title against the acceptor. But if the bill were paid by the drawer upon C.'s order, the title would then be in him; and by virtue of his position, any holder under him, we should say, could recover. The payee and indorser of a note to whom it is afterward transferred before maturity, in the usual course of business may negotiate it again, and all parties to it at the time it is renegotiated would be liable to the holder.14

§ 1242. Parties negotiating instrument after payment are bound. It is to be observed that while after payment the parties thereby discharged cannot be bound by its reissue, still bills and notes may remain negotiable after payment, so far as respects the parties who shall knowingly negotiate the same afterward, for in such a case the negotiation cannot prejudice any other persons, and will only

11. Gardner v. Maynard, 7 Allen, 457; Chitty on Bills (13th Am. ed.) [*224], 255; Story on Notes, § 180.

12. French v. Jarvis, 29 Conn. 348. See Sater v. Hunt, 66 Mo. App. 527. 13. In Callow v. Lawrence, 3 Maule & S. 95 (1814), Lord Ellenborough said: "It does not prejudice any of the other parties who have indorsed the bill that the holder should be at liberty to sue the acceptor. The case would be different if the circulation of the bill would have the effect of prejudicing any of the indorsers. In Beck v. Robley, if the bill had been negotiable it would have had the effect of rendering Hodson liable on his indorsement, which, in point of law, was discharged by Brown's taking up the bill. That, I think, is the distinction, and disposes of that case." The drawer of a bill who pays it to an indorsee may leave it in his hands to be sued upon by him for the drawer's benefit. Williams v. James, 15 Ad. & El. (N. S.) 499; Stevens v. Hannan, 88 Mich. 13, 49 N. W. 874.

14. West Boston Sav. Inst. v. Thompson, 124 Mass. 506; Stevens v. Hannan, 88 Mich. 13, 49 N. W. 874.

charge themselves.15 But the indorsement of a negotiable bill after its dishonor has been held to be a new and independent contract, and in its effect between indorser and indorsee distinct from the negotiable character of such a bill; so that if indorsed to a particular person by name, without adding the words "or order," or equivalent words of negotiability, he cannot transfer it by indorsement so as to enable his indorsee to sue upon it in his own

It has been held that if an indorser who pays a bill reissues it, he is bound by his first or second indorsement according to intention; if as one already fixed he need not have notice.17

§ 1243. Agreement to retire bill. Sometimes an agreement is made to "retire" a bill. It should be construed according to the circumstances of the case. The word "retire" is susceptible of various meanings according as it applies in various circumstances. "If the acceptor retires a bill, he takes it out of circulation— then the bill is paid; but if an indorser retires it, he only withdraws it from circulation so far as he himself is concerned, and may hold the bill with the same remedies as he would have had, had he been called upon in due course, and paid the amount to his immediate indorsee. This is the ordinary meaning of the word; and we think it was used in that sense in the letter in question." 18

If a note be surrendered by mistake, the whole amount being supposed to have been paid, whereas only a part had been, the balance may be recovered.19 But in the absence of fraud, illegality, or mistake, it could not be.20

15. Hubbard v. Jackson, 4 Bing. 390; Callow v. Lawrence, 3 Maule & S. 95; Guild v. Eager, 17 Mass. 615; Mead v. Small, 2 Greenl. 207; Story on Bills, § 223.

16. Leavitt v. Putnam, 1 Sandf. 199; Story on Bills (Bennett's ed.), 199. 17. Montgomery R. Co. v. Trebles, 44 Ala. 258. See ante, § 997.

18. Elsom v. Denny, 25 Eng. L. & Eq. 423, Jervis, C. J.

19. Banks v. Marshall, 23 Cal. 223; Locke v. Locke, 166 Mass. 435, 44 N. E. 346. And it has likewise been held that as between the original parties a note which is shown to have been delivered under misapprehension or mistake of fact, such defense, if established, is good. Quinlan v. Fairchild, 76 Hun, 312, 27 N. Y. Supp. 689. See authorities cited in notes to § 1226.

20. Kent v. Reynolds, 8 Hun, 559.

SECTION VI.

IN WHAT MEDIUM PAYMENT MAY BE MADE

CASES.

THE LEGAL TENDER

§ 1244. The money to be paid is that which is current at the place where payment is to be made. But in construing the terms of the bill or note, it is to be interpreted according to the meaning of the words used at the time when, and the place where, the instrument was drawn or made. And accordingly, if the coin which is expressly agreed to be paid be alloyed by the government between the time of contract and the time of payment, the debtor should be required to make good the full value of the coin at the time of the contract. And so, if the name of the coin be changed so as to apply to a lesser value, the amount to be paid should be estimated according to the value at the time of the drawing of the instrument, for payment in that coin then of higher value was contemplated.22 On this subject the authorities exhibit great contrariety of opinion.23 We have simply stated the conclusions which seem to us just and right.24

21. Chitty on Bills (13th Am. ed.) [*399], 450; Story on Bills, § 418; Williamson v. Smith, 1 Coldw. 1.

22. In the case of "The Mixed Monies," Sir John Davies' Reports, a different view was taken. In a subsequent case (Da Costa v. Cole, Holt, 465, Skin. 272 [1688]), it was held that a bill drawn in England, on Portugal, for 1,000 mille rees could not be satisfied by tender of mille rees which had been depreciated 20 per cent. by the King of Portugal eight days after the bill was drawn. Holt, C. J., said: "This case differs from the case of Mixed Monies, for there the alteration was by the King of England, who has such a prerogative, and this shall bind his own subjects.”

23. See Story's Conflict of Laws, §§ 313, 313a, et seq.

24. Sir William Grant, in the case of Pilkinton v. Commissioners of Claims, 2 Knapp, 17, states the view which we have adopted very clearly. In the course of his opinion he said: "Vinnius, whose authority was quoted the other day, certainly comes to a conclusion directly at variance with the decision in Sir John Davies' Reports. [The case of the Mixed Monies' above cited.] He takes the distinction that, if, between the time of contracting the debt and the time of its payment, the currency of the country is depreciated by the State, that is to say, lowered in its intrinsic goodness, as if there were a greater proportion of alloy put into a guinea or a shilling, the debtor should not liberate himself by paying the nominal amount of his debt in the debased money; that is, he may pay in the debased money, being the current coin, but he must pay so much more as would make it equal to the sum he borrowed. But, he says, if the nominal value of the currency, leaving it unadulterated, were to be increased, as if they were to make the guinea pass

§ 1245. Party bound must pay in money. The party bound to make payment has no right to do so in any other medium than that expressed on the face of the instrument—that is, he must make payment in money.25 And an agent, holding the instrument for payment, can take nothing else but money.26 Sometimes

checks or drafts are offered by the debtor in discharge of the debt, and the effect of giving and receiving them is elsewhere considered.27

But where a bill or note is expressed to be payable "in cur rency" (in which case, however, it would not be negotiable), there is no specification of a particular value which is to be paid; but only a designation of quantity in nominal value. "One hundred dollars in currency" does not mean the value of one hundred gold dollars to be paid by as much currency as will amount to that value; but means "one hundred dollars of currency" that is, one hundred currency dollars.28 Any currency in circulation at

for thirty shillings, the debtor may liberate himself from a debt of one pound ten shillings by paying a guinea, although he had borrowed the guinea when it was worth but twenty-one shillings."

25. Story on Bills, § 419; Edwards on Bills, 550; Corbett v. Hughes, 75 Iowa, 282. When the creditor's own paper was thrust upon him by a party who had obtained possession of a note offered by the creditor for sale, under the pretense of examining it with a view of purchasing it, it was held no payment. Vancleave v. Beach, 110 Ind. 269. But where a depositor tendered his check to the assignee of an insolvent bank in part payment of paper held by the bank against him, and cash for the balance, it was held in effect a valid payment. Lionberger v. Kinealy, 13 Mo. App. 4; Hall v. Appel, 67 Conn. 585, 35 Atl. 524. Unless creditor assents to settlement and discharge of the obligation in something else (i. e., checks, drafts, other notes, etc.). See cases cited in notes to § 1623. A check certified is not currency and does not strictly possess the character of money, although it may pass current from hand to hand. See Dike v. Drexel, 11 App. Div. 77, 42 N. Y. Supp. 979; Cowgill v. Robberson, 75 Mo. App. 412, text cited.

26. Ibid. See chapter XI, § 335, vol. I; Herrimon v. Shomon, 24 Kan. 387; Bank of Kansas City v. Mills, 24 Kan. 610; Chapman v. Cowles, 41 Ala. 103; De Mets v. Dagson, 53 N. Y. 635; Maddur v. Bevan, 39 Md. 485; Speurs v. Lederberger, 56 Mo. 465; Davis v. Lee, 20 La. Ann. 248; Moye v. Cogdell, 69 N. C. 93; Wilcox Organ Co. v. Lasley, 40 Kan. 521; McCormick v. Peters, 24 Nebr. 70; Cedar County v. Jenal, 14 Nebr. 254; Foster v. Rincker, 4 Wyo. 484, 35 Pac. 470; Scott v. Gilkey, 153 Ill. 168, 39 N. E. 265.

See Farm

27. See chapter XLIX, on Checks, § 7. But usage of the collecting bank to the contrary has been held to be binding upon the customer. ers' Bank & Trust Co. v. Newland, 97 Ky. 464, 31 S. W. 38. 28. But see ante, § 57 and the cases of Bull v. Bank of Kassen, 123 U. S. 112, 8 Sup. Ct. Rep. 62, and Woodruff v. Mississippi, 162 U. S. 292, 16 Sup.

the time of payment would then satisfy the terms of the contract would be the identical thing contracted to be paid and, however much depreciated, would be a good tender in discharge of the debt.29

§ 1246. The legal tender cases. It is provided by the Constitution of the United States (art. I, § 9), that "No State shall coin money, emit bills of credit, or shall make anything but gold and silver coin a tender in payment of debts;" and thus any interference of the State governments with the money of the country is forestalled and prevented. It is also provided that Congress shal! have power" to coin money and regulate the value thereof," but no power is conferred upon it to make anything but coined money "legal tender" in discharge of debts, nor is anything said on that subject. The Constitution, however, declares by article X of its amendments, that "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively or to the people." During the war between the Confederate States and the United States, and as a means of raising revenues for its prosecution, Congress, on the 25th day of February, 1863, passed an act providing for the issue of treasury notes, and declaring that they "should be receivable in payment of all taxes, internal duties, excises, debts, and demands of every kind due to the United States, except duCt. Rep. 820, which hold that a check payable "in current funds" is negotiable, revolutionizing the law as the States generally interpret it since all currency, whether gold, silver, national bank notes or treasury notes are now preserved at par, all are of equal commercial value; and as matter of fact the form of expression is temporarily immaterial and may possibly continue immaterial indefinitely. But it would seem that as legal and commercial conditions are subject, in the nature of things, to change it in time, that jurisprudence should stand by the ancient land marks and construe words according to their settled meaning, rather than according to transient consequences.

29. In Rucker v. Dearing, 18 Gratt. 438, Joynes, J., said: "A contract for the payment of so many dollars in Confederate notes was a contract to pay so many dollars of Confederate notes, or so many Confederate dollars. The specification of dollars served only to measure the quantity of the notes, so that, in every such contract, the quantity of notes to be delivered was ascertained, though their value was uncertain. The contract was for quantity only, and not for value." Huston v. Noble, 4 J. J. Marsh. 130; David v. Phillips, 7 Mont. 632; McCord v. Ford, 3 Mont. 166; Chambers v. George, 5 Litt. 335; Dillard v. Evans, 4 Ark. 175; Trebilcock v. Wilson, 12 Wall. 694; Taup v. Drew, 10 How. 218. But see Johnson v. Dooley, 65 Ark. 71, 44 S. W.