This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
If the creditor has not agreed to accept something other than money in payment of an obligation which by its terms is to be performed by the payment of money, he can not be compelled to accept anything but money in payment thereof.1
2 Knox v. Lee, 79 U. S. (12 Wall.) 457, 20 L. ed. 287; Cincinnati Northern Traction Co. v. Rosnagle, 84 O. S. 310, 35 L. B. A. (N.S.) 1030, 05 N. E. 884; Miller v. Lacy, 33 Tex. 351.
3 Mobile St. By. v. Watters, 135 Ala. 227, 33 So. 42; Cincinnati Northern Traction Co. v. Rosnagle, 84 O. S. 310, 35 L. R. A. (N.S.) 1030, 95 N. E. 884.
4 Reaper's Bank v. Willard, 24 111. 440.
5 Reaper's Bank v. Willard, 24 111. 440.
6 Fall River v. Public Service Commission, - Mass. - , 122 N. E. 406.
1 Bronson v. Bodes, 74 U. S. (7 Wall) 229, 19 L. ed. 141; Butler v. Horwitx, 74 U. S. (7 Wall.) 258, 19 L. ed. 149: Trebilcock v. Wilson, 79 U. S. (12 Wall.) 687, 20 L ed. 460; Phillips v. Dugan, 21 O. S. 466, 8 Am. Rep. 66; Dennis v. Moses, 18 Wash. 537, 40 L. R. A. 302, 52 Pac. 333.
See, Can Contracts to Pay in Specific Coin (Gold) be Enforced? by N. M. Thygeson, 30 American Law Re-view, 716.
2 Brown v. Welch, 26 Ind. 116; Shol-lenberger v. Brinton, 52 Pa. St. 9; Laughlin v. Harvey, 52 Pa. St. 30.
While a creditor is not bound in the absence of specific agreement to accept anything but legal tender in payment of an obligation which by its terms is payable in money, he may agree to accept something other than legal tender in payment of a debt;2 and if he makes a binding contract to accept such medium of payment, or if he actually accepts something other than legal tender in payment of a money debt, full effect is given to such payment.3 If the original contract provides for payment in something other than money, payment in the medium thus agreed upon is performance of the contract and is governed by the ordinary principles of performance. If, on the other hand, the contract originally provides for payment in money, and by subsequent agreement between the debtor and the creditor something other than money is accepted as performance of the contract, the transaction is rather the discharge of the original contract by a new contract,4 or by accord and satisfaction.5 A discharge of this sort is not a true case of performance or payment, since the thing which has been agreed upon has not been done; but, instead, something has been done which the parties by subsequent agreement substituted for the thing originally agreed upon.
By agreement between the debtor and the creditor, an obligation may be made payable in work and labor,6 or in property,7 such as land 8 or water rights,9 or personal property,10 such as negotiable instruments.11
1 National Sewer Pipe Co. v. Smith-Jaycox Lumber Co., 183 Ia. 17, 166 N W. 708.
2 Bartholomew v. Emerson-Branting-ham Implement Co, - Colo. - , 187 Pac. 538. See Sec. 2808 et seq.
3 Bartholomew v. Emerson-Branting-ham Implement Co., - Colo. - , 187 Pac. 538; Bernard v. Fisher, - Ida. - , 177 Pac 762.
4 See ch. LXXV.
5 See Sec. 2501 et seq.
6 Ross v. Crane, 74 la. 375, 37 N. W. 050; Allen v. Wall, 7 Wash. 316, 35 Pac. 65.
For the distinction between a contract for payment in work and labor on the one hand and peonage on the other, see Clyatt v. United States, 107 U. S. 207, 40 L. ed. 726.
7 Clyatt v. United States, 107 U. S. 207, 49 L. ed. 726; Bassett v. Shepard-son, 52 Mich. 3, 17 N. W. 217; Strong v. McConnell, 10 Vt. 231.
8 Hebard v. Reeves, 112 Mich. 175, 70 N. W. 418.
9 Bernard v. Fisher, - Ida. - , 177 Pac. 762 (payment also to be made in part in mortgages).
10 Bartholomew v. Emerson-Branting-ham Implement Co., - Colo. - , 187 Pac. 538; Bassett v. Shepardson, 52 Mich. 3, 17 N. W. 217; Strong v. McConnell, 10 Vt. 231.
11 Bartholomew v. Emerson-Branting-ham Implement Co., - Colo. - , 187 Pac. 538.