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So, where a pledgee makes proof against a bankrupt maker, the balance over and above the amount secured by the pledge will be subject to such equities as would be available against the pledgor.565 And in a suit against an accommodation maker the pledgee can only recover the amount actually due and secured to him.5 So, where his suit is against an accommodation indorser, and the note has been diverted from its original purpose. 567 One who takes a bill by pledge from a drawer, who has been accommodated, may prove against the bankrupt estate of the accommodation acceptor for the face of the bill, although he will not be entitled to any dividend over and above the debt secured. 568 If a note is held as collateral, and the debt secured is satisfied in whole or in part, the burden is on the defendant to show that fact.5 569

Damages in Trover-Negligence-Fraud.

§ 1732. In an action of trover the damages recoverable are the amount due on the bill, with interest.570 But, although the face of the note is prima facie the measure of damages in such action, the insolvency of the maker and reduced value of the note may be shown in mitigation of damages. 571 So, if the maker destroys a note that

565 Ex parte Kelty, 1 Low. 394, Fed. Cas. No. 7,681.

566 Hilton v. Smith, 5 Gray (Mass.) 400; Atlas Bank v. Doyle, 9 R. I. 76. 567 Williams v. Smith, 2 Hill (N. Y.) 301.

568 Ex parte Newton, 16 Ch. Div. 330.

569 Hancock v. Hodgson, 4 Ill. 329.

570 Robbins v. Packard, 31 Vt. 570; Thayer v. Manley, 73 N. Y. 305; Griggs v. Day, 136 N. Y. 152, 32 N. E. 612; Richardson v. Ashby, 132 Mo. 238, 33 S. W. 806. And this will include interest on coupons maturing before judgment. City of Winona v. Minnesota Ry. Const. Co., 29 Minn. 68, 11 N. W. 228. If it is payable in cotton or grain, the value of the merchandise is the measure of damages. Bell v. G. Ober & Sons Co., 96 Ga. 214, 23 S. E. 7; Canadian Bank of Commerce v. McCrea, 106 Ill. 281. And see § 1684, supra.

571 McPeters v. Phillips, 46 Ala. 496; Callahan v. Brown, 31 Iowa, 333; Western R. Co. v. Bayne, 75 N. Y. 1, affirming 11 Hun (N. Y.) 166. "The defendant has the right to show in reduction the fact of payment in whole or in part, the inability of the makers to pay wholly or partially, a release of the makers from their undertaking, the invalidity of the note, or other matter which will legitimately affect and diminish its value." Booth v. Powers, 56 N. Y. 22, reversing 59 Barb. (N. Y.) 331.

Folger, J., in

is outlawed, the damages recoverable for the conversion will amount to the face of the note, unless the statute of limitations is set up by the defendant.572

374

A collection agent is liable for negligence to the amount of the note and interest, where it has become worthless by the maker's failure.573 But the actual value of the note at the time of the negli gence is the measure of his liability. If he neglects to present a bill properly for acceptance, he will be liable prima facie for the amount of the bill, but evidence is admissible in mitigation of damages. So, in an action for damages against a notary, the amount of the note is recoverable, but not the costs incurred by the holder in an unsuccessful suit against the indorser, who was discharged by the notary's negligence.576

575

578

Where suit is brought against an assignor for the fraudulent assignment of a note which had been already paid, the assignee may recover prima facie the amount due on the note, or he may bring suit for the original consideration paid by him.577 If suit is brought against a pledgee who sells collateral without authority, the damages recoverable will be the value of the collateral, and this is presumptively its face value." So, if an accommodation note is fraudulently diverted by the payee, and discounted to a bona fide holder, and paid to him by the maker, the maker may recover the whole face value from the payee on the strength of his liability alone, without alleging its payment.579 And, if suit is brought for the nonperformance of a contract to sell a note, the value of the note at the time fixed for its delivery will be the measure of damages.

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580

Merchants' State Bank v. State

574 Mitchell v. Shuert, 16 Mich. 444; West v. Bank, 54 Minn. 466, 56 N. W. 54; Povall v. Manufacturing Co., 59 Hun, 70, 12 N. Y. Supp. 653; Fox v. Bank, 73 Iowa, 649, 35 N. W. 688.

575 Allen v. Suydam, 20 Wend. (N. Y.) 321.

576 Downer v. Bank, 6 Hill (N. Y.) 648.

577 Neff v. Clufe, 12 Barb. (N. Y.) 469.
578 Hazzard v. Duke, 64 Ind. 220.
579 Decker v. Mathews, 12 N. Y. 313.
580 Smith v. Dunlap, 12 Ill. 184.

Damages-In What Currency.

§ 1733. Where a bill is payable in foreign money, its value is determined by the rate of exchange at the time of trial.581 The value of a bill payable in the United States in pounds sterling is at the rate fixed by act of congress. 582

But, where a note is for "dollars," it will be presumed that legal dollars are intended, and judgment will be rendered for the face of the note, without inquiry as to the value of the currency intended.583 If, however, it is payable "in legal-tender greenback money,” with a provision that, if it depreciates, it is to be made good at a definite rate named, judgment will be recovered "for the amount in currency which the plaintiff elected to receive.” 584 If a note is payable expressly in a depreciated currency, the damages recoverable will be the value of such currency at the time of making the note.585 Thus, the value of a note for "$125 Texas money at current price in New Orleans" may be fixed by the jury on parol evidence.58 So, where a bill is payable in "current bank notes," the damages recoverable will be the value of such notes.587 If "in Georgia or Alabama bank notes," the maker will be liable for the value of such notes as it is most for his interest to pay.58 If in commercial paper of a certain character, the damages will be the value of such paper at the time it should have been given.589 But a condition that a note may

581 Lee v. Wilcocks, 5 Serg. & R. (Pa.) 48.

582 Cary v. Courtenay, 103 Mass. 316.

583 Petty v. Fleishel, 31 Tex. 169. So, where the promise is to pay "in the currency then in circulation an amount equivalent to $ of the currency now in circulation, as it is valued at this date." Whitaker v. Dye, 56 Ga. 380. As to the amount of damages under the United States legal tender act, where the paper is payable in gold or gold coin, see § 98, supra.

584 Ledford v. Smith, 6 Bush (Ky.) 129.

585 Walker v. Meek, 12 Smedes & M. (Miss.) 495; Farwell v. Kennett, 7 Mo. 595; Chevallier v. Buford, 1 Tex. 503.

586 Roberts v. Short, 1 Tex. 373.

587 McDowell v. Keller, 4 Cold. (Tenn.) 258; Coffin v. Hill, 1 Heisk. (Tenn.) 385; Moore v. Gooch, 6 Heisk. (Tenn.) 104; Hopson v. Fountain, 5 Humph. (Tenn.) 140; Jones v. Kincaid, 5 Lea (Tenn.) 677.

588 Hixon v. Hixon, 7 Humph. (Tenn.) 33.

589 Robinson v. Noble, 8 Pet. (U. S.) 181.

be paid in notes of solvent makers relates to, and expires at the time of, its maturity; and suit may be brought for the amount of the note in cash.590

Notes Payable in Property.

§ 1734. If a note is payable in bank stock, no action will lie for damages in money without proof of a demand and refusal to pay according to its terms.591 If it is payable in cotton or other property at a certain price, it has been held that the market value of the cotton at the maturity of the note may be recovered.592 And it is provided by statute in Georgia that, where a note for goods is not punctually paid, the holder may recover the value of the goods at the time and place fixed for payment.593 And in Texas the holder of a note payable in cotton may recover as damages the highest market value between the maturity of the note and the time of trial.59 But if a note is for a certain sum, payable in goods designated, the measure of damages will be the sum named, and not the value of the goods. 595 A distinction has been made, that if a note is payable, at the holder's election, in certain goods or money, the debt and interest are the sum recoverable, but, if it is payable in certain goods, the value of the goods, with interest, is the measure of damages. 59*

Confederate "Scaling Acts."

§ 1735. After the war, many of the Southern states enacted statutes defining and reducing the amount recoverable on contracts made in contemplation of a depreciated currency.597 In some states the

590 Mason v. Toner, 6 Ind. 328; Grant v. Burleson, 38 Tex. 214. 591 Markley v. Rhodes, 59 Iowa, 57, 12 N. W. 775.

592 Whitsett v. Forehand, 79 N. C. 230; Read v. Sturtevant, 40 Vt. 521; Price v. Justrobe, Harp. (S. C.) 111; Cockrell v. Warner, 14 Ark. 345; Johnson v. Dooley (Ark.) 44 S. W. 1032; Clark v. Minor, 73 Ga. 590.

593 GEORGIA (Code, § 3677).

594 Brasher v. Davidson, 31 Tex. 190.

595 2 Edw. Bills & N. § 1015; Pinney v. Gleason, 5 Wend. (N. Y.) 393.

596 Cleveland & P. R. Co. v. Kelley, 5 Ohio St. 180.

597 In ALABAMA it was provided that parol evidence should be admissible on contracts made between September 1, 1861, and May 1, 1865, to prove the consideration and intention of the parties to receive payment in Confed

amount recoverable under these statutes is left largely in discretion of the jury. 598 These statutes, although held to be constitutional,599

erate currency, and, if so, "to show the real or true value of the consideration, * and what amount the plaintiff is justly and equitably entitled to recover" (Ordc. p. 55, § 3, affirmed 1867, Rev. Code, § 11, and repealed 1876. Code, p. 188, § 10); in ARKANSAS, that, on "any contract for the payment of money which was intended, and understood or agreed," should be paid in Confederate currency, the plaintiff should recover in United States legal tender only the value of such Confederate money, "as estimated in the community at the time and place of making the contract," with interest, and. if such intention did not appear on the paper, it might be specially pleaded and proved by parol evidence (Laws 1867, p. 195); in GEORGIA, that on contracts made before June 1, 1865, the parties may prove the consideration, "the amount and value of the property owned by the debtor at the time the debt was contracted, upon the faith of which property credit was given him, the tender made by him, if any, and the loss consequent upon its refusal, the jury having power to reduce the amount according to the equities of each case, and render such verdicts as to them shall appear just and equitable" (Laws 1868, p. 148); in NORTH CAROLINA, by ordinance of 1865, that "all executory contracts solvable in money made after the depreciation of said currency before May 1, 1865, and yet unfulfilled (except official and penal bonds), shall be deemed to have been made with the understanding that they were solvable in money of the value of said currency," subject to evidence to the contrary; and by Act 1866, c. 38, that in actions for debts contracted during the war, "in which the nature of the obligation is not set forth, nor the value of the property for which such debts were contracted is stated," either party may show what was the consideration, and the jury "shall take the same into consideration and determine the value of said contract in present currency in the particular locality in which it is to be performed." And see, for scale of depreciation, Code, § 2495. The ordinance of 1865 applies to a demand note. Stokes v. Cowles, 70 N. C. 124. In VIRGINIA, on contracts made between June 1, 1862, and April 10, 1865, either party might show by parol evidence "what was the true understanding and agreement in respect to the kind of currency in which the same was to be fulfilled, or with reference to which, as a standard of value, it was made," without special plea, and, if Confederate currency was referred to, the nominal amount should be reduced "to its true value" at the time it was made, "or at such other time as may to the court seem right in the particular case" (Laws 1865, p. 184). So, in WEST VIRGINIA, as to contracts between May 1, 1861, and May 1, 1865 (Laws 1873, p. 307).

598 Cherry v. Rawson, 49 Ga. 228; Moses v. Trice, 21 Grat. (Va.) 556; Cherry v. Walker, 36 Ga. 327.

599 Holt v. Patterson, 74 N. C. 650; Robeson v. Brown, 63 N. C. 554: Rut

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