Bank of the United States v. Bank of Georgia
23 U.S. 333 (1825)

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U.S. Supreme Court

Bank of the United States v. Bank of Georgia, 23 U.S. 10 Wheat. 333 333 (1825)

Bank of the United States v. Bank of Georgia

23 U.S. (10 Wheat.) 333

Syllabus

In general, a payment received in forged paper or in any base coin is not good, and if there be no negligence in the party, he may recover back the consideration paid for them or sue upon his original demand.

But this principle does not apply to a payment made bona fide to a bank in its own notes which are received as cash and afterwards discovered to be forged.

Effect of acceptances where the handwriting of the drawer has been forged.

Bank notes are a part of the currency of the country; they pass as money, and are a good tender unless specially objected to.

In case of such a payment upon general account, an action may be maintained by the party paying the notes if there is a balance due him from the bank upon their general account, either upon an insimul computassent or as for money had and received.

This was an action of assumpsit brought by the plaintiffs in error, the President, &c., of the Bank of the United States, against the defendants in error, the President, &c., of the Bank of the State of Georgia, in which the plaintiffs declared for the balance of an account stated and for money had and received to their use. At the trial, the plaintiffs offered evidence to prove, that mutual dealings existed between the parties in the course of which, each being in the receipt of the bills of the other, they mutually paid in or deposited the bills of the other party at intervals as

Page 23 U. S. 334

each found the bills of the other party had accumulated to any considerable amount in their respective vaults, and upon each of such payments or deposits the amount thereof was entered as so much "cash" in the customer's book of the party depositing, by the proper officer of the bank receiving the same, from which said book of the plaintiffs, which was given in evidence, it appeared that the sum of $6,900 was the balance due from the defendants to the plaintiffs at the time of instituting this action. The plaintiffs also offered evidence that the transactions between the parties were almost exclusively in the deposits of their respective bills as aforesaid. And the defendants, to maintain their said defense, offered evidence to prove that in one of the said deposits so made by the plaintiffs in the bank of the defendants and so entered in the said book of the plaintiffs by the proper officer of the defendants at the time the said deposit was made, to-wit, on 25 February, 1819, and which is one of the items comprised in the account upon which the balance was claimed by the plaintiffs, there were paid in 38 bills of the defendants' own issues or notes, of $5 each, which had been fraudulently altered by some person or persons unknown, from the denomination of $5 to that of $50; and 40 bills of the defendants' own issues or notes of $10 each which had in like manner been fraudulently altered by some person or persons unknown to that of hundreds, making together the sum of $5,900 demanded by the plaintiffs

Page 23 U. S. 335

in this action, which said bills or notes had been subsequently tendered by the defendants to the plaintiffs before the institution of this action and by the plaintiffs refused. The plaintiffs then offered evidence to prove that no notice or intimation of the said fraudulent alteration aforesaid was given by the defendants to the plaintiffs until 16 March, 1819, and that the tender to return the said altered notes to the plaintiffs by the defendants was not made until 17 March, 1819, nineteen days after the receipt of the said notes by the defendants from the plaintiffs and the entry of the same in the customer's book of the plaintiffs. The defendants further offered evidence to prove that the said altered bills, so deposited by the plaintiffs and received by the defendants, had been received by the plaintiffs from the Planters' and Merchants' Bank of Huntsville, concerning which notes a correspondence had taken place between the plaintiffs and the said Planters' and Merchants' Bank of Huntsville, subsequently to the detection of the said fraudulent alteration, in the following words and figures, to-wit:

"OFFICE BANK U. STATES"

"Savannah, 17 March, 1819"

"EDWARD RAWLINS, Esq., Cashier P. and Merchants' Bank of Huntsville."

"SIR -- Upon a more minute investigation of the bills received last month from Mr. Hobson, of your bank, it turns out that 40 of the $100 notes of the state bank of this place were altered

Page 23 U. S. 336

from $10, and 58 of the $50 notes of the same bank were altered from $5 dollar, producing against us a difference in the $100 notes of $3,600, and in the $50, $2,610, making the whole difference $6,210. By the person which we shall in a few days send to your place, as heretofore intimated, we will forward these altered bills for the purpose of getting you to exchange them for other money."

"ELEAZAR EARLY, Cashier"

"P.S. Herein I enclose for your future security the official notice of the Banks of Georgia pointing out the difference between the genuine and altered bills."

"E. E., Cashier"

"OFFICE BANK U. STATES"

"Savannah, 25 March, 1818"

"LE ROY POPE, Esq."

"President bank Huntsville"

"SIR -- Will you suffer me to introduce to your acquaintance and kindness, the bearer, Mr. Heinemann, our teller, whose objects have already been imparted to you in my letters of 23 February, and 13 inst. (copies in Mr. H.'s possession) and which we doubt not will receive every facility from your institution. Mr. Heinemann is also instructed to lay before you formal notice of a claim which we shall make on your bank for the spurious notes received from Mr. Hobson in the event of our being cast in the suit about to be brought between the Bank of Georgia and ourselves

Page 23 U. S. 337

in the case. It has been deemed a better course than that proposed in our cashier's letter to Mr. Rawlins, your cashier, of 17 inst. and will, no doubt, be more agreeable to you,"

"Your obedient servant,"

"R. RICHARDSON, President"

"PLANTERS AND MERCHANTS' BANK OF HUNTSVILLE"

"4 May, 1819"

"SIR -- Your favor under date of the 25th, has been handed me by Mr. Heinemann, wherein you give me notice that your bank holds this institution bound to make good the amount of the spurious notes which you say was received from Mr. Hobson in the event of your being cast in a suit about to be brought between the Bank of Georgia and yourselves. I am directed by the board of directors to state to you that they highly approve of the course your bank has adopted in regard to these spurious notes, and we shall cheerfully acquiesce with the decision of the court, let that be what it may."

"I am, respectfully,"

"Your obedient servant,"

"LE ROY POPE, President"

"R. RICHARDSON, Esq."

"President, Office Bank United States, Savannah."

And the plaintiffs further offered evidence to prove that the officers of the defendants, at the time of receiving the said altered notes, had in their possession a certain book, called the bank

Page 23 U. S. 338

note register of the said Bank of the State of Georgia, wherein were registered and recorded the date, number, letter, amount, and payees' name, of all the notes ever issued by the said bank, by means of which, and by reference whereto, the forgeries or alterations aforesaid could have been promptly and satisfactorily detected, and further that so far as related to the said notes purporting to be the notes of $100, all the genuine notes of the defendants of that amount in circulation on the said 25 February, 1819, were marked with the letter A., whereas twenty-three of the notes of $100 each so received by the defendants as genuine notes when in fact they were altered notes bore the letters B., C. or D.

And the defendants further offered evidence to prove that the alteration in the said notes consisted in extracting the ink of certain printed figures and words which expressed the amount of said notes and substituting therefor other printed figures and words, the signatures and every other part of said notes remaining unaltered. Whereupon, the parties having offered the above evidence, the plaintiffs prayed the court

1. To instruct the jury that if it believed the said evidence, the said plaintiffs were entitled to recover of the said defendants the whole sum of $6,900, being the balance so exhibited by their customer's book aforesaid, and as due from the said defendants to the said plaintiffs, which instruction the judges aforesaid, being divided

Page 23 U. S. 339

in opinion, refused to give, and the counsel for the plaintiffs excepted to the refusal.

2. The plaintiffs prayed the court to instruct the jury that if it believed the evidence so given, the plaintiffs were entitled to recover of the defendants the sum of $690, being the original value of the altered notes, which instruction the said judges, being divided in opinion, did not give, to which refusal the said counsel for the plaintiffs excepted.

3. The plaintiffs prayed the court to instruct the jury that if it believed the evidence so given, the plaintiffs were entitled to recover of the defendants the whole sum of $6,900, being the balance so exhibited by their customer's book aforesaid as due from the defendants to the plaintiffs, with legal interest thereon from the day of instituting their action aforesaid, which instruction the judges aforesaid, being divided in opinion, refused to give, to which refusal the counsel for the plaintiffs excepted.

Judgment being rendered upon this bill of exceptions for the defendants in the court below, the cause was brought by writ of error to this Court.

It was insisted, on the part of the plaintiffs that the judgment ought to be reversed, on the following grounds:

1. That what took place on 25 February, 1819, between the parties was not only equivalent to payment, but was payment itself, and the defendants are in all respects to be considered

Page 23 U. S. 340

as if they were suing to recover back the money.

2. That if understood only as an acceptance or agreement to pay, the principle would still be the same.

3. That in either case, the plaintiffs were entitled to recover.

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