The Merchants' Bank of New York against Spalding, 1 Seld. Notes 172

The circulation of the bills or notes of the banks of other states, of a less denomination than five dollars, is illegal in this state.

A note was made by a citizen of New Jersey, payable at a bank in that state, discounted by such bank for the maker, the amount paid to him in notes of the bank of a less denomination than five dollars, and sent by him to the indorser of the note residing in this state, to be used, and actually used here in the purchase of wheat; the officers of the bank at the time of making the discount were informed of the use intended to be made of the notes, but there was no agreement that they should be so used ; nor did it appear that the maker of the note, or the officers of the bank, were informed that the circulation of such notes was prohibited by our laws.

It was held, in an action against the indorser of the note, brought for the benefit of the foreign bank, that those facts constituted no defence, and that it was proper for the judge on the trial so to instruct the jury. Citizens of another state, making contracts in that state, to be performed there, are not chargeable with a knowledge of our laws. (S. C., 12 Barb. 302 ; 9 N. Y. 53.)