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DECISIONS OF THE SUPREME COURT. OFFICIAL. Opinions of the Supreme Court of the State of Tennessee, at Jackson, April Term, 1859. G.G. Ware vs. Jas. A. Street & Co Street Co. commenced snit by warrant before a Justice of the Peace against Ware on an account of $191.00. for merchandize. The only controversy was upon a payment of $100.00 upon the 12th of July, 1858. This is not disputed. but it is insisted, that should not have been allowed, because the payment was made in notes upon the Citizens' Bank, which suspended on the next day, and the notes became worthless. The proof is not sufficient to fix upon Ware any knowledge that the Bank was broke. or that it had suspended, or was about to suspend. He lived forty miles from Memphis, and it is not probable that he knew as much about the condition of the Banks as the plaintiffs, who are mercharts in that city. The facts relied upon to fasten knowledge upon him. are not at all sufficient for that purpose; and so the question of fraud is out of the case. The proof shows that the Bank did business on that day, to the close, and did not suspend until the next day. It seems by the evidence of the Clerk that it was resolved upon that evening, but not made known. The payment in question was made by the agent and son-in-law of the defendent late in the evening of the 12th, and a receipt taken. The plaiatiffs made demand at the B nk in Memphis next day and notified the defendant hat the payment should the not stand, and the credit was cancelled upon books. The notes were tendered in a few days to the defendant, and he refused to receive them, but insisted upon the credit, The loss must fall upon one of two innocent men, and the law must control it. At the time the payment was made, the notes were circulating as eurreney, and considered good by the community. But they were, in fact, of no value, at the hour they were paid out, although a few hours before they were convertible into specie. A payment in genuine bank notes, supposed by both parties to be good. though in fact worthless, will be binding, and the loss must fall upon the receiver, in the absence of fraud. It is otherwise, if the not genuine not what they purport to be-so. be payment in forged or counterfeit paper would void, and have no effect as a credit or payment for property or pre-existing debts. But, it is contended, that by the same case, a payment good under the above rule, may be avoided, by presenting them to the Bank where they are payable, and a refusal to pay with notice to the person from whom they were received. But even if that were the law, the Court erred in relation to the proper ip for the demand. The notes were payable at the branch of the Citizens' Bank. at Knoxville, but were presented at the at The charge made this Memphis. they principal sufficient, Bank and that was fatal to the defendant, by avoiding the pay ment. To this the defendant excepts, as error. We have heretofore held. in a recent reported ease, that where a demand purpose is necessary, it must be made at the place where the notes, upon their face, are made payable. So there was no legal demand here. and the payment was binding upon the parties, on the principle first stated. This is decisive of the case, and other objections might not be noticed. But another error exists in the charge equally fatal to the case, and is one of practical importance, and perhaps. ought now to he decided as it fairly arises. That is, as to the effect cirof a payment made in bank-notes, under the cumstances stated. His Honor, in his charge, adopted the arbiter dietum of the Court, in the case of Suggs vs. Goss, 8 Yer. 175, and placed a payment in bank-notes, upon the same ground as ordinary promissory notes or bille, so that recourse could be of had upon them, OF the payment avoided in case presentation, and refusal to pay, &e We think such is not the law; but that a-payment without fraud, in bank-notes, circulating and re- received as money, cannot be avoided by demand, fusal and notice, or tender to the payor. It would be most unreasonable and inconvenient, hold otherwise. The supposed commercial interest to of our country, and the general convenience of the people, have produced 26 course of legisla tion, by which, bank-paper has become the circulat- of ing medium, and the standard of value, instead specie. True, it has net been made a lawful tender, and cannot be without a change of the Constitution. But, by almost universal consent, it has become of the medium of exchange, and the representative of property. It has taken the place of the precious and is regarded as money. This, however, is by consent, and not by law. No man is bound to receive it in payment of debts. or for property. But if it gets into his hands by consent, and R loss comes by the failure of the Bank, the misfortune must and should be his, risk in whose must hands it happens to be at the time. The follow the and not the former owners. It from hand to hand, without recourse, of fraud or concealment, passes in case paper, as before explained. avoided. except Upon no other ground can the payment be The Judgment must be reversed, and a new trial laid awarded, when the law will be charged, CARUTJERJ. as down in this opinion. Test M. D. WELCH, Cleak.
