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From: leichter@yale-com.UUCP (Jerry Leichter)
Newsgroups: net.misc,net.legal
Subject: Re: Legality of refusing to accept bills greater than $20
Message-ID: <2727@yale-com.UUCP>
Date: Mon, 16-Jan-84 16:45:31 EST
Article-I.D.: yale-com.2727
Posted: Mon Jan 16 16:45:31 1984
Date-Received: Wed, 18-Jan-84 01:21:47 EST
References: utcsrgv.3064
Lines: 95

As explained to me by a lawyer friend, the situation can be viewed a little
differently from the way Dave described it.

The actual full description of "legal tender" bills is "this bill is legal
tender for all debts, public and private".  That is:  If I owe you money,
and offer you a $100 bill, you must accept it as a valid attempt to pay the
debt.  If you DON'T accept it, you are denying the existence of a debt, and
I no longer owe you the money.  A check is NOT legal tender:  You are per-
fectly within your rights to refuse to accept the check, and say "No, you
still owe me the money, and I want it in legal tender".  (There is an
intermediate case, which has no specific statutory meaning, but is understood
within the legal/business community:  "Good funds" are funds "almost as good
as cash" - for example, a certified check is usually "good funds" (assuming
the certifying bank is trustworthy!))

Refusing to accept legal tender for a debt is not a crime; it simply cancels
the debt.  After you refuse to accept my $100 bill, you are still out the
money; if you take me to court, and I can show that you refused the legal
tender, the court will refuse to act to collect for you.  (You can argue
about whether the debt "still exists" in some abstract sense, but in practice
it doesn't; the courts won't collect it for you, and if you try and collect
it yourself by taking my car, you will be found guilty of theft.)

To cast the bookstore case in a similar light, what you should do is take
your $90 of books to the counter and offer your $100 bill.  When the clerk
refuses to accept it, simply walk out of the store.  He will call the police,
you will be arrested, and eventually you will argue in court that you didn't
steal anything:  The store offered the books to the public for sale; you took
them up on their offer, incurring a debt; you offered to settle the debt with
legal tender, but they refused; ergo, the debt was disolved and the books
are yours.  The prosecuter, if it's a criminal case, or the lawyer for the
store, if it's a civil case trying to get the books and/or damages from you,
will present Dave's argument:  The store, in posting the sign, limited the
offer of a contract to sell books to those willing to present small bills.
Since you are not in that class, your appropriation of the books did not
create a contract between you and the store, and was simply theft.
(Notice that, if the store wins the civil case, they CANNOT at this point
refuse payment in $100 bills! - any money you owe them as a result of the
case is just an ordinary debt.)

Who prevails?  Who knows?  Most law is based on precedent, not statute; you'd
have to search for a similar case in the past to see what the courts had
done.  It is quite possible that you would find no precedent; on the other
hand, various organizations have been making restrictions like this for
years.  For example, many bus lines require exact change.  This situation
is a little different, however:  You have to pay BEFORE you are allowed on
the bus, so the bus company can probably make a very strong argument that
no debt exists, it's just a matter of non-creation of a contract.  (In
Boston, where you sometimes pay part of your fare when you get on the
bus or trolley and part when you get off, you might conceivably get dif-
ferent results depending on when you tried to pay in non-exact change!)

If there is no precedent, the argument is likely to come down to one of
rational public policy.  My (the $100 bill tender's) argument is that
Congress has made public policy on this issue quite clear by creating
the entire concept of legal tender:  There is a need for SOMETHING to be
the final unit of measure for all debts, since otherwise arguments about
payment will go on indefinitely.  Further, Congress has been quite explicit
in making cash that final measure (except for pennies and nickels in quanti-
ties worth more than $5, BTW).  Your counter-argument, of course, is that
it is absurd to require merchants to accept the whole risk of dealing with
counterfeit money.  Suppose someone insists on paying for a newspaper with
a $1000 bill?  Will you require every newstand to be able to give change
for such a bill?  (Fortunately, there are no longer any larger bills in
circulation!)

Counterfeiting in general raises typical "damned if you do, damned if you
don't" situations.  In general, if you accept a counterfeit bill, you are
stuck with it, unless you can prove a particular person gave it to you -
in which case they now owe you the value of that bill.  You can carry
insurance against such eventualities, but otherwise no one will reimburse
you for the fake $100 found in your day's receipts.  Hence, you will
probably want to be very careful about what you are willing to accept.
The problem is, if people become TOO picky, commerce breaks down entirely,
because money becomes unspendable...obviously not a desired result.

BTW, be VERY careful about accusing someone of giving you a bad bill.  If
you turn out to be wrong, he will be able to sue you for slander to credit
and other wrongs, and, especially if anyone else heard your accusation -
but even if it just interfered with his getting his business done - he
is likely to win a big judgement.

Just for interest's sake, here is the one case on this sort of issue I've
ever heard of:  X sued Y for something or other, and one a judgement for
(say) $1000.  Y was very pissed, and payed the amount in dimes dropped into
a barrel of mollasses [sp?].  Held:  This was not a good-faith tender of
the amount owed.  (This is a real case...there is no thing so crazy that
it hasn't come up sometime in the history of the common law.)  Y had to
try again, and may have had to pay an additional penalty (most likely,
but I don't remember for certain).

If anyone would like to make a test case out of these policies...well, I'd
love to learn the results.
							-- Jerry
					decvax!yale-comix!leichter leichter@yale