Originally Posted by
LearnTheLaw
maybe this will shed a little more light on the matter?
Westfall vs. Braley, 10 Ohio 188, 75 Am. Dec. 509:
“Bank notes are the representative of money, and circulate as such,
only by the general consent and usage of the community. But this
consent and usage are based upon the convertibility of such notes
into coin, at the pleasure of the holder, upon their presentation to
the bank for redemption. This is the vital principle which sustains
their character as money. So long as they are in fact what they
purport to be, payable on demand, common consent gives them the
ordinary attributes of money. But upon failure of the bank by which
they are issued, when its doors are closed, and its inability to
redeem its bills is openly avowed, they instantly lose the character of money,
their circulation as currency ceases with the usage and consent upon
which it rested, and the notes become the mere dishonored and
depreciated evidences of debt . . . It is only upon this idea that they
can honestly be tendered as money, and when accepted as such,
under the same supposition, the mutual mistake of facts should no
more be permitted to benefit one party, or prejudice the other, than
if the notes had been spurious, or payment had been made in base
or adulterated coin."