■2 kf Me.a.usSiSs*'"™" 1 *"' Digest of national bank decisions / 3 1924 018 830 194 fyxmll 8tate**Ug ptatg THE GIFT OF S.r...SA»«^f^.,..4>/...-^ AA9&^&* q./i>A.. 4534 ^TeTaTe shows when this volume was taken. HOME USE RULES. Books not needed for instruction or re- search are returnable within 4 weeks. Volumes of periodi- cals and of pamphlets are held in the library as much as possible. For special purposes they are given out for a limited time. Borrowers should not use their library privileges for the bene- fit of other perpons. Books not needed during recess periods should be returned to the library, or arrange- ments made for their return during 'borrow- er's absence, if wanted. Books needed by more than one person are held on the reserve list. Books of special value and gift books, when the giver' wishes it, are not allowed to circulate. GJnnwll IGaui ^rfyool library Cornell University Library The original of this book is in the Cornell University Library. There are no known copyright restrictions in the United States on the use of the text. http://www.archive.org/details/cu31 92401 88301 94 Treasury Department, Document No. 2404. Comptroller of the Currency. CONTENTS. Page Accommodation paper 5 Actions (cross references only) . . 11 Agent of shareholders 12 Appeal 14 Assessment. (See Shareholders. ) Attachment 20 Bonds, purchase of. (See Pow- ers.) Bonds of officers. (See Officers.) Books, inspection of (cross refer- ences only) 36 Branch banks. . . . 26 Brokers. (See Powers. ) Capital stock 27 Cashier. (See Officers.) Certificate of deposit, (\ee De- posits.) Certification of checks. (See Checks.) Checks 40 Circulation 74 Clearing house 76 Collateral securities - 77 Collections 86 Comptroller of Currency (cross references only) . 114 Constitutionality 114 Construction of law 116 Conversion of State banks. (See Organization.) Corporate existence. (See Or- ganization.) Creditor's bill against sharehold- ers. (See Shareholders. ) Deposits ... 118 Deputy Comptroller 145 Directors. (See Officers.) District attorney 146 Dividends(crossreferencesonly) . 146 Drafts. (See Checks.) Enforcement of payment of capi- tal stock. (See Capital stock.) Estoppel 147 Evidence 151 Execution _• 163 False entries. (See Officers, crim- inal liability of. ) Forfeiture of charter 163 Forged or altered paper _ 164 Guaranty 173 Impairment of capital stock. (See Capital stock.) Increase of capital stock. (See Capital stock.) Table of cases Abbreviations Page. Indictment. (See Officers, crimi- nal liability of.) Injunction 176 Insolvency and receivers 177 Interest and usury 217 Jurisdiction 244 Lease 256 Liability of bank (cross references only). 257 Lien 358 Limitation of actions . . . 262 Liquidation 364 Loans 268 Mandamus 272 Married women 274 Mortgage - 274 Negotiable paper _ 280 Notary public 293 Notice _ _ 293 Officers ., 302 Officers, civil liability of 335 Officers, criminal liability of ... 349 Offsets 386 Organization 397 Pass books 407 Place of business. (See Organi- zation.) Pleading and practice 407 Powers 412 Preferences 438 President. (See Officers.) Protest (cross references only) . - 442 Real estate 1 442 Receivers. (See Insolvency and receivers.) Rediscount (cross references only).._ 443 Reduction of capital stock. (See Capital stock.) Report of condition . . .". 443 Residence 1 444 Savings banks (cross references only) _.. 444 Shareholders _ 444 Signature and seal 499 Special deposits. (See Deposits.) Taxation 499 Transfer of stock. (See Share- holders.) Trusts .-- 534 Ultra vires. (See Powers.) Usury. (See Interest and usury.) Vice-president. (See Officers.) Voting. (See Shareholders.) 549 605 DIGEST OF NATIONAL BANK DECISIONS. ACCOMMODATION PAPER. Page. National bank as indorsee, guarantor, ob surety on commercial paper solely for accommodation : Accommodation indorser 5 Accommodation guarantor 5 Accommodation drafts ._ 6 Accommodation surety ._ _ 6 Rights of holders op accommodation paper op national banks: Holders with notice 7 Holders without notice 7 When bank may recover on accommodation paper 7 Miscellaneous 10 national bank as indorsee, guarantor, or surety on commercial paper solely for accommodation. Accommodation indorser. 1. A national bank can not become an accommodation indorser. (U. S. C. C, 1893) Nat. Bank of Commerce v. Atkinson, 55 Fed. Rep., 465 ; (U. S. C. C.) Seligman v. Charlottesville Nat. Bank, 3 Hughes, U. S., 647 ; s ' (Mich., 1890) Knickerbocker v. Wilcox, 83 Mich., 200; (Nebr., 1894) Thomas v. City National Bank, 40 Nebr., 501 ; 46 Nebr. (1896), 861; (N. Y., 1880) National Bank of Gloversville v. Wells, 79 N. T., 499, reversing National Bank of Gloversville v. Wells, 15 Hun, 51 (N. Y., 1878). Accommodation guarantor. 2 (U. S. Sup. Ct, 1879). The national bank act gives every bank the powers of " discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt." To hand over with an indorsement or guaranty is one of the commonest modes of trans- ferring the securities named. Held, that the bank was not prohib- ited by law from guaranteeing the payment of the note. (People's Bank v. National Bank, 101 U. S., 181.) 3 (U. S. C. C. A., 1899). An agreement "by a national bank to guarantee the payment of the debt of a third party, solely for his benefit, is ultra vires. A corporation is estopped to contend that its contract was ultra vires only when it seeks to retain unjustly the fruits of the contract which has been performed by the other party. (Bowen ?;. Needles Nat. Bank, 94 Fed. Rep., 925.) 4 (U. S. C. O.). A national bank, upon the deposit of collateral security with it, has no power to guarantee the obligation of the person mak- ing such deposits. (Seligman v. Charlottesville National Bank, 3 Hughes, U. S., 647.) 5 (U. S. C. C, 1893). Revised Statutes, section 5136, empowers a national bank to " exercise, by its board of directors or duly authorized officers or agents, subject to law, all such incidental powers as shall be neces- sary to carry on the business of banking, by discounting and negoti- ating promissory notes, drafts, * * * and other evidences of debt ; b DIGEST OF NATIONAL, BANK DECISIONS. ACCOMMODATION PAPER— Continued. NATIONAL BANK AS INDOKSEB, GUAEANTOE, ETC. Continued. * * * by loaning money on personal security," etc. Held, that the cashier of a national bank has no power to bind it to pay the draft of a third person on one of its customers, to be drawn at a future day, when it expects to have a deposit from him sufficient to cover it, and no action lies against the bank for its refusal to pay such a draft. (Flannagan et al. v. California Nat. Bank et al., 56 Fed. Kep., 959.) 6 (U. S. C. C. A., 1899). It is ultra vires on the part of a national bank to guarantee checks drawn on it by one having no funds deposited with the bank. (Bowen v. Needles Nat. Bank et al., 94 Fed. Kep., 925.) 7 (U. S. C. C. A., 1897). The act of Congress authorizing the organization of national banks confers upon them no authority, either in express terms or by implication, to guarantee the payment of debts contracted by a third person, and solely for his benefit; and acts of this nature, whether executed by the cashier or the board of directors, are nec- essarily ultra vires. (Commercial National Bank et al. v. Pirie et al., 82 Fed Rep., 799.) 8 (U. S. C. C. A., 1897). The presentation by a merchant seeking to pur- chase goods of a written guaranty, by a national bank, of payment for any goods he may purchase, even if it implies a representation that the bank is financially sound, Is not of itself a fraudulent representa- tion, such as will justify a rescission, since the seller is chargeable with knowledge that in law such a guaranty by a national bank is ultra vires and void. (lb.) 9 (U. S. C. C. A., 1899). A national bank has no power to lend its credit to any person or corporation, or to become guarantor of the obliga- tions of another, except in the case of the transfer of promissory notes discounted, which is in the ordinary course of banking (Bowen v Needles National Bank, 94 Fed. Rep., 925.) 10 (Minn., 1898). The unanimous consent of all the stockholders of a national bank is required to bind it on an accommodation guaranty. (Ft. Dearborn Nat. Bank v. Seymour, 73 N. W. R., 724.) 11 (N. H., 1882). While a national bank has no power to guarantee a con- tract between third persons yet it can not repudiate the contract and retain its fruits. (Norton v. Derry Nat. Bank, 61 N. H., 589.) Accommodation drafts. 12 (U. S. C. C). A national bank has no power to make accommodation drafts for a customer to be used by him as collateral security. (Johnson v. Charlottesville National Bank, 3 Hughes, IT. S., 657.) 13 (Mo. Sup., 1903). Under Revised Statutes, section 5136, prescribing the powers of national banks, such a bank has no power to bind itself that a draft drawn on its customer will be paid, and when sued on such contract, it can plead ultra vires. (First Nat. Bank of Moscow Idaho, v. American Nat. Bank of Kansas City, 5 B. C. 462 • 72 S W Rep., 1059.) V ' 14 (Ohio, 1899). Where a bank guaranteed the payment of a draft solely for the accommodation of a customer, it was not liable on its con- tract of guaranty, it being against public policy for a bank to become an accommodation party to drafts. (Nat. Bank of Barnwell v. Citv •Hall Bank, 9 Ohio S. and C. P. Dec, 827.) Accommodation surety. 15 (U. S. C. C, 1897). A contract by a national bank to indemnify one for loss incurred as surety on an attachment bond is not void on the ground of public policy, the loss having occurred, though the bond is not given for the benefit of the bank. (Seeber v. CommeBcial Nat Bank of Ogden, 77 Fed. Rep., 957.) 16 (Ky., 1899). With the exception of trust and surety companies as a general rule, no corporation has the power to become surety for another. (M. V. Monarch Co. et al. v. Farmers and Drovers' Bank 1 B. C, 146; Ky. court of appeals.) DIGEST OF NATIONAL BANK DECISIONS. 7 ACCOMMODATION PAPER— Continued. NATIONAL BANK AS INDOBSER, GUARANTOR, ETC. Continued. 17 (Mich., 1890). National banks have no power under the banking act to enter into contracts of suretyship in which they have no interest. (Knickerbocker v. Wilcox, 83 Mich., 200.) 18 (Nebr., 1901). A cashier of a national bank has no authority, merely by virtue of his office, to obligate the bank upon an undertaking in replevin jn a cause wherein the bank has no interest. (Sturdevant et al. v. Farmers and Merchants' Bank of Rushville et al., 4 Bank- ing Cases, 49 ; 62 Nebr., 472 ; 87 N. W. Rep., 136.) 19 (Nebr., 1901). It is not within the powers of an incorporated State bank to pledge its credit as a mere matter or accommodation by executing undertakings in judicial proceedings. (lb.) 20 (Nebr., 1901). Where an incorporated bank becomes surety in such an undertaking, no estoppel to assert want of power to incur the obliga- tion arises solely upon the ground that other parties have been mis- led, and acted in reliance thereon to their disadvantage, since the obligation was so clearly ultra vires that the parties must have known it, and taken their chances ot the corporation carrying it out. (lb.) 21 (Nebr., 1901). In such cases the corporation will be held estopped only where it has acquired money or property by means of the contract in excess of its powers, and having retained the same or the proceeds thereof, sets up want of power against the party seeking to enforce it. (lb.) BIGHTS OF HOLDERS OF ACCOMMODATION PAPER OF NATIONAL BANKS. Holders with notice. 1. The accommodation paper of a national banking association is ultra vires, and void in the hands of one who takes it with knowledge of its character. (U. S. C. C, 1898) Bowen v. Needles Nat. Bank, 87 Fed. Rep., 430; (U. S. C. C.) Johnson v. Charlottesville National Bank, 3 Hughes, U. S., 657. 2. Where a party knowingly takes as collateral security drafts of a national bank, drawn for the accommodation of a customer, he can not recover in a suit against the bank in the hands of a receiver. (U. S. C. C.) Johnson v. Charlottesville National Bank, 3 Hughes, U. S., 657 ; (U. S. C. C, 1898) Bowen v. Needles Nat. Bank, 87 Fed. Rep., 430; 1 Banking Cases, 644. 3 (U. S. C. C, 1898). Accommodation indorsements or acceptances by a national bank are ultra vires, and void in the hands of holders with notice. (Bowen v. Needles Nat. Bank, 87 Fed. Rep., 430.) Holders without notice. (U. S. C. C). A national bank's accommodation indorsement of com- mercial paper or its accommodation draft is valid in the hands of a bona fide holder. (Johnson v. Charlottesville National Bank, 3 Hughes, U. S., 657.) WHEN BANK MAT RECOVER ON ACCOMMODATION PAPER. 1. The mere knowledge on the part of the officers of the bank, when dis- counting paper, that it was drawn for accommodation, will not pre- vent the bank from recovering thereon. (U. S. Sup. Ct 1899) Israel v. Gale, 1 Banking Cases, 705; 174 U. S., 391 ; (U. S. C. C.) Molson v. Hawley, 1 Blatch., U. S., 409; (U. S. C. C, 1888) Union Bank v. Crine, 33 Fed. Rep., 809; (U. S. C. C, 1888) Armstrong v. Scott, 36 Fed. Rep., 63. 2 (U. S. C. C. A., 1898). A national bank receiver can not recover upon notes made for the accommodation and sole benefit of the bank, with- out consideration. ( Stapylton v. Teague ; same v. Anderson et al. ; same v. Carmichael, 85 Fed. Rep., 407.) DIGEST OF NATIONAL BANK DECISIONS. ACCOMMODATION PAPER— Continued. WHEN BANK MAY EBCOVEK ON ACCOMMODATION PAPEB Continued. 3 (U. S. C. C, 1895). A note given without consideration to a bank for the purpose of deceiving the Government or the creditors and stockholders can be collected by the receiver. (Pauly v. O'Brien, 69 Fed. Rep., 460.) 4 (U. S. C. C v 1888). The fact that one who signed as maker of a note was in fact only an accommodation maker, and signed - , without considera- tion, in order that the indorser, who was really the principal debtor, might get tne note discounted, and that these facts were known to the bank which discounted the note at the time of discounting, is no defense for such accommodation maker in an action on the note. (Armstrong v. Scott et al., 36 Fed. Rep., 63.) 5 (U. S. C. C, 1888). In an action upon a negotiable promissory note, brought by the indorsee against the maker, it appeared that the note had been given to the indorser as accommodation paper, under an express agreement that defendant should not be held liable on the note. Held, that defendant could not take advantage of the agreement against a bona fide purchased for value, before maturity, unless it appeared that at the time of the purchase he knew of the agree- ment. (Union Bank v. Crine, 33 Fed. Rep., 809.) 6 (U. S. C. C. A., 1895). One L made a note, and delivered it to the payee, upon an express agreement that it should be sold and dis- counted by the payee for cash, which should be paid over to L. Instead of so doing, the payee diverted the note, which passed through the hands of several parties, who had notice of the diversion, and who severally indorsed the note. The last of these partieSj the D Co., had the note discounted at its bank, which had no notice of the diversion, and received and used the proceeds. The note not being paid, the bank, at the request of the D Co., sued the maker and all the indorsers except the D Co. Held, that the fact that the bank had discounted the note solely in reliance on the credit of the D Co., and that it had omitted to sue that company, in reliance upon the company's paying the note if not collected from the maker or prior indorsers, though it enabled the D Co. to obtain an unfair advantage, was not a defense to the action. (Germania Bank of New York v. La Follette et al., 72 Fed. Rep., 145.) 7 (U. S. C. C, 1895). A director and stockholder of a national bank gave an accommodation note to the bank's president, on the latter's request and representation that the note was to be put in the hands of his personal creditor as security, and on condition that no money should be drawn on the note, and that the note should not be put in the bank. Without the knowledge of the maker, he being aged and infirm of sight, the note was made payable to the bank and placed therein, and a certificate of deposit for the amount thereof issued to the president, and by him deposited with his creditor, who held the the same until the bank's failure. Held, that the maker's stipula- tion that the note should not be used to take money from the bank was apparently made for the bank's benefit, and that having given a valid accommodation note he was liable on the note to the bank's receiver. (Linn County National Bank v. Crawford, 69 Fed. Rep., •>•_>_. ) , 8 (Ala., 1894). A private corporation can not defend an action on its accommodation note on the ground of ultra vires as against a bona fide holder. (Florence Railroad and Improvement Company v. Chase National Bank, 17 So., 720; 106 Ala., 364.) 9 (Ky., 1901). Accommodation indorsers of a note made payable to them- selves can not escape liability to plaintiff bank on the ground that the note was delivered by them to the vice-president and general manager of the bank upon the faith of his agreement that the note was not to be accepted or discounted by him for the bank until it had been indorsed by another person, as the bank is to be regarded as the payee, and a note can not be delivered to the payee as an escrow ■ DIGEST OF NATIONAL BANK DECISIONS. i) ACCOMMODATION PAPER— Continued. WHEN BANK MAY RECOVER ON ACCOMMODATION PAPER Continued. but defendant may, by counter claim, recover damages for breach of the agreement. (Dils v. Bank of Pikeville, 3 Banking Cases, 206; Ky. Court of Appeals, 60 S. W., 715.) 10 (Mass., 1896). Where signatures of defendants were obtained either as makers or indorsers of certain notes for the supposed accommodation of certain persons to whom they looked for indemnity, the fact that the notes were fraudulently obtained for the use of the cashier of a bank, who discounted them with the bank's funds, and applied the proceeds to his own use, does not render the bank chargeable with a knowledge of the fraud, and it is an owner in good faith of the paper which it took for value and before maturity. (Indian Head National Bank v. Clark, Mass., 43 N. E., 912 ; 166 Mass., 27.) 11 (N. Y., 1890). In an action by a bank on a note it appeared that the defendant, a resident of New York, made the note for the accommoda- tion of the payees, residents of another State, who indorsed it to plaintiff, situated in the same State. The indorsers were afterwards discharged in insolvency proceedings, in which plaintiff proved the note as a claim and received a dividend thereon. Held, that the maker was not discharged from liability, since the indorsers would have been discharged as to plaintiff if it had not appeared and taken • the dividend, and defendant was not injured thereby. ( 12 N. Y. S., 401, affirmed ; Third National Bank v. Hastings, N. Y. App., 32 N. E., 71 ; 58 Hun, 531 ; 134 N. Y., 501.) 12 (N. Y. Sup.). The maker of a note can not assert as a defense thereto against the payee, a bank, that he signed the note at the request of the cashier and teller of the bank, who stated that they wished to use his name in stock speculations, for which purpose the notes would be dis- counted by the bank ; that their names could not appear because of , their official connection with the bank ; and that he should not be charged with any of the notes given nor credited with anything received on the sale of the stock ; and that the bank would take care of the notes as they became due, an agreement that a note given for a proper consideration shall not be collected being nugatory. (Mead v. National Bank of Pawling, 34 N. Y. S., 1054.) 13 (Pa. Sup., 1896). Where the maKer of a note gives to the bank which dis- counts it a mortgage as collateral security on the express condition that it shall not be recorded unless the bank shall thereafter consider it necessary, the failure of the bank to record the mortgage until too late to realize anything thereon will not discharge the accommodation indorser from liability on the note. (Allentown National Bank v. Trexler, 34 A., 195 ; 174 Pa. St., 497.) 14 (Pa.). When the payee of an accommodation check, given for a partic- ular purpose, deposits it in a bank in his own name and the bank makes advances and extends credit on the faith of the deposit with- out notice of the trust, its rights and equities are superior to the drawer of the check. (Erisman v. Delaware County National Bank, 1 Pa. Super. Ct, 144; 37 W. N. C, 518.) 15 (Tex.). Where a note was signed by accommodation makers, and made payable to a bank on the understanding that it was to be deposited in the bank to secure a loan for the purchase of wheat for a mill, with the ultimate intention of paying off a mortgage on the mill, and such makers, without notice to the bank of any restrictions on the disposition of the note, allowed the mortgagor, for whose benefit it was made, to have possession and control thereof, they can not com- plain that he effected an immediate payment of the mortgage by procuring an indorsement to himself from the bank, and then indors- ing the note to the mortgagee. (First National Bank v. Wood, Tex. Civ. App., 28 S. W., 384; 8 Texas Civ. App., 554.) 16 (Wis., 1902). The directors of a bank, on examining its loans, found a note signed by its cashier as a joint maker, who, on his attention being called thereto, stated that defendant was to -Indorse the note; and 10 DIGEST OF NATIONAL BANK DECISIONS. ACCOMMODATION PAPER— Continued. WHEN BANK MAY RECOVER ON ACCOMMODATION PAPEB — Continued. he was called In and indorsed it. Held, that the fact that the defend- ant received no consideration therefor would not relieve him troin liability on the note in the hands of the bank, as merely an accommo- dation indorser for the bank after it had purchased the note, as the cashier had no authority to discount his own note for the bank, even if he had general authority to discount notes, and therefore the bank did not accept the note until it was indorsed by defendants, and the original consideration paid for the note attached to the indorsement. (Bank of Monticello v. Dooley et al„ 4 Banking Cases, 276.) MISCELLANEOUS. Holder of accommodation paper having knowledge of its character. 1 (U. S. C. C. A., 1896). Accommodation paper is put into circulation for the purpose of giving credit to the party for whose benefit it is intended, and, although he can not maintain an action upon it against the accommodation maker or indorser, a purchaser can do so who acquires it while still current and gives the credit it was intended to promote, although with knowledge of 'its original character. (Israel v. Gale, 77 Fed. Rep., 532.) Affirmed by U. S. Sup. Ct. (1899)— 174 U. S., 391. 2 (U. S. C. C. A., 1898). One who takes accommodation paper from the party for whose benefit it was made and gives him credit for the same on a precedent indebtedness, though advancing no money, is a holder of such paper for value. (lb.) President of business corporation; authority as to accommodation paper; when holder can recover on; ultra vires. 3 (U. S. C. C. A., 1898). The general authority of the president of a busi- ness corporation to make and discount its promissory notes gives him no power to make a note of the corporation payable to his own order, and one who discounts such a note can not recover thereon against the corporation without showing special authority for its execution. (Park Hotel Co. v. Fourth National Bank of St. Louis, 86 Fed. Rep., 742.) 4 (U. S. C. C. A., 1898). To the general rule that the acts and contracts of a general agent within the scope of his powers are presumed to be lawfully done and made, there is an exception as universal and inflexible as the rule. It is that an act done or a contract made with himself by an agent on behalf of his principal is presumed to be, and is notice of the fact that it is, without the scope of his general powers, and no one who has notice of its character may safely recover upon it without proof that the agent was expressly and specially authorized by his principal to do the act or make the contract. (lb.) 5 (U. S. C. C. A., 1898). It is ultra vires of a corporation to make accom- modation paper or to guarantee the payment of the obligations of others. ( lb. ) 6 (U. S. C. C. A., 189S). A contract which a corporation has no power to make it has no power to ratify and no power to estop itself from denying. (lb.) 7 (Ga., 1896). Where a note executed solely for the accommodation of a bank was made payable to the order of the bank's cashier and in- dorsed in blank, the mere fact that the president of the bank negoti- ated the note for his personal benefit to a third person, who knew his office, was not of itself notice to the purchaser of the facts, or sufficient to put him on inquiry as to the legality of the president's act. (Kaiser v. United States National Bank, Ga., 25 S E 620- 99 Ga., 258.) ' Power of corporation to make or indorse accommodation paper. 8 (N. Y.). In the absence of statutory or charter authority a corporation has no power, either directly or incidental, to bind itself by making DIGEST OP NATIONAL BANK DECISIONS. 11 ACCOMMODATION PAPER— Continued. miscellaneous — continued. or indorsing negotiable instruments for the accommodation of the makers, even for a consideration paid. (National Park Bank v. Ger- man American Mut. W. and S. Co., 116 N. Y., 281. ) Rediscount by "bank when not accommodation indorser. 9 (N. Y., 1895). In an action on a note, it appeared that plaintiff bank discounted P. & Co.'s paper to the full extent consistent with Its rules, and, in reply to an application for a further discount, suggested that the company get defendant bank to discount the paper and allow plaintiff to rediscount it. The company made its note to defendant, who indorsed it, and sent it on to plaintiff, with whom it had an account, and the proceeds were placed to defendant's credit. De- fendant placed the amount of the note to the credit of P. & Co., by whom it was at once checked out. This specific amount credited to defendant by plaintiff was not checked out by defendant, but checks in various amounts, in ordinary course of business, were drawn against its account, none of which apparently had any special reference to the amount of the discount. Held, that defendant was not an accommodation indorser. (Fox v. Home Co., Sup., 35 N. Y. S., 896, distinguished ; Tradesmen's National Bank v. Bank of Commerce, Sup., 39 N. Y, S., 554.) Action on accommodation paper; insufficient answer, 10 (N. Y., 1894). An answer which alleges that the note sued on was ac- commodation paper, and was made and delivered on condition that defendants should not be held liable thereon, provided there was delivered to plaintiff good business paper of the person accommo- I dated, is insufficient, because it does not allege that the agreement to replace such note with other paper was made with plaintiff. (Vilas National Bank v. Barnard, Sup., 28 N. Y. S., 922.) Filling out blanks in accommodation paper. 11 (N. Y., 1894). Defendant, for the accommodation of the maker, in- dorsed blank notes in the following form : " after date, • promise to pay to the order of , at the Farmers' National Bank, Adams, N. Y. Value received." Held, that the delivery of the Indorsed blanks did not authorize the holder to fill them out so as to make them payable " on demand " instead of at a specified time after date, or to add the words " with interest." Farmers' National Bank v. Thomas, Sup., 29 N..Y. S.,-837.) Insane maker of accommodation paper ; when not released. 12 (Tenn. Sup., 1896). An accommodation indorser on a note given in renewal of a note on which he was also accommodation indorser, at its maturity, is not relieved of liability because of his insanity at time of signing it, the bank taking it in renewal having no notice of his insanity, and he having been sane when the prior note was exe- cuted. (Memphis National Bank v. Sneed, 36 S. W., 716; 97 Tenn., 120.) ACTIONS. Ckoss references : Page. Attachment — Actions of attachment ._ 22 Capital stock — Action by creditor to enforce payment of capital stock 32 Deposits — Officers' suit against receiver for special deposits 142 Actions by depositors -_ 144 Insolvency and receivers — Actions by receivers 193 Actions against receivers _ _ 197 12 DIGEST OP NATIONAL BANK DECISIONS. ACTIONS — Continued. Cross references — Continued. Page Interest and usury — Actions for penalty --- 236 Mortgage — Foreclosure of mortgage 278 Officers, civil liability of— Actions to enforce liability 343 Shareholders — Actions to enforce liability. 483 AGENT OF SHAREHOLDERS. Ceoss references : Liquidation — . Page- Agent of shareholders may sue on notes during liquidation Who may be agent. 1 (U. S. C. C, 1897). The president, director, or clerk of a national bank may be the agent of the shareholders. (United States v. Jewett, 84 Fed. Rep., 142. Affirmed in Jewett v. U. S., 100 Fed. Rep., 832.) Effect of appointment of agent. 2 (U. S. C. C, 1897). A national banking association is not terminated by the appointment of an agent, but the powers of its officers are limited thereby. (United States v. Jewett, 84 Fed. Rep., 142.) Agent stands in same relation as receiver. 3. Twenty-seventh United States Statutes at Large, 345, chapter 360, sec- tion 3, authorizes the election of* an agent by the stockholders of a' national bank in the hands of a receiver when all indebtedness to outside creditors has been paid, and provides that such agent, after giving bond, shall be vested with the control of the bank's affairs by the Comptroller and receiver, being accountable to the circuit or district court of the United States. (U. S. Sup. Ct, 1897) Ex parte Chetwood, 165 U. S., 443; (U. S. C. C, 1888) McConville v. Gilmour et al., 36 Fed. Rep., 277; (Calif., 1896) Chetwood v. California National Bank, 45 Pac. Rep., 854; 113 Cal., 414, 649. Embezzlement by agent. 4 (U. S. C. C, 1897). The agent of shareholders of a national bank in liquidation is criminally liable for embezzlement under the national- bank act. (United States v. -Jewett, 84 Fed. Rep., 142.) Agent takes assets under an express trust for benefit of creditors. 5 (U. S. C. C. A., 1904). Where the insolvency of a national bank was accompanied by a conveyance of its assets to a trustee, and a pledge thereof for the benefit of creditors, and this was followed by affirma- tive proceedings in liquidation, authorized by law, and the selection by the shareholders of the same trustee as their liquidating agent, such agent held the assets under an express trust for the benefit of creditors. (George et al. v. Wallace et al., 135 Fed. Rep., 286.) Disbursements of assets by agent. 6 (S. C, 1892). An agent must reimburse the stockholders who have paid assessments before distributing assets to those who have not paid, though the shares of the latter are in the hands of purchasers, with- out notice of such nonpayment. (Richardson v. Wallace, 39 S. C, 216.) Federal courts have same jurisdiction of agents as of receivers. 7 (U. S. C. C. A., 1900). An action by or against an agent of the share- holders of a national bank, chosen by them in pursuance of "An act authorizing the appointment of receivers of national banks, and for other purposes," approved June 30, 1876, , and its amendments (19 DIGEST OF NATIONAL BANK DECISIONS. 18 AGENT OP SHAREHOLDERS— Continued. Stat. L., 63, c. 156; 27 Stat. L., 345, c. 360; 29 Stat. L., 600, c. 354), is a suit arising under the laws of the United States, of which a Fed- eral court has jurisdiction, under sections 1 and 2 of the acts of 1887-88 <25 Stat L., 434). (Guarantee Co. of North Dakota v. Hanway, 104 Fed. Rep., 369.) 8 (U. S. C. C. A., 1900). Such an action is also a cause for winding up the affairs of a national bank, and is by or against an officer thereof, and hence cognizable by a Federal court, under the last clause of section 4 of the acts of 1887-88 (25 Stat. L., 436). (lb.) 9 (U. S. C. C. A., 1900). For the reasons above stated, an action by or against an agent of the shareholders of a national bank is removable from a State to a Federal court (lb.) 10 (U. S. C. C, 1888). The Federal courts have the same jurisdiction of snits by and against the " agents " of national banks appointed under the national banking acts of Congress, when the " receivers " of an insolvent bank have been displaced by such " agents," as they have of suits by and against the " receivers " of such banks, each being in the same sense officers of the United States, and each representing in precisely the same relation the bank in its corporate capacity ; and this jurisdiction attaches without regard to any diversity of citizen- ship of the parties or the amounts involved. (McConville v. Gil- mour et al., 36 Fed. Rep., 277.) When action in Federal court will not 'bar action in State courts. 11 (U. S. Sup. Ct, 1897). That a receiver of an insolvent national bank has applied to the proper circuit court for authority to sell assets, and that thereafter an agent has been appointed, under 19 Statutes, 63, as amended by 27 Statutes, 345, to succeed the receiver, gives that court no authority to enjoin a stockholder in the bank from prose- cuting actions in the State courts, in behalf of the bank, against its directors, or against using the bank's name in writs of error sued out from the United, States Supreme Court to review the judgments of the State supreme court in such actions. (Ex parte Chetwood. 165 U. S., 443.) Parties, substitution for receiver. 12 (U. S. Sup. Ct, 1897). A duly elected " agent " who is substituted under the act of June' 30, 1876 (19 Stat. L., 63), as amended by the act of August 3, 1892 (27 Stat. L., 345), for the receiver of an insolvent national bank to complete the winding up of its affairs, proceeds with like authority to that of the receiver, and is not an officer of the cir- cuit court, though he is required by the statute to render an account to it of all his proceedings, expenditures, etc., and he and his sureties are finally discharged by its order. (Ex parte Chetwood, 165 U. S., 443.) 13 (U. S. C. C, 1888). When the receiver of an insolvent national bank has been displaced by an " agent " appointed under the acts of Congress in that behalf, it is proper practice to substitute, upon motion, the " agent " as the plaintiff on the record in place of the " receiver " in a suit already commenced by the latter. (McConville v. Gilmour et al., 36 Fed. Rep., 277:) When agent can not sue shareholder. 14 (U. S. C. C. A., 1902). Where a national bank goes into voluntary liquida- tion, the only authorized procedure for the enforcement of the indi- vidual liability of its stockholders is that prescribed by act June 30, 1876 (10 Stat, 63), by a suit in equity in the nature of a creditors' suit brought on behalf of all creditors in a court for the district in which the bank is located, in which the necessity and extent of the ratable enforcement of the stockholders' liability shall be deter- mined. Such suit should be against the bank and all its stock- holders, and, in case ancillary proceedings should be necessary for the collection from nonresident stockholders of their ratable pro- portion of the amount necessary to pay creditors, such suits should 14 DIGEST OF NATIONAL BANK DECISIONS. AGENT OF SHAREHOLDERS— Continued. be authorized by the court of original jurisdiction, and brought by a receiver or other person appointed by such court. (Williamson v. American Bank et al., 115 Fed. Rep., 793.) 15 (U. S. Dist. Ct, 1897). An agent chosen by stockholders to take charge of the business of a national bank in liquidation can not, after all debts have been paid, enforce the individual liability of stockholders, under Revised Statutes, sections 5151, 5234, as he has no greater powers than those conferred upon the receiver. (Church v. Ayer, 80 Fed. Rep., 543.) When agent entitled to proceeds of stockholder's suit. 16 (Cal., 1896). Where an action brought by a stockholder in a national bank, in behalf of the corporation while in the hands of a receiver, has terminated, an agent of the corporation elected to succeed the receiver as provided by law, and charged with the duty of control- ling and disposing of its assets and of distributing the proceeds, is entitled to receive the proceeds of such action, less a reasonable allowance to the plaintiff for his costs, disbursements, and attor- ney's fees. (Chetwood v. California National Bank, 45 P., 854; 113 Cal., 414-649. When agent may sue shareholder. 17 (Tex., 1898). The liquidating agent of a national bank may sue a stock- holder on his unpaid notes held by the bank, and such suit may be brought before the bank's affairs are closed. (Norwood v. Interstate Nat. Bank, 45 S. W. Rep., 927; 92 Tex., 268.) When agent may purchase. 1& (Tex., 1898). One of the liquidating trustees of a national, bank may purchase at the sale of the assets of the bank, he being a stockholder and the sale being at auction, after notice to all the • stockholders, who alone are interested — the bank being solvent. (Cage v. Shap- pard, 46 S. W. Rep., 839; 19 Tex. Civ. App., 206.) APPEAL. Page. Questions considered on appeal 14 Questions not consideeed on appeal ______ _ _ . 15 Presumptions on appeal 17 Appeal, when dismissed _ _ _ _ _ _ 17 Miscellaneous _ 18 Cross references: Evidence — When appellate court will not weigh evidence 160 Insolvency and receivers — Appeal _ 196 Appeal bond, when not required of receivers _ 196 Jurisdiction — When appeal does not lie to circuit court of appeals _ _ _ 251 Mandamus — When appeal will not be entertained 273 Officers, criminal liability of — Appeal 382 Pleading and practice — What considered on appeal — special finding 408 QUESTIONS CONSIDERED ON APPEAL. 1 (U. S. Sup. Ct., 1890). Where the case is tried by the circuit court with- out a jury, and it makes a special finding, of facts, with conclusions of law, alleged errors of fact are not, on a writ of error, subject to DIGEST OF NATIONAL BANK DECISIONS. 15 APPEAL— Continued. questions considered on appeal — continued. revision by this court, if there was any evidence on which such find' ings could be made. (Hathaway v. First National Bank of Cam- bridge, 134 U. S., 494.) 2 (U. S. Sup. Ct., 1890). Where the circuit court finds ultimate facts which justify the judgment rendered, its refusal to find certain specified facts, and certain propositions of law based on those facts, will not be reviewed by this court, on a writ of error, if they were either immaterial facts or incidental facts, amounting only to evidence bear- ing on the ultimate facts found. (lb.) 3 (U. S. C. C. A-, 1896). When the finding in the circuit court involves mixed questions of law and fact, and is general in its form, nothing is open to review in the circuit court of appeals except the rulings made in the progress of the trial, the findings being conclusive as to the facts. (Humphreys v. Third National Bank of Cincinnati, Ohio, 75 Fed. Rep., 852.) 4 (U. S. C. C. A., 1896). When a jury is waived in the circuit court, a party wishing to raise any question of law upon the merits in the court above should request special findings of fact, framed like the verdict of a jury, and reserve his exceptions to those special findings if he deems them not sustained by the evidence ; and if he wishes to except to the conclusions of law drawn by the court from the facts found he should have them separately stated and excepted to. (lb.) 5 (U. S. C. C. A., 1901). When a peremptory instruction Is given in favor of either party, the only question with respect to the charge which is open for consideration by an appellate court is whether such direc- tion to find for one party or the other, when considered in the light of the pleadings and all the evidence, was right. Assignments of error as to other matters contained in the charge are in such case immaterial. (Modern Woodmen of America v. Union Nat. Bank of Omaha, 108 Fed. Rep., 753.) Second appeal in same suit* — Questions reviewable. 6 (U. S. C. C. A., 1903). A second appeal to the circuit court of appeals in the same suit brings up for consideration only the proceedings of the circuit court after the mandate was sent down on the first appeal, and no question decided on such appeal can be reviewed. .(Mont- gomery Co. v. Cochran et al., Cochran et al. v. Montgomery Co., 126 Fed. Rep., 456.) 7 (Va., 1902). When there have been two trials of an action at law, and the verdict of the jury on the first has been set aside by the trial court, and proper exception taken, and the evidence certified, the appellate court will examine the proceedings and evidence of the first trial ; and if it discovers that the court erred in setting aside the verdict it will annul all subsequent proceedings and render judg- ment thereon. (Wood v. American Nat. Bank, 40 S. E. Rep., 931 ; 100 Va., 306.) QUESTIONS NOT CONSIDERED ON APPEAL. 1 (U. S. Sup. Ct., 1901). To render a Federal question available on writ of error to a State court, it must have been raised in "the case before judgment, and can not be claimed for the first time in a petition for rehearing. (Turner, Syndic, etc., v. Richardson, Receiver, etc., 3 Banking Cases, 232 ; 180 U. S., 87.) 2 (U. S. Sup. Ct., 1891). Upon writ of error no error in law can be re- viewed which does not appear upon the record or by bill of exceptions made a part of the record. (Claasen v. United States, 142 U. S., 140.) 3 (U. S. C. C. A., 1894). An objection and exception to the introduction of certain evidence, for which no ground was assigned, can not be considered on appeal. (Tabor v. Commercial National Bank of Cleve- land, 62 Fed. Rep., 383.) 16 DIGEST OF NATIONAL, BANK DECISIONS. APPEAL — Continued. questions not considebed on afpeai, — continued. 4 (U. S. C. C. A., 1894). On a trial by the court, where no request was made for a peremptory declaration that the evidence was insufficient to entitle plaintiff to judgment, a general finding for plaintiff can not be reviewed on a single exception to the finding and the judgment thereon. (lb.) 5 (U. S. C. C. A., 1901). Special findings made by a jury, as authorized by the State practice, have the same weight and effect as special findings of fact by the court where a jury has been waived, and can not be reviewed by the appellate court for the purpose of determining whether there was any evidence to support them, where the bill of exceptions does not state affirmatively that it contains all the evi- dence. (Metropolitan Nat. Bank v. Jansen et al., 108 Fed. Rep., 572.) 6 (U. S. C. O. A., 1898). When a case goes twice to an appellate court, questions decided upon the first occasion will not be considered upon the second. (Mohrenstecher et al. v. Westervelt, 87 Fed. Rep., 157.) 7 (U. S. C. C. A., 1898). Under rule 11 of the circuit court of appeals (21 C. C. A., cxi, and 78 Fed. Rep., cxi), requiring the assignment of errors to quote the full substance of evidence alleged to have been erroneously admitted or rejected, and to set out the part of the charge referred to totidem verbis, assignments that " the court erred in per- mitting evidence as shown in bills of exceptions numbers two and three," which errors can only be ascertained by a careful reading of a voluminous record, and that " the court erred in its charge," etc., referring to marked lines and numbers in the written opinion for instructions erroneously given and refused, will not be considered. (Gallot v. United States, 87 Fed. Rep., 446.) 8. A finding on conflicting evidence can not (on appeal) be disturbed. (Cal., 1896.) Smith v. Sabin, 43 P., 588; (111., 1896.) Lehman v. Rothbarth, 42 N. E., 777; 159 111., 270; (Nebr., 1899.) Schmelling v. State et al., 1 Banking Cases, 670; 57 Nebr., 562 ; (Nebr., 1896.) Buffalo County National Bank v. Gilcrest, 66 N. W., 850 ; 47 Nebr., 897 ; (Tex., 1896.) Merchants' National Bank v. McAnulty, 33 S. W., 963 ; 89 Tex., 124. 9 (Conn., 1901). Where answers to questions objected to are not preju- dicial to the objecting party, error in allowing them to be answered is harmless, and will not be considered on appeal. (Appeal of Main., 3 Banking Cases, 437.) 10 (111. Sup., 1894). Where no question of law is presented by the record a certificate by the appellate court that the case involves questions of law of such importance that they should be passed on by the supreme court does not present any questions of law to be determined. (Com- mercial National Bank v. Cauniff, 37 N. E., 898 ; 151 111., 329. 11 (111. Sup., 1894). In determining the questions at issue the supreme court can only look at the record and not at the opinion of the appel- late court, (lb.) 12 (Me., 1900). Exceptions do not lie to rulings that fail to raise any ques- tion of law. (Hatch v. First Nat. Bank of Dexter, 3 Banking Cases, 191 ; 94 Me., 348 ; 47 Atl. Rep., 908.) 13 (Nebr., 1899). Questions of which there is no assignment in the petition in error will not be considered on review. (Stuart v. Bank of Staple- hurst, 1 Banking Cases, 518; 57 Nebr., 569.) 14 (Nebr., 1901). Where, on appeal in an action in equity, the decree ren- dered is reversed and remanded for want of sufficient evidence to sustain it, and on a second trial de novo additional and material evi- dence is introduced, and an appeal again taken, the second appeal is to be considered on the record then presented, uninfluenced by the prior decision on the question of the sufficiency of tlie evidence DIGEST OF NATIONAL BANK DECISIONS. 17 APPEAL, — Continued. questions not considered on appeal — continued. (First Nat. Bank of Sutton v. Grosshans et al„ 3 Banking Oases, 283 ; 61 Nebr., 575; 85 N. W. Rep., 542.) 15 (N. Y., 1896). An order requiring an answer to be made more definite, so as to sbow what is pleaded as defense and what as counterclaim, rests in discretion, and is not appealable. (Garfield National Bank v. Kirchway, City Ct. N. Y., 37 N. Y. S., 1140.) PRESUMPTIONS ON APPEAL. 1 (U. S. Sup. Ct., 1897). Where the circuit court and the circuit court of appeals agree as to what facts are established by the evidence, this court will not take a different view unless it clearly appears that the facts are otherwise. ( Stuart v. Hayden, 169 U. S., 1 ; Gruetter v. Stuart, lb.) 2 (U. S. C. C. A., 1900). An agreed statement of facts on which a judgment is rendered will be treated on appeal as the equivalent of a special finding as to the ultimate facts stated therein, but as to the inferences to be drawn from the facts stated, which are merely evidentiary, the general finding is conclusive. (Wilson v. Merchants' Loan and Trust Co. of Chicago, 111., 98 Fed. Rep., 688. ) 3 (Ala., 1898). Where a case was tried upon parol evidence, on appeal, it is the rule to indulge all reasonable presumptions in favor of the decision of the trial court upon questions of fact, and not to reverse unless it clearly appears to be erroneous. (First Nat. Bank of Cambridge, 111., v. Hall et al., 1 Banking Cases, 198; 119 Ala., 64.) 4 (Cal., 1894). Where, on appeal, the record does not contain the evidence, and findings of fact were waived, it will be presumed that the alle- gations of the complaint were proven, and that the affirmative allega- tions in the answer were not. (Ulrich v. Santa Rosa National Bank, Cal.,. 37 P., 500; 103 Cal., XVIII.) APPEAL, WHEN DISMISSED. 1 (U. S. Sup, Ct., 1899). A decree of the circuit court was reversed by the circuit court of appeals in a decree containing specific directions, and the circuit court entered a decree in conformity with such direc- tions, and an appeal therefrom was prayed to the circuit court of appeals, which was dismissed. The second decree of the circuit court was entered before an appeal from the first decree of the circuit court of appeals was presented to" the Supreme Court. Held, that this promptness of action did not cut off such appeal to the Supreme Court, and any difficulty on the part of the Supreme Court in dealing with the cause in the circuit court was obviated by an appeal from the action of the circuit court of appeals in dismissing an appeal from the second decree of the circuit court, which brought before the Supreme Court the record subsequent to the first decree of the circuit court of appeals. (Merrill v. National Bank of Jack- sonville (two cases), 173 U. S., 131; 1 Banking Cases, 210.) 2 (IT. S. C. C. A., 1897). A writ of error which has been allowed, served, and returned to the appellate court with the transcript of the pro- ceedings in the trial court will not be dismissed because the clerk of the trial court has inadvertently failed to make* an indorsement of its filing on the writ itself. Insurance Co. v. Phinney, 22 C. C. A., 425 ; 76 Fed. Rep., 617, disapproved: (United States National Bank v. First National Bank of Little Rock et al., 79 Fed. Rep., 296.) 3 (U. S. C. C. A., 1896). An appeal taken to the circuit court of appeals from a decree of the circuit court entered in accordance with the mandate of the former court upon a previous appeal will be dismissed, even though an appeal lie to the Supreme Court from the decision of 4049—05 2 18 DIGEST OF NATIONAL BANK DECISIONS. APPEAL — Continued. appeal, when dismissed — continued. the circuit court of appeals. (Merrill v. National Bank of Jackson- ville, 78 Fed. Rep., 208.) 4 (Wash., 1896). Where the record fails to show that notice of appeal was given, the appeal will be dismissed. (Merchants' National Bank v. Ault, Wash., 44 P., 129; 14 Wash., 701.) MISCELLANEOUS. Evidence on appeal. 1 (Wis., 1896). Where, on the issue of a fraudulent preference of a cred- itor, the verdict and findings cover all the material, controverted, and issuable facts, a party can not urge, on appeal, certain transac- tions in evidence from which a preference might have been found, where there was no request for the trial court to submit them to the jury for determination. (Continental National Bank of Chicago, v. McGeoch, Wis., 66 N. W., 606; 92 Wis., 286.) Bill of exceptions, when unnecessary. ' 2 (TJ. S. C. C. A., 1896). It is not indispensable that an exception to a ruling of the court on the trial of an action should be brought before an appellate court by a bill of exceptions if it fully appears upon the record proper. (Wilson v. Pauly, 72 Fed. Rep., 129.) Bill of exceptions, insufficient authentication. 3 (Nebr., 1896). Where the bill of exceptions purporting to contain the evidence in a case is not authenticated by the certificate of the clerk of the trial court it will not be examined. First National Bank v. Cass County, Nebr., 66 N. W., 300; 47 Nebr., 172.) Writs of error, limitation. •4 (U.S. C. C. A., 1895). Under act March 3, 1891, § 11, a writ of error must be sued out within six months in order to authorize a review by the circuit court of appeals. (White et al. v. Iowa National Bank of Des Moines, 71 Fed. Rep., 97.) Consolidation of causes on appeal. 5 (Tex. Sup., 1896. As each party may appeal from the same final judgment without making separate cases of each appeal, the appellate court may consolidate into one proceeding separate cases on appeal from the same judgment. (Farmers and Merchants' National Bank v. Waco Electric Railway and Light Co., 34 S. W., 737; 89 Tex., 331.) Error waived. 6 (Wash., 1894). Where, in an action against a firm on a note signed by one partner, the court tried the case without a jury and found that such partner had no authority to sign the note, but also found that the other partner afterwards ratified the signature, error in admitting evidence as to the former's authority to sign the note is immaterial. (Merchant's National Bank v. Peet, Wash., 37 P., 290; 9 Wash. 237.) Modification of judgment after affirmation. 7 (U. S. C. C. A., 1896). Where an order refusing to dissolve an injunction pendente lite restraining a sheriff from selling certain silks on execu- tion was affirmed, but it appeared to the court that a sale of the goods would be to the pecuniary advantage of both parties, held, that leave would be reserved to the court below to modify its order so that by consent of the parties the silk might be sold under the execu- tion, after ample notice, and the proceeds placed in the registry to await a final decision. (Hadden et al. v. Dooley et al., 74 Fed. Rep., Intervening petition under Louisiana Code. 8 (U. S. C. C. A., 1896). Under the Louisiana code of practice providing (articles 364, 391) that third persons may intervene in suits, either before or after issue, provided the intervention does not retard the DIGEST OF NATIONAL BANK DECISIONS. 19 APPEAL— Continued. miscellaneous — continued. suit, but that persons so intervening must be always ready to plead or exhibit their testimony, an appellate court can not review the exer- cise of discretion by the trial court in refusing an application by such an intervener, made after the commencement of a trial, for a continuance, in order to enable the intervener to take steps necessary to bring his intervention to an issue. It is not error to refuse to admit evidence offered by such an intervener when his intervention has not been brought to an issue with the original parties. ' (Baker v. Texarkana National Bank et al., 74 Fed. Rep., 598.) Rehearing. 9 (Fla., 1895). A rehearing will not be granted for consideration of a question not raised on the original hearing. (Arnau v. First National Bank, 18 So., 790; 36 Fla., 395.) Practice. 10 (U. S. Sup. Ct, 1891). In a criminal case a" general judgment upon an indictment containing several counts and a verdict of guilty on each count can not be reversed on error if any count is good and is suffi- cient to support the judgment. (Claasen v. United States, 142 U. S.. 140.) 11 (Nebr., 1900). A petition which is attacked for the first time in this court on the ground that it does not state a cause of action will be liberally construed. (Omaha Nat. Bank v. Kiper et al., 2 Banking Cases, 419; 60 Nebr., 33.) Appealable decree. 12 (U. S. C. C. A., 1901). A decree which determines the validity of a trust deed is final and appealable as to the trustee and beneficiary in such deed, although it is interlocutory only as to other matters involved in the suit, in which such parties have no interest. Kemp et al. v. Nat. Bank of the Republic of New York, 109 Fed. Rep., 48.) Parties to appeal. 13 (Mich., 1901). Where the decree in an interpleader's suit commenced by a bank to determine the right of a deposit relieves the bank from all liability on the payment-of the fund into the court, and an appeal from the decree is dismissed, the bank is not a proper party to an appeal from the final decree, determining the right of the fund as between the claimants. (Detroit Sav. Bank v. Haines et al., 3 Bank- ing Cases, 648 ; 128 Mich., 38.) Appeal — Assignment of errors — Filing before allowance of appeal indispensable. 14 (TJ. S. C. C. A., 1904). The filing of an assignment of errors before or at the time of the allowance of an appeal is indispensable, under the eleventh rule of the circuit courts of appeals (91 Fed. vi, 32 C. C. A., lxxxviii), and the appeal will be dismissed if the assignment is not thus filed. (Simpson v. First National Bank of Denver; First National Bank of Denver v. Simpson, 129 Fed. Rep., 257.) Same — Conditional allowance. 15 (U. S. C. C. A., 1904). An allowance of an appeal on condition that the petitioner give a bond in a fixed amount does not become an allow- ance of the appeal until the bond is given and accepted, and the filing of an assignment of errors before or at the time of the giving and acceptance of the bond is a filing within the time prescribed by the rule. (lb.) Appeal matter of right — Allowance of writ of error matter for judicial determi- nation. 16 (U. S. C. C. A., 1904). An appeal is a matter of right, secured by act of Congress upon compliance with the statutes relative to security and with the rules of the courts. The allowance of a writ of error is a matter for judicial determination upon a consideration of the suffi- ciency of the grounds for the writ stated in the petition and assign- 20 DIGEST OP NATIONAL BANK DECISIONS. APPEAL— Continued. miscellaneous — continued. ment of errors. The reason for the rule requiring the filing of an assignment of errors before the allowance of an appeal is to give notice to opposing counsel and the appellate court of the questions of law to be discussed. In an action at law there is the additional rea- son that the presentation of an assignment of errors to the judge who allows or issues a writ of error is essential to his decision of the question whether or not it should be issued. (lb.) Appeal — Review — Harmless error. 17 (tl. S. C. C. A., 1904). The erroneous admission of evidence in corrobo- ration of the testimony of an unimpeached and uncontradicted wit- ness, and in respect to a mere matter of detail, is not ground for reversal. (First National Bank of Houston v. Wells, Fargo & Co., 127 Fed. Rep., 818.) ASSESSMENT. (See Shabeholdebs. ) ATTACHMENT. Page. Attachment of national bank not allowed _ _ 20 Attachment of shareholders' stock ". 22 Actions of attachment, pleading and practice- 22 Garnishment of national banks 24 Miscellaneous 26 Cross references: Deposits — Bank not liable for interest on money held in it by attachment 125 Insolvency and receivers — Attachment of funds in receiver's hands not allowed 197 Garnishment of receiver 198 Lien — Garnishment of property in custody of bank 261 Liquidation- Garnishment during liquidation 267 Preferences- Lien of attachment 439 ATTACHMENT OF NATIONAL BANK NOT ALLOWED. [The courts in New York held for some time that the prohibition in section 5242, Revised Statutes, United States, only applied to cases of actual or pending insolvency, but it has been definitely settled by the Supreme Court of the United States in the cases of Butler v. Coleman, "124 U. S., 721, and Pacific Nat. Bank v. Mixter, 124 U. S., 721, that an attachment prior to final judgment against a national bank is wholly void whether issued by a State or Federal court. This decision has been followed by the New York courts in the case of Bank of Montreal v. Fidelity Nat. Bank, 1 N. Y. Supp., 852 ; 112 N. Y., 667, overruling former decisions.] 1 (U.S. Sup. Ct, 1888). Section 5242, Revised Statutes, United States, stands as the paramount law of the land that attachments shall not issue from State courts against national banks, and writes into all State attachment laws an exception in favor of national banks. The effect of the act of Congress is to deny the State remedy altogether so far as suits against national banks are concerned, and in this way it operates as well on the courts of the United States as on those of the States. Although the provision was evidently made to secure DIGEST OP NATIONAL BANK DECISIONS. 21 ATTACHMENT— Continued. ATTACHMENT OF NATIONAL BANK NOT ALLOWED — Continued. equality among the general creditors in the division of the proceeds of the property of an insolvent bank, its operation is by no means confined to cases of actual or contemplated insolvency. The remedy is taken away altogether and can not be used under any circum- stances. (Pacific National Bank v. Mixter, 124 U. S., 721; Butler v. Coleman, 124 U. S., 721.) 2 (U. S. Sup. Ct, 1888). A bond given to release property from an illegal attachment is void. The principal in a bond given in an attachment suit may maintain an action in equity to have the bond declared void and the property held by the sureties as indemnity returned. (lb.) 3. When a creditor attaches the property of an insplvent bank, he can not hold such property against the claim of a receiver appointed after the attachment suit was commenced. Such creditor must share pro rata with all others. (U. S. Sup. Ct, 1874.) First National Bank of Selina v. Colby, 21 Wall., 88 U. S., 609 ; (U. S. C. C.) Harvey v. Allen, 10 Blatch., 29. 4 (U. S. C. C, 1895). Where service is made on a national bank only by attachment and publication or service out of the State, the attach- ment, being prohibited by Revised Statutes, section 5242, should be vacated and the service set aside. (Garner v. Second National Bank, 66 Fed. Rep., 369.) 5 (N. Y. Appls., 1889). Attachment vacated and set aside on authority of Pacific National Bank v. Mixter, 124 U. S., 721. (Bank of Montreal v. Fidelity National Bank, 112 N. Y., 667. Unanimous decision of court of appeals.) 6i(N. Y. Appls., 1903). Revised Statutes 5242 prohibits an attachment against a national bank whether solvent or insolvent. (Van Reed v. People's National Bank of Lebanon, Pa., 5 B. C, 383; 66 N. E. Rep., 16. 7 (N. Y., 1878). An attachment will not lie before final judgment against the property in this State of a national bank situated and doing business in another State. (Rhoner v. National Bank of Allentown, Pa.; Palmer v. Same, 14 Hun., 126; 2 N. B. C, 331.) 8 (N. Y., 1876). An attachment can not be issued from a State court against a national bank before final judgment, whether such bank be located in this State or not. (Central National Bank v. Rich- land National Bank, 52 Howard, 136; 1 N. B. C, 801). 9_(N. Y., 1883). The provision of the national banking act prohibiting attachments in such cases is not repealed by the act of Congress of July 12, 1883, providing that the jurisdiction for suits thereafter brought against national banks shall be the same as for suits against State banks and repealing laws inconsistent therewith. (Raynor v. Pacific National Bank, 93 N. Y., 371; 3 N. B. C, 624.) 10 (111., 1891). An attachment can not be issued by a State court against a solvent national bank of another State. (McDonald v. First Nat. Bank, 41 111. App., 368.) [Prior to the decision of the New York court of appeals in the case of the Bank of Montreal v. Fidelity National Bank, following the decision of the Supreme Court of the United States in Pacific National Bank v. Mixter and holding that attachments against national banks are wholly void, the New York courts held (as shown below) that attachments could be issued against solvent but not against insolvent banks.] 11 (N. Y., 1882). An attachment from a State court may not issue against an insolvent national bank of that State. (National Shoe and Leather Bank of the City of New York v. Mechanics' National Bank of Newark, N. J. ; Corn Exchange Bank v. Same ; West Side Bank v. Same, 89 N. Y., 467 ; 3 N. B. C, 601.) 22 DIGEST OP NATIONAL BANK DECISIONS. ATTACHMENT— Continued. ATTACHMENT OF NATIONAL BANK NOT ALLOWED Continued. 12 (N. Y., 1883.) An attachment issued against an insolvent national bank is invalid (Rev. Stat., sec. 5242), and is not made valid by the subse- quent acquisition by the bank of further capital. (Raynor v. Pacific National Bank, 93 N. Y., 371 ; 3 N. B. C, 624.) 13 (N. Y., 1883). Although the bank after the issuing of the attachment paid a large amount of its debts in full, this does not estop it from questioning the validity of the attachment. (lb.) 14 (N. Y., 1882). A receiver of a national bank situated in another State, though not a party, may move to vacate an attachment. (People's Bank of the City of New York v. Mechanics' National Bank of Newark, -62 How. Pr., 422; 3 N. B. C, 670.) 15 (N. Y., 1882). In an action against a national bank of another State an attachment issued against its property in this State will be vacated _upon proof of its insolvency. (lb.) 16 (N. Y., 1883). The defendant, a national bank at Boston, Mass., on November 18, 1881, closed its doors and was put in charge of a Gov- ernment bank examiner, and thus continued till March 14, 1882, when the Comptroller allowed it to resume. It transacted business till May 22, 1882, when it was placed in the hands of a receiver. An attachment was issued in this action November 19, 1881, against defendant's property in this State. At that time its assets would have paid its debts and liabilities exclusive of its capital, but it had refused to pay various legal obligations then due. Held, that defend- ant had committed acts of insolvency within United States Revised Statutes, section 5242, and the attachment should be vacated. (Mar- ket National Bank of New York v. Pacific National Bank of Boston, 30 Hun., 50 ; 3 N. B. C, 672.) ATTACHMENT OF SHAREHOLDERS' STOCK. 1 (U. S. C. C, 1881). An unrecorded transfer of national-bank stock will take precedence of a subsequent attachment in behalf of a creditor without notice. (Continental National Bank v. Elliot National Bank et al., 7 Fed. Rep., 369.) 2 (U. S. C. C, 1897). The levy of an attachment on the shares of a national bank under the Vermont statutes (R. L., sees. 3261, 3262), which do not include national bank stock in their provisions, is of no effect against the defendant in attachment. (Sowles v National Union Bank of Swanton, Vt, 82 Fed. Rep., 696. ) 3 (U. S. C. C, 1897). It seems doubtful whether any attachment under State laws can operate as a transfer of shares of national-bank stock since such stock exists solely under the laws of the United States' which provide for transfers and declare the effect thereof. (lb ) 4 (Me.). The stock of a shareholder indebted to it may be attached bv Ba e nk, S 63 C Me!°509.T ^ on > exeeutlon - ^^r v. Union National ACTIONS 01? ATTACHMENT, PLEADING AND PRACTICE. Action on attachment bond when discharged in equity. 1 (U. S Sup. Ct, 1888). Sureties on attachment bond against national thereon °t heTb W^ T^ £ th f baDk to ^cure fhem from "os 3*°' tne obligation being illegal, will be discharged in eauitv and be compelled to transfer their collateral to the receiver of tte bank. (Pacific National Bank v. Mister, 124 U. S., 721.) Damages for wrongful attachment. 2 (U. S. C. C, 1888). The loss of interest occasioned bv an «++„ r. wrongfully laid is clearly an injury for whfch damages are ^ES? able against the wrongdoer. (Jacobus v. Monongahefa N»H™Ji Bank of Brownsville, 35 Fed. Rep., 395.) "saneia National DIGEST OF NATIONAL BANK DECISIONS. 23 ATTACHMENT— Continued. ACTIONS OF ATTACHMENT, PLEADINO AND PRACTICE Continued. When dividends covered by attachment. 3 (TJ. S. C. C, 1888). Where shares of corporation stock are attached, the subsequently declared dividends are as much bound by the attach- ments as the corpus of the stock itself is. (lb.) Counsel fees in defending against wrongful attachment not recoverable as damages. 4 (U. S. C. G, 1888). Counsel fees and other expenses (not taxable as costs) pai£ or incurred in defending against an attachment wrong- fully laid are not recoverable as damages in an action upon a statu- tory recognizance given when the attachment was issued, conditioned for the payment to the party aggrieved of " such damages as the court may adjudge." (lb.) When creditor can not be enjoined from selling under attachment although he had concealed the property from other creditors so as to prevent their levying upon it. 5 (U. S. Sup. Ct, 1901). One who has actual possession of the goods of a debtor corporation under a bill of sale which, being executed by the president without authority, did not give a good title can not. be enjoined from selling said property under an attachment thereon, owing to the fact that he placed the property in the nominal posses- sion of his attorney in a place known only to himself, and was thus enabled to secure a levy on them prior in law to that of the other creditors. (Dooley v. Hadden — Hadden v. Dooley, 179 U. S., 646.) Practice pleading. 6 (U. S. Sup. Ct, 1901). In Illinois the law does not permit the owner of personal property to sell it and still continue in possession of it, so as to exempt it from seizure and attachment at the suit of cred- itors of the vendor ; and in cases of this kind the courts of the United States regard and follow the policy of the State law. (Dooley v. Pease, 180 U. S., 126.) 7 (U. S. Sup. Ct, 1901). Where a case is tried by the court, a jury having been waived, its findings upon questions of fact are conclusive in the courts of review. ( lb. ) 8 (US. Sup. Ct, 1901). Errors alleged in the findings of the court are not subject to revision by the circuit court of appeals or by this court if there was any evidence upon which such findings could be made. (lb.) 9 (U. S. Sup. Ct., 1901). Applying the settled law of Illinois to the facts as found, the conclusion reached in this case by the circuit court, and affirmed by the circuit court of appeals, that the sale was void against the attaching creditors, must be accepted by this court. ( lb. ) 10 (U. S. Sup. Ct, 1901). A receiver of a national bank may be notified? by service upon him of an attachment issued from a State court, of the nature and extent of the interest sought to be acquired by the plaintiff in the attachment in the assets in his custody; but, for reasons stated in Earle v. Pennsylvania, ante, 449, such an attach- ment can not create any lien upon specific assets of the bank in the hands of the receiver, nor disturb his custody of those assets, nor prevent him from paying to the Treasurer of the United States, sub- ject to the order of the Comptroller of the Currency, all moneys coming to his hands or realized by him as receiver from the sale of the property and assets of the bank. (Earle v. Conway, 178 U. S. Rep., 456.) 11 (Ala., 1896). An appearance, by counsel, of a nonresident attachment defendant, for the sole purpose of moving a discharge of the levy and the dissolution of the attachment, does not constitute a general appearance, and service must be made by publication before default and judgment can be entered. (Exchange National Bank v. Clement (Ala.), 19 So., 814; 109 Ala., 270.) 24 DIGEST OF NATIONAL BANK DECISIONS. ATTACHMENT— Continued. ACTIONS OF ATTACHMENT, PLEADING AND PRACTICE} — Continued. 12 (Ala., 1896). In action against a nonresident commenced by attach- ment, unless the levy is fictitious or merely colorable, the defendant can not, as a ground for abating the action, dissolving the attach- ment, or vacating the levy, traverse the ownership of the property attached, or deny having a leviable interest therein. (lb.) 13 (N. Y. Sup.). Inan action by an attaching creditor against certain plaintiffs in an action to replevy the attached property for the appoint- ment of a receiver, L., who claimed a lien by virtue of an attachment prior to plaintiff's, was not made a party to the action, and after the appointment of the receiver he made a motion to modify the order made therein, so far as it directed the sheriff to deliver to the receiver the property held under his attachment. Held, that L. might appeal from an order denying such motion. (National Park Bank v. Goddard, 20 N. Y. S., 499 ; In re Lilianthal, ib.) 14 (N. Y. Sup.). A receiver who simply holds property pending the deter- mination of an action to settle the ownership of the same has no interest in such action and will not be allowed to intervene. ( National Park Bank v. Goddard, 20 N. Y. S., 526.) GARNISHMENT OF NATIONAL BANKS: 1 (U. S. Sup. Ct, 1900). An attachment against a national bank as gar- nishee is not an attachment against the bank or its property nor a suit against it, within the meaning of United States Revised Statutes, section 5242, prohibiting such suit against such bank in a State court, with a view of acquiring a preference over other creditors, after insolvency or in contemplation thereof. (Earle, Receiver, etc., v. Commonwealth of Pennsylvania, 178 U. S., 449.) 2 (U. S. Sup. Ct, 1900). When the Chestnut Street National Bank sus- pended and went into the hands of a receiver, the entire control and administration of its assets were committed to the receiver and the Comptroller, subject, however, to any rights or priority previously acquired by the plaintiff through the proceedings in the suit against Long. (Ib.) 3 (U. S. Sup. Ct, 1900). The State court had no authority to order exe- cution in favor of the plaintiff of any dividends upon the money on deposit in the bank to Long's credit at the time the bank was served with the attachment, and direct the sale of the shares of stock origi- nally held by the bank as collateral security. (Ib.) 4 (Kans., 1901). It is the duty of one summoned in garnishment, hold- ing property In the name of, or apparently that of, the defendant debtor, having notice of the claim of a third party to the property, to disclose, by his answer, the name and post-office address of such claimant, the fact that such claim is made, and the nature of such claim so far as known to the garnishee, that such claimant may be interpleaded, and the garnishee may be relieved from liability by delivery of the property to the officers of the court, as provided by statute. (Rock Island Lumber and Mfg. C. v. Fourth Nat. Bank of Wichita et al., 4 Banking Cases, 380; 63 Kans., 768; 66 Fed. Rep., 1024.) 5 (Kans., 1901). When a bank, summoned as garnishee, has on deposit money deposited by the defendant debtor, and has notice of the claim of a third party thereto, and files its answer denying all liability as garnishee, without making disclosure of the facts, and the plaintiff elects to take issue on such answer, if it is disclosed upon the trial that the garnishee had such money on deposit at the time of the serv- ice of the summons in garnishment, the garnishee will not be per- mitted to defend or escape liability upon the ground that some third party is entitled to the property ; nor will a judgment of liability to plaintiff in the garnishment proceeding and satisfaction thereof afford the garnishee protection from the demand of a known claim- ant to the fund. (Ib.) DIGEST OF NATIONAL BANK DECISIONS. 25 ATTACHMENT— Continued. GARNISHMENT OP NATIONAL BANKS — Continued. 6 (Kans., 1901). A judgment against a garnishee and satisfaction thereof will afford the garnishee full protection against all third parties claiming the fund in the hands of the garnishee at the time of the service of summons in garnishment, of whose claim the garnishee had no knowledge, and will also afford protection against all third parties who, knowing the property claimed by them had been arrested in the hands of the garnishee, fail to assert their rights thereto by interpleading in the garnishment proceedings. (lb.) 7 (Mo. Appls., 1903). Where, before the service of the garnishee sum- mons in an action against a depositor in bank and the bank as gar- nishee, the depositor had given a check for the amount of his de- posit, which had been presented to and accepted by the bank, and the amount charged to the depositor and credited to the payee in the check, the relation of debtor and creditor between such depositor and the bank had ceased to exist; hence the bank could not be held as garnishee. (Young v. Bank of Princeton, 5 B. C, 366 ; 71 S. W. Rep., 713.) Chech, when not affected by garnishment. 8 (Ky., 1899). A check drawn prior to, but presented subsequent to, the service of an attachment upon the bank as garnishee, is, to the amount for which it is drawn, an appropriation of any funds in the bank to the credit of the drawer at its presentation, regardless of the attachment lien. (Winchester Bank v. Clark County Nat. Bank, 1 Banking Cases, 515; 51 S. W., 315.) When section 5242 not applicable. 9 (Pa., 1899). Section 5242 of the Revised Statutes of the United States, providing in substance that no attachment shall issue against a na- tional bank or its property before final judgment in any proceeding in any State court, etc., is not applicable .to an attachment against an individual with a clause of scire facias to warn the bank to show cause why judgment should not be levied on such individual's prop- erty in the possession of the bank. (Commonwealth, to use of Com- monwealth Title Insurance and Trust Co. v. Chestnut Street Na- tional Bank et al., 1 Banking Cases, 748.) Funds of a bankrupt estate deposited by bankrupt court can not be garnished. 10 (N. Y., 1875). A national bank holding funds belonging to a bankrupt estate as depository of a bankrupt court can not be garnished in pro- ceedings supplementary to execution. (Havens v. National City Bank of Brooklyn, 6 Thompson & Cook, 346; 1 N. B. C, 783.) Bank in liquidation may be garnished. 11 (Ala.). A national bank may be garnished after it has gone into liquida- tion. (Birmingham N. B. v. Mayor, 104 Ala., 634.) Demand not necessary. 12 (Ala.). A garnishment may be had without first making a demand upon the bank. (lb.) True owner entitled to deposit. 13 (Iowa). The true owner of a deposit is entitled to the deposit as against the depositor's garnishing creditor. (Des Moines Cotton Mills Co. v. Cooper, 93 Iowa, 654.) Bank must respect lien created by garnishment. 14 (Kans.). The bank must respect the lien from the time it has notice of the garnishment. (Exchange Bank v. Gulick, 24 Kans., 359.) Transfer good against subsequent garnishment. 15 (Mass.). A transfer of deposits is good against subsequent attachments and garnishments. (Taft v. Bowker, 132 Mass., 277.) 26 DIGEST OP NATIONAL BANK DECISIONS. ATTACHMENT— Continued. GARNISHMENT OF NATIONAL BANKS Continued. Uncollected paper not subject to garnishment. 16. Uncollected paper is not subject to garnishment. (Conn.)* Grosner v. Farmers' Bank, 13 Conn., 104; (Maine) Bowker v. Hill, 60 Me., 172; (Mass.) Hancock v. Colyer, 99 Mass., 187; (Pa.) Allen v. Brie City Bank, 57 Pa., 129. MISCELLANEOUS. Attaching creditor acquires no right superior to other creditors. 1 (Tex., 1896). An attaching creditor of an insolvent corporation acquires no right superior to other creditors. (Farmers and Merchants' National Bank v. Waco Electric Railway and Light Co., Tex. Civ. App., 36 S. W., 131; Metropolitan Trust Co. v. Farmers and Mer- chant's National Bank, ib.) 2 (Tex., 1896). An attaching creditor of an insolvent corporation for which a receiver is appointed after the attachment acquires no preference right or lien that will deprive the court of the power to equitably apportion the earnings of the property during the receiver- ship to claims classed as operating expenses. (Ib.) When bank's lien superior to that of attaching creditor. 3 (W. Va., 1895). A bank which discounted a draft to which was attached deliverable to its order, a bill of lading of the goods against which the draft was drawn was not required, on notice of nonacceptance of the draft, to charge the amount thereof against the drawer's account, which was sufficient to pay the draft, in order to enforce its lien on the property against an attaching creditor of the drawer. (Neill v. Rogers Bros. Produce Co. (W. Va.), 23 S. E., 702; 41 W. Va., 37. BONDS, PURCHASE OF. (See Powers.) BONDS OF OFFICERS. (See Officers.) BOOKS, INSPECTION OF. Cross references: Jurisdiction — Page. Federal courts may order inspection of books 249 Liquidation — Court may order exhibition of books to shareholders _ _ 268 Shareholders — Right of, to examine books _. 446 Taxation — Right of State officers to examine books 509 BRANCH BANKS. Business of a national bank, where transacted. 1 (U.S. DistCt., 1889). Under Revised Statutes, section 5190, providing that "the usual business of each national banking association shall be transacted at an office or banking house located in the place specified in its organization certificate," a national bank can not make a valid contract for the cashing of checks upon it at a different place from that of its residence, through the agency of another bank (Armstrong v. Second National Bank of Springfield, 38 Fed. Rep., OOO. ) 2 (N. T., 1875). A national bank located in another State can not keep an office for discount and deposit in New York, and can not maintain an action upon a note discounted at such office. (National Bank of Fairhaven v. The Phoenix Warehousing Co., 6 Hun., 71; IN B C, 784.) - a - °" DIGEST OF NATIONAL BANK DECISIONS. 27 BRANCH BANKS— Continued. 3 (N. T., 1875). In this regard national banks are subject to State laws forbidding foreign corporations to act within the State. (lb.) Business necessarily transacted away from the bank. 4 (U. S. Sup. Ct., 1870). The provision of the national-bank act requiring " the usual business " of the banks to be transacted " at an office or , banking house in the place specified in its organization certificate," does not prevent the purchase of coin by one bank at the banking house of another. (Merchants' National Bank v. State National Bank, 10 Wall., 604; 1 N. B. C, 47.) BROKER. (See Powers.) CAPITAL STOCK. Page. Increase of capital stock 27 Enforcement of payment of capital stock 31 Reduction of capital stock 33 Restoration of impaired capital «4 Sale of capital stock _____ 35 Lien of bank on stock or dividends 38 . Miscellaneous 39 Cross references: Evidence — Expert evidence as to value of stock ___ 158 Powers — Power of bank to purchase its own stock or loan money on security thereof _ __. 419 Trusts — When deposit to restore impaired capital not a trust fund 545 INCEEASE OF CAPITAL STOCK. Increased stock must he paid in to make- increase valid. 1 (D. S. C. C. A., 1898). The increase of the capital stock of a bank based on a fictitious value of assets, and on notes given by directors, with an understanding' that they were not to be paid, is in violation of Revised Statutes, section 5142, and the directors of the bauk partici- pating are liable for all losses resulting to creditors. (Cockrill v. Abeles et al., 86 Fed. Rep., 505.) 2 (U. S. C. C. A., 1898). The provision of Revised Statutes, section 5142, to the effect that no increase of the stock of a national bank shall be valid until the whole amount thereof is paid in, does not create a condition which renders shares subscribed and paid for in full invalid unless the entire amount of the proposed increase is subscribed and paid for in full, but refers only to the actual increase created by a subscription for a given number of shares, which must be paid up in full to render it valid ; the amount of the proposed increase approved by the Comptroller merely fixing the maximum amount within which any increase, if paid up, will be valid, and each subscription thereto when paid up in full becomes valid and binding until such maximum is reached. (Scott v. Latimer, 89 Fed. Rep., 843.) Subscriptions to invalid increase of capital stock. 3 (U. S. C. C, 1889). National banks have no authority to increase their capital stock except as provided by Revised Statutes, section 5142, and act of Congress,, May 1, 1886 ; and where an increase is attempted to be made without obtaining The consent of two-thirds of the stock, the payment in full of the amount of such increase and the oertificate and approval of the Comptroller of the Currency, as required by those statutes, the proceedings are invalid, and preliminary subscriptions to 28 DIGEST OP NATIONAL BANK DECISIONS. CAPITAL STOCK— Continued. increase of oapital stock — continued. such increase can not be enforced. (Winters v. Armstrong; Arm- strong v. Stanage; Armstrong v. Wood, 37 Fed. Rep.. 508.) 4 (U. S. C. C, 1889). Such a subscription is impliedly conditioned on the subscription of the whole amount of the proposed increase and on the compliance by the corporation with all the requirements of the statute necessary to make the increase stock valid, and in case of noncom- pliance with such requirements there is a failure of consideration, (lb.) 5 (U. S. C. C, 1889). In an action by the receiver of a national bank to enforce subscriptions to a proposed increase of its capital stock, an allegation that the bank, subsequent to defendants' subscriptions, and with their knowledge, represented to the public by means of circulars! letter heads, etc., that its capital stock had been so increased and that defendants allowed their names to remain " upon the list of those subscribing for and entitled to such new or increase of stock," but without alleging that the public gave credit to the bank on the faith that the defendants were part owners of such increase of stock, or that they allowed themselves to be held out as actual stockholders, does not show that they are estopped to plead the failure of the bank to comply with the statutory requirements in perfecting such increase, (lb.) 6 (U. S. C. C, 1889). A subscriber who has made payments on his sub- scription to the proposed increase, believing that the statutory re- quirements would be complied with, is entitled to have the amount thereof allowed as a claim against the assets of the bank in the receiver's hands. (lb.) 7 (Mo., 1888). A national bank determined to increase its capital stock from $300,000 to $500,000. The new stock subscriptions amounted only to $130,060. This was never authorized by vote of the stock- holders, nor certified to or approved by the Comptroller of the Cur- rency. The plaintiff subscribed and paid $2,000 for so much of the originally proposed increase. Held, that plaintiff did not become a stockholder, and when the bank became insolvent was entitled to judgment against the receiver for the amount so paid. ( Schierenberg v. Stephens, 32 Mo. App., 314; 3 N. B. C, 528.) When subscriber to increased stock is held as owner. 8 (U. S. Sup. Ct, 1891). Where one subscribes for shares in the increase » of the capital of a national banking association in a certain amount, such subscription being paid in full and the entry made on the stock book of the bank, he becomes a shareholder, although no stock certifi- cate is issued. (Pacific National Bank v. Eaton, 141 U. S., 227.) 9 (U. S. Sup. Ct, 1886). Where a shareholder subscribes to a certain increase of capital stock and pays his subscription and the bank after- wards reduces the amount of the increase, if such subscriber has' assented to or ratified the change he will be held a shareholder (Delano v. Butler, 118 U. S„ 634.) 10 (U. S. Sup. Ct, 1890). When the previous proceedings looking to an increase in the capital stock of a national bank have been regular and all that are requisite, and a stockholder subscribes to his propor- tionate part of the increase and pays his subscription, the law does not attach to the subscription a condition that it is to be void if the whole increase authorized be not subscribed, although there may be cases in which equity would interfere to protect him in case of a material deficiency. U. S. Rev. Stat. 5142 is not violated by an issue of the exact amount of stock that was paid in ; it was intended to frr 1 /^ J 8 called " waterin S of stock." ( Aspinwall v. Butler, loo U. S., 595.) m * 11 (D. S. Sup. Ct., 1890). The Comptroller of the Currency has power by law to assent to an increase in the capital stock of a national bank less than that originally voted by the directors, but equal to the DIGEST OP NATIONAL BANK DECISIONS. 29 CAPITAL STOCK— Continued. increase op capital stock — continued. amount actually subscribed and paid for by the shareholders under that vote. (lb.) 12 (U. S. Sup. Ct, 1891). Where one subscribes for shares in an increase of capital stock of a national bank and pays for the same, without wait- ing to see whether the whole amount of the increase is taken, he is bound by such subscription and payment, though the amount of the increase is afterwards reduced by the bank and the Comptroller of the Currency. (Pacific National Bank v. Eaton, 141 U. S., 227; Thayer v. Butler, 141 U. S., 234.) 13 (U. S. Sup. Ct, 1890). The conditions imposed by Revised Statutes, sec- tion 5142, as to the validity of increase of national-bank capital were intended to secure actual cash payment of subscriptions and to pre- vent watering of stock, not to invalidate bona fide subscriptions actu- ally made and paid. (Aspinwall v. Butler, 133 U. S., 595.) 14 (U. S. Supt. Ct.). A stockholder in a national bank who, with knowledge of its insolvent condition and of all material facts, subscribes foi increased stock to same amount as his original stock, and amount of proposed increase is afterwards reduced, can not question validity of proceedings for such increase to annul such subscription and pay- ment. (U. S. Sup. Ct, 1886) Delano v. Butler, 118 U. S., 644; (U. S. Sup. Ct, 1891) Pacific Natl. Bank v. Baton, 141 IT. S., 227; (U. S. Sup. Ct, 1891) Thayer v. Butler, 141 U. S., 234; (U. S. Sup. Ct, 1891) Butler v. Eaton, 141 U. S., 240. Comptroller's approval and certificate essential to increase. 15 (S. C, 1874). There can be no increase of the capital of a national bank until the Comptroller of the Currency approves thereof and issues his certificate, as provided by section 13 of the act of Congress provid- ing for the organization of national banks. (Charleston v. People's National Bank, 5 South Carolina, 103; 1 N. B. C, 898.) Comptroller's certificate conclusive, collateral attach. 16 (TJ. S. C. C. A., 1898). The certificate of the Comptroller of the Currency that the capital stock of a bank has been increased to a certain amount is conclusive of the sufficiency of the facts and the regularity of the proceedings requisite to an increase, and can not be questioned in any collateral proceeding. (Columbia National Bank of Tacoma et al. v. Matthews, 85 Fed. Rep., 934.) 17 (U. S. C. C. A., 1899). The action of the Comptroller in issuing a certifi- cate approving an increase of the capital stock of a national bank is not subject to collateral attack, and a suit by a subscriber to such stock against a receiver of the bank, after its insolvency, for the recovery of his subscription, on the ground that such increase was illegal and the Comptroller's certificate void, is such an attack. (Brown v. Tillitig- hast, 93 Fed. Rep., 326.) 18 (U. S. C. C. A., 1899). Under a resolution of the stockholders of a national bank proposing to increase the capital stock from $200,000 to $500,000, and authorizing the president and cashier whenever $50,000 should be subscribed and paid to certify the same to the Comptroller, subscriptions to such increase, when paid and approved by the Comptroller in the amount of $50,000, or any multiple thereof not exceeding $300,000, were valid and binding on the subscribers, (lb.) 19 (U. S. C. C. A., 1899). Where a subscription to a part of an increase of the capital stock of a national bank has become binding by the terms of the original resolution authorizing the increase, the subscriber is not affected by the subsequent action of the shareholders in limiting the amount of such increase to a part only of that originally author- ized, when the increase to the amount so limited has been approved by the Comptroller, and whether or not the action so limiting the increase was legally taken can not render his subscription illegal or revocable. (lb,) 30 DIGEST OF NATIONAL BANK DECISIONS. CAPITAL STOCK— Continued. incbease of capital, stock — continued. 20 (U. S. C. C. A., 1900). The Comptroller's certificate, authorizing an increase of the capital stock of a national bank, is conclusive of the existence of all the facts necessary to authorize such increase in favor of the public and against the subscribers to such stock. Bailey v. Tillinghast, 99 Fed. Rep., 801.) 21 (U. S. C. C, 1896). Under the national banking law (Rev. Stat, sec. 5142) and the amendment of May 1, 1886 (24 Stat. L., 18), the action of the Comptroller of the Currency in approving of an increase in the capital of a national bank, and certifying that the amount thereof has been paid in is conclusive, and the validity of the increase can not be assailed in a collateral proceeding such as an action to enforce the liability of the stockholders. (Latimer v. Bard et al., 76 Fed. Rep., 536.) 22 (U. S. C. C, 1897). The certificate of the Comptroller of the Currency, approving an increase of the capital stock of a national bank is conclusive of the existence of the facts authorizing such certificate, and a subscriber to the stock can not question its validity. (Tilling- hast v. Bailey et al., 86 Fed. Rep., 46.) Bolder of increased stock when estopped to claim increase illegal. 23 (U. S. C. C. A., 1898). The certificate of the Comptroller of the Currency that the capital stock of a bank has been increased to a certain amount is conclusive of the sufficiency of the facts and the regularity of the proceedings requisite to an increase, and can not be questioned in any collateral proceeding. (Columbia National Bank of Tacoma et al. v. Matthews, 85 Fed. Rep., 934; 79 Fed. Rep., 558, reversed.) 24 (U. S. C. C. A., 1898). One who subscribes to a proposed increase of stock with knowledge that the stockholders had by a resolution authorized the officers, with the approval of the Comptroller, to increase the capital stock in any multiple of $50,000 up to $300,000, as the sub- scriptions shall be paid in, is estopped from questioning the regularity of the proceedings after the certificate of the Comptroller to such an increase is obtained. (lb.) 25 (U. S. C. C. A., 1898). A stockholder who, by power of attorney, has au- thorized another to vote his stock at any and all stockholders' meet- ings " in the same manner as I should do were I there personally present," is estopped by the vote of his proxy as respects any irregu- larity in the proceedings or calls of the meeting, which he could have waived if personally present. (lb.) 26 (U. S. C. C. A., 1900). By a resolution duly passed, the stockholders of a national bank authorized an increase of $300,000 in the capital stock, and under such resolution defendants and others subscribed and paid for such stock to the amount of $150,000, and received certificates therefor, upon which dividends were paid the same as on the original stock. The names of the subscribers were entered on the books of the bank as stockholders, but the increase was not certified to the Comptroller until three years later, the stock being shown during that time in the published statements of the bank as " stock paid in but not certified." At the end of that time a second resolution was passed, reducing the amount of the authorized increase to $150000, and directing the same to be certified to the Comptroller, which was done, and the increase was approved by him. The bank was then known to be insolvent, and was thereafter closed, and a receiver appointed. Held, that the adtion of the stockholders in reducing the amount of the increase was legal, and that of the Comptroller in approving the increase under the circumstances was proper ; that the subscribers became stockholders, and had no equitable ground upon which to repudiate their liability as such to the creditors of the bank (Bailey v. Tillinghast, 99 Fed. Rep., 801.) 27 (U. S.C.C.,1897). Subscribers to a duly authorized and increased issue of stock by a national bank, who accept certificates therefor, vote the stock by proxy, and take dividends thereon, can not question the DIGEST OP NATIONAL BANK DECISIONS. 31 CAPITAL STOCK— Continued. increase of capital stook — continued. validity of such stock as against the receiver after the bank has become insolvent. (Tillinghast v. Bailey et al., 86 Fed. Rep., 46.) 28 (U. S. C. C, 1896).. Where the capital of a national bank has been in- creased, and defendants have received their additional stock, and for several years held themselves out as stockholders, they can not, when the bank becomes insolvent and they are assessed to pay its indebted- ness, deny their liability upon the ground that the increase of capital was fraudulent, and that they could not have discovered the fraud with ordinary care. More diligence was required of them, and they are estopped by their laches. Upton v. Tribilcock, 91 U. S., 45, and Sanger v. Upton, ib., 64, followed. (Latimer v. Bard et al., 76 Fed. Rep., 536.) 29 (U. S. C. C, 1896). The officers, in taking the necessary steps for such increase, act as the agents of the stockholders, and such stockholders can not set up the fraud of the officers concerning the increase to defeat the claims of innocent creditors. (Ib.) 30 (U. S. C. C, 1896). Under the United States statutes national banks have the abstract power to increase their capital to such a limit as may be approved by the Comptroller of the Currency, and where stockholders have assented to an increase they can not set up any defects or irregu- larities in the exercise of the power as a defense in an action to enforce their liability. Chubb v. Upton, 95 U. S., 665 ; Veeder v. Mudgett, 95 N. Y., 295, followed. Scovill v. Thayer, 105 U. S., 143, and Implement Co. v. Stevenson, 13 C. C. A., 661, 66 Fed., 633, dis- tinguished. (Ib.) ENFORCEMENT OF PAYMENT OF CAPITAL STOCK. 1 (U. S. Rev. Stat, 5141). Whenever any shareholder, or his assignee, fails to pay any installment on the stock when the same is required , by the preceding section to be paid, the directors of such association may sell the stock of such delinquent shareholder at public auction, having given three weeks' previous notice thereof in a newspaper published and of general circulation in the city or county where the association is located, or if no newspaper is published in said city or county, then in a newspaper published nearest thereto, to any person m who will pay the highest price therefor, to be not less than the amount then due thereon, with the expenses of advertisement and sale ; and the excess, if any, shall be paid to the delinquent shareholder. If no bidder can be found -who will pay for such stock the amount due thereon to the association, and the cost of advertisement and sale, the amount previously paid shall be forfeited to the association, and such stock shall be sold as the directors may order, within six months from the time of such forfeiture, and if not sold it shall be canceled and deducted from the capital stock of the association. 2 (U. S. C. C, 1889). National banks have no authority to increase their capital stock except as provided by Rev. Stat. U. S., 5142, and act of Congress May 6, 1886 ; and where an increase is attempted to be made without obtaining the consent of two-thirds of the stock, the payment in full of the amount of such increase, and the certificate and the approval of the Comptroller of the Currency, as required by those statutes, the proceedings are invalid, and preliminary sub- scriptions to such increase can not be enforced. (Winters v. Arm- strong ; Armstrong v. Strange ; Armstrong v. Wood, 37 Fed. Rep., 508.) 3 (U. S. C. C, 1889). Such a subscription is impliedly conditioned on the subscription of the whole amount of the proposed increase and on the compliance by the corporation with all the requirements of the statutes necessary to make the increase stock valid, and in case of noncompliance with such requirements there is failure of considera- tion. (Ib.) 4 (U. S. C. C, 1889). In an action by the receiver of a national bank to enforce subscriptions to a proposed increase of its capital stock, an allegation that the bank subsequent to defendants' subscriptions, and 32 DIGEST OF NATIONAL BANK DECISIONS. CAPITAL STOCK— Continued. BNFOECEMENT OF PAYMENT OF CAPITAL STOCK Continued. with their knowledge, represented to the public by means of circulars, letter heads, etc., that its capital stock had been so increased and that defendants allowed their names to remain " upon the list of those sub- scribing for and entitled to such new or increase of stock," but with- out alleging that the public gave credit to the bank on the faith that the defendants were part owners of such increase of stock, or that they allowed themselves to be held out as actual stockholders, does not show that they are estopped to plead the failure of the bank to comply with the statutory requirements in perfecting such increase, (lb.) 5 (U. S. C. C. A., 1899). The maker of a note given in payment for stock in a national bank and transferred to the bank by the payee with the maker's knowledge and acquiescence, can not defend against an action thereon by the receiver of the bank on the ground of failure of con- sideration, because of the bank's insolvency, where he has been fully indemnified against loss by the payee. (Myers v. Hettinger, 94 Fed. Rep., 370.) Receiver may collect note when statute requires payment of stock in, cash. 6 (Miss.). A receiver can collect from a stockholder a note given for capital stock, although a statute requires that the capital stock shall be paid in cash. (Hepburn v. Kincannon, 74 Miss., 691.) Bights of creditors of corporations under general principles of law. 7 (U. S. C. C, 1895). The right of creditors to look to unpaid portions of the capital stock as a fund for the payment of their claims is not created by State statutes, but is derived from general principles of law. The enforcement of such right, therefore, is not dependent upon remedies provided by State legislation; and if it appear that the State has, by statute, provided legal remedies 'for the enforcement of equitable rights, the creditor may, at his election, when proceeding in a Federal court, adopt the form of remedy appropriate in courts of equity, or may sue at law, under the statute. (First National Bank of Sioux City v. Peavey, 69 Fed. Rep., 455.) 8 (U. S. C. C, 1895). The question whether the right of a creditor to look to unpaid capital stock is legal or equitable- in its nature in any particu- lar case is to be determined, it seems, by the following principles : If a person has subscribed for or purchased the stock under such circum- stances that the corporation itself, and through it its creditors, can call upon the stockholder for the. unpaid portions of the stock, then this claim is one at law based upon the express or implied terms of the subscription or purchase.. If, however, by the terms of the original subscription or purchase, no liability is assumed to make any further payments to the corporation on this stock, and it is agreed between the corporation and the stockholder that the stock shall be considered as full paid, then a creditor's right to look to unpaid por- tions of the stock is equitable, and can not be enforced by action at law unless so provided by statute. (lb.) Action by one creditor must be for all. 9 (U. S. C. C, 1896). Where suit is brought in equity to enforce subscrip- tions to the capital stock of a corporation as part of a trust fund for the benefit of the creditors of such corporation, the bill must be so framed as to be for the benefit of all the creditors who are entitled to the trust fund. (First National Bank of Sioux Citv v. Peavev 75 Fed Rep., 154.) *' 10 (Nev.). Creditors who may choose may come in, establish their claims, and contribute to the expense of the suit to subject the unpaid sub- scription of a stockholder to the satisfaction of their claims under the equity practice, and under section 1077 of the Nevada Compiled Laws, which provides that when the question is one of common or general interest of many persons, one or more may sue or defend for the benefit of all. (Thompson v. Reno Savings Bank, 19 Nevada 103 ; 3 Am. St. Kept, 797 ; see note.) ' DIGEST OF NATIONAL BANK DECISIONS. 33 CAPITAL STOCK— Continued. BEDUCTION OF CAPITAL STOCK. Comptroller's certificate approving reduction, effect of. 1 (U. S. Dist. Ct, 1900). The certificate of the Comptroller of the Currency- issued to a national bank approving a reduction of its capital stock is in itself proof of such reduction. (Brown v. Ellis, 103 Fed. Rep., 834.) Disposition of proceeds of retired stock. 2 (Col., 1901). A stockholder's resolution reducing the amount of capital stock of a bank one-half and providing that each stockholder should surrender one-half of his stock and receive long-time certificates of deposit therefor could only operate to distribute to the stockholders the excess of the bank's assets over its liabilities and stock as reduced, and hence, where the bank was insolvent at the time the resolution was passed, a holder of such certificates of deposit was not entitled to payment in priority over other creditors. (Kassler v. Kyle, 65 Pac. Rep., 34; 28 Col., 374.) 3 (Conn., 1905). Under United States Revised Statutes, section 5145 (U. S. Comp. St., 1901, p. 3463), providing that the affairs of a national bank shall be managed by the directors, the directors may, on a reduction of the capital stock of the bank by a vote of the share- holders, approved by the Comptroller of the Currency on the assur- ance of the president and directors that bad and doubtful assets will be charged off and set aside for the benefit of the then shareholders, charge off the bad and doubtful assets as, in effect, a dividend from assets in excess of capital stock, and on so doing the right to receive the proceeds of the assets thus set apart is irrevocably vested in those who are shareholders on the date of the approval of the reduction of stock by the Comptroller of the Currency. (Cogswell et al. v. Sec- ond National Bank, 60 Atl. Rep., 1059. ) 4 (Conn., 1905). Under United States Revised Statutes, sections 5199, 5204 (U. S. Comp. St., 1901, pp. 3494, 3495), authorizing directors of a national bank to declare semiannual dividends out of net profits after carrying one-tenth part of the net profits of the preceding half year to the surplus fund until the same shall amount to 20 per centum of the capital stock and prohibiting the withdrawal, in the form of dividends or otherwise, of any portion of the capital, assets which it is not necessary to retain as capital or for the surplus fund may be returned to the shareholders by the directors, and dividends so ordered may be made payable in the future and on the contingency of future collections on such assets. (lb.) 5 (Conn., 1905). A national bank in charging off assets against capital stock withdrawn by consent of the Comptroller of the Currency may list in the schedule of charged-off assets claims which are also and primarily listed at a lesser valuation as part of the capital stock. (lb.) 6 (Conn., 1905). Where assets of a national bank are charged off against withdrawn capital stock and set apart in trust for the benefit of the then stockholders, a subsequent transfer of shares by the stockhold- ers does not pass the right to the interest of the transferrers in the trust fund, notwithstanding the provision of Revised Statutes of the United States, section 5139 (U. S. Comp. St., 1901, p. 3461), that transferees of national bank stock shall succeed to all the rights and liabilities of their transferrers. (lb.) 7 (Conn., 1905). Similarly, shareholders at the time of the creation of the trust fund may at any time thereafter transfer their rights in the trust fund, with or without a transfer of their shares of stock. (lb.) 8 (Ind., 1887). The capital of a national bank having become impaired by ■the nonpayment of the interest on some paper among its assets to the amount of $71,000, in order to avoid an assessment by the Comp- troller the stockholders reduced its capital stock and carried the bills 4049—05 3 34 DIGEST OP NATIONAL BANK DECISIONS. CAPITAL STOCK— Continued. reduction or capital stock — continued. and notes to the account of suspended or " bad debts," which were not thereafter included as assets, although retained in its custody. Some years afterwards the bank realized .$75,000 from collaterals pledged for the security of that paper. In a suit by a stockholder to recover his share of the amount realized proportioned to the amount of stock surrendered, Held, that he could not recover. .(McCann v. First National Bank of Jeffersonville, 112 Ind., 354 ; 3 N. B. C, 434. ) 9 (N. Y. Common Pleas, 1878). A national bank reducing its capital can not retain, as a surplus or for any other purpose, any portion of the money which it received for retired stock, and having refused to per- mit shares thus retired to be transferred on its books, is liable for the value of the shares to the holder. ( Seeley v. New York National Exchange Bank, 78 N. Y., 608 ; 4 Abb. New Cases, 61 ; 2 N. B. C, 340.) RESTORATION OF IMPAIRED CAPITAL. Assessments under Revised Statutes, section 5205. 1 (U. S. C. C, 1898). On notice from the Comptroller, under Revised Statutes, section 5205, that the bank's capital is impaired so as to require an assessment on the stockholders, such assessment is to be made by the stockholders themselves and an assessment by the directors is void. (Hulitt v. Bell et al., 85 Fed. Rep., 98.) 2 (U. S. C. C, 1898). An assessment to restore impaired capital, under Revised Statutes, section 5205, is only enforceable by subjecting the stock of persons refusing to pay, and no action will lie against the stockholders personally. (lb.) 3 (Ga., 1898). A sale of all the shares of stock held by a shareholder in a national bank, when such sale is made under the provisions of and for the purpose set forth in section 5205, Revised Statutes United States, as amended by act June 30, 1876, is void, unless at such sale the stock brings a price equal in amount to the assessment placed thereon under the provisions of that section. (Merchants' National Bank of Rome v. Fouche, 1 Banking Cases, 745; 103 Ga., 851.) When stockholders may sue the bank for improper assessment. 4 (N. Y.). Where a bank sold a stockholder's shares for his failure to pay assessments made necessary by the losses caused by the negligence of the directors, an action to recover the losses so sustained, which would ordinarily be brought against the delinquent directors by the cor- poration, need not be brought by it, but may be brought by the stockholders affected, when the managing directors at the time are the ones charged with the misconduct. (Hanna v. People's Nat. Bank, 71 N. Y. S., 1076; 35 Misc. Rep., 517.) Equities of shareholders icho pay improper assessment. 5 (U. S. C. C, 1899). Where a number of the shareholders of a national bank in good faith paid an assessment made to comply with a requirement of the Comptroller to make good an impairment of the bank's capital, although such assessment was invalid because made by the directors instead of by the stockholders, on the insolvency of the bank and the winding up of its affairs by a receiver, after outside creditors are paid such paying shareholders are entitled to be treated as creditors as against the nonpaying shareholders and repaid the amounts so paid before general distribution of the remaining assets among all the shareholders. (In re Hulitt, 96 Fed. Rep., 785.) Voluntary assessments to restore impaired capital do not discharge share- holders from liabiltiy. 6 (U. S. Sup. Ct, 188G). Where shareholders have assessed themselves to the amount of the par value of the stock for the purpose of restoring impaired capital, the contributions made in pursuance of such assessment, though all used in paying the debts of the associa- tion, will not so operate as to discharge the shareholders from their individual liability. (Delano v. Butler, 118 U. S., 634.) DIGEST OF NATIONAL BANK DECISIONS. 35 CAPITAL STOCK— Continued. bestobation or impaibed capital — continued. 7 (U. S. C. C, 1885). A voluntary assessment of one hundred per cent under section 5205 for the purpose of restoring impaired capital will not relieve shareholders of their individual liability under section 5151. (Morrison v. Price, Receiver, 23 Fed. Rep., 217.) 8 (U. S. C. C, 1889). In an action by the receiver of an insolvent national bank to recover of a stockholder an assessment on his shares, the defendant alleged as a counterclaim that the Comptroller of the Cur- rency had directed the bank to restore the value of certain securities held by it which had been reported worthless by an examiner; that certain of the stockholders, including defendant, had raised a fund which was placed in the hands of trustees to apply so much as might be from time to time required by the Comptroller to retire such securi- ties ; that the fund was deposited with the bank with full notice of the purpose to which it was to be applied; that a portion had been used to retire the securities designated, and that when the bank failed the balance of the fund came into the hands of the receiver, and was now claimed by him as a part of the ordinary assets of the bank ; that a certain portion of this balance belonged to defendant, which amount he asked to set off against plaintiff's demand. Held, that a general demurrer based on the ground ,that no set-off or counterclaim was available in such an action would be overruled, as the claim could be set off if it was of such a nature that the holder would be entitled to receive the full amount before distribution by the receiver to general creditors. (Welles v. Stout, 38 Fed. Rep., 807.) 9 (U. S. C. C, 1895). The F. National Bank suspended business for lack of funds, and was placed in charge of a bank examiner, who required that $50,000 should be raised and placed in the bank before it could resume business. » The stockholders, including one B., the president, thereupon raised this sum, in amounts equal to 50 per cent of their stock, and placed it in the bank. The examiner caused entries to be made on the books indicating that this contribution was a voluntary assessment, subject, after one year, to the liabilities of the bank, and permitted the bank to resume. B., at a meeting of the directors sub- sequently held, protested against these book entries, but afterwards signed reports in which the $50,000 was included as surplus. At the time of the advance the bank held two notes of B., and discounted another note of his a few days before the expiration of a year from the advance. Shortly after the expiration of the year the bank again suspended payment. Held, that the advance to the bank was a volun- tary assessment and not a loan, and could not be set off by B. in an action against him on the notes by the receiver of the bank. (Brod- erick v. Brown, 69 Fed. Rep., 497.) Directors have no authority to levy assessment to restore capital; shareholders alone can act. 10 (U. S. Sup. Ct, 1904). Section 5205, Revised Statutes, is intended to, and does, confer upon a national banking association the privilege of declining to make the assessment to make good a deficiency in the capital after notice by the Comptroller of the Currency so to do and to elect instead to wind up the bank under section 5220. The share- holders and not the directors have the right to decide which course shall be pursued, and an assessment made upon the shares by the directors without action by stockholders is void. (Commercial Na- tional Bank v. Weinhard; same v. Williams, 192 U. S., 243.) SALE OF CAPITAL STOCK. Acquirement of its own stock by a national bank. 1 (N. Y. Appls., 1867). A national bank can acquire an interest in its own stock only by purchase to prevent a loss upon a debt previously con- tracted in good faith ; and a provision in certificates of stock in such bank that they shall not be transferred until all the liabilities of the 36 DIGEST OF NATIONAL BANK DECISIONS. CAPITAL STOCK— Continued. sale of capital stock — continued. stockholder to the bank are paid is void and of no effect. (Conklin v. The Second National Bank, 45 N. Y., 655 ; 1 N. B. C, 693.) A national oank may not purchase its own stock. 2 (U. S. C. C. A., 1898). The purchase of its own stock by a national bank, not for the purpose of preventing, or necessary to prevent, a loss upon a debt previously contracted, is illegal, and the bank may maintain an ■ action at law to recover the money paid therefor without tendering back the stock. (Burrows v. Niblack, 84 Fed. Rep., 111.) Sales of stock under section 5201, Revised Statutes United States, must oe real. 3 (U. S. C. C, 1885). The sale which section 5201, Revised Statutes, re- quires- a national bank to make of its own stock is real and not ficti- tious. And where the president and cashier of a national bank which is the owner of some of its own stock purchase such stock and execute their note to the bank for the purchase money, in a suit against them on the note by the receiver of such bank they are estopped to set up as a defense that their purchase of the stock was unauthorized, or that their purchase was merely colorable, or to avoid a forfeiture of the bank's charter, or for any other deceptive or illegal purpose. (Bundy, as Receiver, etc., v. Jackson, 24 Fed. Rep., 628.) Directors can give president and cashier parole authority to sell. 4 (Ky. Appls., 1903). Where a depositor sued the receiver of a bank for the amount of a deposit, and he pleaded that a part of the deposit was used to pay the depositor's subscription to the capital stock of the bank, evidence that the president and cashier, who made the alleged sale to the depositor, had been given parole authority by the board of directors to sell the stock was admissible. (Somerset Natl. Banking Co.'s Receiver et al. v. Adams, 5 B. C, 481* 72 S. W. Rep., 1125.) Invalidity of provisions against transfer of stock. 5. The articles of association and the by-laws of a national bank pro- hibited the transfer of stock owned by any stockholder indebted to the bank until such indebtedness should be satisfied. Held, that the prohibition was invalid, under the national banking act, and that the bank could not thus acquire a lien on the shares of the stock- holders. (U. S. Sup. Ct, 1873) Bullard v. National Eagle Bank, 18 Wall., 589 ; 1 N. B. C, 93 ; (NT.) Conklin v. Second National Bank, 45 N. T., 655. 6 (N. Y., 1900). A by-law of a national bank organized under the act of 1864 seeking to impose restrictions upon transfers of stock by declaring a lien upon the stock to the extent of any liability of the stockholder to the bank is inoperative to accomplish such pur- pose, being inconsistent with section 36 of such act, which provides that " no association shall make any loan or discount on the security of its own shares of capital stock, nor be purchaser or holder of any such shares, unless such security or purchase shall be necessary to prevent loss upon a debt previously contracted in good faith." (Buf- falo German Ins. Co. v. Third Nat. Bank of Buffalo, 2 Banking Cases, 325 ; 162 N. Y., 163. Affirmed by U. S. Sup. Ct, Third National Bank of Buffalo v. Buffalo German Insurance Co., 193 U. S., 581. ) 7 (N Y., 1900). Under such section a national bank is not entitled, by virtue of such a by-law and of notice thereof printed on its certifi- cates of stock, to have an equitable lien upon its outstanding stock declared in its favor against a bona fide purchaser. (lb.) Purchaser of stock may rescind for fraud. 8 (U. S. C. C. A., 1893). The intending purchaser of bank stock is entitled to rely upon a statement of its president as to the bank's condition without inquiring further. 50 Fed. Rep., 77 ; 2 C. C. A., 629 • 2 U s' App., 434, reaffirmed. (Merrill v. Florida Land and Imp. Co.. 60 Fed. Rep„ 17.) ' DIGEST OE NATIONAL, BANK DECISIONS. 37 CAPITAL STOCK—Continued. sale op capital stock — continued. 9 (U. S. C. C. A., 1893). The receipt by a bank of the fraudulent proceeds of a sale of stock belonging to it, and the subsequent appointment of a receiver, gives its creditors no such right in the proceeds as will prevent the purchaser from rescinding the sale and requiring resti- tution, (lb.) 10 (S. Dak., 1895). Under Compiled Laws, sections 3589, 4515, relating to the rescission of contracts procured through fraud, one induced to purchase bank stock by fraudulent representations as to its value may rescind the purchase and recover his notes given therefor against a holder of the notes having notice of the fraud. (Taylor v. National Bank (S. D.), 62 N. W., 99; 6 S. Dak., 511.) Fraud of president in sale of banlc stock, defenses. 11 (S. Dak., 1894). S., the president and active manager of a bank, sold a number of shares of its capital stock to T., under representations of fact relied upon by T. and afterwards claimed by him to be fraudu- lent and false. The bank, by its directors, had full and actual knowl- edge of such representations, and with such knowledge consented and arranged . that T.'s notes given in partial payment for said stock should be made directly to the bank and take the place of notes held by it against S. and others. Held, that in an action by the bank against T. on such notes he might make the same defense, founded on such alleged false and fraudulent representations, as he could have made if the notes had been given to S. and the action brought by him. (National Bank of Dakota v. Taylor, 58 N. W., 297 ; 5 S. Dak., 99.) 12 (S. Dak., 1894). In such purchase of stock T. had the right to rely solely upon the representations of fact by S., and if S., conscious that T. was so relying, knowingly deceived him, nothing would condone the wrong as between them, or estop T. from asserting it, but his acquiescence in it with knowledge of the facts. ( lb. ) 13 (S. Dak., 1894). A party who thus deliberately deceives another to his prejudice can not complain that the sufferer has not been vigilant in finding it out. (lb.) 14 (S. Dak., 1894). The right of such sufferer to rescind may be qualified by intervening interests of innocent parties, but so long as the ques- tion is between the original parties solely he may cdntinue to rely on the representations upon which the contract was made and by which it was induced, and loses no rights as against the wrongdoer himself by failure to diligently discover the fraud. (lb.) 15 (S. Dak., 1894). The fact that soon after such purchase T. became, and for a number of months was, the cashier of the bank would not alone, and as a matter of law, make him chargeable with a knowledge of the condition of the bank, and so of the falsity of the representa- tions under which he bought, as against evidence that he was for a considerable portion of the time absent from the bank and the city where it was located, and that during all his connection with the bank he, by direction of S., the president, and the person of whom he bought the stock, was engaged in routine work and had practically nothing to do with the bills receivable of the bank. (lb.) 16 (S. Dak., 1894). The fact that as cashier he signed statements exhibit- ing the condition of the bank would not, in an action on such notes by the bank or by S., estop him from showing, as against them, that such statements, which he believed at the time were true, were in fact false. (lb.) Sale of stock on execution. 17 (Pa., 1895). The State legislature may authorize the sale under execu- tion of national-bank stock. (In re Braden's Estate, 30 A., 746; 165 Pa. St.. 184; Appeal of Wood, ib.) 38 DIGEST OP NATIONAL BANK DECISIONS. CAPITAL STOCK— Continued. sale op capital stock — continued. Measure of damages for conversion of stock. 18 (Ala.). The measure of damages for the conversion of stock in a national bank is the highest market value, together with dividends shown to have been paid on the stock. (Terry v. Birmingham Nat. Bank, 93 Ala., 599.) A national oank may sell stock for a customer. 19 (N. Y.). It is within the incidental powers of a national bank, as part of the regular banking business, to sell the shares of a customer in such bank in order to increase his deposit. (Williamson v. Mason, 12 Hun., N. Y., 97.) When pledgor can not maintain suit to redeem. 20 (U. S. Sup. Ct., 1877). The pledgor of stock can not maintain an action to redeem and for an accounting after the lapse of over three years, and when the stock has been sold on due notice to the pledgor and an account has been made to him and he has not objected. (Hay ward v. Eliot Nat. Bank, 2 N. B. C, 1 ; 96 U. S., 611.) Sale of hank stock — Failure to disclose insolvency of oank. 21 (Ky. Appls., 1902). The seller of bank stock is not liable to the buyer in an action of deceit merely because he failed to disclose the insolvent condition of the bank, where he had no connection with the bank, and no actual knowledge Of its condition. (Kirtley's Admrx. v. Shinkle, 5 B. C, 287; 69 S. W. Rep., 723.) Measure of damages for deceit in sale of stock. 22 (U. S. C. C. A., 1902). The measure of damages recoverable in an action for deceit inducing the purchase of shares of stock in a corporation is the difference between the price paid and the real intrinsic value of such shares at the time of their purchase, and such value is to be ascertained in the light of subsequent events in the history of the company, and not by their market value, although the plaintiff is not entitled to recover for depreciation by reason of subsequent acts which were entirely independent of the causes existing at the time of the purchase. (Hindman v. First Nat. Bank of Louisville et al., 112 Fed. Rep., 931.) LIEN OF BANK ON STOCK OB DIVIDENDS. On its own stock. ' 1 (U. S. Sup. Ct, 1873). A bank can not acquire a lien on its own stock held by. its debtors, even if its by-laws are framed with that intention. (Bullard v. Natl. Eagle Bank, 18 Wall., 589.) 2 (U. S. Sup. Ct, 1870). Loans by bank to stockholder do not give lien to bank on his stock. (First National Bank of South Bend v. Lanier (78 U. S.), 11 Wall., 369.) 3 (U. S. C. C, 1871). The by-laws of a national bank provided that no transfer of the stock should be made by any shareholder who was indebted to the bank, and this provision was also included in the cer- tificates of stock. Held, invalid, and that a transfer of stock by a shareholder while indebted to the bank was good. (Evansville Na- tional Bank v. Metropolitan National Bank, 2 Bissell, 527 ; 1 N. B C 189.) Note. — This case was appealed to the Supreme Court and affirmed by a divided court, no opinion being given. 4 (N. J., 1884). A national bank organized under the law of 1864 can not, even by specific provisions for the purpose in its articles of association and in its by-laws, acquire a lien on its own stock held by its debtor. (Delaware, Lackawanna and Western Railroad Company v Oxford Iron Company, 38 N. J. Eq., 340; 3 N. B. C, 582.) 5 (N. Y., 1867). A national bank can acquire an interest in its own stock only by a purchase to prevent a loss upon a debt previously contracted DIGEST OP NATIONAL BANK DECISIONS. 39 CAPITAL STOCK— Continued. LIEN OF BANK ON STOCK OR DIVIDENDS — Continued. in good faith, and a provision in certificate of stock in such bank that they shall not be transferred until all the liabilities of the stockholder to the bank are paid is void and of no effect. (Conklin v. The Second Nat. Bank, 1 N. B. C, 693 ; 45 N. Y., 655.) Contra. 6 (Maine, 1897). A national bank may, by a by-law, make the shares of a stockholder subject to a lien for his debt to the bank, and thus pre- vent a transfer on the books until the debt is paid. (Bath Sav. Inst. v. Sagadahoc Nat. Bank, 89 Me., 500.) 7 (Maine, 1897). Where there is no provision in the law of the bank sub- jecting shares to the payment of a shareholder's debts, a transferee of shares transferable only on the books of the bank by the share- holder or his attorney and by a surrender of the certificate takes a perfect title by transferring the shares under a power to himself, and can require the bank, upon surrender of the certificate, to give a new one, certifying that the shares stand" recorded in his own name. (Bath Saving Institution v. Sagadahoc National Bank, Me., 36 A., 996; 89 Me., 500.) 8 (Maine, 1897). Without the surrender of the crtificate of stock, a bank can not issue another upon a transfer made by the apparent -owner, either in person or by attorney, that will deprive the real owner of his shares. (lb.) Lien of bank on dividends for claim against shareholder. 9 (Maine, 1874). A national bank has a lien on and the right to hold a cash dividend as pledge for the indebtedness of the shareholder to the bank. (Hagar v. Union Nat. Bank, 63 Maine, 509; 1 N. B. C, 523.) 10 (Ohio). Where the by-laws of a bank authorize its directors to withhold dividends from a stockholder who is indebted to the bank until such indebtedness is paid, and the directors have ordered the dividends of a stockholder to be withheld, a mere donee of such dividends, to whom they were transferred without consideration by such stockholder, can not recover them from the bank until such indebtedness is paid, since such transferee had no better claim to such dividends against the bank than did the transferrer. (Bellevue Bank v. Higbee, 2 O. C. D., 512.) Necessity of demand before suit for. 11 (Maine, 1874). A national bank sued a shareholder therein and attached his shares. Pending suit he demanded payment of the dividends de- clared- upon the attached shares, which was refused. He afterwards settled the suit and brought an action for his dividends, without renewing his demand. Held, that the demand while the shares were attached was a nullity, and as dividends were not payable until demanded, the action could not be maintained. (Hagar v. Union Nat. Bank, 63 Maine, 509 ; 1N.B.C, 523.) MISCELLANEOUS. Rights of national bank as to pledged stock. 1 (U. S. Sup. Ct, 1882) . Where a national bank made a loan upon the pledge of its own shares and afterwards sold the shares to obtain payment of the loan, which exceeded the amount realized from the shares. Held, that the owner of the shares could not, on the ground that the statute forbids a national bank to take its own shares as security, recover from the bank the amount realized upon the sale of the shares. (First National Bank of Xenia v. Stewart, 107 U. S., 676; 3 N. B. C, 96.) 2 (U. S. Sup. Ct., 1885). But if said stock was merely in the possession of the bank and not deposited with it as collateral for a loan, the bank can not without judicial process and against the debtor's will sell the property and apply its proceeds to the payment of his debt. (First National Bank of Xenia v. Stewart, 114 U. S„ 224.) 40 DIGEST OF NATIONAL BANK DECISIONS. CAPITAL STOCK— Continued. miscellaneous — continued. The character of a stock certificate man be shown aliunde. 3 (U. S. C. C. A., 1898). A certificate of stock in a national bank, though in due form, may be shown aliunde to have been issued to the apparent stockholder solely as collateral security for money loaned. _ (Williams v. American National Bank Qf Arkansas City, Kans., et al., 85 Fed. Rep., 376.) 4 (TJ. S. C. C. A., 1898). It is no defense to an action against a national bank for money had and received that the collateral security it gave to plaintiff was issued without authority of law. (lb.) Pledge of spurious stocJc by cashier — Liability of bank. 5 (N. C. Sup., 1903). Where the president of a bank, the stock of which had been fully issued, signed blank certificates of the bank's stock, which were left in the custody of the bank's cashier, and such cashier fraudulently filled up and countersigned one of such certifi- cates to himself, which he pledged to plaintiff as security for a loan, and plaintiff had no knowledge' that the certificate was spurious, on the cashier's failure to pay the loan the bank was liable to plaintiff for the value of the stock. (Havens v. Bank of Tarboro et al., 5 B. C, 491 ; 43 S. E. Rep., 639.) Insufficient defense in action for stock subscription. C (S. Dak., 1899). The president of a bank in issuing shares of its stock for a negotiable note payable to the bank made an agreement with the maker that he should not be called upon to pay the note. Held, that the president had no authority to make such agreement, and that in an action on the note against the maker, by its bona fide purchaser from the bank, a verdict was properly directed for plain- tiff. (Mead v. Pettigrew, 1 Banking Cases, 595; 11 S. Dak., 529.) Diversion of funds paid on subscription. 7 (Wyo.). A subscriber to bank stock can maintain an action against the bank for a diversion of funds delivered by him to the bank to be paid on his stock subscription. (Wilson v. Cheyenne First Nat. Bank, 1 Wyo., 108.) CASHIER. (See Officers.) CERTIFICATE OF DEPOSIT. (See Deposits.) CERTIFICATION OF CHECKS. (-See Checks.) CHECKS. Page. Nature and effect of check 41 Checks revoked by death. 43 Order of payment 43 Presentation of check 43 Date of checks ..._.". 43 When payment can not be rescinded 44 Payment of checks not properly countersigned 44 Payment of checks on trust funds 44 Payment of checks on partnership funds _ .45 Payment of checks drawn by agents without authority 45 Payment of checks made payable to fictitious payees 46 What constitutes payment 47 Payment after depositor has directed bank not to pay 47 Rights and liabilities of drawer _ __. _ 47 Liability of bank to drawer for refusal to pay checks 49 DIGEST OP NATIONAL BANK DECISIONS. 41 CHECKS— Continued. Obligations of bank to payee or holder: Page. In States whero issuance of check is held not to bs an equitable assign- ment of the deposit before acceptance . ... _'_ 52 In States where issuance of check is held to be an equitable assign- ment of the deposit before acceptance _ 7 _ 54 Holder's rights as against garnishment by drawer's creditor 57 Whether check accepted for payment or collection 57 When deposit insufficient to pay check 60 Check for illegal consideration _ . _ 60 Who not a bona fide holder for value 61 Overdrafts - - - 62 Lost or stolen checks. . .. 63 Miscellaneous 63 Certification of checks: Right to certify 68 What not a certification 68 Oral acceptance _ 68 Authority of officers to certify checks 68 Nature and effect of certification _ 69 Check altered after certification 71 Negligence in certifying a raised draft; liability . _ 71 Canceling certified check at request of drawer _ 71 Bona fide holder of illegally certified check _ _ _ _ 71 Drawer when released by certification 72 Miscellaneous 73 Certification of note 74 Cross references: Attachment — When checks not affected by garnishment 25 Deposits — Checks, how applied when title to deposit is in dispute 130 Forged or altered paper 164 Powers — National banks may buy checks _ __ 416 nature and effect of check. Is a check a Mil of exchange? 1 (U. S. Sup. Ct, 1870). Bank checks are not inland bills of exchange, but have many of the properties of such commercial paper, and many of the rules of the law merchant are alike applicable to both. Without acceptance no action can be maintained by the holder upon either against the drawer. The chief points of difference are that a check is always drawn on a bank or banker. No days of grace are allowed. The drawer is not discharged by the laches of the holder in presentment for payment unless he can show that he has sus- tained some injury by the default. It is not due until payment is demanded, and the statute of limitations runs only from that time. It is by its face the appropriation of so much money of the drawer in the hands of the drawee to the payment of an admitted liability of the drawer. It is not necessary that the drawer of a bill should have funds in the hands of the drawee. A check in such a case would be a fraud. All the authorities, both English and American, agree that a check may be accepted, though acceptance is not usual. By the law merchant of this country the certificate of the bank 42 DIGEST OF NATIONAL BANK DECISIONS. CHECKS— Continued. nature and effbct of check — continued. that a check is good is equivalent to acceptance. It implies that the check was drawn upon sufficient funds in the hands of the drawee, that they have been set apart for its satisfaction, and that they shall be so applied whenever the check is presented for pay- ment. It is an undertaking that the check is good then and shall continue good, and this agreement is as binding on the bank as its notes of circulation, a certificate of deposit payable to the order of the depositor, or any other obligation it can assume. (Merchants' National Bank v. State National Bank, U. S. Sup. Ct, 10 Wall., 604.) 2. A check drawn on a bank and payable at some future day is not an inland bill of exchange. (Pa.) Champion v. Gordon, 70 Pa., 474; (R. I.) Westminster Bank v. Wheaton, 4 R. I., 30. 3. A check payable after date is a bill of exchange. (Cal.) Mintuan v. Fisher, 4 Cal., 35; (Ind.) Glenn v. Noble, 1 Blackf., 104; (N. Y.) Bowen v. Newell, 13 N. T., 290; (Ohio) Andrew v. Blachly, 11 Ohio St., 89. 4 (Cal., 1901). Under Civil Code, section 3254, defining a check as "a bill of exchange drawn upon a bank or banker, and payable on demand without interest," an instrument having these characteristics does not cease to be a check because drawn by a bank. (Garthwaite et al. v. Bank of Tulare, 4 Banking Cases, 8; 134 Cal., 237.) 5 (Cal., 1901). Where a check was sent by mail and never received by the addressee it remained the property of the sender. (lb.) 6 (111.). A check is, substantially, an inland bill of exchange, and the rules applicable to such bills are alike applicable to checks. (Bickford v. First National Bank of Chicago, 42 111., 238.) 7 (111.). The check of a depositor upon his banker, delivered to another for value, transfers to that other the title to so much of the deposit as the check calls for, which may again be transferred by delivery, and when presented at the bank the banker becomes the holder of the money to the use of the owner of the check, and is bound to account to him for that amount, provided the drawer has funds to that amount on deposit subject to his check at the time it is pre- ' sented. These checks are received and passed and deposited with bankers as cash, subject, of course, to be made good if not paid on presentation. This is the legal effect of an ordinary uncertified check. (lb.) 8 (Kans. Sup., 1903). A bank check is a bill of exchange, within the mean- ing of section 9 of chapter 4 of the General Statutes of 1901, provid- ing that an acceptance of a bill of exchange written on paper other than the bill " shall not bind the acceptor, except in favor of a person to whom such acceptance shall have been shown, and who, in faith thereof, shall have received the bill for a valuable con- sideration." (Eakin v. Citizens' State Bank of Ness City, 5 B. C, 654; 72 I'ac. Rep., 874.) 9 (N. Y.). In the case of a deposit of a check drawn upon itself, the bank becomes at once the debtor of the depositor, and the title to the deposit passes to the bank. (Oddie et al. v. The National City Bank of New York, 45 N. Y„ 735.) 10 (Nebr., 1898). A general agent of an insurance company collected money for the company and deposited it to his credit as " general agent," and made remittances from time to time to the company. Held, that a check on said fund given by him without direction or authority of the company was a personal and not a company check. (Penn. Mut. Life Ins. Co. v. Conoughy, 74 N. W„ 422; 54 Nebr., 123.) DIGEST OF NATIONAL, BANK DECISIONS. 43 CHECKS— Continued. CHECKS REVOKED BY DEATH. 1. All unaccepted checks are revoked by death of the drawer. (Ala.) National Commercial Bank v. Miller, 77 Ala., 168; (Ky., 1901) Weiands, admr., v. State National Bank of Maysville, 65 S. W. Rep., 617 ; (Mich.) Second National Bank v. Williams, 13 Mich., 282; (Ohio) Simmons v. Cincinnati Sav. Soc, 31 Ohio St., 457. 2 (Cal. Sup., 1902). Where one, for the purpose of making a gift, draws and delivers a check, and asks the payee not to present it till after the donor's death, such death revokes the gift under Civil Code, section 1147, providing that a verbal gift is invalid unless accom- panied by a delivery of the thing given, or the means of obtaining Its possession and control. (Pullen et al. v. Placer Co. Bank, 5 B. C, 216; 71 Pac. Rep., 83.) Liability of bank. 3 (Cal. Sup., 1902). A bank paying a check with notice of the drawer's death is liable to his estate. (lb.) OEDEB OF PAYMENT. i. As between different check holders, the one first presenting his check for payment at the bank on which it is drawn is entitled to priority. (111.) National Safe and Lock Co. v. People, 50 111. App., 336; (111.) Jacobson v. Bank of Commerce, 6U 111. App., 470; (Ky.) Chambers v. Northern Bank of Kentucky, 5 Ky. Law Rep., 123. 2 (N. Y.). Mere priority in the drawing of a check does not give it any priority or preference over checks subsequently drawn, as when checks are, presented at the same time for more than is due the depos- itor it would be impossible for banks to do business if they were obliged, at their peril,' to settle the conflicting claims of the holders of checks as to rights of priority arising from the time of drawing such checks. ( Dykers- v. Leather Manufacturers' Bank, 11 Paige, 612.) PBESENTATION OF CHECK. Diligence in presentment. 1 (Idaho Sup., 1902). Under the statutes of Idaho the holder of a check or other bill of exchange payable at sight, without interest, is entitled to ten days in addition to a reasonable time in which to present same for payment before neglect in presenting can be charged against the said holder. (Chambers v. Custer Co., 5 B. C, 233; 71 Pac. Rep., 113.) Negligence in presentation of check — Discharge of indorser. 2 (111. 'Sup., 1903). Where a property owner delivered two checks of a third person to his building contractors, to be applied on the con- tract price, and they indorsed the checks to subcontractors, who failed to present the same for payment on the same or the succeeding day on which they were received, during which the maker had suf- ficient funds in the bank on which the checks were drawn to pay the same, but, by reason of the maker's assignment for the benefit of creditors before the checks were presented, the bank refused to pay the same, the property owner was discharged from liability as indorser of the checks, which constituted a valid payment on the contract. (Brown et ux. v. Schintz et al., 5 B. C, 635; 67 N. E. Rep., 172.) DATE OP CHECK. 1 (N. Y.). The issuing of a check with a blank date is implied authority to any holder to fill in a date. (Crawford v. West Side Bank, 100 N. Y., 50.) ^4 DIGEST OP NATIONAL BANK DECISIONS. CHECKS— Continued. date of check — continued. 2 (N. T.). But where the date of the check was altered by the depositor's bookkeeper, who collected it before the date which it originally bore, the bank and not the depositor must suffer the loss. (Ib.)- 3 (N. Y.). When a bank pays a post-dated check before the day upon which it is dated the bank makes the payment upon its own responsibility and can not charge the amount to the drawer. (Godin v. Common- wealth Bank, 13 N. Y. Super. Ct, 76.) 4 (N. Y.). Parties taking a post-dated check can not recover unless the bank has funds on hand belonging to the drawer at the date of the check, even though the check had been certified by the cashier of the bank on which it was drawn. (Clarke National Bank v. Albion Bank, 52 Barb., 592.) WHEN PAYMENT CAN NOT BE BESCINDED. 1 (Mo.). Where the bank pays a check to the holder, who has taken it in good faith and for value, and charges up the check to the makers, such payment can not be rescinded by the maker without the consent of the person to whom payment was made. (Albers v. Commercial Bank, 85 Mo., 173.) PAYMENT OF CHECKS NOT PROPERLY COUNTERSIGNED. 1 (Mich.). In an action by a bank for overdrafts paid on defendants' check, where it appeared that plaintiff was instructed by defendants to cash no checks not countersigned by their bookkeeper, and that the checks in question were not so countersigned, the burden is on the bank to show that the defendants received the benefit of the amount so drawn. (Gladstone Exchange National Bank v. Keating, 94 Mich., 429.) Paying unsigned checks. 2 (Mo. Appls., 1902). Where the bookkeeper of a depositing corporation presents an unsigned check, which the bank pays, the bookkeeper appropriating the proceeds, such payment is negligence per se, and the bank is liable to the depositing corporation, without reference to any question of the estoppel of the corporation to recover for the pay- ment of forged checks, because of having failed to warn the bank in advance thereof. (Kenneth Inv. Co. v. National Bank of the Repub- lic of St. Louis, 5 B. C, 13; 70 S. W. Rep., 173.) PAYMENT OF CHECKS ON TRUST FUNDS. 1 (U. S. Sup. Ct, 1881). A bank is held to have notice when an account is kept with a depositor as trustee that the fund is not his individual property if it is shown to consist in whole or part of trust funds. (National Bank v. Insurance Co., 104 U. S., 54.) 2 (U. S. Sup. Ct, 1890). Where money is deposited by one known to be an agent the bank has notice that the money belongs to some one other than the depositor. (Union Stockyards Bank v. Gillespie, 137 U. S., 411.) 3 (Kansas Sup., 1903). A bank can not be held to account to the owner of a fund, where such fund has been deposited by an agent in his own name and paid out upon his check, without knowledge by the bank of any want of power on the part of the agent. (Martin v. Kansas Natl. Bank et al., 5 B. C, 768 ; 72 Pac. Rep., 218.) 4 (Ky. Appls., 1903). If a depositor of trust funds appropriates them to the payment of his individual debt to the bank, the latter, having notice of the character of the fund, is affected with knowledge of the misappropriation and may be compelled to refund. (Columbia Fi- nance and Trust Co. v. First Natl. Bank, 5 B. C, 611 ; 76 S. W. Rep., 156.) DIGEST OF NATIONAL BANK DECISIONS. 45 CHECKS— Continued. payment of ohbcks on trust funds — continued. 5 (Md.). Where a bank has notice of a trust it is liable for funds paid out in known violation of the trust. (Swift v. Williams, 68 Md., 236.) 6 (Mass., 1869). Where money is so deposited by a trustee that the bank has no notice of the trust the bank is not liable for paying it out as if it belonged to the depositor. (School Dist. of Greenfield v. First National Bank, 102 Mass., 174.) PAYMENT OF CHECKS ON PABTNEBSHIP FUNDS. 1 (U. S. C. 0.). A bank is liable for paying out partnership funds on the private check of one of the partners, unless it can be shown that the money actually went for partnership purposes. (Coote v. U. S. Bank, 3 Cranch., C. C, 50.) Deposits to joint credit — Checks — Signatures. 2 (Ky. Appls., 1903). Where several persons make a deposit in a bank to their joint credit, the bank must have the signatures of all appended to a check before it is authorized to pay it. (Columbia Finance and Trust Co. v. First Natl. Bank., 5 B. C, 611 ; 76 S, W. Rep., 156.) Payment of one partner's indebtedness from firm's deposit. 3 (Ky. Appls., 1903). Where moneys belonging to a firm are deposited in a bank, a member thereof can not employ any part of such funds to pay his debts to the bank without the consent of the remainder of the firm. (lb.) PAYMENT OF CHECKS DBAWN BY AGENTS WITHOUT AUTH0BITY. 1 (U. S. C. C. A., 1902). Where a dealer in corn arranged with a bank to cash the checks of his purchasing agent, such checks to be sent to the dealer from time to time with drafts for the amount thereof, and such agent drew and had cashed at such bank checks purporting to but in fact not representing any purchase of corn, and indorsed by himself, and bearing the fictitious indorsement of the pretended payee, if the indorsement by such agent was irregular it was the duty of such dealer, on the first of such checks being sent to him by the bank, to have notified the bank of such fact, and until so notified the bank was not negligent in receiving and paying such checks. (Ar- mour v. Greene County State Bank, 112 Fed. Rep., 631 ; 4 Banking Cases, 233.) 2 (TJ. S. C. C. A., 1902). Where a dealer in corn arranged with a bank to cash the checks of his agent given for the purchase of corn, and each check bore a memorandum of the amount purchased, the truth- fulness of the memoranda could at any time have been tested by such dealer by inspecting the corn in the cribs, but it was no part of the duty of the bank, and it could not be held responsible if some of the checks so drawn and cashed by it did not represent actual pur- chases, (lb.) 3 (U. S. C. C. A., 1902). Where a dealer in corn made an arrangement with a bank to cash the checks of his agent given for the purchase of corn, the bank to be repaid the amount so advanced from time to I time on drafts on the dealer, and at the time of making such arrangement he deposited a small sum in the nature of indemnity against its advancements, such deposit did not create the relation- ship of banker and depositor between them. (lb.) 4 (111., 1901). Where a dealer in corn arranges with a bank to cash the checks of his agent given for the purchase of corn, and such agent ' issues checks purporting to but in fact not representing such pur- * chase, and the bank in good faith cashes such checks, and there is '" no negligence on the part of such banker, the loss must fall on the dealer, who, by his selection of such agent, made the loss possible. h (Hanna et al, v. Drovers' National Bank, 62 N. E„ 556.) 46 DIGEST OP NATIONAL BANK DECISIONS. CHECKS— Continued. PAYMENT OF CHECKS DRAWN BY AJ3ENTS WITHOUT AUTHORITY Continued. 5 (111.). A depositor gave his clerk a power of attorney to draw checks for fifteen days and deposited the power of attorney at the bank. Without the knowledge of the depositor the clerk drew checks after the fifteen days had expired and appropriated part of the money to his own use. Held, that the bank was not entitled to presume that the clerk had a general authority to draw checks beyond the fifteen days, from the fact that when the depositor's bank book was written up it was delivered to the clerk with the paid checks, the depositor not having examined the same and not knowing the facts. (Manu- facturer's National Bank v. Barnes, 65 111., 69.) Unauthorized indorsement — Notice of limitation of agent's authority — Liability of drawee. (Colo. Appls., 1903). Plaintiff's bookkeeper had authority to indorse in blank certain checks payable by defendant, which came monthly to • plaintiff, the indorsement to be used only in order to deposit the checks to the credit of plaintiff with a bank, from which they passed through the clearing house and were paid by defendant, who had no knowledge of the limitation. Held, that the bank was not liable for the amount of a check which the bookkeeper negotiated to others after indorsing it in blank, defendant not being put on inquiry by the fact that the check bore the indorsements of parties to whom it was negotiated, while former checks bore the bookkeeper's indorse- ment alone. (Wedge Mines Co. v. Denver Natl. Bank, 5 B. C, 619; 73 Pac. Rep., 873.) Drafts drawn by agent — Bank's knowledge of lack of authority. 7 (Nebr. Sup., 1903). Where a former agent, without actual authority, and with nothing due him, has drawn on his former principal through a bank instructed by the principal to pay such drafts, it is the bank's duty, as soon as it learns of the agent's lack of authority, to retain any proceeds of the draft which have not been paid out (Baeschlin et al. v. Chamberlain Banking House, 5 B. C, 331.) 8 (Nebr. Sup., 1903). In a suit by the bank to recover for the amount paid on such a draft, it can recover only the amount paid before receiv- ing notice of the agent's want of authority. That the remainder had been previously placed to the agent's credit in the bank is not sufficient. (lb.) PAYMENT OF CHECKS MADE PAYABLE TO FICTITIOUS PAYEES. 1 (N. Y.). A check made payable to a fictitious payee is as a general rule payable to bearer, and if negotiated by the maker is " as against the maker and all persons having knowledge of the facts as if payble to Shipman v. Bank of State of N. Y., 126 N. Y., 318 ; Phillips v. Merchants' National Bank, 140 N. Y., 556. 2 (Ohio). A fictitious payee is not a person who is not in existence, but whom the drawer believes to be in existence. Where by the fraud of a third person a depositor is induced to draw his check to a non- existing person, the drawer being in ignorance of the fact and intend- ing no fraud, payment by the bank of the check upon an indorsement representing such payee is not payment. (Armstrong v. Pomeroy National Bank, 46 Ohio St., 512.) 3 (Ohio). A building and loan association made a loan to one B upon the representation of its attorney and agent that a person named B desired the loan. The loan having been approved by the proper officers, a check was drawn payable to B and delivered to the attor- ney, who indorsed it and appropriated the money to his own uses. There was in fact no such person as B, and it appeared that the asso- ciation had made no inquiries as to the existence of such person. Held, that the association was guilty of negligence, barring a recovery from the bank of the amount called for by the check. (Burnet DIGEST OE NATIONAL BANK DECISIONS. 47 CHECKS— Continued. PAYMENT OF CHECKS MADE PAYABLE TO FICTITIOUS PAYEES — Continued. Woods Building and Savings Co. v. German National Bank of Cin- cinnati, 3 Ohio N. P., 84.) WHAT CONSTITUTES PAYMENT. 1 (U. S. C. C. A., 1903). When, in the absence of fraud, a check is presented in bank by the payee, and received as a deposit, and credited on his account in the bank, the check is paid. The transaction is the same in effect as if the cash had been handed to the payee, and by him returned to the bank. This result does not depend on the amount of , cash in the bank being equal to the check, nor on the financial condi- ' tion of the bank, as shown later on a settlement of its affairs after insolvency. (Montgomery Co. v. Cochran et al. ; Cochran et al. v, Montgomery Co., 126 Fed. Rep., 456.) 2 (Cal., 1899). A depositor gave his check for the. bank's draft payable to another party, and the check was charged against him ; but the draft was protested and returned to the bank. Held, that there was no payment Of the check which could withdraw from the amount of the deposit. (Dingley v. McDonald et al., 2 Banking Cases, 153; 124 Cal., 90.) 3 (Ky., 1899). Where a bank received a check by mail, with directions to send " cash for same," it should have adopted the usual method of ^sending money to the point indicated, which was by registered pack- age ; and therefore the deposit of the money in the post-office with- out having the package registered or taking a receipt for it did not constitute a payment, though the bank may have notified the post- master that it wished to have the package registered. (Clay City Nat. Bank v. Conlee, 51 S. W„ 615.) PAYMENT AFTER DEPOSITOR HAS DIRECTED BANK NOT TO PAY. 1 (N. Y., 1899). Where a bank, through an oversight, pays a check drawn by a depositor to the order of a third party after it has received an order from the depositor not to honor the check, the bank is liable to its depositor for the amount thereof, although there was an agree- ment between the bank and the depositor to the effect that the bank would not be liable for failure to obey such orders, but would merely endeavor to execute them. (Elder v. Franklin Nat. Bank of City of New York, 1 Banking Cases, 507; 55 N. Y. Sup., 576.) BIGHTS AND LIABILITIES OF DRAWER. Time of presentation in order to charge draicer or indorser. 1 (111.). In order to fix the liability of the drawer of an inland bill of exchange or check in case of nonpayment, the holder should pre- sent the bill or check to the person or bank on which it is drawn within business hours of the day next succeeding the receipt of the paper and give notice of the dishonor to the drawer. (Bickford v. First Nat. Bank of Chicago, 42 111., 238.) 2 (111.). Where a notary public takes a check to a bank during banking hours for the purpose of demanding payment thereon, and finding the bank's doors closed, goes to the president and demands payment of him, there is sufficient presentment. (Judgment, Park Nat. Bank v. Niblack, 67 111. App., 583, reversed ; Niblack v. Park Nat. Bank, 48 N. B„ 438; 169 111., 517.) 3 (Nebr.). The indorser of an ordinary check is released from liability thereon where the indorsee might have presented the check for pay- ment within twenty-four hours, but sent the same by a circuitous route, so that it was not presented until five days, when payment was refused. (55 N. W., 1064; 37 Nebr., 500, affirmed; First National Bank v. Miller, 62 N. W., 195; 43 Nebr., 791.) 48 DIGEST OF NATIONAL BANK DECISIONS. CHECKS— Continued. BIGHTS AND LIABILITIES OF DRAWEE — Continued. Drawer may revoke before acceptance. 4 (La., 1899). A check issued by the bank should not be countermanded as to its payment without cause. (Valdetero v. Citizens' Bank of Jen- nings et al., 1 Banking Cases, 601 ; 51 La. Ann., 1651.) 5 (La., 1899). A loan promised by a cashier personally and as cashier, to enable one to go in search of the president who is sick in body and mind and has disappeared, has consideration enough to hold the bank for the promise of its cashier, for which loan the latter issued a check, and without cause shown stopped payment without proof enough of any.cause for stopping it, after the one who went in search had left and was performing his part of the agreement. (lb.) 6. A check may be revoked by the drawer at any time before acceptance. (Ala.) National Commercial Bank v. Miller & Co., 77 Ala., 168; (Ky.,-1901) Weiands Admr. v. State National Bank of Maysville, 65 S. W. Kep., 617 ; (Ky.) Tramel v. Farmers' National Bank, 11 Ky. Law. Rep., 900; (Mo.) Albers v. Commercial Bank, 85 Mo., 173; (N. Y.) Dykers v. Leather Manufacturers' Bank, 11 Paige, 612. When drawer may not revoke. 7 (N. Dak., 1901). A cashier's check, being merely a bill of exchange drawn by a bank upon itself, and accepted in advance by the act of its issuance, is not subject to countermand, like an ordinary check, and the relations of the parties to such an instrument are analogous to those of the parties to a negotiable promissory note payable on de- mand. (Drinkall v. Movious State Bank, 88 N. W. Rep., 724; 4 Bank- ing Cases, 222.) Release of drawer. 8 (U. S. C. C, 1884). Where the indorsee of a draft accepts the drawee's check in payment, instead of cash, and neglects to present it for pay- ment or certification until the next day, and the check is dishonored in consequence of the delay, and the draft has to be protested for non- payment, the drawer can not be held liable. (Merchants' National Bank of the City of New Tork v. Samuel et al., 20 Fed. Rep., 664.) When drawer's action barred by his negligence. 9 (Ohio). A building and loan association made a loan to one B upon the representation of its attorney and agent that a person named B de- sired the loan. The loan having been approved by the proper officers, a check was drawn payable to B, and delivered to the attorney, who indorsed it and appropriated the money to his own uses. There was, in fact, no such person as B, and it appeared that the association had made no inquiries as to the existence of such person. Held, that the association was guilty of negligence, barring a recovery from the bank of the amount called for by the check. (Burnet Woods Bldg. and Sav. Co. v. German Nat. Bank of Cincinnati, 3 Ohio X. P., 84. ) 10 (N. Y., 1902). The drawer of a check is not required to so prepare it that no one else can successfully tamper with it. (Critten et al. v. Chem- ical Nat. Bank, 63 N. B. Rep., 969; 171 X. X., 219.) Drawer owes no duty as to genuineness of indorsement*. 11 (Iowa, 1897). A drawer of a check owes no duty to the drawee or to an indorsee to investigate the genuineness of an indorsement, or for that purpose to examine with diligence the check upon its return. (Ger- man Sav. Bank v. Citizens' Nat. Bank, Iowa, 70 N. W., 769 ; 101 Iowa, 530.) Liability of draiccr to bank for overdraft. 12 (N. Y., 1898). A bank receiving from a depositor, in the usual course of business, a check drawn to its order, before its maturity, is, in the absence of evidence to the contrary, entitled to presume that it was given for a valuable consideration, and if, under such circumstances, DIGEST OF NATIONAL, BANK DECISIONS. 49 CHECKS— Continued. EIGHTS AND LIABILITIES OF DBA WEB — Continued. the bank practically purchases such check by paying money on the faith of the first-mentioned check, on a check drawn by such depos- itor, the drawer of the first-mentioned check is not entitled to show equities existing between the drawer and drawee at the date of the check to defeat the bank's title thereto. And in an action on the check against the drawer, the fact that the bank, after paying for the check, charged the amount thereof back to such depositor is imma- terial. (Riverside Bank v. Woodhaven Junction Land Co. et al., 1 Banking Cases, 297; 34 Hun., 359.) Liability of drawer to holder; limitations. 13 (Cal., 1901). The drawer of a dishonored check, who has been notified of its dishonor, is not relieved of any part of his liability by the in- solvency of the drawee occurring after notice of dishonor. (Garth- waite et al. v. Bank of Tulare, 4 Banking Cases, 8 ; 134 Cal., 237 ; 66 Pac. Rep., 326.) 14 (Ga., 1900). Ordinarily the drawer is not bound until payment is de- manded and refused, but presentation is not necessary when the drawer, at the time of its delivery, had no funds to his credit in the bank on which it was drawn. In that event the statute begins to run from the date of the check. (Haynes v. Wesley, 3 Banking Cases, 240 ; 112 Ga., 668.) 15 (Ga., 1900). By the execution and delivery of an ordinary check the drawer contracts with the payee that the bank will pay to the latter or his order the amount designated on presentation. Being a simple contract in writing, the limitation prescribed by the statute in which suit may be brought for its enforcement is six years from the date of presentation and refusal to pay, unless presentation is in law ex- cused, (lb.) 16 (Mich., 1902). Defendants sent plaintiff a check on account, which the latter deposited for collection. The bank forwarded it by mail to the bank on which it was drawn. Payment was not made promptly, and the latter bank subsequently became insolvent. There was evi- dence that defendants had a balance in the bank sufficient to pay all outstanding checks, and that if the check had been presented it would have been paid. Defendants had information from which they might infer that the 4 bank was not strong, but it did not appear that they had any reason* to suppose that if the check was properly presented in a reasonable time it would not be paid. Held, that in an action on the unpaid check it was error to instruct that defend- ants committed a fraud in sending plaintiff the check, and were not entitled to notice of nonpayment. (Carson, Pirie, Scott & Co. v. Pincher et al., 89 N. W. Rep., 570 ; 4 Banking Cases, 315 ; 129 Mich., 687.) 17 (Mich., 1902). It was proper to instruct that the bank on which the check was drawn was not a suitable agent for its collection. (lb.) LIABILITY OP BANK TO DBAWEB FOB EEFTJSAL TO PAY CHECK. 1 (Ga.). Where a bank refused to pay a check drawn by a customer who had enough funds on deposit to pay the same, the customer, though there was no proof of special damages, was not confined to nominal but was entitled to " temperate " damages. (Atlanta Nat. Bank v. Davis, 23 S. B., 190; 96 Ga., 334.) 2 (111., 1901). Where a check is drawn by a person in trade in favor of and delivered to a third person, who presents the same to the bank on which it is drawn for payment, and payment is refused for want of funds, when there are ample funds in the bank belonging to the drawer of the check and subject to its payment, such refusal is wrongful, and entitles the drawer of the check to an action for 4049—05 4 50 DIGEST OF NATIONAL BANK DECISIONS. CHECKS— Continued. LIABILITY OP BANK TO DEAWEK FOE BEFUSAL TO PAY CHECK Continued. wrongfully slandering his credit in his business. (Hanna v. Drovers' Nat. Bank, 92 111. App., Oil, judgment affirmed, 62 N. E., 556.) 3 (111., 1901). In an action against a bank for damages for injuring plain- tiffs' credit by refusing to pay their checks when they had money to meet them on deposit, defendant filed the general issue, and pleaded a judgment in an action between plaintiffs and another adjudicating that all the money deposited with defendant by plaintiffs when pay- ment of the checks was refused belonged to such customer, and was held by plaintiffs in trust for him. Plaintiffs' demurrer to such plea was sustained. Defendant then filed a notice of defense setting up the same judgment. On the trial fhe court admitted such judgment in evidence. Held, that in the absence of anything to show on what ground the demurrer was sustained, it does not necessarily appear that such rulings were inconsistent. (Hanna et al. v. Drovers' Nat. Bank, 62 N. E. Rep., 55(5; 4 Banking Cases, 174; 192 111., 252.) 4 (111., 1901). Where* a banker has notice of the fact that money deposited belongs to another than the depositor, It may refuse to pay his check and be compelled to pay to the real owner. (lb.) 5 (Kans., 1898). A judgment for one dollar of actual damages, in a suit against a bank by a depositor for injury to his business standing, caused by a refusal to honor his check drawn in favor of a third person, will be considered as for a nominal sum only, and will not be a basis for the allowance of an extra -amount as exemplary damages. (First Nat. Bank v. Kansas Grain Co., 55 P., 277.) 6 (Kans. Sup., 1902). A bank is liable in damages resulting from a non- fulfillment of its contract to pay the money of its depositor on demand, to the same extent and for the same reason that other per- sons are liable for the nonfulfillment of contracts. The measure of its liability depends upon the circumstances of each individual case. (Kleopfer v. First Natl. Bank of Herington, 5 B. C. 150; 70 Pac. Rep. 880). 7 (Ky., 1896). A bank may properly refuse to honor the check of a depos- itor who is indebted to it on a past-due note for an amount larger than the sum on deposit. (Mt. Sterling Nat. Bank v. Green (Ky.), 35 S. W., 911; 99 Ky., 262.) 8 (Ky., 1896). One who draws a check on a bank in which he has enough funds for its payment, not encumbered by an earlier lien in favor of the bank, may sue such bank for damages, on its refusal to pay the check to the drawee. (lb.) 9 (Mass. Sup., 1903). Where in an action against a bank for refusal to honor a depositor's check, the plaintiff was and had been a trader engaged in business, and there was evidence that his business amounted to $150,000 a year, and that he had sufficient funds in the bank to meet the check, he was entitled to recover substantial dam- ages. The liability was not limited to the amount of plaintiff's funds in defendant's hands at the time, nor to the amount of checks payment of which was refused. Plaintiff being in good standing and credit the bank was not entitled to set off unmatured notes against its liability. (Wiley v. Bunker Hill Natl. Bank, 5 B. C, 627; 67 N. E., 655.) 10 (Minn., 1896). When a bank refuses to pay a check drawn by a depositor against a fund sufficient to pay it, the depositor is not, in an action for the slander, restricted to nominal damages. (Svendsen v. State ( Bank, 65 N. W„ 1086 ; 64 Minn., 40.) « 11 (Nebr., 1899). Proof by the drawer of a check that, when presented, he had a sufficient deposit with the drawee subject to check to pay it, and that afterwards he was compelled to pay the amount of the check to the holder because of the unwarranted refusal of the drawee to pay it, supports a judgment for the amount paid out by the drawer and such other damages as are alleged and proved. (First Nat. Bank v. Railsback, 78 N. W., 512 ; 58 Nebr., 248.) DIGEST OF NATIONAL- BANK DECISIONS. 51 CHECKS— Continued. LIABILITY OP BANK TO DRAWER FOR REFUSAL TO PAY CHECK Continued. 12 (Nebr., 1902). Deposits in a bank create between it and the depositor the relation of debtor and creditor, and, as long as this relation exists, the bank is in duty bound to honor the checks of the depositor, and it can not refuse to do so on the ground that the money deposited belongs to some other person, or that the title of the depositor to it is defective. (Nehawka Bank v. Ingersoll et al., 89 N. W. Rep., 618; 4 Banking Cases, 333.) 13 (Nebr., 1902). Knowledge by the bank that u draft has been drawn on the depositor and is outstanding would not justify a refusal by the bank to pay out the money deposited when demanded by the depos- itor. The law would not allow the bank to set up a jus tertii against the demand. ( lb. ) 14 (N. Y.). The implied contract between a bank and its depositors is that it will pay the deposits when and in such sums as are demanded, the depositor having the election to make the whole payable at one time by demanding the whole or in installments by demanding portions ; and whenever a demand is made by presentation of a genuine check in the hands of a person entitled to receive the amount thereof for a portion of the amount on deposit, and payment is refused, a cause of action immediately arises, and the statute of limitations begins to ruu as against the installments so due and payable. ( Viets v. The Union National Bank of Troy, 101 N. Y., 503.) 15 (N. Y.). While a check drawn by a depositor against a general bank ac- count does not operate as an assignment of so much of the account, it authorizes the payee, or one to whom he has indorsed and delivered it, to make a demand, and a refusal of the bank to pay on presenta- . tion gives the drawer a right of action, in case he has funds in bank to meet the check, and the refusal was without his authority. (lb.) 16 (N. Y.). The refusal of the bank to pay a cheek upon presentation gives the drawer a right of action in case he has funds in the bank to meet the check, and the refusal to pay was without authority. (Brooke v. Tradesmen's National Bank, 22 N. Y. St., 633; 68 Hun., 129.) 17 (N. Y.). The measure of damages will be the amount of actual loss the party has sustained, which may fairly and reasonably be considered as naturally arising from the breach of the contract, according to the usual course of things. (lb.) 18 (N. Y.). The ordinary amount of damages in such case would be the amount of check, interests, and costs. (lb.) 19 (N. Y.). The immediate entering of a judgment against the drawer, and the seizure of his business by the sheriff in consequence of the failure of the bank to pay the check, is not an injury for which the bank would be liable. (lb.) 20 (N. Y.). Where a bank, in consequence of an error, fails to pay a depos- itor's check when presented, but discovers the error and pays the check five days later, the depositor can recover only nominal damages against the bank. (Burroughs v. Tradesmen's National Bank (Sup.), 33 N. Y. S., 864.) 21 (N. Y.). Where a plaintiff in an action for tort for injury to his credit had deposited a note with a defendant bank to be discounted, and thereafter, and subsequent to the maturity of the note, drew sev- eral checks on the bank, which were dishonored because the note deposited had not been paid when due, an instruction that if the jury believed the note was discounted, and that the defendant bank acted through malicious, wrongful, and improper motives, it was liable for the actual money loss of the plaintiff, and also for such substantial damages for the impairment of his credit, and for his feelings and mental anxiety over the matter, as directly resulted from such wrong- ful acts was proper. (Davis v. Standard Nat. Bank, 63 N. Y. S., 764; 50 App. Div„ 210.) 52 DIGEST OF RATIONAL BANK DECISIONS. CHECKS— Continued. LIABILITY OF BANK TO DRAWEE FOB REFUSAL TO PAY CHECK Continued. 22 (N. Y.). Where the defendant bank dishonored the checks of the plaintiff on four successive occasions, and without reasonable excuse, when the plaintiff had money deposited in the bank, and great injury resulted to the credit of the plaintiff from such action, such acts are sufficient to warrant the legal inference that the bank acted with malice. (lb.) 23 (Tenn., 1900). Substantial damages may be recovered against a bank for wrongfully, willfully,- and maliciously refusing to honor a depositor's check, if he is a "trader," without alleging special damages. (J. M. James Co. v. Continental Nat. Bank, 2 Banking Cases, 573; 105 Tenn., 1.) 24 (Va., 1902). A declaration alleged that plaintiff, being a depositor in the defendant bank, drew a check thereon, but that, though his deposit was sufficient to pay such check, it was twice presented for payment and each time dishonored, and charged that by reason of the negligence of defendant, and of the wrongs thus committed against plaintiff, he has been greatly injured in his good name and credit, and thereby suf- fers great loss. Held, that plaintiff was entitled to prove exemplary damages. (Wood v. American Nat. Bank, 40 S. E. Rep., 931 ; 4 Bank- ing Cases, 340; 100 Va., 306.) 25 (Va., 1902). Plaintiff's check was wrongfully dishonored by the defend- ant bank, and, when plaintiff asked defendant's bookkeeper why it was dishonored, the bookkeeper said he knew nothing about the mat- ter. Plaintiff then drew another check for the same amount to the same payee, and went with him to the bank. The teller again refused to pay, saying there were no funds, but, after consultation with the bookkeeper, said there had been a mistake, and paid the check. The relations between plaintiff and defendant had always been pleasant, and defendant promptly wrote plaintiff, disclaiming all intent to in- jure him, and offered to do all it could do to remove any injurious impressions arising from its mistake, and authorized plaintiff to use its letter for that purpose. Held, that plaintiff was not entitled to exemplary damages. (lb.) 26 (Va., 1902). Exemplary damages are allowable only where there is mis- conduct or malice or such reckless negligence as evinces a conscious disregard of the rights of others, and where these elements are lack- ing only compensatory damages are permissible. (lb.) OBLIGATIONS OF BANK TO PAYEE OR HOLDER. Liability of bank to holder in States where issuance of a check is held not to be an equitable assignment of the deposit. All the courts of England and America, except the State courts of the States of Illinois, Iowa, Kentucky, Louisiana, Nebraska, South Carolina, and Texas, hold that the issuance of a check does not con- stitute an equitable assignment of the deposit before acceptance, and that the payee or holder (before acceptance) has no right of action against the bank. 1 (U. S. Sup. Ct, 1869). The holder of a bank check has no right of action upon it against the bank unless under special circumstances, such as an acceptance of the check by the bank. (Bank of Republic v. Millard, 77 U. S., 152.) 2 (U. S. Sup. Ct., 1876). The holder of a check before it is accepted by the bank can not maintain an action on it against the bank, as there is no privity of contract between them. (First National Bank of Wash- ington v. Whitman, 94 U. S., 343.) 3 (U. S. Sup. Ct, 1897). As between a check holder and the bank upon which such a check is drawn it is settled that, unless the cheek be accepted by the bank, an action can not be maintained by the holder against the bank. (Fourth Street National Bank of Philadelphia v. Yardley, 165 U. S„ 634.) DIGEST OF NATIONAL BANK DECISIONS. 53 CHECKS— Continued. OBLIGATIONS OF BANK TO PAYEE OE HOLDER Continued. 4 (U. S. C. C. A., 1894). Drafts for part of a fund in the hands of a debtor of the drawer do not, without acceptance by the drawee, constitute an appropriation of part of such fund, or an equitable assignment thereof. (Bosworth v. Jacksonville National Bank, 64 Fed Rep., 615.) 5 (Ala.). A check drawn and delivered to the person to whose order it is payable does not, without acceptance by the drawee, operate as an assignment of the sum in his hands for which it is given. It may be revoked by the drawer at any time before acceptance, and is revoked by his death ; and there being no privity, expressed or implied, be- tween the payee and the drawee, the former can maintain no action 'on or against the latter. (National Commercial Bank v. Miller & Co., 77 Ala., 168.) 6 (Cal. Sup., 1902). An ordinary bank check, for a part only of the sum on deposit, does not operate at the time of delivery as an equitable assignment pro tanto of the sum on deposit, and an attachment on the deposit will take precedence of an unpresented check. (Dono- hoe-Kelly Banking Co. v. Southern Pacific Co. et al., 5 B. C, 224 ; 71 Pac. Rep., 93.) 7 (Kans.). The holders of the checks of a firm can maintain an action upon a contract made by the bank with the firm to pay the checks. (Chanute Nat. Bank v. Crowell, 6 Kans. App., 533.) 8 (Mo.). Payment by a bank of a check upon a forged indorsement, where the deposit of the drawer exceeded the amount of the check, gave no right of action against the bank to the payee of the check. (J. M. Houston Grocer Co. v. Farmers' Bank, 71 Mo. App., 132.) 9 (Nebr., 1897). A commission firm sold cattle for plaintiff, depositing pro- ceeds in a bank to their own credit, and gave plaintiff a check for the amount less charges. The bank knew nothing of the source from which the deposit was derived, and paid it out on checks of the firm, and when the plaintiff's check was presented it was refused payment for want of funds. Held, that the fact that, between the time the deposit was made and the time the check was presented, the bank had collected a draft in favor of the firm in excess of the amount of the check, and had credited the proceeds to the firm, at the same time charging it with the amount of a demand note it held against the firm, did not render it liable for the amount of plaintiff's check, where the draft was deposited at the time the note was given, and as collateral to it. (Pederson v. South Omaha Nat. Bank, 71 N. W. Rep., 973.) 10 (N. C, 1896). The holder of a check can not sue the bank on which it is drawn until such check is accepted by the bank. (Commercial National Bank v. First National Bank, 24 S. E., 524 ; 118 N. C, 783. ) 11 (N. C, 1896). A stipulation stamped on the face of a check, that it will not be paid to a certain company or its agents is valid. (lb.) 12 ( N. J. ) . The holder of a check on a bank can not sue the bank for refusal to pay it on presentation, though the drawer have sufficient on deposit to meet it. (Creveling et al. v. Bloomsbury National Bank, 46 N. J., 255.) 13 (N. T.). The implied engagement on the part of a banker to pay the checks of his depositor does not inure to the benefit of the holder of a check so as to enable him to enforce payment thereon against the bank prior to acceptance, and in the absence of assent by the banker the giving of the check does not operate as a transfer or assignment of the debt created by the making of the deposit. (First National Bank of Union Mills v. Clark, 134 N. Y., 368.) 14 (N. Y. App., 1892). The giving of a check by a bank depositor for the full amount of the deposit does not operate as an assignment to the holder of the check so as to enable him to enforce payment thereon against the bank prior to its acceptance of the check. (First National Bank v. Clack, 32 N. E., 38; 134 N. Y„ 368.) 54 DIGEST OF NATIONAL BANK DECISIONS. CHECKS— Continued. OBLIGATIONS OF BANK TO PAYEE OE HOLDER Continued. 15 (Ohio. Sup.). An action can not be maintained against a bank by the holder of a check for refusal to pay it, unless the check has been accepted, although therf is to the credit of the drawer on the books of the bank a sum more than sufficient to nieet the check. (Cincin- nati, H. and D. R. Co. v. Metropolitan Nat. Bank, 42 N. E., 700; 54 Ohio St., 60.) 16 (Okla., 1898). A draft drawn in the ordinary form does not constitute an equitable assignment pro tanto of funds in the hands of the drawee to the credit of the drawer before such draft has been accepted or presented for payment. (Guthrie Nat. Bank v. Gill, 1 Banking Cases, 183; 6 Okla., 560.) 17 (Okla., 1898). There is an implied promise on the part of a Wank, when receiving deposits, to pay them out, on the checks of the depositor, to any person in whose favor he may draw the same ; and the check holder is subrogated to the right of the depositor in so much of the deposits as the check may call for, remaining in the bank to the credit of the depositor at the time when such draft is presented for payment. ( lb. ) 18 (Okla., 1898). Where a depositor makes a draft on a bank in which he has funds to his credit and afterwards makes a general assignment for the benefit of his creditors, and the holder of such draft presents the same to the drawee for payment after such assignment is made and payment is refused, be can not maintain an action against the drawee and recover on said draft, although at the time the draft was presented for payment the drawee did not know of the assignment, but learned of such assignment before making payment and by rea- son of such knowledge refused payment. (lb.) 19 (Tenn.). The holder of a check can not sue the bank on which it is drawn unless it has been accepted by the bank. (Pickle v. People's National Bank (Pickle v. Muse), 12 S. W., 919; 88 Tenn., 380.) 20 (W. Va.). A general assignment for the benefit of creditors does not defeat the check holder, although the check be not presented to the bank for payment until after such assignment. (Hulings v. Hulings Lumber Company et al., 18 S. E. Rep., 620; 38 W. Va., 351.) Liability of bank to holder in States toliere issuance of check is held to be an equitable assignment of the deposit before acceptance. In Illinois, Iowa, Kentucky, Louisiana, Nebraska, South Carolina, and Texas the State courts hold that the holder of a check can sue upon it if when presented the bank has a sufficient amount to the credit of the drawer to pay it. In these States, however, the Fed- eral courts follow the general rule of commercial law that only the owner of the deposit has a right to sue. Illinois. 1 (111.). The check of a depositor, on a bank in which he has funds suffi- cient to meet it, transfers to the payee, as between him and the depositor, the title of so much of the deposit as the check calls for, to remain in the bank until demanded by the presentation of the check. (Judgment (1899), 80 111. App., 204, reversed. Rickert v. Suddard, 56 N. E., 344; 184 111., 149.) 2 (111.). Where a depositor draws his check on his banker, who has funds to an equal or greater sum than his check, it operates to transfer the sum named to the payee, who may sue for and recover the amount from the bank, and a transfer of the check carries with it the title to the amount named in the check to each successive holder. (The • Union National Bank v. The Oceana County Bank, 80 111., 212.) 3 (III.). After a check has passed into the hands of a bona fide holder it is not in the power of the drawer to countermand the order of pay- ment, (lb.) DIGEST OP NATIONAL BANK DECISIONS. 55 CHECKS— Continued. OBLIGATIONS OF BANK TO PAYEE OB HOLDER — Continued. 4 (111.). An instrument drawn by a depositor on a bank in the following form, after giving the date and the name of the bank, " Pay to A. and B., for account of C. & -Co., ten hundred and eighteen 23-100 dollars," and signed by the depositor, is a valid bank check, and will operate to transfer to the payees an amount of the drawers' funds on deposit equal to the sum named on its face. The words " for account of C. & Co." do not change its character as a check. A bill or note, without at all affecting its character as such, may state the transaction out of which it arose or the consideration for which it , was given. (The Ridgely National Bank v. Patton & Hamilton, 109 111., 479.) 5 (111.). A bank check payable to attorneys on account of a debt due from the drawer to the clients of the attorneys vests the legal title in the payee named as trustees for the clients, and a suit thereon against the bank is properly brought in the names of the payees. (lb.) 6 (111.). A debtor gave his check on a bank for the amount of his indebted- ness, payable to the attorneys of the creditor, which the bank refused to pay, alleging an agreement of the debtor to apply his deposits on other indebtedness. It was held that the bringing of an action by the creditor against his debtor did not estop him from bringing an action on the check in the name of his attorneys, the payees, against the bank. (lb.) 7 ( 111. ) . If, at the time of presenting a check for payment, the" deposit has been lawfully applied by the bank on a note of the drawer, the holder can not enforce payment of the check. (Merchants' Nat. Bank v. Maple, 65 111. App., 484.) 8 (111.). When payment of a check is refused because the drawer has no funds, there is no presumption that the check remains outstanding for payment, and no duty devolves on the bank to reserve from a future deposit an amount large enough to pay it. (Gilliam v. Mer- chants' Nat. Bank, 70 111. App., 592.) 9 (111.). Plaintiff presented a check to the bank on which it was drawn and the bank refused payment for want of funds. On the next day the drawer deposited sufficient funds to meet plaintiff's check, and the day following made a general assignment, and the assignee entered upon his duties. Plaintiff then presented his check for pay- ment. Held, that the bank was not liable to him. (Gilliam v. Mer- chants' Nat. Bank, 70 111. App., 592.) 10 (111.). Where a bank certifies a check, it is manifest that the bank has enough funds of the drawer at the time of the certification on deposit to pay it, and the transfer of the check carries with it, as against the bank, title to the amount named in it. (American Trust and Savings Bank v. Crowe & Gillen, 82 111. App., 537.) 11 (111.). Where a bank pays checks drawn upon it to any other than a person to whose order they are made payable, it does so at its peril. (T. M. Sinclair & Co. v. Goodell, 93 111. App., 592.) 12 (111.). A bank, which has on deposit funds sufficient to pay the same, can not refuse to pay a check presented by a bona fide holder, though the maker owes the bank on an overdue note more than the amount of his deposit, unless such note has been charged against such deposit before presentment of the check. Judgment, Park Nat. Bank v. Niblack, 67 111. App., reversed. (Niblack v. Park Nat. Bank, 48 N. E., 438; 169 111., 51-7; 39 L. R. A., 159.) 13 (111.). A bank is not justified in refusing to pay a check because the drawer orders it not to pay it, if it has on deposit sufficient funds of the drawer to pay the check when presented for payment. Judg- ment, 69 111. App., 681, affirmed. (Gage Hotel Co. v. Union Nat. Bank, 49 N. E., 420; 171 111., 531 ; 39 L. R. A., 479.) 14 (111.). The delivery of a check drawn by a failing bank of another State on funds deposited to its credit in a resident bank of the State does 56 DIGEST 01' NATIONAL BANK DECISIONS. CHECKS— Continued. OBLIGATIONS OF BANK TO PAYEE OB HOLDER — Continued. not give the drawee such an interest in the funds deposited as he can enforce in equity to the prejudice of the resident bank. (Fort Dearborn Nat: Bank v. Wyman, 80 111. App., 150.) Iowa. 15 (Iowa Sup. Ct). The holder of an unaccepted check may bring suit thereon in his own name. (Roberts v. Corbin, 26 Iowa, 315; Schollmier v. Schoendelen, 78 Iowa, 426 ; May v. Jones, 87 Iowa, 188 ; Thomas v. Exchange Bank, 99 Iowa, 202; Bloom v. Winthrop State Bank (Iowa Sup., 1903), 5 B. C, 607; 96 N. W. Rep., 7330 Kentucky. 16 (Ky., 1899). A bank agreed through its cashier to credit a customer by the amount' of a draft drawn by him_ on consignees of produce, with a bill of lading attached; and tha't the customer should then draw checks on the bank against this cash credit for the purchase price of the produce in favor of its vendors. Held, that the bank could not refuse payment of such checks after it had received the draft, and credited the customer by its amount, pursuant to such agreement. (German Nat. Bank v. Grinstead et al., 2 Banking Cases, 50; 52 S. W., 951.) 17 (Ky.). The demand fixes the liability of the bank and the holder can prpsecute an action against the bank to recover the amount of the check if payment is refused. (Chambers v. Northern Bank of Ken- tucky, 5 Ky. Law Rep., 123.) 18 (Ky. Appeals. 1903). The holder of an unaccepted check may maintain an action thereon. (Columbia Finance and Trust Co. v. First Na- tional Bank, 5 B. C, 611 ; 76 S. W. Rep., 156.) Louisiana. 19 (La.). Our law differs from the common law doctrine that where a check has been presented to and acceptance refused by a bank there being no privity, the holder of the check can not sue the bank. A check duly notified to the bank constitutes an equitable assignment of the fund against which it is drawn. (Gordon, etc., v. Muchler; Lou- isiana National Bank v. Union National Bank, 34 La. Ann., 604.) 20 (La., 1897). An action does not lie against a bank on a check drawn upon it unless the check has been accepted or the bank notified, and a holder of a check drawn upon a bank, but not presented before the failure of the bank, is not entitled to have the check paid by the liquidators out of the dividend assigned to the drawer. (State ex rel. St. Arnand v. Bank of Commerce, 22 So. Rep., 207; 49 La. Ann., 1060.) Neoraska. 21 (Nebr.). If a bank having funds of the drawer refuses to pay a check the holder may recover of the bank in an action brought in its own name. (Fonner v. Smith, 31 Nebr., 107.) 22 (Nebr., 1902). The indorsee of a check is possessed of the legal title thereto, and is the proper party plaintiff in an action for its collec- tion. (Commercial State Bank of Genoa v. Rowley, 89 N. W. Rep 765 ; 4 Banking Cases, 393.) 23 (Nebr. Sup., 1898). A check upon a bank by a depositor operates a trans- fer of its amount to the payee if on deposit at the time of presenta- tion, and the payee or holder may on refusal of payment maintain a suit on the instrument for the recovery of its stated sum. (Columbia Nat. Bank v. German Nat. Bank, 1 Banking Cases, 43 ; 56 Nebr., 803.) 24 (Nebr. Sup., 1898). As against the holder of a check against an account of a depositor, the bank of deposit may not apply the amount of the account to the payment of the indebtedness of the depositor to tho bank which is not yet due, although the depositor may be insolvent (lb.) DIGEST OF NATIONAL BANK DECISIONS. 57 CHECKS— Continued. OBLIGATIONS OF BANK TO PAYEE OR HOLDER Continued. 25 (Nebr. Sup., 1903). The payee of a check has a right of action against the drawee if the latter has funds to meet it when it is presented. (Palls City State Bank v. Wehrlie, 5 B. C, 431 ; 93 N. W. Rep., 994.) South Carolina. 26 (S. C). The holder of a check may recover the amount thereof from the bank on which it is drawn if the bank having funds on hand belong- ing to the drawer refuses to pay the check. (Fogarties & Stillinan v. State Bank, 12 Rich. Law, 518, 78 Am. Dec, 468.) 27 (S. C, 1893). The holder of a check on a bank in which the drawer has on general deposit to his credit funds sufficient to pay the check may maintain action against the bank after demand and refusal without acceptance or certification. Fogarties & Stillman r. State Bank fol- lowed and approved. (Simmons v. Bank of Greenwood, 41 S. C, 177.) Texas. 28 (Tex., 1888). The deposit of funds in a bank forms sufficient considera- tion to authorize the holder of a check drawn against such funds by the depositor to maintain a suit against the bank on its refusal to ■pay. (First National Bank v. Randall, 1 Tex. App. Civ. (White & Wilson), 546, par. 975.) holder's rights as against garnishment by drawer's creditor. 1 (Ky., 1899). A claeck drawn prior to but presented subsequent to the • service of an attachment upon the bank as garnishee is, to the amount for which it is drawn, an appropriation of any funds in the bank to the credit of the drawer at its presentation, regardless of the attachment lien. (Winchester Bank v. Clark County Nat. Bank, 51 S. W. Rep., 315; 1 Banking Cases, 515.) 2 (Wash., 1896). Where checks on a general deposit are not presented to the bank till after it has been garnisheed by a judgment creditor of the depositor, though drawn before garnishment, the fund is subject to the satisfaction of the judgment. (Commercial Bank v. Chilberg, 44 Pac. Rep., 264; 14 Wash., 247.) whether check accepted for payment or collection. 1 (U. S. C. C, 1883). Where checks. are deposited to the credit of a depos- itor the right to check against the balance thus created is a gratui- tous privilege and the bank may revoke the credit if the checks are not collected. (Balbach v. Frelinghuysen, 15 Fed. Rep., 675.) 2 (Ala.). Where it is shown to be out of a bank's course of business to receive for collection checks drawn on it by its depositors, and a check on it drawn by one of its depositors in favor of another is pre- sented by the latter and the amount thereof is credited on his pass book as a deposit, and the check is placed on the file of paid and can- celed checks, and afterwards the amount of the check is also entered to his credit and charged against the drawer on the books of the bank, these facts constitute a payment of the check, and the amount of it can not be withheld by the bank on discovering that the check was an unauthorized overdraft and the drawer was insolvent. (City National Bank of Selma v. Burns. 68 Ala., 600.) 3 (Ala.). A charge is erroneously and properly refused which affirms, as matter of law, that if the drawer and payee of a check are customers of the bank on which it is drawn the presentation of the check by the payee to the bank and the noting or entry of it by the bank on his pass book as a deposit do not operate as a payment of the check, and that if within a reasonable time the bank ascertains that the check is an unauthorized overdraft and offers to return it there is no lia- bility to the depositor. (lb.) 58 DIGEST OF NATIONAL BANK DECISIONS. CHECKS— Continued. WHETHER CHECK ACCEPTED FOB PAYMENT OR COLLECTION Continued. 4 (Ala.). In such case no presumption arises that the bank received the check merely for collection and in the capacity of agent for the holder; but a presumption of payment of the check does arise and the onus of overcoming that presumption rests upon the bank and it can only be removed by evidence that such was not the intention of the parties, derived from the course of business with the depositor or from contemporaneous acts or declarations. (lb.) 5 (Ala.). If a holder of a check, with full knowledge that the drawer is without funds in the bank to meet it, and has no Just reason to believe that the check will be honored in the absence of funds, he is wanting in good faith if he demands and receives payment, especially if it is known to him that the drawer is insolvent and the bank is ignorant of the insolvency. (lb.) 6 (Ala.). In such case, fraud being imputed to the holder of the check, knowledge of the want of funds must be clearly traced to him. It can not be inferred from the relations existing between him and the drawer, however intimate, unless connected with inculpatory facts or circumstances. (lb.) 7 (Ala.). When a bank receives from a customer a check on another bank for the special purpose of collection, the title does not pass by the special indorsement for that purpose, nor does the receiving bank owe the amount until the check is collected. But where the customer has a deposit account with the bankers, on which he is accustomed to deposit Checks payable to himself, which are entered on his pass book, and to draw against such deposits an indorsement of the words " For deposit " on a check so deposited " is, in the absence of a different understanding, presumptive of more than a mere agency or authority to collect ; " it is a request and direction to deposit the sum to the credit of the customer," and gives to the bankers authority, not only to collect, but to use the check in such manner as, in their judgment and discretion, having reference to the conditions and necessities of their business, may make it most available to their pro- tection, and they may have it certified by the bank on which it is drawn. (National Commercial Bank v. Miller & Co., 77 Ala., 168.) 8 (Ala., 1899). A bank received a draft from the drawer for collection; and, upon presenting it for payment, received from the drawee his check for the amount of the draft, drawn on another bank of the same town in which it was located. Held, that, as between itself and the drawer of the check, the bank had until the close of banking hours on the next secular day after receiving the check to present it to the drawee bank for payment — the time allowed by commercial law, as the bank in presenting the check was not the agent of its drawer. (Morris v. Bufaula Nat. Bank, 1 Banking Cases, 677; 122 Ala., 580.) 9 (Cal.). When checks on another bank are handed by a depositor to the receiving teller of a bank and are by the teller credited on the depos- itor's pass book, they are only received for collection, and if not paid on presentation may be returned and the credit in the pass book canceled. (National Gold Bank and Trust Company v. McDon- ald, 51 Cal., 64.) 10 (111., 1898). Plaintiff deposited with a banking firm two checks indorsed by him in blank, which the banking firm, after indorsing for collec- tion to its credit, deposited with the defendant bank. Held, that defendant, having no knowledge to the contrary, was authorized to act upon the banking firm's indorsement of the checks and to proceed to collect them and credit the banking firm's account with the pro- ceeds. (Doppelt v. National Bank of the Republic, 1 Banking Cases, 96; 175 111., 432.) 11 (Mass., 1899). The defendant bank received from plaintiff upon deposit a check indorsed without restriction and gave credit for it to the DIGEST OF NATIONAL BANK DECISIONS. 59 CHECKS— Continued. WHETHEE CHECK ACCEPTED FOB PAYMENT OB COLLECTION— Continued. depositor as cash in a drawing account, and while defendant was trying to get the maker to pay the check, a period of over two months, plaintiff's checks were honored by defendant at times wh»n his account would not have been enough to meet them if the amount of the first-mentioned check had been charged back to plaintiff There was no evidence as to any custom or agreement having a tendency to show that the bank received such check for collection as plaintiff's agent. Held, that a finding that the bank purchased such check was warranted by the evidence. (Taft v. Quinsigamond Nat. Bank, 1 Banking Cases, 99; 172 Mass., 363.) 12 (Mo. Sup., 1899.) The H. bank sent a draft, of which it was the holder for value, to the A. bank for collection, and the latter forwarded it to the plaintiff bank for collection and return. And plaintiff accepted the drawee's check on another bank in payment of the draft, which it delivered to the drawee, and remitted the amount of the draft to the A. bank. The check proving to be worthless, plaintiff brought an action against the A. bank to recover the amount of the remit- tance. Held, that when plaintiff received the check and surrendered the draft, it made the check its own and its liability to the II. bank became fixed— as much so as if it had received the cash ; and there could be no recovery. (National Bank of Commerce of Kansas City v. American Exch. Bank of St. Louis, 2 Banking Cases, 10.1 ; 151 Mo., • '*— 1 1. ) 13 (Nebr., 1898). Crediting the payee with the amount of a check as a deposit by the bank upon which it is drawn amounts to a payment of the check in money and a redeposit thereof. (Bartley v. State, 73 N. W., 744; 53 Nebr., 310.) 14 (N. J., 1900). Where one deposits in a bank a check or draft on a third party, it is a bailment, unless there is an understanding that he may at once draw against the deposit, or, being indebted to the bank, that the deposit may be applied on such indebtedness. (Perth Amboy Gaslight Co. v. Middlesex County Bank, 45 A., 704; 60 N. J. Eq., 84.) 15 (N. Y.). The assignee of an insolvent estate, who had a deposit as such in a bank of which he was cashier, drew a check, as assignee, for the amount of the deposit, and placed it on the spindle where paid checks were placed by the paying teller, and the check was entered in the bank's books. Held, that.a disputable presumption of payment of the deposit arose. (Wiggins v. Stevens, 53 N. Y. S., 90; 33 App. Div., 83.) 16 (N. Y.). Where a check is deposited in a bank in the regular course of business, and is received and credited to the account of the depositor as money, the bank is liable in an action on contract for such indebted- ness. Judgment, City Ct, N. Y., 1899, 58 N. Y. S., 1008; 28 Misc. Rep., 449, affirmed. (Walton v. Riverside Bank, 60 N. Y. S., 519; 29 Misc. Rep., 304.) 17 (Okla., 1900). Where a bank, in the due course of business, receives from a correspondent bank a check indorsed in blank, and in good faith parts with value or permits an existing indebtedness to" remain unpaid by reason thereof, it is entitled to the proceeds of such check against the real owner, even though the check was»not actually col- lected by such bank until after failure of .the bank which transmitted the same to it. (Winfield Nat. Bank v. Mc Williams, 2 Banking Cases, 277; 9 Okla., 493.) • 18 (Tenn.). A regular customer of a bank sent to it a check with an unre- stricted indorsement, and directed it to be placed to his credit. The check was received and credited and the Customer so advised. On the day of receipt the bank sent the check to its correspondent for collection, paid a check drawn by the customer from a part of the proceeds of the credit; and closed its doors as insolvent. Held, That the check was not deposited for collection, but as cash for immediate use. (Williams v. Cox, Tenn. Sup., 37 S. W„ 282; 97 Tenn., 555.) 60 DIGEST OE NATIONAL BANK DECISIONS. CHECKS— Continued. WHETHER CHECK ACCEPTED FOE PAYMENT OB COLLECTION Continued. 19 (Tenn., 1896). Where a bank accepts a check on another bank as cash, giving therefor a sum of money, a certificate of deposit, and the bal- ance in a credit to the account of a third person, such transaction creates merely the relation of debtor and creditor between-the bank and its customer, and the latter can not, on the insolvency of the bank, follow up the check, or its proceeds, as his property. (Friberg v. Cox, Tenn. Sup., 37 S. W., 283 ; 97 Tenn., 550.) 20 (Tenn., 1896). Where a check drawn on another bank is deposited in an insolvent bank without any special instructions, and it is not placed to the customer's credit, and immediately thereafter the receiving bank fails, and the check goes into the hands of the bank examiner and is afterwards collected, the proceeds are the property of the cus- tomer, and not of the bank. ( Showalter v. Cox, Tenn. Sup., 37 S. W., 286; 97 Tenn., 547.) WHEN DEPOSIT INSUFFICIENT TO PAY CHECK. 1 (Ala., 1896). Where the funds are insufficient to pay a check in full the drawee is under no obligation to make a partial payment thereon. (Lowenstein v. Bresler, Ala., 19 So., 860; 109 Ala., 326.) 2 (111.). A bank is not obliged to make a partial payment on a check which is larger than the fund in the bank subject to check, but, if it pay part it may take up the check as evidence of its payment. (Har- rington v. First National Bank, 85 111. App., 212.) 3 A bank is not bound to pay a part of a check when there is not enough to the depositor's credit to pay it in full. (111.) Jacobson v. Bank of Commerce, 66 111. App., 592; (111.) Coates v. Preston, 105 III., 470; (Mass.) Dana v. Third National Bank, 95 Mass., 445. 4 (Nebr., 1899). A bank will not be obligated to pay a check in a sum greater than the amount of the credit of the drawer in his account with the bank, nor does the check operate a transfer or an assign- ment of the lesser amount of the account. (C. M. Henderson & Co. v. United States National Bank, 2 Banking Cases, 85; 59 Nebr., 280.) 5 (Pa.). Where the payee of the check offers to take the amount to the credit of the drawer on the books of the bank which is less than the amount of the check, the tiank should pay him said amount and indorse the payment on the check. (Bromley v. Commercial National Bank, 9 Phila., 522.) CHECK FOB ILLEGAL CONSIDERATION. 1 (Cal., 1892). A bank can not refuse to cash a check, although it knows that the check was drawn in payment of a bet made, in violation of a law, on the result of an election ; and the fact that a check was so cashed is not ground on which the drawer can recover the amount from the bank. (McCord v. California National Bank (Cal.), 31 P., 51; 96 Cal., 197.) 2 (Maine, 1901). A statute of Maine provides that all notes or bills given for gambling debts are void against all except bona fide holders. Under this statute a check purchased by one knowing the same to have been given in payment for pool tickets is incollectible by him. (This is a decision of the supreme court of Michigan construing a Maine statute.) (Maine Mile-Track Association v. Hammond, 87 N. W. Rep., 135; 127 Mich., 690.) 3 (N. Dak., 1901). Both under elementary principles of the law of con- tracts and by the provisions of section 59 of chapter 100 of the Civil Code (Rev. Codes, 1899), the title of an indorser of a negotiable note is defective when the consideration for the indorsement is unlawful, or where the indorsement is procured by unlawful means. (Drinkall v. Movious State Bank, 88 N. W. Rep., 724; 4 Banking Cases, 222.) DIGEST OF NATIONAL BANK DECISIONS. 61 CHECKS— Continued. , CHECK FOB ILLEGAL CONSIDERATION Continued. 4 (N. Dak., 1901). Under the statutes of this State gambling is expressly- prohibited. It is accordingly held that the indorsement and deliv- ery of a cashier's check by the payee to a gambler in payment for chips to be used in a gambling game does not make such a gambler a holder in due course, and his title so acquired is defective. (lb.) 5 (N. Dak., 1901). The rule that courts of law and equity will leave the parties to prohibited transactions where their unlawful acts have placed them, so far as the same are executed, does not authorize an indorsee, who has procured the indorsement of a negotiable instru- ment in a gambling transaction, to rely on the indorsement so pro- cured, either against the indorser or the maker of the instrument Neither will prevent the payee of the instrument which has been so indorsed from enforcing payment against the maker, for the obvious reason that the contract which the latter enforces is not tainted with the unlawful transaction. (lb.) 6 (N. Dak., 1901). The plaintiff in this action seeks to recover on a cashier's check issued to him by the defendant, which check he indorsed and delivered to a gambler in payment for chips to be used in playing a roulette wheel. The check was thereafter paid to the gambler by the defendant. We find there is substantial evidence in the record to sustain the finding of the jury that the defendant had notice of the defect in the gambler's title- prior to making such payment, and therefore hold that it was not error for the trial court to overrule defendant's motion for a new trial, based upon the insufficiency of the evidence as to notice. ( lb. ) WHO NOT A BONA FIDE HOLDER FOR VALUE. 1 (U. S. Sup. Ct, 1893). A bank, knowing that the county treasurer of the county had not sufficient county funds in his hands to balance his offi- cial accounts, consented to give him a fictitious credit in order to en- able him to impose upon the county commissioners, who were about to examine his accounts. They accordingly gave him a "cashier's check " for $16,571.61, which he indorsed and took to the commission- ers. They received it, but refused to discharge him or his bondsmen, and placed the check and such funds as he had in cash in a box and delivered them to his bondsmen. The latter deposited the money and the check in another bank in the same place, which bank brought suit against the bank which issued the check to recover upon it. Held, 1, that the circumstances under which the check was issued were a plain fraud upon the law, and also upon the county commissioners ; 2, that their receipt of it and turning it over to the sureties was a single act, intended to assist the sureties in protecting themselves, and was inconsistent with the idea of releasing them from their obli- gations; 3, that the question whether the evidence did or did not establish the fact that the county was an innocent holder should have been submitted to the jury. (Thompson v. Sioux Falls National Bank, 150 U. S., 231.) 2 (Ala., 1894). The crediting by a bank of the amount of a check to the account of a depositor indebted to it does not make the bank a bona fide holder for value of the check. (First National Bank v. Nelson (Ala.), 16 So., 707; 105 Ala., 180, 1894.) 3 (111.). Title to a check payable to H. B., intended for N. B., can not be obtained under indorsement by H. B., made fraudulently, though the indorsee be deceived and pay value. (Sioux Valley State Bank v. Drovers' National Bank, 58 111. App., 395.) 4 (Ind. T., 1896). Plaintiff accepted in good faith a check in which the in- dorsement of the payee's name was a forgery, and after indorsing the same delivered it to defendant bank for collection. Defendant col- lected the check and paid the money to plaintiff, but on subsequently discovering the forgery paid back such amount to the bank on which the check was drawn without notifying plaintiff of the forgery or 62 DIGEST OP NATIONAL BANK DECISIONS. CHECKS— Continued. WHO NOT A BONA FIDE HOLDER FOB VALUE Continued. I that it had paid back the sum collected. Held, that any fund be- longing to plaintiff subsequently coming into possession of defendant could be legally applied to the reimbursement of the latter for the amount advanced on the check, plaintiff being chargeable with notice of the forgery. (Green v. Purcell National Bank, 37 S. W., 50; Ind. T., 270. ) 5 (Mich., 1896). Where a bank discounts a draft in advance of its accept- ance, it is not a bona fide holder for value unless it has funds in its hands which it releases or fails to withhold from the drawer because of the acceptance. (First National Bank v. Wills Creek Coal Co. (Mich.), 68 N. W., 232; 110 Mich., 447.) 6 (Mich. Sup., 1903). Where commercial paper is tainted with fraud, the burden is on the holder to show that he acquired it in good faith. (Glines v. State Savings Bank, 5 B. C, 568; 94 N. W. Rep., 195.) OVERDRAFTS. 1 (U. S. C. C. A., 1904). An overdraft allowed by a bank is a loan due on demand, and hence, where a demand note is given therefor, a suit may be maintained thereon to the same extent as could have been maintained on the overdraft thereby segregated from the account. (Hennessy Bros. & Evans Co. v. Memphis National Bank, 129 Fed. Rep., 557.) 2 (U. S. C. C. A., 1904). 'A building corporation opened an office in a city in a foreign state, where it was conducting large building operations, and placed the same in charge of its assistant secretary, who opened a bank account in defendant's bank in the name of the corporation through which the latter's financial transactions at that place were accomplished. The account becoming overdrawn, such officer exe- cuted demand notes in the name of the corporation to the bank there- for, whereupon the amounts were credited in the corporation's bank- book, and the book was delivered to the officer, whose accounts were periodically checked up by the corporation, and no objections to the accounts were made. Held, that the corporation was liable on the notes, though no express authority to the officer executing them to do so was shown, and he subsequently became a defaulter to the corpora- tion for a large sum. (lb.) 3. The state of a depositor's account is its true condition and not the con- dition shown by its books, and the bank is justified in refusing to pay a check that would create an overdraft. (111.) American Exchange Bank •;;. Gregg, 138 111., 596; (Mass.) Merchants' National Bank v. National Bank of Commerce, 139 Mass., 513. 4 (Me.). A bank may maintain an action against the drawer who has received moneys from it on overdrawn checks. (Franklin Bank v. Byram, 39 Me., 489 ; 63 Am. Dec, 643.) 5 (Mass., 1885). A bank may recover from another bank the amount of an overdraft of one of its depositors paid by mistake to such latter bank through the clearing house. (Merchants' National Bank v. National Bank of Commerce, 139 Mass., 513.) 6 (Nebr.). Where a depositor has overdrawn his account and subsequently makes a deposit, in the absence of evidence to the contrary it will be presumed that the deposit was made in payment of the overdraft (Nichols v. State, 46 Nebr., 715.) 7 (N. Y.). Where money has been fraudulently obtained by means of an overdraft the title remains in the bank which may follow and reclaim it in the hands of anyone not an innocent holder who has taken it and allowed an equivalent theref»r. (Tradesmen's National Bank v. Merritt, 1 Paige, 302.) 8 (Pa.). The payment of overdrafts has no authority in sound usage or in law. (Lancaster Bank v. Woodward, 18 Pa., 357.) DIGEST OP NATIONAL BANK DECISIONS. 63 CHECKS— Continued. overdrafts — continued. Interest on' overdrafts. 9 (U. S. C. C. A., 1904). Where an overdraft was settled by the execution of a note payable on demand, the amount due bore interest from the date of the settlement. (Hennessy Bros. & Evans Co. v. Memphis National Bank, 129 Fed. Rep., 55T.) 10 (Ill.,"1889). A bank is not entitled to interest on overdrafts except by express agreement. (Owens v. Stapp, 32 111. App., 653.) 11 (111., 1866). If a bank presents an account to a depositor who has over- drawn, it amounts to a demand for payment and interest may be recovered from that date. (Casey v. Carver, 42 111., 225.) LOST OR STOLEN -CHECKS. l(Conn.). A corporation receiving a check in payment of an account indorsed it to the bank, filled out a deposit slip, and placing both check and slip in a sealed envelope delivered them to a messenger known to be untrustworthy to take to the bank. The messenger opened the envelope, destroyed the deposit slip and told the cashier that he had been directed to draw the cash on the check. The cashier paid him and the messenger absconded. Held, that the bank was liable, the corporation having never before drawn funds on a check of a third party ; hence this was not in the usual course of business. (Bristol Knife Co. v. First National Bank, 41 Conn., 421.) 2 (Ind.). It was the custom of a grain dealer, doing business at a place by an agent, to furnish the agent with checks on the bank, signed in blank, to be also signed by the agent when used in payment for grain. Such a check, after being signed in blank by both principal and agent, was stolen and filled out by a third person, and was presented to and paid by the bank. Held, that, as between the customer and the bank, the customer was liable for the loss. (Snodgrass v. Sweetser (Ind. App.), 44 N. E., 648; 15 Ind. App., 682.) 3 (Mass.). A firm made out checks payable to the order of several parties for the payment of debts owing to each. The checks, together with the accounts to be paid by them were placed in envelopes, sealed, and handed to a clerk of the firm for mailing. The clerk opened the letters, changed the words " or order " to " or bearer," and obtained the money. Held, that the bank was liable, as the circumstances did not show any negligence on the part of the depositor. (Belknap v. National Bank, 100 Mass., 376.) 4 (Ohio). A depositor drew a check payable to himself without adding the words "or order" or "or bearer" and indorsed it in blank. The check was lost and was paid to the finder on presentation. Held, that the check was negotiable and that the bank was not liable to the drawer (Bowden v. Third National Bank (Common Pleas), 7 Weekly Law Bulletin, 283 ; District Court, 12 Weekly Law Bulletin. 184.) Stolen check, value of instructions. 5 (Ind 1894) Where the larceny of a bank check is charged, the question ' of its value is for the jury, and it is error to instruct them that a check drawn on a bank where the maker has funds sufficient to meet it is presumptively of some value. (Burrows v. State, 37 N. E., 271 ; 137 Ind., 474.) MISCELLANEOUS. Authority to sign checks. 1 rAln 1901) In an action by a married woman against a bank tor ™'nnpv had and received, the following facts were disclosed: A check wp« drawn payable to the order of the plaintiff and delivered to her h,7 a hnnd The husband presented the check at the defendant bank "" ' indorsed by the payee. Upon his attention being called to this fact the husband, pretending to have authority to indorse the paper 64 DIGEST OF NATIONAL BANK DECISIONS. CHECKS— Continued. miscellaneous — continued. for and in the name of his wife, wrote on the back of the check his wife's name, per himself. "Thereupon the defendant bank cashed the check and put the money to the credit of the husband. Subsequently the money so put to his credit was drawn out by the husband .and used in the payment of his own debts and for other purposes of his own. The husband was without authority to indorse the check for and in the name of his wife. The check was given by the lender of the money to the wife, and the money collected on it was the pro- ceeds of a loan which was secured by a mortgage upon the wife's property, which mortgage was duly executed by her. The purpose of the wife in obtaining the loan was to raise money to pay off her husband's debt and enable him to carry on his business, and she knew that her husband "had gotten the money on the loan for such purpose. Held, that the wife can not maintain an action against the bank for money had and received. (First Nat. Bank of Gadsden v. Moragne, 30 So. Kept, 628 ; 128 Ala., 157.) 2 (Ky., 1902). In an action against a bank to recover a deposit in which plaintiff by reply denied that a check for the amount sued for, which defendant had paid, was signed by her, or by her authority, it was error to instruct the jury that, in order to find for the defendant, it must believe that the check was signed by plaintiff, but the court should, as requested by defendant, have instructed the jury to find for defendant if it believed that the check was signed by plaintiff, " or by another for her and with her consent, or by her authority." (Phoenix Nat. Bank v. Taylor, 67 S. W. Rep., 27; 4 Banking Cases, 366.) 3 (Tex., 1901). Revised statutes (Texas), 1895, article 2967, provides that during the marriage the husband shall have sole management of the wife's separate estate. A husband deposited his wife's money in a bank in her name, and stated .that it would be checked out by hini. Held, that the bank was authorized to cash checks which were pre- sented by the husband and signed with the wife's name by the hus- band as agent. (Coleman v. First Nat. Bank of Waxahachie, 63 S. W. Rep., 867; 3 Banking Cases, 643; 94 Tex., 605.) 4 (Tex., 1901). The fact that to the bank's knowledge the husband was a drunkard, and improvident in the use of money, did not impose on the bank the duty of seeing that the, money was drawn out for the wife's use. (lb.) Bank must know that indorsement is genuine. 5 (Iowa, 1897). It is the duty of a bank to which a check drawn by a depositor, and payable to order, is presented by one claiming under an ostensible indorsement by the payee, to learn at its peril that the indorsement is genuine. (German Sav. Bank v. Citizens' Nat. Bank, Iowa, 70 N. W., 769; 101 Iowa, 530.) When hank not liable if money is misappropriated. 6 (U. S. C. C, 1895). A bank cashier or teller may pay out a check drawn in the name of a corporation in the usual course of business and when there are no circumstances of suspicion to put him on inquiry, with- out any investigation as to the destination of the money drawfl ; and the bank is not to be held liable if the money is misappropriated. (Hatch v. Johnson Loan and Trust Co., 79 Fed Rep., 828.) "When bank bound by agreement to cash future checks. 7 (Iowa, 1898). Plaintiff testified that he inquired by telephone whether thereafter checks drawn by S., a live-stock buyer, would be paid, and the response was : " It will be all O. K. to cash checks from S. to the amount of stock he gets." Defendant testified that this response was to an inquiry as to specific checks. Held, that the jury was war- ranted in finding that it referred to future checks. (Leach v. Hill, 76 N. W., 667; 106 Iowa, 171.) DIGEST OF NATIONAL BANK DECISIONS. 65 CHECKS— Continued. miscellaneous — continued. Protest of checks.. 8 (Nebr.). The term "protest," as applied to inland bills of exchange, includes only the steps essential to charge the drawer and indorser. (Wood Eiver Bank v. First National Bank of Omaha, 55 N. W., 239: 36 Nebr., 744.) 9 (Nebr.). Bank checks in the country are regarded as inland bills of exchange, for the purpose of presentment and demand and notice of dishonor, and do not require a formal protest in order to charge the indorsers. (lb.) 10 (Nebr.). They are also due upon presentation and not entitled to days of grace. (lb.) Presumptions as to names in check. 11 (N. Y. Sup.). In the absence of proof to the contrary, it will be presumed that the name of the payee appearing in a check was written in when the check was signed. (Fifth National Bank v. Central Na- tional Bank, 31 N. Y. S., 541.) Checks, how applied against depositor's account. 12 (N. Y. Sup.). Where a person deposits in bank money held by him in a fiduciary capacity, mixing it with his own moneys, and afterwards draws checks against his account, such checks will be applied first to the moneys belonging to the drawer ; and in such case the rule that checks will be applied to the deposits in the order in which the deposits were made does not apply. (Heidelbach v. National Park Bank, 33 N. Y. S., 794.) Liability of bank when deposit is a trust fund. 13 (Nebr., 1897). Where officers of a corporation borrow money to be de- posited in a bank as a trust fund for its creditors, but such intention and the insolvent condition of the corporation are not known to the bank, its payment in good faith of such fund on the check of an officer of the corporation does not render it liable as a trustee to the other creditors of the corporation because the proceeds of the check, with the consent of the bank, were used to take up the note on the faith of which the loan had originally been made by the bank. Wyman v. Nat. Bank of Commerce, 71 N. W., 277 ; 51 Nebr., 636.) Notice to payee of dishonor of check. 14 (Mo.). Where the payee of a check mails it to the drawee bank, it is the duty of the bank to give the payee notice of dishonor, if the drawer has no funds on deposit from which payment can be made. (Ripley National Bank v. Latimer, 2 Mo. App. Rep'r, 967.) Bank check as a tender. 15 (N. Y.). A check, unless objected to, is a sufficient tender. Wright v. Robinson et al., 32 N. Y. S., 463.) 16 (Wash., 1895). A tender of bank checks payable in sixty and ninety days is not a tender of payment. (Cady v. Case, 39 P., 375 ; 11 Wash., 124.) Character of indorsement not shown by its place on back of draft. 17 (Tex., 1895). A draft was drawn payable to the order of the drawer, and by it indorsed specially to the defendant corporation, and t>y defend- ant indorsed in blank, and cashed by the plaintiff bank for another corporation, whose indorsement was written above the indorsement of the defendant. Held, that the position of the indorsements was not notice to plaintiff that defendant was an accommodation indorser. Marshall National Bank v. O'Neal, 34 S. W., 344 ; 11 Tex. Civ. App., 640.) Collection of checks, conversion, demand. 18 (N. Y. App.). Where the payee of a check deposited the same with a bank for collection, and said bank sent it for collection to defendant, and 4049—05 5 66 DIGEST OF NATIONAL BANK DECISIONS. CHECKS— Continued. miscellaneous — continued. defendant received from the bank upon which the check was drawn a draft in payment thereof, defendant is not liable to the payee for the conversion of said draft, in the absence of a demand therefor, and neither a telegram sent to defendant by the drawer of the check, instructing defendant to hold the draft, nor an inquiry by the bank upon which the check was drawn as to whether defendant could hold the draft, is a sufficient demand on behalf of said payee. (26 N. Y. S., 1035, affirmed; Castle v. Corn Exch. Bank, 42 N. E., 518; 148 N. Y., 122.) Liability of indorser of cheek. 19 (Ala., 1894). The payee of a forged check, who indorses it and receives full value therefor, guarantees its genuineness ; and as to him, the indorsee is under no obligation to discover that it is forged, and may recover back the money so paid. (Birmingham National Bank v. Bradley (Ala.), 15 So., 440; 103 Ala., 109.) 'Negligence of bank in payment of cheek. 20 (S. C, 1899). In an action by a bank to compel defendant to make good overdrafts by the latter's agent to break the force and effect of its dealings with the bank during eight years, defendant offered testi- mony to prove directions to its agents which were never communi- cated to the bank or to any other person than such agent, and alleged to have been communicated through a person who did not appear to have had any relation to defendant making him a proper instrument for the purpose. Held, that the testimony was inad- missible. (Merchants and Planters' Nat. Bank v. Clifton Mfg. Co., 2 Banking Cases, 128.) Correction by bank of mistake in payment. 21 (111. App.). If a customer of a bank hands the receiving teller a check drawn by another person upon the same bank, and at the same time « hands him his pass book, and the teller receives the check and enters a credit for the amount in the pass book, but no entry is made on the books of the bank, and nothing else is said or done, and the drawer has no funds in the bank, the check may be returned to the depositor and the credit in the pass book canceled. (Jacobsou v. Bank of Com- merce, 66 111. App., 470.) 22 (111. App.). In such case a finding by the court that the check was re- ceived as a cash deposit is erroneous. (lb.) 23 (Ind.). The fact that the cashier of a bank upon which a check is drawn takes the check and places it upon the " canceling fork " does not constitute such an acceptance as will prevent him from declining to pay und returning the same upon learning that the drawer has not sufficient funds, or if the check is not in proper form. (The National Bank of Rockville v. The Second National Bank of Lafayette, 69 Ind., 479.) 24 (Tenn., 1897). A check was forwarded to the bank on which it was drawn for collection. When received by the bank the maker's account was overdrawn. The cashier directed his assistant to refuse payment, but, through mistake, he stamped it paid and mailed a remittance, which action was revoked by the cashier and the remit- tance recovered from the post-office and the check protested. The account at the bank was not charged with the check. Held, that the bauk was not liable. (Carley v. Potter's Bank, 46 S. W., 328.) When failure to pay check not an act of insolvency. 25 (U. S. Sup. Ct, 1899). For a number of years there had been mutual and extensive dealings between the defendant bank and the " C." bank, in which each was acting for the other as correspondent banks for the making of collections and the auditing of the proceeds thereof, and transmitting accounts of the same, including costs of protest and other expenses, and the " C." bank also kept an active deposit DIGEST OF NATIONAL BANK DECISIONS. 67 CHECKS— Continued. miscellaneous — continued. account with the defendant bank, and settlements on the basis of such accounts were made at periodic times during all such period, and any balance, mutually agreed to be charged or credited, was at such times credited or debited, as the fact might be, upon the books of each of the banks, to a new account, and the prior accounts thereby and in that manner adjusted and settled. Held, That a refusal on the part of the defendant bank to pay a check drawn on it by the " C." bank did not constitute an act of insolvency on the part of the " C." bank. (McDonald v. Chemical Nat. Bank, 1 Bank- ing Cases, 657,; 174 U. S., 610.) Chech; gift causa mortis. 26 (Cal., 1901). Defendant firm had been acting as banker for plaintiff's testator for fourteen years, and K., a member of the firm, had been an intimate friend of testator. Testator wrote K. on the 13th day of January that he was sick, and requested K. to call, which he did ; and he continued to visit testator until he died, on the 21st of Janu- ary. K. testified that on the 14th of January testator requested K. to call a lawyer, as he wished to leave something to K., and that he insisted thereon, and that" K. then attempted to get attorneys, but failed, and on the 15th testator told him to draw a check for the amount of testator's deposit, and that he would give it to the chil- dren of K., and the latter drew a check for $25,000 of such deposit, . and testator signed it, and K. had the money transferred to his account. The testator was of sound mind, left no relatives in this country, and was worth $102,000, and devised all his property to his brother, a colonel in the French army. Held, sufficient to sustain a judgment for defendant in an action by testator's executors to recover the amount of the check from the firm. (Prantz et al. v. Porter* et al. (S. F. 1, 741), 64 Pac. Rep., 92; 132 Cal., 49. See note at end of case.) 27 (Cal., 1901). Where a party delivers a negotiable check on a bank to another, though he thereafter requests that it be not presented for payment until after his death, the payee gains such possession and control of the thing as constitutes a completed and perfected gift. (Pullen et al. v. Placer County Bank, 4 Banking Cases, 220; 138 Cal., 169 ; 66 Pac. Rep., 740. ) Ownership of draft. 28 (Mich., 1902). The disclosure of a garnishee stated that defendant in the principal action gave him a check payable to, and indorsed in blank by, a third party, and requested him to see if it was good; that he inclosed it in a letter to the bank, and thereafter received a draft from the bank, payable to defendant, which draft was in his posses- sion when the garnishee process was served on him, but was after- Wards returned by him to the bank. Held, that in the absence of any evidence to show that the check did not belong to defendant, a judg- ment against the garnishee was proper. (Weaver v. Irons, 88 N. W. Rep., 873 ; 4 Banking Cases, 170 ; 129 Mich., 368.) Holders of draft not hound by acts of indorsers after transfer. 29. The holders of a draft before maturity are not bound by the acts of indorsers after the transfer. (La., 1894.) Block v. Creditors, 16 So., 267; 46 La. Ann., 1334; St. Louis National Bank v. Bloch ; (N. Y.) Castle v. Corn Exchange Bank, N. Y. App., 42 N. E., 518. Effect of custom in transfer of check. 30 (Ala., 1894). Evidence of a custom of passing checks payable to a person " or bearer " by delivery only does not affect the operation of the Code, section 1761, requiring such checks to be construed as payable to a person " or order." (First National Bank v. Nelson, 16 So., 707 ; 105 Ala., 180,) 68 DIGEST OF NATIONAL BANK DECISIONS. CHECKS— Continued. Certification op Checks. eight to certify. National banks may certify checks. . 1 (U. S. Sup. Ct, 1870). National banks have the power to certify checks, and this power may be exercised by the cashier without special authorization. The directors may limit his exercise of this power as they deem proper, but such limitation will not affect a person ignorant thereof who deals with the cashier in relation to matters apparently within the scope of his power. (Merchants' Nat. Bank v. State Nat. Bank, 10 Wall., 604; 1 N. B. C, 47.) When cashier may not certify his own check. 2 (U. S. C. C. A., 1900). The certification by the cashier of a national bank of his individual check, given and received for his individual benefit, with no authority -either to certify it or to make it payable elsewhere than at the office of his bank, is not binding on the bank. (Gale v. Chase Nat. Bank, 104 Fed. Rep., 214.) WHAT NOT A CERTIFICATION. 1 (U. S. C. C, 1898). A promise by a bank to pay any checks that may be drawn upon it by a certain person is not a certification of such checks, but a guaranty. (Bowen v. Needles Nat. Bank, 87 Fed. Rep., 430.) ORAL ACCEPTANCE. 1 (111.). Proof that a bank had paid a check to an unauthorized indorsee, and had charged it to the account of the drawee, who at the time of such payment had enough funds on deposit to meet it, constitutes sufficient proof of an acceptance of the check, by the bank and ren- ders it liable to the payee for the amount thereof. (Commercial Nat. Bank v. Lincoln Fuel Co., 67 111. App., 166.) 2 (Iowa, 1898). An oral acceptance of a check is valid when the drawee knows that the drawer is acting for another, and he has funds of the other sufficient to pay it. (Leach v. Hill, 78 N. W., 667; 106 Iowa, 171.) 3 (W. Va., 1874). The act of Congress of March 3, 1869 (Rev. Stat, sec. 5208), making it unlawful for national banks to certify checks unless the drawer has at the time an amount of funds on deposit equal to the amount specified in the check, does not invalidate an oral accept- ance of a check or promise to pay a check, there being at the time sufficient funds of the drawer in possession to meet it. (First Nat Bank v. Merchants' Nat. Bank, 7 West Virginia, 544; 1 N. B. C, 915.) 4 (W. Va.). A check drawn on a national bank was presented for accept- ance, whereupon the bank promised to pay it as soon as it received information that a certain draft left with it for collection was paid. The draft was paid and the bank informed. Held, that the accept- ance was good and binding on the bank. (lb.) AUTHORITY OF OFFICERS TO CERTIFY CHECKS. 1 (N. Y.). The president may certify a check. (Claflin v. Farmers' Bank, 25 N. T., 293.) 2 (U. S. Sup. Ct.). Cashier may certify check. (Merchants' National Ba"nk v. State National Bank, 77 U. S., 604.) 3 (N. Y.). Where a check was certified by a teller the latter's authority may be inferred from previous transactions and, acts of the same kind. (Farmers and Mechanics' Bank v. Butchers and Drovers' Bank, 28 N. Y., 425.) DIGEST OF NATIONAL BANK DECISIONS. 69 CHECKS— Continued. AUTHORITY OF OFFICERS TO CERTIFY CHECKS Continued. 4 (N. Y.). A cashier may certify checks under his general authority, but he can not certify a check until after the day it is made payable. Clarke National Bank v. Albion Bank, 52 Barb., 592.) 5 (N. Y.). Parties dealing with a bank are not bound by any restrictions on the power of the cashier to certify checks unless said restriction is known to them. (Clarke National Bank v. Albion Bank, 52 Barb., 592.) NATURE AND EFFECT OF CERTIFICATION. 1 (U. S. Sup. Ct, 1870). If a check is certified at the request of the payee, so much of the depositor's account as corresponds to the certified check is at once withdrawn from the depositor's account and becomes the property of the bank. (Merchants' National Bank of Boston v. State Bank, 10 Wall., 604.) 2. The certification of a check by a bank at the request of the payee releases the drawer and substitutes the bank as the debtor. (111.) Drovers' National Bank v. Packing Co., 117 111., 100; (N. Y.) Irving Bank v. Wetherwald, 36 N. Y„ 335; 3 (N. Y.). The certification of a check at the request of the drawer may be revoked for mistake as to the drawer's account unless it has passed to a bona fide holder or the payee has parted with value and suffered a detriment on the faith of the certification. Lynch v. First National Bank, 107 N. Y., 179 ; Goshen National Bank v. Bingham, 118 N. Y., 349. 4 (TL S. Sup. Ct, 1870). A certificate of a bank that a check is good is equivalent to an acceptance ; it implies that a check is drawn upon sufficient funds in the hands of the drawee ; that they have been set apart for its' satisfaction, and that they shall be so applied whenever the check is presented for payment. (Merchants' National Bank v. State National Bank, 10 Wall., 604; 1 N. B. C, 47.) 5 (Ala.). A certified check has a distinctive character as a species of com- mercial paper, the certification constituting a new contract between the holder and the certifying bank. The funds of the drawer are, in legal contemplation, withdrawn from his credit and appropriated to the payment of the cheek, and the bank becomes the debtor of the holder as for money had and received. (National Commercial Bank v. Miller &_Co., 77 Ala., 168.) 6 (Ala.). Where the defendant has a right of election, on account of a tort committed, either to sue for the tort, or, waiving the tort, to sue for money had and received, the relation of debtor and creditor does not exist until he elects to sue for the money ; and his creditors can not defeat his election by garnishment against the wrongdoer. But this principle does not apply where the garnishees, having received a check from the defendant, with authority to collect for deposit and use, have had the check certified by the bank on which it is drawn, before the service of the garnishment; being authorized to have it certified, and the relation of the parties being thereby changed,, they are liable to the defendant for the amount of the check as for money had and received, and that liability may be reached by garnishment. (lb.) 7 (111.). The receipt of a certified check is not, of itself, payment. Such a check does not cease to be commercial paper and become money. . Certifying a check to be " good " is nothing more than a promise by the bank upon which it is drawn to pay it when presented, as in the case of the acceptance of the bill of exchange. If an accepted bill be protested for nonpayment, and the drawer duly notified thereof, he is bound to pay the bill, with damages and costs. The same is the law with regard to a certified check. (Bickford- v. Fi|»t National Bank of Chicago, 42 111., 238.) 70 DIGEST OF NATIONAL BANK DECISIONS. CHECKS— Continued. NATURE AND EFFECT OF CERTIFICATION Continued. 8 (111.). As the acceptance of a bill of exchange does not discharge the drawer, so neither should the acceptance of a check, manifested by the word " good " placed upon it by the bank, discharge the drawer. They rest on the same principles. In this respect there is no differ- ence between an uncertified and a certified check ; the dishonor of either must make the drawer liable. (lb.) 9 (111.). There is this difference, however, between a certified and an uncertified check : In case of the former, the amount of the check is supposed to be at once charged up against the drawer, and thus placed beyond Mis control, while the holder of an uncertified check may be anticipated by another, who also holds a check on which he may draw the money. The certificate is an unconditional promise on the part of the bank to pay the check on demand. The object in certifying the check is to give it a currency value and to enable the holder to use it as money. (lb.) 10 (111.). AlthoughMt be the fact that certified checks pass from hand to hand as cash, still they are not cash or currency, in the legal sense of those terms, and they do not lose, on that account, any of their characteristics as bills of exchange, and, therefore, when dishonored, the holder has a right to look to the drawer for payment. (lb.) 11 (111.). In this case a check was drawn and certified and deposited in a bank after 10 o'clock a. m. and before 3 o'clock p. m. on a certain day, where it remained until the next morning, when it was taken, In the usual course of business, to the bank on which it was drawn. The bank was closed and continued so. The check was protested for nonpayment and due notice given. This was sufficient diligence to hold the drawer. (lb.) 12 (111.). The holder of a certified check has the right to hold the drawee and acceptor as well as the drawer. So, "where the acceptor has failed and made an assignment, the holder waives none of his rights against the drawer by giving notice to the assignee of the acceptor not to pay over any money to the drawer out of assets which might come to his hands in that capacity. (lb.) 13 (111.). Where a check is certified by the bank on which it is drawn, such certification constitutes a contract between the holder of the check and the bank, and so much of the money of the drawer as is required for its payment is in law appropriated and set apart for its payment, and hence the drawer of the check has no longer the right to check out such money, as his interest in it has terminated. (Wright v. MacCarty, 92 111. App., 120.) 14 (III. Sup., 1902). Where a bank certifies a check it thereby enters into an absolute undertaking to pay it when presented at any time within the time fixed by the statute of limitations, and is therefore estopped to deny that it possessed sufficient funds of the drawer to pay the same. (Jackson Paper Mfg. Co. v. Commercial Natl. Bank, 5 B. C, 33; 65 N. E. Rep., 136.) 15 (N. Y.). The certification of a check by a bank is, in effect, merely an acceptance, and creates no trust in favor of the holder of the check and gives no lien on any particular portion of the assets of the bank. (People v. St. Nicholas Bank, 28 N. Y. St., 427 ; 58 N. Y. St., 712.) 16 (Pa. Sup., 1903). Where a check drawn by a depositor is certified, in the absence of fraud the amount is as much withdrawn from the deposi- tor's credit as if the money had been paid. (Central Guarantee Trust and Safe Deposit Co. v. White et al., 5 B. C, 600; 56 Atl. Rep., 76.) When certified checJc in excess of deposit ruJicl against bank. 17 (U. S. Sup. Ct, 1892). A broker received coupon railroad mortgage bonds to cover future margins of a customer and pledged them to a bank as collateral security for any indebtedness he might owe it. Afterwards the bank advanced money and certified checks on the faith of these bonds, when broker did not have money on deposit equal in amount DIGEST OF NATIONAL BANK DECISIONS. 1l CHECKS— Continued. NATURE AND EFFECT OF CEBTIFICATION — Continued. to the checks. Held, under section 5208, that although the certifica- tions were unlawful the checks certified were good and valid obliga- tions against the bank. (Thompson v. "St. Nicholas National Bank, 146 U. S., 240.) 18 (N. Y.). Where a bank erroneously certified a check drawn by one of its depositors for rents collected by him for his employer when the deposi- tor has not sufficient funds to meet the same, the mere fact that the employer would have discharged the depositor if the check had not been certified, and prevented the collection of further rents by him, whereby further loss might have been prevented, is not sufficient as an element of damages to render the bank liable to the employer on the certification for more than the amount of the depositor's funds in its hands when the certification was made. (Rankin v. Colonial Bank, 64 N. Y. S., 32; 31 Misc. Rep., 227.) CHECK ALTERED AFTEE CEBTIFICATION. 1 (La.). Where a bank certified a check without drawing a line with a pen through the blank space following the amount it was held that the bank was negligent and was liable to an innocent holder for the amount of the check as fraudulently altered. (Helwege v. Hibernia National Bank, 28 La. Ann., 520.) 2 (N. Y.). Where a bank paid to a bona fide holder a certified check which after certification had been fraudulently altered by raising the amount, it can recover back the sum thus paid unless such bona fide holder has suffered loss in consequence of the mistake. (National Bank of Commerce in New York v. National Mechanics' Banking Association, 55 N. Y., 211.) NEGLIGENCE IN CERTIFYING A RAISED DRAFT — LIABILITY. 1 (N. Y. App., 1903). A bank negligently certified a raised draft, which was thereupon deposited with another bank, which, relying on the negli- gent acts of the former bank in certifying, accepting, and paying the draft, parted with the moneys on the demand of its depositor. Held, that the first bank could not thereafter recover back as moneys paid by mistake. Its liability rests on the estoppel arising from its subse- quent acts and its negligence until it was too late to protect the bank with which the draft was deposited or itself from loss, and not on the mere certification. (Continental Nat. Bank of New York v. Trades- men's National Bank of New York, 5 B. C, 242 ; 66 N. E., 1108.) CANCELING CERTIFIED CHECK AT REQUEST OF DRAWER. 1 (111.). The possession of a check (whether certified or not) by the drawer raises the presumption that it has not been delivered to the payee, and the banker on whom said check is drawn has a right to cancel it on the application of the drawer. (Buehler v. Gait, 35 111. App., 225.) 2 (N. Y.). Where a check has been certified at the request of the payee, the bank was bound by contract to pay it, although the drawer after the certification had notified it not to do so. (Freund v. Importers and Traders' National Bank, 76 N. Y., 352.) BONA FIDE HOLDER OF ILLEGALLY CERTIFIED CHECK. Bona fide holder of check illegally certified may collect. 1 (U. S. C. C, 1898). A bank certifying a check without funds is not liable except to a bona fide holder. (Bowen v. Needles National Bank, 87 Fed. Rep., 430.) 2 (N. Y.). In an action by a bona fide holder of a check drawn on defend- ant, a national bank, and certified by its cashier, held, that the de- 72 digest 6f national bank decisions. CHECKS— Continued. BONA FIDE HOLDER OF ILLEGALLY CERTIFIED CHECK Continued. fendant was liable although the drawer had no funds in the bank when the check was certified. (Cooke v. The State National Bank of Boston, 52 N. Y., 96 ; 1 N. B. C, 698.) Who not a oona fide holder. 3 (N. T.). Where a postdated check is certified by the cashier of the bank on which it is drawn to be " good," by indorsement thereon before the day of its date, the instrument, upon its very face, communicates facts and information to persons receiving the same that the cashier, in making such certification, was not acting within the known limits of his power, and that he was clearly exceeding them. (Clarke Na- tional Bank v. The Bank of Albion, impleaded, etc., 52 Barb., 592.) 4 (N. Y.). It appearing on the face of such paper that is was certified by i:he cashier before its payment could have been legally demanded and before it could be presumed that the drawer had made a deposit for its payment, this is, in the law, full notice to a purchaser. (lb.) 5 (N. Y.). To enable a holder of such check to recover of the bank upon it, it must appear that he became the owner and holder in good faith for a full and fair consideration in the usual course of busi- ness, and without notice of the cashier's want of power to make the certification. He must have parted with something of value upon the. strength and in consideration of the transfer of the paper. (lb.) 6 (N. Y,). If he parted with nothing before the check was dishonored, he stands in privity with his immediate indorsers. and is affected by all that will affect them. (lb.) 7 (N. Y.). Crediting the indorsers with the avails of the check on the books of the holder is in no sense a paying over. The holder upon receiving notice of dishonor, has an undoubted right to erase such credit, and to restore it only at the special instance of the indorsers from whom he received the check. (lb.) ' DRAWER, WHEN RELEASED BY CERTIFICATION, RIGHTS OF INDORSER. 1 (Ind.). As a general rule the certification of a check in the hands of the payee, the body of which is unaltered, releases the drawer from further liability and creates a direct liability from the bank to the payee, while as between the bank and the drawer it operates as a -payment to that extent on his account; and although prior to its being certified the check may be countermanded by the drawer, after its certification it has passed beyond his control and he no longer has. power to countermand its payment. (Meridian National Bank of Indianapolis v. First National Bank of Shelbyville, 34 N. E., 608 ; 7 Ind. App., 322.) 2 (Ind.). The indorsement of a check by the person to whom it was actually issued and by whom the drawer intended the money should be received, is an effectual indorsement to pass title to the check to a bank cashing the same ; and the indorsement is not, as to such bank, invalidated by reason of the payee acting under an assumed and fictitious name when he was not impersonating any other individual, (lb.) 3 (Ind.). A bank cashing in good faith a check so drawn and indorsed, may collect the amount thereof of the bank which has certified the same. ( lb. ) Drawer, when not released oy certification. 4 (Mass.). Though the drawer of a check, before delivering it, has it certi- fied, he will not be relieved from liability thereon, the bank having failed before payment thereof, though presented in due season. (Randolph National Bank v. Hornblower et al., 35 N. E., 850; 160 Mass., 401.) 5 (Ohio, 1894). Where the drawer of a check, before delivering it to the payee, has it certified as good by the bank upon which it is drawn, and DIGEST OF NATIONAL BANK DECISIONS. 73 CHECKS— Continued. DEAWER, WHEN RELEASED BY CERTIFICATION, RIGHTS OF INDORSEE Continued. the payee presents it in good season for payment, and gives due notice to the drawer of its nonpayment, and the bank had failed 1 at the time of presentment for payment, the drawer will not be discharged from liability on the check. -(Cincinnati Oyster and Fish Co. v. National Lafayette Bank, 36 N. E., 833; 51 Ohio St., 106.) MISCELLANEOUS. Genuineness of indorsement not warranted by certification. 1 (111., 1894). The acceptance or certification of a bank check does not warrant the signatures of the indorsers to be genuine. (First Na- tional Bank of Chicago v. Northwestern National Bank of Chicago, 38 N. E., 739; 152 111., 296.) When mistake in certification may be corrected. 2 (111.). In case a bank has, through mistake, certified a check for an amount greater than the drawer has on deposit, it may, after discov- ering the mistake and after the check has been delivered by the bank with certification to the holder, upon again getting temporary posses- sion of it, cancel and make the certification of no effect as between the holder and the bank, provided no rights of other parties have intervened, and the situation or rights of the holder, between the certification of the check and its cancellation, has in no way changed. (Dillway v. Northwestern Nat. Bank, 82 111. App., 71.) Mistake in certification, bank's rights against drawer. 3 (N. Y. ). Plaintiff, a real estate agent, received two checks drawn on defendant bank, and took one to the main office of the bank, where it was certified. He then took the second check to a branch office, and the teller, not knowing of the certification of the first check, • which had made the account too short to meet the second, certified the second check. Held, where the second check had not passed out of plaintiff's hands, and no rights of third parties had intervened, that the bank was liable, under the certification thereof, only for the balance the drawer had on hand when the certification was made. (Rankin v. Colonial Bank, 64 N. Y. S., 32; 31 Misc. Rep., 227.) Payment by bank of check certified by another bank. ■ 4 (Minn., 1898). At the time of a failure of a bank with which plaintiff had a deposit, plaintiff had nine checks on said bank outstanding, one of which had been certified by the bank, though plaintiff was not aware of the fact. Plaintiff made*arrangements with defendant bank to pay the outstanding checks, and the nine checks were presented in a bundle, and, after being examined by the teller, paid, the teller failing- to discover the certification on said check. Defendant knew that plaintiff had not examined the checks since he issued them. Held, it was a question of fact whether defendant was at fault in paying the check, although plaintiff stood by when the bundle of checks was presented, and ordered them paid. (Tomlinson v. National German- American Bank, 75 N. W., 1028.) When acceptance can not be withdrawn. 5 (N. J.). A bill of exchange, drawn on defendant, was sent by plaintiff to a bank for collection, and on presentation to defendant was accepted by its treasurer and redelivered to the bank. On the same day de- fendant's treasurer learned that the drawer of the bill had failed two days before. On the next day defendant's treasurer applied to the bank's cashier for leave to revoke the acceptance and erase the in- dorsement, which the cashier declined to do, and notice was there- upon given the bank to refuse payment of the bill. At the time of the acceptance the drawer had no funds in defendant's hands, but was indebted to it. No fraud was shown on plaintiff's part. Held, that the defendant was bound by its acceptance. (Trent Title Com- pany v. Fort Dearborn National Bank of Chicago, 54 N. J., 33.) 74 DIGEST OF NATIONAL BANK DECISIONS. CHECKS— Continued. miscellaneous — 'continued. IAmitations. G (Ky., 1900). The statute of limitations began to run against the holder of a certified check from the date of the bank's refusal to pay it to him ; and the bank could-not be estopped from pleading the statute by reason of the fact that it had in the publication of its condition required by law stated that such check was an indebtedness of the bank. (Blades v. Grant County Deposit Bank et al., 2 Banking Cases, 494; 56 S. W., 415.) CERTIFICATION OF NOTE. 1 (U. S. C. C. A., 1896). The certification by a bank of a note made payable at such bank where the maker keeps an account is an absolute prom- ise by the bank to pay such note, not as the debt of another, but as its own obligation, entitling the holder to suspend any remedy against the maker and relax steps to charge an indorser, and can not be rescinded by % the bank because made under a misapprehension of fact as to the sufficiency of the maker's account to meet, the note. (Riverside Bank v. First National Bank of Shenandoah, 74 Fed. Rep., 2T6.) 2 (U. S. C. C. A., 1896). The payment of a note by the bank at which it is made payable, although made under misapprehension of the state of the maker's account with the bank, concludes the bank as against the holder of the paper who has surrendered it, and the payment can not be recovered back of the holder. ( lb. ) CIRCULATION. Treasury seal not essential to validity of national-hank notes. 1 (U. S. C. C). The circulating notes of a national banking association are valid though they do not bear the imprint of the seal or the Treasury. Such imprint was intended to be simply evidence of the contract, and forms no part of the contract itself. (United States v. Bennett, 17 Blatch., 357.) National-bank notes for less than $1 unlawful — An obligation, payable in goods is not illegal. 2 (U. S. Dist. Ct, 1883). Section 5172 of the Revised Statutes provides how the notes contemplated by the national-bank act shall be printed and what they shall contain. No provision is made for a note of less than $1. A note for a fractional sum is not only unknown to the law, but its issue is unlawful. (Sec. 3583.) The Supreme Court, by deciding that an obligation " payable in goods " was not illegal, has left the inference to follow almost necessarily that it was not such a note as was contemplated by statute, and therefore not taxable. (In re Aldrich et al., 16 Fed. Rep., 369.) National-bank notes not a legal tender. 3 (Ind.). The circulating notes or bills of a national bank are not legal tender. (Arnsworth v. Scotten, 29 Ind., 495.) Taxation of national-bank notes. 4 (U. S. Statutes). The following act of Congress relative to the taxation of currency was approved August 13, 1894 : Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That circulating notes of national banking associations and United States legal-tender notes and other notes and certificates of the United States, payable on demand and circulating or intended to circulate as currency, and gold, silver, or other coin, shall be subject to taxation as money on hand or on deposit under the laws of any State or Territory : Pro- vided, That any such taxation shall be exercised in the same manner and at the same rate that any such State or Territory shall tax money or currency circulating as money within its jurisdiction. DIGEST OF NATIONAL BANK DECISIONS. 75 CIRCULATION— Continued. Sec. 2. That the provisions of this act shall not be deemed or held to change existing laws in respect of the taxation of national banking associations. 5 (Ind., 1869). The circulating notes of national banks, known as "na- tional currency," are not exempt from taxation by a State. (Board of Commissioners of Montgomery County v. Elston, 32 Ind., 27 ; 1 N. B. C, 425. ) G (Miss.). The State can not tax the circulating notes of national banking associations. (Home v. Greene, 52 Miss., 452.) 7 (N. C, 1873). The State, until forbidden by Congress, has the power to tax national-bank bills. (Lilly v. The Board of Commissioners of Cumberland County, 09 N. C, 300.) 8 (N. C, 1873). The power of a State to tax the circulation of the national banks depends upon whether such circulation is for tne use of the United States Government or for private profit. Congress can pro- tect the circulation of these banks by forbidding the State to tax it. Until this is done the States have a right to tax it. (Ruffin v. Board of Commissioners, 69 N. C, 498; 1 N. B. C, 806.) Tax on average circulation not a revenue bill. 9 (U. S. Sup. Ct, 1897). Section 41 of the national banking act imposing certain taxes upon the average amount of the notes in circulation of a banking association, now found in the Revised Statutes, is not a revenue bill within the meaning of the clause of the Constitution declaring that " all bills for raising revenue shall originate in the House of Representatives, but the Senate may propose or concur with amendments as on other bills." (Twin City Bank v. Nebeker, 167 v U. S., 196.) State-bank notes. 10 (U. S. Sup. Ct, 1869). The tax of 10 per cent imposed by the act of July 13, 1866 (14 Stat L., 146, sec. 9), on the circulation of State banks used for currency and paid out by the national or State banks is not repugnant to the Constitution, either on the ground that the tax is a direct tax, which must be apportioned among the several States, or that the act impairs franchises granted by the State. (Veazie Bank v. Fenno, 8 Wall., 533; 1 N. B. C, 22.) 11 (U. S. Sup. Ct, 1869). Congress having undertaken, in the exercise of undisputed constitutional power, to provide a currency for the whole country, may constitutionally secure the benefit of it to the people by appropriate legislation, and to that end may restrain by suitable enactments the circulation of any notes not issued under its own authority. (lb.) 12 (U. S. Sup. Ct, 1869). Such a tax is not a direct tax within the mean- ing of the clause of the Constitution which declares that " direct taxes shall be apportioned among the several States according to their respective numbers." (lb.) 13 (U. S. Sup. Gt, 1879). The provision of section 3413 of the national- bank act, that " every national banking association, State bank or banker, or association shall pay a tax of 10 per cent on the amount of notes of any town, city, or municipal corporation paid out by them," is constitutional, even where its effect is to tax an instru- mentality of a State. (Merchants' National Bank of Little Rock v. United States, 101 U. S., 1 ; 2 N. B. C, 100.) 14 (Pa.). The notes of State banks are not money within the meaning of the national-bank act, and a national bank may refuse to receive them as money in its own proper business. (Thorpe v. Wegefrath, 56 Pa. St., 82.) " United States currency " embraces national-bank notes. 15 (La.). The circulating notes of national banking associations are in- cluded in the phrase " United States .currency " when used in a penal statute. ( State, v. Gasting, 23 La. Ann., 1609.) 76 DIGEST. OF NATIONAL BANK DECISIONS. CIRCULATION— Continued. Five per cent redemption fund. 16 (U. S. Ct Claims). The Treasurer of the United States can use the 5 per cent redemption fund in his hands for the redemption of circula- tion for that purpose only. (Jackson v. United States, 20 Ct. CIs., 298.) Receiver has no interest in bonds deposited for circulation. 17 (U. S. C. C, 1871). The receiver of a national bank has no power over or interest in the bonds of a national bank deposited to secure the circu- lation, and he should not be made defendant in an action to determine title thereto. (Van Antwerp v. Hulburd, 1 N. B. C, 219; 8 Blateh- ford, 282.) Forgery of national-bank notes — Signing fictitious names. 18 (U.*S. C. C. A., 1903). The unauthorized signing of names to notes of a national bank, purporting to be those of the president and cashier, constitutes the crime of forging such notes, under Revised Statutes, section 5415 (U. S. Comp. St., 1901, p. 3662), whether the names so signed are in fact. those of the president and cashier or of fictitious persons. (Logan v. U. S., 123 Fed. Rep., 291.) Effect of statute making forged notes redeemable. 19 (U. S. C. C. A., 1903). The fact that national-bank notes to which the sig- natures have been forged, and which have been put in circulation, are made redeemable by act July 28, 1892, 27 Stat, 322, chapter 317 (Comp. St., 1901, p. 3491), does not relieve one who forges the names of the president and cashier of a national bank to genuine but un- signed notes from the crime of forging such notes, as defined in Re- vised Statutes, section 5415 (U. S. Comp. St., 1901, p. 3662).. (lb.) Duplication of offense. 20 (U. S. C. C. A., 1903). Two offenses can not be created out of the same criminal act by charging the defendant in one count with having forged a national-bank note and in another count with having forged the signatures to the same notes. (lb.) Keeping in possession with intent to pass — Separate offenses. 21 (U. S. C. C. A., 1903). Under Revised Statutes, section 5431 (U. S. Comp. St., 1901, p. 3671), which makes it a crime for any person to keep in possession, with intent to pass, any forged obligation of the . United States, a defendant may be convicted of a separate offense for each one of such obligations he keeps in possession with intent to pass. (lb.) CLEARING HOUSE. Clearing house may offset due Mils against collections in its hands. 1 (U. S. Sup. Ct, 1897). Where, by a special agreement, the clearing house was permitted to retain the paper of a bank each day until it settled its balance with the clearing house for that day, the clearing house is entitled, up to notice of insolvency, to set off the due bills for bal- ances in clearings of the preceding days against the proceeds of the collections in its hands, but can not (it not being included in said special agreement) set off the amount due from the bank for loan certificates, as that would be a preference within the prohibition of Rev. St., 5242. (Yardley v. Philler, 167 U. S., 344.) Rules of clearing house. 2 (Cal. Sup., 1903). It is competent for banks associated together in a clearing-house arrangement to bind themselves by rules governing, as between themselves, the effect of their indorsements, and such rules as to them will supplant the law. (Crocker- Wool worth Nat. Bank of San Francisco v. Nevada Bank of San Francisco, 5 B. C, 661; 73 Pac. Rep., 456.) DIGEST OF NATIONAL BANK DECISIONS. 77 CLEARING HOUSE— Continued. New York clearing house — Construction of constitution — Paper returned as not good — Reclamation from hank required to refund. 3 (N. Y. App., 1902). The constitution of the New York clearing house provides that all checks, drafts, or items in the exchanges reported as not good or missent shall be returned the same day to the bank from which they were received, and the said bank shall immediately refund to the bank returning the same the amount which it had received through the clearing house for said drafts, checks, or items so returned. A later provision requires, in case of failure of any bank to promptly refund to the bank holding paper returned as not good, that such bank repoi't the fact to the manager of the clearing > house, who shall thereafter, with the approval of the clearing-house committee, readjust the clearing-house statement and declare the correct balance between such banks, provided such report be ren- dered before 1 o'clock of the same day. Held, not to repeal the first provision, so that a bank charged by the clearing house with the amount of drafts or checks returned as not good can allow such charge to stand against it in the account of the clearing house, and seek reclamation directly from the bank required to refund such 'amount under the direct rules of the clearing house. (Mt. Morris Bank v. Twenty-third Ward Bank, 5 B. G, 56; 64 N. E., 810.) COLLATERAL SECURITIES. Page. What national banks may take as collateral 77 What amounts to deposit of securities as collateral 78 Rights and liabilities op holders of collateral 80 Sale of collateral securities 82 Cross references: Evidence — Evidence of collateral security 156 Insolvency and receivers — Creditors may prove entire claim regardless of collateral 199 Rights of creditor holding collateral 201 What credits not required on collateral _ . _ 202 Pleading and practice — Foreclosure of liens on collateral 411 Shareholders — Liability of pledgee - - - 471 WHAT A NATIO"NAL BANK MAT TAKE AS COLLATERAL. 1 (U. S. Sup. Ct, 1878). A national bank may take as collateral security the stock of another national banking association. (Germania Na- tional Bank v. Case, Receiver, 99 U. S., 628.) 2 (U. S. C. O, 1869). A national banking association may take stock of a corporation as collateral security for a loan. (Shoemaker v. The National Mechanics' Bank, 2 Abb., U. S., 416; 1 N. B. C, 169.) , 3 (U. S., 1875). A national banking association may take a pledge of per- sonal chattels as security for a loan. (Pittsburg Locomotive and Car Works v. State National Bank of Keokuk, 2 Cent. L. J., 692; 1 N. B. C, 315.) 4 U. S. C. C. A., 1894). A contract by which one bank pledges any of its prop- erty in the hands of another bank as collateral to notes discounted for and guaranteed by it authorizes the discounting bank to hold a - deposit balance standing to the credit of the borrowing bank at the time of its insolvency, as collateral to any liability, then or at matur- ity of the discounted notes, until the amount of the lien has been ascertained, (Fisher v. Continental National Bank, 64 Fed. Rep., 707.) 78 DIGEST OF NATIONAL BANK DECISIONS. COLLATERAL SECURITIES— Continued. WHAT NATIONAL BANKS MAY TAKE AS COLLATERAL Continued. 5 (Md. App., 1876). A national bank received from a customer bonds as col- lateral security for a debt then existing and for future obligations. Afterwards, and after the customer had paid his indebtedness, the bonds were stolen from the bank. Held, (1) that the'bank was not a gratuitous bailee of such bonds; (2) that it had power to take the bonds as security for existing or future loans; (3) that it was liable if it failed to exercise ordinary care and diligence in keeping the bonds; and (4) that the measure of damage was the value of the bonds when stolen and not when demand of them was made. (Third Nat. Bank of Baltimore r. Boyd, 44 Maryland, 47 ; IN. B. C, 5,45.) 6 (N. Y., 1876). A national bank indorsed upon a contract of sale and delivery between A. and B. that B. deposited $2,500 in the bank, " to be held by us as collateral security for the faithful fulfillment of the within contract." Held, (1) that the bank had the power to receive the deposit and enter into the said contract; (2) but that, even if the contract was ultra vires, the bank would be estopped from set- ting up that defense in an action by A., as he had performed his part of the agreement, relying on the undertaking of the bank. (*BushneII v. The Chautauqua County National Bank, 10 Hun., 378 ; 1 N. B. C, 794.) 7 (Ohio). A national banking association may take as collateral security for a loan a warehouse receipt for merchandise. (Cleveland, Brown & Co. v. Shoeman, 40 Ohio St., 176.) 8 (Tex., 1901). Incidental to the power of loaning money on personal security, a national bank, in the ordinary course of business, may accept stock of another corporation as collateral security ; and may, by the enforcement of its rights as pledgee, become the owner of the collateral and subject itself to liability as other stockholders. (Ful- ton v. National Bank of Denison, 62 S. W. Rep., 84; 26 Tex. Civ. App., 115.) Guaranty as collateral. 9 (Utah). In order to make a guaranty of a loan collateral therefor a consideration to the guarantor is required and the guaranty must be so drawn as to cover specifically any present or future indebtedness intended to be secured. (Deseret National Bank v. Dinwoodey, 53 Pac. Rep., 215; 17 Utah, 43.) What a national bank may not take as collateral security. 10 (U. S. Sup. Ct, 1880). A national bank refusing to discount a note sent to it for that purpose can not hold the note as security for an overdraft. (Bank of Montreal v. White, 154 U. S., 660.) WHAT AMOUNTS TO A DEPOSIT OF SECURITIES AS COLLATERAL. 1 (Me.). This suit was brought to recover the value of certain bonds which, it is claimed, had been left at the bank as collateral security for money which the bank might, from time to time, advance the plaintiff. The plaintiff testified that on July 1, 1868, he went to the bank to obtain a loan upon this security ; that the bonds could not be found, but that he received the money. The defendant requested the court to instruct the jury that " if the bonds were not found by the bank when the note of July 1 was offered and were not after- wards found the jury are not authorized to find that they were taken and held as collateral security for the note of July 1." Held, that this instruction was properly refused. (Dearborn v. The Union National Bank of Brunswick, 61 Me., 369.) Possession essential to validity of [iledge. 2 (La.). The plaintiff, a- judgment creditor of the defendant, had the steamboat Kiuta seized. The defendant had pledged it to the Third National Bank of New York, but remained in possession for his own account, and never completed the pledge by an actual delivery to DIGEST OP NATIONAL, BANK DECISIONS. 79 COLLATERAL SECURITIES— Continued. WHAT AMOUNTS TO A DEPOSIT (fa SECURITIES AS COLLATERAL — Continued. the pledgee. The act of pledge was drawn up in the coaimon-law form and was intended to operate as a chattel mortgage. It con- tains, as to the form of the act, the essentials of an act of pledge. (Citizens' Bank of Louisiana v. Janin (Third National Bank of New York, Intervener), 15 So., 471; 46 La. Ana, 995.) 3 (La.). The Third National Bank, as pledgee, claimed the proceeds of the sale. The property, when it was seized, was in the possession of the subtenant. It is not proved that the plaintiff colluded with the defendant and thereby gained an improper advantage. Pledge is not made perfect by the consent of the parties. It requires abso- lute possession. The alleged pledgee never was in possession during the tenure of the defendant. (lb.) 4 (La.). It (the Third National) could not obtain possession through the agency of the sublessee, who held possession for ' his lessor, the defendant. (lb.) 5 (La.). A pledge can not be made perfect by the sublessee's delivery of possession without the consent of his lessor. (lb.) 6 (La.). The obligation of the lessor to account for the property and whatever revenues were realized therefrom, binding between him and his creditor, the Third National Bank — the property not having been delivered — did not affect his other creditors, who could seize the property in his possession or in that of his sublessee, who held possession for his lessor. (lb.) Clearing house as -holder of securities. 7 (Pa., 1895). A clearing-house committee, created by the agreement of several banks, which receives deposits from such banks of securities at a fixed ratio on their capital stock, and issues certificates therefor to be used in paying balances, becomes an owner, for value, of the securities. (Philler v. Patterson (Pa. Sup.), 32 A., 26; 168 Pa. St., 468.) Bill of lading for goods in transitu held by bank as security. 8 (Colo., 1895). The fact that a transfer of a bill of lading to a bank as security was, after its doors were closed for the day, for the purpose of deposit and check does not affect its right«as against the vendor who stops the goods in transit, though before its doors are again opened it learns of the insolvency of the vendee. (First National Bank r. Schmidt, 6 Colo. App., 216; 40 P., 479.) 9 (Colo., 1895). As against the depositor does not pass the title to the bank where, on nonpayment of the check, its amount was to be charged up to the depositor so as to prevent its recovery by the depositor from a receiver appointed for the bank. (Armour Packing Co. v. Davis, 24 S. E., 365; 118 N, C, 548.) 25 (N. Y. Sup., 1884). Where one deposits a draft with a national bank and the bank sends it to an agent for collection, who collects it, and the bank fails before receiving the avails, having been insolvent at the • time of the deposit, the depositor may rescind the transaction for DIGEST OF NATIONAL BANK DECISIONS. 95 COLLECTIONS— Continued. TITLE TO CLAIMS DEPOSITED WITH BANK FOB COLLECTION AND LIABILITY OF HOLDER fob proceeds — continued. WHEN FIRST BANK INSOLVENT BEFORE PEOPEBLY CREDITING HOLDER — Continued. fraud and recover the avails from the agent. (Craigie v. Smith, 14 Abb. N. C, 409; 3 N. B. C, 679.) 26 (N. Y.). The drawers of a draft deposited with a bank for collection, and by it forwarded to a correspondent bank, are entitled to the amount as against the receiver of the forwarding bank, which was insolvent and known to be so by its officers when it received the draft, and sus- pended payment before the proceeds were withdrawn from the col- lecting bank. (Importers and Traders' National Bank v. Peters et al., 123 N. Y., 272.) 27 (N. Y.). A bank holding a note for collection from one not a depositor, and which receives payment thereof by charging to the account of a depositor having sufficient to his credit to meet it, does not become thereby a debtor of the owner of the note, but holds the amount of the collection in trust for him ; such trust being impressed on all the funds of the bank, which may be followed though they pass into the hands of a receiver. (People v. Merchants' Bank (Sup.), 36 N. Y. S., 989; In re Friend, ib.) 28 (Tex., 1894). Plaintiff sent a draft to a bank for collection. The bank collected it a»d then passed into the hands of a receiver without remitting. The bank had previously made similar collections for plaintiff, the proceeds of which were always remitted to him promptly and never credited to him as a deposit. Held, that plaintiff was entitled to be paid the entire proceeds of the draft out of the bank assets in the receiver's hands, since the bank was his trustee and not his debtor. (Hunt v. Townsend, 26 S. W., 310.) Conversion by first bank gives holder no preference. 29 (U. S. CO., 1889). Plaintiff sent to defendant's bank paper indorsed " for collection and immediate return " to plaintiff, and the paper was collected and the proceeds mingled with other moneys of the bank, instead of forwarded to plaintiff. The bill contained an un- controverted allegation that defendant's bank, at all times subsequent to the collection and at the time of defendant's appointment as receiver, had on hand cash to u greater amount than that due plain- tiff. The bill asked to have the balance due plaintiff paid in full, on the ground that the bank by receiving the paper for collection and immediate return became a trustee, and that either its entire property or the money in its vaults became impressed with the trust. Held, that if the mingling of the funds was a breach of trust it was a con- version, and plaintiff became a simple contract creditor, with no preference at law. (Philadelphia National Bank v. Dowd, 38 Fed. Rep., 172.) 3J (U. S. C. C, 1889). It was immaterial whether or not the bank stood in a fiduciary capacity to plaintiff, as the facts stated in the bill showed that the money collected could not be traced into any specific invest- ment or fund, but had been indistinguishably mingled with the general assets. (Ib.) 31 (Ind.). A claim to a preference in the assets in the hands of an assignee of an insolvent bank, on account of moneys collected by the bank for the claimant and not paid over to him, is not established in the absence of evidence as to what was done with them, although if they had been deposited in the bank and commingled with other moneys, or had gone into other properties represented by the assets the claim- • ant would be entitled to a preference. (Winstandley et al. v. The Second Nat. Bank of Louisville, Ky., 13 Ind. App., 544.) 32 (Kans., 1896). When money is paid to and accepted by a bank for the purpose of transmission to the holder of a note made by the person so paying and is mingled by the bank with its assets, and is not transmitted, and the bank thereafter assigns for the benefit of its 9(J DIGEST 01* NATIONAL BANK DECISIONS. COLLECTIONS— Continued. TITLE TO CLAIMS DEPOSITED WITH BANK FOR COLLECTION AND LIABILITY OF HOLDER fob proceeds — continued. WHEN FIRSCT BANK INSOLVENT BEFORE PROPERLY CREDITING HOLDER — Continued. creditors, if the holder of the note adopts the trust thereby created in his favor, and no other rights thereto intervene, he may maintain an action to enforce the execution of the trust by the assignee of the bank. (Ryan v. Phillips, 44 Pac. Rep., 909 ; 3 Kans. App., 704.) WHEN FIRST BANK INSOLVENT AFTER PROPERLY CREDITING HOLDER. 1 (U. S. C. C, 1889). By agreement and custom the Fidelity Bank reserved drafts from its correspondent bank at E., and credited them to it as cash, with the understanding that any draft which was unpaid should be charged back to the correspondent. The latter forwarded drafts, which were credited to it, but were not collected before the Fidelity Bank failed. The drafts were paid after the appointment of a receiver and the moneys actually came into his hands. The drafts were indorsed payable to the Fidelity Bank " for collection " for the bank at E. Held, that as the drafts were, when received, cred- ited as cash to the bank at E., which had the right at once to draw against them, the indorsement for collection did not affect the result, and the bank had only the rights of a general creditor. (First National Bank of Elkhart v. Armstrong, 39 Fed. Rep., 231.) 2 (U. S. 0. C, 1890). Checks and drafts sent from one bank to another were • indorsed " for collection," and credited " subject to payment," accord- ing to the dealings between the banks. Part of them were paid to the receiver of the latter bank after its failure, and the balance were credited to it by the payors. Held, that the amount paid the receiver should be accounted for as a trust fund, but the balance as a general debt. (First National Bank of Wellston v. Armstrong, 42 Fed. Rep., 193.) 3 (U. S. C. C, 1892). Where plaintiff and defendant banks for several years had acted as agents for each other in the collection of checks, notes, and drafts (the practice being for each to credit the other for checks when received and for drafts and notes when advised of their pay- ment, charging the amount back again if it was returned unpaid), and where plaintiff sent defendant a note " for collection and credit " which on maturity was paid by a check and credit was imme- diately given on the books, but defendant failed and the check passed into the hands of a receiver. Held, that in view of the course of dealing the two banks stood in the relation of debtor and creditor with respect to the amount of the check, and it became part of the assets of the bank (Franklin County National Bank v. Beal, 49 Fed. Rep., G06.) 4 (U. S. C. C. A., 1892). A city treasurer deposited checks in a bank, indorsed by him " For deposit," and the checks were immediately credited to him on his pass book, though not in pursuance of any agreement, to that effect. He had been a depositor in the bank for some years, but had no agreement that his checks should be treated as cash or that he should draw against them before collection. The bank becanie insolvent before the checks were collected and their proceeds passed into the hands of a receiver. Held, that no title passed to the bank except as a bailee and that the depositor was entitled to the proceeds. (Beal, Receiver, v. City of Somerville, 50 Fed. Rep., 647.) 5 (U. S. C. C, 1899). Where a Philadelphia bank, being indebted to a New York bank for collections made, remitted by its cashier's check on another New York bank with which it had a sufficient deposit, which check was duly presented and paid through the clearing house, the transaction amounted to a complete appropriation of the fund to the creditor bank, and its ownership is not affected by the restoration by it of the money to the bank paying the check on the same day, on DIGEST OP NATIONAL BANK DECISIONS. 97 COLLECTIONS— Continued. TITLE TO CLAIMS DEPOSITED WITH BANK FOB COLLECTION AND LIABILITY OF HOLDER fob proceeds — continued. WHEN FIRST BANK INSOLVENT AFTER PROPERLY CREDITING HOLDER Continued. the demand of the latter, made on learning of the suspension of the drawer, which return was required under such circumstances by the rules of the clearing house, of which both banks were members, but only for the purpose of protecting the paying bank in case the pay- ment should prove to be unauthorized ; nor will the fact that such bank, without right, paid the money to the receiver of the insolvent bank prevent its recovery from the receiver by the payee of the check. (National Union Bank v. Earle, 93 Fed. Rep., 330.) 6 (Ind., 1899). The usual and ordinary custom by which banks are gener- ally controlled in collecting paper does not require them to hold the money collected separate and apart from their own funds and remit the identical money collected. And when the money is collected, and the proper credit given to the person by whom the paper was sent for collection, as a general rule the relation of debtor and creditor is cre- ated between the bank and such person, and the relation of trustee and cestui que trust does not arise. And the fact that the bank is insolvent when the proceeds of the paper are mingled with its own funds are immaterial in this connection, if its officers are not aware of its insolvency. (Union Nat. Bank v. Citizens' Bank of Union City et al., 1 Banking Cases, 712; 153 Ind., 44.) 7 (Kans., 1901). Where a check is sent to a bank for collection, and such bank, after collection, retains and uses the proceeds of the check in its general business, it will be deemed to be an agent and trustee of the owner of the check, and the money so wrongfully retained and used to be a trust fund which the owner may follow and claim if it can be identified and the rights of no innocent third parties have intervened. (Kansas State Bank v. First State Bank of Marion et al., 64 Pac. Rep., 634; 3 Banking Cases, 413; 62 Kans., 788.) 8 (Minn., 1898). A customer kept an account with a bank, which received his deposits, consisting of checks, with the understanding that the checks should be credited to his account, and, if not paid on presenta- tion, should be charged back. Held, that the title to the checks passed to the bank, subject to the condition that credit should be rescinded if the checks were not paid on presentation, and that the failure of the bank after it had received certain checks, but before they were collected, did not divest its title. (In re Receivership of Washington Bank, 75 N. W. Rep., 228; 72 Minn., 283; Brusegard v. Ueland; Id.) 9 (Mo., 1899). Where a bank accepts a check on another bank in payment of a draft in its hands for collection, and gives up the draft, it makes the check its own, and its liability is the same as if cash had been received. (National Bank of Commerce v. American Exeh. Bank of St. Louis, 52 S. W. Rep., 265; 151 Mo., 320.) 10 (Nebr., 1897). Where the uniform course of business between two banks showed that the real import of the indorsement of a certificate' of deposit by one bank to the other was to pass the certificate, not for the sole purpose of collection, but as the property of the transferee, it will be treated as having that effect, though the form of the trans- mitting letter tends to show a remittance for collection, it being admitted that all classes of paper were remitted under this same form, and that they were differently treated thereunder. (United States Nat. Bank v. Greer, 73 N. W. Rep., 266; 53 Nebr., 67.) 11 (Nebr., 1897). A depositor tendered to a bank a draft made by him pay- able to its order, saying that his outstanding checks would overdraw his account, and that he wished credit for the draft. The bank took the draft and agreed to give him credit for it and to protect his checks, but told him if it should not be paid he would " be overdrawn 4049—05 7 98 DIGEST OF NATIONAL BANK DECISIONS. COLLECTIONS— Continued. TITLE TO CLAIMS DEPOSITED WITH BANK FOB COLLECTION AND LIABILITY OF HOLDER foe proceeds — continued. WHEN FIRST BANK INSOLVENT AFTER PROPERLY CREDITING HOLDER Continued. just the same." On that day the bank honored his checks for more than one-half the amount, and two days later the bank, which was then insolvent, and so known by its officers to be, closed its doors. Held, that the draft became the property of the bank, and was' not intrusted to it for the sole purpose of collection. (lb.) 12 (Nebr., 1901). Money collected by a bank for another on notes or drafts, and retained, is held in trust for the owner and does not become a part of the assets of the bank, and if the bank thereafter becomes insolvent, and a receiver is appointed, the one from whom the col- lection is made is a preferred creditor. (State v. Bank of Commerce of Grand Island et al., 85 N. W. Rep., 43; 3 Banking Cases, 4G; 61 Nebr., 181.) 13 (N.Y.). Where the owner of a note sends it to a bank for collection only, and the maker's check is drawn on that bank for the amount thereof, and is delivered to it, and the note is thereupon canceled and surrendered, and the check is charged to the account of the maker, which was good for the amount, there is a collection of the amount from the general fund of the bank and a special appropria- tion of that amount to the payment of the note, and as between the owner of the note and the receiver of the bank the title to the money dedicated to the payment of the note remains in the owner. (Arnot v. Bingham, 9 N. Y. S., 68; 55 Hun., 553.) 14 (N. Y., 1900). Defendant received from plaintiff, one of its depositors, an indorsed draft for collection, and forwarded it to its agent, where the drawee resided, and on November 3 received in payment a check of the drawee on a local bank, and immediately gave plaintiff credit for the amount. The fact that plaintiff, after protest of the check, aided the bank in its effori to procure payment of the check by the indorser of the draft, did not estop plaintiff from enforcing the liability of the bank for its negligence in not returning the check. (Kirkham v. Bank of America, 58 N. E. Rep., 753 ; 3 Banking Cases, 56; 165 N. Y., 132.) 15 (N. C, 1894). Under an agreement between plaintiff bank and the H. bank that the latter should collect notes and checks forwarded it by plaintiff for a commission and remit daily, the relation of principal and agent as to any paper ceased on collection, and the relation of creditor and debtor as to cash immediately arose. (First National Bank of Richmond v. Davis, 19 S. E., 280; 114 N. C, 343.) 16 (N. C, 1894). On failure of the H. bank, it being shown that its cashier had no knowledge of its insolvency till the failure, it is not charge- able as for a conversion of funds of plaintiff which it has mingled with its own funds, since, in the absence of such knowledge on the cashier's part, the contract, with its necessary implication as to the disposition to be made of plaintiff's money on collection, remained in force till the failure. (lb.) 17 (S. Dak., 1901). Where for two years the general agent of a corporation had been accustomed to send notes due the corporation to a bank for collection, and the bank, as it collected the notes at different times, gave the agent credit on its books, sometimes retaining the collections as long as two months before remitting the balance due the corpora- tion, the corporation was merely a creditor of the bank, and the pro- ceeds of collections made by it could not be regarded as trust funds. (McCormick Harvesting Mach. Co. v. Yankton Sav. Bank et al., 87 N. W. Rep., 974; 4 Banking Cases, 81 ; 15 S. Dak., 196.) 18 (Wash., 1898). Only the usual relation of debtor and creditor, and not that of trustee and cestui que trust, exists between a bank which has collected a draft and the person who left the draft for collection, though there was no contract for deposit of the proceeds; so that, DIGEST OF NATIONAL BANK DECISIONS. 99 COLLECTIONS— Continued. TITLE TO CLAIMS DEPOSITED WITH BANK FOR COLLECTION AND LIABILITY OF HOLDEE foe proceeds — continued. WHEN FIRST BANK INSOLVENT AFTER PROPERLY CREDITING HOLDER — Continued. the bank becoming insolvent, such person is not entitled to prefer- ence. (Hallam v. Tillinghast, 52 Pac. Rep., 329 ; 19 Wash., 20.) WHEN CORRESPONDENT BANK PROPERLY CREDITS HOLDER BEFORE INSOLVENCY. 1 (U. S. Sup. Ct, 1892). A bank in Ohio contracted with a bank in Penn- sylvania to collect for it at par, at all points of Pennsylvania, and remit the 1st, 11th, and 21st of each month. In executing this agree- ment the Pennsylvania bank stamped upon the paper forwarded for collection, with a stamp prepared for it by the Ohio bank, an indorse- ment " Pay to " the Ohio bank, " or 'order, for collection for " the Pennsylvania bank. The Ohio bank failed, having in its hands, or in the hands of other banks to which it had been sent for collection, proceeds of paper sent it by the Pennsylvania bank for collection. A receiver being appointed, the Pennsylvania bank brought this action to recover such proceeds. Held, first, that the relation between the banks as to uncollected paper was that of principal and agent, and that the mere fact that the subagent of the Ohio bank had collected the money due on such paper was not a commingling of those collections with the general funds of the Ohio bank, and did not operate to relieve them from the trust obligation created by the agency, or create any difficulty in specially tracing them. Second, that if the Ohio bank was indebted to its subagent, and the collections when made were entered in their books as a credit to such indebtedness, they were thereby reduced to possession and 1 passed into the general funds of the Ohio bank. Third, that by the terms of the agreement the relation of debtor and creditor was created when the collections were fully made, the funds being on general deposit with the Ohio bank, with the right in that bank to their use until the time of remittance should arrive. (Commercial National Bank of Pennsylvania v. Armstrong, 148 U. S., 50.) 2 (U. S. C. C. A., 1893). Where a check of a depositor is accepted by a cor- respondent bank in payment of a draft for collection, which charges the same to the drawee and credits the drawer without separating the amount from its general fund, it holds the money as agent for the drawer, who, after insolvency, becomes a mere general creditor, notwithstanding the State constitution provides "that " depositors who have not stipulated for interest shall for such deposits be entitled in case of insolvency to preference of payment over all other creditors." (Anheuser-Busch Brewing Association v. Clayton, 56 Fed. Rep., 759.) 3 (U. S. C. C, 1891). A bank which collects a draft sent to it by another bank for that purpose, with directions to remit the proceeds to a third bank for the owner's account, does not thereby Become a trustee, so that the fund can be followed into the hands of a receiver, although it had become mixed with the other cash of the bank before his appointment; especially when it appears that the business was car- ried on, and money paid out, for several days after the collection was probably made. (Merchants and Farmers' Bank v. Austin et al., 48 Fed. Rep., 25.) 4 (U. S. C. C. A., 1899). Checks were sent to a bank by depositors for the purpose of having them collected and the proceeds placed to their credit; and they were received and placed to their credit when the bank officers knew that it was insolvept, and when the depositors were not indebted to the bank. Held, that the action of the bank in so receiving the checks at such time was such a fraud upon the depositors as gave them the right to recover the checks from the bank's receiver. (Richardson v, Denegre et al., 1 Banking Cases, 503; 93 Fed. Rep., 572.) 100 DIGEST OF NATIONAL BANK DECISIONS. COLLECTIONS— Continued. TITLE TO CLAIMS DEPOSITED WITH BANK FOB COLLECTION AND LIABILITY OF HOLDER foe pboceeds — continued. WHEN COBBESPONDENT BANK PBOPEBLY CREDITS HOLDEE BEFOBE INSOLVENCY Cont'd. 5 (Ark.). Where a bank forwarded a note to a correspondent for collection, and the latter, which had the maker's money on deposit, with instruc- tions to pay it on the note, charged the amount to the maker, and credited it to the sender of the note in the usual course of business, it constitutes a payment, though the bank failed the next day, and returned the note without indorsing anything thereon, or accounting for the collection. (Daniel v. St. Louis Nat. Bank, 54 S. W. Rep., 214; 67 Ark., 223.) 6 (Mich., 1898). The F. bank, which sent to the M. bank, for collection, a number of checks on the latter, has no right to preference, on the M. bank becoming insolvent, the M. bank having received no money on the checks, but merely charged them on its books against the draw- ers. (Sunderlin v. Mecosta County Sav. Bank, 74 N. W. Rep., 478; 116 Mich., 281.) 7 (Mo., 1899). The plaintiff bank sent items to another bank for collec- tion, and they were collected by the latter bank by charging the accounts of certain of its depositors, with their consent, and crediting plaintiff therewith, at a time when the collecting bank had no funds on hand, except a small amount, not a dollar of which had been received from the depositors owing the collections. Plaintiff had not received payment for any portion of such collection items when the collecting bank became insolvent and assigned. Held, that plaintiff- was not entitled to a preference over general creditors on account of such collections, it not appearing that the assets In the hands of the assignee had been augmented thereby. (Midland Nat Bank of Kan- sas City v. Brightwell (Mo. App.), 1 Banking Cases, 379.) 8 (Nebr., 1898). Plaintiff bank transmitted to defendant bank for collec- tion, and so indorsed, a note payable at a third bank. Defendant in- dorsed the note for collection and forwarded it to the third bank with a letter instructing the latter bank, after making the collection, to credit the same to defendant, with whom said third bank had a running account. The note was collected and the proceeds credited to defendant, and on the same day the collecting bank failed, being at the time overdrawn with the defendant. Held, that defendant was liable to plaintiff for the amount of the note. (First Nat. Bank of Omaha v. First National Bank of Moline, 75 N. W. Rep., 843 ; 55 Nebr., 303".) 9 (Okla., 1900)., Where a bank, in the due course of business, receives from a correspondent bank a check indorsed in blank, and in good faith parts with value or permits an existing indebtedness to remain unpaid by reason thereof, it is entitled to the proceeds Of such check against the real owner, even though the check was not actually col- lecte'd by such bank until after failure of the bank which transmitted the same to it. (Winfield Nat. Bank i>._ Mc Williams, 2 Banking Cases, 277; 9 Okla., 493.) 10 (Pa., 1894). A bank received two drafts indorsed to it for collection, on account of the drawers, against two of its depositors. After accept- ance by the latter the bank charged to each depositor's account the amount of the draft accepted by him. Before remitting to the drawers the bank assigned, having on hand cash sufficient to pay such drafts. Held, that the drawers were not entitled to a prefer- ence as to the funds on hand at the time the bank failed, where the assignee holds nothing which he or such drawers can identify with the drafts or trace as a payment of them. (Freiberg v. Stoddard, 28 Atl. Rep., 1111; 161 Pa. St., 259.) 11 (Wash., 1894). B. forwarded to bank a draft for collection. On July 22, 1893, bank made collection, and the same day forwarded its draft on New York. On July 26 bank failed, and a receiver was appointed. •DIGEST OF NATIONAL, BANK DECISIONS. 101 COLLECTIONS— Continued. TITLE TO CLAIMS DEPOSITED WITH BANK FOB COLLECTION AND LIABILITY OP HOLDER fob pboceeds — continued. WHEN CORRESPONDENT BANK PROPERLY CREDITS HOLDER BEFORE INSOLVENCY — Cont'd. Draft was presented after the failure and payment refused. B. brought suit to secure a preference in payment. Held, that when a draft is forwarded to a bank for collection, in the absence of instruc- tions to the contrary, it is with the understanding that upon collec- tion the title to the proceeds shall vest in the collecting bank, and that said bank shall remit to its correspondent the equivalent of such proceeds by the system of exchanges established by the universal cus- tom among banks, and when this has been done no preference can arise. (Bowman et al. v. Clark et al., 38 P., 211 ; 9 Wash., 614.) WHEN CORRESPONDENT BANK INSOLVENT BEFOBE HOLDEB PROPEBLY CREDITED. 1 (U. S. C. C. A., 1893). Where a bank sends paper to another bank for col- lection and credit on general account, the custom being to enter credit only when paper is collected, the relation being that of prin- cipal and agent until collection and receipt of money by the second bank, and if latter sends to another bank, which collects, but does not remit until latter bank has failed, the former can recover the proceeds from the receiver thereof. (Beal v. National Exchange Bank of Dallas, 55 Fed. Rep., 894.) 2 (U. S. C. C. A., 1899). In answer to letters soliciting an account and mak- ing an offer of services for the care of business in its neighborhood, a bank wrote, " If we understand your position, you agree that you will take from us all items on (neighboring States), crediting your account with the total of our letter on receipt at par, and remitting New York at par the year round on our balance in excess of $10,000." The correspondent was directed to advise of collections by the col- lection number of the remitting bank, so that they could be checked without difficulty. Each letter of advice contained the passage : " I inclose for collection and * * *. Please advise collection by number, and return immediately if not honored." The list of items often directed protests, which directions were followed, and imme- diately on such protest the amount of such item and protest fees were charged back to remitting bank. Some items were charged with the note " Held," probably meaning held for future direction. Of many of the items the remitting bank was the mere mandatary for collection. Held, that the contract was one for the collection of the items forwarded, and not of purchase, and the forwarding bank was entitled to all items not collected before suspension of the collecting bank, and afterwards collected by subagents, and traced to the possession of the receiver appointed to wind it up. (Richard- son v. Louisville Banking Co., of Louisville, Ky., 94 Fed. Rep., 442.) 3 (U. S. C. C. A., 1899). A bank entered into an agreement to "handle" the business of another bank within a specified territory, and, pur- suant thereto, certain items of exchange were transmitted to it, in- dorsed payable to the order of any national or State bank, which were credited to the account of the transmitting bank. Held, that the receiving bank was not the purchaser of such items of exchange, nor did it become the debtor of the transmitting bank by so crediting the items ; and that the latter was entitled to the possession of all such items uncollected at the time of the failure of the receiving bank, or their proceeds, which could be identified in the hands of the receiver. (Richardson v. Continental Nat. Bank of Memphis, Tenn., 2 Banking Cases, 438; 94 Fed. Rep., 450.) 4 (Mont., 1899). The defendant bank received from plaintiff a draft depos- ited by him with directions to collect and notify plaintiff and not for credit. A receiver was appointed for defendant before plaintiff was paid any part of the amount of the draft. Defendant was not in- debted to its correspondent at the time the latter collected the draft 102 DIGEST OF NATIONAL BANK DECISIONS. * COLLECTIONS— Continued. TITLE TO CLAIMS DEPOSITED WITH BANK FOB COLLECTION AND LIABILITY OF HOLDEB fob proceeds — continued. WHEN COBRESPONDENT BANK INSOLVENT BEFORE HOLDER PROPERLY CREDITED — Cont'd. and did not become indebted to it subsequently, and the balance paid by the correspondent into the hands of the receiver exceeded the amount of the draft. Held, that the fact that plaintiff, when he depos- ited the draft, had an open account with defendant subject to check did not change the bank's relation to defendant from that of agent to that of debtor in regard to the draft, whether or not the amount of the draft was credited to plaintiff on defendant's books. (Guig- non v. First Nat. Bank of Helena et al-., 1 Banking Cases, 290; 22 Mont., 140.) 5 (Wyo., 1894). A national bank collected a note for plaintiff by accepting a draft for the amount on another party, which it forwarded to its correspondent for collection, and at the same time sent plaintiff a draft on the same correspondent as a remittance of the proceeds of his note. The correspondent received the money on the draft sent it for collection, but before plaintiff's draft was paid by the corre- spondent the bank failed. Held, that the bank was only agent for plaintiff, and that the money derived from his note was a trust fund, which did not become a part of the bank's assets. (Foster v. Rincker, 35 P., 470; 4 Wyo., 484.) NEGLIGENCE IN MAKING COLLECTIONS. GENERALLY. National Panics liable for negligence in making collections. 1 (Utah). Collecting commercial paper is part of the regular business of banking, and a national bank will be liable for negligence in collect- ing a draft the same as any other bank or agent. (Mound City Paint and Color Co. v. Commercial National Bank, 9 P., 709; 4 Utah, 353.) Negligence in loss of draft. 2 (Cal.). In an action against a bank for the loss of a draft left with it for collection the bank should be permitted to show that it acted in the matter according to the usage of banks. (Davis v. First Nat. Bank, 50 Pac. Rep., 666; 118 Cal., 600.) Negligence in sending collections by mail. 3 (Mo.). A bank receiving paper for collection payable at a distant place, and sending it by mail to the payor for collection, is guilty of negli- gence, though the payor is the only bank in the place and though it is customary to send paper in that manner for collection. (American Exchange Nat. Bank v. Metropolitan Nat. Bank, 71 Mo. App., 451.) Bank must exercise due care. 4 (Minn., 1902). Plaintiff was defendant's agent for the collection of the check, and was bound to exercise reasonable care and diligence to protect all the rights of defendant in respect to the liability of the indorser and drawer thereof; and a failure to exercise such care released defendant from liability to plaintiff. (Ft. Dearborn Nat. Bank v. Security Bank of Renville, 91 N. W. Rep., 257; 4 Banking Cases, 665; 87 Minn., 81.) 5 (Minn., 1902). The measure of damages in such case is, prima facie, the face value of the check, subject to reduction and mitigation, however, by a showing of insolvency of the person discharged from liability, or other fact showing no damages in point of fact. Solvency is ordina- rily presumed, and the .burden is upon him who asserts the contrary to prove it (lb.) 6 (N. Dak., 1899). A note was sent to a bank for collection. The maker was a stockholder and director of the bank, and the bank knew that he was largely in debt and would not be able to pay his obligations DIGEST OF NATIONAL BANK DECISIONS. 103 COLLECTIONS— Continued. NEGLIGENCE IN MAKING COLLECTIONS — Continued. generally — continued. if pressed by all his creditors. For many weeks after the note reached the bank the debtor had an unencumbered stock of goods, in his store, which was worth $2,500, and also real estate partially unencumbered. The bank did not inform its principal of the facts, but withheld information for a long time after maturity of note, and replied only in answer to a telegram of inquiry. In the mean- time the bank obtained security from the maker to protect its own claims. Held, that the bank is liable to its principal for negligence. (Commercial Bank v. Red River Val. Nat. Bank, 79 N. W. Rep., 859; 8 N. Dak., 382.) Collection of drafts — Measure of duty — Ordinary care. 7 (U. S. C. C, 1903). Where drafts are sent from one bank to another for collection and remittance, the measure of duty of the collecting bank is the exercise of ordinary care and reasonable diligence. (Bank of Bay Biscayne, of Miami, Fla., v. Monongahela National Bank, 126 Fed. Rep., 436.) NEGLIGENCE IN PRESENTATION. 1 (Ga.). When a bill of exchange, payable at , was sent to a bank for collection, and the bank, treating it as a bank check and not entitled to days of grace, presented it for payment, and had it pro- tested, etc., on the day of its maturity, without days of grace, by means of which the indorser was discharged, and it was in evidence that the bank was notified by the indorser at the time that he claimed the paper to have days of grace, held, that the bank was liable to the person who deposited the paper for collection for dam- ages for its negligence in not presenting the check, as required by law, and causing notice of its nonpayment to be given to the indorser. (The Georgia National Bank v. Henderson, 46 Ga., 487.) 2 (Ind., 1898). Where the drawer of a draft, by reason of having no funds in the drawee's hands or no right to draw, remains liable on his indorsement of the draft without presentment, demand, or notice, a bank to which the draft is transmitted for collection, by negligence in presenting the same -for acceptance, becomes liable only for nominal damages, unless the drawer has become insolvent since the time at which the indorsee would have received notice of the nonacceptance had the draft been presented at the proper time, in which case it may become liable for the loss occasioned by its negligence. (Citizens' Nat. Bank v. Third Nat. Bank, 49 N. E. Rep., 171; 19 Ind. App., 69.) 3 (Ind., 1898). The fact that a bona fide indorsee of a draft did not inquire whether the drawer had the right to draw or had reason to expect it to be paid will not excuse the bank which undertook to collect the draft from presenting it for acceptance. (lb.) 4 (Kans., 1901). It is the duty of a bank receiving commercial paper for collection before it is due to present same to the maker for payment on its maturity, and, if payment is refused, immediately to notify the holder. In a case where the duty to give such notice was neglected and the bank, after the maturity of the note and while holding it for collection, took from the maker a chattel mortgage to itself and assisted another creditor to obtain a mortgage covering all the debt- or's property, by reason of which the note was rendered uncollectible, it was error for the court to take from the jury the question of the bank's liability for the amount of the note. (Sprague et al. v. Farm- ers' Nat. Bank of Arkansas City et al., 64 Pac. Rep., 967 ; 3 Banking Cases, 449; 63 Kans., 12.) 5 (Md., 1894). The payee of a check deposited it for collection with bank A on the same day it was made. The bank presented it for payment the next day shortly before 11 o'clock, and the drawee's check on 104 DIGEST OF NATIONAL BANK DECISIONS. COLLECTIONS— Continued. NEGLIGENCE IN MAKING COLLECTIONS Continued. negligence in peesentation — continued. bank B, only a few blocks distant, was taken in payment. The drawee became a bankrupt at 1 o'clock. Several checks given after this, one by the drawee on bank B, were paid before 1 o'clock. Before 3 o'clock bank A presented the check in question for payment, which was refused; whereupon it immediately went to the drawee, and, after recovering the original check, protested it. Held, that the drawer of the check was not liable thereon. (Anderson v. Gill, 29 A., 527; 79 Md., 312.) 6 (Mo.). In an action against a collecting bank for failure to present a draft for payment, since no pecuniary benefit could have been real- ized by the defendant, the measure of damages is the face value of the draft, without interest. (Gray's Harbor Commercial Co. v. Con- tinental Nat. Bank, 74 Mo. App., 633. ) 7 (Nebr., 1898). The custom of two banks at a certain town to hold collec- tions at the request of debtors and unknown to the parties drawing on them is not a defense to a bank in an action for the negligent hold- ing of a draft unpaid. (Dern v. Kellogg, 74 N. W. Rep., 844; 54 Nebr., 560.) 8 (Nebr., 1898). A bank received a draft for collection February 19, pre- sented it and secured an oral acceptance and a promise that it would be paid in a few days. At maturity the merchant asked the bank to hold it, and repeated his promise to pay in a few days. The same thing occurred later. The bank held the draft without communicating with the drawers until March 5, when, at the request of the mer- chant, it wrote the drawers requesting an extension of thirty days. March 7, and before an answer was received, it took a conveyance of all the merchant's property in satisfaction of a debt to itself, and with an agreement to pay debts to strangers to a large amount, but not including the drawers of the draft. It then returned the draft, which could not be collected. Held, that it had not performed its duties in good faith and was liable. (lb.) 9 (Nebr., 1901). If the payee of a check drawn upon a bank in this State indorses and delivers it to a bank in a neighboring town for collec- tion and accompanies the act with a request that it be not immedi- ately presented for payment, and agrees that it may be sent for col- lection through a distant bank, situate outside the State, the indorsee will not be liable for the consequences of the delay necessarily incident to the course adopted nor for the default or negligence of the bank chosen to make presentment for payment. (Bedell v. Har- bine Bank of Fairbury, 86 N. W. Rep., 1060 ; 3 Banking Cases, 678 ; 62 Nebr., 339.) 10 (Nebr., 1901). If the payee of a check drawn upon a bank in this State indorses it to a bank in a neighboring town for collection, and the latter, without the knowledge or consent of the payee, sends it for collection through a distant bank, situate outside the State, thereby consuming three days in making a presentment for payment which might have been made in one day, the indorsee will be liable for the consequences of such delay and for any default or negligence of the bank chosen to make the collection. (lb.) 11 (N. Y., 1900). It is the duty of a bank, receiving from a customer a draft drawn by a third party, to present it for payment, and it is liable for loss caused by acts of its agents in making the collection. (Kirkham v. Bank of America, 49 N. Y. S., 767.) , 12 (N. Y., 1899). Where the failure of a bank receiving a check for collec- tion ,to present it for payment within a reasonable time is the cause of the loss of money, an indorser paying, the check without knowl- edge of the bank's negligence can recover the amount from the latter. (Martin et al. v. Home Bank, 2 Banking Cases, 112; 160 N. Y. St., 190.) DIGEST OF NATIONAL BANK DECISIONS. 105 COLLECTIONS— Continued. NEGLIGENCE IN MAKING COLLECTIONS — Continued. negligence in pkesentation — continued. 13 (Pa.). Defendant bank received for collection a draft drawn on plaintiff, payable at another bank where he had funds and had left instructions to meet it. Defendant negligently failed to present the draft until the failure of the bank at which it was payable, so that plaintiff became discharged from liability thereon. Held, that plaintiff could not recover back the amount of the draft paid by him to defendant with knowledge of the facts, although he made the payment under protest and to save his credit. (Harvey v. Girard National Bank, Pa., 13 A., 202; 119 Pa. St., 212.) DUTY OE BANK TO TAKE PROPER STEPS TO CHARGE INDORSER AND LIABILITY FOR FAILURE TO TAKE PROPER ACTION. Duty of bank to take proper steps to charge indorser. 1 (Ala., 1899). A bank received a draft from the drawer for collection and upon presenting it for payment, received from the drawee his check for the amount of the draft drawn on another bank of the same town in which it was located. Held, that, as between itself and the drawer of the check, the bank had until the close of banking hours on the next secular day after receiving the check to present it to the drawee bank for payment — the time allowed by commercial law, as the bank in presenting the check was not the agent of the drawer. (Morris v. Bufaula Nat. Bank, 1 Banking Cases, 677; 122 Ala., 580.) 2 (Minn.). A bank receiving an indorsed note before maturity for collec- tion is required to take the proper steps to fix the liability of the indorser. (West v. St. Paul National Bank, 56 N. W., 54; 54 Minn., 466.) 3 (Minn.). In an action by the owner of the note for neglect of that duty, resulting in the discharge of the indorser, the question of the sol- vency of the maker is material as affecting the measure of damages, (lb.) 4 (Minn.). Insolvency may be shown prima facie by proof of general repu- tation. Proof of insolvency within a reasonable time after the maturity of the note held admissible. (lb.) 5 (Mo.). The town, of S. was situated on the same railroad, 12 miles beyond the town of M. A bank at K. received a check on a bank at S. for collection, and on account of the suspected insolvency of its correspondent, the only other bank at S., transmitted the check to a bank at M., where it was received on Saturday, on which day the bank at S. became insolvent. Held, that the bank at K. was negligent in not transmitting the check direct to its correspondent at S., and the suspected insolvency afforded no excuse. (Herider v. Phoenix Loan Association, 82 Mo. App., 427.) 6 (Nebr., 1897). A bank which receives for collection the check of a cus- tomer must pay it upon the receipt thereof during business hours, or promptly give notice of its dishonor, in order to charge the drawers and indorsers. (Western Wheeled Scraper Co. v. Sadilek, 69 N. W. Rep., 765; 50 Nebr., 105.) 7 (N. T.). Plaintiff bank forwarded to defendant bank for collection drafts drawn by W. on the K. bank, and defendant transmitted them to such bank, which, in payment, sent defendant drafts drawn by it on defendant. Defendant merely protested these, the account with it being overdrawn, and sent them to plaintiff. Held, that, though the K. bank was insolvent, defendant, having made no effort to obtain possession of the drafts sent it for collection, and not having had them protested and notice of protest given, was liable for the amount thereof. (National Revere Bank v. National Bank of the Republic, 66 N. Y. S., 662 ; 54 App. Div., 342.) 106 DIGEST OF NATIONAL BANK DECISIONS. COLLECTIONS— Continued. NEGLIGENCE IN MAKING COLLECTIONS — Continued. DUTY OF BANK TO TAKE PROPER STEPS TO CHARGE INDORSEE AND LIABILITY FOR failure to take propeb action — continued. « 8 (N. Y.). Where a notary public in the employ of a bank protested notes deposited for collection, without allowing days of grace, by reason of which improper protest the indorsers were relieved from liability, the bank was liable to the owner of the notes for whatever damages he sustained thereby. (Hitchcock v. Bank of Suspension Bridge, 08 N. Y. S., 234; 57 App. Div., 458.) 9 (S. Dak.). A note payable on Sunday was left at defendant's bank before maturity for collection, with instructions to protest the same in case it was not paid. The note was protested on Thursday fol- lowing its maturity, which, in an action on the note, was held to be too late to hold the indorser. Held, that the bank was bound to use a reasonable degree of skill only, and the question of law involved being one of serious doubt and difficulty owing to the condition of the statutes relating to holidays and days of grace, the bank was not liability to the holder of a note for the damages sustained by reason of the release of the indorser. ( Morris v. Union Nat. Bank, 83 N. W. Rep., 252 ; 50 L. R. A., 182 ; 13 S. D., 329.) 10 (Wis., 1896). Plaintiff, as indorsee of notes due August 4, sent them to defendant bank for collection. Before they were received by defend- ant the bank building was burned, but on August 1 the bank resumed business and notified the maker of the notes. Held, that the defend- ant, having undertaken the collection of the notes, was not excused from liability for its negligence in not protesting the notes by reason of the confusion consequent upon the fire. (Merchants' State Bank v. State Bank of Phillips, 69 N. W. Rep., 170; 94 Wis., 444.) Liability for failure to notify indorser. 11 (Nebr., 1893). A bank receiving for collection, from a correspondent, checks drawn upon it by a customer with instructions to protest in case of nonpayment, is required in case payment is refused for want of funds to give notice to the bank from which they were received not later than the next day after dishonor ; and when they are held for two days in order to enable the drawer to provide funds for payment thereof a jury will be warranted in finding that the bank intended to accept them and become liable thereon. (Wood River Bank v. First National Bank of Omaha, 55 N. W., 239 ; 36 Nebr., 744.) Bank only liable for care in selecting notary. 12 (Nebr.). The general rule is that where a bank delivers a note or bill to a notary public for demand, protest, and notice, it will not be liable for the default of the latter. (Wood River Bank v. First National Bank of Omaha, 55 N. W., 239; 36 Nebr., 744.) 13 (Nebr.). But where such bill remains in the bank to be protested for nonpayment by the president and manager thereof, a notary public, who, although aware of the instructions to the contrary, delays noting for protest or giving notice, in consequence of which the indorsers are discharged, such notary will be held to be the agent of the bank and the latter will be liable for his negligence. (lb.) 14 (Iowa, 1899). A draft received by the defendant bank for collection hav- ing been presented to the drawee and payment refused was placed in the hands of a notary public, who was also defendant's cashier, with instructions to protest for nonpayment. It was not contended that defendant was negligent in selecting such notary. Held, that the bank was not chargeable with the notary's negligence in failing to promptly send notice of protest. (First National Bank of Manning v. German Bank of Carroll County et al., 1 Banking Cases, 300 ; 107 Iowa, 543.) DIGEST OF NATIONAL, BANK DECISIONS. 107 COLLECTIONS— Continued. NEGLIGENCE IN MAKING COLLECTIONS — Continued. NEGLIGENCE IN ACCEPTING SOMETHING OTHER THAN CASH IN PAYMENT. 1 (Ark., 1900). Where the holder of a check delivers it to a bank, as his bailee, for collection, and the latter sends it by mail to the drawee, who lives at a distance, and the drawee, upon receipt of the check, having money on deposit to the credit of the drawer, indorses the check " paid" and delivers it to the drawer, as between the payee or holder and the drawer the check is paid, and if the bailee bank, instead of receiving the cash, takes, for the amount of the check, exchange which proves to be worthless, the loss which the holder thereby sustains is the result of his own negligence, or that of the bailee bank. (O'Leary et al. v. Abeles et al., 2 Banking Cases, 773; 68 Ark., 259.) 2 (Iowa, 1898). A collecting bank can' not accept, in payment of notes belonging to its principal, a claim for deposits made against it by the maker of the notes. (Bank of Montreal v. Ingerson, 75 N. W. Rep., 351; 105 Iowa, 349.) 3 (Md., 1894). Where the payee of a check makes a demand on the drawee and receives something other than cash in payment, he can not, by making a second demand, though within the time allowed for pre- senting a check, undo the first, and render the drawer liable on the bankruptcy of the drawee. (Anderson v. Gill, 29 A., 527; 79 Md., 312.) 4 (Mo.,^1899). The H. bank sent a draft, of which it was the holder for value to the A. bank for collection, and the latter forwarded it to the plaintiff bank for collection and return. And plaintiff accepted the drawee's check on another bank in payment of the draft which it delivered to the drawee, and remitted the amount of the draft to the A. bank. The check proving to be worthless, plaintiff brought an action against the A. bank to recover the amount of the remit- tance. Held, that when plaintiff received the check and surrendered the draft, it made the check its own and its liability to the H. bank became fixed, as much so as if it had received the cash, and there could be no recovery. (National Bank of Commerce of Kansas City v. American Exch. Bank of St. Louis, 2 Banking Cases, 101 ; 151 Mo., 320.) 5 (Mo., 1899). The custom of banks in collecting drafts, to surrender them to the drawees by taking checks in payment therefor, is unreason- able, (lb.) 6. If a bank takes anything other than money it takes the risk of the payment of it. (111.) Bank of Antigo v. Union Trust Co., 149 111., 343; 36 N. E., 1029; (N. Y.T Commercial Bank v. Union Bank, 11 N. Y., 203 : (Pa.) Hazlett v. Comm. National Bank, 132 Pa., 118. 7 (Ohio). Where a note is left with a bank for collection, such bank has no authority to accept anything except money as payment. (Dunn v. Dewey, 7 Ohio N. P., 334; 5 Ohio S. & C. P. Dec, 149.) 8 (Pa.). Where a bank, in collecting a check left with it for collection, accepted a check instead of money, and before the check was paid the bank giving it made an assignment, the first bank was liable to the depositor for the amount of the check, since it was its duty to collect in money. (Farmers and Mechanics' National Bank v. Cuy- ler, 18 Lane. Law. Rev., 54; 9 Pa. Dist. R., 539.) 9 (Tenn., 1897). It is a reasonable usage for local banks to accept, in pay- ment of drafts given them for collection, certified checks on one of their own number in good standing, to present these checks each day at 11 a. m., and to leave them for examination. (Jefferson County Sav. Bank v. Commercial Nat. Bank., 39 S. W. Rep., 338.) 108 DIGEST OF NATIONAL BANK DECISIONS. COLLECTIONS— Continued. NEGLIGENCE IN MAKING COLLECTIONS Continued. NEGLIGENCE IN ACCEPTING SOMETHING OTHER THAN CASH IN PAYMENT Continued. 10 (Tenn., 1897). A principal selecting a bank as his collecting agency is bound, in the absence of special directions, by any reasonable usage prevailing and established among the banks at the place where, the collection is to be made, whether he knows of it or not. (Ib.)~ Bank can not accept partial payment. 11 (Ala.). A collecting bank has, no right to accept a partial payment. (Lowenstein v. Bressler, 109 Ala., 326.) LIABILITY BETWEEN BANKS. [" If there is an express contract governing the liability of the initial bank, that contract will govern. (Exchange Natl. Bank v. Third Natl. Bank, 112 U. S., 276 ; In re State Bank, 56 Minn., 119; Power v. First Natl. Bank, 6 Mont, 251.) But it would be against public policy for the bank to contract against liability for its own negligence, although it could contract against liability for its correspondent's negligence. (See Minneapolis Co. v. Metropolitan Bank, 44 L. R. A., 504.)" — Zane's Law of Banks and Banking, page 306. In States where the courts hold that the first bank is responsible for the acts or default of its correspondent, the first bank has the right to bring an action for negligence against its correspondent ; in States where the courts hold that the correspondent bank is the agent of the holder, the holder has the right to bring an action for negligence against the correspondent bank.] Where first bank is liable for correspondent bank. 1. The first bank is liable for all defaults of the correspondent bank. (U. S. Sup. Ct, 1884) Exchange National Bank v. Third National Bank, 112 U. S., 276 ; (U. S. Sup. Ct.) Hoover v. Wise, 91 U. S., 308; (Ind.) Tyson v. State Bank, 6 Blackf., 225; (N. J.) Davey v. Jones, 42 N. J. Law, 28 ; (N. Y.) Castle v. Corn Exchange Bank, 148 N. Y., 122 ; (Ohio) Reeves v. State Bank, 8 Ohio St., 465. 2 (Ohio). Where a bank in the State receives for collection a draft pay- able at another bank within the State, but transmits the draft to a foreign bank in the course of collection, which in turn transmits it to the bank at which it is payable, the last-named bank is responsible for its negligence in collection only to the foreign bank. (First National Bank v. Mansfield Savings Bank, 10 Ohio Cir. Ct. R., 233.) 3 (Ohio). Where a bank receives a draft for collection, and transmits it in the course of business to another bank, the cashier of the latter bank has no implied authority to agree to defend in behalf of his hank an action against the first bank by the drawer of the draft for negligence in collection. (lb.) 4 (Tex., 1897). Where a bank receives commercial paper for collection, it is liable for the defalcations of its agents employed in making the col- lection. (State Nat. Bank of Ft. Worth v. Thomas Mfg. Co., 42 S. W. Rep., 1016; 17 Tex. Civ. App., 214.) 5 (Tex., 1898). Where a note is deposited with one bank, to be collected at a point where it has no agent, and it forwards the same to another bank for collection, in the absence of any special agreement or custom of bankers which fixes another measure of liability, the bank to which the note is sent is the agent of the bank with which the deposit was made, and it is responsible to the depositor for the defaults of such agent. (Schumacher v. Trent, 44 S. W. Rep., 460; 18 Tex. Civ. App., 17.) DIGEST OF NATIONAL BANK DECISIONS. 109 COLLECTIONS— Continued. NEGLIGENCE IN MAKING COLLECTIONS — Continued. liability between banks — continued. Where first bank not liable for correspondent bank. 6. The first bank is only liable for due care and diligence in selecting a correspondent bank which becomes the agent of the holder. (Colo.) Bank v. Burns, 12 Colo., 539; (Conn. ) East Haddam Bank v. Scovil, 12 Conn., 303 ; (111.) Waterloo Milling Co. v. Kuenster, 158 111., 259; 41 N. E.,906; (Iowa) Gueliek v. National State Bank, 56 Iowa, 434; (Kans.) Bank v. Ober, 31 Kansas, 599; (La.) Hum v. Union Bank, 4 Rob. La., 109; (Md.) Citizens Bank v. Howell, 8 Md., 530; (Mass.) Fabens v. Mercantile Bank, 23 Pick., 330; (Miss.) Third National Bank of Louisville v. Vicksburg Bank, 61 Miss., 112 ; (Mo.) Daly v. Butchers Bank, 56 Mo., 94; (Nebr.) First National Bank v. Sprague, 34 Nebr., 318; (Tenn.) Bank of Louisville v. Bank, 8 Baxt, 101 ; (Wis.) Stacy v. Dane Co. Bank, 12 Wis., 629. When first bank not liable for correspondent's negligence. 7 (111.). A bank %vhieh receives checks to be transmitted to another place for collection without compensation fully discharges its duty by send- ing them in due season to a solvent and competent correspondent, with proper instructions for their collection, and is not liable for any loss occasioned by the negligence of such correspondent. (An- derson v. Alton National Bank, 59 111. App., 587.) 8 '111.). Where a bank receives a check for transmission and collection, and it does not agree to be responsible at all events, it fully dis- charges its duty by sending the check to a competent and reliable agent with the proper instructions for the collection of same. Then the agent selected becomes the agent of the owner of the check and not of the bank transmitting it. (Carlinville Nat. Bank v. Wilson, Wilson v. Carlinville Natl. Bank, 78 111. App.. 339.) 9 (Ind., 1898). A bank with which is deposited a foreign draft for collec- tion, which the owner knew could be collected only by transmitting it to a subagent, is not liable for the default of the subagent, if due care has been used in his selection, although the bank was to receive a consideration for the services. (Irwin v. Reeves Pulley Co., 20 Ind. App., 101 ; 50 N. E. Rep., 317.) 10 (Ky., 1901). A bank is not liable to its customer for negligence of its correspondent as to the collection of a note where there was no negli- gence in the selection of the correspondent. (Second Nat. Bank v. Merchants' Nat. Bank, 65 S. W. Rep., 4; 4 Banking Cases, 25.) 11 (Mo.). If a bank that has received a paper for collection on a person at a distant place transmits it to a competent and reliable agent, with proper instructions, its responsibility ceases. (American Exchange Nat. Bank v. Metropolitan Nat. Bank, 71 Mo. App., 451.) 12 (Tenn., 1898). Where a person deposits with a bank for collection checks on a distant bank, and in the usual and regular course of business the first bank transmits them for collection to a third, the latter becomes the agent of the depositor and the first bank is not liable for the third bank's negligence in the collection. (Givan r. Bank of Alexandria, 52 S. W. Rep., 923; 47 L. R. A., 270.) LIABILITY OF FIRST BANK FOE SENDING DIRECT TO DRAWEE. 1 (111., 1900). Although the depositor of a check drawn on a bank in a dis- tant city may not be familiar with the details of the system in force among banks for the collection of such checks, if he knows that the collection of the check is to be made, without expense to him, through 110 DIGEST OF NATIONAL BANK DECISIONS. COLLECTIONS— Continued. NEGLIGENCE IN MAKING COLLECTIONS Continued. LIABILITY OF FIRST BANK FOB SENDING DIEECT TO DBAWEE Continued. banks operating together, in compliance with certain usages and cus- toms existing between such institutions to enable such collections to be made, and knows that the drawee bank is the only bank in such city, the collecting bank can not be held negligent in selecting a corre- spondent merely because it did so with knowledge that the latter would send the check for payment directly to the drawee bank. (Wilson v. Carlinville Nat. Bank, 3 Banking Cases, 1; 187 111., 222.) 2 (Minn., 1899). An established usage and custom existing among banks to send checks or drafts payable by other banks at distant points to the drawee directly and by mail, in case there is no other bank of good standing in the same town, will not excuse or justify such a course of procedure. In case of loss through the bad conduct of the drawee, the sender of the check or draft must bear it. (Minneapolis Sash & Door Co. v. Metropolitan Bank, 1 Banking Cases, 286; 78 Minn., 136.) 3 (Nebr., 1897). A bank which undertakes to collect the check of a cus- tomer is negligent if it sends it for payment direct to the drawee bank if there is in the same town another bank in good standing. (Western Wheeled Scraper Co. v. Sadilek, 69 N. W. Rep., 765; 50 Nebr., 105.) 4 (Oreg., 1899). It is not negligence for a bank receiving for collection an ordinary unindorsed check against an account with a bank situated and doing business at a place distant from where the collecting bank is located, and where the collecting bank has no agent or correspond- ents, to forward the check by mail directly to the drawee bank and returns where such method is sanctioned by a general and well- established custom among banks. (Kershaw v. Ladd et al., 1 Bank- ing Cases, 271; 34 Oreg., 375.) 5 (Tenn., 1898). A bank holding checks for collection is guilty of negli- gence in sending them directly to the drawee bank. (Givan v. Bank of Alexandria, 52 S. W. Rep., 923; 47 L. R. A., 270.) 6 (Tex., 1896). A bank which has a draft for collection will not be excused for negligence in sending it direct to the drawee, instead of through a third person, if it would have been collected had it been sent at the time it was sent to a third person, though had the bank delayed send- ing it as long as it might have without negligence it would not have reached its destination in time to be collected. (First National Bank v. City National Bank, Tex. Civ. App., 34 S. W., 458; 12 Tex. Civ. App., 318.) 7 (Tex.). A bank having a draft of $2,000 for collection will not be held liable for negligence in sending it direct to the drawee bank, instead of through a third person, where, at 1 o'clock on the day on which it reached its destination, the drawee bank required $1,000 to insure its ability to meet local checks which might be presented that day after the hour, and was furnished that amount by another bank for that purpose, to prevent a general run on local banks. (lb.) LIABILITY FOB MAILING COLLECTION DIRECT TO DRAWER. 1 (TJ. S. C. C. A., 1893). A bank receiving a certificate of deposit for collec- tion, and mailing it to the drawer with a request for a remittance, is s;uilty of negligence. (First National Bank of Evansville v. Fourth National Bank of Louisville, 56 Fed. Rep., 967.) 2 (U. S. C. C. A., 1893). The E. bank, on May 8, 1888, mailed to the L. bank for collection a certificate of deposit issued by P. & Co., which, the next day, negligently mailed it to P. & Co., with request to remit. On June 1 the L. bank credited the E. bank with the item in account current for May, and wrote that nothing had been heard from P. & Co. On June 22 the L. bank wrote that repeated letters about the DIGEST OF NATIONAL, BANK DECISIONS. Ill COLLECTIONS— Continued. NEGLIGENCE IN MAKING COLLECTIONS — Continued. LIABILITY FOR MAILING COLLECTION DIRECT TO DRAWER — Continued. item had remained unanswered. The L. bank now charged the E. bank with the item. No further correspondence ensued. P. & Co. continued in good credit until after January 1, 1889, when they failed. Held, that the L. bank was not responsible for more than nominal damages, (ib. ) 3 (Mich., 1900). Although it is negligence in a collecting bank, unless instructed to do so, to send the collection directly to the drawer, a ' bank in D. receiving for collection a certificate of deposit issued by the only bank in B., with instructions from the forwarding bank to secure the best rate of exchange, and stating that it knew that the D. bank had a correspondent in B., is not negligent in sending, in good -faith, the certificate directly to the issuing bank, its only pos- sible correspondent in B., as the lowest rate of- exchange could be obtained in no other way, especially as the issuing bank's rating was known to be good. (First Nat. Bank of Chicago v. Citizens' Savings Bank of Detroit, 2 Banking Cases, 430; 123 Mich., 336.) 4 (Mich., 1900). In the absence of instructions to do so, it is negligence for a bank to which a certificate has been given for collection to send it direct to the drawer; and such negligence makes the sender liable for any loss resulting therefrom. (Ib.) LIABILITY OF FIRST BANK TO HOLDER FOR WRONGFUL OR NEGLIGENT ACT. 1 (Ala., 1897). Where a bank through negligence loses transfers of land certificates sent to it to collect the sum for which they were given as collateral security it is liable for the expenses of prosecuting suits to establish them, though such expenses would not have been neces- sary if the sender had recorded them before sending. (First Nat. Bank of Birmingham v. First Nat. Bank of Newport, 22 So. Rep., 976; 116 Ala., 520.) 2 (Ga., 1895). Where the owner of a check, which had been collected with- out her authority by a bank, accepted, with knowledge of the facts, part of the proceeds of the collection, and a note for the balance of her claim arising out of the transaction, she thereby ratified the col- lection, and the bank was, hence, not liable to her. (Hughes v. Neal Loan &,Banking Co., 23 S. E., 823; 97 Ga., 383.) ( 3 (Kans., 1895). Where a note was placed in a bank for collection, with instructions to collect when due and apply the proceeds to the depos- itor's paper, and a person voluntarily selected by the bank to present the note at the place named for payment and receive payment thereon collected the note, the bank was liable for the proceeds to the owner. (First National Bank v. Craig (Kans. App.), 42 P., 830.) SURRENDER OF COLLATERAL BEFORE MAKING COLLECTION. Bank must hold bill of lading until draft is paid or accepted. 1 (U. S. Sup. Ct, 1§75). A bill of lading of merchandise deliverable to order, when attached to and forwarded with a time draft, sent with- out special instructions to an agent for collection, may be surrendered to the drawee on his acceptance of the draft. It is not, the agent's duty to hold the bill after such acceptance. (National Bank of Com- merce of Boston v. Merchants' National Bank of 'Memphis, 91 U. S., 92.) 2 (Fla., 1898). In the absence of special instructions, if a time bill of exchange with a bill of lading attached be sent to an agent for col- lection, there is an implied obligation upon the agent to hold the bill of lading until the bill of exchange is either accepted or paid, accord- ing to circumstances, and he can not deliver the bill of lading without 112 DIGEST OF NATIONAL BANK DECISIONS. COLLECTIONS— Continued. SURRENDER OP COLLATERAL BEFOBE MAKING COLLECTION Continued. requiring the one or the other. (Oxford Lake Line v. First Nat. Bank of Pensacola, 1 Banking Cases, 126;- 40 Fla., 349.) 3 (Ga.). Where a shipper consigned goods to his own order, at the same time drawing in favor of a bank, " for collection," a draft on the person to whom the goods were to be delivered on payment of the draft, and attached the draft to a bill of lading so indorsed as to give the bank control of the possession of the goods, a delivery of the goods by the bank to the drawee of the draft, without securing its payment was, as against the owner, a conversion. (Hobbs v. Chi- cago Packing and Provision Co., 25 S. E. Rep., 584 ; 98 Ga., 570.) ^Examination of "Papers to be delivered upon payment of draft." 4 (Mass.). The written instruction, ""Papers to be delivered only upon payment of draft," sent to a collector with a draft and a sealed package of papers, is not violated by the collector in allowing the drawee to open the package and inspect the -papers before paying the draft, as such a temporary surrender for inspection is not a " delivery." (People's Nat. Bank v. Freeman's Nat. Bank, 47 N. E. Rep., 588; 169 Mass., 129.) MISCELLANEOUS. When correspondent bank not liable for illegal collection. 1 (U. S. Dist. Ct, 1895). A bank which, as collecting agent of another bank, collects at the subtreasury a pension draft on which the payee's name has been forged after her death, indorsing the draft as collect- ing agent, and remits the proceeds, without knowledge of the forgery, is not liable to the United States for the amount so collected. (Onon- daga Co. Sav. Bank v. United States (C. C. A.), 64 F., 703, distin- guished; United States v. American Exchange National Bank, 70 Fed. Rep., 232.) Collecting bank need not remit same money collected. 2 (U. S. C. C. A., 1896). When a bank indorses commercial paper "for collection " and forwards the same to another bank for collection and remittance, the collecting bank, though it acts only as agent for the remitting bank, and has no mutual account with it, is not required to keep the moneys collected separate from all other moneys in its possession, and to remit the identical money, nor is the payer of such paper required to see that the identical money is remitted. (First National Bank of Richmond v. Wilmington and Weldon Railroad Co., 77 Fed. Rep., 401.) When notice given, no payment to be made. 3 (Cal., 1902). On an issue whether plaintiff bank, in paying a draft drawn by a third party on defendant, had done so at defendant's request, or had merely received it for collection, it was error not to allow the defendant to show that prior to the payment of the drafts he had notified plaintiff's correspondent that he would not pay any more drafts drawn on him by this party unless such party had suffi- cient credits to cover the amount thereof, whether such correspondent was plaintiff's general agent or only an agent for the purpose of col- lecting drafts. (First Nat. Bank of Riverside v. Jacoby, 69 Pac. Rep., 690; 4 Banking Cases, 695; 137 Cal., 17.) When holder liable to first bank. 4 (Conn.). An indorsee of a bill indorsed and delivered it to plaintiff bank for collection, and the bank forwarded it to its correspondent where it was payable for collection, without indorsing it. Not being paid when due, it was protested, and due notice given to the drawer, but no notice was given to the bank or to the indorser ; and the bank, two weeks afterwards, supposing the bill to have been paid, paid it to defendant, and on discovering its mistake sued him to recover the DIGEST OF NATIONAL BANK DECISIONS. 113 COLLECTIONS— Continued. miscellaneous — continued. money. Held, that the bank was justified in assuming that the draft had been paid, and having paid the money under mistake of fact, might recover it. (East Haddam Bank v. Scovil, 12 Conn., 303.) 5 (Tenn., 1898). Where checks are intrusted with a bank for collection, and it credits them to the depositor's account as cash, and the deposit slip and the pass books contain a statement that " all cash items not actual cash are entered subject to payment," the depositor can not recover the amount of the checks when the bank, using due care, fails to collect them. (Givan v. Bank of Alexandria, 52 S. W. Rep., 923.) Payment to one not agent of holder. 6 (Pa.). The owners of a draft on a bank indorsed it to the K. bank for collection, and it was sent by the latter bank to the clearing house, in due course, with other checks and drafts. The K. bank was closed before the balance against it on the clearing-house settlement was adjusted, and thereupon the clearing house called upon the drawee, also one of its members, to pay to it the amount of the draft. Held, that the payment being to a stranger to the draft, who had no inter- est in the proceeds nor authority to act as agent for the owners, it was no defense to an action by the owners against the drawee for the amount of the draft. (Crane v. Fourth St. National Bank, Pa. Sup., 34 A., 296; 173 Pa. St., 566.) Remittance — Custom — Instructions. 7 (U. S. C. C. A., 1905). The instruction of a bank, in sending to one bank for collection a check on another bank, " Remit New York exchange," authorizes the remittance only in accordance with custom, be that the sending of a draft drawn on a New York bank by the bank to which the check was sent or a draft drawn by another. (Holder v. Western German Bank, 136 Fed. Rep., 90.) Trust relation. 8 (U.S. C. C. A., 1905). Plaintiff deposited a check with defendant bank for collection, as plaintiff's agent. Defendant forwarded it to the F. bank for collection, with the instruction, " Remit New York ex- change." The F. bank remitted the proceeds of the collection by its own draft on a New York bank, which the New York bank, at direc- tion of the receiver of the F. bank, who in the meantime had been appointed, refused to pay. Held, that the F. bank- was liable, as trustee for the money collected, there being no authorization by defendant that its relation should be changed to that of debtor, so that defendant was not liable. (lb.) Draft attached to hill of lading — Indorsement — Bank holding formcollection. 9 (Texas Civ. Appeals, 1902). Where a draft attached to a bill of lading was indorsed " Pay to the order of American National Bank " and by the latter indorsed " Pay any bank or banker or order American National Bank," and was presented by defendant bank to the drawee, such indorsements were sufficient to put the drawee on inquiry that defendant was a holder for collection only, and was not a purchaser of the draft payable to bearer. (Gregory et al. v. Sturgis Natl. -Bank, 5 B. C, 153; 71 S. W. Rep., 66.) Breach of drawer's contract — Liability of bank. 10 (Texas Civ. Appls., 1902). A bank holding a draft attached to a bill of lading, for the price of corn shipped, which holds the draft for col- lection only, and not as a purchaser, is not liable to the drawee after receiving payment for a deficiency in quantity of the corn pur- ported to be shipped, and for the drawer's failure to pay the freight as agreed and as shown by the invoice attached to the draft and bill of lading. (lb.) 4049—05 8 ]14 DIGEST OF NATIONAL BANK DECISIONS. COMPTROLLER OF CURRENCY. Ceoss reference: Capital stock— Page- Comptroller's approval and certificate essential to increase 29 Comptroller's certificate conclusive 29 Comptroller's certificate approving reduction, effect of 33 Collateral securities — Receiver may sell collateral without authority of Comptroller 84 Deputy Comptroller — Certificate signed by deputy as acting comptroller sufficient under Rev. Stat. 5154 145 Courts will presume that deputy acted lawfully _ _ 145 Insolvency and receivers — Power of Comptroller to appoint or remove receiver 180 Receiver under Comptroller's direction 182 Comptroller may not order receiver's suit compounded 183 Liquidation — Comptroller may appoint receiver 265 Action of Comptroller, when unnecessary _, 266 Organization — Comptroller's certificate, proof of 398 Shareholders — Assessment of — Conclusiveness of Comptroller's action _._ 459 Right of Comptroller to make successive assessments 460 Creditor must seek remedy through Comptroller 497 CONSTITUTIONALITY. Cross reference: Circulation 74 1 (U. S. Sup. Ct). Congress lias the power to incorporate a bank. The Government of the Union is a government of the people ; it emanates from them ; its powers are granted by them, and are to be exercised directly on them and for their benefit. T4ie Government of the Union, though . limited in its powers, is supreme within its sphere of action, and its laws, when made in pur- suance of the Constitution, form the supreme law of the land. There is nothing in the Constitution of the United States, similar to th,e Articles of Confederation, which includes incidental or implied powers. If the end be legitimate, and within the scope of the Constitution, all the means which are appropriate, which are plainly adapted to that end, and which are not prohibited, may constitutionally be employed to carry it into effect. The power of establishing a corporation is not a distinct sovereign power or end of government, but only the means of carrying into effect other powers which are sovereign. . Whenever it becomes an appropriate means of exercising any of the powers given by the Constitution to the Government of the Union it may be exercised by that Government. If a certain means to carry into effect any of the powers expressly given by the Constitution to the Government of the Union be an appropriate measure not prohibited by the Constitution, the degree of its necessity is a question of legislative discretion, not of judicial cognizance. The act of the 10th April, 1816, c. 44, to " incorporate the subscrib- ers to the bank of the United States," is a law made in pursuance of the Constitution. The Bank of the United States has, constitutionally, a right to DIGEST OP NATIONAL BANK DECISIONS. 115 CONSTITUTIONALITY— Continued. establish its branches or offices of discount and deposit within any State. (U. S. Sup. Ct, 1819.) McCuIloch v. State of Maryland, 4 Wheat. (17 U. S.), 315; (U. S. Sup. Ct., 1824.) Osborne et al., appellants, v. Bank of the United States, 9 Wheat. (22 U. S.), 737. 2 (U. S. Sup. Ct., 1869). Congress having, in the exercise of undisputed con- stitutional powers, undertaken to provide a currency for the whole country, may secure the benefit of it to the people bv appropriate legislation. (Veazie Bank v. Fenno, 8 Wall., 533 ; 1 N. B. C, 22.) 3 (U. S. Sup. Ct, 1869). The tax of 10 per cent imposed by the act of July 13, 1806 (14 Stat. L., 146, sec. 9), on the circulation of State banks used for currency and paid out by the national or State banks is not repugnant to the Constitution, either on the ground that the tax is a direct tax, which must be apportioned among the several States, or that the act impairs franchises granted by the State. (lb.) 4 (U. S. Sup. Ct., 1879). The provisions of section 3413 of the national-bank act that " every national banking association, State bank or banker, or association, shall pay a tax of 10 per cent on the amount of notes of any town, city, or municipal corporation paid out by them " is consti- tutional, even where its effect is to tax an instrumentality of a State. (Merchants' National Bank of Little Rock v. United States, 101 U. S., 1; 2 N. B. C, 100.) 5 (U. S. Sup. Ct., 1875). National banking associations, being instruments designed to aid the Government in the administration of u branch of the public service, can not be controlled by the States, except in so far as Congress may see proper to permit. (Farmers and Mechanics' Bank v. Dearing, 91 U. S., 29.) 6 (U. S. Sup. Ct., 1865). Act of 1864 "to provide a national currency," etc., subjects shares of banks authorized by it to taxation by States, though part or whole of capital is invested in national securities exempt from State taxation, and is constitutional. (Van Allen v. Assessors, 3 Wall., 573.) 7 (U. S. C. C, 1885). Congress has the power to divest the United States courts of their jurisdiction of suits by or against national banking associations. (National Bank of Jefferson v. Fare et al., 25 Fed. Rep., 209.) 8 (Ala.). National banking corporations, organized under the acts of Con- gress providing for their creation, are agencies or instruments of the General Government, designed to aid in the administration of an important branch of the public service, and are an appropriate consti- tutional means to that end. (Pollard v. The State, ex rel. Zuber, 65 Ala., 628.) 9 (Me.). A State law« prohibiting the establishment of banking companies in the State without the authority of the legislature was not intended to apply to banking corporations created by authority of Congress, since such corporations may be legally established in the State with- out the consent of the legislature. (Stetson v. City of Bangor, 56 Me., 274.) ' 10 (Md.). Congress has power to clothe national banking associations, as to their contracts and dealings with the world, with any special immuni- ties and privileges exempting them, in their trade and intercourse with others, from the laws and remedies applicable in like cases to other citizens. (The Chesapeake Bank v. The First National Bank of Baltimore, 40 Md., 269. ) 11 (Md.). Thus the provision of the banking law that no attachment, injunc- tion, or execution shall issue against a national banking association before final judgment in any suit, action, or proceeding in a State court is constitutional. (lb.) 12 (N. C). The State, until forbidden by Congress, has the power to tax national-bank bills. (Lilly v. The Board of Commissioners of Cum- berland County, 69 N. C, 300.) 116 DIGEST OP NATIONAL BANK DECISIONS. CONSTRUCTION OF LAW. Cross references: Mortgage— Page. State statutes construed _ 279 Negotiable paper — When Federal courts do not follow State courts 281 Preferences — Construction of State statutes as to fraudulent conveyances 439 Taxation — State and Federal statutes construed 527 When State court decisions given weight. 1 (U. S. C. C. A., 1892). The Federal courts, when called upon to construe the general commercial law of Indiana in respect to a question which is a new one in the Federal courts, should give weight to the Indiana decisions, although they are not absolutely bound thereby. (Burgess v. Seligman, 107 U. S., 20, followed ; The Farmers' National Bank of Valparaiso, Ind., v. Sutton Manufacturing Company, 52 Fed. Rep., 191.) 2 (U. S. C. C, 1879). Where the State and Federal courts have concur- rent jurisdiction, a State statute of limitation may be pleaded as effectively in a Federal court as it could be in a State court; and in such cases the Federal courts will follow the decisions of the local State tribunals and will administer the same justice which the State courts would administer between the same parties. (Price, Receiver of Venango National Bank, v. Yates, 19 Alb. L. J., 295; 2 N. B. C, 204.) 3 (U. S. C. C, 1883). It ,is the peculiar province of the supreme court of the State to determine the meaning of the statutes of such state, and with such determination courts of the United States will hesitate to place upon a State statute any construction which will bring such statute in conflict with a satute of the United States, and therefore render it void. (Davenport National Bank v. Mittlebuscher, Col- lector, et al., 15 Fed. Rep., 225.) 4 (U. S. C. C, 1901). Where the validity of a statute under a State consti- tution has been determined by the highest court of the State, its decision will be followed by the Federal courts. (People's National Bank of Lynchburg v. Marye, Auditor of Public Accounts ; First National Bank of Lynchburg v. Same ; Lynchburg National Bank v. Same ; National Exchange Bank of Lynchburg v. Same, 107 Fed. Rep., 570.) Construction of State statutes. 5 (U. S. Sup. Ct, 1879). The intention of the legislature, clearly expressed in a constitutional enactment, should not be defeated by too rigid adherence to the letter of the statute, or by technical rules of con- struction. Any construction should be disregarded which leads to absurd consequences. ( Oates v. First National Bank of Montgomery, 100 U. S., 239; 2 N. B. C, 35.) G (U. S. Sup. Ct., 1879). The Federal courts are not bound by decisions of State courts upon questions of general commercial law. (lb.) "When valid portions of a statute upheld. 7 (U. S. Sup. Ct., 1881). In a statute which contains invalid or unconstitu- tional provisions, that which is unaffected by those provisions, or which can stand without them, must remain. If the valid and invalid are capable of separation, only the latter are to be disregarded. (Supervisors of Albany v. Stanley, 105 U. S., 305.) Repeals by implication. 8 (U. S. Sup. Ct, 1882). A law embracing an entire subject, dealing with it in all its phases, may withdraw the subject from the operation of a general law as effectually as though, as to such subject, the general law were in terms repealed. The question is one respecting the 'digest op national bank decisions. 117 CONSTRUCTION OF LAW— Continued. intention of. the legislature. (Cook Co. National Bank v. United. States, 107 U. S., 445.) When punctuation disregarded. 9 (U. S. C. C. 1881). The punctuation of a statute is not made to be relied on, and must be disregarded if it requires a construction which is repugnant to a sense of justice. (United States v. Voorhees, 9 Fed. Rep., 143.) When Federal statute controls. 10 (U. S. Dist. Ct., 1890). Where Congress has enacted a law covering a particular case, such law must prevail in the Federal courts though it differs from the State law. (Stephens v. Bernays, 42 Fed. Rep., 488.) When State statutes control. 11 (U. S. C. C, 1887). Among the assets of an insolvent national bank were three mortgages which were sought to be impeached by the assignees of the mortgagor as having been given in violation of the insolvency law of the State. Plaintiff, receiver of the bank, claimed that the State law was inoperative upon the assets of a national bank and was ineffectual to divest him of the title acquired by the mort- gages. Held, that the mortgages were governed by the State law, and the bank took them with all the limitations imposed by the laws of the State upon them. (Witters, Receiver, etc., v. Sowles et al., Assignees, 32 Fed. Rep., 758.) Section 5134, Revised Statutes United States, construed. 12 (HI.). By the provisions of Revised Statutes United States, section 5134, subdivision 2, requiring an association formed for the purpose .of conducting a national bank to designate in its organization certifi- cate " the place where its operations of discount and deposits are to be carried on," the town or city is meant, and not the office or build- ing. (61 111. App., 33, affirmed; McCormick v. Market National Bank, 111. Sup., 44 N. E., 381.) As to power of national banks Federal decisions control. 13 ( Wash. ) . As the Supreme Court of the United States has decided that it has authority to reexamine the judgment of a State court as to the power of national banks under the act of Congress, a State court should follow its decisions on the question. (First National Bank of Aberdeen v. Andrews et al. ; Young v. Same, 34 P., 913 ; 7 Wash., 261.) When Federal courts do not follow State courts. 14 (U. S. Sup. Ct, 1880). The courts of the United States, in determining questions of general commercial law, are not controlled by the de- cisions of a State court, even in an action instituted by a national bank, located in the State rendering such decision, against one of its own citizens upon a negotiable note there executed and payable. Such decisions not based upon local legislative enactments are not " laws " within the meaning of the Federal statute, which provides that " the laws of the several States, except where the Constitution, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decision in trials at common law in the courts of the United States in cases where they apply." (Brooklyn City and Newtown R. R. Co. v. National Bank of the Republic, 102 U. S., 14.) Effect of decision of court having jurisdiction. 15 (U. S. Sup. Ct, 1901). Whatever may be the nature of a question pre- sented for judicial determination — whether depending on Federal, general, or local law — if it be embraced by the issues made, its deter- mination by a court having jurisdiction of the parties and of the sub- ject-matter binds the parties and their privies so long as the judgment remains unmodified and unreversed. (Mitchell v. First National Bank of Chicago, 180 U. S., 471.) 118 DIGEST OF NATIONAL BANK DECISIONS. CONVERSION OP STATE BANKS. (See Obganization.) CORPORATE EXISTENCE. {See Organization.) CREDITOR'S BILL AGAINST SHAREHOLDERS. (See Shareholders.) DEPOSITS. General deposits: Page. General deposits the relation that of debtor and creditor 119 Receipt of deposits — In general _ 130 Who can receive deposits. - - 121 Effect of entries in pass books _. 121 Deposit of checks and drafts 121 Ownership of deposit and payment to other than the owner 122 Deposit of trust funds . 122 Deposit of partnership funds 123 Evidence of deposits — instructions . _ 123 Interest on deposits 124 Application of deposit on claim 125 Application of deposit on note made payable at the bank 127 Transfer of deposit as gift. 128 Deposits of public money trust 128 Miscellaneous 130 Certificates op deposit: .In general. . .. 131 Negotiability of certificate of deposit 134 Want of consideration , false certificate remedy 135 Payment of lost or stolen certificate of deposit ... . . . 136 Special deposits: What are special deposits 137 What not a special deposit 137 Receiving special deposits incidental to banking business 137 Degree of care required of- bank 138 Authority of officers to bind bank -. 140 Miscellaneous 141 Actions by depositors: In general 144 Limitations upon actions for deposit 145 Cross references: Insolvency and receivers — Application of deposit on claim 187 Demand of deposit of receiver 201 General depositors are general creditors 201 When special deposit a preferred claim 207 Rights of persons making deposits after insolvency . . . 209 When deposit of public funds preferred 212 When deposit of public funds not preferred 213 Claims of United States 213 Lien— On general deposits for claim against depositor 260 On special deposits 260 On general deposits for debt not matured _ . 260 Negotiable paper- When certificate of deposit a promissory note 284 DIGEST OF NATIONAL BANK DECISIONS. 119 DEPOSITS— Continued. Cross references — Continued. Officers, civil liability of — Page. When bank officer personally liable to depositor _ _ 341 Offset- Special deposits — payment by third party as offset 388 Set-off of deposit against debt to bank 389 When depositor insolvent 395 Powers — • ' Power to receive deposit to be disbursed on condition 416 Power to hold special deposit as security 417 Power to issue certificate of deposit 423 Trusts — When deposit is impressed with a trust 535 What necessary to impress deposit with a trust 538 GENERAL DEPOSITS. GENERAL DEPOSITS, THE RELATION THAT OF DEBTOR AND CREDITOR. 1. The relation of banker and depositor is that of debtor and creditor. (U. S.) In re Madison Bank, Fed. Cases, No. 890 (5 Biss., 515) ; (La.) Matthews v. Creditors, 10 La. Ann., 344; (Mass.) National Bank v. Eliot Bank, 5 Am. Law Reg., 711 ; (Mo.) Knecht v. U. S. Savings Inst., 2 Mo. App., 563 ; (N. Y.) iEtna National Bank v. Fourth National Bank, 46 N. Y., 82 ; (Tex.) Baker v. Kennedy, 53 Tex., 200. 2 (Fla. Sup., 1902). A bank becomes the absolute owner of money de- posited with it to the general credit of a depositor, in the absence of any special agreement importing a different character into the transaction, and the relationship between the parties is simply that of debtor and creditor. (Camp et al. v. First Natl. Bank of Ocala, 33 So. Rep., 241; 5 B. C, 202.) 3 (Mo. Appls., 1903). A deposit of money in a bank does not create a bailment, but creates the relation of debtor and creditor. (Arnold v, Sedalia Natl. Bank, 5 B. C, 712; 74 S. W. Rep., 1038.) 4 (N. Y.). Deposits on general account belong to the bank and are part of its general fund. The bank becomes a debtor to the depositor to the amount thereof and the debt can only be discharged by payment to the depositor or pursuant to his order. (.iEtna National Bank v. Fourth National Bank, 46 N. Y., 82.) 5. The contract has none of the elements of a trust. For a breach on the part of the bank of the obligation resulting from the relation between the parties the depositor alone can sue. (N. Y.) ^Etna National Bank v. Fourth National Bank, 46 N. Y., 82; (Ohio) Bank of Marysville v. Windisch Mulhauser Brewing Co., 50 Ohio State, 151 ; (Pa.) Bank of Northern Liberties v. Jones, 42 Pa. St., 530; (S. C.) Dabney v. State Bank, 3 S. C, 124; (Va.) Robinson v. Gardner, 18 Grat, 509. 6 (U. S. C. C, 1883). Unlike checks, cash deposited by customers with the bank ceases to be the property of the depositor, and becomes the property of the bank, creating at once the relationship of debtor and creditor. (Balbach et al. v. Frelinghuysen, Receiver, etc., 15 Fed. Rep., 675.) 7 (Fla.). General deposits in a commercial bank on account of the depos- itor, without being complicated by any other transaction than that of the depositing and withdrawing of the moneys, transfers the owner- ship of the money to the bank ; and the relationship with reference thereto, as between the bank and the depositor, is simply that of debtor and creditor. (Collins v. State, 15 So., 214; 33 Fla., 429.) 120 DIGEST OP NATIONAL BANK DECISIONS. DEPO SITS— Continued. GENERAL DEPOSITS, THE RELATION THAT OF DEBTOR AND CREDITOR continued. 8 (Okla., 1900). Deposits of money in a bank are either general or special. A general deposit is one which is to be repaid on demand in money, and the title to the money deposited passes to the bank. A special deposit is one in which the depositor is entitled to the return of the identical thing deposited, and the title remains in the depositor. (Bank of Blaekwell r. Dean, 2 Banking Cases, 232; 9 Okla., 626.) 9 (Okla., 1900). Deposits of money made in a bank in the ordinary course of business are presumed to be general, and the burden of proof is on the depositor to overcome such presumption by showing that the deposit was made under such stipulations or directions as to consti- tute it a special deposit. (lb.) 10 (Okla., 1900). Unless there are stipulations to the contrary, deposits of money made in a bank become a part of its general funds, and create the relation of debtor and creditor between the depositor and the bank. (lb.) 11 (Wash., 1895). A person deposited money with a bank, taking from it a deposit slip in the form used for general deposits. Upon such slips were the words, " Security for signing bond to be held by bank." Subsequently the depositor, in order to change the security so the $700 would be available for one purpose and $800 for another, drew an ordinary check, which was marked " Paid," and a certificate of deposit for $800 made out, to be held by the surety, and $700 to secure other bondsmen. The first-named certificate was afterwards paid by the bank. The depositor testified that the deposit was a special one. Held, a general deposit and not a trust fund in the hands of a receiver. (Dearborn v. Washington Sav. Bank, Wash., 42 P., 1107; Watson v. Sheaf e, ib. ; 13 Wash., 345.) RECEIPT OF DEPOSITS. IN GENERAL. Bank may select its own customers. 1 (N, Y. ). A bank is not bound to receive on deposit the funds of every man who offers them, but may select its own customers. (Thatcher v. State Bank, 7 N. Y. Super. Ct, 121.) 2 (N. Y.). Where money is left with a paying teller for the purpose of paying a bill of one not a regular depositor the bank is not bound to make the payment unless it consented to receive the deposit. (Ib.) Deposit man be made payable to third party. 3 (N. Y.). The fact that a deposit in a bank is so made that it may become payable to a third person for whose security the deposit is made does not deprive it of the character of a deposit. (Bushnell v. Chau- tauqua County National Bank, 74 N. Y., 290; afflrmed, 10 Hun., 378.) Bank liable for acts of its officers. 4 (111.). Where the cashier issued a certificate of deposit, plaeing on it u memorandum that the amount was to be paid to a creditor of the depositor, or, if he would not receive it, to be loaned for the depos- itor, the bank was liable, the cashier having acted within the scope of his duties. (First National Bank of Monmouth r. Brooks, 22 111. App., 238. ) 5 (Mass.). Where bank officers are in the habit or receiving valuables to be placed in the vault for safe-keeping the officers will be considered to be acting for the bank. (Foster ■;;. Essex Bank, 17 Mass., 479.) 6 (Mo.). Where a customer of a bank gave the teller a draft for collec- tion and directed him to deposit the proceeds to his (the depositor) credit, or to the teller's credit as trustee, and the teller converted the money to his own use, it was held that when the bank received the draft through its teller for collection the teller acted for the bank. (Ihl v. St. Joseph Bank, 26 Mo. App., 129.) DIGEST OP NATIONAL BANK DECISIONS. 121 DEPOSITS— Continued. beceipt of deposits — continued. in general — continued. 7 (N. Y.). Where a depositor delivers money to an officer of a bank, who also did a private, banking business, supposing he was dealing with the bank, and the officer used the money and failed, the depositor afterwards treating the officer as his debtor, he lost all right to hold the bank. (Rich v. Niagara Co. Sav. Bank, 5 Thomp. & C, 589.) 8 (Tenn.). Nonobservance by the officers of a bank of its rules and customs will not absolve it from liability for the tellers crediting the wrong person with a deposit received without ticket or pass book. (Jackson Insurance Co. v. Cross, 56 Tenn., 283. ) Date of deposit. 9 (Ind.). If money is deposited, the deposit will date from the receipt of the money at the bank and its entry on the depositor's pass book, and not from the date it was entered on the books of the bank. (Wasson v. Lamb, 120 Ind., 514.) Deposits by gambler, when bank party to conspiracy. lO (U. S. C. C, 1904). A banking corporation may become a party to a fraudulent conspiracy, the same as a natural person, with like re- sponsibility. It and its managing officers may legitimately receive on deposit the moneys of a gambler, with reason to believe it was won in gaming or by other questionable means ; but they cross the line of permissibility when, with a knowledge that such depositor is obtain- ing the money by fraud or theft, they do acts in aid of the wrongful means by which the money is obtained. (Wright v. Stuart et al., 130 Fed. Rep., 905.) WHO CAN RECEIVE DEPOSITS. Tellers. 1 (N. Y.) The receiving teller is the proper officer to receive a deposit, and if a deposit is made with the paying teller, who assumes payment of the depositor's bill, the paying teller becomes the depositor's agent. (Thatcher v. State Bank, 7 N. Y. Super. Ct, 121.) 2 (N. Y.) Where the paying teller of a bank notified the customer that his account was overdrawn and the customer paid the difference to the paying teller, the bank was bound by the payment to the paying teller. (East River National Bank v. Gove, 57 N. Y., 597.) Cashier. 3 (111.). The cashier of a State bank is authorized to receive deposits and his receipt is evidence of the deposit. (State Bank v. Kain, 1 111., 75.) President. 4 (Wis.). The president of a bank has authority to receive deposits. (Hazleton v. Union Bank, 32 Wis., 34.) EFFECT OF ENTRIES IN PASS BOOKS. 1 (Kans.). An entry in a pass book is merely a receipt and is open to explanation. (Talcott v. First National Bank, 53 Kans., 480.) 2 (N. Y.). An entry in a pass book is prima facie evidence of the amount deposited. (Asher v. National Park Bank, 7 Alb. Law J., 43.) DEPOSIT OF CHECKS AND DRAFTS. 1 (U. S. Sup. Ct., 1905). The deposit of checks in a bank and the drawing against them by a customer constitutes the relation of debtor and creditor, and the bank becomes the absolute owner of the checks so deposited, and not the agent of the customer to collect them ; this relation is not, in the absence of any special agreement, affected by the right of the bank against the customer, and his liability therefor, 122 DIGEST OP NATIONAL BANK DECISIONS. DEPOSITS— Continued. deposit of checks and drafts — continued. in case the checks are not paid. (Burton v. United States, 196 U. S., 283.) 2 (U. S. C. C., 1883). Where checks are deposited to the credit of a depos- itor, the right to check against the balance thus created is a mere privilege, and the bank has a right to revoke the credit if the checks are not collected. (Balbach v. Frelinghuysen, 15 Fed. Rep., 675.) 3 (Ala.). If a bank purchases a draft, it does not become a deposit even though the cashier makes out a deposit slip to an illiterate man. (Bank of Guntersville v. Webb, 108 Ala., 132.) 4 (Pa.). Drafts and checks in favor of banks and held by them will be considered as received on deposit and not as deposited for collection unless there is some evidence to the contrary. (Gettysburg National Bank v. Kuhns, 62 Pa. St., 88.) OWNERSHIP OF DEPOSIT AND PAYMENT TO OTHER THAN THE OWNER. 1 (Ind. ). A banker will be fully protected in paying the apparent owner of a deposit or one designated by him until he has notice that the owner- ship of the deposit is claimed by some one adversely to either of -these parties. (McEwen v. Davis, 39 Ind., 109.) 2 (Pa.). The true ownership of a deposit may be proved to be in another than the person in whose name such deposit was made. (Stair v. York National Bank, 55 Pa. St., 364. ) 3 (Pa.). When a bank has received money from a depositor and credited it to him on their books it can not allege that the money belonged to some one else. (Citizens' Bank v. Alexander, 120 Pa. State, 476.) Rival claimants — Ditty of bank to protect itself. 4 (Mo. Appls., 1903). Where a bank with which money has been deposited is sued by one other than the depositor for the funds, it should take some appropriate means to protect itself, such as depositing the money in court and asking a decision as to the ownership. (Arnold v. Sedalia Natl. Bank, 5 B. C, 712; 74 S. W. Rep., 1038.) Husband depositing wife's money — Ownership of deposit. 5 (U. S. C. C, 1903). A husband deposited money belonging to his wife in a bank, taking out a pass book in her name, and drew it out on checks to which he signed her name. The wife had not authorized the deposit nor did she authorize the drawing of the checks. Held, that having accepted the deposit the relation of creditor and debtor was established between the wife and the bank, and that the bank could not discharge its indebtedness by paying out the money with- out lier authority. (Brown v. Daugherty et al., 5 B. C, 449 ; 120 Fed. Rep., 526.) DEPOSIT OF TRUST FUNDS. 1 (U. S. Sup. Ct, 1881). Although the relation between a bank and its depositor is that merely of debtor and creditor, the money which he deposits, if held by him in a fiduciary capacity, does not change its character by being placed to his credit in his bank account. (National Bank v. Insurance Co., 104 U. S., 54.) 2 (U. S. Sup. Ct, 1881). When a bank account was opened in the name of a depositor as general agent, and it was known to the bank that he was the agent of an insurance company* that conducting its agency was his chief business, the bank is chargeable with notice of the equitable rights of the company, although he deposited other money in the same account and drew checks upon it for his private use. • (National Bank v. Insurance Co., 104 U. S., 54.) 3 (Cal., 1887). A bank has no right to assume that a customer depositing money as agent represents a fictitious principal or that he has power DIGEST OF NATIONAL BANK DECISIONS. 123 DEPO SITS— Continued. deposit op tkust funds — continued. to do anything more than deposit the money. (Honig v. Pacific Bank, 73 Cal., 464.) 4 (Mass., 1869). Where money is so deposited by a trustee that the bank has no notice of the trust, the bank is not liable for paying it out as if it belonged to the depositor. (School District v. First National Bank, 102 Mass., 174.) When deposit by an executor is a general deposit and not a trust deposit. 5 (Iowa Sup., 1903). Where an executor deposited funds belonging to the estate with a bank, and drew checks against the funds, which were honored, there being no agreement to return the identical money deposited, or that the funds should be used for any specified purpose, the deposit was merely a general one. (Officer v. Officer et al. (Stewart, intervener), 5 B. C, 749; 94 N. W. Rep., 947.) DEPOSIT OF PAKTNEBSHIP FUNDS. 1 (U. S. C. C, 1826). A bank can not pay out partnership deposits on the private check of one partner. (Coote v. United States Bank, 3 Cranch C. C, 50; Billings v. Meigs, 53 Barb., 272.) 2 (U. S. C. C, 1826). If the bank can show that the funds were used for partnership purposes, it will not be liable, although the check on which it was drawn was the individual check of one of the partners. (Coote v. United States Bank, 3 Cranch C. C, 50.) EVIDENCE OF DEPOSIT — INSTRUCTIONS. 1 (Ala.). In an action by a bank to recover money advanced on a draft, for goods sold, deposited with it by the vendor, where it claims that the deposit was made for collection, and the depositor that it was a sale, it is proper to instruct that if it was a sale the bank could not recover, though there is evidence that the vendee, after the deposit, paid part of the price for which the draft was drawn directly to the vendor. (Bank of Guntersville v. Webb, 19 So., 14; 108 Ala., 132.) 2 (Ala.). An instruction that if an illiterate depositor, to whom a bank cashier fraudulently gave a deposit slip showing a deposit of a draft for collection instead of as a discount, " within a reasonable time, and on his first opportunity," repudiates the transaction as shown by the slip, would make no difference, is not objectionable as leaving to the jury the question of reasonable time. (lb.) 3 (Ala.). Where a bank cashier, in receiving from an illiterate person a draft sold to the bank, fraudulently makes out his deposit slip for him so as to show a deposit for collection, and the depositor subse- quently, on discovering the fraud, repudiates the transaction as -a deposit for collection, and, on an issue as to whether the transaction was a purchase or a deposit for collection, the bank admits that the slip was a receipt for the draft, and the depositor claims that it was one for the proceeds, it is proper to refuse to instruct for the bank that the retention of the slip by the depositor after repudiation, and using it as evidence of its demand against the bank, rendered it binding on him. (lb.) 4 (Ala.). Where a bank cashier, in receiving from an illiterate person a draft sold to the bank, fraudulently makes out his deposit slip for him so as to show a deposit for collection, it is error to admit evi- dence that the bank -required the cashier to pay the draft on failure to collect it, on the issue as to whether the bank was liable as pur- chaser or as receiver for collection only. (lb.) ' 5 (Ala.). On an issue as to whether the delivery of a draft to a bank was a purchase or a deposit for collection, the depositor may testify to his illiteracy to explain his accepting the deposit slip; and, having 124 DIGEST OF NATIONAL BANK DECISIONS. DEPO SITS— Continued. evidence of deposit — insteuctions — continued. on cross-examination given the name of the. person who first informed him of its contents, he may testify when and where the information was given. (lb.) 6 (Cal., 1900). A pass book shown to be in the handwriting of the bank cashier, and to have been issued by him in the usual course of busi- ness, is admissible in evidence in an action by the depositor's admin- istratrix against the bank to recover sums alleged to have been de- posited. (Nicholson v. Randall Banking Co., 62 Pac. Rep., 930; 3 Banking Cases, 26; 130 Cal., 533.) 7 (La., 1901). The book entries of deposits, made by a bank cashier who is dead (his handwriting and death being proven), accompanied by evidence corroborative of the contention of plaintiff that these entries exhibited all the deposits made by defendant, who kept no pass book, make a prima facie showing of the state and extent of defendant's deposit account, and suffice to shift the burden of proof on defendant to show other deposits. (Bastrop State Bank v-. Levy, 31 So. Rep., 164; 4 Banking Cases, 409; 106 La., 586.) 8 (Mass., 1894). Testimony that the cashier of a bank failed to enter deposits on its books is not admissible as against the depositor to show that the deposits were made with the cashier in his individual capacity. (L'Herbette v. Pittsfield National Bank, 38 N. E., 368; 162 Mass., 137.) ' 9 (Mass.). An envelope on which the sums paid into and drawn out of a bank by a depositor are entered by the cashier is admissible against the bank to show the state of his account. (lb.) 10 (N. Dak., 1900). The issuance of a deposit slip by a bank or the entry • of a deposit in a pass book has only the effect of a receipt for money. While it raises a presumption that the deposit was made, yet it is open to parol explanation. (Andrews et al. v. State Bank of Wheat- land, 2 Banking Cases,' 508.) When relation not created. 11 (Pa.). Where one mails to a bank money and checks for deposit, but the bank refuses to acknowledge receipt thereof, and persistently denies such receipt, the relation of depositor and depositee is not created. (Miller v. Western National Bank, 172 Pa. St., 197; 33 A., 684.) INTEBEST ON DEPOSITS. 1 (U.S. Sup. Ct, 1876). A national bank, holding deposits, refused to pay the same on demand and thereafter a receiver was appointed. Held, that the depositor was entitled to interest thereon from the date of the demand. (National Bank of Commonwealth v. Mechanics' National Bank, 94 U. S., 437; 1 N. B. C, 133.) 2 (U. S. Sup. Ct, 1876). The entire priucipal of the deposits, but no interest thereon, was paid by the receiver. Held, that interest upon the aggregate of unpaid interest was recoverable. (lb.) 3(U. S., 1875). Where a bank has, by reason of its own default, been placed in the hands of a receiver, a demand of payment by a depositor is no longer a necessary condition precedent to a right of action for the deposit, and the deposit bears interest from the tiirie of such default. (Chemical National Bank v. Bailey, 1 N. B. C, 260; 12 Blatchford, 480.) 4 (U. S. C. C. A., 1900). A deposit upon which interest must be paid can not be special or in trust, and in case of the failure of the bank must, for the purpose of payment, be on the same footing with general deposits or unsecured demands. (McNulta v. West Chicago Park Com'rs, 2 Banking Cases, 764; 99 Fed. Rep., 900.) 5 (Ky., 1884). In an action against a bank to recover deposits, the balance found due plaintiff should bear interest from the institution of the action. (Bobb v. Savings Bank of Louisville et al., 64 S. W. Rep.. 494; 3 Banking Cases, 760.) DIGEST OF NATIONAL BANK DECISIONS. 125 DEPOSITS— Continued. interest on deposits — continued. 6 (W. Va. ). A bank is not chargeable with interest on sums deposited to the credit of customers to be drawn against by check until payment be demanded, unless upon special contract. (Parkersburg National Bank v. Als., 5 W. Va., 50.) Evidence of contract to pay interest on deposits. 7 (N. Y. ). The fact that there are several entries in the books of a bank and. in the pass book of a depositor of allowance of interest on his account is not sufficient to prove a contract by the bank to pay interest while the deposit should remain, where it is proven that after the entries were made the officers of the bank, on several occasions, told the depositor that it was against their rules to pay interest, and that they would not pay it, and that he apparently acquiesced. (McLoghlin v. National Mohawk Valley Bank, 139 N. Y. St., 514; 34 N. E., 1095.) Bank not liable for interest on money held in it by attachment. 8 (Me.). A stockholder in a bank is not entitled to interest from the bank, either on ordinary dividends declared or on money due him from a reduction of capital stock, for a period during which the bank was prevented from paying him the same by attachments of his stock in suits of other parties, though the money thus belonging to him was during such time mingled by the bank with its general assets, the bank being ready and willing to pay over the same but for the attachments. (Mustard ». Union National Bank, 29 A., 977; 86 Me., 177.) Where payment to a depositor is refused on demand and the demand is subse- quently withdrawn no interest can be recovered. 9 (Mo. Appls., 1903). Where money is deposited in a bank, and there is no contract to pay interest, and payment to the depositor is refused on demand, but subsequently the depositor withdraws the money de- posited without interest, no interest can be afterwards recovered. (Arnold v. Sedalia Natl. Bank, 5 B. C, 712; 74 S. W. Rep., 1038.) APPLICATION OF DEPOSIT ON CLAIM. 1 (U. S. C. C. A., 1900). A bank has the right to charge to the account of a general depositor the amount of notes of such depositor held by it which are due, and such right is not affected by the fact that the depositor is the receiver of a railroad, and as such made the deposits, where he also executed the notes in the same capacity. (Durkee v. National Bank, 102 Fed. Rep., 845; 3 Banking Cases, 75.) 2. Where a bank holds funds as a general deposit it may appropriate them to the payment of the depositor's debt to the bank. (Ark.) Dawson tf. Real Estate Bank, 5 Ark., 283 ; (Del.) McDowell v. Bank of Wilmington and Brandywine, 1 Har., 369; (N. Y.) Commercial Bank v. Hughes, 17 Wend., 94. 3 (Cal., 1899). General deposits made in a bank where the depositor is drawing against the account from time to time by checks and drafts are to be deemed as payments on account of any existing overdraft of the depositor. (Santa Rosa Nat. Bank v. Barnett et al., 2 Bank- ing Cases, 749 ; 125 Cal., 407.) 4 (Fla. Sup., 1902). The right of a bank to apply a depositor's credit bal- ance to the satisfaction of a debt due it by such depositor is in the nature of a set-off or application of payments, which will not be required by law so as to benefit a surety liable for such debt where there is no instruction from the depositor to so apply it, nor agree- ment between hini and the bank that it shall be done, and where the debt has not been included in the account between the bank and the depositor by the course of dealing between them. (Camp et al. v. First Natl. Bank of Ocala, 33 So. Rep., 241 ; 5 B. C, 202.) 126 DIGEST OF NATIONAL BANK DECISIONS. DEPOSITS— Continued. application of deposit on claim — continued. 5 (Ky., 1902). A bank may apply a deposit to the payment of a debt which it holds against a firm of which the depositor is a member, or may, when sued for the deposit, plead the firm debt as a set-off. (Owsley v. Bank of Cumberland, 66 S. W. Rep., 33; 4 Banking Cases, 172.) 6 (N. T.). Where, after the maturity of a promissory note held by a bank, and due protest and notice thereof, the maker makes a general deposit in the bank of an amount sufficient to pay the note, this does not of itself, as between the bank and an indorser, operate as a payment. In the absence of any expressed agreement or directions it is optional with the bank whether or not to apply the money in payment ; it is under no legal obligation so to do. (The National Bank of Newburgh, respondent, v. Daniel Smith, appellant, 66 N. Y., 271.) 7 (Pa., 1896). The duty which a bank holding a note owes to an indorser thereon to appropriate a deposit in the bank to payment of the note exists only where the maker of the note, at its maturity, has a deposit sufficient to pay it, and not previously appropriated to any other purpose, and does not apply to a deposit made after the maturity of the note, or to a deposit by a prior indorser, though he be in fact the principal debtor and the maker be an accommodation maker. (First National Bank of Lockhaven v. Peltz, 35 A., 218; 176 Pa. St., 513.) <■ 8 (Pa., 1888). A firm made an assignment, parts of its assets consisting of a sum on deposit in defendant* bank. The assignee made demand for the deposit, which was refused, and he brought suit. After the demand, but before suit, a note against the assignors, held by the bank at the date of the assignment, matured. Held, that it could not be set off in the suit by the assignee. (Chipinan v. Ninth National Bank, 13 Atl. Rep., 707; 120 Pa. St., 86.) 9 (Va., 1901). Where it was agreed that an agent should receive the pro- ceeds of all sales of tobacco at a warehouse and procure the money to pay for all purchases made, he to be reimbursed before anything should be due the principal, and such agent deposited a sum in a bank in his own name as cashier, instructing the bank to pay the funds to no one else, and subsequently the balance due on the bank account was assigned by the principal to the agent, the bank was not entitled, as against the agent, to set off against the balance a sum due it from the principal. (Nolting v. Nat. Bank of Virginia, 3 Banking Cases, 211 ; 37 S. E. Rep., 804 ; 99 Va., 54.) Bank can not appropriate trust fund to satisfy individual debt of depositor. 10 (111. Sup., 1895). Where a bank knows that money deposited with it to the general credit of a depositor is held in trust by such depositor, the bank has no right to apply such deposit to the payment of a note due to it from the depositor; 57 111. App., 107, reversed. (Clenimer v. Drovers' National Bank, 41 N. E., 728; 157 111., 206.) 11 (Nebr. Sup., 1902). A bank has the right to appropriate the funds of a depositor to the extent of the indebtedness due from him ; but if the deposit, or any part thereof, is a trust fund, and the bank has notice of this fact, it will be liable to the true owner if it appropriates such fund to the discharge of an indebtedness due from the depositor. (Globe Sav. Bank v. Nat. Bank of Commerce of New London, Conn., et al., 89 N. W. Rep., 1030; 4 Banking Cases, 397; 64 Nebr., 413.) 12 (Nebr. Sup., 1902). In a suit against a bank, entries on its books, made by its officers or bookkeeper in the regular course of its business, are admissible in evidence on behalf of the adverse party when in the nature of admissions. ( lb. ) 13 (Nebr. Sup., 1902). A bank that appropriates a deposit made by a cus- tomer to reduce his indebtedness due the bank, knowing the deposit, or a part thereof, to be a trust fund, is liable to the true owner for a conversion of his money, and an action at law to recover the amount can be maintained. (lb.) DIGEST OF NATIONAL BANK DECISIONS. 127 DEPOSITS— Continued. application of deposit on claim — continued. 14 (N. C. Sup., 1899). Where a bank knew that the surviving partner of a dissolved copartnership made deposits in such capacity, it was bound to know that he held them in trust for the payment of the debts of the dissolved firm, and. therefore, it had no right to apply them to the payment of a debt due it and created by the partnership prior to its dissolution. (Hodgin v. People's Nat. Bank, 124 N. C, 540: 2 B. C, 222.) When bank can appropriate trust funds to pay notes given by trustee. 15 (N. Y. Sup., 1899). Where the trustee of an incompetent person deposits the trust funds in his personal bank account, and there is nothing to show that they are not the trustee's individual property, and the bank appropriates them as a part of such account, to satisfy notes given to it by 'the trustee, the succeeding trustee can not recover such funds in behalf of his ward's estate. (Meyers v. New York County Nat. Bank, 1 Banking Cases, 72.) application of deposit on note made payable at bank. 1 (Ala., 1898). Where it appears that a note was deposited in a bank where it was payable, and where there was on deposit, at its maturity, suffi- cient cash to the credit of the maker to pay it; and the cashier had been instructed by the maker to appropriate such funds to the pay- ment of the note; and that on the morning of the day it fell due the maker tendered the cashier a check on such funds in the bank, after banking hours, in payment of the note, and was advised by the cashier that a check was unnecessary because the note had already been charged to the maker, and there was exhibited by the cashier to the maker the note stuck on the canceling spindle and stamped " Paid," such note is, in fact, paid in money, a verbal instruction by a depositor to the cashier of a bank to apply his money on deposit in a certain way being sufficient authority. (First Nat. Bank of Cam- bridge, 111., v. Hall et ah, 1 Banking Cases, 198; 119 Ala., 64.) 2 (Ind.). Where a bank pays a note made payable at the bank it has a right to hold the note as a purchaser and to set it off against a balance due the depositor on a general account. (Bedford Bank v. Acoam, 125 Ind., 584.) Payment of note of insolvent depositor. 3 (Mass. Sup., 1903). Plaintiff sent to defendant bank for collection and remittance a properly indorsed note of a depositor of defendant, who had directed it to pay his notes. On the day for payment, defendant's cashier, as such, drew his check to plaintiff's order for the amount of the proceeds, made a memorandum thereof on a block, wrote on the face of the note the defendant's name, that it was paid, and perforated it and put it in the files. He was then notified of the depositor's insolvency. Held, that the note was already paid, nothing remaining, besides entries of records on the books, but to remit the proceeds. (Nineteenth Ward Bank v. First National Bank of South Weymouth, 5 B. C, 697; 67 N. E., 670.) Right of bank to pay note without special authority. 4. If a note be made payable at a bank the bank can not pay it out of the maker's deposit without being directed to do so. (111.) Ridgely National Bank v. Patten and Hamilton, 109 111., 479; (Tenn.) Grisson v. Commercial National Bank, 87 Tenn., 350. Contra. 5. Making a note payable at a bank where the maker is a depositor amounts to a request that the bank pay it. (N. Y.) Griffin v. Rice, 1 Hilt, 184; (Ohio) Francis v. People's National Bank, 1 Ohio N. P., 281. 6 (N. Y.). But if the depositor notifies the bank not to pay the note the bank can not charge him with the amount if paid contrary to the notice. (Egerton v. Fulton National Bank, 43 How. Practice, 216.) 128 DIGEST OF NATIONAL BANK DECISIONS. DEPO SITS— Continued. TRANSFKE OF DEPOSIT AS A GIFT. 1 (Conn., 1901). A mother deposited money in a bank, and received three pass books therefor, each of which recited that it was an account with the mother and a designated daughter, and was payable to both. The bank was informed at the time th£ deposit was made that the mother wished to retain control of the money until her death, when she wished it to go to her three daughters, and was informed that the deposit as made would accomplish the purpose. The mother had no intention of making a gift, and she retained the pass book, except when intrusted to the daughters for safe-keeping. Held, not to show a gift, but an attempted and void testamentary dis- position, and hence the entire deposit would descend to her per- sonal representatives. (Appeal of Main, 48 Atl. Rep., 965; 3 Bank- ing Cases, 437 ; 73 Conn., 638. ) 2 (Me., 1901). A gift inter vivos is not valid unless there is delivery to the donee or to some one for him, unless the donor parts with all present and future dominion and right of control over it, and unless the gift is intended to take immediate effect, to be -complete as a transfer of title in prsesenti, and is absolute and irrevocable. (Hal- lowell Sav. Inst. v. Titcomb et al., 51 Atl. Rep., 249; 4 Banking Cases, 202.) 3 (Me., 1901). Where a depositor in a savings bank caused the deposit to be transferred on "the books of the bank to his brother, and surren- dered his old deposit book and took out a new one in the name of his brother, it was the same as if he had drawn the money and then deposited it in his brother's name ; and that is the same as if he had then so deposited it for the first time. (lb.) 4 (Minn., 1901). A gift of money in a bank, on deposit in the donor's name, may be legally executed by the person making such gift, although the credit of the deposit is not changed on the books of the bank, but continues in the name of the donor, provided, in the absence of fraud, there is some substantial act of the donor giving the donee the right to have such money and appropriate it. (Mur- phy et al. v. Bordwell, 85 N. W. Rep., 915 ; 3 Banking Cases, 433 ; 83 Minn., 54.) 5 (Tenn. Sup., 1903). A third person delivered to complainant his pass books in defendant bank, stating that he was going away and wanted her to have the money to his credit in the bank as evidenced by said books, and that if he did not return he wanted her to understand that it was hers, and said books were delivered to her to enable her to collect the same if he did not return. Held, not a valid gift inter vivos, being dependent on a contingency. (Balling v. Manhattan Sav. Bank and Trust Co., 5 B. C, 757; 75 S. W. Rep., 1051.) DEPOSIT OF PUBLIC MONEYS, TETJST. 1 (U. S. C. C, 1896). A national bank, not designated as a depository of public moneys, which receives, under the permissive authority of law and the regulations of the Post-Office Department, deposits of money made by postmasters in their official capacity, thereby assumes a fiduciary relation to the Government, and becomes a bailee of the Government, so as to become directly responsible to it for any moneys which it knowingly or negligently allows the postmaster to withdraw by private check, or otherwise appropriate to his own use ; and where, after the removal of the postmaster, he deposits a sum to make good a shortage in his balance, the bank can not apply it in discharge of a debt due it from him personally. (United States v. National Bank of Asheville et al., 73 Fed. Rep., 379. > 2 (U. S. Ct. Cls., 1877). Designating a national bank as a depository of public moneys does not constitute it an agent of the Government, or render the Government liable for moneys lost by a failure of such bank. (Branch v. The United States, 1 N. B. C, 363.) DIGEST OF NATIONAL BANK DECISIONS. 129 DEPOSITS— Continued. deposit of public moneys, tbust — continued. 3 (U. S. Ct Cls., 1877). Such bank does not become a custodian of public moneys deposited with it, but it becomes a debtor to the United States the same as it does to other depositors for individual deposits, (lb.) 4 (U. S. Ct. Cls., 1877). Certain moneys coming into the possession of the clerk of a Federal court pending a litigation were by him deposited in a national bank which had been designated as a depository of pub- lic moneys. The bank failed. Held, that the United States were not liable for the money so deposited. (lb.) 5 (U. S. C. C, 1887). A postmaster at Lewiston, Idaho, with intent to defraud the Government, and without receiving any money, issued post-office orders upon the postmaster at Pueblo in favor of the Stock- growers' Bank. He mailed the orders to the bank, with a letter pur- porting to be written by one Wilson, and directed the bank to draw the money and hold it subject to said Wilson's order. The bank, without knowledge of the fraud, obtained the money as directed, but in doing so acted as a principal without disclosing their agency in the matter. The Lewiston postmaster, under the name of Wilson, subse- quently drew the greater part of the money from the bank, and suit was afterwards brought against it by the United States to recover the money so obtained on the order. Held, that the bank was liable. (United States v. Stockgrowers' National Bank of Pueblo, 30 Fed. Rep., 912.) 6 (U. S. C. C, 1898). Where a national bank receives State funds subject to check, giving security therefor, and agreeing to pay interest on daily balances, the transaction is a deposit and not a loan. (State of Nebraska v. First National Bank of Orleans, 88 Fed. Rep., 947.) 7 (U. S. C. O, 1898). It is within the power of a national bank to give bond to secure State funds deposited with it, and sureties on such bond are bound thereby. (lb.) 8 (U. S. C. C. A., 1900). It was charged that a member of a banking firm, who was also the treasurer of a quasi municipal corporation, misap- plied the moneys of such corporation deposited by him in a national bank ; and that the bank, through its officers, knowingly, and for its own advantage, permitted and participated in a diversion of such fund to the discharge of the liabilities of the firm to itself, when the latter was insolvent. Held, that such charge was sustained by the evidence, and that the bank was liable for the amount so diverted. (McNulta v. West Chicago Park Com'rs., West Chicago Park Com'rs. v. McNulta, 2 Banking Cases, 764; 99 Fed Rep., 900.) Treasurer of school district may deposit school funds in national bank. 9 (Iowa Sup., 1903). Code 1873, section 1747, provides that a school treas- urer shall hold all moneys belonging to the district, and shall pay out the same on the order of the president, countersigned by the sec- retary. Held, that the word " hold," as so used, did not require that the treasurer should keep the moneys of the district in his physical possession at all times, and did not prohibit the treasurer from mak- ing a general deposit of the district's funds in a solvent bank to his credit as treasurer. (Hunt t. Hopley, 5 B. C, 734; 95 N. W. Rep., 205.) Jurisdiction in actions for public money on deposit. 10 (U. S. C. C.,1896). By reason of this trust relation, equity has juris- diction of a bill by the Government to require an account and settle- ment of the moneys so deposited with it; and this remedy is not affected by the fact of a cumulative remedy at law agaipst the post- master on his official bond. (United States v. Nat Bank of Ashe- ville et al., 73 Fed. Rep., 379.) 4049—05" 9 130 DIGEST OF NATIONAL BANK DECISIONS. DEPOSITS— Continued. MISCELLANEOUS. Liability for deposit for transmission to another bank. 1 (III.). Upon deposit in a city bank of funds for transmission to the credit of a country bank, for the use of the depositor, the city bank becomes a trustee of the depositor ; and where the country bank, by reason of its failure before the deposit was made, becomes unable to receive the deposit, the city bank is liable to the depositor in an action for money had and received, for the amount of the deposit. (111.) Union Stockyards National Bank v. Dumond, 37 N. B., 863; 150 111., 501 ; (111.) Dumond v. Merchants' National Bank, 37 N. E., 864; 150 111., 515. 2 (111.). The fact that the city bank deposited the money with another city bank, which was the correspondent of the country bank, does not exempt the former bank from such liability, where the depositor was unacquainted with the custom of the banks in making such deposits, and did not consent thereto. (lb.) 3 (111.). Nor will the city bank in which the money was finally deposited be liable therefor, at the suit of the depositor, where the money was left with it with instructions to credit it to the country bank, gen- erally, without any intimation that it was to be credited to that bank as the money of the depositor. (lb.) Where deposit payable. 4 (Ind. T., 1896). Money deposited in a bank without stipulation as to place of payment is payable to the depositor at the bank. (McBee v. Purcell National Bank, Ind. T., 37 S. W., 55 ; 1 Ind. T., 288!) When act of cashier as to deposit binds bank. 5 (Ky., 1884). Where the cashier and general manager of a bank under- took to make investments for a depositor, and exhibited to the de- positor, from time to time, statements, taken from the books of the bank, purporting to show investments made by the bank for him, it will be presumed that the officer of the bank was acting for the bank, and not as special agent for the depositor, and the bank will be re- quired to account for the deposits or the investments. (Bobb v. Sav- ings Bank of Louisville et al., 64 S. W. Rep., 494; 3 Banking Cases, 760.) Delivery of deposit slip does not assign deposit. 6 (N. Y., 1892). A deposit slip issued by a banker, acknowledging the re- ceipt of the amount of money therein named, is intended merely to furnish evidence, as between the depositor and the bank, that on a given day there was deposited a given sum, and not that such sum remains on deposit; and hence the delivery of a deposit slip to a third person by the depositor does not operate as an assignment of the deposit. (First National Bank v. Clark, N. T. App., 32 N. E., 38; 134 N. Y., 368.) 7 (N. Y., 1892). A conversation between a bank depositor and a third per- son, to whom he had delivered the deposit slip, and in whose favor he had drawn a check for the amount, in which he stated that the deposit would not be available for ten days, and tjjat he wanted the check discounted immediately, which was accordingly done, and the • money paid him by such third person, does not, as a matter of law, operate as an assignment of the deposit to such third person ; and a finding by the jury that it did not will not be disturbed on appeal, (lb.) Checks, how Applied when title to deposit is in dispute. 8 (N. Y.). Where several deposits in bank have been made on the same account, and the title to one of the deposits is disputed, checks drawn on the account will be first applied to the deposits not in dispute. (Hauptmann v. First National Bank (Sup.), 31 N. Y. S., 364.) DIGEST OF NATIONAL BANK DECISIONS. 131 DEPOSITS— Continued. miscellaneous — continued. Fraud of bank officers in issuing deposit certificate. 9 (Pa.). Defendant, who had money on deposit in a nationalbank, when demanding payment thereof was induced by an officer of the bank to sign a promissory note, which was represented to him to be a receipt for the money. He was unable to read English. Held, that he was not liable to the bank upon the note. (Resh v. First National Bank of Allentown, 93 Penn. St., 397 ; 3 N. B. C, 724. ) 10 (Pa.). Plaintiff, who was unable to read, deposited money in a national bank and took a- certificate of deposit therefor, which the officers of the bank represented was a certificate of the bank. It was, on its face, the certificate of a private hanking firm, composed of some of the officers of the bank. Held, that the bank was liable for the amount of the deposit. (Zeigler v. First National Bank of Allen- town, 93 Penn. St., 393; 39 Am. Rep., 758; ?. N. B. C, 721.) CERTIFICATE OF DEPOSIT. IN GENEBAL. Certificate of deposit bank's promissory note. 1. An ordinary certificate of deposit is the bank's promissory note, payable on demand. (Cal.) Brummagim v. Tallent, 29 Cal., 503; (Conn.) Kilgore t'. Bulkley, 14 Conn., 362 ; (111.) Swift v. Whitney, 20 111., 144; (Mich.) Beardsley v. Webber, 104 Mich., 88 ; (N. Y.) Mitchell v. Easton, 64 N. Y., 155 ; (Ohio) Citizens' National Bank v. Brown, 45 Ohio State, 39. Certificate of deposit good until presented. 2 (N. Y. Sup. Ct). Where a bank issues a certificate of deposit, payable on its return properly indorsed, it is liable thereon to a bona fide holder to whom it was transferred seven years after its issue, notwithstand- ing a payment thereof to the original holder. Such cei-tificate is not dishonored until presented. (National Bank of Fort Edward v. The Washington County National Bank, 5 Hun., 605.) 3 (Cal., 1900). A certificate of deposit is not a promissory note under Cali- fornia Civil Code, section 3095. reciting that " bills Of exchange." " promissory notes," and " certificates of deposit " are classes of nego- tiable instruments, and hence a bank stockholder having a certificate of deposit does not loan the money to the bank, but is a mere stock- holder depositor, within act of April 11, 1862, section 10, providing that the capital stock of savings banks shall be security for nonstock- holding depositors. (Murphy v. Pacific Bank, 62 Pac. Rep., 1059; 3 Banking Cases, 702; 130 Cal., 542.) Liability of indorser. 4 (Mich.). An indorser on a certificate of deposit assumes the same liabil- ity as the indorser on a promissory note. (Cate v. Patterson, 25 Mich., 191.) Value of certificate, how determined. 5 (Mo.). The value of the certificate is governed by the amount stated in the body and not by the figures in the margin. (Payne v. Clark, 19 Mo., 152.) Liability of bank for certificate issued by its officers when not acting for the bank. (N. Y., 1880). Where a national bank was in the habit of receiving money on deposit and issuing certificates, sometimes in its own name and sometimes in the name of its president, it is liable to a depositor who took a certificate issued by the president personally, but which 132 DIGEST OP NATIONAL BANK DECISIONS. DEPOSIT S^-Continued. CERTIFICATE OF DEPOSIT IN GENERAL — Continued. the deposito.r believed to be an obligation of the bank and would not have taken otherwise. (West v. Blmira Bank, 20 Hun., 408.) 7 (Pa., 1880). A depositor asked for a certificate of deposit drawing inter- est for a portion of his deposit. The teller gave him a certificate issued by a private banking firm composed of the managing officers of the bank and told him that this was the bank's certificate. Held, that the bank was liable. ( Steckel v. First National Bank of Allen- town, 93 Pa. State, 376.) 8 (Pa.). A business man inquired of a bank .president if the bank paid interest on deposits. He was informed that it did not, but that he would give him a certificate of a firm that would. He also informed him that the firm owned the bank and that he could get his money of the bank at any time. The firm failed and it was held lhat the bank was not liable. (Allentown Bank v. Williams, 100 Pa. State, 123.) 9 (Utah, 1892). A bank is not liable on a certificate of deposit issued before its organization and signed as cashier by one who afterwards became such. (Long v. Citizens' Bank, 8 Utah, 104. X Payment on unauthorized indorsement-no payment. 10 (Cal.). Payment by the bank of a certificate of deposit upon an unau- thorized indorsement is no payment. (Honig v. Pacific Bank, 73 Cal., 464.) ~ Bank's right to offset. 11 (Mich.). Certificates of deposit are subject to same rule as other general deposits as to rights of set-off. (Newberry v. Trowbridge, 13 Mich., 263.) Certificates of deposit, re-formation of. 12 (Iowa, 1895). Plaintiff made a certain payment to defendant bank, and received in exchange a note signed by a firm composed of the officers of the bank, and the business of which was transacted in the bank's office. He subsequently' gave a check to his wife, which was also exchanged at the bank office for a similar note. Plaintiff and his wife could both read and write, and had transacted considerable busi- ness with the banks. Plaintiff retained the notes for two years, and upon the failure of the firm began suit to re-form the notes and change them into certificates of deposit of the bank on the ground that he intended to deposit his money with the bank. Held, that plaintiff was not entitled to a decree. (Murphy v. First National Bank of Cedar Falls (Iowa), 63 N. W., 702; 95 Iowa, 325.) When not in violation of section 5183, United States Revised Statutes. 13 (Mass., 1886). A certificate of deposit issued by a national bank, payable to the order of the depositor on return of the certificate properly indorsed and understood between the bank and the depositor not to be payable until a future day agreed upon, is not in violation of the national banking act. (Hunt, Appellant, 141 Mass., 515; 3 N. B. C, 474.) 14 (Ohio). A certificate of deposit representing an actual loan is not a post note within the meaning of section 5183, Revised Statutes. (Logan National Bank v. Williamson, 2 Cin. Ct. Rep. (Ohio), 118.) When void for want of consideration. 15 (U. S. C. C, 1893). Certain persons, directors of a savings and of a national bank, procured money from the former on notes made by a third person to them for the payment of stock of the national bank issued in the name of such third person for their benefit. These persons were behind in their accounts with the national bank, and the savings bank allowed them to overdraw their accounts with it to a large amount, which was used in settling their accounts with tho national bank. Thereafter the savings bank delivered the notes DIGEST OF NATIONAL BANK DECISIONS. 133 DEPOSITS— Continued. CERTIFICATE OF DEPOSIT — IN GENERAL — Continued. and the check to the national bank, which issued to it a certificate of deposit for an amount covering the whole amount represented by them. Held, that this certificate of deposit was without considera- tion and void, and any loss accruing to the savings bank by virtue of the transactions was due to the fraud or incompetency of its own officers. (Murray v. Pauly, 56 Fed. Rep., 962.) Certificate of deposit as evidence of sum deposited. 16 (111.). A certificate of deposit is evidence of so high and satisfactory a character as to the sum deposited that to- escape its effect the maker must overcome it by clear and satisfactory evidence. Where the tes- timony, aside from the certificate, is balanced as to the amount deposited, the certificate will turn the scale. (First National Bank of Lacon i\ Myers, 83 111., 507.) • Stub from which certificate is taken, as evidence. 17 (U. S. C. C, 1892). A person depositing money jn a bank accepted from the cashier a certificate of deposit which made no mention of interest, but with a verbal agreement that interest should be paid. The cashier at the same time indorsed a memorandum of the rate of in- terest on the stub from which the certificate was taken. Held, that the stub should be read with the certificate as evidence of the entire contract. (Thomson v. Beal, 48 Fed. Rep., 614.) Nature of certificate of deposit. 18 (Md., 1896). A savings bank provided by its by-laws for three classes of depositors — weekly depositors who were stockholders on the deposit of a minimum sum, special .depositors, and irregular deposi- tors. Plaintiff made a special deposit, receiving a certificate ac- knowledging the receipt of the money on special deposit at a specific rate of interest, if not drawn out within one year. Held, that the special deposit was in effect, a loan, creating an indebtedness on the part of the bank ; and the weekly depositors having, as stockholders, received benefits from the loans, in the way of increased dividends, they are estopped from pleading that such loans were void, as being beyond the power of the corporation. (Heironimus v. Sweeney (Md.), 34 A., 823; Edwards v. Same, ib. ; 83 Md., 146.) When tru.it companies may issue. . 19 (U. S. C. C, 1900). In the absence of statutory provisions on the subject, a trust company authorized to receive money on deposit has lawful authority to issue certificates of deposit therefor in the usual form. (Bank of Saginaw v. Title and Trust Company of Western Pennsyl- vania, 105 Fed. Rep., 491.) Certificate signed by third person, rights of parties. 20 (N. Y., 1902). When a certificate of deposit of a banking firm is signed by a third party to give it credit, after his death and the failure of the firm, as he is liable as ostensible partner and as surety, if his estate is insufficient to pay his individual and firm debts in full, the holder of the certificate is entitled to be paid out of the estate before any part thereof can be applied on the debts of the firm. (In re Baldwin's Estate, 63 N. E. Rep., 62; 170 N. Y., 156.) 21 (N. Y., 1902). Where an active member of a banking firm makes a deposit with it as executor in the absence of a written agreement, he can not recover as against one who signs certificates of deposit of the firm to give it credit; silch executor knowing at the time that no partner- ship in fact existed, so as to render such person liable to him for the deposit. (Ib.) Certificate of deposit of public moneys. 22 (U. S. C. C. A., 1900). The fact that certificates of deposit issued by a national bank to a State treasurer in his official capacity for money of the State deposited were surrendered by his successor in office, who 134 DIGEST OF NATIONAL BANK DECISIONS. DEPOSITS— Continued. CERTIFICATE OP DEPOSIT — IN GENERAL Continued. had the amount credited in his general account as treasurer, can not affect the liability of the bank to the State for the money actually deposited, and which was never repaid, nor does it justify its receiver in contesting the claim of the State or its treasurer therefor, where there is no defense to such claim on its merits. (McDonald v. State of Nebraska, 101 Fed. Rep., 171.) Presentation of certificate, demand, action. 23 (N. Y., 1901). When a depositor in a bank failed to produce or surrender his certificates of deposit, which had not been lost, on making demand for their payment, and failed to produce them on the trial of an action for the amount of the certificates, he can not recover, since the bank is not bound to pay the deposits, except on the production and surren- der of the certificates properly indorsed. (Cottle et al. v. Marine Bank of Buffalo, 59 N. E. Rep., 736; 3 Banking Cases, 218; 166 N. Y., 53.) 24 (N. Y., 1901). Though certificates of deposit in a bank are payable on demand when properly indorsed, the bringing of an action against the bank for the amount of the certificates is not a sufficient demand to entitle the depositor to recover, since the demand must be by presentation of the certificates properly indorsed. (lb.) 25 (N. Y., 1901). Though there was no evidence upon which the trial court might have based a finding, yet, where the judgment and findings of the trial court were unanimously affirmed by the appellate division, the court of appeals can not supply the finding. (lb.) Wrongful detention of certificate, measure of damages. 26 'U. S. C. C, 1882). The defendants unlawfuly detained a certificate of deposit of the value of $2,000 from the plaintiff. Held, that the plaintiff was entitled to recover damages for such detention equal to legal interest on the value of tie certificate from the date of the demand therefor and refusal to the recovery, and this without any evidence that the plaintiff would have converted said certificate into money and put it to use, other than his right to do so and the defend- ants' illegal prevention of the exercise of such right. ( Sleppy v. Bank of Commerce and -others, 17 Fed. Rep., 712.) NEGOTIABILITY OP CERTIFICATES OP DEPOSIT. 1 (U. S. C. C, 1900). The courts of the United States are not controlled by the decisions of the State courts on questions of general commer- cial law, and a Federal court will follow the decisions of the Supreme Court as to the negotiability of an instrument, notwithstanding a contrary holding by the courts of the State where the transaction took place. (Bank of Saginaw v. Title and Trust Co. of Western Pennsylvania, 105 Fed. Rep., 491.) 2 (U. S. C. C, 1900). A certificate of deposit in the ordinary form, paya- ble to the order of the depositor, is a negotiable instrument possess- ing the qualities of a negotiable promissory note. (lb.) 3 (Colo., 1898). Certificates of deposit are negotiable, and where a recov- ery is sought thereon present ownership must be proved : and they must be produced or their destruction or loss be established; and the necessity for such proof is not obviated by the introduction in evidence of a list of verified claims presented to the assignee of the bank and allowed by the court. (Zang et al. v. Wyant et al., 1 Banking Cases, 349; 25 tiolo., 551.) ' 4. An unindorsed certificate of deposit is not negotiable. (Ind.) National State Bank of Lafayette v. Rtngel, 51 Ind., 393; (Ohio) Citizens' National Bank v. Brown, 45 Ohio State, 39. 5 (Me., 1900). A certificate of deposit payable in current funds to the order of the depositor on return of the certificate properly indorsed, with interest at 3 per cent per annum if on deposit six months, is DIGEST OP NATIONAL BANK DECISIONS. 135 DEPOSITS— Continued. NEGOTIABILITY OF CERTIFICATES OF DEPOSIT— Continued. negotiable. (Hatch v. First Nat. Bank of Dexter, 3 Banking Cases, 191 ; 94 Me., 348 ; see notes at end of case.) 6 (Me., 1900). The term "current funds," when used in commercial transactions as the expression of the medium of payment, is con- strued to mean current money, or funds which are current by law as money. (lb.) 7 (Me., 1900). Making such a certificate payable on its return properly indorsed creates no such contingency as to payment as affects its negotiability. The language used expresses no more than the law implies as the duty of the holder in the absence of any such stipu- lation. • (lb.) 8 (Me., 1900). The amount of payment is not rendered uncertain by such an interest clause. (lb.) _ 9 (Me., 1900). If payment be demanded at any time within six months, the amount payable is certain ; it is the face of the certificate. (lb.) 10 (Me., 1900). If payment be not demanded until after six months, the amount payable is equally certain ; it is the face of the certificate and interest to time of payment. The sum payable at any given time is ascertainable on the face of the certificate, and that is suffi- cient, (lb.) 11 (Nebr.). An overdue certificate of deposit is subject to the same defenses as other overdue papers. (First National Bank v. Security National Bank, 34 Nebr., 71. ) s 12 (N. Mex., 1901). The rule which applies to negotiable instruments has no application to a certificate of deposit until the certificate has been indorsed and transferred by the original holder. Then a new relation arises between all parties, which must be tested by the rules and customs of the law merchant. (Bank of Commerce r. Harrison, 66 Pac. Rep., 460.) 13 (N.Y., 1902). A certificate of deposit signed by a banking firm, and by one who allowed his name to be used to give the certificate credit, though not a member of the firm, is a negotiable instrument. (In re Baldwin's estate, 63 N. B. Rep., 62; 170 N. Y., 156.) 14 (Ohio). An overdue certificate of deposit is not negotiable. Citizens' National Bank v. Brown, 11 Weekly Law Bulletin, 220.) WANT OF CONSIDERATION, FALSE CERTIFICATE, DECEIT, REMEDY. 1 (U. S. C. C. A., 1901). An instrument executed by the cashier of a bank which merely certifies that on a prior date named a party had a stated sum on deposit to its credit in the bank, but which contains no words of negotiability or promise to pay, is not a certificate of deposit or an obligation of the bank upon which an action can be maintained, but is merely evidentiary in character. (Modern Woodmen of Amer- ica v. Union Nat. Bank of Omaha, 108 Fed. Rep., 753. ) 2 (U. S. C. C. A., 1901). Z was head banker of plaintiff, which was an incor- porated insurance order, and as such had the custody of its funds. After the expiration of his term of office he retained certain of such funds, although they had been demanded by plaintiff, and kept the same on deposit in a bank in Grand Island, Nebr., of which be was a stockholder and director. The cashier of such bank wrote to the cash- ier of the defendant bank, which was its Omaha correspondent, ex- plaining that his bank had certain money of plaintiff on deposit; that on a certain date plaintiff would issue a statement, and, for reasons concerning his own bank, he did not wish such deposit to appear therein. He requested defendant to give plaintiff a fictitious credit for the amount on said date, inclosing his note foY the amount to be cred- ited, and also a check for the same amount, to be used in paying the note a day or two later. He further stated that the arrangement had been fully explained to and was understood by Z and plaintiffs directors. The arrangement was carried out, and defendant's 136 DIGEST OF NATIONAL, BANK DECISIONS. DEPOSITS— Continued. WANT OF CONSIDERATION, FALSE CEBTIFICATE, DECEIT, EEMEDT — Continued. cashier, a few days later, on request, issued a certificate stating that on the date named plaintiff had such sum on deposit in his bank. This certificate was sent to the Grand Island bank, and by it given to Z, who forwarded it to plaintiff. Three weeks later the Grand Island bank failed, and Z and his sureties were also insolvent. Plaintiff, having made demand, brought action against defendant to recover the amount, suing both on the certificate and for money had and received. Held, that the certificate executed by defendant's cashier was not an obligation that would support an action, nor would the action lie on an implied promise, since defendant did not in fact receive any money on deposit; that it was not estopped to show such facts by the certificate, which was issued only as an ac- commodation to its correspondent and without any intention to deceive plaintiff or knowledge that it would be so used, but, on the contrary, with the understanding that plaintiff's officers had full knowledge of the transaction ; that, when there is nothing in the cir- cumstances of a case indicating that one making a false statement intended that the complaining party should act on it, the party mak- ing such statement is not estopped from showing the truth. (lb.) 3 (U. S. C. C. A., 1901). Where a bank issued a certificate falsely stating that on a certain date it had on deposit a sum to the credit of a party, and it was claimed that the certificate misled the party and occasioned damage, but it appeared that such damage was much less than the amount of the certificate : Held, that the proper remedy was an action ex delicto for deceit, rather than in assumpsit to recover the amount of the certificate. (lb.) Payment when bank has notice that depositor's indorsement was procured by a trick. 4 (Mo. Appls., 1903). Where the indorsement of a certificate of deposit is procured by a trick practiced on the depositor, and the bank issuing it pays it to the indorsee with notice of the facts, the depositor or his assignee may recover from the bank the amount, of the certificate. (Currey v. Joplin Sav. Bank, 5 B. C, 740; 74 S. W. Rep., 1036.) PAYMENT OF LOST OR STOLEN CERTIFICATES OF DEPOSIT. 1 (U. S.). A certificate of deposit issued by plaintiff bank to one whoxould not write his name was stolen from the payee. The thief presented it to the defendant, who, without identification, took the certificate, with the thief's mark indorsed thereon and witnessed, collected the money of plaintiff, and paid the thief. Held, that the plaintiff in pay- ing it was entitled to assume that the payee had been properly iden- tified, and having paid the amount to the real payee was entitled to recover of defendant. (State National Bank v. Freedmen's Savings and Trust Co., 13 Fed. Cases, 324 [2 Dill, 11].) 2 (Ind.). Suit against a bank upon a stolen certificate of deposit given by the defendant to the plaintiff, reciting that he had deposited in said bank a certain number of dollars, payable to his order in current funds on the return of the certificate properly indorsed. Held, that the instrument should be regarded as the promissory note of the bank, assignable under the statute, but that it was not negotiable as an inland bill of exchange, being made payable, not in money, but " in current funds." (National State Bank of Lafayette v. Ringel, 51 Ind., 393.) 3 (Ind.). Held, therefore, that the payee could recover on said stolen cer- tificate without giving a bond to indemnify the bank against a sub- sequent claim thereunder by another person. (lb.) 4 (Ohio). When a negotiable certificate of deposit is lost before indorse- ment the finder can have no title, and the depositor may recover from the bank without executing an indemnity bond, even though the cer- tificate states that the same is payable " on return of this certificate." (Citizens' National Bank v. Brown, 45 Ohio Stat, 39.) DIGEST OP NATIONAL BANK DECISIONS. 137 DEPOSITS— Continued. SPECIAL DEPOSITS. WHAT ARE SPECIAL DEPOSITS 1 (U. S.). A special deposit is created whenever a particular thing is deliv- ered to a bank to be returned upon demand. (In re Mutual Building Soc, 2 Hughes, 374. ) 2 (U. S. C. C. A., 1898). A debtor deposited in a bank in New York the amount due from him to a creditor in Helena, Mont. The bank in New York telegraphed the Bank of Helena to pay the debt and charge to it. The Bank of Helena refused to pay in any way but by ex- change on New York, which the creditor~refused to accept, and also refused to permit the amount to be placed to his credit. The creditor then accepted a draft on the New York bank, to be a payment if honored. The Bank of Helena suspended, and the draft was not paid. Held, that the refusal of the creditor to accept the draft in payment or to permit the amount to be placed to his credit made it a special deposit subject to the law governing such deposits. (Moreland v. Brown, 86 Fed. Hep., 257.) 3. Money given to a bank for any special purpose is a special deposit. (U. S. C. C, 1894) Massey v. Fisher, G2 Fed. Rep., 958; (Kans.) Ellicott v. Barnes, 31 Kans., 170; (Mo,) Harrison v. Smith, 83 Mo., 210. 4. Every deposit of money is general unless expressly made special or deposited in some particular way. (111.) Ward v. Johnson, 95 111., 215; (La.) Matthews v. Creditors, 10 La. Ann., 342. 5 (N. Y.). The term "special deposits" includes money, securities, and other valuables delivered to banks to be specifically kept and deliv- ered. It is not confined to securities held by the banks as collateral to loans. (Pattison v. The Syracuse Nat. Bank, 80 N. Y., 82.) WHAT NOT A SPECIAL DEPOSIT. 1 (Mo., 1900). 'Where a guardian deposited a trust fund with a bank as an ordinary depositor, and it was mingled with the other funds of the bank upon the insolvency of the bank, the cestui qui trust was not entitled to a preference over other creditors merely because the bank was aware that the fund was a trust fund, but in order to entitle the cestui qui trust to a preference it must have been a special deposit creating a trust relation, and not merely the' relation of creditor and debtor. (Paul v. Draper, 3 Banking Cases, 50; 158 Mo., 197.) 2 (Nebr., 1899). The owner of a sum of money on a general deposit in a " bank at the time of its failure is not entitled to a preferred claim against the assets in the hands of its receiver. (Schmelling v. State et al., 1 Banking Cases, 670; 57 Nebr., 562.) RECEIVING SPECIAL DEPOSITS INCIDENTAL TO BANKING BUSINESS. 1 (U. S. Sup. Ct., 1879). A national banking association may receive spe- cial deposits. The provision in section 5228, Revised Statutes, authorizing an association " to deliver special deposits," implies that it may receive them as a part of its legitimate business; and this implication is as effectual as an express declaration to the same effect would have been. (First National Bank of Carlisle v. Graham. 100 U. S., 699.) 2 (U. S. Sup. Ct, 1879). It is competent for a national bank to receive special deposits or securities, either on a contract of hiring, or with- out reward, and it will be liable for a greater or less degree of neg- ligence accordingly. (lb.) 3. National banks are by implication given the power to receive special deposits. (Md.) Planters' Bank v. Farmers' Bank, 8 Gill & J., 449; (Mass.) Watson v. Phoenix Bank, 8 Met, 217. 138 DIGEST OF NATIONAL BANK DECISIONS. DEPOSITS— Continued. RECEIVING SPECIAL DEPOSITS INCIDENTAL TO BANKING BUSINESS — Continued. 4. If a bank is accustomed to receive special deposits it will be held liable for them whether it had power to receive them or not. (Ga.) Chattahoochee National Bank v. Schley, 58 Ga., 369; (Ohio) First National Bank v. Zent, 39 Ohio St., 105; (Pa.) First National Bank of Carlisle v. Graham, 97 Pa., 106. 5 (N. T.). The power to receive special deposits is incidental to the busi- ness of banking. (Pattison v. The Syracuse National Bank, 80 N. ¥., 82.) 6 (N. Y.). National banks, therefore, have power to receive special depos- its gratuitously or otherwise ; and, when received gratuitously, they are liable for their loss by gross negligence. (lb.) Contra. 7 (Vt. Sup., 1875). The taking of special deposits, to keep merely for the accommodation of the depositor, is not within the authorized busi- ness of national banks ; and the cashiers of such banks have no power to bind them on any express contract accompanying, or implied contract arising out of, such taking. (Wiley v. The First Nat. Bank of Brattleboro, 47 Vermont, 546; 1 N. B. C, 905.) SPECIAL DEPOSITS — DEGBEE OF OABE REQUIRED OF BANK. Bank required to use reasonable care. , 1 (U. S. Sup. Ct, 1891). The reasonable care, which a bailee of another's property inlyusted to him for safe-keeping without reward must take, varies with the nature, value, and situation of the property and the bearings of surrounding circumstances on its securitv. (Preston v. Prather, 137 TJ. S., 604.) 2 (U. S. Sup. Ct, 1891). Persons depositing valuable articles with banks for safe-keeping without reward have a right to expect that such measures will be taken as will ordinarily secure them from burglars outside and from thieves within ; that whenever ground for suspi- cion arises an examination will be made to see f hat they have not been abstracted or tampered with ; that competent men, both as to ability and integrity, for the discharge of these duties will be employed, and that they will be removed whenever found wanting in either of these particulars. (lb.) 3 (U. S. Sup. Ct, 1891). When bonds originally deposited with a bank for safe-keeping are by agreement of the bailor and bailee made a stand- ing security for the payment of loans to be made by the bank to the owner of the bonds, the bailee becomes bound to give such care to them as a prudent owner would extend to his own property of a similar kind. (lb.) 4 (Ala., 1897). A bank which receives certain transfers of land certificates with instructions to deliver them to a certain person upon the pay- ment of a certain sum is not a gratuitous bailee thereof, and is bound to use ordinary cafe in keeping them. (First Nat. Bank of Birming- ham v. First Nat. Bank of Newport, 22 So. Rep., 976; 116 Ala., 520.) 5 (Ohio Sup., 1883). Where a national bank has been accustomed to receive United States bonds as special deposits gratuitously, it is liable for any loss thereof occurring through the want of that degree of care which good business men would exercise in keeping property of such value. (First National Bank of Mansfield v. Zent, 39 Ohio St., 105; 3N. B. C, 698.) 6 (Ohio Sup., 1883). A demand of said bonds, and a refusal by the bank to deliver the same, with no other explanation of such refusal than the statement that the bank has no such bonds in its possession, furnish sufficient proof of loss by such negligence as will render the bank liable therefor. (lb.) Liable for gross negligence, ichat is. 7 (U. S. Sup. Ct, 1879). A national bank received for safe-keeping Gov- ernment bonds belonging to G. From time to time the cashier of the DIGEST OF NATIONAL BANK DECISIONS. 139 DEPOSITS— Continued. SPECIAL DEPOSITS — DEGBEE OP CARE REQUIRED OP BANK Continued. bank cut off the coupons and collected the same, placing the amount to the credit of G., paying it to her when demanded. For this service the bank received no compensation. Through gross negli- gence of the bank or its officers the bonds were lost. Held, that the bank was liable. (First National Bank of Carlisle v. Graham, 100 U. S., 699; 2 N. B. C, 64.) 8 (U. S. Sup. Ct., 1891). Gratuitous bailees of another's property are not responsible for its loss unless guilty of gross negligence in its keep- ing ; and whether that negligence existed is a question of fact for the jury to determine or to be determined by the court where a jury is waived. (Preston v. Prather, 13T U. S., 604.) 9 (U. S. Sup. Ct, 1891). In this case persons engaged in business as bank- ers received for safe-keeping a parcel containing bonds, which was put in their vaults. They were notified that their assistant cashier, , who had free access to the vaults where the bonds were deposited, and who was a person of scant means, was engaged in speculations in stocks. They made no examination as to the securities deposited with them, and did not remove the cashier. He stole the bonds so deposited. Held, that the bankers were guilty of gross negligence and were liable to the owner of the bonds for their value at the time they were stolen. (lb.) 10. A national bank is liable for damages occasioned by the loss through gross negligence of a special deposit made in it with knowledge and acquiescence of its officers and directors. (U. S. Sup. Ct., 1879.) First National Bank of Carlisle v. Graham, 100 U. S., 099 ; (Ga.) The Chattahoochee National Bank v. Schley, 58 Ga., 369; 1 N. B. C, 379 ; (N. Y.) Pattison v. The Syracuse National Bank, 80 N. T., 82. 11 (U. S. Sup. Ct, 1886). Where a national bank was broken into by bur- glars, and property belonging to it and to others was taken there- from, the bank may take measures to recover its own ; and it may lawfully undertake to act also for others thus jointly concerned with itself ; and want of proper diligence, skill, and care in the per- formance of such an undertaking would render it liable to respond in damage for failure. (Wylie v. Northampton National Bank, 119 U. S., 361; 3 N. B. C, 188.) 12 (Ga., 1893). Where the speculations in stocks and bonds on margins of a bank cashier, of which the president had knowledge, were such that such president must have known of the cashier's dishonesty, the bank is liable for bonds deposited with it as a gratuitous bailee, which the cashier converted to his own use. (Merchants' National Bank of Savannah v. Guilmartin (Ga.), 21 S. B., 55; 93 Ga., 503.) 13 (Ga., 1895). In an action against a bank to recover the value of a special deposit embezzled by the cashier, diligence in the keeping of the deposit was not shown by evidence that under similar circumstances defendant intrusted its cashier with like property of its own. (Mer- chants' National Bank v. Carhart (Ga.), 22 S. E., 628; 95 Ga., 394.) 14 (Mass.). An action against a bank for the conversion or the loss by gross negligence of valuable articles deposited with it as a bailee without hire can not be sustained on evidence from which the inference that the articles were stolen by servants of the bank, selected and con- tinued in its employment without negligence, who in the proper course of business had access to them, is equally deducible with any other inference. (Smith v. First National Bank of Westfleld, 99 Mass., 605.) 15 (N. J. Errors and Appeals, 1903). In a suit against a bank by a gratuitous bailee to recover the value of securities left with it, and which have been stolen by one of its employees, a want of ordinary care on the part of the bank not appearing, the bank is not liable for the loss of the plaintiff. (Smith v. Elizabethport Banking Co., 5 B. C, 755; 55 Atl. Rep,, 248.) 140 DIGEST OF NATIONAL BANK DECISIONS. DEPOSITS— Continued. SPECIAL DEPOSITS — DEGBEE OF CARE REQUIRED OE BANE Continued. 16 (N. Y. Appls., 1875). A gratuitous bailee is only liable for gross negli- gence ; he is not bound to any special or extraordinary measures to protect the property, and the negligence with which he can be charged, or which is the proper subject of evident?, is only that which is connected with and directly contributes to the loss. (First Nat. Bank of Lyons v. Ocean Nat. Bank, 60 N. Y., 278; 1 N. B. C, 728.) 17 (Pa. Sup., 1879). A national bank, receiving a special deposit for safe- keeping, without reward, is liable only for gross negligence; the burden of proof is on the plaintiff, and gross negligence is not the omission of that care which every attentive and diligent person takes of his own goods, but the omission of that care which the most inattentive takes. (First National Bank of Allentown v. Rex, 89 Pa. St., 308; 2 N. B. C, 373.) 18 (Pa. Sup., 1874). In an action to recover of a bank the value of the bonds deposited for safe-keeping by plaintiff and stolen by the teller of the bank, held, that the bank being a "gratuitous bailee was not liable, although an examination of the teller's accounts, after the theft, proved them to have been falsely kept, and showed that he had been abstracting funds for two years, and although it was known to the president of the bank that he had dealt once or twice in stocks. Mistaken confidence is not a ground of liability in such cases. ( Scott v. Nat. Bank of Chester Valley, 1 N. B. C, 864; 72 Pa. St., 471.) 19 (Pa. Sup., 1876). Whether or not a national bank has the power to take bonds, etc., on deposit for safe-keeping, it is not liable for the loss of such property so taken without compensation, unless it has been guilty of gross negligence contributing to the loss. (De Haven v. Kensington Nat. Bank, 81 Pa. St., 95; IN. B. C, 882.) 20 (Pa. Sup., 1875). In an action against a national bank to recover bonds deposited with it for safe-keeping, without compensation, and which the bank alleged were stolen from its vaults, held, (1) that the bank was liable only for gross negligence; (2) that its failure to give prompt notice of the robbery was a question for the jury as bearing on the question of negligence, and (3) that while the voluntary act of the cashier in receiving the funds would not subject the bank to liability, yet if the deposit was known to the directors, and they acquiesced in its retention, a contract relation was created by which the defendants would be held bound. (First National Bank of Car- lisle v. Graham, 79 Pa. St., 106; 1 N. B. C, 875.) 21 (Vt). The plaintiff delivered to the defendant bank $4,000 of United States bonds and received this writing : " Received of J. D. Whitney four thousand dollars, for safe-keeping as a special deposit. S. SI. Waite, C." Held, that it was a naked deposit without reward; that the defendant would not be liable for the robbery or larceny of the bonds, unless there was complicity or bad faith ; that it was answer- able only for fraud or for gross negligence; that the law demands good faith and the same care of the plaintiff's bonds as defendant took of its own of like character. (Whitney v. The First National Bank of Brattleboro, 55 Vt., 154.) 22 (Tex., 1895). A bank is liable to a special depositor for the loss of his deposit through its diversion by the bank's officers. (El Paso National Bank v. Fuchs, Tex. Civ. App., 34 S. W., 203.) AUTHORITY OP OFFICERS TO BIND BANK. 1 (Ga. Sup., 1877). A national bank which habitually receives special de- posits for safe-keeping as matter of accommodation is bound by the act of its cashier in receiving on special deposit a package of stocks and bonds. The bank, though acting without reward, becomes a bailee and is responsible for gross negligence. (The Chattahoo- chee National Bank v. Schley, 58 Georgia, 369; 1 N. B. C, 379.) DIGEST OE NATIONAL BANK DECISIONS. 141 DEPOSITS— Continued. AUTHOBITY OF OFFICEKS TO BIND BANK Continued. 2 (N. Y. Appls., 1875). A cashier or other executive officer of a national bank has not, in the absence of special authority from the directors or of a usage or practice so to do, power to receive, on behalf of the bank, property for safe-keeping. Quaere as to the power of a national bank to become a bailee of property either gratuitously or for hire. (First Nat. Bank of Lyons v. Ocean Nat. Bank, 60 N. Y., 278; 1 N. B. C, 728.) 3 (N. Y. Appls., 1875). In an action against a bank for the loss of property which it had received as gratuitous bailee, held, that the declara- tions and admissions of the president, tending to show negligence on his part, made after the transaction, and when not acting within the limit of his authority, were not binding upon the bank. (lb.) MISCELLANEOUS. Withdrawal of special deposit, authority for. 1 (Ga. Sup., 1877). If a person withdraws from a bank a special deposit. in pursuance of authority conferred upon him by the depositor, the bank is discharged, though at the time its officers were not aware of his authority. (Chattahoochee Nat. Bank v. Schley, 58 Ga., 369; 1 N. B. C, 379.) 2 (Ga. Sup., 1877). Written authority indorsed on a certificate of deposit of stocks and bonds to pay a certain person dividends or coupons is no authority for surrendering the stocks and bonds themselves. (lb.) Conversion of special deposit, measure of damages. 3 (Mo. Sup., 1870). In an action of trover against a bank, after its reor- ganization as a national bank, for the value of certain special depos- its in coin made prior thereto, Held, that the measure of damage was the value of the coin at the date of its conversion, with interest thereon. (Coffey v. The National Bank of Missouri, 46 Mo., 140; 1 N. B. C, 644.) 4 (Pa. Sup., 1879). It seems when the president of a bank, for his own private purposes, hypothecates bonds especially deposited with the bank for gratuitous safe-keeping, and they are thereby lost, the bank is not liable, unless the bank officers knew, and assented, or used no effort to recover them. (First Nat. Bank of Allentown v. Rex, 89 Penn. St., 308; 2 N. B. C, 373.) When bank must deliver on demmnd. 5 (Iowa). And where an association receives United States bonds of one class for the purpose of having them converted into bonds of another class, it is not a mere mandatary, but is responsible for the failure to deliver the bonds on demand. (Leach v. Hale, 31 Iowa, 69.) When special deposit not a payment to bank. 6 (U. S. C. 0, 1888). An insolvent was cashier of a bank to which he was largely indebted, and put certain of his own securities in a package, and placed it with similar bundles left with the bank as special deposits for safe-keeping. It was insolvent's intention in this man- ner to pay certain drafts securing his indebteduess to the bank, and these drafts were entered on the books as paid, and the item of bonds of the bank was increased to the extent of the value of these securities. The securities were not indorsed by insolvent, and the other officers of the bank had no knowledge of the transactions. Held, that no property in the securities was transferred to the bank. (Witters v. Sowles et al., 33 Fed. Rep., 542.) What constitutes an equitable assignment. 7 (U. S. CO, 1893). To constitute an equitable assignment of property there must be an appropriation or separation, and the mere intent to appropriate is not sufficient. (Putnam Savings Bank v. Beal, 54 Fed. Rep., 577.) 142 DIGEST OF NATIONAL BANK DECISIONS. DEPOSITS— Continued. miscellaneous — continued. 8 (U. S. C. C, 1893). Plaintiff bought of a bank $25,000 of five-year city of Duluth bonds and paid the $25,000. The bank, not having in its pos- session enough of the five-year bonds, proposed to set aside $17,000 five-year bonds and $8,000 one-year bonds, and to exchange the latter for five-year bonds as soon as received. A clerk was directed to make a package of such bonds, and mark it with plantiff's name, and set it aside as his property, and the officers of the bank supposed this had been done. When defendant, as receiver, took possession of the bank, there were found two packages of bonds. The first package contained $18,500 five-year bonds, with a slip of paper on which was written a memorandum, " Property of Putnam Ct. Sav. Bank ; $6,500 more due them five-year bonds." The second package contained bonds amount- ing to $23,611.50, of which three, amounting to $10,255.90, had one year to run ; six, amounting to $2,280.81, had five years to run ; the remaining bonds running two, three, and four years. With this pack- age was a slip of paper on which was written a memorandum of the date, amount of bonds, and the time when due, and also the words, " 6,500 due Putnam." Held, that these facts did not show an equi- table assignment by the bank to the plaintiff of the remaining $6,500 worth of bonds. (lb.) * 9 (Colo., 1896). An order to a bank to pay to persons named a specified sum, out of a special fund, belonging to the drawer, in the hands of such bank, constitutes an assignment of such fund to the persons named in the order, to the amount specified, whether the bank accepts the order or not. (Central National Bank of Pueblo v. Spratlen, Colo. App., 43 P., 1048; 7 Colo. App., 430.) Officer's suit against receiver for special deposit. 10 (U. S. C. C. A., 1892). A national bank president, against whom an indict- ment was pending for violating the banking laws, brought a bill against the receiver of the bank to obtain possession of a trunk alleged to contain privnte papers. To this proceeding the United States district attorney was made a party defendant on his own peti- tion, for the purpose of claiming the papers, in order that they might be laid before the grand jury. After hearing, a decree was made ap- pointing a special master to make a private examination of the trunk, with directions to turn over to the complainant any papers belonging- to him, and to the receiver such papers as belonged to the bank and were not material to the prosecution against the president, and to reserve for further consideration such as concerned bank transactions and were material to the prosecution. Held, that in so far as the decree directed papers to be turned over to the president and the receiver, it was final and appealable, since such papers might thus pass entirely beyond control of the other party claiming them. (Potter v. Beal et al., 50 Fed. Rep., 860.) 11 (U. S. C. C. A., 1892). It was improper to make the district attorney a party defendant for the purpose of procuring the papers to be laid before the grand jury. The proper course was for him to obtain a subpoena duces tecum from the court in which the investigation was pending, and then to make summary application to the court which had impounded the papers. (lb.) 12 (U. S. C. C. A., 1892). Under the circumstances the order made by the court for an examination of the papers by a special master was in violation of the fundamental and constitutional rights of the litigants as to the method of trial. (lb.) 13 (U. S. C. C. A., 1892). It appearing that before the bill was brought the trunk had been opened by consent of the president of the bank and the receiver and certain papers taken out in the presence of third persons, one of whom thereby obtained some knowledge of its contents, it was in the power of the court to ascertain by private examination the nature of the evidence thus to be had, and if it proved prima facie admissible, to allow public testimony thereof to be given. (lb.) DIGEST OF NATIONAL BANK DECISIONS. 143 DEPOSITS— Continued. MiscELLANEOus^continued. Liability when special deposit is transferred to branch bank. 14 (Tex., 1896). Where the president of a bank transfers a special deposit to a branch bank without authority of the depositor there is no implied promise by such president to pay the depositor the value of it in case it is lost by failure of such branch bank. (El Paso National Bank v. Fuchs, Tex. Sup., 34 S. W„ 206 ; 89 Tex., 197.) Liability for deception of depositor of special deposit. 15 (Pa., 1880). Plaintiff, who was a depositor in a national bank, requested a certificate of deposit drawing interest for a portion of his deposit. The teller of the bank gave him a certificate which purported to be issued by B. & Co., a private banking firm, and informed him in the presence of. the 'cashier of the bank that this was the bank's certifi- cate, upon which assurance plaintiff accepted it. The members of the firm were the managing officers of the bank, but had » separate place of business in the same town. Held, that the bank was liable to the plaintiff for the amount of his deposit. (Steckel v. First National Bank of Allentown, 93 Penn. St., 376 ; 3 N. B. C, 719.) Mistake in duplicate receipt for special deposit. 16 (U. S. C. C. A.. 1897). A bank, on receiving certain notes as a special deposit, issued a certificate for the amount thereof, made out on a printed form, from which the words " in current funds " were erased and " in certain notes " substituted. The certificate was marked " Special deposit." Having been transferred, this certificate was sent by the holder to the bank for payment. The notes had not then been collected, and the teller was directed by the cashier to return the cer- tificate ; but as the signature was torn, he was instructed to prepare and transmit a duplicate certificate. In doing so he carelessly omitted to change the printed form by erasing " in current funds " and substituting " in certain notes." Held, that there was no ground for a claim that the second certificate was given in payment for the first ; that it was only a substitute for it, and that the receiver of the bank was only required to surrender to the holder the notes consti- tuting the special deposit, for which the original was issued. (74 Fed. Rep., 1000, afnrined. Niblack r. Cosier, 80 Fed. Rep., 596.) 17 (U. S. C. C. A., 1897). Knowledge by a member of a firm of the true con- sideration of a certificate of deposit, which the firm discounted at a bank in payment of individual notes of one of its members, and which had been negligently altered in making out a duplicate certificate, _ Held, to be imputable to the bank, where the other member of the firm was its president, and, as such, acted as the sole representative of the bank in accepting the certificate. (74 Fed. Rep., 1000, affirmed, lb.) Deposit for payment on condition, recall. 18 (Cal., 1901). Where a depositor delivered his certificate to the bank, ' indorsed to the sheriff, with directions to pay him the money when- ever he should defrver to the bank for deposit a certificate of redemp- tion of certain lands, and the sheriff never complied with the condi- tion or made, any claim to the money or certificate, the depositor may recall his deposit, and payment of the money to him by the bank discharges it from all liability. (McGorray v. Stockton Sav- ings and Loan Soc. et al., 63 Pac. Rep., 479 ; 3 Banking Cases, 335 ; 131 Cal,, 321.) 19 (Mont, 1901). Plaintiffs agreed to sell a mine for M., and the deeds were placed in escrow in defendant bank until payment of $47,000 as a balance of the purchase price. M. sold the mine to Scottish pur- chasers, and the seventh paragraph of the contract provided that the £20,000 should be deposited with the defendant bank to pay plaintiffs the balance of the purchase price in full and other charges against 144 DIGEST OF NATIONAL BANK DECISIONS. DEPOSITS— Continued. miscellaneous — continued. the mine, and that the amount and a copy of the contract were for- warded to the bank, and the cashier's attention was called to the seventh paragraph. Plaintiffs, without knowledge of such contract, agreed to deliver the deed on receipt of $22,000 in cash out of the first payment by the foreign purchasers, and to accept M.'s note for the balance until the second payment. Defendant, without inform- ing plaintiffs of the provisions of the contract between M. and the foreign purchasers, paid plaintiffs $22,000. The foreign purchasers never made any further payments. Held, that plaintiffs were not entitled to recover the balance of the purchase price from defendant as money had and received. (McDonald v. American Nat. Bank; Cooney v. Same, 65 Pac. Rep., 896; 3 Banking Cases, 616; 25 Mon., 456.) ACTIONS BY DEPOSITORS. IN GENERAL. Action on special deposit, memorandum. 1 (111.). An -instrument headed by the name of a bank and a list of its officers, reciting that plaintiff had left a sum of money to be loaned for his use, " payable not to exceed six months, on return of this memorandum," and signed with the name of the person represented at the top of the paper to be the cashier, the signature being followed by a scroll composed of the letters " chr.," shows prima facie a cause of action against the bank for a return of the money loaned. (Squires v. First National Bank, 59" 111. App., 134.) When depositor's action barred, ratification. 2 (Wis., 1892). An action ex contractu brought by an administrator to recover money claimed to have been wrongfully paid to defendant by a bank constitutes an election and ratification of the payment and precludes a subsequent action against the bank on the same claim. (Crook v. First National Bank of Baraboo, 52 N. W., 1131; 83 Wis.,. 31.) Action by assignee of certificate of deposit, evidence. 3 (Utah, 1894). In an action to recover on certificates of deposit alleged to have been assigned plaintiff by deceased, where the complainant alleges and the assignment recites a consideration of $1,000, and the assignment is attacked as fraudulent, testimony that deceased said she intended plaintiff to have all her property when she died is incompetent. ' (Turner v. Utah Title Insurance & Trust Co., Utah, 37 P., 91; Same v. Wells, Fargo, & Co., ib., 94; Same v. Union National Bank, ib., 95; 10 Utah, 61.) Action for special deposit, parties. 4 (Cal., 1894). In an action to recover money deposited by plaintiff with defendant under an agreement that it is to be paid to a thisd person on condition that the latter deliver a deed to plaintiff within a cer- tain time, such person is not a necessary party. (Ulrich v. Santa Rosa National Bank, Cal.. 37 P., 500; 103 Cal., XVIII.) Conflicting claims of depositors, interpleader. 5 (U. S. C. O, 1880). When conflicting claims are filed by different persons against a national bank for a deposit, the bank may compel them to interplead and settle the controversy between themselves. (Foss v. First Nat. Bank of Denver, 3 Fed. Rep., 185.) Tender of receipt or check not condition precedent to a cause of action. 6 (Iowa, 1901). In an action to recover money deposited in defendant bank to plaintiff's credit, and which he had not received because of mis- take in settlement, the tender of a receipt or check is not a condition precedent to a cause of action. (Cole p. Charles City Nat Bank, 87 N. W. Rep., 671 ; 4 Banking Cases, 5 ; 114 Iowa, 632.) DIGEST OF NATIONAL BANK DECISIONS. 145 DEPOSITS— Continued. LIMITATIONS UPON ACTIONS FOR DEPOSITS. 1 (U. S. C. C, 1886). A certificate of deposit, payable to the order of the depositor on the return of the certificate, is not due or suable until demand made and return of the certificate. The statute of limita- tions is not set in motion against a certificate of deposit by the ap- pointment of a receiver for the bank \vhich issued it. (Riddle v. First National Bank of Butler, Pa., 27 Fed. Rep., 503.) 2 (Cal., 1884). In an action brought to recover money deposited in any bank there is in this State no limitation. (Green v. Odd Fellows' Savings and Commercial Bank, 65 Cal., 71.) 3 (111., 1888). Entry in a pass book is evidence of indebtedness in writing, and a suit is not barred until ten years after the cause of action accrued. (Schalucky v. Field, 124 III., 617.) 4 (Iowa, 1900). A demand certificate of deposit, in the usual form, is in effect a promissory note, and the statute of limitations commences to run at its date. The statute of limitations running against a cer- tificate of deposit is not interrupted by the death of the depositor. The fact that the bank writes to the depositor denying liability will not toll the statute of limitations running against his certificate of deposit, where evidence of the bank's liability exists in the bank books. (Mereness v. First National Bank of Charles City, 2 Banking Cases, 623 ; see note at end of case ; 112 Iowa, 11.) 5 (Md., 1838). The statute of limitations begins to run upon deposits from the date the depositor learns of the bank's suspension. (Union Bank v. Planters' Bank, 9 Gill & J., 439.) 6 (N. H.). The statute begins to run from the date of the deposit. (Locke v. First National Bank, 65 X. H., 670. ) 7 (N. Mex., 1901). A certificate of deposit, like a deposit credited in a pass book, represents money actually left with the bank for safe keeping. It is to be retained by the bank until demanded by the depositor, and the statute of limitations does not begin to run against.it until presentation and demand of payment. (Bank of Commerce v. Har- rison, 66 Pac. Rep., 460.) 8. The statute of limitations begins to run upon deposits, whether payable on demand or not, from the date of the demand. (Md.) Falls Point Saving Institution v. Weedon, 18 Md., 320; (N. Y.) Howell v. Adams, 68 N. Y., 314. 9 (N. Y. App., 1886). Whenever a demand for a deposit is made by check or otherwise, the statute of limitations begins to run as against the amount demanded. (Viets v. Union National Bank of Troy, 101 N. Y., 563.) 10 (Pa. Sup. Ct, 1884). A certificate of deposit payable to the order of Lhe depositor on the return of the certificate is not due until demand is made, and until that time the statute will not begin to ruu. (McGough et al. v. Jamison, 107 Pa., 336.) 11 (Pa., 1892). A bank delivered a statement of account to a depositor.. Af- ter acquiescing in the correctness of the account for six years, the depositor claimed the account to have been wrongly stated. Held, that he was barred by the statute. (In re Penn Bank, 152 Pa., 65.) DEPUTY COMPTROLLER. 1 (U. S. Sup. Ct., 1890). A certificate signed by the Deputy Comptroller of the Currency as "Acting Comptroller of the Currency " is a sufficient certificate by the Comptroller of the Currency within the requirements of Revised Statutes, par. 5154. (Keyser v. Hitz, 133 U. S., 138.) 2 (U. S. C. C, 1891). The Deputy Comptroller of the Currency being author-. ized by law to act for the Comptroller in certain contingencies, the courts will presume, in the absence of any showing to the contrary, that the Deputy, in acting for the Comptroller in any particular instance, has acted lawfully. (Young v. Weinp et al., 46 Fed, Rep., 354.) 4049-05 10 146 DIGEST OF NATIONAL BANK DECISIONS. DIRECTORS. (See Officebs.) DISTRICT ATTORNEY. . 1 (U. S. Sup. Ct, 1869). The fifty-sixth (now one hundred and fifty-third) section of the act providing that suits under it in which officers of the United States are parties shall l/e conducted by the district attorney of the district is directory only, and can not be set up by stockholders to defeat a suit brought against 'them by a receiver, under the act, which receiver, with the approval of the Treasury Department, and after the matter had been submitted to the Solicitor of the Treasury, had employed private counsel, by whom alone suit was conducted. (Kennedy v. Gibson, 8 Wall., 498.) 2 (U. S. Sup. Ct, 1893). District attorney can not recover compensation for services in conducting suit arising out of the provisions of the national banking law in which the United States or any of its agents or officers are parties. (Gibson v. Peters, Receiver, 150 U. S., 342.) 3 (U. S. Sup. Ct., 1893). The expenses of a receivership can not be held to include compensation of district attorney for conducting a suit in which the receiver is party, and he can not receive any compensation for services so rendered or offered to be rendered. (lb.) 4 (U, S. C. C, 1891). For services performed by the district attorney in bringing a suit against a national bank and obtaining a forfeiture of its charter, he is not entitled to more than $10, the fees prescribed by section 824, there being no other law in the United States giving a compensation to a district attorney for such services. (Bashaw v. United States, 47 Fed. Rep., 40.) District attorney, when conducts actions. 5 (U. S. Sup. Ct., 1871). Suits and proceedings under the act in which the United States or their officers or agents are parties, whether com- menced before or after the appointment of a receiver, are to be conducted by the district attorney, under the direction of the Solicitor of the Treasury, and from appointment of receiver directors' author- ity ceases. (First" National Bank of Bethel v. National Pahquioque Bank, 14 Wall., 383.) DIVIDENDS. Cboss befeeences : Insolvency and receivers — Page. Suits in equity to recover dividends 196 Set-off judgment against dividends 197 Basis on which dividends are paid to creditor secured by collateral. 199 Two judgments and dividends on same debt not allowed 199 Lien — Lien on dividends for shareholder's debt to bank 258 Liquidation — Who entitled to dividends during liquidation 268 Offset- Dividends may be set off against shareholder's debt to bank 388 Powers — Bank has a right to accumulate a surplus before declaring divi- dends __ 417 Preferences — Dividends when part of claim is secured by mortgage 439 DRAFTS. (See Checks.) ENFORCEMENT OF PAYMENT OF CAPITAL STOCK. (See Capital Stock.) DIGEST OF NATIONAL BANK DECISIONS. 147 ESTOPPEL. Cboss references : Capital stock — Page. Holder of increased stock, when estopped to claim increase illegal. . 38 Lien — When national bank estopped from claiming lien 261 Loans — . When bank estopped from claiming that cashier acted beyond his authority . _. , 272 Officers — When bank estopped by acts of its officers. ... 330 Organization— Estoppel as to validity of 400 Reorganization as national banks under another name — Rights of stockholders 405 Who estopped to deny incorporation of bank. 1. A shareholder who has held himself out to the world as such is estopped to deny that the association was legally incorporated. (U. S. Sup. Ct, 1876) Casey c. Galli, 94 U. S., G73 ; (111.) Wheelock v. Kost, 77 111., 296. 2 (U. S. Sup. Ct, 1876). A shareholder against whom suit is brought to recover the assessment made upon him by the Comptroller will not he permitted to deny the existence of the association, or that it was legally incorporated. (Casey v. Galli, 94 U. S., 673.) 3 (Ala.). A stockholder of a private corporation, when sued by its credit- ors, is estopped from denying the legal existence of the corporation, or insisting that its charter has been forfeited by noncompliance with statutory provisions for which a forfeiture might be judicially declared. (National Commercial Bank v. McDonnell, 92 Ala., 387.) 4 (Ind.). After a party has recovered judgment against a corporation, as such, and obtained the appointment of a receiver therefor, he can not in the same suit deny its corporate entity and seek to hold the stock- holders thereof liable as partners. (First National Bank of Craw- fordsville r. Dovetail Body & Gear Co. (Ind. Sup.), 42 N. E., 924; 143 Ind., 534.) 5 (Ky., 1870). The organization of a national bank under the national banking act may be put in issue by a party who has not estopped him- self. But a party who has accepted as payee a promissory note pay- able at a banking institution which the parties to the note style a national bank, and has sold and transferred the note to such bank- ing institution, can not be allowed to raise that issue by merely aver- ring want of knowledge or information sufficient to form a belief , as to whether the institution is a body corporate, etc. (Huffaker v. National Bank of Monticello, 12 Bush, 287 ; 1 N. B. C„ 504. ) 6 (N. Y.). Where one sued by a national bank is accustomed to deal with it as such and does so deal with it in respect to the matter in suit, he is estopped from denying its incorporation. (National Bank of Fairhaven v. The Phoenix Warehousing Company, 6 Hun., 71.) When director not estopped. 7 (Mo., 1900). Bank directors, in an action against them under section 2760, Revised Statutes, 1889, of Missouri, are not estopped to plead ignorance of its conditions. (Utley v. Hill et al., 2 Banking Cases, 371.) 8 (Ohio). A director is not, by reason of his position, estopped from set- * ting up the defense of usury in an action brought against him by the association. (Bank of Cadiz v. Slemons, 34 Ohio St, 142.) 148 DIGEST OF NATIONAL, BANK DECISIONS. ESTOPPEL— Continued. When bank estopped by act of its officers. 9 (U. S. C. C, 1893). An officer of a bank borrowed money for his indi- vidual benefit, but in the name of the bank and upon a false certifi- cate of deposit and collateral belonging to the bank. Held, that his bank was estopped to deny the loan and is liable therefor, as the lender dealt with him solely in his official capacity. (Stewart v. Armstrong, 56 Fed. Rep., 167.) . 10 (U. S. C. 0., 1893). Vice-president of bank, also manager of a commercial house, substituted as collateral notes to order of his house, and in- dorsed by them without consideration. Held, that, as against holders of collateral, the house was estopped to deny that these notes were properly pledged as security for a loan to his bank. ( lb. ) 11 (U. S. C. C, 1893). The estoppel upon his bank exists only in favor' of lender. Hence, his house has no remedy against his bank for any liability enforced by the lender on account of its indorsed notes so pledged. (lb.) 12 (U. S. C. C. A., 1897). The cashier of a bank does not act as its agent or representative in answering an inquiry addressed to him by another bank as to the business standing of a third person ; and the bank is not bound or estopped by statements so made by him, his act being one not relating to the business of his bank, but simply one of cus- tomary courtesy rendered without consideration. (First National Bank of Manistee, Mich., et al. v. Marshal and Ilsley Bank of Mil- waukee, Wis., 83 Fed. Rep., 725.) 13 (U. S. C. C. A., 1897). The failure of the officers of a bank, in answering a general inquiry from another bank as to the character and standing of a customer, to disclose the fact that the customer was indebted to their bank, and that it held liens on certain of his property, will not estop it, to assert such liens as against a mortgage subsequently taken by the inquiring bank, in the absence of any fraudulent intent, (lb.) 14 (Ky. App., 1887). Where the cashier of a bank purchases bonds with- out authority of the bank, afterwards appropriates them to his own use, it is estopped to deny the authority of the cashier. (Logan County Nat. Bank v. Townsend, 3 N. B. C, 44S.) 15 (Mich., 1895). Where the cashier, intrusted by its directors with its en- tire management, has been accustomed in having paper rediscounted to guarantee its payment, the bank will be estopped from denying his authority to so guarantee it. (First National Bank of Kala- mazoo v. Stone, Mich., 64 N. W., 487 ; 106 Mich., 367.) 16 (N. H.). If, upon inquiry by the surety, the cashier, knowing that he is a surety, inform him that the note is paid, intending that he should rely upon his statement, and the surety does so, and in consequence changes his position by giving up securities, or indorsing other notes for the principal, or the like, the bank will be estopped to deny that such note is paid. (Cochecho Rational Bank v. Haskell et al., 51 N. H., 116.)' 17 (Utah, 1897). Where the manager of a bank, with the knowledge of its directors and without objection, continually exercises the authority to discharge guarantors of notes and accept collaterals in lieu thereof, the bank is estopped, after third persons have in good faith acted on such appearances, to deny his authority. (Armstrong v. Cache Valley Land and Canal Co., 48 Pac. Rep., 690; 14 Utah, 450.) When ratification amounts to an estoppel. 18 (Nebr., 1896). In order to constitute a ratification of an unauthorized act, the act relied on as such ratification must be performed with knowledge of the material facts in the absence of circumstances cre- ating an equitable estoppel. (Columbia National Bank of Lincoln v. Rice, Nebr., 67 N. W., 165 ; 48 Nebr., 428.) Estoppel by representations to obtain, credit. 19 (Mich., 1895). A bank which received a letter from another bank, asking in regard to the character and financial standing of a certain person, DIGEST OP NATIONAL BANK DECISIONS. 149 ESTOPPEL— Continued. without any intimation as to the making of a loan, is not estopped, as against a loan subsequently made by the inquiring bank, to claim a chattel-mortgage lien on the man's property, because in its answer it merely stated the man's character and assets above his indebted- ness, without stating that he was indebted to it. (First National Bank of Manistee v. Marshall & Ilsley Bank, Mich., 65 N. W., fi04; 108 Mich., 114.) 20 (Mich., 1895). Statements of a mortgagor, made for the purpose of obtaining credit for a corporation of which he was a member, that he had sold to it the mortgaged property, would not conclude the mortgagee unless it had knowledge thereof at the time and kept silent. (lb.) 21 (Tex. Civ. Appls., 1892). A partner who is made known by his fellow- partner to a third person, in order to obtain credit, can not after- wards claim to be a dormant partner as to such person, so as to relieve him from the necessity of giving notice upon retiring from the partnership. (Milmo National Bank v. Bergstrom, 20 S. W., 836; 1 Tex. Civ. App., 151.) Estoppel in favor of innocent purchaser. 22 (Ala., 1894). The maker of a note payable at Tuscaloosa Pence Factory is estopped in a suit thereon by an innocent purchaser for value to deny the existence of such a place. (Brown v. First National Bank of Tuscaloosa, 15 So. Rep., 435; 103 Ala., 123.) 23 (S. Dak., 1902). One who has been defrauded out of a certificate of de- posit by a gambler is not estopped from denying the title of the in- dorsee of such gambler (the indorsee not being a bona fide purchaser) by the fact that he was present when the transfer was made and made no objections ; his presence being merely an incident to the scheme to defraud. (Dunn v. Nat. Bank of Canton, 4 Banking Cases, 522.) 24 (Tex., 1896). The holder of part of the bonds of an insolvent corporation is not estopped to set up the invalidity or want of consideration of other- of the bonds not in the hands of innocent holders. (Farmers & Merchants' National Bank v. Waco Electric Railway & Light Co. (Tex. Civ. App.), 36 S. W., 131; Metropolitan Trust Co. v. Farmers & Merchants' National Bank, ib.) When wife estopped to plead her suretyship. 25 (N. J., 1893). A wife, jointly with another person, signed a note to her husband's order, and delivered it to him to have discounted, and with the proceeds pay a debt of his. The husband applied to a bank offi- cial, who had notice that the note was made without consideration, but did not have notice that the proceeds were to be applied for the husband's benefit, and the official offered to discount it by a check to the wife's order, which the husband accepted, and afterwards, pro- cured his wife to indorse and deliver to him, she knowing that it was the proceeds of her note. Held, that the wife was estopped from set- ting up against the bank that she was a mere surety on the note. (Hackettstowng National Bank v. Ming (N. J. Ch.), 27 A., 920; 52 N. J. Eq., 156.) 26 (N. J., 1893). A bank recovered judgment at law by default on a note made by a wife to the order of her husband, and subsequently the wife obtained an order opening the judgment, with unrestricted leave to plead. She pleaded that she occupied the position of surety on the note and was a married woman, and also that it was a contract made with her husband and therefore void at law. The bank then filed a bill in equity for an injunction against setting up these de- fenses at law. On the trial of the issues thus raised the defense of suretyship was not sustained. Held, that the bank was in effect compelled to come into equity by defendant pleading that the contract was between husband and wife, and that, having established its case there on the merits, defendant should not be permitted to litigate it agajn in the law courts. (Ib.) 150 DIGEST OP NATIONAL BANK DECISIONS. ESTOPPEL— Continued. Estoppel by silence and delay. , 27 (U. S. Sup. Ct, 1899). Less than two years having elapsed from the pay- ment of the first dividend to the filing of this bill, and the other creditors of the bank not having been harmed by the delay, no pre- sumption of laches is raised, nor can an estoppel properly be held to have arisen. (Merrill v. National Bank of Jacksonville, 173 T T . S., 131.) 28 (U. S. C. C. A., 1900). Plaintiff sued the receiver of a national- bank for money loaned the bank, for which bank stock had been given as collateral security. The receiver defended on the theory that the transaction was a purchase of the stock. At the trial, plaintiff and another testified positively that plaintiff contracted for the loan with the bank cashier on the terms claimed by plaintiff. The receiver's evidence showed that after his appointment he furnished plaintiff, at her request, with a list of stockholders, in which her own n'ame ap- peared, and that she did not disclaim being a stockholder, and did not begin suit for two years thereafter. Certain entries on the bank's books showed plaintiff to be a >stockho!der, but she had not receipted for the certificates she held on the bank's books, and it did not appear that she knew of the entries. In the letters to the Comp- troller and to defendant, written after the bank's insolvency, plaintiff, who was inexperienced in business matters, referred to herself as a stockholder. Held, that the evidence did not estop plaintiff from showing that she was not a stockholder, and that that issue was prop- erly submitted to the jury. (American Nat. Bank v. Williams, 101 Fed. Rep., 943.) 29 (Tex., 1898). Defendant bank, upon being instructed by the cashier of plaintiff bank, applied the latter's deposit to the payment of the pri- vate debt of the cashier, and transmitted him the note and collateral therefor. Plaintiff did not learn of this for several months, at which time the cashier, who was not then connected with plaintiff, was hopelessly insolvent, and the collateral, even if he still had it, was worthless. Held, that plaintiff was not estopped by failure to repu- diate the action of the cashier after discovering it. (Iron City Nat. Bank v. Fifth Nat. Bank, 47 S. W. Rep., 533; 92 Tex., 436.) / When receiver not estopped to question jurisdiction. 30 (TJ. S. C. C, 1873). An action having been commenced in a State court against "an insolvent national bank, the receiver of the bank appointed, by the Comptroller of the Currency was on his own application sub- stituted as defendant. Held, that the receiver was not thereby estopped from questioning the jurisdiction of the court. (Cadle v. Tracy, 1 N. B. C, 230 ; 11 Blatchford, 101. ) When fraudulent statements do not estop. 31. Fraudulent statements must be relied upon before they may be pleaded in estoppel. (U. S. C. C. A., 1901) Modern Woodmen of America v. Union Na- tional Bank of Omaha, 108 Fed. Rep., 753 ; (Tex., 1901) Waxahachie National Bajik v. Beilharz, 62 S. W., 743 ; 94 Tex., 493. Cases in which the facts held not to he an estoppel. 32 (U. S. C. C, 1897). A national bank which returns its capital for taxation is not thereby estopped from setting up that the same was not sub- ject to taxation, and refusing to pay the tax. (Brown v. French, 80 Fed. Rep., 166.) 33 (U. S. C. C, 1897). The judgment in an action is conclusive in a subse- quent action between the same parties upon the same cause as to all questions which might have been presented and determined in the first suit ; but in a subsequent action between the same parties upon a different cause it is conclusive only upon such questions as were actually litigated and determined in the first suit (Lawrence v. Stearns, Stearns v. Lawrence, 79 Fed. Rep., 878.) DIGEST OF NATIONAL BANK DECISIONS. 151 ESTOPPEL— Continued. 34 (D. S. 0. C, 1897). One who has been prosecuted to judgment upon a cause of action basecUon the negligent act of another, who has been called in to defend and has defended the suit, may sue such other party for indemnity, and rest his case upon the former adjudication, it being shown that it was in consequence of such negligence that the former judgment passed. (lb.) 35 (Ky., 1901). Where a bank returned to its correspondent several notes, notifying it that they had been charged to its account for its failure to protest them for nonpayment when they were in its hands for col- lection, the fact that it retained the notes, and thus admitted its lia- bility, does not estop it from denying that it is liable and claiming that it admitted its liability under mistake of law, as the other bank, though misled, has not been induced thereby to change its condition for the worse, the notes not being on the footing of bills of exchange. (Louisville Banking Company v. Asher, 65 S. W. Rep., 831 ; 4 Bank- ing Cases, 407.) 36 ( Md., 190] ) . Where plaintiff, who was entitled to a deposit in the joint names of herself and her husband by right of survivorship, indorsed the certificate to her husband's administrator on his representation that it belonged to the estate, and in ignorance of her rights, and there was no evidence that she intended to transfer it to the admin- istrator, the indorsement did not preclude her from maintaining an action for the deposit. (Brewer v. Bowersox, 48 Atl. Rep., 1060; 4 Banking Cases, 90 ; 92 Md., 567.) 37 (Tex., 1894). One who has demanded a certain amount as a balance due on a trade is not estopped from suing for a greater amount, and may explain the demand. (First National Bank of Arlington v. Lynch (Tex. Civ. App.), 25 S. W., 1042.) 38 (Vt-). The fact that the bank stamped the original note " Paid" instead of " Renewed," in the belief that the forged signature of the surety on the renewal note was genuine, does not estop it from enforcing its claim against the surety on the original note, though the surety, seeing the latter in the hands of the principal, believed it had been paid, and signed other notes of the principal as surety to his dam- age. (Lyndonville National Bank v. Fletcher, 34 A., 38; 68 Vt, 81.) Estoppel of 'bank. 39 (Nebr., 1899). A national bank by consenting to the order appointing a receiver, which did not determine the terms or conditions or time of the sale, is not estopped from resisting a subsequent order of sale by the receiver. (State ex rel. German Savings Bank v. Fawcett, 78 N. W. Rep., 636 ; 58 Nebr., 371. ) EVIDENCE. Page. Bank books as evidence *.... ... 152 Written instruments as evidence - 154 Admissibility op parol evidence to explain writing 155 Fraud, misappropriation, negligence, burden op proop 157 Miscellaneous :... ' 158 Cross references: Appeal- Evidence on appeal — 18 Deposits — Evidence of ^ 123 Evidence of contract to pay interest on _ 125 Certificate of deposit as evidence of sum deposited 133 Stub from which certificate of deposit is taken as evidence 133 Forged or altered paper — Evidence of, instructions _ ___ - - 171 152 DIGEST OF NATIONAL BANK DECISIONS. EVIDENCE— Continued. Cross references — Continued. Page. Insolvency and receivers — When case will not be reopened for the introduction of newly dis- covered evidence - 192 Negotiable paper — Evidence of payment - ■ 291 Officers, criminal liability of — Evidence of, in general 370 Evidence of intent as an element in false entries 374 Organization — Proof of organization, Comptroller's certificate _ _ 398 Shareholders — Evidence and burden of proof in action for assessment of share- holders .., .-- --- -— 487 BANK BOOKS AS EVIDENCE. 1 (U. S. C. C. A„ 1896). When the books of a bank are offered in evidence by one party to a suit, the other party is entitled to avail himself of any part of the evidence contained therein, such as the state of a particu- lar account. (Blanchard v. Commercial Bank of Tacoma, 75 Fed. Rep., 249.) 2 (U. S. C. C. A., 1896). In an action to recover a sum alleged to have been loaned to a bank, the receiver thereof claimed that the loan was to the president of the bank personally. He also contended that the bank's books should not be considered as evidence that the loali w.is to the bank, because they were not properly kept, and he offered to show by expert testimony what would have been the proper method of entering the transaction if the loan had been made to the bank. Held, that this evidence was properly excluded, as it did not appear that there was any such ambiguity in the account as to require expert evidence in relation thereto. (lb.) 3 (U. S. C. C. A., 1899). In a suit between the receiver of a national bank and a stockholder the books of the bank are evidence to establish acts of the corporation and its financial condition at a particular time, though not as to dealings between the corporation and the defendant. (Hayden v. Williams, 96 Fed. Rep., 279.) 4 (U. S. C. C. A., 1899). In prosecutions for making false reports to the" Comptroller of the condition of a national bank the books of the - bank, having been properly identified as such, were admissible against defendant without it being shown that they had been correctly kept, as the presumption is in favor of their correctness. (Bacon v. United States, 2 Banking Cases, 26; 97 Fed. Rep., 35.) 5 (Ala., 1893). In an action by a bank on a note dated on Sunday its " dis- count register " is not admissible in evidence to show that the note in suit was a renewal of a note which matured on Sunday, and that the renewal note was made on a certain week day after its date and dated back to the date of the maturity of the first note, according to the custom of the bank. (Hauerwas v. Goodloe, 13 So. Rep., 567; 101 Ala., 162.) 6 (Colo., 1898). The relation of defendants, as stockholders of the bank, was sufficiently shown by entries in the " stock book," and by the testimony of a witness to the effect that such book represented the stockholders and was the only book kept for the purpose ; that it was kept in the ordinary course of business, while he was connected with the bank ; that he made some of the entries himself, and that the persons named therein took part in the meetings of stockholders dur- ing the period of time their names appeared on the book. (Zang et al. v. Wyant et al., 1 Banking Cases, 349 ; 25 Colo., 551.) 1 (Colo., 1898). The claims sued upon consisted of money deposited with the bank, time and demand certificates of deposit, and drafts that DIGEST OF NATIONAL BANK DECISIONS. 153 EVIDENCE— Continued. bank books as evidence — continued. had been issued by the bank and protested for nonpayment ; and the " daily balance book " and the " draft book," identified by a witness, who had been the bank's cashier during the period in question, were admitted to prove such claims. Held, that the books were admissible for such purpose in an action against the stockholders, section 4817. Mills's Ann. St., enabling a party to use his own books as evidence in his own behalf, not being applicable. (lb.) 8 (Colo., 1898). Pass books were issued by the bank to each of its depos- itors, in which the amount of their deposits were entered by the receiving teller at the time they were made. A deposit slip, showing the amount of his deposit, was made out by the depositor, and the deposit slips were preserved by the bank, and from them the entries in the balance book were made. Held, that the entries in pass books furnished no better evidence of the amounts deposited than the entries in the balance book. (lb.) 9 (Iowa, 1900). In a suit in equity to impress a trust on funds in the hands of defendants, as assignees of a bank, a witness who had been the bank's bookkeeper, and was one of its assignees, was properly allowed to make statements from the bank's books as to the condition of its assets at certain periods, the books being in court and plaintiff having had ample opportunity to examine them and to cross-examine the witness. (Bradley v. Chesebrough et al., 2 Banking Cases, 409; 111 Iowa, 126.) 10 (Iowa, 1900). In such an action, in order for plaintiff to' prevail, it is not enough that it appears that the trust money was deposited in and received as such by the bank and wrongfully converted by it, but it must appear by presumption of law or otherwise that it has been pre- served in the hands of the assignees as an increase of assets which may be taken without impairment to the rights of creditors. (lb.) 11 (Mich., 1901). Where a fund is deposited in a bank in the name of a certain depositor, it shows a prima facie title in the depositor, and a claimant thereof in an interpleader's suit must show a clear title thereto. (Detroit Sav. Bank v. Haines et al., 87 N. W. Rep., G6; 3 Banking Cases, 648 ; 128 Mich., 38.) 12 (Minn., 1901). When books of account which are material to an issue on trial are properly received in evidence, and, being in court, open to inspection by all parties, require a long examination of many details, it is proper to receive balances of summaries from an expert witness who has made the same upon proper foundation being laid. (State v. Clements, 3 Banking Cases, 153; 85 N. W. Rep., 229; 82 Minn., 434.) 13 (Mo. App., 1902). Where a depositor receives his bank book, duly bal- anced, together with canceled checks, and retains it an unreason- able length of time without objection, the balance therein becomes an account stated, but is nevertheless only prima facie evidence of its correctness ; and the depositor is not precluded from impeaching it, as based on the payment of forged checks, unless the payment of the checks was induced by his negligence and special damage will result to the "bank if compelled to make restitution. (Kenneth Inv. Co. i\ National Bank of the Republic of St. Louis, 5 B. C, 13 ; 70 S. W. Rep., 173.) 14. (Mo. App., 1902). In such case, however, the burden of proof is on the depositor to show that the balance was in faot based on the payment of forged checks. (lb.) 15 (N.Y., 1901). Where, in an action against the bondsmen of a bank cash- ier to recover for an alleged breach of the bond for failure to enter a true account and turn over the money in his custody, there was no preliminary proof of who made the original entries in the bank's books, or as to the custom of keeping them, or that the parties by whom they were kept were dead or without the jurisdiction of the court, such entries and computations therefrom by an expert who 154 DIGEST OF NATIONAL BANK DECISIONS. EVIDENCE— Continued. bank books as evidenoe — continued. never saw them until after the cashier ceased his duties were not admissible in evidence. ( State Bank of Pike v. Brown et al., 3 Bank- ing Cases, 148 ; 165 N. Y., 216.) 16 (S. C, 1894). Where the genuineness of the signatures of certain letters alleged to have been written by plaintiff were in question, and she admitted her signature to a certificate of stock, it was not error to send the stock book to the jury for a comparison of signatures, (Rose v. Winnsboro National Bank, 19 S. E., 487; 41 S. C, 191.) Evidence in an action against a receiver. 17 (N. J. Eq., 1894). In an action against the receiver of an insolvent corpo- ration, the facts that he represents the corporation and produces its books of account do not prevent him from contradicting the entries therein, as he represents creditors also. (Whittaker v. Amwell National Bank, 29 A., 20.3; 52 N. J. Eq., 400.) WRITTEN INSTRUMENTS AS EVIDENCE. 1 (Ala., 1895). On an issue whether a check had been raised in amount, it was error to admit in evidence a check which bore evident signs of having been altered, as a result of experiments with acids which had been made thereon, for the purpose of showing that an alteration could not be made without detection. (Birmingham Nat. Bank v. Bradley, 19 So. Rep., 791; 108 Ala., 205.) 2 (Ga., 1893). An unsigned entry on a deed is inadmissible to show the time it was filed for record. (First National Bank v. Cody, 19 S. E.. 831; 93 Ga., 127.) 3 (Iowa, 1892). In an action by a bona fide holder on bonds of a school district, purporting to have been issued in satisfaction of a judg- ment against the district, as authorized by acts Seventeenth General Assembly, chapter 132, the defense was that such bonds had been fraudulently issued after the judgment had been already satisfied by a prior issue of bonds. Held, that, after a showing that a diligent search had been ineffectually made for the records of the district authorizing the first issue of bonds, and after the then secretary of the district identified one of such bonds as having been issued in pay- ment of the judgment in question, and had partly described the others, such bonds purporting on their face to have been issued by the officers of the district, and having been afterwards found to be valid obligations of the district by a court of competent jurisdiction, were themselves properly admitted in evidence. (First National Bank v. District Tp. of Doon, 53 N. W., 301 ; 86 Iowa, 330.) When position of indorsers' names not evidence. 4 (Minn., 1892). Where the cashier of a bank who assumed to be acting as such applied to another bank in the usual course of business to discount a note produced by him, payable to himself, and regularly indorsed by him in both his individual and official capacity, neither the fact that he appeared to be the payee and first indorser and his bank the second indorser, nor that the avails of the note were re- ceived by him personally, was conclusive evidence that the indorse- ment of his bank was unauthorized or for his own accommodation. (Merchants' National Bank v. McNeir, 53 N. W., 178; 51 Minn., 123.) Of deposits, slips, and pass oooks. 5 (Cal., 1899). A claim showing the state of the depositor's account with the bank, signed by its manager, and delivered to the depositor in place of his bank book, after the bank's insolvency, but while it was under the control and management of its directors, was competent evidence in an action to enforce the stockholder's liability, and was not subject to objection as a mere declaration of officers after insol- vency, as it was merely a restatement of what the bank book, which was in evidence, showed. (Dingley v. McDonald et al„ 2 Banking Cases, 153; 124 Cal., 90.) DIGEST OF NATIONAL BANK DECISIONS. 155 B VI DENCE— Continued. WRITTEN INSTRUMENTS AS EVIDENCE — continued. 6 (Cal., 1900). A - pass book shown to be the handwriting of the bank's cashier, and to have been issued to him in the regular course of busi- ness, is admissible in evidence in an action by the depositor's admin- istratrix against such bank to recover sums alleged to have been deposited. (Nicholson v. Randall Banking Co., 3 Banking Cases, 26; 130 Cal., 533.) 7 (Idaho Sup., 1901). It is not error to allow the cashier of a bank to tes- tify to the terms of said deposit agreement, although the person with whom it was made be dead. (Greene r. Bank of Camas Prairie, 64 Pac. Rep., 888 ; 7 Idaho, 576.) 8 (N. Dak., 1900). The issuance of a deposit slip by a bank or the entry of a deposit in a pass book has only the effect of a receipt for money. While it raises a presumption that the deposit was made, yet it is open to parol explanation. (Andrews et al. v. State Bank of Wheat- land, 2 Banking Cases, 508.) Evidence — Account — Each side prima facie evidence of its contents. 9 (U. S. C. C. A., 1904). The introduction in evidence without qualification of an account containing debit and credit items makes each side evi- dence of its contents. In the absence of all other evidence, the debits and credits of such an account offset each other, and the account proves its balance only. An admission must be taken with its qualifi- cations as an entirety. But where there is other evidence the court or jury is not required to give equal credit to each side of the account, to the admissions against interest, and to the self-serving statements contained in it. They may. and they should, determine the fact for or against the evidence contained in the account as the preponderance of all the evidence in the case and the rules of law require. (Simpson v. First Nat: Bank of Denver, 129 F. R., 257.) ADMISSIBILITY OF PAROL EVIDENCE TO EXPLAIN WBITING. 1 (U. S. C. C. A., 1896). Where the facts do not appear on the face of the judgment oral evidence is admissible to show how credits thereon came to be allowed and what they were allowed for. (Humphreys v. Third National Bank of Cincinnati, 75 Fed. Rep., 852.) 2 (Ala., 1893). In an action on a note dated on Sunday the burden is on plaintiff to show that it was in fact executed on a day which was not Sunday. (Hauerwas v. Goodloe, 13 So. Rep., 567; 101 Ala., 162.) 3 (Ala., 1893). In an action by a bank on a note dated on Sunday it is not error to admit evidence that the note is in the handwriting of the bank's cashier, and that he was not in the employ of the- bank until after the date of the note, and that the note is a renewal note and dates back. (lb.) 4 (Cal., 1895). In an action by one bank against another on a note, and for money loaned, where defendant asserts that plaintiff bought the note, proof of the negotiations for the loan, and that defendant received its proceeds, is not incompetent as varying the written instrument. (First National Bank of Chicago v. California National Bank (Cal.), 35 P., 639.) 5 (Mich., 1894). Parol evidence is admissible to show that the word " accounts," as used in an assignment for the purpose of security, of the " good and collectible accounts " of the assignor, covered not only such accounts as showed an unconditional liability on the part of the debtor at the date of the assignment, but also partially executed contracts and consignment contracts which called for pay- ment in the future and on conditions to be performed. (Preston National Bank v. The George T. Smith Middlings Purifier Co., et al., 60 N. W., 981; 102 Mich., 462.) 6 (Mo., 1902). Where a certified check given by a firm to one of its mem- bers was retained by the payee ten months, during which the account 156 DIGEST OF NATIONAL BANK DECISIONS. EVIDENCE — Continued. .ADMISSIBILITY OF PABOL EVIDENCE TO EXPLAIN WRITING Continued. was drawn out, and, in an action on the check, the defense was fraud, it was proper to admit evidence of a conversation between plaintiff and the teller at the time of certification tending to show that it was understood that the check should be presented in a few days ; such evidence not tending to vary the written contract, but being a mate- rial fact on the issue of fraud. (Muth v. St. Louis Trust Co., 67 S. W. Rep., 978; 4 Banking Cases, 416; 94 Mo. App., 94.) 7. (Nebr., 1893)*. As against bona fide purchasers of a note signed in blank on the back thereof by a third person before delivery to the payee, parol evidence is not admissible to show that such person signed as accommodation indorser, and not as joint maker, as presumed by law. (Salisbury v. First National Bank of Cambridge City, 56 N. W., 727; 37 Nebr., 872.) 8 (Tex., 1895). Parol evidence is admissible to show that a note, though in the possession of the payee, was delivered with the understanding that it would not be binding upon the makers unless signed by other persons. (Merchants' National Bank v. McAnulty (Tex. Civ. App.), 31 S. W., 1091.) Of collateral security. 9 (Va., 1901). In support of a claim by a bank that insurance policies on the life of a decedent were held by it to secure all his indebtedness to it, including that as guarantor on two notes, two of its directors, who arranged for the assignment of the policies, testified positively that it was made with that understanding; and the president who con- versed with him after his proposition to assign had been accepted, said that he so understood it. To overcome this evidence, it was shown that after the assignment payments were made to the bank by him and his trustees under an assignment for creditors, and credited on the guaranteed notes ; but it clearly appeared that these payments were made, not on account of his liability as guarantor, but on account of his indebtedness to the maker of the notes. Held, that under the evidence the bank was entitled to deduct the entire debt from the proceeds of the policies. (First Nat. Bank of Roanoke v. Terry's Adm'r, 3 Banking Cases, 317; 99 Va., 194.) Oral evidence of unrecorded proceedings of bank. 10 (Wis., 1901). A mortgage to a bank is released, without being delivered up, where the directors of the bank pass a resolution releasing it, holding the personal security only, to enable the mortgagor to im- prove the property, and he does so and conveys the property, and no claim is made on the mortgage till ten years later, and then by the bank's assignee. (In re Bank of West Superior. Goodvin r. Nich- ols, 85 N. W. Rep., 501 ; 3 Banking Cases, 322 ; 109 Wis., 672.) 11 (Wis., 1901). The act of the directors of a bank in releasing a mortgage by resolution may be proved by parol, witness testifying that he did not think this action appeared on the records, and. there being no evidence that it did so appear. (lb.) Of custom of hanks. 12 (Ind., 1901). Where, in a suit on a note given by certain directors of a bank for a loan procured by the directors for their individual use, and they had no authority to cause the indorsement, evidence of the custom of the banks in that vicinity to borrow money without special authority of the board of directors was admissible. (First Nat. Bank oj Huntington v. Arnold et al., 60 N. E. Rep., 134 ; 156 Ind., 487.) Of admissions of bank officers. 13 (Nebr., 1896). The testimony on another trial of an officer of a corpora- tion with relation to previous corporate acts can not be proved- as an admission binding upon the corporation. (Columbia National Bank of Lincoln v. Rice, 67 N. W., 165; 48 Nebr., 428.) DIGEST OF NATIONAL BANK DECISIONS. 157 EVIDENCE— Continued. ADMISSIBILITY OF PAROL EVIDENCE TO EXPLAIN WRITING Continued. How testimony of witness in another case may he proven. 14 (Nebr., 1894). The testimony of a witness in another case may be proven by anyone who heard it, and the reporter's notes are not the only or best evidence. (German National Bank v. Leonard (Nebr.), 59 N. W., 107 ; 40 Nebr., 676. ) 15 (Nebr., 1894). The testimony of a witness in an action to which he was not a party may be proved in a subsequent action to which he is a party as an admission. (lb.) FKATJD, MISAPPROPRIATION, NEGLIGENCE, BURDEN OF PROOF. 1 (U. S. C. C. A., 1899). Where it is not shown that a certain collection made by a receiver of an insolvent national bank was forwarded by a correspondent of the bank, nor included in the list of items sent, it is not sufficiently traced ; and this though the receiver testified that the item was collected for the forwarding bank. (Richardson v. Louisville Banking Co., 94 Fed. Rep., 442.) 2 (U. S. C. C. A., 1899). A bill by the receiver of the bank to set aside a preferential transfer of notes, in violation of Revised Statutes, sec- tion 5242, is not sustained by proof that the notes were put into the transferee's hands for payment by him, and that instead of paying them he wrongfully kept them. (Alabama Iron and Railway Co. v. Austin, 94 Fed. Rep., 89J.) 3 (U. S. C. C. A., 1900). In an action by the receiver of an insolvent national bank to recover an assessment from defendant as a stock- holder, where defendant held stock in another bank as collateral, in lieu of which, on the consolidation of the two banks, it had caused stock in the consolidated bank to be issued to a third person, plaintiff was held to have the burden of proving that such exchange was without the authority of the pledgor, so as to amount to a con- version of the original collateral. (Wilson v. Merchants' Loan and Trust Co. of Chicago, 111., 98 Fed. Rep., 688.) 4 (U. S. C. C. A., 1900). In a suit by a park board to recover funds alleged to have been misappropriated by its treasurer, from a bank to which funds were paid, evidence of the insolvency of thejreasurer, and that such fact was known to the bank, may be shown in support of the charge of misappropriation, although, not directly alleged. (McNulta v. West Chicago Park Com'rs, 99 Fed. Rep., 900 ; 2 B. C, 764 ; West Chicago Park Com'rs v. McNulta, ib. )' 5 (U. S. C. C, 1900). Allegations in a pleading by the receiver of a national bank against the directors, charging them with negligence in permitting the cashier to manage the affairs of the bank without su- pervision, are not admissible against the successor of such receiver in an action against him by a third party to establish a liabilty of the bank, the subject-matter of the two suits, as well as the parties, being different. (School Dist. of City of Sedalia, Mo., v. De Weese. 100 Fed. Rep., 705.) 6 (111., App.). An instruction that a party alleging fraud must prove it by a preponderance of the evidence so clear that it leaves the mind well satisfied that the charge is true requires too high a degree of proof, since it is sufficient if the jury believe a material fact in issue from the evidence, even if the proofs do not generate a belief which entirely satisfied the mind. (Hutchinson National Bank «. Crow, 56 111. App., 558.) 7 (Mich., 1901). In an action by a bank against a former president and director to recover for moneys lost by his negligence in permitting the cashier to borrow on inadequate security, the admission of testi- mony that the loans to the cashier were not read off at meetings of directors subsequent to the loans, and to show that the notes given by the cashier were not reported to the committee on such matters, 158 DIGEST OF NATIONAL BANK DECISIONS. EVIDENCE— Continued. FRAUD, MISAPPROPRIATION, NEQMGENCE, BURDEN OF PROOF — Continued. was proper. (Commercial Bank v. Chatfield, 86 N. W. Rep., 1015 ; 3 Banking Cases, 594; 127 Mich., 407.) 8 (Mich., 1901). The cashier was asked why he did not request his loan of a full board of directors, and answered, over objection, that it was the custom to discount nearly all the paper before the board knew of it. Held, that any error was immaterial, inasmuch as the reply was not prejudicial to defendant. (lb.) 9 (Nebr., 1896). Proof of false statements knowingly made by the pur- chaser of goods, whereby he is shown to .be possessed of a large amount of property over and above his liabilities, is admissible under an allegation that, being insolvent, he knowingly concealed his insol- vency from the vendor. (First National Bank of Chadron v. McKin- ney (Nebr.), 66 N. W., 280; 47 Nebr., 149.) 10 (Wash., 1899). In an action against a national bank, its president anil cashier, for damages arising from fraud alleged to have been perpe- trated upon plaintiff* by defendants, it appeared that certain notes were the property of the bank, that the notes were worthless, the payor being insolvent, and that defendants, without the consent of plaintiff, caused the notes to be forwarded to him and his account with the bank to be charged with the face value of the notes, falsely representing that the notes were taken for a loan of plaintiff's money made by one of the defendants to the maker of the notes, that the maker was solvent, and that the notes would be paid on demand, and that plaintiff was injured-thereby to the amount of the verdict Held, that the evidence made a prima facie case against the defendants. Pronger v. Old Nat. Bank et al., 1 Banking Cases, 399; 20 Wash., 618.) MISCELLANEOUS. Of protest and notice. 1 (U. S. C. C. A., 1895). In accordance with the provisions of the Minne- sota statute (Gen. Stat, 1878, c. 26, sec. 8; Gen. Stat., 1894, sec. 2275) making the certificate of protest of a bill or note of any notary public of that or another State evidence of the fact therein certified, such a certificate is competent evidence in a Federal court sitting in Minnesota of the presentment, demand, dishonor, or notice of dishonor of a note drawn in Minnesota and payable and protested in Connecti- cut. (Nelson v. First. National Bank of Killingley, 69 Fed. Rep., 798.) 2 (U. S. C. C. A., 1895). A letter written in the ordinary course of business by a clerk in the office of one sought to be charged as indorser of a note, acknowledging the receipt of notice of the protest thereof, is competent evidence of the sending of the notice. (lb.) Expert evidence as to value of stock. 3 (U. S. C. C. A., 1895). Upon the question of the value of stock in a cor- poration which has been placed in the hands of a receiver, under a statute of the State creating it, in proceedings for its dissolution as insolvent, the opinions of competent witnesses as to the value of the stock are admissible, as is also evidence of the amount and value of the assets and liabilities of the corporation at different times between the appointment of a receiver and the sale of the assets in accordance with the statutory requirements. (Nelson v. First National Bank of Killingley, 69 Fed. Rep., 798.) 4 (U. S. C. C. A., 1895). Upon the same question it is also admissible to prove the amounts realized at the sales made of the property of the corporation by the receiver under the order of the court, in the regular course of the insolvency proceedings, though taking place at a time remote from that to which the inquiry as to the value of the stock relates. (lb.) DIGEST OF NATIONAL BANK DECISIONS. 159 EVIDENCE — Continued. miscellaneous — continued. 5 (U. S. C. C. A.-, 1895). A witness ought not to be permitted to give an opinion as to the value of an article when it does not appear that he has acquired any correct information from which to form an opinion, or that he has formed any opinion whatever. (lb.) Expert evidence as to forgeries. 6 (Ala., 1895). In an action to recover the amount paid to the payee and indorser of a check, on the ground that the amount of the check had been raised, where experts had testified that writing could be removed by acids without leaving any trace, and there was evidence that the name of the payee and amount in the check in question had been altered, but none that the check had been subjected to acids, experienced cashiers were properly allowed to testify as to the gen- uineness of the check, though not shown to be experts as to the effect acids on writing. (Birmingham National Bank v. Bradley, 19 So., 791; 108 Ala., 205.) , 7 (Ala., 1895). Plaintiff should have been allowed to cross-examine defend- ant's expert witnesses as to their knowledge of the use and effect of acids in removing ink. (lb.) Of receipt of letter. 8 (Mo.). Depositing in the post-office a letter properly addressed, with postage prepaid, is prima facie evidence that the sendee received it. (Ripley National Bank v. Latimer, 2 Mo. App. Rep., 967.) Payment, burden of proof. 9 (U. S. C. C. A., 1896). An indorser on certain notes made a compromise with the indorsee by which he* gave his notes for a part of the amount due, he to be released from liability on the original notes upon payment of the compromise notes at maturity. Held, that evi- dence that money with which he made part payment on the compro- mise notes was borrowed by him was not admissible on an issue as to whether the indorsee, after accepting such payments was estopped to hold him liable on the original notes. (Humphreys v. Third National Bank of Cincinnati, 75 Fed. Rep., 852.) 10 (U. S. C. C. A., 1890). An indorsee of a note agreed to receive, in com- promise of an indorsees liability thereon, secured notes for a less amount, the indorsee to have the right if the compromise notes were not paid when due to sue the indorser for the balance remaining due on the original notes after applying thereon the partial payments made on the compromise notes and the proceeds of the security given therefor. Held, that the indorsee did not, by' receiving part payments on the compromise notes after their maturity, waive the right to sue the indorser on the original notes. 66 Fed. Rep., 872, affirmed. (lb.) • 11 ( U. S. C. C. A., 1896 ) . Nor did he waive his right to proceed on the original note by failing to tender back the compromise notes or the security given therefor. (lb.) 12 (Kans., 1894). Where defendant, in a suit by a. mortgagee against the mortgagor for the mortgaged property, claims payment of the debt the burden is on him of proving such payment. (First National Bank v. Hellyer, 37 P., 130; 53 Kans., 695.) 13 (N. Dak., 1901). Payment of a negotiable instrument, to effect a dis- ■ charge must be made to the rightful holder or his authorized agent ; but the mere possession of such an instrument indorsed by the payee in blank is prima facie evidence of the holder's right to demand and receive payment, and payment to such holder will discharge the instrument, when made in good faith, and in ignorance of facts which impair the holder's title. (Drinkall v. Movius State Bank, 88 N. W. Rep., 724; 11 N. Dak., 10.) 160 DIGEST OF NATIONAL BANK DECISIONS. EVIDENCE— Continued. miscellaneous — continued. When appellate court will not weigh evidence. 14 (U. S. Sup. Ct, 188G). Under the acts of Congress authorizing questions arising on a trial or hearing before two judges in the circuit court, and upon which they are divided in opinion, to be certified to the Supreme Court of the United States for decision, each question certi- fied must be one of law and not of fact, nor of mixed law and fact, and it must be a distinct point or proposition clearly stated, and not the whole case nor the question whether upon the evidence the judg- ment should be for one party or for the" other. (Williamsport National Bank v. Knapp, 119 U. S., 357; 3 N. B. C, 184.) 15 (U. S. C. C. A., 1894). On a writ of error in a case in which a jury has been waived in writing, the court can not inquire whether the special findings are sustained by the evidence ; and in the absence of excep- tions to the admission or exclusion of evidence, or to rulings upon declarations of law tendered to the court, the review is limited to the 'question whether the judgment is supported by the pleadings and findings. (Walker v. Miller, 59 Fed. Rep., 869.) Immaterial error in admission of. 16 (U. S. C. C. A., 1896). When evidence which may have been irrelevant or otherwise open to an objection seasonably taken has been admitted without objection, the witness being examined and cross-examined by the respective parties, it is not error to deny a motion to strike out such evidence, made after its tendency and effect have been dis- closed. (Farmers and Traders' National Bank of Covington, Ky., r. Greene et al., 74 Fed. Rep., 439. ) 17 (U. S. C. C. A., 1899). It is immaterial whether there was error in admit- ting evidence of irrelevant or immaterial facts stated in special find- ings. The sufficiency of the facts found is the sole question to be determined. (Lamson-et al. r. Beard, 1 Banking Cases, 568; 94 Fed. Rep., 30.) 18 (Ky., 1902). There can be no reversal for an error in admitting incompe- tent testimony to establish a fact the existence of which the instruc- tions asked by both parties assumed. (First Nat. Bank v. Germania Safety Vault and Trust Co., 66 S. W. Rep., 716; 4 Banking Cases, 291.) 19 (Minn., 1899). Conceding, without deciding, that certain evidence intro- duced is incompetent, and that it was error to admit it, it was error without prejudice, when the fact sought to be proved by it was con- clusively proved by other evidence. (Selover v. First Nat. Bank- of Minneapolis, 1 Banking Cases, 739.) Action by indorsee of nonnegotiable note, proof. 20 (W. Va., 1895). In an action by the assignee of an invalid nonnegotiable instrument against the assignor thereof, plaintiff must show that the maker was insolvent when the instrument was made or became due, or that he used diligence to recover from the maker, and failed, or that suit against the maker would have been of no avail. (Mer- ' chant's National Bank v. Spates, 23 S. E.. 681 ; 41 W. Va., 27.) Of impairment of business because of dishonor of check. 21 (Tenn., 1900). In an action against a bank for damages for breach of contract in refusing to honor a depositor's check, plaintiff can not show that certain persons have ceased to deal with him because of the dishonor of his checks by defendant, unless the loss of their custom is set out in the pleadings as special damages. (The J. M. James Co. v. Continental Nat. Bank, 2 Banking Cases, 573; 105 Tenn., 1.) Of receiving deposits after insolvency. 22 (Colo., 1900). In the prosecution against the president of a bank for receiving deposits after its insolvency, it is not necessary to show any specific intent to injure another upon the part of defendant; and if defendant has been criminally negligent in not informing himself as DIGEST OF NATIONAL BANK DECISIONS. 161 EVIDENCE— Continued. miscellaneous — continued. to the condition of the bank, that fact, coupled wtih proof that he did the act prohibited, will be sufficient to warrant a conviction. (McClure v. People, 2 Banking Cases, 728; 27 Colo., 358.) 23 (Colo., 1900). In such a prosecution, if it appears that defendant had, by the exercise of the degree of care required of him, obtained informa- tion which led him to believe that the bank was solvent when the deposit was received, a conviction is not warranted, although the bank was insolvent; and, therefore, in such a proceeding, evidence tending to show what steps defendant had taken in the way of informing himself regarding the solvency of the bank was admissi- ble, (lb.) 24 (N. Y., 1900). In an action against a bank director to recover deposits received after the bank's insolvency, where defendant's liability is predicated upon the claim that he fraudulently suppressed his knowl- edge of such insolvency, defendant's testimony as to his belief in regard to the condition of the bank is competent evidence and entitled to be weighed by the jury with the other evidence in deter- mining what was his intent. (Cassidy v. Uhlmann, 2 Banking Cases, 661; 163 N. Y., 380.) Of trust deposit. 25 (S. Dak., 1901). In an action against the receiver of a bank to have the proceeds of certain notes collected by the bank declared a preferred claim as a trust fund, the funds in the bank at the time of its insolvency having amounted to less than plaintiff's claim, it was proper to admit in evidence judgments recovered by certain pre- ferred creditors of the bank, in order to show that there were pre- ferred creditors entitled to share pro rata in the funds in the bank at the time of its insolvency. (McCormick Harvesting ftfach. Co. v. Yankton Sav. Bank et al., 87 N. W. Rep., 974; 4 Banking Cases, 81; 15 N. Dak., 196.) Of agreement to pay interest on deposits. 26 (N. Y.). On an issue as to whether the deposits of plaintiff's testator in defendant bank were interest bearing, evidence of the value of the use of money in vicinity of the bank, and that testator received interest on similar deposits in other banks, and that one bank offered him 5 per cent on any money that he might deposit, is admissible in rebuttal of defendant's evidence that the agreement between the parties, by which testator's account should be interest bearing, was abrogated by a subsequent agreement that it should not bear inter- est. Merwin, J., dissenting. (McLoghlin v. National Mohawk Val- ley Bank (Sup.), 20 N. Y. S., 171.) Of motive in procuring issuance of attachment. 27 (Utah, 1893). In an action for malicious prosecution of an attachment it is not error to refuse to permit plaintiff to testify whether defendant had any motive in procuring the issuance of the attachment other than an honest desire to collect a debt, and to limit him to a state- ment of the facts. (Hamer v. First National Bank of Ogden, Utah, 33 P., 941; 9 Utah, 215.) Ifature of law case can not be shown by affidavit. 28 (U. S. C. C. A., 1899). Where an order dismissing a law case is pleaded in bar in an equity suit, and no proof is offered except the order itself, defendant can not show the nature of the law case by affidavit after trial. (Alabama Iron and Railway Co. v. Austin, 94 Fed. Rep., 897.) Evidence that assignment was made for the benefit of the bank. 29 (U. S. Sup. Ct, 1902). Cross, who was president of a bank and had been misusing its funds, gave to Martindale two instruments of assignment, 4049—05 11 162 DIGEST OF NATIONAL BANK DECISIONS. EVIDENCE — Continued. miscellaneous — continued. providing that Martindale should pay himself for any paper on which Cross and Martindale were mutually makers or indorsers. The bank and other parties held such paper. Cross killed himself the day after the assignment was given. There was an earlier assignment to Martindale as trustee. The receiver of the bank alleged that the earlier assignment was made to protect the bank. Martindale was the only witness as to delivery of the assignment and admitted that it was for the benefit of the bank but only to a limited amount. Held, in an action in which other holders of paper made by Cross and Martindale sought to obtain the proceeds of sale of the property assigned, that it was not error to admit testimony that Martindale had stated that the earlier assignment had been made to secure the bank generally for Cross's liability thereto. (Fourth National Bank v. Albaugh, 188 U. S., 734.) Weight of testimony — Contradictory statements of witness — Effect. 30 (U. S. C. C.,1903). The fact that a witness, testifying that in a certain transaction he acted as agent for a bank, had stated in contradiction of this that he was acting individually, affects only the weight of his testimony, and does not disprove his agency. (Hallett v. Fish, 120 Fed. Rep., 986.) Bank's insolvency — Aid of third person — Inducement by cashier — Agency for bank — Sufficiency of evidence. 31 (U. S.'C. C.,1903). Evidence in an action by one furnishing aid to an insolvent bank (being induced thereto by its cashier) to recover from the receiver, as a preferred creditor, considered, and held to show that the aid was furnished to the cashier in his official capacity as representative of the bank and not as an individual. (lb.) EXECUTION. No lien can be established after receiver is appointed. 1 (U. S. Sup. Ct, 1871). A judgment against a national bank in the hands of a receiver only establishes the validity of the claim ; the plaintiff will not have any lien on the property of the association nor secure any preference over other creditors. (First National Bank of Bethel v. National Pahquioque Bank, 14 Wall, 383.) Sheriff may not levy on real estate outside his county. 2 (U. S. C. C, 1898). A sheriff in Texas has no power to levy upon or sell land lying outside his county, and his deed, describing by metes and bounds land purporting to have been levied on and sold; part of which lies outside his county, is void as to such part. (Short v. Hepburn, 75 Fed. Rep., 113.) Appointment of examiner does not prevent execution. 3 (U. S. C. C, 1898). That a national bank for which no receiver has yet been appointed is in charge of an examiner appointed by the Comp- troller to investigate its affairs does not exempt its tangible assets from execution upon final judgment. (Kimball v. Dunn, 89 Fed. Rep., 782.) Description in notice of sheriff's sale. 4 (111.). The imperfect description of property in a notice of sheriff's sale under execution will not necessarily vitiate the sale where the de- scription is sufficiently certain so that no one is deceived as to the identity of the property sold. (Grundy County National Bank v. Rulison, 61 111. App., 388.) FALSE ENTRIES. (See Officebs, criminal liability of.) DIGEST OF NATIONAL BANK DECISIONS. 168 FORFEITURE OF CHARTER. Cboss references : Loans — p ^se- Government only can have forfeiture declared for loans in excess of limit 269 Charter of national bank forfeited owing to the directors having knowingly violated, and permitted its officers to violate, the Revised Statutes of the United States. 1 (U.S. C.C., 1887). The Fidelity National Bank and the directors of said bank having knowingly violated, and permitted its officers to violate, the provisions of the Revised Statutes of the United States. 1. By making loans to divers persons on the security of the shares of its own stock, said security not being necessary to prevent loss on debts previously contracted in good faith. 2. By increasing its liabilities by making new loans and discounts otherwise than by discounting or purchasing bills of exchange pay- able at sight when its reserve was below the amount fixed by law. It is thereupon considered and adjudged by the court that all the rights, privileges, and franchises of the said association, the Fidelity National Bank of Cincinnati, Ohio, are hereby forfeited, and said association is hereby declared, adjudged, and decreed to be dissolved. (Trenholm v. The Fidelity National Bank. Transcript from journal U. S. Circuit Court, Southern District of Ohio. The case not being reported.) Charter can be forfeited only for acts done by the directors or by executive officers with the knowledge of the directors. 2 (U. S. C. C, 1889). In an information charging that "the banking asso- ciation and the directors thereof did knowingly permit," etc., the allegation that the association, aside from the directors, permitted the doing of the alleged acts, tenders an immaterial issue, and should be stricken out on motion. (Trenholm, Comptroller, v. Commercial National Bank, 38 Fed. Rep., 323.) 3 (U. S. C. C, 1889). As section 5239 only refers to acts done by the directors, or by the executive officers with the knowledge of the directors, an information, seeking a forfeiture, which charges that the association did the act is insufficient. (lb.) Forfeiture of charter can be adjudged only in a suit brought by the Comptroller and the association will stand until so dissolved. 4 (Colo.). A forfeiture of the rights and privileges of a national bank must be adjudged by a proper court of the United States in a suit instituted for that purpose by the Comptroller, in his own name, and the association must stand until so dissolved. (Union Gold Mining Co. 17. Rocky Mountain Nat. Bank, 1 Colo., 531.) 5 (Pa., 1879). Forfeiture of the privileges and powers of a national bank must be determined by a suit brought by the Comptroller of the Cur- rency, and until determined it may do business, and no person, by a conspiracy to evade its regulations, may escape liability for borrowed money loaned by it upon personal security in the manner authorized. (Stephens v. Monongahela National Bank of Brownsville, 88 Penn. St., 157; 32 Am. Rep., 438; 2 N. B. C, 398.) Limitations in actions for. 6 (U. S. C. C, 1890). The forfeiture of the rights, privileges, and franchises of a bank authorized by Revised Statutes, section 5239, for violation by its directors of the provisions of the banking act, comes within section 1047, limiting suits for any penalty or forfeiture accruing under the laws of the United States to five years. (Welles v. Graves, 41 Fed. Rep., 459.) Forfeiture of charter not necessary before receiver may bring suit against directors. 7. The receiver of a national bank may maintain a suit to enforce the liability of directors under section 5239 without the charter of the 164 DIGEST OF NATIONAL BANK DECISIONS. FORFEITURE OF CHARTER— Continued. bank having been first forfeited in a suit brought by the Comptroller of the Currency under that section. (U. S. C. C. A., 1898) Cockrill v. Cooper et al., 86 Fed. Rep., 7 ; (U. S. C. C, 1890) Stephens v. Overstate, 43 Fed. Rep., 771-772; (U. S. C. C, 1897) National Bank of Commerce of Tacoma v. Wade, 84 Fed. Rep., 10, 13, 14. 3 Thomp. Corp., 4113-^1303. Contra. (U. S. C. C, 1890) Welles v. Graves, 41 Fed. Rep., 459-468; (TJ. S. C. C, 1896) Gerner v. Thompson et al., 74 Fed. Rep., 125, 131; Hayden v. Thompson (U. S. C. C. A.), 71 Fed. Rep., 60, distinguished. FORGED OR ALTERED PAPER. Page. Negligence of depositor in not examining vouchers 164 Negligence between banks in not giving notice of 166 Liability of bank to drawer for negligence 167 Mistake of drawer as to identity of payee 167 Liability of bank to drawer for payment of check when name of payee or indorsee is forged 168 Liability between banks for payment of forged check 170 When bank may or may not recover money paid on forged check. 170 Evidence of forgery — instructions _ 171 Miscellaneous 172 negligence of depositor in not examining vouchees — examination of vouch- ees by agent committing fobgeby. 1 (U. S. C. C. A., 1902). Where a dealer in corn arranged with a bank to cash the checks of his purchasing agent, such checks to be sent to the dealer from time to time with drafts for the amount thereof, and such agent drew and had cashed at such bank checks purporting to but in fact not representing any purchase of corn, and indorsed by himself, and bearing the fictitious indorsement of the pretended payee, if the indorsement by such agent was irregular, it was the duty of such dealer, on the first of such checks being sent to him by the bank, to have notified the bank of such' fact, and until so notified the bank was not negligent in receiving and paying -such checks. Armour v. Greene County State Bank, 112 Fed. Rep., 631.) 2 (Ala., 1893). A depositor owes a duty to the bank to make an examina- tion of his pass book and vouchers within a reasonable time; and if loss would result to the bank from his failure to do so he can not recover for forged checks paid by the bank and charged to his account. (First National Bank v. Allen, 14 So., 335; 100 Ala., 476.) 3 (Ala., 1893). Where the examination is committed to a clerk or agent who has himself committed the forgeries, his concealment of such forgeries will not relieve the depositor from the consequences of the failure to discover the fraud and notify the bank. ( lb. ) 4 (Ala., 1893). But if the omission of the depositor to discharge such duty has resulted in no injury to the bank, the depositor may recover, (lb.) 5 (Ala., 1893). Where, however, forgeries by the same person are commit- ted after the depositor is chargeable with knowledge of the fact, the failure of the depositor to give the bank notice may estop him to dis- pute the genuineness of such checks. (lb.) 6 (Mo. Appls., 1902). Where a depositor, by retaining without objection his bank book as balanced and returned to him, together with the can- celed checks, recognizes the balance shown as an account stated, the DIGEST OF NATIONAL BANK DECISIONS. 165 FORGED OR ALTERED PAPER— Continued. NEGLIGENCE OF DEPOSITOB IN NOT EXAMINING VOUCHEES — EXAMINATION OP V0UCH- EBS BY AGENT COMMITTING FOBGEBY — continued. burden of proof is on him to show that the. balance was in fact based on the payment of forged checks. (Kenneth Inv. Co. v. National Bank of Republic, of St. Louis, 5 B. C, 13 ; 70 S. W., 173.) 7(N. Y.). Where a bank has paid raised checks, the depositor is not estopped from bringing an action against the bank to recover the amounts thereby obtained by failing to examine his bank account and vouchers when returned to him by the bank, whereby he would have discovered that the checks had been raised, and thus prevented further acts of such kind. (Critten v. Chemical Nat. Bank, 70 N. Y. S., 246; CO App. Div., 241.) 8 (N. Y.). A depositor's bookkeeper, after procuring the signature of his employer to checks for the pay roll, raised and cashed them, retained the excess, and when they were returned as vouchers, with a state- ment, he reduced them to the original amounts, altered the statement to correspond, and reported their correctness to his employer, who had an expert examine the accounts monthly. Held, that the depos- itor's failure to personally examine the vouchers and statements, or the accountant's failure to examine the statements, did not consti- tute negligence as against the bank. (Clark v. National Shoe and Leather Bank, 52 N. Y. S., 1064.) 9 (Pa., 1899). In an action to recover a sum deposited with the defendant bank, and alleged to have been paid out by it on forged checks, it appeared from plaintiff's evidence that during a period of over two years plaintiff's confidential clerk and bookkeeper, who was spe- cially intrusted with the business of attending to his bank account, making deposits with defendant, etc., forged checks to the amount of the claim, which were paid by defendant, and charged to plaintiff in his bank book ; that such bank book was balanced twelve times during such period, and the first settlement included two of the forged checks ; and that it would have appeared, upon proper exami- nation by plaintiff, that the bank had charged him with the payment of the first two forged checks, for which no vouchers appeared among the checks handed to him by his clerk, they having been abstracted and destroyed by the latter. Held, that plaintiff's failure to object within a reasonable time to the payment of the forged checks included in the first settlement gave the bank a right, in afterwards honoring checks signed by the same person, to assume that their signatures had been at least tacitly recognized by plaintiff as genuine ; and that a verdict was properly directed for defendant. (Myers v. Southwestern Nat. Bank, 2 Banking Cases, 74; 193 Pa. St., 1.) 10 (Pa.). Depositors, on return by the bank of their paid checks, are not bound to examine them to see that the indorsements are correct. (United Security Life Insurance and Trust Co. v. Central Nat. Bank, 40 A., 97; 185 Pa. St., 586;. 42 W. N. C, 145.) 11 (Tenn., 1897). In a suit against a bank to recover money paid by it on checks drawn by complainant, payable to T.'s order, and delivered to W., who forged indorsements thereof by T., it appeared that his transactions with W. covered a period of eighteen months, during which he turned over to W. 35 checks, all payable to T.'s order, 32 of which were paid on indorsements like those on the 3 checks in ques- tion, and all of ' which complainant claimed were forgeries ; that during such period his account was balanced three times, and he never examined it until after " this litigation " arose ; and that he knew T.'s signature, and the signature on all the checks were for- geries, except possibly two. Held, that recovery was not prevented by negligence of the complainant, it appearing that there had been no loss to complainant or the bank on account of the 32 checks, and hence no cause to challenge an inspection of the indorsements thereon. (Pollard v. Wellford, 42 S. W., 23 ; 99 Tenn., 113.) 166 DIGEST OF NATIONAL BANK DECISIONS. FORGED OR ALTERED PAPER— Continued. NEGLIGENCE OF DEPOSITOR IN NOT EXAMINING VOUCHEES — EXAMINATION OF VOUCH- ERS BY AGENT COMMITTING FOEGEBY Continued. When depositor liable for his agent's forgeries. 12 (U. S. C. C. A., 1899). A bank held entitled to recover from a depositor the amount of a check forged by an agent of such depositor, and indorsed and deposited by him under a power of attorney authorizing such indorsement and deposit, which check was credited to the depositor's account, and the amount drawn and embezzled by the agent. (Warren-Scharf Asphalt Pav. Co. v. Commercial Nat Bank, 97 Fed. Rep., 181 ; 2 B. C, 172.) 13 (U. S. C. C. A., 1899). A bank is not guilty of negligence or of a violation of the usual rules and customs of banking by crediting at once as cash to the account of a depositor the amount of a check indorsed and delivered for deposit by the authorized agent of the depositor; and permitting such amount to be subsequently drawn out by the agent prior to the collection of the check does not constitute an overdraft. (lb.) NEGLIGENCE BETWEEN BANKS IN NOT GIVING NOTICE OF. 1 (U. S. C. C, 1886). The right of the United States Government to recover money paid on a check on the Treasury, under a forged indorsement, is conditioned on promptness in giving notice to the person to whom the check was paid. - (United States v. Clinton National Bank, 28 Fed. Rep., 357.) 2 (111., 1894). In an action by a bank which has paid to another bank a check drawn on the former bank and transferred to the latter by a forged indorsement, it is immaterial whether the signature of the drawer of the check is genuine, since both parties are estopped to deny its genuineness. (First National Bank of Chicago v. North- western National Bank of Chicago, 111., 38 N. E., 739 ; 152 111., 296.) 3 (Ind., 1894). Plaintiff bank paid defendant bank money on a forged order, made payable at plaintiff bank, bearing the general indorse- ment of the payee and of defendant, the latter being " For collec- tion." The person by whom the order purported to be drawn was a customer of plaintiff, and had directed it to pay orders drawn by him. The forgery was not discovered for four weeks. Held, that an answer alleging that at the time of the payment the payee had property from which the order could have been collected, but that before the discovery of the forgery the payee had departed with his property, was not sufficient to prevent recovery of the money paid defendant, as it did not show how long the payee and the property remained within reach, and therefore failed to show loss to defend- ant by unreasonable delay of plaintiff in discovering the forgery and notifying defendant. (Indiana National Bank v. First National Bank, 36 N. E., 382; 9 Ind..App., 185.) 4 (N. T.). Defendant bank received a check drawn on plaintiff for collec- tion. After plaintiff had remitted to defendant, and defendant had paid the holder of the check, it was discovered that the payee's name was forged. Held, that delay of plaintiff in not notifying defendant of the forgery did not relieve defendant from liability, where the only evidence of injury from the delay was that of defendant's cashier, who said : " If more seasonable notice had been given the forger would have been arrested earlier, and more favor- able results might have arisen." (Third National Bank v. Mer- chants' National Bank, 27 N. Y. S., 1070.) Payment of forged check without identification — Negligence. 5 (Wash. Sup., 1902). Where a bank, without inquiry or identification of the person presenting a forged check drawn on another bank, pays such check, and indorses and presents it to the drawee, where it is paid without discovering the forgery, and in reliance upon such DIGEST OP NATIONAL BANK DECISIONS. 167 FORGED OR ALTERED PAPER— Continued. NEGLIGENCE BETWEEN BANKS IN NOT GIVING NOTICE OE Continued. indorsement, on subsequently discovering the forgery and demand- ing the money paid to the paying bank, before such bank has been placed in any worse position than it would have been had the drawee refused payment when the check was presented to it, the drawee may recover from such paying bank the amount so paid. (Canadian Bank of Commerce v. Bingham, 5 B. C, 140; 71 Pac. Rep., 43.) LIABILITY OP BANK TO DRAWEE FOB NEGLIGENCE. 1 CK. S. C. C. A., 1899). Although a bank is informed that an agent is authorized to draw checks upon it for the " use of '" the principal, in the absence of* circumstances calculated to arouse suspicion that a check drawn by the agent is for some fraudulent purpose of its own, there is no duty upon the bank to inquire into the purposes of the check, or the use to which the money is to be put. (Warren-Scharf Asphalt Pav. Co. v. Commercial Nat. Bank of Detroit, Mich., 2 Bank- ing Cases, 172 ; 97 Fed. Rep., 181.) 2 (Ohio). Where the person whose name is to a check as its drawer has no individual account with the bank, the bank, by paying the check and charging it to such person as administrator, thereby delaying for three months the discovery of the fact that the check is a forgery, is negligent. (First Nat. Bank of Belmont v. First National Bank of Barnesville, 50 N. E., 723; 58 Ohio St., 207.) 3 (Ohio). Presentation of a check for payment by a bank which is the indorsee " for collection " does not justify the drawee bank in relax- ing any of its vigilance in determining whether the name of the drawer is genuine. (lb.) MISTAKE OF DRAWER AS TO IDENTITY OF PAYEE. 1 (Ind., 1901). H. secured a loan from plaintiffs, giving a note and mort- gage therefor by the name of D., under the false representation that his name was D., and that he owned the land. The loan was turned over by a check on defendant bank. H. indorsed the check as D., and again as H. Held, that H., and not D., was the intended payee of the check, and he was entitled to payment as between himself and the bank, and the bank, having no notice of the fraud, was not liable to plaintiff for the amount of the check. (Meyer et al. v. Indiana Nat. Bank, 61 N. E. Rep., 596 ; 4 Banking Cases, 54.) 2 (Pa., 1900). A. was introduced to a trust company by a responsible party as B. The company, in the pursuance of a business transaction, gave A. its check drawn on itself to the order of B. This check, fraudu- lently indorsed in the name of B., was deposited in the defendant bank by R., who had opened an account with it, and was collected by the bank of the trust company, and its proceeds drawn out of the bank by R. So far as it appeared from the evidence, all parties to the transaction acted in good faith except A. Held, that the trust company could not recover from the bank the money paid on the check. (Land Title and Trust Co. v. Northwestern Nat. Bank, 2 Banking Cases, 588 ; 196 Pa. St., 230.) 3 (R. I., 1901). Puhlic Laws (Rhode Island), 1899, chapter 674, section 31, declares that a signature to a negotiable instrument, which is made without authority, or forged, shall be wholly inoperative, and shall not give a right to enforce payment against a party thereto. A check drawn payable to the order of A. was procured by representa- tions that the person to whom it was given was A., and the indorse- ment of the latter was forged thereto, and it was paid by the bank. Held, that the bank was liable to the drawer for such sum, both at common law and under the statute. (Tolman v. American Nat. Bank, 3 Banking Cases, 258 ; 22 R. I., 462.) 168 DIGEST OP NATIONAL BANK DECISIONS. FORGED OR ALTERED PAPER— Continued. LIABILITY OF BANK TO DRAWEE FOE PAYMENT OF CHECK WHEN NAME OF PAYEE OR INDORSEE IS FORGED. 1 (Cal., 1902). Where a bank paid a check to another than the payee, upon a forged indorsement, such bank acquired.no right against the drawer either to reimbursement or to retain the check. (Garth- waite et al. v. Bank of Tulare, 4 Banking Cases, 8; 134 Cal., 237.) 2 (Cal., 1902). Where the addressee and payee of a check sent by mail never received the same, and it was paid by the drawee on a forged indorsement, a demand of payment by the payee was in legal con- templation as agent of the owner of the check, and was a good demand. (lb.) • 3 (Cal., 1902). Where a check was paid by the. drawee on a forged in- dorsement, a subsequent verbal demand of payment by the payee was good, without a physical presentation of the check; the posses- sion of the check by the drawee obviating the necessity of such pres- entation, (lb.) 4 (Cal., 1902). Where a debtor purchased a bank's check on another bank, payable to his creditor, and such check, having been lost dur- ing transmission through the mail, was paid by the drawee on a forged indorsement, demand by the payee, and notice to the drawer of the drawee's refusal to pay, fixed the liability of the former to the original purchaser for the amount paid by him for the check. (lb.) 5 (Colo., 1902). Where a bank had no knowledge that the drawer of a check was not satisfied that the person receiving the check as payee was the person therein named as payee and took his receipts therefor it can not claim that such circumstances amount to a direction from the drawer to pay without reference to identification or to the genu- ineness of the indorsement, so as to relieve the bank from liability for paying to the wrong person, it having paid to another bank which had in the first instance paid the check, and in so doing relied solely on the indorsements. (Western Union Tel. Co. v. Bimetallic Bank, 4 Banking Cases, 373.) 6 (Colo., 1902). Where a bank paid a check simply upon the face of the indorsement, which was made by one " Daley " while the check was payable to one " Daily," that fact was amply sufficient to have placed the bank upon its guard and caused it to have made some inquiry as to whether it was paying to the proper person. (lb.) 7 (Colo., 1902). Payment having been made upon the written indorsement only, no question of idem sonans can arise. (lb.) 8 (111.). The burden of showing the authority of a stranger to a check to indorse it for the payee is upon the drawee if he would escape liabil- ity to pay the same over again to the payee. (Commercial Nat. Bank v. Lincoln Fuel Co., 67 111. App., 166.) 9 (111.). The drawer of a check delivered it to one who had applied for a loan as agent of the payee, and who gave the drawer notes and a trust deed purporting to be signed by said payee ; but the latter had not authorized the transaction and never received the check, which was paid by the drawee bank on a forged indorsement of the payee's name. Held, that the bank was liable to the drawer of the check, since it never became the property of the payee. Judgment (68 111. App., 562) affirmed. (First Nat. Bank v. Pease,' 48 N. E., 160; 168 111., 40.) 10 (Ind.?. Where a husband learns that his wife has forged checks on his bank account, which have been paid, and he examines the checks and pass book, but does not make any complaint to the bank, the latter is liable to him for the payment of future checks forged by the wife. (Neal v. First Nat. Bank, 60 N. E., 164; 26 Ind. App., 503.) 11 (Iowa, 1897). A bank which delivered to the supposed agent of a bor- rower its check on another bank for the amount of the loan, payable to the borrower, is not bound by the act of such agent in procuring DIGEST OF NATIONAL BANK DECISIONS. 169 FORGED OE ALTERED PAPER— Continued. LIABILITY OF BANK TO DRAWEE FOB PAYMENT OF CHECK WHEN NAME OF PAYEE OB indobsee is forged — continued. the money from a third bank on a forged indorsement of the bor- rower's name, though he was at the time acting as the drawer's agent. (German Sav. Bank v. Citizens' Nat. Bank, 70 N. W., 769; 101 Iowa, 530.) 12 (Ky., 1899). The payment by a bank of a check to any person save the payee himself, unless it be payable to bearer, is a payment at its peril ; and if the indorsement is forged, it is a payment out of the bank's funds, and the depositor can not be charged therewith. (Rice et al. v. Citizens' Nat. Bank, 1 Banking Cases, 512; 51 S. W., 454; see note at end of case. ) 13 Rep., 148; 173 U. S. Rep., 131.) Two judgments and dividends on same debt not allowed. 3 (U. S. C. C. A., 1896). Complainants, on the request of a national bank needing funds, signed an accommodation note for $10,000, payable to its order, with the understanding that it would discount the same and use the proceeds in its business. The bank at the same time agreed to place to the credit of complainants on its books an amount equal to the proceeds of the note, complainants stipulating that they would not check against this credit except to pay the note or to reimburse themselves for paying it. The credit was accordingly made, and the bank, after continuing business for some time failed, and complain- ants were compelled to pay the note. They thereafter recovered a judgment at law against the bank's receiver for the amount paid to take up the note, and sued in equity for the amount placed to their credit according to agreement. Held, that they were not entitled to two judgments for the same debt and to dividends on both judg- ments until one of them was satisfied, and that the bill must there- fore be dismissed. (Latimer v. Wood et al., 73 Fed. Rep., 1001.) 200 DIGEST OP NATIONAL BANK DECISIONS. INSOLVENCY AND RECEIVERS— Continued. Proof and Payment of Claims — Continued. claims provable — continued. Liability for rent. 4 (U. S. Sup. Ct, 1896). After passing into the liands of a receiver ap- pointed by the Comptroller of the Currency under the provisions ol the Revised Statutes, a national bank remains liable, during the remainder of the term, for accrued and accruing rent under a lease of the premises occupied by it, although the receiver may have aban- doned and surrendered them ; but if the lessor, in the exercise of a power conferred by the lease, reenters and relets the premises, the liability of the bank after the reletting is limited to the rent then accrued and unpaid, and the diminution, if any, in the rent for the remainder of the term after the reletting. (Chemical National Bank v. Hartford Deposit Company, 161 U. S., 1.) 5 (U. S. C. C, 1901). The receiver of a national bank succeeds to no rights beyond those which could have been enforced by the bank, its stock- holders, or creditors. He is not entitled to have a contract made by the bank, and which has been executed, set aside on the ground merely that it was ultra vires. (Brown v. Schleier et al., 112 Fed Rep., 577.) 6 (U. S. C. C, 1901). The receiver of a national bank can not attack the validity of a contract by which the bank leased ground for ninety- nine years for the purpose of building thereon, on the ground that it was ultra vires, since the bank was authorized to purchase and hold in fee real estate for certain specified purposes, and the question whether it exceeded its powers either in making the lease or in the erection of the building, is one which can only be raised by the Gov- ernment, (lb.) 7 (U. S. C. C.,1901). A contract by which a national bank leased ground for ninety-nine years, agreeing to pay the monthly rental therefor, does not create an indebtedness for the full amount of the rental accruing during the term. (lb.) 8 (U. S. C. C, 1901). A national bank leased ground for a term of ninety- nine years, and expended over $300,000 in the erection of a building thereon. It occupied a portion of the building as a banking house and rented the remainder to tenants. By a subsequent contract it surrendered the building to the owner of the land, and the lease was canceled. A receiver was afterwards appointed for the bank, who brought suit to charge the property with a lien for the money ex- pended in the erection of the building, on the ground that the action of the bank in making the lease and in expending the money was ultra vires. No fraud was shown in the transaction and it did not appear that any of the creditors were such when the lease was* made. Held, that the receiver, under such circumstances, had no greater rights than the bank, and that the bill stated no ground for relief. (lb.) Subscribers to increased stock as creditors. 9 (U. S. C. C, 1889). A subscriber who has made payments on his sub- scription to the proposed increase, believing that the statutory re- quirements would be complied with, is entitled to have the amount thereof allowed as a claim against the assets of the bank in the receiver's hands. (Armstrong v. Stannage, 37 Fed. Rep., 508.) 10 (U. S. C. C. A., 1895). One induced to subscribe for certificates alleged to represent an increase of the capital stock of a national bank at a time when no increase had been authorized, on false representa- tions of the cashier as to the bank's condition, it being, in fact, insolvent at the time, is entitled to a judgment against the bank and its receiver for the purchase money paid. (Newbegin v. Newton National Bank, 66 Fed. Rep., 701.) DIGEST OF NATIONAL BANK DECISIONS. 201 INSOLVENCY AND RECEIVERS— Continued. Proof and Payment of Claims — Continued. claims provable — continued. 11 (Mo. App., 1888). A national bank determined to increase its capital stock from $300,000 to $500,000. The new stock subscriptions amounted to only $130,060. The bank advertised an increase to $430,060. This was never authorized by vote of the stockholders, nor certified to or approved by the Comptroller of the Currency. The plaintiff subscribed and paid $2,000 for so much of the orig- inally proposed increase. Held, that plaintiff did not become a stockholder, and when the bank became insolvent was entitled to judgment against the receiver for the amount so paid. (Schieren- berg v. Stephens, 32 Mo. App., 314; 3 N. B. C, 528.) Receiver liable for frauds of bank. 12 (U. S. C. C. A., 1894). An embarrassed bank which organized a trust and safe deposit company to aid in its struggles for existence, held liable for funds abstracted from the trust company and used for the bank, on the ground that the organization and use made of the fprmer was a fraud on the public. (Fisher v. Adams, 63 Fed. Rep., 674.) .Rights of creditors holding collaterals. 13 (U. S. C. C, 1896). When a creditor of an insolvent estate holds col- lateral securities for his debt he is not required to exhaust his remedy upon such securities, nor to surrender them to the assignee or receiver administering such assigned estate, before receiving a » dividend therefrom. (Wheeler v. Walton & Whann Co., 72 Fed. Rep., 965.) Iceceiver liable for money received by bank. 14 (U. S. C. C. A., 1896). The receiver of an insolvent national bank is liable for money borrowed by the president of the bank without special authority when it appears that the bank actually received the money and appropriated it to its own use. (Western National Bank v. Armstrong, 152 U. S., 346; 14 Sup. Ct, 572, distinguished. Blanchard v. Commercial Bank of Tacoma, 75 Fed. Rep., 249.) Expenses of receivership — when stockholders not liable. 15 (U. S. Sup. Ct., 1887). The expenses of a receivership of a national bank appointed in a creditor's suit contesting a voluntary liquidation of the bank can not be charged upon stockholders as part of their stat- utory liability, but must come from'the creditors at whose instance the receiver was appointed. (Richmond v. Irons, 121 U. S., 27.) Claims for damages are paid ratably with debts. 16 (Iowa). Claims arising out of the nonfeasance or malfeasance of the association should be paid ratably with the debts, technically so called. (Turner v. First National Bank of Keokuk et al., 26 Iowa, 562.) Demand of deposit of receiver. 17 (S. C, 1902). Where a bank is in the hands of a receiver, a demand for payment of a deposit due by the bank is properly made by drawing a check on the bank and demanding payment thereof of the receiver. (Wylie v. Commercial and Farmers' Bank, 4 Banking Cases, 497; 41 S. E. Rep., 504; 63 S. C, 406.) General depositors are general creditors. 18 (Mo., 1900). Where a guardian deposited a trust fund with a bank as an ordinary depositor, and it was mingled with the other funds of the bank upon the insolvency of the bank, the cestui qui trust was not entitled to a preference over other creditors merely because the bank was aware that the fund was a trust fund, but, in order to entitle the cestui to a preference, it must have been a special deposit 202 DIGEST OP NATIONAL BANK DECISIONS. INSOLVENCY AND RECEIVERS— Continued. Proof and Payment of Claims — Continued. claims pbovable — continued. creating a trust relation, and not merely tlie relation of creditor and debtor. (Paul v. Draper, 3 Banking Cases, 50; 158 Mo., 197.) 19 (Nebr., 1899). The owner of a sum of money on a general deposit in a bank at the time of its failure is not entitled to a preferred claim ngainst the assets in the hands of its receiver. (Schmelling v. State et al., 1 Banking Cases, 670; 57 Neb., 562.) 20 (Okla., 1900). A general depositor is merely a general creditor of the bank, and is not entitled to any priority of payment over other gen- eral creditors, in case of an assignment for the benefit of creditors or of bankruptcy. (Bank of Blackwell v. Dean, 2 Banking Cases, 232; 9 Okla., 626.) EFFECT OF PROOF OF DEPOSIT AGAINST INSOLVENT BANK. 1 (U. S. Sup. Ct., 1876). The claims of depositors in a suspended national bank are, when proven to the satisfaction of the Comptroller of the Currency, on the same footing as if they were reduced to judgments. (National Bank of Commonwealth v. Mechanics' National Bank, 94 U. S., 437; 1 N. B. C, 133.) COMPUTING AMOUNT OF CLAIM AGAINST BANK. What credits not required on collaterals. 1 (U. S. Sup. Ct.). Collections from a collateral security made by a cred- itor of a national bank after the declared insolvency of the bank need not be deducted from the amount on which dividends are to be com- puted by the receiver of the bank, as the secured creditor is a creditor to the full amount due him when the insolvency is declared, and his right to dividends is unaffected by his collateral. (U. S. Sup. Ct., 1900) Aldrich, Receiver, etc., v. Chemical Nat. Bank of New York, 20 Sup. Ct. Rep., 498 ; 176 U. S., 618 ; -~ (U. S. Sup. Ct, 1899) Merrill v. National Bank of Jacksonville, 173 U. S., 181. 2 (TJ. S. C. C, 1896). The fact that a creditor's claim is secured by mort- gage or otherwise does not affect his "right to prove for the full amount of the claim, nor does the fact that he has realized part thereof out of the collateral since the date of the receivership; but in the latter case he is entitled to dividends only until the balance of his debt is satisfied. (New York Security and Trust Co. et al. v. Lombard Inv. Co. of Kans. et al., 73 Fed. Rep., 537.) 3 (N. Y.). Creditor of insolvent bank has the right to prove and have divi- dends upon his entire claim, irrespective of collateral security he may hold. (People v. Remington, 121 N. Y., 328.) PRIORITIES NONE GAINED BY' FILING CREDITOR'S BILL. 1 (U. S. C. C, 1883). The manifest intention of the national banking act is a distribution of its assets, in case a bank becomes insolvert, equally among all the unsecured creditors, and the di'igence of a creditor who files a creditor's bill can give him no greater rights than are given any other creditor to share in the distribution of the assets, and a prayer in the bill that such creditor be given priority- over other creditors will not be granted. (Irons, executor, etc., et al. v. Manufacturers' National Bank of Chicago et al., 17 Fed. Rep., 308.) PRIORITIES BETWEEN BANKS. When creditor bank has lien on insolvent bank funds. 1 (U. S. C. C. A., 1894). A contract between two national banks that the proceeds of paper, discounted by one for the other, should not be DIGEST OF NATIONAL BANK DECISIONS. 20tS INSOLVENCY AND RECEIVERS— Continued. Proof and Payment of Claims — Continued. priorities between banks — continued. drawn on in advance of the maturity of such paper, is not affected by the subsequent fraud of the bank obtaining the discount in report- ing such proceeds to the Comptroller of the Currency as part of its casn reserve. (Fisher v. Tradesmen's National Bank, 64 Fed. Rep.. 706.) 2 (U. S. C. C. A., 1894). A contract by which one bank pledges any of its property in the hands of another bank, as collateral to notes dis- counted for and guaranteed by it, authorizes the discounting bank to hold a deposit balance, standing to the credit of the borrowing bank at the time of its insolvency, as collateral to any liability, then or at maturity of the discounted notes, until the amount of the lien has been ascertained. (Fisher v. Continental National Bank, C. C. A., 64 Fed. Rep., 707.) 3 (U. S. C. C, 1890). Revised Statutes, section 5242, which invalidates all transfers of the notes, bonds, or bills of exchange of a national bank after the commission of an act of insolvency with a view to the pref- erence of one creditor over another, does not prohibit a bank which has in good faith accepted the draft of a national bank the day before the latter's insolvency, and afterwards paid the same, from applying the proceeds of collections made by it on paper in its hands belonging to the insolvent bank to the payment of the draft, since its lien on such collection runs from the date of the acceptance. (In re Arm- strong, 41 Fed. Rep., 381.) Preferences in Insolvency. meaning of " insolvency." 1 (U. S. C. C. A., 1898). Revised Statutes, section 5242, declaring void pay- ments made by a national bank after the commission of an act of bankruptcy, or in contemplation thereof, with a view to prevent the lawful application of its assets, means an act of bankruptcy or in- solvency in the legal sense of a failure to pay current obligations in the ordinary course, and does not invalidate payments made in the usual course of business before commission of any such act, and not in contemplation thereof, though the bank, if wound up at the time, would in fact be unable to meet all its obligations. (Hayden v. Chemical National Bank of New York, 84 Fed. Rep., 874, affirmed by U. S. Sup. Ct, 174 U. S. Rep., 610.) 2. The term " insolvency," as used in section 5242, Revised Statutes, for- bidding transfer of the assets of national banking associations after or in contemplation of such insolvency, has the same meaning as it had in the bankrupt act; that is, it does not mean an absolute ina- bility of a debtor to pay his debt at some future time upon a settle- ment and winding up of his affairs, but a present inability to pay in the ordinary course of business. (U. S. C. C, 1874) Case v. Citizens' Bank of Louisiana, 2 Woods, 23 ; IN. B. C, 276 ; (N. Y. Sup. Ct.) Market Bank v. Pacific National Bank, 30 Hun, 50. What is contemplation of insolvency. 3 (U. S. Sup. Ct, 1899). It can not be said that all payments made in the due course of business by a bank when its officers know its condition is that of actual insolvency are made in contemplation of insolvency, or with a view to prefer one creditor to another. The several pay- ments and remittances made to the Chemical Bank by the Capital Bank before its insolvency were not made in contemplation of insol- vency, or with a view to. prefer the Chemical Bank. These checks and remittances were not casual, but, were plainly made under a gen- eral agreement that remittances were to be made by mail, and that their proceeds were not to be returned to the Capital Bank, but were 204 DIGEST OP NATIONAL BANK DECISIONS. INSOLVENCY AND RECEIVERS— Continued. Preferences in Insolvency — Continued. meaning of " insolvency " — continued. to be credited to its constantly overdrawn account ; and when letters containing them were deposited in the post-office, such mailing was a delivery to the Chemical Bank, whose property therein was not destroyed or impaired by the insolvency of the Capital Bank, taking place after the mailing and before the delivery of the letters con- taining the remittances. (McDonald, receiver, v. Chemical National Bank, 174 U. S., 610 ; 1 Banking Cases, 657.) 4 (U. S. C. C, 1885). A bank is in contemplation of insolvency when the fact becomes reasonably apparent to its officers that the concern will presently be unable to meet its obligations, and will be obliged to suspend its ordinary operations. (Roberts, receiver, etc., v. Hill, administrator, etc., 24 Fed. Rep., 571.) The fact that the reserve is below the legal requirement does not affect bank's transactions. 5 (U. S. Sup. Ct, 1902). The mere reduction of the reserve of a national bank below the legal limit does not affect, with a legal presumption of bad faith, all transactions made with or concerning the bank flur- the period whilst the reserve is impaired. (Earle v. Carson, 188 U. S., 42.) WHEN INTENT TO GIVE PREFERENCE PRESUMED. 1 (U. S. C. C, 1885). The intent to give a preference is presumed when a payment is made to a creditor by a bank whose officers know of its insolvency, and therefore that it can not pay all of its, creditors in full. (Roberts, receiver, etc., v. Hill, administrator, etc., 24 Fed. Rep., 571.) 2 (U. S. C. C, 1885). After a vote of the directors to close their bank and go into liquidation, any transfer of the assets of the bank to a cred- itor, whereby that creditor secures a preference, will be presumed to be made with a fraudulent intent. (National Security Bank v. Price, receiver, 22 Fed. Rep., 697.) NOTES GIVEN IN RENEWAL OF OTHERS NOT EVIDENCES OF DEBT OR ASSETS WITHIN THE MEANING OF SECTION 5242. 1 (Ala.). Notes given in renewal of other notes held by a national bank, the original notes not being returned to the maker, are not " evidence of debt " or " assets " within Revised Statutes, section 5242, declaring void all transfers of " evidence of debt " owing to any national bank made after insolvency, or in contemplation thereof, to prevent the application of the assets of the bank, as required by law, or with n view to prefer creditors. (First National Bank of Decatur v. John- ston, 11 So., 690; 97 Ala., 655.) VALID PREFERENCES. Mortgage or pledge for present loan valid. 1 (U.S. C. C, 1890). Revised Statutes United States, section 5242, which prohibits all transfers by any national banking association made after the commission of an act of insolvency, or in contemplation thereof, with a view to the preference of one creditor over another, is directed to a preference, not to the giving of security when a debt is created ; and if the transaction be free from fraud in fact, and is intended merely to adequately protect a loan made at the time, the creditor can retain property transferred to secure such loan until the debt is paid, though the debtor is insolvent and the creditor has reason at the time to believe that to be the fact. (Armstrong v. Chemical National Bank, 41 Fed. Kep., 234.) DIGEST OF NATIONAL BANK DECISIONS. 205 INSOLVENCY AND RECEIVERS— Continued. Pbbfebences in Insolvency — Continued. valid pbefebences — continued. 2 (D. S. C. C, 1893). Revised Statutes, section 5242, which declares all deposits, all transfers of deposits, and all payments of money made by a national bank after an act of insolvency, or in contemplation thereof, to be null and void, does not render illegal the retention of a balance standing to the credit of an insolvent national bank with a correspondent on the day of its failure which has been pledged for the purpose of securing loans made by the correspondent to the insol- vent bank. (Bell v. Hanover National Bank, 57 Fed. Rep., 821.) 3 (U. S. C. C, 1893). Where a deposit with a correspondent has, long prior to the commission of the act of insolvency by a national bank, been pledged as collateral to secure the payment of loans made to the insol- vent by its correspondent, neither the subsequent insolvency of the bank nor the appointment of the receiver destroys the lien of the correspondent or its rights to dispose of the pledge to satisfy the debt secured. (lb.) Insolvent banlc's mortgage for present loan valid. 4 (U. S. C. C. A., 1899). Revised Statutes, section 5242, does not invali- date a transfer of property by a national bank to secure advances made to it at the time, though it is insolvent or in contemplation of insolvency ; nor is such transfer, to the extent of such advances, ren- dered invalid by the fact that, as a part of the same transaction, it is agreed that such property shall also stand as security for an ante- cedent indebtedness, where the creditor acts in good faith and in the belief that the bank is solvent ( Stapylton v. Stockton, 91 Fed. Rep., 326.) 5 (U. S. C. C. A., 1899). The fact that a deed to property of a national bank, executed by its president as security for a loan obtained for the bank, and enforceable as an equitable mortgage, was not recorded until the day the bank closed its doors, does not entitle other creditors to set aside such deed, where there was no agreement to withhold it from record, and under the laws of the State it was good as a mort- gage between the parties, whether recorded or not (lb.) 6 (U. S. C. C. A., 1899). The president of a national bank, who owned a majority of its stock and exercised full control over its affairs, with the acquiescence of the directors, obtained a loan for the bank at a time when it waS, in fact, insolvent, though not known or believed to be so by the lender, and, as security, executed a deed to the bank building and lot, producing a certified copy of what purported to be the minutes of the action of the board of directors authorizing the conveyance, though no such action had, in fact, been taken. Held, that though insufficient as a formal conveyance by the bank, where authorized by the course of decisions in the State such deed would be upheld as an equitable mortgage. (lb.) May assign securities to secure previous debts. 7 (111. Sup., 1878). As security for a preexisting debt, a national bank may make an assignment of a note and a real mortgage contemporaneously executed to secure such note. (Worcester National Bank v. Cheeney, 87 111., 603; 2 N. B. C, 227.) ' When payment after insolvency valid. 8 (III. Sup.). Where an insolvent debtor, just before making an assignment for the benefit of creditors, and after he has determined to make it, pays in cash an interest-bearing debt, not then due, and the creditor, without notice of the debtor's insolvency, or of his intention of mak- ing an assignment, receives the payment and surrenders the evidence of indebtedness, the transaction does not constitute a preference, within the meaning of the assignment law. (43 111. App.. 499, affirmed. Illinois Paper Co. v. Northwestern National Bank, 111. Sup., 37 N. E., 66.) 206 DIGEST OF NATIONAL BANK DECISIONS. INSOLVENCY AND RECEIVERS— Continued. Pebfebbncbs in Insolvency — Continued. valid pbeferences — continued. 9 (Mo. Sup.. 1894). A corporation in failing circumstances may, by con- veyance, prefer one creditor to another in discharging its obligations, if such preference is made in good faith, while the property of the company remains in its possession, unaffected by liens or by process of law. (Alberger v. National Bank of Commerce, Mo. Sup., 27 S. W., 657; 123 Mo., 313.) 10 (Mo. Sup., 1894). A conveyance of property by a corporation in failing circumstances to discharge its obligations, though constituting a preference, is not rendered fraudulent because the amount of prop- erty conveyed largely exceeds the debt thereby preferred. (lb.) 11 (Mo. Sup., 1894). A conveyance of property by a corporation in failing circumstances to discharge its obligations, though constituting a preference, is not invalidated by general assignment made the same day. (lb.) 12 (N. Y. ). In an action by the receiver of a national bank to recover back payments alleged to have been made by the bank in violation of the provision of the national banking act (section 5242), declaring void all transfers of securities and payments made by a bank organized under it, " after the commission of an act of insolvency, or in con- templation thereof, made with a view to prevent the application of its assets," as prescribed by the act, these facts were found : De- fendant held three certificates of deposit issued by the bank, draw- ing 6 per cent interest ; its "cashier, for the reason alleged by him that the directors did not like his paying so large a rate of interest, voluntarily paid two of them, mostly by transferring to defendant negotiable paper. The third certificate was paid on presentation. The bank at the time of these payments was, in fact, insolvent and had been for years, but this was known only to the cashier; it was in good credit and had committed no act of insolvency, and paid all its obligations as they became due or were demanded for six weeks after the last of said payments was made : Held, that the complaint was properly dismissed, as plaintiff failed to show that the pay- ments were made in contemplation of insolvency, or to prevent the application of the bank's assets as prescribed by the act. (Hayes, Receiver, v. Beardsley, 136 N. Y., 299.) 13 (N. Y.). The insolvency of the bank was sp concealed by the cashier that none of its directors had any suspicion thereof, and it was not discovered by the bank examiner: Held, that under the circum- stances the fact that defendant was a director did not as a matter of law charge him with liability for the payments made to him ; that, it having been found that he acted in good faith and in igno- rance of any wrongdoing or of the bank's insolvency, payments made to him were to be tested under said provisions like payments made to other creditors. (lb.) When sale of drafts after insolvency not a preference. 14 (N. J. Eq., 1884). Baldwin, one of the executors and the general financial manager and custodian of the securities of an estate and also the cashier of a national bank, purchased four accepted bills of exchange. To pay for them he drew his check as executor on the deposit in the bank to the credit of the estate, and placed in the box containing the papers of the estate, usually kept in the cashier's desk in the bank, the drafts with this memorandum attached : " Est. W. James, loan $25,000, Oct. 26th, 1881, C. Nugent & Co." The proceeds of the drafts were applied to the drawer's indebtedness to the bank. The bank failed and the defendant was appointed receiver. He gave to the executors the box and all its contents except the drafts, which he kept, claiming that they were the assets of the bank. He refused to deliver them on demand, and collected them at maturity, but kept the proceeds separate. Held, that Baldwin, in the purchase of the drafts, DIGEST OF NATIONAL BANK DECISIONS. 207 INSOLVENCY AND RECEIVERS— Continued. Pbefbbbnces in Insolvency — Continued. valid pbefebenceb — continued. acted as agent of the drawers and as executor and not as cashier, and though Baldwin knew at the time that the bank was insolvent, yet the transaction being a bona flde purchase and not a plan to secure preference of the estate over other depositors, was not in violation of section 5242 of the Revised Statutes of the United States, which forbids the transfer of any bills of exchange, etc., owing to any national bank * * * after the commission of any act of insol- vency or in contemplation thereof; and further, that this court has jurisdiction to follow the proceeds of the drafts as trust property so long as they are identifiable, and to decree their payment to the estate. (Turtle v. Frelinghuysen, 38 N. J. Eq„ 12; 3 National Bank- ing Cases, 576.) When remittances made in regular course of business not preferences — Checks and remittances sent by mail are delivered when the letters containing them are deposited in the post-office. 15 (U. S. Sup. Ct, 1899). The several payments and remittances made to the Chemical Bank by the Capital Bank before its insolvency were not made in contemplation of insolvency, or with a view to prefer the Chemical Bank. These checks and remittances were not casual, but were plainly made under a general agreement that remittances were to be made by mail, and that their proceeds were not to be returned to the Capital Bank, but were to, be credited to its constantly over- drawn account; and when letters "containing them were deposited in the post-office, such mailing was a delivery to the Chemical Bank, whose property therein was riot destroyed or impaired by the insol- vency of the Capital Bank, taking place after the mailing and before the delivery of the letters containing the remittances. (McDonald, receiver, v. Chemical National Bank, 174 U. S., 610.) When special deposit a preferred claim. 16 (TJ. S. C. C, 1897). Money deposited in one bank to the account of another, with directions to the latter to pay the amount thereof by telegram to a third bank, is a specific deposit, which may be recovered in full, as against general creditors, where the bank to whose credit the money is deposited receives the same, but suspends before making payment as directed. (Montagu et al. v. Pacific Bank et al., 81 Fed. Rep., 602.) 17 (U. S. C. C, 1894). When an indorser pays a note to a bank, and takes a receipt containing an order for a surrender of the note on return of the receipt, the relation between the bank and the indorser is not that of debtor and creditor, but it is a fiduciary relation, entitling the indorser, on the bank becoming insolvent without applying the money on the note or procuring its surrender, to have the assets in the hands of its receiver applied in payment thereof. (Massey v. Fisher, 62 Fed. Rep., 958.) 18 (Cal., 1896). Plaintiff, under an agreement with the bank, deposited with it $2,000 to secure the bank and the sureties it might procure from liability as bail, and received a receipt reciting the deposit, and that it was payable on return of the certificate and release from liability on bail bond. The money, without the consent of plaintiff, went into the bank vault through the regular channels. Held, that the deposit was special, and therefore, on the insolvency of the bank, plaintiff did not stand merely in the same position as the general creditors of the bank. (Anderson v. Pacific Bank, Cal., 44 P., 1063 ; 112 Cal., 598.) 19 (Nebr.). A fund coming into posession of a bank, with respect to which the bank has but a single duty to perform, which is to deliver it to the person entitled thereto, is a trust fund incapable of being com- mingled with general assets of the bank afterwards transferred to a receiver. (Capital Nat. Bank v. Coldwater Nat. Bank, 49 Nebr., 786; 69 N. W. Rep., 115.) 208 DIGEST OF NATIONAL BANK DECISIONS. INSOLVENCY AND RECEIVERS— Continued. Preferences in Insolvency — Continued. WHEN CLEARING HOUSE MAY RETAIN BANK'S PAPER. 1 (U. S. Sup. Ct, 1897). Where by a special agreement the clearing house was permitted to retain the paper of a bank each day until it settled its balance with the clearing house for that day, the clearing house is entitled, up to notice of insolvency, to set off the due bills for bal- ances in clearings of the preceding days against the proceeds of the collections in its hands, but can not (it not being included in said special agreement) set off the amount due from the bank for loan certificates, as that would be a preference within the prohibition of Revised Statutes 5242. (Tardley v. Philler, 167 U. S., 344.) INVALID PREFERENCES. Preference of officers not allowed. 1 (Wis., 1899). Where a savings bank, although it has officers of its own, is exclusively managed by the officers of a national bank to which it is indebted, a transfer of collaterals and money from the savings bank to the national bank when the former is insolvent and on the verge of suspension, is an illegal preference of the de facto officers of a corporation. (Slack v. Northwestern Nat. Bank of Superior, 2 Bank- ing Cases, 66; 103 Wis., 57.) Bank's indemnity to its sureties on attachment bond void. 2 (U. S. Sup. Ct, 1888). No attachment can issue from a circuit court of the United States in an action against a national bank before final judgment in the cause ; and if such an attachment is made on mesne process and is then dissolved by means of a bond, with sureties con- ditioned to pay to plaintiff the judgment which he may recover, the bond is void, and the sureties are under no liability to plaintiff. If the sureties have received assets of the bank to indemnify them against loss (the bank having passed into the hands of a receiver), the receiver may maintain a bill in equity to discharge the sureties and to compel them to transfer their collateral to him. (Pacific National Bank v. Mixter, 124 U. S., 721; Butler v. Coleman, id.) What forbidden after insolvency by section 5242, Revised Statutes. 3 (U. S. Sup. Ct, 1889). The meaning of section 5242 is not different from the meaning of section 52 of the act of June 3, 1864, c. 106, 13 Stat, 115. (National Security Bank v. Butler, 129 U. S., 223.) 4 (U. S. Sup. Ct., 1889). It is sufficient, under section 5242, to invalidate such a transfer, that it is made in contemplation of insolvency, and either with a view on the part of the bank to prevent the application of its assets in the manner prescribed by chapter 4 of title 62 of the Revised Statutes, or with a view on its part to the preference of one creditor to another ; and it is not necessary to such invalidity that there should be such view on the part of the creditor in receiving the transfer, or any knowledge or suspicion on his part at the time, that the debtor is insolvent or contemplates insolvency. (lb.) Void when given in contemplation of insolvency. 5 (U. S. C. C, 1874). To make transfers, assignments, etc., void under sec- tion 52, it is only necessary that the insolvency should be in the con- templation of the bank making transfers ; the parties receiving the transfers need not know of or contemplate such insolvency. (Case v. Citizens' Bank of Louisiana, 2 Woods, 23 ; 1 National Banking Cases, 276.) When given to postpone contemplated failure. 6 (U. S. C. C, 1885). Where property is transferred by a bank to a creditor to avoid paying him the amount due him, and thus postpone the fail- ure of the hank, it is none the less fraudulent and void. (Roberts,, receiver, etc., v. Hill, administrator, etc., 24 Fed. Rep*,. 571.) DIGEST OF NATIONAL BANK DECISIONS. ^09 INSOLVENCY AND RECEIVERS— Continued. Pbefebences in Insolvency — Continued. invalid pbefeeences — continued. Possession is the essence of a pledge; and without it, no privilege can exist as against third persons. 7 (U. S. Sup. Ct, 1877). The thing pledged may be in the temporary posses- sion of the pledger as special bailee, without defeating the legal possession of the pledgee ; but where it has never been out of the pledgor's actual possession, and has always been subject to his dis- posal by way of collection, sale, substitution, or exchange, no pledge ' or privilege exists as against third persons. Where it was agreed that a bank should deposit bills and notes with its president and his partner, by way of pledge to secure a loan made by a third party, and the president delivers them back to the bank officers for collec- tion, with power to substitute other securities therefor, it is not such a delivery and possession as is necessary to create a privilege by the law of Louisiana. (Justices Swayne, Field, and Harlan dissented.) (Casey v. Cavaroc, 96 U. S. Rep., 467.) EIGHTS OF PEBSONS MAKING DEPOSITS AFTEB INSOLVENCY. When a deposit may be recovered. 1 (U. S. Sup. Ct, 1890). When a bank has become hopelessly insolvent, and its president knows that it is so, it is a fraud to receive deposits of checks from an innocent depositor, ignorant of its condition, and he can redeem them or their proceeds; and the pleadings in this case are so framed as to give the plaintiff in error the benefit of this prin- ciple. (St. Louis and San Francisco Railway Company v. Johnston, 133 U. S., 566.) 2 (U. S. C. C, 1892). Certain checks marked " For deposit" were deposited in a bank at a quarter to 3 on Saturday, and credit was immediately given for the amount thereof on the pass book. The bank closed at 3, and the next day was declared insolvent, with the checks still in its hands. It was the bank's custom, at the close, of each day's business, to balance its books, crediting depositors with the amount of their checks, and if a check was subsequently returned unpaid from the clearing house it was charged off to the depositors. The depositor in this instance did not know of this custom. He had made deposits with the bank for several years without any special arrangement, and had never drawn against uncollected checks, except by particular understanding. Held, that on these facts title had passed to the bank so as to create the relation of debtor and creditor. (City of Somerville v. Beal, receiver, 49 Fed. Rep., 790 ; affirmed in 50 Fed. Rep., 647.) 3 (U. S. C. C, 1892). But where the foregoing facts were alleged in the bill, and connected with the further allegation that at the time the checks were received the bank was " irretrievably insolvent, and made so by the operations of the president and two others of the directors," and that the depositor then believed it to be solvent and had no means of knowing of its insolvency, this was sufficient to show fraud and to render the bank liable to return the checks or their proceeds, (lb.) 4 (U. S. C. C, 1892). It was not necessary for the bill to specifically allege that the officers of the bank had knowledge of its insolvency, since such knowledge would be implied from the allegation that the in- solvency was caused by the president and two directors. (lb.) 5 (U. S. C. C. A., 1892). A city treasurer deposited checks in a bank, in- dorsed by him " For deposit," and the checks were immediately cred- ited to him on his pass book, though not in pursuance of any agreement to that effect. He had been a depositor in the bank for some years, but had no agreement that his checks should be treated 4049—05 14 210 DIGEST OF NATIONAL BANK DECISIONS. INSOLVENCY AND RECEIVERS— Continued. Preferences in Insolvency — Continued. RIGHTS OF PERSONS MAKING DEPOSITS AFTER INSOLVENCY Continued. as cash or that he should draw against them before collection. The bank became insolvent before the checks were collected, and their proceeds passed into the hands of a receiver. Held, that no title passed to the bank except as a bailee, and that the depositor was entitled to the proceeds. (Beal, Receiver, v. City of Somerville, 50 Fed. Rep., 647.) 6 (U. S. C. C, 1894). Where money and checks are unsuspectingly de- posited in a bank which is known by its managing officer to be hopelessly insolvent a few minutes before closing hour on the last day on which it does business, and the checks are subsequently collected by the bank's clerk, the whole of the deposit is charged with a trust, and an equal amount may be recovered from the receiver, who retains the specific money among the general mass of the bank's funds. (Wasson v. Hawkins, 59 Fed. Rep., 233.) 7 (U. S. C. C, 1888). Where plaintiff deposits money with the receiving teller of a bank a few minutes before the bank closes its doors, to be credited to his account, and the teller, not knowing of the coming failure, after crediting the money in the plaintiff's pass book, puts the money and deposit ticket one side, and before entry is made in the books of the bank it closes its doors, and the money is by order of the directors placed apart, and in that condition delivered to the receiver, plaintiff can maintain replevin for the moneys so deposited. (Furber v. Stephens, 35 Fed. Rep., 17.) 8 (U. S. C. C, 1896). The title to funds deposited in an insolvent national bank before banking hours, where the bank was taken in charge by the examiner before the time for opening arrived and was not there- after opened for business, held to have remained in the depositor, and the funds to be recoverable by him from the receiver. (City of Philadelphia v. Eckels, 98 Fed. Rep., 485. ) 9 (U. S. C. C, 1899). Where a clearing house collected checks and drafts for an insolvent national bank on the day it had been closed by the Comptroller, and from the proceeds paid the balances due from the bank, leaving a balance to its credit, such balance must be presumed to include the proceeds of paper which had been deposited in the bank, and the title to which still remained in the depositors. (City of Philadelphia v. Aldrich, 98 Fed. Rep., 487.) 10 (U. S. C. C. A., 1900). It is not essential to the right of a depositor to recover from the receiver of an insolvent bank money deposited after it was known by its officers to be insolvent that he should be able to trace the identical money, but it is sufficient if the money which came into the receiver's hands was increased by the amount of the deposit. (Richardson v. New Orleans Debenture Redemption Co., 102 Fed. Rep., 780.) 11 (U. S. C. G. A., 1900). When a bank receives a deposit after hopeless insolvency, the fraud avoids the implied contract between the parties by which the relation of debtor and creditor would ordinarily arise and prevents the money deposited from becoming the property of the bank and a trust is the equitable result. (lb.) 12 (U. S. C. C. A., 1898). Defendant deposited in bank a draft drawn on its New York correspondent, having theretofore slightly overdrawn its account. The draft was passed to defendant's credit and checked against. On suspension of the bank defendant stopped payment of the draft by telegram, whereupon plaintiff sued as receiver to recover on the draft. Held, that he was entitled to recover only the amount due the bank after charging back the draft. (Stapylton v. Cie. des Phosphates de France, 88 Fed. Rep., 53.) 13 (U. S. C. C. A., 1900). Money deposited in a bank on the day it closed its doors, and when it was known by its officers to be insolvent, remains the property of the depositor, and may be recovered by him DIGEST OF NATIONAL BANK DECISIONS. 211 INSOLVENCY AND RECEIVERS— Continued. Preferences in Insolvency — Continued. BIGHTS OF PERSONS MAKING DEPOSITS AFTER INSOLVENCY — Continued. from the receiver where it is shown that it went to increase the sum which ca*me into his hands. (Richardson v. New Orleans Coffee Co., 102 Fed. Rep., 785 ; 2 B. C, 522. ) 14 (U. S. C. C. A., 1900). The right of a depositor to recover a deposit made on the day a bank closed its doors was not affected by the sale by the bank to him on the same day of drafts which were not paid, and for which he gave checks covering the amount deposited. (lb.) 15 U. S. C. C, 1895). A depositor is entitled to a preference where the deposit was made when the bank was hopelessly insolvent, which fact was concealed by the bank ; and an equal amount may be recovered from the receiver, who has received the specific money among the general mass of the bank's funds. (Lake Erie and Western Railroad Company v. Indianapolis National Bank, 65 Fed. Rep., 690.) 16 (N. Y.). Plaintiffs deposited, in the usual course of business, certain drafts with a national bank, which were credited to them on the books of the bank and in their pass book. The bank was at the time irretrievably insolvent, and its drafts had gone to protest the day before; of this its president, to whom was intrusted its entire con- trol and management, had full knowledge, and presumably its other officers and agents. The bank kept open until the usual hour of closing on the day of the deposit, but did not open its doors there- after, and went into the hands of a receiver. In an action to recover the deposit, held, that in permitting plaintiffs to make it, in reliance upon the supposed solvency of the bank, a gross fraud was practiced upon the plaintiffs, and they were entitled to reclaim the drafts or their proceeds. Also, that the right of plaintiffs to make the recla- mation was not precluded by the provisions of Revised Statutes, sec- tions 5234 and 5242, forbidding all preferential payment or transfers by an insolvent bank and providing for a ratable distribution of its assets, as plaintiffs did not claim under a transfer from the bank, but under their original title, that their relation as creditors termi- nated when they elected to rescind the contract implied when the deposit was made, and they were seeking simply to reclaim their own property, and that neither the receiver nor any creditor of the bank had any equity to have such property applied in payment of its obli- gations. (Cragie et al. v. Hadley, Receiver, 99 N. Y., 131.) 17 (N. Y.). It makes no difference if the deposit be money or paper for col- lection, if the officers knew the bank to be insolvent a trust results. (Importers and Traders' Bank v. Peters, 123 N. Y., 272.) When a deposit made after insolvency may not &e recovered. 18 (U. S. C. C, 1899). One who made a general deposit in a bank can not recover such deposit from a receiver on the grounds that the bank was insolvent and known to be so by its officers when the deposit was made, and that the fraud authorized him to rescind the con- tract, unless the money deposited can be identified in the hands of the receiver, or it appears that the funds coming into his hands were increased by that amount (Quin v. Earle, 95 Fed. Rep., 728.) 19 (U. S. C. C, 1899). To constitute fraud on the part of a bank in receiv- ing a deposit when insolvent, which will authorize the depositor to rescind the contract and recover the deposit from a receiver subse- quently appointed, the officers must have known or believed the bank to be insolvent at the time the deposit was received, and such knowl- edge can not be presumed, but must be proved. The fact that they knew it to be in an embarrassed condition is insufficient to establish the fraud. (lb.) 20 (N. Y.). A deposit made in the usual course of business vests in the bank, and can not be recovered by the depositor on the ground of fraud, though the bank was insolvent and failed on the next day, 212 DIGEST OP NATIONAL BANK DECISIONS. INSOLVENCY AND RECEIVERS— Continued. Preferences in Insolvency — Continued. EIGHTS OF PERSONS MAKING DEPOSITS AFTER INSOLVENCY — Continued. and though the deposit was made in reliance on representations of the president that the bank was all right, unless the officers of the bank knew of its insolvency at the time of the deposit. (New York Breweries Co. v. Higgins, 29 N. Y. S., 416.) 21 (Ohio C. P.). A deposit made in a bank at a time when the officers knew that it was insolvent can not be recovered from the assignee unless it can be identified and traced into his hands. (In re Com- mercial Bank (Ct. Insolv.), 2 Ohio N. P., 170.) When deceived depositor not allowed preference. 22 (Tenn. App., 1895). Where a general depositor presented his check to a bank, accompanied with a demand for payment, but by reason of the false representations of the president as to the solvency of the bank was induced to withdraw said check and to allow his money to remain in the bank, he can not, as a preferred creditor, maintain a bill to recover the amount of said check against a receiver appointed after the bank was declared insolvent. (Venner v. Cox, Tenn. Ch. App., 35 S. W., 769.) CLAIMS OF SAVINGS BANKS NOT PREFERRED. 1 (U. S. Sup. Ct., 1896). The provisions of the New York banking law, that debts due savings banks by an insolvent bank shall be preferred, is in conflict with Revised Statutes, sections 5236, "5242, requiring the assets of an insolvent national bank to be distributed ratably among the creditors, and is therefore inapplicable in the case of a national bank. (Davis v. Elmira Savings Banks, 16 S. Ct., 502 ; 161 U. S., 275.) DEPOSIT OF COUNTY OR SCHOOL FUNDS. When deposit of public funds preferred. 1 (U. S. C. C. A., 1899). A fund deposited with a national bank, which it agreed to hold for the special purpose of paying certain bonds of a school district, and which it could not legally receive as an ordinary deposit or mingle with its own funds, constituted a trust fund, recoverable by the district from its receiver, though it was in fact mingled with the funds of the bank, where a sufficient amount of cash remained on hand at the time the bank suspended business and came into the hands of the receiver. (Merchants' National Bank v. School Dist. N. 8, of Meagher County, Mont, 94 Fed. Rep., 705.) 2 (U. S. C. C, 1892). Where the treasurer and tax collector of a county, without authority of law, deposit county moneys in a bank, and re- ceive certificates of deposit marked " Special," the title to the moneys does not pass, although there is no agreement that the identical bills shall be returned, and they are mixed with the bank's general funds, and the county , is entitled to recover an equal amount from a receiver of the bank prior to the payment of the general depositors. ( San Diego County v. California National Bank, 52 Fed. Rep., 59. ) 3 (Idaho Sup., 1898). The creditors of an insolvent national bank are not entitled to share pro rata in the public money deposited in such bank. ( State ex rel. Anderson et al. v. Thum, 1 Banking Cases, 481 ; 6 Idaho, 323.) 4 (Idaho Sup., 1900). Public moneys deposited in a bank in violation of law as trust funds, do not become the property or assets of such bank, and remain trust funds, with title in the true owner, after the appointment of a receiver and the insolvency of the bank. State v. Thum, 55 Pac, 858, affirmed. (First Nat. Bank of Pocatello v. C. Bunting & Co. et al., 2 Banking Cases, 239 ; 7 Idaho, 27.) DIGEST OF NATIONAL BANK DECISIONS. 213 INSOLVENCY AND RECEIVERS— Continued. Preferences in Insolvency — Continued. deposit of county or school funds — continued. 5 (Idaho Sup., 1900). A county whose funds have been unlawfully de- posited in a bank is not estopped from claiming such funds as a trust fund by reason of its treasurer having received a pro rata payment thereon in common with general creditors. (lb.) When deposit of public funds not preferred. 6 (U. S. C. C, 1894). Under Revised Statutes, section 5242, which forbids" all preferences among the creditors of insolvent national banks, a county whose money has been deposited by the county treasurer in a national bank that has become insolvent has no superior right over "other depositors in the assets of the bank, where it is not shown that the identical funds deposited by the treasurer or the proceeds of such funds have come into the hands of the receiver. (Spokane County v. Clark, 61 Fed. Rep., 538.) 7 (U. S. C. C, 1894). A county whose funds are deposited in a bank that fails has no preference over other depositors as to the bank assets where the identity of the funds deposited by the county has been lost. San Diego County v. California National Bank, 52 Fed. Rep., 59, disapproved. (Multnomah County et al. v. Oregon National Bank et al., 61 Fed. Rep., 9i2.) 8 (U. S. C. C. A., 1898). Where the treasurer of a school district has ille- gally deposited its funds in a national bank, and they have become intermingled with the general funds of the bank, after the bank has been declared insolvent, no right is conferred upon the district by the statutes of Iowa to priority of payment out of such general funds over other creditors, and a decision to such effect by the supreme court of the State would not be binding upon a Federal court. (Beard v. Independent District of Pella City, 1 Banking Cases, 385; 88 Fed. Rep., 375.) 9 (TJ. S. C. C. A., 1898). In order to establish its right to such priority of payment out of the cash fund in the hands of the bank's receiver, the school district must pr.ove that such cash has been augmented by the addition thereto of trust funds belonging to it, and wrongfully deposited by its treasurer, and this is not shown by evidence to the effect that the amount claimed was not actual cash deposited, but was represented by checks drawn on the bank itself against an ordi- nary account, the amount of each being charged on the bank's books against the drawer and then entered to the credit of the treasurer of the school district. (lb.) CLAIMS OF UNITED STATES. Section 3466 does not apply to insolvent national banks. 1 (U. S. Sup. Ct, 1882). Section 3466, which gives the United States a pri- ority for all claims it has against insolvent debtors, does not apply to the case of an insolvent national banking association. (Cook County National Bank v. United States, 107 U. S., 445.) Claim of United States not preferred. 2 (U. S. Sup. Ct., 1882). The United States Government has no priority over other creditors on the proceeds of the sale of bonds deposited as security for the circulation of national-bank bills, as well as no prior claim in the distribution of the bank assets, for the payment of the claims of the Government against such bank, and may not apply the proceeds of such assets to the payment pro tanto of its claim for the postal funds and money-order funds deposited in such bank by the postmaster. (lb.) Offset of the United States. 3 (U. S. Sup. Ct., 1882). Against the proceeds of the bonds deposited to secure circulation the United States can set off no claim, except for money advanced to redeem notes. (lb.) 214 DIGEST OP NATIONAL BANK DECISIONS. INSOLVENCY AND RECEIVERS— Continued. Preferences in Insolvency — Continued. claims of united states — continued. 4 (U. S. Ct. Cls.). And upon the failure of any association its 5 per cem redemption fund can not be retained by the Treasury to pay taxes due to the United States, but the fund passes to the Comptroller as an asset of the association. (Jackson v. United States, 20 Ct. Cls., 298.) TRANSFER OF SECURITIES AFTER INSOLVENCY PROHIBITED. 1 'Ky. Appls., 1901). Where a deposit in bank, made by an insolvent debtor, was applied by the bank to the payment of a note it held against the depositor, in order to prevent the release of a surety in the note, the making of the deposit was a preference within the statute, though there may have been no intent to prefer, as that was the natural re- sult ; and therefore, in an action to have a prior act of preference declared to operate as an assignment, the bank may be required to surrender the money, the facts constituting the deposit an act of preference being alleged and proved. (Northern Bank of Kentucky v. Farmers' National Bank of Cynthiana et al., 63 S. W. Rep., 64; 3 Banking Cases, 564.) 2 (Md. Appls., 1900). In an action to have certain payments made by the defendant bank declared fraudulent preferences, it appeared that the bank, when such payments were made, had been insolvent for years, and was hopelessly insolvent at the time of the payments, or imme- diately following thereupon. Held, that it must be concluded that the payments were made when the bank was insolvent and about to close its doors, and when its officers were chargeable with notice of its condition. (James Clark Co. et al. v. Colton et al., 2 Banking Cases, 530; 91 Md., 195.) 3 (N. T. Sup., 1898). A director of the M. S. bank, who was also the presi- dent of a bridge company, when he had acquired as such director the knowledge that such bank was in imminent danger of insolvency and would be closed the following day, and that the St. N. bank, as the agent of the M. S. bank at the latter's clearing house, had in its pos- session a large amount of the latter's securities and was responsible for all checks of the M. S. bank that would be presented at the clear- ing house on the next morning, signed as president of the bridge com- pany a check upon the M. S. bank for the amount owing by the latter to the bridge company and had it passed through the clearing house on the next day, thereby effecting a transfer of such amount from the M. S. bank to the bridge company. Held, that such transfer was an invalid preference under section 48 of the stock-corporation law of New York. (O'Brien et al. v. East River Bridge Company, 1 Bank- ing Cases, 615; 36 Hun, 17.) » 4 (Wash., 1899). When a bank was in fact insolvent and its officers and plaintiffs were chargeable with notice of its condition, the bank, in order to gain an extension of time, pledged a note and mortgage as additional security for the debt due plaintiffs. Held, that such trans- action was an unlawful preference. (Burrell et al. v. Bennett, 1 Banking Cases, 673; 20 Wash., 644.) INTEREST ON CLAIMS. Interest on claims against receiver. 1 (U. S. Sup. Ct, 1876). The creditors of an insolvent national banking association in the hands of a receiver are entitled to interest on their claims during the period of administration. (National Bank of Commonwealth v. Mechanics' National Bank, 94 U. S., 437 ; White v. Knox, 111 U. S., 784.) DIGEST OB 1 . NATIONAL BANK DECISIONS. 215 INSOLVENCY AND RECEIVERS— Continued. intebest on claims — continued. 2 (U. S. Sup. Ct, 1884). A creditor of an insolvent national bank, who establishes his debt by suit and judgment after refusal of Comp- troller to allow it, is entitled to share in dividends on debt and inter- est so established as of day of failure of bank, not for subsequent interest. (White v. Knox, 111 U. S., 784.) 3 (U. S. Sup. Ct., 1890). A creditor of a national bank is entitled to inter- est on the amount of his dividend from the time it was declared by a receiver of the bank until paid. (Armstrong v. American Ex- change National Bank, 133 U. S., 433.) 4 (y. S. C. C, 1875). Where a national bank is declared in default by the Comptroller of the Currency, and a receiver is appointed, and a suffi- cient fund is realized from its assets to pay all claims against it and leave a surplus, the Comptroller should allow interest on the claims during the period "of administration before appropriating the surplus to the stockholders of the bank. (Chemical National Bank v. Bailey, 12 Blatchford, 480; 1 N. B. C, 260.) 5 (U. S. C. C, 1875). An action of assumpsit to recover such interest will not lie against the Comptroller of the Currency or the receiver of the bank, but will lie against the bank. (lb.) 6 (U. S. C. C, 1875). Where a bank has by reason of its own default been placed in the hands of a receiver, a demand of payment by a depos- itor is no longer a necessary condition precedent to a right of action for the deposit, and the deposit bears interest from the time of such default. (lb.) 7 (U. S. C. C. A., 1899). An order directing payment of interest by the re- ceiver of a national bank from date of judicial demand is erroneous, as funds coming into the hands of a receiver are turned over to the Comptroller and could not earn interest, and any payment of inter- est would necessarily be taken from some other trust fund, and this particularly where the involved circumstances of the case made it impossible to pay over the amount without investigation and an accounting. (Richardson v. Louisville Banking Co., 94 Fed. Rep., 442.) 8 (U. S. C. C. A., 1899). No interest is recoverable against the fund in the hands of the receiver of an insolvent national bank on recovery in a suit to establish a claim against the bank, made necessary solely by the disallowance of the claim by the receiver. The receiver is required to exercise his judgment as to the allowance of claims, and other creditors are not chargeable with interest because of an error on his part. (Merchants' Nat. Bank v. School Dist. No. 8, of Meagher County, Mont., 94 Fed. Rep., 705.) 9 (U. S. C. C. A., 1900). In a suit against the receiver of a national bank for money loaned the bank while it was a going concern, it was error to permit plaintiff to recover interest on the loan after the bank's suspension and the appointment of a receiver, since debts of an insolvent bank must be liquidated by the receiver as of the date when insolvency supervenes and the amount of all debts computed as of that day. (American Nat. Bank v. Williams, 101 Fed. Rep.. 943.) 10 (Mont. Sup., 1899). It would be an injustice to other creditors to allow one creditor interest for the time his claim was withheld by the receiver in order to obtain instructions as to his duty in the prem- ises. (Guignon v. First Nat. Bank of Helena et al., 1 Banking Cases, 290; 22 Mont., 140.) When depositor's account begins to hear interest. 11 (U. S. Sup. Ct, 1887). In case of book accounts in favor of depositors, interest begins to run against an association in liquidation from the date of the suspension of business. (Richmond v. Irons, 121 U. S., 27.) 216 DIGEST OF NATIONAL BANK DECISIONS. INSOLVENCY AND RECEIVERS— Continued. interest on claims — continued. 12 (Ky. Appeals, 1901). In an action against a bank to recover deposits, the balance found due plaintiff should bear interest from the insti- tution of his action. (Bobb v. Savings Bank of Louisville et al., 64 S. W. Rep., 494.) When no interest allowed on dividends. 13 (U.S. C. C. A., 1893). Interest on dividends should not be allowed in favor of one who voluntarily delayed presenting his claim until long after the dividends were declared, although the delay was due to a mistaken belief that he had a right to pay his claim in full from collaterals in his hands. (Chemical National Bank v. Armstrong, 59 Fed. Rep., 372.) 14 (U. S. C. C. A., 1893). The refusal of a creditor to accept the receiver's offer to allow part of a claim without prejudice to a suit for allow- ance of the remainder, or to the receiver's right to still further reduce the claim if the court should hold such reduction proper, bars the creditor's right to interest on subsequent dividends on the part offered to be allowed, although it is subsequently adjudged that the whole of his claim should have been allowed; but he is entitled to interest on the dividends on the part rejected. (lb.) When receiver's offer to allow claim is deemed withdrawn. 15 (U. S. C. C. A., 1895). Where the receiver of an insolvent bank with- draws his offer to allow part of a claim by filing a pleading in the proceedings denying the liability of the bank on the claim, the interest on dividends should be allowed the owner of claim as though no such offer had been made. (Chemical National Bank v. Armstrong, 65 Fed. Rep., 573, modifying 59 Fed. Rep., 372.) DISTRIBUTION OF ASSETS. What claims recognized by Comptroller. 1 (U. S. Sup. Ct, 1884). The only claims the Comptroller can recognize in the settlement of the affairs of an insolvent national bank are those which are shown by proof satisfactory to him, or by the adjudication of a competent court, to be valid claims against the bank ; and he must take the value of the claim at that time, and not at the time judgment is rendered upon it, as the basis of dis- tribution. (White v. Knox, 111 U. S., 784.) Rules of distribution in bankruptcy not applicable. 2 (U. S. Sup. Ct, 1882). The priorities and method of distribution under the bankruptcy law have no application to the winding up of insolvent national banks. Everything essential to the farmation of banks, * * * the winding up of the institutions, and the dis- tribution of their effects are fully provided for as in a separate code by itself, neither limited or enlarged by other statutory provisions with respect to the settlement of demands against insolvents or their estates. (Cook County Nat. Bank v. United States, 107 U. S., 445; 2 Sup. Ct, 561.) Basis on which dividends are paid to secured creditor. 3 (U. S. Sup. Ct). A secured creditor of an insolvent national bank may prove and receive dividends upon the face of his clairo as it stood at the time of the declaration of insolvency, without crediting either his collaterals or collections made therefrom after such declaration, sub- ject always to the proviso that dividends must cease when from them and from collaterals realized the claim has been paid in full. (U. S. Sup. Ct, 1899) Merrill v. National Bank of Jacksonville, 173 U. S., 131 ; (U. S. Sup. Ct, 1900) Aldrich, receiver, v. Chemical National Bank, 2 B. C, 446 ; 176 U. S., 618. DIGEST OP NATIONAL BANK DECISIONS. 217 INSOLVENCY AND RECEIVERS— Continued. distribution of assets — continued. When creditor not entitled to share in distribution of assets obtained by assess- ing shareholders. 4 (U. S. Sup. Ct). After the bank went into voluntary liquidation several creditors took in payment of their claims paper belonging to the bank indorsed and guaranteed in the name of the bank by its president, which paper was not paid. Held, that such creditors were not entitled to distribution of the assets obtained by enforcement of the statutory liability of the stockholders, as the original debt was paid and the stockholders, in the absence of express authorization, are not liable on the contract of indorsement or guarantee, made after sus- pension. (U. S. Sup. Ct., 1887) Richmond v. Irons, 121 U. S. 27; (U. S. Sup. Ct., 1890) Schrader v. Manufacturers' National Bank, 133 U. S., 67. National banks — Distribution of assets in insolvency — Holders of outstanding drafts. 5 (U. S. C. C. A., 1903). When a national bank has been placed in the hands of a receiver as insolvent, the Federal law becomes" from that moment the law of the distribution of its assets, to the exclusion of the law of any State ; and a second bank, which holds a deposit of funds of the insolvent bank, against which the latter has drawn drafts which have not been paid, can not pay the same after notice, and set up the payment as a defense to an action by the receiver to recover the deposit, although by the law of the State in which the second bank is located a draft or check is held to be an assignment pro tanto of the fund on which it is drawn ; since by the Federal law it is not such an assignment as entitles the holder to a preference over the other creditors when the drawer has become insolvent before payment. (First National Bank of Chicago v. Selden, 120 Fed Rep., 212.) Disposition of assets. 6 (Md., 1901). An order finally confirming an auditor's account in a re- ceivership, ascertaining a balance for distribution, to which no excep- tion is filed, is, in effect, an adjudication in rem, and the distributions are res adjudicata. (Rogers et al. v. Citizens' Nat. Bank of Balti- more et al., 4 Banking Cases, 69; 93 Md., 613.) INTEREST AND USURY. Page. What law governs — application of State law 218 What constitutes usury 219 Transactions not usurious . 221 State usury laws inapplicable to national banks 221 Effect of taking usury on contract 222 Forfeiture of interest 224 Renewal of usurious note 225 What rate of interest may be charged •_ 225 Right of set-off __ 229 Whether payments made shall be applied to principal or forfeited interest _ ._. 231 Amount and extent of penalty _ _ 232 Usury as a defense against recovery of interest 234 Actions: Action for penalty the remedy 236 When action lies _ . _ 237 Who may sue .' _ ; _ 238 218 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. Actions — Continued. Page. Jurisdiction 239 Complaint — sufficiency of — proof - _ 240 Limitations in actions for penalty for usury 241 Release and discharge of claims for penalty . . 243 Cross references: Deposits — Interest on , 124 Evidence of contract to pay interest on 125 Insolvency and receivers — Interest on claims due insolvent banks 186 Interest on claims against receiver 214 When depositor's account begins to bear interest 215 When no interest allowed on dividends 216 Liquidation — Interest on deposits 266 Shareholders- Interest on assessment 481 WHAT LAW GOVERNS — APPLICATION OP STATE LAW. Laws of what State control. 1. The general principle in relation to contracts made in one place to be performed in another is well settled. They are to be governed by the law of the place of performance, and if the interest allowed by the law of the place of performance is higher than that permitted at the place of contract the parties may stipulate for the higher interest without incurring the penalties of usury. The converse of this proposition is also well settled. If the rate of interest be higher at the place of contract than at the place of performance the par- ties may lawfully contract in that case also for the higher rate. These rules are subject to the qualification that the parties act in good faith and that form of the transaction is not adopted to dis- guise its real character. The validity of -the contract is determined by the law of the place where it is entered into. Whether void or valid there, it is so everywhere. (U. S. Sup. Ct, 1867) Miller v. Tiffany, 68 U. S., 298, quoting: Andrews v. Pond, 13 Peters, 77-78 ; Curtis et al. v. Leavitt, 15 New York, 92 ; Berrien v. Wright, 26 Barbour, 213 ; Depeau v. Humphrey, 20 Howard, 1 ; Chapman v. Robinson, 6 Paige, 634 ; Mix et al. v. The Madison Ins. Co., 11 Ind., 117 ; Corcoran & Riggs v. Powers et al., 6 Ohio St., 19 ; (U. S. Sup. Ct, 1876) Cockle v. Flack, 93 U. S., 344; (U. S. Sup. Ct., 1877) Cromwell v. Sac. Co., 96 U. S., 51. 2. The laws o'f the State in which the note is made payable and is to be used determines the lawfulness of the rate. (U. S. C. C.) Bank of Alexandria v. Mandeville, 1 Cranch C. C, 552 ; (Md.) Billingsley v. State Bank, 3 Md., 375; (Me.) Lumbermen's Bank v. Bearce, 41 Me., 505; (Wis.) Dukie v. City Bank, 13 Wis., 216. 3 (U. S. Sup. Ct, 1874). A draft drawn in Illinois and accepted by parties residing in New York and then sent to Illinois to be negotiated is,an Illinois contract and is governed by the usury laws of Illinois, although the draft is payable in New York. (Tilden v. Blair, 88 U. S., 241.) 4 (U. S. C. C A., 1899). Where a note executed in one State is made pay- able in another, under the laws of which it is not usurious, while it is DIGEST OF NATIONAL BANK DECISIONS. 219 INTEREST AND USURY— Continued. WHAT LAW GOVERNS — APPLICATION OF STATE LAW Continued. usurious under the law of the State where made, the law of the State of performance will govern as to usury. (Dygert et ux. v. Vermont Loan and Trust Co., 94 Fed Hep., 913.) 5 (U. S. C. C. A., 1899). The question whether a promissory note is gov- erned, as to usury, by the law of the State where it was executed and in which suit is brought, or of the State in which it is made payable, in the absence of a State statute on the subject, is one of general law, upon which a Federal court is not bound to follow the decision of the supreme court of the State. (lb.) G (U. S. C. C. A., 1894). A note made in one State and payable in another, if valid where made, is not rendered invalid because it contravenes the usury laws of the State in which it is payable. (Sturdivant v. Memphis National Bank, 60 Fed. Rep., 730; ib., 736.) 7 (U. S. C. C. A., 1893). A note dated and signed by the makers in Tennessee and payable in Chicago, 111., and forwarded by them to the payees in Chicago, to be used by the latter in raising money with which to pay off a prior note made by the same parties, actually used in Chicago for that purpose, must be held an Illinois contract and governed by the laws of Illinois relating to usury. (Buchanan et al. v. Drovers' National Bank of Chicago, 55 Fed. Rep., 223.) WHAT CONSTITUTES USURY. Requisites to form an usurious transaction. 1 (U. S. Sup. Ct, 1830). The requisites to form an usurious transaction are: First, A loan, either express or implied; second, an understanding that the money lent shall or may be returned; third, that a greater rate of interest than is allowed by the statute shall be paid. The intent with which the act is done is an important ingredient to con- stitute this offense. An ignorance of the law will not protect a party from the penalties of usury where it is committeed ; but where there was no intention to evade the law, and the facts, which amount to usury, whether they appear upon the face of contract or by other proof, can be shown to have been the result of mistake or accident, no penalty attaches. (Lloyd v. Scott, 29 U. S., 205.) What constitutes payment within meaning of section 5198. 2 (U. S. Sup. Ct., 1905). The payment referred to in section 5198 Revised Statutes is an actual payment and not a further promise to pay and the mere discharge of a maker of a note by his giving his own note in renewal thereof will not uphold a recovery against the bank on account of usurious interest in the former note. (First National Bank of Jacksboro v. Lasater, 196 U. S., 115.) When interest usurious although the total interest amounts to less than the maximum rate permitted by the State. 3 (U. S. Sup. Ct, 1904). Under sections 5197-5198, U. S. Revised Statutes, a national bank which compounds interest in a manner prohibited by the State forfeits all interest even though the total interest amounts to less than the maximum rate permitted by the State. (Citizen's National Bank of Kansas City v. Donnell, 195 U. S., 369.) Discount at higher rate than is legal is usury. 4. The discounting of business paper by a national banking association at a higher than the legal rate is usurious, though the law of the State fixes no limit to the rate which natural persons may take for the discount or purchase of such paper. (U. S. Sup. Ct, 1881) National Bank of Gloversville v. Johnson, 104 U: S., 271 ; (N. Y.) Johnson v. National Bank of Gloversville, 74 N. Y., 329. 5 (U. S. C. C. A., 1896). The purchase of accepted drafts by a national bank from the holder without his indorsement at a greater reduction 220 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND' USURY— Continued. what constitutes usury — continued. than lawful interest on their face value is a discounting of those drafts within the meaning of Revised Statutes, section 5197, which prohibits such bank from taking interest on any loan or discount made by it at a greater rate than is allowed by the laws of the State where it is situated. (Danforth et al. v. National State Bank of Elizabeth, 48 Fed. Rep., 271.) More than legal interest on overdrafts is usury. 6 (Pa.). By charging more than legal interest on overdrafts a national banking association loses the right to recover any interest at all. (Third National Bank of Philadelphia v. Miller, 90 Penn. St., 241.) When interest on overdraft not usury. 7 (U. S. C. C, 1890). Where drafts are from time to time deposited in a bank, some of them being payable on demand and some on time, an agreement between the bank and the depositor that credit shall be given for such drafts on the day after their deposit, the depositor being charged the full legal rate for any overdraft, does not consti- tute usury when such agreement is made in good faith in order to. save involved calculations. (Timberlake et al. v. First National Bank, 43 Fed. Rep., 231.) 8 (U. S. C. C, 1890). Charging a depositor, by agreement, at the end of each month with interest at the full legal rate on his overdraft and adding such charge to the overdraft does not constitute usury. (lb.) When commission in addition to interest is usury. 9 (111., 1893). Bank loaned money upon note which it afterwards dis- counted, the maker agreeing to open account with bank or to pay 2J per cent commission to the bank on the loan. As the money loaned belonged to the bank, commission held to be usury. (Union National Bank of Chicago v. L., N. A. and C. Rwy. Co., 111. Supreme Court, May 9, 1893, 34 N. E., 135; 145 111., 208.) ' Agreement in mortgage for illegal interest on notes secured. 10 (Ky. Ct. App., 1888). An agreement to pay illegal interest in a mortgage given to secure the notes after maturity forfeits both legal and illegal interest, though no interest is expressed in the notes them- selves. (Alves v. Henderson National Bank, 3 N. B. C, 452; 89 Ky., 126.) Stipulation for attorney's fee usurious. 11 (U. S. C. C, 1882). A provision in a promissory note "to pay an attor- ney's fee of 10 per cent on the amount due if suit is brought to enforce payment, for use of the attorney bringing the suit," is a stipulation for a penalty or forfeiture, and tends to the oppression of the debtor ; is a cover for usury, and is without consideration and contrary to public policy, and void: (Merchants' National Bank v. Sevier et al., 14 Fed. Rep., 662.) 12 (U. S. C. G, 1882). Such a stipulation in a note discounted by a national bank is void for the further reason that it is in excess of the power of the bank under its charter. (lb.) Contra. 13 (Ga.). A contract to pay attorney's fees for collecting, in addition to principal and interest, is not, on its face, usurious ; nor does it become usurious by reducing the debt to judgment and including in the judgment 10 per cent for attorney's fees. (National Bank of Athens v. Danforth, Ga., 7 S. E. Rep., 546; 80 Ga., 55.) Interest charged all that is regarded illegal. 14 (U. S. Sup. Ct., 1902). In these statutes relating to illegal interest, it is the interest charged, and not the interest to which a forfeiture might be enforced, that the statute regards as illegal ; and if interest greater than the legal rate is charged, it may be relinquished, and DIGEST OF NATIONAL BANK DECISIONS. 221 INTEREST AND USURY— Continued. what constitutes usury — continued. recovery had of the legal rate. (Talbot v. Sioux City First National Bank, 185 U. S., 172.) When bank can not elect to remit excessive interest. 15 (U. S. Sup. Ct, 1904). A national bank met in an action by the plea of usury may not avoid the forfeiture of all interest by then declaring an election to remit the excessive interest. (Citizens' National Bank of Kansas City v. Donnell, 195 U. S., 369.) TRANSACTIONS NOT USURIOUS. 1 (U. S. Rev. Stat., Sec. 5197). " Interest may be taken in advance, reckon- ing the days from which the note, bill, or other evidence of debt has to run, and the purchase discount or sale of a bona fide bill of exchange payable at another place than the place of such purchase, discount, or sale at not more than the current rate of exchange for sight drafts in addition to the interest shall not be considered as tak- ing or receiving a greater rate of interest." 2 (U..S. Sup. Ct, 1891). It is settled doctrine in Illinois that the mere tak- ing of interest in advance does not bring a loan within the prohi- bition against usury ; but whether the doctrine would apply where the loan was for such period that the exaction by the lender of inter- est in advance would at the outset absorb so much of the principal as to leave the borrower very little of the amount agreed to be loaned to him is not decided. (Fowler v. Equitable Trust Co., 141 U. S., 384.) 3 (N. Y. Sup.). C, whose business was lending money and indorsing paper, had an arrangement with plaintiff bank by which it was to discount all notes bearing her indorsement, for the benefit of the maker ; the proceeds to be drawn by " discount checks " signed by the maker, plaintiff being furnished by C. with collateral security to indemnify it. Defendant made application to C. for a loan of $50 for three months, and C. offered, as testified by defendant, to make the loan, or, as testified by C, to lend C.'s credit for $10. A note for $60, signed by defendant, payable to and indorsed by C, was discounted by plaintiff, and the proceeds, less the legal discount, placed to defend- ant's credit, and immediately withdrawn on his discount check, he thereupon paying $10 to C.'s agent. Held, that whether the trans- action was a cover for usury to plaintiff's knowledge, was a question for the jury. (Flour City National Bank v. Miller, 38 N. Y. S., 503.) Transactions held not to be usurious. 4 (Iowa, 1898). Usurious interest is not paid a national bank by sale of the mortgaged lands so as to authorize recovery back of same, under Revised Statutes United States, section 5198, where the same is embraced in a note, and the debtor then gives bonds secured by trust deed therefor and in action to foreclose, usury is set up, and the. amount thereof deducted by the judgment from the amount due on the bonds. (Talbot v. First Nat. Bank of Sioux City, 76 N. W., 726 ; 106 Iowa, 361, 1898.) STATE USURY LAWS INAPPLICABLE TO NATIONAL BANKS. 1. The usury laws of the State do not apply to national banking associa- tions. (U. S. Sup. Ct., 1875) Farmers and Mechanics' Bank v. Dearing, 91 U. S., 29 ; (Mass.) Central National Bank v. Pratt, 115 Mass., 539; (Mass.) Davis v. Randall, 115 Mass., 547; (N. Y.) Hintermister v. First Nat Bank, 64 N. Y., 212; (Ohio) First National Bank v. Garlinghouse, 22 Ohio St, 492, 222 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. STATE USUBT LAWS INAPPLICABLE TO NATIONAL BANKS — Continued. 2. And the remedies provided by the State for the taking of usury can not be resorted to. (U. S. Sup. Ct.) Farmers and Mechanics' Bank v. Dearing, 91 U. S., 29 ■ (Ind.') Wiley v. Starbuck, 44 Ind., 293. 3 (U. S. Sup. Ct., 1903). ^. claim that usurious interest has been paid on a debt to a national bank, secured by mortgage on real estate given by the debtors to an individual for the benefit of the bank, can not be , asserted under the State law in foreclosure proceedings in the State courts. Where usury has been paid to a national bank the remedy afforded by section 5198, Revised Statutes, is exclusive and is con- fined to an independent action to recover such usurious payments. (Schuyler Nat. Bank v. Gadsen, 191 U. S., 451.) 4 (Ala., 1894). A State law imposing a penalty on banks exacting usurious discounts does not apply to national banks, the penalty imposed on such banks by Federal laws in regard to usurious discounts being exclu- sive. (Florence Railroad and Improvement Company v. Chase Na- tional Bank, Ala., 17 So., 720; 106 Ala., 364.) 5 (Ala., 1896). Code 1886, section 4140, making it a misdemeanor for any banker to discount commercial paper at a higher rate than 8 per cent per annum, has no application to national banks. (Slaughter v. First Nat. Bank of Montgomery, 19 So., 430; 109 Ala., 157.) (Ohio Sup., 1872). National banks organized under acts of Congress are not bound by the usury laws of the States in which they are situated. (The First- National Bank of Columbus, plaintiff in error, v. Gar- linghouse et al., 22 Ohio St., 492; 1 N. B. C, 811.) State law may not provide additional forfeiture for usury. 7 (U. S. Sup. Ct, 1875). The only forfeiture for usury declared by section 30 of act of 1864 is of entire interest, and no greater loss is incurred by such bank by reason of the usury laws of a State. (Farmers and Mechanics' National Bank v. Dearing, 91 U. S., 29.) 8 (Ga. Sup., 1900). The penalty imposed by section 5198, Revised Statutes United States, updn national banks for charging usury is exclusive. The law of this State that a waiver of homestead, when part of a usurious contract, is void, imposes a penalty for charging usury, and is, therefore, not applicable to national banks. It follows that a surety who signs a promissory note containing a waiver of homestead, and secretly tainted with usury, of which latter fact he had no knowledge at the time of signing, is not discharged from liability when the note is payable to a national bank, as his risk has not been increased. (First Nat." Bank of Dalton v. McEntire, 37 S. E. Rep.. 381 ; 3 Banking Cases, 70; 112 Ga., 232.) EFFECT OF TAKING TTSTIKY ON CONTBACT. Usury does not invalidate contract. 1 (U.S. Sup. Ct, 1875). The taking of illegal interest by a national bank- ing association does not render the contract void. (Farmers and Mechanics' Bank v. Dearing, 91 U. S., 29.) 2. It does not invalidate an indorsement of the notes upon which the usurious interest was paid. (U. S. Sup. Ct, 1879) Oates v. First National Bank of Montgomery, 100 U. S., 239 ; (Md.) Lazear v. National Union Bank of Baltimore, 52 Md., 78. 3 (Ohio Sup., 1872). The reservation of illegal interest by a national bank does not avoid the principal. (Shinkle v. The First National Bank of Ripley, 22 Ohio St., 516 ; 1 N. B. C, 824.) 4 (Ohio Sup., 1872). The discounting of a promissory note by a national bank at an unlawful rate of interest does not render the note void in DIGEST OF NATIONAL BANK DECISIONS. 223 INTEREST AND USURY— Continued. EFFECT OF TAKING USURY ON CONTRACT Continued. toto, but only to the extent of the interest. (The First National Bank of Columbus, plaintiff in error, v. Garlinghouse et al., 22 Ohio St., 492; 1 N. B. C, 811.) 5 (Ohio Sup., 1872). National banks are authorized to take mortgages on real estate in good faith to secure debts previously contracted. A national bank extended the time of payment of indebtedness at a usurious rate of interest and took therefor notes and a mortgage made by the debtor to a third person, the notes being indorsed by the latter. Held, that the usury only avoided the interest, and that to the extent the debt was valid the mortgage was a bona fide security and that the bank by becoming the owner of the notes acquired the equity in the mortgage. (Allen v. The First Nat. Bank of Xenia, 2: J . Ohio St., 97; IN. B. C, 828.) 6 (Tex., 1896). The fact that a part of the consideration of a note was for usurious interest on a former note does not render the note void in toto. (First National Bank of Mason v. Ledbetter, Tex. Civ. App., 34 S. W., 1042.) Usury on notes does not invalidate a guaranty of them. 7 (Md. Appls., 1879). A guaranty of negotiable .paper discounted by a national bank is not rendered void by the fact that the bank demanded and received usurious interest upon the notes. (Lazear v. National Union Bank of Baltimore, 2 N. B. C, 261; 52 Md., 78.) Usury does not affect liability by antecedent parties for interest. 8 (Ohio). The liabilities of antecedent parties to a note or bill will not be affected by the usurious character of the transaction between the payee and the association ; and the association may recover the full amount of the note or bill from the maker or acceptor. (Smith v. The Exchange Bank of Pittsburg, 26 Ohio St., 141.) Indorser bank, not estopped because it has charged usury. 9 (Pa.). Where a national banking association has discounted notes for another bank at a usurious rate of interest, the fact that the other bank has charged illegal interest on those notes to_jts customers will not affect its right to set up the defense of usury in an action by the association. (Third National Bank of Philadelphia v. Miller, 90 Penn. St., 241.) Surety not released by exaction of usury. 10 (Ohio Sup., 1872). The discounting of a note for the principal maker at an unlawful rate of interest is not such an unauthorized use of the note as will discharge the sureties from liability. In the absence of any express agreement or understanding on that subject between the sureties and the principal, of which the holder had notice, or any intention to practice a fraud on the sureties, they must be held to have trusted to the judgment and discretion of the principal as to the terms on which the note might be discounted. (First Nat. Bank of Columbus v. Garlinghouse, 22 Ohio St., 492 ; 1 N. B. C, 811.) Penalty may not be pleaded as a defense. 11 (N. Y.). Under the national banking act (13 Stat. L., 99) prescribing a penalty against national banks for taking usury, which can only be collected in an action of debt, a defense of usury can not be set up to defeat a bank's recovery on a note. (First Nat. Bank v. Anderson, 67 N. Y. S., 434 ; 55 App. Div., 570.) Effect of usury in note purchased- by bank or held by it as collateral. 12 (U. S. Sup. Ct., 1830). Usurious securities where declared void by statute are not only void as between the original parties, but the illegality of their inception affects them even in the hands of third persons who are entire strangers to the transaction. (Lloyd v. Scott, 4 Pet (29 U. S.),205.) 224 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. FORFEITURE OF INTEREST. Usury destroys mterest-hearing power of note. 1 (Pa., 1895). But usury destroys the interest-bearing power of the obliga- tion ; and there will be no point of time from which it can bear inter- est. (Lucas v. Government National Bank of Pottsville, 78 Penn. St., 228 ; overruled by Second National Bank of Clarion v. Morgan, 30 Atl. Rep., 957; 165 Pa. St., 199.) 2 (Pa., 1884). Where a national bank takes, receives, or charges more than the legal rate of interest in the discount of a note, the interest-bearing power of the note is destroyed and remains destroyed until it is paid. (Guthrie v. Reid, 107 Penn. St., 251 ; 3 N. B. C, 751.) Usury forfeits interest oefore and after maturity until judgment. 3 (U. S. C. C, 1880). The receipt by a national bank of an usurious rate of interest upon the discount of a note works a forfeiture of such inter- est as would otherwise have accrued after the maturity of the note. (The First National Bank of Uniontown v. StaufCer, 1 Fed. Rep., 187.) 4 (U. S. C. C, 1883). Section 5198, Revised Statutes, makes the receiving or charging " a rate of interest greater than is allowed " " a for- feiture of the 'entire interest." In case a greater rate of interest has been paid the debtor may recover back " twice the amount of interest thus paid." (Hill v. National Bank of Barre, 15 Fed. Rep., 432.) 5 (Kans., 1894). Where a national bank received usurious interest it for- feits the entire interest on the note, including that accruing after maturity, though the latter rate be lawful. (Shafer v. First National Bank of Russell, 36 P., 998 ; 53 Kans., 614.) 6 (Ky. Ct. Appls., 1901). A national bank by contracting for usurious inter- est forfeits all interest only to the date of bringing suit on the note, and judgment for the principal should bear interest at the legal rate from the date of filing the petition. (Second Nat. Bank of Rich- mond v. Fitzpatrick et al., 63 S. W. Rep., 459; 3 Banking Cases, 461.) 7 (Ky. Appls., 1881). Under act of Congress, June 3, 1864, section 30, pro- viding that national banks knowingly receiving or charging a greater rate of interest than allowed by the State where the bank is located shall forfeit the entire interest which the note carries with it, or which has been agreed to be paid thereon, not only is forfeited a greater sum reserved by the bank out of the money than the legal interest for the time the note has to run, but also the interest accru- ing by law upon nonpayment after maturity. (Alves v. Henderson National Bank, 3 N. B. C, 452; 89 Ky., 126.) 8 (Ohio). The usury works a forfeiture of the entire interest accruing after maturity and before judgment, as well as that which accrues before maturity. (Shunk v. The First National Bank of Galion, 22 Ohio St., 508.) Contra. 9 (Pa., 1887). The taking of usurious interest under section 5197 of the Revised Statutes of the United States and the Pennsylvania act of May 28, 1858, does not prevent the recovery of the lawful interest. (Appeal of Second National Bank of Titusville; Henderson, to use of Second National Bank of Titusville v. Waid, 96 Penn. St., 460 ; 3 N. B. C, 740.) Interest on judgment on usurious note. 10 (Kans. Sup., 1894). A judgment on a note, whereon interest is forfeited because of usury, bears interest at 6 per cent, under General Statutes 1889, paragraph 3500, relating to interest on judgments, though the note provided for lawful interest after maturity. (Shafer v. First National Bank of Russell, 36 P., 998; 53 Kans., 614.) DIGEST OF NATIONAL BANK DECISIONS. 225 INTEREST AND USURY— Continued. RENEWAL OF USURIOUS NOTE. Usury is not purged by settlements and renewals. 1 (U. S. Sup. Ct, 1839). No subsequent confirmation of an usurious con- tract, nor any new contract, stipulating to pay the debt with the usurious interest will make it valid. (Moncure v. Dermott, 38 U. S., 345.) 2 (Ark., 1879). The knowingly taking or .receiving by a national bank of a greater rate of interest than is lawful in the State where it is located is usurious under the national banking act and the entire interest is forfeited, and the usury is not purged by settlements and renewal notes without additional usury. (Pickett v. Merchants' National Bank of Memphis, 32 Ark., 346 ; 2 N. B. C, 209.) Note given for interest partly usurious is without consideration. 3 (Nebr. Sup., 1894). A promissory note given for already accrued interest, in part usurious, was without consideration, and suspension of the right of collection between its date and maturity in no way operated to supply this essential element, otherwise lacking. (McGhee v. First National Bank of Tobias, 58 N. W., 537; 40 Nebr., 92.) WHAT RATE OP INTEREST MAY BE CHARGED. Over 7 per cent usurious when no rate fixed by State law. 1 (U. S. C. C., 1873). In New York the rate of interest which a corporation may pay is not limited. A national bank located in that State loaned money to a corporation at a rate of interest exceeding 7 per cent per annum. Held, that the interest on the loan was forfeited under section 30 of the national banking act (13 Stat. L., 108), which pro- vided that when no rate of interest was fixed by the law of a State a national bank might charge a rate not exceeding 7 per cent per annum, and that if it charged more the entire interest should be for- feited. (In re Wild, 11 Blatch., 243 ; 1 N. B. C, 246.) 2 (N. Y. Appls., 1878). A national bank discounting business paper at a greater rate than 7 per cent is liable to the forfeiture of double the excess over 7 per cent imposed by the national banking act, although the transaction is not usurious under the State law. (Johnson v. National Bank of Gloversville, 74 N. Y., 329; 30 Am. Rep., 302; 2 N. B. C, 302. Affirmed, Natl. Bank of Gloversville v. Johnson, 104 U. S., 271.) 3 (N. Y.). No privilege of immunity from the usury laws of the States is conferred upon national banks by the act of Congress of 1864 (13 Stat. L., 99), and a contract for a loan made in this State with ope of these organizations, by which it reserves a greater rate of interest than 7 per cent is void. (First National Bank of Whitehall, respond- ent, v. James Lamb et al., appellants, 50 N. Y., 95.) 4 (N. Y.). The provision-of section 30 of said act, limiting the forfeiture to the interest, has reference only to the preceding sentence, which prescribes a rate of interest in those States and Territories where no rate is fixed by law. A construction of this provision which would make it applicable to contracts made in States where the rate of inter- est is regulated, and which would bring it in conflict with l3tate laws, would render it unconstitutional. (lb.) 5 (N. Y.). The power to create a corporation as an appropriate instrument for the execution of a constitutional power vested in the Federal Government only carries with it authority to confer upon that cor- poration such privileges or immunities from State laws as are neces- sary to enable it to effect the legitimate national object for which it is created. No such national object requires that national banks should exceed the rate of interest fixed by the States, and no immu- nity from State usury laws is therefore necessary. (lb.) 4049—05 15 226 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. WHAT BATE OF INTBEEST MAT BE CHABGED Continued. When national banks may charge any rate. 6 (Cal.). Where by the statutes of the State parties are authorized to con- tract for any rate of interest, national banking associations in that State may likewise contract for any rate, and are not limited to 7 per cent. (Hines v. Marmolejo, 60 Cal., 229.) 7 (Colo., 1894). Under Revised Statutes, section 5197, authorizing national banks to charge any rate of interest allowed by the law of the State wherein such bank is organized, and the statute fixing a legal rate of interest, but permitting the parties to stipulate for any rate of interest, a national bank in Colorado may charge interest at any agreed rate. The restriction contained in the national banking act which forbade national banks to charge more than 7 per cent only became operative in the absence of State legislation. Whenever the State legislature has acted, the general grant of power to banks to charge whatever rate might be reserved either by citizens or banks of issue became operative. (Rockwell v. Farmers' National Bank of Longmont, 36 P., 905; 4 Colo. App., 562.) Rate of interest chargeable by national banks same as allowed under State laws by individuals or State banks generally. 8 (U. S. Sup. Ct., 1873). The provision in section 30 of the act of 1864, " that where, by the law of any State, a different rate is limited for banks of issue organized under State laws, the rate so limited shall be allowed for associations organized in any such State under the act," is enabling, and not restrictive; and therefore a national bank- ing association in any State may stipulate for as high a rate of inter- est as by the laws of such State a natural person may, although State banks of issue are restricted to a less rate. (Tiffany v. National Bank of the State of Missouri, 18 Wall., 409.) 9 (U. S. Sup. Ct, 1873). Bank may take the rate of interest allowed by the State to natural persons generally, and a higher rate where State banks of issue can take it. (lb.) 10 (U. S. Sup. Ct., 1881). But it is not to be inferred, from Tiffany v. Na- tional Bank of Missouri, that whatever by the laws of the State is lawful for natural persons in acquiring title to negotiable paper by discount is lawful for national banks. (National Bank of Glovers- ville v. Johnson, 104 U. S., 271.) 11 (U. S. Sup. Ct, 1881). May charge rate of interest allowed to natural persons in the State or Territory where bank is located, but can not take more, even on discount of paper for third party, without it being usury. (lb.) ' 12 (U. S. Sup. Ct., 1900). In the provisions in Revised Statutes, section 5197, that when no rate of interest " is fixed by the laws of the State or Territory, or district," in which a bank is situated, it " may take, receive, reserve, or charge a rate not exceeding 7 per cent," the words " fixed by the laws " must be construed to mean " allowed by the laws." (Daggs v. Phoenix National Bank, 177 U. S. Rep., 549.) 13 (U. S. C. C, 1879). Under the national banking act, any national bank in Pennsylvania can charge and take the same rate of Interest as any State bank of issue is authorized to charge. (First National Bank of Mount Pleasant v. Tinstman, 36 Legal Intelligencer, 228 : 2 N B. C. 182.) 14. The interest which a national banking association may charge is limited to the rate allowed to the banks of the State generally ; and the fact that a few of the State banks are specially authorized to take a higher rate is not a warrant for a national banking associatioa to do so. (U. S. D. C, 1878) Duncan v. First National Bank of Mount Pleas- ant, 11 Bank Mag., 787; 1 N. B. C, 360; (Pa. Sup., 1879) First National Bank of Clarion v. Gruber, 87 Pa. St, 468. DIGEST OF NATIONAL, BANK DECISIONS. 227 INTEREST AND USURY— Continued. WHAT BATE OF INTEREST MAY BE CHARGED Continued. 15 (Ind. Sup., 1873). By the statute of a State, 6 per cent was declared to be the legal rate of interest, but parties were authorized to agree in writing for a higher rate, not exceeding 10 per cent. Held, that national banks located in the State could charge 10 per cent. (Wiley v. Starbuck, 1 N. B. C, 436 ; 44 Ind., 298.) 16 (Tex.). The decisions of the United States Supreme Court teach that the statute referred to is to be liberally construed in favor of national banks, and eve* when the language of the statute would restrict them to a less rate of interest than is allowed to individuals, the intend- ment of the law must be presumed to have been otherwise. Tiffany v. National Bank of Missouri held that the intent of the law was to put national banks on an equal footing with State banks ; to allow the State banks to charge any amount of interest and national banks only 8 per cent would violate that intention; to say that national banks could only charge 7 per cent would be to say that the State had prescribed no rate of interest (National Bank of Jefferson v. Bruhn & Williams, 64 Tex., 571.) Bate under State laws. 17 (Ala., 1896). Code, 1886, section 4140, making it a misdemeanor for any banker to discount commercial paper at a higher rate than 8 per cent per annum, is not applicable to national banks. (Slaughter v. First Nat. Bank of Montgomery, 19 So. Rep., 430; 109 Ala., 157.) 18 (Cal., 1895). Revised Statutes of the United States, section 5197, pro- hibits a national bank from charging a higher rate of interest than the one fixed by the law of the State in which it is located. Civil Code, section 1918, makes a rate of interest greater than the one fixed by law as the legal rate, viz, 7 per cent, valid when agreed to by the parties. Held, that a national bank may contract for any rate of interest. (California Nat. Bank v. Ginty, 108 Cal., 148; 41 Pac. Rep., 38.) 19 (Ky. App., 1876). By the statute of Kentucky no more than 6 per cent interest could be exacted, but parties were allowed to contract and pay 10 per cent " by memorandum in writing, signed by the party chargeable thereon, and not otherwise." A national bank located in the State discounted notes, charging interest in advance at the rate of 10 per cent without other " memorandum in writing " than the notes, wherein was a promise to pay the principal and accrued inter- est at the rate of 10 per cent. Held, that the transaction was not usurious. (Newell v. Nat. Bank of Somerset, 1 N. B. C, 501; 12 Bush., 57.) 20 (Mo. Sup., 1903). In renewing an indebtedness interest was compounded every six months and included in the new note. Held, a violation of the statutes of Missouri providing that interest shall not be com- pounded oftener than once a year, and of that section of the national banking law which provides that a national bank may charge interest at the rate allowed by the State law and no more. (Citizens' Nat. Bank v. Donnell, 5 B. G, 504; 72 S. W., 925.) 21 (Ohio Sup., 1894). As act of 1873 (70 Ohio Laws, 178) repeals the statute fixing the rate of interest for banks of issue, a national bank may charge interest at 8 per cent under Revised Statutes, section 3181. (La Dow v. First National Bank, 37 N. E., 11; Ohio State Reps., 51-234.) 22 (Wash.). There is an established rate of interest in Washington (10 per cent), and the fact that by special contracts different rates may be collected does not affect the question, and therefore a national bank may charge that rate. (Yakima National Bank v. Knipe, 33 P., 834; 6 Wash., 348.) 23 (Wash.). Revised Statutes of the United States, section 5197, author- izes national banks to take interest at the rate allowed in the State where tbe bank is located, and, when no rate is fixed by the laws of 228 DIGEST OP NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. WHAT BATE OF INTEREST MAY BE CHABGED Continued. such State, they are authorized to take interest at a rate not exceed- ing 7 per cent. Held, that since 1 Hill's Code, section 2796, and Session Laws 1893, page 29, allow individuals and State banks to take any rate of interest agreed to in writing by the parties to the contract, national banks have the same privilege. (Wolverton v. Exchange National Bank of Spokane, Wash., 39 P., 247; 11 Wash., 94.) Bate of interest allowed under Pennsylvania statute. % 24 (Pa.). A bank is a private corporation, and its charter a private act, to be pleaded and proved as all other private acts. The court can not take judicial cognizance of the fact that there are State banks whose charters authorize them to take more than 6 per cent interest. (First National Bank of Clarion v. Gruber, 87 Pa. St., 468; 30 Am. Rep., 378; 8 Weekly Notes of Cases, 113.) 25 (Pa.). The general rate of interest allowed in Pennsylvania to be takeu by State banks is only 6 per cent. The establishment of a few banks authorized by special acts of assembly to take more than this amount is not sufficient to authorize national banks to take usurious interest under that clause of the national-bank act allowing them to charge interest at the same rate as banks of issue organized under the laws of the State wherein the national bank is situate, (lb.) 26 (Pa., 1878). Neither under the national banking act nor the Pennsylva- nia usury act of 1858 is the taking of more than 6 per cent interest a fraud upon creditors in itself. (Appeal of Second National Bank of Titusville, 85 Pa. St., 528; 2 N. B. C, 364.) 27 (Pa., 1881). No bank in Pennsylvania can lawfully take more than 6 per cent interest. (Lebanon National Bank v. Karmany, 98 Pa. St., 65; 3 N. B. C, 746.) Bate of interest chargeable under Dakota statute. 28 (Sup. Ct. S. Dak., 1894). In an action against the First National Bank of Deadwood to recover illegal interest paid it, the court holds : A Ter- ritorial law in force in certain counties of the late Territory of Dakota, which provided that in those counties " it shall be lawful to take, receive, retain, and contract for any rate (of interest) agreed on between the parties," allowed and fixed the rate of interest by law in such counties or district, within the meaning of section 5197, Revised Statutes, which provides that " any association may take, receive, reserve, and charge on any loan * * * interest allowed by the laws of the State, Territory, or district where the bank is located." (Guild v. First National Bank of Deadwood, 57 N. W., 499 ; 4 S. Dak., 566.) 29 (Sup. Ct. S. Dak., 1894). From February, 1881, when said Territorial law was enacted, until July 1, 1887, when the same was repealed, it was lawful for Territorial and private banks and individuals to take, receive, retain, and. contract for any rate of interest agreed on between the parties, within the counties named in the act, when there was an express contract in writing fixing the rate. Therefore it was lawful for a national bank in those counties to contract in writing for any rate of interest agreed on between the parties. (lb.) 30 (Sup. Ct. S. Dak., 1894). Under the general law relating to interest in force in the Territory after July 1, 1887, Territorial and private banks and individuals were allowed to take, receive, retain, and contract for interest at the rate of 12 per cent per annum, and national banks were therefore allowed to take, receive, and: retain interest paid at the same rate; and it was not unlawful for such national banks, under the national banking act, to take, receive, and retain interest paid at the rate of 12 per cent per annum, in the absence of an express contract in writing therefor. (lb.) 31 (Sup. Ct. S. Dak., 1894). Under section 1851, Revised Statutes, one of the sections of the organic act of the Territory of Dakota, which DIGEST OF NATIONAL BANK DECISIONS. 229 INTEREST AND USURY— Continued. WHAT BATE OF INTEBEST MAY BE CHARGED — Continued. provides " that the legislative power of the Territory shall extend to all rightful subjects of legislation not inconsistent with the Con- stitution and laws of the United States," the Territorial legislature was vested with general legislative power, restricted only as pre- scribed in the act, and subject to the power of Congress to disap- prove its acts. (lb.) 3*2 (Sup. Ct. S. Dak., 1894). The act of Congress, approved July 30, 1886, providing that " the legislatures of the Territories of the United States shall not pass special or local laws * * * regulating the interest on money," was not retroactive, but was applicable only to acts thereafter passed by a Territorial legislature, and did not have the effect to invalidate the then existing interest law in the counties mentioned in the provisions of the act of 1881. (lb.) 33 (Sup. Ct. S. Dak., 1894). The passage of the law of 1881 by the Territo- rial legislature, which provided for a different rate of interest in certain counties of the Territory from that allowed in other parts of the Territory, was a valid exercise of the legislative power, and was not in conflict with the organic act or the Constitution of the United States. (lb.) 34 (Sup. Ct. S. Dak., 1894). A law changing the rate of interest which can lawfully be taken by reducing such rate does not affect express con- tracts in writing for interest at the higher rate, made when the law allowing the higher rate was in force, when such contract specific- ally provides that the interest at the rate specified in the contract shall be payable from the date of the contract until the same is paid. (lb.) RIGHT OF SET-OFF. Usury may not he pleaded as payment, set-off, or counterclaim. 1 (U. S. Sup. Ct, 1878). Usurious interest which has been paid to a national banking association can not be applied by way of payment, set-off, or counterclaim in an action by the association to recover the amount of the loan, but a separate action must be brought therefor. (Barnet v. Muncie National Bank, 98 U. S., 555.) 2 (U. S. Sup. Ct). Usurious interest paid a national bank on renewing a series of notes can not, in an action by the bank on the last of them, be applied in satisfaction of the debt. (U. S. Sup. Ct, 1881) Driesbach v. National Bank, 104 U. S; f 52; (U. S. Sup. Ct., 1878) Barnet v. Muncie National Bank, 98 U. S., 555. 3 (U. S. Sup. Ct, 1901). Usurious interest paid in cash upon renewals of a note given to a national bank, and of all other notes of which it was a consolidation, can not be set off in an action upon the note, as the remedy provided by United States Revised Statutes, section 5198, where such usurious interest has been actually paid, viz, a recovery in an action in the nature of an action of debt of twice the amount of the interest thus paid, is exclusive. (Haseltine et al., Plffs. in Err., v. Central National Bank, 4 Banking Cases, 119; 183 U. S., 132.) 4 (U. S. C. C, 1881). Interest in excess of the legal rate received by a national bank, although taken in renewal of a series of notes, can not be applied by way of set-off or payment in a suit upon the last of the series. (Farmers and Mechanics' Bank v. Hoagland, 7 Fed. Rep., 159.) 5 (U. S. C. C, 1881). In such case, however, the bank can not recover the illegal interest, although such interest has been finally incorporated in notes bearing legal rates. (lb.) 6 (U. S. C. C, 1881). Neither can the bank recover any interest upon such renewal notes from the date the interest has been reduced to the legal rate. (lb.) 230 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. bight of set-off — continued. 7 (Colo., 1894). Usurious interest paid a national bank on a note can not be offset against the principal sum due. (Rockwell v. Farmers' National Bank of Longmont, 36 P., 905; 4 Col. App., 562.) 8(111. App., 1882). Where a national bank has actually taken usurious interest, the party paying it may recover double the amount in an action therefor, but can not set off or counterclaim it in an actisn to recover the principal ; and the action for such penalty must be brought within two years. (Ellis v. First National Bank of Olney, 11 Bradw., 275; 3 N. B. C, 378.) 9 (Kans. Sup., 1894). Parkhurst having, as maker of the notes to the bank representing the debt secured by the chattel mortgage, paid usurious interest thereon, and having recovered judgment against the bank for twice the interest thus paid under the Federal statute, he can not be allowed to apply the same interest in reduction of the debt secured by the chattel mortgages. (Parkhurst v. First National Bank of Clyde, 35 P., 1116; 53 Kans., 136.) 10 (Mass. Sup., 1882). In an action by a national bank upon a note the defendant is not entitled to any set-off for legal interest exacted by the bank upon the discount thereof, but the bank can recover only the principal of the note. (Peterborough National Bank v. Childs, 133 Mass., 248; 43 Am. Rep., 509; 3 N. B. C, 469.) 11 (N. Y. Appls., 1880). In an action by a national bank on a promissory note discounted by it, the defendant may not counterclaim or set off usurious interest taken by the bank on the discount of it and other notes of which it was a renewal. (National Bank of Auburn v. Lewis, 81 N. Y., 15 ; 3 N. B. C, 587.) 12 (N. Y. Sup., 1877). In an action by a national bank the defendant can not be allowed a counterclaim for unlawful interest paid by him more than two years prior thereto. (National State Bank of Newark v. Boylan, 2 Abbott's N. C, 216 ; 1 N. B. C, 798.) 13 (N. Y. Appls., 1896). Usury can not be pleaded against a national bank. 25 N. Y. S., 447, affirmed. (Chase National Bank v. Faurot, 44 N. E., 164; 149 N. Y., 532.) 14 (N. C. Sup. Ct., 1881). Usurious interest previously received by a national bank in the course of renewals of a series of notes, terminating in one upon which suit is brought, can not be pleaded by way of set- off .or payment, but the only remedy is a separate action for double the interest paid by him. (Oldham v. Bank, 85 N. C, 240 ; 3 N. B. C, 688.) 15 (Ohio Sup., 1887). In an action on a note discounted by a national bank, the defendant can not set off the penalty of twice the amount of interest paid on other loans. (Hade, Receiver, v. McVay, 31 Ohio St., 231; 2N. B. C, 353.) 16 (Pa. Sup., 1881). Where usurious interest has been paid to a national bank on renewal notes and the bank brings suit on the last note, the defendant may not set off such illegal interest, but his only remedy is by an action against the bank to recover the penalty prescribed by the national-bank act. (National Bank of Fayette County v. Dushane, 96 Penn. St., 340 ; 3 N. B. C, 739.) • 17 (Tex. Civ. App., 1894). The payment of usurious interest to a national bank can not be pleaded as a set-off or counterclaim against the prin- cipal of the note so sued on. (Huggins et al. v. Citizens' National Bank of Kansas City, 24 S. W., 926 ; 6 Tex. Civ. App., 33.) 18 (W. Va. Sup., 1902). Usurious interest paid a national bank on renewing a series of notes can not, in an action by the bank on the last of them, be applied in satisfaction of the principal of the debt. (Charles- ton Nat. Bank v. Bradford, 41 S. E. Rep., 153; 51 W. Va., 255.) State laws as to set-oft and counterclaim do not apply. 19 (Mo.). Where plaintiff in a suit on a note is a national bank and a counterclaim ^s set up for alleged usurious interest paid on the note. DIGEST OF NATIONAL BANK DECISIONS. 231 INTEREST AND USURY— Continued. • eight of set-off — continued. the Federal and not the State statutes concerning usury govern the rights of the parties. Judgment, Bullmaster v. City of St. Joseph (1897), 70 Mo. App., 60, affirmed. (Central Nat. Bank v. Haseltine, 55 S. W., 1015 ; 155 Mo., 58.) 20 (N. Y. App., 1878). The practice and pleadings prescribed by the legis- lature of the State in regard to a counterclaim or recoupment may not be used to defeat the intention of a Federal enactment. (National Bank of Auburn v. Lewis, 81 N. T., 15 ; 3 N. B. C, 587.) 21 (N. Y. App., 1878). The provision of the United States statutes (section 914) that the practice, pleadings, forms, and modes of proceedings in civil causes in the circuit and district courts shall conform, as near as may be, to those existing at the time in the courts of record of the State has no application in such case. (lb.) Limitation as to offset. 22 (N. Y. Super., 1877). In an action by a national bank the defendant can not be allowed a counterclaim for unlawful interest paid by him more than two years prior thereto. (Nat. State Bank v. Boylan, 1 N. B. C, 798; 2 Abbott's New Cases, 216.) 23 (Ohio Sup., 1875). Where the two years within which an action lies to recover back twice the amount of illegal interest paid to a national bank have elapsed, the right to offset such interest against any claim of the bank is also barred. (Shinkle v. The First National Bank of Ripley, 1 N. B. C, 824; 22 Ohio St., 516.) * 24 (Ohio Sup., 1875). The knowingly taking or receiving by a national bank of a rate of interest greater than is allowed by law upon a loan of money does not entitle the person paying the same to have it applied as a payment of so much of the principal in an action brought to recover the principal debt more than two years after such payment was made. The rights and liabilities of the parties in such case are prescribed in the national-bank act, and- can not be controlled by State legislation. (Highley v. The First National Bank of Beverly, 1 N. B. C, 833 ; 26 Ohio St., 75.) Offsets against claims for penalty. 25 (U. S. C. C, 1880). Section 5073, Revised Statutes, relating to set-offs in bankruptcy proceedings, provides that " in all cases of mutual debts or mutual credits between the parties the account between them shall be stated, and one debt set off against the other, and the balance only shall he allowed or paid ; but no set-off shall be allowed in favor of any debtors to the bankrupt of a claim in its nature not provable against the estate, or of a claim purchased by or transferred to him after the filing of the petition." Held, that under this section a judg- ment obtained by an assignee in bankruptcy, for a penalty incurred by the violation of a State statute against usury, could not be set off against a claim of the judgment debtor against the bankrupt estate. (Wilson, Assignee, v. National Bank of Rolla, 3 Fed. Rep., 391.) 26 (Pa., 1881). In such suit the defendant can not set off a judgment held by it against the plaintiff. (Lebanon Nat. Bank v. Karmany, 98 Penn. St., 65; 3 N. B. C, 746.) WHETHER PAYMENTS MADE SHALL BE APPLIED TO PRINCIPAL OR FORFEITED INTEREST. Application of payments on usurious note when such payments are not appro- priated oy the debtor to the payment of interest as such. 1 (Kans. App., 1896). Under Revised Statutes United States, sections 5197, 5198, prohibiting any national bank from charging a greater rate of interest than is allowed by the laws of the State in which it is lo- cated, and providing that the taking of such interest shall forfeit the entire interest, a payment to a national bank on a note bearing usurious interest is a payment on the principal debt. (First National Bank of Hutchinson v. Mclnturff, 43 P., 839, 3 Kans. App., 536.) 232 DIGEST OP NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. WHETHEB PAYMENTS MADE SHALL BE APPLIED TO PBINCTPAL OE FOBFEITED IN- TEREST — continued. 2 (Kans. App.). Under Revised Statutes United States, sections 5197, 5198, providing that the charging of a greater rate of interest by a national bank than that allowed by the laws of the State in which the bank is located, shall forfeit the entire interest, and that, if such interest has been paid, the person who paid the same may recover twice the amount thereof, a payment on a note stipulating for usurious interest is a payment on the principal debt, and not of the interest, which is forfeited. (First National Bank of Newton i>. Turner, 42 P., 936; 3 Kans. App., 352.) 3 (Ky., 1901). The fact that payments made by the debtor have been ap- plied by the bank on its books to interest as such does not authorize the presumption that the debtor so applied them where he had no access to the books and no knowledge of the application made by the bank. (Second Nat. Bank of Richmond v. Fitzpatrick et al., 3 Banking Cases, 461; 63 S. W. Rep., 459.) 4 (Ky., 1901). The discounting by a national bank of a note at a usurious rate of interest is merely the " charging " or " reserving " of usury, and not the "taking" or "receiving" of usury;, and the debtor's right of action under Revised Statutes United States, section 5198, to recover twice the amount of usurious interest paid, does not ac- crue when the note is discounted. (Citizens' Nat. Bank of Danville v. Forman's Assignee, 63 S. W. Rep., 454; 3 Banking Cases, 451.) 5 (Ky., 1901). Where a national bank contracts for interest at a usurious rate it at once forfeits all interest, and unappropriated payments subsequently made by the debtor must be first applied to the princi- pal, so that while any part of the principal remains unpaid there is no payment of usurious interest, and no right to recover the penalty for taking usury accrues unless payments made by the debtor are specifically applied by him to usurious interest, for the law will not presume an application of payments to an illegal and void obligation ; nor will it permit the creditor to make such application. (lb.) 6 (Mo. Sup., 1903). Where a general payment is made on a renewal note, which includes usurious interest on an old note, it must be applied on the principal debt, and can not be applied on such usurious in- terest. (Citizens' Natl. Bank of Kansas City v. Donnell, 5 B. C, 504; 72 S. W. Rep., 925.) 7 (Nebr. Sup., 1897). In an action against a national bank for the penalty for taking usury, it appeared that the transactions between the plain- < tiff and the bank consisted of a large number of loans, evidenced by notes, many of which had been from time to time renewed. Held, that evidence of the whole course of transactions was material in order to trace the different debts and the interest reserved on each, although some transactions were not pleaded as usurious. (First National Bank of Tobias v. Barnet (Nebr.), 70 N. W., 937; 51 Nebr., 397.) 8 (Ohio Sup., 1877). Payments made generally on a promissory note to a national bank, which note embraces illegal interest, will be applied in satisfaction of the principal. (Bank of Cadiz v. Slemmons, 34 Ohio St., 142; 2 N. B. C, 361.) AMOUNT AND EXTENT OF PENALTY. Amount recoverable as penalty for usury. 1. The amount which may be recovered from the association as a penalty is twice the amount of interest paid, and not simply twice the amount in excess of the legal rate. (U. S. Sup. Ct, 1878) Barnet v. Muncie National Bank, 98 U. S., 555 ; (U. S. Cir. Ct, 1876) Crocker v. First National Bank of Chetopa, 3 Am. L. T. (N. S.), 350; 1 N. B. C, 317; (Pa.) Overholt v. National Bank of Mount Pleasant, 82 Pa. St, 490. DIGEST OP NATIONAL BANK DECISIONS. 233 INTEREST AND USURY— Continued. AMOUNT AND EXTENT OF PENALTY — Continued. 2 (U. S. Sup. Ct, 1902). The provision in Revised Statutes, section 5198, ' that " in case the greater rate of interest has been paid, the person by whom it has been paid, or his legal representatives, may recover back in an action in the nature of .debt, twice the amount of the in- terest thus paid," on the one hand causes a forfeiture of the entire interest to result from the taking, receiving, reserving, or charging a rate greater than is allowed by law, and on the other subjects the creditor to pay twice the amount of the interest illegally exacted if, by persisting in wrongdoing, he subjects the debtor to the necessity of suing to recover. (First National Bank of Lake Benton v. John W. Watt, 4 B. C, 319 ; 184 U. S., 151.) 3 (U. S. C. C, 1883). The amount of penalty recoverable in an action against banks under section 5198, Revised Statutes, is twice the whole amount of the interest paid, and not merely twice the amount paid in excess of the legal rate. (Hill v. National Bank of Barre, 15 Fed. Rep., 432.) 4 (U. S. C. C, 1898). Under Revised Statutes, section 5198, which provides that one paying usurious interest to a national bank may recover back twice the amount of the interest thus paid, it seems that the recovery allowed is twice the amount of the entire interest, and not merely of the excess over the legal rate. (Louisville Trust Co. v. Kentucky National Bank et al., 87 Fed. Rep., 143.) 5 (Kans. Appls., 1896). Under United States Revised Statutes, sections 5197, 5198, if usurious interest is paid a national bank the payor may recover back twice the total amount of interest paid. (First Na- tional Bank of Hutchinson v. Mclnturff, 43 P., 839; 3 Kans. App., 536.) 6 (Ky., 1901). The penalty which may be recovered from a national bank for taking usury is twice the amount of the entire interest paid, and not merely twice the amount of the excess over the legal rate. (Sec- ond Nat. Bank of Richmond v. Fitzpatrick et al., 3 Banking Cases, 461; 63 S. W. Rep., 459.) 7 (N. Y. Appls., 1876). In an action against a national bank to recover the penalty imposed by the act of Congress for taking a greater rate of interest than is allowed by law, the plaintiff is entitled to recover only twice the amount taken in excess of the legal interest, and not twice the amount of the entire interest paid. (Hintermister v. First National Bank, 64 N. Y., 212 ; 1 N. B. C, 741. ) 8 (N. Y., 1880).- The remedy is an action of debt to recover back twice the amount paid. (National Bank of Auburn v. Lewis, 81 N. Y., 15; 3 N. B. C, 587.) 9 (Pa. Sup., 1881). In such suit the plaintiff may recover twice the entire amount of interest paid. (Lebanon National Bank v. Karmany, 98 Pa. St., 65; 3 N. B. C, 746.) Penalty statute not penal, not strictly construed. 10 (Nebr. Sup., 1898). Revised Statutes United States, sections 5197, 5198, prohibiting a national bank from exacting usurious interest and pro- viding for the recovery back of double the amount wrongfully exacted is not a penal statute, and therefore need not be strictly construed. (Albion Nat. Bank v. Montgomery, 74 N. W., 1102 ; 54 Nebr., 681.) Penalties of national-oanJc act for usury exclusive. 11 (U.S. Sup. Ct). Remedy given by section 5198, Revised Statutes, for recovery of usurious interest paid to a national bank, is exclusive. (U. S. Sup. Ct., 1878) Barnet v. Muncie National Bank, 98 U. S. 555. (U. S. Sup. Ct, 1881) Driesbach v. National Bank, 104 U. S., 52. (U.S. Sup. Ct, 1884) Stephens v. Monongahela National Bank of Brownsville, 111 U. S., 197. 12 (Ga.). Revised Statutes United States, section 5198, provides that a national bank which knowingly charges usury shall forfeit the 234 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. AMOUNT AND EXTENT OF PENALTY Continued. entire interest and, in case usury has been paid, shall be liable for twice the amount thereof. The law of Georgia made a waiver of homestead void if part of a usurious contract. A surety signed a usurious note, payable to a national bank, containing a waiver of homestead. He had no knowledge of the usury. Held, that the penalty imposed on national banks by the United States statute was exclusive, and hence, a waiver of homestead exemption not being void because of the usury, the surety's risk was not increased, and hence he was not discharged. (First Nat. Bank of Dalton v. McEn- tire, 37 S. E., 381 ; 112 Ga., 232.) Contra. 13 (Ky. Appls., 1898). A debt due a national bank may be purged of usury under the State statute if the debtor so elects, the remedy provided by the national banking act -for forfeiture of all interest or recovery of double the usury not being exclusive. (Farrow v. First Nat. Bank, 47 S. W., 594.) Usury penalties inherited on conversion of hank. 14 (Nebr. Sup., 1894). A national bank succeeding to the business of a pri- vate bank inherits the usury penalties incurred by the latter in attempting to enforce a transfer note and mortgage. State usury penalty is applicable to transaction previous to debtor's knowledge that debt was transferred to national bank. (Exeter National Bank v. Orchard, 58 N. W., 144; 39 Nebr., 485.) So interest allowed on penalty. 15 (Tenn. Sup., 1902). Under Revised Statutes 5198, providing that the per- son who has pa-id usurious interest to a national bank may recover back twice the amount paid, he can not recover- interest on the amount. (McCreary v. First Nat. Bank of Morristown, 5 B. C, 317 ; 70 S. W. Rep., 821.) USURY AS A DEFENSE AGAINST BECOVEEY OF INTEBEST. 1 (U. S. Sup. Ct, 1898). Section 5198 of the Revised Statutes of the United States, prescribing what rate of interest may be taken, received, reserved, or charged by a national banking association, makes a dif- ference between interest which a note, bill, or other evidence of debt " carries with it, or which has been agreed to be paid thereon," and interest which has been "paid." (Brown v. Marion National Bank, 169 U. S., 416.) 2 (U. S. Sup. Ct, 1898). Interest included in a renewal note or evidenced by a separate note does not thereby cease to be interest within the meaning of section 5198. (lb.) 3 (U. S. Sup. Ct, 1838). If a national bank sues upon a note, bill, or other evidence of debt held by it, the debtor may insist that the entire interest, legal and usurious, included in his written obligation and agreed to be paid, but which has not been actually paid, shall be either credited on the note or eliminated from it, and judgment given only for the original principal debt, with interest at the legal rate from the commencement of the suit. (lb.) 4 (U. S. Sup. Ct, 1898). The forfeiture declared by the statute is not waived by giving a renewal note in which is included the usurious interest. No matter how many renewals may be made, if the bank has charged a greater rate of interest than the law allows, it must, if the forfeiture clause of the statute be relied on and the matter is thus brought to the attention of the court, lose the entire interest which the note carries or which has been agreed to be paid. (lb.) 5 (U. S. Sup. Ct, 1898). If, for instance, one executes his note to a national bank for a named sum as evidence of a loan to him of that amount to be paid in one year at ten per cent interest such rate of interest being illegal, and if renewal notes are executed each year for DIGEST OF NATIONAL BANK DECISIONS. 235 INTEREST AND USURY— Continued. USURY AS A DEFENSE AGAINST BECOVERY OF INTEREST — Continued five years, without any money being in fact paid by the borrower- — each renewal note including past interest, legal and usurious — the sum included in the last note, in excess of the sum originally loaned, would be interest which that note carried or which was agreed to be paid, and not, as to any part of it, interest paid. (lb.) 6 (U. S. Sup. Ct, 1898). If the note when sued on includes usurious inter- est, or interest on usurious interest, agreed to be paid, the holder may elect to remit such interest, and it can not then be said that usurious interest was paid to him. (lb.) 7 (U. S. Sup. Ct., 1898). If the obligee actually pays usurious interest as such, the usurious transaction must be held to have then and not before occurred and he must sue within two years thereafter. (lb.) 8 (U. S. Sup. Ct., 1904). A national bank met in an action by the plea of usury may not avoid the forfeiture of all interest by then declaring an election to remit the excessive interest. (Citizens' National Bank of Kansas City v. Donnell, 195 U. S., 369.) 9 (U. S. C. C, 1877). If a national bank discount a note at a usurious rate of interest, paying the borrower the proceeds less the interest, it can recover only the face of the note less the entire interest received. But if such note be renewed, the borrower paying the usurious interest out of his pocket, in advance, the defendant may recoup, or recover in an independent action, double the amount of the entire interest paid at the renewal. If, instead of paying the usurious interest at each renewal, it be added to the principal and included in the renewal notes, the bank can only recover the amount originally paid to the borrower, i. e., the amount of the last of the renewal notes less all interest included in it. (National Bank of Madison v. Davis, 6 Cent. L. J., 106; 1 N. B. C, 350.) 10 (Ark., 1900). In an action for damages against the receiver of a national bank, for deceit and fraud practiced upon plaintiff, by which it was induced to pay out a large sum of money for the worthless note of an insolvent company, defendant's contention that the discount of the note by plaintiff was usurious and illegal, stated no defense, whether it was a New York or Arkansas contract, as a statute of the former does not permit a corporation to interpose the defense of usury, and under the laws of Arkansas the rate charged was legal. (Binghamton Trust Co. v. Auten, 2 Banking Cases, 502; 68 Ark., 299.) 11 (Iowa Sup., 1879). Where a national bank lends money upon a usurious contract and attempts to enforce such contract in a State court, the defendant may insist upon such usury as a defense. (National Bank of Winterset v. Eyre, 2 N. W. Rep., 995 ; 2 N. B. C, 234 ; 52 Iowa, 114.) 12 (Ky. Appls., 1893). Under Revised Statutes United States, section 5198, relating to national banks, providing that the taking a rate of inter- est greater than is allowed by the preceding section, when knowingly done, shall be deemed a forfeiture of the entire interest, where a national bank loaned money at usurious interest, and added it into a note, which was several times renewed at the usurious rate, the bank is only entitled to recover, in an action on the last note, the principal sum originally loaned, less the partial payments made on the notes. (Snyder v. Mount Sterling National Bank, Ky., 21 S. W., 1050; 94 Ky., 231.) 13 (Nebr. Sup., 1894). Where a national bank loans money at a usurious rate, which is included in the note, in an action to enforce the con- tract, the interest is forfeited. (McGhee v. First National Bank of Tobias, 58 N. W., 537; 40 Nebr., 92.) 14 (Nebr. Sup., 1897). The defense of usury is available in an action by a national bank for the recovery of unpaid interest, where the rate con- tracted for by it exceeds that prescribed by the act of Congress. (Tomblin v. Higgins, 73 N. W„ 461 ; 53 Nebr., 92.) 236 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. USTJBY AS A DEFENSE AGAINST EECOVEEY OF INTEREST — Continued. 15 (Nebr. Sup., 1888). Where the usurious interest is discounted from the face of the note, the bank can only recover the face of the note, less the interest deducted. If the borrower pays the usurious interest in advance, he may recover double the interest so paid. (Schuyler National Bank v. Bollong, 24 Nebr., 825 ; 3 N. B. C, 561.) 16 (N. Y. Appls., 1880). Where a national bank has usuriously reserved a sum greater than the lawful rate of interest on a discount, the amount so reserved is forfeited and may not be recovered in an ac- tion upon the note. (National Bank of Auburn v. Lewis, 81 N. Y., 15; 3 N. B. C, 587.) 17 (Ohio Sup., 1877). In rendering judgment on a promissory note given to a national bank, in renewal, into which note illegal interest on the original note was incorporated, the whole interest of both notes will be disallowed. (Bank of Cadiz v. Slemmons, 34 Ohio St., 142; 32 Am. Rep., 364; 2 N. B. C, 361.) 18 (Pa. Sup., 1879). Where a note is held by a national bank as collateral for overdrafts upon it, "and suit is brought upon the note, the action, though nominally upon the note, is actually to recover those over- drafts as against the makers of the note as sureties. Such sureties are entitled, in case usurious interest has been charged, to deduct all the interest charged as against the total amount of overdraft claimed. (Third Nat. Bank of Philadelphia v. Miller, 2 N. B. C, 378; 90 Pa. St., 241.) 19 (Pa. Sup., 1878). Where there has been a series of renewal notes given for the continuation of the same original loan, a taint of usury in the first transaction follows down through the whole, and in action by a national bank on the last of the series, the borrower is entitled to credit for all the interest he has paid from the beginning. (Cake v. The First National Bank of Lebanon, 1 N. B. C, 890; 86 Pa. St., 303.) 17 (Pa. Sup., 1884). Reid gave Guthrie a judgment note for the latter's ac- commodation. Guthrie procured it to be discounted by a national bank at a usurious rate of interest. Held, that defendant could avail himself of the usurious discount charged by the bank as a de- fense to the payment of interest. (Guthrie v. Reid, 107 Penn. St, 251; 3 N B. C, 751.) Defense of usury in State court. 20 (Iowa). The defense of usury may be set up in action brought in a State court. (National Bank of Winterset v. Eyre, 52 Iowa, 114.) Actions, action fob penalty the kemedy fok usury paid. 1 (U. S. Sup. Ct, 1901). In an action upon a note given to a national bank, the maker can not set off or obtain credit for usurious interest paid in cash upon the renewals of such note and others of which it is a consolidation. In cases arising under the second clause of Revised Statutes, section 5198, the person by whom the usurious interest has been paid can only recover the same back in an action in the nature of an action of debt. The remedy given by the statute is exclusive. (Haseltine v. Central National Bank of Springfield, Mo., 183 U. S., 132.) 2 (U. S. C. C, 1897). Where more than the legal rate of interest has been paid to a national bank, the remedy is a penal suit to recover twice the amount paid, and such payment is not available as a defense in an equitable proceeding to collect the debt on which it was paid. (Cox v. Beck et al., 83 Fed. Rep., 269.) 3 (Pa. Sup., 1879). In no way, either by set-off or original action, can inter- est over the legal rate paid to a national bank be recovered, except by way of penalty, within two years, as prescribed by the national- bank act. (First Nat. Bank of Clarion v. Gruber, 2 N. B. C, 395; 87 Pa. St., 465.) DIGEST OF NATIONAL BANK DECISIONS. 237 INTEREST AND USURY— Continued. Actions — Continued. ACTION FOR PENALTY THE BEMEDY FOB ITSUBY PAID Continued. 4 (Pa. Sup.). Where usury has been actually paid to and received by a bank, the only remedy is an action for the penalty of " twice the amount of interest thus paid." (Brown v. The Second National Bank of Erie, 72 Pa., 209.) 5 (Tenn. Sup., 1902). Where usury has been charged and received by a national bank in discounting notes which drew no interest until after maturity, the maker's only remedy to recover such interest was by action under the second subdivision of Revised Statutes United States, section 5198, providing that the person paying usury may recover back twice the amount of interest paid from the bank ; and such liability could not be set up by way of crossbill in an action by the bank to recover on the notes. (First Nat. Bank of Morristown v. Hunter, 70 S. W. Rep., 371 ; 5 B. C, 324.) WHEN ACTION LIES. Action lies for penalty whether debt paid or not. 1 (Ky., 1901). There may be payments of usurious interest as such which will entitle a debtor to recover from a national bank the penalty for taking usury, though the principal sum remains unpaid; and such a case is presented where the interest upon one note is included- in the amount of another note and the other note is subsequently paid in full. (Second Nat. Bank of Richmond v. Fitzpatrick, 3 Banking Cases, 461 ; 63 S. W. Rep., 459.) 2 (Pa. Sup., 1881). The right of action to recover double the amount of usurious interest paid to a national bank, as provided by section 5197 of the national banking act, accrues upon the actual payment by the borrower of the amount of the illegal interest to the bank, and can be maintained whether the debt has been paid or not. (Mononga- hela National Bank v. Overholt, 96 Penn. St., 327; 3 N. B. C, 735.) 3 (Pa. Sup., 1881). The person paying usurious interest may recover twice its amount, although the principal is not paid. (Lebanon National Bank v. Karmany, 98 Penn. St., 65 ; 3 N. B. 0., 746.) Principal need not be paid before suit for penalty. 4 (Nebr., 1895). The payment of a usurious loan made by a national bank is not a condition precedent to the right of the borrower to maintain an action against such bank to recover double the amount of usurious interest paid on such loan. (Exeter National Bank v. Orchard, Nebr., 61 N. W., 833 ; 39 Nebr., 485.) Contra. 5 (Mo.). Under Revised Statutes United States, section 5198, providing that where a national bank knowingly charges a greater rate of inter- est than is allowed by the laws of the State where it is located, the person paying it may, within two years from the transaction, recover back twice the amount of such interest, in an action in the nature of debt; such an action can not be maintained where plaintiff does not allege or prove that he had paid or tendered the principal sum due. (Haseltine v. Central Nat. Bank, 56 S. W., 895; 155 Mo., 66.) Action for penalty involves Federal question. 6 (U. S. Sup. Ct., 1902). A decision by the highest court of the State ad- verse to the right claimed under United States Revised Statutes, sec- tions 5197, 5198, to recover back usurious interest from a national bank, presents a Federal question, which gives to the Supreme Court of the United States the right to review the judgment of such State court. (Daniel H. Talbot, plff. in err., v. Sioux City First National Bank of Sioux City, Iowa, 4 Banking Cases, 509; 185 U. S., 172,) 238 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. Actions — Continued. when action lies — continued. No interest allowed on penalty prior to judgment. 7 (Kans. App.). Interest is not recoverable on a penalty for receiving usurious interest prior to its merger into judgment. (First National Bank of Newton v. Turner, 42 P., 936; 3 Kans. App., 352.) Judgment for penalty bears interest from filing of suit. 8 (Ky. Appls., 1901). A judgment against a national bank for twice the amount of interest paid, as a penalty for taking usury, should have been allowed interest from the date of the filing the petition to re- cover the penalty, that being the date of the first demand therefor. ( Second Nat. Bank v. Pitzpatrick et al., 3 Banking Cases, 461 ; 63 S. W. Rep., 459.) No action lies to recover usurious interest. 9 (Pa.). Under the thirtieth section of the national banking act the remedy of the " forfeiture of the entire interest " for the exacting of unlaw- ful interest can only be had by way of defense to an action on the note, or to recover the loan, but no action lies for it. (Brown v. The Second National Bank of Erie, 72 Pa., 209.) 10 (Pa. (C. P.), 1879). A bill in equity will not lie to recover usury from a national bank. (Hambright v. National Bank, 3 Lea, 40; 31 Am. Rep., 629; 2 N. B. C, 419.) Penalty recoverable though both principal and interest paid. 11 (Nebr. Sup., 1897). Under the national banking act a suit will lie against a national bank to recover payments of usury, though the borrower has paid both principal and interest. (First Nat. Bank of Tobias v. Barnett, Nebr., 70 N. W., 937; 51 Nebr., 397.) WHO MAT SUE. Only he who pays usury may recover penalty. 1 (Md. App., 1879). The party who paid the usurious interest is the only party to the note who is entitled to sue for the penalty. (Lazear v. National Union Bank of Maryland, 52 Md., 78; 2 N. B. C, 261.) 2 (Md. App., 1879). No one can recover usurious interest paid to a national bank but the party who paid it, and it can not be set off or recouped by another party to the paper. (lb.) 3 (N. Dak.). The right given by Revised Statutes United States, section 5198, to recover double the interest paid to a national bank, when the interest so paid is in excess of that allowed by the laws of the State, is personal to the party paying such usurious interest, and an action to recover the same can be maintained only by such person or his or her legal representatives. (Lealos v. Union Nat. Bank, 81 N. W., 56; 9N. Dak., 77.) Partnership may recover penalty. 4 (Nebr. Sup., 1898). Revised Statutes United States, sections 5197, 5198, prohibiting a bank from exacting usurious interest, and providing for the recovery back of double the amount wrongfully exacted, does not restrict the relief thereunder to natural persons, but extends to part- nerships. (Albion Nat. Bank v. Montgomery, 74 N. W., 1102.) When joint makers of note may not join in suit for penalty. 5 (Kans. App., 1897). Under Revised Statutes United States, section 5198, which authorizes the person paying usurious interest to a national bank to recover twice the amount paid, where each of several joint makers of a note has paid his part of the illegal interest out of his individual money they can not join in one action to recover the penalty. (Teague v. First Nat. Bank of Salina, 48 P., 603: 5 Kans. App., 300.) DIGEST OP NATIONAL BANK DECISIONS. 239 INTEREST AND USURY— Continued. Actions — Continued. who may sue — continued. 6 (Kans.). Under Revised Statutes, section 5198, which authorizes the per- son paying usurious interest to a national bank to recover twice the amount paid, one of the joint makers of a note on which illegal inter- est is charged can not recover the penalty from the bank where the illegal interest was paid by the other maker. (First National Bank of Concordia v. Rowley, 34 P., 1049 ; 52 Kans., 394.) After insolvency right to penalty vests in assignee. 7 (U. S. C. C, 1898). An assignee for the benefit of creditors under the Kentucky statutes who, in order to get possession of collaterals, pays to a national bank a note of his assignor, which includes usurious interest, may maintain an action to recover it back, under Revised Statutes, section 5198. The assignee is the assignor's " legal repre- sentative " in the meaning of that section. (Louisville Trust Co. v. Kentucky National Bank et al., 87 Fed. Rep., 143.) 8 (Pa. Sup., 1881). The party paying such illegal interest can not recover for it after his discharge from bankruptcy, but the right of action vests in the assignee. (Monongahela National Bank v. Overholt, 96 Penn. St., 327; 3 N. B. C, 735.) Assignee of bankrupt may recover penalty for usury. 9. Where a bankrupt has paid usurious interest, his assignee may bring an action against the association to recover the penalty. (U. S. C. C.) Wright v. First National Bank of Greensburg, 8 Bisjs., 243 ; (U. S. C. C, 1876) Crocker v. First National Bank of Chetopa, 1 N. B. C, 317. One suit for all penalties accruing within two years. 10 (N. Y.). The penalty for all illegal interest paid to a national banking association within two years prior to the commencement of proceed- ings may be recovered in a single action, whether the amount was in one payment or in several. (Hintermister v. First National Bank, 64 N. J., 212.) Only he who pays usury may claim forfeiture. 11 (Pa.). Act of Congress, June 3, 1864, section 30, relative to the taking of usury by national banks, does not apply - to the discounting by the bank for the payee of a note given in payment of an article, and stipulating for legal interest, and, if it did, would not avail the maker. (Second National Bank of Clarion v. Morgan, Pa., 30 A., 957; 165 Pa. St., 199.) Creditors are entitled to bankrupt's claim for usury. 12 (U. S. Sup. Ct, 1904). If a claim owned by a bankrupt is of value, his creditors are entitled to it, and he can not, by withholding knowledge of its existence from the trustee, after obtaining a discharge of his debts, immediately assert title to and collect the claim for his own benefit. (First National Bank #f Jacksboro v. Lasater, 196 U. S., 115.) JUBISDICTION IN ACTIONS FOE PENALTY. 1 (U. S. Sup. Ct, 1902). The defendant in error moved to dismiss the action on the ground that no Federal question was decided by the supreme court of Iowa. Held, that the motion should be overruled, as the plaintiff explicitly based his right of action on Revised Statutes 5197, 5198, and as the judgment of the trial court and that of the supreme court of the State denied such right, and this court therefore has jurisdiction. (Talbot v. Sioux City First National Bank, 185 U. S., 172.) 240 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. Actions — Continued. jurisdiction in actions FOE pbnalty — continued. 2 (HI. Sup., 1874). The courts of one State have no jurisdiction of an action against a national bank located in another State to recover the penalty imposed by the act of Congress for the taking of unlawful interest. (Missouri River Telegraph Company v. First National Bank of Sioux City, 74 111., 217; 1 N. B. C, 401.) 3 (Ky. App., 1876). The State courts will not enforce the penalties im- posed by the national banking act for exacting unlawful interest. (Newell v. National Bank of Somerset, 12 Bush., 57; 1 N. B. C.,501.) 4. A State court can entertain an action brought to recover of a national banking association the penalty for taking usury. (Md.) Ordway v. The Central National Bank, 47 Md., 217; (Ohio) Hade v. McVay, 31 Ohio St., 231 ; (Pa.) Bletz v. Columbia National Bank, 87 Pa. St., 87. 5 (Nebr. Sup., 1887). Actions and proceedings against any national bank may be brought in any State, county, or municipal court in the county or city in which such association is located, having jurisdic- tion in similar cases, to enforce a penalty under 'section 5198, Revised Statutes. (First National Bank of Tecumseh v. Overman, 22 Nebr., 116; 3 N. B. C, 556.) 6 (Nebr.). An act of Congress March 3, 1887, section 4, relating to the re- moval of causes, as corrected by act of Congress August 13, 1888, providing that all national banks shall be deemed citizens of the States in which they are located for the purpose of all actions by or against them, does not subject national banks to the laws of the States in which they are situated as to remedies of the debtor for the requirement by the creditor of usurious interest. (Norfolk Nat. Bank v. Schwenk, 64 N. W., 1073; 46 Nebr., 381.) 7 (Pa. Sup., 1879). State courts have jurisdiction in an action against a national bank to recover double the amount of usurious interest paid thereto. (First National Bank of Clarion v. Gruber, 87 Pa. St., 468; 30 Am. Rep., 378; 8 Weekly Notes of Cases, 113; 2 N. B. C, 382.) 8 (Pa. Sup., 1881). State courts have jurisdiction in actions against national banks to recover the penalty imposed upon such banks for taking usurious interest. (Lebanon National Bank v. Karmany, 98 Pa. St., 65; 3 N. B. C, 746.) 9 (Pa. Sup., 1879). State courts have jurisdiction of suits to recover pen- alty for usurious interest. (First Nat. Bank of Clarion v. Gruber, 2 N. B. C, 395; 87 Pa. St., 465.) 10 (Tenn. Sup., 1902). A State court has jurisdiction of an action against a national bank to recover a penalty for charging usurious interest under Revised Statutes 5197, 5198, imposing such penalty, and pro- viding that the suit, action, and proceeding against any association under this title may be had in any State, county, or municipal court in the county or city in which said association is located having juris- diction in similar cases. (McCreary v. First Nat. Bank of Morris- town, 5 B. C, 317; 70 S.~W. Rep., 821.) 11 (Vt. Sup., 1877). State courts have jurisdiction of suits against national banks to recover money paid as usury. (Dow v. Irasburg Nat. Bank of Orleans, 50 Vt, 112; 2 N. B. C, 421.) COMPLAINT, SUFFICIENCY OF, IN SUIT FOB PENALTY, PROOF. 1 (U. S. Sup. Ct, 1889). When the complaint alleges that the usurious transactions took place at a given date more than two years before the commencement of the action, and at other times and dates sub- sequent thereto. Eeld, that though it might have been made more specific, the complaint was sufficient to sustain a judgment in an action against a national bank for exacting usurious interest, the DIGEST OF NATIONAL BANK DECISIONS. 241 INTEREST AND USURY— Continued. Actions — Continued. COMPLAINT, SUFFICIENCY OF, IN SUIT FOE PENALTY, PEOOF — Continued. jury having found that the usurious interest had been taken during the two years next before the commencement of the action. (First National Bank of Charlotte v. Morgan, 132 U. S., 141.) 2 (U. S. Sup. CL, 1877). The national currency act should be liberally con- strued to effect the ends for which it was passed, but a forfeiture under its provisions should not be declared unless the facts upon which it rests are clearly established. In case of a claim of for- feiture against a bank for taking unlawful interest upon the discount of bills of exchange payable at another place, it should appear affirma- tively that the bank knowingly received or reserved an amount in excess of the statutory rate of interest and the current exchange for sight drafts. Accordingly, where it was not shown what the rate of exchange was, a charge of one-quarter of 1 per cent in addition to the statutory rate of interest would not be sufficient to authorize a forfeiture. (Wheeler v. Union National Bank of Pittsburg, 96 U. S., 785; 2 N. B. C, 9.) 3 (Nebr. Sup., 1888). When an action is brought to recover a penalty under sections 5197 and 5198, Revised Statutes, for taking, receiving, reserving, or charging a rate of interest greater than is allowed by law, it is necessary to allege in the petition that the act was " know- ingly done." (Schuyler National Bank v. Bollong, 24 Nebr., 821; 3 N. B. C, 558.) 4 (N. Dak.). A complaint, by an executrix of the will of her deceased husband, to recover double the amount of usurious interest paid for money borrowed from a national bank by such husband during his lifetime, which shows that no payments were made on such debt by such husband, and that the total payments made to the bank by her as executrix did not equal in amount the sum alleged to have been borrowed, with lawful interest, and that the additional payments which constituted the usury were made by her in an individual ca- pacity, prior to qualifying as executrix, does not state a cause of action in her representative capacity, under Revised Statutes United States, section 5198, giving a party the right to recover double the interest paid to a national bank, when the interest so paid is greater than allowed by the laws of the State. (Lealos v. Union Nat. Bank, 81 N. W., 56; 9 N. Dak., 77.) 5 (S. Dak., 1894). A complaint that alleges that the defendant " knowingly and usuriously charged, took, received, and reserved from plaintiff, and that plaintiff paid to defendant for interest, * * * being at the rate of 24 per cent per annum," giving time, amount, etc., states facts sufficient to constitute a good cause of action for the recovery of such alleged illegal interest under the national banking act, (Guild v. First National Bank of Deadwood, 57 N. W., 499; 4 S. Dak., 566.) Action for penalty, demand not prerequisite. 6 (Kans. Appls., 1895). In an action for the penalty for charging usurious interest a demand need not be shown. (First National Bank of Newton v. Turner, 42 P., 936 ; 3 Kans. App., 352. ) LIMITATIONS IN ACTIONS FOE PENALTY FOE USUEY. 1 (U. S. Sup. Ct, 1898). If the obligee actually pays usurious interest as such, the usurious transaction must be held to have then, and not before, occurred, and he must sue within two years thereafter. (Brown v. Marion Nat. Bank, 169 U. S., 416.) 2 (U. S. Sup. Ct, 1901). The inclusion of usurious interest as principal in notes given to a national banking association does not constitute a 4049—05 16 242 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. Action s — Continued. LIMITATIONS IN ACTIONS FOB PENALTY FOB TJSTJBT Continued. payment of the interest within the meaning of United States Re- vised Statutes, sections 5197, 5198, so as to start the running of the statute against a right of action to recover twice the amount of inter- est paid ; but " the usurious transaction " from the date of which the statute begins to run is the time when the usurious interest is actually paid. (Nat. Bank of Daingerfield v. Ragland, 3 Banking Cases, 466; 181 U. S., 45.) 3 (U. S. Sup. Ct, 1902). A petition to recover back usurious interest from a national bank, under United States Revised Statutes, sections 5197, 5198, which shows on its face that the action was not " commenced within two years from the time the usurious transactions occurred," as required by the latter section, can not withstand a demurrer be- cause of an allegation that the charge and reservation of the usurious interest were without plantiff's knowledge or consent, since, even if the period of limitation of the statute does not begin until discov- ery of the wrong, the court will not indulge the presumption that plaintiff's consciousness of the wrong was not aroused until some time within two years before the commencement of the action. (Tal- bot v. First National Bank of Sioux City, 4 Banking Cases, 509 ; 185 U. S., 172.) 4 (U. S. C. G, 1900). On a settlement between a national bank and' a debtor who owed the bank some $69,000 on a number of notes, a pay- ment was made which reduced such indebtedness to $30,000, for which a new note was given. Held, that, both on general principles, in accordance with the presumed intention of the parties, and under Kentucky Statutes; section 2219, clause 3, which provides that " par- tial payment on a debt bearing interest shall be first applied to the extinguishment of the interest then due," all past interest, whether usurious or otherwise, must be regarded as having been paid in the settlement, and that limitation commenced to run on that date against an action under Revised Statutes, section 5198, to recover the penalty for usury previously contracted for. (Louisville Trust Company v. Kentucky Nat. Bank, 102 Fed. Rep., 442.) 5 (U. S. C. C, 1900). Where a national bank discounts a note at a usurious rate, the maker or his legal representative, on payment of the note, is entitled to recover as a penalty, under Revised Statutes, section 5198, double the amount of the discount so taken, and of all interest subsequently paid on the note or its renewals, although separate payments of interest were made from time to time after its matu- rity, and all at legal rates ; and limitation does not begin to run against an action to recover such penalty until full payment of the note or its renewals. (lb.) 6 (U. S. Dist Ct, 1878). Where a national bank has taken usurious inter- est on a loan or discount, it may elect to apply the excess of interest on the principal at any time before the loan is paid in full, or before judgment is entered for the full amount. Therefore, the two years within which an action' may be brought to recover twice the amount of interest paid do not begin to run until the principal has been paid or a judgment entered for the full amount thereof. (Duncan v. First Nat. Bank of Mt. Pleasant, 1 N. B. C, 360.) 7 (U. S. C. G, 1898). Usurious interest on a note is not paid, so as to set running the statute of limitations against an action to recover it back, by giving a renewal note which includes the interest. The statute only begins to run from the time the renewal note is paid. (Louisville Trust Co. v. Kentucky Nat. Bank et al., 87 Fed. Rep., 143.) 8 (Iowa Sup., 1902). Where an action to recover illegal interest charged by a national bank was barred by limitations, and defendant col- lected a judgment against plaintiff for costs, such a collection was DIGEST OF NATIONAL BANK DECISIONS. 243 INTEREST AND USURY— Continued. Action s — Continued. LIMITATIONS IN ACTIONS FOB PENALTY FOB USURY — Continued. not a further usurious transaction, extending the period of limita- tions. (Talbot v. First Nat. Bank of Sioux City, 4 Banking Cases, 387.) 9 (Nebr. Sup., 1894). The limitation of two years within which suit may be brought against a national bank under section 5198, Revised Statutes, for taking usurious interest begins to run from the time when the usurious interest is paid. (First National Bank of Dor- chester v. Smith, 57 N. W., 996; 39 Nebr., 90.) 10 (Nebr. Sup.). The limitation under Revised Statutes United States, sec- tion 5198, of actions for the recovery from a national bank of a pen- alty for usury dates from the payment of such interest, and not from the reservation of it from the original loaji by way of discount. (Smith v. First National Bank of Crete, Nebr., 00 N. W., 866; 42 Nebr., 687 ; Lanham v. First National Bank of Crete, 60 N. W., 1041 ; 42 Nebr., 757.) 11. Under Revised Statutes, section 5198, providing that a suit against a national bank for taking usurious interest must be commenced -within two years from " the time the usurious transaction occurred," the limitation begins to run from the time when such interest is paid. (N. J. Ct. of Errors and Appeals, 1890) National Bank of Rahway v. Carpenter, 19 At., 181 ; 52 N. J. L., 165 ; (Tenn. Sup., 1893) Bobo v. People's National Bank of Shelbyville, 21 S, W., 888 ; 92 Tenn., 444. 12 (Pa. Sup., 1871). The limitation of two years within which an action for the penalty must be brought commences to run from the actual pay- ment of the usury. (Brown v. Second Nat. Bank of Erie, 72 Pa., 209; IN. B. C, 849.) 13 (U. S. Sup. Ct., 1904). The payment contemplated by the statute is an actual payment and not a further promise to pay, is not made until the bank receives its money, and an action must be brought within two years from that date. (First National Bank of Jacksboro v. Lasater, 196 U. S., 115.) When State statute does not govern. 14 (Pa. Sup., 1875). In actions for the recovery of usurious interest, a State statute limiting the time within which an action to recover excessive interest may be brought does not apply. (Lucas v. Government Nat. Bank of Pottsville, 1 N. B. C, 872 ; 78 Pa. State, 228.) RELEASE AND DISCHARGE OF CLAIMS FOB PENALTY. 1 (N. Y. App., 1882). Plaintiff, as assignee in bankruptcy of A, sued to recover the penalties imposed by the national banking act for charg- ing and receiving usurious rates of interest. Defendant proved a release and discharge executed by A before the commencement of the bankruptcy proceedings. Plaintiff gave in evidence the record of a judgment in his favor in an action in which he, as assignee, sued defendant to recover a payment of a debt made to it by A about a month prior to the execution of the release, as having been made when A was insolvent, and when defendant had reasonable cause to believe that fact and knew the payment was made in fraud of the bankrupt act. Held, that defendant was not concluded or affected by the judgment. (German v. Second National Bank of Oswego, 89 N. Y., 136 ; 3 N. B. C, 599.) 2 (N. Y. App., 1885). In an action under United States Revised Statutes, section 5198, against a national bank to recover twice the amount of usurious interest taken on loans made by it to McRae, the defend- ant proved an oral agreement between it and McRae, whereby the 244 DIGEST OF NATIONAL BANK DECISIONS. INTEREST AND USURY— Continued. Actions — Continued. i BELEASE AND DISCHARGE OF CLAIMS FOE PENALTY Continued. latter agreed to settle and discharge all such claims against defend- ant ; that the same be applied in payment of that part of his indebted- ness to the bank not collected by it from any other source, and that he would not sue or allow suit to be brought against the bank on account of such illegal interest. In consideration thereof the bank agreed that it would satisfy so much of the indebtedness of McRae as remained after applying all other available collections, or would consent as a creditor to" his discharge in bankruptcy, as he might request. At the time of the agreement McRae was indebted to defendant in a large amount, and after applying all the collections there remained due a sum much larger than the excessive interest, none of which indebtedness has been paid. Meld, that the agreement operated as^ an immediate discharge and satisfaction of the claim of McRae against defendant. (Morehouse v. Second National Bank of Oswego, 98 N. Y., 503 ; 3 N. B. C, 631.) 3 (N. Y. App., 1885). Inconsistent action by the defendant subsequent to the agreement did not affect its legal operation. (lb.) Holder of usurious note may elect to remit. 4 (U. S. Sup. Ct., 1898). If the note when sued on includes usurious interest or interest upon usurious interest agreed to be paid, the holder may elect to remit such interest, and it can not then be said that usurious interest was paid to him. (Brown v. Marion National Bank, 169 U.S., 416.) JURISDICTION. Page. Generally 245 When Federal courts hate jurisdiction: Generally _• _ _ _ _ 246 When Federal Supreme Court has j urisdiction 250 When circuit court of appeals or circuit court has jurisdiction _ _ . 251 When district court has jurisdiction __ __. 252 Removal from State to Federal courts _ _ 252 When State courts have jurisdiction _._ 255 Cross references: Agent of shareholders — Federal courts have the same jurisdiction of agents as of receivers. 12 Deposits — Jurisdiction in actions for public money on deposit 129 Insolvency and receivers — National banks not under jurisdiction of bankruptcy courts 179 Jurisdiction in actions by and against receivers 189 Interest and usury- Jurisdiction in actions for penalty 239 Officers, criminal liability of — Jurisdiction __. 376 Pleading and practice — Diligence in removal 409 Shareholders — Jurisdiction in assessment of 494 DIGEST OF NATIONAL BANK DECISION'S. 245 JURISDICTION— Continued. GENERALLY. National bank a citizen, where. 1. By the acts of July 12, 1882, March 3, 1887, and August 13, 1888, national banks are, for the purposes of the jurisdiction of the United States courts in actions by or against them, to be deemed citizens of the States in which they are located. y express agreement. 6 (U. S. Sup. Ct, 1889). The controversy in this case involves the allowance, in favor of the trustee in bankruptcy of S.,of liens upon certain bonds, owned in fact by C. and D., though ostensibly belonging to C. only, as pledged to secure, by express agreement, the general balance of ac- count of a New Orleans bank, of which C. was president ; and also, by implication from the usage of the banking business in which S. was engaged, C.'s general balance. (Reynes v. Dumont ; Dumont v. Fry, 130 IT. S., 354.) 7 (U. S.. Sup. Ct., 1889). The court is of the opinion upon the evidence that the bonds were pledged to secure the remittance by the bank to S. of " exchange bought and paid for " — that is, bills drawn against ship- ments and purchased by advances to the shippers — and that they can not be held to make good a debit balance of the bank created by the nonpayment of certain drafts drawn by it directly on Europe and unaccompanied by documents. (lb.) 8 (U. S. Sup. Ct., 1889). A banker's lien rests upon the presumption of credit extended in faith of securities in possession or expectancy, and does not arise in reference to securities in possession of a bank under circumstances, or where there is a particular mode of dealing, incon- sistent with such lien. (lb.) 9 (U. S. Sup. Ct., 1889). The pledge of these bonds to guarantee the remit- tance by the bank as before stated, and the circumstances under which they were left in the possession of S. and had been made use of by C, precludes the allowance of the banker's lien claimed on behalf of S. as against the ultimate indebtedness of C. (lb.) 10 (U. S. Sup. Ct, 1889). The receipt by D. and the assignee of C. of the remaining bonds and money realized from bonds or coupons, after the satisfaction of the amounts decreed as liens by the circuit court, did not deprive D. and C.'s assignee of the right to appeal. (lb.) 11 (Ky. App., 1901). Where bonds were pledged to a bank to secure a spe- cific debi the bank had no lien except for that debt. (First Nat. Bank v. Germania Safety Vault and Trust Co., 4 Banking Cases, 291.) 12 (N. Y. App., 1883). Moller & Co., brokers and agents for HuntTW an absolute power of attorney, having authority from her to pledge her stocks for a loan of $35,000, contracted with defendant for the loan, giving their own note therefor, secured by pledge of the stock. Defendant knew that the loan was for Hunt, and was to be used to pay for a portion of the stocks, and that the stocks bel&nged to her. Held, that defendant could not hold the same as security for other loans made by it to M. & Co. (Talmage v. Third National Bank of the City of New, York, 91 N. Y., 531 ; 3 N. B. C, 603.) 13 (N. Y. App., 1883). Plaintiff tendered before suit the $35,000 and interest, and on this being refused tendered $46,000. Held, not a conclusive admission that defendant had a lien for the latter sum. (lb.) 260 DIGEST OP NATIONAL BANK DECISIONS. LIEN— Continued. WHEN NATIONAL BANK MAY HAVE LIEN Continued. 14 (Va. Sup. Ct. of App., 1901). A creditor may acquire by assignment an interest in insurance policies on the life of his debtor, limited solely to the amount of the latter's ability at the time of his death, Together with such premiums, with interest thereon, as the creditor has paid to preserve the insurance ; the residue belonging to the insured's es- tate whether the policies were assigned absolutely or as collateral. (First Nat. Bank of Roanoke v. Terry's Admr., 3 Banking Cases, 317; 99 Va., 194.) On general deposit for claim against depositor. 15 (N. Y.). A bank has a general lien on all moneys and funds of a de- positor in its hands, for the balance of the general account, if such account be due and payable; but where a note is discounted by a bank for its depositor, it has no resulting lien upon his funds or property until the note becomes due. (Smith v. Eighth Ward Bank, 52 N. T. S., 200.) 16 (N. Y.). Where a bank held matured notes of a firm to an amount greater than the firm's deposit, it had a lien on the deposit, and was entitled to hold the same until the notes were paid. (Delehunty v. Central National Bank, 71 N. Y. S., 416.) 17 (Pa.). Where the payee of an accommodation check, given for a special purpose, deposits it in a bank in his own name, and the bank makes advances and extends credit on the faith of the deposit without notice of the trust, its rights and equities are superior to the drawer of the check. (Erisman v. Delaware County Nat. Bank, 1 Pa. Super. Ct, 144.) National oank entitled to mechanic's lien. 18 (Wis. Sup., 1903). Where a subcontract was assigned by the subcontractor to a national bank as collateral security and the subcontractor died insolvent, leaving the work unfinished, the bank completing the con- tract, it became a subcontractor and as such entitled to a mechanic's lien. (Security Natl. Bank of Sioux City, Iowa, v. St. Croix Power Co., 94 N. W. Rep., 74 ; 5 B. C, 560.) WHEN NATIONAL BANK MAY NOT HAVE LIEN. On special deposit. 1 (U. S. C. C, 1890). A banker's lien for the amount of the balance of its general account does not exist when the securities have been depos- ited with the bank for a special purpose or for the payment of a par- ticular loan. (Armstrong v. Chemical National Bank, 41 Fed. Rep., 234.) On general deposit for deot not matured. 2 (Mo. Sup., 1897). A bank has no lien on the deposit of a customer for an indebtedness owing to it by him, which has not matured, though he be insolvent. (Homer v. National Bank of Commerce of St. Louis, 41 S. W., 790; 140 Mo., 225.) 3 (N. Y.). A firm having a deposit with a bank which held unmatured notes of the firm exceeding the amount of the deposit made an assign- ment for the benefit of creditors, which was afterwards set aside at the suit of a judgment creditor and a receiver appointed. The judg- ment appointing the receiver was not recovered until after the ma- turity of the notes. Held, that the receiver was merely subrogated to the rights of the firm as of the date of his appointment, and therefore was not entitled to recover the amount of the deposit. (Delahunty v. Central Nat. Bank, 71 N. Y. S., 416.) On its land alleged to Be, out not actually, sold. r 4 (U. S. C. C. A., 1896). There can be no vendor's lien in favor of a bank » which causes lands held in trust for it to be conveyed to a corpora- tion for the purpose of giving such corporation the appearance of DIGEST OF NATIONAL BANK DECISIONS. 261 LIEN — Continued. WHEN NATIONAL BANK MAY NOT HAVE LIEN Continued. ownership and the power and opportunity, to deal with strangers as the owner, when in reality it takes the lands in trust for the bank. There can be no vendor's lien when there is no actual sale. (Butler et al. v. Cockrill, 73 Fed. Rep., 945.) When estopped from claiming lien. 5 (S. Dak. Sup., 1898). A county treasurer borrowed $1,000 from defend- ant on his individual note and then deposited it to his account as county treasurer, for the ostensible purpose of taking the place of funds previously collected for the county. Thereafter the bank deliv- ered to the treasurer drafts, Including one for the $1,000, payable to his order as county treasurer, which were exhibited by him to the county commissioners, and his accounts settled in reliance thereon. Held, that the bank was estopped from claiming a lien on the $1,000 on account of the loan, or from setting up an agreement with the treasurer that, if the note was not paid in full, the balance was to be charged back to the account. (Custer County v. Walker, 74 N. W. Rep., 1040; 10 S. Dak., 594.) WHEN LIEN MAY BE HAD ON BANK'S PROPERTY OB ON PROPERTY OF OTHERS IN ITS CUSTODY. Garnishment of property in custody of bank-. 1 (Pa.). The lien of an attachment in execution takes effect at the time the writ is served on the garnishee, and can not be subsequently defeated by an assignment of the attached property to the garnishee, prior to service on defendant. (National Bank of Spring City v. National Bank of Pottstown (Com. PI.), Montg. Co. Law Repr., 64.) 2 (Tex.). One claiming. a lien on attached property, superior to the attach- ment plaintiff, can not, in a cross bill, traverse the affidavit for attach- ment. (Farmers and Merchants' National Bank v. Waco Electric Railway and Light Co. (Tex. Civ. App.), 36 S. W., 131 ; Metropolitan Trust Co. v. Farmers and Merchants' National Bank, ib.) Creditor of bank may apply payment to item not secured. 3 (Ohio Cir. Ct). Where a creditor is entitled to a lien for debts repre- sented by certain items on an open account, and is not entitled to a lien under other items, the creditor may apply a payment made on the account generally to those items under which no lien exists. (Union National Bank v. City of Cleveland, 10 Ohio Cir. Ct. R., 222.) Lien of United States. 4 (La. Sup., 1870). The national banking act gives to the United States a first and paramount privilege upon all the assets of a banking asso- ciation organized under the act to reimburse to the United States the amount expended in paying the circulating notes of such bank asso- ciation. Therefore, the privilege given to an attaching creditor over the assets of the First National Bank of Selma must be postponed to that of the privilege of the United States where it is shown, as in this case, that the Louisiana National Bank, a debtor of the First National Bank of Selma, had notice of the claim of the United States on the assets of the First National Bank of Selma before the seizure by the creditors under the attachment. (Schmidt v. The First Nat. Bank of Selma, 1 N. B. C, 505 ; 22 La. Ann., 314.) MISCELLANEOUS. Possession essential to factor's lien. 1 (111. Sup., 1893). A contract between a corporation and its factor, whereby the corporation appoints the factor its general selling agent and agrees to consign all its products to him, does not give the latter a lien for advances on money due the corporation for goods sold and 262 DIGEST OP NATIONAL BANK DECISIONS. LIEN — Continued. miscellaneous — continued. delivered by the corporation directly to the purchaser, since posses- sion is essential to a factor's lien. .(Warren v. First National Bank of Columbus, 38 X. E., 122 ; 149 111., 9.) Mortgage on merchandise, stock replaced. 2 (Md., 1894). A mortgage of a stock of goods, providing that all stock replaced after the sale of any of the stock conveyed should be substi- tuted therefor and be liable for the debt, is ineffectual to create a lien on after-acquired goods. (First Xational Bank of Baltimore v. Lin- denstruth, 28 A., 807; 79 Md., 136.) Waiver of lien by holders of preferred stock. 3 (Md. App., 1901). Where stockholders holding preferred stock, issued pursuant to code, article 23, section 297, to enable the company to obtain a loan, consent, by indorsement on the certificate, to postpone their lien in favor of any banks making loans to the company, such banks, on the company becoming insolvent, are entitled to share as unsecured creditors on the full amount of their claims, and then pro rata in the proceeds of the property, subject to the lien of the pre- ferred stock, after deducting the percentage previously received in common with other creditors. (Rogers et al. v. Citizens' Nat. Bank et al., 49 Atl. Rep., 843 ; 93 Md., 613.) Mechanics' liens, builders' contract. 4 (N. Y. Sup.). Where a building contract makes a certificate from the county cleric that no liens are unsatisfied of record an absolute condi- tion of payment of any money under the contract, and does not expressly limit the protection of this provision to the owners of the building, such provision is also for the benefit of persons entitled to mechanics' liens, and an assignment of moneys due under the contract will be subject to the satisfaction of any such liens duly filed after such assignment, and before such certificate is obtained. (27 N. T. S., 951, affirmed; Bates v. Salt Springs National Bank, 34 N. Y. S., 598.) Record of deed giving lien not essential. 5 (Tex., 1895). A vendor's lien expressly reserved in deed is not affected by failure to record the deed or by its destruction after record. (Texar- kana National Bank v. Daniel (Tex. Civ. App.), 31 S. W., 704.) Lien of judgment may not be collaterally attacked. 6 (W. Va., 1895). In a suit in equity to enforce a judgment lien against real estate of the debtor, the judgment is, as between the judgment creditor and other judgment creditors of the debtor, conclusive of the justness and amount of the debt, and can not be impeached except for fraud. (First National Bank of Ceredo v. Huntington Distilling Co., 23 S. E„ 792; 41 W. Va., 530.) LIMITATION OF ACTIONS. Cross references: Checks — Page. When statute begins to run against holder of certified check 74 Deposits — Limitations upon actions for _ . 145 Forfeiture of charter — Limitations in action for forfeiture 163 Insolvency and receivers — Discovery of defalcation by temporary receiver will not cause statute to begin to run against insurance policy taken as in- demnity 182 Statute of limitations does not affect assets in receiver's hands 186 DIGEST OF NATIONAL BANK DECISIONS. 263 LIMITATION OF ACTIONS— Continued. . Cross references — Continued. Insolvency and receivers — Continued. Page. Receiver's actions for conversion — limitations ... 195 Limitations in receiver's suit for unearned dividends 197 Interest and usury — Limitations in actions for penalty for usury 241 Jurisdiction — When limitations a Federal question 247 Liquidation — Shareholder's liability, statute of limitations 266 Officers, civil liability of — Limitations in actions against directors, renewal of certificate of deposit does not create new debt _ 338 Limitation of action against director for impairment 344 * Officers, criminal liability of — Limitation of prosecutions for making false entries 357 Shareholders — Limitation in action for assessment of 494 GENERALLY. 1 (U. S. C. C. A., 1895). Under act March 3, 1891, section 11, a writ of error must be sued out witbin six months in order to authorize a review by the circuit court of appeals. (White et al. r. Iowa National Bank of Des Moines, 71 Fed. Rep., 97.) 2 (U. S. C. C, 1879). Where the State and Federal courts have concurrent jurisdiction, a State statute of limitation may be pleaded as effect- ively in a Federal court as it could be in a State court ; and in such cases the Federal courts will follow the decisions of the local State tribunals and will administer the same justice which a State court would administer between the same parties. (Price v. Yates, 2 N. B. C, 204; 19 Alb. Law Journal, 295.) 3 (U. S. C. C, 1887). The time of commencement of judicial proceedings to avoid a statute bar may be shown by parol. (Witters, receiver, v. Sowles and others, assignees, 32 Fed. Rep., 765.) 4 (Nebr. Sup., 1900). A claim against the estate of a deceased person must be presented for examination and allowance to the probate judge or commissioners appointed for that purpose within the time allowed by statute, as fixed by order of the probate court. ( Schaberg's Estate v. McDonald, 3 Banking Cases, 164; 60 Nebr., 493.) In action for conversion. ' 5 (U. S. C. O, 1900). The cashier of a bank, as agent for a school district, resold bonds which he had redeemed on behalf of the district, and converted the proceeds to his own use, stating to the directors that he had been unable to obtain such bonds. The directors were also negligent in failing to' make inquiry from third persons, which would have disclosed the facts. Held, that limitation began to run against an action by the district to charge the bank from the time of the con- version. (School Dist. of City of Sedalia, Mo., v. De Weese, 100 Fed. Rep., 705.) Concealment of cause of action \>y defendant. 6 (U. S. C. C, 1900). Fraud or concealment which will prevent the run- ning of limitation against an action must be that of the defendant. School Dist. of City of Sedalia, Mo., v. De Weese, 100 Fed. Rep., 705.) 7 (Iowa Sup. Ct, 1901). Where plaintiff sued to recover money deposited in a bank without his knowledge to his credit, but which he did not receive in the settlement of his account, and which the bank's presi- dent told him had not been made, the cause of action was not barred 264 DIGEST OF NATIONAL BANK DECISIONS. LIMITATION OF ACTIONS— Continued. generally — continued. in the statutory period after toe fraud or mistake; but under code, section 3448, providing that in actions for fraud or mistake the cause of action shall not accrue until discovery, the statute did not begin to run against his cause of action until he discovered the error. (Cole v. Charles City Nat. Bank, 4 Banking Cases, 5; 114.Iowa, 632.) Bills and notes — Limitations — Payments — Authority. 8 (U. S. C. C, 1904). Defendant made a note payable to his wife, which she indorsed, and defendant's son, who was a director in the bank of which plaintiff was the receiver, procured it to discount the note, the money being paid to defendant. Thereafter payments of interest within the period of limitations were made by the son directing the cashier of the bank to apply the dividends due to defendant's wife on certain shares of the bank's stock standing in her name; but there was no evidence tending to connect defendant with such payments, except the declaration of the bank's cashier, as a witness, that the son was acting as his father's agent throughout the transactfon. Held, that the evidence was insufficient to show that the payments of interest were made with defendant's authority and consent, and were therefore insufficient to stop the running of limitations as against him. (Schofleld v. Twining, 127 Fed. Kep., 488.) LIQUIDATION. Holders of two-thirds of stock may force liquidation. 1 (Kans.). A national bank may go into voluntary liquidation and be closed by a vote of two-thirds of its shareholders, although contrary to the wishes and against the interests of the remainder. (Watkins v. National Bank of Lawrence, 32 P., 914 ; 51 Kans., 254.) Corporate existence continues until business settled. 2. A national bank which has gone into voluntary liquidation will con- tinue to exist as a body corporate for the purpose of suing and being sued until its affairs are completely settled. (U. S. Sup. Ct, 1881) National Bank v. Insurance Company, 104 U. S., 54 ; 3 N. B. C. 20 ; (Md.) Ordway v. Central National Bank, 47 Md., 217. 3*(U. S. Sup. Ct, 1881). A national bank in voluntary liquidation may still sue and be sued by its name for the purpose of closing its business, and a creditor may maintain a suit upon a disputed claim, although he has filed a bill under the act of June 30, 1876, section 2, to enforce the individual liability of shareholders. (National Bank v. Insurance Company, 104 U. S., 54; 3 N. B. C„ 20.) 4 (Minn. Sup., 1889). A two-thirds vote of the shareholders to go into liquidation does not dissolve a national bank. While it may not go on with the banking business, it still has power to collect its assets and close its affairs. (Merchants' Nat. Bank v. Gaslin, 41 .Minn., 552; 43 N. W. Rep., 483.) Authority of officers during liquidation. 5 (U. S. Sup. Ct, 1890). The officers of a national bank which has gone into liquidation having no authority to bind the stockholders by the transaction of any business except that necessarily involved in the winding up of its affairs, an agreement by the president of such bank that its guaranty, made before liquidation, of certain notes shall not be discharged by a change in the security of such notes and the release of the principal debtor, creates no liability on the part of the stockholders. (Schrader v. Manufacturers' Nat. Bank, 133 U. S., 67.) 6 (U. S. Sup. Ct, 1887). After an association goes into liquidation there is no authority oh the part of its officers to transact any business in its name so as to bind its shareholders, except that which is implied DIGEST OP NATIONAL BANK DECISIONS. 265 LIQUIDATION— Continued. in the duty of liquidation, unless such authority has been expressly conferred by the shareholders. (Richmond v. Irons, 121 U. S., 27.) 7 (Kans.). Without express authority from the shareholders in a national bank, its officers, after- the bank goes into liquidation, can only bind them by acts implied by the duty of liquidation. (Elwood v. First Nat. Bank, 41 Kans., 475.) National banJc in liquidation subject to like proceedings as domestic corpora- tions. 8 (Ga.). A national bank which has gone into voluntary liquidation be- comes subject to like proceedings as domestic corporations ; for instance, to a creditor's bill to reach a fund held by the president. (Merchants and Planters' National Bank v. Masonic Hall, 65 Ga., 603.) Comptroller may appoint receiver. 9 (U. S. C. C, 1893). The Comptroller may appoint a receiver for a bank that has voted to go into voluntary liquidation. (Washington Na- tional Bank of Tacoma v. Eckels, 57 Fed. Rep., 870. ) When court will appoint receiver during liquidation. 10 (U. S. C. C, 1875). Where a bank has gone into voluntary liquidation and the Comptroller has no power to appoint a receiver, a proper court, in a case where such action is. necessary to protect the interests of a creditor, will appoint a receiver for it. (Irons, executor, et al. v. Manufacturers' National Bank, 6 Biss., 301.) 11 (Kans.). Where a national bank is insolvent and in process of voluntary liquidation, and its affairs are being greatly mismanaged by its man- aging agents, to the injury of its creditors and stockholders, and some of the creditors and stockholders are being favored to the injury of others, a receiver may be appointed in such a case, even where the bank only has been made a defendant. (Elwood v. First National Bank, 41 Kajis., 475.) Stockholders of liquidating corporation Have the right to have the assets con- verted into money. 12 (U. S. Sup. Ct, 1889). On the dissolution of a corporation at the expira- tion of the term of its corporate existence, each stockholder has the right as a general rule and in the absence of a special agreement to the contrary, to have the partnership property converted into money whether such sale be necessary for the payment of debts or not. (Mason v. Pewabic Mining Co., 133 U. S., 50.) Directors responsible for their acts after expiration of charter. 13 (TJ. S. Sup. Ct., 1889). Directors of a corporation conducting its business and receiving moneys belonging to it after the expiration of the term for which it was incorporated will be held to an account on the dis- solution and the final liquidation of the affairs of the corporation in a court of equity. (lb.) Bills receivable may be transferred to creditors. 14 (U. S. Sup. Ct). A bank in process of liquidation may pay creditors in bills receivable and other assets of the bank, which may be trans- ferred by the president or cashier by indorsement or otherwise, but such indorsement, and the use of the name of the bank, is in liquida- tion and merely for the purpose of transferring title, as the bank can not guarantee the paper and it does not constitute a liability for which the shareholders can be held individually responsible. (U. S. Sup. Ct., 1890) Schrader v. Manufacturers' National Bank, 133 U. S., 67 ; (U. S. Sup. Ct., 1887) Richmond v. Irons, 121 U. S., 27; 3 N. B. C, 211. Nature of action to recover assessment. 15 (U. S. Sup. Ct, 1887). A court of equity has jurisdiction, under the na- tional banking act, of an action brought by one creditor on behalf 266 DIGEST OF NATIONAL BANK DECISIONS. LIQUIDATION— Continued. of all the creditors to enforce the liability of the shareholders and carry out the liquidation proceedings. (Richmond v. Irons, 121 U. S., 27; 3N. B. C, 211.) 16 (U. S. C. C. A., 1902). The only authorized procedure for enforcing the individual liability of the shareholders of a national bank which has gone into voluntary liquidation is by a bill in equity in the nature of a creditor's bill, brought by a creditor " on behalf of himself and of all other creditors of the association." The trustee appointed by the stockholders has no authority to enforce this liability. The suit must be brought in the district in which the bank is situated. (Williamson et al. v. American Bank et al., 115 Fed. Rep., 793.) Interest on deposits. 17 (U. S. Sup. Ct, 1887). If a national bank goes into voluntary liquidation, the book accounts of depositors draw interest from the date of sus- pension, the act of going into liquidation dispensing with demand. (Richmond v. Irons, 121 U. S., 27.) Maladministration, character of action for. 18 (U. S. Sup. Ct., 1887). Under the original act respecting national banks, and before the act of June 30, 1876, a court of equity had jurisdiction of suit to prevent or redress maladministration or fraud against creditors, in voluntary liquidation of such bank, whether contem- plated or executed; and such suit by one creditor must be for all. (Richmond v. Irons, 121 U. S., 27.) Voluntary liquidation — Shareholders' liability — Court's receiver may enforce. 19 (U. S. C. C. A., 1903). Under the act of June 3, 1864, c. 106 (13 Stat, 99), authorizing the formation of national banks, a Federal court sitting in equity had jurisdiction in a proper case to appoint a receiver to liquidate its obligations and to authorize him to collect and to enforce by action the liability of the shareholders of the bank under section 12 of the act (sec. 5151, Rev. Stat.; U. S. Comp. St., liJOl, p. 3465.) (King v. Pomeroy, C. C. of App., 121 Fed. Rep., 287.) Receiver — Has rights of creditors as well as debtors. 20 (U. S. C. C. A., 1903). In the absence of restrictive legislation a receiver in liquidation proceedings may ordinarily enforce the rights cf ■" creditors as well as the rights of the debtor. (lb.) New remedy — Cumulative, not exclusive. 21 (U. S. C. C. A., 1903). While a remedy given by the act creating the right is ordinarily exclusive, a new remedy provided in a case in which the right and an appropriate remedy already existed is merely cumula- tive, and the injured party is at liberty to pursue either. (lb.) Voluntary liquidation — Remedy of creditors' suits not exclusive. 22 (U. S. C. C. A., 1903). The remedy of the creditors' suit to enforce the liability of shareholders of national banks in voluntary liquidation, provided by section 2 of the act of June 30, 1876, c. 156 (19 Stat., 63 ' U. S. Comp. St., 1901, p. 3509), is cumulative and not exclusive, (lb.) Action of Comptroller, when unnecessary. 23 (U. S. C. C. A., 1903). In cases in which a court of equity appoints a receiver to liquidate the debts of national banks in voluntary liquida- tion, no action of the Comptroller is requisite to empower the court's receiver to enforce the liability of the shareholders. The court has plenary power to ascertain the necessity of enforcing the liability, and to direct its receiver to collect it. (lb.) Shareholders' liability — Statute of limitations. 24 (U. S. C. C. A., 1903). The statute of limitations does not run against an action to enforce the liability of a shareholder of a national bank during the time while proper liquidation proceedings are pending in a court of equity. (lb.) " DIGEST OF NATIONAL BANK DECISIONS. 267 LIQUIDATION— Continued. 25 (U. S. C. C. A., 1903). The liability of a shareholder of a national bank whose affairs are in course of judicial administration in a court of equity does not mature until the court ascertains the necessity of enforcing it, determines the amount which the shareholder must pay, and fixes the time of payment ; and the cause of action of the receiver of the court to enforce the liability does not accrue until the liability thus matures. (lb.) Solvent national bank assumes debts of insolvent bank contemplating liquida- tion — Liability of shareholders of insolvent bank. 26 (TJ. S. C. C. A., 1904). Where a national bank assumed the debts of an insolvent bank contemplating liquidation, in consideration of a trans- fer of certain of the bank's available assets, and certain notes for the balance, such notes represented the " contracts, debts, and engage- ments " of the insolvent bank in equity, for which its stockholders were liable, as provided by Rev. Stat, 5151. (George et al. v. Wal- lace ; Brownlee et al. v. Same ; Morsman v. Same ; Poppleton v. Same ; Morton et al. v. . Same ; McCague Inv. Co. et al. v. Same, 135 Fed. Rep., 286. Trust funds. 27 (U. S. C. C. A., 1904). The tangible assets and the liability of stock- holders of an insolvent national bank in process of voluntary liquida- - tion in the hands of the liquidating agent is a trust fund for the primary benefit of creditors. (lb.) Capacity to sue — Necessity of judgment. 28 (U. S. C. C. A., 1904). All of the assets of an insolvent national bank in process of voluntary liquidation having been placed in the hands of a defendant, who by express contract, was constituted a trustee for the primary benefit of another national bank, which became a creditor of the liquidating bank by the assumption and payment of the demands of all of the other creditors of the liquidating bank, complainant, the holder of the note executed by the liquidating bank as a part of the assumption contract sued to enforce an asserted lien by way of pledge on all of the undisposed assets of the liquidating bank, to obtain a. judicial administration of its affairs, and to enforce the statutory obligation of stockholders. Held, that it was no objection to com- plainant's capacity to sue that his claim had not been reduced to judgment. ( lb. ) Garnishment during liquidation. 29 (Ala.). A national bank may be garnished after it has gone into liquida- tion. (Birmingham Nat. Bank v. Mayor, 104 Ala., 634; 16 So. Rep., 526.) Judgments against bank during liquidation. 30 (Kans.). A judgment rendered against a national bank after it has gone into voluntary liquidation, and to dissolve which proper steps have been taken, is void, and may be attacked collaterally. (Hodg- son v. McKinstry, 42 Pac. Rep., 929; 3 Kans. App., 412.) 31 (Tex. Civ. Appls., 1898). A judgment against a national bank which had. gone into voluntary liquidation is yalid. (Cage v. Shappard, 40 S. W. Rep., 839; 19 Tex. Civ. App., 206.) When creditors held to be paid. 32 (Kans.). Creditors of a national bank, who, after it suspends payment and goes into voluntary liquidation, receive in settlement of their claims bills receivable, indorsed or guaranteed in the name of the bank by its president, can not claim as creditors against the share- holders, as the original debt is paid. (Elwood v. First Nat. Bank, 41 Kans., 475.) Election of officers for the purpose of effecting liquidation. 33 (Mass. Sup., 1889). Under the act of Congress of July 12, 1882, extending for the purpose of liquidation the franchises of such national banking 268 DIGEST OF NATIONAL BANK DECISIONS. LIQUIDATION— Continued. associations as do not extend the periods of their charters, and making applicable to them the statute relating to liquidation of banking associations, such an association may continue to elect officers and directors for the purpose of effecting liquidation ; but after the expi- ration of the term of its charter the stock of such an association is not transferable, so as to give the transferee the right to share in the election of directors, and such transferee, not being a stock- holder, is ineligible as a director under Revised Statutes, section 5145. (Richards v. Attleboro National Bank, 148 Mass., 187; 3 N. B. C, 495.) Who entitled to dividends during liquidation. 34 (Me.). Dividends of a national bank in process of liquidation belong to the holder of the shares, whether those shares be recorded upon the books of the bank or not, and must be paid to the holder of such shares on demand. (Bath Sav. Inst. v. Sagadahoc Nat. Bank, 89 Me., 500; 36 ■ Atl. Rep., 996.) Agent may sue on notes during liquidation. 35 (Minn. Sup., 1889). The appointment of trustees to wind up the affairs of the bank, in whom title to the assets does not vest and who are merely the agents of the corporation, does not affect the rights of a national bank to maintain suits on its choses in action. (Merchants' Nat. Bank v. Gaslin, 41 Minn., 552; 43 N. W. Rep., 483.) 36 (Tex.). A national bank in the process of liquidation may by its agent maintain suit against a stockholder on his unpaid notes held by the bank, and such suit may be brought before the bank's affairs are closed. (Norwood v. Interstate Nat. Bank of Texarkana, 48 S. W. Rep., 3; 92 Tex., 268.) Court may order exhibition of hooks to stockholders. 37 (N. Y. Appls., 1902). The Supreme Court has power, in its discretion, to compel the officers of a national bank in process of liquidation, on expiration of its charter by limitation, to exhibit books, papers, and assets of the bank to the stockholders, and to permit them to examine and take extracts therefrom. (Turtle et al. v. Iron Nat. Bankjuf Plattsburg et. al., 62 N. B. Rep., 761; 4 Banking Cases, 300; 170 N. Y., 9.) When trustee may buy bank's property. 38 (Tex. Civ. Appls., 1898). One of the liquidating trustees of a national bank may purchase at a sale of the assets of the bank, where he is also a stockholder, and the sale is made on notice to all the stock- holders and the bank is solvent. (Cage v. Shappard, 46 S. W. Rep., 839; 19 Tex. Civ. App., 206.) 39 (Wash. Sup., 1905). When a national bank goes into voluntary liquida- tion it thereby ceases to do business as a going concern, and is not thereafter required to register a subsequent transfer of its stock and to issue new stock to the transferee. (Muir v. Citizens' Na- tional Bank of Fairhaven, 80 Pac. Rep., 1007.) LOANS. Page. Violations op section 5200, Revised Statutes United States 269 Violations op section 5201, Revised Statutes United States 270 Violations op section 5202, Revised Statutes United States 271 Miscellaneous - - - 271 Cross references: Officers, civil liability of — Liability of directors for assenting to excessive loans 340 / Liability of cashier for making excessive loans ._ 342 Actions against former officers for excessive loans _ 344 DIGEST OF NATIONAL BANK DECISIONS. 269 LOANS— Continued. VIOLATIONS OF SECTION 5200, REVISED STATUTES UNITED STATES. Permanent deposit in another bank a loan within this enactment. 1 (U. S. Sup. Ct, 1870). Placing by orfe bank of its funds on permanent deposit with another is a loan within enactment forbidding loans on security of banks' capital stock. (First National Bank of South Bend v. Lanier, 11 Wall., 369.) Loans in ewcevs of limit valid and collectible. 2. Section 5200, Revised Statutes, which provides that the total liabilities to any association or any person, etc., shall not exceed one-tenth part of the capital stock paid in, was intended only for the guidance of the association, and, though its franchises may be liable to forfeiture for violation of the law, the association may recover of the borrower the full amount of the loan. (U. S. Sup. Ct., 1877) Union Gold Mining Co. v. Rocky Mountain National Bank, 96 U. S., 640 ; 1 N. B. C, 169 ; (U. S. Cir. Ct.) Shoemaker v. The National Mechanics' Bank, 2 Abb. U. S., 416 ; (U. S. Cir. Ct.) Stewart v. National Union Bank of Maryland, 2 Abb. U. S., 424 ; t (Pa.) O'Hare v. Second National Bank of Titusville, 77 Penn. St., 96. 3 (U. S. Sup. Ct., 1877). Loans to any person or company in excess of one- tenth part of the capital stock of a national bank are not void, and in an action to recover such loans the defendant can not interpose the defense that they were in violation of the national-bank act. (Union Gold Hill Mining Co. v. Rocky Mountain National Bank, 96 U. S., 640.) 4 (U. S. C. C, 1869). Loans by a national bank to an individual or company in excess of one-tenth of its paid-up capital are not void. The loan may be collected, though the bank is exposed to forfeiture of its franchise and the officers participating are declared personally liable. (Stewart v. The National Union Bank of Maryland, 2 Abb. U. S., 424; 1 N. B. C, 175.) 5 (111. Sup., 1901). The fact that a debtor owed a bank a sum amounting to more than one-tenth of the paid-in capital of the bank does not render such debt uncollectible and void, under Starr & C. Ann. St. 1896, ch. 16a, par. 13, providing that the total liabilities of any person to any association shall at no time exceed one-tenth part of the amount of capital of such association actually paid in. (Murry Nelson & Co. v. Leiter, 4 Banking Cases, 14. See note at the end of case. ) 6 (Mass. Sup., 1888). The prohibition of Revised Statutes, section 5200, that the total liabilities of any national bank to any person, company, corporation, or firm for money borrowed, including in them " the lia- bilities of the several members thereof, shall at no time exceed one- tenth part " of the capital stock actually paid in does not prevent a bank from recovering of a person to. whom it has lent a sum greater than 10 per cent of its capital stock the excess of the loan over such limit. (Corcoran v. Batchelder, 147 Mass., 541; 3 N. B. C, 491.) 7 (Pa.). A note is not illegal because at the time it was discounted by the association the maker was indebted to the association in a sum equal to more than one-tenth part of its capital. (O'Hare v. Second National Bank of Titusville, 77 Penn. St., 96.) Government only can have forfeiture declared. 8 (U. S. C. C, 1887). Revised Statutes, section 5200, providing that the amount for which any one individual or firm shall be indebted to a national bank shall not exceed a certain sum when such a bank vio- lates the provision by lending to one person an amount in excess of the limit, such a person can not set up the violation of the statute as a defense to his liability on the note. If a penalty is to be enforced 270 DIGEST OF NATIONAL BANK DECISIONS. LOANS— Continued. VIOLATIONS OF SECTION 5200, BEVISED STATUTES UNITED STATES Continued. against the bank, it can be done only at the instance of the Govern- ment. A contract entered into by the bank in violation of this section is not void. (Wyman v. Citizens' National Bank of Faribault, 29 Fed. Rep., 734. ) Bankruptcy — Provable claims. — Notes unlawfully discounted by bank cashier. 9 (U. S. Dist. Ct, 1902). Where the cashier of a national bank, without the knowledge and against the orders of the other officers, dis- counted for the maker notes far in excess of the amount which the bank could legally loan to one person, and beyond the ability of the maker or indorser of such notes to pay, the facts that he was prosecuted and sentenced to imprisonment for misapplying the funds of the bank, and the maker of the notes for aiding and assisting him, and that the receiver for the bank sued and recovered on the cashier's bond the amount of the penalty therein, do not affect the validity of the notes, nor the bank's ownership thereof; and the receiver may prove the same in bankruptcy against the estate of the indorser, where proper steps were taken to fix his liability thereon. (In re Edson, 119 Fed. Rep., 487.) 'Not cause for enjoining transfer of notes. 10 (Kans.). And a court of equity will not enjoin an association, at the instance of the borrower, from transferring to innocent third per- sons notes and securities, on the ground that the notes represent part of a loan made in excess of 10 per cent of the capital of the association. (Elder v. First National Bank of Ottawa, 12 Kans., 238.) May not be attacked by third person. 11 (Nebr.). A mortgage given a bank could not be attacked by a third per- son on the ground that it was ultra vires of the bank to take such security, or that the loan made by the bank, which the mortgage secured, was more than 10 per cent of the bank's capital. (Smith v. First National Bank of Chadron, G3 N. W., 796; 45 Nebr., 444.) 12 (Pa. Sup., 1895). The loaning by a national bank to an individual of more than the national banking law allows can not be taken advan- tage of either by the debtor or another creditor of his. (McCart- ney v. Kipp, 33 A., 233; 171 Pa. St., 644.) What not a violation of section 5200, Revised Statutes. 13 (Ohio). Where a State bank makes a loan to one person of an amount in excess of one-tenth part of its capital, and is afterwards con- verted into a national bank, it may, after conversion, extend the time for payment of such loan without violating section 5200, Re- vised Statutes. (Allen v. The First National Bank of Xenia, 23 Ohio St., 97.) VIOLATIONS OF SECTION 5201. 1 (U. S. Sup. Ct, 1903). The mere statement by a borrower from a national bank, made to the president when the loan is' obtained, that his stock in the bank is security for the loan, there being no delivery Of the certificates, does not amount to a pledge of the stock, nor does it give the bank any lien thereon as against one subse- quently loaning on the stock in good faith and receiving the cer- tificates as collateral. (Third Nat. Bank of Buffalo v. Buffalo German Ins. Co., 193 U. S., 581.) 2 (U. S. Sup. Ct, 1903). The provisions of section 36 of the national bank- ing act of 1863, empowering the withholding of transfer of the stock of a shareholder indebted to the bank, were not only omitted from the national banking act of 1864, but were expressly repealed thereby. (lb.) 3 (U. S. Sup. Ct, 1903). A provision in the charter and by-laws, and a condition in a certificate of stock, of a national bank, forbidding the DIGEST OF NATIONAL BANK DECISIONS. 271 LOANS— Continued. violations or section 5201 — continued. transfer of stock where the stockholder is indebted to the bank, is void as repugnant to the national banking act and in conflict with the public policy embodied in that act, and creates no 'lien which the bank can enforce by refusing to transfer the stock to a holder for value in good faith. (lb.) 4 (U. S. Sup. Ct, 1903). A condition in a certificate of stock of a national bank which is void under the national banking act will not operate as a notice to one loaning on the stock as collateral that it is sub- ject to a lien of the bank which will affect the right of the pledgee of having the stock transferred to him. (lb.) VIOLATIONS of section 5202, BEVISED statutes united states. What not a violation of section 5202. 1 (U. S. C. C. A., 1894). Revised Statutes United States, section 5202, pro- viding that no national bank shall be indebted or in any way liable to an amount exceeding the amount of its capital stock paid in, except on circulation, deposits, special funds, or declared dividends, does not prohibit a national bank from incurring indebtedness up to the amount of its paid-up capital, for any purpose within its powers, no matter what may be the amount of its debt or liability upon de- mands within such four classes. (Weber v. Spokane National Bank, 64 Fed. Rep., 208.) Validity of debt contracted in violation of the statute. 2 (U. S. C. C. A., 1894). An indebtedness which a national bank incurs in the exercise of any of its authorized powers, and for which it has received and retains the consideration, is not void from the fact that the amount of the debt surpasses the limit prescribed by Rev. Stat. U. S., 5202, or is even incurred in violation of the positive prohibition • of the law in that regard. (lb.) MISCELLANEOUS. When transaction a deposit and not a loan. 1 (U. S. C. C, 1898). Where a national bank receives State funds subject to check, agreeing to pay interest on daily balances, the transaction is a deposit and not a loan. (State of Nebraska v. First National Bank of Orleans, 88 Fed. Rep., 947.) 2 (TJ. S. C. C, 1877). A national bank loaned money and took stock in a corporation as collateral security therefor. Held, that it had not exceeded its power. (Canfield v. The State National Bank of Minne- apolis, 1 N. W. Rep., 173; 1 N. B. C, 312.) Duty of bank when loan is deposited. 3 (U. S. C. C, 1898). A bank which discounts the notes of a corporation depositor and credits the proceeds to its account is not bound, in order to protect the validity of the notes, to see that the money when paid out on checks of the corporation, drawn in the regular course of busi- ness, is properly applied to the uses of the corporation. (First Na tional Bank of Hailey v. G. V. B. Min. Company, 89 Fed. Rep., 439.) What national bank may take as security. 4 (U. S. C. C, 1875). National banks may take personal chattels (e. g., a locomotive) as security for loans and discounts. (Pittsburg Loco- motive and Car Works v. State Nat. Bank of Keokuk, 1 N B. C, 315 ; 2 Central Law Journal, 692.) Bank may not loan money specially deposited. 5 (Ark., 1897). As a national bank has no authority to loan the money of other persons, it is not liable for a loan made by its cashier for a depositor, even though the loan was made as the result of a con- spiracy with the president with intent to defraud the depositor. (Grow v. Cockrill, 39 S. W„ 60; 63 Ark., 418.) 272 DIGEST OF NATIONAL BANK DECISIONS. LOANS— Continued. miscellaneous — continued. When transaction a purchase and not a loan. 6 (Minn., 1896). Where, for a debt actually due him, a creditor held the note of a debtor, which he discounted, indorsed, and delivered to a bank at a rate of discount greater than the rate of interest allowed by law, but no greater than the rate provided for in the note, the transaction was not necessarily a loan, in which the note was de- livered as collateral. (Becker's Investment Agency v. Rea, 65 N. W., 928; 63 Minn., 459.) Cashier's authority to make loan, estoppel. 7 (N. Y. Sup.). Where a bank has received the proceeds of a discount, and used them, it can not dispute its cashier's authority to apply for the discount. (Tradesmen's National Bank v. Bank of Commerce, 39 N. Y. S., 554.) When oanlc may recover unauthorized loan. 8 (N. Y. App., 1888). Where a national bank which is a depository of the funds of a municipality, acting by its president, makes in absolute good faith, and in pursuance of a custom of the banks of the city, advances not authorized by law to a commission for building a court- house upon checks regularly drawn and indorsed, and the legisla- ture, by a subsequent act, authorizes the repayment of such advances, the bank can" recover the full amount with interest, although a part of the money so advanced was fraudulently misappropriated by cer- tain of the city officials who were also directors in the bank. (Mayor, etc., of New York v. Tenth National Bank, 111 N. Y., 446 ; 3 N. B. C, 655.) 9 (Tex., 1896). A national bank, having joined with other persons in a part- nership to operate a mill, can not be prevented from recovering moneys loaned to the firm on the ground that it had no power to become a partner in the mill. (Cameron v. First National Bank of Decatur (Tex. Civ. App.), 34 S. W., 178; 4 Tex. Civ. App., 309.) Acceptance of stocks or bonds, payment of loans. 10 (Tex. Civ. App.). The promoters of a railroad corporation on their in- dividual credit borrowed money of banks, which was used in con- structing the road, and paid themselves by stock issued to them. They afterwards caused to be issued by the company 200 bonds of $2,000 each, and turned over to such banks $134,000 of the bonds in payment of the money borrowed, the banks having knowledge of the facts. Held, that the banks acquired such bonds without considera- tion. (Farmers and Merchants' National Bank v. Waco Electric Railway and Light Co., 36 S. W., 131; Metropolitan Trust Co. v. Farmers and Merchants' National Bank, ib.) Violation of directions as to loan of special deposit. 11 (Utah Sup., 1901). A complaint alleging that plaintiff made a special deposit with defendant bank, to be loaned on real estate, but that the bank loaned it to H. without any security, and knowing that he was insolvent, is sufficient to support a recovery for fraud on the part of the bank in procuring H„ who was indebted to it, to execute a new note to plaintiff, and thereupon transferring the amount of the loan from the plaintiff's account to that of the bank. (Larsen v. Utah Loan and Trust Co., 65 Pac. Rep., 208 ; 3 Banking Cases, 634 ; 23 Utah, 449.) MANDAMUS. Cross references : Pleading and practice — Page. Mandamus the proper remedy to compel court to take jurisdiction of suit against executor of deceased stockholder 408 DIGEST OF NATIONAL BANK DECISIONS. 273 MANDAMUS— Continued. When the proper remedy. 1 (U. S. Sup. Ct, 1894). Mandamus is Ihe proper remedy when a mandate of the United States Supreme Court has been disregarded. (In re City National Bank of Fort Worth, 153 U. S., 246.) 2 (U. S. Sup. Ct, 1894). Compliance with a mandate of this court which leaves nothing to the judgment or discretion of the court below may be enforced by mandamus. (City National Bank of Fort Worth v. Hunter, 152 U. S., 512.) 3 (U. S. C. C, 1896). Where a judgment recovered in a State court against a county is assigned to a citizen of another State, the assignee may sue thereon in the proper Federal court, although the original judg- ment is still in force. The assignee has a right to have judicially determined its right to enforce payment of the indebtedness, and the action is not to be considered as brought merely^ to vex defendant. (First National Bank of Buchanan County v. Deuel County, 74 Fed. Rep., 373.) 4 (U. S. C. C, 1896). If, as alleged, the assignee's only remedy is a man- . damus to compel the levy of a tax, then it has a right to obtain a judgment in the Federal court to enable it to invoke the power of that court in the granting and enforcement of the mandamus pro- ceeding, (lb.) Allegations of petition. 5 (Ind., 1902). The petition for mandamus and the alternative writ to compel a bank to allow an inspection of its books by the tax assessor under Burn's Revised Statutes, 1894, section 8444, are insufficient, they proceeding on the theory that he can examine the account of any depositor regardless of whether he is bound to pay taxes in the State and not alleging what taxpayer had omitted to make returns of deposits therein, or that any taxpayer who was a depositor therein had omitted to make proper return. (Applegate v. State ex rel. Bowling, 63 N. E. Rep., 16; 4 Banking Cases, 295; 158 Ind., 119.) When will not lie. 6 (U. S. C. C, 1900). A bill in equity to compel a board of public officers to issue bonds to plaintiff is, in effect, a petition for a peremptory mandamus, and neither can be maintained unless the act sought to be coerced is a purely ministerial one, enjoined on the defendants by positive requirements of law, which leaves nothing to their discretion. (Farmers' Nat. Bank of Hudson v. Jones et al., 105 Fed. Rep., 459.) 7 (U. S. C. C, 1900). Act Arkansas, May 8, 1899, which authorizes and directs the State debt board to fund the valid bonded indebtedness of the State by exchanging new bonds for outstanding valid bonds, which shall be presented by the holders, confers no power on such board to issue new bonds in lieu of old bonds which have been lost or destroyed, even though they were erroneously destroyed by the officers of the State ; nor can such power be conferred by a court on equitable grounds, the only remedy of the creditor being through legis- lation. ( lb. ) 8 (Ohio Sup., 1894). Mandamus does not lie to compel the officers of a pri- vate corporation to issue stock to a person entitled thereto. (State v. Carpenter, 37 N. B., 261 ; 51 Ohio St., 83.) 9 (Ohio-Sup., 1894). When the officers of a corporation refuse, on demand, to issue a certificate of stock to a person entitled thereto, the remedy is by action for damages, or to enforce the issue and delivery of such certificate in equity, rather than by mandamus. (lb.) Appeal, jurisdiction. 10 (U. S. Sup. Ct, 1894). This court can not entertain an appeal from a judgment executing its mandate if the value of the matter in dis- pute upon the appeal is less than $5,000. (City Nat Bank of Fort Worth v. Hunter, 152 U. S., 512.) 11 (U. S. Sup. Ct., 1894). No appeal lies from a. decree for costs. (lb.) 4049—05 18 274 DIGEST OF NATIONAL, BANK DECISIONS. MARRIED WOMEN. Cross references : Estoppel — Page. When wife estopped to plead her suretyship 149 Mortgage — Mortgage of wife's property to secure extension of debt 276 Shareholders — Liability of married women for assessment on stock 475 Married women. 1 (U. S. Sup. Ct, 1890). A married woman in the District of Columbia may become a holder of stock in a national banking association and assume all the liabilities of such a shareholder, although the consid- eration may have proceeded wholly from the husband. (Keyser v. Hitz, 133 U. S., 138.) 2 (U. S. C. C.,*1889). In Vermont a married woman is competent to become a stockholder in a corporation and to contract to charge her separate property with the payment of any liability which is implied from entering into that relation. (Witters v. Sowles and wife, 38 Fed. Rep., 700.) 3 (N. Y. ). A national banking association may take as security for a loan the indorsement of a married woman, charging her separate estate. Such security is to be treated as personal security, within the mean- ing of the banking law, and not as a mortgage. (Third National Bank v. Blake, 73 N. T., 260.) MORTGAGE. Page. In general 274 Foreclosure _ . 278 Construction of State statutes _ 279 Cross references: Insolvency and receivers — Mortgage or pledge for present loan valid. _ 204 Lien — i Mortgage on merchandise when stock replaced 262 Powers — Power to take chattel mortgage 416 When national bank may take real estate mortgage _ _ t . . 426 Validity of mortgages when taken ultra vires ._ 428 Preferences — When labor claims have no priority over mortgage : 439 IN GENERAL. Subrogation. 1 (U.-S. Sup. Ct., 1892). M. gave to a bank a mortgage on land owned by him to secure paper which the bank might discount. Among the paper so discounted was a note made by J. which M. had discounted, and which J. paid to the bank. The note had been given for a cer- tificate of deposit which J. afterwards indorsed and subsequently paid. J. claimed subrogation under the mortgage to the rights of the bank as respected the certificate of deposit. Held, that the claim could not be allowed ; that the payment -of the note to the bank by J. discharged the mortgage, so far as it was a security for the note, and that the certificate of deposit was not secured by the mortgage. (Underwood v. Metropolitan National Bank, 144 U. S., 669.) When mortgage valid under bankrupt law, 2 (U. S. C. C. A., 1901). A mortgage given by a bankrupt within four months prior to .his bankruptcy, in order to constitute a valid lien under bankruptcy act, 1898, section 67d, must have been given or DIGEST OP NATIONAL BANK DECISIONS. 275 MORTGAGE— Continued. in general — continued. accepted in good faith, and not in contemplation of, or in fraud upon, the act, and " for a present consideration." Where a mort- gage so given was in part for a present consideration and in part as security for a renewal of an antecedent debt previously secured by a mortgage, which was void as against other creditors because not recorded, it constitutes a valid lien to the extent of the new con- sideration, but is voidable as a preference to the extent that the. notes secured were based upon the prior debt. (City National Bank of Greenville v. Bruce, 109 Fed. Rep., 69.) When decree is final and appealable. 3 (U. S. C. C. A., 1901). A decree which determines the invalidity of a trust deed is final and appealable as" to the trustee and beneficiary in such deed, although it is interloctuory only as to other matters involved in the suit, in which such parties have no interest. (Kemp et al. v. National Bank of the Republic of New York, 109 Fed. Rep., 48.) Liability of banlc officer for false statement to depositor — Mortgage given to depositor to indemnify Mm from loss occasioned by said false state- ment held valid. 4 (U. S. C. C. A., 1901). An oflScer of a bank can not avail himself of the statute of frauds, requiring a promise to answer for the debt of another to be in writing to sustain an action thereon, to protect him from liability arising from a false and fraudulent statement made by him to a depositor in regard to the condition of the bank, by reason of which the depositor suffered loss. (Kemp et al. v. Nat. Bank of the Republic of New York, 109 Fed. Rep., 48.) 5 (U. S. C. C. A., 1901). Creditors can not invoke the statute of frauds to defeat a liability of their debtor, which he has himself recognized by giving his notes and security therefor. (lb.) 6 (U. S. C. C. A., 1901). A county treasurer, who was a large depositor of public money in a national bank, applied to the president for infor- mation as to the bank's condition, and was by him assured that the bank was solvent and able to pay all its indebtedness. It was in fact insolvent, as the president knew, and subsequently failed, and the de- positor was obliged to individually make good to the county the amount lost through his deposit. Thereafter the president, who was also insolvent, without the knowledge of the depositor, executed to him his individual notes, secured by a trust deed for the amount so lost. Held, that such notes and deed were supported by a legal con- sideration, which was the liability of the maker for the loss sustained by reason of his false and fraudulent statement, and were valid as against his other creditors. (lb.) Representations by assignor of mortgage, estoppel. 7 (U. S. C. C. A., 1901). One who sells notes secured by a second mortgage, falsely representing such mortgage to be a first lien, can not invoke the record of a prior mortgage held by himself as notice to the pur- chaser, but as between them the purchaser is entitled to priority of lien. (Zeis v. Potter et al. ; Potter et al. v. Zeis, 105 Fed. Rep., 671.) Fraud on creditors — Withholding mortgage from record — Enhancement of credit — Allowance of mortgage debt in bankruptcy. 8 (U. S. C. C. A., 1903). Code Georgia, 1895, sections 2724, 2727, require mortgages to be recorded, and provide that a failure to record will postpone them to subsequent lienees and purchasers. Section 2695 provides that every conveyance or contract made to defraud creditors, such intention being known to the party taking, shall be void, but a bona fide transaction, without ground for reasonable suspicion, shall be valid. A storekeeper who had done business with a bank for twenty years executed mortgages to it covering his entire prop- erty, consisting of realty, and also his stock in trade then existing and to be acquired. The mortgages were withheld from record, 276 DIGEST OF NATIONAL BANK DECISIONS. MORTGAGE— Continued. in general — continued! though the storekeeper and bank president both denied any agreement therefor. The storekeeper purchased goods, referring his vendors to a rating in a mercantile agency which he had given without men- tioning the mortgages. He filed a voluntary petition in bankruptcy, and on the same day and hour, in response to notice thereof by tele- phone, the bank recorded the mortgages. The bank president testi- fied that he had no reason to suspect the storekeeper's insolvency until three or four days before his bankruptcy, but admitted that he knew that the recording of the mortgages would have destroyed the storekeeper's credit, and that he knew the mortgagor was going to New York to buy goods, and that the purpose of keeping the mort- gages off the record was not to impair his credit. Held, that the mortgage debts were not 'entitled to priority in the bankruptcy proceedings over the claims of the vendors subsequently selling goods to the storekeeper. (Clayton et al. v. Exchange Bank of Macon; In re Josephson, 121 Fed. Rep., 630.) Mortgage of wife's property to secure extension of debt. 9 (Ga., 1895). A mortgage given by a wife on her separate estate in set- tlement of a debt of her husband is not binding on her, though she gave it under the impression that the creditor could, for some reason, subject the property to payment of the debt, and intended, in giving it, to effect a compromise of what she regarded as a doubtful claim against her property. (First National Bank of Cartersville v. Bay- less, Ga., 23 S. E., 851 ; 96 Ga., 684.) Insufficient defenses to mortgages. 10 (Iowa, 1892). Where the description of property covered by a mortgage is found to have been inserted before the execution and delivery of the mortgage, and the mortgage is otherwise complete, the defense can not be made to a foreclosure that certain collaterals, which were to have been embraced in the mortgages, had been omitted in violation of mortgagors' rights. (Des Moines National Bank v. Harding, 53 N. W., 99; 86 Iowa, 153.) Landlord's mortgage of his interest in growing crops. 11 (Iowa, 1896). A landlord who is to receive as rent for a farm a share of the crop, to be delivered by the tenant, has such an interest in the crop that he may, before its division, make a valid mortgage thereon, which will attach to his share as soon as segregated, and will take precedence of a garnishment of the tenant by the creditor of the landlord after the execution of the mortgage. (Riddle v. Dow, 66 N. W., 1066; 98 Iowa, 7; Thompson National Bank v. Dow, ib.) Mortgage to defraud creditors. 12 (Kans. Sup., 1896). A mortgage taken for the purpose of defrauding creditors of a mortgagor is not merely voidable as to such creditors, but is void. (First National Bank of Concordia v. Marshall, 43 P., 774; 56 Kans., 441.) Who may not object to indepniteness of mortgages. 13 (Mich., 1895). An objection as to indefiniteness of a chattel mortgage, sufficiently certain as between the parties, can not be raised by one who had acquired no valid lien on the property. (First National Bank of Manistee v. Marshall & Ilsley Bank of Milwaukee, 65 N. W., 604; 108 Mich., 114.) 14 (Mich., 1895). In an action between two parties claiming property under chattel mortgages from different persons the court properly refused to direct a verdict for defendant on the ground that plaintiff's mort- gage was not on file when the defendant extended credit to its mort- gagor, it appearing the plaintiff's mortgagor was the owner of the property when plaintiff's mortgage was given, and the evidence not being conclusive that defendant's mortgagor ever succeeded to the rights in the property of plaintiff's mortgagor. (Ib.) DIGEST OF NATIONAL BANK DECISIONS. 277 MORTGAGE— Continued. in general — continued. Bona fide holder of mortgage note purchased by banJc. 15 (Nebr. Sup., 1876). Notes secured by mortgages .were assigned to a national bank and by it to plaintiff. Held, in an action of fore- closure, that the mortgages were not extinguished by the assignment to the bank, and were valid in the hands of the plaintiff, he being a bona fide purchaser. (Richards v. Kountze, 4 Nebr., 200; 1 N. B. C, 652.) 16 (Nebr. Sup., 1876). In the absence of evidence showing the purpose and object of the assignment to the bank it can not be presumed that it was for a debt created in presenti in violation of the national bank- ing act. (lb.) 17 (Nebr. Sup., 1876). Semble, that the limitations of the national banking act apply to transactions in real property, independent of legitimate banking operations, and not to mortgage securities. (lb.) Release of sureties by extension. 18 (N. Y.). Giving a chattel mortgage to secure an overdue note, the time of payment of which is by terms of the mortgage extended for thirty days, such mortgage to remain after the overdue note is paid, as additional security for the payment of several demand notes already secured by a real-estate mortgage, does not postpone payment of .the demand notes for any definite time, so as to discharge the sureties thereon. (Fallkill National Bank v. Sleight, Sup., 37 N. Y. S., 155.) Effect of record of mortgage on rights of parties. 13 (N. Y. Sup.). In replevin by a chattel mortgagee against a purchaser at an execution sale of the mortgaged chattels plaintiff's right to recover is not affected by the fact that the mortgage was not filed as required by statute, where it appears that the sale was made sub- ject to the rights of the mortgagee. (Potter v. Traders' National Bank, Sup., 23 N. Y. S., 1079.) 20 (Wash., 1893). A creditor, on receiving a mortgage on his debtor's stock of goods, immediately went to the latter's store and told the clerks and others present that he had taken possession under the mortgage, putting one of the clerks in charge, and he proceeded forthwith to the county seat to record the mortgage. Before the mortgage was re- corded an attachment was levied on the goods, though the officer making such levy was informed at the time that the property was in plaintiff's possession under his mortgage. Held, that plaintiff's mortgage was good as against the attachment, though the attaching creditor had no notice of the mortgage at the time the writ was issued. (First National Bank of Aberdeen v. Carter, Wash., 33 P., 824; 6 Wash., 494.) Indemnity mortgage inures to. benefit of all sureties. 21 (Oreg., 1896). Where one of several sureties, after all have signed, but before the debt has been paid, obtained a mortgage from the princi- pal as indemnity, it inures to the benefit of his cosureties. (Farmers and Traders' National Bank of La Grande r. Snodgrass, Oreg., 45 P., 758; 29 Oreg., 395.) Effect of release of part of mortgaged property. 22 (Tex., 1896). A mortgagee of chattels who releases a part of the mort- gaged property is not thereby precluded from enforcing his" mortgage upon the remainder as against another creditor whose rights are in no way prejudiced by such release. (Ballinger National Bank v. Bryan, Tex. Civ. App., 34 S. W., 451; 12 Tex. Civ. App., 673.) Remedy of mortgages of real estate. 23 (Wash.). Where notes* payable at different times and secured by a mort- gage are assigned to different persons there is no priority of right under the mortgage between the assignees in the absence of express stipulation, but each is entitled to share pro rata in the proceeds of 278 DIGEST OF NATIONAL BANK DECISIONS. MORTGAGE — Continued. in genebal — continued. the mortgaged property. (First National Bank of Aberdeen v. Andrews et al. ; Young v. Same, 34 P., 913 ; 7 Wash., 261.) Release of mortgage to hank by resolution of directors. 24 (Wis. Sup., 1901). A mortgage to a bank is released without being deliv- ered up where the directors of the bank pass a resolution releasing it, holding the personal security only, to enable the mortgagor to improve the property and he does so and conveys the property, and no claim is made on the mortgage until ten years later, and then by the bank's assignee. (In re Bank of West Superior, Goodvin v. Nichols, 85 N. W. Rep., 501 ; 3 Banking Cases, 322; 109 Wis., 672.) 25 (Wis. Sup., 1901). The act of the directors of a bank in releasing a mort- gage by resolution may be proved by parol, witness testifying that he did not think this action appeared on the records, and there being no evidence that it did so appear. (lb.) FOEECLOSUKE. foreclosure iclien mortgagor adjudged a bankrupt. 1(U. S. C. C. A., 1901). A decree was entered in a State court foreclosing a first and second mortgage on real estate and ordering its sale. Before the time fixed for the sale creditors filed a petition against the mortgagors on which they were adjudicated bankrupts. Such creditors also filed a bill in the circuit court of the United States on which they obtained an injunction restraining further proceedings for the sale of the mortgaged property by the State court. There- after the mortgagees joined in a petition to the court of bankruptcy asking that the property be sold by the trustee for payment of their liens, and such sale was ordered and made, the proceeds received being insufficient to pay the mortgage debts. On petition of the trustee the court ordered the first mortgage paid from the proceeds, but displaced the second in favor of the costs and expenses incurred in both the bankruptcy proceedings and the injunction suit, includ- ing fees allowed to counsel for the creditors and trustee. No other assets of the bankrupt came into the hands of the trustee. Held, that such order was erroneous, except in so far as it directed pay- ment of the costs incurred in selling the property, including the com- pensation to the trustee not exceeding that to which- the master in the State court would have been entitled. (Ridgley Nat. Bank v. Matheny, 105 Fed. Rep., 754.) 2 (U. S. C. C. A., 1901). Under bankruptcy act, 1898, sections 40, 48, pro- viding that referees and trustees in bankruptcy shall be entitled to commissions on " dividends "' paid by the estate, they are not entitled to commissions on sums paid to mortgagees from the proceeds of the mortgaged property on its sale by order of the court of bankruptcy, such sums not being dividends within' the meaning of the statute, (lb.) Foreclosure of mortgage held as collateral. 3 (Minn., 1895). A complaint, in an action to foreclose a mortgage held as collateral, against the principal debtor and the mortgagor, which set out the mortgage note, which had been assigned to plaintiff, and also the note of the principal debtor, and demanded judgment against the mortgagor and the principal debtor for a deficiency, was not demurrable, on the ground that it united different causes of action. (First National Bank of Hastings v. Lambert, 65 N. W., 451; 63 Minn., 263.) Foreclosure of mwtgage given to predecessor State bank. 4 (Nebr. Sup., 1879). A national bank organized as successor to a State bank may maintain an action to foreclose a mortgage of real estate executed to the State bank as security for a note and assigned to it by the State bank on the formation of the national bank. (Scofield v. State National Bank of Lincoln, 9 Nebr., 316; 31 Am. Rep., 412; 2 N. B. C, 280.) DIGEST OF NATIONAL BANK DECISIONS. 279 MORTGAGE— Continued. CONSTRUCTION OF STATE STATUTES. Iowa statute construed. 1 (U. S. C. C, 1895). The Iowa statute provides that corporations organ- ized thereunder must, by their articles of incorporation, fix a maxi- mum of indebtedness, which shall not exceed two-thirds of their capital stock ; this provision not to apply, however, where corporate bonds are issued and .secured " by an actual transfer of real-estate securities," which shall be a first lien on unencumbered real estate, worth at least twice the amount loaned thereon. (McClain's Code, sec. 1611.) Held, that the execution and delivery by the corporation of a mortgage on its own real estate to secure bonds was a transfer of real-estate securities within the meaning of the statute. (First National Bank of Montpelier v. Sioux City Terminal Railroad and Warehouse Co. (Trust Co. of North America, Intervener), 69 Fed. Rep., 441.) 2 (U. S. C. C, 1895). A terminal and warehouse company executed a lease of its property for a term of one hundred years, and shortly afterwards mortgaged the same to secure an issue of bonds. The lease and mortgage mutually referred to each other, and the lease contained a provision, with an express covenant by the lessee, for the payment to the trustee under the mortgage of so much of the rental as was necessary to pay interest on the bonds and the costs of the trusteeship. Held, that the two instruments were to be con- strued in pari materia, and that consequently the lease was not a prior incumbrance to the mortgage, within the meaning of a statute requiring corporate bonds to be secured by mortgage upon unincum- bered real estate. (McClain's Code, sec. 1611.) (lb.) 3 (U. S. C. C, 1895). Upon a question as to whether property mortgaged by a corporation was worth twice the amount of the bonds secured by the mortgage, as required by statute, held, that where it appeared that the bonds were sold in open market for from 90 to 95 cents on the dollar, in cash, it could not be held that the security, at the time it was given, did not meet the statutory requirement. (lb.) 4 (U. S. C. C, 1895). The fact that a trust deed to secure bonds was not in strict accordance, in some particulars'with the resolution authorizing it, is not sufficient ground for holding it invalid, where, subsequent to its execution, the board of directors recognized its existence and validity by directing the issuance of the amount of bonds which the deed was given to secure. (lb.) 5 (U. S. C. C, 1895). Where a corporation executed a lease for one hundred years, and shortly afterwards a mortgage of the same property, and the two instruments mutually referred to each other, so as to be in pari materia, held, that there was no ground for a contention that the estate created by the mortgage could not take effect until the expira- tion of the lease, and that consequently the morgage was void, as creating a perpetuity. (lb.) Wyoming statute construed. 6 (U. S. C. C, 1896). An instrument which on its face purports to be a mortgage of personal property, by a firm, but is invalid as such be- cause not executed by all the members of the firm, as required by the Wyoming act of 1890, is not effective in any way, either as conveying the entire interest of the firm in the partnership property or of the individual members who have signed it. (Ridgely et al. v. First National Bank, 75 Fed. Rep., 808.) 7 (U. S. C. C, 1896). Nor can the instrument be ratified by the partner whose name was omitted. (lb.) 8 (U. S. C. C, 1896). A purchaser from the mortgagor may attack a mort- gage as void because not properly executed. (lb.) 280 DIGEST OF NATIONAL BANK DECISIONS. NEGOTIABLE PAPER. Page. Generally _ _ 280 Protest op note 287 Bona fide holders for value without notice 288 Payment 291 Fraud 292 Cross references: Deposit — Negotiability of certificate of deposit 134 Powers — Power to purchase negotiable paper 422 fSENEBALLY. Paper held to 6e negotiable.' 1 (U. S. Sup. Ct, 1890). The maker executed in the State of Illinois and delivered to the promisee a series of notes, one of which was acquired by a bona fide indorsee, and was as follows : " $5,000. Chicago, 111., January 20, A. D. 1884. For value received, four months after date the Chicago Railway Equipment Company promise to pay to the order of the Northwestern Manufacturing and Car Company, of Stillwater, Minnesota, five thousand dollars, at First Nat. Bank of Chicago, Illinois, with interest thereon at the rate of — per cent per annum from date until paid. This note is one of a series of twenty- five notes, of even date herewith, of the sum of five thousand dollars each, and shall become due and payable to the holder on the failure of the maker to pay the principal and interest of any one of the notes of said series, and all of said notes are given for the purchase price of two hundred and fifty railway freight cars manufactured by the payee hereof and sold by said payee to the maker hereof, which cars are numbered from 13000 to 13249, inclusive, and marked on the side thereof with the words and letters ' Blue Line, C. & E. I. R. R. Co. ; ' and it is agreed by the maker hereof that the title; to said cars shall remain in the said payee until all the notes of said series, both principal and interest, are fully paid, all of said notes being equally and ratably secured on said cars. No. 1. Geo. B. Bur- rows, vice-president. Countersigned by E. D. Buflington, treas." Held, ( 1 ) that this was a negotiable promissory note according to the statute of Illinois, where it was made, as well as by the general mer- cantile law; (2) that its negotiability was not affected by the fact that the title to the cars for which it was given remained in the vendor until all the notes of the same series were fully paid, the title being so retained only by way of security for the payment of the notes, and the agreement for the retention for that purpose being a short form of chattel mortgage: (3) that its negotiability was not affected by the fact that it might, at the option of the holder and by reason of the default of the maker, become due at a date earlier than that fixed. (Chicago Railway Equipment Company v. Merchants' National Bank of Chicago, 13e> X T . S., 268.) 2 (U. S. C. C, 1900). A certificate of deposit in the ordinary forms payable to the order of the depositor, is a negotiable instrument possessing the qualities of a negotiable promissory note. (Bank of Saginaw ». Title and Trust Co. of Western Pennsylvania, 105 Fed. Rep., 491.) 3 (N. Y. App., 1890). Where the note of a corporation is negotiable in form, the affixing of the corporate seal does not destroy its negotiability. 25 N. Y. S., 447, affirmed. (Chase National Bank v. Faurot, 44 N. E., 164; 149 N. Y., 532.) 4 (Tex. Civ. App., 1898). The fact that a promissory note is payable "on or before " a certain date does not affect its negotiability. (Gill v. First Nat. Bank, 1 Banking Cases, 28.) DIGEST OF NATIONAL BANK DECISIONS. 281 NEGOTIABLE PAPER— Continued. generally— continued. When Federal courts do not follow State courts. ;"> (U. S. Sup. Ct, 1880). The courts of the United States, in determining questions of general commercial law, are not controlled by the deci- sions of a State court, even in an action instituted by a national bank, located in a State rendering such decision, against one of its own citizens upon a negotiable note there executed and payable. Such decisions not based upon local legislative enactments are not " laws " within the meaning of the Federal statute, which provides that " the laws of the several States, except where the Constitution, treaties, or statutes of the United States otherwise require or pro- vide, shall be regarded as rules of decision in trials at common law in the courts of the United States in cases where they apply." (Brooklyn City and Newtown R. R. Co. v. National Bank of the Republic, 102 U. S., 14.) Conversion of collaterals as a defense. » 6 (U. S. C. C. A., 1895). In an action on a note, plaintiff averred that it had made a valid sale of securities pledged for the note, and had credited the proceeds on the note, and prayed a judgment for the amount of the note, less such credit. Defendant pleaded that the alleged sale was unlawful, and that, as plaintiff had wrongfully appropriated the securities pledged, defendant was entitled to a credit for their full value. Held, that defendant was not bound to tender the amount due on his note, as a condition precedent to making such defense. (Rush v. First National Bank of Kansas City, 71 Fed. Rep., 102.) 7 (U. S. C. C. A., 1895). The wrongful act complained of by the defendant's answer was so connected with the transaction set forth by plaintiff as to constitute a valid counterclaim under General Statutes of Kansas, 1889, paragraph 4178. (lb.) 8 (Pa. Sup., 1892). Where a note given a bank by one indebted to it was signed by the debtor's sister on the bank's representation that a fur- ther loan would be made the debtor, but no such loan was made, and the note was held merely as collateral security, it was a defense that the note was diverted from the purpose for which it was signed, and an inquiry could not be made as to whether the use which was 'made of the note was more disadvantageous than that stipulated would have been. (Second National Bank of Altoona v. Dunn, 25 A., 80; 151 Pa. St., 228 ; Gardner v. Same, ib., 81 and 82 ; 151 Pa. St., 228.) Invalid consideration as defense. 9 (U. S. C. C. A., 1896). A note given in part in consideration of an agree- ment to refrain from bidding at a public sale of goods by a statutory assignee is invalid, except in the hands of an innocent purchaser. (Atlas National Bank v. Holm et al., 71 Fed. Rep., 489.) Jndorser on bade of note before delivery a maker. 10 (U. S. C. C, 1885). A third party who places his name upon the back of a negotiable promissory note at the time of its execution by the maker and before its delivery to the payee will be liable as a joint maker, and the note itself, with the indorsement thereon, is prima facie evidence of such liability. Good v. Martin, 95 U. S., 90, fol- lowed. (First National Bank of Worcester, Mass., v. Lock-Stitch Fence Co. and others, 24 Fed. Rep., 221.) 11 (U. S. C. C, 1885). The question of the liability of such a party is one of general commercial law, and the decisions of the courts of the State in which the note is executed and made payable are not neces- » sarily controlling in the decision thereof by a United States court (lb.) 12 (U. S. C. C. A., 1895). By the general commercial law parties who place their names on the back of a promissory note, before its delivery, for the purpose of giving credit to the jnaker, are joint makers of the note, and will be so treated in the Federal courts, though the note is 282 DIGEST OP NATIONAL BANK DECISIONS. NEGOTIABLE PAPER— Continued. genebaixy — continued. made in a State whose courts hold such parties to be indorsers. (Phipps et al. v, Harding, 70 Fed. Rep., 468.) 13 (U. S. C. C. A., 1895). The several States are not without power to change by statute the general commercial law, but each State has the right to impose such conditions and limitations upon contracts not inhibited by the terms of its own or the Federal Constitution, as it may see proper. ( lb. ) 14 (U. S. C. C. A., 1895). The Massachusetts statute (St. 1874, c. 404) pro- viding that " all persons becoming parties to promissory notes payable en time, by signature on the back thereof, shall be entitled to notice cf nonpayment thereof the same as indorsers," is a valid exercise of the power to change the general commercial law, and becomes a term of the contract, evidenced by a note made in Wisconsin while such statute was in force, and delivered and payable in Massachu- setts. • ( lb. ) 15 (La.). An indorser of a note, whether a surety or an indorser in the strict mercantile sense, will be released if, without his consent, the holder releases the maker of the note, though at maturity of the note he waived demand, notice and protest. (Union National Bank of New Orleans v. Grant, La., 18 So., 705; 48 La. Ann., 18.) 16 (Mich. Sup., 1901). Where a note was made payable to the order of plaintiff, who instituted a suit against it for one of the original sign- ers, the fact that it was nonnegotiable, and that the names of some of the original signers were written on the back of the note, was imma- terial, since all the parties were makers. (Dow Law Bank r. God- frey, 85 N. W. Rep., 1075; 3 Banking Cases, 530; 126 Mich., 521.) 17 (N. T. Appls., 1896). Defendant indorsed a note payable to himself, and gave it to his agent, to be delivered to one S., after the latter should have procured the execution of a certain contract ; but the agent gave S. the note before receiving the contract, on S.'s promise that he would procure its execution that day. S. failed to keep his promise, and sent the note to brokers, who sold it to plaintiff before maturity. Held, that as the note had a legal inception defendant could not avail himself of his agent's mistake and S.'s bad faith as a defense against the bona fide holder. (Chase National Bank v. Faurot, 44 N. E. Rep., 164; 149 N. Y., 532.) 18 (N. Y.). One who indorses a note payable to another before its delivery to the payee is presumed to be liable as a subsequent indorser. (Lin- coln National Bank v. Butler (City Ct. N. Y.), 3C X. Y. S., 1112.) 19 (Nebr., 1893). A person other than a payee, who signs his name in blank upon the back of a promissory note at the time of its execution, and before its delivery to the payee, is, as to a subsequent bona fide holder for value, liable thereon as a joint maker, and not as accom- modation" indorser. ( Salisbury v. First National Bank of Cambridge City, Nebr., 56 N. W., 727; 37 Nebr., 872.) Suit on lost instrument, bond. 20 (TJ. S. C. C. A., 1900). A court of law — especially one which is vested with jurisdiction both at law and in equity — has power to require a plain- tiff to give a bond of indemnity as a condition precedent to a recovery in an action brought therein on a lost negotiable instrument. (First National Bank of Denver v. Wilder, 104 Fed. Rep., 187.) 21 (U. S. C. C. A., 1900). The payee of a negotiable instrument, who claims to have lost the same before maturity, but that it had not been in- dorsed, should not be allowed to recover thereon against the maker without giving reasonable indemnity, unless the evidence that the paper has been actually destroyed is so cogent that there is prac- tically no risk of its reappearance. A finding of the jury in such an action that the instrument was not negotiated, but was lost while unindorsed, is not in -itself a ground for dispensing with the require- DIGEST OF NATIONAL BANK DECISIONS. 283 NEGOTIABLE PAPER— Continued. generally — continued. ment of indemnity, since it would not be available to the maker as a defense against an action by a third person who produced the instru- ment properly indorsed. (lb.) When surety not released by extension given to maker. 22 (Mo.). Payment of interest in advance on a note is not of itself evidence of an agreement for the extension of time of payment sufficient to release a surety from liability. (American National Bank v. Love, 62 Mo. App., 378.) 2.3 (Wash., 1894). Where the payee of a note, in extending time of payment to the maker, reserves his rights against the sureties, the latter are not discharged, though they are not notified of the fact. (Boston National Bank of Seattle v. Jose, 38 P., 1026; 10 Wash., 185.) Renewal of note raises no presumption of payment. 24 (Wash., 1894). The fact that a bank takes a note in place of one which has matured raises no presumption that the note was taken in pay- ment of the other, but the question of payment is one of fact, depend- ing on the intention of the parties. (lb.) BanJc's ratification of officer's unauthorized contract. 25 (Nebr., 1896). A note executed by stockholders of a corporation in the corporate name, without authority of the directors, becomes a corpo- rate liability if ratified by the corporation by permitting judgment to go against it on the note. (Nebraska National Bank of York v. Ferguson, Nebr., 68 N. W., 370 ; 49 Nebr., 109.) 26 (Oreg., 1895). A bank by suing on a note taken by its cashier under a contract made by him ratines the contract in toto, though he was unauthorized to make it. (La Grande National Bank v. Blum., Oreg., 41 P., 659 ; 26 Oreg., 49.) Effect of material alteration after delivery. 27 (N. Dak., 1894). Erasing from a note after delivery the words " agreeing to pay all expenses incurred by suit or otherwise in attempting the collection of this note, including reasonable attorney's fees," is a material alteration which renders the note void, since without such words the note is negotiable. (First National Bank of Decorah v. Laughlin, 61 N. W., 473; 4 N. Dak., 391.) 28 (Pa., 1895). Where a note was altered after delivery by an agent of the payee, without the maker's knowledge, by an interlineation of the words " with interest at 6 per cent," which occupied only half a line and appeared to have been interlined, no recovery could be had thereon by a subsequent holder for value of either interest or prin- cipal alone. (Gettysburg National Bank v. Chisholm, 32 Atl. Rep., 730; 169 Pa. St., 564.) 29 (Tex. Sup., 1896). Where the maker of a note previously indorsed for his accommodation alters the same without the indorser's consent, by adding the words " with interest at 10 per cent per annum," there being at the time the maker received it no blank space for the inser- tion of interest nor words indicating that interest should be expressed, the note will be invalid, as against the. accommodation indorser, even in the hands of a bona fide holder. (Farmers and Merchants' National Bank v. Novich, 34 S. W., 914; 89 Tex., 381.) Procuring signature to Manic paper and writing note above. 30 (Iowa, 1894). Where a person induces another to sign a paper containing no writing and which is to be used merely as a means of identifying the signer, who does not intend to execute a note or contract of any kind, and then fills out the blanks so as to make the paper a note, the note will be void even in the hands of an innocent holder. (First National Bank of Grand Haven v. Zeims, 61 N. W., 483 ; 93 Iowa, 140.) 284 DIGEST OF NATIONAL BANK DECISIONS. NEGOTIABLE PAPER— Continued. generally — continued. When certificate of deposit a promissory note. 31 (Mich., 1895). The plaintiff received from defendants the following cer- tificate: " B. has deposited in this bank $8,000 (eight thousand dol- lars), payable to the order of himself on the return of this certificate properly indorsed. Interest at 6 per cent, if left twelve months, for all future months. Interest to cease if not renewed at end of one year from date." Held, that such a certificate of deposit is a promis- sory note, payable on demand. (Beardsley v. Webber, 62 N. W., 173; 101 Mich., 88.) Authority of corporate officer to indorse note, presumed. 32 (Wash., 1896). The possession of a negotiable note payable to a corpora- tion, and bearing the indorsement of such corporation, regular in form, and signed by its general manager, is prima facie sufficient to show that the officer so indorsing the note had authority to do so and to entitle the holder thereof to recover. (Citizens' National Bank of , Tacoma v. Wintler, 45 P., 38 ; 14 Wash., 558.) Effect of guaranty written on back of note. 33 (Wash., 1896). The fact that a guaranty is written on the back of a note, above the signature of the payee, does not have the effect of pre- venting the signature from operating as an indorsement, for the pur- pose of passing the legal title to the note. (National Bank of Com- merce of Tacoma v. Galland, 45 P., 35 ; 14 Wash., 502.) When .administrator personally liable. 34 (Mont., 1896). An administrator is personally liable on a note, signed by him as such, the proceeds of which were placed with the payee, a bank, and paid out on checks drawn by him to pay, generally, bills and debts of the estate. (First National Bank of White Sulphur Springs v. Collins, 43 P., 499 ; IT Mont, 433.) Attorney's fees. 35 (Fla. Sup., 1901). A count in a declaration alleging that a third person executed his certain promissory note, payable to the order of de- fendant ; that defendant indorsed and delivered said note to a certain bank, whereby she promised to pay the bank $100 for attorney's fees in the event that the note was not paid at maturity, and was placed in the hands of an attorney for collection ; that the note was not paid at maturity, and had been placed in the hands of an attorney for col- lection, does not show a liability for attorney's fees on the part of defendant to the bank, or to one claiming through it. (Robinson v. Aird, 3 Banking Cases, 309; 29 So. Rep., 633; 43 Fla., 30.) 36 (Fla. Sup., 1901). An ordinary indorsement of a note does not carry with it an original obligation to pay attorney's fees for collecting the note ; and, without notice of its dishonor, the indorser will not be liable upon such indorsement for attorney's fees stipulated in the face of the note to be paid by the maker. (lb.) 37 (Miss., 1894). An agreement by the- maker of a note to pay 10 per cent commission, if the note be not paid at maturity, and is collected by an attorney is valid. • (Brahan v. First National Bank of Clarksville, 16 So., 203; 72 Miss., 266.) 38 (Tex., 1895). The obligation imposed by a provision in a note for the payment of 10 per cent attorney's fees is not affected by the fact that it was inserted for the sole benefit of the payee and not with any pur- pose of paying the amount to an attorney. (Sturgis National Bank v. Smyth, 30 S. W., 678; 9 Tex. Civ. App., 540.) 39 (Wash., 1893). The amount of attorney's fees stipulated in a note to be paid in case suit is brought may be added to the amount of the judg- ment recovered on the note, under Code Proceedings, section 803, expressly authorizing the allowance of such fees. (Exchange Na- tional Bank of Spokane v. Wolverton, 39 P., 248; 11 Wash., 108.) DIGEST OF NATIONAL BANK DECISIONS. . '285 NEGOTIABLE PAPER— Continued. generally — continued. Contribution between toobligors. 40 (Tex. Sup., 1896). An obligor in a note who pays a sum in excess of his pro rata share to the obligee in consideration of his full discharge is entitled to contribution from each of his coobligors" of their pro rata share of the excess so paid. (Merchants' National Bank v. Mc- Anulty, 33 S. W., 963; 89 Tex., 124.) Duty of assignee to assignor in order to charge latter. 41 (W. Va., 1895). An assignee of an invalid nonnegotiable draft who relies on its invalidity as excusing him from attempting by suit to collect the money must notify his assignor of his reason for not suing and offer to return the instrument to him ; and if he is guilty of negli- gence therein, to the assignor's damage, he can not recover the con- sideration of the assignment. (Merchants' National Bank v. Spates, 23 S. E., 681; 41 W. Va., 27.) Right of assignee to sue. 42, (111.). The assignment of a promissory note vests the legal title in the assignee and renders him a proper party plaintiff in an action there- on. (Forster v. Second National Bank, 61 111. App., 272.) What an assignor impliedly warrants. 43 (W. Va., 1895). One who assigns a nonnegotiable draft by indorsement and delivery thereof impliedly warrants its validity, his right to assign, that it is a subsisting, unpaid debt, and the solvency of the debtor. (Merchants' National Bank v. Spates 23 S. E., 681; 41 W. Va., 27.) One holding himself out as partner liable as such. , 44 (Ky., 1894). A note signed by only one member of a firm was binding upon both members. Held, that the fact that such note is renewed after the death of the nonsigning member does not release his estate from liability on the original note, the payee not having intended to release him, and having canceled the original note through inad- vertence. (National Exchange Bank of Lexington v. Wilgus's Exec- utors, 25 S. W., 2; 95 Ky., 309.) 45 (Mo. Sup., 1894). The course of business between members of a firm may show the authority of one partner to act for and charge the firm. (Midland National Bank v. Schoen, 27 S. W., 547; 123 Mo., 650.) . 46 (Mo. Sup., 1894). Where a partner is invested with general authority to use the firm name on notes for his individual purposes, the firm is liable on, notes discounted on the faith of such authority. (lb.) 47 (Mo. Sup., 1894). Where a note is given by a firm for the debt of one partner it may be renewed by any one of the partners without alter- ing the firm's liability. (lb.) 48 (Mo. Sup., 1894). Where a partner has general authority to give notes of the firm for his private debts it is not necessary to show special authority on the particular notes sued on. (lb.) 49 (Pa. Sup., 1894). One who, by his acts and declarations in dealing with a bank, holds himself out to it as a member of a firm, thus inducing the bank to discount notes and pass the proceeds to the credit of the firm, will be liable to the bank on the notes as a member of the firm. (Lancaster County National Bank v. Boffenmyer, 29 A., 855; 162 Pa. St., 559.) ' When law where note is payable governs. 50 (U. S. C. C. A., 1894). A note executed and delivered in one State and payable in another is governed, as to defenses against an indorsee, by the law of the latter State, though sued on in the State wherein it was executed. (Sturdivant v. Memphis National Bank, 60 Fed. Rep., 730; ib., 736.) 286 ' , DIGEST OF NATIONAL BANK DECISIONS. NEGOTIABLE PAPER— Continued. generally — continued. Filling Monks in notes. 51 (Me.). If one signs a printed blank for a note and intrusts it to another to have the blanks filled up, he confers the right, and the note carries on its face an implied authority to fill up the blanks at pleasure, so far as is consistent with the printed words. As to all purchasers for value without notice, the person to whom the blank note is intrusted must be deemed the agent of the signer ; and an oral agree- ment between such principal and agent, limiting the amount for which the note shall be perfected, can not affect the rights of an indorsee who takes the note for a different amount, before maturity, for value, in ignorance of such agreement. (Market and Fulton National Bank v. Sargent, 27 A., 192 ; 85 Me., 348.) When corporate officer personally liable. 52 (N. T. Sup.). Where a note, with the name of a corporation in the mar- gin, signed by two persons, designated as " president " and " treas- urer," respectively, is discounted for the payee without inquiry as to whether it was the note of the corporation or of the individual mak- ers, the holder may treat it as a personal obligation of the makers. (First National Bank v. Stuetzer, 30 N. Y. S., 83.) Liability of survivors when one joint maker dies. 53 (111. Sup., 1894). Where there are three or more joint makers of a note, and one of them dies while the note is unpaid and before suit brought, the surviving makers are jointly liable on the note. (Stevens v. Catlin, 37 N. E., 1023 ; 152 111., 56.) Defenses. 54 ( U. S. C. C. A., 1899 ) . The maker of a promissory note given in payment for stock in a national bank, and immediately transferred by indorsement to said bank by the payee, can not resist payment of the note, in the hands of a receiver of the bank, on a plea of failure of consideration, because of the. insolvency of the bank where the payee has fully indemnified him against loss. (Myers v. Hettinger, 94 Fed. Rep., 370.) 55 (Ky., 1901). In an action on a promissory note the pleas of non est factum and want of consideration are not inconsistent, and may be joined. (First Nat. Bank of Paducah v. Wisdom's Exrs., G3 S. W. Rep., 461; 3 Banking Cases, 483.) 56 (Ky., 1901). Under a plea of non est factum to an action by a bank on a promissory note which was placed in the bank by its president, who soon thereafter absconded, being a confessed forger and defaulter, it was admissible for defendants, the executors of - the person whose name was signed to the note, to prove that the president, after the note sued on was discounted, had in his possession other notes pur- porting to have been signed by testator, and which were manifestly forgeries, as the transactions were logically connected, and when con- sidered together authorize the conclusion that all the notes were pre- pared by the president to conceal his delinquency, with the intention to use them as it became necessary ; and, besides, the fact that he" forged testator's name to other notes would be admissible, at least, to show his capacity to imitate the signature, (lb.) 57 (Ky., 1901). The court properly instructed the jury that, though the testator signed and delivered the note to the bank, yet if he did not receive from it, by himself or order, or for his use, the proceeds of the note, they should find for defendants, as plaintiff, having pleaded a particular consideration for the note, was bound to prove that con- sideration, (lb. ) Notes — Obligation of surety — Release. 58 (U. S\ C. C, 1904). Plaintiff, who was surety for her father on certain notes payable to defendant bank, agreed to become surety on four new notes, and to pay $200 in money in consideration of her discharge DIGEST OF NATIONAL BANK DECISIONS. 287 NEGOTIABLE PAPER— Continued. generally — continued. from further liability. A note on which plaintiff was liable, not then due, was not noticed when this arrangement was made, and on its maturity the bank commenced suit thereon against plaintiff ; but plaintiff claimed that the bringing of suit on such note was a fraud, and released her from liability on the other notes. The bank there- upon surrendered the note and gave up all claim to recover thereon. Held, that the surrender of such notes cured the act of the bank in attempting to collect it in 'so far as it tended to show a violation of the previous agreement. (Sowles v. First National Bank of Platts- burg et al., 130 Fed. Rep., 1009.) PEOTEST OF NOTE. Notice of protest. 1 (U. S. C. C. A., 1895). It is not essential that a notice of dishonor or of protest of a note . should state in so. many words that the holder looks to the ihdorser for payment, but a notice from which that fact may be reasonably inferred is sufficient. A copy of the note and of the protest sent to the indorser constitute such notice. (Nelson v. First National Bank of Killingly, 69 Fed. Rep., 798.) Notes — Liability of indorser. 2 (U. S. Dist. Ct, 1902). A note payable to the order of the maker, when indorsed by him, becomes a negotiable instrument ; and a second indorser for accommodation becomes a party to such instrument, with the liabilities and immunities of an indorser of commercial paper, and his liability can only be fixed by protest and notice in due form. (In re Edson (Vt), 119 Fed. Rep., 487.) Waiver of demand, protest and notice by indorser. 3 (U. S. Sup. Ct, 1892). A promissory note payable to the order of the maker, being indorsed by him, was indorsed and delivered to another for his accommodation. The latter indorsed it and borrowed money upon it, waiving demand and protest. The waiver was stamped upon the back of the note by mistake over both indorsements. Held, that the liability of the maker was not affected thereby. (Gordon v. Third National Bank of Chattanooga, 144 U. S., 97.) 4 (Tex., 1894). A promise by an indorser to pay a note after maturity, with knowledge that no demand was made and no notice given, waives such demand and notice. (First National Bank of Hastings v. Bon- ner, Tex. Civ. App., 27 S. W., 698.) 5 (Tex., 1894). A letter to the holders of a note, written after maturity of the note by the indorsers, wherein they promise to " do our utmost to put you in funds at an early date," and express a hope to be " able to take up this paper," and declare a willingness to confess judg- ment when sued, is sufficient evidence of waiver of demand and notice. ( lb. ) 6 (Tex., 1894). An indorser may waive the benefit of a statute requiring suit to be brought at the first term o2 court after the cause of action accrues. (lb.) Liability for failure to protest note. 7 (Me.). A second indorser of a note having learned that the maker had failed, and that the first indorser, who lived in the same place as the maker, had agreed to meet it, wrote to his indorsee to recall it. Said indorsee had forwarded it through the usual bank channels for collection, and the indorser merely wished to save the protest charges. The indorsee consented to recall the note on condition that the new note should be signed by all the local indorsers. Three days before maturity the second indorser received a request from the first in- dorser to have the note forwarded for protest. Under directions from the second indorser the indorsee tried by telegraph to order the note forwarded, not knowing where it was, but on the day of 288 DIGEST OF NATIONAL BANK DECISIONS. NEGOTIABLE PAPER— Continued. protest of note — continued. maturity it came back to his residence too late for protest. Held, that the second indorser was estopped as against said indorsee to insist that his waiver of demand and notice should have been in writing. (Hallowell National Bank v. Marston, 27 A., 529; 85 Me., 488.) 8 (Minn., 1895). A complaint in an action on a note alleged that the payee delivered the note for collection- at a bank, which sent it to plaintiff, who caused the same to be protested; that the payee claimed the protest to be invalid, and insisted that the bank pay the note, and that the bank, believing itself liable, required plaintiff to pay the same ; and that on such payment the bank, as agent for the payee, delivered the note to plaintiff, and prayed that plaintiff be subro- gated to the rights of the payee. Held, that the absence of an aver- ment that the bank was authorized to deliver the note to plaintiff on payment, or that the payee received the_ money paid, or ratified the transaction, rendered the complaint insufficient on demurrer. (Marine National Bank v. Humphreys, 64 N. W., 148; 62 Minn., 141.) BONA FIDE HOLDERS FOR VALUE WITHOUT NOTICE. Who are bona fide holders. 1 (U. S. Sup. Ct, 1892). Where the holder of bonds payable to bearer trans- fers them to stock brokers, to hold as margins on his individual stock transactions, and the brokers pledge them to a bank in the regular course of business as security for current indebtedness, the bank acquires a valid title to them, and the owner can not recover them except by paying the amount for which they are pledged. (Thompson v. St. Nicholas National Bank, 146 tf. S., 240, affirming; 113 N. T., 325; 3 N. B. C, 663.) 2 (U. S. C. C. A., 1896). In order to deprive one of the character of a bona fide purchaser it is not enough that he neglected to make the inquiry which a prudent man would or ought to have made, but he must have acted in bad faith. (Atlas Nat. Bank v. Holm et al., 71 Fed. Rep., 489.) 3 (U. S. C. C. A., 1896). There is no presumption that a purchaser of a note was aware of existing defenses thereto. (lb.) 4 (U. S. C. C. A., 1896). One who was president both of the A. bank and the B. bank received from the president of a third bank two notes, which the latter claimed to own individually, as collateral both for balances due from his bank to the A. bank and for debts due by him individually to the B. bank. The notes were kept by the A. bank until dishonored, and until its own balances were discharged, and were then sent to the B. bank. Held, that the fact that the B. bank re- ceived physical possession of the notes after dishonor was no evidence that it was not a bona fide holder for value. (Kaiser et al. v. First Nat. Bank of Brandon, 78 Fed. Rep., 281.) 5 (N. Y. Sup.). Defendant corporation placed bonds issued by it in the hands of one G. as its agent to sell to a third person, but instead of selling them G. pledged the bonds to plaintiff as collateral security for ,a debt owing by him. The bonds were negotiable in form, and plain- tiff had no notice of the arrangement between defendant and G. Held, that plaintiff was a bona fide holder. (Tompkins County Na- tional Bank v. Bunnell & Eno Inv. Co., 40 N. T. S., 411.) 6 (Tenn., 1898). The mere fact that the holder of a promissory note knew that it was given for land and that there was a lien on the land for unpaid purchase money, and that there might thereafter occur a par- tial failure of consideration for the note by an enforcement of the lien, will not render such holder subject to all the equities that may thereafter arise between the original parties to the notes, nor prevent him from being a bona fide purchaser. (Merchants and Planters' Bank v. Penland, J Banking Cases, 25; 101 Tenn., 445.) DIGEST OF NATIONAL BANK DECISIONS. 289 NEGOTIABLE PAPER— Continued. BONA FIDE HOLDERS FOB VALUE WITHOUT NOTICE Continued. 7 (Tex. Civ. App., 1896). The doctrine of lis pendens does not apply to a purchaser of negotiable bonds for value before maturity. (Farmers and Merchants' National Bank v. Waco Electric Railway and Light Co., Tex. Civ. App., 36 S. W., 131 ; Metropolitan Trust Co. v. Farmers and Merchants' National Bank, ib.) 8 (Vt. Sup., 1894). Defendant indorsed a note of his debtor to be dis- counted and part of the proceeds applied to his debt. The debtor pledged it with plaintiff as collateral security for another note of his in consideration of the latter's extension. Plaintiff had no notice of the agreement as to the application of the proceeds. Held, that plaintiff was a bona fide holder for value to the extent of the note secured, and could maintain action thereon. (People's Nat. Bank v. Clayton, 29 At. Rep., 1020; 66 Vt, 541.) When purchaser charged with notice. 9 (U. S. Sup. Ct, 1899). By the rule that an individual negotiating for the purchase of a note from one having it in possession, and whose name is upon it, must assume that the title of the holder, as well as the liability of all prior parties, is precisely that indicated by the paper itself, it is not meant that circumstances may not explain the note or may not relieve the taker from the obligation of inquiry. (Auten . v. United States Nat. Bank of New York, 1 Banking Cases, 416 ; 174 TJ. S., 125.) 10 (U. S. C. C. A., 1896). The fact that a purchaser, for a valuable considera- tion, of negotiable notes from a member of the payee firm, who claims to be the owner thereof, knows that the latter is the president of a bank whose indorsement in blank appears on the notes, after the indorsement of the firm, is not sufficient to put the purchaser on inquiry or charge him with notice that the notes belong to the bank. ( Kaiser et al. v. First National Bank of Brandon, 78 Fed. Rep., 281.) 11 (U. S. C. C, 1884). An indorsement upon negotiable paper, "For collec- tion ; pay to the order of A. B.," is notice to all purchasers that the indorser is entitled to the proceeds. (Bank of the Metropolis v. First National Bank of Jersey City, 19 Fed. Rep., 301.) 12 (Minn., 1884). The indorsement of a note " for collection " is notice to a purchaser that the indorsee is not the owner. (Merchants' Nat. Bank of St. Paul v. Hanson, 33 Minn., 40 ; 53 Am. Rep., 5 ; 3 N. B. C, 509.) 13 (Nebr. Sup., 1894). A certificate of deposit with provision that "This deposit not subject to cjjeck ; with interest at 6 per cent if left six , months ; no interest after six months," is overdue, so as to charge purchaser with notice of equities, after six months. (Kirk wood v. First National Bank of Hastings, 58 N. W., 1016 ; 40 Nebr., 484 ; Kirk- wood v. Exchange National Bank, ib., 1135 ; 40 Nebr., 497. ) 14 (N. Y. Com. PI. ). It is an equitable defense to an action against the maker of a promissory note that the indorsee took it with notice that it was given to his immediate indorser by the maker as a security. (Western National Bank v. Wood, 20 N. Y. S., 642.) 15 (N. Y. Sup.). When a note is presented for discount by the first indorser, the presumption is that it had its inception in his hands, and the bank is not chargeable with notice that the note was owned by the maker, and that the indorsements were, therefore, for his accommo- dation. (First National Bank v. Weston, 34 N. Y. S., 558.) Indorsee of note presumed to take without notice. 16 (U. S. C. C, 1882). An indorsee for value of a promissory note is pre- sumed, in the absence of evidence to the contrary, to have taken it without notice of equities subsisting between the maker and. payee. (Third Nat. Bank v. Harrison et al., 10 Fed. Rep., 243.) 4049—05 19 290 DIGEST OF NATIONAL BANK DECISIONS. NEGOTIABLE PAPER— Continued. BONA FIDE HOLDERS FOR VALUE WITHOUT NOTICE Continued. Who not purchasers for value. 17 (Mich., 18d6). A mere credit given by a bank to its depositor (or a note procured by fraud does not constitute a purchase for value, in the absence of evidence that the credit was ever drawn upon, or that the account of which it became a part was exhausted before maturity of the note, or before notice of the fraud. (Drovers' National Bank v: Blue, 67 N. W., 1105 ; 110 Mich., 31.) 18 (Mich., 1896). Where plaintiff, in an action on a note, undertook, but failed, to establish that it purchased the note before maturity .in good faith, proof of fraud by the payee in procuring the note is a complete defense unless plaintiff shows a bona fide purchase. (lb.) When bank not a bona fide, holder for value. 19 (N. Y.). The mere discounting of paper, and placing the amount thereof to the credit of a depositor who already has a large balance to his credit, does not make the bank a purchaser for value so as to protect it against infirmities in the paper. Entering the amount of the dis- count to the credit of the depositor simply creates, the relation, ~ between the bank and the depositor, of debtor and creditor ; and as long as that relation remains and the deposit is not drawn out the bank has simply promised to pay the depositor, has parted with no value, and is not entitled to the protection of a bona fide bolder of paper. (Nat. Bank of Newburgh, respondent, v. Daniel Smith, appellant, 66 N. Y., 271.) When set-off by maker not allowed against purchaser. 20 (N. C. Sup., 1895). A purchaser of several notes for value and before ma- turity, without notice of any set-offs, who pays one-half of their aggregate face value and gives the indorsee credit for the balance, subject to his check, holds all the notes free from any right of set-off in favor of the maker, and the fact that he may have recovered on part of the notes does not deprive him of the character of a pur- chaser for value, so as to let in the right of set-off as to the others. (United States National Bank v. McNair, 21 S. E., 389.) 21 (N. C. Sup., 1895). That an indorsee who rediscounts notes may have paid less than their face value for them does not entitle the maker to any right of set-off to which he would not otherwise be entitled, (lb.) When holder must prove his purchase bona fide. 22 (Minn. Sup., 1895). Proof of fraud ifi the inception of a note casts on the indorsee the burden of showing that he took it for value before maturity without notice; but proof that he paid full value before maturity raises a presumption that he purchased it in good faith without notice. (Marine Nat. Bank v. Humphreys, 64 N. W. Rep., 148; 62 Minn., 141.) 23 (N. Y. Sup.). The holder of a note does not have the burden of proving that he is a bona fide purchaser, unless it appears that the payee obtained it by fraud. (Flour City" National Bank v. Grover, 34 N. Y. S., 496.) 24 (R. I., 1892). Until it is shown that the note in suit was never delivered by the maker, or that it was obtained from him by undue means, it is not incumbent on plaintiff to show himself a bona fide holder for a valuable consideration. (Third National Bank v. Angell, 29 A., 500; 18 R. I., 1.) Rights of innocent holder of note fraudulently obtained. 25 (N. J., 1896). Negotiable paper fraudulent at its inception is not invali- • dated in the hands of one taking it for value before maturity, unless there be actual fraud upon his part. ( Second National Bank of Read- ing v. Hewitt, N. J., 34 A., 988 ; 59 N. J. L., 57.) DIGEST OF NATIONAL BANK DECISIONS. 291 NEGOTIABLE PAPER— Continued. PAYMENT. When note given m payment of stranger's note may be enforced. 1 (U. S. C. C, 1895). Where a person at the solicitation of national-bank officers gave his note to the bank to take up the note of a stranger, for the purpose, as stated by the officers, of getting the old note " out of the past-due notes," held, that the maker of the new note was liable to the receiver of the bank on a renewal of the note, whether- the transaction was a real one or a mere trick to make it appear to the Government and the creditors and stockholders that the bank had a valuable asset, which it in fact did not have. (Pauly v. O'Brien, 69 Fed. Rep., 460.) Payment to indorser as agent of indorsee. 2 (U. S. C. C, 1887). If the indorsee constitute the indorser or original holder, his agent, by relying on him to collect of the maker, taking himself no steps for that purpose until after the failure of the indorser, payment to the original holder will be good. (Exchange National Bank v. Johnson et al., 30 Fed. Rep., 588.) 3 (U. S. C. C, 1887). If the maker pay other-than the rightful owner of the note, he can not rely on facts unknown to him, and not in- fluencing his action, as an estoppel, but if the facts be of a char- acter that establish an agency for collection, that is a defense against repayment. ( lb. ) 4 (Ark., 1899). Where a note is sent to bank, which is an indorser thereof, for collection, it can not plead in its own defense its failure to make demand and protest. (Auten v. Manistee Nat. Bank, 2 Banking Case, 215; 67 Ark., 243.) When indorser pays indorsee with new note. 5 (U. S. C. C, 1887). If a bank accepts the note of the indorser in dis- charge of his liability as indorser, the title to the first note reverts* to the indorser, and payment to him is good, although the indorser leave the note on deposit with the bank ; but it is a question for the jury to determine whether, on the facts of the case, the new note'be taken in discharge of the indorser's liability, or as a mere memorandum note, not intended to affect the title to the old note. (Exchange Nat. Bank v. Johnson et al., 30 Fed. Rep., 588.) Payments by principal do not revive as to surety. 6 (Ind., 1895). After a note is barred by statute of limitations, the lia- bility of a surety thereon can not be revived by payments made, without his knowledge or consent, by the maker. (Dougherty v. , Hoffstetter, 40 N. E., 278; 12 Ind., 699.) When payment to bank not payment on note. 7 (Nebr., 1895). Payment of money on a note at a bank where it is pay- able is not a payment of the note if the note is not at the bank and is not produced. (First National Bank of Omaha v. Chilson, 63 N. W., 362; 45 Nebr., 257.) Evidence of payment. 8 (N. 0., 1899). The execution of the note sued on was admitted by de- fendants, and their plea was substantially that of payment, but it was not contended that the note had ever been actually paid, or that it had been canceled or surrendered, and it was permitted to remain in the possession of the plaintiff bank, and, upon its failure, was turned over among its assets to the receiver. The evidence tended to prove simply an executory agreement to pay. Held, that a verdict should have been directed for plaintiff. (Piedmont Bank of Morgantown et al. v. Wilson et al., 124 N. C, 561.) 9 (N. C, 1899). A bank cashier can not, without express authority, take in payment of a note a mere verbal assignment of an intangible interest in another note already held by another bank as collateral security, as such a transaction is not within the ordinary dealings of a bank. (lb.) 292 DIGEST OF NATIONAL BANK DECISIONS. NEGOTIABLE PAPER— Continued. payment — continued. Reissuance of note by principal after payment. 10 (Wash., 1893). A note coming into the hands of the maker after pay- ment can not be reissued by him, so as to bind a surety thereon, in the hands of one taking it with knowledge of the suretyship. (First National Bank of Seattle v. Harris, 34 P., 466; 7 Wash., 139.) FRAUD. Fraud in procuring stock subscription. 1 (Ala., 1896). A plea in an action on a note alleging that it was a re- newal of one originally executed in payment of a subscription to stock; that three certain persons were interested in selling said stock ; that one of said persons, acting for himself and his asso- ciates, induced defendant to sign said note by representing that cer- tain other persons had agreed to take a large amount of said stock, that others had contracted to take a large quantity of the product of the corporation, and that the property of the corporation was then marketable, but that said representations were wholly false, imports liability on said three persons for said false representations, and the averments thereof are sufficient to avoid the original note and all mere renewals thereof, as between defendant and said per- sons and their assigns with notice. (Alabama National Bank v. Halsey, Ala., 19 So., 522 ; 109 Ala., 196.) 2 (S. Dak., 1894). Where a bank takes a note for shares of its stock sold by its president, with knowledge of president's representations as to stock's value, the maker, in an action on the note, may set up the defense that the representations were false. (National Bank of Dakota v. Taylor, 58 N. W., 297; 5 S. Dak., 99.) Fraud in procuring assignment. 3 (Idaho, 1895). Where, on an issue whether a transferree of notes in fraud of the owner's creditors acquired the notes in good faith in due course of business, it appeared that he was an intimate friend of the owner and well acquainted with the latter's business affairs ; that he knew that the payee did not own the notes and that the use of his name was a mere pretense; that as fast as payments were made on the notes he remitted them to the owner, and that a receipt therefor given him by the owner was signed in the owner's name " for " the payee, a finding that he had no knowledge of the fraud was against the evidence. (First National Bank of Hailey v. Van Ness, 43 P., 59; 4 Idaho, 539.) Ratification of fraud. 4 (Minn., 1896). The mere promise to pay, or the procuring of an exten- sion of the time for paying, a note obtained by fraud, to pay which the maker is under no legal or moral obligation, does not, as a matter of law, constitute a ratification of the note, in the absence of facts creating an estoppel in pais. (First National Bank of Decorah v. Holan, 65 N. W., 952 ; 63 Minn., 525.) Agreement to forbear suit for fraud. 5 (Oreg., 1892). Where a signer of a joint and several note assigned his property to another, and the payee thereupon called on such as- signee, and, to induce him to sign, said, " Unless you sign the note we will contest the conveyance," whereupon the assignee signed, it was sufficient to warrant a jury in finding an implied agreement to for- bear. (First National Bank of Arlington v. Cecil, Oreg., 31 P., 61 ; 23 Oreg., 58.) 6 (Oreg., 1892). Where a signer of a joint and several note assigned his property to another, and the assignee thereupon assigned the note, the payee agreeing to forbear, the assignee became a party to a new contract, on a new and additional consideration ; the rule being that, when one signs his name to a joint and several note for a valuable consideration, after delivery he becomes as between himself and the payee, a maker, and may be sued as such. (lb.) DIGEST OP NATIONAL BANK DECISIONS. 293 NOTARY PUBLIC. 1 (U. S. C. C. A., 1895). Since the removal of the disqualification of inter- ested witnesses, a notary who is an officer of a bank may legally pro- test paper belonging to it. (Nelson v. First National Bank of Kil- lingly, 69 Fed. Rep., 798. ) 2 (Nebr. Sup., 1902). Instruction sent with a note forwarded by one bank to another for the purpose of collection, " to protest," held to mean, and to have been understood to mean, by the notary 'to whose atten- tion it was called that the necessary steps to bind indorsers were to be taken. (Dartmouth Sav. Bank v. Foley et al., 89 N. W. Rep., 395; 4 Banking Cases, 402. ) 3 (Nebr. Sup., 1902). While a prompt return to the sender of a protest, showing no notice to an indorser, would have enabled it to serve notice in time, having intrusted that duty to a notary,, it was not bound to make examination to see whether it was done. (lb.) 4 (Nebr. Sup., 1902). Giving notice of dishonor of protested paper is, in the absence of contrary instructions, an official duty of a notary public in Nebraska, for neglect of which an action is maintainable by the party injured upon his official bond. (lb.) NOTICE. • Page Notice to president op bank 293 Notice to cashier or bank 295 Notice to director or messenger _ 298 When those deamng with agent are put on inquiry 299 Notice in transactions between officer and bank _ 300 Miscellaneous _ _ _ _ _ 301 Cross references: Insolvency and receivers — Receiver chargeable with notice same as bank _ 188 Officers — Notice to president as affecting bank ' 327 NOTICE TO PRESIDENT OF BANK. 1 (U. S. C. C. A., 1896). The receiver of the C. National Bank brought an action against one W. on certain promissory notes, made by him directly to the bank. W. defended the action on the ground that the • notes were given for the purchase money of an interest in a brickyard, which W. had been induced to purchase by the misrepresentations of C, the president of the bank. It appeared that the bank held sundry notes of the principal owner of the brickyard, which notes were worth- less ; that the notes made by W. were substituted for these, and that C. pretended to be interested himself in the brickyard, and to enter into a partnership with W. and the former owner of the yard for the purpose of inducing W. to make the notes to the bank, which would replace the worthless notes it then held. There was also evidence tending to show that C. was the active party in the transaction and misrepresented the facts to W. Held, that the bank, being the payee of the notes, could not be held to have been without notice of the fraud, or unaffected by C.'s knowledge thereof, and that it was error to direct the jury to render a verdict against W. (Wilson v. Paulv, 72 Fed. Rep., 129.) 2 (U. S. C. C, 1894). Defendant executed his promissory note to C. and delivered it upon condition that it was to be surrendered to him upon C.'s failure to perform stipulated acts. C. immediately transferred this note by indorsement to a bank of which he was president and general manager. Held, that, as C. himself was the sole representa- tive of the bank in the transfer of the note to it, the bank is charge- able with his knowledge of the condition to which it was subject, and and so can hot sue on the note until that condition is performed. (First National Bank of Blaine v. Blake, 60 Fed. Rep., 78.) 294 DIGEST OP NATIONAL, BANK DECISIONS. NOTICE— Continued. notice to president of bank — continued. 3 (U. S. C. C. A., 1899). Knowledge by the president of a bank of his mis- appropriation of bank funds held not notice to the bank. (Lamson v. Beard, 94 Fed. Rep., 30 ; C. B. Congdon & Co. v. Same, ib. ; Phelps v. Same, ib. ; 1 Banking Cases, 568. ) 4 (U. S. C. C. A., 1896). A, bank whose president acted for it in making a loan on guaranteed negotiable bonds, after he had learned that the stockholders of the company making the guaranty had repudiated it as unauthorized, will be charged with notice. (Louisville Trust Co. v. Louisville, N. A. & C. R. Co., 75 Fed. Rep., 433.) 5 (U. S. C. C. A., 1896). The president of a bank, having embezzled funds of the bank on deposit with its reserve agent, replaced such funds with money borrowed by him on the bank's note without the direct- ors' knowledge, and such borrowed money was thereafter drawn out to pay the bank's lawful debts. Held, that the bank, having received the benefit of the loan through its president, it was affected with his knowledge of the loan, and hence was liable to the lender as for money had and received to its use. (Ditty v. Dominion Nat. Bank of Bristol, Va., 75 Fed. Rep., 769.) 6 (U. S. C. C. A., 1897). Knowledge by a member of a firm of the true con- sideration of a certificate of deposit, which the firm discounted at a bank in payment of individual notes of one of its members, and which had been negligently altered in making out a duplicate certificate, held to be imputable to the bank, where the other member of the firm was its president, and as such acted as the sole l'epresentative of the bank in accepting the certificate. (74 Fed., 1000, affirmed; Niblack v. Cosier, 80 Fed. Rep., 596.) 7 (Colo. Sup., 1896). Where the president of a bank had been often told of a third ownership in property afterwards levied on by the bank, the bank was charged with that information, though the president gained it in his private business. (Campbell v. First Nat. Bank of Denver, 43 P., 1007 ; 22 Colo., 177.') 8 (Ga.) The knowledge of a president of a bank that certain stpck had not been fully paid up is chargeable to the bank, if he, acting for it and in its behalf, accepted a transfer of the stock to it, and it there- under retained the same. (Fouche v. Merchants' Nat. Bank, 36 S. E., 256; 110 Ga., 827; Merchants' Nat. Bank v. Fouche, id.) 9 (111. App.). Where the president of a bank received notice while engaged in business for the bank the" bank was chargeable therewith. (Bart- lett v. Woodbine Sav. Bank, 57 111. App., 425.) * 10 (111. Appls., 1884). The private knowledge of the president of a bank of the failure of the ' consideration of a note purchased by it is not attributable to the bank. (First Nat. Bank of Greenville v. Sher- burne, 3 N. B. C, 382; 14 Bradw., 566.) 11 (Ky. Appls., 1902). While it is the duty of a trust company acting as administrator to deposit the funds of the estate in bank, it was guilty of negligence in depositing them in an insolvent bank, and therefore liable for loss resulting therefrom, where its president had actual knowledge, at the time of the insolvent condition of the bank, and its officers whose duty it was to look after deposits of trust accounts had heard rumors sufficient to put them on inquiry, which, if made, would have revealed to them the true condition of the bank. (Germania Safety Vault and Trust Co. v. Driskell et al.,' 66 N. W. Rep., 610; 4 Banking Cases, 538.) 12 (Ky. Appls., 1902). The trust company can not rely upon the general reputation of the bank, where its president was also president of the bank, and thus had the means' at hand, coupled with the duty, to acquaint himself with its condition. (Ib.) ■ 13 (Md. Appls., 1900). The law imputes to one who is president and director of a bank knowledge of its condition ; and neither he nor its other officers can be given, in such an action, on -account of their willful DIGEST OF NATIONAL BANK DECISIONS. 295 NOTICE— Continued. notice to president of bank — continued. ignorance, a better standing than if he or they had actual knowledge of such condition. (James Clark Co. et al. v. Colton et al., 2 Bank- ing Cases, 530; 91 Md., 195.) 14 (Tenn. Sup., 1896). A bank will not be charged with notice of the insan- ity of an accommodation indorser on a renewal note accepted by it because at that time the president of the bank, who was a member of the discount committee which passed on the note, had knowledge of such insanity, he not having been present with the committee when the new note was taken and the old note extinguished, and not having had knowledge of the transaction till the day after it was consum- mated. (Memphis Nat. Bank v. Sneed, 36 S. W. 716; 97 Tenn., 120.) 15 (Tenn. Ch. App., 1895). When an agent of an undisclosed principal hold- ing bonds as collateral, with notice that subject to such pledge they have been transferred as collateral to another, relinquishes them to the pledger, who, from proceeds obtained from a sale thereof, pays a debt to a bank of which such agent is president, having been urged by such president to make a payment, the bank will be liable for the money so received to the one having the secondary rights in the bonds as security, the president, and through him the bank, being charged with notice how the money was obtained. (Hughes v. Settle, Tenn. Ch. App., 36 S. W., 577.) 16 (Tenn. Ch. App., 1901). Notice acquired by the president in a private transaction is not imputable to the bank. (Smith v. Carmack, 64 S. W. Rep., 372.) 17 (Wash., 1893). The fact that the maker of a note told the president of a bank, at the office of a company of which they were both directors, that a certain note had been obtained from him by fraud will not be held notice to the bank, where it afterwards discounts the note. (Washington National Bank v. Pierce, 33 P., 972; 6 Wash., 49l) NOTICE TO CASHIER OF BANK. 1 (U. S. C. C. A., 1901). Where a borrower from a bank presented collat- erals to the assistant cashier, who was authorized to represent the bank in the transaction, and was directed by the latter, in accord- ance with custom, to take such collaterals to the note teller, who had charge of the collaterals to be cheeked up, notice to the teller ■ in regard to the rights of a third person in one of the securities pledged was notice to the bank. (Zeis v. Potter et al., 105 Fed. Rep., 671.) 2 (U. S. C. C. A., 1902). The rule that knowledge possessed by an agent while transacting business for his principal is imputable to the prin- cipal is based on the presumption that he will communicate such knowledge as his duty requires, and is subject to exception where in the transaction he acts not only for his principal, but also for him- self individually, and his interest or conduct is such as to render it certain that he would not make such disclosure. (Bank of "Overton v. Thompson, 118 Fed. Rep., 798. ) 3 (U. S. C. C. A., 1902). The cashier of a bank sold cattle in which he and complainant were jointly interested, receiving payment in a draft and credit slip payable to the bank. These he deposited to his own credit, and collected and thereafter checked out the entire amount and converted it to Ids own use. He transacted the entire business on behalf of both the bank and himself, and no one else connected with the bank had any knowledge of complainant's interest in the cattle or their proceeds-. Held, that the bank was not chargeable with notice that complainant had any interest in the fund deposited, and occupied no trust relation to him which rendered it accountable for such interest. (lb.) 4 (U. S. C. C. A., 1902). A contract between an owner of land and his tenant by which the former agreed to furnish money for the pur- chase of stock to be placed on the land and cared for by the tenant, 296 DIGEST OP NATIONAL BANK DECISIONS. NOTICE— Continued. notice to cashier of bank — continued. the amount to be repaid with interest from the proceeds of the stock when sold, and the profit or loss to be divided equally, created a partnership in the venture ; and on a sale of the stock by the tenant at a price which realized a profit, the landlord had no interest in the specific money received therefor and no claim against a bank in which it was deposited by the tenant to his own credit on account of such deposit, even though the bank had knowledge or notice of the source from which it was obtained, his only right being to- hold his partner to a personal accounting. (lb.) 5 (U. S. C. C, 1887)'. Defendant was heavily indebted to the bank of which he was cashier, and within four months of the filing of a petition by a creditor to have him declared an insolvent (under Rev. Laws Vt, sec. 1870) transferred certain securities to the bank with a view to preferring it over his other creditors. Held, that knowledge on the part of defendant of his insolvency affected the bank of which he was cashier with such knowledge and made the transfer of such securities void, under Revised Laws Vermont, section 1860, which provides that a conveyance made by an insolvent, or one in contemplation of insolvency, within four months before the filing of a petition of insolvency by or against him, with a view to giving a preference to certain of his creditors, the latter having knowledge of his insol- vency, is void. (Witters ■;;. Sowles's assignees et al., 32 Fed. Rep.. 762.) 6 (Cal. ). The articles of incorporation of a bank provided that "it is to act as an agent in the investment of funds," and " to transact any business that may properly be done by a financial agent." The cash- ier of such bank made a loan for a customer who had money depos-- ited therein, took the acknowledgment to the mortgage securing the loan, had possession of the unrecorded mortgage, and received two installments of interest, which he placed to such customer's credit on his pass book. Held, that the knowledge of its cashier was the knowledge of the bank, affecting it with notice of such unrecorded mortgage. (Christie v. Sherwood, Cal., 45 P., 820; 113 Cal., 526.) 7 (Conn.). A bank cashier's fraud in obtaining the execution of a note can not be imputed to the bank merely from the fact that he was its cash- ier, on the cashier's transferring the note to the bank as security for a loan so as to preclude the bank from recovering on the notes as indorsee. (First Nat. Bank v. Bevin, 45 A., 954; 72 Conn., 666.)" 8 (Ga. Sup., 1898). Knowledge by one of the officers of a bank, who joined in the acceptance for the bank of a negotiable note before due, of a fact which would put a prudent person upon inquiry as to the power of the maker to execute the paper, is sufficient to charge the bank with notice of a disability, if such existed. (Hager v. National Ger- man-American Bank, 31 S. E., 141.) 9 (Ky. Appls., 1899). Notice to a cashier of an, incorporated bank that a note discounted with the bank was procured by fraud is notice to the bank, so that the defense is available against it. (Citizens' Sav. Bank v. Walden, 52 S. W., 953 ; Same v. Lydane, id. ) 10 (Mich. Sup., 1898). Where a bank had no committee or agent to make loans excepting their cashier, evidence that he did not know that a note indorsed to them for value was procured by fraud is prima facie sufficient to show want of such notice by bank. (Drovers' Nat. Bank v. Potvin, 74 N. W. Rep., 724.) 11 (Minn. Sup., 1898). Knowledge of a cashier and two directors that the cashier has without authority pledged the bank's responsibility upon the note of a corporation in which such officers have an interest adversely to the bank is not notice to the bank. (Fort Dearborn Nat. Bank v. Seymour, 73 N. W., 724; 71 Minn., 81.) 12 (Mo. Appls.). Knowledge of the cashier of a bank, procured by reason of his interest and connection with other parties, but not obtained in the performance of any duty he owed to the bank, is not notice to the bank. (National Bank of Commerce v. Fitze, 76 Mo. App., 356.) DIGEST OF NATIONAL BANK DECISIONS. 297 NOT ICE— Continued. notice to cashieb op bank — continued. 13 (Mo. Sup., 1894). The cashier of a bank was also the secretary of another corporation, and while working in the interest of the latter sold stock therein, taking the purchaser's note therefor, which note was afterwards discounted by the bank. Held, that the bank was not affected with jts cashier's knowledge as to the value of the stock sold, obtained through his connection with the other corporation. (Benton v. German-American National Bank, 26 S. W., 975 ; 122 Mo., 332.) 14 (N. Y.). Where the cashier of a bank conspires with a third person to sell worthless property to defendant at par, in order that the pro- ceeds may be applied to the payment of a debt due the bank, the bank is chargeable with the knowledge that the cashier had of such conspiracy. (Merchants' National Bank v. Tracy, 29 N. Y. S., 77.) 15 (N. Y.). In an action on a check there was evidence that defendant gave the check, postdated, to one 6. for the price of stock of a cor- poration, under an agreement that G. should not use the check until defendant had further considered the purchase of the stock ; that defendant was induced to give the check by representations of G. as to the prosperity of the company, which was in fact insolvent ; that the cashier of plaintiff bank knew of the negotiations between defendant and G. ; that G. immediately procured the check to be dis- counted by plaintiff and placed the proceeds to the credit of the com- pany, which was largely indebted to plaintiff. Held, .that a finding that plaintiff was not a bona fide holder for value was sustained by the evidence, though plaintiff's cashier denied that he knew of the negotiations between defendant and G. (lb.) 16 (S. Dak.). Where a partner sells to a bank of which he is cashier a note due the firm, and the bank acts entirely through its discount committee, to which he does not belong, it is not affected with knowl- edge possessed by him of infirmities in the note. (National Bank of Commerce of Pierre v. Feeney, S. Dak., 70 N. W., 874; 9 S. Dak., 550.) 17 (Tenn. Sup., 1898). Where the cashier of a bank has been given full authority to make discounts, it can not be contended in behalf of the i bank that notice to the cashier is not notice to the bank in the dis- counting of notes. (Merchants and Planters' Bank v. Penland, 1 B. C, 25; 101 Tenn., 445.) 18 (Tenn. Chancery Appls., 1897). A holder of bank stock placed it in the hands of the bank's cashier for negotiation. The cashier obtained a loan on the stock arid was told by the owner to remit the proceeds to him. The owner was at the time indebted to the bank, and the cashier, without authority, deposited the proceeds in the bank, by which it was appropriated in payment of the indebtedness. Held, that the bank was charged with notice of the cashier's fraud and could not make the appropriation. (Winslow v. Harriman Iran Co., 42 S. W., 698.) 19 (Tenn. Chancery Appls., 1897). G., cashier of a bank which had express i notice that W. was manager of H. & Co., and was^ forbidden from selling or discounting drafts received in the course of business, hav- ing, as agent of K, bought a draft indorsed to W., manager, and then, as cashier, received the proceeds of the check given by L. and placed it to the individual credit of W., and the draft. having afterwards been received by the bank for collection, and the proceeds when col- lected having been paid to L., the bank is liable to H. & Co. therefor. (Heinz v. Fourth Nat. Bank, 48 S. W., 133.) * 20 (Tex. Civ. Appls., 1896). Notice to the cashier of a national bank is notice to the bank. (First National Bank of Mason v. Ledbetter, Tex. Civ. App., 34 S. W., 1042.) 21 (Vt. Sup., 1898). Knowledge acquired by the officers of a bank while not acting for it, but while acting for themselves, is not imputable to the bank. It appeared that an accommodation note was executed by B. to his brother, plaintiff's cashier, for use at the plaintiff bank ; that it 298 DIGEST OF NATIONAL BANK DECISIONS. NOTICE— Continued. notice to cashier of bank — continued. was appropriated to the use and benefit of plaintiff by such cashier, with the knowledge and consent of the maker, after the latter had become insolvent ; but the plaintiff, at such time, was not chargable with notice of such insolvency. Held, that the assignees of the maker could not take advantage of such insolvency to defeat such appropriation. (First Nat. Bank of Brandon v. Brigg's assignees, 1 B. C, 19; TO Vt, 594.) NOTICE TO DIRECTOR OR MESSENGER. Notice to director of banJc. 1 (U. S. C. C, 1882). Where a bank, in the absence of a director by whom a note has been offered for discount, accepts it, and accepts a note payable to him and indorsed to it as collateral, its rights are not affected by such director's knowledge of illegality in the inception of the note accepted as security. (Third National Bank v. Harrison et al., 10 Fed. Rep., 243.) 2 (U. S. C. C. A.,1893). Where grantor states to director of bank that he is willing to convey a half interest in certain land to the bank's president, with the understanding that such president was to deed the whole interest to the bank, and that the president or the bank was to pay him by giving him credit upon notes then running against him in the bank, held, not to amount to notice to the director that the grantor intends to retain a vendor's lien, but rather imports a notice that no such lien is to be retained. (First National Bank of Sheffield et al. v. Tompkins, 57 Fed. Rep., 20.) 3 (Ga.). Knowledge of failure of consideration of a negotiable note, which the director of a bank sells to it before the maturity of the paper, is not chargeable to the bank when in the transaction the seller did not act for it at all, but exclusively for himself, and the bank was represented by another of its officials, who alone acted for it. (English- American Loan and Trust Co. v. Hiers, 38 S. E., 103; 112 Ga., 823.) 4 (Md. Appls., 1903). Notice to a director of a banking corporation pri- vately, or acquired by him generally through channels open to all persons, and which he does not communicate to his associates in the management of the corporation, is not binding on the same. (Black v. First Nat. Bank of Westminster, 5 B. C, 388; 54 Atl. Rep., 88.) 5 (Mass.). If a director of a bank, who acts for the bank in discounting a note, has knowledge that the note was procured by fraud, the bank is affected with his knowledge. (National Security Bank v. Edward F. Cushman, 121 Mass., 490.) 6 (N. J.). A bank discounting a note before its maturity is not chargeable with the knowledge of illegality or want of consideration acquired by one of its directors in other than his official capacity, such director not having acted with the board in making the discount. (First National Bank of Hightstown v. Christopher, 40 N. J. Law, 435.) 7 (N. J. ). A director offering a note, of whicH he is the owner, to the bank of which he is a director, for discount, is regarded in the transaction as a stranger, and the bank i« not chargeable with the knowledge of such director of an infirmity or defect in the consideration of the note. (Ib.^ 8 (N. J.). P. was a member of the firm of M. & J. S. P., and also a director of the bank of H. He obtained at the bank the discount of a note belonging to the firm, which had been got of the maker by fraud. He had notice, as a member of the firm, of the fraud before the note was offered for discount, but did not communicate his knowledge to any of the- officers of the bank. Held, that the knowledge of P. was not, constructively, notice to the bank. (lb.) DIGEST OF NATIONAL BANK DECISIONS. 299 NOTICE— Continued. notice to director ok messengee — continued. 9 (N.,Y.). In' a suit by a bank on a note, against accommodation indorsers, it appeared that one K., a director of the bank, drew the notes, and procured defendant's indorsement, and that he agreed with them that a certain other person should also indorse the note. One witness testified, without objection, that, so far as he knew, K. was the bank's counsel. Plaintiff gave no proof on the subject of K.'s agency. Meld,, that the evidence was sufficient to show that notice to K. was notice to the bank of the agreement to procure such additional in- dorser. 27 N. Y. S., 883 affirmed. (Twenty-sixth Ward Bank of Brooklyn v. Stearns, N. Y. App., 42 N. E., 1050; 148 N. Y., 515:) 10 (Pa.). When the director of a bank is informed of the equities existing between the maker and the payee of a note, such notice does not bind the bank acquiring the note for value before maturity, since notice to the director is not notice to the corporation. (Boston Com- mercial Bank v. Heppes, 23 Pa. Co. Ct. R., 447; 9 Pa. Dist. R., 352.) 11 (Wis., 1896). On an issue whether the plaintiff bank had knowledge of the preference of a creditor of its debtor, it was proper to instruct that the bank was not chargeable with knowledge of its directors acting individually, but that the jury might consider the knowledge of the directors as tending to prove knowledge on the part of the bank. (Continental Nat. Bank of Chicago v. McGeoch, Wis., 66 N. W., 606; 92 Wis., 286.) 'Notice to messenger. 12 (Ga. ). A bank was not affected by information given to one of its mes- sengers by a member of a former partnership, to whom a draft upon which the partnership was liable, and which was subsequently renewed, was presented, to the effect that the partnership had been dissolved, and that the other partner was liable for its debts, where the information was not in fact communicated to the bank, and 'the messenger's agency was restricted to mere collections. (Camp v. Southern Banking and Trust Co., Ga., 25 S. E., 362; 97 Ga., 582.) WHEN THOSE DEALING WITH AGENT ARE PUT ON INQUIRY. 1 (U. S. Sup. Ct., 1884). An agent can not lawfully act for his principal and for himself in matters in which they have adverse interests, and every person dealing with an agent who is acting for himself as well as for his principal in such matters is put upon inquiry as to authority and good faith of the agent. (Moore v. Citizens' National Bank of Piqua, Ohio, 15 Fed. Rep., 141. Affirmed, 111 U. S., 156.) 2 (U. S. Sup. Ct, 1884). The plaintiff contracted to loan money to M., cash- ier of the defendant bank, for his individual uses, on his representa- tions that he held a number of shares of stock of said bank, and his agreement to transfer a certa-in number thereof to the plaintiff as security for the loan. In pursuance of said agreement, M. after- wards produced a certificate of stock bearing the genuine signatures of the president and of himself as cashier, on the faith of which plaintiff loaned him the money. In fact, M. had previously hypothe- cated and transferred to others all- the stock of said bank which he had held, and the certificate was fraudulently issued, without any transfer of stock and without any knowledge of any of the officers of the bank except himself, he having used for that purpose a certificate left with him for use as occasion might require, signed by the president in blank. The plaintiff had no knowledge of the fraud, and believed that the certificate had been issued in good faith and by competent authority, but knew that the transaction was for the benefit of M. Held, that the knowledge that M. was acting for him- self as well as for the bank in issuing the certificate put the plaintiff upon inquiry as to the authority and good faith of M., and having failed to make it, the bank is not liable on the certificate. (lb.) 300 DIGEST OF NATIONAL BANK DECISIONS. NOTICE— Continued. NOTICE IN TRANSACTIONS BETWEEN OFFICES AND BANK. 1 (U. S. C. C, 1894). The rule that where a bank officer is dealing with the bank on his own account his knowledge will not be imputed to the bank does not apply where such officer is the sole representative of the bank in the transaction. (First National Bank of Blaine v. Blake, 60 Fed. Rep., 78.) 2 (U. S. C. C. A., 1899). Possession of books by a bank containing entries of drafts fraudulently drawn by the president in personal brokerage transactions is not notice thereof to the bank, where the books were under the sole control of the president and kept tn such a manner as to conceal his defalcations. (Lamson et al. v. Beard, 94 Fed. Rep., 30; IB. C, 568.) i 3 (U. S. C. C. A., 1899). Knowledge by the president of a bank of his mis- appropriation of its funds in personal transactions is not notice to the bank. (lb.) 4 (Ga.). Where the president and cashier of a bank", being also members of a partnership composed of themselves and another person, to the capital stock of which they had, under the partnership articles, agreed to contribute a given sum, without the knowledge or consent of the other partner exeputed and delivered to the bank a note in the name of the partnership, in order to raise the money they had agreed to pay into the partnership business, the bank was affected with notice that the transaction was for the private benefit alone of the two parties raising the money, and hence could not hold the partnership itself nor the remaining partner liable on the note. (Brobstron v. Penniman, 25 S. B., 350; 97 Ga., 527.) 5 (Mass.). The president of plaintiff bank, without consideration, obtained defendant's note as a personal loan, and without disclosing the want of consideration procured its discount by plaintiff's cashier. Held, that though the cashier was without authority to discount paper, his agency in discounting the note not having been disavowed by plaintiff, it could recover on the note, as the president's knowledge of its infirmity could not be imputed to it. (First National Bank of Grafton v. Babbidge et al., 36 N. B., 462; 160 Mass., 563.) 6 (Mo., 1893). Where an officer of a bank is dealing with it in his individual interest, the bank is not chargeable with his uncommunicated knowl- edge of facts derogatory to his title to the paper which is the subject " of the transaction. (Merchants' National Bank of Kansas City v. Lovitt, 21 S. W., 825.) 7 (Mo., 1893). Where the president acts for the bank in accepting for dis- count paper offered by another officer, the bank is not affected by any knowledge of the latter regarding such paper, since he is acting in the transaction in his own behalf. (lb.) 8 (Mo., 1893). The fact that the discount was calculated by the officer , offering the paper would not be material in such case. (lb.) 9 (Mo. App.). Where the president of a bank, as agent of a shareholder, fraudulently and without authority has such shareholder's certifi- cates canceled and new certificates issued to himself as transferee, he is acting in a double capacity, and the bank is bound by his knowledge of the fraud and want of authority. (Withers v. Lafay- ette County Bank, 67 Mo. App., 115.) 10 (Wyo., 1895). Where the president of the bank knew that its cashier had purchased sheep from plaintiff, and was in debt therefor, that outside of them he 1 could not pay the price, and that he had gone with the sheep to market, to sell them, the bank is chargeable with notice that a draft, sent to it by the cashier, was the proceeds of the sheep and of plaintiff's interest therein as mortgagee of the sheep, and was liable to plaintiff for a portion of the draft applied on its own debt. (Rock Springs National Bank v. Luman, 42 P., 874 ; 5 Wyo., 159.) DIGEST OF NATIONAL BANK DECISIONS. 301 NOTICE— Continued. MISCELLANEOUS. In transactions between banks, 1 (U. S. C. C. A., 1894). The fact that notes offered for discount to a bank by another bank, its correspondent, are payable to its president indi- vidually and bear his indorsement, followed by that of the bank affixed by him, does not give notice to the discounting bank that they are the property of such president and the bank's indorsement is for accommodation, especially when the negotiations for the discount have been carried on by letters written in their official capacity by the president and cashier of the offering bank. (United States Na- tional Bank v. First National Bank, 64 Fed. Rep., 985.) When bank put on inquiry. 2 (U. S. C. C, 1895). Where there is a custom between brokers and bank- ers that on application of tx broker a bank will certify as to whether it has any lien on certain of its stock by the holder thereof being indebted to it, a bank, by being asked by a broker to give such a cer- tificate, is thereby put .on inquiry and charged with notice that a loan for a certain amount had been or was to be made to the holder of the stock by a certain person. (Covington City National Bank v. Commercial Bank, 65 Fed Rep., 547. ) Bank charged with notice of letters mailed to it. 3 (U. S. C. C. A., 1893). A bank is charged with notice of letters duly mailed to it and received by the general bookkeeper, whose duty it is to open and distribute mail matter, although he conceals such letters to hide certain irregularities in his office and thereby prevents their coming into the hands of the other bank officers. (First National Bank of Evansville v. Fourth National Bank of Louisville, 56 Fed. Rep., 967.) Service of notice by copy. 4 (6a., 1894). The fact that defendant, with his family, is absent from the county because of the prevalence of an epidemic does not prevent service of process on him by leaving a copy thereof at his residence during such absence. (Burbage v.- American National Bank, 20 S. E., 246; 95 Ga., 503.) When pledgee of stock not charged idith notice. 5 (III.). The pledgee of stock can not be said to acquiesce in the payment of dividends thereon to the pledgor where he has no notice of it, actual or constructive. (Fairbanks v. Merchants' National Bank, 30 111. App., 28; reversed, 22 N. E., 524.) Notice to nonresident. 6 (Iowa, 1896). Notice of expiration of time to redeem from sale of land for taxes, which the statute provides shall be served on the person in whose name the land is taxed if he is a resident of the county, and may be served on a nonresident of the county by publication, is properly addressed, in the case of a nonresident, to the "Am. Ex. Bank," that being the name as it appeared on the lists to whom the land was taxed. (American Exchange National Bank of New Tort v. Crooks, 66 N. W., 168; Same v. Dugan, lb. ; 97 Iowa, 244.) Purchaser of partnership property. 7 (Nebr., 1896). One who knowingly receives partnership property with knowledge that its proceeds are passing to the individual use of one partner is charged with notice of such partner's want of authority to dispose of the property for his individual beneit. (Columbia National Bank of Lincoln v. Rice, 67 N. W., 165: 48 Nebr., 428.) Officer's act outside his authority. 8 (Nebr. Sup., 1902). The acts of a bank officer, outside the usual scope of his authority, in a matter to which it is no party, and of which it is not chargeable with notice, do not bind the bank. (Jones v. First Nat. Bank of Lincoln, 4 Banking Cases, 566 ; 90 N. W. Rep., 512,) 302 DIGEST OF NATIONAL BANK DECISIONS. NOTICE — Continued. miscellaneous — continued. Change in officers does not affect notice once given, 9 (Nebr. Sup., 1902). The rule is well settled that a bank or other corpora- tion, being once charged with notice of the character of a trans- action, continues to be affected by such notice, whatever changes may occur in the personnel of its working force. (United States Nat. Bank of Holdrege v. Forstedt, 4 Banking Cases, 521 ; 64 Nebr., 855.) To officer acting outside his duties. 10 (N. C. Sup., 1896). The fact that the chairman of the defendant com- mittee was the attorney for the creditor in a garnishment proceed- ing did not affect the liability of defendant under the notice received by him as agent of the defendant several months before. (Anniston National Bank v. School Committee of Town of Durham, N. C, 24 S. B., 792; 118 N. C, 383.) Notice to one partner notice to all. 11 (Tex. Civ. App., 1898). In regard to partnership business, the knowledge of one partner is imputable to the other. (Gill v. First Nat. Bank, 1 B. C, 28.) OFFICERS. Page. Generally 303 Bonds op officers 304 Acceptance of bonds 304 Nature of sureties undertaking 304 Discharge of sureties, defenses 305 Extent of liability on bond 307 Evidence in suit on bond 311 Instructions to jury in suit on bond 312 Jurisdiction in action on bond 313 Action of appellate court where motion erroneously denied by trial court. _ 313 Directors 313 Cashier. 315 Powers of and representation op bank by officers 315 Powers of directors _ 315 Powers of cashier 317 In general _ 317 What cashier may do.._ _ 318 What cashier may not do 319 Effect of acts outside cashier's authority 320 Powers of president ._ ' 323 What president may not do 325 Ratification of president's action 326 Miscellaneous 327 Vice-president __ 338 Authority of officers to borrow money for bank. 328 When bank estopped by act of its officers- „ 330 Liability df bank for officer's unauthorized act within his apparent au- thority __. 331 Liability of bank for officer's unauthorized act not within his apparent authority 332 Liability of bank for directors' authorized act 332 Liability of bank for false representations by president _ . 333 DIGEST OP NATIONAL BANK DECISIONS. 303 OFFICERS— Continued. Powers of and representation op bank by officers — Continued. Page. Liability of bank for officer ' s criminal act within his apparent authority- 333 Liability of bank for fraudulent representations as to financial responsi- bility^. - 333 Authority of officers to bind bank in receiving special deposits . . : 334 Liability of bank for certificate issued by its officers when not acting for the bank' ._ _ 334 When act of cashier as to deposit binds bank , 334 Authority of officers during liquidation 334 Eeceiver liable for money borrowed by bank's officers without special authority _ _ _ 335 Bank not liable for conduct of cashier when he is acting as agent for a third party : _ ' 335 Cross references: Notice — Notice to president of bank 293 Notice to cashier of bank 295 Notice to director or messenger 298 When those dealing with agent are put on inquiry 299 Notice in transactions between officer and bank - . _ . _ 300 generally. Employment of officers. 1 (N. Y. Sup., 1873). A national bank can not hire one of its officers for a specified time. (Harrington t>. First National Bank of Chittenango, N. B. C, 760; 1 Thomp. & Cook, 361.) 2 (N. .T. Sup., 1873). Knowledge, without objection, by the directors of a bank that one is acting in its employ does not ratify the details of a contract for his employment by the president unless they know of such details. (lb.) Directors may remove officers at pleasure. 3 (N. Y. Sup.). Directors of national banking associations may remove the president, both under the law o* Congress and the articles of associa- tion, where the latter so provide. The power exists, though the asso- ciation has adopted no by-laws. (Taylor v. Hutton, 43 Barb., 195.) 4 (N. Y. Sup., 1873). The officers of a national banking association can ■ hold their positions only by the tenure specified in section 5136, Re- vised Statutes, viz, the pleasure of the board of directors. (Harring- ton v. First National Bank of Chittenango, 1 N. B. C, 760 ; 1 Thomp. & Cook, 361 ; Taylor v. Hutton, 43 Barb., 195.) Resignation of officer. 5 (U. S. C. C, 1887). The law providing no particular mode by which a director is to resign from the board, an oral resignation would be as good as any. (Movius v. Lee, 30 Fed. Rep., 298.) 6 (U. S. C. C, 1887). The president being the head of the board, a resigna- tion to him is a resignation to the board, (lb.) 7,(U. S. C. C, 1887). A director is not prohibited from resigning during the year. The apparent purpose of the provision in regard to the term of office is to make it conform to the time of the new election, and not to absolutely require every director to serve the full term. (lb.) Compensation of officers. 8 (U. S. C. C. A., 1899). Officers of corporations, who are also directors, and who have rendered their services under an agreement that they shall receive reasonable but indefinite compensation therefor, may recover as much as their services are worth, and it is not beyond the powers of the board of directors to fix and pay reasonable salaries to them after the services are rendered. (National Loan and Invest- ment Co. v. Rockland Co., 94 Fed. Rep., 335.) 304 DIGEST OP NATIONAL, BANK DECISIONS. OFFICERS— Continued. generally — continued." 9 (TJ. £3. C. C. A., 1899). Where, after the organization of a corporation, it was agreed and understood at an informal meeting of all the stock- holders that the officers should be paid a reasonable compensation for • their services, and by a by-law the board of directors was given power to fix the compensation of officers, their subsequent action in voting the president a reasonable salary for past services was legal, and a note of the corporation, executed to him therefor, was not without consideration. (lb.) Directors are officers within the meaning of section 5209, Revised Statutes^ 10 (U. S. C. C, 1889). Directors of a national bank are "officers" within the meaning of Revised Statutes, section 5209, which makes it a mis- demeanor for bank officers to make false entries in any book, report, or statement of the bank, with intent to deceive any of its officers. (United States v. Means et al., 42 Fed. Rep., 599.) National-bank examiner not an officer. 11 (U. S. C. C, 1887). A national-bank examiner is not an officer or agent of the bank and has no authority as such to act for the bank and can not bind it by any act done in its behalf. (Witters v. Sowles's Assignees et al., 32 Fed. Rep., 762.) Officer may borrow of bank. 12 (U. S. C. C, 1877). An' officer may, in the ordinary course of business, borrow money of the association. (Blair v. First National Bank of Mansfield, 10 Chicago Legal News, 84; 2 N. B. C, 173.) . Bank may repair property lawfully acquired. 13 (U. S. C. C. A., 1899). A national bank which has lawfully acquired the title to property in payment of a debt has implied authority to make reasonable repairs thereon for the purpose of putting it in salable condition, and its directors can not be held personally" liable for money so expended in good faith. (Cooper v. Hill, 94 Fed. Rep., 582.) BONDS OF OFFICERS. Acceptance of bonds. 1 (Ky.). It is not necessary that national banking associations shall sig- nify their approval of the* official bonds of their officers by memo- randa entered upon the journals or minutes of the directors. The acceptance is to be presumed from the retention of the bond, and from the fact that tbe officer is permitted to enter upon or continue in the discharge of his duties. (Graves •;;. The Lebanon National Bank, 10 Bush., 23.) 2 (Nebr. Sup., 1901). The fact that the bond of an assistant cashier of a bank was delivered to cashier of the bank, who was one of the directors, and that the assistant cashier entered upon the duties of his offce under such bond, and that such bond was retained by the cashier of the bank, is sufficient to establish the acceptance of the bond, though no acceptance or approval of such bond is shown by the minutes of the board of directors. (Fiala et al. v. Ainsworth, 88 N. W Rep., 135; 63 Nebr.; 1.) Nature of sureties' undertaking. 3 (Ind.). The engagement of a surety is a direct original agreement with the obligee that in the event his principal fails he will perform the original obligation, and whether it is entered into jointly with the principal or separately, the extent and character of the obligation are the same as to both, depending only upon the form in which it is expressed. (La Rose et al. v. The Logansport National Bank et al., 102 Ind., 332.) 4 (Ind.). The contract of the obligors, whether entered into separately or jointly with the principal, if by its terms it appears that the prin- cipal is separately bound by an original, independent contract, to DIGEST OP NATIONAL BANK DECISIONS. 305 OFFICERS— Continued. bonds of officers — continued. which the contract for security is collateral, and the obligors agree therein that the principal will pay or perform according to his original engagement, and that they will answer for his default in the event of failure, is a contract of guaranty. (lb.) 5 (Ind.). The contract of the sureties in the bond of a bank cashier, con- ditioned' for the faithful discharge of his duties by such cashier, is a contract of guaranty. (lb.) Discharge of sureties, defenses. 6 (U. S. C. C. A., 1900). The bond upon which the action was brought was given by the defendant company to indemnify the bank for which plaintiff was receiver against loss by fraudulent acts by M. as ts president. The provisions of the bond requiring notice to be given the company only obligated the bank to give notice of the discovery of any default or loss under the bond, and to notify the company when M. engaged in gambling or speculation, or indulged in disreputable or unlawful habits or pursuits. Held, that the bank was not required to notify the company that M. was making numerous overdrafts on his personal account in the bank, if it did not know that they were made with fraudulent intent ; and that the mere fact that they were made for fraudulent purposes would not relieve the company from liability under the bond. (Fidelity and Deposit Co. of Maryland v. Courtney, 2 Banking Cases, 633 ; 103 Fed. Rep., 599. ) 7 (U. S. C. C. A., 1900). The knowledge of an individual director of a bank of misconduct on the part of its president which would amount to such a fraudulent act affecting the duties of the officer as would require notice thereof to the maker of such bond, in order to be bind- ing on the bank must be knowledge acquired by the director when engaged in the business of the bank. • (lb.) 8 (U. S. C. C. A., 1900). The bond required that the bank should " immedi- ately " give the company notice of the discovery of any default or loss thereunder. Held, that the notice given by the bank's receiver complied with the requirement, if given without a longer delay than the circumstances made necessary ; and whether it was so given was a question for the jury in an action on the-bond. (lb.) 9 (U. S. C. C. A., 1900). Such notice was general in its character, but it advised the company of the default, claimed the full amount of indemnity, and no objection was taken prior to such action. Held, that there could be no reasonable objection to the form of the notice, (lb.) 10 (U. S. C. C. A., 1900.) The proof of claims which was required by such bond was furnished in time, as it was furnished as soon as the full particulars of the claim were developed so as to be capable of proof, (lb.) 11 (U. S. C. C. A., 1900). The cashier of the bank, without express author- ity, could not bind the bank by filling in, signing as cashier, and sending to the maker of such bond a certificate of the prior official conduct of the bank's president, although he had charge of the bank's correspondence, and the certificate had been received in blank form in a letter from the maker of the bond to the bank requesting the bank to have the certificate filled in, signed, and forwarded, (lb.) 12 (U. S. C. C. A., 1895). Plaintiff, as a receiver. of a national bank, sued a former employee of the bank and a guaranty company upon a bond of indemnity against the fraudulent acts of such employee which contained a provision that it should be essential to the validity of the bond that the employee's signature be subscribed thereto. The defendants pleaded non est factum. The bond offered in evidence was not signed by the employee of the bank and there was no evi- dence that it had been executed by the defendant company. The 4049—05 20 306 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS— Continued. bonds of officers — continued. court sustained defendants' plea and dismissed the suit. Held, no error. (Blackmore v. Guarantee Company of North America et al., 71 Fed. Rep., 363.) 13 (U.S. Dist.Ct, 1888). Where a cashier's bond is given to the "National Bank of Sumter," the sureties are not released from liability for a default of the cashier because such default was permitted by the negligence and misconduct of the president and board of directors. (Phillips v. Bossard et al., 35 Fed. Rep., 99.) 14 (Ind.). A failure to give notice to guarantors of the default of their principal, except in cases governed by commercial rules, is a matter of defense, and resulting damages must concur with such failure in order to work a discharge. (La Rose et al. v. The Logansport Nat. Bank et al., 102 Infl., 332.) 15 (Ind.). The knowledge by an employer of the misconduct of an em- ployee whose conduct and fidelity have been guaranteed by another, which will, if concealed, release the guarantor, must relate to the service in which the employee is engaged, and must be something more than mere moral delinquency unconnected with the subject- matter of the guaranty. (lb.) 16 (Ind.). A continuing contract, guaranteeing the fidelity of a bank cash- ier, may be revoked by the guarantors without cause, upon proper notice, but the right must be exercised reasonably. (lb.) 17 (Mass. Sup., 1874). A surety on the bond of a cashier of a national bank is not discharged by the fact that the cashier had, before the bond was given, committed frauds upon the bank if such frauds were unknown to the officers of the bank, although they were guilty of gross negligence in not discovering them. (Tapley v. Martin, 116 Mass., 275; 1 N. B. C, 611.) 18 (N. T.). Where a cashier of a national bank made a loan on the security of the stock of the bank, it is no defense for the sureties in an action on the bond that such loan violated the national banking act. (Wal- den Nat. Bank v. Birch, 130 N. Y., 221.) False statements, in a newspaper publication, of resources and liabilities as a 19 (Del., 1900). False statements in a newspaper publication of resources and liabilities of a national bank will not discharge a surety on the bond of an officer of the bank. (Lieberman v. First Nat. Bank of Wilmington, 2 Pennewills, 416.) 20 (Ky. ). Where the sureties of an officer can reasonably be presumed to have been deceived by the statement of the condition of the bank published just prior to the execution of the bond and to have been led to think that there was no deficit, whereas there had been a mis- application of a large part of the funds by the officer whose bonds- men they became, which fact would have been ascertained had the directors exercised ordinary diligence, the sureties are discharged from their liability. (Graves v. Lebanon National Bank, 10 Bush., 23.) President — Statement to surety company — Cashier's bond. 21 (U. S. Sup. Ct, 1897). The making of a statement as to the honesty and fidelity of an employee of a bank for the benefit of the employee and to enable the latter to obtain a bond insuring his fidelity was no part of the ordinary "routine business of a bank president. (American Surety Co. v. Pauly, 170 U. S., 133.) 22 (U. S. C. C. A., 1896). Prior to the issue of the bond sued on, the cashier and president of the bank had conspired to rob it and had been en- gaged in fraudulent practices. When application was made for the bond, the surety company required a certificate from the bank of the cashier's good character. Such certificate was made by the president without, so far as appeared, any direct authority from the board of DIGEST OF NATIONAL BANK DECISIONS. 807 OFFICERS— Continued. bonds op officers — continued. directors or any knowledge by them that such certificate was made or required. Held, that the president's knowledge of the cashier's dis- honesty was not to be imputed to the bank, so as to make it respon- sible for the misrepresentations contained in such certificate. (Ameri- can Surety Co. v. Pauly, 72 Fed. Rep., 470; affirmed by U. S. Sup. Ct, 170 U. S., 133.) 23 (U. S. C. C. A., 1902). A bank cashier applying to a surety company for a bond accompanied the application with a statement as to his past conduct and the condition of his account, signed by the president of the bank, which was incorrect, though made in good faith. Such statement was not referred to in the bond issued. The president had no special authority to make it, and none of the directors knew of it until interposed as a defense in a suit on the bond, defendant claim- ing that the statement was either a false warranty by the bank or a misrepresentation by it of material facts, which induced defendant to execute the bond. Held, that making the statement was no part of the duties of the office of president and not within his implied powers or ordinary duties, but was his individual act, by which the bank was not bound. (United States Fidelity and Guaranty Co. v. Muir, 115 Fed. Rep., 264.) EXTENT OF LIABILITY ON BOND. 24 (U. S. Sup. Ct, 1898). The A. Surety Co. executed and delivered. to the C. i Bank a bond, insuring the bank against loss by any act of fraud or dishonesty of its cashier in connection with the duties of that office, or the duties to which, in the bank's service, he might be subsequently appointed, occurring during the continuauce of the bond, and dis- covered within six months thereafter and within six months from the death, dismissal, or retirement of the cashier from the service of the bank. The bond provided that the surety company should be notified . of " any act " of the cashier which might involve a loss for which the company would be responsible " as soon as practicable after the occurrence of such act shall have come to the knowledge " of the bank, and it required proofs of loss to be furnished to the surety company. The bank suspended payment and passed into the hands of a receiver, who afterwards notified the surety company of the dis- covery of dishonest acts of the cashier, furnished proofs of loss, and •brought suit against the surety company on the bond. Held— 1. In an action against the maker of a bond, given to indemnify or insure a bank against loss arising from acts of fraud or dishonesty on the part of its cashier, if the bond was fairly and reasonably sus- ceptible of two constructions, one favorable to the bank and the other to the insurer, the former, if consistent with the object for which the bond was given, must be adopted. 2. Under the condition of the bond in this case, requiring notice of acts of fraud or dishonesty, the defendant was entitled to notice in writing of any act of the cashier which came to the knowledge of the plaintiff of a fraudulent or a dishonest character as soon as practi- cable after the plaintiff acquired knowledge; and it is not sufficient to defeat the plaintiff's right of action upon the policy to show that the plaintiff may have had suspicions of dishonest conduct of the cashier; but it was plaintiff's. duty when it came to his knowledge, when he was satisfied that the cashier had committed acts of dis- honesty or fraud likely to involve loss to the ^ defendant under the bond, as soon as was practicable thereafter to give written notice to the defendant ; though he may have had suspicions of irregularity or fraud, he was not bound to act until he had acquired knowledge of some specific fraudulent or dishonest act that might involve the defendant in liability for misconduct. 3. When the bank suspended business, and the investigation by the examiner commenced, O'Brien ceased to perform the ordinary duties 308 DIGEST OF NATIONAL BANK DECISIONS. i OFFICERS— Continued. extent of liability on bond — continued. of a cashier ; but within the meaning of the bond he did not retire from, but remained in, the service of the employer during at least the investigation of the bank's affairs and the custody of its assets by the national-bank examiner, which lasted until the appointment of a receiver and his qualifications. Held, that the six months from " the death or dismissal or retirement of the employee from the service of the employer," within which his fraud or dishonesty must have been discovered in order to hold the company liable, did not commence to run prior to" the date last named. 4. The making of a statement as to the honesty and fidelity of an employee of a bank for the benefit of the employee, and to enable the latter to obtain a bond insuring his fidelity, was no part of the ordi- nary routine business of a bank president, and there was nothing to show that by any usage of this particular bank such function was committed to its president. 5. The presumption that an agent informs his principal of that which his duty and the interests of his principal require him to com- municate does not arise where the agent acts or makes declarations not in execution of any duty that he owes to the principal, nor within any authority possessed by him, but to subserve simply his own per- sonal ends or to commit some fraud against the principal : and in such cases the principal is not bound by the acts or declarations of the agent unless it be proved that he had at the time actual notice of them, or having received notice of them failed to disavow what was assumed to be said and done in his behalf. > 6. When an agent has, in the course of his employment, been guilty of an actual fraud contrived and carried out for his own benefit, by which he intended to defraud and did defraud his own principal or client, as well as perhaps the other party, and the very perpetration of such fraud involved the necessity of his concealing the facts from his own client, then under such circumstances the principal is not charged with constructive notice of facts known by the attorney^and thus fraudulently concealed. (American Surety Co. v. Pauly (No. 1), 170 U. S., 133.) 25 (U. S. Sup. Ct, 1898). This was an action upon a bond guaranteeing a national bank against loss by any act of fraud or dishonesty by its president. The bond was similar in its provisions to the one referred to in the case preceding this, and contained, among other provisions, the following: "Now, therefore, in consideration," etc.,'* * * " it is hereby declared and agreed, that subject to the provision herein contained, the company shall, within three months next after notice, accompanied by satisfactory proof of a loss, as hereinafter mentioned, has been given to the company, make good and reimburse to the employer all and any pecuniary loss sustained by the employer of moneys, securities, or other personal property in the possession of the employee, or for the possession of which he is responsible, by any act of fraud or dishonesty on the part of the employee in connection with the duties of the office or position hereinbefore referred to, or the duties to which in the employer's service he may be subsequently appointed, and occurring during the continuance of this bond and discovered during said continuance, or within six months thereafter, and within six months from the death or dismissal or retirement of the employee from the service of the employer, it being understood that a written statement of such loss, certified by the duly authorized officer or representative of the employer, and based upon the accounts of the employee, shall be prima facie evidence thereof." Held — ' 1. That this language, was susceptible of two constructions, equally reasonable, and that the one most favorable to the insured should be accepted, namely, that the required written statement of loss arising from the fraud or dishonesty of the president of the bank, based upon its accounts, was admissible in evidence if suit was brought and was prima facie sufficient to establish the loss. DIGEST OF NATIONAL BANK DECISIONS. 309 _ i OFFICERS— Continued. extent or liability on bond — continued. 2. That within the meaning of the bond in suit, the president of the bank remained in its service at least up to the day on which the receiver took possession of books, papers, and assets. (American Surety Company v. Pauly (No. 2), 170 U. S., 160.) 26 (U. S. C. C. A., 1895). A bank employee's bond, conditioned for the reimbursement of any loss sustained by reason of fraud or dis- honesty in connection with his duties, provided that any claim under the bond should embrace and cover only acts and defaults committed during its currency and within twelve months next before the date of discovery of the act or default upon which such claim was based. Beld, that the bond did not cover a default committed more than twelve months prior to its discovery, which would, however, have been discovered within a year from its commission had not such dis- covery been prevented by the act of the employee in falsifying the books during the year preceding the discovery. 67 Fed. .Rep., 874, reversed. (Fidelity and Casualty Company of New York v. Con- solidated National Bank, 71 Fed. Rep., 116.) 27 (U. S. C. C. A., 1898). The" making of a loan exceeding 10 per cent of a national bank's capital, in the absence of fraud, is not a breach of the cashier's bond. (MohrenStecher et al. v. Westervelt, 87 Fed. Rep., 157.) 28 (U. S. C. C. A., 1898). To constitute a misapplication of the funds of a bank, it is necessary that some portion thereof shall be withdrawn from its possession or control, or that some conversion be made so as to deprive the bank of the benefit thereof. Mere renewal of notes already in the bank's possession does not, of itself, constitute a mis- application of funds. (lb.) 29 (U. S. C. C. A., 1898) . The cashier of a bank having made large purchases of real estate, one of the sureties on his bond made inquiries of sev- eral officers of the bank, actively engaged in its affairs, as to whether the cashier had borrowed money of the bank in order to make such purchases, and was informed that the purchases were for the benefit of the bank, that no liability accrued therefrom to the cashier to the bank, and that the cashier's total indebtedness to the bank was but a few hundred dollars. Beld, that the bank was estopped subsequently to deny these statements, when the sureties had relied thereon, and the cashier had in the meantime become insolvent. (lb.) 30 (U. S. C. C. A., 1896). A bond conditioned for the proper performance by a cashier of his duties " for and during all the time he shall hold the said office " binds the sureties for all Such time, irrespective of the fact that he is reappointed at the beginning of each year. (Wester- velt v. Mohrenstecher et al., 76 Fed. Rep., 118.) 31 (U. S. C. C. A., 1896). In an action on a cashier's bond for damages aris- ing from breach thereof by his misappropriation of money and mak- ing of excessive loans, the fact that the bank and its receiver have sued and obtained judgment upon notes taken by the cashier for such misappropriated money and excessive loans is no defense. (lb.) 32 (U. S. Dist. Ct, 1888). The sureties on a cashier's bond, reciting that B. had been elected cashier of a bank to hold his office during the pleas- ure of the board of directors, are liable for any default occurring while he continues to act as cashier. (Phillips v. Bossard et al., 35 Fed. Rep., 99.) 33 (U. S. Dist. Ct, 1888). A judgment against a defaulting cashier for embezzlement of $5,500 in gold, taken by him from the vaults of the bank, does not estop the bank from bringing an action on his official bond to recover amounts subsequently discovered to have been appro- priated by him by means of false entries and omissions to account for sums received by express. (lb.) 34 (U. S. Dist. Ct, 1888). When the defalcations of a cashier exceed the amount of his bond, the bank need not credit on the bond sums col- lected from other sources, but may- apply them in reduction of the unsecured balance. (lb.) 310 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS— Continued. extent of liability on bond — continued. 35 (U. S. C. C. A., 1904). Defendant, a surety company, executed a bond to plaintiff bank by which it undertook, for the term of one year, to in- demnify plaintiff against loss sustained by the dishonesty of em- ployees. Action was brought thereon to recover for loss alleged to have occurred during the term through the action of a bookkeeper in falsifying the account of a depositor so as to increase his apparent credit balance, by which he was enabled to and did overdraw his account to a large amount. Such false entries and overdrafts con- tinued through four years, but defendant's bond covered only about three months of the last part of the bookkeeper's employment, there having been bonds with different sureties covering a portion at least of the previous time. The depositor's account was the ordinary run- ning account, subject to check, and continuous during all the time, and no application of deposits to any particular item of debit was made by either party, nor by implication, there having at no time been an overdraft as shown by the books. The false entries and overdrafts continued for a part of the time after defendant's bond went into effect, but subsequent deposits made prior to the time the book- keeper's employment terminated exceeded the checks paid during the same time in. an amount greater than such overdrafts. Held, that the ordinary rule in such cases between debtor and creditor, that pay- ments should be appropriated to the oldest item of indebtedness, could not be applied as against a surety whose obligation covered a distinct portion of the time during which the account was running, but that as between plaintiff and defendant all deposits made during the currency of the bond would be applied by the court to the debit items made during the same time, and, it appearing that they exceeded the sums drawn out, there was no loss to the bank during the term for which defendant was liable. (First National Bank of Nashville v. National Surety Co., 130 Fed. Rep., 401.) 36 (U. S. C. C. A., 1904). When there are different bonds given by a bank offi- cial, covering different periods of time, with different sureties, an un- appropriated payment made by the common principal is not to be always applied by the court to the oldest obligation. Regard must be had to the responsibility of the different sureties, as limited by the period for which they respectively contract, as well as to the injustice that would ensue if collections received under one obliga- tion are applied to the discharge of a liability under a preceding or succeeding term, with distinct sureties. (lb.) 37 (Ind.). Where by a by-law of a bank its cashier is made responsible for the funds and valuables of the bank, it can not be implied that his bond would not become operative until all the other officers and employees were denied access to such funds and valuables nor that he is responsible for losses which may occur through the delinquencies of others. (La Rose et al. v. Logansport National Bank et al., 102 Ind., 332.) 38 (Ind.). The bond of a bank cashier, executed and approved two weeks after he enters upon his duties, is upon sufficient .consideration, and is operative at least from the date of its approval. (lb.) 39 (Nebr. Sup., 1901). A condition in the bond of an assistant cashier of a. bank that he will " honestly, faithfully, and efficiently discharge the duties of such position " is a guaranty not only of the personal hon- esty of such officer, but also a guaranty of his competency, skill, and diligence in the discharge of his duties. (Fiala et al. v. Ainsworth, 88 N. W. Rep., 135 ; 63 Nebr., 1. ) 40 (Nebr. Sup., 1901). Within the scope of the cashier's authority, and so long as he is apparently acting on behalf of the corporation, the cashier's directions may control the assistant cashier and the teller, and the latter may not be required to look beneath the surface of his superior's acts. But when he is led to believe that the cashier is violating his own duty to the bank, and is taking the bank's funds DIGEST OF NATION/1, BANK DECISIONS. 3ll OFFICERS— Continued. extent of LIABILITY on bond — continued. for his own ends, irregularly, and without authority from the direct- ors, the assistant cashier has no more right to aid in or connive at such appropriation than if it were being perpetrated by a stranger, (lb.) 41 (Nebr. Sup., 1903). Where an officer of a bank gives a bond conditioned that he will " honestly and faithfully and efficiently " perform his duties, he and his sureties are liable for loss resulting from his neg- ligence, even though the directors may not have used due diligence. (Fiala et al. v. Ainsworth, 5 B. C, 554; 94 N. W. Rep., 153.) 42 (N. Y.). The sureties of a national-bank cashier are liable for his mis- appropriation of stock held in his name but as collateral for a loan made by the bank. (Walden Nat. Bank v. Birch, 130 N. ¥., 221.) 43 (N. Y.). The official bond of the cashier of a bank, given when first tak- ing his office, is a continuing obligation, where its conditions are unlimited as to its duration, and his original appointment was for a definite period, and the by-laws of the bank provide that his appoint- ment shall be during the pleasure of the board of directors, and the statute under which his appointment is made authorizes his continu- ance in office until he is dismissed at the pleasure of the board (Rev. Stat, sec. 5136, subd. 5), though he is reelected annually as an inci- dent to fixing his salary for the ensuing year. (Stevens v. Orton, 43 N. T. S., 792 ; 18 Misc. Rep., 538 ; Same v. Smith, id. ; Same v. White, id.) 44 (Tex. Civ. Appls., 1895). The cashier of a bank, whose bond, with sure- ties, was conditioned that he would " faithfully and honestly dis- charge his duties as cashier, and account for all such moneys, funds, and valuables " as came into his hands, cashed a draft, payable to his order, amply secured by bills of lading of cotton, and duly forwarded** the same, with the bills of lading, to a bank in another city for col- lection. The draft and bills of lading were lost in the mail. The cashier's bookkeeper, whose duty it was to check the statements and accounts with other banks, reported the draft as credited on their account with the bank to which they had been forwarded, and his accounts balanced according to his report. The agent of the railroad company, without production of the bills of lading and without the consent of the cashier, delivered the cotton to the consignee. Held, that the cashier was not liable on his bond. (First National Bank of Kaufman v. Still (Tex. Civ. App.), 32 S. W., 61.) 45 (Vt.). Under the provision of the national banking act empowering directors to appoint a cashier, and to dismiss him at pleasure and to prescribe by-laws, a by-law was adopted which provided that the cashier should hold office during the pleasure of the board, and a cashier was appointed for the year ensuing, who gave a bond pro- viding for the faithful performance of his duties as cashier forever, so long as he should occupy the position. Held, that the sureties on the bond were not liable for defaults occurring after the first year. (First Nat. Bank of Brandon v. Briggs's Assignees, 37 A., 231; 69 Vt, 12.) EVIDENCE IN SUIT ON BOND. 46 (TJ. S. C. C. A., 1896). The bank having suspended business on Novem- ber 12, 1891, but the cashier having continued in the service of the receiver until March following, when he resigned, held, that the serv- ices so rendered by him after November 12 were rendered to the bank none the less because its affairs were controlled by a receiver, and the surety comp.any was not absolved from liability for* acts discovered more than six months from November 12> but within six months from his resignation. Held, further, that a proof of loss under the bond, which set forth with reasonable plainness, and in a manner by which a person of ordinary intelligence could not be misled, that certain sums of money had been taken from the bank by means of acts of 312 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS— Continued. evidence in suit on bond — continued. the cashier, described in such proof, was sufficient, though it failed to aver explicitly that a loss had been caused to the bank. (American Surety Co. v. Pauly, 72 Fed. Rep., 470.) 47 (U. S. C. C. A., 1896). The " teller's book " of the bank, which had been kept by one G., who died before the trial, was offered in evidence to show that on certain days no money was received for certificates of deposit. Held, that in connection with evidence of the course of business, by which, if received, such money would be entered in the book, the evidence was competent, though not conclusive. (lb.) 48 (U. S. C. C. A., 1896). For the purpose of showing the dealings with the bank of the president, who was charged with having misappropriated the bank's money with the cashier's aid, the president's ledger ac- count was put in evidence, together with the testimony of the book- keeper who made the entries^ and who swore that they were correctly made from the original deposit slips and checks furnished to him by the teller, who had died before the trial ; that it had been the teller's duty to verify all deposit slips and to pay the checks, and that all such slips and checks, when reaching the bookkeeper's hands, bore marks indicating that they had been verified or paid by the teller. Held, that the account was competent and sufficiently proven. Held, further, that evidence of acts of. fraud and dishonesty by the cashier, occurring before the date of the bond, and for which no claim was made against the surety company, but which were similar to the acts on which the- claim was based, was admissible to show that the acts on which the claim was based were intentional, and not merely negligent or due to oversight. (lb.) 49 (U. S. C. C. A., 1898). In a suit upon a bank cashier's bond, one of the sureties thereon was not allowed to testify to statements of bank officers in reference to the cashier's dealings with the bank, but the cashier himself was afterwards permitted to testify to practically the same effect as the testimony offered. Held, that the rejection was not harmless error, as the evidence could not be considered merely cumu- lative, in view of attacks made upon the cashier's credibility, and of his interest in misrepresenting his transactions, if illegal. (Mohren- stecher et al. v. Westervelt, 87 Fed. Rep., 157.) INSTBUCTIONS TO JUBY IN SUIT ON BOND. 50 (U. S. Sup. Ct, 1902). In an action brought by the receiver of a national bank appointed by the Comptroller pf the Currency upon a bond of indemnity given to hold the bank harmless against fraud of a speci- fied officer, it was contended that the court erred in admitting in evi- dence a notice of the default of the officer, given to the surety com- pany by the receiver within from ten to seventeen days after the dis- covery of the default, and in instructing the jury that the require- ment in the bond that immediate notice- should be given of a default was fulfilled by giving notice as soon as reasonably practicable and with promptness, or within a reasonable time. Held, that the trial court did not err in refusing to instruct, as a matter of law ; that the notice was not given as soon as reasonably practicable under the cir- cumstances of the case, or without unnecessary delay ; and in leav- ing the jury to determine the question whether the receiver had acted with reasonable promptness in giving the notice. (Fidelity and De- posit Company v. Courtney, 186 U. S., 342.) 51 (II. S. Sup. Ct, 1902). The court points out an error in excluding evi- dence, but further holds that as the very question which the jury would have been called upon to determine if the evidence hfid been received was fully submitted to them and was necessarily negatived by their verdict, too foundation exists for holding that prejudicial error resulted from excluding the evidence. (lb.) 52 (U. S. Sup. Ct., 1902). If the court below in anywise erred it was in giving instructions which were more favorable to the defendant than was justified by the principles of law applicable to the case. (lb.) DIGEST OF NATIONAL BANK DECISIONS. 313 OFFICERS— Continued. instructions to juby in suit on bond — continued. 53 (U. S. Sup. Ct, 1902). To instruct the jury in broad terms that if they found that the directors were careless in the management of the bank generally they should find for the defendant, could only have served to mislead. (lb.) 54 (U. S. C. C. A., 1898). Error in denying a motion to compel the plaintiff to elect between causes of action is cured by instructions eliminating all but one cause. (Mohrenstecher et al. v. Westervelt, 87 Fed. Rep., 157.) 55 (U. S. C. 0. A., 1898). It is error to give instructions authorizing the jury, in determining whether a transaction by which the cashier of a national bank obtained possession of some of its funds was a mis- application thereof, to consider the fact that his indebtedness to the bank exceeded 10 per cent of its capital. (lb.) 56 (U. S. C. C. A., 1898). Instructions that no devices for concealment, how- ever elaborate, which a bank cashier may adopt to conceal a trans- action amounting to a misappropriation of its funds can protect him are erroneous when there is no evidence of any concealment what- ever in respect to the transaction in question. ( lb. ) JURISDICTION IN ACTION ON BOND. 57 (U. S.- C. C. A., 1893). A suit on the official bond of the cashier of a na- tional bank conditioned for the faithful performances of the duties thereof " according to law and by-laws " of the bank involves a Fed- eral question, and is maintainable in a Federal court, irrespective of the citizenship of the parties. (Walker et al. v. Windsor National Bank, 56 Fed. Rep., 76.) ACTION OP APPELLATE COURT WHERE MOTION ERRONEOUSLY DENIED BY TRIAL COURT. 58 (U. S. C. C. A., 1893). Where a motion for leave to file a plea in abate- ment for nonjoinder of parties was erroneously denied, and at the time of such ruling there appeared of record all the facts essential to such a plea, an appellate court will order the same judgment as if the plea had been filed and sustained. (lb.) Directors. Term of office, resignation. 1 (U. S. Sup. Ct, 1891). A director of a national bank is not precluded from resignation within the year by the provision in Revised Statutes, section 1545, that when elected he shall hold office for one year and until his successor is elected. (Briggs v. Spaulding, 141 U. S., 132.) Are officers within meaning of section 5209. 2 (U. S. C. C, 1889). Directors of a national bank are "officers" within the meaning of Revised Statutes, section 5209, which makes it a mis- demeanor for bank officers to make false entries in any book, report, or statement of the bank, with intent to deceive any of its officers. (United States v. Means et al., 42 Fed. Rep., 599.)- Oath of director. 3 (U.S. Sup. Ct, 1882). Prior to the act of February 26, 1881, a notary public holding his commission under a State had no authority to administer the oath required by section 5211, Revised Statutes; and therefore a cashier who made oath before such notary to a false statement of the condition of his association was not guilty of per- jury. (United States v. Curtis, 107 U. S., 671.) 4 (R. I. Sup., 1869). By the provisions of section 44 of the national bank- ing act, upon conversion of a State bank to a national bank, all the directors of the former become those of the latter until an election or an appointment by the national bank. Semble, that no oath is required from these ad interim directors, the oath prescribed by 314 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS— Continued. Dibectobs — continued. section 9 of the aforesaid act being designated for those regularly elected by the national bank ; but assuming its necessity, a majority of those who were the directors of the State bank before its con- version is necessary to make a quorum of the board of the national bank. (Lockwood v. The Mechanics' National Bank, 9 R. I., 308; 1 N. B. C, 895.) 5 (R. I. Sup., 1869). In all cases where an act is to be done by a corporate body, or a part of a corporate body, and the number is definite, a majority of the whole number is necessary to constitute a legal meeting, although at a legal meeting where a quorum is present a majority of those present may act. (lb.) 6 (R. I. Sup., 1869). Hence a by-law adopted at a meeting of six ad interim directors of a national bank which had twelve directors before its con- version is invalid, because not adopted by a majority or quorum of the board. ( lb. ) Oath of, as to ownership of stock. 7 (U. S. C. C, 1883). A notary of the city of Alexandria is authorized to administer the oath required by law to be taken by a director of the First National Bank of that city as to his ownership of the capital stock of such bank. (United States v. Neale, 14 Fed. Rep., 767.) 8 (U. S. C. C, 1883). When the oath is taken and subscribed by the accused it is complete, so far as the accused can make it, and if the notary, in certifying the fact of the oath having been taken, erroneously used the term " county " instead of " city," and used the seal of said bank instead of his own official seal, such error did not affect the oath taken. (lb.) 9 (U. S. C. C, 1883). If accused took an oath in which he stated that he was the bona fide owner in his own right of the number of shares of stock then standing in his name on the books of the bank, and that the said shares were not hypothecated or in any way pledged as security for any loan or debt, and if he took it willfully, and not believing that he was stating the truth, it is perjury, if in point of fact he was not the owner of said stock or had pledged the same for a loan or debt. ( lb. ) Directors' duties continue until receiver appointed. 10 (U. S. C. C. A., 1894). It is a mistake to suppose that the directors of national banks cease to be such, and that their duty to the bank lapses when an examiner is put in charge of its fund, properties, and books by the Comptroller. (Robinson v. Hall et al., 63 Fed. Rep., 222.) 11 (U. S. C. C. A., 1894). They were still as much the advisers of the bank examiner as they had been of the cashier, notwithstanding they were not invested by law with the control over him which they were empowered to exercise over the cashier. (lb.) 12 (U. S. C. C. A., 1894). Their duty as directors does not cease until after the appointment of a receiver. (lb.) Director's pledge of his stock. 13 (U. S. C. C, 1883). An irrevocable power of attorney given by the accused, wherein he constituted and appointed a third party his attorney for the purposes therein set forth, being a general power covering any indebtedness of accused to said third party, is a pledge of the shares of stock owned by accused mentioned therein as long as there was any debt due by the accused to such third party. (United States v. Neale, 14 Fed. Rep., 767.) Disqualification of judge who is director. 14 (Tex. Civ. App., 1904). A judge who is a director of a national bank can not try a case to which it is a party, since, by Revised Statutes, section 5146, he must necessarily be interested as a stockholder. (Williams v. City National Bank, 27 S. W., 147.) DIGEST OF NATIONAL BANK DECISIONS. 315 OFFICERS— Continued. Cashier. Term of office. 1 (U. S. C. C. A., 1896). The office of cashier of a national bank is not an annual office, but the term of the incumbent continues until he resigns or until he is removed or a successor is appointed by the board of directors of the bank. (Westervelt v. Mohrenstecher et al., 76 Fed. Rep., .118.) 2 (U. S. C. C. A., 1896). Since the national bank act expressly provides that the cashier of a national bank shall hold his office subject to the pleasure of the board of directors, a by-law providing that a cashier shall hold his office for one year, and shall be elected annually, is nugatory, as is a reappointment in accordance with such by-law at the beginning of each year. (lb.) Bank may sue on note payable to cashier. 3 (Ala.). A bank may sue as payee on a note payable to its cashier, alleg- ing either that the promise was made to the cashier for it, or that the cashier's name was used by adoption for that of the bank. . (Darby v. Berney National Bank, 11 So., 881 ; 97 Ala., 643.) Cashier's violation of directions. 4 (Ky. Appls., 1900). A bank cashier, by discounting a note which the board of directors had ordered him not to discount, violated his bonds. (Cassell v. Mercer Nat. Bank of Harrodsburg, 3 Banking Cases, 64; 59 S. W., 504. )^ 5 (Ky. Appls., 1900). The bank, by making efforts to collect the note, did not estop itself from suing on the cashier's bond for the loss sus- tained, (lb.) When only bank may question his authority. 6 (Minn.). The power of a bank cashier to transfer notes and securities ' held by the bank can be questioned only by the bank or its repre- sentative. (Haugan v. Sunwal, Minn., 62 N. W., 398.) Powers of and Representation of Bank dy Officers. Powers of Directors. Directors may empower officer to indorse its paper. 1 (U. S. Sup. Ct, 1899). In June, 1892, the United States National Bank of New York, by letter, solicited the business of the First National Bank of Little Rock, Ark. The latter, through its president, ac- cepted the proposition and opened business by inclosing for discount notes to a large amount. This business continued for some months, the discounted notes being taken up as maturing, until the Arkansas bank suspended payment and went into the hands of a receiver. At that time the New York bank held notes to a large amount, which it had acquired by discounting them from the Arkansas bank. These notes have been duly protested for nonpayment, and payment of the fees of protest, made by the New York bank, had been charged to the Arkansas bank in account. The receiver refused to pay or allow them. At the time of the failure of the Arkansas bank there was a slight balance due it -from the New York bank, which the latter cred- ited to it on account of the sum which was claimed to be due on the notes after the refusal of the receiver to allow them. The New York bank commenced this ^piit against the receiver to recover the balance which it claimed was due to it. The receiver denied all liability, and asked judgment in his favor for the small balance in the hands of the New York bank. It was also set- up that the notes discounted by the New York bank were not for the benefit of the Arkansas bank, but for the benefit of its president, and that the New York bank was charged with notice of this. The judgment of the trial court, which was affirmed by the circuit court of appeals, was for the full amount of the notes, less the set-off. In this court motion was made to dis- miss the writ of error on the ground that jurisdiction below depended on diversity of citizenship, and hence was final. Held, (1) that the 316 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS— Continued. m Powers of Directobs — Continued. receiver, being an officer of the United States, the action against him was one arising under the laws of the United States, and this court vhad jurisdiction; (2) that it was competent for the directors of the Arkansas bank to empower the president, or cashier, or both, to indorse the paper of the bank, and that, under the circumstances, the New York bank was, justified in assuming that the 'dealings with it were authorized and were executed as authorized; (3) that the set- off having been allowed by the New York bank in account, the receiver was entitled to no other relief. (Auten v. United States National Bank of New York, 174 U. S. Rep., 125.) Ratification by directors. 2 (U. S. C. C. A., 1899). A contract by which a national bank assumed the liabilities of another bank was ratified by the directors of the national bank at a meeting where the presence of a certain mem- ber of its board of' directors, who was a stockholder in the other bank, was necessary to constitute a quorum. There was no charge that such ratification constituted a fraud or imposition upon the national bank. Held, that the ratification was not void because voted for by such director. (Schofield v. State Nat Bank of Den- ver, Colo., 2 Banking Cases, 182; 97 Fed. Rep., 282.) Notice of meetings of directors. 3. If the directors of a bank have long pursued an established custom of holding meetings and transacting business at the bank during busi- ness hours whenever a sufficient number were present, the custom would carry with it a standing notice to each director and enable those present to proceed, in the absence of a controlling by-law oj statute. Unless it is otherwise provided, notice need not be given of fixed and stated meetings of directors. (U.S., 1897) American Exchange National Bank of New York v. First National Bank of Spokane Falls et al., 82 Fed. Rep., 961 ; (Iowa) West Imp. Co. v. Des Moines National Bank, 103 Iowa, 455. 4 (Conn.). Unless the articles of association or by-laws or a statute pro- vide otherwise, the notice of a meeting of directors- need not state the object of the meeting unless business out of the usual nature is transacted. (Savings Bank v. Davis, 8 Conn., 191.) Quorum of directors. 5 (Kans. Sup., 1886). The law proceeds upon the theory that the directors shall meet and counsel with each other, and that any determination affecting the association shall be arrived at and expressed only after a consultation at a meeting of the board attended by at least a major- ity of its members. (National Bank v. Drake, 35 Kans., 564; 3 N. B. C, 445.) 6 (Mass.). If it be customary to allow less than a quorum of directors to act, the doings of such less number will bind the corporation in regard to acts authorized by the customary mode of proceeding. (National Security Bank v. Cushman, 121 Mass., 490.) Individual directors do not represent corporation. 7 (Kans. Sup., 1886). The election of an individual as a director does not constitute him an agent of the corporation with authority to act separately and independently of his fellow-members. It is the board duly convened and acting ng» a unit that is made the repre- sentative of the association. The assent or determination of the members of the board, acting separately and individually, is not the assent of the' corporation. The law proceeds upon the theory that the directors shall meet and counsel with each other, and that any determination affecting the association shall be arrived at and expressed only after a consultation at a meeting of the board, at- tended by at least a majority of its members. (First National Bank of Fort Scott v. Drake, 35 Kans., 564; 57 Am. Rep., 193; 3 N. B. C, 445.) DIGEST OF NATIONAL BANK DECISIONS. 31 7 OFFICERS— Continued. Powers of Directors — Continued. 8 (Kans. Sup., 1886). To bind a national bank the directors must act together as a board ; their separate individual assent is ineffectual, (lb.) 9 (Mass., 1840). The board of directors of a bank is a body recognized by law, and to all purposes of dealing with others constitutes , the cor- poration. (Burrill v. President, Directors, etc., of the Nahant Bank, 2 Metcalf, 163.) Hale of land by committee of directors. 10 (Mass., 1840). A board of bank directors may delegate authority to a committee of its members to alienate or mortgage real estate ; and such authority to convey real estate necessarily implies authority ' to execute proper instruments for that purpose and to affix the cor- porate seal thereto. (Burrill v. President, Directors, etc., of the Nahant Bank, 2 Metcalf, 163.) 11 (Mass., 1840). Where a board of bank directors authorized a committee of its members " to sell and transfer any estate owned by the bank," and the committee gave mortgage on the real estate of the bank to a creditor who had recovered judgment against the bank on its bills, and took from him at the same time a bond conditioned that he would not put those bills in circulation, and the board of directors accepted said bond and acted on it, and the cashier paid the costs of the suit in which said judgment was recovered, according to the agreement made between said creditor and said committee, it was held that, whether the committee had or had not authority to mort- gage the estate, the mortgage had been ratified by the board of directors. (lb.) Directors must authorize gratuitous bailment. 12 (N. Y. ). The executive officers of an association can not bind it as a gratuitous bailee unless they have a special authority from the board of directors so to do or there exists a general custom or usage to that effect. (First National Bank of Lyons v. Ocean National Bank, 60 N. Y., 278.) Directors' action proved by parol. 13 (Wis., 19Q1). The act of the directors of a bank in releasing a mortgage by resolution may be proved by parol, witness testifying that he did not think this action appeared on their records, and there being no evidence that it did so appear. (In re Bank of West Superior, Goodvin v. Nichols, 3 Banking Cases, 322; 109 Wis., 672.) Powers of Cashier, in general. 7s agent of corporation, and his acts bind it. 1 (111. App.). A bank cashier is the agent of the bank in financial transac- tions with customers, and his acts will bind it, unless contrary to the provisions of the charter, or of general law, or against public policy. (Squires v. First National Bank, 59 111. App., 134.) 2 (Ind. ). The vice-president of a bank, to procure a loan from another bank, represented that the loan was for his bank, and gave a note signed by himself and another director and indorsed by the bank by its president. Thereafter the note was renewed by another, exe- cuted by the same parties, except that the indorsement by the bank was signed by the .cashier. The lending bank knew who were direct- ors of the borrowing bank and that the cashier who made the indorsement transacted all of its business. Held, that although the indorsement was not authorized by the board of directors and the proceeds of the loan were not, in fact, received by the bank, but were misapplied by the officers who procured it, the bank was liable. (First Nat. Bank of Huntington v. Arnold, 156 Ind., 487.) 318 DIGEST OP NATIONAL BANK DECISIONS. OFFICERS— Continued. Powers of Cashiee — Continued. in general — continued. 3 (Pa.). The cashier of an incorporated bank is the general executive offi- cer to manage its concerns in all things not peculiarly committed to the directors ; he is agent of the corporation, not of the directors. (Bissell v. The First National Bank of Franklin, 69 Pa. St., 415.) Usage of bank as affecting cashier's authority. 4 (U. S. C. C, 1897). Under an allegation that the guaranty sued on was executed by the defendant bank in the name of its cashier, and that such cashier was authorized by a general usage to bind the bank to similar contracts, the plaintiff may prove any competent authority to the cashier, and is not restricted to proof of usage. (Seeber v. Commercial National Bank of Ogden, 77 Fed. Rep., 957.) 5 (U. S. C. C. A., 1897). The cashier of the Q. bank, who, In addition to his usual powers as such, was allowed by the officers to have full con- trol of its business, applied to a bank in another city for accommoda- tion, sending to the latter bank what purported to.be the signatures of the officers of the Q. bank and a resolution of its directors author- izing him to borrow money and rediscount paper. Thereafter loans were made to the Q. bank on its notes, signed by the cashier in its name. It was customary" for banks in the region where the Q. bank was located to borrow at certain seasons, and everything connected with the transaction was apparently done in the usual and regular course of business. Held, that the Q. bank was liable on the notes signed by the cashier, though it afterwards appeared that the signa- tures of the officers and the resolutions sent by him to the lending bank were forgeries, and the proceeds of the loans were used by him for his own benefit. (City National Bank of Quanah, Tex., v. Chemical National Bank of St. Louis, Mo., 80 Fed. Rep., 859.) WHAT CASHIER MAY DO. May receive offers for bank's securities. 1 (U. S. Sup. Ct, 1885). It is within scope of general authority of cashier to receive offers for purchase of securities held by the bank, and to state whether or not bank owns securities in its possession. (Xenia Bank v. Stewart et al., 114 U. S., 224.) May certify checks lohen drawer has funds. 2 (U. S. Sup. Ct., 1870). Where the money is in the bank the cashier has virtuti officii authority to certify a check to be good and charge the amount to the drawer. (Merchants' National Bank v. State National Bank, 10 Wall, 604; 1 N. B. C, 47.) 3 (N. Y. Sup. Ct.). The cashier of a bank, as one of its financial officers, in its daily and ordinary business transactions, has authority to certify checks drawn on the bank by its customers in all cases where any officer could do the same and bind the bank. (Clarke National Bank v. The Bank of Albion, impleaded, etc., 52 Barb., 592.) 4 (N. Y. Sup. Ct. ) . This authority is regarded as general, growing out of a cashier's position in the bank, and persons dealing with the bank are not in any way affected or bound by the special restrictions and limitations imposed upon him by the corporation whose agent he is. (lb.) 5 (N. Y. Sup. Ct.). A cashier has no power, however, to make the certifi- cation unless he has the funds of the drawer in hand to meet the check. This limitation on his general authority is, in the law, pre- sumed to be known by all the bank's customers and others, who act upon the statements and representations of its agent. (lb.) 6 (N. Y. Sup. Ct.). Neither has the cashier power, as the agent of the bank, to certify a check until on or after the day the same is made payable, (lb.) DIGEST OF NATIONAL BANK DECISIONS. 319 OFFICERS— Continued. Powers of Cashiee — Continued. what cashier may do — continued. May reassign collateral on payment. 7 (U. S. C. C). It is within the general authority of the cashier of a bank to sign, in its behalf, a blank transfer upon a certificate of stock in the name of the bank held by it as collateral security for a loan, and deliver the certificate to the pledgor on payment of the loan. (Matthews^*. The Massachusetts National Bank, 1 Holmes, 396.) Ratification of cashier's acts. 8 (Ky. Appls., 1899). When the act of a bank cashier in crediting a cus- tomer by the proceeds of a draft presented to the bank was properly authorized and ratified, authority was thereby created in the cashier, by implication, to bind the bank by subsequent similar acts. (Ger- man Nat. Bank v. Grinstead et al., 2 Banking Cases, 50 ; 52 S. W., 951.) WHAT CASHIER MAY NOT DO. When can not bind bank to pay draft on customer. 1 (U. S. C. C, 1893). Under section 5136 of the national-bank act the cash- ier of a national bank has no power to bind it to pay the draft of a third person on one of its customers, to be drawn at a future day, when it expects to have a deposit from him sufficient to cover it, and no action lies against the bank for its refusal to pay such a draft. (Flanagan et al. v. California National Bank et al., 56 Fed. Refl., 959.) May not certify his own check. 2 (U. S. C. C. A.. 1900). The cashier of a bank has no authority by virtue of his office, to bind the bank by a certification of his own individual check drawn thereon ; and as in this case he had neither real nor apparent authority, the certification was invalid. (Gale v. Chase Nat. Bank, 104 Fed. Rep., 214.) 3 (U. S. C. C. A., 1900). A creditor who receives payment of his debt in money in due course of business, and in good faith, can not be re- quired to repay tHe money to one from whom the debtor illegally obtained it. (lb.) May not bind bank on promise to pay his oivn note. 4 (U. S. C. C. A., 1895). A cashier of a bank has no implied authority to bind the bank by a pledge of its credit to secure a discount of his own notes for the benefit of a corporation in which he was a stock- holder. (State National Bank of St. Joseph v. Newton National Bank, 66 Fed. Rep., 691.) May not issue cashier's draft for his own debt. 5 (U. S. C. C. A., 1900). The cashier of a bank, as such, has no authority to issue cashier's drafts to his own order in payment of his individual debts, and a creditor accepting a draft so drawn takes the risk of such lack of authority. (Gale v. Chase Nat. Bank, 104 Fed. Rep., 214.) 6 (U. S. C. C. A., 1900). To warrant the finding that the cashier of a bank had implied authority to issue cashier's drafts to his own order in payment of his individual debts, such as will bind the bank and por- tect a creditor in accepting a draft so drawn for a sum so large as to be out of the usual line of conduct in the banking business, a settled course of business must be shown, by which he was permitted, with the acquiescence of the directors, to exercise such authority during a series of years or in numerous transactions ; and evidence that he had drawn not exceeding nine drafts in all in payment of his own debts, only four of which were to his own order, and all of which were issued within the preceding six months, is insufficient, (lb.) 320 DIGEST OP NATIONAL BANK DECISIONS. .OFFICERS— Continued. Powebs op Cashier — Continued. what cashieb mat not do — continued. May not release tank's debtor without payment. 7 (Mo. App.). Where a statute creating a banking corporation provides that its affairs shall be managed by a board of directors, who shall appoint and remove a cashier and other employees, the power to discharge a surety on a note without payment can not be exercised by the cashier unless expressly delegated to,him by the board of directors. (People's Savings Bank v. Hughes, 1 Mo. App. Rep'r, 549.) 8 (N. H.). Ordinarily the cashier of a bank has no authority to discharge its debtors without payment or to bind the bank by an agreement that a surety should not be called upon to pay a note he had signed, or that he would have no further trouble from it. (Cocheco Na- tional Bank v. Haskell et al., 51 N. H., 116.) May not take property fdr safe-keeping without authority. 9 (N. Y. Appls., 1875). The cashier or other executive officer of a national bank has not, in the absence of special authority from the directors, or of a usage or practice so to do, power to receive, on behalf of the bank, property for safe-keeping. (First National Bank of Lyons v. Ocean National Bank, appellant, 60 N. Y., 278; 1 N. B. C, 728.) EFFECT OF ACTS OUTSIDE CASHIEE'S AUTHORITY. Cashier of bank not presumed to have the power to bind it as an accommodation indorser on his individual note. 1 (U. S. Sup. Ct, 1877). The cashier of a bank is not, by reason of his offi- cial position, presumed to have the power to bind it as an accommo- dation indorser on his individual note, and the payee who fails to prove that the cashier as such had authority to make the indorse- ment can not recover against the bank. (Western St. Louis Savings Bank v. Shawnee County Bank, 95 U. S., 557.) Cashier paying individual debt to correspondent bank with bank's funds — By sending bank's currency — By sending of, draft on another bank made by himself to himself. 2 (U. S. Sup. Ct, 1903). One who has in good faith and in payment of an existing debt received currency can not be compelled to repay the same, even though it subsequently develops that it had been em- bezzled, and the burden of showing fraud is pn- the person claiming the repayment. (Rankin v. Chase National Bank, 188 U. S., 557.) 3 (U. S. Sup. Ct, 1903). A collecting bank may not retain the proceeds of a draft in payment of the individual debt of a cashier where such draft was not drawn to his individual order, but by him as cashier to his order as cashier, and indorsed for deposit to his credit as cashier. (lb.) Banks — Drafts issued by cashier to individual creditor — Implied authority. 4 (U. S. C. C. A., 1904). A bank can not recover the amount collected on a cashier's draft issued by its cashier and made payable to its indi- vidual creditor, where it is shown that the cashier had on numerous previous occasions drawn similar drafts in payment of his own debts, and such acts had continued for a period sufficiently long to establish a settled course of business in the conduct of the bank which had been sanctioned by its officers, and was known, or should have been known, to its directors. (Campbell v. National Broadway Bank, 130 Fed. Rep., 699.) Officer acting outside his official duties not presumed to be authorized. 5 (U. S. C. C. A., 1896). One who deals with the cashier of a national bank, professing to act on its behalf, in a transaction known to be outside the legitimate sphere of its operations, has no right to presume that DIGEST OF NATIONAL BANK DECISIONS. 321 OFFICERS— Continued. Powers of Cashier — Continued. EFFECT OF ACTS OUTSIDE CASHIER'S AUTHORITY — Continued. the acts of the cashier have been sanctioned by the board of directors or other governing body, as no act done by an officer of an incorpo- rated company in furtherance of a business venture which is in excess of the corporate powers can be said to be an act which is within the scope of the customary powers of such officer. (Farmers and Mer- chants' National Bank v. Smith, 77 Fed. Rep., 129.) 6 (U.S. C. C. A., 1896). Plaintiff bought a bond and mortgage from the defendant national bank through its agent, knowing, or having reason to believe, that the bank was acting only as a broker. After the pur- chase he accepted a guaranty against loss through defects in the title to the mortgaged premises, executed by the cashier of the hank, as such, making no inquiry as to the cashier's authority, but relying on his acting within the apparent scope of his duties. The bank received none of the proceeds of the sale, and profited in no way by the transaction. Held, that the bank was not bound by the alleged guaranty, nor estopped to deny the cashier's authority to execute it (lb.) Those dealing with cashier outside his ordinary official authority do so at their peril. 7 (U. S. C. C, 1888). The cashier of a bank kept an account with the de- fendants, who were brokers, and bought and sold stocks for him, and from time to time the defendants received checks of his bank upon another bank, its correspondent, drawn by him in his official capacity, and collected them from the bank upon which they were drawn, and applied the avails to the cashier's individual account. In an action brought by a receiver of the bank of the cashier to recover of defend- ants the amount of the checks received by them. Held, the checks being made payable to the order of the defendants, for the cashier's individual use, the defendants took them under an obligation to ascer- tain at their peril that the cashier had authority outside of his_ ordi- nary official authority to make the checks, and could not assume that he was acting within the scope of his official duties. A purchaser of commercial paper made by an agent can not acquire any title to it as against the principal, unless he can show that it was made by the agent upon due authorization ; and when he knows that the agent has made it in the name of the principal for his own use, he must be pre- pared to show that special authority in that behalf was delegated by the principal, and can not rely upon the implied or ostensible au- thority of the agent to make such paper in the ordinary business of the principal. (Anderson v. Kissam et al., 35 Fed. Rep., 699.) 8 (U. S. Sup. Ct, 1892). The Third National Bank in New York was the correspondent of the Albion bank, a country bank. W., during part of the time in which the transactions in controversy took place, was cashier, and during the remainder was president of the Albion bank. During all the time W. practically managed that bank, and his co- directors and other officers had little or no oversight of its affairs. He was engaged in stock speculations on his own account in New York, and drew from time to time for his own purposes in favor of K. & Co., his brokers, on the bank balance with the Third National Bank. K. & Co. from time to time returned to that bank sums to be credited to the Albion bank. The latter bank eventually became insolvent, being ruined by fraudulent operations of W., who dis- appeared, and was put in the hands of a receiver, who brought suit against K. & Co. to recover the sums so paid to them by W. out of the balance to the credit of the bank with the Third National. K. & Co. claimed to offset the return payments made by them to the Third National, but the trial court ruled that they were not entitled to do it. Held, that the defendants were entitled to have it submitted to 4049—05 21 322 DIGEST Oh" NATIONAL BANK DECISIONS. ' OFFICERS— Continued. Powers op Cashier — Continued. EFFECT OF ACTS OUTSIDE CASHIER'S AUTHORITY Continued. the jury whether the other directors and officers of the Albion bank might not in the exercise of proper and reasonable care have ascer- tained that these moneys had been deposited to the credit of the Albion bank, and whether they would or would not have accepted such deposits as the return of the moneys to the bank. Anderson v. Kissam reversed but propriety of rulings (in No. 7 above) in so far as they went to charge the defendants with liability for moneys obtained from the Albion bank not inquired into. (Kissam v. Ander- son, 145 U. S., 435.) False statement outside official authority. (U. S. C. C. A., 1899). A bank can not be charged with responsibility as principal for the action of. its cashier, performed as a director of a manufacturing company, in assisting to promulgate false statements as to the company's financial condition for the purpose of defrauding all of its creditors, including the bank, so as to affect the validity of the bank's claims against the company. (Hadden v. Dooley, 92 Fed. Rep., 274.) 10 (Conn. Sup., 1900). In an action by a bank as the indorsee of promissory notes, the fraud of its cashier, the indorser, by which the maker was induced to give the notes, can not be imputed to plaintiff, it not appearing that the bank had any knowledge of the fraud, except that inferable from the fact that the fraud was that of its cashier. (First Nat. Bank of Willimantic v. Bevin, 2 Banking Cases, 340 ; 72 Conn., 666.) When bank is liable for cashier's deceit. 11 (U. S. C. C. A., 1902). The cashier of a bank is the proper officer to receive deposits and to give certificates or vouchers in respect thereto, which may properly include, with the consent of the depositor, a statement of the source from which the deposit arose ; and for a false statement in that respect, made to subserve the interests of the bank, the latter is liable in tort to one injured thereby, although the cashier was not expressly authorized to make such statement by the board of directors. (Hindman v. First Nat. Bank of Louisville et al.,- 112 Fed. Rep., 931.) 12 (U. S. C. C. A., 1902) To sustain an action for fraud and deceit, based on false representations by defendant by which plaintiff was inducea to purchase property, it must be shown (1) that the representation was false and (2) that the person making it knew it to be false; but if the fact was one within his means of knowledge, and he had no knowledge of it, a jury is authorized to find that the statement was knowingly false. (lb.) Cashier pays individual debt with bank's deposit. 13 (Tex. Civ. Appls., 1903). The cashier of plaintiff bank instructed de- fendant bank to apply plaintiff's deposit with defendant to the cashier's individual note. At the end of the month defendant sent plaintiff a statement showing said payment. Held, it was the duty of plaintiff's officers to examine defendant's statement and to notify defendant of any want of authority of the cashier within a reason- able time, and that failing to do so plaintiff could not recover. (Iron City National Bank of Llano v. Fifth National Bank of San Antonio, 5 B. C, 237; 71 S. W. Rep., 612.) Indorsement of bank's note to innocent holder. 14 (Ark. Sup., 1899). A national bank is bound by the act of its cashier in indorsing a negotiable note belonging to it. when such note is taken by one without notice of the cashier's want of authority to indorse for the bank. (Auten v. Manistee Nat. Bank, 2 Banking Cases, 215; 67 Ark., 243.) DIGEST OF NATIONAL BANK DECISIONS. • 323 OFFICERS— Continued. Powers or Cashier — Continued. EFFECT OF ACTS OUTSIDE CASHIER'S AUTHORITY — Continued. When cashier interested in transaction. 15 (R. I. Sup., 1901). Plaintiffs were the assignees of a corporation wliich had a considerable deposit with the defendant bank. At the time of the assignment the defendant held three of the corporation's notes, which defendant's cashier, who was treasurer of the corporation, had personally indorsed. On the assignment the plaintiffs informed defendant's cashier of the same, who agreed to transfer the deposit account of the corporation to plaintiffs, and to honor the checks of one of them. Held, in an action to recover the balance of the depos- its retained by the bank as a payment for the unpaid notes, that the defendant's cashier was not the proper bank officer with whom the plaintiffs should have dealt, because of his interest in the affairs of the corporation, and hencer the agreement to transfer the deposit, being repudiated by the directors, was void. (Ellis et al. v. First Nat. Bank of Woonsocket, 3 Banking Cases, 346; 22 R. I., 565.) 16 (Wyo. Sup., 1902). *A cashier of a bank, who was also a stockholder therein, had such an interest in a mortgage given to secure a note of which the bank was the beneficial owner as to render void the acknowledgment thereof taken by him. (First Nat. Bank of Sheri- dan, Wyo. v. Citizens' State Bank of Dubuque, Iowa, et al., 5 B. C, 128; 70 Pac. Rep., 726.) Powers of President. Requires special authority to execute notes. 1 (U. S. C. C, 1893). The president of a national bank has no power in- herent in his office to bind the bank on the execution of a note in its name ; but power to do so may be conferred on him by the board of directors, either expressly by resolution to that effect, or by subse- quent ratification, or by acquiescence in transactions of a similar nature, of which the directors have notice. (National Bank of Com- merce v. Atkinson, 55 Fed. Rep., 465.) Authority to borrow money. 2 (U. S. C. C. A., 1893). If a president of a bank exercised the functions of a cashier and was the sole managing officer of the bank, he had au- thority to borrow money for the use of the bank in the regular course of its business. (Simons et al. v. Fisher, 55 Fed. Rep., 905.) Effect of deed by president. 3 (U. S. C. C. A., 1899). The president of a national bank, who had exclu- sive charge of its affairs and owned a controlling interest, executed a deed to certain property of the bank under what purported to be a certified copy from the minutes of the board of directors to secure an advance to the bank, made in good faith, when the bank was legally in contemplation of insolvency. The deed was recorded on the day upon which the bank closed its doors. It did not appear from the minutes of the board of directors that the president had any authority to execute the deed. Held, that the deed was valid as an equitable mortgage, and sufficient to bind the bank's receiver. (Stapylton v. Stockton et al., 1 Banking Cases, 262; 91 Fed. Rep., 326.) When may indorse for rediscount without special authority. 4 (U. S. C. C. A.,1897). A rediscount by a bank of its bills receivable, though it indorses the same and becomes contingently liable for' their payment, is not a borrowing of money by the bank, but has more the characteristics of a sale. (United States National Bank v. First National Bank of Little Rock et al., 79 Fed. Rep., 296.) 5 (U. S. C. C. A., 1897). It is within the scope of the implied powers of the president of a bank to indorse negotiable paper in the ordinary 324 - DIGEST OF NATIONAL BANK DECISIONS. OFFICERS— Continued. Powers of President — Continued. transaction of the bank's business, and a special authority to that end need not be conferred by the board of directors. (lb.) 6 (U. S. C. C. A., 1897). When a bank has long been in the habit of redis- counting its bills receivable in large amounts, all other banks in the same locality pursuing the same practice, and the president and cashier of such bank propose to its regular correspondent a redis- count of its bills, and there are no circumstances attending such proposal to arouse suspicion, the bank to which it is made may safely act upon it, without further inquiry, on the assumption that the act has either been specially authorized or that the officers are acting within the purview of their general powers. (lb.) 7 (U. S. C. C. A., 1897). When the directors of a bank have known for many months that its paper was being rediscounted in large amounts, under the president's direction, and without consulting the board, and that the money so obtained was being used in the business of the bank, and they have made no inquiry as to how the paper was in-, dorsed, the bank is estopped to dispute the authority of the president to indorse such paper for rediscount (lb.) 8 (U. S. C. C. A., 1901). The president of a national bank, who has the actual management of its operations, is authorized to procure the discount of its paper. (Hanover National Bank of City of New York v. First National Bank of Burlingame, Kansi, 109 Fed. Rep., 421.) May assign judgment. 9 (Iowa, 1896). The president of a bank has authority by virtue of his office to make a valid assignment of a judgment in favor of the bank. (Guernsey v. Black Diamond Coal and Mining Co., 68 N. W., 777; 99 Iowa, 471.) May employ counsel without special authority. 10 (Kans., 1894). The president of a banking corporation has power to employ counsel and manage the litigation of the bank in the absence of any order of the board of directors depriving him of such power. (Citizens' National Bank of Kingman v. Berry, 37 P., 131; 53 Kans., 696.) When authority to execute guaranty presumed. 11 (Nebr. Sup., 1894). The authority of the president of a national bank to guarantee notes of third parties held and sold by the bank will be presumed in favor of a purchaser without notice to the contrary. (Thomas v. City National Bank of Hastings, 58 N. W., 943 ; 40 Nebr., 501.) Authority incident to office. 12 (N. Dak. Sup., 1900). Where the members of the board of directors of a bank have for months ceased to exercise the functions of their offices, and have abandoned the management and control of the corporation business entirely to the president of the bank, it will be presumed that such officer was authorized to do, in the name of the bank,' what- ever the bank might lawfully do, and no special authorization or ratification of his acts need be shown. (Tourteiot v. Whitehead, 3 Banking Cases, 15.) 13 ( W. Ya. ) . The inherent powers of a president of a bank by virtue of his office are very limited, and it is difficult to say what powers he inherently possesses, if any, other than the power to take charge of the litigation of the bank by employing counsel and otherwise. (The First National Bank of Wellsburg v. Kimberlands, 16 W. Va., 555.) What authority may be conferred by directors. 14 (W. Va.). A president of a bank may be authorized by its directors to do any act which they are authorized by their charter to do, unless DIGEST OP NATIONAL BANK DECISIONS. 825 OFFICERS— Continued. Powers of President — Continued. the act to be done can by the charter be done only by the directors themselves. (The First National Bank of Wellsburg v. Kimber- lands, 16 W. Va., 555.) Special authority may be implied from conduct. 15 (W. Va.). Such authority need not be proven by showing that it was expressly conferred by the board of directors, but may be proven by showing the existence of such facts as constitute clearly a public holding out that the particular act done or contract entered into was within the scope of his legitimate delegated authority. (First National Bank of Wellsburg v. Kimberlands, 16 W. Va., 555.) 16 (W. Va.). The inference that such authority has been impliedly con- ferred may be legitimately drawn by proving that he was in the habit of doing acts or making contracts of the same general char- acter as the particular act or contracts which he has done or made and that these acts or contracts which he was in the habit of doing, though applied to different subjects, involved the same general power, except when the acts and contracts which he was in the habit of doing or making were so very numerous and so variant in their character as clearly to justify the inference that he was authorized impliedly to do all acts and make all contracts which the directors had the power to do or to make and to confer on the president the right to do or to make. (lb.) WHAT PRESIDENT MAY NOT DO. May not check on bank's account loith another bank. 1 (U. S. Sup. Ct, 1896). The president of a national bank has not, by virtue of his office, power to draw checks against an account kept by his bank with another bank. The statutes expressly provide that the power of the president of a national bank may be defined by the board of directors. (Putnam v. United States, 16 S. Ct., 923; 162 U. S., 687.) Use of bank's funds to pay individual debt. 2 (U. S. C. C. A., 1894). C, in order to obtain a credit in his personal ac- count with a bank of which he was the president, procured the de- fendants, a banking firm, to discount his individual note, credit the amount to the bank, and notify the bank that he had deposited the amount with them to the credit of the bank. The bank had pre- viously given C. credit for the amount, and after being notified by the defendants that the deposit had been actually made with them, allowed C. to overdraw his account. Thereafter, and while his ac- count with the bank was overdrawn, C, in his official character as president, authorized the defendants to charge the note to the account of the bank, and the defendants did so. Held, in a suit by the re- ceiver of the bank to recover the deposit, that, unless expressly authorized to do so, the president of the bank could not use the funds of the bank to pay his personal obligation, and, there being no proof of such express authority, the authorization given by him to the de- fendants was not a defense to the claim. (Chrystie et al. v. Foster, 61 Fed. Rep., 551.) Use of bank funds to pay officer's debts. 3 (U. S. C. C. A., 1899). In the absence of special authority from the direct- ors of a bank, its president has no authority to draw drafts on iN funds, in payment of personal debts. (Lamson v. Beard, 94 Fed. Rep., 30; IB. C, 568.) May not surrender securities without consideration? 4 (Mich.). It is doubtful whether a general authority in the president of a bank to make discounts could empower him to make an arrange- ment under which the bank wouia surrender securities on receiving 326 DIGEST OP NATIONAL BANK DECISIONS, OFFICER S— Conti nued. Powers of President — Continued. what president may not do — continued. others, which, it was at the same time agreed, should be mere nulli- ties so far as the sureties were concerned. (The First National Bank of Sturgis v. Bennett et al., 33 Mich., 520. ) When may not execute guaranty. 5 (Mich.). A guaranty against loss or liability for signing as sureties, given by a bank president in his own name and without authority from the directors, to those whom he had solicited thus to sign a note given to the bank to retire a prior note held by it against their principal is held to be the individual contract of the president, and not binding upon the bank. (The First National Bank of Sturgis v. Bennett et al., 33 Mich., 520.) May not subscribe donations. 6 (Nebr. gup., 1894). The president of a national bank has no authority to subscribe money from the bank on condition that certain parties would erect a paper mill in the town. (Robertson v. Buffalo County National Bank, 58 N. W., 715 ; 40 Nebr., 235.) May not bind bank away from place of business. 7 (Nebr. Sup., 1902). As a general rule, acts done by an officer of a bank away from its place of business, and not authorized or ratified, are not binding upon it. (Jones v. First Nat. Bank of Lincoln, 4 Bank- ing Cases, 566.) President may not prefer himself to bank. 8 (Tex. Sup.). The president of a bank, a large creditor, or his minor nephew, who promised, when the bank advanced money to such minor, that it should be repaid before he would attempt to collect his debt, and thereby made himself liable to the bank for such ad- vance, can not in equity assert a preference lien for his own claim, given him in a deed of trust by the insolvent minor, as against the claim of the bank. 31 S. W., 216, affirmed. (Brown v. Farmers and Merchants' National Bank of Cleburne, 31 S. W., 285.) ratification of president's action. 1 (U. S. Sup. Ct, 1893). Ratification of the unauthorized act of a national bank officer in borrowing $200,000 for the bank can only be made, if at all, by the board of directors, acting with knowledge of the mate- rial facts, and ca'n not be inferred from the mere fact that by direc- tion of the same officer the money was placed to the credit of the bank, when it appears that it was drawn out by him and the assistant cashier and that no part of it came to the use or benefit of the bank. (Western National Bank v. Armstrong, 4 S. Ct., 572; 152 U. S., 346.) 2 (Nebr. Sup., 1894). The retention by a national bank of the proceeds of the sale and guaranty of notes owned by the bank is a ratification of the president's act in such selling, whether he was authorized to execute the guaranty or not. (Thomas v. City National Bank of Hastings, 58 N. W., 943; 40 Nebr., 501.) 3 (W. Va.). The directors of a bank may ratify any act done or contract made by the president without authority which they could have authorized him to do or to make. (The First National Bank of Wellsburg r. Kimberlands, 16 W. Va., 555.) 4 (W. Va.). The acceptance of the benefits of a contract made by the president for the bank is an implied ratification of such contract, and if money is receh*id by its cashier for the bank under such contract, even when such receipt was unknown to the directors, it will be a confirmation of the contract unless the money so received is returned when its receipt become%ki^)wn to the directors. (lb.) DIGEST OF NATIONAL, BANK DECISIONS. 327 OFFICERS— Continued. Powers of President — Continued. MISCELLANEOUS. Negligent purchase of note subject lo defenses. 1 (TJ. S. C. C. A., 1897). The purchase of a note by the president and man- aging officer of a bank for which he paid from its funds over $20,000, with knowledge that it was burdened with a guaranty made by the payee which might defeat its collection, is such negligence as renders him liable to account to the bank or its creditors for any loss which resulted. (Stearns v. Lawrence, 83 Fed. Rep., 738.) Liability of bank for fraud of president. 2 (Ark. Sup., 1900). In an action for damages against the receiver of a national bank for deceit and fraud practiced upon plaintiff, by which it was induced to pay out a large sum of money for the worth- less note of an insolvent company, it appeared tbnt the president of the -bank, as such, was endeavoring to collect a debt due it; for this purpose, the note was executed and delivered to him, and negotiated by him to plaintiff ; that his letter to plaintiff by which he effected the sale of the note by making fraudulent statements as to the maker's condition, was written upon paper upon which was the bank's letter head; that he assumed in such letter that he was acting for the bank, and directed plaintiff to remit the proceeds to the bank, and signed the letter as president ; and that it was his duty, as presi- dent, to endeavor to collect the debt. Held, that the bank was liable for the damages occasioned by this fraud, at least to the extent of the benefit received by it from the fraud. (Binghampton Trust Co. v. Auten, 2 Banking Cases, 502; 68 Ark., 299.) Notice to president as affecting bank. 3 (Colo. Sup.). Where the president of a bank had been frequently told of a third ownership in property subsequently levied on by the bank, the bank was charged with that information, though the president gained it in his private business. (Campbell v. First National Bank of Denver, 43 P., 1007; 22 Colo., 177.) When directors may remove president. 4 (N. Y. Sup., 1804). Where the articles of association of a national bank, signed by all the original stockholders and giving express authority to the board of directors to remove the president, have been trans- mitted to the Comptroller of the Currency, who has, on receiving the same, issued circulating notes to the bank, he will be deemed to have approved the articles, and the directors will have the power to remove the president, even though the bank has never legally adopted any by-laws. (Taylor v. Button. 43 Barb., 195 ; 1 N. B. C, 755.) When president required to pay overdrafts. 5 (Tex. Civ. Appls., 1894). Where the president of a bank has agreed to answer to a bank for the overdrafts of another person, the fact that the bank, in accordance with its custom, which was well known to the president, requires such person to give notes for his overdrafts at different times, which action was explained to the president and not objected to by him, did not release him from liability for the amounts. (Brown v. Farmers and Merchants' National Bank of Cleburne, Tex. Civ. App., 31 S. W., 216.) When president promises to pay loan. 6 (Tex. Sup., 1895). The president of a national bank who requests the cashier to make advances to a minor, verbally promising that he will see them repaid, is liable to the bank for any loss sustained, by reason of said loans, as having been guilty of a breach of trust. (Brown v. Farmers and Merchants' National Bank of Cleburne, > Tex. Sup., 31 S. W., 285; 88 Tex., 265.) 328 DIGEST OP NATIONAL BANK DECISIONS. OFFICERS— Continued. VICE-PRESIDENT. Fraud of vice-president. 1 (Tex. Sup., 1901). A bank is not estopped by the false representations of its vice-president unless they are relied upon. (Waxahachie Nat. Bank v. Beilharz, 3 Banking Cases, 354; 94 Tex., 493.) AUTHORITY OF OFFICERS TO BORROW MONEY FOR BANK. Officers require special authority to borrow for bank. 1 (U. S. Sup. Ct, 1893). The borrowing of money by a bank, though not illegal, is so much out of the course of ordinary and legitimate bank- ing business as to require those making the loan to see to it that the officer or agent acting for the bank had special authority to borrow money. (Western National Bank v. Armstrong, 152 IT. S., 340.) Borrowing by bank officers, directors' authority — Usage between banks. 2 (U. S. C. C. A., 1897). The rule announced in Western National Bank v. Armstrong (14 Sup. Ct, 572; 152 U. S., 346), that the vice-president or cashier of a national bank has no power to borrow money on its behalf unless specially authorized by the directors, is not applicable in a case where a general and long-established usage is shown between corresponding banks, prevailing in both cities where the lending and borrowing banks were respectively situated, of lending and borrow- ing through the executive officers of the banks, no further authority being furnished or demanded, the presumption being that such usage was known and acquiesced in by the directors of the borrowing bank in the absence of notice to the contrary to its correspondents. (Arm- strong v. Chemical National Bank of City of New York, 83 Fed. Rep., 550.) Borrowing by bank officers, implied authority from directors. 3 (U. S. C. C. A., 1897). The vice-president of a national bank was engaged , in outside speculations, to which the cashier and teller were privy, and in which funds of the bank were used. All were directors. Two of the remaining six directors were employees of the vice-president, whom he had qualified to act by gifts of stock, and the remainder were selected by him for the purpose of giving him full control- and management of the bank, which he exercised, borrowing money and pledging the securities of the bank therefor, and using large amounts of its funds and securities in his speculations, to the knowledge of a minority of the directors, and without inquiry or investigation on the part of any. Held, that such knowledge and conduct on the part of the directors gave implied authority to the vice-president to borrow money on behalf of the bank. (lb.) Borrowing by bank officers — Passing of current accounts. 4 (U. S. C. C. A., 1897). Where, by usage between two correspondent banks, one rendered a monthly statement to the other, which returned a reconcilement sheet noting any matter of difference, which was settled by correspondence, such a statement, showing a loan by the bank making it to the other, was notice of such loan to the directors of the latter, and a failure to notice or object to it was a ratification, though in fact the books of the borrowing bank showed the transaction to have been a deposit to its credit by its vice-president, and the amount was credited to his individual account and used by him, the discrep- ancy having been overlooked by the bookkeepers who checked the statement. In such case the negligence of the employees was charge- able to the directors, whose agents they were. (lb.) Covert borrowing by bank. 5 (U. S. C. C. A., 1897). If, for the purpose of enabling a bank to borrow without having its printed statements show it as a borrower, another bank credits a sum to the borrower's account, and charges the same to a special account, and takes an individual guaranty note from the DIGEST OF NATIONAL BANK DECISIONS. 329 OFFICERS— Continued. AUTHORITY OP OFFICERS TO BORROW MONEY FOR BANK — continued, borrower's directors, amounts drawn on the credit constitute a loan to the bank and not to its directors. (American Exchange National Bank of New York v. First National Bank of Spokane Falls et al., 82 Fed. Rep., 961.) Borrowing in directors' names. 6 (U. S. C. C. A., 1897). Upon the question whether a loan was made to the defendant bank itself, and secured by a guaranty note of its directors individually, or was made to the directors upon their own note, there was conflicting testimony as to the original agreement, but it ap- peared that interest was charged to the bank, and by it entered on its books under profit and loss ; that the note itself was a promise to repay loans made to the bank ; that the bank's cashier, in trans- mitting the note, referred to it as a guaranty, and that the loan was credited to the bank and drawn on by it in the ordinary method and course. Held, that there was sufficient evidence of a loan to the bank to warrant a submission to the jury. (lb.) 7 (U. S. C. C. A., 1897). On the question whether a loan was made to a bank or to its directors, the private arrangements of the directors as to how the transaction should be entered on the bank's books would not be controlling as against the lender. (lb.) Contracts made for corporations by unauthorized agents. 8 (TJ. S. C. C. A., 1897). A corporation may become liable upon contracts assumed to have been made in its behalf by an unauthorized agent by appropriating and retaining, with knowledge of the facts, the ben- efits of the contract. (lb.) 9 (TJ. S. C. C. A., 1897). The fact that the directors of a bank unite in mak- ing a guaranty note to secure a loan to the bank previously arranged for by the cashier is evidence of a ratification of the cashier's act. (lb.) Notice of directors' meetings. 10 (TJ. S. C. C. A., 1897). If the directors of a bank have long pursued an established custom of holding meetings and transacting business at the bank during business hours whenever a sufficient number were present, the custom would carry with it a standing notice to each director and enable those present to proceed, in the absence of a con- trolling by-law or statute. (lb.) National bank may make oral contract to borrow money. 11 (U. S. C. C. A., 1901). A national bank may make a binding oral agree- ment to repay money it borrows and to pay notes it procures to be discounted. (Hanover Nat Bank of City of New York v. First Nat Bank of Burlingame, Kans., 3 Banking Cases, 533; 109 Fed. Rep., 421.) A national bank is liable for a deposit with it made at the request of its presi- dent in order that he might have the use of the money. 12 (TJ. S. C. C, 1884). A., the .president of defendant, a national bank in Vermont, applied to the plaintiff, a banking corporation in Canada, for a loan for his railroad of $50,000, which he had been unable to obtain from defendant. Plaintiff's manager told him the money could not be loaned as an individual loan, as its individual loans were too near the limit allowed by law, but that it would deposit that amount with defendant if desired. A. assented, and they agreed the deposit should draw interest at 6 per cent while it remained, and that bonds should be deposited as security. Plaintiff drew two drafts for the amount on a Boston bank, delivered them to defendant, and received the collaterals, and entered the transaction on its books as a loan to defendant. Defendant indorsed the drafts, forwarded them to the Boston bank, from which it received credit for them, and has always retained their avails. About a year afterwards defendant failed, and a receiver was appointed, who rejected the claim of plaintiff when 330 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS— Continued. AUTHORITY OF OFFICEBS TO BORROW MONEY FOR BANK Continued. • presented for payment, and defendant brought suit. Held, that the transaction was not a loan to A. individually, but to defendant ; that plaintiff was entitled to a judgment, to be paid by the Comptroller from the assets ratably with other claims, and that the amount due should be adjusted as of the time when the receiver was appointed, and so certified by the receiver to the Comptroller, to be paid in due course of administration. (Eastern Township Bank v. Vermont Na- tional Bank of St. Albans and another, 22 Fed. Rep., 186.) Authority of president to pledge deposit as security for loan. 13 (U. S. C. C, 1893). In an action by the receiver of an insolvent national bank against the correspondent of the bank to recover money depos- ited by the bank with its correspondent, the evidence showed that the directors of a bank left it to the president to negotiate loans and to make such contracts as to repayment and security as were lawful and usual. Held, that the evidence was sufficient to establish the president's authority to pledge the deposit with the correspondent as security for loans made by the latter. (Bell v. Hanover N. B., 57 Fed. Rep., 821.) Bank liable for money oorrowed — Implied authority of officers. 14 (Ind. Sup., 1901). The vice-president of a bank represented to another bank that he desired a loan for his bank, and gave a note signed by himself and another director, indorsed by his bank and its president. Thereafter such note was renewed by another note, indorsed by the bank by its cashier. The lending bank knew that the two directors signing the first note were directors of the borrowing bank and that the cashier signing the indorsement on the second note transacted all the business of the borrowing bank. Held, that, though the loan was not in fact procured for the bank, and though it did not receive the proceeds, and the indorsement was .not authorized by the board of directors, the bank was liable, the officers having implied authority to act. (First Nat. Bank of Huntington v. Arnold et al., 3 Banking Cases, 358; 156 Ind., 487.) WHEN BANK ESTOPPED BY ACT OF ITS OFFICERS. 1 (U. S. C. C, 1893). An officer of a bank borrowed money for its indi- vidual benefit, but in the name of the bank and upon a false cer- tificate of deposit and collateral belonging to the bank. Held, that that his bank was estopped to deny the loan and is liable therefor, as the lender dealt with- him solely in his official capacity. (Stewart v. Armstrong, 56 .Fed. Rep., 167.) 2 (U. S. C. C, 1893). Vice-president of bank, also manager" of a commer- cial house, substituted as collateral notes to order of his house, and indorsed by them without consideration. Held, that, as against hold- ers of collateral, the house was estopped to deny that these notes were properly pledged as security for a loan to his bank. (lb.) 3 (U. S. C. C, 1893). The estoppel upon his bank exists only in favor of lender. Hence, his house has no remedy against his bank for any liability enforced by the lender on account of its indorsed notes so pledged. (lb.) 4 (U. S. C. C. A., 1897). The cashier of a bank does not act as its agent or representative in answering an inquiry addressed to him by an- other bank as to the business standing of a third person ; and the bank is not bound or estopped by statements so made by him, his act bejng one not relating to the business of his bank, but simply one of customary courtesy rendered without consideration. (First Na- tional Bank of Manistee, Mich., et al. v. Marshall and Ilsley Bank of Milwaukee, Wis., 83 Fed. Rep., 725. ) 5 (U. S. C. C. A., 1897). The failure of the officers of a bank, in answering a general inquiry from another bank as to the character and stand- DIGEST OF NATIONAL BANK DECISIONS. 331 OFFICERS— Continued. WHEN BANK ESTOPPED BY ACT OF ITS OFFICERS — Continued. * ing of a customer, to disclose the fact that the customer was indebted to their bank, and that it held liens on certain of his property, will not estop it, to assert such liens as against a mortgage subsequently taken by the inquiring bank, in the absence of any fraudulent intent, (lb.) 6 (U. S. C. C, 1880). Where the president of a national bank instructed his correspondent bank to charge up against the bank of which he was president the amount of a note given by him in payment of such note, and an account was rendered showing the transaction, the bank was estopped from denying the correctness of the charge in an action by a receiver, subsequently appointed, seeking to set aside the transaction. (Burton v: Burley, 13 Fed. Rep., 811.) 7 (Ky. Appls., 1887). Where the cashier of a bank purchases bonds without authority of the bank, afterwards appropriates them to his own use, it is estopped to deny the authority of the cashier. (Logan County Nat. Bank v. Townsend, 3 N. B. C, 448.) 8 (Mich., 1895). Where the cashier, intrusted by its directors with its en- tire management, has been accustomed in having paper rediscounted to guarantee its payment, the bank will be estopped from denying his authority to so guarantee it. (First National Bank of Kala- mazoo v. Stone, 64 N. W., 487; 10G Mich., 3G7.) 9 (N. H. ). If upon inquiry by the surety, the cashier, knowing that he is a surety, inform him that the note is paid, intending that he should rely upon his statement, and the surety does so, and in consequence changes his position by giving up securities, or indorsing other notes for the principal, or the like, IJie bank will be estopped to deny that such note is paid. (Cochecho National Bank v. Haskell et al., 51 N. H., 116.) 10 (Utah, 1897). Where the manager of a bank, with the knowledge of its directors and without objection, continually exercises the authority to discharge guarantors of notes and accept collaterals in lieu thereof, the bank is estopped, after third persons have in good faith acted on such appearances, to deny his authority. (Armstrong v. Cache Valley Land and Canal Co., 48 Pac. Rep., 690 ; 14 Utah, 450.) LIABILITY OF BANK FOB OFFICER'S UNAUTHORIZED ACT WITHIN HIS APPARENT AUTHORITY. 1 (U. S. Sup. Ct, 1870). If a cashier without authority to buy coin in be- half of his bank, do so buy it, and it goes into the funds of the bank, the bank is liable on the principle of quantum valebat. (Merchants' National Bank v. State National Bank, 10 Wall., 604.) 2 (N. Y. Appls., 1894). Where a cashier, in payment of his individual in- debtedness, gives his creditor a cashier's draft drawn by himself on his bank's correspondent, and the same is received in good faith by the creditor, with no knowledge or notice that the draft is drawn fraudulently, and the same is paid by the - correspondent to the creditor, the bank can net recover from the creditor the money so paid. (Goshen National Bank v. State, 36 N. B., 316; 141 N. Y., 379.) 3 (N. Y. Appls., 1894). A bank is bound by the act of its cashier in draw- ing checks in its name, though with the intent of embezzling the pro- ceeds, and payment of the checks by the drawee is binding on the bank. (Phillips v. Mercantile National Bank of the City of New York, 35 N. B., 982; 140 N. Y., 556.) 4 (N. Y. Appls., 1894). Checks drawn by the cashier of a bank, payable to fictitious persons, whose names he indorses thereon, are in effect payable to the bearer, and the payment of such checks by the drawee is binding on the bank, as, in transmitting them made and indorsed, the bank is so far concluded by his acts as to be estopped from denying their validity. (lb.) 332 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS— Continued. LIABILITY OF BANK FOR' OFFICEB'S UNAUTHORIZED ACT WITHIN HIS APPARENT authority — continued. * 5 (N. Y. Appls., 1894). The fact that the payees in the checks, whose names were indorsed thereon by the cashier, were customers of the bank does not vary the rule applicable to fictitious payees, where the cashier did not intend to deliver the paper to the customers, as the fictitiousness of the maker's direction to pay does not depend upon the identification of the name of the payee with some existing person, but upon the intention underlying the act of the maker in inserting the name. (lb.) 6 (N. Y.). Where one pays a debt due by him to a bank upon the demand of an officer thereof, whom he finds employed in its business, to said officer, over its counter, without knowledge that the officer's authority is so limited that he is not authorized to receive the money, it is a payment to the bank, and the latter is bound thereby. (The East River National Bank v. Gove, 57 N. Y., 597.) 7 (Okla., 1896). Where the president of a banking corporation, having con- trol and management of its business, entered into a conspiracy with a merchant whereby the latter was to purchase of wholesale dealers a large amount of goods on credit, on which the bank was to take a mortgage in an amount largely in excess of a loan which was to be made the merchant, under which it was to sell the goods, the pro- ceeds of such sale to be given one-third to the bank and two-thirds to the merchant, leaving the creditors unpaid; and in pursuance thereof, goods were bought of the value of $10,000, on which the bank loaned $1,000, taking a mortgage for $9,960, and before the bills for the goods became due the bank foreclosed the mortgage and took pos- session thereunder, and sold the goods for $5,300, which was divided according to the agreement — the bank was liable to each of the de- frauded creditors for the amount of goods so sold by each. (John- stone Fife Hat Co. v. National Bank of Guthrie (Okla.), 44 P., 192; ' 4 Okla., 17.) LIABILITY OF BANK FOR OFFICER'S UNAUTHORIZED ACT NOT WITHIN HIS APPARENT AUTHORITY. 1 (Colo. Sup., 1896). Mine owners indebted to a bank made their note, and executed a deed of trust to the bank's cashier to secure the indebted- ness. The note was not paid at maturity, and without the payment of any money to him or to the bank and without authority the cashier released the deed of trust, and two other papers were exe- cuted between the parties. One was an absolute deed of the prop- erty to the cashier ; the other an agreement whereby he was to work the mines till the indebtedness of the bank was paid from the pro- ceeds and certain amounts paid to the grantors, after which he was to become the absolute owner. Subsequently a creditor of the bank attached the property as belonging to the bank. Held, that the bank could not be held to have adopted the contract of its cashier, since it must have done so in its entirety, and the agreement to operate the mines would have been ultra vires. (Weston v. Estey, 45 P., 367; 22 Colo., 334.) LIABILITY OF BANK FOR DIRECTOR'S AUTHORIZED ACT. 1 (Tex. Civ. Appls., 1894). A settlement of a claim against a bank made by a director who had been specially delegated by the bank to take charge of the matter, and who acted under the direct advice of the president of the bank, is binding on the bank. (Waxahachie Na- tional Bank v. Vickery, 26 S. W., 876.) DIGEST OP NATIONAL BANK DECISIONS. 333 OFFICERS— Continued. LIABILITY OF BANK FOE FALSE REPRESENTATIONS BY PRESIDENT. 1 (U. S. Sup. Ct, 1903). Where a national bank has sold certain bonds and the vendee has obtained a judgment for the purchase money in a State court on the ground that the sale was induced by false repre- sentations of the president of the bank, the judgment will not be reversed on the ground that the sale of the bonds was without the authority of the bank and was illegal and void. The fraud is prior to the sale and authorizes a recision ; nor can the bank claim that the fraud was perpetrated by an agent who did not represent it for illegal " purposes. .The bank must adopt the whole transaction or no part of it. (National Bank and Loan Company v, Petrie, 189 U. S., 423.) LIABILITY OF BANK FOB OFFICER'S CRIMINAL ACT WITHIN HIS APPARENT AUTHORITY. 1 (111. Appls., 1886). A national bank, by its cashier, issued its certificate of deposit for money to be paid on a note of the depositor or lent for his use. Held, that the bank was liable thereon, although the cashier embezzled much more of the bank's funds. (First National Bank of Monmouth v. Brooks, 22 111. App., 238; 3 N. B. C, 387.) LIABILITY OF BANK FOR FRAUDULENT REPRESENTATIONS AS TO FINANCIAL RESPON- SIBILITY. 1 (U. S. C. C, 1893). A national bank is liable for fraudulent representa- tions jnade by it through its cashier to another bank as to the finan- cial responsibility of a customer. (Nevada Bank of San Francisco v. Portland National Bank, 59 Fed. Rep., 338.) 2 (U. S. C. C, 1893), Representations by one bank to another that a certain business corporation " is prosperous," " well organized," " doing a large business," and are " valued customers of ours ; " that an inves- tigation of its business and responsibility had been made by the vice- president and cashier of the bank, coupled with the transmission of an annual statement, which (as alleged) is known to be false, are representations of fact, and not of opinion, and are actionable if fraudulently made. (lb.) 3 (U. S. C. C, 1893). Fraudulent representations as to the financial respon- sibility of another for the purpose of procuring him credit are action- able, though containing no statement as to the amount of credit it is safe to extend. (lb.) 4 (U. S. C. C, 1893). -False representations concerning the financial respon- sibility of another, made for the purpose of procuring him credit, negligently and carelessly, without investigation, when investigation would disclose their falsity, imply a fraudulent intent, and are actionable. (lb.) 5 (U. S. C. C, 1893). The signature of a bank cashier, with his official title appended, to a letter bearing the bank's name at the head, is the sig- nature of the bank, within the meaning of a statute providing against liability for representations as to the credit, skill, or character of another, unless there is a memorandum thereof in writing signed by the "party to be charged." (lb.) (U. S. C. C. A., 1899). A bank is liable for deceit where, through its board of directors, it causes false statements to be made in regard to the financial condition of a customer, for the purpose of furthering its own interests, by increasing its deposits or selling its collateral, .and loss results to a third person from such statements. (Hindman v. First Nat. Bank of Louisville, 98 Fed. Rep., 562.) 7 (N. Y. Appls., 1903). In the absence of evidence of authorization, the cashier of a bank has no authority by virtue of his position to make any representations oh behalf of the bank as to the solvency of a. customer. (Taylor v. "Commercial Bank. 5 B. C, 532; 66 N. B. Rep.,' 726.) 334 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS — Continued. AUTHORITY OF OFFICERS TO BIND BANK IN RECEIVING SPECIAL DEPOSITS. 1 (Ga. Sup., 1877). A national bank which habitually receives special deposits for safe-keeping as matter of accommodation is bound by the act of its cashier in receiving on speciaj .deposit a package of stocks and bonds. The bank, though acting "without reward, becomes a bailee and is responsible for gross negligence. (The Chattahoochee National Bank v. Schley, 58 Georgia, 369; 1 N. B. C, 379.) 2 (N. Y. Appls., 1875). A cashier or other executive officer of a national bank has not, in the absence of special authority from the directors or of a usage or practice so to do, power to 'receive, on behalf of the bank, property for safe-keeping. Quasre as to the power of a national bank to become a bailee of property either gratuitously or for hire. (First Nat. Bank of Lyons v. Ocean Nat. Bank, 60 N. Y., 278; 1 N. B. C, 728.) 3 (N. Y. Appls*., 1875). In an action against a bank for the loss of property which it had received as gratuitous bailee, held, that the declarations and admissions of the president, tending to show negligence on his part, made after the transaction, and when not acting within the limit of his authority, were not binding upon the bank. (lb.) LIABILITY OF BANK FOR CERTIFICATE ISSUED BY ITS OFFICERS WHEN NOT ACTING FOR THE BANK. 1 (N. Y., 1880). Where a national bank was in the habit of receiving money on deposit and issuing certificates, sometimes in its own name and sometimes in the name of its president, it is liable to a depositor who took a certificate issued by the president personally, but which the depositor believed to i>e an obligation of the bank and would not have taken otherwise. (West v. Elmira Bank, 20 Hun, 408.) 2 (Pa., 1880). A depositor asked for a certificate of deposit drawing inter- est for a portion of his deposit. The teller gave him a certificate issued by a private banking firm. composed of the managing officers of the bank and told him that this was the bank's certificate. Held, that the bank was liable. (Steckel v. First National Bank of Allen- town, 93 Pa. State, 376.) 3 (Pa.). A business man inquired of a bank president if the bank paid interest on deposits. He was informed that it did not, but that he would give him a certificate of a firm that would. He also informed him that the firm owned the bank and that he could get his money of the bank at any time. The firm failed and it was held that the bank was not liable. (Allentown Bank v. Williams, 100 Pa. State, 123.) 4 (Utah, 1892). A bank is not liable on a certificate of deposit issued before its organization and signed as cashier by one who afterwards became such. (Long v. Citizens' Bank, 8 Utah, 104.) WHEN ACT OF CASHIER AS TO DEPOSIT BINDS BANK. 1 (Ky., 1884). Where the cashier and general manager of a bank undertook to make investments for a depositor, and exhibited to the depositor, from time to time, statements, taken from the books of the bank, pur- porting to show investments made by the bank for him, it will be pre- sumed that the officer of the bank was acting for the bank, and not as special agent for the depositor, and the bank will be required to ac- count for the deposits or the investments. (Bobb v. Savings Bank of Louisville et al., 64 S. W. Rep., 494; 3 Banking Cases, 760.) AUTHORITY OF OFFICERS DURING LIQUIDATION. 1 (U. S. Sup. Ct, 1890). The officers of a national bank which has gone into liquidation having no authority to bind the stockholders by the transaction of any business except that necessarily involved in the winding up of its affairs, an agreement by the president of such DIGEST OF NATIONAL BANK DECISIONS. 335 OFFICERS— Continued. AUTHORITY OF OFFICERS DURING LIQUIDATION Continued. bank that its guaranty, made before liquidation, of certain notes shall not be discharged by a change in the security of such notes and the release of the principal debtor, creates no liability on the part of the stockholders. (Schrader v. Manufacturers' Nat. Bank, 133 U. S., 67.) 2 (U. S. Sup. Ct, 3887). After an association goes into liquidation there is no authority on the part of its officers to transact any business in its name so as to bind its shareholders, except that which is implied in the duty of liquidation, unless such authority has been expressly conferred by the shareholders. (Richmond v. Irons, 121 U. S., 27.) 3 (Kans.). Without express authority from the shareholders in a national bank, its officers, after the bank goes into liquidation, can only bind them by acts implied by the duty of liquidation. (Elwood v. First Nat. Bank, 41 Kans., 475.) RECEIVER LIABLE FOR MONEY BORROWED BY BANK'S OFFICERS WITHOUT SPECIAL AUTHORITY. 1 (U. S. Sup. Ct., 1900). By using the money obtained from the New York bank by H. in his capacity of vice-president the Cincinnati bank became bound to account for the same as for money had and received, and could not escape liability to the New York bank upon the mere ground, supposing it to be true, that it was not permitted by its charter to borrow money. The liability of the Cincinnati bank rested upon the fact, and the implied obligation arising there- from, that that bank used in its business and for its benefit the money which the other bank placed to its credit in consequence of the loan negotiated by H., who assumed to represent it. There is nothing in the acts of Congress authorizing or permitting a national bank to appropriate and use the mouey or property of others without incurring liability for so doing. This case and Western National Bank v. Armstrong (152 U. S., 346), distinguished. (Aldrich v. Chemical Nat. Bank, 176 U. S. Rep., .618.) 2 (U. S. C. C. A., 1896). The receiver of an insolvent national bank is liable for money borrowed by the president of the bank without special authority when it appears that the bank actually received the money and appropriated it to its own use. (Bank v. Armstrong, 152- U. S., 346 ; 14 Sup. Ct., 572, distinguished. Blanchard v. Commercial Bank of Tacoma, 75 Fed. Rep., 249.) BANK NOT LIABLE FOR CONDUCT OF CASHIER WHEN HE IS ACTING AS AGENT FOR THIRD PARTY. 1 (U. S. C. C, 1900). A bank is not chargeable with notice of the misap- propriation of money by its cashier acting as agent for a third party in his individual capacity ; nor is it liable to the principal for such money when it receives no benefit therefrom. (School Dist. of City of Sedalia, Mo., v. De Weese, 100 Fed. Rep., 705.) OFFICERS, CIVIL LIABILITY OF. Page. Common-law liability for deceit _ . 336 Liability of directors for mismanagement 337 Degree of care required op directors. 338 Liability of director's for assenting to excessive loans _ _ 340 Directors' liability on public statement 341 When bank officers personally liable to depositor 341 President's liability for mismanagement 341 Personal liability of cashier 343 336 DIGEST OF NATIONAL BANK DECISIONS, OFFICERS, CIVIL LIABILITY OF— Continued. ACTIONS TO ENFORCE LIABILITY. Pago. Method of enforcing liability _ 343 Forfeiture of charter not necessary before receiver may bring suit against directors 343 Action at law or in equity _ - _ 343 Actions by bank against former officers 344 Actions by shareholders 345 Actions by depositors against directors 346 Receiver's suit against directors 347 Officers set-off against liability 348 Survival of actions 348 Cross references: Jurisdiction — In actions against bank officers for deceit .. 256 Mortgage — Liability of bank officer for false statement to depositor. (Mort- gage given by bank officer to indemnify depositor for damage caused by false statement) 275 common-law liability for deceit. Directors liable at common lair for deceit. 1 (U. S. C. C, 1895). The liability of directors of a national bank to a common-law action of deceit for false and fraudulent representations • made by tbem in the pretended performance of duties imposed upon them by the national banking law is not precluded by the liability imposed in that law for violation of its provisions. (Prescott v. Haughey, 65 Fed. Rep., 653.) 2 (U. S. C. C, 1895). Complaint alleging false and fraudulent representa- tions by directors of'a national bank in advertisements, statements, and reports as to its condition, whereby plaintiffs, relying thereon., were induced to deposit money with the < bank, and were deceived and damaged, Held, to state a common-law cause of action for deceit, not removable as involving a Federal question. (lb.) 3 (Nebr. Sup., 1899). The directors of an insolvent national bank are per- sonally liable, at the suit of one purchasing the stock of such bank, for damages sustained by the reason of the insolvency of the corpora- tion, when the plaintiff is induced to make such purchase by false representations of solvency, contained in reports made by the bank to the Comptroller of the Currency and attested by the directors, and published in pursuance of law, even though the directors were unaware that such reports and representations were false or untrue, and were made without intention to defraud. (Gerner v. Mosher et at, 1 Banking Cases, 457; 58 Nebr., 135.) Liability of directors for deceit by false reports. 4 (Nebr. Sup., 1899). Directors of a national bank who, in simulated per- formance of the duties prescribed by the law applicable to such an institution, relative to the preparation and publications of advertise- ments, statements, and reports, knowingly make and publish false statements and reports of the financial condition of the bank, with intent to deceive, and such matters are believed and acted upon bv parties to their damage, are liable for the damages in an action for the deceit. (Stuart v. Bank of Staplehurst, 1 Banking Cases. 518; 57 Nebr., 569.) 5 (Nebr., Sup., 1899). The liabilities which are fixed in the national bank- ing law for violations of its provisions are not exclusive, and do not preclude the action for deceit. (lb.) DIGEST OF NATIONAL BANK DECISIONS. 337 OFFICERS, CIVIL LIABILITY OF— Continued. common-law liability for dbceit — continued. 6 (Nebr. Sup.. 1899). The petition in the case at bar held to state a cause of action for deceit, and not for relief under the national banking law, and to present no Federal question for adjudication. (lb.) 7 (Nebr. Sup., 1899). The statements and reports which are required and are made to the Comptroller, and published in the newspapers, have among their purposes that of conveyance of information to those per- sons, each or all, who contemplate dealings with the bank in which its financial condition enters as a vital matter. (lb.) LIABILITY OF DIRECTORS FOR MISMANAGEMENT. Not liable for fraud during his leave of absence. 1 (U. S. Sup. Ct, 1891). If a director of a national bank is seriously ill" it is within the power of the other directors to give to him leave of absence for a term of one year instead of requiring him to resign, and if frauds are committed during his absence and without his knowledge, whereby the bank suffers loss, he is not responsible for them. (Briggs v. Spaulding, 141 U. S., 132.) 2 (U. S. C. C, 1887). The president of a national bank, being in failing health, was anxious to resign his position, but at a suggestion of a • majority of the directors consented to take a year's leave of absence, and during such absence, and without any fault on his own part, losses were sustained by the bank, and it became insolvent. Held, in a suit by the receiver to charge the directors with such losses, that he was not liable. (Movius, Receiver, v. Lee et al., SOJTed. Rep., 298.) Checking their own deposits after 'insolvency. 3 (U. S. C. C. A., 1894). If directors were depositors, and knew two months or more before suspension that that event was inevitable, and that the bank could pay only a percentage of its deposits, and yet checked for the whole of their own balances, thereby diminishing the percent- age to which other creditors would be entitled, they certainly de- frauded to the extent of the dimunition the creditors whose interests they were relied upon to protect, and should be held to strict account- ability. (Robinson i. Hall et al., 63 Fed. Rep., 222.) 4 (U. S. C. C. A., 1894). Directors of a national bank left its management for more than three years almost wholly to its cashier, who had but little property, and of whom they required no bond ; and they know- ingly permitted loans to be made to individuals and firms largely in excess of the amounts allowed by law. They failed to record mort- gages given to secure large debts due the bank even after they were aware of its insolvency, and erroneously advised an examiner who had taken charge of the bank that it was not necessary to record them. Held, that the directors were personally liable for the losses caused by such mismanagement and the fraud and defalcations of the cashier. Briggs v. Spaulding, 11 S. C, 924; 141 U. S., 132, dis- tinguished. ( lb. ) Officers jointly and severally liable for conversion. 5 (LT. S. C. C. A., 1899). When a loss has been caused to a national bank by the appropriation of its funds to a purpose unauthorized by law, or by culpable negligence, or conversion of its funds, the officers who participated in or consented to the act are jointly and severally liable for the entire amount. (Cooper r. Hill, 94 Fed. Rep., 582.) Officers liable for interest on funds converted. 6 (U. S. C. C. A., 1899). When the directors and officers of a bank have misappropriated its funds, they are liable for interest on the amount from the date of the misappropriation as damages, and no statute is necessary to authorize the allowance of such interest by a court of equity. (lb.) • 4049—05 22 338 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CIVIL LIABILITY OF— Continued. LIABILITY OF DIEECTOBS FOE MISMANAGEMENT — Continued. Increase of stock on fictitious assets is fraudulent. 7 (TJ. S. C. C. A., 1898). The increase of the capital stock of a bank based on a fictitious value of assets, and on notes given by the directors with an understanding that they were not to be paid, is in violation of Revised Statutes, section 5142, and the directors of the bank par- ticipating are liable for all losses resulting to the creditors. (Cock- rill v. Abeles et al., 86 Fed. Rep., 505.) Limitations in action against directors — Renewal of certificate of deposit. 8 (U. S. C. C. A., 1902). The issuance by a bank of a certificate of deposit for the amount of a former certificate which has matured does not create a new debt, but merely operates to extend the time of pay- ment, of the old debt, and a right of action in favor of the holder against directors of the bank, who, under the statute, have pre- viously become liable for the payment of any debt " then existing or incurred while they remain in office," accrues at the time of the maturity of the certificate existing at the time the penalty was incurred, and not on the maturity of the new certificate. (Patter- son v. Wade, 115 Fed. Rep., 770.) Director not liable after sale of stock and resignation. 9 (U. S. C. C, 1887). A director of a national bank who, before the*expira- tion of his term, sells his stock and orally resigns his office to the president, in his place of president at the bank, and afterwards receives the money for his stock prior to the sustaining of losses by the bank, ceases to be a director and can not be held liable for subse- quent losses caused by the negligence of the directors. (Movius, Receiver, v. Lee et al., 30 Fed. Rep., 737.) Delegation of authority does not release directors. 10 (Utah Sup., 1899). A board of directors of a banking corporation is elected primarily for the management of the corporate affairs ; and when the board delegates its authority to the executive officers and through their carelessness and mismanagement disaster and loss to the stockholders and creditors ensue, the individual members of the board can not escape liability by showing that they did not know of the unfortunate transactions and were ignorant of the business of the corporation. (Warren et al. v. Robinson et al., 1 Banking Cases, 541; 19 Utah, 289.) DEGEEE OF CAEE REQUIRED OF. DIRECTORS. 1 (U. S. Sup. "Ct, 1891). The degree of care required of directors of cor- porations depends upon the subject to which it is to be applied, and each case is to be determined in view of all the circumstances. (Briggs v. Spaulding, 141 U. S., 132.) 2 (U. S. Sup. Ct, 1891). Directors of a corporation are not insurers of the fidelity of the agents whom they appoint who become by such appointment agents of the corporation ; nor can they be held respon- sible for losses resulting from the wrongful acts or omissions of other directors or agents unless the loss is a consequence of their own neglect of duty. (lb.) 3 (U. S. Sup. Ct., 1891). Persons who are elected into a board of directors of a national bank about which there is no reason to suppose anything wrong, but which becomes bankrupt in ninety days after their election, are not to be held personally responsible to the bank because they did not compel an investigation or personally conduct an examination. (lb.) 4 (U. S. Sup. Ct, 1891). Directors of a national bank must exercise ordi- nary care and prudence in the administration of the affairs of a bank, and this includes something more than officiating as figure- heads. They are entitled under the law to commit the banking busi- ness, as defined, to their duly authorized officers; but this does not DIGEST OF NATIONAL BANK DECISIONS. 339 OFFICERS, CIVIL LIABILITY OF— Continued. DEGREE OF CAKE REQUIRED OF DIRECTORS — Continued. 1 absolve them from the duty of reasonable supervision, nor ought they to be permitted to he shielded from liability because of want of knowledge of wrongdoing, if that ignorance is the result of gross inattention. (lb.) 5 (U. S. C. C, 1887). The directors of a national bank which has become insolvent by reason of losses caused by the discount from time to time of paper not properly secured, indorsed by a director who is a man of wealth and the largest stockholder in the bank, and in whom the other directors have reason to place confidence, can not be held liable for the mere failure to discover the illegal transactions and to prevent such director from continuing therein. (Movius, Receiver, v. Lee et al., 30 Fed. Rep., 298.) 6 (U. S. C. C, 1887). /The officers of an insolvent national bank can not be held personally responsible to creditors for losses on loans and dis- counts made by them in good faith, and, as they thought at the time, for the best interests of the bank, merely because such loans and dis- counts appear to have been unwise and « hazardous when looked back upon. (Witters, Receiver, etc., v. Sowles et al., 31 Fed. Rep., 1.) 7 (U. S. C. C, 1887). Bank directors can not be held personally liable for money paid out for dividends " to a greater amount than net profits, after deducting losses and bad debts " (Rev. Stat., sec. 5204), because - there were debts bad in fact, but supposed to be good when the dividends were declared and paid. Bad judgment on the part of the directors as to the condition of the assets, without bad faith, does not make them individually liable. (lb.) 8 (U. S. C. C, 1887). Directors of a national bank can not be held to the common-law liability for inattention to duty as directors in not pre- venting a hazardous, imprudent, and disastrous loan if such loan was made by their associates without their knowledge, connivance, or participation. (lb.) 9 (U. S. C. C, 1897). The duty of the board of directors is not discharged by merely selecting officers of good reputation for ability and integ- rity, and then leaving the affairs of the bank" in their hands without any other supervision or examination than mere inquiry of such offi- cers, and relying upon their statement until some cause for suspicion attracts their attention. The board is bound to maintain a super vision of the bank's affairs, to have a general knowledge of the char- acter of the business and the manner in which it is conducted, and to know at least on what security its large lines of credit are given. (Gibbons v. Anderson et al., 80 Fed. Rep., 345.) id (U. S. C. C. A., 1898). In an action by the receiver of a national bank to charge the directors with liability for its losses, proof of general looseness of management on their part is not sufficient to cast upon them the burden of exonerating themselves, as the court can only charge them with losses shown to have resulted from their negilgence. (Warner v. Penoyer, 91 Fed. Rep., 587.) 11 (U. S. C. C. A., 1898). The cashier of a national bank permitted an out- side corporation in which he was interested to become indebted to the bank, by overdraft and discounts for the corporation and its members, in the sum of $72,000, which was the principal cause of the bank's failure. The directors had appointed a discount and an examining committee, and acted upon their reports approving the statements of the cashier. The committees, in fact, made no independent examina- tion, but merely checked the notes with a list furnished by the cash- ;er. Such list, upon which they acted several months before the fail- ure, showed eight notes for $5,000 each. Though the bank's capital was but $50,000, the members of the committee testified that they had no knowledge of such notes, nor of the fact of the large indebtedness of the corporation. Held, that they were guilty of negligence,, which rendered them liable for the losses so sustained, but that the other 340 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CIVIL LIABILITY OF— Continued. DEGREE OF CABE REQUIRED OF DIRECTORS — Continued. directors were not liable, there being no evidence that they knew of the negligent manner in which the committees acted. (lb.) 12 (U. S. C. C. A., 1898). The directors of a national bank are not liable for losses occurring through malversations of the cashier, unless, by the performance of their .own duty of general supervision in good faith and with ordinary care and intelligence, such losses would have been prevented. (lb.) Degree of care required of directors of a savings banlc in Missouri. 13 (Mo. Sup., 1899). The defendant directors of an incorporated savings bank before its insolvency failed to discover that many loans were being made by the bank in violation of an express statutory pro- vision, and to insolvent persons, and they left the entire manage- ment of its business to the cashier. ■ Many of the sums of money so loaned having been lost by reason of the insolvency of the debtors, the bank became insolvent and made an assignment. Beld, that such insolvency was the result of failure on the part of the directors to exercise ordinary care in the discharge of their duties. (Union Nat. Bank of Kansas City et al. v. Hill et al., 1 Banking Cases, 443 ; 148 Mo., 380; affirmed, 155 Mo., 279.) 14 (Mo. Sup., 1899). For the mere failure of such directors to exercise ordi- nary diligence and care, as such, in the management of the business affairs of the bank, by reason of which the bank became -insolvent, they could not be held responsible at the suit of the bank's general creditors. ( lb. ) LIABILITY OF DIRECTORS FOR ASSENTING TO EXCESSIVE LOANS. 1 (U. S. C. C, 1887). Under Revised Statutes, section 5200, directors of a national bank who make or assent to the making of a loan to any one person of a sum exceeding one-tenth of the capital stock of the bank become personally and individually liable for all loss sustained thereby ; but where the borrower in such a case is also one of the directors he is not so liable, but simply as a debtor to the bank. (Witters, Receiver, etc., v. Sowles et al., 31 Fed. Rep., 1.) 2 (U. S. C. C, 1888). A national bank was organized with a capital of $60,000. The promoter of the bank took 380 shares of stock in his own name and procured the defendants to be directors, as well as a person to be elected cashier by them. The directors were not ac- quainted with the banking business. The proposed cashier was known to the directors, at least by reputation, and was supposed by them to be competent and trustworthy and of considerable experience in the business, and they had full confidence in his integrity and abil- ity to take charge of the bank. The cashier acted as manager of the loan and discount business of the bank, and the directors merely as advisers when applied to. The promoter of the bank knew, and the other stockholders were presumed to know, that the directors were wholly unused to the banking business. Held, that the directors were not liable for the acts of the cashier in violation' of the bank- ing law done without their participation or knowledge. (Clews et al. v. Bardon et al., 36 Fed. Rep., 617.) 3 (U. S. C. C, 1888). The cashier made loans in excess of 10 per cent of the capital to a manufacturing corporation supposed by him and by the public to be entirely solvent. None of the directors knew of the loans when made, but after a loan of $3,000 in excess of the lawful limit had been made the cashier informed one of them of such loan, aud was by him advised to call it in when due; and thereafter such director's advice was asked as to a further discount to the same corporation, and he disapproved of it, and it was not made. After- wards further loans or discounts were made to the same corporation without the knowledge or consent of any of the directors. About eight months after the bank commenced business one or more of DIGEST OF NATIONAL BANK DECISIONS. 341 OFFICERS, CIVIL LIABILITY OF— Continued. LIABILITY OP DIRECTORS FOR ASSENTING TO EXCESSIVE LOANS — Continued. the debtors of the bank failed, and the directors thereupon took the active management into their own hands. Held, that none of the directors had knowingly violated or knowingly permitted to be vio- lated any of the provisions of the banking law, and were not liable for such violation by the cashier. (lb.) 4 (U. S. C. C, 1888). Under the banking law the management of a national bank may be exercised either by the directors or by the cashier or other officers ; therefore the directors are not liable for the illegal or negligent acts of the cashier or other officers by whom the bank is managed if they "have no knowledge of such acts and do not connive at them or willfully shut their eyes and permit them. (lb.) 5 (U. S. C. C, 1888). It seems that the liability of directors of a national bank is substantially the same under, the banking law as at the com- mon law. (lb.) DIRECTORS' LIABILITY ON PUBLIC STATEMENT. 1 (U. S. C. C, 1891). Defendants, as directors, during a run on their bank posted conspicuously in the bank a notice, signed by them and ad- dressed to the general public* representing the bank to be solvent. Plaintiff sawthe notice, and, after a consultation with the directors, loaned the bank money, which was lost. Held, that' the notice, noc being addressed to plaintiff, could not entitle it to recover from the directors under R. L. Vt, section 983, which provides that no action shall be brought to charge any person upon a representation concern- ing the credit of another unless such a representation is in writing and signed by the party to be charged ; and the fact that the notice was signed by defendants as directors would prevent a recovery from them individually, even if the notice were a sufficient representation in writing. (First National Bank of Plattsburg v. Sowles et al., 46 Fed. Rep., 731.) , , WHEN BANK OFFICER PERSONALLY LIABLE TO DEPOSITOR. 1 (U. S. C. C. A., 1901). An officer of a bank can not avail himself of the statute of frauds, requiring a promise to answer for the debt of another to be in writing to sustain an action thereon, to protect him from liability arising from a false and fraudulent statement made by him to a depositor in regard to the condition of the bank, by reason of which the depositor suffered loss. (Kemp et al. v. National Bank of the Republic of New York, 3 Banking Cases, 652 ; 109 Fed. Rep., 48.) 2 (N. C, 1895). A bank depositor, on rumors of its insolvency, went to withdraw his deposits, but was informed by the vice-president and director that the bank was perfectly solvent, and that " we have got all the money you want. You need never have any fears of this bank as long as I am in it." Such depositor, relying on such representa- tions, permitted his deposit to remain. It was in fact insolvent when the representations were made. Held, that such vice-president and director was personally liable to such depositor for the money lost by the failure of the bank. (Townsend v. Williams, 23 S. E., 461; 117 N. C, 330.) PRESIDENT'S LIABILITY FOR MISMANAGEMENT. 1 (U. S. C. C. A., 1897). The purchase of a note by the president and managing officer of a bank, for which he paid from its funds over $20,000, with knowledge that it was burdened with a guaranty made by the payee, which might defeat its collection, is such negligence as renders him liable to account to the bank or its creditors for any loss which resulted. (Stearns v. Lawrence, 83 Fed. Rep., „ 738, affirming Lawrence v. Stearns, 79 Fed. Rep.,- 878.) 342 DIGEST OP NATIONAL BANK DECISIONS. OFFICERS, CIVIL LIABILITY OF— Continued. president's liability fob mismanagement — continued. 2 (U. S. C. C. A., 1897). Where the president of a bank negligently pur- chased a note, subject to a condition which defeated its collection, the bank is entitled to recover from him, as a part of the loss resulting, the expense of an unsuccessful defense made' by him for the bank to an action brought by the maker of the note to enforce the con- dition, (lb.) PERSONAL LIABILITY OF CASHIER. Liable for reasonable care, skill, and diligence. 1 (Ky., 1895). A cashier on whom, by continued absence of the directors, has devolved the duty of making loans and discounts will be liable for losses through overdrafts and discounts made by him only where it appears that he failed to make reasonable inquiry into the finan- cial standing of those making the overdrafts, and those whose paper was discounted, and failed to exercise the care and discretion which an ordinarily prudent man would exercise in his own business. (Pryse v. Farmers' Bank of Beattyville, Ky., 33 S. W., 532.) 2 (Tenn.). A cashier is bound to exercise reasonable skill, care, and dili- gence in the discharge of his duties, and if he fails so to do, and the bank suffer damage in consequence, he is liable therefor. (Vance v. Mottley, 21 S. W., 593 ; 92 Tenn., 310.) 3 (Tenn.). He is liable for loss on loans made by him through want of care, diligence, and reasonable skill. (lb.) Liability for making excessive loans. 4 (N. Y.). If a cashier, without authority from the directors so to do, makes a loan in excess of one-tenth of the capital of the associa- tion, he will be liable, in case of loss, for the amount of the excess. (Second National Bank of Oswego v. Burt, 93 N. Y., 233.) Concealment of defalcation, limitation. 5 (Tenn.). Where the cashier of a bank conceals the defalcation of another officer the statute of limitations will not begin to run in favor of such cashier or his estate until such defalcation is dis- closed to the directors or stockholders. (Vance v. Mottley. 21 S. W., 593: 92 Tenn., 310.) Cashier's tort may be waived. 6 (Tenn.). Though the act of the cashier which occasions the loss is a tort, the tort may be waived and an action for value maintained against him or his estate. (Vance v. Mottley, 92 Tenn., 310.) Actions tq Enforce Liability. method of enforcing liability. Creditor may not sue after receiver appointed. 1 (U. S. C. C. A., 1894). A creditor of an insolvent national bank that is in the hands of a receiver can not sue to enforce against officers and directors who have violated the banking laws the personal liability imposed by Revised Statutes, section 5239, as such liability is an asset belonging equally to all creditors, and must be enforced by the re- ceiver. (Bailey v. Mosher, 63 Fed. Rep., 488.) Actions against directors under sections 523J/ and J.23.9. 2 (U. S. C. C, 1890). Revised Statutes, sections 5234 and 5239, prescribing the method of enforcing the liability of the directors of national banks for violation of the banking law, are exclusive of other remedies, and a creditor of an' insolvent bank, for which a receiver has been ap- pointed, can not sue its directors for the purpose of making them per- sonally liable for the mismanagement of the bank. (National Ex- change Bank of Baltimore v. Peters et al., 44 Fed. Rep., 13.) DIGEST OF NATIONAL BANK DECISIONS. 343 OFFICERS, CIVIL LIABILITY OF— Continued. Actions to Enforce Liability — Continued. METHOD OF ENFORCING LIABILITY — continued. 3 (U. S. C. C. A., 1899). A suit by a receiver of an insolvent national bank against its officers and directo»s to compel restitution of funds unlaw- fully diverted by them is one to execute a trust, and involves an accounting as to trust funds, and hence is of equitable cognizance. (Cooper et al. v. Hill, 94 Fed. Rep., 582.) 4 (U. S. C. C. A., 1899). A national bank has no power to, prosecute a min- ing business on property which it has acquired, much less to expend its funds in prospecting for mineral on such property ; and directors who authorize such expenditure are personally liable therefor to the- bank or its receiver. (lb.) 5 (U. S. C. C, 1896). An action against the directors of a national bank under the provisions of Revised Statutes, section 5239, can be main- tained only by a receiver of the bank ; and an action by a private individual against such directors for damages arising from the mak- ing of false reports or other violations of the national banking act can only be maintained as an action at the common law in the nature of an action of deceit. (Gerner v. Thompson et al., 74 Fed. Rep., 125.) FORFEITURE OF CHARTER NOT NECESSARY BEFORE RECEIVER MAY BRING SUIT AGAINST DIRECTORS. t. The receiver of a national bank may maintain a suit to enforce the liability of directors under section 5239 without the charter of the bank having been first forfeited in a suit brought by the Comptroller of the Currency under that section. (U. S. C. C. A., 1898) Cockrill v. Cooper et al.. 86 Fed. Rep., 7; (U. S. C. O, 1890) Stephens v. Overstolz, 43 Fed. Rep., 771, 772 ; (U. S. C. C, 1897) National Bank of Commerce of Tacoma v. Wade, 84 Fed. Rep., 10, 13, 14 ; , 3 Thomp. Corp., 4113-4303. Contra. (IT. S. C. O, 1890) Welles v. Graves, 41 Fed. Rep., 459, 468. (U. S. C. C, 1896) Gerner v. Thompson et al., 74 Fed. Rep.. 125. 131. Hayden v. Thompson (U. S. C. C. A.) 71 Fed. Rep., 60, distin- guished. ACTION AT LAW OR IN EQUITY. In equity, actions under sections 5200, 6204, ond 5239. 1 (U. S. C. C. A., 1898). A court of equity has jurisdiction of a suit against the directors of a national bank for excessive loans, under Revised Statutes, sections 5200, 5239, where the suit is against a large number of directors whose terms of service were not identical, where the excessive loans were inaugurated by one set of directors and contin- ued, renewed, or enlarged by another, and where the directors were also charged with a violation of Revised Statutes, section 5204, in declaring dividends. (Cockrill r. Cooper et al.. 86 Fed. Rep.. 7.) At law, actions by receiver against director. 2 (U. S. C. C, 1890). An action by a receiver of a bank whose charter has been forfeited under sections 5200 and 5239 against a director is properly brought at law, there being no necessity for invoking the aid of a court of chancery, either because of the nature of the issues involved .or to avoid a multiplicity of actions. ( Stephens v. Over- stolz, 43 Fed. Rep., 771.) 3 (U. S. C. C, 1890). In such action plaintiff may state the aggregate amount of the excessive loans made to each party and the damage resulting therefrom in each case, accompanying each allegation with an exhibit showing the dates and amounts of the several loans that go to make up the aggregate sum stated in the petition, and is not compelled to declare in a separate count for each loan made. ( lb. ) 344 DIGEST OP NATIONAL BANK DECISIONS. OFFICERS, CIVIL LIABILITY OF— Continued. Actions to Enforce Liability — Continued.^ action at law or in equity — continued. Contra. 4 (U. S. C. C, 1890). The personal liability of directors of a national bank for violation of Revised Statutes, section 5204, by declaring dividends in excess of net profits, and of section 5200, for loaning to separate persons, firms, or corporations amounts exceeding one-tenth of the capital stock, can not be enforced in an action at law. (Welles v. Graves et al., 41 Fed. Rep., 459.) Limitations. 5 (U. S. C. C. A., 1890). The personal liability imposed by Revised Statutes, section 5239, upon directors for violation of the provisions of the banking act in favor of anyone injured thereby can not be enforced unless the charter has been forfeited and is a penalty within the meaning of section 1047, limiting actions for penalties to five years. (Welles v. Graves et al., 41 Fed. Rep., 459.) 6 (U. S. C. C. A., 1898). Revised Statutes Arkansas, 1837, chapter 91, section 7, barring " all special actions on the case " after the lapse of one year, was repealed by implication by the code of procedure adopted in that State in the year 1868, except for certain specified actions. It accordingly has no application to an action on the case against the directors of a national bank under Revised Statutes, 5239, for making excessive loans, or for other acts, either of mis- feasance or nonfeasance. (Cockrill v. Butler, 78 Fed. Rep., 679, reversed; Cockrill v. Cooper. 86 Fed. Rep.. 7; 29 C. C. A., 529.) ACTIONS by bank against former officers. Action against former officers for excessive loan. 1 (U. S. C. C, 1897.). A suit by a national bank against its former manag- ing officers to charge them with losses sustained by reason of their having made loans to one individual in excess of 10 per cent of the* capital stock, and other loans without personal security, in violation of the national banking statutes, the right of recovery being claimed under Revised Statutes, section 5239, is one arising under the laws of the United States. (National Bank of Commerce of Tacoma, Wash., v. Wade et al., 84 Fed. Rep., 10.) 2 (U. S. C. C, 1897). A national bank may maintain a suit against its directors to enforce their liability under Revised Statutes, section 5239, for losses resulting from x a violation of tne statutory require- ments in conducting the business of the bank. A suit by the Comp- troller for dissolution of the association and an adjudication of such violations is not a condition precedent to the enforcement of such liability. (lb.) 3 (U. S. C. C, 1897). A suit by a national bank against its former officers and directors, under Revised Statutes, section 5239, to recover for losses resulting from their mismanagement in violation of the pro- visions of the national banking law, is cognizable in equity where the transactions involved are complicated and the conversion of securities into money is required before the extent of the Jiability can be ascertained, and when, therefore, the remedy at law is not complete or adequate. (lb.) 4 (U. S. C. C, 1897). The fact that a suit by the Comptroller for the for- feiture of the charter of a national bank for violations of the banking statutes is barred by limitation does not operate to bar a suit by the bank against its officers and directors, under Revised Statutes, . sec- tion 5239, to charge them with losses resulting from such violations, (lb.) 5 (IT. S. C. C, 1897). The statute does not commence to run against a suit by a national bank against its managing officers to enforce their liability under Revised Statutes, section 5239, for losses resulting from acts in violation of the national banking law, until such officers have surrendered control of the bank to their successors. (lb,) DIGEST OF NATIONAL BANK DECISIONS. 345 OFFICERS, CIVIL LIABILITY OF— -Continued. Actions to Enforce Liability — Continued. ACTIONS BY SHAREHOLDERS. Shareholder's remedy, when equitable. 1 (U. S. C. O, 1893). A stockholder in a national bank can not maintain an action at law against the officers and directors thereof to recover damages for willful waste of the, assets, whereby the value of his shares was decreased and he became liable to an assessment thereon. His remedy must be sought in equity. (Hirsh v. Jones et al., 56 Fed. Rep., 137.) 2 (Mich. Sup., 1900) . Where one of the directors of a national bank charged with negligence in the management of its affairs, which is alleged to have resulted in its insolvency, is its receiver, a shareholder may maintain a suit against the directors to have them decreed to pay the . amount lost by such negligence ; and the refusal of such receiver to bring the suit in behalf of the bank is not a prerequisite to the filing of the bill. (Flynn v. Third Nat. Bank of Detroit et al., 2 Banking Cases, 212; 122 Mich., 642.) 3. But where the receiver refuses to bring an action against negligent directors to recover the amount which the shareholders have been compelled to contribute to pay the debt of the association, an action against such directors may be brought by a shareholder on behalf of himself and the other shareholders. (N.J.) Ackerman v. Halsey, 37 N. J. Eq., 356: (N. Y.) Nelson v. Burroughs, 9 Abb. N. C, 280; (N. Y.) Brinckerhoff v. Bostwick, 88 N. Y., 52 ; (Tenn.) Wallace v. Lincoln Savings Bank, 89 Tenn., 630. ' .4 (Ohio). Where the directors of a national bank have violated the pro- visions of the national banking act, to the damage of the bank and its shareholders, and the bank fails upon request to bring an action against such directors for the recovery of such damages, an actioii may be maintained for that purpose by a shareholder ; but such action must be brought by such shareholder on behalf of himself and all the other shareholders, the bank must be made a party, the judg- ment must be in its favor, and the proceeds of such judgment will inure to the common benefit of all the shareholders alike. Such action may be brought in a State court. (Zinn v. Baxter et al., 1 Banking Cases, 74; 62 N. E. Rep., 327; 65 Ohio St., 341.) 5 (Ohio). In such case a shareholder can not maintain such action for his benefit alone while the bank is a going concern and has not been dissolved by proper action by the Comptroller of the Currency in a Federal court. (lb.) 6 (Ohio). One who has been a shareholder in a national bank, but has parted' with his stock, can not maintain such action against the directors before the dissolution of the bank by the proper proceed- ings in a Federal court. Whether he can do so after such dissolution is not involved in this case, and is not hereby decided. (lb.) When shareholder can not sue. 7. A shareholder of a national banking association can not maintain an action against the directors to recover damages«sustained for neglect and mismanagement of the affairs of the association whereby it became insolvent and its stock was rendered worthless. Such an action can be brought only by the corporation itself. (U. S. C. C, 1891) Howe v. Barney, 45 Fed. Rep., 668; (N. J. ) Conway v. Halsey, 15 Vroom, 462. Stockholder may riot sue after receiver appointed. 8 (U. S. C. C, 1891). A stockholder in an insolvent national bank for which a receiver has been appointed can not sue its directors to make them personally lfable for the mismanagement of the bank, as the right of action is in the receiver and not in the individual stockholder. (Howe v. Barney et al., 45 Fed. Rep., 668.) 346 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CIVIL LIABILITY OF— Continued. Actions to Enforce Liability — Continued. action by shareholders — continued. "Where shareholder can sue. 9 (U. S. Sup. Ct.,*1897). A stockholder of an insolvent national bank may bring a suit in a State court, in behalf of the bank and himself, as a representative stockholder, against the directors, to recover money alleged to have been lost through their negligence and breach of trust, when the bank's officers, the receiver, and the Comptroller of the Currency have all refused to bring such a suit. (Ex parte Chet- wood, 105 U. S., 443.) 10 (N. Y. Appls., 1882). The State courts have jurisdiction of an action brought by a shareholder on behalf of himself and other share- holders to recover of the directors of an insolvent association dam- ages for injuries resulting from their negligence and misconduct. (Brinckerhoff v. Bostwick, 88 N. Y., 52.) Action oy one shareholder for all. 11 (N. Y., 1882). And when the receiver is a director and one of the parties charged with misconduct and against whom a remedy is sought, the action may be brought by a shareholder on behalf of himself and the other shareholders. (Brinckerhoff v. Bostwick, 88 N. Y., 52.) Actions oy stockholders against directors, injunction. 12 (U. S. C. C, 1869). The circuit court has jurisdiction, at the suit of a stockholder, to enjoin the officers of a national bank from any mis- application of its funds which might result from any act not war- ranted by its charter, or which would amount to a breach of trust (Shoemaker v. The National Mechanics' Bank, 1 N. B. C, 169; 2 Abbott, U. S., 416.) Limitation- of action against director for impairment. 13 (N. Y.). An action by stockholders of a national bank against directors to recover for negligence which resulted in a loss of the bank's cap- ital may be brought at any time within ten years. (Haftna v. People's" Nat. Bank, 71 N. Y. S., 1076 ; 35 Misc. Rep., 517. ) ACTIONS BY DEPOSITORS AGAINST DIRECTORS. 1 (U. S. C. C. A., 1904). The national bank act, providing for the adminis- tration of the affairs of an insolvent national bank by a receiver appointed by the Comptroller of the Currency, does not prevent the depositors of an insolvent bank from maintaining a suit against its directors for negligently permitting its officers to loan the bank's assets in violation of s.uch act, constituting a breach of the bank's implied contract with such depositors, inherent in the contract of deposit, that the bank would use such deposits and its other assets in conformity with the safeguards provided by law. (Boyd et al. v. Schneider et al., 131 Fed. Rep., 223.) 2 (U. S. C. C. A., 1904). Where several depositors of a national bank had claims against a number of the bank's directors arising out of their failure to take steps to prevent the bank's assets being improperly loaned, and none of such depositors could, by separate suits at law. recover that to which he was entitled, such depositors were entitled to maintain a single suit against such directors in equity. (lb.) 3 (U. S. C. C. A., 1904). Where the right of each of several depositors of an insolvent national bank to recover against several of the bank's directors, made parties to the bill, was based on the same theory, the bill was not multifarious. (lb.) 4 (U. S. C. C. A., 1904). Where several depositors of an insolvent national bank filed a bill against its directors for a breach of their implied contract to see that the bank's assets were used according to law, but the bill failed to allege the time when complainants' deposits were made, complainants were entitled to leave to amend in that respect, (lb.) * DIGEST OF NATIONAL BANK DECISIONS. 347 OFFICERS, CIVIL LIABILITY OF— Continued. Actions to Enforce Liability — Continued. ACTIONS BY DEPOSITORS AGAINST DIRECTORS — Continued. 5 (U. S. C. C. A., 1904). That certain of the defendants sued were not directors of an insolvent bank at the time acts of mismanagement complained of occurred did not exempt them from liability to the depositors where it appeared that during their term of office divi- v dends were paid from the capital, which was also alleged as a ground of action. (lb.) Contra. G (U. S. C. C„ 1890). Revised Statutes, sections 5234, 5239, prescribing the method of enforcing the liability of the directors of national banks for violation of the banking law, are exclusive of other remedies, and a creditor of an insolvent bank, for which a receiver has been appointed, can not sue its directors for the purpose of making them personally liable for the mismanagement of the bank. (National Exchange Bank of Baltimore v. Peters et al., 44 Fed. Rep., 13.) receiver's suit against directors. 9 Receiver's .suit against directors; action; practice. 1 (U. S. C. C, 1887). A bill brought to charge the directors of an insolvent national bank with the amount of losses caused by the bank's failure alleged that one of the defendants sold and transferred his stock on the day named, but the evidence showed that defendant had not paid anything for the stock, but delivered it to a messenger of another one of the defendants, from whom he had agreed to purchase it, and that such defendant then sold and indorsed the stock to a third party, as it was agreed he might do if he so desired. Plaintiff moved to amend the bill to conform to the proofs and make it allege that the transfer was merely formal. Held, unnecessary. (Movius, Receiver, v. Lee et al., 30 Fed. Rep., 298.) 2 (U. S. C. C, 1887). A receiver of an insolvent national bank, in his own name or in the name of a bank, may enforce against the directors, for the benefit of the stockholders, depositors, and other creditors of the bank, any right or claim resting upon the nonperformance or negligent performance of their duties that the bank itself could have enforced. (lb.) Receiver may sue directors for fraud. 3 (V. S. C. C. A., 1898). A receiver of an insolvent national bank.has a right to maintain a suit in his own name against directors to charge them for losses that may have been sustained by the corporation and its creditors through their wrongful or fraudulent acts. (Cockrill v. Abeles et al., 86 Fed. Rep., 505. ) Receiver may sue director for gross negligence. __ 4 (U. S. C. C, 1897). A receiver of a national bank may sue the directors to hold them responsible for the malfeasance of the managing officer when it appears that they were so negligent as to make practically no examination of its books or affairs, and to hold meetings only at rare intervals, and then to limit their business almost wholly to the election of directors and the declaration of dividends. In such case their liability for losses should begin at a time when they ceased to discharge the duty of giving proper supervision to the conduct of the bank's affairs. In the circumstances of the present case they were held liable from the time when, by reason of their failure to earn dividends for more than a year, their attention should have been drawn to the necessity of making a thorough examination. (Gibbons v. Anderson et al., 80 Fed. Rep., 345.) 5 (N. Y., 1882). An action may be brought by a receiver of a national bank against its directors .to recover damages sustained by their gross negligence. (Brinckerhoff v. Bostwick, 88 N. Y., 52; 3 N. B. C, 591.) 348 DIGEST OF NATIONAL BANK DECISIONS. , OFFICERS, CIVIL LIABILITY OF— Continued. Actions to Enforce Liability — Continued. receiver's suit against directors — continued. 6 (N. Y., 1882). If the receiver is one of the directors, such action may be maintained by the stockholders, or, when they are numerous, by one or more in behalf of all. (lb.) 7 (N. Y., 1882). It is not necessary to allege in the complaint a direction from the Comptroller, or a demand upon him and a refusal, to direct . the receiver to bring the action, or a refusal of the receiver to sue. (lb.) 8 (X. X., 1882). Such action may be brought in a State court. (lb.) 9 (N, Y., 1882). The bank and the receiver, as such, are necessary parties defendant to such an action. (lb.) officers, set-off against liability. 1 (Miss. Sup., 1901). Where the vice-president and attorney of an insol- vent bank was indebted to it on notes secured by mortgage, he was estopped to set up claims arising from a liability accruing against •him as surety on an attachment bond, and for money which he bor- rowed on his personal credit and gave to the bank's cashier, as a set- off against his liability on the debt due the bank ; and hence he was not entitled to maintain a bill to restrain the receiver of the bank from foreclosing the mortgage. (Chapman et al. v. Cutler, 3 Bank- ing Cases, 280. ) SURVIVAL OF ACTIONS. Survival of actions against director. 1 (U. S. C. C, 1890). An act of Congress imposing a legal liability on the directors of a national bank for certain things which they may do which shall result in an injury to the bank, its stockholders, or creditors, and making them liable for the amount of the damage, is a remedial and not a penal statute, and therefore an action under it survives against the estate of a director. (Stephens v. Overstolz, 43 Fed. Rep., 465.) 2 (TJ. S. C. C, 1890). Where a bank director makes a wrongful loan of money from which loss occurs, it is no defense to an action by the receiver of the bank against the director's estate that the insolvency of the person to whom the loan was made was not discovered until . after the death of the director and the appointment of the receiver, (lb.) 3 (U. S. C. C, 1886). Whether a suit against a director for negligent per- formance of his duties, as required by the statutes of the United States and the by-laws of the association, will survive against the executor or administrator depends upon State laws. (Witters, Re- ceiver, v. Foster, Administrator, 26 Fed. Rep., 737. ) • 4 (U. S. C. C. A., 1904). An action by depositors against directors of an insolvent national bank to recover damages for breach of the direct- ors' implied contract to see that the bank's assets were used in the manner prescribed by the national-bank act is an action on contract, and survives against representatives of deceased directors. (Boyd et al. v. Schneider et al., 131 Fed. Rep., 223.) When action against, for negligence abates. 5 (U. S. C. C, 1886). Under the laws of Vermont an action against a di- rector of a national bank for the negligent performance of duty in not requiring a bond from the cashier, and otherwise mismanaging the affairs of the bank, abates by his death, and can not be revived against his administrator. (Witters, Receiver, etc., v. Foster, Ad- ministrator, etc., 26 Fed. Rep., 737,) DIGEST OP NATIONAL BANK DECISIONS. 349 OFFICERS, CRIMINAL LIABILITY OF. Page. Generally 349 Embezzlement .__ 351 Abstraction of funds 351 Willful misapplication of funds 352 False entries 354 Aiders and abettors . _ 357 Wrongful certification of check 358 Prosecutions; Indictment— In general _.. _ 358 When evidence given by bank officer or other witness before grand jury may be used as basis for his indictment 359 For embezzlement 360 For abstraction of funds 361 For willful misapplication of funds'- 361 For making false entries . _' 364 Aiders and abettors _. 36? For wrongfully certifying check 368 When indictment should Joe quashed _*_ 369 Motion in arrest _ 369 Evidence — In general 370 Intent as an element in false entries, evidence of 374 Trial and its incidents — Jurisdiction 376 Insufficient defenses 376 Instructions to jury _ _ 377 Practice, jury 380 Juror's duty as to reasonable doubt 381 Verdict 381 Sentence '- 382 Appeal 382 When both State and United States have jurisdiction . , - 384 Liability of national bank officers under State statutes 384 genebally. Offenses under section 5209. 1 (U. S. C. C, 1882). The first clause of section 5209 of the Revised Stat- utes provides for three distinct offenses : First, embezzlement ; second, abstraction ; and, third, willful misapplication of" the moneys, funds, or credits of the bank by any president, director, cashier, teller, clerk, or agent of any association organized as a national banking associa- tion. (United States v. Lee, VI Fed. Rep., 816.) ~Not criminally liable for bad judgment. 2 (U. S. C. C, 1887). Directors or the managing committee of a national, bank may, in the honest exercise of official discretion, make loans or discounts for the actual or supposed benefit of the association, and, although the transaction may be injudicious and actually result la loss or damage to the bank, there is no criminal liability, so long as their acts are not in bad faith, for the purpose of personal gain or private advantage to the officials. (United States v. Harper, 33 Fed. Rep., 471.) Liable if not acting in good faith. 3 (U. S. Sup. Ct, 1895). A bank president, not acting in good faith, has no right to permit overdrafts when he does' not believe, and has no 350 DIGEST OF NATIONAL BANK DECISIONS. OFFICEES, CRIMINAL LIABILITY OP— Continued. generally — continued. reasonable ground to believe, that the moneys can be repaid; and, if coupled with such wrongful act, the proof establishes that he intended by the transaction to injure and defraud the bank, the wrongful act becomes a crime. (Coffin v. United States, 162 U. S., 664.) 4 (U. S., 1885). The exercise of official discretion in good faith, without fraud, for the advantage or the supposed advantage of the associa- tion, is not punishable ; but if official action be taken not in the exercise of discretion in bad faith, for personal advantage and with fraudulent intent, it is punishable. (United States v. Fish, 24 Fed. Rep., 585.) What held to be not a violation of section 5209. 5 (U. S. Sup. Ct, 1882). It is not an offense against United States, under section 5540, Revised Statutes, nor a willful misapplication of money of bank, under section 5209, for president and director of bank to cause shares of its stock to be' purchased with its money and held on trust for its benefit. (United States v. Britton, 108 U. S., 192.) 6 (U. S. Sup. Ct, 1882). It is not a willful misapplication of bank money by the president, under section 5209, for him to procure the discount by bank for his* own benefit of an unsecured note on which both maker and indorser are insolvent to his knowledge unless it is charged that the note was discounted without the authority of the board of directors or was procured by fraud. (lb., 193.) 7 (U. S. Sup. Ct., 1882). Nor is president liable for a criminal violation of that section solely by reason of permitting a depositor who is largely indebted to bank to withdraw his deposits without first paying such indebtedness. (lb.) 8 (U. S. Sup. Ct, 1882). The procuring by two or more directors of the declaration of a dividend at a time when there are no net profits to pay is not a willful misappropriation of money of bank within sec- tion 5204, Revised Statutes. (lb., 199.) 9 (U. S. Sup. Ct, 1882). Purchase of stock in violation of section 5201, Revised Statutes, made with intent to defraud, and by officers named in section 5209, .is not punishable under latter section. (United States v. Britton, 107 U. S., 655.) 10 (U. S. Dist. Ct., 1889). The president of a national bank can not be* con- victed -under Revised Statutes, section 5209, of the crime of making false entries in reports made by such bank to the Comptroller upon evidence that he signed and verified reports containing false entries where it is also shown that such entries were not made by him or by his direction. (United States v. Booker, 98 Fed. Rep., 291.) "What held to be not a violation of section 5430. 11 (U. S. Dist. Ct., 1901). Bills issued by a bank for circulation are not obligations or securities " engraved and printed after the similitude of an obligation and security issued under the authority of the United States," within .the meaning of the Revised Statutes, section 5430, since they do not purport to be obligations or securities of the United States, and an indictment for a violation of said section does not charge an offense where it shows that the instruments referred to are such bank bills. (United States v. Conners, 111 Fed. Rep., 734.) Meaning of word willful. 12 (U. S. Sup. Ct., 1894). The word " willful " in the act of Congress impos- ing a penalty on willful violation of the law respecting national banks implies a knowledge and purpose to do wrong. (Potter v. United States, 155 U. S., 438.) DIGEST OF NATIONAL BANK DECISIONS. 351 OFFICERS, CRIMINAL LIABILITY OF— Continued. EMBEZZLEMENT. What constitutes embezzlement. 1 (U. S. C. C, 1898). To constitute embezzlement by an officer of funds of a national bank, within the meaning of Revised Statutes, section 5209, with intent to defraud the bank, there must be an unlawful con- version by the officer to his own use of funds intrusted to him, with intent to injure or defraud the bank, while abstraction or misapplica- .tion consists of the conversion, with a like intent, of funds not espe- cially intrusted to his care. (U. S. v. Youtsey, 91 Fed. Rep., 864.) 2 (U.S. CO., 1879). The word "embezzle," as- found in the United States Revised Statutes, is used to describe a crime which a person has an opportunity to commit by reason of some office or employment, and which may include some breach of confidence or trust. (United States v. Conant, 9 Cent. L. J., 129; 2 N. B. C, 148.) 3 (U. S. Dist. Ct. ). Where the president, charged as a trustee with the administration of the funds of the bank in his hands, converts them to his own use without authority for so doing, he embezzles and abstracts them within the meaning of section 5209, Revised Statutes. (In re Van Campen, 2 Ben., 419.) 4 (U. S. Dist. Ct., 1904). The crime of embezzlement from a national bank by an officer, clerk, or agent within Rev.. St. section 5209 [U. S. Comp. St. 1901, p. 3497], involves two general elements: First, a breach of trust or duty with respect to the moneys, funds, or credits of the bank embezzled, which must have been lawfully in the custody or possession of the accused by virtue of his office or employment, although such possession need not have been exclusive of that of other officers, clerks, or agents ; and, second, the wrongful appro- priation of such moneys, funds, or credits to his own use, with intent to injure or defraud the association or others. (United States v. Breese, 131 Fed. Rep., 915.) 5 (U. S. Dist. Ct, 1904). The crime of embezzlement by an officer, clerk, or agent of a national bank, under Revised Statutes, section 5209 [U. S. Comp. St. 1901, p. 3497], necessarily includes the offenses of abstrac- tion and willful misappropriation, but either of the latter offenses may be committed without embezzlement. (lb.) 6 (U. S. Dist. Ct., 1904). The intent to injure or defraud, made by Revised Statutes, section 5209 [U. S. Comp. St. 1901, p. 3497], an element of the offenses of embezzlement, abstraction, or willful misapplication of funds by an officer, clerk, or agent of a national bank, need not necessarily have been the object or purpose with which the act was done; but it is sufficient if the natural and necessary effect of the act was to injure or defraud the bank or others, and it was willfully and intentionally done. (lb.) 7 (U. S. Dist. Ct., 1904). An officer of a national bank is not guilty of embezzlement, abstraction, or willful misapplication of its funds because of his obtaining money from the bank for his own use by means of overdrafts or loans by bona fide arrangement with its authorized officers or committee, but he is only protected by such arrangement where it was made by those representing the bank in good faith, and in the supposed interest of the bank. (lb.) ABSTBACTION OF FUNDS. What constitutes vnllful abstraction. 1 (U. S. C. C, 1887). To constitute the offense of willful abstraction by an officer, defined by the statute, it is necessary that the money or funds of the association should be withdrawn by the officer or by his direction; that such taking or withdrawing should be without the knowledge or consent of the bank, or of its board of directors ; that the money or funds so taken or withdrawn should be converted to the officer's own use or for the benefit and advantage of some person other than the association, and that this should be done with intent 352 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. abstraction of funds — continued. to injure and defraud the association. (United States v. Harper, 33 Fed. Rep., 471.) 2 (U. S. Dist. Ct, 1904). Abstraction, under Rev. St. §5209 [U. S. Comp. St. 1901, p. 3497], is the act of one who, being an officer, clerk, or agent of a national banking association, wrongfully takes or with- draws from it any of its moneys, funds, or credits, with intent to injure or defraud it, or some other person or company, and, without its knowledge and consent, or that of its board of directors, converts them to the use of himself, or of some person or company other than the bank. No previous lawful possession is necessary to constitute the crime, nor does it matter in what manner it is accomplished. (United States v. Breese, 131 Fed. Rep., 915.) WILLFUL MISAPPLICATION OF FUNDS. What constitutes willful misapplication of funds. 1 (U. S. Sup.„Ct, 1882). Willful misapplication under section 5209, Revised Statutes, means a misapplication for the use, benefit, or gain of the party charged, or of some company or person other than the associa- tion. Therefore to constitute the offense of willful misapplication there must be a conversion to his own use or the use of some one else of the moneys and funds of the association by the party charged. The purchase, for the use of the bank, of its own stock by its presi- dent when not necessary to secure a debt due the association is a maladministration of the affairs of the bank, but not a criminal mis- application of its funds. (U. S. v. Britton, 107U. S., 655.) 2 (U. S. C. C, 1882). It was the intention of Congress to make criminal the misapplication and conversion of the funds of national banking associations without regard to whether or not the party so misapply- ing received any of the funds or other advantage, directly or indi- rectly. (United States v. Lee, 12 Fed. Rep., 816.) 3 (U. S. C. C 1882). If it appears that the funds of the banking associa- tion have been abstracted or willfully misapplied by defendant, he is precluded from denying that it was done with unlawful intent, (lb.) 4 (U. S. C. C, 1885). It is not necessary that the officer should person- ally misapply the funds of the association. He will be guilty as a principal offender though he merely procures or causes the misappli- cation. (United States v. Fish, 24 Fed. Rep., 585.) 5 (U. S. C. C, 1885). A loan in bad faith, with intent to defraud the asso- ciation, is a willful misapplication within the meaning of the statute, (lb.) .6 (U. S. C. C, 1887). To constitute the offense of a willful misapplication of the moneys, funds, or credits of the association within section 5209, Revised Statutes, it is not necessary that the person charged with the offense should have been previously in the actual possession of such moneys, funds, and credits under or by virtue of any trust, duty, or employment committed to him. Xor is it necessary to the commission of this offense that the officer making the willful misap- plication should derive any personal benefit therefrom. When the funds or assets of the bank are unlawfully taken from its possession, and afterwards willfully misapplied by converting them to the use of any person other than the bank, with intent to injure and defraud, the offense as described in the statute is committed. (United States v. Harper, 33 Fed. Rep, 471.) 7 (U. S. C. C, 1887). This criminal act may be done directly and personally, or it may be done indirectly through the agency of another. If the officer charged with it has such control, direction, and power of man- agement, by virtue of his relation to the bank, as to direct an applica- tion of its funds in such manner and under such circumstances as to constitute the offense of willful misapplication, and actually makes DIGEST OF NATIONAL BANK DECISIONS. 353 OFFICEKS, CRIMINAL LIABILITY OF— Continued. willful misapplication of funds — continued. such direction or causes such misapplication to be made, he is equally as guilty as if it was done by his own hands. (lb.) 8 (U. S. C. C. A., 1897). An indictment under Revised Statutes, section 5209, against officers of a national bank and a depositor, charged will- ful misapplication of the funds of the bank, with intent to injure and defraud the bank. On the trial it appeared that the depositor made and deposited fictitious checks, which were credited to his account. Held, that it was necessary to show that some portion of the funds were withdrawn from the possession or control of the bank, or a conversion in some form was made thereof, so that the bank would be deprived of the benefit thereof. (Dow et al. v. United States, 82 Fed. Rep., 904.) 9 (U. S. C. C. A., 1897). The mere fact of payment by the officers of a national bank of a check which creates an overdraft does not neces- sarily constitute a fraudulent misapplication of the funds of the bank, (lb.) 10 (U. S. C. C. A., 1900). Misapplication of assets of national bank by agent appointed to assist in liquidation is an offense, within Revised Stat- utes, section 5209. (Jewett v. United States, 100 Fed. Rep., 832.) ' 11 (U. S. C. C. A., 1900). President of national bank, appointed as agent to assist in liquidation, is liable to indictment for misapplication of assets as agent, under Revised Statutes, section 5209, though he is also a trustee for creditors. (lb.) 12 (U. S. C. C. A., 1900). President of national bank, appointed to close its affairs in liquidation, is an agent, within meaning of Revised Stat- utes, section 5209, punishing misapplication of assets of national bank. (lb.) 13 (U. S. C. C. A., 1900). Under indictment for misapplying assets of national bank, under Revised Statutes, section 5209, defendant may be con- victed of misapplication of assets in his actual possession, since the word misapplication is the broader term and includes the offense of embezzlement. (lb.) 14 (U. S. C. C. A., 1901). The willful misapplication of the funds of a national bank by an officer without the knowledge or consent of the bank, in violation of Revised Statutes, section 5209, is not changed, as to its criminal character, by the fact that the act subsequently became known to the officers of the bank, and that they impliedly consented thereto by taking no action in regard to it. (Rieger v. United States, 107 Fed. Rep., 916.) 15 (U. S. C. C. A., 1901). To constitute the offense of willful misapplication, of the funds of a national bank, under Revised Statutes, section 5209, it is not essential that the money should be actually withdrawn from the bank, but the offense may be consummated by giving fraudulent credits and the transfer of the same in the usual way by means of checks. An indictment for such offense, alleged to have been com- mitted by discounting a certain note, is sustained by proof that defendant, as president of the bank, without the knowledge or con- sent of the directors, discounted such note, which he knew to be worthless and insufficiently secured, crediting the proceeds on the books of the bank to the maker, subject to his check ; that the maker drew a check for the amount in favor of a third person, who indorsed the same to defendant, and that defendant by means of such check paid a note held by the bank for which he was himself liable, (lb.) 16 (U. S. Dist. Ct). If, with intent to defraud the association, an officer allows a firm in which he is a member to overdraw its account, he will be guilty of misapplying the funds of the association. (In the matter of Van Campen, 2 Ben., 419.) 17 (U. S. Dist. Ct, 1904). Willful misapplication of the moneys, funds, or credits of a national bank, within Revised Statutes, section 5209 4049—05 23 354 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. willful misapplication of funds — continued. [U. S. Comp. St., 1901, p. 3497], consists in their misapplication by an officer, clerk, or agent of the bank, made willfully and wrongfully, and with intent to injure or defraud the association or some other person or company, and their conversion to his own use, or to the use of some one other than the bank. No previous lawful possession is necessary to constitute the crime. (United States v. Breese, 131 Fed. Rep., 915.) Not misapplication to purchase stock of an association with its own funds, if stock is to be held m trust for it. 18 (U. S. Sup. Ct, 1882). It is no violation of the provisions of section 5440, Revised Statutes, subjecting to penalties persons conspiring to commit an offense against the United States, and persons doing acts to effect the object of conspiracy ; and no violation of section 5209, Revised Statutes, subjecting to punishment a president or a director of a national banking association who willfully misapplies the money, funds, or credits of the association, if the president and such a director conjointly cause shares in the capital stock of such associa- tion to be purchased with the money of the association, and held on trust for its benefit. (United States v. Britton, 108 U. S., 192.) When not misapplication to procure discount of note where both maker and indorser are insolvent. 19 (U. S. Sup. Ct., 1882). It is not an offense under section 5209, Revised Statutes, which forbids the willful misapplication of the moneys of a national banking association by a president of the bank, for such officer to procure the discount by the bank of a note which is not well secured, and of which both maker and indorser are, to the knowledge of the president, insolvent when the note is discounted ; and to apply the proceeds to his own use, unless it is charged that the note was discounted without the authority of the board of directors or was procured by fraud. (United States v. Britton, 108 U. S., 193.) Permitting a depositor indebted to the bank to withdraw his deposit not mis- application of funds. 20 (U. S. Sup. Ct, 1882). Assuming that it was the duty of the president of a national banking association to prevent the withdrawal of deposits while the depositor is indebted to the association, he is, nevertheless, not liable for a criminal violation of section 5209, Revised Statutes, forbidding the willful misapplication of the funds of the bank, solely by reason of permitting a depositor who is largely indebted to the bank to withdraw his deposits without first paying his indebtedness to the bank. (United States v. Britton, 108 U. S., 193.) Payment of dividend when there are no net profits not misapplication of funds. 21 (U. S. Sup. Ct., 1882). The procuring by two or more directors of a national banking association of a declaration of a dividend by the bank at the time when there are no net profits to pay it, is not a will- ful misappropriation of the money of the association within the pro- visions of section 5204, Revised Statutes ; and an allegation of a conspiracy to do that act is not an allegation of a conspiracy to com- mit an offense against the United States. (United States v. Britton, 108 U. S„ 199.) FALSE ENTRIES. On books of bank. 1 (U. S. Sup. Ct., 1897). Where a transaction by a national-bank officer with intent to defraud is entered on a deposit slip, entry of the con- tents of such slip upon the books of the bank by him, or by his direc- tion, is making a " false entry " within Revised Statutes, section 5209. (Agnew v. United States, 165 U. S., 36.) 2 (U. S. C. C, 1898). In a prosecution of an officer for making false entries in the books of a national bank and in the report made to the Comp- troller, with intent to deceive the bank's directors and any agent of DIGEST OF NATIONAL BANK DECISIONS. 355 OFFICERS, CRIMINAL LIABILITY OF— Continued. paise entries — continued. the Comptroller, proof that the entries made were false, and known to be so by defendant ; that they were made in the books, and after- wards carried into a report made by the bank to the Comptroller, and were calculated to deceive the Comptroller or his agent, raises a presumption that such was the intention in making them, though such presumption is not conclusive. (United States v. Toutsey, 91 Fed. Rep., 864.) 3 (U. S. C. C, 1898). Under the provisions of Revised Statutes, section ,5209, making it a crime for an officer, clerk, or agent of a national bank to make any false entry in any book, report, or statement of the association, with intent to defraud or to deceive any officer of the bank, or any agent appointed to examine the affairs of the bank,' an officer is chargeable for a false entry made by a clerk under his direction, the same as though he had made it in person. (lb.) 4 (U. S. C. C, 1898). Where defendant, as cashier of a national bank, dis- counted certain notes, credited the proceeds to the makers, procured the credit to be transferred to himself, and with it paid certain other notes then held by the bank, thus effecting a substitution of securities, the fact that he knew the makers of the notes taken up to be solvent, and the makers of the new notes to be insolvent, and the collateral security deposited therewith to be insufficient in value to pay them, raises a presumption that he intended by the transaction to injure or defraud the bank, though such presumption is not con- clusive, (lb.) 5 (U. S. C. C, 1887). Any entry on the books of the bank which is inten- tionally made to represent what is not true or what does not exist, with intent either to deceive its officers or defraud the association, is a false entry within the meaning of the statute. (United States v. Harper, 33 Fed. Rep., 471.) 6 (U. S. C. C, 1887). It may be made personally or by direction. (lb.) 7 (U. S. Dist. Ct., 1888). The erasure of figures already written in the books of a national bank and the substitution of other figures which falsify the state of the account constitute a " false entry " within the meaning of section 5209, Revised Statutes, by which it is declared to be a misdemeanor to make any " false entry in any book, report, or statement of the association, with intent to injure or defraud," etc. (United States v. Crecelius, 34 Fed. Rep., 30.) 8 (U. S. C. C, 1889). A conviction can not be had under section 5209 where it appears that the officers alleged to have been deceived were accom- plices in the speculation, to hide which the false entries were made. (United States v. Means et al., 42 Fed. Rep., 599.) 9 (U. S. C. C. A., 1897). If an overdraft is made and allowed under cir- cumstances justifying it, or even under circumstances making it a fraud upon the bank, the entry of the transaction just as it occurred on the books of the bank is not a false entry, under section 5209, Re- vised Statutes. (Dow et al. v. United States, 82 Fed. Rep., 904.) 10 (U. S. Dist Ct, 1904). The entry on the books of a national bank by the cashier as a " cash item " of a check which actually entered into a transaction of the bank will not support an indictment of the cash- ier, under Revised Statutes, section 5209 (U. S. Comp. St. 1901, p. 3497), for making a "false entry," although it is further charged that he knew the check to be worthless and fraudulent and made the entry with intent to deceive, etc. The entry, being a truthful state- ment of the actual transaction, can not be converted into a false entry by any other fraudulent or unlawful act of the cashier. (United States v. Young, 128 Fed. Rep., 111.) In reports to Comptroller. 1 (U. S. Sup. Ct., 1895). The assistant cashier of a bank is indictable under Revised Statutes, section 5209, for making a false entry in a report to the Comptroller, although he is not one of the officers authorized 356 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. fai.sk entries — continued. by section 5211 to make such a report; for he may be regarded as within the category of " clerk or agent," within the terms of section 5209, the penalty being affixed to the making of the false entry and not to the making or verification of the report. (Cochran v. United States, 157 U. S., 286.) 12 (U. S. Sup. Ct, 1895). A national bank officer can not be held criminally liable for verifying a report which he believes to be true but which is in fact false under Revised Statutes, section 5209, since that makes the intent to defraud a material element of the offense. (lb.) 13 (U. S. C. C. A., 1899). The fact that a depositor in a national bank has given the bank an " overdraft note," which has not in fact been dis- counted, does not warrant the bank in reporting an overdraft by such depositor under the head of "loans and discounts." (Bacon v. United States, 97 Fed. Rep., 35; 2 B. C, 26.) 14 (U. S. C. C. A., 1899). To constitute the offense of making a false report of the condition of a national bank, within Revised Statutes, section 5209, it is not necessary that such report, when made by an officer of the bank to the Comptroller, should have been made in response to a call or request of the Comptroller. (lb.) 15 (U. S. Dist. Ct, 1891). A report of condition of a national bank, whether called for by the Comptroller of the Currency or not, which is a re- port in the usual form made by an officer of the bank in his official capacity, if it contains a false entry made with intent to deceive, is within Revised Statutes, section 5209, which declares such false en- tries to be a misdemeanor. (United States v. Hughitt, 45 Fed. Rep., 47.) 16 (U. S. Dist. Ct, 1892). A "false entry" in a report by a national-bank officer or a director to Comptroller of the Currency within the mean- ing of section 5209 is not merely an incorrect entry made through inadvertent negligence or mistake, but is an entry known to the maker to be untrue and incorrect and by him intentionally entered while so knowing its false and untrue character. (United States v. Graves, 53 Fed. Rep., 634. See also Graves v. U. S.) 17 (U. S. Dist. Ct., 1892). It is not necessary to complete the offense of making a " false entry " in a report to the Comptroller of the Cur- rency of the condition of a national bank, with intent to deceive or defraud, that any person shall have been in fact actually deceived or defrauded, for the making of such a " false entry " with the intent to deceive or defraud is sufficient. (lb.) 18 (U. S. C. C, 1893). Under section 5209 of the national-bank act it is an indictable offense to make a false entry in a report to the Comp- troller of the Currency, or to aid and abet the making of such an entry. (United States v. French et al., 57 Fed. Rep., 382.) In statements to examiner. 19 (U. S. C. C, 1898). If money is left with a national bank in a sack, with the express understanding that it is not to be mingled with the bank's funds, but the identical bills or coins are to be returned in the same condition, and this is done to make a showing of money to a bank . examiner, as if it were the money of the bank, then the entry thereof on the books of the bank as a deposit is a false entry. (United States v. Peters, 87 Fed. Rep., 984, ) In due course of business.^ 20 (U. S. Dist. Ct., 1897). It is not a necessary ingredient of the offense of making a false entry in a report, under Revised Statutes, section 5209, that the report shall be one of those mentioned in sections 5211, 5212, or one which the bank is bound by law to make. It is sufficient if the report is one made in due course of business. (United States v. Potter, 56 Fed. Rep., 83, disapproved. United States v. Booker, 80 Fed. Rep., 376.) DIGEST OP NATIONAL BANK DECISIONS. 357 OFFICERS, CRIMINAL LIABILITY OF— Continued. false entries — continued. Principal and accessories. 21 (U. S. Sup. Ct., 1895). The president and assistant cashier of a national bank are indictable as principals, under Revised Statutes, section 5209, for making a false entry in a report, although neither of them actually signed or attested the report. (Cochran v. United States, 157 U. S., 286.) 22 (U. S.). Where false entries are made by a clerk at the direction of the president, the latter is a principal. (U. S. C. C, 1885) United States v. Fish, 24 Fed. Rep., 585 ; (U. S. Dist. Ct.) In the matter of Van Campen, 2 Ben., 419. What is not a false entry under section 5209. 23 (U. S. Dist. Ct., 1892). When false entries were made by a bookkeeper in a statement requested by a national-bank examiner, purporting to give the balance due to depositors, which statement it was the duty of the examiner to make and not the bookkeeper, an indictment for making " false entries in a statement of the association " will not be sustained. (United States v. Ege, 49 Fed. Rep., 852.) 24 (U. S. Dist. Ct, 1892). It is not a "false entry" to enter under heading of " Loans and discounts " items which, on books of the bank and for convenience of its officers, have been temporarily, withdrawn from that heading, and which are, from day to day, carried on the books of the bank under heading of " Suspended loans " while await- ing action of directors as to same being withdrawn from character of loans and entered up as a loss on profit and loss account. (United States v. Graves, 53 Fed. Rep., 634. See also Graves v. U. S.) Limitations. 25 (N. Mex. Sup., 1894). The provisions of section 1024, Revised Statutes, United States, relating to limitations of actions, apply to the offense of making false entries in books of national banks. (United States v. Folsom, 38 Pac. R., 70 ; 7 N. Mex., 532.) AIDEES AND ABETTOBS. Persons who are not officers indictable under section 5209. 1 (U. S. Sup. Ct, 1895). Revised Statutes, section 5209, relating to national banks, provides that officers or agents thereof who willfully misapply any of its moneys, or who make any false entry or reports with intent to injure or defraud it, or to deceive any officer of the bank, or any agent appointed to examine its affairs, and " every person " who, with like intent, aids or abets any officer or agent in any violation of the section, shall be guilty, etc. Held, that persons not officers or agents of a national bank may be aiders and abettors of the presi- dent of the bank in violation of such statute. (Coffin v. United States, 15 S. Ct, 394; 156 U. S., 432.) 2 (U. S. Sup. Ct, 1896). One who has an interest in a company, for the benefit of which the president of a national bank criminally misap- plies its funds, may be guilty as an aider and abettor in such mis- application, although the president has no interest in or relation to him or to said company, and although he has no interest in the bank or with the president thereof of any kind. (Coffin v. United States, 16 S. Ct, 943; 162 U. S., 664.) 3 (U. S. Sup. Ct, 1896). It is not necessary to the guilt of aiders and abettors who are not officers of the bank that they should have a com- mon purpose with the principal to subserve joint interests with him by the misapplication of the bank's funds. (lb.) 4 (U. S. C. G, 1898). A depositor may knowingly overdraw his account and be innocent of any unlawful purpose ; but if he does so for con- siderable amounts, without the knowledge and consent of the proper officials, and with a fraudulent intent that the moneys of the bank 358 DIGEST OF NATIONAL, BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. aiders and abettoes — continued. shall be applied to their payment by the teller without the knowl- 1 edge or consent of the proper officials, he is guilty. (United States v. Kenney, 90 Fed. Rep., 257.) 5 (U. S. C. C, 1898). An intent to injure or defraud a national bank, with-' in the meaning of Revised Statutes, section 5209, does not necessarily involve malice or ill will toward the bank. It is sufficient that the unlawful intent is such as, if carried into execution, will necessarily or naturally injure or defraud the bank. (lb.) 6 (U. S. C. C, 1898). If, at the time defendant drew checks upon a na- tional bank, he knew or had reason to believe that they were to be fraudulently paid by the teller out of the funds of the bank, and not from any funds to which defendant could legitimately resort, he had a guilty intent; and it is immaterial that he intended finally to rec- ompense the bank through successful operations in stocks or other- wise, (lb.) 7 (U. S. C. C, 1898). If there was a fraudulent understanding between defendant and the paying teller that checks drawn by defendant in favor of a firm of stockbrokers were to be paid out of funds of the bank, when defendant had no funds or only insufficient funds to his credit, and that such checks were not to be charged in his account, but were to be fraudulently concealed until he should make deposits sufficient to meet them, defendant had a guilty intent to injure or defraud the bank. (lb.) Death of principal before indictment no obstacle. 8 (U. S. C. C. A., 1898). The death of the principal before indictment is no obstacle to the prosecution and punishment of one charged with aid- ing and abetting an officer, clerk, or agent of a national bank to ab- stract, misapply, or embezzle the funds thereof, in violation of Re- vised Statutes, section 5209, which makes such offense a misde- meanor. (Gallot v. United States, 87 Fed. Rep., 446.) WRONGFUL CERTIFICATION OF CHECK. 1 (U. S. C. C. A., 1898). In order to convict a national-bank officer of wrongfully certifying checks, it is not necessary to show that he had actual knowledge that the account against which the checks were drawn was not sufficient; it is enough if he willfully refrained from investigation in order to avoid knowledge. (Spurr v. United States, 87 Fed. Rep., 701.) Prosecutions, indictment, in general. Indictments for violations of section 5209. 1 (U. S. Sup. Ct, 1896). An indictment against its president for defraud- ing a national bank, described the bank as the " National Granite State Bank," " carrying on a national banking business at the city of Exeter." The evidence showed that the authorized name of the bank was the " National Granite State Bank of Exeter." Held, that the variance was immaterial. (Putnam v. United States, 162 U. S., 687.) 2 (U. S. Sup. Ct, 1894). An indictment should charge the crime alleged to have been committed with precision and certainty, and every in- gredient of which it is composed must be accurately and clearly al- leged ; but it is not necessary in framing it to set up an impracticable standard of particularity, whereby the Government may be en- trapped into making allegations which it would be impossible to prove. (Evans v. United States, 153 U. S., 584.) DIGEST OFaNATIONAL BANK DECISIONS. 359 OFFICERS, CRIMINAL LIABILITY OF— Continued. Prosecutions — Continued. indictment — continued. in general — continued. 3 (U. S. C. C, 1879). Section 1025 of the Revised Statutes provides: "No indictment * * * shall be deemed insufficient * * * in the matter of form only." Held, that anything that forms a part of the description of the crime is not a " matter of form." (United States v. Conant, 2 N. B. C, 148 ; 9 Central Law Journal, 129.) 4 (U. S. Dist. Ct, 1893). Embezzlement, abstraction, and willful misappli- cation of the moneys, funds, etc., of a national bank, as described in Revised Statutes, section 5209, constitute three separate crimes or offenses, which, under Revised Statutes, section 1024, may be joined in one indictment, but must be stated in separate counts. (United States v. Cadwallader, 59 Fed. Rep., 677.) 5 (U. S. C. C, 1897). An indictment against a defendant for the embezzle- ment and abstraction of the property of a national banking association is not demurrable because it charges the receipt of the property by him in different capacities, both as an officer and as an agent«of the association. (United States v. Jewett, 84 Fed. Rep., 142. Affirmed, Jewett v. U. S., 100 Fed. Rep., 832. ) 6 (U. S. C. C, 1897). An averment in an indictment against an officer and agent of a national banking association that the defendant " did steal, abstract, take, and carry away " property of the association does not charge two offenses. (lb.) 7 (U. S. C. C, 1897). An allegation that defendant, an officer and agent of a national banking association, did secretly, in a manner and by par- ticulars to the jurors unknown, willfully, unlawfully, and fraudu- lently convert to his own use, and misapply, from said association to himself, certain funds, sufficiently charges the offense of " willful mis- application " of property, under Revised Statutes, section 5209. (lb.) 8 (U. S. C. C. A., 1901). Under Revised Statutes, section 5209, which makes it a criminal offense for an officer or agent of a national bank to do either of certain acts therein enumerated, " with intent in either case to injure or defraud the association," etc., such intent is an essential element of every offense therein specified, which must be charged in the indictment and proved. (McKnight v. United States, 111 Fed. Rep., 735.) For perjury for' false statement under section 5211, Revised Statutes. 9 (U. S. Sup. Ct, 1882). Indictment for perjury against officer for false statement under section 5211, Revised Statutes, is bad if, prior to the act of 1881, chapter 82, his oath verifying report was taken before notary appointed by a State. (United States v. Curtis, 107 U. S., 671.) WHEN EVIDENCE GIVEN BY BANK OFFICER OR OTHER WITNESS BEFORE GRAND JURY MAT BE USED AS BASIS FOR HIS INDICTMENT. Witnesses — Appearance before grand jury— Privilege. 1 (U, S. C. C, 1902). Code of Criminal Procedure of New York, section ,393, declaring that the defendant in all cases may testify as a witness in his own behalf, but his neglect or refusal to testify does not create any presumption against him, applies only to " defendants," or persons against whom a charge has been brought, and is not the same as the constitutional provision declaring that no person shall be compelled to testify against himself, which provision includes not only defendants, but all witnesses. (United States v. Kimball et al., 117 Fed. Rep., 156.) 360 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. ' Pbosecutions — Continued. indictment — continued. WHEN EVIDENCE GIVEN BY BANK OFFICER OE OTHEE WITNESS BEFOEE 6EAND JTJBY MAT BE USED AS BASIS FOE HIS INDICTMENT Continued. Indictment — Use of evidence. 2 (U. S. C. C, 1902). Where an investigation before a grand jury is in prog- ress for the purpose of ascertaining whether a crime has been com- mitted, not based on any complaint or formal accusation, evidence given in such investigation by persons subsequently indicted is not used elsewhere, in violation of Revised Statutes of the United States, section 860, declaring that any evidence voluntarily given by a wit- ness can not be used against him in any criminal prosecution. (lb.) 3 (U. S. C. C„ 1902). That a person subsequently indicted was subpoenaed before the grand jury and compelled to take the usual oath was not an infringement of his constitutional right not to testify agains^ him- self, he not being able to claim his constitutional privilege until he had been sworn as a witness. (lb.) Compulsion. 4 (U. S. C. C, 1902). Where defendants were subpoenaed to appear before a grand jury and testify in an investigation concerning matters in which they were the principal actors, and before any complaint or accusation had been brought against them, and before appearing had time to consult counsel, and on appearing stated that they were desir- ous of an opportunity to testify, and made no claim of their consti- tutional privilege to refrain from testifying, they were not " com- pelled " to testify, within the constitutional prohibition declaring ' that no person shall be compelled to testify against himself, so as to invalidate an indictment subsequently found on evidence disclosed, (lb.) 5 (U. S. C. C, 1902). Where a witness, on appearing before a Federal grand jury in response to a subpoena, stated that he had been advised not to answer any questions in regard to the subject under investiga- tion, on the ground that his answers might tend to incriminate him, and he was thereupon fully informed that he could not be so com- pelled to testify, and he continued to answer questions or not, accord- ing to his free will, he could not thereafter claim, on a motion to" quash an indictment against him, that his constitutional privilege was violated. ( lb. ) 6 (U. S. Dist. Ct, 1897). An indictment should be quashed when it appears that defendant was compelled by subpoena to attend before the grand jury, and give material testimony, without knowing that his own con- duct was under investigation. (U. S. v. Edgerton, 80 Fed. Rep., 374.) EMBEZZLEMENT. 1 (U. S. Sup. Ct, 1891). An indictment on Revised Statutes, section 5209, is sufficient which avers that the defendant was president of the national banking association ; that by virtue of his office he received and took into his possession certain bonds (described), the property of the association, and that, with intent to injure and defraud the associ- ation, he embezzled the bonds and converted them to his own use. (Claasen v. United States, 142 U. S., 140.) 2 (U. S. Sup. Ct, 1891). In a criminal case a general judgment upon an indictment containing several counts and a verdict of guilty on each count can not be reversed on error if any count is good and is suffi- cient to support the judgment. (lb.) 3 (U. S. C. C. A., 1899). Where the facts averred in an indictment against an officer of a national bank for embezzlement show that defendant wrongfully used the bank's money in his care and under his control for the purpose of bribing certain city officials in his own interest it DIGEST OF NATIONAL BANK DECISIONS. 361 OFFICERS, CRIMINAL LIABILITY OF— Continued. Prosecutions — Continued. indictment — continued. embezzlement — continued. sufficiently avers an appropriation to his own use, and is not vitiated by further averments that there was an intent to wrongfully convert the money to the use of such officials, and that it was so converted. (McKnight v. U. S., 97 Fed. Rep., 208.) 4 (U. S. C. C. A., 1901). An indictment under the national banking laws, which, following the words of the statute, charges the president of the bank with embezzling, abstracting, and misapplying moneys, funds, and credits of the bank at various times, need not specify how much was moneys, how much funds, and how much credits. (Breese v. United States, 106 Fed. Rep., 680.) 5 (U. S. C. C. A., 1898). An averment in an indictment under Revised Stat- utes, section 5209, for embezzlement by an officer of a national bank, that the money embezzled was lawful legal-tender money of the United States, is surplusage, and need not be proved. (Porter v. United States, 91 Fed. Rep., 494. ) ABSTBACTION of funds. 1 (U. S. Sup. Ct, 1887). A form of indictment which sufficiently describes and identifies the crime of abstracting the funds of a national bank created by Revised Statutes, section 5209, sufficiently states the char- acter and capacity of the bank. (U. S. v. Northway, 120 U. S., 327.) 2 (U. S. Sup. Ct, 1887). An indictment which charges in substance that the defendant was president and agent of a certain national bank there- tofore duly organized and established and then existing and doing business, under the laws of the United States, and that, being such president and agent, he did then and there " willfully and unlawfully and with intent to injure the said national banking association, and without the knowledge and consent thereof, abstract and convert to his own use certain moneys and funds of the property of the said association of the amount and value," etc., sufficiently describes and identifies the crime of abstracting the funds of the bank created by Revised Statutes, section 5209. (lb.) WILLFUL MISAPPLICATION OF FUNDS. 1 (U. S. Sup. Ct., 1887). In an indictment, under Revised Statutes, section 5209, for willfully misapplying the funds of a national bank, it is not necessary to charge that the moneys and funds alleged to have been misapplied had been previously intrusted to the defendant, since a willful and criminal misapplication of the funds of the association may be made by its officer or agent without having previously received them into his manual possession. (U. S. v. Northway, 120 U. S., 327.) 2 (U. S. Sup. Ct., 1887). In indictment charging president of a bank with aiding and abetting its cashier in the misapplication of its funds, it is not necessary to aver that he then and there knew that the person so aided and abetted was the cashier. (lb.) 3 (U. S. Sup. Ct, 1882). The willful misapplication of the moneys and funds of the bank, which is made an offense by section 5209, means some- thing different from the acts of official maladministration referred to ' in section 5239, and it must be a willful misapplication for the use or benefit of the party charged, or of some person or company, other than the association, with intent to injure and defraud the association, or some other body corporate, or some natural person, and it must be charged in the indictment that such misapplication was so made. The counts in an indictment which charge the fraudulent purchase by the defendant, as president of a banking association, of certain shares of stock " in trust for the use of said association, and that said shares of stock were not purchased as aforesaid in order to prevent loss upon 362 DIGEST OP NATIONAL BANK DECISIONS. OFFICEES, CRIMINAL LIABILITY OF— Continued. Prosecutions — Continued. indictment — continued. willful misapplication of funds — continued. any debts theretofore contracted with said association in good faith," do not allege with sufficient certainty an offense under section 5209, (United States v. Britton, 107 U. S., 655.) 4 (U. S. Sup. Ct., 1895). The words'" " willfully misapplies" having no set- tled technical meaning, do not, of themselves, fully and clearly set forth every element necessary to constitute the offense intended to be punished; but they must be supplemented by further averments, showing how the misapplication was made, and that it was an unlaw- ful one. (Batchelor v. United States, 156 U. S., 426.) 5 (U. S. C. C, 1893). An indictment against the president of a national bank alleging that he " unlawfully and willfully and with intent to injure and defraud the said association for the use, benefit, and advantage of himself did misapply certain of the money and funds of the association which he * * * then and there, with the intent aforesaid, paid and caused to be paid " to certain persons named, was bad for failure to allege the fact that made such payment unlawful or criminal. (United States v. Eno., 56 Fed. Rep., 218.) 6 (U. S. C. C, 1893). It is not essential that such indictment should allege that the acts charged were done without the knowledge and assent of the directors of the association. (lb.) 7 (U. S. C. C. A., 1900). Indictment charging one, as president, director, and agent of national bank, with willfully misapplying its assets, is not bad for duplicity. (Jewett v. United States (C. C. A.), 100 Fed. Rep., 832.) 8 (U. S. C. C. A., 1900). Indictment for misapplying assets of national bank held not bad, for want of certainty, because it does not allege how funds were misapplied by defendant. (lb.) 9 (U. S. C. C. A., 1901). Indictment for misapplying assets of national banking association need not allege that association is carrying on a banking business. (lb.) 10 (U. S. C. C. A., 1901). In an indictment under Revised Statutes, section 5209, charging an officer of a national banking association with the willful misapplication of certain moneys, funds, and credits of the bank by using the same to discount an unsecured note of a person known to be insolvent, such note does not constitute the subject-matter of the offense, and need not be set out hsec verba. A description by giving the date and amount and the name of the maker, so as to advise the accused with reasonable certainty what note is intended, is sufficient. (Eieger v. United States, 107 Fed. Rep>., 916.) 11 (U. S. C. C, A., 1901). It is not a substantial defect in such an indictment to aver that the misapplication of the funds was without the knowl- edge " and " consent of the bank, its directors, etc., instead of using the disjunctive form. (lb.) 12 (U. S. C. C. A., 1901). An averment that defendant misapplied "certain moneys, funds, and credits " of the bank does not render the indict- ment bad for indefiniteness where it is followed by an explicit state- ment that the misapplication was committed by means of discounting a note, sufficiently described, which was known by him to be worth- less, (lb.) 13 (U. S. C. C. A., 1901). An averment that such note was "made and drawn " by a person designated by his full first and surnames is supported by proof that it was made by such person, although it is not shown whether it was signed with his full first name or by his initials. (lb.) 14 (U. S. C. C. A., 1901). The indictment averred that the note was dated on the 8th day of December, 1894, and was due and payable " on the 11th day of April, A. D. 1894." The proof corresponded with the DIGEST OP NATIONAL BANK DECISIONS. 363 OFFICERS, CRIMINAL LIABILITY OF— Continued. Pbosectjtions — Continued. indictment — continued. willful misapplication of funds — continued. indictment as to date, but showed that the note was due on the 11th day of April, 1895. Held, that the mistake in the indictment was one so obvious that it could not have misled the accused to his preju- dice, and that the variance was not fatal. The note not being the subject-matter of the offense, and the averment of the date of its maturity one which was immaterial and unnecessary to its identi- fication, the allegation as to the day of maturity might be rejected as surplusage. (lb.) 15 (U. S. C. C. A,, 1901). An averment in the indictment that the misapplica- tion of funds by the accused was for the benefit of himself " and other persons to the grand jurors aforesaid unknown " did not entitle the defendant to have the question whether the grand jury did in fact know, or should have known, the names of such other persons, submitted to the jury for the purpose of establishing a variance, since the failure to state such names, even if they might have been stated, could not have been prejudicial to defendant. (lb.) 16 (U. S. C. C. A., 1901). Where an indictment, under Revised Statutes, sec- tion 5209, for a criminal misapplication of the funds of a national bank, fully describes the act constituting the alleged offense, so as to advise the accused of the particular transaction which is called in question, and the act is averred to have been done willfully and with intent to injure and defraud the bank, and without its knowl- edge or consent, it is sufficient to allege generally that it was done for the use, benefit, and advantage of the accused, or some company or person other than the bank, and a conversion of the fund or credit need not be averred. (lb.) 17 (U. S. C. 0, 1904). An indictment of an officer of a national bank, under Revised Statutes, section 5209 (D. S. Comp. St. 1901, p. 3497), for misapplication of funds, sufficiently alleges his possession of the funds by an averment that he was president of the bank, and as such had access to its funds, properties, moneys, and credits, with duties to perform in their control, management, and application. (U. S. v. Eastman, 132 Fed. Rep., 551.) 18 (U. S. C. C, 1904). An indictment of an officer of a national bank, under Revised Statutes, section 5209 (U. S. Comp. St. 1901, p. 3497), for misapplication of the funds or property of the association, suffi- ciently alleges the manner in which the misapplication was accom- plished where it charges that, having access to the funds and prop- erties of the bank, he willfully, unlawfully, fraudulently, and with- out the consent of the bank, converted them to his own use, or to the use of persons other than himself and other than the association, (lb.) 19 (U. S. C. C, 1904). An indictment charging an officer of a national bank with misapplication of its funds, or with making false entries in its books, need not allege that the acts were done feloniously, where they are charged to have been done willfully and with intent to defraud the bank, and are such as are made misdemeanors by the statute. (lb.) 20 (U. S. C. C, 1904). Under Revised Statutes, section 1024 (U. S. Comp. St. 1901, p. 720), providing that indictments shall not be deemed insufficient because of defects in form or other matters which do not affect the substantial rights of the accused, an indictment under sec- tion 5209 (U. S. Comp. St. 1901, p. 3497), charging a defendant, in different counts, with offenses against two different national banks, of each of which he was an officer, is not necessarily demurrable ; but the propriety of such joinder in a given case is left to the dis- cretion of the court, which may compel an election between the counts or direct separate trials. (lb.) 364 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. Pbobectjtions — Continued. indictment — continued. FOB MAKING FALSE ENTRIES. 1 (U. S. Sup. Ct, 1882). An indictment under Revised Statutes, section 5209, requires the* following averments : 1. That the accused was the president or other officer of a national banking association, which was carrying on a banking business. 2. That being such president or other officer, he made in a book, report, or statement of the association, describing it, a false entry, describing it. (Such entries need not be intelligible to persons not skilled in bookkeeping, and the fact that the attempt to deceive ,by making a false entry was not an adroit and skillful one does not relieve the act of its criminal character.) 3. That such false entry was made with intent to injure or defraud the association, or to deceive any agent, describing him, appointed to examine the affairs of the association. (It is not necessary that a bank examiner should have been appointed to examine the bank at the time the false entries were made, as the purpose of the statute is to punish all entries, no difference when made, if made with the intent to defraud the association or deceive the examiner.) 4. Averments of time and place. (U. S. v. Britton, 107 U. S., 655.) 2 (U. S. Sup. Ct., 1882). In an indictment of an officer of a national bank, under section 5209, Revised Statutes, for making false entries in a book, report, or statement of such association, with an intent to injure and defraud the association, or deceive an agent appointed to examine the affairs of such association, it is not necessary to aver that the false entry was made " in an account of and in due course of the business of the bank." (lb.) 3 (U. S. Sup. Ct, 1895). An indictment under Revised Statutes, section 5209, for making a false entry in a report to the Comptroller need not allege that such report was made by the banking association, or that it was actually verified by the oath or affirmation of the presi- dent or cashier, or attested by the directors, as required by section 5211; but it is sufficient to aver- that defendant made such false entry " in a certain report of the condition of the First National Bank, * * * made to the Comptroller of the Currency in accord- ance with the provisions" of Revised Statutes, section 5211. (Coch- ran v. United States, 15 S. Ct, 628; 157 U. S., 286.) 4 (U. S. C. C. A., 1900). An indictment charging a defendant as an officer of a national bank with having made a false statement in a report made to the Comptroller is not required to set out such report in full; but is sufficient if it identifies the report by its date and sets out the particular statement claimed to be false. (Dorsey v. United States, 101 Fed. Rep., 746.) 5 U. S. C. C, 1892). An indictment charging directors of a national bank- ing association with making false entries in a report of condition to the Comptroller of the Currency can not be sustained under section 5209, for under section 5211 their sole duty in regard to such reports is to attest them by their signatures ; and any entries therein by them would be mere spoliation and not false " within the meaning of the section. (United States v. Potter, 56 Fed. Rep., 83.) 6 (U. S. C. C, 1892). The use in an indictment, under section 5209, of the words " then and there," in alleging that the defendant was president or director of such bank and made alleged false entries, is not uncer- tain or repugnant merely because in one place they may refer to the whole of a day and in another to only one instant of the day. (lb.) 7 (U. S. C. C, 1892). The omission of the signs for dollars and cents in the recital of alleged false entries in reports and misnomer of reports are immaterial where reports are set out by their tenor in the indictment, so that these discrepancies are at the most " mere matter of form " DIGEST OF NATIONAL, BANK DECISIONS. 365 OFFICERS, CRIMINAL LIABILITY OF— Continued. Pbosectttions — Continued. indictment — continued. foe making palse entbies — continued. within the meaning of Revised Statutes, section 1025, for which the indictment is not to be deemed insufficient. (lb.) 8 (U. S. C. C, 1892). It is not necessary to allege specifically in such indict- ment that the reports were transmitted to the Comptroller of the Cur- rency or that they were published. (lb.) 9 (U. S. C. C, 1892). When indictment alleges that the false entries indi- cated that there was then in the paying teller's department of the bank certain amount in gold, legal tenders, and gold certificates, when in fact such amount was not there, it is not necessary that it should further allege that such amount was not then in other departments of the bank. (United States v. Potter, 56 Fed. Rep., 97.) 10 (U. S. C. C, 1892). In addition to the entries themselves, the indictment need set out the context only when it so modifies the entries as to be in presumption of law a part of them. (lb.) 11 (U. S. C. C, 1892). The fact that the note teller's and paying teller's books, in which the president is charged with making the false en- tries, are usually kept by those officers without interference by the president does not invalidate indictment thereon, for the presumption that these acts were so far beyond the range of his duty as to be mere spoliations is at best one of fact and not of law. (lb.) 12 (U. S. C. C, 1892). Counts charging false entries by the president in reports of condition of the bank, which allege that reports were made in conformity to the law, and then set them out by their tenor, are bad for their failure to allege specifically that the reports were veri- fied and attested by the cashier. (lb.) 13 (U. S. C. C, 1893). Where the entry whose tenor is set forth contains the words " See schedule," it is not a valid objection to the indictment that these words are not explained. (United States v. French et al., 57 Fed. Rep., 382.) 14 (U. S. C. C, 1893). It is sufficient if the indictment allege the substance of the reports in question without setting them out in full. (lb.) 15 (U. S. C. C, 1893). An allegation in an indictment under section 5209 that defendant " did make a certain false entry in a certain report of the association " will not be construed to mean that the entry was made after the report was completed and was, in fact, an alteration, (lb.) 16 (U. S. C. C, 1893). The preparation and completion of the report, the making of the false entry therein, its verification, attestation, and delivery to the Comptroller may be considered as simultaneous, and there is no repugnance in failing to allege that any or all of these things occurred in consecutive order. (lb.) 17 (U. S. C. C, 1893). Though the counts in an indictment under this section for aiding and abetting the cashier in making such false entries described defendant as " being then and there director " of the bank in question, it can not be held that they charge him in aiding and abetting in his official capacity. (lb.) 18 (U. S. C. C, 1893). Counts in such indictment which charge defendants with procuring and counseling the false entry before the facts are valid, for such acts are covered by the clause of the section extend- ing the penalty to anyone who " abets " an officer or agent in the acts prohibited. (lb.) 19 (U. S. C. C. A., 1897). If, in an indictment under Revised Statutes, section 5209, it is the purpose of the Government to charge the making of false entries in the books of the bank, because of the receiving and crediting of checks drawn thereon by parties who had no funds there, the indictment should set forth a description of the checks, with an 366 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. Prosecutions — Continued. indictment — continued. FOE MAKING FALSE ENTBIES-<-COntinued. averment of the reasons why they were to be deemed false or value- less. (Dow et al. v. United States, 82 Fed. Rep., 904.) 20 (U. S. C. C, 1897). Averments in an indictment that the defendant was appointed agent in liquidation for a national banking association, and accepted that office, are not inconsistent with further averments that he afterwards acted as president, clerk, and director of the associa- tion. (United States v. Jewett, 84 Fed. Rep., 142. Affirmed in Jewett v. U. S., 100 Fed. Rep., 832.) 21 (U. S. Dist. Ct., 1899). Where an officer of a national bank is charged with several offenses under Revised Statutes, section 5209, in making at different times false entries in the books, reports, or statements of the association, such offenses may be charged in different counts of the same indictment, as provided in Revised Statutes, section 1024, as " acts or transactions of the same class of crimes or offenses." (United States v. Berry et al., 96 Fed. Rep., 842.) 22 (U. S. Dist. Ct, 1899). A count of an indictment charging one person with the commission of an offense as principal, and another as aiding and abetting its commission, is not open to the objection that it constitutes two separate counts, one against each defendant, because the formal closing, " contrary to the form of the statute," etc., is used at the close of each charge. The charges in such case are properly joined in one count, and the use of the formula at the close of the charge against the principal is surplusage, and will be disregarded. (lb.) 23 (U, S. C. C. A., 1899). A count of an indictment charging that defendant, as president of a national banking association, caused a false entry, which is set out, to be made in the books of the bank, purporting to show that a customer had deposited a certain sum to his general credit, when in fact, as defendant well knew, no such deposit had been made, is not insufficient, in the absence of an application for a bill of particulars, because it does not allege the manner in which defendant " causes " the entry to t)e made. (McKnight v. United States, 97 Fed. Rep., 208.) Charge of intent. 24 (U. S. C. C, 1892). An indictment against the president of a national bank, under section 5209, for making false entries in the books of the bank, charging that it was done " with intent to defraud said association and certain persns to the grand jurors unknown," is sufficient so far as concerns the allegations of intent. (United States v. Potter, 56 Fed. Rep., 97.) 25 (U. S. C. C. A., 1901). Under Revised Statutes, section 5209, which makes it a criminal offense for an officer or agent of a national bank to do either of certain acts therein enumerated, " with intent in either case to injure or defraud the association," etc., such intent is an essential element of every offense therein specified, which must be charged in the indictment and proved. (McKnight v. United States, 111 Fed. Rep., 735.) Conspiracy — Offense against United States — Violation of national banking act. 26 (U. S. C. C. A., 1904). A conspiracy to violate Revised Statutes, section 5209 (U. S. Comp. St., 1901, p. 3497), by causing false entries to be made in the books of a national bank by an officer or agent thereof , for the purpose of defrauding the bank or others, or deceiving an agent appointed to examine the affairs of a bank, is one to commit " an offense against the United States," within the meaning of sec- tion 5440 (U. S. Comp. St., 1901, p. 3676), and is indictable there- under. (Scott v. U. 8., 130 Fed. Rep., 429.) DIGEST OF NATIONAL BANK DECISIONS. 367 OFFICERS, CRIMINAL LIABILITY OF— Continued. Pbosecutions — Continued. indictment — continued. foe making false ENTRIES — continued. Elements of offense — Act of one conspirator act of all. 27 (U. S. C. C. A., 1904). An indictment, under Revised Statutes, section 5440 (U. S. Comp. St., 1901, p. 3676), against two defendants, charg- ing them with a conspiracy to commit an offense against the United States by making certain false entries in the books of a national bank of which one of the defendants was an officer, in violation of Revised Statutes, section 5209 (U. S. Comp. St., 1901, p. 3497), is not bad because, in stating the details of the overt act committed by defendants, it is averred that the entries which were made in the books of the bank were made by the hand of the defendant, who was not an officer thereof ; it being averred that both defendants were present and participated in the carrying out of. the plan formed between them to make such entries. (lb.) AIDEBS AND ABETTORS. 1 (U. S. Sup. Ct, 1895). An indictment of persons for aiding and abetting a president of a national bank in misapplying its funds and making false entries in its books, with intent to defraud it, in violation of Revised Statutes, section 5209, need not specifically set out the act or acts by which the aiding and abetting were consummated. (Coffin v. United States, 15 S. Ct, 394; 156 U. S., 432.) 2 (U. S. Sup. Ct, 1895). An indictment of H. and other persons for viola- tion of Revised Statutes, section 5209, averred that " said H., then and there being president " of a certain national bank, " by virtue of his said office as president aforesaid," " misapplied the funds," with intent to defraud, etc., and that such other persons did unlaw- fully, feloniously, " knowingly," and with intent to defraud, aid and abet the " said H., as aforesaid." Held, that the indictment averred that the aiders and abettors knew that H. was president of the bank at the time it is averred the acts were committed. (lb.) 3 (U. S. Sup. Ct, 1895). Such indictment charged that H. did misapply the moneys of the bank with intent to convert a certain sum to the use of a specified company by causing it to be paid out of the moneys of the bank on a check drawn on the bank by such company, which check was then and there cashed and paJd out of the bank's funds, which sum, and no part thereof, was such company entitled to with- draw from the bank, because it had no funds therein, and that said company was then and there insolvent, as H. well knew, whereby said sum became lost to the bank. Held, that the indictment averred the actual conversion of the sum misapplied. (lb.) 4 (U. S. Sup. Ct, 1895). Where an indictment under Revised Statutes, sec- tion 5209, against a president of a national bank and others, for misapplying the funds of the bank, avers that such funds were mis- applied with intent to convert the same to the use of a certain company, " and to other persons to the grand Jury unknown," the Government need not prove want of knowledge in the grand jury as to such persons; and, in the absence of evidence on the subject, the verity of the averment will be presumed. (lb.) 5 (U. S. Sup. Ct, 1896). Persons who have no official relation to a national bank may be indicted, under Revised Statutes, section 5209, as aiders and abettors of some officer of the bank in criminal misapplication of its funds, or in the making of false entries in its books. (Coffin v. United States, 16 S. Ct., 943; 162 U. S., 664.) 6 (U. S. Sup. Ct, 1896). If a violation of the statute is committed by an officer of the bank and by an outsider, the officer must be prose- cuted as the principal, and the other can only be prosecuted, under the terms of the statute, as an aider and abettor. (lb.) 368 DIGEST (XF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. Prosecutions — Continued. indictment — continued. aiders and abettors — continued. 7 (U. S. Sup. Ct, 1896). An indictment for -aiding and abetting one H., the president of a bank, in the criminal misapplication of its funds, charged that, on a specified date, the said H. misapplied a named sum, by causing the same to be paid out on the checks of a company having no moneys in the bank. The aiding and abetting clause charged that the accused did " on [specifying the same date] aid and abet said H., as aforesaid, to wrongfully," etc., misapply the moneys of the bank, " to wit," specifying an identical sum. Held (overrul- ing a contention that the words " said " and " as aforesaid " did not refer to the same moneys previously charged to have been misap- plied by the president), that the language sufficiently connected the acts charged against the aider and abettor with the offense stated against the principal. (lb.) 8 (U. S. Sup. Ct., 1896). An indictment for violating the national banking laws averred that the bank in question had been " heretofore " created and organized under the laws of the United States. Held, that even if it were assumed that the word should have been " there- tofore " in order to make it certain that the bank had been incorpo- rated prior to the finding of the indictment, the result was only an im- perfect statement of what the law implies to be true after verdict, (lb.) 9 (U.S. Sup. Ct, 1896). CofBn v. United States (156 U. S., 432) affirmed on the following points : (1) That the offense of aiding or abetting an officei of a national bank in committing one or more of the offenses set forth in Revised Statutes, section 5209, may be committed by persons who are not officers or agents of the bank, and consequently it is not necessary to aver in an indictment against such an aider or abettor that he was an officer of the bank or- occupied any spe- cific relation to it when committing the offense ; (2) that the plain and unmistakable statement of the indictment in that case and this, as a whole, is that the acts charged against Haughey were done by him as president of the bank, and that the aiding and abetting were also done by assisting him in the official capacity in which alone it is charged he misapplied funds. (Coffin v. United States, 162 U. S., 664.) 10 (U. S. Sup. Ct, 1896). When the principal offender in the commission of the offense, made criminal by Revised Statutes, section 5209, and the aider and abettor were both actuated by the criminal intent speci- fied in the statute, it is immaterial that the principal offender should be further charged in the indictment with having had otber intents, (lb.) 11 (U. S. C. C, 1886). An indictment charging defendants with aiding and abetting a director in a willful misapplication of the money of an association must state facts to show that there has been such mis- application committed by the director. (United States v. Warner, 26 Fed Rep., 616.) FOR WRONGFULLY CERTIFYING CHECK. 1 (U. S. Sup. Ct, 1894). In an indictment for a statutory offense, while it ' is doubtless true that it is not always sufficient to use simply the language of the statute in describing the offense, yet if such language is, according to the natural import of the words, fully descriptive of the offense, then ordinarily it is sufficient. (Potter v. United States, 155 L. S., 438.) 2 (U. S. Sup. Ct., 1894). A charge in an indictment that the defendant was president of a national bank, and as such on a day and at a place named unlawfully, knowingly, and willfully certified a certain check DIGEST OF NATIONAL BANK DECISIONS. 369 OFFICERS, CRIMINAL' LIABILITY OF— Continued. Peosejiutions — Continued. indictment — continued. FOB WRONGFULLY CERTIFYING CHECK — Continued. (describing it) drawn upon the bank, and that the drawer did not then and there have on deposit with the bank an amount of money equal to the amount specified in the check, is a sufficient averment of the offense described in Rev. Stat., section 5208, the punishment for which is provided for in the act of July 12, 1882, c. 290, 22 Stat, 162, 166. (lb.) 3 (U. S. Sup. Ct, 1894). As it is of the essence of the offense against those acts that the criminal act should have been done willfully, a person charged with illegally certifying a check is entitled to have submitted to the jury, on the question of " willful " wrongdoing, evidence of an agreement on the part of the officers of the bank that it should be treated as a loan from day to day, -secured by ample .collateral, and that for the check certified each day there was deposited each day an ample amount of cash. ( lb. ) WHEN INDICTMENT SHOULD BE QUASHED. 1 (U. S. Dist Ct, 1897). No person, other than a witness undergoing exam- ination and the Government attorney, can be present at the ses- sions of a grand jury ; and an indictment should be quashed where an expert witness remained in the jury room while another witness was being examined and' the expert permitted to question him. (United States v. Edgerton, 80 Fed. Rep., 374.) 2 (U. S. Dist. Ct, 1897). An indictment should be quashed when it appears that defendant was compelled by subpoena to attend before the grand jury, and give material testimony, without knowing that his own con- duct was under investigation. (lb.) 3 (U. S. C. C, 1898). Revised Statutes, section' 1025, forbidding the court to quash an indictment for defect of form, makes it unnecessary, in criminal indictments, to repeat an averment contained in the first count, where subsequent counts refer back to the first, and are thereby rendered sufficiently explicit in stating the offense. (United States v. Peters, 87 Fed. Rep., 985.) MOTION IN ABBEST. 1 (U. S. Dist. Ct, 1901). Judgment will not be arrested on motion for insufficiency of the indictment if any one of the counts therein is good. (United States v. McClure, 107 Fed. Rep., 268.) 2 (U. S. Dist. Ct, 1901). A count in an indictment for aiding the misappli- cation of national-bank funds in violation of Revised Statutes, section 5209, with ample allegations of fraudulent intent and purpose, dis- tinctly charged embezzlement by the cashier of a national bank on many different days and times between May 24, 1897, and March 24, 1900, for the benefit and gain of defendant by a pretended discount of paper, contrary to the express direction of the directors, whereby defendant obtained $140,000 of its moneys and funds, and converted the same to his own use. Held, good on motion in arrest, in view of section 1024, declaring the form of an indictment to be immate- rial, provided the substance is there ; the word " embezzlement," as used- therein, showing a misapplication by the cashier of the property in his official possession, within the meaning of the statute, and the punishment prescribed being not so much for each offense, but so much for every officer or agent who commits such offenses, and every person who aids or abets, irrespective of the number Of times. (lb.) 4049—05 — ^-24 370 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. Prosecutions — Continued. Evidence. in geneeai. 1 (U. S. Sup. Ct, 1896). Conversations with a person took place in August, 1893. In December, 1893, lie testified to them before the grand Jury which found the indictment in this case. On the trial of this case his evidence before the grand jury was offered to refresh his memory as to those conversations. Held, that that evidence was not contempo- raneous with the conversations, and would not support a reasonable probability that the memory of the witness, if impaired at the time of trial, was not equally so when his testimony was committed to , writing; and that the evidence was therefore inadmissible for the purpose offered. (Putnam v. United States, 162 U. S., 687.) 2 (U. S. Sup. Ct, 1896). On the trial of a national-bank president for defrauding a bank, a - witness for the Government was asked, on cross-examination, as to the amount of stock held by the president. This being objected to, the question was ruled out as not proper on cross-examination, the Government " not having opened up affirma- tively the ownership of the stock." Belli, that as the order in which evidence shall be produced is within the discretion of the trial court, and as the matter sought to be elicited on the cross-examination for the accused was not offered by him at any subsequent stage of the trial, no prejudicial error was committed by the ruling. (lb.) 3 (U. S. Sup. Ct, 1897). On trial of the president of a bank for misappli- cation of its funds, the cashier, who has testified as a witness for defendant, may be asked, on cross-examination, whether he did not resign because of transactions of the defendant similar to that charged in the indictment. (Agnew v. United States, 165 U. S., 36.) 4 (U. S. Sup. Ct., 1897). The opinions of the financial world as to the rat- ing or standing of the defendant when the acts complained of were committed were not admissible in evidence. (lb.) 5 (U. S. C. C. A., 1899). A letter taken by some person from a box marked as containing private papers of the president of a national bank, and given to officers of the United States, is not, by reason of the manner in which it was obtained, inadmissible in evidence on behalf of the Government in the prosecution of the president for a violation of the national banking law. (Bacon v. United States, 97 Fed. Rep., 35; 2 B. C, 26.) 6 (U. S. C. C. A., 1899). Books of account of a national bank, in which the record of its daily business was kept, are admissible, without further proof, against an officer of the bank on trial for making false returns of its condition. (lb.) 7 (U. S. C. C. A., 1899). Books of a national bank, obtained by the officers of the United States from the receivers of a State bank, which suc- ceeded such national bank, are not inadmissible against an officer of such bank on trial for making false reports on the ground that they were obtained in violation of the constitutional provision against unreasonable searches and seizures. (lb.) 8 (U. S. C. C A., 1899). Prior false reports held admissible on the ques- tion of intent, on the trial of the president of a national bank for making a false report. (lb.) 9 (U. S. C. C. A., 1899).- The admission of expert testimony as to the meaning of certain entries in a report made by a national bank to the Comptroller against an officer of the bank on trial for making a false report of its condition is not prejudicial error, where it appears that such entries were correctly interpreted. (lb.) 10 (U. S. C. C. A., 1900). Evidence to the effect that when a bank redis- counts notes it indorses them, and that a bank held, certain notes which it rediscounted, is sufficient to establish the fact, when such notes have become lost or destroyed, that they were indorsed by the DIGEST OF NATIONAL BANK DECISIONS. 371 OFFICERS, CRIMINAL LIABILITY OF— Continued. Prosecutions — Continued. Evidence — Continued. in GENEEAi. — continued. bank, and to render admissible testimony of false entries in the books of the bank respecting such notes, made by direction of a defendant charged with having, as cashier, caused such entries to be made for the purpose of concealing the liability of the bank on account of such indorsement. (Dorsey v. United States, 101 Fed. Rep., 746.) 11 (U. S. C. C. A., 1901). A teller in a bank, testifying to checks on it, may refresh his memory by examining entries in its books, though some of them were not written by him. (Breese v. United States, 106 Fed. Rep., 680.) 12 (U. S. C. C. A., 1901). As evidence that overdrafts on a bank by its presi- dent were made with intent to abstract or misapply its funds, it may be shown that at the time of the overdrafts it was hopelessly insol- vent, that this was due to its assets being notes of wholly irresponsible persons, and that these notes had been used by the president in con- nivance with the cashier, who was a director, and another director, to give him a fictitious credit (lb.) 13 (U. S. C. C. A., 1901). On the question. of whether or not a bank president is guilty of abstracting or misapplying its moneys, it is immaterial that he drew out some of it for his children. (lb.) 14 (U. S. C. C. A., 1901). The acts and intent of the president of a bank in obtaining money from it on worthless securities being such as to make him guilty of embezzlement, abstraction, or willful misapplication of its funds, it is immaterial that his acts were permitted, sanctioned, or ratified by the other officers of the bank, with knowledge of the facts. (lb.) 15 (U. S. C. C. A., 1901). Though the president of a bank, in appropriating and converting its funds to his own use, does it in such a way that it can be easily discovered, and he is liable to a civil action, and does not abscond, or otherwise avoid the civil suit, he may be convicted of embezzlement. (lb.) 16 (U. S. C. C. A., 1901). It is within the discretion of the judge to refuse to charge that there is no evidence in the case justifying a conviction. ' (lb.) 17 (U. S. C. C. A., 1901). An expression of opinion by the judge that defend- ant is guilty is not error, he having cautioned the jury that they were the sole judges of the facts, and should not be governed by the opinion of the court. (lb.) 18 (U. S. C. C. A., 1902). Under an indictment for embezzlement by an officer of a national bank, by causing money of the bank to be paid out to insolvent persons on their note, with intent to injure and defraud the bank, the insolvency of such persons is an important consideration for the jury, going to the question of fraudulent intent. (McKnight v. United States, 115 Fed. Rep., 972.) 19 (U. S. C. C. A., 1902). An averment, in an indictment charging an officer of a national bank with embezzlement by paying out money on a note which he knew to be worthless, with intent to injure and defraud the bank, that the transaction was without the knowledge' or consent of the directors or the discount committee, need not be specifically proved, where the transaction which the evidence tends to prove was one to which it can not be presumed the directors or committee would consent ; but in such case, if consent is relied on, it must be proved as matter of defense, and by evidence showing that it was given in good faith and with knowledge of the facts. (lb.) 20 (U. S. C. C. A., 1897). Under such an indictment, where the issues involve the intent with which certain acts were done, the trial court is justi- fied in giving a reasonably wide latitude to the introduction of evi- ence tending to show the relations of the parties, the mode in which 372 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. Pbosecutions — Continued. Evidence — Continued. in genebai, — continued. the business was carried on, and the knowledge which the officers had of the character of the operations carried on by the depositor. (Dow et al. v. United States, 82 Fed. Rep., 904.) 21 (U. S. C. C. A., 1898). Upon the trial of the president of a national bank for certifying checks without funds, evidence of speculations by the cashier with funds of the bank, with defendant's knowledge, is admissible for its bearing upon the right of the latter to rely upon the former's representations as to the state of the customers' accounts. (Spurr v. United States, 87 Fed. Rep., 701.) 22 (U. S. C. C. A., 1898). The period of time within which collateral trans- actions offered to show a guilty intent must have occurred is largely discretionary with the court. (lb.) 23 (U. S. C. C. A., 1898). Upon the trial of a national-bank officer for official misconduct, evidence as to the defendant's reputation for honesty and integrity should be limited to such reputation down to the time of the failure of the bank. (lb.) 24 (U. S. C. C. A., 1898). In general, where no attempt has been made to im- peach the defendant's testimony, he may not add to the weight of his evidence by evidence of his general reputation for truthfulness. (lb.) 25 (U. S. C. C, 1898). An indictment charging the making of false entries in the books of a national bank for the purpose of showing that on a certain date a county treasurer deposited $10,000 " special," which was drawn out again a few days later. Evidence was offered by the Government to prove that no such deposit was made, and the treas- urer himself was called by it, and testified that he had some recollec- tion of having deposited a large sum about the time in question. Thereupon his books were produced, and after he had testified that he believed them to be correct he was permitted to testify as to the entries therein on the dates referred to. By these entries it did not appear that $10,000 had been either deposited in bank or drawn from the cash on hand. The treasurer, however, then reiterated his former statement, and was even more positive that he had made the deposit. Held, that, in view thereof, there was no prejudicial error in admitting his testimony as to the book entries. (United States v. Peters, 87 Fed. Rep., 985.) 26 (U. S. C. C. A., 1901). In the prosecution of a bank teller for embezzling funds of the bank in violation of Revised Statutes, section 5209, the Comptroller's certificate of the organization of the bank and the extension of its powers and privileges was admissible. (Tyler v. United States, 106 Fed. Rep., 137.) 27 (U. S. C. C. A., 1901). Evidence as to how he conducted himself in the performance of his duty as teller was competent. (lb.) 28 (U. S. C. C. A., 1901). A deposit slip introduced in evidence was delivered to accused by the clerk of the depositor at the time he deposited money and checks specified therein, and the deposit was made with the accused as teller ; and the depositor's pass book showed the entry, in the handwriting of the accused, of $274, the amount of the deposit. Held, that an entry by the accused of a deposit of the same amount ■in the ledger of the bank under a subsequent date, as made by a depositor of the same surname, but different initials, was not res inter alios, especially as the book was not in his charge or kept by him. (lb.) 29 (111. Sup., 1902). On a prosecution under 111. Starr &C. Ann. St., c. 38, section 168, providing for the punishment of an officer of a bank receiving deposits when it is insolvent, accused should have been allowed to testify as to his belief that the bank was solvent. (Paul- sen v. People, 63 N. E. Rep., 144 ; 4 Banking Cases, 351 ; 195 111., 507.) DIGEST OF NATIONAL BANK DECISIONS. 373 OFFICERS, CRIMINAL LIABILITY OF— Continued. Prosecution s — Continued. Evidence — Continued. in general — continued. 30 (111. Sup., 1902). On a prosecution under 111. Starr & C. Ann. St., c. 38, section 168, providing for the punishment of an officer of a bank receiving deposits when it is insolvent, it was harmless error not to permit accused to testify as to his belief of its solvency, the testimony being overwhelming to the effect that it was insolvent to his knowl- edge, (lb.) Confessions — Corroboration as to corpus delicti. 31 (U. S. C. C. A., 1902). A defendant in a criminal case can not be convicted on his extra-judicial confession unless it is corroborated in a material and substantial manner by evidence aliunde as to the corpus delicti. Such evidence, however, need not be such as to alone establish that fact beyond a reasonable doubt, but it is sufficient if, when considered in connection with the confession, it satisfies the jury beyond a reasonable doubt that the offense was committed, and that the defendant committed it (Flower v. V. S., 116 Fed. Rep., 241.) Evidence considered. 32 (U. S. C. C. A., 1902). Evidence considered, and held sufficient, when con- sidered in connection with defendant's confession, made to different persons, to sustain a verdict finding him guilty of embezzlement of the funds of a national bank of which he was paying teller. (lb.) Witnesses — Cross-examination — Scope, 33 (U. S. C. C. A., 1903). It is the general rule in the Federal courts that a party has no right to cross-examine a witness, without leave of court, as to any facts or circumstances not connected with matters stated in his direct examination. (McKnight v. U. S., 122 Fed. Rep., 926.) Indictment for embezzlement as bank officer — Proof of official capacity. 34 (U. S. C. C. A., 1903). An entry in a book identified as the minute book of a national bank, showing the election of defendant as a director and as president of the bank, together with evidence that he acted as such, is sufficient, prima facie, to support an averment that he was president of the bank in an indictment charging him with embezzle- ment as such officer. (lb.) Secondary evidence of documents — Demand on defendant to produce. 35 (U. S. C. C. A., 1903). In a criminal case it is not necessary to prove notice or demand to produce an incriminating document, shown by the testi- mony of a witness to have been in possession of the "defendant, as a foundation for the introduction of- secondary evidence of its con- tents, since the defendant could not be compelled to produce it to be used as evidence against himself ; but the requiring of such demand and the making of it in open court, where the jury had been first excused, was not error prejudicial to the defendant, nor was a state- ment by the court to the district attorney in the presence of the jury that he could introduce a copy of the document, " provided you gave the necessary notice," where it was not stated what notice was meant, nor to whom. (lb.) Same — Constitutional rights of defendant — Demand for production of incrimi- nating documents. 36 (U. S. C. C. A., 1902). To permit a demand to be made on the defendant in a criminal case, in the presence of the jury, to produce a paper or document containing incriminating evidence against him, is a viola- tion of the immunity secured to him by the fifth amendment to the Constitution, providing that no person in any criminal case shall be Compelled to be a witness against himself, even though no order for the production of the paper is made, and the demand is made solely 374 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. Prosecutions — Continued. Evidence — Continued. in genebal — continued. because of its supposed necessity to authorize the introduction of secondary evidence. (McKnight v. U. S., 115 Fed. Rep., 972.) Same — Remarks of court or counsels-Reference to defendant's rights to testify. 37 (U. S. C. C. A., 1902). It is prejudicial error for the court or counsel to call to the attention of the jury, in a criminal case, in any manner, the right of the defendant, under the statute, to testify in his own behalf; and such an error can only be cured, if at all, by a clear and emphatic statement by the court that the jury are not permitted to attach any importance to the failure of the defendant to testify. Such comment is not rendered harmless by the fact that the defendant does afterwards testify, since it virtually compels him to do so to avoid unfavorable inferences by the jury. (lb.) Burden of proof — When successfully met. 38 (U. S. Dist. Ct, 1904). While the burden of proof rests upon the prose- cution in a criminal case from the beginning to the end of the trial, it is successfully met whenever, from all the evidence introduced in the case, and taking into consideration the presumption of innocence in favor of the accused, the jury are satisfied of his guilt beyond a reasonable doubt. (U. S. v. Breese, 131 Fed. Rep., 915.) INTENT AS AN ELEMENT IN FALSE ENTBIES, EVIDENCE OF. 1 (U. S. C. C. A., 1899). In prosecutions for making false reports to the Comptroller of the condition of a national bank, a preceding report of the condition of the bank to the Comptroller of the Currency, attested by defendant as its president, and containing a false entry reporting an overdraft as so much cash on hand, was admissible to show with what intent any false entry found in the false report alleged in the indictment was made by the defendant, as the bank examiner who discovered such false entry testified that he had called defendant's attention to the error within four months preceding the making of the false report alleged in the indictment. (Bacon v. United States, 2 Banking Cases, 27; 97 Fed. Rep., 35.) 2 (U. S. Dist. Ct., 1897). Under Revised Statutes, section 5209, prohibit- ing " every * * * cashier * * * of any " national bank from making " any false entry in any * * * report * * * with intent to injure or defraud," etc., and prescribing a like penalty for " every person who, with like intent, aids or abets any officer," etc., the intent is a material ingredient under each clause ; and therefore an indictment which, after duly charging the act and intent in respect to the cashier, merely charges another person with aiding and abet- ting him to make said false entries " in manner and form as afore- said," is open to demurrer. (United States v. Berry et al., 85 Fed. Rep., 208.) 3 (U. S. C. C, 1893). The " false entry " in the books or reports of a bank, which is punishable under Revised Statutes, section 5209, is an entry that is knowingly and intentionally false when made. It is not the purpose of the statute to punish an officer who, through honest mis- take, makes an entry in the books or reports of the bank which he believes to be true, when it is in fact false. (United States v. Allis, 73 Fed. Rep., 165.) 4 (U. S. C. C, 1893). If a president or cashier makes a false entry in a report of the condition of the bank to the Comptroller of the Cur- rency, the jury are authorized to presume, from the false entry itself, in the absence of any explanation or of any other testimony, that he knew it to be false. This presumption results from the fact that it DIGEST OF NATIONAL BANK DECISIONS. 375 OFFICERS, CRIMINAL LIABILITY OF— Continued. Pbosecutions — Continued. Evidence — Continued. INTENT AS AN ELEMENT IN FALSE ENTBIES, EVIDENCE OF — Continued. is the duty of the officer who verifies the report to know the condition of the bank, and if the report is false there is a prima facie presump- tion that he knew it. (lb.) 5 (U. S. C. C, 1893). A false entry, either in the books of the bank or in a report of its condition, is punishable only when the jury find that it was made by the defendant or by his direction, with the intent either (1) to injure or defraud the bank, or some other corporation, or some firm or person ; or (2) to deceive some officer of the bank ; or (3) to deceive some agent appointed or thereafter to be appointed to examine the affairs of the bank. If any one of these intents is pres- ent the offense is complete, (lb.) 6 (U. S. C. C, 1893). Where an entry in the books or in a report of the bank's condition is in fact false, the jury are authorized to infer, from the false entry itself, an intent of the defendant to injure or defraud the bank, or some other corporation or individual, or to de- ceive some officer of the association, or agent appointed to examine into the condition of the bank, if such would be the natural and prob- able consequence of the false entry. (lb.) 7 (U. S. C. C, 1893). A false entry made in the books or reports of a bank by a clerk, bookkeeper, or other subordinate employee, by the com- mand or direction of the president of the bank, is a false entry made by the president, and he is liable to punishment for it if he gives the direction knowing the entry to be false, or with the intent to defraud, deceive, etc. (lb.) 8 (U. S. C. C, 1893). If a false entry in the books or reports is made with a criminal intent, it is no defense that another false entry is also made, which offsets the former entry with a like intent : but changes of this character are not as strong evidence of an intent to injure or defraud the bank, or to deceive its officers or examiners, as false entries which enable the officer making them to withdraw the funds of the bank without consideration. (lb.) 9 (U. S. C. C, 1893). Every overdraft, whether made by previous arrange- ment or not, whether secured or not, and whether drawing interest or not, is a loan, and is required by the law and the rules prescribed by the Comptroller to be listed and reported as an overdraft. It is, therefore, no defense to a charge of false entries in respect to over- drafts that they had been arranged for or secured, or that interest was to be paid upon them by agreement, if such false entries were made with a criminal intent ; but in determining the intent the jury may consider the testimony of defendant that he considered the over- drafts as loans. (lb.) 10 (U. S. C. C. A., 1899). Under an indictment based upon Revised Statutes, section 5209, charging an officer of a national bank with having made false entries in its books with the intent to deceive the officers and directors of the bank and any agent appointed by the Comptroller to examine the affairs of the bank and to injure and defraud the association, it is sufficient to prove the wrongful intent in either particular charged. (McKnight v. United States, 97 Fed. Rep., 208.) 11 (U. S. C. C. A., 1900). On the trial of a defendant upon charges of having, while an officer of a national bank, unlawfully abstracted money from such bank and having made false entries in report made to the Comptroller, evidence that, at about the same time as the acts charged, the defendant made other reports to the Comptroller, con- taining similar false statements, and that he also procured the execution by an irresponsible third party of a note without considera- tion, which he discounted on behalf of the bank and appropriated the proceeds, is admissible on the question of intent, as showing that 376 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. Pbosecutions — Continued. Evidence — Continued. INTENT AS AN ELEMENT IN FALSE ENTRIES, EVIDENCE OF Continued. defendant had acted in bad faith toward the bank in such transac- tions, although such acts are not counted upon in -the indictment. (Dorsey v. United States, 101 Fed. Rep., 746.) 12 (U. S. Dist. Ct, 1904). On the trial of an officer of a national bank for embezzlement, abstraction, and misapplication of funds, under Revised Statutes, 5209, which makes an intent to injure or defraud an element of either offense, evidence of other transactions by defendant of similar character is admissible, but may be considered by the jury only on the question of the knowledge and intent of the accused when he committed the acts charged in the indictment. (United States v. Breese, 131 Fed. Rep., 915.) 13 (N. Mex. Sup., 1894). The jury are warranted in finding that false entries were made with guilty intent from the testimony of defend- ant that the said entries were made under his direction, with the knowledge that they were not transactions of the day on which they were entered in the books of the bank. (United States v. Folsom, 38 P., 70; 7 N. Mex., 532.) Tbial and Its Incidents. jubisdiction. 1 (U. S. Sup. Ct., 1896). When an offense against the provisions of Revised Statutes, section 5209, is begun in one State and completed in another, the United. States court in the latter State has jurisdic- tion over the prosecution of the offender. (Putnam v. United States, 162 U. S., 687.) INSUFFICIENT DEFENSES. 1 (U. S. C. C). It is no defense to a charge of embezzlement, abstraction, or misapplication of the funds of a national banking association that the funds were used with the knowledge and consent of the president and some of the directors. The intent to defraud is to , be conclusively presumed from the commission of the offense. (United States v. Taintor, 11 Blatch., 374.) 2 (U. S. Dist. Ct, 1880). In an indictment of an officer of a national bank under section 5209, Revised Statutes, for making false entries in a report to the Comptroller of the Currency, it is no defense that such entries were made by a clerk and verified by the officer without actual knowledge of their truth, since it was his duty to inform himself. (United States v. Allen, 47 Fed. Rep., 696.) 3 (U. S. C. C, 1893). If the president of a bank makes or causes to be made false entries in its books, or in reports to the Comptroller, with the intent to deceive or defraud, etc., it is no defense that he struggled to save the bank from failure and to provide money to pay its depositors by sacrificing his own property and borrowing money from others. (United States v. Allis, 73 Fed. Rep., 165.) 4 (U. S. C. C. A., 1898). Where, during the trial, a juror becomes dis- qualified, and the court adjudges a mistrial, a plea of former jeop- ardy is not good on a second trial, even though all parties were willing to proceed with eleven jurors. (Gardes v. United States; Girault v. Same, 87 Fed. Rep., 172.) 5 (U. S. C. C. A., 1898). Where defendants have been arraigned, and have , waived reading of the indictment, they may not subsequently com- plain if the whole indictment is not read at the trial, but such parts of it are read and such explanations made of the other parts as may give the jury the clearest comprehension of it. (lb.) DIGEST OP NATIONAL BANK DECISIONS. 377 OFFICERS, CRIMINAL LIABILITY OF— Continued. Prosecutions — Continued. Trial and Its Incidents — Continued. insufficient defenses — continued. 6 (U. S. C. C, 1898). A plea of former jeopardy set up certain prior proceedings had in the same court under the same indictment. Counsel for the Government having objected thereto, the court treated his objection as a demurrer to its sufficiency in law, and thereupon overruled the plea. The trial then went on, without objec- tion by defendant to the subsequent proceedings. Held, that there was no .error in thus proceeding with the cause without first setting down the plea for trial, as the only question arising thereon was one of law, which was finally disposed of by the former ruling. (United States v. Peters, 87 Fed. Rep., 985.) instructions to jury. 1 (U. S. Sup. Ct, 1896). On the trial of persons charged with aiding and abetting the president of a national bank in criminally misapplying its funds and making false entries in its books, the court charged that if the jury were satisfied that the president did knowingly and purposely make, or cause to be made, the false entries as charged, they could not find the defendants guilty as aiders and abettors, unless they were satisfied that defendants, " with like intent, unlaw- fully and knowingly did or said something showing their consent to, and participation in, the unlawful and criminal acts " of the said president, " and contributing to their execution." Held, that this language was not open to the objection that the expression " unlaw- ful and criminal acts " might have been understood as relating to unlawful and criminal acts of the president generally. (Coffin v. United States, 162 U. S., 664.) 2 (U. S. Sup. Ct, 1896). Instructions requested may be properly refused when fully covered by the general charge of the court. ( lb. ) 3 (U. S. Sup. Ct, 1896). When the charge, as a whole, correctly conveys to the jury the rule by which they are to determine, from all the evi- dence, the question of intent, there is no error in refusing the request of the defendant to single out the absence of one of the several pos- 'sible motives for the commission of the offense, and instruct the jury as to the weight to be given to this particular fact independent of the other proof in the case. (lb.) 4 (U. S. Sup. Ct, 1896). The refusal to give, when requested, a correct legal proposition does not constitute error, unless there be evidence ren- dering the legal theory applicable to the case. (lb.) 5 (U. S. Sup. Ct, 1896). When it is impossible to determine whether there was evidence tending to show a state of facts adequate to make a refused instruction pertinent, and there is nothing else in the bill of exceptions to which the stated principle could apply, there is no error in refusing it. (lb.) 6 (U. S. Sup. Ct., 1897). When an officer of a national bank, indicted under Revised Statutes, section 5209, for making false entries in the report of the condition of su,ch bank in respect to amounts of overdrafts and of k>£.ns and discounts, has testified that certain overdrafts, In respect to which the depositors had consulted the bank officers and obtained permission to overdraw, were treated by the officers and directors of the bank as temporary loans, and were reported by him among loans, and not among overdrafts, in the belief that they might properly be so reported, it is error to charge the jury that the defend- ant was required by law to place, under the heading " Overdrafts " in the report, all sums drawn out by depositors in excess of their deposits, and that the transfer of any such sums to the heading " Loans and discounts " was the making of a false entry, since such charge takes from the jury the right to consider, upon the question 378 DIGEST OP NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. Pbosecutions — Continued. Tbial and Its Incidents — Continued. instructions to JUBT — continued. of intent, the explanation given by the defendant, while, if they believed such explanation, and that the defendant acted in good faith, the entries were not false within the meaning of the statute. Mr. Justice Harlan dissenting. (Graves v. United States, 165 U. S., 323.). 7 (U. S. Sup. Ct, 1897). A charge to the effect that if defendant, a bank president, purchased bonds which were worthless, or of but little value, placed them among the assets of the bank at a greatly exag- gerated value, and had such exaggerated value placed to his own credit, these facts create a presumption of an intent to defraud the bank, which " throws the burden of proof upon the defendant," and that evidence to overcome the presumption " must be sufficiently strong to satisfy you beyond a reasonable doubt that there was no such guilty intent," is not error where the character of such evidence and the nature of a reasonable doubt are sufficiently explained in other portions of the charge. (Agnew v. United States, 165 U. S., 36.) 8 (U. S. Sup. Ct, 1897). A charge that if the defendant " either embezzled or willfully misapplied " the funds or credits of the bank, " whereby, as a necessary, natural, or legitimate consequence, its capital was reduced or placed beyond the control of the directors, or its ability to meet its engagements or obligations or to continue its business was lessened or destroyed, the intent to injure or defraud the bank may be presumed," is correct. (lb.) 9 (U. S. Sup. Ct., 1897). It is not reversible error to refuse to charge that if defendant used the proceeds of a check belonging to the bank, and which he had caused to be placed to his credit, in the payment of a debt of the bank, the jury must find that he did not fraudulently embezzle the amount, especially where defendant's' explanation of the transaction is satisfactory. (lb.) 10 (U. S. C. C. A., 1900). It is not error to refuse a special instruction that defendant was not guilty of making false entries if he made them in good faith, when in its general charge the court states that the defendant could not be convicted unless the entries were " know- ingly and intentionally false when made " and were made with intent to defraud and deceive, and that if the jury found that the defend- ant honestly believed, and had good reason to believe, that the entries were correct, he would not be guilty. (Dorsey v. United States, 101 Fed. Rep., 746.) 11 (U. S. C. C. A., 1900). Where a defendant was charged in several counts with making false entries in the books of a national bank, an instruc- tion to find for defendant on such counts was properly refused where there was sufficient evidence tp go to the jury on any one of them, (lb.) 12 (U. S. C. C. A., 1901). An instruction on a trial for violating the banking law that " in his opinion it was the duty of the jury to convict the defendant," was ground for a new trial, as calculated to mislead the jury, who would, perhaps, construe the language as a direction on the part of the court (Breese v. United States, 108 Fed. Rep., 804.) 13 (U. S. C. C. A., 1897). In such a case, a statement by the court to the jury that under a State statute it is made a misdemeanor to draw a check on a bank where there are no funds to meet it, tends to mis- lead the jury, and constitutes error. (Dow et al. v. United States, 82 Fed. Rep., 904.) 14 (U. S. C. C. A., 1898). In a prosecution against a national-bank presi- dent for unlawfully certifying checks, it is not error to instruct the jury that the presumption is that he had knowledge of the condition DIGEST OF NATIONAL BANK DECISIONS. 379 OFFICERS, CRIMINAL LIABILITY OF— Continued. . Pbosbcution s — Continued. Trtat, and Its Incidents — Continued. instbuotions to juby — continued. of the account upon which the checks were drawn, where the same- instruction cautions them that such presumption may be rebutted by evidence that the defendant did not in fact have such knowledge. (Spurr v. United States, 87 Fed. Rep., 701.) 15 (U. S. C. C, 1898). If the jury be charged that a false entry on the books of a national bank alone gives rise to the presumption, not only that the entry was made with criminal intent, but also with knowledge of its falsity, but elsewhere in the charge it was said that a false entry must be known to be false and designed and intended to deceive, the charge is not erroneous. (United States v. Peters, 87 Fed. Rep., 985.) 16 (U. S. C. C, 1898). Where the court has several times stated to the jury that the indictment charges the making of false entries in the books of the bank with intent to deceive the examiner, and the making of false reports with intent to deceive the Comptroller, it is not mis- leading to thereafter say that defendant is guilty if he made such false entries and report " with the intent mentioned in the statute," although the statute mentions several other intents. (lb.) 17 (U. S. C. C. A., 1901). A jury returned into court and requested the judge to reread the portion of his instructions relating to the particular charge made in one count of the indictment. The judge did so, and the attorney for defendant then requested that the portion of the charge relating to the presumption of innocence and reasonable doubt be also reread. This request the court refused, after having asked the jury if they desired to have such parts reread, and received a reply, through the foreman, that they did not. Held, that such action by the court was not error. (Rieger v. United States, 107 Fed. Rep., 916.) 18 (U. S. C. O. A.,1901). The refusal of the court in a criminal case to in- struct the jury, as requested, that they might find the defendant guilty or innocent of some of the offenses charged in the indictment, and return a verdict of disagreement as to others, can not be held error prejudicial to the defendant, where he was found guilty upon one count and acquitted upon the others. It must be presumed that the verdict would have been the same had such instruction been given. (lb.) 19 (U. S. C. C. A., 1901). Where the court, in a prosecution under Revised Statutes, section 5209, for embezzlement by an officer of a .national bank, refused to charge, as requested, that the defendant could not be convicted unless the jury found that the acts of embezzlement were committed with intent to injure or defraud the bank, as charged in the indictment, but charged that the averment of such intent was surplusage, such action was reversible error, notwith- standing it defined embezzlement in the charge as the fraudulent appropriation by defendant of funds of the bank to his own use. (McKnight v. United States, 111 Fed. Rep., 735.) 20 (U. S. C. C. A., 1902). A charge in a criminal case, in which intent was an essential ingredient of the offense, was erroneous, where, after correctly stating that the burden rested upon the Government to prove such intent beyond a reasonable doubt, but that it might be inferred from the acts of the defendant, who was presumed to have intended the natural and probable consequences of his acts, it was further stated that, if the acts proven were such as to raise an in- ference of guilty intent, the burden was thrown upon defendant to rebut such inference by evidence sufficiently strong to satisfy the jury beyond a reasonable doubt that there was no guilty intent ; and the error can not be held harmless where the general instruction that the burden of proof rested on the Government, and continued 380 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. Pbosecutions — Continued. Teial and Its Incidents — Continued. instructions to juby — continued. throughout the case, was qualified by the words " subject to what will be thereafter said upon the question of proof of intent." °(McKnight v. United States, 115 Fed. Rep., 972.) 21 (U. S. Dist. Ct, 1902). In a prosecution, under Revised Statutes, section 5209, against an officer or clerk of a national bank for embezzlement or the making of false entries, with intent to injure or defraud the bank or to deceive, if the acts charged are proved the intent must be inferred therefrom ; and, while such inference or presumption is not conclusive, it throws the burden of proof upon the defendant, and the evidence upon him in rebuttal to do away with that presumption of guilty intent must be sufficiently strong to satisfy the jury, beyond a reasonable doubt, that there was no such guilty intent in the trans- action, though, if the use of the words " beyond a reasonable doubt " was technically erroneous, such use was not prejudicial to the case, when the charge is viewed as a whole and in connection with the uncontradicted evidence of the acts which constituted the prima facie case. (United States v. German, 115 Fed. Rep., 987.) PEACTICE, JUBY. 1 (U. S. Sup. Ct., 1891). When it is made to appear to the court during the trial of a criminal case that, either by reason of facts existing when the jurors were sworn, but not then disclosed and known to the court, or by reason of outside influences brought to bear on the jury pend- ing the trial, the jurors, or any of them, are subject to such bias or prejudice as not to stand impartial between the Government and the accused, the jury may be discharged and the defendant put on trial by another jury ; and the defendant is not thereby twice put in jeopardy, within the meaning of the fifth amendment to the Consti- tution of the United States. (Simmons v. United States, 142 U. S., 148.) 2 (U. S. Sup. Ct, 1891). The judge presiding at a trial, civil or criminal, in any court of the United States may express his opinion to the jury upon the questions of fact which he submits to their determination, (lb.) 3 (U. S. C. C. A., 1901). In determining the number of peremptory chal- lenges to which a bank teller accused of embezzling funds of the bank in violation of Revised Statutes United States, section 5209, is entitled, the offense will be considered a misdemeanor, regardless of the penalty attached thereto, since the statute defining and creating it explicitly says that a party guilty thereof " shall be deemed guilty of a misdemeanor." (Tyler v. United States, 106 Fed. Rep., 137.) 4 (U. S. C. C. A., 1900). An issue as to the guilt of a defendant on a charge of making false entries in a report made as an officer of a national bank, where the defendants claimed that the overdrafts in question bore interest and were reported by him in good faith under the head of loans and discounts, the sufficiency of such defense, both as to the facts and the question of good faith, was a matter for the determination of the jury. (Dorsey v. United States, 101 Fed. Rep., 746.) 5 (U. S. C. C. A., 1898). Where an indictment contains many counts, all alike, except as to amounts of money and dates of misapplication, it is sufficient to read one count in full to the jury, explain the differ- ence, and state the amount and date charged in each of the other counts. (Gallot v. United States, 87 Fed. Rep.. 446.) 6 (U. S. C. C. A., 1898). A juror who says he has an impression or opinion as to guilt or innocence of defendant, formed from newspapers and rumors, that it would require evidence to remove it, but that it DIGEST OF NATIONAL BANK DECISIONS. 381 OFFICERS, CRIMINAL LIABILITY OF— Continued. Pbosecutions — Continued. Trial and Its Incidents — Continued. pbactice, jtjby — continued. would yield to evidence, and that he can and will give the defendant a fair and impartial trial according to the evidence that may be adduced before him, is competent. (Gallot v. United States, 87 Fed. .Rep., 446.) 7 (U. S. C. C. A., 1898). Where an indictment consists of numerous counts, the trial court may, in the exercise of sound judicial discretion, require the Government to elect certain counts upon which it will ask conviction ; but where the counts are all for transactions con- nected together, or of the same class, their joinder is proper under Revised Statutes, section 1024, and the exercise of the court's dis- cretion will not be disturbed, except in a clear case of improvidence or abuse. (Gardes v. United States; Girault v. Same, 87 Fed. Rep., 172.) 8 (U. S. C. C. A., 1898). Where, after mistrial, and before a new trial, amendments are made to purely formal parts of certain counts of an indictment, and the defendants are not rearraigned, even if the irregularity is material, it can affect only the counts so amended, and the error is cured by arrest of judgment on such counts. (lb.) JUBOBS' DUTY AS TO REASONABLE DOUBT. 1 (U. S. Sup. Ct, 1894). In a criminal ' trial the burden of proof is on the Government, and the defendant is entitled to the benefit of a reason- able doubt; and when testimony contradictory or explanatory is introduced by the defendant, it becomes a part of the burden resting upon the Government to make the case so clear that there is no reasonable doubt as to the inferences and presumptions claimed to flow from the evidence. (Potter v. United States, 155 U. S., 439.) 2 (U. S. C. C, 1893). If much the larger number of the jury are for con- viction, a dissenting juror' should consider whether a doubt in his own mind is a reasonable one which makes no impression upon the minds of others equally honest and equally intelligent with himself, who have heard the same evidence with an equal desire to arrive at the truth, and under the sanction of the same oath. On the other hand, if a majority are for acquittal, the minority ought to seriously ask themselves whether they may not reasonably, and ought not to, doubt the correctness of a judgment which is not concurred in by most of those with whom they are associated, and to distrust the weight and sufficiency of that evidence which fails to carry convic- tion to the minds of their fellows. (United States v. Allis, 73 Fed. Rep., 165.) (U. S. C. C. A., 1898). One indictment in thirty -six counts charged de- fendant with aiding in the abstraction of thirty-six specified amounts of money, at thirty-six specified dates. Another indictment charged him with aiding in the misapplication of the same amounts, upon the same dates. The two were tried together, and the jury returned a verdict of " guilty as charged." Held, that the verdict was definite, certain, responsive to the issues, and not a double conviction, the sentence imposed by the court being imprisonment for a less term than the maximum under any one count. (Gallot v. United States, 87 Fed. Rep., 446.) (U. S. C. C. A.,' 1898). Where the jury finds accused guilty upon all counts of an indictment, " Guilty as charged," without specifying the counts, is a proper form of verdict. (Gardes v. United States ; Gi- rault v. Same, 87 Fed. Rep., 172.) 382 DIGEST OP NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. Prosecutions — Continued, Trial and Its Incidents — Continued. verdict — continued. 3 (U. S. C. C. A., 1898). Where the verdict is sustained by one good count in the indictment, it must stand, even if all the other counts are bad. (lb.) 4 (Nebr. Sup., 1900). A verdict in favor of one defendant and against another, based upon conflicting evidence, which is the same as to both defendants, can not be permitted to stand as to either. (Gerner v. Yates et al., 3 Banking Cases, 95 ; 61 Nebr., 100.) Submitting question of insanity at time of trial- 5 (U. S. Dist. Ct, 1902). Where the question whether a defendant in a criminal case was insane at the time of the trial is submitted to the jury for a preliminary finding, a unanimous verdict of insanity is required to authorize the court to take action thereon. (United States v. German, 115 Fed. Rep., 987.) SENTENCE. 1 (U. S. Sup. Ct, 1896). The sentence on both counts having been distinct as to each, the entire amount of punishment imposed will be under- gone, although the conviction and sentence as to the second count are set aside. (Putnam v. United States,- 162 U. S., 687.) 2 (U. S. C. C. A., 1901). The record in a misdemeanor case not showing that defendant was present when sentenced, the case will be remanded for new sentence. (Breese v. United States, 106 Fed. Rep., 680.) 3 (U. S. C. C, 1887). Upon a plea of guilty to three indictments found under section 5209, Revised Statutes United States, one for the mis- application of funds of a national bank by the accused while cashier thereof, one for false entries to conceal such misapplication, and the third for making a false statement with intent to deceive the exam- ining officers, the district court pronounced sentence upon the accused as follows : " That the prisoner be confined at hard labor in the State prison of the State of New Jersey for the term of five years upon each of the three indictments above named, said terms not to run concurrently, and from and after the expiration of said terms until the costs of this prosecution shall have been paid." Held, that the words " said terms not to run concurrently " are uncertain and inca- pable of application, and therefore void ; and that the sentences com- menced at once and ran concurrently. (United States v. Patterson, Keeper, etc., 29 Fed. Rep., 775.) 4 (U. S. C. C. A., 1898). Where the statute under which a prisoner is sen- tenced provides for imprisonment, but not at hard labor, the words " at hard labor " should not be inserted in the sentence, even if hard labor is a part of the discipline of the prison at which the sentence is to be served. (Gardes v. United States; Girault v. Same, 87 Fed. Rep., 172.) 1 (U. S. Sup. Ct, 1891). In a criminal case a general judgment upon an indictment containing several counts and a verdict of guilty on each count can not be reversed on error if any count is good and is suffi- cient to support the judgment. (Claasen v. United States, 142 U. S., 140.) 2 (U. S. Sup. Ct., 1891). Upon writ of error no error in law can be re- viewed which does not appear upon the record, or by bill- of excep- tions made part of the record. ( lb. ) DIGEST OP NATIONAL BANK DECISIONS. 383 OFFICERS, CRIMINAL LIABILITY OF— Continued. Prosecutions — Continued. Tbial and Its Incidents — Continued. appeal — continued. 3 (U. S. Sup. Ct., 1891). Under section 5 of the act of March 3, 1891, enti- tled "An act to establish circuit courts of appeals, and to define and regulate in certain cases the jurisdiction of the courts of the United States, and for other purposes," a writ of error may, even before July 1, 1891, issue from this court to a circuit court in the case of a con- viction of a crime under section 5209 of the Revised Statutes where the conviction occurred May 28, 1890, but a sentence of imprison- ment in a penitentiary was imposed March 18, 1891. (In re Claasen, 140 U. S., 200.) 4 (U. S. Sup. Ct, 1891). A crime is " infamous " under that act where it is punishable by imprisonment in a State prison or penitentiary, whether the accused is or is not sentenced or put to hard labor, (lb.) 5 (U. S. Sup. Ct, 1891). Such writ of error is a matter of right, and under section 999 of the Revised Statutes the citation may be signed by a justice of this court as an authority for the issuing of the writ under section 1004. (lb.) 6 (U. S. Sup. Ct, 1891). At the time of , the conviction no writ of error from this court in the case was provided for by statute, nor was any bill of exceptions, with a view to a writ of error, provided for by statute or rule, and therefore a mandamus will not lie to the judge who presided at the trial to compel him to settle a bill of excep- tions which was presented to him for settlement after the sentence, nor can the minutes of the trial, as settled by the judge by consent, and signed by him, and printed and filed in July, 1890, and on which a motion for a new trial was heard in October, 1890, be treated by this court, on the return to the writ of error, as a bill of exceptions properly forming part of the record. ( lb. ) 7 (U. S. Sup. Ct, 1891). A criminal court in the southern district of New York, sitting as a circuit court therein, under section 613 of the Re- vised Statutes, and composed of the three judges named in that sec- tion, to hear a motion for a new trial and an "arrest of judgment in a criminal case previously tried by a jury before one of them, is a legally constituted tribunal. (lb.) 8 (U. S. Sup. Ct, 1891). A justice of this court on allowing such writ and signing a citation had authority also to grant a supersedeas and stay of execution. (lb.) 9 (U. S. C. C. A., 1898). Under rule 11 of the circuit court of appeals (21 C. C. A., cxi, and 78 Fed. Rep., cxi), requiring the assignment of errors to quote the full substance of evidence alleged to have been erroneously admitted or rejected, and to set out the part of the charge referred to totidem verbis, assignments that " the court erred in permitting evidence as shown in bills of exceptions numbers two and three," which errors can only be ascertained by a careful read- ing of a voluminous record, and that " the court erred in its charge," etc., referring to marked lines and numbers in the written opinion for instructions erroneously given and refused, will not be consid- ered. (Gallot v. United States, 87 Fed. Rep., 446.) Habeas corpus — When judgment is void for any reason the party imprisoned under it can be released on habeas corpus. 10 (U. S. C. C, 1887). The judgment of the district and circuit courts, of the United States in criminal cases is final, and can not be reviewed by writ of error ; but if a judgment, or any part thereof, is void, either because the court that renders it is not competent to do so for want of jurisdiction, or because it is rendered under a law clearly uncon- stitutional, or because it is senseless and without meaning and can 384 DIGEST OF NATIONAL BANK DECISIONS. OFFICERS, CRIMINAL LIABILITY OF— Continued. Pbosecutions — Continued. Teial and Its Incidents — Continued. appeal — continued. not be corrected, or for any other cause, the party imprisoned by virtue of such judgment may be discharged on habeas corpus. (United States v. Patterson, keeper, etc., 29 Fed. Rep., 775.) 11 (U. S. C. C, 1887). On a habeas corpus the decision should be made upon the actual status of the case at the time of the decision, and not according to the state of things when the writ was allowed. When, at the time the writ of habeas corpus for the discharge of a prisoner, under three sentences of five years, each running concurrently, was allowed, the first term of five years had not expired by lapse, although at least one of the sentences had been satisfied by means of remissions for good conduct. Held, that the five years having entirely elapsed since the allowance of the writ, the question of the , applicability of the remission for good conduct to all the sentences may be waived and the prisoner discharged. (lb.) WHEN BOTH STATE AND UNITED STATES HAVE JURISDICTION. 1 (U. S. Sup. Ct, 1889). A State is not deprived of jurisdiction over a per- son who criminally foTges a bill of exchange or promissory note with intent to defraud, in violation of its statutes, or of its power to punish the offender committing such offense, by the fact that he fol- lows this crime up by committing against the United States the fur- ther crime of making false entries concerning such bill or note on the books of a national bank, with intent to deceive the agent of the United States designated to examine the affairs of the bank, and in violation of the statute of the United States in that behalf. (Cross v. North Carolina, 132 U. S. R., 131.) 2 (U. S. Sup. Ct, 1889). The false making or forging of a promissory note in a State, purporting to be executed by an individual, and made payable at a national bank, is not a fraud upon the United States, or an offense described in Revised Statutes, section 5418. (lb.) 3 (U. S. Sup. Ct, 1889). The same act or series of acts may constitute an offense equally against the United States and against a State, and subject the guilty party to punishment under the laws of each government. (lb.) „ LIABILITY OF NATIONAL BANK OPFICEKS UNDEE STATE STATUTES. 1 (U. S. Sup. Ct., 1903). Congress, having the power to create a system of national banks, is the judge as to the extent of the powers which should be conferred upon such banks, and has the sole power to regu- late and control the exercise of their operations. Congress having dealt directly with the insolvency of national banks by giving con- trol to the Secretary of the Treasury and the Comptroller of the Currency, who are authorized to suspend the operations of the banks and appoint receivers thereof when they become insolvent, or when they fail to make good any impairment of capital, and full and ade- quate provision having been made for the protection of creditors of national banks by requiring frequent reports to be made of their con- dition, and by the power of visitation of Federal officers, it is not competent for State legislatures to interfere, whether with hostile or friendly intentions, with national banks or thair officers in the exer- cise of the powers bestowed upon them by the General Government. (Easton v. Iowa, 188 U. S., 220.) 2. (U. S. Sup. Ct., 1903). While a State has the legitimate power to define and punish crimes by general laws applicable to all persons within its jurisdiction, and it may declare, by special laws, certain acts (such DIGEST OF NATIONAL BANK DECISIONS. 385 OFFICERS, CRIMINAL LIABILITY OF— Continued. LIABILITY OF NATIONAL BANK OFFICERS UNDER STATE STATUTES — Continued. as the receipt of deposits when bank is insolvent) to be criminal of- fenses when committed by officers and agents of its own banks and institutions, it is without lawful power to make such special laws applicable to banks organized and operated under the laws of the United States. (Baston v. Iowa, 188 U. S., 220.) 3 (U. S. C. O, 1893). The offense of making false entries in the books of a bank, for which an officer of the bank is liable to punishment under section 5209, Revised Statutes, since it is not a crime of which the State courts have concurrent jurisdiction under section 5328, Revised Statutes, is exclusively cognizable by the Federal courts. (In re Bno, 54 Fed. Rep., 669.) 4 (Conn.) It is competent for a State by penal enactments to protect its citizens in their dealings with national banking associations located within the State. (State v. Tuller, 34 Conn., 280.) 5. The officers of a national banking association may be prosecuted under State statutes for fraudulent conversion of the property of individ- uals deposited with a-nd in the custody of the association. (Conn.) State v. Tuller, 34 Conn., 280; (Mass.) Commonwealth v. Tenney, 97 Mass., 50. 6 (111. Sup., 1877). Defendant, a bookkeeper in a national bank, without authority filled a draft signed in blank by the assistant cashier, issued it, and fraudulently changed his book entries to cover the crime. Held, on an indictment for forgery, that the crime was within the jurisdiction of the State courts. ( Hoke v . People, 122 111., 511 ; 3 N. B. C, 372.) 7 (Mass.). As the national banking law makes the embezzlement, abstrac- tion, or willful missapplicatiou of the funds of a national banking as- sociation merely a misdemeanor, a person who procures such an offense to be committed can not be punished under a State statute which provides that a person who procures a felony to be committed may be indicted and convicted of a substantive felony. (Common- wealth v. Felton, 101 Mass., 204. ) 8. An officer of a national banking, association can not be punished under State laws for embezzling the funds of the association. (Mass.) Commonwealth v. Felton, 101 Mass., 204; (Pa.) Commonwealth ex rel. v. Ketner, 92 Pa. St., 372. 9 (Mass.). Where the offense committed by an officer is properly a larceny of the funds, and not an embezzlement, he may be indicted under a State law! (Commonwealth v. Barry, 116 Mass., 1.) 10 (Mich. Sup., 1886). State courts have no jurisdiction of the offense of' embezzlement of the funds of a national bank. (People v. Fonda, 62 Mich., 401 ; 3 N. B. C, 501.) 11 (Ohio Sup., 1889). The only remedy for the making of a false return to the auditor, by the cashier of a bank, of the resources and liabilities of the bank, for the purposes of taxation, is afforded by Revised Statutes of Ohio, section 2679, which provides that the auditor may examine the books of the bank, and any officer or agent of it under oath, and make out the statement ; and any officer of the bank may be fined not exceeding $100 for failing to make the statement, or for will- fully making a false one. (Miller v. First National Bank of Cin- cinnati, 21 N. E., 860; 46 Ohio St., 424.) 12 (Pa.). And an officer may be punished under State laws for making false entries in the books of the association with intent to defraud it. (Luberg v. Commonwealth, 94 Pa. St., 85.) , 4049—05 25 386 DIGEST OF NATIONAL BANK DECISIONS. OFFSETS. Page. Generally 386 Offsets between insolvent banks and their creditors . 389 When depositor insolvent _ _ 395 Cross references: Deposits — Application of deposit on claim 125 Insolvency and receivers — Set-off of judgment against dividends 197 Interest and usury — Right to set off usury _"_ 229 Negotiable paper — When set-off by maker not allowed against purchaser 290, Shareholders — Set-off against assessment 481 GENERALLY. Law of what place governs. 1. Set-off must be governed by the law of the place where, in case of con- troversy, suit must be brought to settle the rights of the parties. (U. S. C. C.) Vose v. Philbrook, 3 Story, 335; (N. H.) Gibbs v. Howard, 2 N. H., 296 ; (N. Y.) Euggles v. Kuler, 3 Johns, 263; (Pa.) Savary v. Savary, 3 Clark, 271. 2 (U. S. C. C. A., 1896). The right to set-off, except as it is enforced in equity, is a matter of local legislation ; and the Federal courts, sit- ting in any State, when dealing with the subject, will follow the rules established by the tribunals of the State. (Charnley v. Sibley et al., 73 Fed. Rep., 980.) Must be mutuality. ■ 3 (U. S. Sup. Ct.). A separate demand can not be set off against a joint one, or a joint debt against a separate one. (U. S. Sup. Ct., 1873) Gray v. Rollo, 18 Wall., 629 ; (U. S. Sup. Ct, 1875) Scammon v. Kimball, 92 U. S., 362. 4. An executor, administrator, or public officer is not entitled to set off against his liability as such any indebtedness from bank to himself individually, nor contra. (111.) Stowe v. Yarwood, 14 111., 424; (Ky.) Benton v. Holmes, executor, 1 A. K. Marsh, 19. 5 (U. S. C. C. A., 1894). Debts of a partner and his firm to a bank can not, in equity, be set off by a receiver of the bank against trust moneys which the partner, after the debts were contracted, mingled with the firm deposits without tlfe bank's knowledge, and the whole amount of which remained continuously in the bank until it failed. (Fisher v. Knight, 61 Fed. Rep., 491.) 6 (Colo. App., 1892). In an action on a note by a firm, to which it is pay- able, defendant can not offset a claim against a copartner of such firm. (Woolman v. Capital National Bank, Colo. App., 31 P., 235 ; 2 Colo. App., 454.) 7 (Colo. App., 1892). No reply is required to an answer, in an action on a note, admitting the execution and delivery of the note, but denying that plaintiff has any interest in the same, and alleging that the action is brought under a conspiracy between plaintiff and a copart- ner of - the payee firm to prevent a set-off by defendant against such partner. (lb.) 8(111. App.). Under an assignment for the benefit of creditors, a" note given for obligations of the firm should be allowed against the firm assets, though it was signed by the partners individually. (Union National Bank v. Henry Dreyfus & Co., 61 111. App., 323.) DIGEST OF NATIONAL BANK* DECISIONS. 387 OFFSETS— Continued. generally — continued. 9 (III. App.). One of two joint makers of a note to a bank can not defeat the right of the bank to set off his individual deposit by showing the partnership character of the debt, the bank not having had notice thereof. (Merchants' Nat. Bank v. Maple, 65 111. App., 484.) 10 (Minn. Sup., 1878). The receiver of an insolvent national bank sued A and B on their joint note given to' the bank. They claimed to set off notes given by the bank, and C and D, who were also insolvent, as joint makers, to D alone, and maturing after the receiver's appoint- ment, and growing out of a distinct transaction from the note in suit. Held, not a proper set-off. (Balch v. Wilson, 25 Minn., 299; 2 N. B. C, 274.) 11 (Tex. Civ. Appls., 1893). A judgment obtained in another than the at- tachment suit can not be set off against damages claimed for a wrongful attachment. (Imperial Roller Milling Company v. First National Bank of Cleburne, 27 S. W., 49.) Exception to rule requiring mutuality. 12. Where, however, a note is signed by one as principal and others as sureties, the indebtedness of the bank to the principal may be set .off. (111.) Himrod v. Baugh, 85 111., 435; (N. H.) Andrews v. Varrell, 46 N. H., 17. Attorney's lien does not affect. 13 (U. S. C. C, 1881). An attorney's lien upon a judgment is subject to any existing right of set-off in the other party to the suit. (National Bank of Winterset v. Byre et al., 8 Fed. Rep., 733.) When voluntary payment waives set-off. 14 (TJ. S. C. C. A., 1896). The voluntary payment by the maker of a promis- sory note, with a full knowledge of all the facts, operates as an abandonment and waiver of all right to set off cross demands or inde- pendent debts, and a bill disclosing such facts presents no case for equitable relief by way of equitable set-off. (United States Bung Manufacturing Co. v. Armstrong, 34 Fed. Rep., 94.) When torts can not oe set off against contracts. 15 (U. S. C. C. A., 1896). Where the State statute of set-off, as in Illinois, does not authorize a set-off, in action on contract, of unliquidated damages arising out of contracts or torts not connected with the subject-matter of the suit, there can be no set-off, in an action at law, of such damages, even as against an insolvent or nonresident plaintiff. (Charnley v. Sibley et al., 73 Fed. Rep., 980.) Inconsistent claims as offsets. 16 (U. S. C. C. A., 1896). It is no objection to a set-off, claimed by a defendant, that it is inconsistent with another set-off previously claimed by him and rejected as improper. (lb.) Set-off against deceased depositor. 17 (Ky. Appls.. 1903). Where decedent had money on deposit in a bank at the time of his death, and the bank held a note against him for a less amount, which matured the day after his death, it was entitled to set off the amount of the note against the deposit, and pay the decedent's administrator the difference. (Little's Admr. v. City Nat. Bank of Fulton, 5 B. C, 728; 74 S. W. Rep., 699.) Maker's claim. against intermediate indorser as set-off. 18 (Ala.). As against the assignee or holder of promissory - note, suing the maker, the doctrine of set-off has never been carried further dhan to put him in the place of the payee or party having the beneficial interest ; and a set-off in favor of the maker against an intermediate holder has been uniformly disallowed, in the absence of an agree- ment founded on new consideration, between the maker and such intermediate holder. (Goldthwaite v. National Bank, 67 Ala., 549.) 388 DIGEST OF NATIONAL BANK DECISIONS. OFFSETS— Continued. generally — continued. 19 (Ala.). In the absence of all intervening equities, courts of equity put the same construction on statutes of set-off as do courts of law. Insol- vency is recognized as a ground for the allowance of a set-off in equity, when it would not be allowed at law, but it is only the insol- vency of the original creditor against whom the claim is asserted: and while the assignee of nonnegotiable paper takes it subject to all equities to which it was subject in the hands of the assignor, this means only the equities between the original parties, and does not include equities which may arise between other parties in the course of its transfer. (lb.) Set-off must be held when suit is brought. 20 (Ala.). A cross demand, to be available as a set-off at law, must be such as would support an independent action at law by the defendant, at the commencement of the suit ; hence, a payment of his principal's debt by the surety, after the commencement of suit against him on a debt due to his principal, is not available as a set-off in the action. (Goldthwaite v. National Bank, 67 Ala., 549.) Set-off of judgments against each other. 21 (Ohio Sup.). A company borrowed money from a national bank at a rate of interest in excess of that prescribed by Revised Statutes United States, section 5197, and gave its note to the bank for $5,000. The bank also discounted, from time to time, sundry notes indorsed by the company to the bank in the ordinary course of business. Before the maturity of any of the notes the company became insol- vent, and a receiver was appointed who took charge of all its prop- erty. The receiver thereafter recovered a judgment against the bank for twice the amount of interest paid by the company to the bank on the note for $5,000, as the penalty provided for taking interest in excess of the rate prescribed by the statute. Subsequently to the recovery of that judgment, the bank obtained two judgments in the same court in which the receiver brought his action — one for the balance due on the note for $5,000, and one against the company for the amount due on the discounted notes indorsed by the company to the bank. Held, in an action to enjoin the collection of a balance due on the judgment in favor of the receiver and for other relief, that the judgments in favor of the bank were, on principles of equity, a proper subject of set-off against the judgment in favor of the receiver. (Barbour v. National Exch. Bank of Tiffin, 33 N. E., 542; 50 Ohio St., 90.) Dividends may be set off against stockholder's debt to bank. 22 (Tex. Civ. App., 1894). A bank may lawfully set off indebtedness of a stockholder to the bank against dividends accruing on such stock- holder's shares. (First National Bank v. De Morse, 26 S. W., 417.) Special deposit, payment by third party as offset. 23 (Tex. Civ. App., 1895). In an action against a bank and its officers and receivers for the conversion of a special deposit, a set-off will be allowed for the payment of part of the deposit by an agent bank in a " foreign country, also in the hands of a receiver, to which the deposit had been transferred. (El Paso National Bank v. Fuchs, Tex. Civ. App., 34 S. W., 203). State statutes. 24 (U. S. Sup. Ct„ Ark., 1899). Under the statute of Arkansas, Gould, Digest, Arkansas, page 1020, section 5, in an action at law 'against the receiver of a national bank, defendant may set off against plaintiff's demand a debt due the bank by plaintiff, and thereby have the amount due plaintiff reduced. (Auten v. United States Nat. Bank of New York, 1 Banking Cases, 416; 174 U. S., 125.) 25 (Mass.). A certificate of deposit issued by a national bank is not a promissory note within the meaning of General Statutes, chapter 53, W^> -j**^""' DIGEST OF NATIONAL BANK DECISIONS. 889 OFFSETS— Continued. generally — continued. section 10; and in an action thereon by a person to whom it has been transferred by the depositor the bank is not entitled to set off the amount due upon a promissory note given by the depositor to and discounted by the bank, the certificate being issued for the pro- ceeds of such note. (Shute v. Pacific National Bank, 136 Mass., 487.) 26 (N. Y.). In an action against a bank, commenced prior to the going into effect of the new code, by the personal representatives of a deceased customer, to recover a deposit which was due and payable to the deceased in his lifetime, held, that the defendant could not, as matter of law and 5n the absence of facts entitling it to equitable relief, set off a claim against the deceased which did not become due until after his death. (Jordan, Administratrix, etc., v. The National Shoe and Leather Bank of New York, 74 N. Y., 467.) 27 (N. Y.). A demand, to be set off in such an action, must have been due and payable from the decedent in his lifetime. (lb.) OFFSETS BETWEEN INSOLVENT BANKS AND THEIR CREDITORS. Rules of set-off applicable to insolvent banks. 1 (U. S. Sup. Ct, 1892). Acts of Congress in relation to the administration of the assets of insolvent banks authorize no other rules of set-off than those recognized by courts in the settlement of the affairs of other insolvent corporations. (Scott v. Armstrong, 146 U. S., 499.) 2 (Nebr. Sup., 1898). As against the holder of a check against an account • of a depositor, the bank of deposit may not apply the amount of the account to the payment of the indebtedness of the depositor to the bank which is not yet due, although the depositor may be insolvent. (Columbia Nat. Bank of Lincoln v. German Nat. Bank of Lincoln, 1 Banking Cases, 43; 56 Nebr., 803.) 3 (N. C. Sup., 1899). Even if such an indebtedness to the bank has not ma- tured, if the depositor becomes insolvent, the bank, by virtue of the right of equitable set-off, may apply the deposits with it of such debtor to his indebtedness. (Hodgin v. People's Nat. Bank, 124 N. C, 540.) 4 (N. C. Sup., 1899). Under the statutes of North Carolina a deposit by defendant in the plaintiff bank, made after the bringing of the action, can not be set up as a counter-claim, and does not entitle the depos- itor to equitable interference in his behalf upon the insolvency of plaintiff and the substitution of its receiver as party plaintiff. (Piedmont Bank of Morgantown et al. v. Wilson et al., 2 Banking Cases, 42; 124 N. C, 562.) Set-off of deposit against debt to bank. 5 (U. S. Sup. Ct., 1892). The Third National Bank in New York was the cor- respondent of the Albion bank, a country bank. W., during part of the time in which the transactions in controversy took place, was cashier, and during the remainder was president of the Albion bank. During all the time W. practically managed that bank, and his codirectors and other officers had little or no oversight of its affairs. He was engaged in stock speculations on his own account in New York, and drew from time to time for his own purposes in favor of K. & Co., his brokers, on the bank balance with the Third National - Bank. K. & Co. from time to time returned to that bank sums to be credited to the Albion bank. The latter bank eventually became insolvent, being ruined by fraudulent operations of W., who dis- appeared, and was put in the hands of a receiver, who brought suit against K. & Co. to recover the sums so paid to them by W. out of the balance to the credit of the bank with the Third National. K. & Co. claimed to offset the return payments made by them to the ThiM National, but the trial court ruled that they were not entitled to do it, and no question in respect of them was submitted to the jury. Held, that the defendants were entitled to have it submitted to the 390 DIGEST OP NATIONAL BANK DECISIONS. OFFSETS— Continued. OFFSETS BETWEEN INSOLVENT BANKS AND THEIR CBEDITOBS : — Continued. jury whether the other directors and officers of the Albion bank might not in the exercise ot proper and reasonable care have ascer- tained that these moneys had been deposited to the credit of the Albion- bank, and whether they would or would not have accepted such deposits as the return of the moneys to the bank. (Kissam v. Anderson,. 145 U. S., 435.) 6 (U. S. C. C, 1888). On the failure of a national bank a depositor was in- debted to it on eleven notes to the amount of $5,000, and had on deposit some $2,900. The receiver of the bank agreed that this sum should go as a set-off on the indebtedness, the depositor to pay the notes first coming due, and the deposit to be applied on the last- maturing notes. After paying the first two notes it was found that the others were in the hands of third parties, and the depositor was compelled to pay them, and filed a bill to authorize the receiver to refund the money paid under a mutual mistake. This bill was heard by the district judge of the western district of Tennessee, sitting in # the circuit court of the southern district of Ohio. Held, that the de- posit should properly be set off against the claim of the bank and the depositor should recover the sum paid by him ; but as the district judge of the southern district of Ohio had held, in an action between the same bank and a creditor, the circuit judge concurring therein, that the plea of set-off was not available, in order that there might not be different rules of set-off in the same court in the case of the same insolvent, and as the case can not be appealed, it will be remanded for reargument before the regular judges, who may, in their discretion, provide for a dissent of record, or do what may to them seem right in the premises. (Snyder's Sons Co. v. Armstrong. 37 Fed. Rep., 18.) 7 (U. S. C. C. A., 1892). The indorser of a note discounted by a national bank, and which matures after the bank becomes insolvent and a receiver is appointed, is entitled, when the maker is insolvent, to set off against the note the amount of his deposit in the bank at the time of its failure. (Yardley v. Clothier, 51 Fed. Rep., 506.) 8 (U. S. C. C, 1893). In an action at law by the receiver of a national bank on a note, the maker may place -as set-off any debt of the bank to him existing at the time of its failure, as the receiver takes the choses in action belonging to the bank subject to all claims and defenses which might have been interposed as against the bank before the liens of the United States and general creditors attached. (Adams v. Spokane Drug Co., 57 Fed. Rep., 888.) 9 (N. J. Sup., 1896). A bank may set off against a general deposit a debt due it from the depositor. (People's Bank and Trust Co. v. Tufts, N. J. Sup., 35 A., 792; 59 N. J. L., 380.) 10 (N. Y. Sup.). The indorser of note held by an insolvent bank may have his money on deposit in the bank set off against the note, though the note was not due when the bank assigned, if the maker is insolvent and the indorser has no security. (O'Connor v. Brandt, Sup., 42 N. T. S., 1079.) 11 (N. Y.). Where a depositor is sued by the temporary receiver of a "bank on a note payable thereto, set-off to the amount of his deposit may be allowed defendant, on application to the court. (People v. St. Nicholas Bank, 28 N. Y. S., 114; 76 Hun, 522, followed. Sickles v. Herold, Com. PI., 36 N. Y. S., 488.) 12 (N. Y.). In an action by the temporary receiver of a bank against a depositor on a note payable to the bank, where the amount of defendant's deposit, which bears no interest, is allowed as a set-off, . the receiver will not be required to pay any interest thereon, in the absence of proof that the money earned any interest while in his hands. ( lb. ) 13 (N. Y. Sup., 1872). A person liable upon a note to an insolvent national bank may set off, against his indebtedness, the amount of his DIGEST OF NATIONAL BANK DECISIONS. 391 OFFSETS— Continued. OFFSETS BETWEEN INSOLVENT BA.NKS AND THEIK CREDITORS — Continued. deposits with the bank. (Piatt v. Bentley, 1 N. B. C, 758; 11 Am. L. Reg., 171.) 14 (N. C. Sup., 1894). When a bank closes its doors and commits an act of insolvency, its deposits, whether on account or certificate, at once become due without demand or notice, and are to be set off against a depositor's debt due the bank. (Davis v. Industrial Mfg. Co., 19 S. B., 371; 114 N. C, 321.) 15 (Ohio Sup., 1892). A national bank received on deposit a check drawn by plaintiff on another bank, anji carried the amount to the credit of his agent, upon the agreement that. he would take for part of the sum a draft drawn on another bank and would not immediately check out the balance. Before the draft was presented, the drawer bank, which was insolvent, passed into the hands of a receiver, without having provided any funds with which to pay it. The check, payment of which bad been stopped, came into the possesion of the receiver, and the draft belonged to plaintiff. Held, that plaintiff was entitled in equity to have the amount of the draft set off against his liability on the check. (Armstrong v. Warner, 31 N. E., 877 ; 49 Ohio St., 376.) 16 (Tex. Civ. Appls., 1901). Where a bank held two notes of a depositor, secured by personal indorsement, and such depositor became insol- vent before service on the bank of a garnishment in a suit against him, which service was prior to maturity of the notes, the bank was entitled to offset such notes against the deposit. (Neely v. Grayson County Nat. Bank, 61 S. W., 559; 25 Tex. Civ. App., 513.) 17 (Tex. Civ. App., 1894). Revised Statutes of United States, section 5234, relating to receivers of national banks, requires them to collect all ' debts, dues, and claims, and, on the order of the court, to compound debts. Section 5242 declares void any application of the assets in preference of creditors after the commission of an act of insolvency or in contemplation thereof. Held, that an act of a receiver of a national bank, in allowing a certificate of deposit issued by such bank as an offset to a note due the bank, signed by the holder of the cer- tificate and another, was void, in the absence of an order of court authorizing it, where such certificate was transferred to such holder after the bank became insolvent. (Beckham v. Shackelford, Tex., 29 S. W., 200; 8 Tex. Civ. App., 660.) 18 (Tex. Civ. App., 1894). Such receiver was not estopped from collecting such note from a surety, who released security held by him on the faith of such offset, and the surrender of the note by the receiver, though the receiver knew he was a surety only, and that he held such security. (lb.) Set-off of collection against debt to tank. 19 (U. S. C. C, 1883). The plaintiffs seek to offset the amount of their credit on the books of a defunct bank against the promissory notes received by the bank for discount before its failure. Held, that if the bank held the notes at the time of its failure and was entitled to receive the "amounts due thereon when they matured, such offset might be made ; but an offset of this kind can not be allowed where it appears that the notes were not the property of the bank at the time of its failure, but had been indorsed away for value. (Balbach et al. v. Frelinghuysen, Receiver, etc., 15 Fed. Rep., 675.) 20 (N. Y.). The plaintiff, who was surety for the repayment of certain sums deposited in defendant bank, which were due and payable at the time the bank suspended, owed certain notes to the bank which became due before a receiver was appointed for such bank. On account of the time required to fix plaintiff's liability he did not pay the creditors for some time after suspension. Held, that payment will be deemed to relate back and to have been made at the time of suspension, and the amount so paid may be set off against the notes held by the bank against plaintiff. (Kilby v. First Nat. Bank, 66 N. Y. S., 579; 32 Misc. Rep., 370.) 392 DIGEST OF NATIONAL BANK DECISIONS. OFFSETS— Continued. OFFSETS BETWEEN INSOLVENT BANKS AND THEIB CREDITORS Continued. Claim on bank must be held at time of failure. 21. One indebted to bank can not set off a claim against bank acquired sub- sequent to its suspension. (U. S. Sup. Gt., 1892.) Scott v. Armstrong, 146 U. S., 511 ; (Mass.) Colt v. Brown, 12 Gray, 233; (Pa.) Venango National Bank v. Taylor, 56 Pa. St., 14. 22 (Colo. Sup., 1902). A debtor of an insolvent bank can not set off against his debt a claim against it which he bought after its insolvency. (Dyer v. Sebrell, 4 Banking Cases, 414.) 23 (Fla. Sup., 1901). Section 2193, Revised Statutes, is directed against cer- tain transactions taking place after the commission of an act of insol- vency by banks, or in contemplation thereof, made with a view to the preference of one creditor to another. Where a party owes the bank a note, and also has a credit to his deposit account for deposits made while the bank is solvent, and not in contemplation of its insolvency, and the bank officials and such party, after the bank becomes insol- vent, enter the amount of the balance due such party on his deposit account as a credit on the note, the statute is not violated, and such credit may be pleaded as a payment on the note in an action brought to recover on such note by a receiver subsequently appointed. (Rob- inson v. Aird, 3 Banking Cases, 309 ; 43 Fla., 30.) 24 (Mich. Sup., 1902). A depositor in an insolvent bank may set off the de- posit standing to his credit when the bank closed its doors against his notes payable to the bank but not then due. (Thompson v. Union Trust Co., 4 Banking Cases, 549 ; 130 Mich., 508.) 25 (N. Y. Sup.). Under Revised Statutes United States, section 5236, pro- viding that the Comptroller of the Currency, after providing for the redemption of the notes of an insolvent national bank, shall make a ratable dividend of the money paid him by its receiver among those who proved claims against it, and section 5242, providing that trans- fers of notes owing a national bank, made after it has committed an act of insolvency, to prevent such application of its assets, shall be void, the maker of a note held by an insolvent national bank can not, / in defense to an action thereon by its receiver, offset a claim against the bank which was assigned to him after the bank suspended and before the receiver was appointed. (Davis v. Knipp, Sup., 36 N. Y. S., 705.) 26 (N. Y. Sup.). Where, between suspension by a bank and commencement of an action for and resulting in its dissolution and appointment of a receiver, one liable to it as indorser on notes takes assignments of deposit accounts, he may offset them against his liability, in an action by the receiver, unless it be shown that the bank was insol- vent at the time of the assignment of the accounts ; and this is not shown .by the recital in an agreed statement of facts that, at the commencement of the action to dissolve, the bank " was insolvent, having suspended its business" on a certain day. (Higgins v, Worthington, Sup., 35 N. Y. S., 815.) 27 (Ohio Sup., 1877). A right of set-off, perfect and available against a bank at the time of the appointment of a receiver, may be pleaded in an action by the receiver. (Hade, Receiver, v. McVay, 2 N. B. C, 353; 31 Ohio State, 231.) 28 (Pa.). But a debtor can not set off the amount of a deposit assigned to him after the act of insolvency committed. ( Venango National Bank v. Taylor, 56 Pa. St., 14.) 29 (Pa. Sup., 1867). A national bank having become insolvent, a depositor therein assigned his deposit to a debtor of the bank. Held, that the ■ latter could not offset such deposit against his debt in an action thereon. (The Venango National Bank v. Taylor, 56 Pa. St., 14; 1 N. B. C, 842.) DIGEST OF NATIONAL BANK DECISIONS. 893 OFFSETS— Continued f OFFSETS BETWEEN INSOLVENT BANKS AND THEIB CBEDITOBS — Continued. "When claims grow out of same transaction. 30 (U. S. Sup. Ct, 1892). The ordinary equity rule of set-ojj in case of insolvency is that where the mutual obligations have grown out of the same transaction insolvency on the one hand justifies the set-off of the debt due on the other, and there is nothing in the statutes relat- ing to national banks which prevents the application of that rule to the receiver of an insolvent national bank under circumstances like those in this case. ( Scott v. Armstrong, 146 U. S., 499. ) 31 (U. S. Sup. Ct., 1892). A customer of a national bank who, in good faith, borrows money of the bank, gives his note therefor due at a future day, and deposits the amount borrowed to be drawn against, any bal- ance to be applied to the payment of the note when due, has an equitable (but not a legal) right, in case of the insolvency and disso- lution of the bank, and the appointment of a receiver before the maturity of the note, to have the balance to his credit at the time of the insolvency applied to the payment of his indebtedness on the note. (lb.) Offsets need not he due at time of suspension. 32. Right of set-off is allowable whether the indebtedness sought to be set off had or had not matured at time of bank's suspension. (U. S. Sup. Ct, 1892) Scott v. Armstrong, 146 U. S., 499 ; (U. S. C. C.) Drake v. Rolio, 3 Biss., 273 ; (Pa.) Skiles v. Houston, 110 Pa. St., 254. 33 (Md. Appls., 1889). At common law a depositor may set off the balance due on his deposit account against his note to the bank in the posses- sion of its receiver, even though the note did not mature until after the insolvency of the bank, and no demand has been made for the deposit. And this rule is not changed by the statutes of Maryland. (Colton et al. 'v. The Drovers Perpetual Building and Loan Ass'n of Baltimore, 2 Banking Cases, 243 ; 90 Md., 85.) 34 (N. Y.). While, as a general rule in the administration of the estate of an insolvent debtor, equality among creditors is equity, courts are not required to ignore the principle that only the balance, in case of mutual debts, is the real sum owing by or to the insolvent. (Hughitt v. Hayes, 136 N. Y., 163.) 35 (N. Y.). Claims will be regarded by a court of equity as due, notwith- standing the absence of a technical demand, when equitable consid- erations require that they shall be applied each to the other. (lb.) 36 (N. Y.). In the application of cross demands to the satisfaction of each other the insolvency of one of the parties is a material circumstance, and although the debt owing by the insolvent may not be due the creditor may waive the credit, and a court of equity will then apply it upon the debt from the insolvent, if that has matured. (lb.) Contra. 37 (Mont. Sup., 1899). Where a debtor of a bank has deposits, the certifi- cates of which have not yet matured, the fact of the bank being insolvent will not give the debtor the right to have such deposits off- set against his liability. ( Stadler v. First Nat. Bank of Helena, 56 P., Ill; 22 Mont, 190.) Bona fide owner for value "before maturity holds free of offsets. 38 (U. S. C. C, 1900). An affidavit of defense in a suit by a receiver of an insolvent bank on a note of which the bank was a bona fide holder for value before maturity, alleging that defendant was an accommo- dation maker, and that the indorsers, who were not parties to the suit, •-had a certain sum on deposit in the bank when it became insolvent, which occurred after the note became due, but containing no allega- tions showing that they still owned such deposit, or that they desired to have the same used by the maker as a set-off in the suit against him, is insufficient to entitle him to set off the amount of such deposit 394 DIGEST OF NATIONAL BANK DECISIONS. OFFSETS— Continued. OFFSETS BETWEEN INSOLVENT BANKS AND THEIR CEEDITOES Continued. on the ground that he was merely surety on the note, which was discounted by the bank in due course of business, in ignorance of his relation to the indorsers. , (Barle v. Miller, 102 Fed. Rep., 600.) Section 5242 does not prevent offsets against insolvent banks. 39 (Mont, 1895). Revised Statutes United States, section 5242, which re- quires a pro rata distribution of the assets of an insolvent national bank and forbids preferences, does not prevent a debtor of the bank from setting off against his indebtedness the amount of a claim he holds against the bank ; and it is immaterial whether or not the debt due to the bank had matured at the time of its insolvency. (Scott v. Armstrong, 13 S. Ct, 148—146 U. S., 499, followed; Mercer v. Dyer, Mont, 39 P., 314; 15 Mont, 317.) 40 (Ohio Sup., 1892). Revised Statutes United States, section 5242, by pro- viding that no national bank, when insolvent or in contemplation of insolvency, shall so dispose of its assets as to prevent their proper application to the redemption of its circulating notes and the ratable distribution of the remainder among its creditors, does not prohibit the allowance of any valid set-off, legal or equitable, which a debtor of the bank has against any obligation owing by him to it at the time of its solvency, the allowance of such set-off not being the creation of a preference. (Armstrong v. Warner, 31 N. B., 877; 49 Ohio St., 376.) Contra. 41 (Mo. Appls.). In an action against the indorser of a promissory note which matured in the hands of plaintiff as receiver of an insolvent national bank, defendant's deposit in the bank can not be made the subject of a set-off, as the claim therefor existed before the re- ceiver's right accrued, and its allowance -would be contrary to the spirit of Revised Statutes, United States, section 5242, making pay- ments of money by an insolvent national bank to shareholders or creditors, with a view to preference, or to evading the disposition of assets, as required by statute, null and void, and section 5324, requir- ing the receiver, after collecting debts, etc., to turn over all money to the United States Treasurer for a ratable distribution among cred- itors. (Stephens v. Schuchmann, 32 Mo. App., 333.) Specific performance between bank and depositor. 42 (N. Y.). The First National Bank entered into an oral contract with plaintiff to sell him certain real estate for a price specified. Plaintiff took possession under the contract and made large and val- uable improvements, with the knowledge and consent of the bank, which had authorized its cashier to execute a conveyance pursuant to the contract. Plaintiff had a deposit account with the bank. Shortly before the failure he, for the third time, requested the cashier to execute the conveyance; this the latter promised to do without further delay. Thereafter plaintiff accumulated his deposits with intent to use the balance to his credit in paying for the land when the deed was delivered ; this was known to the cashier. Plaintiff, also with the knowledge of the cashier, purchased a certificate of deposit issued by the bank, with a view of applying it to ' the pay- ment. Plaintiff aiso did work and furnished materials for the bank, the account for which he rendered to it before the failure, and it was agreed that it should be adjusted on the final settlement for the purchase. Plaintiff, until the bank closed its doors, had no knowledge of its insolvency or of any fact affecting its credit. In an action against the receiver of the bank for a specific performance, held, that plaintiff was entitled to the relief sought, and that he was entitled to be credited on the purchase price the balance due him on the deposit account, the amount of the certificate of deposit, and of the account for work and materials. (Hughitt v. Hayes, 136 N. Y„ 163.) DIGEST OF NATIONAL BANK DECISIONS. 395 OFFSETS— Continued. OFFSETS BETWEEN INSOLVENT BANKS AND THEIR CBEDITOES Continued. Claim for services to bank as a set-off. 43 (N. 0. Sup., 1894). A claim for pay for services, due before a bank closes its doors, is a set-off to a liability on bills discounted. (Davis v. Industrial Manufacturing Co.', 19 S. E., 371; 114 N. C, 321.) Offsets between banks. 44 (Pa.). In an action by an assignee for benefit of creditors of a bank, to recover a balance due from another bank, a check drawn on the in- solvent bank, which came into the hands of defendant prior to the assignment, and to which no defense is set up, should be allowed as a set-off, though defendant is not the owner of the check, but holds it for collection. (Penn Bank v. Farmers' Deposit National Bank, Pa., 20 A., 150; 130 Pa. St., 209.) Offsets between banks and clearing house. 45 (U. S. Sup. Ct, 1897). Where by a special agreement the clearing house was permitted to retain the paper of a bank each day until it settled its balance with the clearing house for that day, the clearing house is entitled up to notice of insolvency to set off the due bills for bal- ances in clearings of the preceding days against the proceeds of the collections in its hands, but can not (it not being included in said special agreement) set off the amount due from the bank for loan certificates, as that would be a preference within the prohibition of Revised Statutes, section 5242. (Yardley v. Philler, 167 U. S., 344.) 46 (Pa., 1895). A note deposited before maturity by a bank with a clearing house committee, to secure payment of the bank's daily balances and other indebtedness due from the bank to other members of the clearing-house association, is not in the hands of the committee sub- ject to set-off by the maker of any sum due him from the bank. (Philler v. Jewett, Pa., 31 Atl. Rep., 204; 166 Pa. St., 456.) WHEN DEPOSITOB INSOLVENT. Right to set off debt not yet due. 1. A bank has the equitable right to set off, against deposits made with it by an insolvent, before making an assignment for the benefit of creditors, a debt due it from_ the insolvent which at the time of the assignment was not yet due. (Ky., 1900). Kentucy Flour Co.'s Assignee- v. Merchants' National Bank, 13 S. W., 910 ; 90 Ky., 225. (N. C. Sup., 1899). Hodgin v. People's National Bank, 124 N. C, 540. Contra. 2j(Mo., 1897). A bank can not set off against the deposit of an insolvent depositor notes owing to it by him which had not matured at the time of his assignment in insolvency. Where a bank informed a depositor that unless his account was more satisfactory it would discontinue discounting and loaning to him, and he promised to keep a fair bal- ance to justify the credit extended, an agreement that in case of his insolvency the bank might apply his deposit to payment of its un- matured demand against him could not be implied. (Homer v. National Bank of Commerce, in St. Louis, Mo., Sup., 41 S. W., 790; 140 Mo., 225.) 3 (Nebr. Sup., 1898). As against the holder of a check against an account of a depositor, the bank of deposit may not apply the amount of the account to the payment of the indebtedness of the depositor to the bank which is not yet due, although the depositor may be insolvent. (Columbia National Bank of Lincoln v. German National Bank of Lincoln, 1 Banking Cases, 43 ; 56 Nebraska, 803. ) 4 (R. I.). Where a depositor made an assignment, having at the time a deposit in the bank, which held three of its notes, two of which had matured ajjd had not been paid, the bank could only retain from the 396 DIGEST OF NATIONAL BANK DECISIONS. OFFSETS— Continued. when depositor insolvent — continued. deposit a sum sufficient to pay the two notes matured at the time of the assignment ; the unmatured note not being a set-off under General Laws, chapter 239, section 11, providing that a set-off must be a demand which existed at the time of the commencement of the action. (Ellis v. First Nat. Bank of Woonsocket, 48 A., 936; 22 R. I. 565.) When claims must be due in order to be used as offsets. 5 (Ky., 1895). A bank on which a check is drawn, though not knowing that the drawer is insolvent, can not, as against the payee, set off against the deposit its indebtedness from the drawer not yet due. (Mer- chants' National Bank of Louisville v. Robinson, Ky., 31 S. W., 136; 97 Ky., 552.) 6 (N. Y. Sup.). Defendant bank discounted for W. a draft which was sub- sequently paid by the drawee, and placed the proceeds to W.'s credit, not knowing that plaintiff was entitled thereto. Afterwards, and while part of the proceeds remained. to W.'s credit, plaintiff notified defendant of his claim. Held, that defendant could not set off against plaintiff's claim to such balance a claim against W. on paper discounted before the draft, but maturing after the notice of plain- tiff's claim. (Heidelbach v. National Park Bank, Sup., 33 N. T. S., 794.) 7 (N. Y. Sup.). A bank has no right to retain the balance of a customer's deposit to apply to an indebtedness of the customer of the bank not yet matured, unless it is authorized to do so by contract. (lb.) General deposits may be offset against debt. 8 (Wis.,. 1899). General deposits received by a bank in the regular course of business simply constitute an indebtedness from the bank to the depositor, and, upon the insolvency of the depositor, the bank may offset it against a sum owing to it by the depositor ; and this right is not affected by the fact that the officers of the bank also endeavor to illegally prefer themselves as the de facto officers of the depositor (bank) by having a check drawn in favor of the bank for the amount on deposit. (Slack v. Northwestern Nat. Bank of Superior, 2 Bank- ing Cases, 66; 103 Wis., 57.) Bankruptcy — Preferential transfer of property — Deposit in bank. 9. The deposit of money in bank by an insolvent within four months prior to his bankruptcy, on open account, subject to check, does not consti- tute a transfer of property amounting to a preference, under Bankr. Act July 1, 1898, c. 541, § 60a, 30 Stat. 562 [U. S. Comp. St. 1901, p. 3445], although the bank may be at the time a creditor, and under section 68a the bank has the right to set off so much of its claims as equals the balance in such account. (U. S. C. C. A., 1904) In re Geo. M. Hill Co., 130 Fed. Rep., 315 ; (U. S. Dist. Ct, 1904) In re Scnerzer, 130 Fed. Rep., 631. Harne — Application of deposit to debt due bank. 10 (U. S. Dist. Ct, 1904). The application by a bank of the amount stand- ing to the credit of a depositor in his general account, subject to check on a note of the depositor, although within four months prior to his bankruptcy, and while he was insolvent, does not constitute a preference which must be surrendered, under Bankr. Act July 1, 1898, § 57g, as amended, Act Feb. 5, 1903, c. 487, 32 Stat., 799 [U. S. Comp. St. Supp. 1903, p. 415], as a condition to the proving of a claim against the estate. (In re Scnerzer, 130 Fed. Rep., 631.) Same — Payment of notes to indorsee. 11 (U. S. C. C. A., 1904). The payment to a bank by an insolvent, within four months prior to bankruptcy, of notes given to third persons, but which have been indorsed to and are owned by the bank, constitutes a preference given to the bank, under Bankr. Act July 1, 1898, c, 541, § 60a, 30 Stat, 562 [U. S. Comp. St. 1901, p. 3445], which it must sur- render under section 57g before proving a claim against the estate. (In re Geo. M. Hill Co., 130 Fed. Rep., 315.) DIGEST OP NATIONAL BANK DECISIONS. 397 OFFSETS— Continued. when depositor insolvent — continued. Same — Payments and new credits — Net result of transactions. 12 (U. S. C. O A., 1904). A corporation previous to its bankruptcy had bor- rowed large sums from a bank, giving its notes therefor, and had also obtained a discount of customers' notes, which it indorsed. The bank had also discounted notes given by the corporation to third per- sons. Such transactions continued during the four months prior to bankruptcy, the corporation being in fact insolvent, but the bank having no knowledge or notice of such fact. The net result of the transactions during such time was to decrease the corporation's direct indebtedness on its own notes, both those given direct to the bank and those given to third persons, by the excess of payments over new notes! given, but to increase its contingent indebtedness on indorsements of customers' notes. Held, that the latter should not be considered in determining the amount of preferences received by the bank, which must be surrendered under Bankr. Act July 1, 1898, c. 541, § 57g, 30 Stat, 560 [U. S. Comp. St. 1901, p. 3443], as a condition to its proving a claim against the estate, since the discounting of the customers' notes which were the bankrupt's property did not increase its estate, but that the excess of payments over new credits on both the other items of direct indebtedness, taken together, constituted a preference, which must be surrendered. (lb.) ORGANIZATION. Page. in general --- - 398 Presumption of organization and evidence op corporate existence. Presumption from use of name 398 When not required to prove their incorporation _.. .. 398 The fact that a note is made payable at a bank not conclusive evidence that bank is a corporation _ 398 Proof of organization — Comptroller's certificate 398 Allegation of organization and place of business 400 Parol evidence of organization . _ . . . 400 Provisions of national banking act not derogatory to State statutes 400 Estoppel as to validity of organization 400 Contracts during organization 401 Place of business. 402 Consolidation of national banks 403 conversion of banks organized under state statutes into national banks. in general 403 Power of stockholders to effect conversion when State bank has nonvoting stock— Rights of holders of nonvoting stock _ 404 Rights and obligations of converted bank 404 Rights of stockholders, how affected 405 reorganization. Reorganization as national bank under another name.. 405' Reorganization of national bank as State bank 406 corporate existence. Generally 406 Cross references: Insolvency and receivers — Effect of appointment of receiver for corporation _ 181 Taxation— ifl| Taxation during conversion .* 505 398 DIGEST OF NATIONAL BANK DECISIONS. ORGANIZATION— Continued. IN GENERAL. When national bank becomes corporation. 1 (Md.). A national bank does not become a corporation until the articles of association and the organization certificate are filed with the Comptroller of the Currency pursuant to the United States Revised Statutes, sections 5133-5136. (Regester v. Medcalf, 71 Md., 528.) Right to adopt any name. 2 (U. S. C. C, 1881). There is nothing in the national banking act to pre- vent a national banking association from adopting any name it pleases, subject to the approval of the Comptroller of the Currency. (Third National Bank of Baltimore v. Teal, 5 Fed. Rep., 503.) Right to word "national." 3 (Ala.). The prohibition in section 5243 of the national banking act against the use of the word " national " by banking concerns not organized under said act does not apply to building and loan associa- tions. (Lomb v. Pioneer Building and Loan Company, 106 Ala., 591.) 4 (111.). The national banking act prohibits the use of the word " national " as part of the name of all banks not .organized under said act. (Peo- ple v. National Savings Bank, 129 111., 618.) PRESUMPTION OF ORGANIZATION AND EVIDENCE OP CORPORATE EXISTENCE. Presumption from use of name. 1 (Ala., 1896). A bank using as a title the name of a national bank will be presumed to have been duly organized as such under the national banking act. ( Slaughter v. First National Bank, 109 Ala., 157. ) When not required to prove their incorporation. 2 (Colo. Appls., 1892). National banking associations are not foreign cor- porations within the Colorado rule of practice requiring foreign cor- porations, under a general denial, to prove their incorporation. (Hummel v. First National Bank of Central City, 32 Pac. Rep., 72; 2 Colo. App., 571.) The fact that a note is made payable at a bank not conclusive evidence that bank is a corporation. 3 (Mass. Sup., 1871). In an action by a national bank against the maker of a promissory note, the fact that the note is made payable at the plaintiff bank is not conclusive evidence that such bank is a corpora- tion. (Hungerford National Bank v. Van Nostrand, 106 Mass., 559; 1 N. B. C, 589.) Proof of organization — Comptroller's certificate. 4 (U. S. Sup. Ct, 1876). In. a suit against the association or its share- holders the certificate of the Comptroller is conclusive as to the com- pleteness of the organization. (Casey v. Galli, 94 U. S., 673.) 5 (U. S. Sup. Ct, 1890). A certificate signed by the Deputy Comptroller of the Currency as "Acting Comptroller of the Currency " is a sufficient certificate by the Comptroller of the Currency within the require- ments of Revised Statutes, par. 5154. (Keyser v. Hitz, 133 U. S., 138.) 6. A copy of the organization certificate of a national bank, with the cer- tificate and seal of the Comptroller attached; is sufficient proof of its incorporation. (Ala., 1890) Hanover National Bank v. Johnson, 90 Ala., 549; (Minn.) First National Bank of Memphis v. Kidd., 20 Minn., 234. 7. In an action by a national bank on a note, where the existence of the corporation is denied, the certificate of the Comptroller of the Cur- rency, under section 22 of the national banking act, that the asso- ciation had complied with the law and was authorized to do banking business was competent evidence, and in connection with proof that the association had done banking business fqr several years and the DIGEST OF NATIONAL* BANK DECISIONS. 399 ORGANIZATION— Continued. PRESUMPTION OF ORGANIZATION AND EVIDENCE OP CORPORATE EXISTENCE Continued. fact that the note was in terms payable at the bank makes a prima facie case. (111., 1878) Mix v. National Bank of Bloomington, 91 111., 20; 2 N. B. C, 232 ; (Mass.) Merchants' National Bank of Bangor v. Glendon, 120 Mass., 97. 8. The certificate of the Comptroller of the Currency that an association has complied with all the provisions required to be complied with before commencing the business of banking is admissible in evidence upon a plea of mil tiel corporation ; and such certificate, together with proof that the association has been acting as a national bank- ing association for a long time, is amply sufficient evidence to estab- lish, at least prima facie, the existence of the corporation. (111., 1878) Mix v. The National Bank of Bloomington, 91 111., 20 ; 2 N. B. C, 232 ; (Mass.) Merchants' National Bank of Bangor v. Glendon, 120 Mass., 97. 9 (Mass., 1873). A national bank brought an action, describing itself as " The Washington County National Bank, a corporation duly estab- lished by law, and doing business in Greenwich, in the State of New York," and to prove its corporate existence introduced an organ- ization certificate of " The Washington County National Bank of Greenwich, to be located in the town of Greenwich, county of Wash- ington and State of New York," and a certificate of the Comptroller of the Currency that " The Washington County National Bank of Greenwich, in the county of Washington and State of New York," had been duly organized. Held, that in the absence of the evidence of the existence at Greenwich of another bank named " The Wash- ington County National Bank of Greenwich " the evidence would warrant the inference of the plaintiff's due organization. (Washing- ton County National Bank v. Lee, 112 Mass., 521.) 10 (Mass. Sup., 1874). Under the national banking act a copy of the certifi- cate of the organization of a United States bank, which is certified by the Comptroller of the Currency and authenticated by his seal of office, is competent evidence in a State court. (Tapley v. Martin, 116 Mass., 275; 1 N. B. C, 611.) 11 (Mass. Sup., 1874). A certificate by the Comptroller of the organization of a national bank, when filed, becomes a public record and may be proved by an authenticated copy. (lb.) 12 (Mich. Sup., 1869). In an action by "The West River National Bank of Jamaica, Vermont," held, that the certificate of the Comptroller of the Currency of the existence of a corporation under the name of " The West River National Bank of Jamaica," described as located in the town of Jamaica, Vt., was admissible under the general issue for the purpose of proving the plaintiff's corporate existence. (Thatcher v. West River National Bank, 1 N. B. C, 622; 19 Mich., 196.) 13 (Mich. Sup., 1869). It is no abjection to the admission in evidence of the certificate of the organization of a national bank that the notary before whom it was acknowledged was one of the shareholders of the bank. The Comptroller's certificate of compliance with the act of Congress removes any objection which otherwise might have been made to the evidence on which he acted. (lb.) 14 (N. Y., 1872). The fact of the incorporation of a national bank is estab- lished by evidence of the de facto existence thereof, together with a copy of the organization certificate and of the Comptroller's certificate of authority to do business under his seal. ( Merchants' Exchange Nat. Bank v. Cardozo, 35 N.'Y. Sup. Ct, 162.) 15 (S. Dak. Sup., 1900). Under section 5169, Revised Statutes United State's, which authorizes the Comptroller of the Currency to issue a certifi- cate to an association lawfully entitled to commence a banking busi- ness, that such association has complied with all the provisions 400 DIGEST OP NATIONAL BANK DECISIONS. ORGANIZATION— Continued. PRESUMPTION OF OEGANIZATION AND EVIDENCE OF CORPORATE EXISTENCE; Continued. required by law before commencing such business, and that it is authorized to commence business, such certificate is conclusive evi- dence of the incorporation of the association to which it is issued. (Citizens' Nat. Bank of Watertown v. Great Western Elevator Co., 82 N. W. Rep., 186; 13 S. Dak., 1.) 16 (Wash. Sup., 1896). The Comptroller's certificate of organization is com- petent evidence tending to prove the incorporation of a national bank. (National Bank of Commerce of Tacoma v. Galland, 45 Pac. Rep., 35;' 14 Wash., 502.) ALLEGATION OF OEGANIZATION AND PLACE OF BUSINESS. Allegation of organization. 17 (U. S. C. C, 1881). The declaration described the plaintiff as " The Third National Bank of Baltimore." Held, on demurrer, that this was not equivalent to an averment that the plaintiff was a banking associa- tion established in the district of Maryland, nor that it was estab- lished under the law of the United States providing for national banking associations. Held, also, that the declaration was demur- rable for want of an averment that the plaintiff was a corporation. (Third Nat. Bank of Baltimore v. Teal, 5 Fed. Rep., 503.) Allegation of place of business. 18 (N. Y. Super., 1888). The complaint alleged that the plaintiff is a corpo- ration organized under the national banking act of the United States ; that defendant made his promissory note for $5,000 payable to the plaintiff at said bank for value received, with interest, and contain- ing an agreement which recites that the defendant " having deposited with the bank as collateral security " a certain certificate of stock, " giving the plaintiff full power in case of default in the payment of the note at maturity to sell the stock at private or public sale and apply the proceeds to the payment of the note ; " that the note was not paid at maturity, and that the stock has not been sold or the lien foreclosed, and demands judgment for $5,000, and that the lien upon the stock be foreclosed, etc. Held, that the complaint alleges a good cause of action. The complaint alleged that the plain- tiff had done business in Buffalo, N. Y., upward of ten years, and the name " Farmers and Mechanics' National Bank of Buffalo " is recited in the complaint. Held, that there was sufficient evidence to fix the location at Buffalo, N. Y., under Code Civil Procedure, section 1775. (Farmers and Mechanics' National Bank of Buffalo v. Rogers, 3 N. B.C., 683; 1 N. Y. S., 757.) Parol evidence of organization; de facto existence. 19 (Wash., 1893). In an action by a national bank plaintiff may prove that it is a corporation de facto by parol evidence ; that it is carrying on a general banking business as a national bank, authorized by the general laws of the United States, under the name by which it has sued, the court taking judicial notice of such laws. (Yakima National Bank v. Knipe, 33 P., 834; 6 Wash., 348.) Provisions of national hanking act not derogatory of State statutes. 20 (Tex. App., 1880). The provisions of the national banking act as to the proof of the organization of national banks are not derogatory of State statutes. (First Nat. Bank v. Randall, 1 W. and W. Civ. Cas., Ct. App., paragraph 972.) ESTOPPEL AS TO VALIDITY OF ORGANIZATION. 1. A shareholder against whom an action has been brought to enforce his statutory liability is estopped from denying the existence or validity of the corporation. (U. S. Sup. Ct, 1876) Casey v. Galli, 94 U. S., 674; (D. C, 1886) Keyser v. Hitz, 82 Mackey, 473. DIGEST OF NATIONAL BANK DECISIONS. 401 ORGANIZATION— Continued. ESTOPPEL AS TO VALIDITY OP ORGANIZATION Continued. 2 (Ky. Appls., 1870). The organization of a national bank under the national banking act may be put in issue by a party who has not estopped himself. But a party who has accepted as payee a prom- issory note payable at a banking institution which the parties style a national bank, and has sold and transferred the note to such bank- ing institution, can not be allowed to raise that issue by merely averring want of knowledge or information sufficient to form a belief as to whether such institution is a body corporate, etc. (Huffaker v. National Bank of Monticello, 1 N. B. C, 504; 12 Bush., 287.) 3 (111.). A stockholder in a de facto national bank, who has participated in its transactions as such and received dividends, is estopped from denying the legality of the incorporation. (Wheelock v. Kost, 77 111., 296.) 4 (Nebr. Sup., 1898). One who subscribes for and receives share of a national bank is estopped from denying the validity of its incorpo- ration. (Davis Estate v. Watkins, 76 N. W. Rep., 575; 56 Nebr., 288.) 5 (N. T. Sup.,.1875). One accustomed to deal with a national bank as such, and who so deals with it in respect to a promissory note, is estopped from denying the incorporation of the bank, in an action on the note. (National Bank of Fairhaven v. The Phoenix Warehousing Company, 1 N. B. C, 784; 6 Hun., 71.) 6 (N. T., 1867). In action by a national bank on a draft discounted for defendant the latter many deny plaintiff's existence as a corporation. (Bank of Metropolis v. Orcutt, 48 Barb., 256.) CONTRACTS DURING ORGANIZATION. 1 (U. S. Sup. Ct, 1897). By section 5136 of the Revised Statutes a contract of lease, at a large rent, of an office to be occupied " as a banking office, and for no other purpose," for the term of five years, determina- ble at the end of any year by either party, executed by a national bank as lessee, after having duly filed its articles of association and organization certificate with the Comptroller of the Currency, but .not having been authorized by him to commence the business of bank- ing, is void, can not be made good by estoppel, and will not support an action against the bank to recover anything beyond the value of what it has actually received and enjoyed. (McCormick v. Market National Bank, 165 TJ. S., 538.) 2 (U. S. Sup. Ct, 1897). In an action against a national bank upon a con- • tract, each party relied on section 5136 of the Revised Statutes, by which a national bank, upon filing its articles of association and organization certificate with the Comptroller of the Currency, be- comes a corporation, with power " to make contracts " and other cor- porate powers, but is prohibited to " transact any business, except such as is incidental and necessarily preliminary to its organization, ' until it has been authorized by the Comptroller of the Currency to commence the business of banking." The defendant relied on the pro- hibition. The plaintiff relied on the exception to the prohibition, and also contended that, under the general power to make contracts, the contract sued on was valid as between the parties, even if con- trary to the prohibition. Held, that a judgment for the defendant in the highest court of the State might be reviewed by this court on writ of error. (lb.) 3 (U. S. Dist. Ct., 1889). Whatever the terms of an agreement, being made before the date of the drawee bank's certificate of authorization, it is invalid under Revised Statutes United States, section 5136, provid- ing that no banking association " shall transact any business except such as is incidental and necessarily preliminary to its organization, 4049—05 26 402 DIGEST OF NATIONAL, BANK DECISIONS. ORGANIZATION— Continued. conteacts ddeing obganization — continued. until it has been authorized by the Comptroller of the Currency to commence the business of banking." (Armstrong v. Second Nat. Bank of Springfield, 38 Fed. Rep., 883.) 4 (U. S. C. C, 1890). Under Revised Statutes United States, section 5136, providing that no banking association shall transact any business except such as is incidental and necessarily preliminary to its organ- ization, until it has been authorized by the Comptroller to commence the business of banking, correspondence between one bank and a person who became the president of a bank afterwards formed can not constitute an agreement controlling the business between the banks, but may be referred to in connection with other evidence to show what was their understanding. (First Nat. Bank of Wellston v. Armstrong, 42 Fed. Rep., 193.) 5 (111.). When bonds are especially deposited with an old bank and a national bank is organized therefrom and the cashier of the new bank recognizes its possession of such bonds by paying interest on the same, the national bank will be held liable for such bonds. (Mon- mouth First Nat. Bank v. Strang, 138 111., 347.) 6 (Tex.). An agreement made by a cashier of a national bank prior to its organization does not bind it unless such agreement is ratified after the organization is perfected under the national banking act. (McDonough v. National Bank of Houston, 34 Tex., 309.) PLACE OF BUSINESS. 1 (U. S. Sup. Ct, 1870). The provisions requiring "the usual business" of the association to be transacted " at an office or banking house in the place specified in its organization certificate " must be construed rea- sonably, and a part of the legitimate business of the association which can not be transacted at the banking house may be done else- where. (Merchants' National Bank v. State National Bank, 10 Wall., 604.) 2 (U. S. C. C). Although the general business of a national banking asso- ciation is to be transacted at its place of business, yet, if the associa- tion is fully advised of the facts and does not object, and there is no fraud, its officers, when acting within the general scope of their authority, may bind it by acts done at another place. (Burton t: Burley, 9 Blss., 253.) 3 (U. S. C. C, 1878). A national bank located in New Jersey, for the con- venience of persons in Philadelphia, kept a clerk in that city who received deposits. Held, that the bank did not become looated. in Philadelphia, so as to be liable to taxation. (National State Bank of Camden v. Pierce, 18 Albany Law Journal, 16 ; 2 N. B. C, 177.) 4 (U. S. Dist. Ct, 1889). Under Revised Statutes, section 5190, providing that " the usual business of each national banking association shall be transacted at an office or banking house located in the place speci- fied in its organization certificate," a national bank can not make a valid contract for the cashing of checks upon it at a different place from that of its residence, through the agency of another bank. (Armstrong ■;;. Second National Bank of Springfield, 38 Fed. Rep., 883.) 5 (111. Sup., 1896). By the provisions of Revised Statutes United States, section 5134, subsection 2, requiring an association formed for the purpose of conducting a national bank to designate in its organiza- tion certificate " the place where its operations of discount and de- posits are to be carried on," the town or city is meant, and not the office or building. (61 111. App., 33, affirmed; McCormick v. Market National Bank of Chicago, 44 N. E., 381; 162 111., 100.) 6 (Ky. App., 1896). A bank created under the national banking act of the United States is not within Revised Statutes, section 571, which DIGEST OP NATIONAL BANK DECISION'S. 403 ORGANIZATION— Continued, place of business — continued. provides that " all corporations, except foreign insurance companies formed under the laws of this or any other State," shall at all times have a place of business in the State, and that no corporation shall do business in the State until it shall have filed a statement designating the location of its office and the name of its agent. (First Nat. Bank v. Commonwealth, 33 S. W. Rep., 1105.) 7 (N. Y. Sup., 1875). National banking associations located outside of a State are subject to its restraining acts prohibiting all corporations not authorized by the law of the State from keeping therein offices for the purpose of discount and deposit. (National Bank of Fair- haven v. The Phoenix Warehousing Company, 6 Hun, 71.) CONSOLIDATION OF NATIONAL BANKS. 1 (Tex. Civ. App., 1900). Where a national bank consolidated with another national bank, taking all the assets and assuming all the liabilities » of the latter bank, it, in effect, became a new corporation, whose shareholders were the shareholders of each corporation before con- solidation ; and hence stockholders of the first bank had no right to the new shares brought in which increased the capital stock, since this would unjustly deprive the stockholders of the other bank of their rights and property without compensation. (Bonnet v. First Nat. Bank of Eagle Pass, 60 S. W., 325; 24 Tex. Civ. App., 613.) 2 (Tex. Civ. App., 1900). The national-bank act (Rev. Stat. U. S., sec. 5223), providing that associations winding up their business for the purpose of consolidation with another association shall not be re- quired to deposit, etc., authorizes consolidation of banks, and the consolidation of two national banks with the approbation of the Comptroller of the Currency, whereby one contracted to assume the lia- bilities of the other, and issued its own increased shares to the stock- holders of the first bank, was not ultra vires and void. (lb.) CONVERSION OF BANKS ORGANIZED UNDER STATE LAWS INTO NATIONAL BANKS. IN GENERAL. Conversion authorized by section 5154, Revised Statutes United States. 1 (U. S. Sup. Ct, 1876). No authority other than that conferred by act of Congress is necessary to enable any State bank to become a national banking association. (Casey v. Galli, 94 U. S., 673.) 2 (U. S. Sup. Ct., 1876). No authority from a State is necessary to enable a State bank to become a national bank. (Casey v. Galli, 94 U. S., 673; 1 N. B. C, 142.) Conversion of savings banks into national banks. 3 (U. S. Sup. Ct., 1890). Under the proviso in the act of 1876 in relation to savings banks in the District of Columbia, such savings banks may convert themselves into national banks. (Keyser"«. Hitz, 133 U. S~, 138.) Old officers continue after conversion. 4 (R. I.). When a State bank is converted into a national banking associa- tion all of the directors at the time will continue to be directors of the association until others are appointed or elected, though some of them may not have joined in the execution of the articles of associa- tion and organization certificate. (Lockwood v. The Mechanics' National Bank, 9 R. I., 308.) 5 (R. I.). But even were the oath required, a majority of all who were directors at the time of the conversion, and not merely a majority of those who take the oath, are necessary to constitute a quorum. (lb. ) 404 PIGEST OF NATIONAL BANK DECISIONS. ORGANIZATION— Continued. CONVERSION OF BANKS ORGANIZED UNDER STATE LAWS INTO NATIONAL BANKS— Continued. POWER OP STOCKHOLDERS TO EFFECT CONVERSION WHEN STATE BANK HAS NONVOTING STOCK — RIGHTS OF HOLDERS OF NONVOTING STOCK. 1 (Conn., 1867). If the State bank has voting and nonvoting stock the non- voting stock can not participate in the voting upon the change of organization and the action of the voting stockholders transfers the nonvoting stock. If the voting stockholders acted under the act (Conn.) of 1863, the nonvoting stockholders had no right to elect to become stockholders in the national bank, but were entitled to a full share of the assets and could not be compelled to accept par value of their stock with interest. (State v. Phoenix Bank, 34 Conn., 205.) 2 (Conn., 1867). The act (Conn.) of 1864 provided that nonvoting stock- holders of a State bank should be included as stockholders in the new national bank, if they, within a prescribed time from receipt of notice required by statute from the bank of its election, gave written notice of their desire to be so included ; otherwise such^ stockholders to be excluded. Held, that where an election was made without pursuing strictly and technically the provision of the act, the new institution can not exclude from becoming stockholders nonvoting stockholders of the old corporation on the ground that they have not complied technically with the act. (State v. Hartford Nat. Bank, 34 Conn., 240.) RIGHTS AND OBLIGATIONS OF CONVERTED BANK. 1 (U. S. Sup. Ct, 1892). The conversion of a State bank into a national bank, with a change of name, under the national-bank act does not affect its identity or its -rights to sue upon liabilities incurred to it by its former name. (Michigan Insurance Bank v. Eldred, 143 U. S., 293.) 2 (U. S. Sup. Ct., 1891). The provisions in the statute in New York of April 11, 1859 (Laws of 1859, chap. 236), as to the redemption of circulating notes issued by a State bank, and the release of the bank if the notes should not be presented within six years, do not apply to a State bank converted into a national bank under the act of March 9, 1865, and not " closing the business of banking." ( Metro- politan National Bank v. Claggett, 141 U. S., 520.) 3 (U. S. Sup. Ct, 1891). The conversion of a State bank in New York into a national bank, under the act of the legislature of that State of March 9, 1865 (N. Y. Laws of 1865, chap. 97), did not destroy its identity or its corporate existence, nor discharge it as a national bank from its liability to holders of its outstanding circulation, issued in accordance with State laws. (lb.) 4. When the business and funds of a bank pass to another the successor is liable for the deposits in the former. (Iowa) Hopper v. Moore, 42 Iowa, 563; (Mo.) Evans v. Exchange Bank, 79 Mo., 182; (Mo.) Hughes v. School Dist, 72 Mo., 643; ■ (Ohio") Citizens' Bank v. Blakesly, 42 Ohio St., 645. 5 (Md.). A State law authorizing national banking associations which have been converted from State banks to use the name of the original corporation for the purpose of prosecuting and defending suits is not in conflict with the national banking law, and therefore proceedings based upon a judgment obtained before the conversion may be insti- tuted by such association in its former corporate name. (Thomas v. Farmers' Bank of Maryland, 46 Md., 43.) 6 (Mass. Sup., 1875). A State bank paid its president money to reimburse him for money which he falsely represented he had paid to its cred- itor. The State bank was afterwards changed to a national bank, and the creditor recovered judgment against it for his debt. Held, DIGEST OP NATIONAL BANK DECISIONS. 405 ORGANIZATION— Continued. CONVERSION OF BANKS ORGANIZED UNDER STATE LAWS INTO NATIONAL BANKS— Continued. EIGHTS AND OBLIGATIONS OF CONVERTED BANK — Continued. that it could maintain an action against the president for money had and received, although the State statute provided that the State bank should be continued a body corporate for three years for the purpose of prosecuting and defending suits, closing its concerns, and conveying its property. (Atlantic National Bank v. Harris, 118 Mass., 147; 2 N. B. C, 454.) 7 (Mo.). The bank of the State of Missouri, by reorganizing under the act of Congress as a national bank, lost none of its assets and escaped none of its liabilities. (Coffey v. National Bank of Missouri, 46 Mo., 140.) 8 (N. Y. Appls., 1884). A national bank changed from a State bank may maintain an action on a continuing guaranty for loans held by it before the change— for loans both before and after the change. (City National Bank of Poughkeepsie v. Phelps, 97 N. Y., 44; 49 Am. Rep., 513 ; 3 N. B. C, 627. ) 9 (N. Y. Appls., 1884). Where a State bank has been converted into a national banking association it may enforce all contracts made with it while a State corporation. (lb.) 10 (Ohio). A national banking association, organized as the successor of a State bank, may take and hold the assets of the bank whose place it takes, though there was not in form a conversion from a State to a national corporation, but the organization of a new corporation. (Bank v. Mclntyre, 40 Ohio St., 528.) 11 (Pa.). A national bank organized by the conversion of a State bank is not deprived of any of the property and is not relieved of any of the liabilities of the State bank. (Kelsey v. Nat. Bank of Crawford, 69 Pa. St., 426.) 12 (Pa.). And it is liable, after the conversion, for all the obligations of the old institution. (lb.) 13 (Pa.). One who is indebted to a national bank organized from a State bank can not set off against such debt the circulating note of the State bank purchased after the act of insolvency. (Thorpe v. Wege- frath, 56 Pa. St., 82.) RIGHTS OF STOCKHOLDERS, HOW AFFECTED. 1 (Pa.). The conversion of a State bank into a national bank, under the act of Congress of June 3, 1864, did not work an annihilation or dis- solution, but only a change of the bank. (Maynard v. Bank, 1 Brew- ster, 483.) 2 (Pa.). Such change does not addeem a residuary legacy in certain shares of the bank, limited upon a life estate in such shares, which is to become an absolute one in case the bank should pay off or refund its stock by reason of the expiration of its charter or from any other cause. The change is not equivalent in law to a paying off in fact, and the residuary legatee is entitled to the stock, on the death of the legatee, for life. (lb.) REORGANIZATION. REORGANIZATION AS NATIONAL BANK UNDER ANOTHER NAME — RIGHTS OF STOCKHOLDERS. 1 (111., 1888). A national bank went into voluntary liquidation. All the stockholders but one united in organizing a new national bank under a different name. He knew that the greater part of the assets were sold to the new bank, and he accepted dividends from nearly all such assets. Held, (1) that he had no right to share in the earnings of the 406 DIGEST OP RATIONAL BANK DECISIONS. ORGANIZATION— Continued. REORGANIZATION— Continued. REORGANIZATION- AS NATIONAL BANK UNDER ANOTHEE NAME — BIGHTS OF stockholders — continued. bank; (2) the old bank had no good will to sell independent of the value of the unexpired lease of its banking house. (First National Bank of Centralia v. Marshall, 26 111. App., 440; 3 N. B. C, 401.) REORGANIZATION OF NATIONAL BANK AS STATE BANK. 1 (Mich., 1895). Where a national bank is reorganized as a State bank, the State bank taking over all the assets and assuming all the liabilities of the national bank and continuing the same officers, the State bank retains the identity of the national bank and may enforce a written authority for the indorsement of commercial paper held by the national bank. (First Commercial Bank v. Talbert, 103 Mich., 625.) CORPORATE EXISTENCE. No change in the status of obligations of bank whose charter has been extended. 1 (Conn.). Where a national bank is rechartered and its existence extended under the provisions of the law of 1882, there is no change in the status or legal effect or power of the corporation, and all of the obli- gations due to and from it have the same force and effect as before such extension. (National Exchange Bank v. Gay, 57 Conn., 224, 234.) 2 (N. T.). Where a national bank continues its existence under the act of Congress of 1882, the bank is not relieved from liability on a bond given previously as security for money deposited; and the sureties on such bond are not discharged. (People v. Backus, 117 N. T., 196.) Officers may be elected for the purpose of effecting liquidation after the expira- tion of the term of the charter. 3 (Mass.). Under the act of Congress, July 12, 1882, extending for the pur- pose of liquidation the franchises of such national banking associa- tions as do not extend the periods of their charters, and making appli- cable to them the statute relating to liquidation of banking associa- tions, such an association may continue to elect officers and directors for the purpose of effecting liquidation. But after the expiration of the term of its charter the stock of such an association is not trans- ferable so as to give the transferee the right to share in the election of directors, and such transferee, not being a stockholder, is ineligible as a director under Revised Statutes, section 5145. (Richards v. Attleboro National Bank, 148 Mass., 187; 3 N. B. C, 495.) Corporate existence continues until business is settled. 4 (Minn., 1898). A national bank, after the expiration of the period for which it was chartered, continues to exist as a person in law, and may sue and be sued until its business is" completely settled. (Farm- ers' Nat. Bank of Owatonna v. Backus, 77 N. W. Rep., 142 ; 74 Minn., 264.) Extension of charter does not change identity of banlc. 5 (N. J., 1894) . The identity of a national bank is not affected by the exten- sion of its term of existence. (Trustees of First Presbyterian Church v. National State Bank of Newark, 29 A., 320; 57 N. J. L., 27.) Officers of a bank whose charter has expired can be compelled to exhibit books, etc., to stockholders. 6 (N. Y.). The supreme court has power, in its discretion, to require the officers of a national bank in process of liquidation, on expiration of its charter by limitation, to exhibit books, papers,- and assets of the bank to the stockholders, and to allow them to examine and take extracts therefrom. (Tuttle v'. Iron Nat. Bank of Plattsburg, 62 N. E. Rep., 761; 170 N. X., 9.) DIGEST OF NATIONAL BANK DECISIONS." 407 ORGANIZATION— Continued. CORPORATE EXISTENCE— Continued. Revised Statutes, section 5242, not repealed by act of July 12, 1882. 7 (N. Y.). Revised Statutes United States, section 5242, was not repealed by implication by act of Congress July 12, 1882 (22 Stat. L., 102), with reference to the extension of succession of national banking associations, and declaring that they shall continue as the same asso- ciation, provided that jurisdiction of suits by or against them, except between them and the United States, shall be the same as for suits by or against other banks not organized under any law of the United States and which do, or might do, banking business where such national bank may be doing business when such suit may be begun, and declaring all laws inconsistent therewith repealed. (Van Reed v. People's Nat. Bank, 73 N. Y. S., 514.)' When committee appointed to appraise shares can correct mistake. 8 (Pa.). The committee provided for by the fifth section of act of Congress of July 12, 1882, to appraise the national-bank shares of shareholders who do not assent to amendments to the articles of association may correct a mistake made by them in their appraisal within thirty days therefrom. (First National Bank of Clarion v. Brenneman's Execu- tors, 114 Penn. SJ., 315; 3 N. B. C, 755.) PASS BOOKS. Cross references : Evidence — Page. Evidence of deposits, slips, and pass books 154 Pass book a receipt. 1 (Kans. Sup., 1894). A pass book given by a bank to a depositor is not a written contract, but is a mere receipt for the amount deposited ; and an action thereon is barred by the three-year limitation. (Talcott v. First National Bank of Larned, 36 P., 1066; 53 Kans., 480.) PLACE OF BUSINESS. (See ORGANIZATION.) PLEADING AND PRACTICE. " Cross references: . Accommodation paper — ■ Page. Action on, insufficient answer 11 - Agent of shareholders — When action in Federal court will not bar action in State court - _ _ 13 Parties, substitution of agent for receiver _ 13 Appeal — Pleading and practice in (miscellaneous) 18 Attachment — Pleading and practice in 22 Insolvency and receivers — Suit to have fund applied to claim, parties 188 When receiver may become party to suit in State court 189 When case will not be reopened for the introduction of newly discovered evidence 192 Receiver's suit to recover assets, pleading 194 Interest and usury — Usury as defense against recovery of interest _ . 234 Complaint, sufficiency of, in suit for penalty : 240 Jurisdiction — Parties, when foreign corporation can not be made party defendant. 245 Effect of filing plea in abatement 246 What amounts to a "general appearance, effect of 246 408 DIGEST OF NATIONAL BANK DECISIONS. PLEADING AND PRACTICE— Continued. Cross references — Continued. Liquidation — Page. Nature of action to recover assessment, creditor's bill_ 265 Negotiable paper- Defenses to .._ 286 Officers, criminal liability of — Insufficient defenses — Instructio ■: s — Practice . jury 376-380 Organization— Allegation of organization , _ _ 400 Shareholders — Transfer to avoid liability, parties, practice, proof 468 Actions for assessment of shareholders, parties, allegations, prac- tice 486 Insufficient defenses 490 Actions by creditors 497 What considered on appeal, special finding. 1 (U. S. Sup. Ct, 1890). Where the case is tried by the circuit court with- out a jury, and it makes a special finding of facts, with conclusions of law, alleged errors of fact are not, on a writ of error, subject to revision by this court, if there was any evidence on which such find- ings could be made. (Hathaway v. First National Bank of Cam- bridge, 134 U. S., 494.) 2 (U. S. Sup. Ct, 1890). Where the circuit court finds ultimate facts which justify the judgment rendered, its refusal to find certain specified facts, arid certain propositions of law based on those facts, will not be reviewed by this court, on a writ of error, if they were either immaterial facts or incidental facts, amounting only to evidence bearing on the ultimate facts found. (lb.) 3 (U. S. C. C. A., 1896). When the finding in the circuit court involves mixed questions of law and fact, and is general in its form, nothing is open to review in the circuit court of appeals except the rulings made in the progress of the trial, the findings being conclusive as to the facts. (Humphreys v. Third National Bank of Cincinnati, Ohio, 75 Fed. Rep., 852.) ( 4 (U. S. C. C."A., 1896). When a jury is waived in the circuit court, a party wishing to raise any question of law upon the merits in the court above should request special findings of fact, framed like the verdict of a jury, and reserve his exceptions to these special findings if he deems them not sustained by the evidence ; and if he wishes to except to the conclusions of law drawn by the court from the facts found he should have them separately stated and excepted to. (lb.) Mandam us. 5 (U. S. Sup. Ct., 1900). A national bank was closed by order of the Comp- troller of the Currency and a receiver appointed. An assessment was' made upon the holders of stock. Overton and Hotter were among those who were assessed, and payment not having been made, suit was brought against them. Service was made upon H., but not upon O., who was very ill, and who died without service having been made upon him. He left a will, under which J. P. O. was duly appointed his executor. The executor was summoned into the suit by a writ of scire facias. A motion was made to set aside the scire facias and the attempted service thereof, which motion was granted. The executor being substituted in the place of the deceased as defendant, the court decided that it had acquired no jurisdiction over the deceased and could acquire none over his executor. There- upon the receiver applied to this court for a writ of mandamus to the judges of the circuit court of the United States for the ninth circuit, commanding them to take jurisdiction and proceed against J. P. O. as executor of the last will and testament of O., deceased, in the action brought by the receiver to recover the assessments. DIGEST OF NATIONAL BANK DECISIONS. 409 PLEADING AND PRACTICE— Continued. Held: (1) That mandamus was the proper remedy, and the rule was made absolute; (2) that the action of the circuit court in set- ting aside the scire facias was here for review ; (3) that scire facias was the proper mode for bringing in th° executor, and under Revised Statutes, section 955, it gave the court jurisdiction to render judg- ment against the estate of the deceased party in the same manner as if the executor had voluntarily made himself a party. (In re Con- haway, Receiver, 178 U. S. Rep., 421.) Office of cross complaint. 6 (U. S. C. C. A., 1895). A cross bill is brought either to aid in the defense of the original suit or to obtain a complete determination of the con- troversies between the original complainant and the cross complain- ant over the subject-matter of the original bill. If its purpose is other than this, it is not a cross bill. A cross bill may not interpose new controversies between codefendants to the original bill, the deci- sion of which is unnecessary to a complete determination of the con- troversies between the complainant and the defendants over the subject-matter of the original bill. If it does so, it becomes an original bill and must be dismissed, because there can not be two original bills in the same case. (Stuart v. Hayden, 72 Fed. Rep., 402.) Complaint held multifarious. 7 (U. S. C. C, 1896). Complainant's bill sought to subject defendant to lia- bility for an indebtedness of a railroad company to complainant on four grounds, viz : That defendant was the owner of stock in the railroad company upon which a part of the subscription, exceeding the railroad company's indebtedness, was unpaid; that, through various transactions in the issue, cancellation, and reissue of stock, and the purchase of shares owned by other parties with funds of the railroad company, there had been a misappropriation of the railroad company's property applicable to the payment of its debts, for which defendant was responsible ; that defendant, and others confederating with him, had caused real estate of the railroad company to be con- veyed to defendant without consideration ; that defendant, combin- ing with others, had misrepresented the financial condition of the railroad company, thereby inducing complainant to loan it money, which he had lost. Held, that, though the first and second grounds of liability, growing out of the defendant's connection with the rail- road company as an officer and stockholder therein, might be united, the third and fourth grounds had no legal connection with the former, and the bill was multifarious. (First National Bank of Sioux City v. Peavey, 75 Fed. Rep., 154.) Parties. 8 (U. S. C. C. A., 1897). To a suit brought against a bank to recover money deposited with it by a corporation, which plaintiffs claimed acted as their agent in making the deposit, and which deposit the bank had applied to the payment of a debt to it from the. depositor, the corpora- tion making the deposit was a proper, and even necessary, party ; but as, on the rendition of the decree in favor of complainants, that company appeared entitled to no right or relief, and was not subjected to any liability, a dismissal as to it was proper. (Union Stock Yards National Bank v: Moore et al., 79 Fed. Rep., 705.) 9 (Me. Sup., 1878). A national bank, having discounted a note for an in- dorser, and having sued the maker, may receive payment from the indorser and assign the note and the suit to the indorser, and he may prosecute it in the name of the bank for his own benefit against the maker. (Ticonic National Bank v. Bagley, 68 Me., 249; 2 N. B. C, 245.) Removal, diligence. 10 (U. S. C- C, 1884). The law requires diligence on the part of fine appli- cant for removal. He can not remain passive, and then after the lapse of several terms of the State court make an application for 410 DIGEST OF NATIONAL BANK DECISIONS. PLEADING AND PRACTICE— Continued. removal. (National Bank of Clinton, Iowa, v. Dorset Pipe and Pav- ing Co., 20 Fed. Rep., 707.) 11 (U. S. C. C, 1884). Court can not take judicial notice of matters that do not appear in the record. (lb.) Joinder of causes of action. 12 (U. S. C. C, 1897)'. A complaint on bills of exchange, filed by the payee against the drawer, may be amended by joining an additional cause of action based on defendant's promise to pay certain checks of a third party, upon which plaintiff had advanced the amount therein called for, since this is kindred in character to the original causes of action . and might originally have been joined with them. (Bowen v. Needles National Bank, 79 Fed. Rep., 49.) 13 (N. Y. Super., 1888). Under Code of Civil Procedure, section 484, such actions as were formerly denominated legal or equitable, or both, may be joined in the same complaint. (Farmers and Mechanics' Nat. Bank of Buffalo v. Rogers, 3 N. B. C, 683; 1 N. Y. S., 757.) Erroneous instructions. 14 (U. S. C. C. A., 1896). Where both parties to an action claim title to land under legal proceedings, those through which defendant derives title being alleged to be fraudulent, it is reversible error to instruct the jury that upon the record evidence the title is vested in the plaintiff, whereas in fact the defendant has the better title unless it is defeated by fraud. (Short et al. v. Hepburn, 75 Fed. Rep., 113.) 15 (U. S.C.C. A., 1896). In an action involving the validity of a title claimed by defendants to have been acquired under attachment and execution against one C, while plaintiff charges that C. was a fictitious person and the deed to him and the proceedings against hi*a were parts of a scheme of his supposed grantor to defraud his creditors, it is error ti charge the jury either that if C.'s whereabouts were unknown it would make his title to the property immaterial or that the fact that C. was a fictitious person would entitle the plaintiff to recover irre- spective of the circumstances under which defendant acquired his title. (lb.) Bill of discovery. 16 (U. S. C. C, 1888). A bill by a judgment creditor for discovery, showing that when the execution was returned unsatisfied, and when the Bill was filed, there was property, within the knowledge of the creditor, subject to levy on execution, fails to show that the legal remedy has been exhausted, and is demurrable. (Merchants' National Bank of Chicago et al. v. Sabin et al., 34 Fed. Rep., 492.) Discretion of court as to arguments in presence of jury. 17 (Ala., 1895). It is within the discretion of the court to have the jury retire during arguments as to the admissibility of evidence. (Bir- mingham National Bank v. Bradley, 19 So., 791; 108 Ala., 205.) Bank's action on note to cashier, allegations. 18 (Ga., 1895). In an action by a bank upon a negotiable note payable to order, the title to which, by appropriate indorsement, has become vested in the name of a person as cashier, the declaration must show that such person is plaintiff's cashier, and that the ownership of the note sued upon is in plaintiff; else it will be demurrable. (Hobbs v. Chemical National Bank., 25 S. E., 348; 97 Ga., 524.) Agreement to hearing in vacation. 19 (Iowa, 1892). A stipulation that a cause should be " heard" at the place where the judge resided, which was other than that of holding court, coupled with the fact that the evidence was submitted there, that two terms of court were afterwards held before the expiration of the judge's term of office, and that neither party took any steps to have * the decision made at either of said terms, although they must have known that it could not otherwise be made by the then judge, except DIGEST OF NATIONAL BANK DECISIONS. 411 PLEADING AND PRACTICE— Continued. in vacation, amounts to an agreement that it might be made in vaca- tion. (Babcock v. Wolf, 28 N. W., 400; 70 Iowa, 676, followed. Shenandoah National Bank v. Read, 53 N. W., 96; 86 Iowa, 136.) Discretion of court as to filing of affidavits. 20 (Minn., 1896). The court below, after giving the parties ample opportu- nity to present affidavits on a motion for the appointment of a receiver, did not abuse its discretion in refusing to hear more affida- vits, not presented at the proper time. (Farmers' National Bank of Owatonna v. Backus, 66 N. W„ 5; 63 Minn., 115.) Amendment of pleading. 21 (Nebr., 1896). In an action against a bank on a deposit, the bank an- swered by a general denial. During the trial it undertook to prove payment. Objection being made to the relevancy of the proof, an agreement was made in open court whereby the bank was allowed twenty days to amend its answer " in any manner " with the same effect as if presently filed, and the trial proceeded. The instructions given excluded from the jury the consideration of the issue of pay- ment which was finally tendered by the amended answer, filed after trial, but within the stipulated time. Held, that the' plaintiff was bound by the terms of his stipulation, and that the judgment must be reversed for failure to submit the issues finally framed to the jury. (Tecumseh National Bank v. Harmon, 66 N. W., 1128.) 'Intervention. 22 (Nebr., 1898). A receiver' of a corporation, appointed after the com- mencement of a suit against the corporation, may intervene in such action to defend the rights of the corporation. (Andrews v. Steele City Bank et al., 1 Banking Cases, 76; 57 Nebr., 173.) Creditor's action. 23 (Nebr. Sup., 1900). A judgment creditor, after an execution has been issued and returned nulla bona, may maintain a suit in equity to make his judgment effective as a lien upon the land by removing obstructions calculated to make an execution sale unproductive. (First National Bank of Plattsmouth v. Gibson et al., 3 Banking Cases, 61; 60 Nebr., 767.) 24 (Nebr. Sup., 1900). A party who is not prejudicially affected by a judg- ment or decree can not secure its modification or reversal. (lb.) In foreclosure of lien on collaterals. 25 (N. Y. Super., 1889). The complaint alleged that the plaintiff is a corpo- ration organized under the national banking act of the United States ; the defendant made his promissory note for $5,000, payable to the plaintiff, at said bank, for value received, with interest, and containing an agreement which recites that the defendant " having deposited with the bank, as collateral security," a certain certificate of stock " giving the plaintiff full power, in case of default in the payment of the "note at maturity, to sell the stock at private or public sale, and apply the proceeds to the payment of the note ; " that the note was not paid at maturity, and that the stock has not been sold or the lien foreclosed, and demands judgment for $5,000 and that the lien upon the stock be foreclosed, etc. Held, that the complaint alleges a good cause of action. (Farmers and Mechanics' Nation.il Bank of Buffalo v. Rogers, Buff. Super. Ct, 3 N. B. C, 683; 1 N. Y. S., 757.) Allegation as to location of bank. r ' 26 (N. Y. Super., 1889). The complaint alleged that the plaintiff had doue business in Buffalo, N. Y., upward of ten years, and the name " Farm- ers and Mechanics' National Bank of Buffalo " is recited in the com- plaint. Held, that there was sufficient to fix the location at Buffalo, N. Y., under Code of Civil Procedure, section 1775. (Farmers and Mechanics' National Bank of Buffalo v. Rogers, 3 N. B. C, 683.) 412 DIGEST OF NATIONAL BANK DECISIONS. PLEADING AND PRACTICE— Continued. -27 (N.Y. Super., 1889). Although the plaintiff had the right under the agreement to sell the stock without action, he may come into court and ask its direction. (lb.) 'National bank, when a foreign corporation. 28 (N. Y.). A national banking association is a foreign corporation within the meaning of a State statute requiring corporations created by the laws of any other State or country "to give security for costs before prosecuting a suit in the courts of the State. (National Park Bank v. Gunst, 1 Abb. N. C, 292.) When judgment on default will be reversed. 29 (Tex. Civ. Appls, 18"96). A judgment entered on failure of defendant to appear on trial, an answer being on file reciting that defendants have failed to appear and wholly made default, will be reversed, no evidence appearing in the record, though the judgment further re- cites that the issues of fact as well as law were submitted to the court. (Hepburn v. Danville National Bank, 34 S. W., 988.) Pleading. 30 (Wash., 1896). A complaint in an action on a note alleged its execution, and in a third paragraph alleged that " no part of said sum has been paid, and the same is wholly due ; " and the answer admitted the execution of the note, but denied " each and every allegation in paragraph three." Held, that the denial was bad, as a negative pregnant. (Columbia National Bank v. Western Iron and Steel Co., 44 P., 145; 14 Wash., 162.) Attorneys — Authority — Stipulations. 31 (U. S. C. C, 1904). Where an attorney was employed to defend an action brought by the receiver of a national bank to recover a stock assess- ment, the attorney had no authority, after judgment in his client's favor, and after the termination of the term of court at which the case was tried, to stipulate that a writ of error should not be prose- cuted in such action, but that his client would be bound by proceed- ings in error in another suit between the receiver and other stock- holders to which the client was not a party. (Brown v. Arnold, 127 Fed. Rep., 387.) 32 (U. S. C. C, 1904). A proceeding in error, after judgment is a new suit, with regard to which an attorney, employed by one of the parties to represent him at the trial, has no authority to act in the absence of a new employment. (lb.) Judgment — Motion to vacate — Termination of term — Jurisdiction. 33 (U. S. C. C, 1904). A court has no jurisdiction to grant a motion to set aside a judgment, after the termination of the term at which it was rendered, on the stipulation of the attorneys, that the same should abide the event of a writ of error in another cause. (lb.) Equity — Adequate remedy at law. 34 (U. S. C. C, 1904). Where the making of a stipulation between attorneys that a judgment should abide the event of a writ of error in another suit was not denied, though the stipulation had been lost or mislaid, a bill in equity was not maintainable to compel vacation of the judg- ment on defendant's refusal to comply with the stipulation, since plaintiff had an adequate remedy at law for breach thereof. (lb.) POWERS. Page. In general _ 413 Power to deal in bonds _ _ _ _ _ ; 418 Power to purchase its own stock or loan money on security thereof 419 Purchase of stock in other banks _ _ _ 420 Purchase of stocks in general _ 421 Purchase of negotiable paper ___ 422 DIGEST OP NATIONAL BANK DECISIONS. 413 POWERS— Continued. • Page. Power to issue certificates of deposit. _ 423 Power to hold or acquire real estate 424 When national bank may take mortgage . . _ 426 "Validity of mortgages when taken ultra vires 428 Power to make contract of guaranty 430 ultra vires acts and contracts. Generally 432 When ultra vires contracts will be enforced . 432 Bank may not repudiate unauthorized contract and retain its fruits _ 433 When national bank may plead that its act was ultra vires . 435 When only United States may complain of ultra vires act 436 When ultra vires act amounts to conversion 437 Ultra vires representations by bank 437 Illegal contracts— defenses _ 438 Cross references: Branch banks — Business of national banks, where transacted . _ _ 26 Business necessarily transacted away from bank 26 Capital stock — ' Acquirement of its own stock by national bank _ 35 " ' Construction of law — As to powers of national banks Federal decisions control _ _ _ _ 117 Lease — Contract of lease before organization invalid 256 Organization — Contracts during organization 401 Rights and obligations of State bank after conversion into a national bank _..-__ 404 in genebal. Congress is sole judge as to extent of powers which should he conferred on na- tional banks. 1 (U. S. Sup. Ct, 1903). Congress, having power to create a system of na- tional banks, is the judge as to the extent of the powers which should be conferred upon such banks and has the sole power to regulate and control the exercise of their operations. Congress having dealt di- rectly with the insolvency of national banks by giving control to the Secretary of the Treasury and the Comptroller of the Currency, who are authorized to suspend the operations of the. banks and appoint receivers thereof when they become insolvent, or when they fail to make good any impairment of capital, and full and adequate provi- sion hating been made for the protection of creditors of national banks by requiring frequent reports to be made of their condition, and by the power of visitation of Federal officers, it is not competent for State legislatures to interfere, whether with hostile or friendly intentions, with national banks or their officers in the exercise of the powers bestowed upon them by the General Government. (Easton v. Iowa, 188 U. S., 220.) Authority of Federal decisions. 2 (Wis. Sup., 1903). While a State court is bound by the decisions of the United States Supreme Court as to the powers of national banks, the application of such decisions as to the powers of such a bank, as a defense in a case properly brought in the State courts, is to be deter- mined by State decisions. (Security Natl. Bank of Sioux City, Iowa, v. St. Croix Power Co. et al.,'94 N. W. Rep., 74; 5 B. C, 560.) 414 DIGEST OF NATIONAL BANK DECISIONS. POWERS— Continued. in genebal — continued. Incidental powers. 3 (U. S. Sup. Ct, 1891). Under national Banking act a national bank can exercise only the powers expressly granted and those necessarily in-, cidental. (Logan County National' Bank v. Townsend, 139 U. S.,*67.) 4 (N. Y.). To the enumerated powers of national banking associations are to be superadded all the powers incidental to the business of bank- ing. (Pattison v. Syracuse National Bank, 80 N. Y., 82.) 5 (N. Y.). The enumeration of banking powers in the national banking act is not significant of an intention to plaice any special restrictions upon national banks as distinguished from State banks. The enumeration is of the general, not the incidental, powers. (lb.) When national hank may borrow money. 6 (U. S. Sup. Ct., 1893). A national bank in certain circumstances may be- come a temporary borrower of money, yet such transactions would be so much out of the course of ordinary and legitimate banking as to require those making the loan to see to it that the officer or agent act- ing for the bank had special authority to borrow money. (Western National Bank v. Armstrong, 152 U. S., 346.) 7 (U. S. C. C, 1896). A national bank has power to borrow money on call for the purposes of its business. (Chemical National Bank of New York v. Armstrong, 76 Fed. Rep., 339. ) 8 (U. S. C. C, 1896). The vice-president of a national bank, who is the act- ing president, may, in conformity with established custom, without special authority from the board of directors, borrow money on be- half of the bank from another bank. (Western National Bank v. Armstrong, 14 Sup. Ct., 572; 152 U. S., 346, distinguished.) (lb.) Violation of Revised Statutes, section 5208, does not preclude bank from realiz- ing on collateral pledged to secure said checks. 9 (U. S. Sup. Ct, 1892). A violation of the provisions of United States Revised Statutes, section 5208, by a national bank in overcertifying checks does not preclude the bank from enforcing its claim out of col- laterals pledged to secure the obligations of the drawer of the checks. (Thompson!;. St. Nicholas National Bank, 146 U. S., 240.) May buy and sell coin. 10 (U. S. Sup. Ct., 1870). The provisions of the national bank act, requiring " the usual business " of the bank to be transacted " at the office or banking house in the place specified in its organization certificate," does not prevent the purchase of coin by one bank at the banking house of another. (Merchants' Nat. Bank v. State Nat. Bank, 1 N. B. C, 47; 10 Wall., 604.) May sell pledged property. 11 (U. S. Sup. Ct, 1870). As the national currency act of 1864 authorizes banks created under it to buy and sell coin, such bank, having coin in pledge, may sell and assign its special property therein. (lb.) May transact no business before authorization. 12 (U. S. C. C, 1890). Under Revised Statutes, section 5136, providing that no banking association shall transact any business- except such as is incidental and necessarily preliminary to its organization, until it has been authorized by the Comptroller to commence the business of banking, correspondence between one bank and the person who became the president of a bank afterwards formed can not constitute an agreement controlling the business between the banks, but may be referred to, in connection with other evidence, to show what was their understanding. (First National Bank of Wellston v. Armstrong, 42 Fed. Rep., 193.) 13 (U. S. Dist Ct., 1889). Whatever the terms of an arrangement being made before the date of the drawee bank's certificate of authorization, it is invalid under Revised Statutes, section 5136, providing that no bank- DIGEST OF NATIONAL BANK DECISIONS. 415 POWERS— Continued. in general — continued. ing association " shall transact any business except such as is inci- dental and necessarily preliminary to its organization until it has been authorized by the Comptroller of the Currency to commence the business of banking." (Armstrong v. Second National Bank of Springfield, 38 Fed. Rep., 883.) • May have property held in trust ~by officer. 14 (U. S. C. C, 1895). Where an assignment of a judgment belonging to a bank is made by one of its offlcers, in its name, to an individual, who, in consideration thereof, transfers property to the bank officer, such transfer constitutes a valid consideration moving to the bank, since a trust results in its favor as to the property transferred to its officer. (Cox v. Robinson, 70 Fed. Rep., 760. Affirmed by U. S. C. C. A., 82 Fed. Rep., 277.) Officers presumed to have powers publicly assumed. 15 (U. S. C. C, 1895). The officers of a national bank, acting for it, are pre- sumed to have the powers which they assume publicly, with the knowledge and acquiescence of the board of trustees, who are pre- sumed to see what is made apparent before the eyes of the public in the action of their agents. (Cox v. Robinson, 70 Fed: Rep., 760.) 16 (U. S. C. C. A., 1897). When the directors of a bank permit an officer to hold himself out to the public as being invested with absolute power to manage and control its affairs, in such manner and for such length of time as to lead innocent persons to make contracts with him, hon- estly believing that he has the authority he claims, the bank can not repudiate such contracts. (Cox v. Robinson, 82 Fed. Rep., 277.) 17 (U. S. C. C. A., 1897). A national bank, owner of a judgment for the pay- ment of which defendant was bound, through its vice-president assigned such judgment to defendant, the consideration being the transfer by defendant to the vice-president of another judgment, which the latter had obligated himself individually to pay, but in the interest of the bank. The vice-president had no express authority from the directors to make the assignment, but he was the largest stockholder, a director, and had long been the principal acting officer of the bank, and general manager of its business, exercising the power of transferring its property and indorsing its notes, with the knowledge and acquiescence of the directors, and he was generally reputed in the community to be its owner. Held, in an action by the receiver of the bank, that the jury were justified in finding that the vice-president had authority to make the assignment, and that the bank received a consideration therefor. (lb.) Unauthorized transfer of judgment. 18 (U. S. C. C, 1895). When a judgment, belonging to a national bank is transferred without collecting it, the presumption is that the transfer is unauthorized. (Cox v. Robinson, 70 Fed. Rep., 760.) Valid oral agreement oy. 19 (U. S. C. C. A., 1901). A national bank may make a binding oral agree- ment to repay money it borrows, and to pay notes it procures to be discounted. (Hanover Nat. Bank v. First Nat. Bank, 109 Fed. Rep., 421.) May give oond to secure deposit. 20 (U. S. C. C, 1898). Giving bond to secure funds deposited t with it is within the power of a national bank, and sureties on such bond are liable. (State of Nebraska v. Nat. Bank of Orleans, 88 Fed. Rep., 947.) Rediscount. 21 (U. S. C. C. A., 1897). A national bank has the authority to rediscount its bills receivable. A rediscount by a bank of its bills receivable, though it indorses the same, and becomes contingently liable for their pay- ment, is not a borrowing of money by the bank, but has more the 416 DIGEST OF NATIONAL BANK DECISIONS. POWERS— Continued. in genebal — continued. characteristics of a sale. (United States Nat. Bank v. f"iret Nat. Bank, 79 Fed. Rep.r296.) Contract to buy assets of another bank not ultra vires. 22 (U. S. C. C. A., 1899). The fact that a director' of a national bank, whose presence was necessary to constitute a quorum at a meeting where, by the action of the directors, in which he participated, a contract by the bank to assume and pay the liabilities of another bank was rati- fied, was also a stockholder in such other bank, in the absence of any allegation of fraud in the transaction, is not sufficient to render the contract invalid. (Scofield v. State Nat. Bank of Denver, 97 Fed. Rep., 282.) 23 (U. S. C. C. A., 1899). A contract by a national bank to assume and pay the liabilities of another bank in consideration of the transfer to it by the other bank of its office furniture and lease and its cash and cash assets, and the further assignment to a trustee for its benefit of bills receivable and securities, is not ultra vires, but is within its powers conferred by statute to conduct a general banking business, (lb.) May take mortgage on chattels. 24. A national bank may take a chattel mortgage as additional security for a preexisting indebtedness. (111. App.) Gaar v. Centralia National Bank, 20 III. App., 611; (111. App.) Barker v. Livingston Co. National Bank, 30 111. App., 591-607 ; (Iowa) Spafford v. First National Bank of Tama City, 37 Iowa, 181. May not make donation. 25 (111.) National banks have no power to make donations of money. They can use the same only for banking purposes. (McCrory v. Chambers, 48 111. App., 445.)- May'receive deposit to be disbursed on condition. 26 (Kans. Sup.). The discounting of commercial paper, and the receipt of the proceeds on deposit to disburse to a certain person when a cer- tain service is performed are within the powers of a bank, and such power may be exercised by the cashier or managing officer. (Kansas National Bank v. Quinton, 48 P., 20.) May empower cashier to employ clerks. 27 (Mass.). It is not negligence for a bank to intrust its cashier to select and hire and pay out of his salary all the clerks and other servants employed in the banking room, no negligence being shown in the selection of the cashier. (Smith v. First National Bank of West- field, 99 Mass., 605.) May buy check. 28 (U. S. Sup. Ct, 1870). A certified check is not against the policy of the banking act and is a legal and valid investment. (Merchants' Na- tional Bank of Boston v. State National Bank, 10 Wall., 604. ) 29 (Mass.). A national bank may buy a check drawn upon another bank. and whether the check is payable to order or to bearer is immaterial. (First National Bank of Rochester v. Harris, 108 Mass., 514.) 30 (S. p.). A draft, with a bill of lading attached thereto and payable to a national bank, by which it is discounted, is a bill of exchange, and a national bank may purchase the same. (Union National Bank v. Rowan, 23 S. C, 339 ; 55 Am. R., 26.) May contract to give stock for patronage. 31 (Nebr.). Where an association has made or ratified a contract to give a person a certain number of the shares of its stock, upon condition that he will continue to do his business with it, and derives the bene- fit from this contract, the other party may recover of the association DIGEST OF NATIONAL BANK DECISIONS. 417 POWERS— Continued. in general — continued. ■ the value of the shares. (Rich v. State National Bank. of Lincoln, * 7 Nebr., 231.) May provide real estate necessary for its business. 32 (N.. J., 1894). A national bank empowered by charter to provide neces- sary, real 1 estate for its business may make a contract to prevent the erection of buildings on adjacent land so as to secure light and air for its banking house. (Trustees of First Presbyterian Church v. National State Bank of Newark, 29 A., 320 ; 57 N. J. L., 27. ) May hold special deposit as security. 33 (N. Y. Appls., 1878). A national banking association may receive a de- posit to be held by it as security for the faithful performance of a contract between the depositor and another. (Bushnell v. The Chau- tauqua County National Bank, 10 Hun, 378.) May take married woman as security. 34 (N. Y. Appls., 1878). An indorsement by a married woman, expressly charging her estate with the payment of a note, is such a security as a national bank may take. (Third National Bank v. Blake, 73 N. Y., 260; 2 N. B. C, 300.) Bank has right to accumulate a surplus before declaring dividend. 35 (N. Y. Sup.). A bank has a right to accumulate a surplus before declar- ing dividends on its stock. (Reynolds v. Bank of Mt. Vernon, 39 N. Y. S., 623.) May employ counsel. 36 (Okla., 1895). Under Revised Statutes United States, section 5136, sub- division 4, authorizing national banks " to sue and be sued, complain, and defend in any court of law or equity, as fully as natural persons," such banks have power to employ attorneys to prosecute or defend suits, and the president may agree as to their compensation. (Na- tional Bank of Guthrie v. Earl, 39 P., 391; 2 Okla., 617.) May form, clearing-house association and issue clearing-house certificates. 37 (Pa., 1895). The national banks of a city formed a clearing-house associ- ation to facilitate the settlement of daily balances between them at a fixed place, and agreed, in order to dispense with the handling of money, that the several banks should deposit in the hands of a com- mittee either cash or securities at a fixed ratio on their capital stock, for which the committee should issue certificates to be used in paying balances against the several banks. Subsequently the association, for the purpose of enabling the members to afford assistance to the mer- cantile and manufacturing community, and also to facilitate the daily interbank settlements, authorized the committee to receive from any member additional deposits of cash or securities and issue certificates therefor in such amounts and to such percentage as they deemed advisable, which certificates should be accepted in payment of daily balances on condition that the deposits therefor should be held by the committee as a special deposit, pledged for the redemption of the certificates, and the committee were made the trustees for all the members of the association and authorized to collect such deposits. Held, that there was no violation of the laws relating to national banks. (Philler v. Patterson, 32 A., 26; 168 Pa. St., 468.) Compromise with creditors. 38 (Wis., 1896). In an action for an alleged balance it appeared that defend- ants McG. and W. illegally undertook to corner the lard market ; that McG. was a partner in the firm through whom the transactions were ! carried on, but that W. was not ; that the deal ruined the firm, and that the receiver for it undertook to effect a settlement ; that defend- ants were personally liable for a part of the indebtedness by their 4049—05 27 418 DIGEST OF NATIONAL BANK DECISIONS. POWERS— Continued. in general — continued. indorsements on the firm's notes, and that at the receiver^ solicita- tion they agreed to contribute a certain sum each on consideration of a release from all creditors ; that the receiver thereupon sub- mitted the firm's proposition to pay 50 per cent of the indebtedness, in full settlement of all unsecured claims, stating that the affairs of the firm were in great confusion and that unfess the compromise were effected the matter would " only terminate after long, vexatious, and fruitless litigation ; " that all of the creditors accepted the pay- ment and signed a release in full. Held, that the transaction was a valid compromise. (Winslow and Pinney, JJ., dissenting.) (Conti- nental National Bank of Chicago v. McGeoch, 66 N. W., 606 ; 92 Wis., 286.) When banJc may act for others in endeavoring to recover stolen property. 39 (U. S. Sup. Ct, 1886). Where a national bank was broken Into by bur- glars, and property belonging to it and to others was taken therefrom, the bank may take measures to recover its own ; and it may lawfully undertake to act also for others thus jointly concerned with itself; and want of proper diligence, skill, and care in the performance of such an undertaking would render it liable to respond in damage for failure. (Wylie v. Northampton National Bank, 119 U. S., 361; 3 N. B. C, 188.) POWEE TO DEAL IN BONDS. Power to purchase bonds. 1 (U. S. Sup. Ct., 1891). A national bank having without authority pur- chased bonds, may retain them until the consideration is repaid. (Logan <3o. National Bank v. Townsend, 139 U. S., 67.) 2 (Ky. Appls., 1902). Section 5736, United States Revised Statutes, confers express power on a national bank to discount and negotiate promis- sory notes, bills of exchange, and other evidences of debt. Held, that bonds are evidences of debt and national banks are therefore author- ized to purchase corporate and municipal bonds. (Newport National Bank v. Board of Education, 70 S. W., 186; 5 B. C, 63.) 3. A national banking association is not authorized to act as a broker or agent in the purchase of bonds and stocks. ( Md. ) Weckler v. The First National Bank of Hagerstown, 42 Md., 581; (Pa.) First National Bank of Allentown v. Hoch, 89 Pa. St., 324. 4 (Miss. Sup., 1897). A municipality having sold its bonds to a national bank is estopped to plead that the purchase was ultra vires. (Town Council of Lexington v. Union Nat. Bank, 22 S. R., 291 ; 75 Miss., 1.) May discount coupons of municipal oonds. 5. A national banking association may take and hold the coupons of munic- ipal bonds, and may maintain actions thereon. (U. S. C. C, 1879) First National Bank of North Bennington v. Town of Bennington, 2 N. B. C, 437 ; (U. S. C. C.) Lyons v. Lyons National Bank, 19 Blatch., 279. National bank may not sell mortgage bonds on commission. 6 (U. S. C. C. A., 1896). It is not within the power of a national bank to engage in the business of selling mortgage bonds on commission. (Farmers and Merchants' National Bank v. Smith, 77 Fed. Rep., 129.) May deal in Government securities. 7. National banking associations can engage in the business of dealing in and exchanging Government securities. (Iowa) Leach v. Hale, 31 Iowa, 69; (N. Y.) Van Leuven v. First National Bank, 54 N. Y., 671; (N. Y.) Yerkes v. National Bank of Port Jervis, 69 N. Y., 383. DIGEST OF NATIONAL BANK DECISIONS. 419 POWERS— Continued. POWER TO PUBCHASE ITS OWN STOCK OR LOAN MONEY ON SECURITY THEREOF. May not buy its own stock. 1 (U. S. Dist. Ct, 1878). A national bank purchased some of its own stock and divided it among some of its directors. One of the directors took some of the stock, giving his note for it, the bank retaining the certificate, but the stock being transferred to him on the bank books, and he receiving dividends on it. This director becoming bankrupt, he transferred the stock to the bank teller, the bank retaining his note. In an action by the assignee to set aside the transfer as a preference, held, that the bank had no power to purchase or convey the stock, and no title to it passed. (Meyers v. Valley National Bank, 2 N. B. C, 156.) May not buy its own stock, exception. 2 (U. S.). The purchase of its own stock by a national bank, not for the purpose of preventing, or necessary to prevent, a loss upon a debt previously contracted, is illegal, and the bank may maintain an action at law to recover the money paid therefor without tendering back the stock. (U. S. C. C. A., 1898) Burrows v. Niblack, 84 Fed. Rep., Ill ; (U. S. Dist. Ct., 1878) Meyers v. Valley Nat. Bank, 2 N. B. C, 156. Bank may make lawful sale of stock unlawfully bought, or taken as security. 3 (U. S. Sup. Ct, 1882). Where a national bank made a loan upon a pledge of its own shares and afterwards sold the shares to obtain payment of the loan, which exceeded the amount realized from the shares, held, that the owner of the shares could not, on the ground that the statute forbids a national bank to take its own shares as security, recover from the bank the amount realized upon the sale of the shares. (First National Bank of Xenia v. Stewart, 107 U. S., 676 ; 3 N. B. C, 96.) 4 (U. S. Sup. Ct., 1901). The fact that a national bank purchased shares of its own stock ultra vires does not render its subsequent sale of such stock to another unlawful, or the stock void in the hands of the pur- chaser ; nor does it constitute any defense to an action by a receiver of the bank against such purchaser to recover an assessment made after the bank's insolvency. (Lantry v. Wallace, 182 U. S., 536.) 5 (U. S. C. C. A., 1898). The statutory inhibition against the purchase by a national bank of its own stock does not render stock so purchased void; and where, in such case, the stock is held for the bank by a nominal owner, a subsequent purchaser for value received by the bank acquires a good title, which can not be questioned by the bank or its creditors. (Wallace v. Hood, 89 Fed. Rep., 11; affirmed by U. S. Sup. Ct., 182 U. S., 555.) When may take its own stock as collateral. 6. National banks can not make valid loans or discounts on the security of their own stock and can take said stock as collateral or purchase it only when necessary to prevent loss on debts previously contracted in good faith. (U. S. Sup. Ct. 1870) First National Bank of South Bend v. Lanier, 78 U. S., 369; (Va.) Feckheimer v. National Exchange Bank, 79 Va., 80. Bank's officer can not bind bank to purchase its own stock. 7 (U. S. C. C, 1877). An agreement by an officer of the bank that if another would purchase stock in the bank the bank would take it off his hands at any time is void. (Bowden v. Santos, 1 Hughes, 158.) No penalty for violation of section 5201, Revised Statutes. 8. The national banking act prescribes no penalty either on the borrower or on the bank for a loan in violation of section 5201, and the prohibi- 420 DIGEST OF NATIONAL BANK DECISIONS. POWERS— Continued. POWEB TO PURCHASE ITS OWN STOCK OB LOAN MONEY ON SECURITY THEREOF Cont'd. tion can be urged by some one else than the Government only before the contract is executed. (U. S. Sup. Ct, 1882) First National Bank of Xenia v. Stewart, 107 U. S., 676 ; (N. Y.) Walden National Bank v. Birch, 130 N. Y., 221. Parties to violation of section 5201 will not be relieved. (N. Y.). The parties to a loan of a national bank on the security of its own stock, being paid in pari delicto, will not be relieved by the court. After the shares have been sold by the consent of the bor- rower, and the proceeds set off against his loan, the courts will not interpose. (Chapins v. Merchants' Nat. Bank, 14 N. Y. St., 272.) Lien of bank on shares for debt due it. 10 (U. S. Sup. Ct, 1903). The mere statement by a borrower from a national bank, made to the president when the loan is obtained, that his stock in the bank is security for the loan, there being no delivery of the certificates, does not amount to a pledge of the stock, nor does it give the bank any lien thereon as against one subsequently loaning on the stock in good faith and receiving the certificates as collateral. (Third Nat. Bank of Buffalo v. Buffalo German Ins. Co., 193 U. S., 581.) 11 (U. S. Sup. Ct., 1903). The provisions of section 36 of the national bank- ing act of 1863, empowering the withholding of transfer of the stock of a shareholder indebted to the bank, were not only omitted from the national banking act of 1864, but were expressly repealed thereby, (lb.) 12 (U. S. Sup. Ct, 1903). A provision in the charter and by-laws, and a con- dition in a certificate of stock, of a national bank, forbidding the transfer of stock where the stockholder is indebted to the bank, is void as repugnant to the national banking act and in conflict with the public policy embodied in that act, and creates no lien which the bank can enforce by refusing to transfer the stock to a holder for value in good faith. (lb.) 13 (U. S. Sup. Ct., 1903). A condition in a certificate of stock of a national bank which is void under the national banking act will not operate as a notice to one loaning on the stock as collateral, that it is sub- ject to a lien of the bank which will affect the right of the pledgee of having the stock transferred to him. (lb.) Lien of bank on shares and dividends. 14 (Me. Sup., 1874). A national bank has a lien on and the right to hold a cash dividend as pledge for the indebtedness of the shareholder to the bank. (Hagar v. Union Nat. Bank, 1 N. B. C, 523 ; 63 Me., 509.) 15 (Me. Sup., 1874). A national bank may attach the shares of a stock- holder therein for his debt due the bank. (lb.) 16 (Me. Sup., 1874). A national bank sued a shareholder therein for money due and attached his shares. Pending suit he demanded payment of - the dividends declared upon the attached shares, which was refused. He afterwards settled the suit and brought an action for his divi- dends, without renewing his demands. Held, that the demand while the shares were attached was a nullity, and as dividends were not payable until demanded, the action could not be maintained. (lb.) PURCHASE OF STOCK IN OTHER BANKS. 1 (U. S. Sup. Ct, 1899). It is ultra vires on the part of a national bank to purchase with its surplus funds, as an investment, and hold as such, shares of stock in another national bank. (First National Bank of Concord, N. H., v. Hawkins, 1 Banking Cases, 635 ; 174 U. S., 364.) 2 (TJ. S. Sup. Ct., 1899). A national bank which has purchased, as an investment, and holds as such, shares of stock in another national DIGEST OF NATIONAL BANK DECISIONS. 421 POWERS— Continued. purchase of stock in OTHER banks — continued. bank is not estopped in an action by the receiver of the latter to enforce the stockholder's liability arising under an assessment by the Comptroller of the Currency to protect itself by alleging the unlaw- fulness of its own action in so purchasing and holding the stock, (lb.) 3 (U. S. C. C, 1897). An agreement between the officers of a national bank and the maker of a note payable to the bank that it may be paid by the transfer to the bank of stock of another bank is illegal, and the receiver of the bank is not estopped from denying its validity by reason of hnving realized on securities transferred to the bank as a part of the transaction, such securities having been received by such maker as trustee for the bank. (Tillinghast v. Carr, 82 Fed. Rep., 298.) PURCHASE OF STOCKS IN GENERAL. National banks may not deal in stocks. 1 (U. S. Sup. Ct, 1875). A national banking association can not deal in stocks. The prohibition is to be implied from the failure -to grant the power. (First National Bank of Charlotte v. National Exchange Bank of Baltimore, 92 U. S., 122.) 2 (U. S. Sup. Ct, 1897). The banking act does not empower national banks to deal in stock. Purchase of stock by a national bank is ultra vires and void and no rights or liabilities can be based upon it. (Cali- fornia National Bank v. Kennedy, 167 U. S., 362.) 3 (Cal., 1898). A national bank has no authority to deal in the stock of other corporations and may set up such ultra vires act in defense to any liability because thereof. (Chemical National Bank of New York v. Havermale, 52 Pac. Rep., 1071 ; 120 Cal., 601.) 4 (Pa.). A national bank can not lawfully sell stock on commission for others. (Smith v. Philadelphia National Bank, 1 Walk., Pa., 318; Searle v. First National Bank, 2 Walk., Pa., 395 ; Pepperday v. Citi- zens' National Bank of Latrobe, 183 Pa. St., 519. ) May not acquire stock as an investment. 5. The purchase by a corporation, only empowered by its charter to trans- act a banking business, of the stock of another corporation, as an investment, and not as security or in payment of a debt, is ultra vires and void, and can not be validated by estoppel. Hence such a cor- poration can not be held liable for an assessment as a stockholder of a national bank, where it pui'Chased the stock as an investment, although it retained such stock until the national bank became insol- vent, and received dividends thereon. (U. S. C. C. A., 1899) Schofleld v. Goodrich Bros. Banking Co., 98 Fed. Rep., 271 ; 2 B. C, 253 ; (U. S. Sup. Ct., 1897) California Nat. Bank v. Kennedy, 167 U. S., 362. May acquire stock in compromise of claim or to secure existing debt. 6 (U. S. Sup. Ct., 1875). A national banking association, in the compro- mise of a claim growing out of its legitimate business, may take rail- road stock. (First National Bank of Charlotte v. National Exchange Bank of Baltimore, 92 U. S., 122.) 7 (U. S. Sup. Ct., 1875). And when necessary to do so, it may pay the dif- ference between the value of the stock and the amount of the claim, (lb.) 8 (II. S. Sup. Ct, 1875). In adjusting and compromising claims growing out of a legitimate banking transaction it may take stocks of other corpo- ' rations with a view to selling them at a profit. (First National Bank of Charlotte v. National Exchange Bank of Baltimore, 92 U. S., 122.) 422 DIGEST OF NATIONAL BANK DECISIONS. POWERS— Continued. pubchase of stock in GENERAL — continued. 9 (Md.). A national bank may receive stock in a corporation in order to secure an existing indebtedness, but not for speculation. (First National Bank of Charlotte v. National Exchange Bank of Baltimore, 39 Md., 600.) National bank may take stock in corporation as collateral. 10 (U. S. C. C, 1869). A national bank may lend money upon the personal obligation of the borrower, secured by a pledge of stock of a corpo- ration as collateral security. (Shoemaker v. The Nat. Mechanics' Bank, 1 N. B. C, 169; 2 Abbott, U. S., 416.) 11 (U. S. C. C, 1877). A national bank may loan money and take stock in a corporation as collateral security therefor. (Canfield v. State Nat. Bank of Minneapolis, 1 N. B. C, 312.) 12 (Minn. Sup., 1880). The transfer to a national bank, as security for a loan, of- stock of a corporation whose property is solely real estate, is not invalid within the national banking act as a loan upon a mort- gage security. (Baldwin v. State National Bank of Minneapolis, 1 N. W. Rep., 261 ; 2 N. B. C, 278; 26 Minn., 43.) May take warehouse receipt as collateral. 13 (Ohio Sup.). A national bank may take a warehouse receipt as collat- eral security for a loan. (Cleveland, Brown & Co. v. Shoeman, 40 Ohio St., 176.) May not act as broker in sale of stocks. 14. The selling of stock by a national bank for another person is outside the banking business and its chartered powers. (U. S. C. C. A., 1896) Farmers and Merchants' National Bank v. Smith, 77 Fed. Rep., 129; (Cal., 1898) Chemical National Bank v. Havermale, 52 Pac. Rep., 1071; 120 Cal., 601; (Md. App., 1875) Weckler v. First National Bank of Hagerstown, 1 N. B. C, 533 ; 42 Md., 581 ; (Pa.) Smith v. Philadelphia National Bank, 1 Walk., Pa., 318; (Pa.) Searle v. First National Bank, 2 Walk., Pa., 295; (Pa.) Pepperday v. Citizens' National Bank of Latrobe, 183 Pa. St., 519; (Pa.) First National Bank of Allentown v. Hoch, 2 N. B. C, 375; 89 Pa. St., 324. PUBCHASE OF NEGOTIABLE PAPEB. What is discount and purchase. 1 (U. S. C. C. A., 1891). The word " diseount " as used in the banking busi- ness includes "purchase." (Danforth v. Nat. State Bank of "Eliza- beth, 48 Fed. Rep., 271.) 2 (Mass.). When the indorser or his agent brings the note to a national bank and receives the proceeds therefor, the transaction is a dis- counting of such note. (Prescott Nat. Bank v. Butler, 157 Mass., 548; 32 N. E. R., 909.) 3 (Mo.). When a national bank receives notes and they are placed to the credit of a depositor, it constitutes a discount and purchase, though no interest was charged in advance or no money passed over the counter. (Ellerbee v. Nat. Bank, 109 Mo., 445; 19 S. W. R., 241.) May purchase negotiable paper. 4 (111. App., 1884). A national bank may purchase negotiable paper. (First National Bank of Greenville v. Sherburne, 14 Bradw., 566 ; 3 N. B. C, 382.) , 5 (Kans. Sup., 1878). A bank empowered to discount negotiable notes has power to purchase such notes. (Pape v. Capitol Bank of Topeka, 20 Kans., 440 ; 27 Am. Rep., 183 ; 2 N. B. C, 238.) DIGEST OF NATIONAL BANK DECISIONS. 423 POWERS— Continued. purchase of negotiable papeb — continued. May acquire negotiable paper to secure debt. 6 (Pa.). National banks have the power to receive promissory notes to ' secure a previous debt, and when they so acquire them they are bona fide holders. (Philler v. Bssler, 1 Pa. Dist. Rep., 282.) May not purchase negotiable paper. 7. A national banking association can not purchase negotiable paper. (But see Smith v. The Exchange Bank of Pittsburg, 26 Ohio St., 141.) (Md.) Lazear v. National Union Bank of Baltimore, 52 Md., 78; (Minn.) First National Bank of Rochester v. Pierson, 24 Minn., 140; (Minn.) Farmers and Mechanics' Bank v. Baldwin, 23 Minn., 198. Only United States can object to purchase of note. 8 (Mass.). In an action by a national bank upon a promissory note it can not be pleaded by an indorser as a defense that the bank acquired the rote by purchase; for even if such purchase is in excess of the power of the bank, this can be availed of only in proceedings by the Government to forfeit the franchises of the bank. (Prescott National Bank of Lowell v. Benjamin JT. Butler, 32 N. E., 909 ; 157 Mass., 548.) 9 (Mass.). Even if a national bank does not get the legal title to the prom- issory note bought in the market, it may maintain a suit as the holder thereof. (lb.) Only United States may question ultra vires act. 10 (U. S. Sup. Ct., 1892). When no penalty is prescribed by the national banking act for acts prohibited to the bank and its officers, the valid- ity of such acts can not be questioned by private parties, but by the United States alone. (Thompson v. St. Nicholas Nat. Bank, 146 U. S., 240.) 11 (Mass.). A national bank can not avoid an ultra vires purchase of nego- tiable paper, both parties to the purchase being in pari delicto. (Attleboro Nat. Bank v. Rogers, 125 Mass., 339.) 12 ( Minn. ) . The plea of an ultra vires purchase of negotiable paper can not De made to defeat a recovery by a national bank on the same. (Mer- chants' Nat. Bank of St. Paul v. Hanson, 33 Minn., 40 ; overruling First Nat. Bank of Rochester v. Pierson, 24 Minn., 140. ) 13 (S. Dak., 1895). Want "of authority in plaintiff national bank to purchase a negotiable note can not be pleaded by the maker of the note in defense. (First National Bank of Pierre v. Smith, 65 N. W., 437; 8 S. Dak., 7.) Contra — When national bank can not sue on purchased note. 14 (Minn.). As a national banking association can acquire no title to a note purchased by it " for speculative purposes," it can maintain no action thereon in a State where the person suing must be owner of the paper. (First National Bank of Rochester v. Pierson, 24 Minn., 140.) POWER TO ISSUE CERTIFICATE OF DEPOSIT. (NOT POST NOTES.). 1(U. S. C. C, 1886). Certificates of deposit in the ordinary form, issued by a national bank to depositors and payable to order, are not post notes within the prohibition of section 5183, Revised Statutes. (Riddle v. First National Bank of Butler, 27 Fed. Rep., 503.) 2 (Mass.). A certificate of deposit, indorsed by payee, is not in violation of section 5183, Revised Statutes, which forbids national banks to issue any other notes to circulate as money than such as are authorized by the provisions of the statute. (In re Hunt, 141 Mass., 515.) 424 DIGEST OF NATIONAL BANK DECISIONS. POWERS— Continued. POWEB TO HOLD OB ACQTJIBE REAL ESTATE. May purchase realty to secure previous debt. 1 (111. Sup., 1879). To secure a preexisting debt in good faith, a national bank may acquire title to real estate by direct conveyance or judicial sale, although such real estate may be encumbered. (Mapes v. Scott, 88 111., 352; 2 N. B. C, 228.) 2 (Ind. Sup., 1881). A national bank may take title to real estate in dis- charge of previous indebtedness. (Turner v. First National Bank of Madison, 78 Ind., 19; 3 N. B. C, 408.) When may purchase more than amount of debt. 3 (111.). Where the purpose is to secure a debt previously contracted, a national banking association may take a conveyance of real estate worth more than the debt, and pay the difference between the debt and the value of the property. (Libby v. Union National Bank, 99 111., 622.) 4 (Mass.). The amount of real estate which a national banking association may purchase to secure a preexisting debt is not limited to the exact amount of the debt, but as much may be purchased as is necessary to secure the debt due, so long as the security of such debt is the real object of the purchase. (Upton v. National Bank of South Reading, 120 Mass., 153.) May purchase at sheriffs sale and sell. 5 (Ind. Sup., 1880). A national bank may purchase, at sheriff's sale, land mortgaged to it as security for a previous debt. (Heath v. Second National Bank of Lafayette, 70 Ind., 106; 3 N. B. C, 406.) 6 (Mo. Sup., 1882). National banks may hold and convey real estate which they purchase at sales under judgments, decrees, or mortgages held by them to secure debts' due them. (Wherry v. Hale, 77 Mo., 20; 3 N. B. C, 521.) Bank may buy undivided interest in realty. 7 (U. S. C. C. A., 1898). Where a national bank has lawfully acquired an interest in real property in satisfaction of a debt, it may purchase other undivided interests therein or incumbrances existing thereon, provided such action is necessary to enable it to manage or dispose of the property to better advantage. (Cockrill v. Abeles et al., 86 Fed. Rep., 505.) 8 (U. S. C. C. A., 1898). Where a national bank acquired certain mill property in satisfaction of a debt, and the directors organized a corporation among themselves for the purpose of operating the mills as the bank's agent, using its funds, and operated them for the bank at a loss of $23,000, the directors of the bank participating are liable to the creditors for the loss. ( lb. ) May purchase land at foreclosure sale and cut and sell timber. 9 (U. S. Dist. Ct, 1887). A national bank that has loaned money on timber land may, to protect itself and collect the debt, purchase the land at foreclosure sale and cut and sell the timber. (Roebling Sons' Co. v. First National Bank et al., 30 Fed. Rep., 744.) Ultra vires purchase voidable only. 10. Where a national banking association acquires real estate which it is not authorized to take, the conveyance to it is not void, but only voidable, and the title of the association to such real estate is good until assailed in a direct proceeding by the Government. (U. S. Sup. Ct, 1878) Union National Bank v. Matthews, 98 U. S., 621; (U. S. Sup. Ct, 1880) National Bank of Genesee v. Whitney, 103 U. S., 99 ; (U. S. Sup. Ct, 1881) Swope v. Lefflngwell, 105 U. S., 3 ; (U. S. Sup. Ct., 1884) Reynolds v. First National Bank of Craw- fofdsville, 112 U. S„ 405 ; DIGEST OF NATIONAL BANK DECISIONS. 425 POWERS— Continued. POWEB TO HOLD OE ACQUIRE REAL ESTATE — Continued. (U. S. Sup. Ct, 1884) Fortier v. New Orleans National Bank, 112 U. S., 439. When purchase part void and part voidable. 11 (U. S. Sup. Ct., 1884). The fact that bank, at judgment sale of land mort- ' gaged to it, purchases the mortgaged property and also other prop- erty which it was not authorized to acquire, does not invalidate its title as to the mortgaged property. (Reynolds v. First National Bank of Crawfordsville, 112 U. S., 405.) Leasing and improvement of real estate. 12 (U. S. Sup. Ct., 1904). A national bank erected a building on leased prop- erty, the lease securing the landlord by a lien on the building and the personal obligation of bank. While a large amount of rent and taxes were unpaid the bank became insolvent, the property was not paying fixed charges ; after notice to, and no objections by, the stock- holders, and no creditors intervening, the bank conveyed the property with the building back to the landlord, in consideration of his releas- ing the bank and the stockholders from all liabilities accrued and to accrue under the lease. Held, that the proceeding was not ultra vires, and that as the judgment of the stockholders and officers had been prudently exercised in good faith the landlord acquired title to the land and building and was not liable to account for the value of the building in an action brought by a creditor who had knowledge of, and had not protested against, the conveyance when made. It is exceedingly disputable whether it is an abuse of discretion justify- ing reversal by this court for the circuit court to deny a motion to file an amended bill after judgment entered. (Brown v. Schleier, 194 U. S., 18.) 13 (U. S. C. C. A., 1902). The power conferred on national banks by Re- vised Statutes, section 5137 (U. S. Comp. St., 1901, p. 3460), to pur- chase and hold such real estate " as shall be necessary for its imme- diate accommodation in the transaction of its business " includes the power to lease real estate for such purpose, and a bank does not exceed its powers by leasing ground for a term of years under an agreement with the owner that it will erect a building thereon for its use, pro- vided it acts in good faith, and for the purpose of obtaining an eligible location and a suitable building in which to conduct its business. Nor is it limited to the construction of a building only sufficient for its own use, but where it has acquired property by purchase or lease for the purpose authorized by the statute it may improve the same in any manner that other prudent owners would do, so as to render it most productive. (Brown v. Schleier et al., 118 Fed. Rep., 981.) 14 (TJ. S. C. C. A., 1902). A lease of property by a national bank for ninety- nine years is not ultra vires and void because the term will outlast its corporate life. Being authorized by the statute to purchase real estate in fee simple for specified purposes, it may acquire any lesser estate or interest which is vendible. (lb.) Indebtedness — Obligation to pay rent. 15 (U. S. C. C. A., 1902). Nor is such a lease invalid because the aggregate rental which the bank agrees to pay during the term in monthly installments exceeds its capital stock? Such an agreement does not create an indebtedness for the aggregate amount of the installments within the meaning of Revised Statutes, section 5202 (U. S. Comp. St., 1901, p. 3494). (lb.) Acts ultra vires — Liability of third parties. - 16 (U. S. C. C. A., 1902). A lessor of real estate to a national bank for a long term, in which the bank covenants to erect a bank building which shall become part of the realty, can not be held accountable to the stockholders or creditors of the bank because it may have exceeded its powers by expending more money in the erection of the 426 DIGEST OP NATIONAL SANK DECISION^. POWERS— Continued. POWER TO HOLD OB ACQUIRE KEAL ESTATE — Continued. building than- it was authorized to do under the law and more than was required by the terms of the lease, nor can such excessive expenditure be charged as a lien upon the property in favor of creditors after the same has passed into the hands of the lessor. (lb.) Deed to third party in trust for bank. 17 (Mo. Sup., 1882). To avoid the supposed effect of certain provisions of the national banking act a national bank caused certain real estate which it was taking for debt to be conveyed to an individual. Held, that the conveyance created a trust in favor of the bank, and a sub- sequent conveyance by the grantee to a trustee for a receiver of the bank was valid. (Wherry v. Hale, 77 Mo., 20 ; 3 N. B. C, 521.) WHEN NATIONAL BANK MAY TAKE MORTGAGE. May take mortgage to secure previous debt. 1 (U. S. C. C, 1878). A national bank can not loan money on real-estate security, but after a creditor has made default, or after a loan has been actually made, the bank may take real-estate security therefor, unless the transaction be colorable for the purpose of evading the statute. (Merchants' National Bank v. Mears, 10 Chicago Leg. News, 180; 1 N. B. C, 353.) 2 (111. Appls., 1879). A mortgage of real estate executed to a national bank as security for a matured antecedent loan is not void. (Warren v. De Witt County National Bank, 3 Bradwell, 305; 2 N. B. C, 222.) 3 (Iowa Sup., 1873). A national bank has a right to take a chattel mort- gage for the purpose of securing a previously contracted debt, and to enforce the same. (Spafford v. The First National Bank of Tama City, 37 Iowa, 181 ; 1 N. B. C, 480.) 4 (Ohio Sup., 1872). National banks are authorized to take mortgages on real estate in good faith to secure debts previously contracted. A national bank extended the time of payment of indebtedness at a usurious rate of interest, and took therefor notes and a mortgage made by the debtor to a third person, the notes being indorsed by the latter. Held, that the usury only avoided the interest, and that to the extent the debt was valid the mortgage was a bona fide security and that the bank, by becoming the owner of the notes, acquired the equity in the mortgage. (Allen v. The First Nat. Bank of Xenia, 1 N. B. C, 828; 23 Ohio State, 97.) 5 (Vt. Sup., 1879). A national bank may take a mortgage of real estate to secure an antecedent indebtedness at the time of renewing and under an agreement for future renewals of the notes evidencing the debt (Howard National Bank of Burlington v. Loomis, 51 Vt, 349; 2 N. B. C, 424.) Deed of trust to bank map be enforced. 6 (U. S. Sup. Ct, 1878). A national bank loaned money and took as security therefor an assignment of a note and deed of trust of real estate. Held, that the deed of trust was not void and that the bank would not be enjoined from selling thereunder. (Union Nat. Bank et al. v. Matthews, 98 U. S., 621 ; 2 N. B. C, 12.) 7 (U. S. Sup. Ct, 1878). While a national bank is prohibited by law from loaning money on real-estate security, yet if it does make a loan on such security the security is not void but may be enforced. This is the only point decided by the court. (lb.) Agreement that bank may enforce indorser's indemnity valid. 8. An agreement by a national banking association to the effect that, in case a note discounted by it shall not be paid, a mortgage given by the maker to his indorser shall inure to the benefit of the association is not inhibited by the national banking law. (Iowa) First National Bank v. Haire, 36 Iowa, 443. DIGEST OP NATIONAL BANK DECISIONS. 427 POWERS— Continued. WHEN NATIONAL BANK MAY TAKE MORTGAGE — Continued. When may acquire and enforce prior liens. 9. A national banking association, having taken a mortgage on real estate to secure a debt previously contracted, may, in order to protect itself. pay off a prior lien on the said real estate ; and the lien which it thus acquires it may enforce. (Ind.) Holmes v. Boyd, 90 Ind., 332; (Kans.) Ornn v. Merchants' National Bank, 16 Kans., 341. Borrower may mortgage to another for bank. 10 (Iowa Sup., 1873). The national banking act does not prohibit a bor- rower from mortgaging real estate to another to be held by such mortgagee as security to a national bank for money advanced to the first party* (First Nat. Bank v. Haire, 1 N. B. C, 480; 36 Iowa, 443.) Hay take mortgage for purchase price of realty sold. 11 (La.). Where a national banking association sells real estate, it may take a mortgage thereon to secure the payment of the purchase money. (New Orleans National Bank v. Raymond, 29 La. Ann., 355.) May tale, as collateral, stock representing only realty. 12 (Minn.). A national banking association may take as security for a loan the stock of a corporation whose entire capital is invested in real estate. Such a loan does not amount to a lending upon a mortgage. (Baldwin v. Canfield, 27 Minn., 43.) « May buy and enforce secured note subject only to forfeiture. , 13 (Mo. Sup., 1879). If a national bank discounts a note secured by a deed of trust on real estate, the security passes to and may be enforced by the bank, subject only to forfeiture of its charter, which penalty can be invoked only by the United States. (Thornton v. National Exchange Bank, 71 Mo., 221 ; 3 N. B. C, 513.) May buy additional note to protect its claim. 14 (N. C. Sup., 1881). A national bank may buy a note of its debtor, in order to gain the whole benefit from the mortgage collateral to such note, and having done this may take a new mortgage for the whole sum. (Oldham v. Bank, 3 N. B. C, 688 ; 85 N. C, 240.) Foreclosure of mortgage given to predecessor State bank. 15 (Nebr. Sup., 1879). A national bank organized as successor to a State bank may maintain an action to foreclose a mortgage of real estate executed to the State bank as security for a note and assigned to it by the State bank on the formation of the national bank. (Scofield v. State National Bank of Lincoln, 9 Nebr., 316; 31 Am. Rep., 412; 2 N. B. C, 280.) Mortgages for present or future advances invalid. 16. National banking associations are, by implication, prohibited from tak- ing mortgages on real estate as security for contemporaneous loans. (U. S. Sup. Ct, 1878) Union National Bank v. Matthews, 98 U. S., 621; (111.) Priedley v. Bo wen, 87 111., 151; (Mo.) Commonwealth Bank v. Clark, 4 Mo., 59. 17. A national bank may take a mortgage in order to secure a debt previ- ously contracted, but not to secure contemporaneous or future ad- vances. (U. 8. C. C, 1873) Kansas Valley National Bank v. Rowell, 2 Dil- lon, 371 ; 1 N. B. C, 264 ; (U. S. C. C, 1878) Merchants' National Bank v. Mears, 1 N. B. C, 353 ' (U. S.) Mathews v. Abbott, 2 Hask., 289 ; (Iowa Sup., 1873) First National Bank v. Haire, 1 N. B. C, 480 ; 36 Iowa, 443 ; 428 DIGEST OP NATIONAL BANK DECISIONS. POWERS— Continued. WHEN NATIONAL BANK MAY TAKE MORTGAGE Continued. (Kans. Sup., 1876) Ornn v. Merchants' National Bank, 1 N. B. C, 490 ; 16 Kans., 341 ; (Mo. Sup., 1876) Matthews v. Skinker, 1 N. B. C, 647; 62 Mo., 329; (N. Y., 1877) Crocker v. Whitney, 1 N. B. C, 745 ; 71 N. Y., 161 ; (Ohio, 1872) Allen v. First National Bank, 1 N. B. C, 828; 23 Ohio State, 97 ; (Pa., 1873) Fowler v. Scully, 1 N. B. C, 854; 72 Pa. St, 456; "(Pa., 1876) Wood v. People's National Bank of Pittsburg, 1 N. B. C, 888 ; 83 Pa. St., 57. VALIDITY OF MOBTGAGES WHEN TAKEN ULTRA VIBES. Mortgage for present loan voidable by United States only — Only United States can object to loans on mortgage security. 1. No one but the Government can object that a national bank has ex- ceeded its authority In accepting real estate security for present or future advances. (U. S. Sup. Ct, 1880) National Bank of Genesee v. Whitney, 103 U. S., 99 ; 3 N. B. C, 5 ; (U. S. Sup. Ct., 1881) Swope >v. Leffingwell, 105 U. S., 3 ; (U. S. Sup. Ct, 1884) Reynolds v. First National Bank of Craw- fordsville, 112 U. S., 405 ; (U. S. Sup. Ct, 1884) Fortier v. New Orleans National Bank, 112 U. S., 439 ; 3 N. B. C, 140 ; (TJ. S. Sup. Ct, 1878) Union National Bank v. Matthews, 98 U. S., 621 ; 2 N. B. O, 12. 2. The United States only can question the power of a national bank to loan money on a trust deed as security. (Cal. Sup., 1898) Camp v. Land, 54 Pac. Rep., 839; (Mich., 1898) Fifth National Bank of Grand Rapids v. Pierce, 75 N. W. Rep., 1058 ; 117 Mich., 376 ; (Mo. Sup., 1882) Wherry v. Hale, 77 Mo., 20; 3 N. B. C, 521. 3 (111. Sup., 1877). A real mortgage executed to a bank offieer at the time of, and to secure a loan by the bank, is void. (Friedley v. Bowen, 2 N. B. C, 224; 87 111., 151.) 4 (Iowa Sup., 1879). A real mortgage to a national bank to secure a pres- ent debt or future advances is not void. (First National Bank of Waterloo v. Elmore, 3 N. W., 547; 2 N. B. C, 237; 52 Iowa, 541.) 5 (Kans. Sup., 1898). After a contract is executed the defense of ultra vires by a debtor can not be made against a national bank. (Farm- ers and Merchants' Nat Bank v. Robinson, 53 Pac Rep., 762.) 6 (La.). The objection that a national bank has loaned money on real estate in violation of the prohibition of the national banking laws does not lie in the mouth of the delinquent debtor of such loan, and does not disable the bank from enforcing the same by foreclosing the mortgage. The United States alone can complain of such violation. (State National Bank v. Flathers, 45 La. Ann., 75; 12 So., 243.) 7 (La.). A national bank is not forbidden from collecting by judicial means a debt secured by a mortgage taken contrary to the pro- visions of the national banking law, and only takes such mortgage subject to the risk of dissolution. (State Nat. Bank v. Flathers, 45 La. Ann., 75.) 8 (Mo. Sup., 1882). If a national bank violates the national banking act in dealing with real estate, the Government alone' can take advan- tage of it. (Wherry v. Hale, 77 Mo., 20; 3 N. B. C, 521.) 9 (Mo. Sup., 1898). Only the United States can object to an ultra vires con- veyance of realty to a national bank. (Hall v. Farmers and Mer- chants' Bank, 46 S. W. Rep., 1000; 145 Mo., 418.) DIGEST OF NATIONAL BANK DECISIONS. 429 POWERS— Continued. VALIDITY OF MORTGAGES WHEN TAKEN ULTBA VIBES — Continued. 10 (Mo., 1876). A national bank has no power to take a deed of trust or mortgage on real estate to secure a contemporaneous loan, and a , sale under such deed or mortgage to satisfy the loan will be enjoined. (Matthews v. Skinker, 62 Mo., 329; 1 N. B. C, 647.) 11 (N. J. Appls., 1880). A mortgage to a national bank, to secure a present loan by the discount of commercial paper in the usual course of business, is not void but only voidable at the election of the Gov- ernment. (Graham v. Nat. Bank of New York, 2 N. B. C, 293; 32 N. J. Eq., 804.) 12 (Pa., 1876). A mortgage to a national bank is valid as to preexisting debts, but void as to future loans. (Wood v. People's Nat. Bank of Pittsburg, 83 Pa. St., 57; IN. B. C, 888.) 13 (Pa., 1873). F. gave to a national bank a mortgage to secure notes there- after to be discounted for him. Held, that under the national cur- rency act of June 3, 1864, the mortgage was void and could not be enforced against the assignee of P. (Fowler v. Scully, 1 N. B. 0., 854; 72 Pa. St., 450.) 14 (Va. Appls., 1879). The provision in the national banking law against loans on real estate security was intended for the benefit of the Government alone. (Wrotens, Assignee, v. Armat, 2 N. B. C, 426; 31 Grattan, 228.) 15 (Wash.). A national bank has power to take an assignment of a mort- gage on land to secure a loan made at the time of the assignment. (First National Bank of Aberdeen v. Andrews et al. ; Young v. Same, 34 P., 913; 7 Wash., 261.) Mortgages in violation of statute enforceable. 16 (Nebr. Sup., 1901). A party who has secured a loan from a national bank, and given real estate security therefor, can not be heard to deny the right of the bank to enforce the provisions of the mortgage because of the section of the United States statutes prohibiting the taking of real estate security for a loan negotiated by a national bank. (First Nat. Bank of Sutton v. Grosshans, 85 N. W. Rep., 542; 3 Banking Cases, 283; 61 Nebr., 575.) 17 (Nebr. Sup., 1901). Where security on real estate has been taken by a national bank on a contemporaneous loan, the same may be enforced notwithstanding the provisions of the United States statute prohibit- ing that character of security. (lb.) Taking of real estate security by a bank president for debt due it same in legal effect as if taken by bank. 18 (U. S. Sup. Ct, 1903). Where the State law does not forbid an agent from taking security for the benefit of a principal the taking of real estate security by the president of a national bank for a debt due to the bank is in legal effect the taking of such security by the bank itself. (Schuyler Nat. Bank v. Gadsden, 191 U. S., 451.) 19 (U. S. Sup. Ct., 1903). The provisions of the United States statutes for- bidding the taking of real estate security for a debt coincidently contracted does not make such security void, but simply subjects the bank to be called to account for exceeding its powers. (lb.) Liona fide holder of mortgage note purchased by bank. 20 (Nebr. Sup., 1876). Notes secured by mortgages were assigned to a national bank and by it to plaintiff. Held, in an action of foreclosure, that the mortgages were not extinguished by the assignment to the bank, and were valid in the hands of the plaintiff, he being a bona fide purchaser. (Richards v. Kountze, 4 Nebr., 200; 1 N. B. C, 652.) 21 (Nebr. Sup., 1876). In the absence of evidence showing the purpose and object of the assignment to the bank it can not be presumed that it was for a debt created in presenti in violation of the national bank- ing act. (lb.) . 430 DIGEST OF NATIONAL BANK DECISIONS. POWERS— Continued. POWER TO MAKE CONTRACT OF GUARANTY. May guarantee payment of note. 1 (U. S. Sup. Ct, 1879). A national bank on transferring a promissory note may guarantee it. (People's Bank of Belleville v. Manufacturers' National Bank of Chicago, 101 U. S., 181.) 2 (Nebr. Sup., 1894). A national bank may guarantee the payment of com- mercial paper as incidental to the exercise of its power to buy and sell the same. (Thomas v. City National Bank of Hastings, 58 N. W., 943; 40 Nebr., 501.) When bank's indemnity contract valid. 3 (U. S. C. 0, 1897). A contract by a national bank to indemnify one for loss incurred as surety on an attachment bond is not void on the ground of public policy, the loss having occurred, though the bond is not given for the benefit of the bank. (Seeber v. Commercial Na- tional Bank of Ogden, 77 Fed. Rep., 957.) Authority of officers to execute guaranty for bank. 4 (U. S. Sup. Ct., 1879). The vice-president of a national bank, upon making a transfer for value of certain notes belonging to the bank (the bank being the correspondent of the transferee) transmitted the notes in a letter on the bank's letterheads and signed by himself as vice- president, in which he stated : " In accordance with your telegram I herewith hand you ten notes of $5,000 each." " We debit your account $50,000." " This bank hereby guarantees the payment of the principal sum and interest of said notes." This was done in behalf of the bank, and the notes were also indorsed by the same individual as vice-president of the bank. It was done with the knowledge and consent of the president and cashier of the bank, but without author- ity of the directors, as a board, or the majority of its members indi- vidually. Held, that the bank was liable on the guaranty. (People's Bank of Belleville v. Manufacturers' National Bank of Chicago, 101 U. S., 181; 2 N. B. C, 97.) 5 (U. S. Sup. Ct, 1879). It is to be presumed that the vice-president had the power to make such guaranty in the name of the bank, and the bank is estopped to deny it. (lb.) 6,(U. S. Sup. Ct, 1879). The retention and enjoyment of the proceeds of the transaction by the bank constituted an acquiescence in such act, as effectual as would have been the most formal authorization in advance or afterwards. (lb.) 7 (U. S. Sup. Ct., 1890). A national bank wentinto voluntary liquidation in September, 1873. . Before that it had become liable to a State bank as guarantor on sundry notes made by a third person, and which were discounted for it by the State bank. In August, 1874, transac- tions took place between the maker of the notes and the State bank and the person who acted as the president of the national bank whereby the maker was released from further liability on the notes, but such acting president attempted to continue by agreement the liability of the national bank as guarantor. In a suit begun in October, 1876, a judgment on the guaranty was obtained in May, 1880, by the State bank against the national bank. In a suit brought by a creditor against the national bank and its stockholders to enforce their statutory liability for its debts, the court, on an application made in June, 1887, inquired into the liability of the stockholders to have the claim of the State bank enforced as against them in view of the transactions of August, 1874, and disallowed that claim. Held, (1) it was proper to reexamine the claim; (2) the judgment against the bank was not binding on the stockholders, in the sense that it could not be reexamined; (3) the guaranty of the bank was released as to the stockholders by the release of the maker of the notes ; (4) the rights of the stockholders could not be affected by the acts of the president done after the bank had gone into liquidation. (Schrader v. Manufacturers' National Bank of Chicago, 133 U. S., 67.) DIGEST OF NATIONAL BANK DECISIONS. 481 POWERS— Continued. POWER TO MAKE CONTRACT OF GUARANTY — Continued. 8 (Nebr., 1896). Where one purchased negotiable paper from the president of a bank with a guaranty of payment executed by him apparently in behalf of the bank, on his representation that the paper belonged to the bank, and the transaction occurred in the banking house where the president was apparently engaged in performing his duties as such, the bank was liable on the guaranty. (City National Bank of Hastings v. Thomas, 65 N. W., 895; 46 Nebr., 861.) Contract of guaranty oy bank is ultra vires. 9 (U.S. C. C. A., 1899). A national bank advised plaintiff that it would pay all checks of a third person, although such person had no funds on deposit, as was known to both plaintiff and the bank. In reliance on such promise, plaintiff cashed checks of such person and transmitted them to the bank for payment. The bank issued and sent to plain- tiff its drafts on a correspondent for the amount of the checks, which drafts were refused payment. Held, that the contract was one purely of guaranty, and was ultra vires on the part of the bank, and the transaction gave plaintiff no right of action against it on the drafts. (Bowen v. Needles Nat. Bank, 94 Fed. Hep., 925.) 10 (Iowa Sup., 1899). When a letter of credit from a national bank is not purchased, but is merely a guaranty of the payment of an account to be created in the future, it is not binding on the bank, as such an institution has no power to thus jeopardize its capital. (Thilmany v. Iowa Paper .Bag Co. et al., 2 Banking Cases, 97; 108 Iowa, 333.) 11 (N. H. Sup., 1882). No action may be maintained against a national bank upon a contract made by its cashier on its behalf to guarantee a con- tract between third persons for delivery of building materials. (Nor- ton v. Derry Nat. Bank, 3 N. B. C, 568 ; 61 N. H., 589.) 12 (Tex. Civ. Appls., 1900). A purchaser of drafts with bills of lading cover- ing corn shipped to plaintiff for sale on commission sent the drafts to-, defendant national bank for collection, with instructions to deliver each bill of lading only on payment of the draft attached thereto. Plaintiff would not accept the corn, and the purchaser wrote to the bank, authorizing it to accept drafts drawn by plaintiff on the ship- per in part payment of the drafts attached to the bills of lading, representing differences in the price for which the corn was sold ; but the plaintiff paid the original drafts to the bank in full, and drew on the shipper for the difference, which drafts the bank prom- ised to pay, without authority from the purchaser, and without consideration, and which drafts the shipper refused to pay when pre- sented. Held, that since a national bank has no power to loan its credit, except in the ordinary course of banking, defendant bank was not liable on the drafts drawn on the shipper for the differences, and therefore an action could not be maintained on them against the purchaser (who was a resident of another county) in the county of the bank's domicile by joining it as a party defendant. (Groos v. Brewster, 55 S. W. Rep., 590.) When banlc will not be allowed to plead that contract was ultra vires. 13 (N. C, 1901). A contract of guaranty by a national bank can not be avoided on the ground of ultra vires. Parties to a contract which has been wholly or partially executed will not be allowed to say it was ultra vires. (Hutchins v. Planters' National Bank of Rich- mond, 128 N. C, 72.) 14 (Tex. Civ. Appls., 1901). When a contract between a national bank and another party , has been fully performed and the bank received a benefit from such performance it is held, estopped to plead that the contract was ultra vires, as being in excess of its corporate powers. (First National Bank of Greenville v. Greenville Oil and Cotton Co., 24 Tex. Civ7 Appls., 645.) 432 DIGEST OF NATIONAL BANK DECISIONS. POWERS— Continued. Ultba Vikes Acts and Contbacts. genebally. When bank may not retain purchased bonds. 1 (U. S. Sup. Ct., 1891). The national bank act does not give a national bank an absolute right to retain bonds coming into its possession by purchase under a contract which it was without legal authority to make. Although the bank is not bound to surrender possession of them until reimbursed the full amount due to it, and may hold them as security for the return of the consideration paid, yet when such amount is returned, or tendered back to it, and the return of the bonds demanded, its authority to retain them no longer exists ; and from the time of such demand and its refusal to surrender the bonds to the vendor or owner it becomes liable for their value upon grounds of implied contract, apart from the original agreement under which it obtained them. It could not rightfully hold them under or by virtue of the contract and at the same time refuse to comply with the terms of purchase. (Logan County National Bank v. Townsend, 139 U. S., 67.) May not prospect for ore. 2 (U. S. C. C. A., 1899). It is ultra vires of a national bank to expend its money in prospecting for ore on its property. (Cooper et a!, v. Hill, 1 Banking Cases, 524; 94 Fed. Rep., 582.) May not agree to procure insurance business for a customer. 3 (Mass., 1896). Under Revised Statutes United States, section 5136, clauses 3, 7, empowering a national bank to make contracts and to exercise all powers necessary to carry on the banking business, an agreement by a national bank to procure a person applications for insurance if he would procure for it a customer is ultra vires. (Dresser v. Traders' National Bank, Mass., 42 N. E., 567; 165 Mass., 120.) May not apply collection otherwise than as directed. 4 (Tex. Civ. Appls., 1894). A bank which receives drafts with instructions to apply the proceeds to the payment of a certain note held by it for collection can not apply them to any other account. (First National Bank v. Munzesheimer, 26 S. W., 428.) WHEN ULTBA VIBES CONTBACTS WILL BE ENFOBCED. When ultra vires contract will be enforced. 1 (U. S. C. C. A., 1899). A contract entered into by a corporation which is ultra vires of its character can not be ratified or become binding on the ground of estoppel, and the only ground on which the corporation can become liable to the payment of money on account of such a con- tract, which has been performed by the other party, is that it has received a benefit or advantage thereby which it can not justly retain. (Bowen v. Needles National Bank, 94 Fed. Rep., 925.) Ultra vires acts — Right to plead. 2 (U. S. C. C. A., 1904). Where a contract by which a national bank as-' sumed all the obligations of an insolvent bank in contemplated liqui- dation was fully explained at a meeting at which 1,665 out of 2,000 shares were represented, and after the contract was executed it was ratified by a vote exceeding the proportion of stock specified by Revised Statutes, sections 5220, 5221 (U. S. Comp. St. 1901, p. 3503), the stockholders were not thereafter entitled to claim that such con- tract was ultra vires. (George et al. v. Wallace et al. ; Brownlee et al. v. Same ; Morsman v. Same ; Poppleton v. Same ; Morton et al. v. Same; McCague Inv. Co. et al. v. Same, 135 Fed. Rep., 286.) Ultra vires, when no defense. 3 (111.). By authority of the directors of a national bank in Chicago, which had acquired some of its own stock, the individual note of its DIGEST OF NATIONAL BANK DECISIONS. 433 POWERS— Continued. Ultra Vibes Acts and Contbacts — Continued. when ultra vires contracts will BE enforced — continued. t cashier, secured by a pledge of that stock, was, through a broker in Portages-sold to a bank, there. The note not being paid at maturity, the Portage bank sued the Chicago bank in assumpsit, declaring specially on the note, which it alleged was made by the bank in the cashier's name, and also setting out the common counts. The bank set up that the purchase of its own stock was illegal, and that money borrowed to pay a debt contracted for that purpose was equally for- bidden by Revised Statutes, section 5201. The trial court was requested by the Chicago bank to rule several propositions of law, and declined to do so. Judgment was then entered for the Portage bank. The supreme court of the State of Illinois held that the Port- age bank was entitled to recover under the common counts, and that it was not necessary to consider whether the trial court had ruled correctly on the proposition of law submitted to it. Held, that that court, in rendering such judgment, denied no title, right, privilege, or immunity specially set up or claimed under the laws of the United States, and that » the writ of error must be dismissed. (Chemical National Bank of Chicago v. City Bank of Portage, 156 111., 149.) 4 (Mo. Sup., 1902). A person borrowing money from a bank through its president can not deny the authority of the president either to loan the money to him or to dictate the terms of such loan. (Roe v. Bank of Versailles, 67 S. W. Rep., 303; 4 Banking Cases, 474; 167 Mo., 406.) 5 (N. Y.). Where a bank received the proceeds of a sale of bonds held by it for speculative purposes, accomplished by means of fraud on the part of its managing officers, it can not escape liability on the ground that the acts of the officer were individual acts and its business of buying and selling bonds was not within the scope of its powers. (Carr v. Nat. Bank and Loan Co., 167 N. Y., 375.) Executed ultra vires contracts, when not void. 6 (N. Dak. Sup., 1900). A contract of a corporation that is ultra vires, not because prohibited by positive law, or inherently vicious, and not because the corporation could not, under any circumstances, make the contract, but solely because of the existing circumstances and conditions under which it was made, is never void, and" the plea of ultra vires will not avail either party to such contract when the con- tract has been fully executed by the other party. (Tourtelot v. Whitehead, 84 N. W. Rep., 8; 3 Banking Cases, 15.) bank may not repudiate unauthorized contract and retain its fbuits. 1 (U. S. Sup. Ct, 1900). H., as vice-president of a Cincinnati bank, made ap- plication to a New York bank for a loan of $300,000. The request was granted, and that amount was placed to the credit of the Cincin- nati bank upon the books of the New York bank. Immediately there- after H. fraudulently caused himself to be personally credited upon the books of his own bank with a like sum of $300,000. The action of H. in negotiating the above loan with the New York bank was unau- thorized by the board of directors of the Cincinnati bank, but after the arrangement had been made that bank drew out by check" the money that had been placed to its credit by the New York bank and used the same in discharging its valid obligations. Held, that by so using the money obtained from the New York bank by H. in his capacity of vice-president the Cincinnati bank became bound to account for the same as for money had and received, and could not escape liability to the New York bank upon the mere ground, sup- posing it to be true, that it was not permitted by its charter to borrow money. The fraud perpetrated by H. upon his own bank, in having 4049—05 28 434 DIGEST OF NATIONAL BANK DECISIONS. POWERS— Continued. Ultra Vires Acts and Contracts — Continued. BANK MAY NOT REPUDIATE UNAUTHORIZED CONTRACT AND RETAIN ITS fruits — continued. himself personally credited upon its books with, the amount of the loan was a matter with which the New York bank had no connection, and its right to recover could not be affected thereby. The liability of the Cincinnati bank rested upon the fact, and the implied obliga- tion arising therefrom, that that bank used in its business and for its benefit the money which the other bank placed to its credit in con- sequence of the loan negotiated by H., who assumed to represent it. There is nothing in the acts of Congress authorizing or permitting a national bank to appropriate and use the money or property of others without incurring liability for so doing. This case and Western National Bank v. Armstrong (152 U. S., 346), distinguished. (Al- dnch v. Chemical Nat. Bank, 176 TJ. S. Rep., 618.) 2. (U. S. Sup. Ct, 1879). Where officer of a bank guaranteed payment in name of bank and sold the note, the bank by retention and enjoyment of the proceeds is estopped to deny the officer's act. (People's Bank v. National Bank, 101 U. S., 181. ) 3 (U. S. C. C. A., 1896). A bank which causes property owned by it to be conveyed by a deed regular in form to a worthless corporation, or- ganized by its own directors, and then loans such corporation money, takes its notes and discounts them with strangers, by representing them as prime paper and on the strength of such corporation's appar- ent ownership of such property, is thereafter estopped, as against the holders of the notes, to assert that the conveyance was ultra vires. (Butler et al. v. Cockrill, 73 Fed. Rep., 945.) 4 (U. S. C. C. A., 1896). A national bank purchased the stock of a dealer in wall paper at a sale under an execution in its favor, and afterwards organized a corporation to take and dispose of this stock, such cor- portion being managed by the officers of the bank and controlled by it. In order to dispose of the stock with advantage, new stock was purchased on credit, the bank, through its cashier, informing the seller, upon inquiry, of the relation between the bank and the corpora- tion, and that the bank would see that the bills were paid if the goods were sold. Held, that whether or not it was within the powers of the bank to purchase new stock to help the sale of that bought on execu- tion sale, the bank having received and appropriated the proceeds of the goods purchased, was estopped to set up in a suit for the price a want of power to make the purchase. (American National Bank v. National Wall Paper Co., 77 Fed. Rep., 85.) 5 (111.). Where a national banking association has entered into a contract which it is not authorized to make, a party who has enjoyed the bene- fit of such contract can not question its validity. (111.) German National Bank v. Meadowcroft, 95 111., 124. 6 (Ky., 1895). A corporation which received and used the proceeds of a discount of notes by its president is estopped to deny his authority to discount the paper. (German National Bank v. Louisville Butchers' Hide and Tallow Co., 29 S. W., 882 ; 97 Ky., 34.) 7 (N. Y. Sup., 1876). A national bank indorsed upon a contract of sale and delivery between A and B that B had deposited $2,500 in the bank, " to be held by us as collateral security for the faithful fulfillment of the within contract." Held, (1) that the bank had the power to receive the deposit and enter into the said contract; (2) but that, even if the contract was ultra vires, the bank would be estopped from setting up that defense in action by A, as he performed his part of the agreement, relying on the undertaking of the bank. ( Bushnell v. The Chatauqua County Nat. Bank, 10 Hun, 378; 1 N. B. C, 794.) 8 (Ohio). A bank which becomes absolute owner of shares of a joint stock company taken by it as security for a loan can not set up in defense to liability for the company's debts that the ownership of such shares DIGEST OF NATIONAL BANK DECISIONS. 435 POWERS— Continue^. Umjba Vibes Acts and Contbacts — Continued. . BANK MAY NOT EEPUDIATE UNAUTHOBIZED CONTEACT AND EETAIN ITS fbtjits — continued. was ultra vires because making the bank a partner in the joint stock company. (Wehrinan v. McFarlan, Ohio N. P., 333.) 9. (Tex. Civ. App., 1898). Where a national bank has acted as a partner' in the sale of horses and has shared in the profits of such sale, it is estopped from denying its power to enter into such partnership when attempting to enforce the collection of the notes given by the pur- chaser for the property. (Gill v. First Nat. Bank, 1 Banking Cases, 28.) 10 (Tex. Civ. App., 1901). A national bank which has received and retained the fruits of its contract to pay for goods sold on its credit and delivered to a depositor in pursuance of the contract can not avoid payment on the ground that the contract was ultra vires. (First Nat. Bank v. Greenville Oil and Cotton Co., 60 S. W. Kep., 828; 24 Texas Civ. App., 645. ) 11 (Wash.). Where a bank has received and retained the benefit of a con- tract made by its officers, it can not plead that the contract was unau- thorized by the directors or beyond the power of the bank or its offi- cers to make. (Tootle et al. v. First National Bank of Port Angeles, 33 P., 345; 6 Wash., 181.) Bank liable for money had and received, though transaction ultra vires. 12 (111.). The First National Bank of Decatur having advanced a sum of money to the owner of a lot of whisky, the latter employed the bank to ship the whisky for him to New York to be sold, and out of the proceeds the bank was to retain the money advanced and a reason- able commission for shipping and selling. The whisky was shipped and sold accordingly, and the proceeds received by the bank. Held. that the bank was liable to the owner of the whisky for the money ^ so received, and this independently of the question whether national banks are, by their charters, authorized to sell produce on commis- sion. (First National Bank of Decatur v. Priest, 50 111., 321..) 13 (III. Sup., 1895). A bank obtained a loan from plaintiff, giving therefor the personal note of its cashier. Held, that the bank was liable to plaintiff for the amount of the loan, on account for money had and received. (Chemical National Bank of Chicago v. City Bank of Portage, 40 N. EL, 328 ; 156 111., 149.) 14 (III. Sup., 1895). A debt incurred by a national bank, for which it re- ceives and retains the consideration, is not void because incurred in violation of Revised Statutes United States, section 5202, providing that no national bank shall be indebted or in any way liable to an amount exceeding the amount of its capital stock paid in, except on circulation, deposits, special funds, or declared dividends. (lb.) 15 (Mass., 1894). Where money is deposited with the cashier of a bank under an agreement that it shall be invested by the bank in bonds and stocks, the bank is liable for the return of the money, no invest- ment haying been made, though the agreement for its investment by the bank was ultra vires. (LVHerbette v. Pittsfleld National Bank, Mass., 38 N. E., 368; 162 Mass., 137.) WHEN NATIONAL BANK MAY PLEAD THAT ITS ACT WAS ULTBA VIBES. When receipt of fruits of ultra vires contract does not estop. 1 (U. S. Sup. Ct, 1899). The investment by the First National Bank of Concord, N. H., of a part of its surplus funds in the stock of the Indianapolis National Bank, of Indianapolis, Ind., was an act which it had no power or authority in law to do, and which is plainly against the meaning and policy of the statutes of the United States and can not be countenanced ; and the Concord corporation is not liable to the receiver of the Indianapolis corporation for an assessment 436 DIGEST OF NATIONAL BANK DECISIONS. POWERS— Continued. Ultra Vibes Acts and Contracts — Continued. WHEN NATIONAL BANK MAY PLEAD THAT ITS ACT WAS ULTRA VIRES Continued. upon the stock so purchased, made under an order of the Comptroller of the Currency to enforce the individual liability of all stockholders to the extent of the assessment. The doctrine of estoppel does not apply to this case. (First National Bank of Concord v. Hawkins, 174 U. S., 364.) 2 (Ind. Sup., 1894). The fact that a party to a contract which is void as against public policy has received the benefits therefrom does not estop him, when sued thereon, from setting up such defense. (Brown v. First National Bank of Columbus, 37 N. E., 158 ; 137 Ind., 655.) WHEN ONLY UNITED STATES MAY COMPLAIN OF ULTRA VIRES ACT. 1 (U. S. Sup. Ct, 1892). Where the provisions of the national banking act prohibit certain acts by banks or their officers without imposing any penalty or forfeiture applicable to particular transactions which had been executed, their validity can be questioned by the United States only, and not by private parties. (Thompson v. St. Nicholas National Bank, 146 U. S., 240.) 2 (Cal., 1898). The question whether a national bank may loan money, taking a trust deed as security, can not be raised by a borrower, but only by the United States. (Camp v. Land, 54 Pac. Rep., 839; 122 Cal., 167.) 3 (111.). The fact that a contract made by a national bank is ultra vires because in violation of the national bank act can not be set up in defense to an action growing but of such contract. (Volz v. Nat. Bank, 158 111., 532.) 4 (Mich. Sup., 1898). A mortgage on real estate taken by a national bank in violation of the national banking act is not invalid. (Fifth National Bank of Grand Rapids v. Pierce, 75 N. W. Rep., 1058; 117 Mich., 376.) 5 (Minn.). The objection that an executed purchase of property by a national bank is ultra vires can be urged only by the Government of the United States. (Hennessy v. City of St. Paul et al., 55 N. W., 1123; 54 Minn., 219.) 6 (Miss., 1897). In an action by a national bank on railroad-aid bonds the United States alone can complain that the bank was not authorized to hold such bonds. (Town Council of Lexington v. Union National Bank, 22 So., 291; 75 Miss., 1.) 7 (Mo. Sup., 1898). The acceptance of a deed in trust by a national bank, though ultra vires, does not make the conveyance void, but only void- able. Only the sovereign can interfere. (Hall v. Farmers and Mer- chants' Bank, 46 S. W. Rep., 1000; 145 Mo., 418.) 8 (Mo.). Though a national bank is forbidden to loan money on real estate security, it can enforce such security if taken ; and where it takes a note without knowledge that it is so secured, it has the right to claim and enforce the same when afterwards discovered. (George v. Somerville, 54 S. W. Rep., 491; 153 Mo., 7.) 9 (S. Dak. Sup., 1895). Want of authority in plaintiff national bank to purchase a negotiable note can not be urged by the maker of the note in defense. (First National Bank of Pierre v. Smith, 65 N. W., 437; 8 S. Dak., 7.) 10 (Tex. Civ. Appls., 1896). A national bank having joined with other per- sons in a partnership to operate a mill, can not be estopped from recovering moneys loaned to the firm on the ground that it had no authority to become a partner. (Cameron v. First Nat. Bank, 34 S. W. Rep., 178.) DIGEST OF NATIONAL, BANK DECISIONS. ' 437 POWERS— Continued. Ultra Vibes Acts and Conteacts — Continued. WHEN ULTRA VIBES ACT AMOUNTS TO CONVERSION. 1 (U. S. Sup. Ct, 1899). A national bank which, being authorized by the owner of notes in its possession to sell them to a third party, pur- chases them itself and converts them to its own use, is liable to their owner for their value, as for a conversion, even though it was not within its power to sell them as the owner's agent. (First National Bank of Grand Forks v. Anderson, 172 U. S., 573.) 2 (U. S. C. C. A., 1'899). The fact that a contract, made by a national bank, to receive and collect securities, and reinvest the proceeds for the owner, contained provisions which were ultra vires, does not relieve the bank of the legal obligation to return the securities or account to the owner for their value. (Emmerling v. First Nat. Bank, 97 Fed. Rep., 739.) 3 (111. Sup., 1880). A national bank which has wrongfully converted to its own use the property of another is estopped from denying its liability to account therefor upon the ground that it received and held the property in carrying on the business of a warehouseman, outside the powers conferred by its charter. (German Nat. Bank v. Meadow- croft, 2 N. B. C. (addenda), 462; 95 111., 124.) 4 (N. Dak. Sup., 1896). A national bank which assumed to sell for another certain notes owned by him, but which, instead of selling them to a third person, without his knowledge sold them to himself, violated its duty to the owner, the same as if it had full power under the law to act as such agent, and was, therefore, guilty of a conversion of such notes, notwithstanding its agency was ultra vires. (Anderson v. First National Bank of Grand Forks, N. Dak., 67 N. W., 821 ; 5 N. Dak., 80.) ULTRA VIRES REPRESENTATIONS BY BANK. 1 (TJ. S. C. C. A., 1902). The cashier of a bank is the proper officer to re- ceive deposits and to give certificates or vouchers in respect thereto, which may properly include, with the consent of the depositor, a statement of the source from which the deposit arose ; and for a false statement in that respect, made to subserve the interests of the bank, the latter is liable in tort to one injured thereby, although the cashier was not expressly authorized to make such statement by the board of directors. (Hindman v. First National Bank of Louisville et al., 112 Fed. Rep., 931.) 2 (U. S. C. C. A., 1902). To sustain an action for fraud and deceit, based on false representation* by defendant, by which plaintiff was induced to purchase property, it must be shown (1) that the representation was false and (2) that the person making it knew it to-be false; but if the fact was one within his means of knowledge, and he had no knowledge of it, a jury is authorized to find that the statement was knowingly false. (lb.) 3 (Col. Sup., 1898). Although it was no part of the business of the defend- ant bank to make representations or statements regarding the finan- cial responsibility of C, or the value of certain mining stock, if they were false, and made in pursuance of an agreement with C, and in- directly for the benefit of the bank, and such benefit was received and retained by the bank, it could not escape liability upon the ground that it was ultra vires on its part to make the representation. (American Nat. Bank of Denver r. Hammond, 1 Banking Cases, 409 ; 55 Colo., 367.) 4 (Wash., 1899). A national bank or other corporation may be liable in a civil action, at the suit of the injured party, for every wrong which it commits, however foreign to its nature or beyond its granted powers the wrongful transactions may be, in such cases the doctrine of ultra vires having no application. (Pronger v. Old Nat. Bank, 1 Banking Cases, 399 ; 20 Wash., 618.) 438 DIGEST OF NATIONAL BANK DECISIONS. POWERS— Continued. Ultra Vibes Acts and Contracts — Continued. ULTRA VIRES REPRESENTATIONS BY BANK — Continued. 5 (Wash., 3899). In an action against: a national bank, its president and cashier, for damages arising from fraud alleged to have been perpe- trated upon plaintiff by defendants, it appeared that certain notes were the property of the bank ; that the notes were worthless, the payor being insolvent ; and that defendants, without the consent of plaintiff, caused the notes to be forwarded to him, and his account with the bank to be charged with the face value of the notes, falsely representing that the notes were taken for a loan of plaintiff's money made by one of defendants to the maker of the notes, that the maker was insolvent, and that the notes would be paid on demand ; and that the plaintiff was injured thereby to the amount of the verdict. Held, that the evidence made a prima facie case against defendants. (lb.) ILLEGAL CONTRACTS — DEFENSES. 1 (U. S. C. C. A., 1901). An action can not .be maintained on a contract that is illegal or against public policy, where both parties are equally cul- pable. (Hanover Nat. Bank v. First Nat. Bank, 109 Fed. Rep., 421.) 2 (U. S. C. C. A., 1901). A contract in whose consideration and performance nothing illegal or against public policy inheres may be enforced although it may incidentally aid one in evading or violating a law. (lb.) 3 (U. S. C. C. A., 1901). Where a statute commands certain parties to do, or prohibits them from doing, certain acts, and prescribes the pen- alties for their violation of its commands, courts may not inflict other penalties for its violation upon other parties not named in the law by the avoidance of their contracts. (lb.) 4 (TJ. S. C. C. A., 1901). One who has received the benefits of the perform- ance by the plaintiff of a contract which was neither malum in se nor malum prohibitum can not successfully defend an action for the pay- ment of his indebtedness arising therefrom on the ground that he intended to do some illegal act, which was neither a part of the con- sideration or of the performance of the agreement. (lb.) PREFERENCES. Cross references: , Insolvency and receivers — Page. Preferences in insolvency ; S03 Preference of bank as creditor of individual. 1 (U. S. C. C. A., 1898). A bank holding a large portion of the stock of a bank indebted to it as security for the debt is entitled to use its influ- ence to induce the corporation to sell its effects and apply the proceeds to the extinguishment of such debt, a private corporation having, as a general rule, the same power to prefer creditors as that possessed by an individual. (Nat. Bank of Commerce in Denver v. Allen et al., 1 Banking Cases, 53; 90 Fed. Rep., 545.) 2 ( Ky. Appls., 1901 ) . Where an insolvent debtor deposited in bank an amount almost exactly equal to the amount of a note which the bank held against him, and the deposit was applied by the bank to the payment of the note, the making of the deposit was, in effect, a payment to the bank, and therefore an act of preference, under the statute, as no inquiry was ever thereafter made by the debtor as to the deposit, and he must have known when he made it that the bank was bound in law to apply it to the payment of the note or release the surety therein. (Mt. Sterling Nat. Bank v. Priest et al., 64 S. W. Rep., 972 ; 4 Banking Cases, 41.) DIGEST OP NATIONAL BANK DECISIONS. 489 PREFERENCE S— Continued. When payment by third person invalid. 3 (Ala., 1896). The directors of an insolvent corporation, being liable as indorsers upon certain indebtedness owing to a bank, transferred the property and assets of the corporation to one of their number, who assumed all the debts and agreed to pay the same in eighteen months. The assignee sold a portion of such assets to E., who gave the bank a m note for the purchase price, secured by mortgage on the property, and the amount of the note was credited upon the debt due to the bank by the corporation. Held, that the transaction was fraudulent and void as to other creditors. (Berney National Bank v. Guyon, 20 So., 520; 111 Ala., 491.) Dividends, when part of claim secured by mortgage. 4 (111. Sup.). Where a claim proved against the estate of an insolvent con- sists of two items, one of which is secured by mortgage, and is after- wards paid in full out of the proceeds of the mortgaged property, it is error after such payment to order that the claimant be paid dividends proportioned to his entire claim as proved, instead of to the residue of his claim. (In re Bates, 9 N. E„ 257; 118 111., 524, distinguished. First National Bank of Peoria v. Commercial National Bank of Peoria, 111. Sup., 37 N. E., 1019; 151 111., 308.) Lien of attachment. 5 (Mo. Sup., 1894). Though a corporation is insolvent, a creditor not con- nected with the corporation may obtain preference, before a court of equity obtains jurisdiction over it for winding up its affairs, by attach- ing the property of the corporation, though he is advised so to do by a director of the corporation. (La Grange Butter Tub Co. v. National Bank of Commerce, 26 S. W., 710; 122 Mo., 154.) When labor claims have not priority over mortgage. 6 (Tex. Civ. App., 1896). Where a railroad company is in the hands of a receiver, though at the instance of the holders of a mortgage, the \ court has no power to appropriate the corpus of the property to the payment of claims for operating expenses in preference to the prior mortgage debts, in the absence of a statute, at the time the mortgage was executed, giving such claims a prior lien on the corpus of the property. (Farmers and Merchants' National Bank v. Waco Electric Railway and Light Co. (Tex. Civ. App.), 36 S. W., 131 ; Metropolitan Trust Co. v. Farmers and Merchants' National Bank, ib.) CONSTRUCTION OF STATE STATUTES BELATING TO FRAUDULENT CONVEYANCES. What construction accepted. 1 (U. S. Sup. Ct, 1890). This court accepts the construction given to n State statute against fraudulent conveyances by the highest court of the State as controlling. (Peters v. Bain, Griffin v. Peters, 133 U. S., 670.) Construction of Massachusetts statute as to fraudulent conveyances. 2 (U. S. Sup. Ct, 1896). The provisions of sections 96 and 98 of chapter 157 of the public statutes of Massachusetts, invalidating preferences made by insolvent debtors and assignments or transfers made in contempla- tion of insolvency, do not conflict with the provisions contained in Revised Statutes, sections 5136 and 5137, relating to national banks and to mortgages of real estate made to them in good faith by way of security for debts previously contracted, and are valid when applied to claims of such banks against insolvent debtors. National Bank v. Commonwealth (9 Wall., 353) affirmed to the point that it is only when a State law incapacitates a national bank from discharging its duties to the Government that it becomes unconstitutional ; and Davis v. Elmira Savings Bank (161 U. S., 275) affirmed to the point that national banks are instrumentalities of the Federal Government, created for a public purpose, and as such necessarily subject to the 440 DIGEST OF NATIONAL BANK DECISIONS. PREFERENCES— Continued.. CONSTRUCTION OF STATE STATUTES RELATING TO FRAUDULENT CONVEYANCES — Cont'd. paramount authority of the United States, and the two distinct prop- ositions held to be harmonious. (McClellan v. Cbipman, 164 U. S., 347.) Construction of Pennsylvania statute — Fraudulent conveyance — Necessity of recording — Conveyance in trust under Pennsylvania statute. ^ 3 (U. S. C. C. A., 1902). The provision of act of Pennsylvania March 24, 1818, requiring all assignments in trust by debtors on account of ina- bility at the time to pay their debts to be recorded within thirty days, and declaring them to be void if not so recorded, does not apply to a transfer made directly to a creditor for his benefit alone, and the transfer of property to the receiver of a national bank to secure a debt due to the bank is, in effect, one to the bank itself and not in trust and is not within the statute. (McCartney et al. v. Earle, 115 Fed. Rep., 462.) Same — Preferential conveyance — Fraudulent intent. 4 (U. S. C. C. A., 1902). No presumption of a fraudulent intent to hinder and delay other creditors arises from a transfer of property as secur- ity to a bona fide creditor whose debt is due, although it is under- stood by the parties that the effect of the transfer will be to give such creditor a preference, nor can such an intent be inferred from a pro- vision of the instrument of transfer that the property shall be re- turned in case a certain contemplated adjustment of the affairs of the debtor shall be made, which provision is favorable to other cred- itors, (lb.) 5 (U. S. C. C. A., 1902). Evidence held insufficient to establish the invalidity of a transfer of property by an insolvent debtor to the receiver of a national bank by way of security for a debt due the bank, either on the ground of undue influence, duress, a fraudulent intent to hinder and delay creditors, or the insanity of the debtor. (lb.) Construction of Virginia statute as to fraudulent conveyances. 6 (U. S. Sup. Ct, 1890). It is settled law in Virginia that an assignment by a debtor for the benefit of creditors will not be declared void as given " with intent to delay, hinder, or defraud creditors, purchas- ers," etc., unless such an inference is so irresistible as to preclude any other ; that the fact that creditors may be delayed or hindered is not of itself sufficient to vacate the instrument, and that one cred- itor may be preferred over another. (Peters v. Bain, Griffin v. Peters, 133 U. S., 670.) 7 (TJ. S. Sup. Ct, 1890). When an assignment for the benefit of partner- ship and individual creditors includes all the property of the grant- ors, as partners and individually it should be construed distribu- tively, partnership assets being applied to the payment of partnership debts and individual assets to individual liabilities. (lb.) 8 (U. S. Sup. Ct, 1890). As respects fraud in law, as distinguished from fraud in fact, in a conveyance, if that which is invalid can be sepa- rated from that which is valid without defeating the general intent, the maxim " Void in part, void in toto " does not necessarily apply, but the instrument may be sustained notwithstanding the invalidity of a particular provision. (lb.) 9 (U. S. Sup. Ct, 1890). An assignment for the benefit of creditors, with preferences, authorized the trustees to " make sale of the real and other personal estate hereby conveyed, at public auction or private sale, at such time or times, and place or places, and after such notice as to them shall seem best, and they may make such sale upon such terms and conditions as to them shall seem best, except that at any sale of said property, real or personal, at public auction, any creditor secured by this deed in the second class above enumerated shall have the right to purchase any part or parcel of said property so sold, and DIGEST OF NATIONAL BANK DECISIONS. 441 PREFERENCE S— Continued. CONSTRUCTION OF STATE STATUTES RELATING TO FBAUDULENT CONVEYANCES — Cont'd. pay the said trustees therefor, at its full face value, the amount found due such purchaser secured by this deed, or so much thereof as may be necessary to enable such creditor to complete the payment of his purchase money, and to enable as many creditors as possible to become bidders on these terms, the said trustees may have the real estate hereby conveyed, or any part thereof, laid off into lots or parcels, as they may think best." Held, that the deed was not void in law because of the insertion of this provision. (lb.) 10 (U. S. Sup. Ct, 1890). The individual members of a private banking house, who were also the controlling directors in a national bank, made an assignment of their property for the benefit of creditors, which assignment was assailed as fraudulent in several matters, among which were alleged frauds upon the national bank, and frauds upon their own depositors previous to the assignment. Held, that violations of their fiduciary relations to the bank, or their treatment of their own depositors, did not render the assignment of all their property for the benefit of their creditors fraudulent for that reason, (lb.) 11 (U. S. Sup. Ct, 1890). The knowledge by a director and stockholder in a national bank that the bank is insolvent does not invalidate an assignment of all his property for the benefit of his creditors, with preferences made with such knowledge. (lb.) 12 (U. S. Sup. Ct, 1890). The court below was right in finding no evidence in this case of a fraudulent intent on the part of the firm or either of its members to hinder and delay their creditors. (lb.) 13 (U. S. Sup. Ct, 1890). The individual partners in a private bank were also directors in a national bank, and by reason of their position became possessed of a large part of the means of the national bank, which they used in their own business. They assigned all their property to trustees for the benefit of their creditors. The national bank also suspended, and went into the hands of a receiver. Held, (1) that the receiver was entitled to the surrender of such of the property as had been actually purchased with the moneys of the bank as he might elect, but that purchases made and paid for -out of the general mass could not be claimed by the receiver unless it could be shown that moneys of the bank in the general fund at the time of the purchase were appropriated for that purpose; (2) that the receiver was not estopped by such election and taking from receiving the full benefit of the deed of trust in favor of the national bank, (lb.) 14 (U. S. Sup. Ct, 1890). In Virginia, trustees and beneficiaries in a deed of trust to secure bona fide debts occupy the position of purchasers for a valuable consideration. (lb.) 15 (U. S. Sup. Ct, 1890). When the counsel of an insolvent debtor draws an assignment of his client's property to himself as trustee for the benefit of creditors, he may be presumed to have had knowledge of the dealings of the insolvent with his creditors. (lb.) 16 (U. S. Sup. Ct, 1890). Under the circumstances of this case a decree directing the payment of the costs of suit out of the trust fund is correct. (lb.) 17 (U. S. C. C. A., 1901). Under the laws of Virginia as they existed in 1896, a debtor, although insolvent, had the right to prefer certain creditors, if done in good faith and for a valid consideration, and such preferences are not invalid because they operate to hinder and delay other creditors. (Kemp et al. v. Nat. Bank of the Republic of New York, 3 Banking Cases, 652 ; 109 Fed. Rep., 48.) PRESIDENT. (See Officers.) 442 DIGEST OF NATIONAL BANK DECISIONS. PROTEST. Cross references; Pa s £ Checks — Protest of checks 65 Collections — Liability for negligence in presentation 103 Duty of bank to take proper steps to charge indorser 105 Evidence — Evidence of protest and notice 158 Negotiable paper — Protest of note 287 REAL ESTATE. Cross references: Officers — Sale of land by committee of directors. _ 317 Powers — Power to hold or acquire real estate _ _ 424 Taxation — Taxation of real estate 508 Fraudulent conveyance of realty. 1 (U. S. C. C. A., 1900). Deeds executed by one who was largely indebted as Indorser of notes, of a corporation in which he was a stockholder, conveying property to his children, for a consideration that was not inadequate, and which was fully paid by taking up such of the obligations upon which the father was indorser as he directed, are not fraudulent as to other creditors of the grantor, where preferences were permitted by the laws of the State, nor are they rendered fraudu- lent by the fact that after their delivery they were withheld from record, by one to whom they were intrusted to be recorded, in the interests of the corporation, to enable it to secure renewals of other notes or new loans on the credit of the grantor as indorser, where such withholding was not in pursuance of any agreement between the parties, and was without the direction or knowledge of the grantees. (Corwine et al. ■;;. Thompson Nat. Bank of Putnam et al., 105 Fed. Rep., 196.) 2 (U. S. C. C. A., 1900). A grantee of land conveyed to her by her father for an adequate consideration authorized her husband to act for her in the transaction. The father was an indorser in a large amount for an insolvent corporation in which both he and the grantee's husband were interested. The conveyance, together with others made at the same time to other children, included practically all the grantor's property, and the consideration received therefor was ap- plied in payment of certain of the notes on which he was liable. After the delivery of the deeds they were intrusted to a third person to be recorded, but at the instance of the grantee's husband he with- held them from record for several months, during which time the hus- band, by concealing the fact of the conveyances from the creditors of the corporation, secured further renewals of its notes as well as new loans upon the indorsement of the grantor. Held, that as against those who were so induced to renew their notes to make loans on the faith of the indorser's solvency, such grantee was .estopped by the acts of her agent to claim title to the property, and as to such creditors the deed to her was void. (lb.) 3 (U. S. C. C. A., 1900). Where a daughter, who owned an undivided three- fourths interest in certain lands, the other one-fourth being owned by her father, had made valuable improvements on such lands, and a conveyance to her by her father of his one-fourth interest was held void as against his creditors, she is entitled to an allowance for the enhanced value of such interest by reason of her improvements. (lb.) DIGEST OF NATIONAL BANK DECISIONS. 443 REAL ESTATE— Continued. Presumption of regularity of bank's proceedings. 4 (U. S. C. C. A., 1896). The fact that trustees holding lands in trust for a national bank formally and regularly execute a deed thereof to a. third party itself raises a presumption that the deed was made pur- suant to a regular resolution of the bank's board of directors, and the deed must be held sufficient to convey the legal title where there is nothing to rebut the presumption. (Butler et al. v. Cockrill, 73 Fed. Rep., 945.) When secret trust in realty void. 5 (111.). Where one conveys property to another and by some secret agree- ment retains an interest, such conveyance is fraudulent as to subse- quent creditors. (Hutchinson National Bank v. Crow, 56 111. App., 558.) Action to make judgment effective against realty. 6 (Nebr. Sup., 1900). A judgment creditor, after an execution has been issued and returned nulla bona, may maintain a suit in equity to make his judgment effective as a lien upon land by removing obstructions calculated to make an execution sale unproductive. (First Nat. Bank of Plattsmouth v. Gibson et al., 84 N. W. Rep., 259; 3 Banking Cases, 61; 60 Nebr., 767.) RECEIVERS. (See Insolvency and Receivers.) REDISCOUNT. Cross references: Accommodation paper — Page. Rediscount by bank when not accommodation indorser 11 Officers — When president of a bank may indorse for rediscount without special authority . 323 Authority of officers to borrow money for bank 328 Powers — Authority to rediscount _.. 415 REDUCTION OF CAPITAL STOCK. (See Capital stock.) REPORT OF CONDITION. Cross references: Officers, civil liability of — Page. Liability of officer for deceit 336 Officers, criminal liability of — False entries in reports of condition 355 Form and contents of reports to the Comptroller. 1 (U. S. Sup. Ct, 1895). The "liabilities" of a national bank, which are required by Revised Statutes, section 5211, to be stated in the reports of the Comptroller of the Currency, include contingent as well as absolute liabilities ; and hence an unmatured note, payment of which at maturity is guaranteed by the bank, should be included in the list of liabilities. (Cochran v. United States, 15 S. Ct., 628; 157 U. S., 286.) 2 (TJ. S. Dist. Ct, 1892). A national bank is not required to conform the headings of the various accounts on its books to any prescribed names, nor to the names stated in the form of report prescribed by the Comptroller, and therefore when a report is called for, if the person making it enters, under the headings in the prescribed form, a state- ment of the bank's condition which is true with respect to the head- 444 DIGEST OF NATIONAL BANK DECISIONS. REPORT OF CONDITION— Continued. 7 ings in said form, he has fulfilled the demands of the law. (United States v. Graves, 53 Fed. Rep., 634.) 3 (U. S. Dist. Ct, 1892). The entry of "Loans and discounts" in reports to the Comptroller does not guarantee the solvency of the makers of the paper, but is a statement that in truth and fact, at the date named in the report, the bank actually held and owned loans and dis- counts to the aggregate so reported. (lb.) 4 (U. S. Dist. Ct, 1892). A director of a bank is personally liable to the bank on paper made to it by a firm of which he is a member, and in making a report of the condition of the bank to the Comptroller the amount of such paper should be entered under the heading of " Lia- bilities of directors (individual and firm) as payers." (lb.) 5 (N. Dak. Sup., 1901). The written report of an officer of a national bank to the Comptroller of the Currency, made pursuant to section 5211, Revised Statutes of the United States, does not purport to give the actual or estimated value of the bank's property, and is incompetent, alone, as a basis from which to deduce the actual value of the bank's stock. (Patterson v. Plummer, 86 N.-W. Rep., Ill ; 3 Banking Cases, 424.) RESIDENCE. Residence. 1 (U. S. C. C, 1871). It will be presumed, so far as the question of juris- diction is concerned, that, the stockholders of a national bank are citizens of the State where the bank is located. (Manufacturers' Nat. Bank v. Baack, 1 N. B. C, 161; 2 Abbott, U. S., 232; 8 Blatch., 147.) 2 (Nev. Sup., 1874). A national bank is a citizen of the State wherein it is located. (Davis v. Cook, 9 Nev., 134 ; 1 N. B. C, 656.) SAVINGS BANKS. Page. Insolvency and receivers: Question as to paying savings bank in full a Federal question 190 Claim of savings bank not preferred _. 212 Organization: Savings bank in District of Columbia may be converted into national bank 403 SHAREHOLDERS. rights of shareholders. What is a shareholder 446 Right of shareholder to examine books of bank 446 Rights of shareholders in general 448 Right to vote at meeting of shareholders 451 transfer of stock. Right of holder to transfer _ 451 When sale complete. 453 When unrecorded transfer prevails over attachment against VENDOR.. 454 Effect of assignment without transfer on books 455 Bank's liability for refusal to transfer. _ 455 Miscellaneous provisions relating to transfer of stock 455 liabilities of shareholders. Liability when money borrowed by order of shareholders 456 Liability of shareholders of a national bank whose assets have been transferred to another bank _ 456 DIGEST 1 OF NATIONAL BANK DECISIONS. 445 SHAREHOLDERS— Continued. assessments. Nature and extent of liability foe assessment 456 Conclusiveness of Comptroller's action 459 Right of Comptroller to make successive assessments 460 Who deemed to be shareholders for assessment 461 Who not chargeable with assessment 464 Validity and effect of transfer 464 Liability of trustee _ . _ 470 Liability of pledgee 471 General propositions as laid down by the Supreme Court in regard to liability of shareholders 474 Liability of married woman 475 Liability of heirs and legatees .... 476 Liability when stock is purchased in name of minors 477 Liability of other national bank owning stock in insolvent bank. _ 477 Liability of state bank or insurance company owning stock in national bank . _ 478 Assessment enforceable against shareholder's estate 479 Compounding shareholder's liability 480 Interest on assessment 481 Shareholder can not prefer creditor. 481 Set-off against assessment 481 actions to enforce liability. Actions by receiver: In general _ _ 483 Actions at law _ 485 Actions in equity 485 Parties, allegations, evidence, burden of proof, practice 486 Insufficient defenses 490 Jurisdiction 494 Limitations 494 Action by creditors 497 Cross references: Agent of shareholders 12 Capital stock — Assessments to restore impaired capital 34 Insolvency and receivers — Receiver's suit in equity to recover dividends. 196 Subscribers to increased stock as creditors 200 Liquidation — Nature pf action to recover assessment when bank in liquidation — Creditor's bill . . 265 Voluntary liquidation — Shareholder's liability — Court's receiver may enforce 266 Officers, civil liability of — Action by shareholders against directors 345 Organization — Conversion of State banks — Rights of stockholders, how effected 405 Powers- Purchase of stock in pther banks, „ 420 446 DIGEST OF NATIONAL SANK DECISIONS. SHAREHOLDERS— Continued. Rights of Shareholders. what is a shareholder. What is a shareholder. 1 (U. S. C. C. A., 1895). A "shareholder" in a corporation, within Revised Statutes, sections 5139, 5151, creating individual liability against shareholders of national banks, is one who has a proportionate interest in its assets and is entitled to take part in and control and receive its dividends. In all essential particulars he is distinguish- able from one who holds shares of stock as collateral security for a loan. (Beal v. Essex Savings Bank, 67 Fed. Rep., 816.) One may Tie shareholder without a certificate. 2 (TJ. S. Sup. Ct, 1891). Subscriptions to stock and payment in full and entry of name on books as a stockholder makes subscriber a share- holder without taking out a certificate. (Pacific National Bank v. Eaton, 141 U. S., 227.) RIGHT OF SHAREHOLDER TO EXAMINE BOOKS OF BANK. Section, 1671, Alabama Code (1886), applies to national banks. 1 (Ala.). Code of Alabama, 1886, section 1677, which provides that stock- holders of all corporations have the right to have access to and inspection and examination of the books, records, and papers of the -corporation at all reasonable and proper times, applies to national banks located within the State; and mandamus will lie against the officer having custody of the books to enforce the right. (Winter v. Baldwin, 7 So., 734; 89 Ala., 583.) 2 (Ala.). The rights of stockholders are not curtailed, nor the statute in conflict with the United States Revised Statutes, which provide that national banks shall not be subject to visitorial powers other than those authorized by Congress or vested in the courts of justice, (lb.) A shareholder or other person having a real interest and laudable object may examine books of a bank. 3 (La., 1899). A shareholder or other person with a laudable object to accomplish or a real and actual interest upon which to predicate his request for information disclosed by the books of the bank, is given by the fundamental law the right to inspect them. (State ex rel. Burke v. Citizens' Bank of Jennings, 1 Banking Cases, 369; 51 La. Ann., 426.) 4 (La., 1899). The claim that the right of inspection is strictly personal to the shareholder and can not be exercised by another for him and in his stead, as an agent or executor, is without force ; for, if it were true, the possession of the right would be futile in many instances. (lb.) 5 (La., 1899). A by-law of a corporation which provides that no stock- holder or other person shall have the right to inspect the books with- out special authority from the board of directors must be subordi- nated to the provisions of the charter and the general and funda- mental law. (lb.) Notes to State ex rel. Burke v. Citizens' Bank of Jennings. 3 Banking Cases, 369. (1899.) 6. Bight of stockholder to inspect corporate books— Common law. — At common law stockholders have the right to examine and inspect the books and records of the corporation of which they are members, at all reasonable times, in order that they may thereby be informed of the condition of the corporation, its purpose, and business. The doctrine of the law is that the books and papers of an incorporated company, although of necessity kept in the hands of some proper officer or agent, are the property of all the shareholders. Angell & Ames on Corporation, sec. 681 ; Field on Corporations, sec. 118 ; DIGEST OF NATIONAL BANK DECISIONS. 447 SHAREHOLDERS— Continued. Rights of Shareholders — Continued. BIGHT OP SHAREHOLDER TO EXAMINE BOOKS Or BANK — Continued. Cook on Stock and Stockholders, sec. 311 ; (La.) Cockburn v. Union Bank, 13 La. Ann., 289; (N. J.) Huyler r. Cragin Cattle Co., 40 N. J. Eq., 392; 12 Am. & Eng. Corp. Cas., 159; (N. J.) Rosenfeld v. Einstein, 46 N. J. L., 479; (N. Y.) People v. Throop, 12 Wend., 183; (Pa.) Commonwealth v. Phoenix Iron Co., 105 Pa. St., Ill; (Vt.) Lewis v. Brainerd, 53 Vt, 519. Same — Statutes (N. Y. ). And this common-law right is confirmed by statute in most of the States of this country and in England. And it has been held that the common-law right of inspection remains, although a special statutory right is also given. (People v. Lake Shore & M. S. R. Co., 11 Hun, N. Y., 1.) (Ala.) A State statute giving a stockholder right to inspect the books of a corporation applies to national banks located within the State. (Winter v. Baldwin, 89 Ala., 583 ; 31 Am. & Eng. Corp. Cas., 400.) (Ala.) And sections 5240 and 5241, Revised Statutes of the United States, providing for national-bank examiners and the exemption of these corporations from all visitorial powers other than those author- ized by Congress or vested in courts of justice, does not affect this statutory right of the stockholder. (Winter v. Baldwin, 89 Ala., 583 ; 31 Am. & Eng. Corp. Cas., 406.) Same — Qualification of rule. — The stockholders, directors, or incorpora- tors of a corporation or banking company may, at proper times and for special and proper purposes, inspect and copy the books of the corporation or company. (England) Rex v. Merchant Tailors Co., 2 B. and Ad., 115; 22 E. C. L., 40 ; (England) In re Burton & Saddlers Co., 31 L. J. Q. B„ 62; (England) Rex v. Babb, 3 T. R., 579; (England) Williams v. Prince of Wales Ins. Co., 23 Beav., 338; (Ala.) Foster v. White, 86 Ala., 467 ; (La.) Hatch v. City Bank, 1 Rob. La., 470; (N. J.) Perry v. Williams, 4 N. J. L., 332; (N. J.) Huyler v. Cragin Cattle Co., 40 N. J. Eq., 392 ; 42 N. J. Eq., 139; (N. Y.) Brouwer v. Cotheal, 10 Barb., N. Y., 216 ; 5 N. Y., 562 ; (N. Y.) People v. Mott, 1 How. Pr. N. Y., 247; (N. Y.) People v. Cornell, 47 Barb., N. Y., 329; 35 How. Pr. N. Y., 31; (N. Y.) Central National Bank v. White, 37 N. Y. Sup. Ct, 297; 70 N. Y., 220 ; (Pa.) Phoenix Iron Co. v. Com., 113 Pa. St., 513. Same — By agents. — And such inspection- may be made through an expert or other agent. (England) Williams v. Prince of Wales Ins. Co., 23 Beav., 338; (England) Bonnardet v. Taylor, 1 J. & H, 386; (England) Draper v. Manchester, etc.,,R. Co., 7 Jur. N. S., pt. 1, 86 ; (England) In "re Joint Stock Discount Co., 36 L. J. Eq., 150; (England) Attorney-General v. Whitwood, 40 L. J. Ch., 592; (England) Lindsay v. Gladstone, L. R. 9 Eq., 132 ; (Ireland) Hide v. Holmes, 2 Moll., 372 ; (Ireland) Blair v. Massey, L. R. 5 Ir. Eq., 623; (Ala.) Foster v. White, 86 Ala., 467; (Ga.) Ballin v. Ferst, 55 Ga., 546 ; (La.) State v. Bienville Oil Works Co., 28 La. Ann., 304; But see — (England) Bartley v. Bartley, 1 Drew, 233; (England) Summerfield v. Pritchard, 17 Beav., 9 ; 448 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Rights or Shareholders — Continued. BIGHT OF SHAREHOLDER TO EXAMINE BOOKS OF BANK Continued. (England) Draper v. Manchester R. Co., 3 De G. F. & J., 23 ; (England) In re West Devon, etc., Mine, 27 Ch. D., 106; (N. Y.) Bank of Utica v. Hilltard, 6 Cow., N. T., 62. Same — Mandamus. — The right of the shareholder to inspect the books of the company is one which he can enforce by mandamus, in the discretion of the court. (La.) Cockburn v. Union Bank, 13 La. Ann.,- 289; (Mass.) St. Luke's Church v. Slack, 61 Mass., 1 Cush., 226; (Miss.) American Railroad Frog Co. v. Haven, 101 Miss., 398; 3 Am. Rep., 377; (N. J.) State v. Goll, 31 N. J. L., 2 Vr., 285; (N.Y.) In re Sage v. Lake Shore and M. S. R. Co., 70 N. Y., 220; (N.Y.) People v. Pacific Mail Steamship Co., 50 Barb., N. Y., 280; (N. Y.) People v. Mott, 1 How., N. Y. Pr., 247 ; (N.Y.) People v. Lake Shore and M. S.-R. Co., 11 Hun., N. Y., 1; (N.Y.) People v. Throop, 12 Wend., N. Y., 183. 7 (N. Y. Appls., 1902). The supreme court has power, in its discretion, to compel the officers of a national bank in process of liquidation, on expiration of its charter by limitation, to exhibit books, papers, and assets of the bank to the stockholders, and to permit them to ex- amine and take extracts therefrom. (Turtle et al. v. Iron Nat Bank of Plattsburg et al., 62 N. E. Rep., 761; 4 Banking Cases, 300; 170 N. Y., 9.) 8 (N. Y. Appls., 1902). Where the discretion of the supreme court in issu- ing a writ of mandamus to compel directors of a national bank in liquidation to allow stockholders to examine its books and papers has been lawfully exercised, the act will not be reviewed by the court of appeals. (lb.) 9 (N. Y., 1905). Under Revised Statutes U. S., 5210, a shareholder of a national bank is entitled to examine its list of shareholders and to make extracts therefrom for the purpose of negotiating for the pur- chase of stock. (People v. Consolidated National Bank, 94 N. Y. Supp., 173.) Amount in dispute must exceed two thousand dollars to give United States cir- cuit court jurisdiction in an application for a icrit of mandamus to compel association to permit shareholder to examine list of share- holders. 10 (U. S. C. C, 1905). On an application to a Federal court by a share- holder in a national banking association for a writ of mandamus to compel the association to permit him to inspect a list of its share- holders, based on Revised Statutes 5210, the pleadings must show that the matter in dispute exceeds the value of $2,000 to give the court jurisdiction. (Xarge v. Consolidated Nat. Bank, 137 Fed. Rep., 168.) Original action for mandamus. 11 (U. S. C. C, 1905). A Federal court has power to issue a mandafln only in the exercise of a jurisdiction where such proceeding is ancillary, (lb.) RIGHTS OF SHAREHOLDERS IN GENERAL. Rescission of fraudulent stock sale. 1 (U.S. Sup. Ct, 1901). Assuming that the defendant became a share- holder in a national bank in consequence of fraudulent representa- tions of the bank's officers, two questions are presented for deter- mination : 1. Whether such representations, relied upon by defend- ant, constituted a defense in this action, brought by the receiver only for the purpose of enforcing the individual liability imposed by sec- tion 5151, Revised Statutes, upon shareholders of national banking DIGEST OF NATIONAL BANK DECISIONS. 449 SHAREHOLDERS— Continued. Rights of Shareholders — Continued. RIGHTS OF SHAREHOLDERS IS GENERAL — Continued. associations? which question is answered in the negative; and, 2, Can the defendant, because of frauds of the bank whereby he was induced to become a purchaser of its stock, have a judgment against the receiver, on a counterclaim for money paid by him for stock, to be satisfied out of the bank's assets and funds in his control and possession? which question is also answered in the negative. (Lan- try v. Wallace, 182 U. S., 530.) 2 (U. S. Sup. Ct, 1901). The present action is at law, its object being to enforce a liability created by statute for the benefit of creditors who •have demands against the bank of which the plaintiff is receiver. If the defendant was entitled, under the facts stated, to a rescission of his contract of purchase, and to a cancellation of his stock certificate, and, consequently, to be relieved from responsibility as a shareholder of the bank, he could obtain such relief only by suit in equity to which the bank and the receiver were parties. (lb.) 3 (U. S. Sup. Ct, 1901). Whether a decree based upon the facts set forth in the answer, even if established in a suit in equity, would be con- sistent with sound principle, or with the statute regulating the affairs of national banks and securing the rights of creditors, is a question upon which this court does not express an opinion. (lb.) -4 (U. S. Sup. Ct., 1901). The purchase of this stock by the bank under the circumstances was ultra vires, but that did not render the purchase void. (lb.) 5 (U. S. Sup. Ct., 1901). If a subscriber to the stock of a national bank becomes a shareholder in consequence of frauds practiced upon him by others, whether they be officers of the bank or officers of the Gov- ernment, he must look to them for such redress as the law author- izes, and is estopped as against creditors to deny that he is a share- holder, within the meaning of section 5151, if at the time the rights of creditors accrued he occupied and was accorded the rights apper- taining to that position. (Scott v. De Weese, 181 V. S., 202.) 6 (U. S. C. C. A., 1899). Even though a stockholder in a national bank has been induced to become such through fraud which would render his purchase or subscription voidable as between himself and the bank, yet, if he has knowingly permitted himself to be registered upon the corporate books as a shareholder prior to its insolvency, and has remained such for any considerable length of time, and until its insolvency has intervened, he can not then be permitted to rescind his purchase or subscription so far as the corporate creditors are concerned. (Lantry v. Wallace, 2 Banking Cases, 314; 97 Fed. Rep., 865.) 7 (U. S. C. C. A., 1898). A subscription to the stock of a national bank, though induced by the fraud of its officers, is not void, but voidable only at the election of the subscriber ; and where he remains and acts as a stockholder for years and receives dividends as such, and until the bank is placed in liquidation, though without knowledge of the fraud or means of ascertaining it, he can not then, as against the bank's creditors, exercise the option to rescind the contract of sub- scription, whatever his rights may have been as against the cor- poration. (Scott v. Latimer, 89 Fed. Rep., 843.) 8 4U. S. C. C. A., 1893). The receipt by a bank of the proceeds of a fraudu- lent sale of stock belonging to it, and the subsequent appointment of a receiver, give its creditors no such right in the proceeds as will prevent the purchaser from rescinding the sale and requiring resti- tution. (Merrill v. Florida Land and Improvement Co., 60 Fed. Rep., 17.) 9 (U. S. C. C. A., 1896). While the N. bank was in embarrassed cir- cumstances, plaintiff was induced, by the fraudulent misrepresenta- 4049—05 29 450 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Rights of Shareholders — Continued. EIGHTS OF SHAREHOLDERS IN GENERAL Continued. tions of its cashier, to subscribe, in May, 1890, for 62 shares of a proposed increase of its capital stock, and to pay in a large sum of money therefor. In the following November the bank failed and the plaintiff, who lived at a distance, in another State, receiving then his first intimation that anything was wrong, proceeded to make inqui- ries, and, as a result, instituted proceedings before the Comptroller of the Currency to have the stock standing in his name declared void, and himself not a stockholder. These proceedings failing, he took steps in May, 1891, to have a bill filed to rescind his subscrip- tion. At the request, however, of parties who were trying to reor- ganize the bank, he consented to withdraw such suit, and surrender his stock to 'be canceled, upon an express agreement that it should be without prejudice to his right to sue the bank for the fraud by which he had been induced to subscribe and pay his money therefor. Plaintiff did not participate in the reorganization, and consistently maintained that he was not a stockholder, and that the bank was liable to him for the money paid. Upon the reorganization the creditors of the bank accepted in settlement a payment in cash and certain certificates of indebtedness. In November, 1891, plaintiff brought this action against the bank to recover the money paid by him as a deposit. In December, 1892, the bank failed again. Held, that the occurrence of the insolvency of the bank before the com- mencement of plaintiff's action did not preclude hiin from rescind- ing his subscription and recovering the money paid for his stock. (Newton National Bank v. Newbegin, 74 Fed. Rep., 135.) 10 (U. S. C. C, 1898). A subscription of stock induced by fraud may be rescinded after as well as before the corporation ceases to be a going concern, where no considerable time has elapsed since the subscription, if the subscriber has taken no active part in the man- agement of the corporation's affairs, has been diligent in discovering the fraud and in taking steps to rescind, and where no considerable amount of corporate indebtedness has been created since the sub- scription, and is still unpaid. (Wallace v. Bacon, 86 Fed. Rep., 553.) 11 (U. S. C. C, 1898). An answer seeking to rescind a subscription to stock of an. insolvent national bank, on the ground that it was obtained by fraud, must show that the creditor for whose benefit the assessment sought to be enforced was levied did not become such during the time defendant held such stock, and allege facts showing that defendant has not been guilty of laches. (lb.) 12 (U. S. C. C, 1898). A national bank went into liquidation November 30, 1896. An action against a stockholder to enforce an assessment made by the Comptroller of the Currency was commenced November 9, 1897. Defendant's answer set up in detail the fraud by which he had been induced to subscribe and pay for stock, alleged that he had ever since been a resident of a distant State, and that, until a short time before the filing of the complaint, he had no opportunity of discovering the fraud. Held, that diligence was not shown. (lb.) 13 (U. S. C. C, 1900). In exceptional cases, where there is no ground for an inference that credit was extended to a national bank on the faith of the ownership of stock by a defendant, he should be permit- ted to rescind his agreement of subscription after insolvency of the bank, where it was induced by fraud, as well when there are creditors as when there are none. There should be no presumption of law to overcome the fact capable of proof in such a case. (Stuf- flebeam v. De Lashmutt, 101 Fed. Rep., 367.) 14 (S. Dak., 1894). One who has been induced to purchase bank stock by deceit of president as to bank's condition does not forfeit his right to rescind by the fact that he was shortly afterwards elected cashier, and did not, during his services as such, attempt rescission, if he had no knowledge of the condition of the bank. (National Bank of Dakota v. Taylor, 58 N. W., 297; 5 S. Dak., 99.) DIGEST OF NATIONAL BANK DECISIONS. 451 SH AREHO LDERS— Continued. Rights op Shareholders — Continued. RIGHTS OF SHAREHOLDERS IN GENERAL — Continued. State laws affecting' shareholders. 15 (U. S. Sup. Ct, 1876). A State statute required, under a penalty for his neglect or refusal, the cashier of each national bank within the State to transmit annually to the clerks of the several towns in which any stock or share holder should reside a true list of the names of such stock or share holders on the books of such banking association, together with the amount of money actually paid in on each share. Held, that the statute was valid. (Waite v. Dowley, 94 U. S., 527 ; 1 N. B. C, 137.) RIGHT TO VOTE AT MEETING OF SHAREHOLDERS. 1 (U. S. C. C, 1888). The provision of section 2144, Revised Statutes, which disqualifies shareholders " whose liability is past due and unpaid " from voting at meetings of shareholders, applies only to liability for unpaid subscriptions for stock. (United States ex rel. v. Barry, 36 Fed. Rep., 246.) 2 (U. S. C. C. A., 1898). A stockholder who, by power of attorney, has authorized another to vote his stock at any and all stockholders' meetings " In the same manner as I should do were I there personally present," is estopped by the vote of his proxy as respects any irregu- larity in the proceedings or calls of the meeting, which he could have waived if personally present. (79 Fed. Rep., 558, reversed; Columbia National Bank of Tacoma et al. v. Matthews, 85 Fed. Rep., 934.) 3 (Mass. Sup., 1889). Under the act of Congress, July 12, 1882, extending for the purpose of liquidation the franchises of such national banking associations as do not extend the periods of their charters and mak- ing applicable to them the statute relating to liquidation of banking associations, such an association may continue to elect officers and directors for the purpose of effecting- liquidation. But after the expiration of the term of its charter the stock of such an association is not transferable so as to give the transferee the right to share in the election of directors, and such transferee, not being a stockholder, is ineligible as a director under Revised Statutes, section 5145. (Richards v. Attleboro National Bank, 148 Mass., 187; 3 N. B. C, 495.) Transfer of Stock. bight of holder to transfer. 1 (U. S. Sup. Ct.,1870). The act of 1864 relieves the holder of bank shares from the restrictions imposed by section 36 of the act of 1863 against transferring his shares so long as he was indebted to the bank. (First National Bank of South Bend v. Lanier, 78 U. S. ; 11 Wall., 369.) 2 (U. S. Sup. Ct, 1880). A shareholder in a national bank, while it is a going concern, has the absolute right, in the absence of fraud, to make a bona fide and actual sale and transfer of his shares at any time to any person capable in law of purchasing and holding the same and of assuming the transferrer's liabilities in respect thereto ; and this right is not in such cases subject to the control of the direct- ors or other stockholders. (Johnston v. Laflin, 103 U. S., 800.) 3 (Ind.). Stock in a national bank is transferable only on the bank's books and by no other person than the shareholder, except on proof of authority so to do. (Weyer v. Second Nat. Bank, 57 Ind., 198 ; Koons v. Bank, 89 Ind., 178.) 4 ( Ind. ) . Mandamus may issue to compel officers of a national bank to per- mit the transfer of stock on the books of the bank when such officers refuse to make proper transfers. (State v. First Nat. Bank, 89 Ind., 302.) 452 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Transfer op Stock — Continued. RIGHT OF HOLDER TO TRANSFER — Continued. State can not limit transferable quality of xtocl-. 5 (N. Dak., 1892). It is not competent for State legislation to limit or interfere with the transferable quality of national-bank stock, as the same is left by the statutes of the United States. (Doty v. First National Bank of Larimore, 53 N. W., 77; 3 N. Dak., 9.) Purpose of entry of transfer in bank's books. 6 (U. S. Sup. Ct, 1880). The entry of the transaction hi the books of the association is required, not for the translation of the title, but for the protection of the parties and others dealing with the association, and to enable it to know who are its stockholders. (Johnston v. Laflin, 103 U. S., 800.) 7 (111. Sup., 1872). Shares iu national banks are in the nature of choses in action. They are mere demands for dividends as they become due. The certificates of stock are merely evidence of the holder's title to a given share in the property and franchises of the corpora- tion of which he is a member. The bank is the trustee of the stock- holders, who must come to its counter for their dividends and their share of assets on final liquidation, and no transfer of stock can b<>. completed until shown upon the books of the bank. (First National Bank of Mendota v. Smith, 65 Illinois, 44; 1 N. B. C, 390.) Rules governing transfer. 8 (U. S. Sup. Ct, 1880). The transfer of shares in national banking asso- ciations is not governed by different rules from those which are ordinarily applied to the transfer of shares in other corporate bodies.. (Johnstons. Laflin, 103 U. S., 800.) 9 (U. S. Sup. Ct, 1880). Und^er the pretense of prescribing the manner thereof, an association can not clog the transfer with useless restric- tions, or make it dependent on the consent of the directors or other stockholders. (lb.) 10 (U. S. C. C, 1883). The rules which regulate the transfer of the stock of national banks are to be found in the statutes of the United States. The national banking act prescribes no exclusive method of transfer, / but authorizes every association t<5 do so. The decisions of the courts of the State in which the bank may be located do not control it. (Scott et al. v. Pequonnock National Bank, 15 Fed. Rep., 494.) Duty of corporation officers to see that a transfer of shares of stock is prop- erly made, either by owner himself or by a person having authority from him. 11 (U. S. Sup. Ct, 1878). The officers of a corporation are the custodians of its books, and it is their duty to see that a transfer of shares of its capital stock is properly made, either by the owner himself or by a person having authority from him. In either case they must ■act upon their own responsibility. Accordingly, when the name of the owner of a certificate of stock had been forged to a blank form of transfer, and to a power of "attorney indorsed on it, and the pur- chaser of the certificate in this form, using the forged power of attorney, obtained a transfer of the stock on the books of the cor- poration. Held, in a suit by such owner against the corporation, that he was entitled to a decree compelling it to replace the stock on its books in his name, issue a proper certificate to him, and pay him the dividends received on the stock after its unauthorized transfer, or to an alternative decree for the value of the stock, with the amount of the dividends. (Western Union Telegraph Co. v. Daven- port, 97 U. S., 369.) 12 (U. S. Sup. Ct., 1878). The negligence of their guardian can not preclude minors from asserting, by suit, their right to stock belonging to them which was so sold and transferred. If competent to transfer DIGEST OP NATIONAL BANK DECISIONS. 453 SHAREHOLDERS— Continued. Transfer of Stock — Continued. RIGHT OF HOLDER TO TRANSFER — Continued. it or to approve of the transfer made they must, to create an estop- pel against them, have, by some act or declaration by which the cor- poration was misled, authorized the use of their names or subse- quently approved such use by accepting the purchase money with knowledge of the transfer ; but under the statute of Ohio, where the minors who are the complainants herein resided, they were not, nor without the authority of the probate court was their guardian, competent to authorize a sale of their property, (lb.) WHEN SALE COMPLETE. When sale is complete and title passes. 1 (U. S. Sup. Ct., 1880). When a shareholder, acting in good faith, delivers his certificates of stock, with a blank power of attorney for making the transfer, and receives the purchase money, the sale is complete and the title passes. (Johnston v. Laflin, 103 U. S., 800.) 2 (IT. S. Sup. Ct., 1880). Title to stock passes on delivery of certificates to purchaser with authority to have shares transferred on books of bank. (lb.) 3 (U. S. C. C, 1887). Defendant, being indebted to the bank of which he was cashier, transferred to it on the books of another bank the stock which he held in the latter, but did not deposit the certificates for such stock in his own bank and take up his paper held by it until some time later. Held, that the title of defendant's bank to the stock transferred dated from the deposit of the certificates with it and not from the transfer on the books of the other bank. (Witters v. Sowles's Assignees et al., 32 Fed. Rep., 762.) Transferrer liable until transfer noted on hooks. 4 (U. S. C. C, 1904). Defendant, prior to the failure of a national bank in which his son was a director, owned certain shares of the bank's stock, which he sold to his son, receiving in payment a demand note, secured by certain collateral. At the time of the sale the son prom 1 ised that he would see that the shares were properly transferred, but he failed to do so. Defendant made no attempt to see that the stock was transferred, and it stood in his name on the books of the bank at the time of its failure. Held, that the son was prima facie the father's agent to transfer the shares, and that in the absence of proof that the transfer was in good faith, and of a prompt attempt to have the stock transferred on the books of the bank, the father was liable to assessment thereon. (Schofield v. Twining, 127 Fed. Rep., 486.) 5 (U. S. C. C, 1877). A shareholder who disposes of his stock will continue to be liable thereon until the transfer is noted on the books of the association. (Bowdell v. Farmers and Merchants' National Bank of Baltimore, 2 N. B. C, 146.) When purchaser of stoclc estopped to deny sale was real. C (IT. S. C. C, 1885). The sale by the president of a national bank, to him- self and the cashier, of the stock of the bank owned by the bank may be ratified by the bank or its legal representative; but a sale by himself to the bank" of its own stock, where he acts in the double capacity of seller and buyer, can not be ratified when the purchase of the stock by the bank is not necessary to prevent loss upon a debt previously contracted. In the one case the sale of the stock is en joined by law, and its sale by the president may be ratified, however irregular it may have been in the first instance ; but the purchase of its own stock by the bank is interdicted by law, and for this act there can be no authorization in advance and no ratification afterwards. (Bundy v. Jackson, 24 Fed. Rep., 628.) 45-t DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Transfer of Stock — Continued. when sale complete — continued. When hank must recognise transfer hy foreign executor. 7 (U. S. C. C, 1880). In the absence of any provision in the by-laws or articles of association of a national bank to the contrary, such a bank is bound under the laws of Pennsylvania to recognize a transfer of its stock by a foreign executor duly appointed in another State. (Hobbs v. Western National Bank, 8 Weekly Notes of Cases, 131; 2 N. B. C, 187.) WHEN UNRECORDED TRANSFER PREVAILS OVER ATTACHMENT AGAINST VENDOR. 1 (U. S. C. C, 1883). Precedence should be given to unrecorded transfers of shares of stock of a national bank which had passed no by-law on the subject, located in a State whose courts leaned strongly against such transfers, but whose statutes gave the attaching cred- itors no peculiar rights, by delivery of certificates and a written assignment with power to transfer, both executed in blank, over sub- sequent attachment of a creditor of the original vendor in whose name the shares still stood on the books of the bank. (Scott et al. v. Pequonnock National Bank, 15 Fed. Rep., 494.) 2 (U. S. C. C, 1883). Where no specified acts are by positive requirement made prerequisite to the vesting of a valid new title, creditors with- out notice take their debtor's property subject to all bona fide liens and equitable transfers. No registry being required, nonrecording was not evidence of fraud. The tendency is to regard State certifi- cates, attached to an executed blank assignment and power to trans- fer, as approximating to negotiable securities and to favor attaching creditors less than when attachment and sale on execution alone could compel payment of a claim out of debtor's property. Federal courts have so decided.- (lb.) 3 (U. S. C. C, 1883). The courts of Connecticut and Massachusetts have quite rigidly maintained that where a statute or charter prescribes an exclusive manner of transfer of the stock of a corporation, an unrecorded transfer shall not be valid against the attaching creditors of vendor; and the courts of the former have strongly leaned toward a construction of the charters of its corporations compelling record of such transfers. (lb.) 4 (U. S. C. C, 1886). On December 30, 1875, A sold certain shares of bank stock to B, and assigned them by transfer written on the back of the certificate. By the by-laws of the bank, stock was transferable only on the books of the company. On December 14, 1878, the shares were attached by a judgment creditor of A and sold and transferred to C. Neither the bank nor the creditor had knowledge of the transfer to B. In January, 1880, B presented his certificate and transfer to the officers of the bank and demanded a transfer of the stock, which was refused, whereupon he brought suit against the bank for such refusal. Held, that the bank was liable in damages for the refusal to transfer the shares. (Hazard v. National Exchange Bank of New- port, 26 Fed. Rep., 94.) 5 (Minn., 1887). An attachment of the shares by the bank, after notice of the assignment, is ineffectual to defeat the prior right of the assignee. (Nicollet National Bank of Minneapolis r. City Bank, 35 N. W. Rep., 577; 38 Minn., 85.) 6 (N. Dak., 1892). Revised Statutes United States, section 5139, providing that the stock of a natiopal bank shall be " transferable on the books of the association in such manner as may be prescribed in the by-laws or articles of association," is for the benefit of the corporation, its shareholders and creditors, only ; and the rights of a transferee of national-bank stock, under an unrecorded transfer, good at common law, are superior to the rights of a subsequent attaching creditor of the transferrer without notice. (Doty v. First National Bank of Larimore, 53 N. W., 77 ; 3 N. Dak., 9.) DIGEST OF NATIONAL BANK DECISIONS. 455 SHAREHOLDERS— Continued. Transfer of Stock — Continued. EFFECT OF ASSIGNMENT WITHOUT TBANSFEE ON BOOKS. 1 (Minn., 1887). Though the shares of stock in defendant bank were made transferable only on the books of the bank, an assignment without such transfer invested the assignee, with an equitable title, which would be protected as against all persons not showing a superior right. (Nicollet National Bank of Minneapolis v. City Bank, 35 N. TV. Rep., 577; 38 Minn., 85.) 2 (Minn, 1887). An assignment of stock transferable only on the books. without such transfer, for the purpose of collateral security, is effec- tual as against the bank asserting a lien for the debt of the stock- holder (contrary to- the Minnesota statute of 1881) ; and its refusal, because of such asserted lien, to make the proper transfer on its books renders it liable to the assignee as for conversion of the stock, (lb.) BANK'S LIABILITY FOR REFUSAL TO TRANSFER. 1 (U. S. Sup. Ct, 1879). B., having duly sold stock of a national bank of Louisiana pledged to him by A., applied to the cashier to have it transferred on the bank books, but the cashier refused, on the ground that A was indebted to the bank. The bank having failed before the transfer could be enforced, B. brought an action of damages against the receiver. Hold, (1) that the action was not barred by the statute of limitations of one year; (2) the cashier having been intrusted by the directors with the duty of transferring the stock of the bank, his refusal was imputable to the bank ; (3) the court below had power, to order the receiver to pay the claim or certify it to the Comptroller. (Case, Receiver, v. Citizens' Bank of Louisiana, 100 U. S., 446; 2 N. B. C, 47.) 2 (U. S. Sup. Ct, 1879). Bank cashier refusing to transfer, on books of bank, shares of capital stock pledged and sold for debt of one of its stockholders, receiver of bank is liable for value of stock at that time if bank had no lien thereon to justify such refusal. (lb.) MISCELLANEOUS PROVISIONS RELATING TO TRANSFER OF STOCK. Vendee of stock liable for unpaid subscription. 1 (U. S. C. C. A., 1890) . One who takes an assignment of stock, accompanied by a transfer to his name on the books, and receives a certificate from the corporation, issued to him in his own name, reciting that he is entitled to so many shares, on each of which a certain sum has been paid, leaving a specified amount " to be paid when called for," is liable as a subscriber for the balance due on the stock. (Glen v. Porter, 73 Fed. Rep., 275.) • Bank's purchase and transfer to its directors of its own stock void. 2 (U. S. Dist Ct, 1878). Where a national banking association purchases shares of its own stock and divides them among its directors, to whom the shares are transferred upon the stock books, the transac- tion is void, and no title passes. (Meyers v. Valley National Bank, 13 National Bankruptcy Register, 34; 2 N. B. C, 156.) After end of term of charter transfers prohibited. 3 (Mass. Sup., 1889). Under the act of Congress July 12, 1882, extending for the purpose of liquidation the franchises of such national bank- ing associations as do not extend the periods of their charters and making applicable to them the statute relating to liquidation of bank- ing associations, such an association may continue to elect officers and directors for the purpose of effecting liquidation. But after the expiration of the term of its charter the stock of such an association is not transferable so as to give the transferee the right to share in the election of directors, and such transferee, not being a stockholder, 456 DIGEST OF NATIONAL BANK DECISIONS. . SHAREHOLDERS— Continued. Transfer or Stock — Continued. MISCELLANEOUS PROVISIONS "RELATING TO TRANSFER OF STOCK Continued. is ineligible as a director under Revised Statutes, section 5145. (Richards v. Attleboro National Bank, 148 Mass., 187; 3 N. B. C, 495.) When transfer of certificate waives right to dividends. 4 (N. C, 1894). Where one to whom the dividends on certain stock were bequeathed during her life or widowhood, after which the stock was to go to her daughter, consented to the transfer of the certificate of the stock to her daughter, she waived all claim to the dividends thereon. (Kennedy v. First National Bank of Wilson, 20 S. E., 375; 115 N. C, 223.) When specific performance of contracts to sell denied^ 5 (Pa. Sup., 1879). In an equitable action to enforce specific performance of an agreement to sell shares in a national bank, which the pur- chaser wished to obtain for the purpose of securing control of the bank, held, that specific performance would not be decreed (1) because, generally, equity will not enforce specific execution of a contract relating to personal chattels, and (2) because a decree enforcing the agreement in question would be against public policy. (Foil's Appeal, 21 Alb. L. J., 27 ; 2 N. B. C, 411 ; 91 Pa., 434.) Liabilities of Shareholders, liability when money borrowed by' order of shareholders. 1 (N. C. Sup., 1900). Where stockholders of an insolvent national bank authorize the trustee of the bank to borrow money on their credit to pay the bank's liabilities, and agree to repay the deficiency between the sum borrowed and the sum realized from the bank's assets, the bank, its assets having been exhausted, and trustee are not necessary parties to an action to recover the money so loaned. (Hanover Nat. Bank v. Cocke et al., 37 S. E. Rep., 507; 3 Banking Cases, 249.) 2 (N. C. Sup., 1900). Where a guardian who holds stock for his ward in an Insolvent national bank enters into an agreement with the other stockholders authorizing the trustee of the bank to borrow money on their credit to pay its liabilities for the purpose of avoiding unnecessary expense, the agreement is binding upon the ward. (lb.) LIABILITY OF SHAREHOLDERS OF NATIONAL BANK WHOSE ASSETS HAVE BEEN TRANS- FERRED TO ANOTHER BANK. 1 (U. S. C. C. A., 1904). Where a national bank assumed the debts of an insolvent bank contemplating liquidation, in consideration of a transfer of certain of the bank's available assets, and certain notes for the balance, such notes represented the " contracts, debts, and' engagements " of the insolvent bank in equity, for which the stock- holders were liable, as provided by Rev. Stat. 5151. (George et al. i\ Wallace, Brownlee et al. e. Same, Morsman v. Same, Poppleten <\ Same, Morton et al. v. Same, McCague Inv. Co. et al. v. Same, 135 Fed. Rep., 286.) Assessments. nature and extent of liability for assessment. Liability statutory. 1. The personal liability of a stockholder in a national banking associa- tion is statutory. (U. S. Sup. Ct, 1869) Kennedy v. Gibson, 75 U. S., 498; (U. S. C. C. A., 1898) Scott v. Latimer, 89 Fed. Rep., 843; (Mich. Sup., 1889) Foster v. Broas (Foster v. Row), 79 N. W., 696; 120 Mich., 1 ; 2 Banking Cases, 700, and note at end of case. DIGEST OF NATIONAL BANK DECISIONS. 457 SHAREHOLDERS— Continued. Assess ments — Continued. NATURE AND EXTENT OF LIABILITY FOR ASSESSMENT Continued. 2 (U. S. C. C, 1899). The liability of a stockholder in a national bank, who has made full payment for his stock, to pay assessments for the benefit of the bank's creditors is not contractual, but is a conditional liability, imposed by law as an incident to ownership of the stock. (Aldrich v. Skinner, 98 Fed. Rep., 375.) 3 (U. S. C. C. A., 1901). The statutes and the settled law of the land at the time a contract is made become a part of it, and must be read Into it. The liability of the shareholders of national banks for their debts under section 5151 of the Revised Statutes is based upon contract. (Deweese v. Smith et al., 106 Fed. Rep., 438.) Liability several, how fixed. 4. The liability of a stockholder of a national bank is several, and is fixed by his taking stock in the corporation. (U. S. Sup. Ct, 1809) Kennedy v. Gibson, 75 U. S., 498; (U. S. C. C.) Bailey v. Sawyer, 4 Dill, 463. 5 (U. S. C. C, 1891). A person who becomes a stockholder in a national bank thereby submits himself to the provisions of the national-bank act and becomes liable to be assessed to the extent of his statutory liability for all debts of the bank existing while he holds his stock. (Young v. Wempe et al., 46 Fed. Rep., 354.) Liability proportionate to shares owned. 6 (U. S. Sup. Ct., 1880). The amount contributed by each shareholder should bear the same proportion to the whole amount of the deficit as his own stock bears to the whole amount of the capital stock at its par value. And the solvent shareholders can not be made to con- tribute more than their proportion to make good the deficiency caused by the insolvencv of other shareholders. (United States v. Knox, 102 D. S., 422.) Individual liability of the stockholders restricted to contracts, debts, and engage- ments contracted in ordinary course of business. 7 (U. S. Sup. Ct, 1887). The individual liability of the stockholders must be restricted in its meaning to such contracts, debts, and engagements of the association as have been duly contracted in the ordinary course of its business. And, therefore, creditors of an association who make settlements after the association is put into liquidation and receive from the president payment of their claims in paper of the associa- tion, or of the individual notes of the president himself, indorsed or guaranteed in the name of the association, are not to be consid- ered as creditors of the association entitled to subject the stock- holders to individual liability, for these are new contracts. (Rich- mond v. Irons, 121 U. S., 27.) When stockholders can not be charged with expenses of receivership. 8 (U. S. Sup. Ct, 1887). On a bill to enforce the individual liability of the stockholders of a national bank in voluntary liquidation they can not be charged with the expenses of the receivership. ( lb. ) When whole amount of assessment may be collected from one of the owners of undivided stock. 9 (TJ. S. Sup. Ct, 1900). Although the whole amount of an assessment on shares of national-bank stock is enforced, pursuant to a State stat- ute, against one to whom there has been an allotment of national- bank stock in indivision, to the extent of the distributive share of the estate received by him, he is not entitled to complain, under the Federal statute providing that each shareholder in a national bank can only be liable to the extent of the amount of his stock therein. (Matteson et al. v. Dent, Receiver, 2 Banking Cases, 469; 170 U. S., 521.) 458 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Assessments — Continued. NATURE AND EXTENT OP LIABILITY FOR ASSESSMENT Continued. Liability that of principal, not surety. 10 (U. S. C. C, 1881). The liability which shareholders in national hanks incur under section 12 of the act of 1864, which provides for a liabil- ity " to the extent of the amount of their stock therein, at the par value thereof, in addition to the amount invested in such shares," is that of principals, not of sureties. (Hobart, Receiver, etc., v. John- son, 8 Fed. Rep., 493.) Liability not that of guaranty. 11 (U. S. C. C, 1881). Such a liability is not one on a " promise to pay the debt, or answer for the default or liability, of any other person," within the meaning of the provision to section 5 of the Revised Stat- utes of New Jersey of 1874, page 469. (Hobart, Receiver, etc., v. Johnson, 8 Fed. Rep., 493.) 12 (U. S. C. C, 1900). Under the national banking act (Rev. Stat, sec. 5151), requiring that the shareholders of every national bank shall be held individually responsible, equally and ratably, and not one for another, for all debts of the bank, to the extent of the amount of their stock, at the par value thereof, in addition to the amount invested in such stock, a stockholder can not be required to make good the failure of another stockholder to pay his assessment ; and, where an assessment has been made, it must be considered, for the purpose of making a second assessment, as if the entire assessment had been paid. (Lease v. Barschall et al., 100 Fed. Rep., 762.) Assessment may be to pay any liability of bank. 13 (U. S. Dist. Ct). The individual liability of the shareholders of an insol- vent association may be enforced for the purpose of paying all of its liabilities, and not merely for the purpose of paying its " debts," technically so called. (Stanton v. Wilkeson, 8 Ben., 357.) Stockholders may dispute validity of debts to pay which assessment is made. 14 (U. S. C. C, 1901). The fact of an assessment by the Comptroller upon the stockholders of a national bank does not conclude such stock- holders as to the validity of the debts to pay which the assessment is made, and they are entitled to their day in court upon that question before being required to pay the assessment in an action against them by the receiver.^ Where the defendants in such an action assert the invalidity of- a judgment against the bank which is the basis of the assessment, the appropriate procedure would seem to be for them to file a bill in equity to determine the validity of such judgemnt, and to enjoin the action against them, giving bond for the payment of the judgment therein in case the injunction should be dissolved after hearing. (Moss v. Whitzel, 108 Fed. Rep., 579.) Recovery of assessment paid under mistake of fact, parties. 15 (U. S. C. C, 1897). The Comptroller of the Currency and the Treasurer of the United States are not necessary parties defendant in an action against the receiver of an insolvent national bank to recover an assessment made by the Comptroller, and paid by the plaintiff under the erroneous belief that he was a stockholder. (Brown v. Tilling- hast, 84 Fed. Rep., 71.) Invalid assessments considered on final distribution. 16 (U. S. C. C, 1899). Shareholders in a national bank who, in good faith, paid an invalid assessment on their stock, on the subsequent winding up of the affairs of a bank by a receiver, and the payment of outside creditors, are entitled, as against the other shareholders, to repay- ment of the amount so paid before a general distribution of the remaining assets. (In re Hulitt, 96 Fed. Rep., 785,) DIGEST OF NATIONAL BANK DECISIONS. 459 SHAREHOLDERS— Continued. Assessments — Continued. CONCLUSIVENESS OF COMPTROLLER'S ACTION. What sufficient. 1 (U. S. Sup. Ct, 1882). A letter addressed to the receiver, and signed by the Comptroller of the Currency," directing him to institute legal pro- ceedings to enforce the individual liability of every stockholder, under the statute, is sufficient evidence that the Comptroller decided, before the suit, that it was necessary to enforce the personal liability of the stockholders. (Bowden r. Johnson, 107 U. S., 251; 3 N. B. C, 55.) 2 (U. S. Dist. Ct., 1900). The original order of the Comptroller of the Cur- rency levying an assessment on the shares of a national bank, over his official signature and seal, proves itself, and fixes the liability of the shareholders from its date, no demand being necessary. (Brown v. Ellis. 103 Fed. Rep., 834.) Conclusive as to amount. 3. Where a national banking association is insolvent, order of Comptroller of Currency declaring to what extent the individual liability of stock- holders shall be enforced is conclusive. . (U. S. Sup. Ct, 1869) Kennedy v. Gibson, 75 U. S. (8 Wall.), 498; (U. S. Sup. Ct, 1876) Casey i\ Galli, 94 U. S., 673; (U.S. Sup. Ct, 1878) Germania National Bank v. Case, 99 U. S., 628 ; (U. S. C. C. A.,1901) Deweese v. Smith, 106 Fed. Rep., 438; (U. S. C. C. A., 1899) Aldrich v. Campbell, 2 B. C. 481 ; 97 Fed. Rep., 003 ; (U. S. C. C.) Bailey v. Sawyer, 4 Dillon, 463; (U. S. C. C, 1891) Young v. Wempe et al., 46 Fed. Rep., 354; (Cal.) O'Connor v. Witherby, 111 Cal., 523. Conclusive as to necessity for. . 4. The question whether there is a deficiency of assets, and when it is necessary to enforce the individual liability of shareholders, is for the Comptroller to determine ; and his decision in this matter is final and conclusive. (U. S. Sup. Ct, 1869) Kennedy v. Gibson, 8 Wall.. 498; (U.S. Sup. Ct, 1878) Germania National Bank v. Case, 99 U. S., 628; (U. S. Sup. Ct, 1876) Casey v. Galli, 94 U. S., 673; (U. S. DistCt) Strong v. Southworth, 8 Ben., 331; (U. S. C. C.) Bailey v. Sawyer, 4 Dill., 463. 5 (U. S. Sup. Ct., 1897). It has been repeatedly settled by this court that the Comptroller of the Currency has power to appoint a receiver of a defaulting or insolvent national bank, and to call for a ratable as- sessment upon the stockholders of such bank without a previous judi- cial ascertainment of the necessity for such action. (Bushnell v. Leland, 164 U. S., 684. ) 6. The action of the Comptroller in ordering an assessment against the stockholders of an insolvent national bank is conclusive on the stock- holders of the necessity for such assessment, which can not be ques- tioned by them, either at law or in equity. (U. S. Sup. Ct, 1869) Kennedy v. Gibson, 75 U. S. (8 Wall.), 498; (U. S. Sup. Ct., 1876) Casey v. Galli, 94 U. S., 673; (U. S. Sup. Ct., 1878) Germania National Bank v. Case, 99 U. S., 628; (U. S. C. C. A., 1899) Aldrich v. Campbell, 97 Fed. Rep., 663; (U. S. C. C, 1899) Aldrich v. Yates, 95 Fed. Rep., 78; (U. S. C. C, 1895) Nead v. Wall, 70 Fed. Rep., 806; (U. S. C. C, 1889) Welles v. Stout, 38 Fed. Rep., 67. 7 (U. S. C. C. A., 1901). The action of Comptroller of the Currency in making an assessment against the stockholders of an insolvent na- tional bank is conclusive as to" the necessity of such assessment, 460 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Assessments — Continued. conclusiveness op compteoller's action^— continued. which can not be questioned collaterally, and is open to avoidance by a court only in a direct attack upon it for error of law, fraud, or mistake. (Deweese v. Smith, 106 Fed. Rep., 438.) RI6HT OF COMPTROLLER TO MAKE SUCCESSIVE ASSESSMENTS. 1 (U. S. Sup. Ct, 1902). The Comptroller of the Currency is authorized to make a second assessment upon the shareholders of an insolvent national-bank association where the first assessment proves insuffi- cient to pay the debts and liabilities of the bank, by United States • Revised Statutes, section 5234, empowering him, if necessary to pay the debts of such association, to enforce the individual liability of its shareholders, which, by section 5151, is measured by the par value of their stock in addition to the amount invested therein, so long as both assessments do not exceed that amount. (Studebaker v. Perry, Receiver, etc., 22 Sup. Ct. Rep., 463; 184 U. S., 258.) 2 (U. S. C. C. A., 1901). The statutes and the settled law of .the land at the time a contract is made becomes a part of it, and must be read into it. (Deweese v. Smith et al„ 106 Fed. Rep., 438.) 3 (U. S. C. C. A., 1901). The liability of the shareholders of national banks for their debts under section 5151 of the Revised Statutes is based upon contract. (lb.) 4 (U. S. C. C. A., 1901). The contract of the shareholder of a national bank with the bank and its creditors regarding its debts is that, to an amount not exceeding the par value of his shares of stock, and not exceeding his equal and ratable proportion, he will pay, at such times and in such amounts as the Comptroller of the Currency shall demand, the debts and obligations of his bank. ( lb. ) 5 (TJ. S. C. C. A., 1901). A judgment for a part of an entire, indivisible demand, all of which is due when the action is commenced, is an election to take the part in satisfaction of the whole, and it estops the plaintiff from recovering the residue. (lb.) 6 (U. S. C. C. A., 1901). But a judgment for a part of such a demand which is due does not estop the plaintiff from maintaining another action for another part of the demand which becomes, due subsequent to the commencement of the first action. ( lb. ) 7 (U. S. C. C. A., 1901). A judgment in favor of the receiver of an insolvent national bank for the recovery of an assessment made by the Comp- troller upon a shareholder does not estop him from maintaining a second action against the same shareholder for another assessment which had not been made or was not due when the first action was commenced. (lb.) 8 (U. S. C. C. A., 1901). While the construction of statutes, by the officers to whom Congress has intrusted their execution and the uniform practice of such officers are persuasive and entitled to careful consid- eration, yet a court can not lawfully renounce its judicial powers ; and it is its duty, if satisfied upon reason or authority that a correct determination of the question before it requires a decision contrary to such construction and practice, to render that decision. (lb.) 9 (U. S. C. C. A., 1901). The decision of the Comptroller of the Currency that it is necessary to collect, and his requisition of a certain per- centage of the liability of the shareholders of a national bank, in order to pay its debts is not a decision that a larger percentage will not be necessary, and he has plenary power to make successive assess- ments until the full liability of the shareholder is exhausted. (lb.) 10 (U. S. C. C. A., 1901). The statute of limitations does not commence to run against the enforcement of the entire liability or against the enforcement of any particular portion of the liability of the share- DIGEST OF NATIONAL BANK DECISIONS. 461 SHAREHOLDERS— Continued. Assessments — Continued. EIGHT OP COMPTROLLER TO MAKE SUCCESSIVE ASSESSMENTS — Continued. holder of a national bank to pay its debts until the time when the Comptroller has declared the entire liability or the particular portion of it in issue to be due. ( lb. ) 11 (U. S. C. C. A., 1901). Under the acts of Congress the Comptroller of the Currency is constituted a quasi judicial tribu lal to determine at what times and what amounts, not exceeding the full liability of the stock- holders, it is necessary to collect from them to pay the debts of the bank. His decisions of these questions are impervious to collateral attack and open to avoidance by a court only in a direct attack upon them for error of law, fraud, or mistake. (lb.) 12 (U. S. C. C. A., 1901). One who would attack in a Federal court the deci- sion of a quasi judicial officer for mistake of fact must proceed in equity, and must allege and prove; the evidence before the officer . from which the mistake resulted, the way in which it was made, and the fact that in its absence his decision would have been otherwise, before a court can enter upon a reconsideration of the issue before the officer. (lb.) 13 (U. S. C. C, 1899). The ultimate liability of a stockholder of an insol- vent national bank, under the statute, is for the full amount of the par value of his stock, if that amount is required, and when the Comptroller makes an assessment for a smaller amount he has power to make a second assessment, if the first proves insufficient to pay the debt of the bank. (Aldrich i\ Yates, 95 Fed. Rep., 78.) 14 (U. S. C. C, 1900). Under the national banking act (Rev. Stat., sec. 5151), requiring that the shareholders of every national bank shall be held individually responsible, equally and ratably, and not one for another, for all debts of the bank, to the extent of the amount of their stock, at the par value thereof, in addition to the amount invested in such stock, a stockholder can not be required to make good the failure of another stockholder to pay his assessment ; and, where an assessment has been made, it must be considered, for the purpose of making a second assessment, as if the entire assessment had been paid. (Lease v. Barschall et al., 106 Fed. Rep., 762.) 15 (U. S. C. C, 1900). Vhere stockholders of a national bank have paid an assessment to a receiver of the bank, the receiver becomes the trustee of the creditors ; and any loss he may sustain by investments, in endeavoring to save the debts of the bank, can not be charged to the shareholders and made the subject of an additional assessment. (lb.) Assessment limited to amount needed. 16 (U. S. Sup. Ct., 1880). Where, to discharge liabilities of an insolvent bank, Comptroller assessed against shareholders a sufficient per cent on par value of stock held by each, some being insolvent, he can not provide for deficiency by new assessment. (United States v. Knox, 102 U. S., 422.) WHO DEEMED TO BE SHAREHOLDERS FOR ASSESSMENT. One who appears on books as owner is chargeable with assessment. 1. One who appears on the books of the association as the owner of shares of its stock is individually liable, though he hold the stock merely as collateral security. (U. S. Sup. Ct., 1878) Germania National Bank v. Case, 99 U. S., 628; (U. S. C. C, J877) Bowdell v. Farmers and Merchants' National Bank of Baltimore, 2 N. B. C, 146 ; (U. S. C. C.) Moore v. Jones, 3 Woods, 53; (III.) Wheelock v. Kost, 77 111., 296; (Iowa) Hale v. Walker, 31 Iowa, 344. 462 DIGEST OP NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Assessments — Continued. WHO DEEMED TO BE SHAREHOLDERS FOR ASSESSMENT— Continued. 2 (TJ. S. Sup. Ct, 1900). As a general rule, the legal owner of stock in a national banking association — that is, the one in* whose name stock stands, on the books of the association — remains liable for an assess- ment so long as the stock is" allowed to stand in his name on the books, and, -consequently, although the registered owner may have made a transfer to another person, unless it has been accompanied by a transfer on the books of registry of the association, such regis- tered owner remains liable for contributions in case of the insol- vency of the bank. The exceptions to this general rule, so far as established by decisions of this court, are: (1) That where a trans- fer has been fraudulently or collusively made to avoid an obligation to pay assessments, such transfer will be disregarded and the real owner be held liable; (2) that where a transfer of stock is made and delivered to officers of a bank, and such officials fail to make entry of it, those acts will operate a transfer on the books and extinguish the liability, as stockholder, of the transferrer; (3) where stock was transferred in pledge, and the pledgee, for the purpose of protecting his contract, caused the stock to be put in his name as pledgee, a registry did not amount to a transfer to the pledgee as owner. (Matteson v. Dent, 376 U. S. Rep., 521.) 3 (U. S. C. C, 1896). One who knowingly permits his name to be entered upon the stock books of a national bank as the owner, individually, of stock therein can not be permitted, as against creditors, or a ^receiver of the bank representing them, to show that he was not the owner of the stock ; and he is liable for an assessment thereon, though he held the stock, in fact, as trustee for the bank itself. (Lewis v. Switz, C. C, 74 Fed. Rep., 381.) 4 (U. S. C. C, 1879). S. bought shares in a national bank and caused them to be transferred to E., who was in his employ, S. remaining the real owner. Held, that S. was liable as stockholder upon the* failure of the bank. (Davis, Receiver, v. Stevens, 20 Alb. L. J., 490; 2 N. B. C, 158.) 5 (U. S. C. C, 1881). Under section 5151, Revised Statutes, owners of stock in a national bank are liable for its debts, and persons who hold them- selves out or allow themselves to be held out as owners of stock are also liable, whether they own stock or not. (Case, Receiver, !'. Small et al., 10 Fed. Rep., 722.)- 6 (TJ. S. C.C., 1886). When bank stock was sold, but not transferred on the books of the bank, and the bank afterwards failed, the executors of the person in whose name the stock stood on the books were held liable for assessment, although said stock had been paid for by a pur- chaser buying at the request of the president of the bank, who gave him a cashier's check for that purpose, placing the money so furnished to the credit of said purchaser on the books of the bank as a temporary loan, the intention being ultimately to transfer said shares to a third party as part of a larger proposed investment in stock, for which funds had been placed in the hands of the presi- dent of the bank. (Price, Receiver, v. Whitney et al., 28 Fed. Rep.. 297.) 7 (U. S. Dist. Ct., 1877). If the trusteeship of one who holds stock in trust does not appear upon the books of the association he will be individ- ually liable. (Davis v. Essex ; Baptist Society, 44 Conn., 582; 2 N. B. C, 110.) 8 (N. Y. Appls., 1887). L. was president of the defendant national bank, and had substantial control and management. He bought fifty shares of defendant's outstanding stock and paid for it with the proceeds of a note signed by M., the cashier, which he indorsed and placed in the bank as discounted paper. He afterwards bought one hundred and forty-eight shares, and paid for them by an ordinary call loan from DIGEST OP NATIONAL BANK DECISIONS. 463 SHAREHOLDERS— Continued. Assessments — Continued. WHO DEEMED TO BE SHAREHOLDERS FOR ASSESSMENT — Continued. defendant On subsequently selling a portion of the stock, L. applied the proceeds to the note and call loan. Fie did not assume to act for defendant, and the stock was transferred to him individually, and was in his name on the books. He had no actual authority to buy the stock for defendant,, but the evidence tended to show that the purpose of the purchase was to get the stock into the hands of persons who would be useful to defendant. In an action for fraud in a subsequent sale of such stock by L., held, that defendant could not be charged as owner of the stock. (Prosser v. First National Bank of Buffalo, 106 N. Y., 677 ; 3 N. B. C, 646.) 9 (N. Y. Appls., 1887). On the question whether the president represented defendant to be the owner of the stock, plaintiff testified that in the conversation resulting in the sale. the president stated that "we can sell you some of our stock at 160," and that that was " the price that the bank took it in at." Plaintiff did not inquire as to the ownership. The president testified that while he might have stated that " we have some stock," his best recollection was that he did not say " the bank took it in." No motive appeared for his representing defendant to" be the owner. Held, that the evidence sustained a finding nega- tiving such representations. (lb.) 10 (N. Y. Appls., 1887). An appeal from an order of reversal which does not state that the reversal was upon questions of fact brings up for review only questions of law. (lb.) 11 (N. Y. Appls., 1887). A finding of fact by the trial court upon sufficient evidence, and not reversed by the general term, is conclusive on appeal to the court of appeals. (lb.) Real owner liable for assessment. 12 (U. S. Sup. Ct, 1887). A stockholder sold certain stock several months before the insolvency of the bank, but the transfer was not made on the books till the date of the bank's failure. Held, that there being no proof of the delivery of the stock to the bank indorsed for trans- fer, that the stockholder incurred the statutory liability. (Richmond v. Irons, 121 U. S., 27.) 13 (U. S. C. C). The real owner of the stock is liable as a stockholder, though when he purchased the stock he had it transferred upon the books to another. (Davis v. Stevens, 17 Blatch., 259.) 14 (U. S. C. C. A., 1899). The real owner of shares of stock in a national bank, which, by his procurement or permission, stand on the books of the bank in the name of an agent, and have never been in his own name, may be charged as a shareholder for an assessment made on the bank's insolvency, and the receiver may bring an action at law for the collection of such assessment directly against him, without regard to the liability of the agent. (Houghton v. Hubbell, 91 Fed. Rep., 453.) 15 (111. Sup., 1882). Where a national bank issues certificates of its shares to a subsequent purchaser in lieu of the certificates of the prior owner, without observing its by-law in regard to a transfer on its books, so far as creditors of the bank are concerned, a party taking and hold- ing such shares of stock will be subject to the liabilities imposed by section 5151 of the national banking law. (Laing v. Burley, 101 111., 591; 3 N. B. C, 369.) Cashier presumed to Ivnoiv stock stood in his name on books, although certifi- cate had not been issued him. 16 (U. S. Sup. Ct, 1891). A director who is also vice-president and cashier of a national bank can not shield himself from liability as a stock- holder and from what he had received from a dividend fraudulently declared by alleging ignorance of what appears by the books of which he has charge. (Finn c Brown, 142 U. S., 56.) •±64 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Assessments — Continued. WHO DEEMED TO BE SHAREHOLDERS FOR ASSESSMENT — Continued. 17 (U. S. Sup. Ct., 1891). Where a person receives from a bank a dividend on stock which he denies owning, he should restore the dividend to the bank. He does not free himself from liability for it by giving his check on the bank for the amount to alleged true owner. (lb.) Assignee of shareholder liable. 18 (Colo. Sup., 1901). Under Revised Statutes United States, section 5151, making the shareholders of a national bank liable personally for the debts of the bank, an assignee for the benefit of creditors of a share- holder is bound to pay the assessment levied by the receiver of the bank after its insolvency, though it is levied after the assignment. (Graham v. Piatt, 65 P., 30; 28 Colo., 421.) WHO NOT CHARGEABLE WITH ASSESSMENTS. 1 (U. S. C. C. A., 1895). Plaintiffs subscribed for certain shares of stock in the E. Bank, to be issued for the purpose of increasing its capital and changing it into a national bank, and paid certain installments on their subscription to the bank, to be held in trust until the whole subscription was paid and the shares legally issued. Subsequently they consented that the E. Bank should be consolidated with the F. National Bank, the capital of the latter increased from $100,000 to $200,000, and that their subscriptions should stand as subscriptions to such increase of the stock of the P. National Bank. They after- -wards made some further payments on their subscriptions. Some preliminary steps were taken by the F. National Bank for the 'increase of its stock, but the Comptroller of the Currency refused to consent to an increase to more than $150,000, and before that amount had been paid in and before any certificate had been made by the Comp- troller declaring an increase the P. National Bank was declared insolvent and placed in the hands of a receiver. Held, that the plaintiffs had never become stockholders in the F. National Bank. (McFarlin et al. v. First Nat. Bank of Kansas City, Kans., et al., 68 Fed. Rep., 868.) 2 (U. S. Dist. Ct., 1901). Where, on an issue as to whether defendant was liable as a stockholder of an insolvent national bank, it appears from an agreed statement as to what the bank books and reports show that at the time the four shares in question, purported to have been transferred to him by the president, the latter's stock was all pledged, it must be held that defendant acquired no stock, and never in reality became a legal shareholder, and hence is not subject to a shareholder's liability. (Burt v. Richmond, 107 Fed. Rep., 387.) 3 (U. S. C. C. A., 1899). Title of C. to stock in a bank is divested, so as to relieve him of liability for an assessment levied four years thereafter, on the bank becoming insolvent, where he employed auctioneers to sell it, and put into their hands his stock certificate, having indorsed thereon an assignment in blank, and a power of attorney in blank to transfer the stock, duly executed by him, and they knocked down the stock to S., who was cashier of the bank, and took the certifi- cate to the banking house, and delivered it to S., " as cashier " of the bank, and requested him to transfer the shares to the purchaser thereof ; and this, notwithstanding a by-law of the bank that " no ofBcer * * * shall, without permission of the. directors, hold stock in the bank " — the inference from the payment of semiannual dividends to S. for the four years being that the bank had accepted him as a stockholder. (Earle v. Coyle, 97 Fed. Rep., 410.) VALIDITY AND EFFECT OF TRANSFER. Bight to transfer when bank is insolvent. 1 (U. S. Sup. Ct, 1903). The presumption of liability of a stockholder of a national bank begotten by the presence of the name on the stock reg- ister may be rebutted if the jury finds the fact to be that a bona DIGEST OF NATIONAL BANK DECISIONS. 465 SHAREHOLDERS— Continued. Assessments — Continued. VALIDITY AND EFFECT OF TBANSFEB — Continued. fide sale of the stock had been made and every duty had been per- formed which the law imposed in order to secure a transfer on the registry of the bank. The mere reduction of the reserve of a national bank below the legal limit does not affect with a legal pre- sumption of bad faith all transactions made with or concerning the bank during the period while the reserve is impaired. (Earle v. Carson, 188 U. S., p. 42.) 2 (U. S. Sup. Ct, 1903). The power of a stockholder to transfer stock in a national bank, iike other personal property, is not limited by the mere fact that at the time of the transfer the bank, which was a going concern, was insolvent in the sense that its assets, if liqui- dated, would not discharge its liabilities, unless it be shown that the seller was aware of the facts and had sold the stock in order to avoid the impending double liability. (lb.), 3 (U. S. Sup. Ct., 1903). Nor is such a bona fide sale void if the person to whom the stock is sold is, owing to his insolvency, unable to respond to the double liability, if the fact of such insolvency was, at the time of the sale, unknown to the seller. (lb.) 4 (Mich. Sup., 1899). A stockholder has the right, even when the bank is insolvent, to make a bona fide sale of his own stock to any person, whether resident or nonresident, capable in law of taking and hold- ing the same, and of assuming the liabilities of the transferrer under such statute in respect thereto. (Poster v. Broas et al., Poster v. Row, 2 Banking Cases, 700; 120 Mich., 1 ; 79 N. W., 696.) 5 (Mich. Sup., 1899). The mere fact that a transfer of stock is not reg- tered on the books of the bank will not prevent it from relieving the transferrer from liability under such statute. (lb.) 6 (Mich. Sup., 1899). Although the bank is insolvent, a stockholder having no knowledge of such fact may relieve himself from liability under such statute by making a bona fide transfer by gift to his son, although the latter is insolvent at the time of the transfer. (lb.) When transferrer's liability ceases. • 7 (U. S. Sup. Ct, 1886). Where a shareholder who has sold his stock has delivered to the bank the certificate of stock and a power of attorney, with the request that the transfer be made upon the books of the bank, and has had no reason to suppose that such transfer was not made, he will not, should the bank afterwards become insolvent, be held liable as a shareholder, although he still appears as such on the books of the bank. (Whitney v. Butler, 118 U. S., 655.) 8 (U. S. Sup. Ct, 1887). But where the president of the bank is himself the purchaser of the stock, then the delivery of the certificates and power of attorney to him, with the request to make the transfer upon the books of the bank, would not be sufficient to discharge the seller from liability as a stockholder. (Richmond v. Irons, 121 U. S., 27.) 9 (U. S. C. C. A., 1901). An owner of shares in a national bank who sold the same in good faith, without knowledge or reason to believe that the bank was insolvent, and who did everything that was reasonably possible to have the proper formal transfer made on the books of the bank, can not be treated as a shareholder and held liable to an assess- ment made by the Comptroller upon the subsequent closing of the bank as insolvent, upon evidence showing that the bank was in fact insolvent at the time the sale was made, and that the purchaser was also insolvent. The statute imposes no restriction upon the right to transfer shares because of the insolvency of the bank or the trans- feree, nor do considerations of public policy justify it where the seller has exercised due diligence and has acted in the transaction in fair- ness and good faith. (Earle v. Carson, 107 Fed. Rep., 639; affirmed by U. S. Sup. Ct, 188 U. S., 42.) 4049—05 30 466 DIGEST OF NATIONAL BANK DECISIONS. t SHAREHOLDERS— Continued. Assessments — Continued. VALIDITY AND EFFECT OF TRANSFER — Continued. 10 (U. S. C. C, 1889). Where a shareholder of a national bank makes a bona fide sale of his stock and goes with the purchaser to the bank, indorses the certificate, and delivers it to the cashier of the bank with directions to make the transfer on the books, he has done all that is incumbent upon him to discharge his liability, and he is not liable, though the cashier failed to make the transfer, upon the sub- sequent suspension of the bank, for an assessment made by the Comptroller of the Currency, under Revised Statutes, section 5151, to pay the bank's debts. (Hayes v. Shoemaker, 39 Fed. Rep., 319.) 11 (U. S. C. C, 1892). In an action by the receiver of a national bank to enforce an assessment under Revised Statutes, section 5151, against one credited on the transfer books as a stockholder, it appeared that nearly a year before the failure he had sold his stock to a broker for an undisclosed' principal ; that he indorsed the same, and requested the broker to -inform the cashier of the transaction and to have the stock transferred ; that the broker accordingly handed the stock to the cashier, gave him the necessary information, and requested him to make the transfer. This the cashier promised to do, but in fact the transfer was never made. The certificate recited that it was transferrable on the books of the company " by indorsement hereon and surrender of this certificate." Meld, that in requesting the cashier to make the transfer the broker acted as the seller's agent, and that the latter did' all that was required of him as a prudent business man, and could not be held liable as a stockholder. (Whit- ney v. Butler, 118 U. S., 655, followed Richmond v. Irons, 121 U. S., 27, distinguished; Young v. McKay, 50 Fed. Rep., 394.) 12 (Mich. Sup., 1899). E.; when a stockholder in a solvent bank, and when he was liable to it for an overdraft, sold his stock to its cashier, who purchased it for himself, and delivered the stock certificate properly signed to the latter, who had control of the stock register. E. re- ceived as payment for the stock a credit on his pass book to the amount of the overdraft, authorized by the cashier ; but when the bank closed its doors E. was a registered stockholder, as appeared by the books of the bank, and the overdraft appeared thereon unpaid. Held, that such transfer discharged E. from liability as a stock- holder, as much so as if the cashier had paid the purchase money from his own pocket and had registered the transfer. (Foster v. Broas et al. (Foster v. Row), 2 Banking Cases, 700; 120 Mich, 1; 79 N. W., 696.) 13 (Tenn. Sup., 1896). Defendant, who was the owner of stock in a national bank which, under its by-laws, was transferable only on the books of the bank, sold the same, and after executing a written assignment to the purchaser and a power of attorney in blank to make the trans- fer, indorsed on her certificate of stock, delivered the certificate to the president of the bank, who promised to make the proper transfer on its books, but failed to do so, though the certificate was thereafter treated and used by the bank as the property of the purchaser. Held, that defendant was not liable as a stockholder. (Cox v. Elmendorf, 37 S. W., 387; 97 Tenn., 518.) When vendee liable though transfer not made on books. 14 (U. S. C. C. A., 1896). One S. subscribed for 50 shares of the stock of a national bank, borrowing the money to pay for them from C, the cashier of the bank. As collateral security for the money so bor- rowed, he indorsed over the certificate to C, and left it with him. A few months later he sold the stock to C. for the amount of the loan and accrued interest, the certificate remaining in C.'s hands. The bank was solvent at the time, and so continued for five years, during which C. collected the dividends on the stock, as shown by the bank's dividend book, but the stock was never actually transferred to C. on the books of the bank. The by-laws of the bank provided that DIGEST OP NATIONAL BANK DECISIONS. 467 SHAREHOLDERS— Continued. Assessments — Continued. VALIDITY AND EFFECT OF TRANSFER — Continued. dividends should be paid to the stockholders in whose names the stock should stand ; that certificates should be issued by the presi- dent and cashier ; and that, when stock was transferred, the certifi- cate should be canceled and a new one issued. Long after the sale of S.'s stock to C. the bank became insolvent, an assessment was made upon the stockholders, and the receiver of the bank, finding S.'s name as a stockholder on the books of the bank, brought suit against him. On the trial of the suit the foregoing facts were shown. C. was dead at the time of the trial. Held, that it might be inferred as a fact, from the evidence, that the bank had notice of the transfer of the stock by S. to C, and the termination of S.'s relation to the bank as stockholder, from which fact the legal presumption would follow that the bank would cause such acts to be done in relation to the transfer as its officers were called on to do, and that the jury should be permitted to draw such. inference. (Snyder v. Poster, 73 Fed. Rep., 136.) Fraudulent transfer to escape individual liability. 15 (U. S. C. C, 1877). Shareholders in a national bank, knowing it to be in- solvent, transferred their shares for the purpose of escaping liability to creditors. Held, that as to such creditors the transfer was void. (Bowden v. Santos, 1 N. B. C, 271; 1 Hughes, 158.) 16 (U. S. C. C. A., 1897). It is not necessary, in order to hold liable for an assessment upon the shareholders of an insolvent national bank one who has transferred his stock to an irresponsible person, to show that the transferrer had actual knowledge of the insolvency of the bank at the time of the transfer, but' it is sufficient if he had good ground to apprehend its failure and made the transfer with intent to relieve himself from individual liability. (Cox v. Montague, 78 Fed. Rep., 845.) ' Transfer after insolvency fraudulent as to creditors. 17 (U. S. C. C, 1883). After a national bank has become insolvent and has closed its doors for business, its shareholders' liability to creditors is so far fixed that any transfer of their shares must be held fraudulent and inoperative as against the creditors of the bank. (Irons, execu- tor, etc., et al. v. Manufacturers' National Bank et al., 17 Fed. Rep., 308.) Transfer without consideration to insolvent person. 18 (U. S. Sup. Ct., 1882). And where a shareholder who has knowledge of the insolvent condition of the bank transfers his shares without con- sideration to a person unable to respond to the assessment the trans- fer may be set aside. (Bowden v. Johnson, 107 U. S., 251.) 19 (U. S. C. C, 1897). Under Revised Statutes United States, section 5151, making shareholders in a national bank liable for the debts of the association, and section 5139, providing for the transfer of shares, with a provision that the transferee shall " succeed to all the rights and liabilities of the prior stockholders of such shares ; and no change shall be made in the articles of the association by which the rights, remedies, and securities of the existing creditors of the association shall be impaired," a transfer of stock, though without consideration and to an irresponsible person, can not be set aside by the receiver, if made in good faith without knowledge of the failing condition of the bank. (Sykes v. Holloway et al., 81 Fed. Rep., 432.) 20 (U. S. C. C, 1898). A stockholder in a national bank, with knowledge that the bank is in a failing condition, can not make a voluntary transfer of his stock to one financially irresponsible, and thereby es- cape liability for assessments. (Baker v. Reeves et al., 85 Fed. Rep., 837.) 468 DIGEST OP NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Assessments — Continued. ' VALIDITY AND EFFECT OF TRANSFER — Continued. 21 (U. S. C. C, 1898). The owner, by assignment of stock in a national bank at the time of its failure, is liable for assessments thereon, though his assignor, who transferred it knowing that the bank was in a failing condition, is also liable. (lb.) Transfer to stoclcholder's infant children. 22 (U. S. Dist. Ct, 1904). A transfer of stock in a national bank, while it is a going concern, to the stockholder's infant children, under five years of. age, not legally liable to assume all the obligations of stockholders, did not relieve the father from his liability for assess- ments levied on the stock so transferred after the bank's insolvency. (Aldrich v. Bingham, 131 Fed. Rep., 363.) 23 (U. S. Dist. Ct, 1904). Where a stockholder in a State bank, after its reorganization as a national bank, accepted dividends on his indi- vidual shares, and in view of the tender age of certain children, to whom he had transferred part of his stock, it might be presumed that he also received dividend check made payable by the bank to the order of such children, he was estopped to deny his liability for assessment levied on such stock by the Comptroller on the insol- vency of the bank on the ground that he did not expressly assent to the reorganization of the bank. (Aldrich v. Bingham, 131 Fed. Rep., 363.) Transfer to avoid liability voidable; parties, practice, proof. 24. A transfer of shares for the purpose of avoiding liability, though made " out and out," is void. (U. S. Sup. Ct., 1878) Germania National Bank c. Case, Receiver, 99 U. S., 628 ; (U. S. C. C.) Bowden v. Santos, 1 Hughes, 158. 25 (U. S. Sup. Ct., 1878). One to whom stock has been transferred in pledge or as collateral security for money loaned, and who appears on the books of the corporation as the owner of the stock, is liable as a stockholder for the benefit of creditors. Where the owner, holder, or pledgee of stock transfers it out and out for the purpose of escaping liability as a shareholder to one who is unable to meet such liability, or when the transfer is colorable and not absolute, the transfer is ineffective as to creditors and the transferrer will be still liable. Therefore when the G. bank loaned money and took as collateral therefor shares of stock in the C. bank, which were duly transferred in the books on the C. bank, and afterwards the G. bank transferred these shares to one of its clerks, with an understanding that he should retransfer on request, and the C. bank was then in failing condition, held, that the G. bank was liable to contribute as a stockholder to the debts of the C. bank. (Germania National Bank v. Case, receiver, 2 N. B. C, 25 ; 99 U. S., 628.) 26 (U. S. Sup. Ct., 1898). One who holds shares of national-bank stock— the bank being at the time insolvent — can not escape the individual lia- bility imposed by the statute by transferring his stock with intent to avoid that liability, knowing or having reason to believe, at the time of the transfer on the books of the bank, that it is insolvent or about to fail. (Stuart r. Hayden, 169 U. S., 1; Gruetter v. Stuart, ib.) 27 (U. S. Sup. Ct, 1898). A transfer with such intent and under such cir- cumstances is a fraud upon the creditors of the bank, and may be treated by the receiver as inoperative between the transferrer and himself, and the former held liable as a shareholder without reference to the financial condition of the transferee. (Ib.) 28 (U. S. Sup. Ct., 1898). The right of creditors of a national bank to look to the individual liability of shareholders, to the extent indicated by the statute for its contracts, debts, and engagements, attaches when the bank becomes insolvent; and the shareholder can not, by trans- DIGEST 03? NATIONAL BANK DECISIONS. 469 SHAREHOLDERS— Continued. Assessments — Continued. VALIDITY AND EFFECT OF TRANSFEK — Continued. ferring his stock, compel creditors to surrender this security as to him, and- force the receiver and creditors to look to the person to whom his stock has been transferred. (lb.) 29 (U. S. Sup. Ct, 1898). If the bank be solvent at the time of the trans- fer — that is, able to meet its existing contracts, debts, and engage- ments — the motive with which the transfer is made is immaterial, as a transfer under such circumstances does not impair the security given to creditors ; but if the bank be insolvent, the receiver may, without suing the transferee and litigating the question of his lia- bility, look to every shareholder who, knowing or having reason to know at the time that the bank was insolvent, got rid of his stock in order to escape the individual liability to which the statute subjected him. (lb.) 30 (TT. S. Sup. Ct., 1898). Whether, the bank being in fact insolvent, the transferrer is liable to be treated as a shareholder in respect of its existing contracts, debts, and engagements, if he believed in good faith at the time of the transfer that the bank was solvent— not de- cided ; although he may be so treated, even where acting in good faith, if the transfer is to one who is financially irresponsible. (lb.) 31 (U. S. Sup. Ct, 1898). Where the circuit court and the circuit court of appeals agree as' to what facts are established by the evidence, this court will not take a different view unless it clearly appears that the facts are otherwise. (lb.) 32 (U. S. C. C, 1896). One C. was the holder of stock in the D. national bank, and was also an officer of the L. bank, which held stock in the D. bank. In the latter capacity he was informed of an urgent demand upon the L. bank to send $5,000 by telegraph in aid of the D. bank. Within a week after this demand, L. transferred his stock in the D. bank, without consideration, to his five children, one of whom was a married woman, and two were minors. Within five months there- after the I>. bank failed, and an assessment was made on the stock- holders. Held, that the transfers must have been made by L. in con- templation of the liability, and that both he and his transferees were liable for the assessment, the latter because the liability was cast upon them by law when they became stockholders. (Foster v. Lin- coln, C. C, 74 Fed. Rep., 382.) 33 (U. S. C. C, 1897). The burden is on the receiver of a national bank to show that a transfer of stock was made by the transferrer for the fraudulent purpose of avoiding liability as a stockholder ; and evi- dence showing that the husband of the transferrer had knowledge of the embarrassed condition of the bank before the transfer was made, and that she had admitted that she never transacted any business without the advice of her husband, is not sufficient for that purpose, as against the positive statement of the transferrer that no one ever suggested to her to transfer the stock for the purpose of relieving herself from liability, or suggested to her that the bank was in a failing condition, and that she made the transfer to her daughter as an advancement. (Sykes v. Holloway et al., 81 Fed. Rep., 432.) 34 (U. S. C. C, 1900). In an action in equity to cancel a transfer of stock as fraudulently made by defendant to avoid a stockholder's liability, and for a decree against defendant for an assessment on the stock, a demurrer to the bill because plaintiff had an adequate remedy at law by ignoring the transfer and suing defendant as actual owner will be overruled, since the plaintiff is entitled to the relief prayed for, which could not be had at law, though such relief be only a technical advan- tage to plaintiff. (Hedlund v. Dewey, 105 Fed. Rep., 541.) 35 (U. S. C. C. A., 1905). To establish the liability of a stockholder in a national bank to creditors, on its failure, after he has made an actual out-and-out sale of his stock, and the same has been transferred on 470 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Assessments — Continued. VALIDITY AND EFFECT OF TBANSFEB — Continued. the books, although the sale may have been made for the purpose of avoiding liability, three things must concur : (1> The bank must have been insolvent when the sale was made; (2) the seller must have known such fact, or be chargeable with knowledge of it ; and (3) the transfer must have been made to one who was insolvent or unable to respond to an assessment, and whose financial condition was known, or ought to have been known, to the seller. (McDonald v. Dewey et al. ; Dewey v. McDonald, 134 Fed. Rep., 528. ) 36 (U. S. C. C. A., 1905). A stockholder in a national bank remains liable to creditors so long as the stock stands in his name on the books, although he may have sold it and delivered the certificate to the pur- chaser, unless he has done all that he can reasonably do to have the same transferred, by seeing that the certificate is delivered to the bank, with the proper power of attorney and data to enable the offi- cers to make the transfer. ( lb. ) LIABILITY OF TRUSTEE. 1 (U. S. C. C, 1898). A trustee, though not appointed by a will or an order of a court or judge, is not personally liable for assessments against stock of an insolvent national bank owned by this cestui que trust, but standing in his name, where he has been guilty of no fraud, con- cealment, or negligence. (Lucas v. Coe, 86 Fed. Rep., 972.) 2 (U. S. C. C, 1898). In fixing the liability, for assessments against stock of an insolvent national bank, the effort of the court should be to ascertain who is the actual owner, and to hold him, releasing the ap- parent owner if he has done nothing to deceive or mislead. (lb.) 3 (U. S. C. C, 1893). A person who is entered on the books of a national bank as the owner of stock, but who is admitted to hold the stock in trust for the true owner, is not liable as a stockholder for the debts of the bank, when the true owner has been adjudged so liable, al- though nothing is realized upon the execution of such judgment. (Yardley v. Wilgus, 56 Fed. Rep., 965.) 4 (U. S. Dist. Ct, 1877). A trustee holding shares in a national bank can not avail himself of his exemption from personal liability for debts of the bank unless his trusteeship appears on the books of the bank. (Davis v. Essex Baptist Society, 44 Conn., 582; 2 N. B. C, 110.) 5 (U. S. Dist. Ct., 1877). With a bequest of money a religious society pur- chased, and held in its own name, shares in a national bank. The society had other donations otherwise invested. Held, that the so- ciety was not a trustee, but an ordinary stockholder, and liable to assessment for debts of the insolvent bank. (lb.) 6 (Ky. App., 1901). Where a guardian, as such, is owner of shares in a national bank, neither the guardian nor the ward are personally lia- ble, but only the estate of the ward in the guardian's hands is liable. (Clark v. Ogilvie, 63 S. W., 429.) 7 (Md., 1897). A person appearing on the books of a national bank to be absolute owner of stock is subject to stockholders' liability, though holding it as trustee. (Kerr v. Urie, 37 A., 789 ; 86 Md., 72.) Who is not a trustee within section -5152, Revised Statutes. 8 (U. S. C. C. A., 1895). Defendant purchased bank stock with his own means, held it for a year, and collected and appropriated all the divi- dends thereon, and, when notified by the bank that the stock stood in his name on the books, gave no notice that he held it in trust for another person, but permitted the bank to deal with him as the bene- ficial owner and did not tender the stock to or demand reimburse- ment from any other person. Held, that he was estopped to claim after the insolvency of the bank that he held the stock merely as trustee for another. (Horton v. Mercer, 71 Fed. Rep., 153.) DIGEST OF NATIONAL BANK DECISIONS. 471 SHAREHOLDERS— Continued. Assessments — Continued. LIABILITY OF TRUSTEE— jCOlltillUed. 9 (IKS. C. C. A., 1895). One who purchases stock in a national bank with his own money on the suggestion of another person that the latter would buy such stock as the former " could get hold of," without being under any obligation to convey the stock to the other, is not a trustee within the meaning of Revised Statutes, section 5152, exempting a person holding stock as trustee from personal liability as a share- holder, (lb.) LIABILITY OF PLEDGEE. When pledgee becomes oicner and chargeable. 1 (U. S. C. C. A., 1905). As a general rule, the question of liability for an assessment on the shares of an insolvent national bank depends upon who was the actual owner of the stock when the operations of the bank were suspended. (Hulitt v. Ohio Valley National Bank, 137 Fed. Rep., 461.) 2 (U. S. C. C. A.,-1905). For the purposes of the national banking act, the pledgor of stock not transferred on the books is to be regarded as the owner until and unless something further transpires which operates to transfer the ownership to another. Where the pledgee caused the stock to be transferred on the books of the bank to an irresponsible employee and credited the pledgor with the value of said stock the transaction would operate to transfer the ownership of the stock to the pledgee and would make him liable to an assessment. ( lb. ) 3 (U. S. C. C, 1877). One who procures a transfer to himself, on the books of a national bank, of stock in such bank, becomes liable for the engagements of the bank as prescribed in the national-bank act, although such stock was pledged to him by the owner simply as 'security for a debt. (Moore v. Jones, 3 Woods, 53; 2 Ni B. C, 144.) 4 (U. S. C. C, 1877). One in whose name shares of the stock of a national bank stand on the bank books is subject to the individual liability of .1 shareholder, although his holding of the stock was originally as collateral security for a loan and the loan has been repaid and the stock certificate surrendered with an executed power of attorney for transfer. (Bowdell v. Farmers and Merchants' National Bank of Baltimore, 14 Bankers' Magazine, 387; 2 N. B. C, 146.) 5 (La., 1895). The pledgee of stock under a contract to sell on default of the payment of a note for which the stock is pledged, who, by judicial proceedings, has compelled the transfer on the books of the stock to himself, will be deemed, in the absence of complaint by the debtor, to have acquired the stock as owner. (Succession of Lanauw 17 So., 200; Appeal of Hibernia National Bank, ib. ; 47 La. Ann., (S43.) 6 (Md. App., 1876). Persons who hold stock of a national bank in pledge the certificates of which stand on the books of the bank in the name of the pledgee, are, in contemplation of the national banking act, stockholders, and so long as they thus hold the stock in pledge are responsible to the creditors of the bank in porportion to the amount so held. (Magruder v. Colston, 1 N. B. C, 554; 44 Md., 349.) Pledgee who appears as owner on books liable. 7 (U. S. Sup. Ct, 1878). Party who, as security for a loan, accepts stock which he causes to be transferred to him on the books, incurs liabil- ity as a stockholder and is not relieved by colorable transfer with understanding that he may have it back on request. (Germania Na- tional Bank v. Case, 99 U. S., 628.) When pledgee not liable. 8 (U. S. Sup. Ct, 1884). But a pledgee of shares of stock in a national bank who, in good faith and with no fraudulent intent, takes the security for his benefit in the name of an irresponsible trustee for the avowed 472 DIGEST OP NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Assessments — Continued. LiABiLrrx" or pledgee — continued. purpose of avoiding individual liability as a shareholder, and who exercises none of the powers or rights of a stockholder, incurs no liability as such to creditors of the bank in case of its failure. (Anderson, Receiver, v. Phiia. Warehouse Company, 111 U. S., 479.) 9 (U. S. Sup v Ct, 1900). A pledgee of stock of a national bank, who sells it in accordance with the terms of the pledge and becomes the purchaser, but never has it transferred on the books of the bank, is not liable for an assessment made under Revised Statutes, section 5151, on the bank's insolvency. (Robinson v. Southern National Bank of New York, 180 U. S., 295.) 10 (U. S. C. C. A., 1897). A corporation which receives shares of national- bank stock in pledge, with power to use and sell, and which, in good faith, without suspicion of the bank's insolvency, causes new certifi- cates to be issued in the name of one of its employees, merely be- cause it is unwilling they should stand in the name of the original owners, remains a mere pledgee, and is not liable, as a shareholder, to assessment on the stock. (National Park Bank of City of New York v. Harmon, 79 Fed. Rep., 891.) 11 (U. S. C. C, 1888). A pledgee of shares of stock in a national bank who does not appear by the books of the bank or otherwise to be the owner is not liable for an assessment upon the shares on the insol- vency of the bank, under Revised Statutes, section 5151, rendering shareholders liable for the debts of the association to the extent of the par value of their stock. (Welles v. Larrabee et al., 36 Fed. Rep., 866.) 12 (U. S. C. C, 1888). One to whom the shares are assigned in trust as security for a debt due a third person, and following whose name on the stock book of the bank is the word " trustee," is not liable for the assessment under section 5151, and is also within the provision of section 5152, exempting from such liability persons holding stock as trustees. (lb.) 13 (U. S. C. C, 1900). A pledgee of shares of stock in a national bank, with a power of attorney in blank to transfer the same indorsed thereon and signed by the pledgor, does not become liable as owner for an assessment thereon by causing them to be transferred on the books of the bank to a third person for the purpose of being held by him as trustee for both parties, and in accordance with the contract of pledge, although the pledgor did not expressly authorize such trans- fer. (Hayes v. Fidelity Insurance, Trust, and Safe-Deposit Co., 105 Fed. Rep., 160.) 14 (U. S. C. C. A., 1901). A pledgee of shares of stock in a national bank as collateral security for a debt due him from the owner, with power of attorney to transfer the same on the books of the bank, does not become a stockholder and liable to assessment as such on the failure of the bank, contrary to his intention, by causing the stock to be transferred into the name of an employee, who holds it for the benefit of all parties interested, nor by any other action which is required or is proper for the protection of both his own interests and those of the pledgor and not inconsistent with his retention of the stock merely as pledgee, such as paying an assessment required by the Comptroller to make good the impaired capital of the bank and charging the amount to the pledgor. (Higgins v. Fidelity Insurance, Trust, and Safe- Deposit Co., 108 Fed. Rep., 475.) 15 (U. S. C. C. A., 1900). It is only in clear cases that a pledgee, on the ground of estoppel, can be subjected to liability for an assessment on national-bank stock, instead of the owner, upon whom the legal obli- gation rests ; and where stock stood upon the books of the bank in the name of a person as cashier of another national bank, the designa- tion suggested a qualified or representative holding, which put all persons on inquiry, and the bank of which the holder was cashier is DIGEST OF NATIONAL BANK DECISIONS. 473 SHAREHOLDERS— Continued. Assessments — Continued. liability of pledgee — continued. not estopped to show that it held the stock as collateral only, at least in the absence of evidence that the insolvent bank or its credit- ors in fact acted in reliance on its supposed ownership. (Frater, Receiver, v. Old National Bank of Providence, 101 Fed. Rep., 391.) 16 (U. S.C.C. A., 1900). A pledgee of stock of a national bank, with a power of attorney to have the shares transferred on the books, so long as he holds the shares as security, without intending to assume liability as a stockholder, can not be treated as one and subjected to an assess- ment under Revised Statutes, section 5151, on the insolvency of the bank, although he has. caused the shares to be transferred to a third person under an agreement that they are still to be held as security for the debt. (Wilson v. Merchants' Loan and Trust Co. of Chicago, 111., 98 Fed. Rep., 688.) 17 (U. S. C. C, 1900). A pledgee of national-bank stock can be held liable for an assessment thereon only*on the ground of estoppel, and the burden of showing such estoppel rests upon the receiver suing to recover such assessment. (Tourtelot v. Stolteben, 101 Fed. Rep., 362.) Pledgee not liable unless stock is in liis name. 18 (U. S. Sup. Ct, 1878). A national bank, having so received stock of another national bank, was sued as a stockholder. Held, that loan by national bank on such security is not prohibited, and if it were, defendant could not avoid liability by its own illegal act. (Germania National Bank v. Case, 99 U. S., 628.) 19 (U. S. Sup. Ct., 1900). The State National Bank of Vernon, Tex., having become insolvent, Robinson was appointed receiver, and the Comp- troller made an assessment upon the stock and its owners. This action .was brought to recover such assessment from J:he Southern National Bank. One hundred and eighty shares of the stock so ' assessed were the property of one Curtis. His certificates were deposited with the Southern Bank as collateral, but the stock remained in his name and so continued to the commencement of this suit. Held, that the case was not one in which the bank was estopped by having assumed an apparent ownership of the stock. (Robinson v. Southern National Bank, 180 U. S., 295.) 20 (U. S. Sup. Ct., 1900). By the mere act of bidding in this stock at a nominal price the Southern National Bank is not to be regarded as having subjected itself to liability as the real owner thereof. (lb.) 21 (U. S. Sup. Ct., 1900). As between the Southern National Bank and Curtis and Thomas the bank is under no legal or equitable obligation to assume or answer for the assessment made by the Comptroller on the stock. (lb.) 22 (U. S. Sup. Ct, 1900). California Bank v. Kennedy (167 U. S., 362) and First National Bank of ConcorcLv. Hawkins (174 U. S., 364 > followed, but this court is not disposed at present to push the principle of these cases so far as to exempt such banks from liability as other shareholders when they have accepted and hold stock of other corporations as collateral security for money advanced (which is not decided). (lb.) 23 (U. S. Sup. Ct., 1900). There is a presumption in such cases against any intention on the part of the lending bank to become an owner of the collateral shares. (lb.) 24 ( U. S. Sup. Ct., 1897). A creditor who receives from his debtor a transfer of shares in a national bank as security for his debt, and who sur- renders the certificates to the bank and takes out new ones in his own name, in which he is described as pledgee, and holds them afterwards in good faith as such pledgee and as collateral security for the pay- ment of his debt, is not a shareholder subject to the personal lia- bility imposed upon shareholders by Revised Statutes, section 5151. (Pauly v. State Loan and Trust Company, 165 U. S., 606.) 474 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Assessments — Continued. GENERAL PROPOSITIONS AS LAID DOWN BY THE SUPREME COURT IN REGARD TO LIABILITY OP SHAREHOLDERS. 1 (U. S. Sup. Ct, 1897). The previous cases relating to the liability of such stockholder examined and held to establish — 1. That the real owner of the shares of the capital stock of a national banking association may, in every case, be treated as a share- holder within the meaning of section 5151 (Pauly v. State Loan and Trust Company, 165 U. S., 606) ; 2. That if the owner transfers his shares to another person as col- lateral security for a debt due to the latter from such owner, and if by the direction or with the knowledge of the pledgee, the shares are placed on the books of the association in such way as to imply that the pledgee is the real owner, then the pledgee may be treated as a shareholder within the meaning of section 5151 of the Revised Stat- utes of the United States, and therefore liable upon the basis pre- scribed by that section for tlje contracts, debts, and engagements of the association ; 3. That if the real owner of the shares transfers them to another person, or causes them to be placed on the books of the association in the name of another person, with the intent simply to evade the responsibility imposed by section 5151 on shareholders of national banking associations, such owner may be treated, for the purposes of that section, as a shareholder, and liable as therein prescribed ; 4. That if one receives shares of the stock of a national banking association as collateral security to him for a debt due from the owner, with power of attorney authorizing him to transfer the same on the books of the association, and being unwilling to incur the responsibilities of a shareholder as prescribed by the statute, causes the shares to be transferred on such books to another, under an agree- ment that they are to be held as security for the- debt due from the real owner to his creditor — the latter acting in good faith and for the purpose only of securing the payment of that debt without incurring the responsibility of a shareholder — he, the creditor, will not, although the real owner may, be treated as a shareholder within the meaning of section 5151 ; and 5. That the pledgee of personal property occupies toward the pledgor somewhat of a fiduciary relation, by virtue of which, he being a trustee to sell, it becomes his duty to exercise his right of sale for the benefit of the pledgor. (lb.) 2 (U. S. Sup. Ct, 1903). The following propositions may be considered as settled in regard to the liability of shareholders of national banks under section 5151, Revised Statutes (Rankin v. Fidelity Insurance, Trust and Safe-Deposit Company, 189 U. S., 242) : 1. Liability may be established by allowing one's name to appear upon the books of the corporation as owner, though in fact he be . only a pledgee. Nor can the real owner exonerate himself from the responsibility by making a colorable transfer of the stock, with the understanding that at his request it shall be retransferred. (lb.) 2. Stockholders of record are liable for unpaid installments, though in fact they may have parted with their stock, or held it for others. ( lb. ) 3. A mere pledgee, however, who receives from his debtor a trans- fer of shares, surrenders the certificate to the bank and takes out new ones in his own name, in which he is described as " pledgee." and holds them afterwards in good faith, and as collateral security for the payment of his debt, is not subject to personal liability as a shareholder. But it is otherwise if he allow his name to appear on the book as owner, or being the owner, makes a colorable transfer of , the stock. (lb.) Where it was shown that a trust company loaned on shares of a then solvent and dividend-paying national bank, and accepted its DIGEST OF NATIONAL BANK DECISIONS. 475 SHAREHOLDERS— Continued. Assessments — Continued. GENERAL PROPOSITIONS AS LAID DOWN BY THE SUPREME COURT IN REGARD TO liability of shareholders — continued. stock as collateral, and subsequently the pledgor failed, and the trust company caused the stock to be transferred to one of its em- ployees, paid an assessment subsequently levied upon the stock, and charged it to the pledgor, and frequently wrote to ascertain if there was any market for the stock, stating that it was held as collateral. Held, that although the construction of written instruments is one for the court, where the case turns upon the proper conclusions to be drawn from a series of letters, particularly of a commercial char- acter taken in connection with other facts and circumstances, it is one which is properly referred to a ' jury, and as this case really turned upon the actual ownership of the shares, such question of ownership was properly left to the jury as one of fact. Held, that the pledgee is not bound by statements made without its knowledge by the assignees of the pledgors upon the schedules of liability to the effect that the pledgee had converted the stock. (lb.) liability of married woman. 1 (U. S. Sup. Ct, 1890). The coverture of a married woman who is a shareholder in a national bank does not prevent the receiver of the bank from recovering judgment against her for the amount of an " assessment levied upon the shareholders equally and ratably under the statute. (Keyser v. Hitz, 133 U. S., 138.) 2. Where a married woman is by the State law capable of holding stock in a national bank in her own right, she is liable to an assessment upon her shares, though the law of the State does not authorize married women to bind themselves by contracts for the payment of money. The law annexes her obligations by its own force ; no act or capacity to act on her part is required: (U. S. C. C, 1887) Witters v. Sowles, 32 Fed. Rep., 767; (U. S. C. C, 1888) Witters v. Sowles, 35 Fed. Rep., 640; (U. S. C. C, 1891) In re First National Bank of- St. Albans, 49 Fed. Rep., 120; (U. S. C. C, 1894) Robinson v. Turrentine, 59 Fed. Rep., 554. 3 (U. S. C. C. A., 1905). A married woman, who was a stockholder in a national bank at the time it became insolvent, is subject to the statutory liability for an assessment made thereon, at least in the absence of any State statute disabling her from owning the stock in her own right. (Christopher et al. v, Norvell, 134 Fed. Rep., 842.) 4 (U. S. C. C, 1891). Married women who are permitted by the laws of.the State in which they reside to become shareholders in national banks are liable to assessments under the national banking laws. (In re First National Bank of St. Albans, 49 Fed. Rep., 120.) 5 (U. S. C. C, 1894). Code of North Carolina, section 1826, provides that no woman during coverture shall be capable of making any contract to affect her real and personal estate without the written consent of her husband. Held, that a purchase of stock by a married woman is not a " contract " within the terms of the statute, and that the wife is liable upon an assessment, although the stock was purchased with- out the written consent of her husbaud. (Robinson v. Turrentine et al., 59 Fed. Rep., 554. ) 6 (Md., 1897). Where one residing in Maryland subscribes for stock of a national bank of another State and then transfers it to his wife, also a resident of Maryland, she becomes owner thereof, and is sub- ject to stockholders' liability, under Revised Statutes United States, section 5152, without regard to the laws of the other State relative to contract by married women. (Kerr v. Urie, 37 A., 789 ; 86 Md., 72. ) 476 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Assessments — Continued. LIABILITY OF HEIRS AND LEGATEES. Heirs liable to the extent of their distributive share. 1 (U. S. Sup. Ct, 1900). Enforcing the whole amount of an assessment on national bank stock, to the extent of the distributive share received against one of the heirs or next of kin, to whom the stock has been allotted by the probate court in indivision, in proportion to their interest in the estate pursuant to the statutes of Minnesota, does not violate any rights under the Federal statutes. (Matteson v. Dent, 1T6U. S., 521.) Devise of stock, transfer by executor. 2 (U. S. C. C. A., 1895). One D., a stockholder in the W. bank, died in 1882, leaving a will by which he gave all his property to his wife for life, " to be hers absolutely;" and at her death to go to his son and daughter, to be divided between them as his wife might think proper. D.'s wife qualified as executrix and took possession of the estate, but did not transfer the bank stock. She died in 1888, leaving a will disposing of the property, upon the assumption that she had entire power of disposition of it, and her disposition of it was acquiesced in by her son and daughter. One F., who was appointed executor of Mrs. D.'s will, qualified as such, and thereby became executor of D. He caused the bank stock to be transferred to his name as " executor," and testified that he meant thereby executor of Mrs. D. The bank officer who made the transfer testified that he understood the stock was transferred to F., as executor of Mrs. D. At the time of the transfer, in 1888, the bank was solvent and prosperous. The stock was held by F. as part of a trust fund created by Mrs. D.'s will for her daughter, as a means of paying a debt from D. to" the daughter, in such a way as to keep the money beyond the control of the daughter's husband. The W. bank failed in 1891, and the receiver sought to hold the estate of D. responsible for an assessment on the stockholders. Held, that as the stock could only have been trans- ferred by the act of D.'s executor, and as F. declared, and the bank understood when the transfer was made, that is was made to him as executor of Mrs. D., and he had power to receive it in that capacity, without regard to the terms of the wills, the bank, and consequently the receiver, were estopped to claim that D. and his estate had not ceased to hold stock at the time of the transfer, there being no ground to impute bad faith to any of the parties. (Ricaud v. Wilmington Savings and Trust Co. et al., 70 Fed. Rep., 424.) 3 (U. S. C. C. A., 1895). M. bequeathed to his wife "for life or widow- hood " 40 shares of stock in a national bank, together with other personal property, providing that she might use any of such personal property if necessary for her comfortable support, and that at her death or marriage whatever should remain of such property should go in equal shares to his four children. The administrator with the will annexed of M.'s estate transferred the stock on the books of the bank to M.'s widow. The bank having become insolvent, and an assessment having been made by the Comptroller on the share- holders, for which a judgment was obtained against M.'s widow, which remained unsatisfied, the receiver of the bank brought suit against M.'s administrator to compel payment of the assessment out of M.'s general estate. Held, that whether the widow took an abso- lute title to the stock by virtue of her power of disposal, or a life interest with remainder to the children, the beneficial ownership of the stock, in either case, had passed from M.'s estate, and the estate could not be made liable for the assessment. Held, further, that the administrator properly transferred the stock to the widow, and was not required to hold the legal title thereto, as administrator or trustee, during her life or widowhood, but that such transfer made no difference to the liability of the estate of M., since the beneficial interest would in either case have been in the widow and children. (Blackmore v. Woodward et al., 71 Fed. Rep., 321.) DIGEST OF NATIONAL BANK DECISIONS. 477 SHAREHOLDERS— Continued. Assessments — Continued. LIABILITY OF HEIHS AND LEGATEES — Continued. Transfer of bank stock to residuary legatee — Insufficiency of assets. 4 (U. S. C. C, 1887). An executor representing that he had sufficient as- sets to pay all legacies, but filing no inventory, obtained a decree that he pay the legacies and that the residue be paid to the residuary legatee, and afterwards transferred to the residuary legatee, with her assent, certain shares of bank stock belonging to the estate, the dividends on which were afterwards paid to the executor, who was the husband of the residuary legatee. The remaining assets were insufficient to satisfy the legacies. In an action brought to charge the estate with an assessment on the stock, held, that the transfer was valid, and passed the title to the residuary legatee. (Witters, Receiver, v. Sowles, Executor, et al., 32 Fed. Rep., 130.) Liability of legatees and devisees. 5 (U.S. CO., 1887). Under Revised Statutes United States, section 5151, rendering shareholders individually responsible for the liabilities of a national bank to the extent of the value of their stock, and section 5152, providing that the estate of a shareholder in the hands of the executor shall be liable in like manner and to the same extent that the testator would be if living — assets which have been transferred to legatees or devisees can not be subjected to liabilities of the bank accruing after the transfer. (lb.) When legatee liable before actual delivery. 6 (U. S. C. C, 1887). Where the court had ordered the transfer of stock to a legatee, but the executor failed to actually deliver it until after the failure of the bank, the legatee is chargeable with the assess- ment, (lb.) LIABILITY WHEN STOCK IS PURCHASED IN NAME OF MINORS. 1 (U. S. C. C, 1896). A father purchased stock in a bank in the name of his minor son. Thereafter the bank failed, and an assessment was made on the stock. After the assessment, but before suit was brought to recover it, the son became of age and assented to holding the stock. Held, that, as the cause of action accrued at the time of the assess- ment, and the son was incapable of assenting at that time, the father became and remained liable for the assessment. (Foster v. Wilson et al., 75 Fed Rep., 797.) 2 (U. S. C. C, 1896). One buying stock in a national bank in the names o£ his minor children himself becomes liable to assessment as a share- holder, for minors are incapable of assenting to become stockholders, so as to bind themselves to the liabilities thereof. (Foster v. Chase et al., 75 Fed. Rep., 797.) LIABILITY OF OTHER NATIONAL BANK OWNING STOCK IN INSOLVENT BANK. {See also Liability of pledgee, ante.) Bank may take corporate stock as collateral. 1 (U. S. Sup. Ct, 1897). The statutes of the United States relating to the organization and powers of national banks prohibit such banks from purchasing or subscribing to the stock of another corporation, although they may, as incidental to the power to loan money on per- sonal security, accept stock of another corporation as collateral, and thus become subject to liability as other stockholders. (California Bank v. Kennedy, 167 U. S., 362.) 2 (U. S. Sup. Ct., 1897). .Where the stock was purchased as an investment, the want of such authority may be set up by a bank to defeat an attempt to enforce against it the liability of a stockholder. (lb.) 478 DIGEST OF NATIONAL, BANK DECISIONS. SHAREHOLDERS— Continued. Assessments — Continued. LIABILITY OF OTHER NATIONAL BANK OWNING STOCK IN INSOLVENT BANK— Cont'd. Purchase of stock by national banks. 3 (U. S. Sup. Ct, 1899). The investment by the First National Bank of Concord, N. H., of a part of its surplus funds in the stock of the Indianapolis National Bank, of Indianapolis, Ind., was an act which it had no power or authority in law to do, and which is plainly against the meaning and policy of the statutes of the United States and can not be countenanced; and the Concord corporation is not liable to the receiver of the Indianapolis corporation for an assess- ment upon the stock so purchased made under an order of the Comp- troller of the Currency to enforce the individual liability of all stock- holders to the extent of the assessment. The doctrine of estoppel does not apply to this case. (First National Bank of Concord v. Hawkins, 174 U. S., 364.) 4 (U. S. C. C. A., 1899). It is ultra vires of a banking corporation, upon which has been conferred only the power to do a banking business, to purchase stock in another corporation merely as an investment, and such a purchase can not be validated by estoppel, so as to render the bank liable as a stockholder. The bank is not liable although it retained such stock until the bank became insolvent and received dividends thereon. (Schofield v. Goodrich Bros. Banking Co., 2 Bank- ing Cases, 253; 98 Fed. Rep., 271.) 5 (U. S. C. C. A., 1904). A national bank has no power to invest its sur- plus fund in the stock of another national bank, and can not be assessed thereon as a stockholder, although it actually made the pur- chase and held and received dividends on the stock. (Shaw v. National German-American Bank of St. Paul, Minn., 132 Fed. Rep., 658.) 6 (Kans. Sup., 1902). In an action against a national bank upon its double liability as a stockholder in another corporation, it was alleged in the petition that it acquired such stock in a particular manner. The evidence showed that it acquired it in a different manner, neither of which was ultra vires. Held, that there was not a fatal variance between allegations and proof ; the vital fact being, was the bank a stockholder, not how did it become such. (First Nat. Bank of Cher- ryvale v. Montgomery County Nat. Bank, 67 Pac. Rep., 458; 64 Kans., 134.) National bank may plead that its purchase of stock in another national bank was ultra vires. 7 (Cal. Sup., 1898). A national bank which deals in stocks of another cor- poration, in violation of the national banking law, may plead its want of authority in avoidance of liability as a stockholder ; and this, though it accepted dividends on such stock. (Chemical National Bank v. Havermale, 52 Pac. Rep., 1071; 120 Cal., 601.) '.LABILITY OF STATE BANK OB INSURANCE COMPANY OWNING STOCK IN NATIONAL BANK. 1 (U. S. C. C. A., 1896). A State bank which, under its charter, had power to accept stock in a national bank as security for a loan, or to acquire such stock by levy and sale under execution to satisfy a debt due to it, but which had no power to purchase such stock as an investment, purchased shares of the stock of a national bank, which were trans- ferred to it on the books of the national bank. The latter bank subsequently became insolvent, and an assessment upon the stock- holders was made by the Comptroller of the Currency, payment of which was resisted by the State bank on the ground that the purchase of the stock was ultra vires. Held, that as the purchase of the stock was merely the exercise, for an unauthorized purpose, of a power existing for other and legitimate purposes, the defense of ultra vires was not available. (Citizens' State Bank of Noblesville v. Hawkins, 71 Fed. Rep,, 369.) DIGEST OF NATIONAL BANK DECISIONS. 479 SHAREHOLDERS— Continued. Assessments — Continued. LIABILITY OF STATE BANK OB INSURANCE COMPANY OWNING STOCK IN NATIONAL bank — continued. 2 (U. S. C. C. A., 1896). The decision in Bank v. Hawkins, 71 Fed. Rep., 309, followed and applied to the case of un insurance company authorized to hold stock of a natienal bank as an investment of surplus but not of capital, which had invested a part of its capital in such stock. (Cooper Insurance Company v. Hawkins, 71 Fed. Rep., 372.) ASSESSMENT ENFORCEABLE AGAINST SHAREHOLDER'S ESTATE. 1 (U. S. Sup. Ct., 1887). Under the national banking act, the individual lia- bility of the stockholder survives as against the personal representa- tives of a deceased stockholder. (Richmond i\ Irons, 121 U. S., 27 ; ■ 3 N. B. C, 211.) 2. And the fact that the title to the stock of a deceased shareholder vests in his administrator does not relieve the estate from the burden of an assessment. (U. S. Sup. Ct, 1887) Richmond v. Irons, 121 U. S., 27; (U. S. C. C, 1894) Wickham v. Hull, CO Fed. Rep., 326; (Conn.) Davis v. Weed, 44 Conn., 569. 3 (tl. S. Sup. Ct., 1900). Allottees to whom there has been an allotment of national-bank stock in indivision, in proportion to their interest in the estate, are liable, under United States Revised Statutes, sections 5139, 5151, 5152, etc., to assessments upon such stock, although it is registered on the books of the bank in the name of the intestate, the bank not having been notified of the allotment, upon the subsequent insolvency of the bank. (Matteson v. Dent, Receiver, 2 Banking Cases, 469; 176 U. S., 521.) 4 (U. S. Sup. Ct, 1900). The fact that the time for filing claims against a deceased shareholder's estate has elapsed does not prevent the estate of the distributees from being held for the assessment. (Matteson v. Dent, 176 U. S., 521.) 5 (U. S. C. C. A., 1895). The personal liability of a deceased stockholder's estate in the hands of his personal representatives should be assessed against those for whose use the stock is held and a judgment against the personal representative for the liability should not be satisfied out of the general assets of the estate. (Blackmore v. Woodward et al„ 71 Fed. Rep., 321.) 6 (U. S. C. C, 1898). The estate in the hands of an executrix at the date of the failure of a national bank is liable for the assessment on stock belonging to the estate in the same manner as if deceased was living (Rev! St., sec. 5152) ; and the fact that the time for filing claims against the estate has expired is no bar to an action to fix such lia- bility. (Zimmerman v. Carpenter, 84 Fed. Rep., 747.) 7 (U. S. C. C. A., 1895). An executor who receives certificates of national- bank stock as part of the assets of decedent's estate, and includes them in his inventory returned to the probate court, is a shareholder, and liable as such for an assessment under Revised Statutes, section 5151, subject to the relief granted by section 5152. (Parker v. Robin- son, 71 Fed. Rep., 256.) 8 (U. S. Dist. Ct., 1900). An executrix is liable as such, under Revised Statutes 5152, for assessment made by the Comptroller on shares of stock in national bank held by her and issued to the estate of her tes- tator in exchange for shares held by the testator in his lifetime and surrendered by her on a reduction of the capital stock of the bank. (Brown v. Ellis, 103 Fed. Rep., 834.) 9 (U. S. C. C, 1900). A testator directed by his will that a daughter's share in his estate should remain in the hands of his executors and be 480 DIGEST -OP NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Assessments — Continued. ASSESSMENT ENFORCEABLE AGAINST SHAREHOLDER'S ESTATE — Continued. invested by them, and the income paid to the daughter during her life, and at her death the part of the estate so " held in reserve " by the executors should revert to the general estate. The executors set apart as a portion of the daughter's share cer- tain shares of stock in a national bank held by the testator and caused the same to be transferred on the books of the bank to them- selves as " trustees." Held, that the legal title to such shares de- volved upon them as executors, and they have no power to divest themselves of such title by any transfer and that an action to recover an assessment on the stock was properly brought against them as executors, and especially where the assessment was not made until after the daughter's death. (Earle v. Rogers et al., 105 Fed. Rep., 208.) 10 (U. S. C. C, 1894). The estate of a deceased owner of national-bank stock is liable (Rev. St., sec. 5152,) to an assessment levied against his executors in consequence of the failure of the bank after his death. (Wickham v. Hull et al., 60 Fed. Rep., 326.) 11 (U. S. C. C, 1898). The widow of a deceased stockholder of an insolvent national bank, who by authority of the will undertook to settle the estate as executrix without judicial proceedings, but failed to trans- fer such stock to herself or other person can not, on the ground that the estate is fully settled, escape liability as executrix for assess- ments on such stock to the extent of assets of the estate under her control. (Baker v. Beach et al., 85 Fed. Rep., 836.) 12 (Conn.). Nor will the fact that the administration is complete and all the assets have been distributed defeat an action brought to recover the assessment. (Davis v. Weed, 44 Conn., 569.) 13 (Wyo., 1897). The assessment in not a lien against the estate of the deceased stockholder and is not a preferred claim. (In re Beard's Estate, 50 Pac. Rep., 226; 7 Wyo., 104.) COMPOUNDING SHAREHOLDER'S LIABILITY. When ineffectual. 1 (U. S. C. C, 1879). A court has no power, under section 5324, United States Revised Statutes, to order the receiver of a national bank to compound debts which are not " bad or doubtful," and a composition under such an order of debts not " bad or doubtful," as the debt of a shareholder arising on his subscription to the stock, is ineffectual. (Price v. Yates, 19 Alb. L. J., 295 ; 2 N. B. C, 204.) Compounding, when not allowed. 2 (U. S. Dist Ct, 1892). A Federal court will not, even if it has the power under Revised Statutes, section 5234, grant an order authorizing a receiver of a national bank to compound the statutory liability of certain stockholders by accepting payment of a gross sum, less than is due, in satisfaction and discharge thereof, although more money would thus be realized than by proceeding to collect the same in the usual way, when it appears probable that such stockholders have fraudulently conveyed their property to avoid their legal obligations as stockholders, or to shield themselves from injury and exposure by litigation. (In re Certain Shareholders of the California National Bank of San Diego, 53 Fed. Rep., 38.) 3 (U. S. C. C, 1899). A judgment recovered by the receiver of an insolvent national bank against a stockholder on an assessment made by the Comptroller, although uncollectible, is not a " bad or doubtful debt." which a court may authorize the receiver to compound under Revised Statutes, section 5234. (In re Earle, 96 Fed. Rep., 678.) DIGEST OF NATIONAL. BANK DECISIONS, 481 SHAREHOLDERS— Continued. Assessments — Continued. INTEREST ON ASSESSMENT. 1 (U. S. Sup. Ct., 1876). The assessments made by the Comptroller Upon the shareholders of an insolvent association bear interest from the date of the order. (Casey v. Galli, 94 U. S., 673.) 2 (U.S. Sup. Ct, 1882). The liability of the stockholders bears interest from the date of a letter of the Comptroller of the Currency directing enforcement of stockholders' personal liability. (Bowden v. Johnson, 107 U. S., 251.) 3 (U. S. Sup. Ct, 1887). A shareholder in a national bank, who is liable for its debts, is liable for interest thereon to the extent of the. bank's liability, and not in excess of the maximum liability fixed by statute. (Richmond v. Irons, 121 U. S., 27.) 4 (Nebr. Sup., 1898). An assessment levied by the Comptroller of the Cur- rency on a stockholder of a national bank draws interest from the date such assessment is made payable. (Davis's Estate v. Watkins, 76 N. W., 575; 56 Nebr., 288.) SHAREHOLDER CAN NOT PREFER CREDITOR. Stockholder's mortgage after tank's failure void. 1 (U. S. C. C, 1888). Section 2, act Congress June 30, 1876 (19 Stat. L„ 63), provides that the individual liability of shareholders of an insol- vent national bank, fixed by Revised Statutes, section 5151, " may be enforced by any creditor of such association by a bill in equity in the nature of a creditor's hill, brought by such creditor on behalf of himself and all other creditors." Held, that a mortgage of all his individual property executed by a cashier and stockholder of such bank, after it had closed its doors, to secure a depositor, amounted to a preference, and was void as against a judgment recovered against the cashier by the receiver under Revised Statutes, section 5151, either in the hands of the receiver or in those of a purchaser from him for value. (Gatch v. Fitch et al. ; Sunman v. Gatch et al., 34 Fed. Rep., 566.) SET-OFF AGAINST ASSESSMENT. When allowed. 1 (U. S. C. 0., 1889). In an action by the receiver of an insolvent national bank to recover of a stockholder an assessment on his shares, the defendant alleged as a counterclaim that the Comptroller of the Cur- rency had directed the bank to restore the value of certain securi- ties held by it which had been reported worthless by an examiner; that certain of the stockholders, including defendant, had raised a fund which was placed in the hands of trustees to apply so much as might be from time to time required by the Comptroller to retire such securities; that the fund was deposited with the bank with full notice of the purpose to which it was to be applied ; that a por- tion had been used to retire the securities designated, and that when the bank failed the balance of the fund came into the hands of the receiver, and was now claimed by. him as a part of the ordinary assets of the bank ; that a certain portion of this balance belonged to defendant, whicn amount he asked to set off against plaintiff's demand. Held, that a general demurrer based on the ground that no set-off or counterclaim was available in such an action would be overruled, as the claim could be set off if it was of such a nature that the holder would be entitled to receive the full amount before distribution by the receiver to general creditors. (Welles v. Stout, 38 Fed. Rep., 807.) 2 (Ohio, 1892). When a subscriber to unauthorized increases of stock in a national bank pays thereon, he may, on the insolvency of the bank, set off such payment against his debt due the bank. (Armstrong v. Law, 27 W. L. Bui., 100.) 4049—05 31 482 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Assessments— Continued. set-off against assessment — continued. Dividends may oe set off against an assessment. 3 (Ohio). The indebtedness of the stockholders on their individual lia- bility, together with the other assets of the insolvent bank, constitute a trust fund for the benefit of its creditors ; and in equity such indebt- edness of a stockholder who is insolvent may be set off against a divi- dend payable out of the trust fund, on a balance due him on his deposit account with the bank at the time of its failure. (King et al. v. Armstrong, receiver, 34 N. E., 163; 50 Ohio St., 222.) 4 (Ohio). An assignment by the stockholder of his claim against the bank, before the direction of the Comptroller to enforce his liability, but after the insolvency of the bank, does not affect the right to set off his liability against the dividend due on his claim, nor does the fact that the Comptroller, at the time of the assignment, had not determined the amount necessary to be collected from the stock- holders for the payment of the creditors. It is sufficient that such direction has been given, and amount so determined when the set-off is made. (lb.) When not allowed. 5. Payments of assessments by stockholder in national bank on increased stock can not be applied, in law or in equity, to discharge assessments by Comptroller in final liquidation of the bank. (U. S. Sup. Ct, 1891) Pacific National Bank v. Eaton, 141 U. S., 227 ' (U. S.'sup. Ct, 1891) Thayer v. Butler, 141 U. S. 234; (U. S. Sup. Ct., 1891) Butler v. Eaton, 141 U. S., 240; (U. S. C. C, 1885) Morrison v. Price, Receiver, 23 Fed. Rep., 217. 6 (TJ. S. Sup. Ct, 1886). Where shareholders have assessed themselves to the amount of the par value of the stock for the purpose of restoring impaired capital, the contributions made in pursuance of such assess- ment, though all used in paying the debts of the association, will not so operate as to discharge the shareholders from their individual liability. It makes no difference that it was made under the mis- taken supposition that it would extinguish such liability and that the proceedings took place while the bank was under the supervision of the Comptroller acting through the bank examiner where the mistake was not caused by any misrepresentation on the part of the creditors. (Delano v. Butler, 118 U. S., 634.) 7 (U. S. Dist Ct, 1881). A stockholder can not set off his individual claim on a national bank against his liability for an assessment. (Hobart, Receiver, v. Gould, 8 Fed. Rep., 57.) 8 (U. S. C. C. A., 1896). The amount of a stockholder's deposit in a national bank can not be set off against an assessment made by the Comp- troller against his stock. (Wingate v. Orchard, 75 F. R., 241. Con- tra: (Ohio, 1880) Brownell v. Armstrong, 20 W. L. B., 465.) 9 (U. S. C. C, 1887). In an action by a receiver of an insolvent bank to charge the estate of a shareholder with an assessment on his shares, the executor claimed, by way of set-off, that property belonging to the estate had been delivered to the bank, upon the understanding that it should be applied on the assessment if the bank should fail. Held, not a proper subject to set off, even though the bank examiner assented to the agreement. (Witters, Receiver, etc., v. Sowles, Ex'r. 32 Fed. Rep., 130.) 10 (U. S. C. C, 1889). Defendant, for the purpose of helping a bank, of which complainant was a stockholder, in a financial crisis loaned it certain securities belonging to complainant, and when complainant was informed of the fact she did not object. She was assured by the bank's officers that if the bank was saved the securities would be returned, and if it failed the avails would be credited on her assess- ment as a stockholder. The bank failed, and the securities were not DIGEST OF NATIONAL BANK DECISIONS. 483 SHAREHOLDERS— Continued. Assessments — Continued. set-off against assessment — continued. returned. Held, that she was not entitled, as against other creditors, to set off the value of the securities against her assessment, but was, as to such value, on the same footing as any other creditor. (Sowles v. Witters et al., 39 Fed. Rep., 403.) 11 (U. S. C. C, 1895). The P. National Bank suspended business for lack of funds, and was placed in charge of a bank examiner, who required that $50,000 should be raised and placed in the bank before it could resume business. The stockholders, including one B., the president, thereupon raised this sum, in amounts equal to 50 per cent of their stock, and placed it in the bank. The examiner caused entries to be made on the ( books indicating that this contribution was a voluntary assessment, subject, after one year, to the liabilities of the. bank, and permitted the bank to resume. B., at a meeting of the directors subsequently held, protested against these book entries, but after- wards signed reports in which the $50,000 was included as surplus. At the time of the advance the bank held two notes of B., and dis- counted another note of his a few days before the expiration of a year from the advance. Shortly after the expiration of the year the bank again suspended payment. Held, that the advance to the bank was a voluntary assessment, and riot a loan, and could not be set off by B. in an action against him on the notes by the receiver of the bank. (Broderick v. Brown, 69 Fed. Rep., 497.) 12 (Cal., 1894). One in whose name stock of an insolvent national bank stood paid an assessment thereon under a threat by the receiver to sue therefore, though he claimed that he had sold the stock. More funds were collected than were required to pay the creditors of the bank. Held, that such payment could not be recovered as having been made under a mistaken belief by the payor that the whole amount would be required to pay the creditors of the bank. (Holt v. Thomas, 38 P., 891; 105 Cal., 273.) 13 (N. C. Sup., 1899). A shareholder in a national bank in the process of liquidation can not set off his distributive share in the assets against his liabilities. (First Natl. Bank v. Biggins, 32 S. E., 801.) Fraud may not be offset against assessment. 14 (U. S. Sup. Ct, 1901). In such a suit, a defendant stockholder can not offset against the stock assessment damages incident to the fraud of the bank in inducing him to become a shareholder. (Lantry v. Wallace, 182 U. S., 536.) Actions to Enforce Liability. actions by receives. in general. Enforcement' of shareholder's personal liability. 1 (U. S. Sup. Ct., 1869). On a bill filed by a receiver against stockholders under section 50, where bank fails to pay its notes, action by Comp- troller must precede institution of suit by receiver and be set forth therein. (Kennedy v. Gibson, 75 U. S. (8 Wall), 498.) 2 (U. S. Sup. Ct., 1869). Creditors of the bank are not proper parties to 'such bill. (lb.) Security for costs. 3 (U. S. C. C, 1898). A receiver of a national bank, bringing suit against stockholders in a circuit court in another jurisdiction, is not ex- empted by Revised Statutes, section 1001, from being required by the court to give security for costs. (Piatt v. Adriance, 90 Fed. Rep., 772.) 484 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Actions to Enforce LiABiuTY^-Continued. actions by receiver — continued. in general — continued. When receiver can not bring suit to enforce individual liability of stockholder. 4 (U. S. C. C, 1882). A creditor's bill was filed against a national bank before the passage of' the act of Congress of June 30, 1876 (19 Stat. L., 63), and a receiver was appointed who took possesion of the property of the bank. An amended bill was filed in the cause, after the passage of that act, to secure the .benefits of the act, to which all stockholders were made parties. Subsequently the Comptroller of the Currency appointed a receiver to wind up the affairs of the bank, and this suit was brought by him against one of the stock- . holders. Held, on demurrer to a plea in abatement, which set forth " these facts, that the defendant is entitled to judgment on the ground that, as the stockholder's liability can be completely enforced in a suit in equity, the general rule applies that a debtor shall not be vexed by two suits in the same jurisdiction for the same cause of action. (Harvey, Receiver, etc., v. Lord, 10 Fed. Rep., 236.) Separate actions allowed.- 5 (V. S. Dist. Ct). Separate actions may be brought to enforce the per- sonal liability of stockholders. (Stanton v. Wilkeson, 8 Ben., 357.) National banks — Action by receiver to recover assessments — Complaint. 6 (U. S. C. C. A., 1902). A complaint in an action by the receiver of a national bank to recover an assessment from a stockholder suffi- ciently shows the capital stock of the bank, although not directly alleged, where it alleges that there were 500 shares, of the* par value of $100 each, and that the assessment was made ratably, at $100 per share, and amounted to $50,000. (McClaine v. Rankin, 119 Fed. Rep., 110; 5 B. C, 269.) Same — Notice of assessment — Evidence. 7 (U. S. C. C. A., 1902). The testimony of a witness that in his capacity as receiver of a national bank he made personal demand upon a stock- holder for the payment of an assessment, and that the stockholder admitted having received notice thereof, where uncontradicted, suffi- ciently shows notice and demand to support an action to recover the assessment. (lb.) Same — Authority to sue. 8 (U. S. C. C. A., 1902). Specific authority given by the Comptroller to the receiver of a national bank to bring an action against a stockholder to recover an assessment is not withdrawn or affected by a subse- quent general authority to compromise or sell all the claims or assets of the bank. (lb.) Same — Defenses — Prior action by receiver. 9 (U. S. C. C. A., 1902). An action brought by the receiver pf a national bank against a stockholder to enforce a compromise agreement entered into for the settlement of the stockholders' liability for an assessment, but in which the receiver took a voluntary nonsuit, is not a bar to a subsequent action to recover the assessment, the stock- holder having failed to carry out the compromise agreement, nor did the receiver's action in commencing such suit create an estoppel against him. (lb.) Satisfaction of judgment for personal liability discharges shareholder. 10 (Nebr. Sup., 1900). A receiver has authority to institute proceedings and collect assessments ordered by the Comptroller of the Currency against stockholders of an insolvent national bank on their individual liability, and satisfaction of a judgment obtained in such proceedings satisfies and obliterates the obligation, regardless of the disposition DIGEST OF NATIONAL BANK DECISIONS. 485 SHAREHOLDERS— Continued. Actions to Enfoecb Liability — Continued. actions by eeceiveb — continued. in general — continued. made of the proceeds of such assessment by the receiver of such national bank. (Schaberg's Estate v. McDonald, 83 N. W., 737; 60 Nebr., 493:) Action by receiver. 11 (Ohio). Each shareholder of a national banking association is individu- ally liable for its debts to the extent of the amount of his stock at its par value, in addition to the amount invested in the shares held by him, and a receiver appointed to wind up yie affairs of such an association that has become insolvent is authorized, under the direc- tion of the Comptroller of the Currency, to enforce the liability of its stockholders, and to collect from each of them the necessary amount, up to the extent of his liability, for the payment of the creditors. (King et al. v. Armstrong, Receiver, 34 N. E., 163; 50 Ohio St., 222.) actions at law. 1 (U. S. Sup. Ct, 1878). An action for debt will lie where the amount of the bank's outstanding indebtedness and the number of shares held by the stockholders can be stated. In such cases the extent of the stock- holders' liability is fixed. (Mills v. Scott, 99 U. S., 25.) 2. When the full personal liability of shareholders is to be enforced the action must be at law. (U. S. Sup. Ct, 1869) Kennedy v. Gibson, 75 U. S. (8 Wall.), 498; (U. S. Sup. Ct, 1876) Casey v. Galli, 94 U. S., 673. 3. When an assessment upon the stockholders is ordered by the Comp- troller, a suit at law is the proper remedy to enforce it. (U. S. C. C, 1877) Bailey v. Sawyer, 4 Dill., U. S., 463 ; 1 N. B. C, 356; (U. S. C. C, 1891) Young v. Wempe et al., 46 Fed. Rep., 354. 4 (U. S. C. C, 1877). And it may be at law, though the assessment is not for the full value of the shares ; for, since the sum each shareholder must contribute is a certain exact sum, there is no necessity for invoking the aid of a court of equity. (Bailey v. Sawyer, 4 Dill., 463; IN. B. C, 356.) Trusts — Action against trustee — 'Pleading. 5 (U. S. C. C, 1904). Under the Massachusetts practice a trustee can not be sued at law as such, but the action must be against him as an individual, and his description in the writ and declaration as trustee is surplusage. (Hampton v. Foster, 127 Fed. Rep., 468.) National banks — Assessment against stockholders — Action against trustee. 6 (U. S. C. C, 1904). Where the question of the liability of a trust estate for an assessment on shares of an insolvent national bank held by the trustee depends upon the power of the trustee, under the terms of the trust, to purchase such shares for the estate, such question can not be determined in an action at law by the bank receiver against the stockholder, though it is alleged that he holds the stock as trustee, (lb.) ACTIONS IN EQUITY. 1 (U. S. Sup. Ct, 1869). Where less than the whole amount of such stock is sought to be recovered the proceeding may be in equity. In such case an interlocutory decree may be taken for contribution, and the case may stand over for further action of the court until the whole amount of the liability is exhausted. (Kennedy v. Gibson, 8 Wall.. 498.) 486 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Actions to Enforce Liability — Continued. actions by receiver — continued. actions in equity — continued. 2 (U. S. Sup. Ct, 1878). Where the amount of shareholder's liability is not fixed, but must be computed on bank's capital stock, assets, and lia- bilities, a suit in equity is the proper remedy to enforce an assess- ment. (Mills v. Scott, 99 U. S., 25.) 3 (U. S. Sup. Ct, 1888). The bill alleging that the married woman is pos- sessed of property in her own right sufficient to pay the assessment and praying for a decree of payment therefrom, and the bill of revivor filed after her death against her husband, praying for relief out of the assets received by him as her legatee, devisee, or executor, the case is one of equitable cognizance. (Bundy v. Cocke, 128 U. S., 185.) 4 (U. S. C. C, 1896). The bar of a statute of limitations will be enforced, when applicable, in equity as well as at law. (Thompson v. German Ins. Co. et al., 76 Fed. Rep., 892.) 5 (U. S. C. C, 1898). Where bank stock was transferred by an executrix to herself individually, and she admits before suit is brought, and again in her answer, that the transfer was without consideration, and is void, such admission does not vacate the transfer, and a bill in equity will lie to determine the liability of the estate on an assess- ment of the face value of the stock. (Zimmerman v. Carpenter, 84 Fed. Rep., 747.) 6 (U. S. C. C, 1898). Where, at the hearing, the defendant raises the point that the claimant has a plain, speedy, and adequate remedy at law, the court will not make a decree if there is a plain defect of juris- diction, but the bill will be construed more liberally than if the point had been raised by demurrer. (lb.) 7 (U. S. C. C. A., 1900). The receiver of an insolvent national bank may maintain a suit in equity to enforce an assessment against stock- holders, where such assessment is less than the full amount of their liability ; and where the question of law involved is common as to a number of the stockholders, and rests upon substantially the same facts, they may be joined as defendants. (Bailey v. Tillinghast, 99 Fed. Rep., 801.) 8 (U. S. C. C. A., 1900). To authorize a plaintiff to maintain a suit in equity against a number of persons, it is not essential that there should be a community of interest between them ; but where a common ques- tion of law arising upon similar facts is involved between the plain- tiff and each defendant, equity has jurisdiction on the ground of preventing a multiplicity of suits. (lb.) PARTIES, ALLEGATIONS, EVIDENCE, BURDEN OF PROOF, PRACTICE. Parties. 1 (U. S. Sup. Ct., 1882). Bill filed by receiver against transferrer and trans- feree (where transfer was made to avoid liability), to enforce such liability will lie, where it is for discovery as well as relief, as the transfer would be good between the parties, and only voidable at the election of the complainant. (Bowden v. Johnson, 107 U. S., 251.) 2 (U. S. Sup. Ct., 1869). Where less than the entire liability of stockholders is sought to be enforced, proceedings may be had in equity and an interlocutory decree may be taken for contribution. Where contribu- tion only is sought, all the stockholders who can be reached by the process of the court may be joined in a suit, and it will be no objec- tion that there are others beyond the jurisdiction of the court who can not for that reason be made codefendants. (Kennedy v. Gibson, 1 N. B. C, 17; 75 U. S. (8 Wall.), 498.) DIGEST OF NATIONAL BANK DECISIONS. 487 SHAREHOLDERS— Continued. Actions to Enforce Liability — Continued. actions by eeceiveb — continued. PASTIES, ALLEGATIONS, EVIDENCE, BURDEN OF PROOF, PRACTICE Continued. Allegations. 3. It is not essential in an action to enforce the individual liability of the shareholders of an insolvent national banking association to aver and prove that the assessment was necessary, for the decision of the Comptroller on this point is conclusive. (U. S. Sup. Ct, 1869) Kennedy v. Gibson, 75 U. S. (8 Wall.), 498; (U. S. Sup. Ct, 1876) Casey v. Galli, 94 U. S., 673 ; (U. S. C. C, 1891) Young v. Wempe et al., 46 Fed. Rep., 354; (U. S. Dist. C.) Strong v. Southworth, 8 Ben., 331. 4 (U. S. C. C, 1895). In an action by the receiver of a national bank to enforce the individual liability of a stockholder, an allegation in the complaint that on a given date the Comptroller, having ascertained and determined that the assets, property, and credits of the bank were insufficient to pay "its debts and liabilities, and, as provided by the act of Congress, made an assessment and requisition on the share- holders of the said bank of a given sum- upon each share held and owned by them, respectively, at the time of its default, and directed the reeciver to take all neecssary steps to enforce the liability, is sufficient (Kennedy v. Gibson, 8 Wall., 498, distinguished; Nead v. Wall., 70 Fed. Rep., 806.) 5 (CaK, 1896). The complaint, in an action by the receiver of an insolvent national bank to enforce an assessment on the shareholders, made by the Comptroller of the Currency, need not aver that there was a necessity therefor, or that the Comptroller determined that there was such necessity, though the law provides that the Comptroller may enforce the individual liability of the stockholders, if necessary to pay the debts of the bank. It is enough that the complaint alleges that the Comptroller made the assessment and directed its enforce- ment. (O'Connor v. Witherby, 44 P., 227; 111 Cal., 523.) 6 (Cal., 1896). The allegation of the complaint, in an action for an assess- ment on shareholders, in a bank, that " defendant, though demanded, has failed and refused to pay said assessment, or any part thereof," is a sufficient averment as against a general demurrer of nonpayment at the time action was commenced. (lb.) 7 (Mass., 1896). Where the statutory liability of a stockholder to corpora- tion creditors is, by statute, declared to be directly to the creditors, an averment in a declaration to enforce such liability that the corpo- ration is in the hands of a receiver is immaterial. (Hancock National Bank v. Ellis, 44 N. E., 349 ; 166 Mass., 414.) 8 (Mass., 1896). The declaration in an action to enforce the liability of a stockholder of a foreign corporation which averred that under the statute of the foreign State, as interpreted by the decisions of the court of last resort of that State, defendant's liability as stockholder was contractual, and arose upon the subscription made by him to the capital stock, and that in subscribing he guaranteed payment to the creditors of the corporation of an amount equal to the par value of the stock held by him, which should be payable to the judgment creditors of the corporation who first pursued their remedy under the statute; and that an action to enforce that liability was transi- tory, and could not be brought in any court of general jurisdiction in the State where personal service could be made upon the stock- holder — stated a cause of action of which the courts of Massachu- setts had jurisdiction. (lb.) Evidence. 9 (U. S. C. C. A., 1897). Upon the trial of a suit brought by the receiver of an insolvent national bank to collect an assessment from one who had transferred his stock, a letter written by the defendant to a bank 488 DIGEST OP NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Actions to Enforce Liability — Continued. actions by receiver — continued. PARTIES, ALLEGATIONS, EVIDENCE, BURDEN OP PBOOP, PRACTICE Continued. examiner, in reply to an inquiry about the bank, in which defendant admits his transfer of his stock when the bank was embarrassed, is not a privileged communication, though the bank examiner's letter, to which it is a reply, is marked " Confidential." (Cox v. Montague, 78 Fed. Rep., 845.) 10 (U. S. Dist. Ct, 1900). In an action by the receiver of a national bank to recover an assessment on stock alleged to be held by the defendant as executrix, a copy of entries in the stock book of the bank show- ing the issuance of a certificate of stock to the estate of the defend- ant's testator, identified as a true copy by the deposition of the former cashier, who testified with the book before him, is admissible against the defendant to prove such entries. (Brown v. Ellis, 103 Fed. Rep., 843.) 11 (U. S. Dist. Ct, "1900). As between the 'shareholders of a national banking association, the books of the bank are public records, and the entries therein are admissible against them as evidence of the facts they show. (lb.) 12 (U. S. Dist. Ct, 1900). The original order of the Comptroller of the Cur- rency levying an assessment on the shares of a national bank, over his official signature and seal, proves itself, and fixes the. liability of the shareholders from its date, no demand being necessary. (lb.) 13 (U. S. Dist Ct, 1900). Depositions taken under a commission issued to "A. C. Strong," a notary public of a certain county, are not inadmis- sible because they were taken and certified by "Alfred C. Strong " as a notary public of such county, who is shown to be the same person, (lb.) 14 (U. S. Dist. Ct, 1900) . Where depositions are taken for use in a Federal court under the provisions of Revised Statutes, 863-865, upon a com- mission issued to a notary public, it is not essential that he should attach his official seal to his certificate. (lb.) 15 (U. S. Dist Ct, 1900). Where, in the taking of depositions for use in a Federal court under the provisions of Revised Statutes, 863-865, both parties were present by counsel, and the testimony on both direct and cross examination was taken in shorthand and reduced to writing by the stenographer in the presence of the magistrate, witnesses, and counsel, a failure to object to such proceedings, either at the time of taking or when the depositions were offered in evidence, was a waiver of the right to have them excluded because the testimony was not reduced to writing by either the magistrate or the witnesses, as required by section 864. (lb.) Burden of ■proof. 16 (U. S. Sup. Ct, 1877). Where the name of an individual appears on the stock book of a corporation as a stockholder the presumption is that he is the owner of the stock ; and in an action against him as stock- holder the burden of rebutting that presumption is cast upon the de- fendant. A receipt of a dividend upon the shares standing upon the book of the company in the name of the defendant is also evidence of his being a stockholder. (Turnbull v. Paysoh, 95 U. S., 418.) 17 (U. S. C. C. A., 1900). Defendant held shares of stock in a national bank as c611ateral security. The bank was subsequently consolidated with another bank, and stock of the latter was issued in lieu of stock of the former. Defendant surrendered the shares it held, and caused stock in the consolidated bank to be issued in lieu thereof in the name of an employee, but continued to hold the same as security for the original debt. Held, in an action by the receiver of the consolidated bank to recover an assessment from the defendant, in which lie DIGEST OF NATIONAL BANK DECISIONS. 489 SHAREHOLDERS— Continued. Actions to Enforce Liability — Continued. actions by receiver — continued. PASTIES, ALLEGATIONS, EVIDENCE, BURDEN OF PROOF, PRACTICE Continued. alleged that defendant had purchased and become the owner of the stock, on the theory that its having caused the substituted stock to be issued amounted to a conversion of the collateral, that the burden of proof rested, on the plaintiff to prove that the exchange was made without the consent of the pledgor. (Wilson v. Merchants' Loan and Trust Co. of Chicago, 111., 98 Fed. Rep., 688.) 18 (U.S. C.C., 1900). A pledgee of national-bank stock can be held liable for an assessment /thereon only on the ground of estoppel, and the burden of showing such estoppel rests upon the receiver suing to recover such assessment. (Tourtelot v. Stolteben, 101 Fed. Rep., 362.) 19 (Mich. Sup., 1899). In an action to enforce such liability, the burden is upon the receiver of the bank to show that a transfer of stock was made by the stockholder for the fraudulent purpose of avoiding lia- bility as such stockholder. (Foster v. Broas, Foster v. Row, 2 Bank- ing Cases, TOO; 79 N. W., 696; 120 Mich., 1.) Practice. 20 (U. S. C. C. A., 1904). Where it had been previously determined in a probate proceeding by the receiver of an insolvent national bank to establish a claim for an assessment levied on stock against decedent's estate that she was the owner of the stock, the parties to a subse- quent action against decedent's distributees by the receiver's suc- cessor to recover a subsequent assessment being in privity, defendants were estopped to relitigate the question ef decedent's ownership, though the cause of action in the two proceedings was not the same. (Rankin v. City of Big Rapids et al., 133 Fed. Rep., 670.) 21 (U. S. C. C, 1894). An action was brought against the executors of an es- tate to establish its liability for an assessment on certain shares of national-bank stock. The estate was at the time in possession of an Iowa probate court for purposes of administration, for which reason the Federal court could not enforce the liability, if adjudged to exist. Defendant set up the limitations contained in the Iowa statute (Code, sec. 2421) regulating the settlement of estates. Held, that the Federal court would not pass upon the question whether this pro- vision debarred complainant from sharing in the estate, for, as the claim established in the Federal court must be presented for allowance in the probate proceedings, the better practice was to remit the question to the probate court. (Wickham v. Hull et al., 60 Fed. Rep., 326.) _ . 22 (U. S. C. C. A., 1900). An assignment of error based on the refusal of an instruction submitting to the jury a question of fraudulent intent in including in a mortgage certain items of indebtedness of a third party to the mortgagee raises no question which can be considered, where the bill of exceptions does not set out the evidence, but merely gives v its substance, and contains a recital that there was evidence tending to show that such indebtedness had previously been assumed by the mortgagor, and that there was no evidence tending to show that its inclusion was with any fraudulent purpose. (Carson et al. v. Com- mercial Nat. Bank of Independence, Kans., et al., 104 Fed. Rep., 733). 23 (Nebr. Sup., 1900). Where, during the proceedings of the trial of a case in the district court, the plaintiff, the receiver of an insolvent national bank, dies, and a successor is appointed, and such facts are suggested to the court, supported by affidavit, with a request for the substitution of the successor, and defendant files objections to such substitution : Held, that the issuance of summons or conditional order of revivor was thereby waived, and that, upon the hearing of such application and objections, a positive order substituting such successor as plaintiff in the action was proper, no sufficient reason 490 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Actions to Enfobce Liability — Continued. actions bt beceiveb — continued. PASTIES, ALLEGATIONS, EVIDENCE, BUBDEN OF PROOF, PBACTICE — Continued. why the same should not be done having been shown on the objec- tions raised. (Schaberg's Estate v. McDonald, 83 N. W., 737; 60 Nebr., 493.) INSUFFICIENT DEFENSES. Shareholder not permitted to deny existence of corporation. 1 (U. S. Sup. Ct, 1876). A shareholder in a national bank is not permitted to deny the existence or legal validity of such corporation. (Casey v. Galli, 94 U. S., 673.) Shareholder can not set up as a defense against his liability the fact that he was induced to purchase said stock by fraud. 2 (U. S. Sup. Ct, 1901). Fraudulent representations by which a person is induced to become a stockholder of a national bank constitute no defense in an action at law by a receiver of the bank to enforce the statutory liability of the stockholders, as the defense is of an equi- table nature and must be asserted, if at all, in equity. (Lantry v. Wallace, 182, U. S., 536.) 3 (U. S. Sup. Ct, 1901). The illegality of a purchase by a national bank of its own stock does not relieve one who subsequently buys it from the bank from liability as stockholder. (lb.) 4 (U. S. C. C, 1898). A stockholder by purchase in a national bank which has conducted business as such for six years can not defend against an action by a? receiver to recover an assessment on the ground that the original capital stock of the bank was never paid in. (Wallace v. Hood, 89 Fed. Rep., 11.) 5 (U. S. C. C, 1898). One induced by the fraud of a national bank to pur- chase stock therein, which the bank in reality owned, can not make an effectual tender of rescission which will support an action at law to recover the purchase price after the bank has passed into the ~ hands of a receiver. (lb.) 6 (U. S. C. C, 1898). In an action by the receiver of a national bank to en- force an assessment against a stockholder, the latter can not main- tain a cross petition to recover the purchase price paid for his stock on the ground of the fraud of the bank inducing his purchase. (lb.) 7 (U. S. C. C, 1898). The statutory inhibition against the purchase by a national bank of its own stock does not render stock so purchased and held in the name of a third person void ; and a subsequent pur- chaser for value acquires a good title. (lb.) 8 (U. S. C. C, 1898). One induced to purchase stock of a national bank by fraudulent representations, who retains it until a receiver is ap- pointed, can only escape liability for an assessment against stock- holders by affirmatively disclosing in his answer such a state of facts as would make it apparent that the equity of the creditors is inferior to that of the defrauded stockholder. (lb.) 9 (U. S. C. C, 1900). A decree of a State court, rescinding for fraud a con- tract for the purchase of stock in a national bank, may be pleaded in the answer of the purchaser, in an action against him by the receiver of the bank to enforce an assessment on the stock, as conclusive on the question of fraud, where the receiver was a party to the decree, although it could not be pleaded as a bar to the action. ( Stufflebeam V. De Lashmutt, 101 Fed. Rep., 367.) 10 (U. S. C. C, 1900). In an action by the receiver of a national bank to recover an assessment from defendant as a stockholder, an answer setting up facts showing that defendant's purchase of the stock was induced by fraud, held, not demurrable. (lb.) 11 (Mich. Sup., 1899). A stockholder, after having purchased his stock and registered it, and permitted depositors to rely upon his ownership, DIGEST OF NATIONAL BANK DECISIONS. 491 SHAREHOLDERS— Continued. Actions to Enforce Liability — Continued. actions by beceivbr — continued. insufficient defenses — continued. can not repudiate his liability under such statute on the ground that he was induced to purchase the stock through fraudulent repre- sentations made as to its value by the officers of the bank. (Foster v. Broas et al., Foster 'v. Row, 120 Mich., 1 ; 79 N. W., 696 ; 2 Banking Cases, 700.) 12 (Mich. Sup., 1899). The mere fact that his stock was never transferred to him on the books of the bank is no defense in an action- against a transferee of stock to enforce such liability. (lb.) In Wisconsin — The fact that shareholder was induced by fraud to subscribe for stock in State bank no defense. 13 (Wis. Sup., 1901). Revised Statutes, 1898, section 2024, subsection 47, provides that stockholders in every banking corporation organized under this act shall be individually responsible to the amount of their respective shares for all its indebtedness and liabilities of every kind. S., the promoter of the bank, secured the signatures of W. R. and R. R. to the articles of incorporation, with the understanding that they were not to be liable unless the signature of M. R. should be secured, and his consent that the firm of R.'s sons should take 25 shares. M. R. refused to sign the articles, and S., after being informed of such refusal, and without the knowledge of W. R. and R. R., filed the articles of incorporation with their signatures, and subsequently tendered 25 shares to the firm, which were refused. In all the reports of the bank to the State treasurer W. R. and R. R. were returned as stockholders. Held, that W. R. and R. R. became stockholders in the bank, and hence were individually liable under the statute, since it would be against public policy to allow them to impeach the record as against the intervening rights of creditors by showing the conditional signature of the articles. (Rehbein et al. v. Rahr et al., 85 N. W. Rep., 315; 109 Wis., 136.) Increase of capital stock — When failure to pay in the whole amount no defense against liability on the amount paid in. 14 (U. S. Sup. Ct, 1901). Section 5142 of the Revised statutes of the United States, providing for the increase of the capital stock of a national bank, and declaring that no increase of capital stock shall be valid until the whole amount of the increase is paid in and until the Comp- troller of the Currency shall certify that the amount of the proposed increase has been duly paid in as,part of the capital of such associa- tion, does not make void a subscription or certificate of stock based upon capital stock actually paid in, simply because the whole amount of any proposed or authorized increase has not in fact been paid into the bank ; certainly the statute should not be so applied in behalf of a person sought to be made liable as shareholder, when, as in the present case, he held at the time the bank suspended and was put into the hands of a receiver a certificate of the shares subscribed for by him, enjoyed, by receiving and retaining dividends, the rights of a shareholder, and appeared as a shareholder upon the books of the bank, which were open to inspection, as of right, by creditors. (Scott v. De Weese, 181 U. S., 202.) 15 (U. S. Sup. Ct., 1901). As between the bank and the defendant, the lat- ter, having paid the amount of his subscription for shares in the pro- posed increase of capital, was entitled to all the rights of a share- holder, and therefore, as between himself and the creditors of the bank, became a shareholder to the extent of the stock subscribed and paid for by him. (lb.) 16 (U. S. Sup. Ct., 1901). That the bank, after obtaining authority to in- crease its capital, issued certificates of stock without the knowledge or approval of the Comptroller and proceeded to do business upon the basis of such increase before the whole amount of the proposed 492 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Actions to Enfoece Liability — Continued. actions' by receiver — continued. insufficient defenses — continued. increase of capital had been paid in, was a matter between it and the Government under whose laws it was organized, and did not render void subscriptions or certificates of stock based upon capital actually paid in nor have the effect to relieve a shareholder who became such by paying into the bank the amount subscribed by him from the indi- vidual liability imposed by section 5151. (lb.) 17 (U. S. Sup. Ct, 1901). Upon the failure of a national bank the rights of creditors attach under section 5151, and a shareholder who was such when the failure occurred can not escape the individual liability pre- scribed by that section upon the ground that the bank issued a cer- tificate of stock before, strictly speaking, it had authority to do so. (lb.) 18 (U. S. Sup. Ct., 1901). If a subscriber to the stock of a national bank be- comes a shareholder in consequence of frauds practiced upon him by others, whether they be officers of the bank or officers of the Govern- ment, he must look to them for such redress as the law authorizes, and is estopped, as against creditors, to deny that he is a shareholder within the meaning of section 5151 if at the time the rights of cred- itors accrued he occupied and was accorded the rights appertaining to that position. (lb.) 19 (U. S. Sup. Ct., 1890). Defendant subscribed for new. stock in the reor- ganization of a bank, and received a certificate on the basis of a total subscription of $500,000. The actual increase was $461,300. He protested against the same, and refused to vote on the stock, but retained his certificate until the bank went into the hands of a re- ceiver several months later. Held, that he was liable to the receiver on his subscription, and it was too late to claim that the increase as to him was invalid. (Aspinwall v. Butler, 133 U. S., 595.) Cashier presumed to know stock stood in his name on books, although certifi- cate had not been issued him. 20 ( U. S. Sup. Ct., 1891 ) . A director who is also vice-president and cashier of a national bank can not shield himself from liability as a stock- holder and from what he had -received from a dividend fraudulently declared by alleging ignorance of what appears by the books of which he has charge. (Finn v. Brown, 142 U. S., 56.) 21 (U. S. Sup. Ct, 1891). Where a person receives from a bank a dividend on stock which he denies* owning, he should restore the dividend to the bank. He does not free himself from liability for it by giving his check on the bank for the amount to alleged true owner. (lb.) The fact subscriber to new stock was given old stock in place of new no defense. 22 (U. S. C. C. A., 1900). A subscriber to an increased issue of stock of a national bank who was given original stock instead, but who retained the same without objection for three years, and until the bank had become insolvent, held, precluded from escaping liability as a stock- holder on the ground that he never subscribed for such stock. (Bailey v. Tillinghast, 99 Fed. Rep., 801.) :3 (U. S. C. C. A., 1900). It is incompatible with the policy and purpose of the national-banking laws to permit irregularities, or even fraudulent practices, in the organization or management of a bank created there- under, to invalidate its action and give ground for a stockholder to repudiate his obligations to the public. (lb.) 24 (TJ. S. C. C. A., 1899). Subscribers to the capital stock of a national bank previously organized and carrying on business, who accepted certifi- cates of stock representing a portion of the original capital stock, obtained by the bank in some manner from the former holders, are estopped, after the lapse of five years, during which they retained the stock, received two dividends, and paid one assessment thereon, DIGEST OF NATIONAL BANK DECISIONS. 493 SHAREHOLDERS— Continued. Actions to Enforce Liabiuty — Continued. actions bt beceiveb — continued. insufficient defenses — continued. to deny that they are stockholders, in a suit by the receiver, on the bank's insolvency, to collect a further assessment, on the ground that they supposed they were purchasing a part of an issue of increased stock which the bank had voted to issue, but the issuance of which had not then been authorized by the Comptroller. (Rand v. Colum- bia National Bank, 94 Fed. Rep., 349; Same v. Tillinghast, ib.) Contra. 25 (U. S. C. C, 1890). One who subscribes and pays for a specified number of shares of a " proposed increase " of the capital stock of a national bank, which increase is in fact never issued, and to whom the bank officials transfer, instead, old stock of the bank without his knowl- edge or consent, is not a " shareholder " within the meaning of Re- vised Statutes, section 5151, imposing individual liability on the shareholders for the debts of national banks. (Stephens v. Pollett et al., 43 Fed. Rep., 842.) 26 (U. S. CO., 1890). The fact that the subscriber for the new shares re- ceived a dividend on the old shares so transferred to him does not estop him from denying his liability as a shareholder, 'where such dividend - was received in the belief that it was paid to him by virtue of his subscription to the new stock. ( Ib. ) Overissues — Shareholders who received new certificates for stock purchased can not claim not to be liable thereon because the old certificates were sold instead of canceled, thereby creating ore overissue. 27 (U. S. C. C. A., 1896). Stock of a bank was purchased by defendants, of the president thereof, at a time when there was no overissue, and when the amount purchased was credited to him on the books. At the time, or shortly afterwards, the stock, by his direction, was transferred from his account to theirs on the stock journal and stock ledger and new certificates were issued to them. Thereafter they were treated by the bank as the lawful owners of the stock and were allowed to vote the same and receive the dividends thereon. The bank having failed, suit was brought to collect an assessment made against defendants as shareholders. Held, that they were estopped from claiming that they were not stockholders, although the presi- dent neglected to cancel the old certificates, and afterwards hypothe- , cated part of them, thereby creating an overissue. (Burt v. Bailey et al., 73 Fed. Rep., 693.) Former judgment bars only matters litigated. 28 (U. S. C. C, 1897). In an action by a receiver to recover an assessment on certain shares of a national bank, defendant pleaded "a prior judgment dismissing a bill brought to charge her father's estate with the same assessment, to which suit she was also a party. Held, that the causes of action were different, that in the earlier suit being the alleged ownership of the shares by the father at the date of the bank's failure and that in the latter the alleged ownership by the daughter of the same shares at the same date ; and that, therefore, the former suit operated as an estoppel only as to the matters actu- ally litigated and determined. (Ricaud v. Tysen, 78 Fed. Rep., 561.) Receiver, unlawful disposing of claim for assessment by, no defense against assessment. 29 (Nebr. Sup., 1900). It is no defense to a stockholder in an insolvent national bank, who is sued by the receiver on his individual liability upon an assessment ordered by the Comptroller of the Currency, to say that the receiver has unlawfully disposed of such claim, and that the creditors of such" bank will not receive of the proceeds thereof as much as tbey are entitled to. (Schaberg's Estate v. McDonald, 83 N. W., 737; 60 Nebr., 493.) 494 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Actions to Enpobce Liability — Continued. actions by beceiveb — continued. JURISDICTION. 1 (-U. S. C. G, 1898). An assessment against the estate of an owner of national-bank stock, in the hands of his executrix, is enforceable in the Federal courts, though proceedings for settlement of the estate are pending in the probate court of Vermont. (Brown v. Ellis, SB Fed. Rep., 357.) 2 (U. S. G G, 1896). The circuit court has jurisdiction of an action to ascertain or fix the liability upon shares of an insolvent national bank which are alleged to have been transferred with a fraudulent intent to escape such liability when the amount of the assessment exceeds $2,000, exclusive of interest and costs. (Thompson v. German Ins. Co. et al., 76 Fed. Rep., 892.) 3 (U. S. G G, 1898). When an executor refuses to recognize, as a claim against decedent's estate, an assessment by the Comptroller of the Currency upon national-bank stock belonging to the deceased, a Federal court will assume jurisdiction of an action against the executor to determine the liability, although the estate is in the course of administration in the probate court. (Zimmerman v. Carpenter, 84 Fed. Rep., 747. ) 4 (U. S. Dist. Ct, 1890). The United States district court has jurisdiction of an action at law brought by the receiver of a national bank to recover an assessment made upon a stockholder, and the action may be maintained in such event against the executor of a deceased stock- holder. (Stephens v. Bernays, 41 Fed. Rep., 401.) 5 (U. S. G G, 1898). Circuit courts have jurisdiction of actions by receiv- ers of national banks to collect assessments made by the Comptroller, without regard to the amount involved. (Brown v. Smith, 88 Fed. Rep., 565.) 6 (U. S. G G A., 1900). The receiver of an insolvent national bank may maintain a suit in equity to enforce an assessment against stock- holders, where such assessment is less than the full amount of their liability; and, where there is a common question of law involved as to a number of the stockholders, they may be joined as defendants. (Bailey v. Tillinghast, 99 Fed. Rep., 801.) 7 (Vt, 1889). As by Revised Statutes United States, section 5242, an attachment issued before final judgment from a State court against a national bank is prohibited, such an attachment does not operate as notice to the absent defendant so as to give the court jurisdiction of the party or subject-matter. (Safford v. First National Bank of Plattsburgh, 17 A., 748; 61 Vt, 373.) LIMITATIONS. 1. The liability of the stockholders of a national bank to an ^assessment on the bank's insolvency is so far conditioned upon the sufficiency of the general assets to pay its indebtedness that the receiver is only authorized to proceed against a stockholder after the Comptroller has determined the necessity of the assessment and the amount required ; hence the statute of limitations does not commence to run against an action to enforce the stockholder's liability until such determination has been made. a (U.S. Sup. Ct, 1889) Hawkins v. Glenn, 131 U. S., 319; o(U. S. Sup. Ct, 1890) Glenn v. Liggett, 135 U. S., 533; «(U. S. Sup. Ct., 1892) Glenn v. Marbury, 145 U. S., 499; (U. S. G C. A., 1901) De Weese v. Smith et al., 106 Fed. Rep., 438; (U. S. G G, 1896) Thompson v. German Insurance Co., 76 Fed. Rep., 892 ; o Not national-bank cases, but sustain the principle. DIGEST OF NATIONAL BANK DECISIONS. 495 SHAREHOLDERS— Continued. Actions to Enforce Liability — Continued. actions by receiver — continued. limitations — continued. (Mo.) Tapley v. McPike, 50 Mo., 589; (Ohio, 1893) King v. Armstrong, 34 N. E., 163; 50 Ohio St., 222. 2 (U. S. Sup. Ct, 1902). A demand which starts the running of the statute of limitations against the right of a receiver of a national bank to enforce the statutory liability of its shareholders is shown by the allegations of the bill filed by the receiver to enforce such liability, that on a specified date the Comptroller of the Currency made au assessment upon the shareholders of such bank and " did thereby make demand upon each and every share of the capital stock of said association," and directed the receiver to take proceedings by suit to enforce the individual liability of the shareholders. (McDonald, receiver, v. Thompson, 4 Banking Cases, 209 ; 22 Sup. Ct. Rep., 297 ; 184 U. S., 71.) 3 (U. S. Sup. Ct, 1905). In the absence of any provision of the act of Con- gress creating the liability of stockholders of national banks, fixing a limitation of time for commencing actions to enforce it, the statute of limitations of the particular State is applicable. (McClaine v. Rankin, 197 U. S., 154.) 4 (U. S. Sup. Ct., 1905). Although a statutory liability may be contractual, or quasi-contractual, in its nature, an action given by statute is not necessarily to be regarded as brought on simple contract or breach of simple contract. (lb.) 5 (U. S. Sup. Ct, 1905). The liability of stockholders of national banks is conditional, and the right to sue does not obtain until the Comptroller of the Currency has acted ; his order is the basis of the suit, and the statute of limitations does not commence to run until assessment made, and then it runs as against an action to enforce the statutory liability and not ar action for breach of contract (lb.) 6. A suit brought in the United States courts by a receiver against a stock- holder to recover an assessment is governed, in the absence of any special provision by Congress, by the State statute of limitations. (U. S. C. C, 1879) Price v. Yates, 2 N. B. C, 204 ; 19 Alb. L. J., 295 ; (U. S. C. C, 1890) Butler v. Poole, 44 Fed. Rep., 586. 7 (U. S. C. C, 1899). No limit of time having been prescribed by the Fed- eral statutes within which an action must be brought to enforce an assessment against a stockholder in an insolvent national bank, such an action is governed as to limitation by the statute of the State where it is brought, by virtue of Revised Statutes, section 721. (Al- drich v. Skinner, 98 Fed. Rep., 345.) 8 (U. S. C. C, 1899). A right of action by the receiver of an insolvent na- tional bank against a stockholder to recover an assessment does not arise until the necessity for the assessment has been determined and the assessment made by the Comptroller ; hence limitation runs against such an action only from that time. (Aldrich v. Yates, C. C„ 95 Fed. Rep., 78.) 9 (U. S. C. C, 1879). In an action by the receiver of a national bank to enforce the liability of a shareholder, it appeared that the date of the defendant's subscription to the stock was prior to May, 1866, when the receiver was appointed; that the Comptroller of the Currency decided on the 28th of June, 1876, that the enforcement of this lia- bility to its full extent was necessary, and instructed the receiver ac- cordingly, and that this action was thereupon brought. Held, that although such decision and order of the Comptroller were necessary preliminaries to a suit against the shareholder, yet, having been de- layed without sufficient apparent reason for more than six years from the date of the subscription, the statute of limitations was a bar to the action, the State courts having decided that an act neces- 496 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Actions to Enfobce LiABiLiTY^Continued. actions by bbceiver — continued. LiMiTATioNs^qontinued. sarily preliminary to the commencement of a suit upon a contract must be done within six years, unless sufficient reason for the delay is shown. (Price, receiver, v. Yates, 19 Alb. L. J., 295; 2 N. B. C., 204.) In California. 10 (Oal. Sup., 1899). A statute of California provides that actions to recover deposits shall be brought within three years " after the liability was created." Held, that the day on which a deposit in such bank was made should be excluded in determining whether an action to enforce the liability of the bank's stockholders on account of such deposit was barred by the statute. (Dingley v. McDonald et al., 2 Banking Cases, 153; 124 Cal., 90.) In Kentucky. 11 (Ky. App., 1901). The rendition of a judgment in favor of the receiver of an insolvent national bank against a guardian for the amount of an assessment on stockholders to pay debts, on which execution was directed to issue against the estate of the ward, even if construed as a personal judgment, if obtained by fraud or rendered without service of process, was equivalent to no judgment, and the statute of limita- tions would apply. (Clark v. Ogilvie, 63 S. W., 429.) 12 (Ky. App., 1901). The rendition of a judgment in favor of the receiver of an insolvent national bank against a guardian for the amount of the assessment on stockholders to pay debts, on which execution was directed to issue against the estate oi the ward, did not stop the run- ning of the statute of limitations in favor of the ward, even if they were personally liable. (lb.) In Nebraska. . < 13 (U. S. Sup. Ct, 1902). An action brought by a receiver of a national bank under United States Revised Statutes, section 5234, to enforce the individual liability of a shareholder prescribed by section 5151 is not an action upon a " contract or promise in writing " within the meaning of the Nebraska statute of limitations, but is governed by the provisions of that statute requiring actions " upon a contract not in writing, express or implied," or " upon a liability created by statute," to be begun within four years. (McDonald, Receiver, etc., v. Thompson, 22 Sup. Ct. Rep., 297, 1902 ; 4 Banking Cases, 209 ; 184 U. fi., 71.) 14 (Nebr. Sup., 1900). A claim against the estate of a deceased person must be presented for examination and allowance to the probate judge or commissioners appointed for that purpose within the time allowed by statute, as fixed by order of the probate court. (Scha- berg's estate v. McDonald, 83 N. W., 737; 60 Nebr., 493.) 15 (Nebr. Sup., 1900). The failure to exhibit a certain claim within the time limited by the court for that purpose forever bars such claim against such estate, either as a demand or as being used as a set-off in any action whatever. (lb.) In Washington. 16 (U. S. C. C. A., 1901). If a stockholder in a national bank is a resident of Washington, and the bank is located there, a suit to enforce his personal liability is governed by Ballinger's Annotated Codes and Statutes, section 4800, subsection 3, which provides that an action on a contract or liability, express or implied, which is not in writing, and does not arise out of any written instrument, may be commenced within three years after the cause of action shall have accrued. (Aldrich v. McClaine, 106 Fed. Rep., 791.) DIGEST OF NATIONAL BANK DECISIONS. 497 SHAREHOLDERS— Continued. Actions by Creditors. Creditor must seek remedy through Comptroller. 1 (TJ. S. Sup. Ct, 1869). The creditors of an insolvent association must seek their remedy through the Comptroller, in the mode prescribed by the statute; they can not proceed directly in their own names against stockholders or the debtors of the bank. (Kennedy v. Gib- son, 75 U. S. ; 8 Wall., 498.) Creditor's only action against stockholders is under act of June 30, 1876; juris- diction, practice. 2 (U. S. C. C. A., 1902). Where a national bank goes into voluntary liquida- tion, the only authorized procedure for the enforcement of the indi- vidual liability of its stockholders is that prescribed by act of June 30, 1876 (19 Stat. L., 63), by a suit in equity in the nature of a cred- itor's suit brought in behalf of all creditors in a court for the district in which the bank is located, in which the necessity and extent of the ratable enforcement of the stockholders' liability shall be determined. Such suit should be against the bank and all its stockholders, and, in case ancillary proceedings should be necessary for the collection from nonresident stockholders of their ratable proportion of the amount necessary to pay creditors, such suits should be authorized by the courts of original jurisdiction, and brought by a receiver or by other person appointed by such court. (Williamson et al. v. American Bank et al., 115 Fed. Rep., 793 ; 4 Banking Cases, 699.) Action in equity by one creditor for all, complaint, amendment. 3 (U. S. Sup. Ct., 1887). Under the original act respecting national banks, and before the act of June 30, 1876, a court of equity had jurisdiction of suit to prevent or redress maladministration or fraud against cred- itors, in voluntary liquidation of such bank, whether contemplated or executed; and such suit by one creditor must be for all. (Richmond v. Irons, 121 U. S., 27.) 4 (U. S. C. C, 1883). The bill contemplated by the second section of the act of June 30, 1876, to enforce the individual liability of stockholders in a national banking association that has gone into liquidation, need not purport expressly on its face to be filed by the complainant on behalf of himself and all other creditors, for the law would give it that effect and the court would so treat it ; but, if this was necessary, the bill might be amended in that respect by leave of the court. (Irons, Ex'r, etc., et al. v. Manufacturers' National Bank of Chicago et al., 17 Fed. Rep., 308, affirmed in Richmond v. Irons, 121 U. S., 27.) 5 (U. S. C. C, 1883). The manifest intention of the national banking act is a distribution of its assets, in case a bank becomes insolvent, equally among all the unsecured creditors, and the diligence of a creditor who files a creditor's bill can give him no greater rights than are given any other creditor to share in the distribution of the assets, and a prayer in the bill that such creditor be given priority over other creditors will not be granted. (lb.) I 6 (U. S. C. C, 1883). Where the original bill filed before the passage of the act of June 30, 1876, was amended after the passage of that act so as \ to make the individual shareholders defendants, and subject them to liability, such bill will not be considered on that account multifa- rious, (lb.) 7 (U. S. C. C, 1883). Where it is admitted by the defendants that they were shareholders in a national bank, but the number of shares respectively held by them is not admitted, the names of the sharehold- ers and the number of shares held by each, as shown by the stock ledger and stubs of the stock certificates and the dividend sheets of the bank on which they respectively drew the last dividends, will be prima facie proof of the number of shares held, and, unless rebutted, sufficient. (lb.) 4049—05 32 498 DIGEST OF NATIONAL BANK DECISIONS. SHAREHOLDERS— Continued. Actions by Ceeditoes — Continued. Creditor may sue for both individual liability and claim. 8 (U. S. Sup. Ct, 1881). A national bank in voluntary liquidation may still sue and be sued by its name for the purpose of closing its business, and a creditor may maintain si suit upon a disputed claim, although he has filed a bill under the act of June 30, 1876, section 2, to enforce the individual liability of shareholders. (National Bank v. Insurance Company, 104 U. S., 54; 3 N. B. C, 20.) Intervention. 9 (U. S. C. C. A., 1898). A judgment creditor may intervene after a cred- itor's bill has been properly filed in a Federal court, although his judg- ment is for less than $2,000. (National Bank of Commerce in Denver v. Allen et al., 1 Banking Cases, 53. ) Parties. 10 (U. S. C. C. A., 1898). To a bill by a creditor of a corporation averring its insolvency and demanding the appointment of a receiver, an account- ing, and the enforcement of the individual liability of the stockhold- ers, the corporation is a necessary party defendant. (Elkhart National Bank, of Elkhart, Ind., v. Northwestern Guaranty Loan Company, of Minneapolis, Minn., et al., 87 Fed. Rep., 252.) 11 (III.). In an action by a depositor in an insolvent bank against the stock- holders to recover the balance due him at the time of the suspension of the bank, it is not necessary to join as defendants persons who signed the articles of incorporation but have since transferred their stock, though such transfer was not made in the manner provided by the articles of incorporation. (Wadsworth v. Hocking, 61 111. App., 156; Same v. Duncan, ib. ; Same v. Laurie, ib.) 12 (111.). Where a person holds stock in a banking association as trustee, he is a proper party defendant, to the exclusion of his beneficiary, in an action brought by a depositor against the stockholders to recover the balance due him at the time of the suspension of the bank. (Ib.) Actions by creditors of State corporation under Colorado statute. 13 (Colo. Sup., 1898). The constitutionality of a statute can not be ques- tioned for the first time on appeal. (Zang et al. v. Wyant et al., 1 Banking Cases, 349; 25 Colo., 551.) 14 (Colo. Sup., 1898). The additional liability of stockholders imposed by the statute of Colorado providing that the shareholders, in banks, etc., shall be held individually responsible for debts, contracts, and engagements of such associations in double the amount of the par value of the stock owned by them, respectively, constitutes a fund for the benefit of all the creditors, which may be pursued in equity for the common benefit by or for all ; and an assignee whose trust relates only to the corporate assets acquires no right to enforce such statu- tory obligation. (Ib.) 15 (Colo. Sup., 1898). Where an insolvent corporation has made an assign- ment, its creditors are not required to wait the collection of doubtful claims before enforcing the stockholders' liability under such statute. (Ib.) Action by creditors under Wisconsm statute. 16 (Wis. Sup., 1900). Section 1755, Revised Statutes of Wisconsin, relating to the liability of stockholders of a corporation to its directors, can be invoked only by creditors existing at the time of the commission of the act upon which the liability depends and to the extent the capi- tal stock is diminished by such violation. (Killen v. State Bank of Manitowoc et al., 2 Banking Cases, 342. ) DIGEST OF NATIONAL BANK DECISIONS. 499 SIGNATURE AND SEAL. Signature and seal. 1. In the absence of charter or statutory requirements to the contrary, a corporation may make a contract, through its authorized agents, without affixing its corporate seal. (U. S. Sup. Ct, 1881) Gottfried v. Miller, 104 U. S., 521; (U. S. Sup. Ct, 1823) Fleckner v. U. S. Bank, 8 Wheat. (U. S.), 338; (U. S. Sup. Ct., 1840) Bank of Metropolis, of Washington, D. C, v. v Guttschlick, 14 Pet. (U. S.), 19; (U. S. Sup. Ct., 1813) Columbia Bank v. Patterson, 7 Cranch (U. S.), 298. SPECIAL DEPOSITS. (See Deposits.) TAXATION. Page. Generally 499 National banks not subject to license tax 507 Taxation of real estate _ _ 508 Eight of State officers to examine books _ _ _ 509 Deductions 510 Assessment of shares 513 Collection of tax ' 522 Injunction.. . 522 State and -Federal statutes construed 527 Taxation under war-revenue act 534 Cross references: Circulation — Taxation of national-bank notes 74 Taxation of State-bank notes 75 Insolvency and receivers — Receiver's liability for taxes on assets 185 Jurisdiction — Actions concerning taxation of shares of national banks 248 I. GENERALLY. Power of Congress to establish national banks and to exempt them from State taxation. 1 (Mass., 1868). Congress has the constitutional right to establish national banks in any State and to provide that the shares of their capital stock shall be exempt from taxation by other States. (Flint v. Board of Aldermen of Boston, 99 Mass., 141 ; 1 N. B. C, 571.) Power of Congress to restrict taxation of national banks. 2 (U. S. Sup. Ct, 1877). The act of Congress of June, 1864, in relation to the taxation of national banks, does not curtail State power as to the subject of taxation or cut off the right to except certain kinds of property if a legislature chooses to do so. Its only object is to prevent unfriendly discrimination against national banks. (Adaim v. Mayor, etc., of Nashville, 95 U. S., 19; 1 N. B. C, 148.) 3 (U. S. Sup. Ct., 1869). Conditions imposed on the power of States to ti: banks refer to banks of circulation. (Lionberger v. Rowse, 9 Wall 468.) 4 (U. S. Sup. Ct, 1869). The shareholders may be taxed by the State . their shares, although all the capital of the bank be invested Federal securities. (First National Bank of Louisville v. Kentue 9 Wall., 353.) 5 (U. S. Sup. Ct, 1869). But the capital of a bank owned by the corpora- tion invested in Government securities can not be taxed. (lb.) 500 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued, i. OENBBAixT — continued. 6 (U. S. Sup. Ct, 1899). A State is wholly without power to levy any tax, either direct or indirect, upon national banks, their property, assets, or franchises, except when permitted so to do by the legislation of Congress. (Owensboro National Bank v. Owensboro, 173 U. S., 664.) 7 (U. S. Sup. Ct, 1899). Section 5219 of the Revised Statutes is the measure of the power of States to tax national banks, their property or their franchises, that power being confined to a taxation of the shares of stock in the names of the shareholders and to an assessment of the real estate of the bank. ( lb. ) 8 (U.S. Sup. Ct, 1899). The taxing law of the State of Kentucky, under the provisions of which the tax in controversy in this case; was imposed, is beyond the authority conferred t)y Congress on the States and is void for repugnancy to that act. (lb.) 9 (U.S. Sup. Ct, 1899). The tax here complained of having been assessed on the franchise or intangible property of the corporation, was not within the purview of the authority conferred by the act of Con- gress, and was therefore illegal. (lb.) Power of Territories as to taxation of national banks. 10 (U. S. Sup. Ct, 1891). The powers of taxation in the States in respect to national banks exist in the Territories. (Talbott v. Silver Bow County, 139 U. S., 438.) States can not taw capital stock in solido. 11 (U. S. Sup. Ct, 1899). Taxes^- imposed upon the franchises and property of the bank, and not upon the shares of stock in the names of the shareholders, are therefore illegal because in violation of the act of Congress. (Third National Bank of Louisville v. Stone, 174 U. S., 432.) 12 (U. S. C. C). A State can not tax the capital stock of a national bank as such. The tax must be assessed upon the shares of the different stockholders. (Collins v. Chicago, 4 Biss., 472.) 13 (U. S. C. C, 1890). Under Revised Statutes, section 5219, which declares that nothing in the national banking act shall prevent all the shares of stock of a national bank from being included in the assessment of the personal property of the owners of such shares, an assessment of the entire stock of a national bank in solido against the bank itself is invalid. (National Bank of Virginia v. City of Richmond et al., 42 Fed. Rep., 877.) 14 (U. S. C. C, 1897). The Montana statute (PoL Code, sec. 3692) provides for assessing shares of bank stock to the owners thereof, and to aid the assessors in determining their value requires the bank to furnish a verified statement showing the amount and number of shares of its capital stock, surplus, etc. An assessor, instead of demanding the statement here required, presented to a national bank a blank form for listing property subject to taxation. The bank did not return a verified list, but its assistant cashier handed to the assessor a state- ment beginning, " Capital; $800,000," followed by items of surplus, undivided profits, United States bonds, and real estate. The assessor deducted the amount of the bonds and real estate from the " capital " and assessed the remainder to the bank as stock. Held, that the tax was illegal, as the capital of national banks is exempt from taxation under the Federal laws, and as both the State and Federal laws require the shares to be taxed to their owners ; and that the form of the return did not warrant the assumption that the bank owned its own shares. (Brown v. French, 80 Fed. Rep., 166.) 15 (U. S. C. C, 1899). The personal property of national banks can not be directly assessed to them by the State for purpose of taxation. (City and County of San Francisco v. Crocker-Woolworth Nat. Bank of San Francisco, 1 Banking Cases, 318; 92 Fed. Rep., 273.) 16 (U. S. C. C, 1889). Revised Statutes, United States, section 5219, provid- ing that shares of national-bank stock may be taxed as part of the DIGEST OF NATIONAL BANK DECISIONS. 501 TAXATION— Continued. i. GENEBAu/r — continued. personalty of the owner, and that each State may tax them in its own manner, except that the taxation shall not be at a greater rate than is imposed on other " moneyed capital " owned by citizens of the State, and that the shares of nonresidents shall only be taxed in the city wherein the bank is located, does not authorize the taxation of the stock of a bank in solido by the city in which it does business, but only the shares of individual owners residing in the city are taxable, and they must be taxed -separately in order that tl\e owner may de- duct from their value the amount of the personal indebtedness, where the State laws or municipal ordinances permit such deductions and require equality of taxation. (First National Bank v. City of Rich- mond, 39 Fed. Rep., 309.) 17 (U. S. C. C. A., 1898). An assessment in a lump sum of all the personal property of a national bank to the bank itself can not be regarded as one against the stockholders on their shares. (Stapylton v. Thag- gard, 91 Fed. Rep., 93; 1 B. C, 320.) 18 (Ala.). The assessment by a municipal corporation of a tax upon the shares of a national bank in gross or upon its capital stock is void, but the remedy is at law and not by injunction, although the munici- pal corporation is insolvent. (National Commercial Bank of Mobile v. Mayor, etc., of Mobile, 62 Ala., 284; 2 N. B. C, 440.) 19 (Ala., 1878). An assessment upon the capital stock of a national bank in gross is invalid, and a provision that the same " shall be paid by each such association for the shareholders thereof," when dependent upon such invalid provision, and incapable of independent enforce- ment, is also inoperative, and imposes no duty on the bank to pay such tax. (Sumter County v. National Bank of Gainesville, 62 Ala., 464; 2 N. B. C, 449.) 20 (Cal., 1898). National banks and their property have been withdrawn from the domain- of State taxation, except so far as Congress has expressly consented that they may be taxed, and therefore the per- sonal assets of a national bank are exempt from State taxation. (People v. National Bank of D. O. Mills & Co., 1 Banking Cases, 341 ; 123 Cal., 53.) 21 (Kans.). The assessment of the entire capital stock of a national bank in solido against the bank itself is invalid. The bank may pay the tax assessed upon the shares of its different stockholders, and it will have a lien thereon when it pays such tax until the same is satisfied. But if for any cause the tax levied upon the different stockholders is not paid by the bank the property of the individual stockholders will be liable therefor. (First National Bank of Leoti v. Fisher, 45 Kans., 726.) 32 (Mo. Sup., 1885). Assessment of taxes against national-bank stock must be made against the shareholders personally, and the refusal of the officers of the bank to furnish the assessor with a list of share- holders does not justify making the assessment and enforcing the tax against the property of the bank. (City of Springfield v. First National Bank of Springfield, 87 Mo., 441 ; 3 N. B. C, 524.) 23 (Ohio Sup., 1889). There is no authority in the statutes of the State, nor of the United States, for listing and valuing the shares in a national bank in the aggregate and placing such aggregate on the tax list in the name of the bank. Such shares, when listed and valued for tax- ation, are required to be placed on the proper tax list in the names of the respective owners. (Miller v. First National Bank of Cincin- nati, 3 N. B. C, 711 ; 46 Ohio St., 424.) 24 (Ohio Sup., 1889). The listing of the shares for taxation is provided for and secured by section 2765, Revised Statutes, and the correction of returns made by the cashier of the bank to the county auditors is provided for by section 2769 and not by section 27^2, Revised Stat- utes, (lb.) 502 DIGEST OP NATIONAL BANK DECISIONS. TAXATION— Continued. I. geneeahy — continued. Habitual payment of taxes levied in solido does not estop bank. 25 (Iowa, 1894). A bank is not estopped from denying liability to pay tax levied on its capital stock as the personal property of the bank by the fact that for several years it had paid taxes so levied. (Farmers and Traders' National Bank v. Hoffman, 61 N. W., 418; 93 Iowa, 119.) State may tax shares in national bank to owner. 26 (U. S. CO., 1890). Under Revised Statutes, United States, section 5219, providing that shares of national-bank stock may be taxed as part of the personalty of the owner, and that each State may tax them in its own manner, except that the taxation shall not be at a greater rate than is imposed on other moneyed capital owned by citizens of the State, a State may tax national-bank shares held by its corporate or individual citizens as an investment, subject to the restriction that the tax shall not exceed the burden upon similar property in the State. (First National Bank of Wilmington v. Herbert, State Treas- urer, 44 Fed. Rep., 158.) 27 (Ala.). National banks being the creatures of Congress, and the right of the States to tax anything pertaining to them being wholly derived from the grant made by Congress, the power to tax shares in such banks for State purposes must be accepted with all the conditions and reservations annexed to its exercise. (Maguire v. Board of Revenue and Road Commissioners of Mobile County, 71 Ala., 401.) 28 (Ala.). The Supreme Court of the United States has the reserved power Of revising, and, if need be, of reversing the rulings of the State courts bearing on the exercise by the States of the power to tax shares in national banks, and hence the decisions of that court on that subject must be adopted and followed by State courts. (lb.) 29 (Ala.). Touching the power conferred by Congress on the States to tax, that body has carefully discriminated between the capital stock of national banks and the shares in such capital stock, the power to tax the former being withheld from the States, while the power to tax the latter is granted with stated conditions and reservations. (lb.) 30 (N. J.,' 1878). An assessment of tax on the stock of a national bank in New Jersey, owned by a stockholder residing in the city where the bank is located, can not be sustained by the presumption that the stockholder resided in the ward in which the bank was located, but the assessment must be made against the stockholder. (State, North Ward National Bank, Pros., v. Newark, 11 Vroom, 559; 2 N. B. C, 290.) "When new shares taxable. 31 (S. C). New shares issued by a national banking association can not be taxed until the increase of capital has been approved by the Comp- troller of the Currency. (Charleston v. People's National Bank, 5 S. C, 103.) State law must authorize taxation of shares. 32 (Me., 1871). Municipal officers can not assess a tax on shares of stock of a national bank unless authorized by a law of the State. (Stetson v. City of Bangor, 56 Maine, 274; 1 N. B. C, 520.) 33 (Me., 1871). A statute authorizing "the taxation of all shares in moneyed corporations " held sufficient authority to tax shares in national banks, (lb.) 34 (N. T. Appls., 1873). Assessors of taxes possess no authority except such as is conferred upon them by statute, and they must see to it that they are within the authority committed to them. (National Bank of Chemung v. Blmira, 53 New York, 49; IN. B. C, 715.) 35 (N. Y. Appls., 1873). Assessors assessed a tax on the capital stock of a national bank, which was expressly prohibited by statute. The prop- erty of the bank was seized by the collector of taxes and sold to pay DIGEST OF NATIONAL BANK DECISIONS. 508 TAXATION— Continued. i. generally — continued. such tax, and the proceeds paid over to the municipal treasurer. Held, that the assessment was void, and that an action lay on behalf of the bank against the municipal corporation to recover the money, (lb.) Effect of State law tawing shares and requiring bank to pay. 36 (U. S, Sup. Ct, 1869). A State tax upon shares is valid, though the tax is collected from the bank. (National Bank v. Commonwealth, 9 Wall., 353.) 37 (U. S. Sup. Ct., 1869). And the State may require the banks to pay a tax rightfully laid upon the shares. (lb.) 38 (U. S. Sup. Ct, 1869). National banks may be required to pay a tax assessed on shares instead of individual shareholders. (Lionberger v. Rouse, 9 Wall., 468.) 39 (U. S. Sup. Ct, 1897). The making the national bank the agent of the State to collect such taxes is a mere matter of procedure, and there is no discrimination against the national ban_ks in the fact that the State banks are not so compelled, but the auditor generally looks to the stockholders directly. (Merchants and Manufacturers' Bank v. Penn- sylvania, 167 U. S., 461.) 40 (U. S. C. C, 1890). Act Louisiana, 1888, section 27, providing that shares in banks shall be assessed to shareholders, but requiring the bank to pay taxes so assessed and authorizing it to collect the same from the shareholders, imposes a tax, not upon the bank, but upon its shares, as permitted by act of Congress providing that a State may determine the manner of taxing the shares of national banks located in the State. (Whitney National Bank v. Parker, 41 Fed. Rep., 402.) 41 (U. S. C. C, 1893). The imposition of a tax upon the shares of the bank according to the Louisiana statute, which requires the bank to pay the tax and then look to the dividends upon the shares and to the stockholders for reimbursement, is a tax upon the bank itself. (Citizens' Bank of Louisiana v. Board of Assessors, 54 Fed. Rep., 73.) 42 (U. S. C. C). A State statute provided that "the stockholders of every national bank located in this State, or of any bank incorporated under the laws of the State, shall be assessed and taxed on the value of their shares of stock therein, subject to the restriction that taxa- tion of such shares shall not be at a greater rate than is assessed upon any other moneyed capital in the hands of individual citizens of this State in the county or precinct where such bank is located. The taxes against such shares shall be levied against the holder of the same, and shall be paid by the bank." Held, that a tax so imposed on the shares of a national bank was valid, and that pay- ment thereof could be enforced by distraint of the property of the bank. (First National Bank v. Douglas County, 3 Dillon, 330.) 43 (Iowa Sup., 1894). Under Code, section 819, providing for the taxation of shares of bank stock, and requiring the officers to furnish the assessors " the name of each person owning shares, and the amount owned by each," an assessment on the capital stock as the personal property of the bank, without mention of the shareholders, is void. (Farmers and Traders' National Bank v. Hoffman, 61 N. W., 418; 93 Iowa, 119.) 44 (Iowa Sup., 1894). Under Code, section 819, providing that banks shall be liable for the tax on shares of capital stock as the agent of the shareholders, and that they " shall retain so much of any dividend belonging to any shareholder as shall be necessary to pay any taxes levied on his shares," a bank is not liable unless it has money or property belonging to the delinquent shareholder. (lb.) 45 (Iowa Sup., 1894). Evidence that a bank had not declared a dividend for a year previous to the levy of an assessment on its capital stock, and that the surplus which it reported after the assessment was made 504 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued. i. generally — continued. was worthless, by reason of the shrinkage of the securities compos- ing it, will sustain a finding that, after the assessment, the bank had no money of the shareholder with which to pay the tax. (lb.) 46 (Iowa). But where the tax laws of the State make the bank the mere agent for paying the tax on shares, and direct it to retain so much of the dividends as will answer that purpose, other agents being required to pay taxes for their principals only when they have under their control the property, money, or credit of such principals, the- bank can not be made liable unless it has the control of the property, etc., of its shareholders or has dividends in its possession or has failed to retain them. (Hershire v. First National Bank, 35 Iowa, 272.) When dividends subject to taxation. 47 (U. S. Sup. Ct, 1890). If a bank by mistake declares a dividend or adds to its surplus when it is not in condition to do so, such dividend or addition to surplus is subject to taxation, and the mistake can not be corrected in action to recover the tax. (Central National Bank v. United States, 137 U. S., 355.) Shares of stock in national bank are personalty. 48 (U. S. Sup. Ct., 1873). Shares of stock in national banks are personal property, and the law creating them could give them a situs of their own, apart from owners, for purpose of taxation. This was done by act of 1864, section 41. (Tappan v. Merchants' National Bank, 19 Wall., 490.) State law requiring list of stockholders valid. 49 (U. S. Sup. Ct., 1876). State statute is not void which requires, for pur- poses of taxation, that the cashier of each national bank within the State transmits to clerks of several towns in State a true list of its stockholders residing there. (Waite v. Dowley, 94 U. S., 527; 1 N. B. C, 137.) K National bank taxable with its shares in another national bank. 50 (U. S. Sup. Ct, 1888). The manifest intention of the law is to permit the State in which a national bank is located to tax, subject to the limi- tations prescribed, all the shares of its capital stock without regard to their ownership; and, therefore, a national bank may be taxed upon the shares which it holds in another national bank. (National Bank of Redemption v. Boston, 125 U. S., 60.) National bank taxable with its stock in other corporations. 51 (Wash. Sup., 1899). The statute of Washington under which the value of the stock of other corporations acquired by a national bank in the ordinary course of its business, to prevent loss, is properly included in the assessment of the aggregate value of its stock for taxation is not in conflict with the section of the Federal statute providing that a State shall not tax national-bank stock at a greater rate than other moneyed capital in the hands of individual citizens of the State; as under such statute there is no unjust discrimination be- tween the taxation of national-bank shares as the personal property of the shareholder and the taxation of the personal property of a citizen not a holder of national-bank stock. (Pacific Nat. Bank of Tacoma v. Pierce County et al., 2 Banking Cases, 293; 20 Wash.. 675.) 52 (Wash. Sup., 1899). Under the laws of Washington, in assessing for tax- ation the aggregate value of the stock of a national bank it is proper to include in such valuation the stock of other corporations acquired by the bank in the ordinary course of its business, to prevent loss, although the property of such corporations is located, assessed, and taxed within the State, double taxation not being forbidden by the State constitution. (lb.) DIGEST OF NATIONAL BANK DECISIONS. 505 TAXATION— Continued. i. GENBEAixY — -continued. Undivided su'i*plus, when taxable. 53. The undivided surplus of a national banking association, unless invested in Federal securities, may be lawfully taxed by the State. (N. H.) First National Bank v. Peterborough, 56 N. H., 38; (N. J.) North Ward National Bank of Newark v. City of Newark, 39 N. J., 380. 54 (N. J.). But, of course, if the surplus is taken into consideration in esti- mating the taxable value of the shares, it is not to be taxed sepa- rately. (North Ward National Bank v. City of Newark, supra.) Note (Md.-Iowa). — But it has been held in Maryland that the stock of an association represents its whole property, and where a tax is assessed upon the shares a separate tax upon the real or per- sonal estate amounts to double taxation ; and, therefore, where the organic laws of the State prohibit double taxation, such a tax upon the property of an association is void. (County Commissioners v. Farmers and Mechanics' National Bank, 48 Md., 117 ; National State Bank v. Young, 25 Iowa, 311, wherein it was held that the State could tax only the shares eo nomine and the real estate.) 55 (N. H.). The surplus fund of a national banking association is not excluded in the valuation of its shares for taxation. (Strafford National Bank v. Dover, 59 N. H., 316.) Personal taxation of national-bank officers. 56 (Ga. Sup., 1899). The words of an act which impose a tax on the presi- dents " of each of the banks of the State " include the presidents of all banks doing business in the State. Such an act,' however, is inoperative when sought to be applied to the presidents of national banking associations organized under the acts of Congress, because such associations are instrumentalities created by Congress, and designed to aid in the administration of an important branch of the public service. The business of such an association not being sub- ject to be taxed by the laws of the State, and the president being an officer prescribed by the act of Congress, through whom, in part, the business of the association must be carried on, a tax on the president, as such, would tend to retard and burden the operation of the law which provides for the creation and maintenance of such institutions. (Linton, Tax Collector, v. Childs, 1 Banking Cases, 306.) Taxation during conversion. 57 (Pa. Com. PL, 1874). While a State bank is changing to a national bank, and before the requirements of the State statute are fully complied with, it is subject to State taxation. (Commonwealth v. Manufac- turers and Mechanics' Bank of Philadelphia, 2 Pearson's Decisions, 386; 2 N. B. C, p. 459 of addenda.) 58 (Pa. Com. PL, 1874). A State bank being converted into a national bank is a subject of State taxation until there has been a strict compli- ance with all the requirements of the statute. (Commonwealth v. Manufacturers and Mechanics' Bank of Philadelphia, 2 N. B. C, 459.) When State law requiring tax after conversion void. 59 (Md. Appls., 1870). A State bank was by its charter required to pay the State a tax or bonus on its capital paid in. A statute afterwards authorized State banks to reorganize as national banks, provided that all sums required by their charter to be paid to the State contin- ued to be paid as theretofore. Held, that a State bank had the right to surrender its charter, and by so doing discharge itself from its obligation to pay the required bonus, and that the State could not require it, in reorganizing as a national bank, to pay any bonus. (State* «. The National Bank of Baltimore, 33 Maryland, 75; 1 N. B. C„ 527,) 506 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued. i. generally — continued. Liabilities for sale of shares subject to lien of taxes. 60 (Wis.). The statute of Wisconsin made taxes assessed on shares of stock in national banks a lien on such stock. The defendant sold to plaintiff shares of stock in a national bank, upon which was an un- paid tax. Defendant gave plaintiff a written statement puporting to contain all facts affecting the value of the stock, but in which the tax was not mentioned. The tax was paid by the bank. Held, that plaintiff could recover damages of the defendant to the amount of the tax. (Simmons v. Aldrich, 41 Wisconsin, 240.) Privileges of revenue officers. 61 (U. S. Sup. Ct, 1877). Under section 3177 of the Revised Statutes United States authority is given to any collector, deputy collector, or in- spector of internal revenue to enter in the daytime any building or place within his district where any articles or objects subject to such taxation are made, produced, or kept, so far as it may be nec- essary for the purpose of examining such objects or articles, and the provision is that any owner of such building or place, or any person having the agency or superintendence of the same, who refuses to admit such officer or suffer him to examine such articles or objects shall for every such refusal forfeit five hundred dollars. Held, that under this provision paid bank checks, which were duly and suffi- ciently stamped at the time they were made, signed, and issued, are not articles or objects subject to taxation, and an officer of a bank where such checks are may lawfully refuse to suffer the collector to examine such checks. (United States, Plaintiff in Error, v. Mann, 95 U. S., 580; 1 N. B. C, 154.) Meaning of " moneyed capital." 62 (U. S. Sup. Ct). The term " other moneyed capital " does not necessarily embrace shares of stock in all corporations whose capital is employed in business carried on for the pecuniary profit of shareholders. The test is to be found in the nature of the business in which the corpo- ration is engaged. The act simply prohibits taxation at a greater rate than like property similarly situated. (U. S. Sup. Ct., 1887) Mercantile National Bank v. New York, 121 U. S., 138; (U. S. Sup. Ct, 1887) Newark Banking Co. v. Newark, 121 U. S., 163; (U. S. Sup. Ct, 1891) Talbot v, Silverbow Co., 139 U. S., 438. 63 (U. S. Sup. Ct, 1899). The term "moneyed capital," as used in section 5219 of the Revised Statutes of the United States, does not' include capital which does not come in competition with the business of national banks, and exemptions from taxation, however large, such as deposits in savings banks or of moneys belonging to charitable institutions, which are exempted for reasons of public policy, and not as an unfriendly discrimination as against investments in national-bank shares, can not be regarded as forbidden by the Fed- eral statute. (First Nat. Bank of Wellington, Ohio, v. Chapman, Treasurer of Lorain County, Ohio, 1 Banking Cases, 325; 173 U. S., 205.) 64 (U. S. Sup. Ct, 1901), The term "moneyed capital," as employed in United States Revised Statutes, section 5219, forbidding greater tax- ation of shareholders of national banks than is imposed on other moneyed capital, does not include capital which does not come in competition with the business of national banks. (Commercial National Bank of Ogden, Plff. in Err., v. Alma D. Chambers, as Treasurer of Weber County, Utah, 3 Banking Cases, 585 ; 182 U. S., 556.) 65 (U. S. C. C. A., 1900). It is equality of assessment with other moneyed capital that is sought to be obtained by section 5219 of the United States Revised Statutes, providing that national-bank shares shall not be taxed at " a greater rate than is assessed upon other moneyed DIGEST OP NATIONAL BANK DECISIONS. 507 TAXATION— Continued. i. generally — continued. capital in the hands of individual citizens of such State," and not equality with personal property generally. And railroad companies, manufacturing or mining companies, and the various commercial enterprises in which capital is employed are not within the contem- plation of such provision. (National Bank of Baltimore v. Mayor, etc., of Baltimore et al., 2 Banking Cases, 665; 100 Fed. Rep., 24.) 66 (U. S. C. C. A., 1900). Wherever money is employed in the carrying on of a business, the object of which is the making of profit by its use as money, it is moneyed capital within the meaning of such section of the Federal statute. So, when such capital is invested in loans or securities of a permanent or temporary character, it is so invested with a view to sale and reinvestment for the purpose of making money by the operation, it is moneyed capital within the meaning of such section, but the securities themselves do not necessarily come within the definition. (lb.) 67 (U. S. C. C, 1886). The term "moneyed capital" has a more limited meaning than the term " personal property," and applies to such cap- ital as is readily solvable in money. (Mercantile National Bank of City of New York v. Mayor, etc., of City of New York and Another, 28 Fed. Rep., 776.) 68 (TJ. S. C. C, 1894). Stock in railroad, insurance, and manufacturing cor- porations is not regarded as "moneyed capital." (Mercantile Nat. Bank v. Shields, 59 Fed. Rep., 952.) 69 (N. J. Appls., 1901). By the provisions of section 5219 of the Federal statutes respecting national banks, the shares of their stock may be taxed to the owners thereof by the States, subject to the restriction that such taxation shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State. This restriction having been construed by the Federal courts to relate to such other moneyed capital as, by its use, comes into competition with the business of national banks, the owners of national-bank stock may require the courts to consider and deter- mine whether such other moneyed capital is taxed by State laws at a less rate than is imposed thereby upon national-bank stock." (Me- chanics' Nat. Bank of Trenton v. Baker, Tax Receiver, 3 Banking Cases, 430 ; 48 Atl. Rep., 582 ; 65 N. J. L., 549.) NATIONAL BANKS NOT SUBJECT TO LICENSE TAX. States had no rigKt to tax Bank of the United States. 1. The Bank of the United States has, constitutionally, a right to establish its branches or offices of discount and deposit within any State. The State, within which such branch may be established, can not, with- out violating the Constitution, tax that branch. The State governments have no right to tax any of the constitutional means employed by the Government of the Union to execute its con- stitutional powers. The States have no power, by taxation or otherwise, to retard, impede, burden, or in any manner control the operations of the constitutional laws enacted by Congress to carry into effect the powers vested in the National Government. * This principle does not extend to a tax paid by the real property of the Bank of the United States, in common with the other real property in a particular State, nor to a tax imposed on the proprietary interest which the citizens of that State may hold in this institution, in com- mon with other property of the same description throughout the State. (U. S. Sup. Ct, 1819) McCulloch v. State of Maryland, 17 U. S. (4 Wheat), 316; (U. S. Sup. Ct, 1824) Osborne et al., appellants, v. Bank of the United States, 22 U. S. (9 Wheat), 738. 508 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued. NATIONAL BANKS NOT SUBJECT TO LICENSE TAX Continued. States without power to levy any taxes on national hanks except such as are permitted by Congress. 2 (U. S. Sup. Ct, 1899). A State is wholly without power to levy any tax, either direct or indirect, upon national banks, their property, assets, or franchises, except when permitted so to do by the legislation of Congress. (Owensboro National Bank v. Owensboro, 173 V. S., 664.) 3 (U. S. Sup. Ct, 1899). Section 5219 of the Revised Statutes is the meas- ure of the power of States to tax national banks, their property, or their franchises, that power being confined to a taxation of the shares of stock in the names of the shareholders, and to an assessment of the real estate of the bank. (lb.) 4 (U. S. Sup. Ct., 1899). The taxing law of the State of Kentucky, under the provisions of which the tax in controversy in this case was imposed, is beyond the authority conferred by Congress on the States, and is void for repugnancy to that act. (lb.) 5 (U. S. Sup. Ct, 1899). The tax here complained of having been assessed on the franchise or intangible property of the corporation was not within the purview of the authority conferred by the act of Congress, and was therefore illegal. (lb.) State can not impose license tax. 6 (Idaho, 1902). Section 1644 of the Revised Statutes of the State of Idaho, imposing a license tax upon persons, associations or corporations en- gaged in the occupation of banking, does not apply to national banks, as it is not within the power of the State to impose upon national banking associations a license to do business. (State of Idaho v. First National Bank of Boise City ; decided by the District Court of Idaho in 1902, but not reported.) City can not impose license tax. 7 (Ga.). National banking associations can not be subjected to a license or privilege tax. (Mayor v. First National Bank of Macon, 59 Ga., 648.) 8 (Mo. Sup., 1880). A city has no power to exact a license fee from a national bank. (City of Carthage v. First National Bank of Car- thage, 2 N. B. C, 279; 71 Mo., 508.) 9 (Tenn. Sup., 1875). National banks are not liable to a privilege tax im- posed by city ordinance on occupation and business transactions, although " banks and banking " are in terms included. (National Bank of Chattanooga v. Mayor, 8 Heiskell, 814 ; 1 N. B. C, 903.) TAXATION OF REAL ESTATE. State may tax bank's realty. 1 (U. S. C. C. A., 1898). A State can not tax a national bank except upon its real property. (Stapylton v. Thaggard, 91 Fed. Rep., 93; 1 B. C, 320.) When bank's realty should not be taxed. 2 (Conn., 1902). General Statutes 1888, section 3832, provides for the taxa- tion of the property of evgry corporation whose stock is not taxable," and whose property is not exempt by law. Section 3833 provides that real estate owned by any corporation, not required in its business, shall be taxable as provided in the preceding section. Section 3836 provides that shares of capital stock of national banks shall be taxed to the shareholders, but so much of the capital as may be invested in real estate on which it pays a tax shall be deducted from the market value of its stock. Held, that property of a national bank used in the transaction of its business is not subject to direct taxa- tion. (Middletown National Bank v. Town of Middletown, 51 Atl. Rep., 138; 4 Banking Cases, 377; 74 Conn., 449.) DIGEST OF NATIONAL BANK DECISIONS. 509 TAXATION— Continued. taxation of BBAL estate — continued. 3 (Md., 1877). A State may tax the real property or the capital stock of a national bank, but not both. (County Commissioners of Frederick County v. Farmers and; Mechanics' National Bank of Frederick, 48 Md., 117; 2 N. B. C, 252.) 4 (Minn. Sup., 1877). Under a statute requiring shares in national banks to be taxed at their actual value without reduction for, real estate, the banking office and lot, owned and occupied as its place of busi- ness by a national bank created, is not liable to assessment and taxa- tion as real estate eo nomine against the bank. (Commissioners of Rice County v. Citizens' National Bank of Faribault, 23 Minn., 280; 1 N. B. C, 629.) 5 (Pa., 1879). Where part of the capital of a national bank is invested in a building used for banking purposes, and the bank pays into the State tax prescribed upon the par value of all its shares, the building can not be taxed for county purposes, although the cashier occupies part of it as a residence. (County of Lancaster v. Lancaster County National Bank, 7 Weekly Notes of Cases, 29 ; 2 N. B. C, 415.) Bank's real estate part of its " assets." 6 (Miss. Sup., 1890). Real estate owned by a bank constitutes part of its assets, within the meaning of Code of Mississippi providing that banks shall pay a privilege tax, whose amount varies with their " capital stock or assets," in lieu of all other taxes. (Vicksburg Bank v. Worrell, 7 So., 219 ; 67 Miss., 47.) BIGHT OF STATE OFFICERS TO EXAMINE BOOKS. Books of a national bank may be examined by State officers for purposes of tax- ation. 1 (IT. S. C. C, 1881). A national bank may be compelled to disclose the names of its depositors and the amounts of their deposits under the compulsory process of a State court, in order to ascertain whether any money deposited therein, subject to taxation within the county, has not been duly returned for that purpose by the owners. (First National Bank of Youngstown v. Hughes and another, 6 Fed. Rep., 737.) 2 (U. S. C. C, 1881). A Federal court can not, in such case, stay the pro- ceedings in the State court by writ of injunction. (lb.) 3 (Ind. Sup., 1902). Under Burns's Revised Statutes (Indiana), 1894, sec- tion 8444, providing that for the purpose of properly listing property for taxation the assessor may inspect the books of corporations, he can not examine the account of any depositor in a bank, regardless of whether he is bound to pay taxes in the State. (Applegate v. State, ex rel. Bowling, Assessor, 63 N. E. Rep., 16; 4 Banking Cases, 295: 158 Ind., 119.) 4 (Ind. Sup., 1902). The petition for mandamus and the alternative writ to compel a bank to allow inspection of its books by the tax assessor under Burns's Revised Statutes, 1894, section 8444, are insufficient, they proceeding on the theory that he can examine the account of any depositor regardless of whether he is bound to pay taxes in the State, and not alleging what taxpayer had omitted to make returns of deposits therein, or that any taxpayer who was a depositor therein had omitted to make proper return. (lb.) Section 3177, Revised Statutes United States, held not to apply to examination for purposes of taxation of paid bank checks duly stamped. 5 (U. S. Sup. Ct, 1877J. Under section 3177 of the Revised Statutes United States, authority is given to any collector, deputy collector, or in- spector of internal revenue to enter in the daytime any building or place within his district where any articles or objects subject to such taxation are made, produced, or kept, so far as it may be necessary for the purpose of examining such objects or articles, and the pro- 510 DIGEST OE NATIONAL, BANK DECISIONS. ' TAXATION— Continued. BIGHT OF STATE OFFICEBS TO EXAMINE BOOKS Continued.. vision is that any owner of such building or place, or any person hav- ing the agency or superintendence of the same, who refuses to admit such officer or suffer him to examine such articles or objects shall for every such refusal forfeit $500. Held, that under this provision paid bank checks, which were duly and sufficiently stamped at the time they were made, signed, and issued, are not articles or objects subject to taxation, and an officer of a bank where such checks are may lawfully refuse to suffer the collector to examine such checks. (United States, plaintiff in error, v. Mann, 95 U. S., 580; 1 N. B. C, 154.) Under section 3177, Revised Statutes United States, internal-revenue officers may examine hank books. 6 (U. S. Dist. Ct, 1875). The law under which national banks are incor- porated does not exempt them from examination by the internal- revenue officers, mentioned in section 3177 of the Revised Statutes. A clerk of a supervisor of internal revenue is, however, not such an officer. (The United States v. Rhawn, 1 N. B. C, 358.) DEDUCTIONS. When portion of capital invested in United States bonds or securities of United States. 1 (U. S. Sup. Ct, 1865). The entire interests of the shareholders may be taxed without any deduction for that portion of the capital which is invested in United States securities. (Van Allen v. The Assessors, 3 Wall., 573.) 2 (U. S. C. C, 1890). Under act Louisiana, 1888, section 27, relating to tax- ation of national-bank shares, making no deduction for that part of the bank's property entering into their value which consists of non- taxable State and national securities, which deductions may, under the act, be made by individuals, a tax on national-bank shares violates Revised Statutes, section- 5219, prohibiting the assessment of such shares at a greater rate than moneyed capital in the hands of indi- vidual citizens ; and it is immaterial that the same discrimination is made against other corporations. (Whitney National Bank v. Par- ker, 41 Fed. Rep., 402.) 3 (Tex. Civ. App., 1894). An assessment upon national-bank stocks is not violative of a constitutional provision declaring that taxation shall be equal and uniform, though in such assessment the owners of such stocks are denied the right to deduct from the value of such shares the amount of capital invested by the banks in United States bonds and legal-tender notes, and such a deduction is given to private bank- ers. (Adair, Tax Collector, v. Robinson et al., 25 S. W., 734; 6 Tex. Civ. App., 275.) 4 (Tex. Civ. App., 1894). Nor is such an assessment for this reason in vio- lation of the Federal statute. ( lb. ) When value of real estate can not be deducted in appraising value of bank stock. 5 (U. S. Supp. Ct, 1901). The refusal to deduct the value of real estate owned in other States by a national bank, from the value of its shares of stock, does not make an unlawful discrimination against such banks under United States Revised Statutes, section 5219, or deny them the equal protection of the laws, where such a deduction is not authorized by the laws of the State in valuing shares of stock of other corporations. (Commercial Nat'l Bank of Ogden v. Alma D. Chambers, Treasurer, 182 U. S., 556; 3 R- C, 585.) 6 (111. Sup., 1903). Revised Statutes U. S., section 5219, provides that the shares of national banks shall be assessable for taxation in the hands of their owners, but not at a greater rate than assessed on other " moneyed capital " in the hands of individual citizens of the State, and that the real property of such banks may be taxed to the DIGEST OF NATIONAL BANK DECISIONS. 511 TAXATION— Continued. deductions — continued. same extent as other real estate is taxed : Held, that the " moneyed capital " referred to was money invested in other banking institu- tions, and therefore if the shares or personalty of other banks were taxed at their full value in addition to taxation on the real estate of such banks, the shares of national banks might also be taxed in the same manner. (Illinois Nat'l Bank v. Kinsella, 66 N. E. Rep., 338; 5 B. C, 414.) Deduction of debt of shareholders — When State law discriminates in favor of other moneyed capital. 7 (U. S. Sup. Ct, 1879). A State law which does not permit a deduction to be made from the assessed value of bank shares for all debts due by the holder thereof while authorizing such a deduction to be made from the assessed value of moneyed capital otherwise invested, is void. (People ex rel. Williams v. Weaver, 100 U. S., 539, reversing S. C, 67 N. Y., 516, and overruling People v. Dolan, 36 N. Y., 59.) 8 (U. S. Sup. Ct., 1901). A construction of a State statute by a State court, on the question of deduction for purposes of taxation, is binding on the Supreme Court of the United- States. (Commercial National Bank of Ogden, Plff. in Err., v. Alma D. Chambers, as Treasurer of Weber County, Utah, 3 B. C, 585; 182 U. S., 556.) 9 (U.S. Sup. Ct, 1881). Where under the statute of New York a stock- holder in a national bank presented to the proper board of assessors his affidavit, showing that his personal property subject to taxation, including such shares, after deducting therefrom his just debts, is of no value, and they refused on his demand to reduce the assessment of the shares, an injunction should be awarded to restrain them from collecting the tax. (Hills v. National Albany Exchange Bank, 105 U. S., 319.) 10 (U. S. Sup. Ct., 1881). The taxation of national-bank shares by the stat- ute of Indiana without permitting the owner of them to deduct from their assessed value the amount of his bona fide indebtedness, as he may in the case of other investments of moneyed capital, is a dis- crimination forbidden by the act of Congress. (Evansville National Bank v. Britton, 105 U. S., 322.) 11 (U. S. Sup. Ct., 1881). State statutes taxing shares without permitting owner to deduct his indebtedness, as allowed to owners of other per- sonal property, make a discrimination forbidden by acts of Congress. (U. S. Sup. Ct, 1881) Albany Co., Supervisors, v. Stanley, 105 U. S., 305. 12 (U. S. Sup. Ct., 1890). Under acts permitting the deduction of debts from the value of all a person's taxable property such deduction must be permitted from the value of national-bank shares ; but a statute is not void because it does not provide for a deduction ; nor is the assess- ment void if deductions are not made, but voidable only. (Palmer v. McMahon, 133 U. S., 660.) 13. The taxation of national-bank shares under a State statute without per- mitting the shareholder to deduct from their assessed value the amount of his bona fide indebtedness, as in the case of other invest- ments of moneyed capital, is a discrimination forbidden by Congress. (U. S. Sup. Ct, 1881) Albany Co. v. Stanley, 105 U. S., 305; (U. S. Sup. Ct., 1879) New York v. Weaver, 100 U. S., 539; (U. S. Sup. Ct, 1881) Hills v. Nat. Albany Exchange Bank, 105 U. S., 319. 14 (U. S. C. C, 1894). Where the tax laws of a State deny to the holders of national-bank stock the right to deduct from the value of their shares their bona fide indebtedness, while conferring this right upon other moneyed capital, an assessment upon national-bank stock will be void. (Mercantile National Bank v. Shields, 59 Fed. Rep., 952.) 512 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued. deductions — continued. 15 (U. S. C. C, 1894). It is immaterial that such deductions are not allowed • to the holder of stock in railroad, insurance, and manufacturing cor- porations, since such stock is not regarded as " moneyed capital." (lb.) 16 (U. S. C. C, 1894). Nonresident stockholders are entitled to the same deductions as resident stockholders. (lb.) 17 (U. S. C. C, 1887). The owners of shares in national banks are, under section 5219, Revised Statutes, United States, entitled to the right of deduction given to taxpayers under section 814 of the Code of Iowa, which provides that from the gross amount of money and credits held by one liable to taxation may be deducted all debts due and owing. (Richards et al. v. Incorporated Town of Rock Rapids, Iowa, 31 Fed. Rep., 505.) 18 (Ind. Sup., 1880). Where a tax law of a State allows taxpayers to deduct their debts from the assessed value of a class of credits which con- stitute a material portion of the moneyed capital of the State in the hands of its citizens, but denies to the owners of national-bank stock the right to deduct their debts from the assessed value of such stock, it is an invalid discrimination under section 5219, United States Revised Statutes. (Wasson v. First National Bank of Indianapolis, 3 N. B. C, 419 ; 107 Ind., 206 ; 8 N. E. Rep., 97.) 19 (Nebr. Sup., 1889). In the assessment and taxation of shares of national- bank stock, the owners thereof, having no other credits or moneyed capital, are entitled to deduct their bona .fide debts from the value of such snares of stock. (Bressler v. Wayne County, 25 Nebr., 468; 3 N. B. C, 564.) 20 (N. C. Sup., 1887). The revenue act of North Carolina (act 1885, chapter 177, section 12) enumerates what shall be deemed "solvent credits," and provides that the party taxed " may deduct from the amount of solvent credits owing to him the amount of collectible debts owing by him as principal debtor." Held, that the holder of stock of a national bank located in said State was entitled to deduct his indebt- edness from the valuation of his shares of said stock, although national-bank stock was not included in the statute enumeration of "solvent credits." (McAden v. Commissioners of Mecklenburg County, 97 N. C, 355 ; 3 N. B. C, 694.) 21 (N. J. Sup., 1899). The taxation of the shares of stock in national banks, under the act of April 1, 1869 (3 Gen. St., 3302), is substantially tax- ation of all the property of the banks, so that debtors of such banks, who have secured the debts by mortgaging their real estate, may properly claim to deduct the debts from the assessed value of the realty. (State (Myers, Prosecutor) v. Campbell, Collector of the Town of Newton, 2 Banking Cases, 195 ; 64 N. J. L., 186.) 22 (N. J. Sup., 1899). The act of March 28, 1895 (3 Gen. St., 3455), does not impair the right to have debts which are due to national banks, and are secured by mortgage on real estate, deducted from the assessed value of the realty, for the purpose of taxation. (lb.) 23 (Ohio). The tax laws of Ohio do not authorize the deduction from the value of shares in a nationai bank, entered on the duplicate for tax- ation, of legal, bona fide debts owing by the holder of such shares of stock. (Niles v. Shaw, 50 Ohio St., 370; 34 N. E., 162.) 24 (Utah Sup., 1900). The term "moneyed capital," employed in section 5219, Revised Statutes United States, does not require that where, under a system of taxation such as ours, debts may be deducted from credits, the individual debts of a shareholder in a national bank must be deducted from the value of his stock ; neither does the term include money which does not come into competition with the busi- ness of the bank. Debts disconnected from such business can not be deducted from the amount of the capital, and the shares of- stock can not be treated as Gredits. (Commercial Nat. Bank of Ogden v. Chambers, County Treasurer, 2 Banking Cases, 682; 21 Utah, 324.) DIGEST OF NATIONAL BANK DECISIONS. 513 TAXATION— Continued. ASSESSMENT OF SHAKES. At what place national-banic shares taxable. 1 (U. S. Sup. Ct., 1866). A State statute required the assessors of each city and town in which any shareholder in national banks resided to in- clude such shares in the assessment of such person. The defendant ' resided in Boston, owned shares in several national banks there situ- ated, and was there assessed on such shares. He refused to pay the tax on the ground that the State statute was in violation of the national banking act permitting States to tax shares of National banks " at the place where such bank is located and not elsewhere." Held, that as in this case the assessment was in conformity to the act of Congress, the defendant had no cause for complaint and could not impeach the validity of the State statute. (Austin v. The Aldermen, 7 Wall., 694; 1 N. B. C, 15.) 2 (U. S. C. C, 1878). A national bank, located in New Jersey, for the con- venience of persons in Philadelphia kept a clerk in that city who received deposits. Held, that the bank did not become located in Philadelphia so as to be liable to taxation. (National State Bank of Camden v. Pierces 18 Albany Law Journal, 16 ; 2 N. B. C, 177.) 3 (111. Sup., 1872). A Slate statute providing that shares of stock in na- tional banks shall be taxed in the county, town, or district where such banks are situated, whether the shareholders reside in such county, town, or district or not, is valid. (First National Bank of Mendota v. Smith, 65 Illinois, 44; IN. B- C, 390.) 4 (Ind. Sup., 1870). The requirement that the stock shall be taxed at the place where the bank is located is not invalid where the owner of the stock lives in another county or State. (Whitney et al., Appel- lants, v. Ragsdale, Treasurer, 33 Indiana, 107; 1 N. B. C, 429.) 5 (Mass. Sup., 1868). Under section 41 of the national banking act of 1864 • it is unlawful for a State to impose a tax on shares owned by an inhabitant thereof in the capital stock of a national bank located in another State. (Flint v. Board of Aldermen of Boston, 99 Massachu- setts, 141; 1 N. B. C, 571.) 6 (Mass. Sup., 1873). A statute made it the duty of every shareholder in a national bank to give notice to the bank of his true residence each year, and, in case of neglect, made the shares taxable where the bank was located as well as where the shareholder resided. Held, that a shareholder was rightfully taxed upon his shares in the town where he resided, although he had, through 1 an honest mistake, notified the cashier that his residence was in another town. (Goldsbury v. Inhabitants of Warwick, 112 Massachusetts, 384; IN. B. C, 592.) 7 (Mich., 1877). By general law of a State, shares of stock in national banks were to be taxed in the township where the bank .was located, except that where a stockholder resided in another township in the same county his shares were to be there taxed. A village charter authorized the taxation of " all property, real and personal, within the limts of said village." Held, not to authorize a tax on shares of stock in a national bank located in such village, owned by a resident of another township in the same county. (Howell v. The Village of Cassopolis, 35 Michigan, 471; 1 N. B. C, 627.) 8 (N. C, 1876). Under a State constitution requiring all property not spe- cifically exempt to be taxed, State assessors must tax the shares of national-bank stock belonging to nonresidents of the State in the city or town where the bank is located, although there is no State statute expressly directing such taxation. (Kyle v. The Mayor, etc., 75 North Carolina, 445 ; IN. B. C, 808.) 9 (N. C, 1878). National-bank shares owned by residents may be assessed at their residence or at the location of the bank, as the State legisla- ture may direct, and a State law directing the assessment where the person required to list them resides is valid. (Buie v. Commissioners of Fayetteville, 75 N. C, 267 ; 2 N. B. C, 343.) 4049—05 33 514 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued. assessment of shabes — continued. 10 (Utah Sup., 1900). Although a national bank is organized under the bank- ing act of the United States, if it is located in this State and conduct- ing its business here, all its property not exempt, situate, or helil, owned, and used within this jurisdiction is within the taxing power of this State under the provisions of section 5219, Revised Statutes United States, and such power extends to every species of property whjch exists within the limits of the State by its authority or which is introduced by permission of the State, unless such power be excluded expressly or by necessary implication. (Commercial Nat. Bank of Ogden v. Chambers, County Treasurer, 2 Banking Cases, 682; 21 Utah, 324; affirmed by U. S. Sup. Ct, 182 U. S., 556.) 11 (Utah Sup., 1900). Under the power of taxation property must be treated as it exists within the jurisdiction of such taxing power and without reference to the powers of another State over which there is no juris- diction whatever. (lb.) 12 (Utah Sup., 1900). A State has the right to fix the particular situs of the stock of a corporation doing business within its limits for the purposes of taxation, and its value for such purposes can not be diminished by deducting therefrom the value of property not situated or taxable within the State and over which the State can exercise no control. (lb.) When " moneyed capital " given advantage is inconsiderable. 13 (U. S. Sup. Ct, 1896). The mere fact that a State statute permits some debts to be deducted from some moneyed capital for the purpose, of assessment for taxation, but not from that which is invested in the shares of national banks, does not show a violation of Revised Stat- utes, section 5219, forbidding State taxation of national-bank shares to be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens, there being nothing to show that the amount of moneyed capital in the State from which debts may be deducted, as compared to the moneyed capital invested in national- bank shares, was so large and substantial as to amount to an illegal discrimination against national-bank shareholders. (First National Bank v. Ayers, 16 S. Ct, 412; 160 U. S., 660.) 14 (Ind. Sup., 1886). Courts will take judicial notice that the moneyed capital from which the taxpayer may so deduct his debts is a material portion of- the whole moneyed capital of the State. See 5 Am. St. Rep., 846, note. (Wasson v. First National Bank of Indian- apolis, 3 N. B. C, 419; 10T Ind., 206; 8 N. E. Rep., 97.) When State oanks are tawed on capital. 15. Where the State banks are taxed upon the capital, no tax can be imposed upon the shares of national banking associations ; for, as the capital of the State banks may consist of the bonds of the United States, which are exempt from State taxation, a tax on capital is not equivalent to a tax on shares. (U. S. Sup. Ct, 1865) Van Allen v. The Assessors, 3 Wall., 573 ; (U. S. Sup. Ct., 1866) Bradley v. Illinois, 4 Wall., 459. 16. But though the tax upon the State banks is not eo nomine a tax on shares, yet if it is equivalent to such a tax the shares in the national banking associations located in that State may be taxed. (Ohio) Frazer v. Seibern, 16 Ohio St., 614; (Wis.) Van Slyke v. State, 2 Wis., 655; (Wis.) Boynoll v. State, 25 Wis., 112. Same rate required on State and national oanlc shares. 17 (U. S. Sup. Ct, 1869). Congress meant no more than to require of the States, as a condition to the exercise of the power to tax the shares in national banks, that they should, as far as they had the capacity, tax in like manner the shares of banks of issue of their own creation. (Lionberger v. Rouse, 9 Wall., 468.) DIGEST OP NATIONAL BANK DECISIONS. 515 TAXATION— Continued. assessment op shabes*— continued. 18 (U. S. Sup. Ct, 1869). Therefore, where a State has previously con- tracted with the banks -which it has chartered 1 that they shall not be taxed above a certain rate, a tax upon national-bank shares at a greater rate is not invalid, if this rate is not greater than that assessed upon all the moneyed capital within the State, except that of the State banks. (lb.) 19 (U. S. Sup. Ct, 1866). The intention of Congress was that the rate of taxation of the shares should be the same as, or no greater than, the tax upon the moneyed capital of the individual citizen which is sub- ject and liable to taxation. (People v. The Commissioners, 4 Wall., 244.) 20 (U. S. Sup. Ct, 1865). New York act of 1865, subjecting shares of national banks to taxation, but not providing that the tax should not exceed rate imposed on State banks, is void, as there was no tax on shares of State banks — only on the capital. (Van Allen v. Assessors, 3 Wall., 573.) 21 (U. S. C. C, 1877). Where by local legislation different rates are pre- scribed for different classes of moneyed capital, the rate imposed upon shares of national banks should not as a general rule exceed the rate imposed upon other moneyed capital of the same or similar class, viz, shares of State banks. (City National Bank v. Paducah, 5 Cent. L. J„ 347; 1 N. B. C, 300.) Effect of partial or complete exemption of State-bank shares'and other moneyed capital. 22 (U. S. Sup. Ct, 1881). The shares of a national bank are not relieved from taxation because a single bank of the State has been favored by mistake or by intention. (Albany Co. v. Stanley, 105 U. S., 305.) 23 (U. S. Sup. Ct, 1885). National-bank shares can not be subjected to State taxation where a large part relatively of other moneyed capital in hands of individual citizens in same taxing district is exempted. (Boyer v. Boyer, 113 U. S-, 689.) 24 (U. S. Sup. Ct, 1897). Money invested in corporations or in individual enterprises that carry on the business of railroads, of manufacturing enterprises, mining investments, and investments in mortgages does not come into competition with the business of national banks, and is therefore not within the meaning of the provision in Revised Stat- utes, section 5219, forbidding State taxation of its shares at a greater rate than is assessed upon other moneyed capital in the hands of the citizen of the State. (First Natl. Bank of Aberdeen v. Chehalis County, 166 U. S., 440.) 25 (U. S. Sup. Ct, 1897). Insurance stocks may be taxed on income instead of on value, and deposits in savings banks and moneys belonging to charitable institutions may be exempted without infringing the pro- visions of that section of the Revised Statutes. (lb.) 26 (U. S. Sup. Ct, 1897). The allegations of the complaint do not show that any moneyed capital of the bank of the character defined by the decisions of this court was omitted or intended to be omitted by the assessor, and those allegations are so general in these respects that they can not be made the basis of action. (lb.) 27 (U. S. Sup. Ct). The main purpose of Congress in fixing limits to State taxation on investments in the shares of national banks was to ren- der it impossible for the State in levying such a tax to create and foster an unequal and unfriendly competition by favoring institu- tions or individuals carrying on similar business and operations and investments of a like character; and the language of the law is' to be read in the light of this, policy. And therefore the exemption of shares of stock in corporations the business of which does not come into competition with that of the national bank (e. g., railroad com- panies, mining companies, manufacturing companies, and insurance companies) does not invalidate a tax upon national-bank shares. 516 DIGEST OP NATIONAL BANK DECISIONS. TAXATION— Continued. assessment of SHAEES— continued. Capital thus employed is not " moneyed capital " within the meaning of the act of Congress. (U. S. Sup. Ct, 1887) Mercantile National Bank v. New York, 121 U. S., 138 ; (U. S. Sup. Ct., 1887) Newark Banking Co. v. Newark, 121 U. S., 163 ; (U. S. Sup. Ct, 1888) National Bank of Redemption v. Boston, 125 U. S., 60. 28 (U. S. Sup. Ct.). Although deposits in savings banks constitute moneyed . capital in the hands of individuals within the terms of any definition which can be given of that phrase, yet tbey are not within the mean- ing of the act of Congress in such a sense as to require that, if they are exempted from taxation, shares of stock in national banks must thereby also be exempted from taxation ; for it can not be supposed that savings banks come into any possible competition with national banks. (lb.) 29 (U. S. Sup. Ct, 1885). But though Congress did not contemplate that there should be an absolute equality (which in the nature of things is impossible), yet it did intend that there should be a substantial equal- ity ; and therefore if the exemptions in favor of other moneyed capital are so palpable as to show that there is a serious discrimination against capital invested in the shares of national banking associations the tax will be declared unlawful. (Boyer v. Boyer, 113 TJ. S., 690.) 30 (U. S. C. C, 1881). The exemption from taxation of the shares of various corporations under the provisions of a State statute does not exempt " moneyed capital in the hands of individual citizens," within the meaning of section 5219 of the Revised Statutes, relating to the taxa- tion of national-bank shares. (First National Bank of Utica v. Waters and another, 7 Fed. Rep., 152.) 31 (U. S. C. C, 1881). The omission of a city clerk to extend upon the assess- ment roll the amount to be paid by each shareholder until after such roll has been delivered to the city treasurer does not render the taxa- tion of such shares void. (lb.) 32 (U. S. C. C, 1881). In such case, therefore, the tax collector is protected by his warrant, when both such warrant and assessment were appar- ently regular when they came to his hands. (lb.) 33 (U. S. C. C, 1887). Section 5219, Revised Statutes United States, pro- vides that shares in the national banks may be subjected to the im- position of a State tax, but the same shall not be at a greater rate than is assessed upon other moneyed capital in the hands of indi- vidual citizens of such State. Under this section, before the assess- ment of the shares in a national bank can be held invalid, it must be shown that there is in fact a higher burden of taxation imposed upon money thus invested than is imposed upon other moneyed capital, and it is insufficient to show merely that the State laws provide a different mode or manner of taxing moneyed capital invested in savings banks or other corporations. (Richards et al. v. Incorpo- rated Town of Rock Rapids, 31 Fed. Rep., 505. ) 34 (U. S. C. C, 1887). Sections 818-820, Code, Iowa, providing for the tax- ation of the shares of national banks, and chapter 60 of the Laws of 1874, providing for the organization of savings banks, and enacting that the shares of stock therein are taxable, but that deposits are not, are not in contravention of section 5219, Revised Statutes of the United States, there being no discrimination against national banks or the capital therein invested. (lb.) 35 (U. S. C. C, 1881). The restriction upon the power of a State to tax the shares of any national bank within its borders " at a greater rate than is assessed upon other moneyed capital in the hands of indi- vidual citizens of such State "'(Rev. Stat., sec. 5219) is intended to secure equality of valuation in the assessment of the stock, as well as equality in the rate of the tax after the assessment has been made. (Albany City National Bank v. Maher, receiver, etc., 6 Fed. Rep., 417.) DIGEST OF NATIONAL BANK DECISIONS. 517 TAXATION— Continued. assessment op shares — continued. 36 (U. S. C. C, 1881). An act for the taxation of corporations generally does not exempt individuals from assessment or taxation upon their per- sonal property or moneyed capital invested in the shares of such cor- porations. ( lb. ) 37 (U. S. C. C, 1881). Therefore the imposition of a higher assessment and heavier tax upon the shares of a national bank than those imposed upon the capital stock and personal property of other corporations within the State does not contravene section 5219 of the Revised Statutes. (lb.) 38 (U. S. C. C, 1886). If the taxation laws of a State subject to taxation the capital stock of certain corporations, but exempt the shares held by the several stockholders, while the shares of national-bank stock are subject to taxation in the hands of the shareholders, but the cap- ital stock itself is exempt, held, that there is here no such discrimi- nation against capital invested in national banks as to run counter to the provisions of Revised Statutes. United States, section 5219. (Mercantile National Bank of City of New York v. Mayor, etc., of City of New York and another, 28 Fed. Rep., 776.) 39 (U. S. C. C, 1886). The exemption from taxation by the laws of New York of shares of life-insurance companies, of stocks and bonds of New York City, of bonds of other State municipalities, and of de- posits in savings banks is justified by public policy and does not indi- cate any unfriendly discrimination on the part of the State as be- tween the shares of national banks and moneyed capital generally, (lb.) 40. The exemption of deposits in savings banks does not affect the rule for taxation of shares of national banks, because it is not like other property similarly invested. (U. S. Sup. Ct, 1887) Davenport National Bank v. Davenport, 123 U. S., 83 ; (U. S. Sup. Ct, 1888) National Bank of Redemption ;;. Boston, 125 U. S., 60 ; (U. S. Sup. Ct, 1890) Palmer v. McMahon, 133 U. S.. 660: (U. S. Sup. Ct, 1887) Mercantile National Bank v. New York, 121 U. S., 138. 41 (Ala.). And a State tax upon shares in national banking associations is not rendered invalid by an exemption of the shares of other corpora- tions, the capital of which consists of property required to be listed for taxation as such. (Mclver v. Robinson, 53 Ala., 456.) 42 (Ind., 1874). State banks were exempt from taxation under a statute passed prior to the national banking act. Held, that shares in na- tional banks could nevertheless be taxed. (City of Richmond v. Scott, 48 Indiana, 568; 1 N. B. C, 445.) 43 (Ind., 1874). A tax was levied on money belonging to plaintiff on the 1st day of January. In March he bought with this money shares in the stock of a national bank. Held, that the shares could be also assessed under a statute providing that persons should be assessed for bank stock held by them on April 1. ( lb. ) 44 (Wash., 1894). A case of discrimination against national banks, within the purview of section 5219, Revised Statutes United States, arises only when the moneyed capital employed in the hands of individual owners in carrying on operations of the same character as those by. national banks is some considerable amount and is exempt by opera- tion of law or by the willful act of the assessors. (Washington National Bank of Seattle v. King County, Wash., 38 P., 219 ; 9 Wash., 607 ; Commercial National Bank v. Same, ib. ; Washington National Bank v. City of Seattle, ib. ; Commercial National Bank v. Same, ib. ; First National Bank v. Same, ib. ; Boston National Bank v. Same, ib. ; National Bank of Commerce v. Same, ib. ; Puget Sound National Bank v. Same, ib. ; Seattle National Bank v. Same, ib.) 518 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued. assessment of shakes — continued. Effect of exemption of trust companies and savings banks. 45 (U. S. Sup. Ct, 1902). No discrimination against national banks in viola- tion of United States Revised Statutes, section 5219, providing that taxation on their shares of stock shall not be at a greater rate than is assessed on other moneyed capital in the hands of individual citi- zens, is made by the system of taxation prevailing in New York in respect to trust companies, since it must be presumed that if such companies are using their funds in a strictly banking business under an assumption of powers not in fact conferred by law, the State will take proper steps to keep them within the statutory limits, and a neg- lect for a limited time to do so can not be considered as an assent by the State to such an improper assumption of power. (Jenkins v. Neff, 186 U. S., 230.) 46 (U. S. Sup. Ct). The mode of taxation adopted by the State of New York in reference to its corporations, excluding trust companies and sav- ings banks, does not operate in such a way as to tax shares of national banks at a greater rate than that imposed upon other mon- eyed capital in the hands of individual citizens. (U. S. Sup. Ct, 1887) Mercantile National Bank v. New York, 121 U. S., 138 ; (U. S. Sup. Ct, 1890) Palmer v. McMahon, 133 U. S., 660. 47 (U. S. Sup. Ct). Although trust companies in New York are not banks in the commercial sense, the shares of stock held by individuals therein are moneyed capital, within United States Revised Statutes, section 5219. (lb.) Effect of exemption of ehoses in action. 48 (U. S. Sup. Ct, 1874). Municipal and school taxes may be levied upon the shares of a national bank, although mortgages, judgments, recog- nizances, and moneys owing upon articles of agreement for the sale of real estate are exempt from taxation except for State purposes in the borough where the bank is located. (Hepburn v. School Directors of Carlisle, 23 Wall., 480.) 49 (Wash. Sup., 1893). The nontaxation of credits of individuals, such as accounts, promissory notes, and mortgages, is not unlawful discrim- ination against national banks whose capital is taxed. (First National Bank of Aberdeen v. Chehalis County et al„ 32 P., 1051 ; 6 Wash., 64.) 50 (Wash. Sup., 1893). Revised Statutes United States, section 5219, which prohibits the legislature of each State from taxing national-bank stock at a greater rate than assessed upon the " moneyed capital " in the hands of individual citizens of the State, is intended merely to prevent moneyed capital invested in national banks from being placed at a disadvantage as compared with moneyed capital in the hands of citizens of the State, used for practically an identical pur- pose with that invested in the stock of national banks ; and the non- taxation of credits owing to individual citizens, such as accounts, promissory notes, and mortgages, is not an unlawful discrimination against national banks whose capital is taxed. (lb.) No discrimination in assessment allowed. 51 (U. S. Sup. Ct, 1879). Any system of assessment of taxes which exacts from the owner of the shares of a national banking association a larger sum in proportion to the actual value of those shares than it does from other mpneyed capital, valued in like manner, taxes the shares at a greater rate, notwithstanding that the percentage of tax on the valuation is the same as that applied to other moneyed capital. (Pelton v. Commercial National Bank, 101 U. S., 143.) 52 (U. S. Sup. Ct., 1879). Where shares in national banking associations are purposely valued proportionately higher than the other moneyed capital in the State, -the assessment is void. (lb.) DIGEST OP NATIONAL BANK DECISIONS. 519 TAXATION— Continued. assessment or shares — continued. 53 (U. S. Sup. Ct, 1879). And the collection of what is in excess of the rate imposed on the other moneyed capital may be enjoined. (lb.) 54 (U. S. Sup. Ct, 1887). A State statute creating a system of taxation of banks which does not discriminate against national banks is not unconstitutional. (Davenport National Bank v. Davenport, 123 U. S., 83.) 55 (U. S. Sup. Ct, 1887). Section 5219, Revised Statutes, does not require perfect equality between State and national banks, but only a system of taxation which shall work no discrimination between them. (lb.) 56 (U. S. Sup. Ct, 1888). The auditor of Cuyahoga County, Ohio, fixed the taxable value of shares in a national bank at 60 per cent of their true value in money, in accordance with the practice adopted for the valu- tion of other moneyed capital of individuals in the courts and State, and transmitted the same to the State board of equalization for incor- porated banks. That board increased the valuation to 65 per cent, and this value, being certified back to the auditor, was placed by him on the tax list without a corresponding change being made in the valuation of other moneyed capital of individuals. Held, that this was such a discrimination as Is forbidden by section 5219 of the Revised Statutes of the United States. The statutes of Ohio regu- lating assessments for taxation allow an owner of moneyed capital other than shares in a national bank to have a deduction equal to his bona fide indebtedness made from the amount of the assessment of the value of such moneyed capital ; but they make no provision for a similar deduction from the assessed value of shares in a national bank, and provide no means by which such a deduction may be obtained. Held, (1) that the owners of such shares are entitled to have a deduction of their indebtedness made from its assessed value as in the case of other moneyed capital ; and (2) that the right to it is not lost by not making a demand for it until the entire process of appraisement and equalization of the value of the shares for taxation is completed and the tax duplicate is delivered to the treasurer for collection. (Whitbeck v. Mercantile National Bank of Cleveland, 127 U. S., 193.) 57 (U. S. Sup. Ct, 1887). A county assessor assessed the stock of all the banks in the county, both State and national, at the par value. The actual value of the shares of the National Albany Exchange Bank was from twenty-five to thirty per cent above par. The actual value of the shares of all the banks in the county, with one excep- tion, was above par from ten to over one hundred per cent In a suit by a shareholder of said national bank to recover the amount paid upon his stock on the ground of discrimination, held, that the discrimination not being designed by the assessor, the assessment was valid. (Williams v. Board of Supervisors of the County of Albany, 122 U. S., 154 ; 3 N. B. C, 278.) 58 (U. S. Sup. Ct, 1887). Where the assessors are required by statute to complete the assessment roll by a certain date, and to make oath to it in a prescribed form, and these requirements are necessary to enable notices to be published specifying a time when they would meet to review the assessments on the application of any person aggrieved, the noncompletion of the assessment roll by the specified date, and departure from the prescribed form of oath, may be cured by remedial statute subsequently enacted, providing the right of the taxpayers aggrieved by the assessment to have their objections passed upon is saved. (lb.) 59 (U. S. Sup. Ct, 1888). Under Public Statutes of Massachusetts, chapter 13, section 8, which provides that all bank shares shall be assessed at their cash value, and at no greater rate than other moneyed capital in the hands of citizens, taxes are not invalid, either under statutes of Massachusetts or United States Revised Statutes, section 5219, because the tax on savings banks is based on the amount of their 520 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued. assessment of shabes — continued. deposits, excepting deposits invested in loans secured on taxable real estate. (National Bank of Redemption v. City of Boston, 125 U. S., 60;3N. B. C, 300.) 60 (U. S. Sup. Ct, 1888). A tax levied under Public Statutes of Massachu- setts, chapter 13, section 8, is not " at a greater rate than other moneyed capital in the hands of citizens " because disproportionate and unequal to the tax imposed under Public Statutes of Massachu- setts, chapter 13, relative to the taxation of the corporate franchise of corporations, excepting banks ; on life insurance companies, based on the number of policies; on trust and like companies, based on the amount of deposits, and on telephone companies, based on the number of telephones used. (lb.) 61 (U. S. Sup. Ct, 1899). Under the Ohio system of taxation there is not an unfavorable discrimination against national bank shareholders and in favor of unincorporated banks or bankers in assessing the value of capital employed in business, as in both cases all the debts of the business itself are deducted from the capital employed before reach- ing the sum which is assessed for taxation, and in neither case can the debts of the individual simply as an individual be deducted from the value of the capital assessed for taxation. (First Nat. Bank of Wellington, Ohio, v. Chapman, Treasurer of Lorain County, Ohio, 1 Banking Cases, 325; 173 U. S., 205.) 62 (U. S. C. C, 1886). If it appears that the capital represented by national- bank shares is subjected in a State to a higher rate of taxation than is assessed upon the moneyed capital generally of the taxpayers, there can be no valid assessment of national-bank shares for taxation in that State, and these shares will be relieved from any contribu- tion whatever to the general burden of taxation under Revised Statutes United States, section 5219. (Mercantile National Bank of the City of New York v. Mayor, etc., of City of New York and another, 28 Fed. Rep., 776.) (As to what constitutes moneyed capi- tal, see Mercantile Bank v. N. Y., No. 27 ante, page 515.) 63 (U. S. C. C, 1893). Section 5219 prohibits an adverse discrimination by a local government in the valuation of national-bank stock fpr assess- ments as compared with an assessment by the same government for the same year of other moneyed capital invested so as to make a profit from the use thereof as money. (Puget Sound National Bank of Seattle v. King County et al., 57 Fed. Rep., 433.) 64 (111.). The provision of the act of June 13, 1867, requiring the assess- ment of shares in banks to be made for the year 1867, with regard of the 1st day of July, 1867, instead of the first day of the preceeding April, does not violate the principle of equality and uniformity established by the Constitution. (McVeagh v. City of Chicago et al., 49 111., 318.) 65 (Mont., 1887). Shares of national banks in the Territories are taxable like other personalty. (Commissioners of Silverbow County v. Davis, 6 Mont, 306; 3 N. B. C, 546.) 66 (Mont., 1887). In Montana stocks or shares in any bank or company are taxable except where the entire capital stock is invested in property assessable in the Territory ; in Silverbow County mining claims not patented were not taxed, and when patented were assessed at $5 an acre ; the entire capital of a large number of mining companies was assessable, and part of their property was mining claims ; defendant's shares of bank stock were assessed at the market value. Held, that there was no discrimination. (lb.) 67 (Wash. Sup., 1899). A constitutional provision requiring "a uniform and equal rate of assessment and taxation " does not necessarily require uniform methods of, assessment. (Pacific Nat. Bank of Tacoma v. Pierce County et al., 2 Banking Cases, 293; 20 Wash., 675.) DIGEST OF NATIONAL BANK DECISIONS. 521 TAXATION— Continued. assessment of shares — continued. Valuation of shares. 68 (U. S. Sup. Ct, 1879). The provision that State taxation on the shares of ' any national bank shall not be at a greater rate than assessed on other moneyed capital includes the valuation of the shares, as well as the rate of percentage charged thereon. (New York v. Weaver, 100 U. S., 539.) 69 (U. S. Sup. Ct., 1881). The shares of national banks are taxable with exclusive reference to their value and without regard to the nature of the property held by them as corporations. (Evansville National Bank v. Britton, 105 U. S., 322.) 70 (U. S. Sup. Ct). The uniform valuation of shares of national and State banks at par, although the actual value of the shares differ, is not in violation of the banking act, as it constitutes no discrimination against banks of either kind. (U. S. Sup. Ct, 1887) Williams v. Albany Co., 122 U. S., 154; (U. S. Sup. Ct, 1887) Stanley v. Albany Co., 121 U. S., 535. 71 (U. S. Sup. Ct, 1876). Under the statute of New York, shares in national banking associations should be taxed at their real or market value. (People v. The Commissioner of Taxes and Assessments, 94 U. S., , 415.) , -72 (U. S. Sup. Ct, 1874). The shares may be valued for taxation at an amount exceeding their face value if this amount is not at a greater rate than the valuation set upon other moneyed capital in the State. (Hepburn v. School Directors, 23 Wall., 480.) 73 (U. S. C. C, 1876). In estimating the value of the shares for the purpose of taxation, reference may be had to all the property and values of the bank. ( St. Louis National Bank v. Papin, 3 Cent. L. J., 669 % 1 N. B. C, 326.) 74 (U. S. C. C, 1876). If no excessive valuation is complained of, and a cor- rect result is arrived at, equity will not restrain the collection of a tax because the method of computation was erroneous. (lb.) 75 (U. S. C. C). National-bank shares can not be included in the valuation for taxation by or under State authority at more than the par value thereof; the par value is the fixed value for taxation. (Union National Bank v. City of Chicago, 3 Biss., 82.) 76 (N. Y. App., 1877). In assessing shares of stock in national banks in. New York the assessors must determine the actual value of the shares, taking into consideration all the capital of the bank, whether surplus or in real estate or otherwise, and then deduct from such value such sum as represents the proportion which the assessed value of the real estate bears to the assessed value of the entire capital. (People ex rel. Tradesmen's National Bank v. Commissioners of Taxes and , Assessments, 1 N. B. C, 752.) 77 (N. Y. App., 1877). Thus the capital of a national bank was $1,000,000, and was represented by 25,000 shares of $40 each. The assessors assessed the shares at $56 each, making in the aggregate $1,400,000, and the real estate at $200,000. Held, that they should deduct from the assessed value of each share $8, being one-seventh, or the propor- tion which the real estate bore to the aggregate assessed value of the shares. (lb.) Ohio — Increase of valuation -without notice. 78 (U. S. Sup. Ct., 1902). This suit was brought in the circuit court of the United States for the northern division of Ohio, eastern district, to restrain the collection of certain taxes levied by the officers of Cuyahoga County, Ohio, upon the appellee bank. The grounds of the suit were that the acts of the taxing officers of said county were in violation of the "rights of the plaintiff (appellee) and of its shareholders accorded to them by section 5219 of the Revised Stat- utes of the United States, securing to said shareholders a restriction of the rate and limit of taxes assessed upon their said shares to that 522 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued. assessment of shabes — continued. assessed upon other moneyed capital in the hands of individual citi- zens of the State of Ohio." The bill alleged that the plaintiff (ap- pellee) was a national bank, and stated the capital stock of the bank and the number of shares into which it was divided ; that its cashier made the proper returns of the resources and liabilities of the bank to the county auditor ; that the latter fixed the value thereof." as re- quired by section 2766 of the Revised Statutes of the State, after de- ducting the assessed value of the real estate of the bank, and trans- mitted a statement of his action, and a copy of- the report made by the cashier to the State board of equalization for incorporated banks, and that board, professing to act under sections 2808 and 2809 of the Revised Statutes of the State, increased the valuation of the shares without notice to the bank or its shareholders, and that the board was hence without jurisdiction to make such increase, and " its action in respect thereto was void and of no effect." It was averred " that said State board of equalization knowingly and designedly did fix a much higher per centum of valuation and assessment for taxation upon the shares of the plaintiff's capital stock than was assessed upon other moneyed capital in the hands of individual citi- zens of the State of Ohio, and much higher than that fixed on other moneyed capital in the hands of such citizens in said county of Cuyahoga and said city of Cleveland." After the answer was filed, the case was referred to a master, and upon the coming in of his re- port, and, after considering the exceptions of the parties to it, the court dissolved the injunction which had been granted and dismissed the bill. That action was reversed by the circuit court of appeals and the cause remanded, with instructions to enter a decree in favor of the complainant (appellee here). Thereupon an appeal was taken. Held, that the judgment of the court of appeals should bo reversed, and the judgment of the circuit court should be affirmed. (Lander v. Mercantile Bank, 186 U. S., 458.) COLLECTION OF TAX. Bank's property may not he seized for tax on, shares. 1 (Iowa, 1870). A collector of taxes has no authority to seize the property of a national bank to satisfy a tax assessed against a shareholder. (First National Bank v. Hershire, 31 Iowa, 18; IN. B. C, 465.) 2 (N. T. Appls., 1872). A warrant for the collection of a tax assessed to the shareholders on shares of stock in a national bank directed the collector " to levy the same on the goods and chattels of such per- sons." Meld, that the collector could not thereon seize the property of the bank to pay the tax. (First National Bank of Sandy Hill v. Fancher, 48 New York, 524 ; 1 N. B. C, 697.) Sank not liaole for tax on shares unless it has dividends. 3 (Iowa, 1870). Under the statute of Iowa a national bank is not liable for the tax assessed against a shareholder unless it have in its pos- session dividends or property belonging to such shareholder, (Her- shire v. The First National Bank, 35 Iowa, 272 ; 1 N. B. C, 476.) Bank may oe garnisheed for taxes against stockholders. 4 (Wash. Sup., 1893). The State has a right to resort to the bank as a garnishee for the collection of its claims against stockholders for taxes, and legislation may l-equire assessment of stock to be made to the bank in solido. (First National Bank of Aberdeen v. Che- halis County et al., 32 P., 1051; 6 Wash., 64.) INJUNCTION. Bank may enjoin collection of unequal tax on shares. 1. Where the tax on shares is collected from the association it may bring a suit to enjoin the collection of an illegal tax. (U. S. Sup. Ct, 1879) Merchants' National Bank of Toledo v. Cuni- ming, 101 U. S., 153 ; DIGEST OF NATIONAL BANK ' DECISIONS. 523 TAXATION— Continued. injunction — continued. (U. S. Sup. Ct., 1879) Pelton v. Commercial National Bank, 101 U. S., 143 ; (U. S. Sup. Ct, 1884) Boyer v. Boyer, 113 U. S., 689. 2 (U. S. Sup. Ct., 1881). Bank may, on behalf of stockholders, maintain suit to enjoin collection of State tax unlawfully assessed on shares. (Hills v. National Albany Exchange Bank, 105 U. S., 319.) 3 (U. S. Sup. Ct, 1879). The constitution of Ohio declares that "laws shall be passed taxing by a uniform rule all moneys, credits, invest- ments in bonds, stocks, joint-stock companies, or otherwise ; and also all the real and personal property according to its true value In money." And the legislature has passed laws providing separate State boards of equalization for real estate, for railroad capital, and for bank shares, but there is no State board to equalize personal property, including all other moneyed capital. The equalizing process as to all other personal property and moneyed capital ceases with the county boards. Throughout a large part of the State of Ohio, in- cluding Lucas County, in which the plaintiff bank is located, perhaps all over the State, the officers charged with the valuation of prop- erty for purposes of taxation adopted a settled rule or system by which real estate was estimated at one-third of its true value, ordi- nary personal property about the same, and moneyed capital at six- tenths its true value. The State board of equalization of bank shares increased the valuation of these shares to their full value. This court holds: (1) That the act creating the board for equaliz- ing bank shares is not void as a violation of the constitution of Ohio, because if the local assessors would discharge their duty by assess- ing all property at its actual cash value the operation of the equal- izing board would work no inequality of taxation, and a law can not be held to be unconstitutional which in itself does not conflict with the constitution because of the injustice produced by its maladminis- tration; (2) the rule or principle of unequal valuation of different classes of property for taxation, adopted by local boards of assess- ment, is in conflict with the constitution and works manifest injustice to the owners of bank shares ; (3) when a rule or system of valua- tion for purposes of taxation is adopted by those whose duty it is to make the assessment which is intended to operate unequally, in vio- lation of the fundamental principles of the constitution, and when this principle is applied not solely to one individual but to a large class of individuals or corporations, equity may properly interfere to restrain the operation of the unconstitutional exercise of power; (4) "the appropriate mode of relief in such cases is, upon payment of the amount of the tax which is equal to that assessed on other prop- erty, to enjoin the collection of the illegal excess. (Merchants' National Bank of Toledo v. Cumming, 101 V. S., 153.) 4 (U. S. C. C. A., 1900). A national bank may maintain a suit in a Federal court to enforce the right given by Revised Statutes of Ohio, section 5848, to enjoin the collection of taxes levied on an illegal assessment (Mercantile Nat. Bank of Cleveland v. Hubbard, County Treasurer, 3 Banking Cases, 130; 105 Fed. Rep., 809.) 5 (Ind. Sup., 1894). Banks may sue to enjoin collection of an illegal tax assessed against them on their stock. (Jones v. Rushville National Bank, 37 N. B., 338 ; Conzman v. First National Bank, ib., 392 ; 138 Ind., 87.) 6 (Wash. Sup., 1900). Under 2 Ballinger's Annual Codes and Statutes, sec- tion 4825, authorizing a trustee of an express trust to bring suit in his own name without joining the person for whose benefit the suit was brought, a national bank may bring suit for relief against an excessive tax on its stock without joining its stockholders, since a trust is imposed on the bank for the payment of such taxes. (Citi- zens' Nat. Bank of Dayton v. Columbia County et al., 3 Banking Cases, 660; 23 Wash., 441.) 524 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued. injunction — continued. Injunction against collection of taxes. 7 (U. S. C. C, 1897). A Federal court will enjoin a sale of real estate of a national bank to enforce payment of taxes illegally assessed against its capital stock, under a law which would make the sale a cloud on its title, though the State law gives an action at law to recover back taxes illegally exacted. (Brown v. French, 80 Fed. Rep., 166.) Illegal dssesment — Statutory remedy oy injunction. 8 (U. S. C. C. A., 1902). The remedy given by Rev. St. Ohio, section 5848, expressly authorizing suits to enjoin the illegal levy of taxes or assess- ments or the collection thereof, may be enforced on the equity side of the Federal courts. (Lander v. Mercantile Nat. Bank, 118 Fed- Rep., 785.) Collateral attack of assessment in suit for taxes. 9 (U. S. Sup. Ct, 1889). P. was a resident in the city of New York and a stockholder in a national bank situated there. In 1881 his shares in the bank were assessed at a valuation of $247,635. This valuation was entered by the tax commissioners in the annual Record of Valua- tions for 1881, a book which was kept open for public inspection from the second Monday of January, 1881, to May 1, 1881, and a public advertisement thereof was made. Before April, 1881, P. appeared before the commissioners and claimed a reduction, and they reduced the valuation to $190,635. On May 1 the .assessment rolls were pre- pared from that record, with the valuation of P.'s shares at the latter sum, and he was assessed at that valuation. The tax rolls were com- pleted on this basis, and notice was given that they would be open for inspection. P.'s tax, upon the reduced valuation, was $4,994.63. The tax rolls were confirmed, and due notice was given to all taxpayers that the taxes were due and payable. P. paid $1,310 of this tax, but declined to pay the further sum of $3,684.63. The collector of taxes thereupon proceeded against him in the court of common pleas for the city and county of New York, under chapter 230 of the laws of New York of 1843, for the enforcement of the payment of the sum remain- ing due. He appeared and answered, and judgment was given against him, which judgment was affirmed by the court of appeals, and the case was remanded to the court of common pleas. A writ of error was sued out from this court to review that judgment. Held, (1) that this court was bound by the decision of the court of appeals as to P.'s failure to comply with the State statute in relation to the method of procedure, form of assessment, etc.; (2) that the assess- ment was not made in contravention of the Constitution or laws of the United States, and was, therefore, not void for that reason; (3* that the mode provided by the statute of New York for the collection of the tax was " due process of law," and did not deprive P. of the equal protection of. the laws, but that it was a purely executive process to collect the tax after the liability of the party was finally fixed. When a law provides a mode for confirming or contesting an assessment for taxation, with appropriate notice to the person charged, the assessment can not be said to deprive the owner of his property without due process of law. Assessors should give all per- sons taxed an opportunity to be heard ; but it is sufficient if the law provides for a board of revision authorized to hear complaints respecting the justice of the assessment, and prescribes the time during which, and the place where, such complaints may be made. (Palmer v. McMahon, 133 U. S. Reports, 660.) 10 (Mont., 1895). Where the assessor made an unauthorized assessment of the shares of bank stock to the bank, and the bank did not ask the board of equalization to correct such erroneous assessment, it could not enjoin the collection of the taxes, in the absence of a valid excuse for its failure to apply to such board. (First National Bank of Missoula v. Bailey, 39 P., 83; 15 Mont, 301.) DIGEST OF NATIONAL BANK DECISIONS. 525 TAXATION— Continued. injunction — continued. 11 (Mont., 1895). Where bank stock is erroneously assessed to the bank instead of the stockholders the board of equalization may correct the assessment. ( lb. ) 12 (Wash. Sup., 1900). Where an assessor states to the officers of a national bank, when it presents its list of stock to him for taxation, that such stock will be assessed at a certain value, but he assesses it at a higher value, and the bank is given no notice thereof, it may maintain an action for relief against such excessive valuation, though it does not go before the board of equalization and ask for a reduction, since the act of the assessor was a fraud on the bank. (Citizens' Nat. Bank of Dayton v. Columbia County, 3 Banking Cases, 660 ; 23 Wash., 441; 63 Pac. Rep., 209.) When illegal taxes can not lie recovered, may be enjoined. 13 (U. S. C. C, 1873). Where there is no means of recovering back from the State taxes illegally assessed and paid into the treasury, a court of equity will enjoin their collection ; and when both State and county taxes are included in one warrant, and are for a common reason illegal, the court will at the same time determine the validity of both the State and county taxes. (First National Bank of Omaha v. County of Douglas, 1 N. B. C, 267 ; 3 Dillon, 298.) 14 (U. S. C. C, 1873). State authorities will be enjoined from collecting a tax on the capital stock of a national bank invested in United States securities. (lb.) , When property assessed below cash value. 15 (U. S. Sup. Ct, 1893). When the statute requires property to be assessed for taxation at its cash value, a bill to enjoin the collection of a tax solely on the ground that the property of other persons is assessed below its cash value can not be maintained by a person whose prop- erly is also assessed below that value. (Albuquerque National Bank v. Perea, 147 TJ. S., 87.) When State board acts without an appeal. 16 (Ind. Sup., 1893). Where the State board of tax commissioners raised the assessment on plaintiff's property without an appeal from the county board of review, the action was void and the collection of the tax on the increased value should be enjoined. (First National Bank v. Brodhecker, 37 N. E., 340; 137 Ind., 693.) Injunctions not granted for irregularities of officers. 17 (U. S. C. C, 1881). The failure of the assessors to place the names of the shareholders upon the assessment roll, in accordance with the re- quirement of the State statute, renders such tax illegal and void, although a separate list, with the knowledge of the shareholders, was kept by such assessors, showing the names of all such share- holders, with the number of shares held by each, and the assessable value of all such shares. (Albany City National Bank v. Maher, Receiver, etc., 6 Fed. Rep., 417.) 18 (U. S. C. C, 1881). The collection of such tax will not, however, be en- joined upon the application of a shareholder upon the mere ground of such illegality. (lb.) 19 (U. S. C. C, 1881). In order to prevent a multiplicity of suits, however, the collection of such tax will be enjoined upon the application of the bank, where the latter is required by the statute under which the assessment was made to retain so much of any dividend or divi- dends belonging to such shareholders as shall be necessary to pay any taxes assessed in pursuance of the act. (lb.) 20 (Kans., 1894). The collection of taxes which plaintiff ought to pay will not be restrained for mere irregularities by the taxing officers. (Dutton v. Citizens' National Bank of Concordia, 36 P., 719; 53 Kans., 440 ; Same v. First National Bank, 36 P., 724 ; First National Bank v. Ayers, 36 P., 724; 53 Kans., 463.) 526 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued. injunction — continued. Injunction will not He while any valid tax unpaid. 21 (U. S. Sup. Ct. 1881). A court of equity will not enjoin the collection of a local tax upon national-bank shares on the ground that the assess- ment is partial, unequal, and unjust, as compared with that upon other property, there being no offer to pay any tax, and the effect of an injunction being to declare the whole tax of a State for the year void. (German National Bank of Chicago v. Kimball, 103 U. S., 732; 3 N. B. C, 9.) When two banks can not join in action. 22 (Ind. Sup., 1894). Two banks, against whose stock illegal taxes have alike been separately assessed, can not join in a suit to enjoin the collection. (Jones v. Rushville National Bank, 37 N. E., 338; Conz- man v. First National Bank, ib., 392; 138 Ind., 87.) Excessive assessments. 23 (U. S. Sup. Ct, 1887). Excessive assessments should be corrected by the statutory course or by injunction. (Stanley v. Board of Supervisors of the County of Albany, 121 V. S., 535 ; 3 N. B. C, 268.) Tax must be illegal and extraordinary relief necessary. 24 (U. S. C. C, 1901). A Federal court will not enjoin the collection of taxes levied under the authority of a State upon the shares of a national bank, unless it clearly appears not only that the tax is illegal, but also that there are special circumstances which bring the case within some recognized ground of equity jurisdiction, and ren- der such relief necessary to the adequate protection of the complain- ant's rights. (People's Nat. Bank of Lynchburg v. Marye, Auditor of Public Accounts ; First Nat. Bank of Lynchburg v. Same ; Lynch- burg Nat. Bank v. Same ; National Exch. Bank of Lynchburg v. Same, 107 Fed. Rep., 570.) 25 (U. S. C. C, 1901). A bank can not maintain a suit in equity on behalf of its shareholders to enjoin the collection of taxes levied on their shares where the shareholders themselves could not maintain such suit, and where the statute under which the taxes are levied imposes no duty or liability on the bank in respect to the same. (Ib.) 26 (U. S. C. C, 1901). Act Virginia, March 6, 1890, providing for the taxa- tion of bank snares, required the banks to pay the taxes levied there- under against their stockholders, and provided that, in case a bank failed to make such payment within a certain time, the cashier and his sureties should be liable therefor, with an added penalty, to be recovered at suit of the State. Act March 3, 1896, providing for the collection of delinquent taxes on bank shares, left it optional with a bank to pay such taxes levied against its stockholders, and provided that, in case it did not elect to make such payment after notice, suits should be instituted for the collection of the same from the stockhold- ers individually. Held, that whether the latter act be regarded as repealing the provision of the one under which the taxes were levied, authorizing suit against the cashier, or as merely providing a cumula- tive remedy, a national bank could not maintain a suit to enjoin the officers of the State from proceeding to collect such taxes, upon an allegation that the statute imposing the same was discriminative and invalid, under the laws of the United States, as applied to national-bank shares, where it was not alleged that any action was threatened or contemplated against the bank itself, since, in suits against the stockholders under the later act, they had full opportu- nity to make any defense, and neither they nor the bank in their ehalf had any ground for injunction. (Ib.) 27 (U. S: C. C, 1901). The jurisdiction of equity on the ground of preventing a multiplicity of suits can be invoked only where such suits will be against the same person, and a bank can not maintain a suit on that ground to enjoin separate suits against its stockholders for the collec- tion of taxes levied upon their shares. (Ib.) DIGEST OP NATIONAL BANK DECISIONS. 527 TAXATION— Continued. injunction — continued. 28 (U. S. C. C, 1901). Where a statute providing for the taxation of bank shares imposes duties and liabilities on the bank, as by requiring it to withhold dividends from its stockholders and apply the same to the payment of the taxes on their stock, and subjecting it to heavy pen- alties for a failure to comply with such requirements, it may main- tain a suit in equity on behalf of its stockholders to test the validity of such statute and to enjoin its enforcement if found invalid. (lb.) 29 (U. S. C. C, 1901). A statute imposing taxes upon bank shares is not invalid because it requires the assessment of such shares at their mar- ket value without making any deduction on account of the real estate- owned by the bank, which is separately taxable — the shares being the property of the stockholder, while the real estate is the property of the corporation; nor can such statute be held discriminative and invalid under Revised Statutes, section 52 10, as to national-bank shares, where it applies to all banks. (lb.) 30 (U. S. C. C, 1901). That the statutes of a State permit a taxpayer to deduct the amount of his indebtedness from the amount of all bonds, notes, and other evidences of debts which he is required to return for taxation does not render the assessment of national-bank shares at their market value without allowing the holder to deduct his indebt- edness an unlawful discrimination against such shares, and in favor of moneyed capital, under Revised Statutes, section 5219, where the same rule of assessment applies to all bank shares. (lb.) 31 (U. S. C. C, 1901). A statute providing for the taxation of bank shares which requires the banks themselves to make returns showing the market value of their shares, and itself fixes the rate of tax which shall be levied on such valuation, is not unconstitutional as depriving the shareholders of their property without due process of law, although it provides for no notice to them of the assessment or opportunity to be heard thereon, and makes the tax bills self-executing and enforce- able by levy without suit, since no judicial act is done by any officer in relation to such assessment, and no action is taken after the return is made by the bank which could in any way be affected by a notice or hearing. (lb.) STATE AND FEDERAL STATUTES CONSTRUED. I Section 1(1 of national banking act. 1 (U. S. Sup. Ct, 1897). Section 41 of the national banking act imposing certain taxes upon the average amount of the notes in circulation of a banking association, now found in the Revised Statutes, is not a revenue bill within the meaning of the clause of the Constitution declaring that " all bills for raising revenue shall originate in the House of Representatives, but the Senate may propose or concur with amendments as on other bills." Whether in determining such a question the courts may refer to the Journals of the two Houses of Congress for the purpose of ascertaining whether the act originated in the one House or the other is not decided. (Twin City Bank v. Nebeker, 167 U. S., 196.) t California. 2 (U. S. Sup. Ct, 1905). Section 5219 Revised Statutes, authorizes the tax- ation by the States of shares of stock of national banks, but exacts that the tax when levied shall be at no greater rate than that im- posed on other moneyed capital ; no conflict necessarily arises between the Federal statute and a State law solely because the latter pro- vides one method for taxation of State banks and another method for national banks if there is no actual discrimination against the shares of the national banks resulting from the difference in method. If, however, irrespective of the face of the law, the system created by the State law in its practical execution produces an actual and 528 DIGEST OF NATIONAL BANK DECISIONS. TAXATION— Continued. STATE AND FEDERAL STATUTES CONSTRUED Continued. material discrimination against national banks, it does conflict with section 5219, Revised Statutes, and is void. The Chief Justice and Justices Brewer, Brown, and Peckham dissenting. (San Francisco National Bank (Nevada National Bank of) v. Dodge, 197 U. S. Rep., 70.) 3 (U. S. Sup. Ct, 1905). Where the record contains an express admission that a specified instance of taxation showing an undervaluation of the property of a corporation is illustrative of the method by which all other similar institutions are assessed under a statute requiring full valuation, this court can not disregard the admission and con- sider that such undervaluation is an isolated instance, and that all the property of other similar institutions is assessed at full value in accordance with the provisions of the statute. (lb.) 4 (U. S. Sup. Ct., 1905). As it appears from the agreed statement of facts in this case that under the laws of California, as construed by the highest court of that State, all the elements of value which are em- braced in the assessment of shares of stock in national banks are not included in assessing the value of property of State banks and other moneyed corporations, there is a discrimination against the shares of national banks, and the State law taxing such shares as so construed violates, and is void under section 5219, Revised Statutes, (lb.) 5 (Cal. Sup., 1881). The provision of section 3640 of the California Polit- ical Code, as amended March 22, 1880, so far as it applies to national banks, is in violation of section 5219, United States Revised Statutes, forbidding the taxation of national bank shares at a greater rate than is assessed upon other moneyed capital in the hands of indi- vidual citizens of the State. (Miller v. Heilbron, 58 Cal., 133; 3 N. B. C, 330.) Illinois. 6 (111. Super. Ct. Cook Co., 1877). The statute of Illinois provided that the stockholders in banks, whether State or national, should be assessed on the value of their shares in the county, town, district, village, or city where the bank was located, whether such stockholder resided there or not, but not at a greater rate than was assessed on other moneyed capital where such bank was located ; that each bank should keep a list of the names, residences, and number of shares of each shareholder, which should be open to the inspection of the revenue officers ; that the assessors should ascertain and report to the county clerk a correct list of the names and residences of all stock- holders, with the number and assesed value of their shares; that the county clerk should enter the assessed valuation of such shares in the tax list and compute and extend the taxes thereon ; that such tax should be a lien on the shares, and that the bank officers should retain the dividends on such stock until the tax was paid. Held, constitutional. (Nickerson v. Kimball, 1 N. B. C, 409; 1 Chi- cago Law Journal, 42.) 7 (111. Super. Ct. Cook Co., 1877). Under the statutes of Illinois anyone may complain to the board of equalization that another is assessed too low, but such complaint is not to be acted upon until the person so assessed or his agent has been notified of such complaint, if a resi- dent of the county, and no error or formality in the proceedings of any of the officers connected with the assessment, levying, or col- lecting of the taxes, not affecting the substantial justice of the tax itself, shall vitiate or in any manner affect the tax or the assessment thereof. Held, (1) that notice of the complaint to the person assessed was not essential to give the board jurisdiction; (2) that the bank was the agent of the shareholders, and service of notice on the officers of the bank was sufficient; (3) that the complaint • need not specify each person claimed to be assessed too low, but a description of them as " shareholders in " a particular bank was sufficient. (lb.) DIGEST OF NATIONAL BANK DECISIONS. 529 TAXATION— Continued. STATE AND FEDERAL STATUTES CONSTRUED Continued. 8 (111. Super. Ct Cook Co., 1877). A national bank alleged that it had been assessed on both its shares of stock and its real estate, and that the value of the real estate was not deducted from the gross value of the stock. It appeared that the aggregate assessed valuation of both the stock and the real estate was less than half their real value. Held, that the bank had no cause to complain. (lb.) 9 (111.). If in making an assessment under the act the valuation of the shares was determined on the 1st day of July, and the law required it should be determined as of the 1st day of April, it would be necessary for the owner of the shares, calling upon a court of equity for relief, to show that he was injured thereby ; that by reason thereof the valuation put upon them on the 1st day of July . was greater than they justly bore on the 1st day of April preceding, or that he was compelled to pay a double tax,, first on the money listed for taxation on the 1st day of April, and again on the bank shares he purchased with this same money between that day and the 1st day of July. (JlcVeagh v. City of Chicago et al., -19 Illinois, 318.) 10 (111.). Where a particular species of property has been omitted from taxation for a given year, the legislature has the power to pass a special law to cure the omission. (lb.) 11 (111.).. So the tax on national-bank shares, not having been equally assessed for the year 1867, by reason of the defective law under which it was attempted, the act of June of that year was designed to supply the omission, and there was no want of constitutional power to enact it. (lb.) 12 (111.). In assessing the shares in national banks under State authority it is not necessary that they shall be included in the personal property, so that upon aggregating the personal property, shares included, the taxable portion would be shown by what remained after the reduction for debts was made, as provided by the general revenue law. It is quite immaterial on what portion of the list these shares are found. (lb.) 13 (111.).. Under the act of 1867 a system of taxation for bank shares was designed, peculiar to itself and independent of the general revenue system of the State. The only deduction allowed by the act from the shares of each owner is a proportionate sum for the real estate in which a portion of the capital might be invested. No deduction for debts owing by the owner can be made from the valuation of his bank shares. (lb.) 14 (111.). Should a collector be compelled to sell the bank shares for the nonpayment of taxes, under the act of 1867, and the bank refuse to transfer them to the purchaser on the books of the bank, a court of chancery, on a bill filed for such purpose, would compel the transfer, (lb.) 15 (111.). Or if the taxes upon such shares remain unpaid through the divi- dends, as provided by this bank, the State could by mandamus compel the officers of the bank to appropriate the dividends or such portions as might be necessary to pay the taxes. (lb.) 16 (111.). No actual notice of the assessment of bank shares is required to be given to the owner, the act requiring only that notice shall be pub- lished in a newspaper a certain length of time. (lb.) 17 (111.). Nor is this discrimination in not allowing a deduction from the valuation of bank shares for debts owing by the owner, as is allowed to be made from the valuation of other personal property under the general revenue law of the State, contrary to the limitations imposed by the provisions of the forty-first section of the national banking act of June 3, 1864, which provides that shares in these banks shall not be taxed under State authority " at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of 4049—05 34 530" DIGEST OP NATIONAL BANK DECISIONS. TAXATION— Continued. STATE AND FEDEBAL STATUTES CONSTRUED Continued. such States." The " rate " of taxation is not affected by the different modes adopted to ascertain the taxable value of the various kinds of property. (lb.) Indiana. 18 (Ind. Sup., 1895). Revised Statutes, 1881, sections 6357, 6358, provide that certain corporations organized under the State laws shall list their stock, and direct the auditor to lay such list before the board of equalization for original valuation. Held, that these provisions do not apply to national banks. (Eaton v. Union County National Bank, 40 N. E., 693; 141 Ind., 159.) 19 (Ind. Sup., 1895). Under tax law, 1891 (Rev. Stat, 1894, sec. 8469), national banks are not required to make the statements therein pro- vided for as a basis for valuation. (lb.) 20 . (New York case) 223 Anderson, First National Bank of Grand Forks, N. Dak., v 251, 437 Anderson, Gibbons v 339, 347 Anderson v. Gill 104, 107 Anderson, Kissam v 322, 390 Anderson v. Pacific Bank 207 Anderson, receiver, v. Philadelphia Warehouse Company 472 Anderson et al. , Stapylton v 7 Andrew v. Blachly 42 Andrews r. Pond 218 Andrews et al. , First National Bank of Aberdeen v 117, 278 Andrews et al. v. State Bank of Wheatland 124, 155 Andrews v. Steel City National Bank 181,411 Andrews r. Varrell 387 Andrews, Young v 117,278,429 Angell, Third National Banku 290 Annheuser-Busch Brewing Associ- ation v. Clayton 99, 538 Anniston National Bank v. School Committee of Town of Durham. 302 Appeal of Foil 456 Appeal of Hibernia National Bank . 471 Appeal of Main 16, 128 Appeal of Second National Bank of Titusville 224,228 Page. Appeal of Wood 37 Applegate v. State ex rel. Bowling, assessor 273, 509 Arbogast v. American Exchange National Bank of Chicago 85, Armat, Wroten' s assignee v 429 Armour v. Greene County State Bank 45,164 ArmourPackingCompanyu.Davis. 94 Armstrong, in re 91, 203 Armstrong v. American Exchange National Bank 215 Armstrong et al, Barhorst et ux. v. 177 Armstrong, Brownell v 482 Armstrong v. Cache Valley Land and Canal Company 148, 331 Armstrong v. Chemical National Bank (first case) 80, 204, 260 Armstrong, Chemical National Bank v. ( second case) 199, 216 Armstrong, Chemical National Bank?;, (third case) 414 Armstrong v. Chemical National Bank (third case) 328 Armstrong, Commercial National Bank of Pennsylvania v 99 Armstrong v. Ettlesohn 194 Armstrong, Fidelity Safe Deposit and Trust Company v 256 Armstrong, Fifth National Bank v. 90, 92 Armstrong, First National Bank of Elkhartu 96 Armstrong, First National Bank of Montgomery?' 93 Armstrong, First National Bank of Wellston v 96, 402, 414 Armstrong, receiver, King et al. v. . 482, 485, 495 Armstrong v. Law 481 Armstrong v. Pomeroy National Bank 46 Armstrong v. Scott 7, 8 Armstrong, Scott v 182, 389, 392, 393, 394 Armstrong?;. Second National Bank of Springfield 26, 402, 415 Armstrong, Snyders' Sons Com- pany v 390 Armstrong v. Stanage 28, 31, 182, 200 Armstrong, Stewart v 148, 199, 330 Armstrong v. Trautman et al 190 Armstrong, United ' States Bung Manufacturing Company v 387 Armstrong v. Warner 391, 394 Armstrong, Western National Bank v 201, 326, 328, 331, 414 Armstrong, Winters v 28, 31, 182 Armstrong v. Wood 28, 31 Arnau v. First National Bank 19 Arnold, Brown v 412 Arnold, First National Bank of Huntington v 156, 317, 330 Arnold v. Sedalia National Bank ... 119, 122, 125 Arnot c. Bingham 98 TABLE OF CASES. 551 Page. Arnsworth v. Scotten 74 Asher, Louisville Banking Com- pany v 151 Asher i>. National Park Bank. ... 121 Aspinvvall v. Butler 28, 29, 492 Assessors, Van Allen r. 115, 510, 514, 515 Assessors, board of, Citizens Bank of Louisiana v 503 Atkinson, National Bank of Com- merce v 5, 323 Atlanta National Bank v. Davis. . . 49 Atlantic National Bank v. Harris . 405 AtlasNationalBanku.Holmetal. 281, 288 Atlas National Bank v. Savery 255 Attleboro National Bank, Rich- ards v 268,406,451,456 Attleboro National Bank v. Rogers . 423 Attorney-General?). Whit wood... 447 Auburn Savings Bank v. Hayes. . . 190 Auld, Piano Manufacturing Com- pany v 90 Ault, Baker v 177 Ault, Merchants National Bank v. . 18 Austin, Alabama Iron and Railway Company i\ , 157, 161, 192 Austin et al., American Trust and Savings Bank v 87 Austin, Merchants and Farmers Bank?) 99 Austin v. The Aldermen 513 Auten, Binghamton Trust Com- pany v 235, 327 Auten, Joyce v 258 Auten v. ManisteeNationalBank.291, 322 Auten v. United States National Bank of New York . . 190, 289, 316, 388 Ayer, Church v 14 Ayres, First National Bank of Gar- netti) 514,525 B. Baack, Manufacturers' National Bank v 444 Babb, Rex v 447 Babbidge, First National Bank of Grafton?) 300 Babcock?). Wolf 411 Backus et al., Farmers National Bank of O watonna v 406, 411 Backus, People v 406 Bacon v. United States. . 152, 356, 370, 374 Bacon, Wallace v 450 Baeschlin et al. v. Chamberlain Banking House 46 Bagley, Ticonic National Bank v. . 409 Bailey et al., Burt v 493 Bailey, Chemical National Bank?). 124, 215 Bailey, First National Bank of Mis- soula v - - - 524, 525 Bailey?). Mosher 342 Bailey, receiver, v. Sawyer 193, 457, 459, 485 Bailey v. Tillinghast. . 30, 31, 486, 492, 494 Bain, Peters i> 186,439,440 Baker v. Ault 177 Baker v. Beach et al 480 Pago. Baker, Cadleu 180 Baker, Denton v 189 Baker v. Kennedy 119 Baker, tax receiver, Mechanics Na- tional Bank of Trenton v 507, 532 Baker v. Reeves et al 467 Baker v. Texarkana National Bank etal 19 Balbach et al. v. Frelinghuysen, re- ceiver 57, 87, 119, 122, 391, 538 Balch?). Wilson 387 Baldwin v. Canfield 427 Baldwin's estate, in re 133, 135 Baldwin, Farmers and Mechanics Bank?) 423 Baldwin et al., Frelinghuysen, re- ceiver, etc. , v 193 Baldwin v. State National Bank of Minneapolis 422 Baldwin, Winter v. 446, 447 Balling Ferst ._. 447 Balling ?>. Manhattan Savings Bank and Trust Company 128 Ballinger National Bank v. Bryan . 277 Baltimore, etc., Ry. Co. v. Wheeler. 80 Baltimore, Mavor, etc., National Bank of Baltimore v 507, 531 Bangor, City of, Stetson v 115, 502 Bangs, Masonic Savings Bank v 80 Bank, Bank of Louisville v 109 Bank v. Burns 109 Bank, Cadyw 536 Banlj, Maynard v 405 Bank v. Mclntyre 405 Bankv. Ober 109 Bank, Oldham v 230,427 Bank of Albion, Clarke National Bank?) 44,69,72,318- Bankof Alexandria, Givanv. 109, 110, 113 Bank of America, Kirkham v 98, 104 Bank of Antigo v. Union Trust Co . . 107 Bank of Bay Biscay ne (of Miami, Fla. ) v. Monongahela National Bank 103 Bank of Blackwell v. Dean 120, 202 Bank of Cadiz y. Slemmons. . 147, 232, 236 Bank of Camais Prairie, Greene v . . 155 Bank of Commerce v. Harrison. . 135, 145 Bank of Commerce, Jacobson v . 43, 60, 66 Bank of Commerceetal., Sleppy v. . 134 Bank of Commerce, State ex rel St. Armand v 56 Bank of Commerce, Tradesmen's National Bank v 272 Bank of Commerce of- Grand Is- land, State?) 98,540,541 Bank of Cumberland, Owsley v. . . 126 Bank of Fayettesville, Boy kin v . . 89 Bank of Greenwood, Simmons v.. 57 Bank of Guntersville v. Webb.. 122,123 Bank of Hartsville, Cox v 172 Bank of Louisville v. Bank 109 Bank of Marysville v. Windisch Mulhauser Brewing Co 119 Bank of Metropolis D.New England Bank 80 552 TABLE OP CASES. Bank of the Metropolis v. First Na- tional Bank of Jersey City 289 Bank of the Metropolis (of Wash- ington, D. C. ) v. Guttschlick 499 Bank of Minnesota, in re 89 Bank of Monroe, First National Bank of Circleville v 92 Bank of Monticello v. Dooley et al . 10 Bank of Montreal v. Fidelity Na- tional Bank 21 Bank of Montreal v. Ingerson 107 Bank of Montreal v. White 78 BankofMountVernon,Reynoldsfl. 417 Bank of Northern Liberties v. Jones 119 Bank of Overton v. Thompson 295 Bank of Pikeville, Dils v 9 Bank of Princeton, Young v 25 Bank of Republic v. Millard 52 Bank of Rutland, West v 81 Bank of Saginaw v. Title and Trust Company of Western Pennsylva- nia 133, 134, 280 Bank of Sparta, Canterbury v 87 Bank of Staplehurst, Stuart v. 16, 253, 336 Bank of the State of New York, Shipman v 46 Bank of Suspension Bridge, Hitch- cock v 106 Bank of Tarboro et al., Havens v. 40 Bank of Tulare, Garth waite et al. v 42,49,168 Bank of the United States, Osborne et al., appellants v llo, 507 Bank of Utica v. Hilliard 448 Bank of Versailles, Roe v 433 'Bank of Wilmington and Brandy- wine, McDowell v 125 Barbour v. National Exchange BankofTiffin 388 Bard et al., Latimer v 30, 31 Barhorst et ux. v. Armstrong etal. 177 Barker v. Livingston County Na- tional Bank 416 Barnard, Vilas National Bank v.. 11 Barnes, Ellicott v 137 Barnes, Manufacturers' National Bank?) 46 Barnes v. Swift 256 Barnet v. Muncie National Bank.. 229, 232, 233 Barnett, First National Bank of Tobias)) 232,238 Barnett et al., Santa Rosa National Banku 125 Barney et al., Howe v 345 Barry, Commonwealth v 385 Barry, United States ex rel. v 451 Barschall et al. , Lease v 458, 461 Bartletta. Woodbine Savings Bank . 294 Bartley v. Bartley 447 Bartley v. State 59 Bardon et al., Clews et al. v 340 Bashaw v. United States 146 Bastrop State Bank n. Levy 124 Batchelder, Corcoran v 269 Page. Batchelor v. United States 362 Bates, in re - 439 Bates v. Salt Springs National Bank 262 Bates County National Bank, Mize v 535 Bath Savings Institution v. Sagada- hock National Bank 39, 268 Baugh, Himrod v 387 Baxter et al. , Zinn v 345 Bayless, First National Bank of Cartersyille v 276 Bayor v. American Trust and Sav- ings Bank 543 Beach etal., Bakers 480 Beach, Piatt v 194 Beal, Boston, City of , v 185 Beal v. Essex Savings Bank 446 Beal, Franklin County National Bank v 96 Beal, National Exchange Bank of Dallas v 93, 101 Beal etal., Potters 142 Beal, Putnam Savings Bank v. . . 141, 546 Beal, receiver, e. Sommerville, citv of ,. 96,209,210 Beal, Thomson?) 133 Bearce, Lumberman's Bank v 218 Beard, Congdon, C. B., & Co. v... 294 Beard v. Pella Citv, Independent District of 213, 539 Beard, Lamson v 160, 294, 300, 325 Beard, Phelps v 294 Beard's estate, in re 480 Beardsley, Hayes, receiver, v 206 Beardsley v. Webber 131, 284 Beaver r. Beaver 537 Beck etal., Cox v 236 Becker's Investment Agency )'. Rea 272 Beckham v. Shackleford 391 Bedell v. Harbine Bank of Fair- bury 104 Bedford Bank v. Acoam 127 Beebe, Piatt v 180 Beilharz, Waxahachie National Bank v 150, 328 Belknap v. National Bank 63 Bell r. Hanover National Bank. 205, 330 Bell et al., Hulitt v 34 Bellvue Bank v. Higbee 39 Bennett, Burrell v 214 Bennett, First National Bank of Sturgis v 326 Bennett, United States v 74 Bennington, town of, First National Bank of North Bennington v ... 418 Bently, Piatt, receiver, v 391 Benton v. German-American Na- tional Bank 297 Benton v. Holmes, executor 386 Bergstrom, Milmo National Bank v. 149 Bernays, Stephens v 117, 194, 494 Berney National Bank, Darby v. . 315 Berney National Bank v. Guyon.. 439 Berrien v. Wright 218 Berry, Citizens' National Bank of Kingman * 324 TABLE OF CASES. 553 l J age. Berry et al., United States v 366, 374 Bevin, First National Bank of Willi- mantic v 296, 322 Bickford v. First National of Chi- cago 42, 47, 69 Bienville Oil Works Company, State v \ . 447 Big Rapids, city of, Rankin v 489 Billings v Meigs 123 Billingsley v. State Bank 218 Bimetallic Bank, Gregg v 88 Bimetallic Bank, Western Union ' Telegraph Company v 1 68 Bingham, Aldrich v, 468 Bingham, Arnot v 98 Bingham, Canadian Bank of Com- merce v 167 Bingham, Goshen National Bank v 69 Binghamton Trust Company v. Au- ten 235, 327 Birch, Walden National Bank v 306,311,420 Bird's executors v. Cockrem 197 Birmingham National Bank?'. Brad- ley 66,154,159,410 Birmingham National Bank v. Mayor # . 25, 267 Birmingham National" Bank, Terry v 38,85 Bissell v. First National Bank of Franklin 318 Blachly, Andrew v . .- 42 Black v. First National Bank of Westminster 298 Black Diamond Coal and Mining Company, Guernsey v 324 Blackmore, City Bank of Hopkins- » ville v 544 Blackmore v. The Guarantee Com- pany of North America et al 306 Blackmore v. Woodward et al . . 476, 479 Blades v. Grant County Deposit Bank et al 74 Blair v. First National Bank of Mansfield 304 Blair*. Hill 89 Blair v. Massey 447 Blair, Tilden v 218 Blake, First National Bank of Blaine* 293,300 Blake, Third National Bank v . . 274, 417 Blakesly, Citizens Bank v 404 Blanchard v. Commercial Bank of Tacoma 152, 201, 335 Bletz v. Columbia National Bank . 240 Bloch v. Creditors 67 Bloch, St. Louis National Bank v. 67 Bloom v. Winthrop State Bank. . . 56 Bloomsbury National Bank, Crev- eling et al v 53 Blue, Drovers National Bank v ... 290 Blum, La Grande National Bank v. 283 Blye. Corn Exchange Bank v 188 Board of Commissioners, Ruffin v. 75 Board of Education, Newport Bank v 418 Page. Bobb v. Savings Bank of Louis- ville 124,130,216,334 Bobo v. People's National Bank of Shelbyville 243 Boffenmyer, Lancaster County Na- tional Bank v 285 Bollong, Schuyler National Bank v 236,241 Bonnardet v. Taylor 447 Bonner, Firet National Bank of Hastings v 287 Bonnet v. First National Bank of Eagle Pass 403 Booker, United States v 350, 356 Boone County National Bank v. Latimer 538-, 540 Booth et al. v. Welles 545 Bordwell, Murphy et al. v 128 Bossard et al. , Phillips v '. 306, 309 Boston, National Bank of Redemp- tion v 504, 516, 517, 520, 531 Boston, Board of Aldermen of, Flints 499,513 Boston, City of, v. Beal 185 Boston, City of, Providence Insti- tution of Savings and Jewell v . . 531 Boston Commercial Bank v. Hep- pes 299 Boston National Bank v. City of Seattle : 517 Boston National Bank of Seattle v. Jose 283 Bostwick, Brinkerhoff v 345,346,347 Bostwick etal., MonticelloBankj). 173 Bosworth v, Jacksonville National Bank 53 Bowdellr. Farmers and Merchants' National Bank of Baltimore.. 453,461 Bowden v. Johnson 459, 467, 481, 486 Bowden v. Santos 419, 467, 468 Bowden v. Third National Bank.. 63 Bowen, Friedly v 427, 428 Bowen r. Needles National Bank . 5, 6, •7,68,71,410,431,432 Bowen v. Newell 42 Bowersox, Brewer *• "151 Bowker v. Hill 26 Bowker, Taft v 25 Bowman et al. v. Clark et al 101 Bowman v. First National Bank. . . 545 Boyd, Holmes v 427 Boyd et al. v. Schneider 346, 348 Boyd, Third National Bank of Bal- timore v 78, 82 Boyer v. Boyer 515, 516, 523 Boykin v. Bank of Fayetteville ... 89 Boylan, National' State Bank of Newark v 230, 231 Boylston Bank, Wood v 80 Boynoll v. State 514 Braden's estate, in re 37 Bradford, Charleston National Bank v 230 Bradley, Birmingham National Bank?) 66, 154, 159, 410 Bradley v. Chesebrough et al 153 Bradley v. Illinois 514 554 TABLE OF OASES. Brahan v. First National Bank of Clarksville 284 Brainerd, Lewis v'. 447 Branch v. United States National Bank 94 Branch v. United States 128 Brandt, O' Connor v 390 Breese -r. United States ( 1st trial) . 361, 371, 378, 382 Breese, United States v. (second trial ) 351, 352, 354, 374, 376 Brennan, Duncan v 80 Brennerman's executors, First National Bank of Clarion v 407 Bressler, Lowenstein v 60, 108 Bressler. v. Wayne County 512 Brewster, Groos v 431 Brewer v. Bowersox 151 Breyfogle" et al. v. Walsh et al 176 Bridgeport Trust Company, First National Bank v 252 Brigg's Assignee, First National Bank of Brandon v 298,311 Briggs v. Spaulding 313, 337, 338 Brightwell, Midland National • Bank of Kansas City v 100, 544 Brinkerhoff v. Bostwick 345,346,347 Brink in an, St. Louis National Bank v 252 Bristol Knife Co. v. First National Bank 63 Britton, Evansville National Bank v 511,521 Britton, United States v 350, 352, 354, 362, 364 Broas, Foster v. (Row, Foster ?'.).. 456, 465, 466, 489, 491 Brobstron v. Penniman 300 Broderick v. Brown 35, 483 Brodhecker, FirstNational Bank v . 525 Bromley v. Commercial National Bank 60 Brooke v. Tradesmen's National Bank 51 Brooklyn and Newtown Railroad Company v. National Bank of the Republic 117,281 Brooks, First National Bank of Monmouth v 120, 333 Brouer, Pearce & Miller Engi- neering Company v 80 Brouwer v. Cotheal 447 Brown v. Arnold 412 Brown, Broderick v 35, 483 Brown v. Carbonate Bank of Lead- vine 195 Brown, Citizens National Bank v . 131, 134, 336 Brown, Colt v 392 Brown v. Daugherty 122 Brown v. Ellis 33, 459, 479, 488, 494 Brown v. Farmers and Merchants' National Bank of Cleburne . . . 326, 327 Brown, Finn v 463, 492 Brown, First National Bank v. (Utahcase) 90 Page. Brown v. First National Bank of Columbus (Ind. case) 436 Brown v. First National Bank of Tuscaloosa (Ala. case) 149 Browne. French 150, 185, 500, 524 Brown, Hayden v 197 Brown v. Marion National Bank. . 234, 241, 244 Brown, Moreland v 137 Brown v. Second National Bank of Erie 237,238,243 Brown et ux. v. Schintz et al 43 Brown v. Schleier 183, 186, 200, 425 Brown v. Smith . _ 494 Brown, State Bank of Pike v 154 Brown v. Tillinghast 29, 458 Brownell v. Armstrong 482 Brownlee et al. v. Wallace et al. . . 267, 432, 456 Bruce, City National Bank of Green- ville v 275 Bruhn & Williams, National Bank of Jefferson^ 82,227 Brummagim v. Tallent 1 31 Bruner v. First National Bank of Johnson City 542, 544 Brusegard v. Ueland 97 Bryan, Bollinger National Bank v. 277 Buchanan et al. v. Drover's Na- tional Bank of Chicago 219 Buehler«. Gait 71 Buffalo County National Bank v. Gilcrest 16 Buffalo County National Bank, Robertson v 326 Buffalo German Insurance Com- pany, Third National Bank of Buf/alow 36,270,420 Buford, Continental National Bank of Memphis v 245,251 Buie v. Commissioners of Fayette- ville 513 Bulkley, Kilgore v 1 131 Bullard v. National Eagle Bank. . . 36, 38 Bundy v. Cocke 486 Bundy, receiver, v. Jackson 36, 453 BunkerHillNational Bank, Wiley v. 50 Bunnell & Eno Investment Co., Tompkins County National Bank <■ 288 Bunt r. Rheum 177 Bunting, C, & Co. et al., First National Bank of Pocatello v. 196, 212 Burbage v. American National Bank. 301 Burgess v. Seligman 116 Burley, Burtons 331,402 Burley, Laing v 463 Burnett, Administrator, v. First National Bank 536 Burnett Woods Building and Sav- ings Co. v. German National Bank of Cincinnati 47, 48 Burnham et al. v. First National Bank of Leoti 245 Burns, Bank v. (Colorado case) 109 TABLE OF CASES. 555 • I'age. Burns, City National Bank of Selma v. (Alabama case ) 57 Barrell v. Bennett 214 Burrilli>. President, Directors, etc., of the Nah ant Bank 317 Burroughs, Nelson v 345 Burroughs v. Tradesmen's National Bank 51 Burrows v. Ni black 36, 419 Burrows v. State 63 Burt ». Bailey et al 493 Burt v. Richmond 464 Burt, Second National Bank of Oswego v „ 342 Burton v. Burley 331, 402 Burton v. United States 122 Burton's & Saddler's Co., in re... 447 Bushnell v. Chautauqua County National Bank 78, 120, 417, 434 Bushnell v. Leland 180, 459 Butcher's Bank, Daly v 109 Butchers and Drovers' Bank, Farm- ers and Mechanics' Bank r ". 68 Butler, Aspinwall v 28, 29, 492 Butler et al. v. Cockrill 261, 434, 443 Butler v. Coleman 21, 208 Butler, Delano r 28, 29, 34, 492 Butler v. Eaton 29, 482 Butler, Lincoln National Bank r. . 282 Butler, National Security Bank)).. 208 Butler v. Poole 495 Butler, Benj. F., Prescott National Bank of Lowell v 422, 423 Butler, Thayer t> 29, 482 Butler, Whitney v 465, 466 Byram, Franklin Bank v 62 C. Cache Valley Land and Canal Com- pany, Armstrong v 148, 331 Cadwallader, United States v 359 Cadle v. Baker 180 Cadle v. Tracey 150, 255 Cady v. Bank '.. 536 Cady v. Case 65 Cage v. Shappard 14, 267, 268 Cake v. First National Bank of Lebanon 236 California National Bank, Chet- wood v 12, 14 California National Bank, First National Bank of Chicago v. . . .-. 155 California National Bank et al., Flannagen et al. v 6, 319 California National Bank v. Ginty. 227 California National Bank v. Ken- nedy 250,421,477 California National Bank, McCord v 60 California National Bank, San Die- go County v 212, 540 California National Bank of San Diego, in re certain shareholders of 480 Cameron v. First National Bank of Decatur 272,436 Pago. Camp et al. v. First National Bank ofOcala 119,125,181 Camp r. Land 428, 436 Camp v. Southern Banking and Trust Company 299 Campbell, Aldrich v 194, 459 Campbell v. First National Bank of Denver 294,327 Campbell v. National Broadway Bank 320 Campbell, collector of town of New- ton, State (Myers, prosecutor) v. 512 Campbell Commission Company, Metropolitan National Bank of Kansas City, Mo. v 540 Canadian Bank of Commerce *. Bingham 167 Canfield, Baldwin v 427 Uanfield v. State National Bank of Minneapolis 271, 422 Canterbury ?'. Bank of Sparta 87 Capital National Bank v. Cold- water National Bank 207 Capital National Bank,Woolman v. 386 Capitol National Bank of Topeka, Pape v 422 Carbonate Bank of Leadville, Brown v 195 Carhart, Merchants' National Bank v 139 Carley v. Potters' Bank 66 Carlin, Dillman v 546 Carlinville National Bank, Wil- son?) 109,110 Carlisle, School Directors of, Hep- burn v 518, 521 Carll, Ocean National Bank v... 188, 193 Carmack, Smith v 295 Carmichael, Stapylton v 7 Carpenter, National Bank of Rail- way v 243 Carpenter, State v 273 Carpenter, Zimmerman v... 479, 486, 494 Carr v. National Bank and Loan Company 433 Carr, Tillinghast v 195, 421 Carson et al. v. Commercial Na- tional Bank of Independence, Kans 489 Carson, Earle v 204,465 Carson, Pirie, Scott & Co. r. Fincher et al 49 Carter, First National Bank of Aberdeen v 277 Carthage, City of, v. First National Bank of Carthage 508 Carver; Casey v 63 Case, Cady v 65 Case, receiver, v. Citizens' Bank" of Louisiana 203, 208, 455 Case, Germania National Bank of New Orleans v 77 250, 459, 461, 468, 471, 473 Case, receiver, v. Small et al 183, 462 Case v. Terrell 182, 245 Casey v. Adams 245 Casey v. Carver 63 556 TABLE OF CASES. Casey v. Galli 147, 398, 400, 403, 459, 481, 485, 487, 490 Casey v. Cavaroc 209 CassCounty, FirstNational Banks. 18 Cassell v. Mercer National Bank of Harrodsburg 315 Oassidy v. Uhlmann et al 161 Cassopolis, Village of, Howell s. . . 513 Castle s. Corn Exchange Bank ... 66, 67, 108 Castles v City of New Orleans 531 Cate s. Patterson 131 Catlin, Stevenss 286 Cauniff, Commercial ' National Bank« 16 Cavaroc, Casey v 209 Cleveland, Cincinnati, Chicago and St. Louis Railroad Company, Hawkins v 540 Cecil, First National Bank of Ar- lington v 292 Cecil National Bank v. Thurber . . 177 Central Guarantee Trust and Safe Deposit Company v. White et al . 70 Central National Bank, Delahunty v 260 Central National Bank, Fifth Na- tional Bank s 65_ Central National Bank of Spring- field, Mo., Haseltine et al. v 229, 231, 236, 237 Central National Bank s. Pratt . . . 221 Central National Bank v. Richland National Bank 21 Central National Bank, United Se- curity Life Insurance and Trust Company v 165 Central National Bank v. United States 504 Central National Bank s. White . . 447 Central National Bank of Balti- more s. Connecticut Mutual Life Insurance Company. See Na- tional Bank v. Insurance Co. Central National Bank of Balti- more, Ordway v 181, 240, 255, 264 Central National Bank of Pueblo r. Spratlen 142 Cehtralia National Bank, Gaar r. . 416 Chambers s. Custer County 43 Chambers, McCrory s 416 Chambers v. Northern Bank of Kentucky 43, 56 Chambers, Alma D., as treasurer of Weber County, Utah, Com- mercial National Bank of Ogden, plaintiff in error, v ' 506, 510,511,512,514' Chamberlains. Chamberlain Bank- ing House 536 Chamberlain Banking House, Baeschlin et al. v 46 Chamberlain Banking House etal., Tecumseli National Bank s 81 Champion s. Gordon 42 Chanute National Bank v. Crowell. 53 Chapins r. Merchants' National Bank 420 Chapman et al. s. Cutler 348 Chapman, treasurer of Lorain County, First National Bank of Wellington, Ohio, v 506, 520 Chapman s. Robinson 218 Charles Baker Company, City Na- tional Bank v 185 Charles City National Bank, Coles 144,264 Charleston National Bank r. Brad- ford 230 Charleston v. People's National Bank i 29,502 Charlottesville National Bank, Johnson v 6, 7 Charlottesville National Bank, Sel- igman v 5 Charnley s. Sibley et al 386, 387 Chase et al., Foster s 477 Chase National Bank v. Faurot . . . 230, 280, 282 Chase National Bank, Florence Railroad and Improvement Com- pany v 8, 222 Chase National Bank, Gale v 68, 319 Chase National Bank, Rankin v... 320 Chatfield, Commercial Bank v 158 Chatham National Bank of New York v. Merchants' National Bank of West Virginia 253 Chattahoochee National Bank e. Schley 138, 139, 1 40, 141, 334 Chattanooga, Mayor of, National Bank of Chattanooga s 508 ChautauquaCounty National Bank, Bushnell s 78, 120, 417, 434 Cheeney, Worcester National Banks 205 Chehalis County et al., First Na- tional Bank of Aberdeen r 515, 518, 522, 534 Chemical National Bank, Aid- rich v 202, 216, 434 Chemical National Bank, Arm- strong v. (first case) 80, 204, 260 Chemical National Bank v. Arm- strong (second case) 199, 216 Chemical National Bank i>. Arm- strong (third case) 414 Chemical National Bank, Arm- strong v. (third case) 328 Chemical National Bank c. Bar- ley 124, 215 Chemical National Bank, Critten etal. s 48,165 Chemical National Bank of Chi- cago v. Hartford Deposit Com- pany 181,200,256 Chemical National Bank of New York, Haydens 203 Chemical National Bank, Hobbs s. 410 Chemical National Bank, Mc- Donald, receiver, v _ 67, 204, 207 TABLE OF CASES. 557 Chemical .National Bank of Chi- cago r. City Bank of Portage . . . 250, 433, 435 Chemical National Bank of New York p. Havermale 421,422,478 Chemical National Bank of St. Louis, City National Bank of Quanah, Tex., v ___ 318 Chesapeake Bank v. First National Bank of Baltimore 115 Chesebrough et al., Bradley v 153 Chestnut Street National Bank et al. , Commonwealth to the use of Commonwealth Title, Insurance and Trust Company v 25 Chestnut Street National Bank, Conway v 198 Chetwood v. California National Bank 12,14 Chetwood, ex parte 12, 13, 182, 346 Cheyenne First National Bank, Wilson v 40 Chicago, Collins v 500 Chicago, City of, et al., McVeagh v.. 520,529,530 Chicago, City of, Union National Bank r 521 Chicago Great Western Railway Company, South Park Foundry and M achine Company v 89 Chicago Packing and Provision Company, Hobbs v 112 Chicago Railway Equipment Com- pany r. Merchants' National Bank of Chicago 280 Chilberg, Commercial Bank v 57 Childs, Linton, tax collectors 505 Childs, Peterborough National Bankr 230 Chilson, First National Bank of Omaha v 291 Chipman, McClellan v 440 Chipman r. Ninth National Bank. 126 Chisholm, Gettysburg National Bank?-' 283 Chism v. First National Bank 1.70 Christie r, Sherwood 296 Christopher, First National Bank of Hightstown v 298 Christopher et al. v. Norvell 475 Chrystie et al. v. Foster 325 Chubbc. Upton 31 Church v. Ayer 14 Cie. des Phosphates de France, • Stapylton r 210 Cincinnati, Hamilton and Dayton Railroad Company v. Metropoli- tan National Bank 54 Cincinnati Oyster and Fish Com- pany?'. National Lafayette Bank. 73 Cincinnati Savings Society, Sim- mons r 43 Citizens' Bank v. Alexander 122 Citizens' Bank r. Blakesly 404 Citizens' Bank r. Houston 94 Citizens' Bank v Howell 109 Citizens' Bank, Long v 1 32, 334 Page. Citizens' Bank of Jennings, State ex rel. Burke v 446 Citizens' Bank of Jennings et al., Valdestero v 48 Citizens' Bank of Louisiana v. As- sessors, board of 503 Citizens' Bank of Louisiana, Case, receiver v 203, 208, 455 Citizens' Bank of Louisiana v. Janin (Third National Bank of New York, intervener) 79 Citizens' Bank of Union City et al., Union National Bank v 88, 97, 543 Citizens' National Bank v. Brown. 131, 134, 136 Citizens' National Bank v. Dowd. . 542 Citizens' National Bank, German Savings Bank v .. 48, 64, 169 Citizens' National Bank, National Citizens' Bank v 89 Citizens' National Bank, Rice et al. v 169 Citizens' National Bank >: Third National Bank 103 Citizens' National Bank of Balti- more, Rogers et al. v 217, 262 Citizens' National Bank of Con- cordia, Dutton v 525 Citizens' National Bank of Dan- ville v. Forman's Assignee 232 Citizens' National Bank of Dayton v. Columbia County 523, 525 Citizens' National Bank of Fair- haven, Muir r 268 Citizens' National Bank of Fari- bault, Commissioners of Rice County v 509 Citizens' National Bank of Fari- bault, Wyman v 270 Citizens' National Bank of Kansas City v. Donnell. . 219, 221, 227, 232, 235 Citizens' National Bank of Kansas City, Huggins et al. v 230 Citizens' National Bank of King- man v. Berry 324 Citizens' National Bank of La- trobe, Pepperday v 421, 422 Citizens' National Bank of Piqua, Ohio, Moore v 299 Citizens' National Bank of Tacoma v. Winder 284 Citizens' National Bank of Water- town •!'. Great Western Elevator Company 400 Citizens' Savings Bank v. Lydane. 296 Citizens' Savings Bank v. Walden. 296 Citizens' Savings Bank of Detroit, First National Bank of Chi- cago v Ill Citizens' State Bank of Dubuque, First National Bank of Sheri- dan, Wyo., v.. 323 Citizens' State Bank of Ness City, Eakin r 42 Citizens' State Bank of Nobles- ville v. Hawkins 478 City Bank, Dukie v 218 558 TABLE OF CASES. Page City Bank, Hatch v 447 City Bank, Nic611ett National Bank of Minneapolis v 454, 455 City Bank of Hopkins vi lie v. Blackmore :. 544 City Bank of Portage, Chemical Na- tional Bank of Chicago v. . 250, 433, 435 City Hall Bank, National Bank of Barnwell v 6 City National Bank v. Charles Baker Company 185 City National Bank, First National Bank v 110 City National Bank v. Paducah. . . 515 City National Bank, Williams v. . . 314 City National Bank of Fort Worth, in re 273 City National Bank of Fort Worth v. Hunter 273 City National Bank of Fulton, ' Little's Administrator v 387 City National Bank of Greenville v. Bruce.. 275 City National Bank of Hastings, Thomas?), (first case).. 5,324,326,430 City National Bank of Hastings v. Thomas ( second case ) 431 City National Bank of Poughkeep- sie v. Phelps 405 City National Bank of Quanah, Tex., v. Chemical National Bank of St. Louis 318 City National Bank of Selma v. Burns :. 57 Claasen, in re 383 Claasen v. United States. . 1 5, 19, 360, 382 Claflin v. Farmers' Bank 68 Claggett, Metropolitan National Bank v 247,404 Clark et al., Bowman et al. v 101 Clark, Commonwealth Bank v 427 Clark, First National Bank of Union Mills v : 53,130 Clark, Indian Head National Bank v 9 Clark v. National Shoe and Leather Bank 165 Clark?). Ogilvie 470,496 Clark, Payne?) 131 Clark, Spokane County v 213 Clark County National Bank, Win- chester Bank v 25, 57 Clark, James, Company et al. v. Coltonetal 214,295 Clarke National Bank v. Bank of Albion 44,69,72,318 Clay City National Bank v. Conlee^ 47 Clayton, Annheuser-Busch Brew- ing Association v 99 Clayton v. Exchange Bank of Macon 276 Clayton , People' s National Bank v. 289 Clement," Exchange National Bank?; 23 Clements, State v 153 Page- Clemmer t. Drovers' National Bank 126 Cleveland, Brown & Co. v. Shoe- man 78, 422 Cleveland, city of, Union National Bank?) 261 Clewes et al. v. Bardon et al 340 Clifton Manufacturing Company, Merchants and Planters' National Bank v 66, 537 Clinton National Bank v. National Park Bank 82 Clinton National Bank, United States v 166 Clothier, Yardley v 390 Coates v. Preston 60 Coburn, Neal et al. v 170 Cochecho National Bank v. Has- kell 148,320,331 Cochran v. United States 356,, 357, 364, 443 Cochran etal., Montgomerv County ?)..: ". 15,47 Cockburn v. Union Bank 447, 448 Cocke, Bundy v 486 Cocke et al., Hanover National Bank?; 456 Cockle?). Flack 218 Cockrell, New Farmers' Bank, trus- tee, v 543, Cockrem, Bird's Executors v ' 197 Cockrill v. Abeles et al. . 27, 338, 347, 424 Cockrill, Butler et al. v 261, 434, 443 Cockrill v. Cooper et al 164, 343, 344 Cockrill, Grow v 271 Cockrill v. Joyce 80, 259 Cody, First National Bank v 154 Coe, Lucas v 470 Coffey v. National Bank of Mis- souri 141, 405 Coffin v. United States 350, 357, 367, 368, 377 Cogswell et al. v. Second National Bank 33 Colby, First National Bank of Sel- ma?) 21 Coldwater National Bank, Capital National Bank ?> 207 Cole v. Charles City National Bank 144,264 Coleman, Butler v 21, 208 Coleman v. First National Bank of Waxahachie 64 Coler, Waller et al. v 249 Collins ?'. Chicago 560 Collins, First National Bank of White Sulphur Springs v 284 Collins v. State 119 Colonial Bank, Bankin v 71, 73 Colony Bank, Woods et al. v 171 Colson, Price, receiver, v 181 Colston, Magruder v 471 Colt?'. Brown 392 Colton et al., Clark, James, Com- pany et al. v 214, 295 TABLE OF CASES. 559 Page. Colton et al. v. Drovers' Perpetual Building and Loan Association of Baltimore 393 Columbia Bank v. Patterson 499 Columbia County, Citizens' Na- tional Bank of Day ton v 523, 525 Columbia Finance and Trust Com- pany v. First National Bank. . 44,45, 56 Columbia National Bank, Bletz v . 240 Columbia National Bank v. West- ern Iron and Steel Company 412 Columbia National Bank of Lin- coln v. German National Bank of Lincoln ,. 56,389,395 Columbia National Bank of Lin- coln v. Rice 148, 156, 301 Columbia National Bank of Tacoma et al. v. Matthews 29, 30, 451 Columbia National Bank of Tacoma et al., Rand et al. v 493 Colyer, Hancock v 26 Commercial Bank, in re 212, 537 Commercial Bank, Albers v 44, 48 Commercial Bank v. Chatfield..., 158 Commercial Bank v. Chilberg 57 Commercial Bank, Covington City National Bank v 301 Commercial Bank v. Hughes 125 Commercial Bank v. Red River Valley National Bank 103 Commercial Bank, Taylor v 333 Commercial Bank v. Union Bank . 107 Commercial Bank of Tacoma, Blanchard v 152, 201, 335 Commercial and Farmers' Bank, Rockhill, et al., White v 542 Commercial and Farmers' Bank, Wyliet) 201 Commercial National Bank, Brom- ley v 60 Commercial National Bank v. Cau- niff 16 Commercial National Bank v. First National Bank 53 Commercial National Bank, Gris- Bomt 127 Commercial National Bank, Haz- letti) 107 Commercial National Bank, Jack- son Paper Manufacturing Com- pany v 70 Commercial National Bank, Jeffer- son County Savings Bank v 107 Commercial National Bank v. King County 517 Commercial National Bank v. Lin- coln Fuel Company 68, 168 Commercial National Bank, Mound City Paint and Color Company v 102 Commercial National Bank, Pel- ton v 518,523 Commercial National Bank et al. v. Pirieetal 6 Commercial National Bank v. Seattle, city of 517 Page. Commercial National Bank, Tren- holm, Comptroller v 163 CommercialNationalBankn. Union Bank 107 Commercial National Bank v. Weinhard 35 Commercial National Bank v. Wil- liams 35 Commercial National Bank of Chicago, Petri*; 246 Commercial National Bank of Cleveland, Tabor v 15 Commercial National Bank of De- troit, Warren-Scharf Asphalt Paving Company v 166, 167 Commercial National Bank of In- dependence, Kans., Carson et al. » 489 Commercial National Bank of Og- den, plaintiff in error, o. Cham- bers, Alma D., as treasurer of Weber County, Utah 506, 510, 511, 512, 514 Commercial. National Bank of Og- den, Seeber v 6,318,430 Commercial National Bank.of Penn- sylvania v. Armstrong 99 Commercial National Bank of Peoria, First National Bank of Peoria v 439 Commercial State Bank of Genoa *. Rowley 56 Commissioners of Taxes, People ex rel., Tradesman's National Bank v 521 Commissioners of Taxes and Assess- ments (two cases), People v . . 515, 521 Commonwealth v. Barry 385 Commonwealth v. Felton 385 Commonwealth, First National Bankw 403 Commonwealth, Luberg v 385 Commonwealth, National Bank w. 503, 534 Commonwealth v. Phoenix Iron Company ■. 447 Commonwealth v. Tenney 385 Commonwealth, to use of Common- wealth Title, Insurance and Trust Company v. Chestnut Street Na- tional Bank et al 25 Commonwealth ex rel. Torrey v. Ketner 385 Commonwealth Bank v. Clark 427 Commonwealth Bank, Godin v ... 44 Commonwealth of Pennsylvania, Earle v 24, 198 Commonwealth of Pennsvlvania v. Manufacturers and Mechanics' Bank of Philadelphia 505 Commonwealth of Pennsylvania v. Merchants and Manufacturers' National Bank of Pittsburg 534 Conant, United States v 351,359 Congdon, C. B., & Co. v. Beard 294 Conklin v. Second National Bank. 36,39 Conlee, Clay City National Bank v. 47 560 TABLE OF CASES. Page. Connecticut Mutual Life Insurance Company, Central National Bank of Baltimore v. (see Insurance Company, National Bank v.). Connecticut and Passumpsic Rail- road Company, Hendee v 246 Conners, United States «■ 350 Connoway, receiver, in re 409 Conoughy, Penn Mutual Life In- surance Company v 42 Consolidated National Bank, Fidel- ity and Casualty Company of New York i) 309 Consolidated National Bank, Large v '. 448 Consolidated National Bank, Peo- ple v 448 Continental National Bank v. Eliot National Bank et al 22 Continental National Bank, Fisher v 77,203 Continental National Bank r, Fol- som 255 Continental National Bank, Grays Harbor Commercial Bank v 104 Continental National Bank, James, J. M.,Co. v 52,160 Continental National Bank, Manu- facturers' National Bank v 94 Continental National Bank of Chi- cago v. McGeoch 18, 299, 418 Continental National Bank of Memphis v. Buf ord 245, 251 Continental National Bank of Memphis, Richardson v 101, 537 Continental National Bank of New York v. Tradesmen's National Bank of New York 71, 170 Conway v. Chestnut Street Na- tional Bank 198 Conway, Earle v 23, 198. Conway v. Halsey 345 Conway v. Shall 198 Conzman r. First National Bank.. 523, 526, 530 Cook, Davis?' 245,444 Cook County National Bank v. United States 117, 213, 216 Cooke v. State National Bank of Boston 72 Coonev v. American National Bank 144 Cooper et al., Cockrill r.... 164, 343, 344 Cooper, Des Moines Cotton Mills Company v 25 Cooper et al. v. Hill. . . . 304, 337, 343, 432 Cooper, j r. , Leather Manufacturers' National Bank v 254 Cooper Insurance Company v. Hawkins _• 479 Cooter. TJ. S. Bank 45,123 Corbin, First National Bank of Chicago r 254 Corbin, Graves v 254 Corbin, Roberts >■ 56 Corcoran v. Batchelder 269 Page. Corcoran & Riggs r. Powers 218 Cordozo, Merchants' Exchange Na- tional Bank v 399 Corn Exchange Bank v Blye 188 CornExchange Bank, Castles. 66, 67, 108 Corn Exchange National Bank v. Mechanics' National Bank of Newark, N. J 21 Corn Exchange National Bank v. Solicitors' Loan and Trust Com- pany et al 542 Cornell, People v 447 Corwineetal. v. Thompson National Bank* of Putnam etal 442 Cosier, Niblack v...: 143, 294 Cotheal, Brouwer v 447 Cottle et al. v. Marine Bank of Buf falo 133 County of Lancaster v. Lancaster County National Bank 509 Courtney, Fidelity and Deposit Company of Maryland v. 305,312 Covington, City of, v. First National Bank of Covington 530, 531 C vington. City National Bank v. Commercial Bank 301 Cox v. Bank of Hartsville 1 72 Cox v. Beck et al 236 Cox v. Elmendorf 466 Cox, Friberg v 60, 538, 543 Cox, Klepper v 544 Cox v. Montague 467, 488 Cox v. Robinson 415 Cox, Sayles v 546 Cox, Showalterv 60,538 Cox, Venner v 212 Cox, Williams v 59, 538 Coyle, Earle v 464 Cragie et al. v. Hadley 211 Cragin Cattle Company, Huylerv.. 447 Craig, First National Bank v Ill Craige v. Smith 95 Crane v. Fourth Street National Bank 113 Crawford, Linn County National Bank r 8, 189 Crawford v. West Side Bank 43 Creceliup, United States v 355 Creditors, Bloch v 67 Creditors, Matthews v 119, 137 Creveling et al. v. Bloomsbury Na- tional Bank 53 Crine, Union Bank r 7, 8 Critten et al. v. Chemical National Bank 48, 165 Crocker r. First National Bank of Chetopa 232, 239 Crocker v. Marine National Bank of New York 255 Crocker v. Whitney 428 Crocker- Wool worth National Bank, San Francisco, City and County of, v 500 Crocker-Woolwortb National Bank of San Francisco v. Nevada Bank of San Francisco 76 TABLE OF OASES. 561 Page Cromwell v. Sac County 218 Crook v. First National Bank of Baraboo 144 Crooks, American Exchange Na- tional Bank of New York v 301 Cross, Jackson Insurance Com- pany v 121 Cross v. North Carolina 384 Crow, Hutchinson National Bank v. 157, 443 Crowe & Gillen, American Trust and Savings Bank v 55 Crowell, Chanute National Bank v. 53 Cumberland County, Board of Commissioners of, Lilly v 75, 115 Cumming, Merchants' National Bank of Toledo a 522,523 Cummings, Merchants and Manu- facturers' National Bank v 81 Curry v. Joplin Savings Bank 1 36 Curtis, United States v 313, 359 Curtis et al. v. Leavitt 218 Cushman, Edward F., National Se- curity Bank v ., 298, 316 Custer County, Chambers v 43 Custer County v. Walker 261 Cutler, Chapman et al. v 348 Cuyler, Farmers and Mechanics' National Bank v 107 D. Dabney v. State Bank 119 Daggs v. Phoenix National Bank. . 226 Daly v. Butchers' Bank 109 Dana v. Third National Bank 60 Dane County Bank, Stacy v 109 Danforth, National Bank of Athens v 220 Danforth et al. v. National State Bank of Elizabeth 220, 422 Daniel a. St. Louis National Bank. -100 Daniel, Texarkana National Bank v ." 262 Danville National Bank, Texas, Hepburn v 412 Darby v. Berney National Bank ... 315 Dartmouth Savings Bank v. Foley •etal 293 Daunis, Adams v 193, 197, 255 Daugherty, Brown v 122 Davenport National Bank v. Daven- port 517,519 Davenport National Bank v. Mittle- buscher, collector, et al 116 Davenport, Western- Union Tele- graph Company v 452 Davey v. Jones 108 Davis, Armour Packing Company v 94 Davis, Atlanta National Bank v . . 49 Davis, Commissioners of Silver- bow Countv v 520 Davis v. Cook 245,444 Davis v. Elmira Savings Bank 212 Davis v. Essex Baptist Society. . 462, 470 4049—05 36 Page. Davis v. First National Bank (Calif. case) 102 Davis, First National Bank of Rich- mond in (N. C. case) 98 Davis v. Industrial Manufacturing Company 391,395 Davis ii. Knipp 392 Davis, McEwin v 122 Davis, National Bank of Madison v. 235 Davis v. Randall 221 Davis, Savings Bank v 316 Davis v. Standard National Bank. 51 Davis, receiver, v. Stevens 462, 463 Davis estate v. Watkins 401, 481 Davis n. Weed 479, 480 Dawson v. Real Estate Bank 125 Dawson Bank, Kent v 86 Dean, Bank of Black well v 120, 202 Dearborn v. Union National Bank of Brunswick 78 Dearborn v. Washington Savings Bank 120 Dearing, Farmers' and Mechanics Bank v 115, 221, 222 Dedham National Bank v. Everett National Bank 170 De Haven v. Kensington National Bank 140 Delahunty v. Central National Bank 260 Delano v. Butler 28, 29, 34, 482 DeLashmutt, Stufflebeam v 450,490 Delaware County National Bank, Erisman v 9, 260 Delaware, Lackawanna and West- ern Railroad Company v. Oxford Iron Company ..^ 38 Demere, Merchants National Bank v 85 De Morse, First National Bank v. - 388 Denegre et al. , Richardson v 99 Dennis v. First National Bank 198 Dent, Matteson v 457, 462, 476, 479 Denton v. Baker 189 Denver National Bank, Fisher v.. 81 Denver National Bank, Wedge Mines Company v 46 Depeau v. Humphrey 218 Dermott, Moncure v 225 Dern v. Kellogg 104 Derry National Bank, Norton v. . . 6, 431 Deseret National Bank v. Din- woodey 78 Des Moines Cotton Mills Com- pany v. Cooper 25 Des Moines National Bank n. Hard- ing 276 Des Moines National Bank, West- ern Improvement Company v... 316 Detroit Savings Bank v. Haines etal 19,153 Deweese, School District of City of Sedaliai; 157,263,335 Deweese v. Smith ' 457, 459, 460, 494 Deweese, receiver, Scott v . . 449, 491, 492 Dewey, Dunn v 107 562 TABLE OF CASES. Page, Dewey, Hedlund v 469 Dewey et al. , McDonald v 470 De Witt County National Bank, Warren v 426 Diamond National Bank, Safe De- posit and Trust Company v 537 Dillman v. Carlin 546 Dila v. Bank of Pikeville 9 Dilway v. Northwestern National Bank 73 Dingley v. McDonald et al. . . 47, 154, 496 Dinwoodey, Deseret National Bank v 78 Ditty v. Dominion National Bank ofBristol.Va 294 Dodge, San Francisco National Bank (Nevada National Bank of)» 528 Dolan, People v 511 Dominion National Bank of Bristol, Va., Ditty v 294 Donnell, Citizens National Bank of Kansas City v... 219, 221, 227, 232, 235 Donohoe-Kelly Banking Company v. Southern Pacific Company et al 53 Dooley, Hadden v 18, 23, 177, 322 Dooley v. Pease 23 Dooley etal., Bank of Monticello v. 10 Doon, District township of, First National Bank v 154 Doppelt v. National Bank of the He- public 58, 88 Dorsey v. United States 1 364, 371, 376, 378, 380 Dorset Pipe and Paving Company, National Bank of Clinton, Iowau. 410 Doty v. First National Bank of Larimore 452, 454 Doudetal. v. NationalParkBank . . 174 Dougherty v. Hoffstetter 291 Douglass, County of, First National Bank of Omaha v 503, 525 Dover, Strafford National Bank v . 505 Dovetail Body and Gear Company, First National Bank of Craw- fordsville v 147, 187 Dow v. Irasburg National Bank of Orleans 240 Dow, Riddles 276 Dow, Thompson National Bank v. 276 Dow et al. v. United States 353, 355, 366, 372, 378 Dow Law Bank v. Godfrey 282 Dowd, Citizens' National Bank v. . 542 Dowd, Philadelphia National Bank v 95 Dowley, Waite v 451, 504 Drake, First National Bank of Fort Scott v 316 Drakew. Eolio 393 Drapers. Manchester, etc., Railway Company 447, 448 Draper, Paul«... 137,202 Pago. Dresser*. Traders' National Bank. 432 Drevfus & Co., Henry, Union Na- tional Bank v 386 Driesbach v. National Bank 229, 233 Drinkall v. Movious State Bank. . . 48, 60, 159 Driskell et al., Germania Safety Vault and Trust Company v...t 294 Drovers' National Bank v. Blue... 290 Drovers' National Bank, Clemmer v 126 Drovers' National Bank, Hanna etal. v 45,50,535 Drovers' National Bank v. O'Hare. 535 Drovers' National Bank v. Packing Company 69 Drovers' National Bank v. Potvin. 296 Drovers' National Bank, Sioux Valley State Bank v 61 Drovers' National Bank of Chicago, Buchannen et al v 219 Drovers and Mechanics' National Bank, Eccles v 187 Drovers' Perpetual Building and Loan Association of Baltimore, Colton et al. v 393 Duel County, First National Bank of Buchanan County v 247, 273 Dugan, American Exchange Na- tional Bank of New York r 301 Dukie o. City Bank ' 218 Dumond v. Merchants' National Bank 130 Dumond, Union Stock Yards Na- tional Bank v 130 Durnont v. Fry 259 Dumont, Reynes v 259 Duncan v. Brennan 80 Duncan v. First National Bank of Mount Pleasant 226, 242 Duncan, Wadsworth v 498 Dunn v. Dewey 107 Dunn, Gardner v , 281 Dunn, Kimball * 162 Dunn v. National Bank of Can- ton 149 Dunn, Second National Bank of Altoona v 281 Durham, School Committee of Town of, Anniston National Bank v 302 Durkee v. National Bank 125 Duryea, in re 249 Dushane, National Bank of Favette County v ." 230 Dutton v. Citizens' National Bank of Concordia 525 Dutton v. First National Bank 525 Dyer, Mercer v 394 Dyer v. Sebrell 392 Dygert etux. v. Vermont Loan and TrustCompany 219 Dvkers c. Leather Manufacturers' "Bank 43,48 TABLE OF CASES. 563 E. Page. Eakin v. Citizens' State Bank of Ness City 42 Earl, National Bank of Guthrie v. . 417 Earle v. Carson 204, 465 Earle v. Commonwealth of Penn- sylvania 24, 198 Earle v. Conway 23,198 Earle?'. Coyle 464 Earle, in re 83, 191, 480 Earle, McCartney et al. v 187, 190, 251, 440 Earle v. Miller 394 Earle v. Munce 195 Earle, National Union Bank v 97 Earle, Quinn v 211 Earle v. Rogers et al 480 Eastern Township Bank v. Ver- mont National Bank of St. Al- bans 330 East Haddam Bank ?>. Scovil. . . 109, 113 Eastman, United States v 363 Easton v. Iowa 384, 385, 413 Easton, Mitchell v 131 East River Bridge Company, O'Brien et al v 214 East River National Bank v. Gove. 121, 332 Eaton, Butler v 29, 482 Eaton, Pacific National Bank v. 28, 29, 482 Eaton v. Union County National Bank 530 Eccles v. Drovers and Mechanics' National Bank 187 Eckels, Philadelphia, city of, v . . 88, 210 Eckels et al., Washington National Bank of Tacoma v 180, 265 Edgerton, United States v 360, 369 Edson, in re 270,287 Edwards v. Sweeney 133 Ege, United States v 357 Egerton v. Fulton National Bank.. 127 Eighth Ward Bank, Smith v 260 Einstein, Rosenfeld ?> 447 Elder v. First National Bank of Ot- tawa 270 Elder v. Franklin National Bank, City of New York 47 Eldred, MichiganlnsuranceBankw. 404 Eliot Bank, National Bank » 119 Eliot National Bank, Hayward v. . 38 Eliot National Bank etal., Conti- nental National Bank v 22 Elizabeth Banking Company, Smiths 139 •Elkhart National Bank (Ind. ) v. Northwestern Guaranty and Loan Company of Minneapolis, Minn., etal 245,498 Ellerbee v. National Bank 422 Ellicott v. Barnes 137 Ellis, Brown v 33, 459, 479, 488, 494 Ellis v. First National Bank of 01- ney 230 Ellis, Hancock National Bank v . . 487 Ellis v. Little 187 Page. Ellis et al. r. First National Bank of Woonsocket 323,396 Ellsworth, Woodward v 1 86 Elmendorf, Cox* 466 Elmira, National Bank of Che- mung v 502 Elmira Bank, West v 132, 334 Elmira Savings Bank, Davis v 212 Elmore, First National Bank of Waterloo v 428 El Paso National Bank v. Fuchs . . 140, 143, 388 Elwood v. First National Bank . . . 265, 267, 335 Elston, Board of Commissioners of Montgomery County v 75 Emerling v. First National Bank. . 437 English-American Loan and Trust Company v. Hiers 298 Eno, in re 385 Eno, United States v 362 Equitable Trust Company, Fowler v 221 Erdlinger, Root v 530 Erie City Bank, Allen v 26 Erisman v. Delaware County Na- tional Bank ; 9, 260 Essex Bank, Foster v 120 Essex Baptist Society, Davis v. . 462, 470 Essex Savings Bank, Berl v ._.'... 446 Essler, Philler v 423 Estey, Weston?) 332 Ettlesohn, Armstrong e 194 Eufaula Grocery Company v. Mis- souri National Bank 87 Eufaula National Bank, Morris v. 58, 105 Evans v. Exchange Bank 404 Evans v. United States 358 Evansville National Bank v. Brit- ton r 511, 521 Evansville National Bank v. Met- ropolitan Nati onal Bank 38 Everett National Bank, Dedham National Bank v 170 Everett National Bank, Winslow v. 169 Exchange Bank, Evans?) 404 Exchange Bank v. Gulick 25 Exchange Bank, Thomas v.'.'.... 56 Exchange Bank of Macon, Clay- ton v 276 Exchange Bank of Pittsburg, Smith v 223, 423 Exchange National Bank v. Clem- ent 23 Exchange National Bank v. John- son 291 Exchange National Bank, Kirk- wood v 289 Exchange National Bank v. Third National Bank 108 Exchange National Bank, Wolver- ton v 228 Exchange National Bank of Atch- ison v. Wich ita Cattle Company . 249 Exchange National Bank of Spo- kane v. Little Rock, Bank of 172 564 TABLE OF CASES. Page. Exchange National Bank of Spo- kane v. Wolverton 284 Exeter National Bank v. Orchard. 234, 237 Ex parte Chetwood 12, 13, 182, 346 Eyre, National Bank of Winterset v 235,236,387 F. Fabens v. Mercantile Bank 109 Fairbanks v. Merchants' National Bank 301 Fallkill National Bank v. Sleight. . 277 Falls City State Bank v. WehrJie. . 57 Falls Point Savings Institution v. Weeden 145 Fancher, First National Bank of Sandy hill v 522 Fare, National Bank of Jefferson v 115,255 Farmers' Bank, Claflin v 68 Farmers' Bank, Grosner v 26 Farmers' Bank, Houston, J. M., Grocery Company v — 53 Farmers' Bank, Miller v 80 Farmers' Bank, Planters' Bank v . 137 Farmers' Bank of Beattvville, Pryse v - 342 Farmers' Bank of * Maryland, Thomas v 404 Farmers' Deposit National Bank, Penn Bank v 395 Farmers and Drovers' Bank, Mon- arch, M. V., Co. et al « 6 Farmers and Mechanics' Bank v. Butchers and Drovers' Bank 68 Farmers and Mechanics' Bank v. Dearing 115, 221, 222 Farmers and Mechanics' Bank v. Hoagland 229 Farmers and Mechanics' National Bank v. Baldwin 423 Farmers and Mechanics' National Banku. Cuyler 107 Farmers and Mechanics' National Bank, Marberry v 82 Farmers and Mechanics' National Bank of Buffalo v. Rogers. 400, 410, 411 Farmers and Mechanics' National Bank of Frederick, County Com- missioners ofFrede rick County?;. 509 Farmers and Merchants' Bank, Halli) 428,436 Farmers and Merchants' Bank of Rushville, Sturdivant et al. v. . . 7 Farmers and Merchants' National Bank, Metropolitan Trust Com- pany v... 26, 149, 188, 261 , 272, 289, 439 Farmers and Merchants' National Bank a. Novich 283 Farmers and Merchants' National Bank v. Robinson 428 Farmers and Merchants' National Bank v. Smith 321, 418, 422 Page. Farmers and Merchants' National Bank v. Waco Electric Railway and Light Company 18, 26, 149, 188, 261, 272, 289, 439 Farmers and Merchants' National Bank of Baltimore, Bowdell v. 453, 461 Farmers and Merchants' National Bank of Cleburne, Brown v . . 326, 327 Farmers' National Bank v. Thomas - 11 Farmers' National Bank, Tramel v. 48 Farmers' National Bank, Arkansas City et al., Sprague et al. v 103 Farmers' National Bank of Cyn- thianaet al., Northern Bank of Kentucky v 214 Farmers' National Bank of Hud- son v. Jones, Governor of Arkan- sas, et al 256, 273 Farmers' National Bank of Long- mount, Rockwell v . , 226, 230 Farmers' National Bank of Owa- tonna v. Backus et al 406, 411 Farmers' National Bank of Valpa- raiso, Ind., !■. Sutton Manufactur- ing* Company 116 Farmers and Traders' National Bank v. Hoffman 502, 503 Farmers and Traders' National Bank of Covington v. Greene et al 160 Farmers and Traders' National Bank of La Grande v. Snod- grass 277 Farrow v. First National Bank 234 Faurot, Chase National Bank v ... 230, 280, 282 Fawcett, State ex rel., German Savings Bank v 151 Fayetteville, Commissioners of, Buie » 513 Fayetteville, Mayor and Commis- sioners of, Moore * 533 Feckheimer v. National Exchange Bank 419 Felton, Commonwealth v 385 Fenno, Veazie Bank v 75, 115 Ferguson, Nebraska National Bank of Yorkv • 283 Feeney, National Bank of Com- merce of Pierre v 297 Ferry v. Williams 447 Ferst, Ballin v 447 Fiala et al. v. Ainsworth 304, 310, 311 Fidelity and Casualty Company, Jackson v 182 Fidelity and Casualty Company of New York v. Consolidated National Bank 309 Fidelity and Deposit Company of Maryland v. Courtney 305, 312 Fidelity Insurance, Trust and Safe Deposit Company, Hayes v 472 Fidelity Insurance, Trust and Safe Deposit Company, Higgins v 472 Fidelity Insurance, Trust and Safe Deposit Company, Rankin v 474 TABLE OF CASES. 565 Fidelity National Bank, Bank of Montreal v 21 Fidelity National Bank, Trenholm, Comptroller, v 163 Fidelity Safe Deposit and Trust Company v. Armstrong 256 Field, Schalucky v 145 Fifth National Bank v. Armstrong. 90, 92 Fifth National Bank v. Central Na- tional Bank 65 Fifth National Bank of Grand Bapids v. Pierce 428, 436 Fifth National Bank of Pittsburg v. Pittsburg and Castle Shannon Railroad Company 252 Fifth National Bank of San An- tonio, Iron City National Bank of Llano v 150,322 Finn v. Brown 463, 492 Fincher et al., Carson, Pirie, Scott &Co.v 49 First Commercial Bank v. Talberf. 406 First National Bank v. Allen (Ala- bama case) 164, 428 First National Bank v. Anderson (New York case) '223 First National Bank, Arnau v 19 First National Bank, Bowman v 545 First National Bank v. Bridgeport Trust Company 252 First National Bank, Bristol Knife Company v 63 First National Bank v. Brodhecker . 525 First National Bank v. Brown (Utah case) 90 First National Bank, Burnett, Administrator, v 536 FirstNational Bank v. CassCounty . 18 First National Bank, Chism v 170 First National Bank v. City Na- tional Bank 110 First National Bank v. City of Seattle 517 First National Bank v. Cody 154 First National Bank, Columbia Finance and Trust Company v.. 44, 45, 56 First National Bank, Commercial National Bank v 53 First National Bank v. Common- wealth 403 First National Bank, Couz- mant 523,526,530 First National Bank v. Craig Ill First National Bank, Davis v. (Calif, case) 102 First National Bank v. De Morse. . 388 First National Bank, Dennis v 198 First National Bank v. District Township of Doon 154 First National Bank, Dutton v 525 First National Bank, Elwood v ... 265, 267, 335 First National Bank, Emerling v. . 437 First National Bank, Farrow v 234 First National Bank v. Forest 246 Page. First National Bank v. Germania Safety Vault and Trust Com- pany 160, 259 First National Bank, Gill v. 280, 302, 435 First National Bank v. Haire . . . 426, 427 First National Bank, Harrington r. (Illinois case) 60 First National Bank, Hauptman v. 130 First National Bank v. Hellyer . . . 159 First National Bank v. Hershire . . 522 First National Bank, Hershire v. 504, 522 First National Bank v. Hughes 86 First National Bank, Huntermis- ter v 221, 233, 239 First National Bank, Indiana Na- tional Bank v 166 First National Bank v. Kansas Grain Company 50 First National Bank, Kilby v 391 First National Bank, La Dow v .... 227 First National Bank, Locke v 145 First National Bank, Lynch v. (N. Y. case.) 69 First National Bank, McDonald v. 21 First National Bank v. Mann 80 First National Bank v. Mansfield Savings Bank 108 First National Bank v. Merchants' National Bank 68 First National Bank r. Miller (Ne- braska case) 47 First National Bank, Moody v 170 First National Bank v. Munze- sheimer 432 First National Bank, Neal v 168 First National Bank t-. Nelson (Al- abama case) 61, 67 First National Bank v. Payne 86 First National Bank v. Pease 168 First National Bank, Peck et al. v. 92 First National Bank v. Peter- borough 505 First National Bank, Power v 108 First National Bank v. Bailsback. . 50. First National Bank v. Randall . . 57, 400 First National Bank, Ridgely et al. v 279 First National Bank v. Biggins 483 First National Bank, Boebling Sons Company v 424 First National Bank v. Sanf ord 94 First National Bank v. Schmidt (Colo, case) 79 First National Bank, School Dis- trict of Greenfield v 45, 123, 536 First National Bank, Searle v. . . 421, 422 First National Bank v. Security National Bank 135 First National Bank, Spokane, City of, v 539 First National Bank, Spokane County v 544 First National Bank v. Sprague. . . 109- First National Bank, Springfield, City of , v 501 First National Bank, Squires v. . 144, 317 566 TABLE OF OASES. Page. First National Bank, State v 451 First National Bank, Stowe v 84 First National Bank v. Stuetzer. . . 286 First National Bank et al. , Tehan c. 192 First National Bank, Timberlake et al. v 220 First National Bank, VanLeuvena. 418 First National Bank v. Weston . . . 289 First National Bank v. Wills Creek Coal Company 62 First National Bank v. Wood 9 First National Bank and another, receiver, Illinois Trust and Sav- ings Company v 539 First National Bank of Aberdeen v. Andrews et al 117, 278 First National Bank of Aberdeen v. Carter 277 First National Bank of Aberdeen v. Chehalis County etal. 515, 518, 522, 534 First National Bank of Allentown v. Hoch 418,422 First National Bank of Allentown, Resh v 131 First National Bank of Allentown v. Rex 140,141 First National Bank of Allentown, Steckel v 132, 143, 334 First National Bank of Allentown, Zeigler v . 131 First National Bank of Arlington v. Cecil 292 First National Bank of Arlington v. Lynch (Texas case) 151 First National Bank of Baltimore, Chesapeake Bank v 115 First National Bank of Baltimore v. Lindenstruth 262 First National Bank of Baraboo, Crook v 144 First National Bank of Belmont r. First National Bank of Barnes- ville 167 First National Bank of Bethel v. National Pahquioque Bank 146, 162, 181, 183, 188, 245, 255 First National Bank of Beverlv, Highleyt)..., :..".. 231 First National Bank of Birming- ham v. First National Bank of Newport 111,138 First National Bank of Blaine v. Blake 293, 300 First National Bank of Boise City, State of Idaho v 508 First National Bank of Brandon v. Briggs' assignee 298, 311 First National Bank of Brandon, Kaiser et al. v 288,289 First National Bank of Brattleboro, Wiley v -- 138 First National Bank of Brattleboro, Whitney v..'. 140 First National Bank of Buchanan County v. Duel County 247, 273 Page. First National Bank of Buffalo, Prosseru 464 First National Bank of Burlingame, Hanover National Bank of City of New York v 324, 329, 415, 438 First National Bank of Butler, Pa., Riddle v 445, 182, 186, 423 First National Bank of Cambridge, Hathaway v 15, 408 First National Bank of Cambridge City, Salisbury v 156, 282 First National Bank of Cambridge, 111., v.Hall etal 17,127,187 First National Bank of Carthage, Carthage, City of, v 508 First National Bank of Carlisle v. Graham 137,138,139,140 First National Bank of Cartersville v. Bayless 276 First National Bank of Cedar Falls, MurRhy v 132 First National Bank of Centraliaw. Marshall : 406 First National Bank of Central City, Hummela 398 First National Bank of Ceredo v. Huntington Distilling Company . 262 First National Bank of Chadron v. McKinney 158 First National Bank of Chadron, Smith v 270 First National Bank of Charles City, Mereness v , 145 First National Bank of Charlotte v. Morgan 241,247,248 First National Bank of Charlotte v. National Exchange Bank of Bal- timore 421, 422 First National Bank of Chetopa, Crocker v 232, 239 First National Bank of Cherryvale r. Montgomery County National Bank . . '. 478 First National Bank of Chicago, Bickfordw 42,47,69 First National Bank of Chicago v. California National Bank 155 First National Bank of Chicago v. Citizens' Savings Bank of De- troit Ill First National Bank of Chicago v. Corbin 254 First National Bank of Chicago, Mitchell v 117 First National Bank of Chicago v. Northwestern National Bank of Chicago 73, 166 First National Bank ot Chicago v. Reno County Bank 90 First National Bank of Chicago v. Selden 217 First National Bank of Chicago v. Stein way et al 247 First National Bank of Chittenango (New York case), Harrington v. 303 TABLE OF OASES. 567 Page. First National Bank of Cincinnati, Miller v. (Ohio case) 385, 501 First National Bank of Circleville v. Bank of Monroe 92 First National Bank of Clarion v. Brenneman's executors 407 First National Bank of Clarion v. Gruber 226,228,236,240 First National Bank of Clarksville, Brahan v...l 284 First National Bank of Cleburne, Imperial Roller Milling Com- pany v 387 First National Bank of Clyde, Park- hurst v 230 First National Bank of Columbus, Brown v. (Ind. case) 436 First National Bank of Columbus v. Garlinghouse et al 221, 222, 223 First National Bank of Columbus, Warren v 262 First National Bank of Concord v. Hawkins 420,436,478 First National Bank of Concordia v. Marshall 276 First National Bank of Concordia v. Rowley 239 First National Bank of Covington, Covington v 530, 531 First National Bank of Crawfords- ville v. Dovetail Body and Gear Company 147, 187 First National Bank of Crawfords- ville, Reynolds v 424, 425, 428 First National Bank of Crete, Lan- ham v 243 First National Bank of Crete, Smith v ' 243 First National Bank of Dalton v. McEntyre 222, 234 First National Bank of Deadwood, Guilds 228,241 First National Bank of Decatur, Cameron v 272, 436 First National Bank of Decatur v. Johnston 204 First National Bank of Decatur v. Priest , 435 First Natibnal Bank of Decorah v. Holan 292 First National Bank of Decorah v. Laughlin 283 First National Bank of Denver, Campbell v 294,327 First National Bank of Denver, Foss v 144 First National Bank of Denver, Simpson v 19, 155 First National Bank of Denver v. Wilder 282 First National Bank of Dexter, Hatch v 16,135 First National Bank of Dorchester v. Smith 243 First National Bank of Eagle Pass, Bonnett v 403 Page. First National Bank of Elkhart v. Armstrong 96 First National Bank of Evansvillew. Fourth National Bank of Evans- ville 110,301 First National Bank of Fort Scott v. Drake 316 First National Bank of Franklin, Bisselli; 318 First National Bank of Gadsden v. Moragne 64 First National Bank of Galion, Shunku 224 First National Bank of Garnett v. Ayers 514,525 First National Bank of Grafton v. Babbidge 300 First National Bank of Grand Forks, N. Dak. v. Anderson.. 251,437 First National Bank of Grand Haven v. Zeims 283 First National Bank of Greens- burg, Wright v 239 First National Bank of Greenville *. Greenville Oil and Cotton Company 431, 435 First National Bank of Greenville v. Sherburne 294, 422 First National Bank of Hagers- town, Weckler v 418, 422 First National Bank of Hailey v. G. Y. B. Mining Company 271 First National Bank of Hailey v. Van Ness 292 First National Bank of Hastings v. Bonner 287 First National Bank of Hastings, Kirkwood v 289 First National of Hastings v. Lam- bert , 278 First National Bank of Helena et al. , Guignon v 102, 215, 540 First National Bank of Helena, Stadler v 393 First National Bank of Herrington, Kloepfer r 50 First National Bank of Hightstown v. Christopher ■ 298 First National Bank of Hot Springs, Hot Springs Independent School District, etc., v 192 First National Bank of Houston v. Wells, Fargo & Co 20 First National Bank of Huntington v. Arnold 156,317,330 First National Bank of Hutchinson v. Mclnturf 231, 233 First National Bank of Indian- apolis, Wasson v 512, 514 First National Bank of Jacksboro v. Lasater 219,239,243 First National Bank of Jefferson- ville, McCann v 34 First National Bank of Jersey City, Bank of the Metropolis v 289 568 TABLE OF CASES. Page. First National Bank of Johnson City, Bruner v 542, 544 First National Bank of Kalamazoo v. Stone 148,331 First National Bank of Kansas City, Kans. , McFarlin et al. v 464 First National Bank of Kansas City, Rush v 281 First National Bank of Kaufman ■y. Still 311 First National Bank of Keokuk et al., Turner v 199, 201 First National Bank of Killingly, Nelson (Minnesota cas) v 81, 158, 287, 293 First National Bank of Lacon v. Myers 133 First National Bank of Lake Ben- ton, Minn., plaintiff in error, v. Watt, John W 233 First National Bank of Larimore, Doty v.. 452,454 First National Bank of Larned, Tal- cotta 121,407 First National Bank of Lebanon, Cokew 236 First National Bank of Leoti, Burn- ham et al. v 245 First National Bank of Leoti v. Fisher 501 First National Bank of Lincoln, Jones v 301, 326 First National Bank of Little Rock, United States National Bank v. . 17, 301, 323, 416 First National Bank of Lock Haven v. Peltz 126 First National Bank of Louisville et al. , Hindman v 38, 322, 333, 437 First National Bank of Louisville v. Kentucky 499 First National Bank of Lynchburg v. Marye, auditor of public ac- counts 116,526,527 First National Bank of Lyons v. Ocean National Bank 140, 141, 317, 320, 334 First National Bank of Macon, Mayor v 508 First National Bank of Madison, Turner v 424 First National Bank of Manistee v. Marshall and'Ilsley Bank of Mil- waukee 148,149,276,330 First National Bank of Manning v. German Bank of Carroll County et al. 106 First National Bank of Mansfield, Blair v 304 First National Bank of Mansfield *. Zent 138 First National Bank of Marshall- town i). Marshalltown State Bank 170 First National Bank of Mason v. Ledbetter 223,297 First National Bank of Memphis v. Kidd 398 Page. First National Bank of Mendota v. Smith 452,513 First National Bank of Minneapo- lis, Selover v 160 First National Bank of Missoula v. Bailey 524, 525 First National Bank of Moline, First National Bank of Omaha v 100 First National Bank of Monmouth v. Brooks .- 120, 333 First National Bank of Monmouth v. Strang 402 First National Bank of Montgom- ery v. Armstrong 93 First National Bank of Montgom- ery, Oates v 80, 116, 222 First National Bank of Montgom- ery, Slaughter v 222, 227, 398 First National Bank of Montpelier v. Hubbard et al 255 First National Bank of Montpelier v. Sioux City Terminal Railroad and Warehouse Company, Trust Company of North America, in- tervener 279 First National Bank of Morristown, McCrearyj) 234,240 First National Bank of Morristown v. Hunter 237 First National Bank of Moscow, Idaho, v. American National Bank of Kansas City 6 First National Bank of Mount Pleasant, Duncan v 226, 242 First National Bank of Mount Pleasant v. Tintsman 226 First National Bank of Nashville v. National Surety Company „ 310 First National Bank of Newport, First National Bank of Birming- ham v Ill, 138 First National Bank of Newton v. Turner 232,238,241 First National Bank of North Ben- nington v. Town of Bennington. 418 First National Bank of Ocala, Camp etal. v 119,125,181 First National Bank of Ogden, Utah, Hamer v !._. 161 First National Bank of Olney, Ellis v ; 230 First National Bank of Omaha v. Chilson . 291 First National Bank of Omaha v. County of Douglas 503, 525 First National Bank of Omaha v. First National Bank of Moline. . 100 First National Bank of Omaha, Wood River Bank« 65,106 First National Bank of Orleans, State of Nebraska v 129, 271, 415 First National Bank of Ottawa, Eldera 270 First National Bank of Paducah v. Wisdom's Executors 171, 286 First National Bank of Pensacola, Oxford Lake Line v 112 TABLE OF OASES. 569 Page. First National Bank of Peoria v. Commercial National Bank of Peoria 439 First National Bank of Pierre v. Smith 423, 436 First National Bank of Plattsburg v. Sowles et al. (first case) 341 First National Bank of Plattsburg, Sowles v. (second case) 287 First National Bank of Pittsburgh, Saff ord v 494 First National Bank of Plattsmouth v. Gibson et al 411, 443 First National Bank of Pocatello v. Bunting, C, & Co., et al 196, 212 First National Bank of Port An- geles, Tootle et al. v 435 First National Bank of Richmond v. City of Richmond et al 501 First National Bank of Richmond v. Davis (N. C. case) 98 First National Bank of Richmond v. Wilmington and Weldon Rail- road Company 112 First National Bank of Ripley, Shinklev 222,231 First National Bank of Riverside v. Jacoby 112 First National Bank of Roanoke v. Terry's Administrators 156, 260 First National Bank of Rochester v. Harris 416 First National Bank of Rochester v. Pierson 423 First National Bank of Russell, Shaferw 224 First i National Bank of Salina, Teague v 238 First National Bank of Sandyhill v. Fancher 522 First National Bank of Seattle v. Harris 292 First National Bank of Selma v. Colby 21 First National Bank of Selma, Schmidt v. (La. case) 261 First National Bank of Sharon, Pa., v. Valley State Bank of Hutchin- son et al 536 First National Bank of Sheffield et al. v. Tompkins 298 First National Bank of Shelby ville, Meridian National Bank of Indianapolis v 72 First National Bank of Shenan- doah, Riverside Bank v 74 First National Bank of Sheridan, Wyo., v. Citizens' State Bank of Dubuque 323 First National Bank of Sioux City, Missouri River Telegraph Com- pany v 240,249 First National Bank of Sioux City v. Peavey 32,249,409 First National Bank of South Bend v. Lanier 38, 269, 419, 451 Page. First National Bank of South Wey- mouth, Nineteenth WardBankw. 127 First National Bank of Spokane Falls et al., American Exchange National Bank of New York v. 316,329 First National Bank of Springfield, Springfield, City of , v 501 First National Bank of St. Albans, ' in re 475 First National Bank of Sturgis v. Bennett 326 First National Bank of Sutton v. Grosshans et al 17, 429 First National Bank of Tama city, Iowa, Spafford v 416, 426 First National Bank of Tecumseh v. Overman 240 First National Bank of Tobias v. Barnett 232, 238 First National Bank of Tobias, McGhee?) 225,235 First National Bank of Tuscaloosa, Brown v. (Ala. case) 149 First National Bank of Union Mills v. Clark 53,130 First National Bank of Uniontown v. Stauffer 224 First National Bank of Utica v. \ Waters etal 516 First National Bank of Washington i'. Whitman 52 First National Bank of Waterloo v. Elmore 428 First National Bank of Waxa- hachie, Coleman v 64 First National Bank of Wellington, Ohio, *'. Chapman, treasurer of Loraine County : 506, 520 First National Bank of Wellsburg v. Kimberlands 324, 325, 326 First National Bank of Wellston v. Armstrong 96, 402, 414 First National Bank of Westfield, Mass., Smith v 139, 416 First National Bank of West- minster, Black v 298 First National Bank of White Hall, respondent, v. Lamb, James, et al 225 First National Bank of White Sul- phur Springs v. Collins 284 First National Bank of Willimantic v. Bevin 296, 322 First National Bank of Wilming- ton v. Herbert, state treasurer. . . 502 First National Bank of Wilming- ton, Lieberman v 306 First National Bank of Wilson, Kennedy v 456 First National Bank of Woon- socket, Ellis et al. v 323, 396 First National Bank of Worcester, Mass., v. Lockstitch Fence Com- pany et al 281 First National Bank of Xenia, Allen v. (Ohio case) 223, 270, 426 570 TABLE OF OASES. Page First National Bank of Xenia v. Stewart 39,419,420 First National Bank of Youngs- town v. Hughes et al 509 First State Bank of Marion et al., Kansas State Bank v 97 Fish, Hallettv 162,547 Fish, United States v 350, 352, 357 Fisher v. Adams 201 Fisher v. Continental National Bank 77,203 Fisher v. Denver National Bank . . 81 Fisher, First National Bank of Leoti v 501 Fishery Knight 386 Fisher, Massey v 137, 207 Fisher, Mintuan v 42 Fisher, Simons v 323 Fisher v. Simons 183 Fish'er v. Tradesmen's National Bank 203 Fisher v. "United States National Bank 541 Fishers Yoder 190 Fitch etal., Gatch v 481 Fitze, National Bank of Com- merce v 296 Fitzpatrick, Second National Bank of Richmond v . . 224, 232, 233, 237, 238 Flack, Cockle v 218 Flanders, Nonotuck Silk Com- pany v 541 Flannagen et al. v. California Na- tional Bank et al 6, 319 Flathers, State National Bank v... 428 Fleckner v. United States Bank. . . 499 Fletcher, Lyndonville National Bank« 151, 173 Flint v. Board of Aldermen of Bos- ton 499,513 Florence Bailroad and Improve- ment Company v. Chase National Bank 8,222 Florida Land and Improvement Company, Merrill v 36, 449 Flour City National Bank v. Gro ver . 290 Flour City National Bank v. Miller. 221 Flower v. United States 373 Flynn v. Third National Bank et al., of Detroit 345 Fogarties & Stillman v. State Bank. 57 Foley et al., Dartmouth Savings . Bank?) 293 Follett et al. , Stephens v 493 Follett v. Tillinghast 191 Foll'sAppeal 456 Folsom, Continental National Bank v 255 Folsom, United States v 357, 376 Fonda, People v 385 Fonner v. Smith 56 Forest, First National Bank v 246 Forman's assignee, Citizens' Na- tional Bank of Danville v 232 Forstedt, United States National Bank of Holdredgen 302 Page. Forster v. Second National Bank . . 285 Fort Dearborn National Bank «. Security Bank of Renville 102 Fort Dearborn National Bank v. Seymour 6,296 Fort Dearborn National Bank v. Wyman 56 Fort Dearborn National Bank of Chicago, Trent Title Company v . 73 Fortier v. New Orleans National Bank 425,428 Foss v. First National Bank of Denver 144 Foster v. Broas. (Fosters. Row). 456, 465,466,489,491 Foster v. Chase et al 477 Foster, Chrystie et al. v 325 Foster v. Essex Bank 120 Foster, Hampton v 485 Foster v. Lincoln et al 469 Foster, Peters v 194 Foster v. Rincker 102 Foster v. Row. (See Foster v. Broas. ) Foster, Snyder v 467 Foster v. White. 447 Foster v. Wilson 477 Foster, administrator, Witters, re- ceiver, v I.. 246,348 Fouche, Merchants' National Bank of Rome v 34, 294 Fourth National Bank, jEtna Na- tional Bank v 119 Fourth National Bank, Hatch v . . 84 Fourth National Bank, Heinz v. . . 297 Fourth National Bank, Ulster County Savings Institution v . . . > 256 Fourth National Bank of Louis- ville, First National Bank of Evansville v 110, 301 Fourth National Bank of St. Louis et al. v. Albaugh et al 162 Fourth National Bank of St. Louis, Park Hotel Company v 10 Fourth National Bank of Wichita et al. , Rock Island Lumber and Manufacturing Company v 24 Fourth Street Bank, Crane v 113 Fourth Street National Bank of Philadelphia v. Yardley 52, 545 Fowler v. Equitable Trust Com- pany 221 Fowler v. Scully 428,429 Fox v. Home Company 11 Francis v. Peoples' National Bank (Ohio) 127 Francis, Peoples' State Bank (North Dakota) v 188 Franklin Bank v. Byram 62 Franklin County National Bank v. Beal 96 Franklin National Bank v. New- combe 83, 84 Franklin National Bank, city of New York, Elder v 47 Frantz et al. v. Porter et al 67 TABLE OF OASES. 571 Page j Frater, receiver, v. Old National Bank of Providence 473 Frazer v. Seibern 514 Frederick County, County Com- sionera of, v. Farmers and Me- chanics' National Bank of Fred- erick 509 Freedman's Savings and Trust Company, State Bank v 136 Freeman Manufacturing Company v. National Bank of the Re- public ' 176 Freeman's National Bank, Peo- ple's National Bank v 112 Freiberg v. Stoddard 100 Frelinghuysen, Tuttle v 207 Frelinghuysen, receiver, Balbach et al. * 57, 87, 119, 122, 391,538 Frelinghuysen, receiver, etc., v. Baldwin et al 193 French, Brown v 150, 185, 500, 524 French et al., United States v. . . 356, 365 Freund v. Importers and Traders' National Bank 71 Fribergv. Cox 60,538,543 Friedley r. Bowen 427, 428, Friend, in re 95 Fry, Durnont v 259 Fuchs, El Paso National Bank v . . 140, 143, 388 Fulton v. National Bank of Denison . 78,80 Fulton National Bank, Egerton v. 127 Furber v. Stephens 210 G. Gaar v. Centralia National Bank.. 416 Gadsen, Schuyler National Bank v 222, 429 Gage Hotel Company v. Union Na- tional Bank ' 55 Gager et al. v. Paul et al 197 Gale v. Chase National Bank 68, 319 Gale, Israel v 7, 10 Galland, National Bank of Com- merce of Tacoma v 284, 400 Galli, Casey v 147, 398, 400, 403, 459, 481, 485, 487, 490 Gallot v. United States 16, 358, 380, 381, 383 Gait, Buehlerv 71 Gardes v. United States 376, 381, 382 Gardner v. Dunn , 281 Gardner, Robinson v 119 Garfield National Bank v. Kirch- way 17 Garlinghouse et al., First National Bank of Columbus v 221, 222, 223 Garner v. Second National Bank. . 21 Garthwaite et al. v. Bank of Tu- lare 42,49,168 Gaslin, Merchants' National Bank v 181,264,268 Gasting, States -. 75 Gatchv. Fitch etal 481 Gatch et al. Sunman v 481 Page, Gay, National Exchange Bank v. . 406 General Electric Company of New York, et al. , Whitney et al. u... 186 George v. SomerviHe 436 George et al. v. Wallace et al 12, 267, 432, 456 Georgia National Bank v. Hender- son '. 103 German, United States v 380, 382 German Bank of Carroll County, First National Bank of Manning v 106 German- American National Bank, Benton*) 1 297 German- American National Bank, Old National Bank of Evans- ville v 91 German American Mutual W. and S. Company, National Park Bank?) 11 German Insurance Company et al., Thompson v 486, 494 German Insurance Company of Freeport v. Kimble 94 German National Bank v. Grin- stead 56, 89, 319 German National Bank v. Leonard . 157 German National Bank v. Louis- ville Butchers' Hide and Tallow Company 434 German National Bank v. Meadow- croft 434,437 German National Bank et al., Speckert et al. v 192, 194, 252 German National Bank of Chicago v. Kimball : 526 German National Bank of Cincin- nati, Burnett Woods Building and Savings Company v 47, 48 German National Bank of Lincoln, Columbia National Bank, of Lin- coln v 56, 389, 395 German Savings Bank v. Citizens' National Bank 46, 64, 169' Germania Bank of New York v. La Follette et al 8 Germania National Bank of New. Orleans^. Case 77, 250,459,461,468,471,473 Germania Safety Vault and Trust Company v. Driskell et al 294 Germania Safety Vault and Trust Company, First National Bank v 160,259 Gerner v. Mosher et al 245, 336 Gerner v. Thompson 164, 343 Gerner v. Yates etal 382 Getman v. Second National Bank of Oswego 243 Gettysburg National Bank v. Chis- holm 283 Gettysburg National Bank v. Kuhns 122 Gibbons v. Anderson 339, 347 Gibbons?;. Hecox 259 Gibbsu. Howard 386 572 TABLE OF CASES. Page. Gibson et al., First National Bank of Plattsmouth v 411, 443 Gibson, Kennedy v 146, 181, 245, 456, 457, 459, 483, 485, 486, 487, 497 Gibson v. Peters 146 Gilberts McNulta 194 Gilcrest, Buffalo County National Bank?) . 16 Gill, Anderson v 104, 107 Gill v. First National Bank. 280, 302, 435 Gill, Guthrie National Bank v 54 Gillespie, Union Stock Yards Na- tional Bank v 44 Gilliam v. Merchants' National Bank 55 Gilmore et al., McOonville v 12, 13 Ginty, California National Bank v. 227 Girard National Bank, Harvey v. . 105 Girault v. United States 376, 381, 382 Givan v. Bank of Alexandria 109, 110, 113 Gladstone, Lindsay v 447 Gladstone Exchange National Bank v. Keating 44 Glen v. Porter 455 Glendon,Merchants'NationalBank of Bangor v 399 Glenn, Hawkins v 494 Glenn v. Liggett 494 Glenn v. Marbury 494 Glenn v. Noble 42 Glines v. State Savings Bank 62 Globe Savings Bank v. National Bank of Commerce of New Lon- don, Conn., et al 126 Goddard, National Park Bank v.. 24 Godfrey, Dow Law Bank v 282 Godin v. Commonwealth Bank 44 Goldsbury v. Inhabitants of War- wick 513 Goldsmith, Holmes v 248 Goldthwaite v. National Bank.. 387,388 Goll, States 448 Gottfried v. Miller 499 Goodu. Martin 281 Goodel, Sinclair T. M. , & Co. v . . . 55 Goodloe, Hauerwas v 152, 155 Goodrich Bros. Banking Company, Schofieldfl 421,478 Goodvin v. Nichols 156, 278, 317 Gordon, Champion v 42 Gordon v. Third National Bank of Chattanooga 287 Gordon et al. v. Muchler 56 - Gove, East River National Bank v. 332 Goshen National Bank v. Bingham. ' 69 Goshen National Bank v. State . . . 331 Gould, Hobart, receiver v 482 Government National Bank of Pottsville, Lucas v 224, 243 Graham, First National Bank of Carlisle v 137, 138, 139, 140 Graham v. National Bank of New York 429 Graham v. Piatt 464 rage. Grant v. Spokane National Bank etal 188 Grant, Union National Bank of New Orleans v 282 Grant County Deposit Bank et al., Blades v 74 Graves v. Corbin 254 Graves v. Lebanon National Bank. 304, 306 Graves v. United States 378 Graves, United States v 356, 357, 444 Graves et al. , Welles v. . 163, 164, 343, 344 Gray v. Hollo 386 Grays Harbor Commercial Com- pany v. Continental National Bank 104 Grayson County National Bank, Neely v.... 391 Great Western Elevator Company, Citizens' National Bank of Water- town v 400 Green, Mount Sterling National Bank v 50 Green r. Oddfellows' Savings and Commercial Bank 145 Green v. Purcell National Bank (Ind.T.) 62 Green v. Walkill National Bank. . . 182 Greene v. Bank of Camas Prairie. . 155 Greene, Home v 75 Greene et al. , Farmers and Traders' National Bank of Covington v . . 160 Greene County State Bank, Ar- mour v 45, 164 Greenfield, School District of, v. First National Bank 45, 123, 536 Greenup, Lawrence v 196 Greenville Oil and Cotton Com- pany, First National Bank of Greenville v 431, 435 Greer t. The Dalles National Bank . 539 Greer, United States National Bank« 97 Gregg, American Exchange Na- tional Bank v 62 Gregg v. Bimetallic Bank 88 Gregory et al. v. Sturgis National Bank 113 Griffins Peters 439,440- Griffin v. Rice 127 Grinstead, German National Bank?) 56,89,319 Grisson v. Commercial National Bank '. 127 Groosi). Brewster 431 Grosner v. Farmers' Bank 26 Grosshans et al., First National Bank of Sutton v 17,429 Grover, Flour City National Bank v . 290 Grow a. Cockrill 271 Gruber, First National Bank of Clarion v 226, 228, 236, 240 Grueter v. Stuart 17, 468 Grundy County National Bank v. Bulison 162 TABLE OF OASES. 573 Page. Guarantee Company of North • America et al., Blackmore v 306 Guarantee Company of North Da- kota v. Hanway 13, 253 Guarantee Trust and Safe Deposit Company of Shamokin, Second National Bank of Pittsburg v 169 Guelich v. National State Bank of Burlington 88, 109 Guernsey v. Black Diamond Coal and Mining Company 324 Guignon v. First National Bank of Helena et al 102, 215, 540 Guild v. First National Bank, Dead- wood 228, 241 Guilmartin, Merchants' National Bank of Savannah v 139 Gulick, Exchange Bank v 25 Gunst, National Park Bank v 412 Guthrie v. Reid 85, 224, 236 Guthrie National Bank v. Gill 54 Guttschlick, Bank of the Metropo- lis (of Washington, D. C. ) v 499 Guyon, Berney National Bank v. . 439 G. Y. B. Mining Company, First National Bank of Hailey v 271 H. Hackettstown National Bank >■. Ming . . .*. 149 Hadden v. Dooley 18, 23, 177, 322 Hade, Receiver, v. McVay. . 230, 240, 392 Hadley, Craig et al. v 211 Hagar v. Union National Bank 22, 39, 258, 420 Hager v. National German-Ameri- can Bank 296 Haines et al., Detroit Savings Bank v 19,153 Haire, First National Bank v... 426, 427 Hale, Leach a 141,418 Halet). Walker 461 Hale, Wherry i> 424,428 Hall v. Farmers and Merchants' Bank 428,436 HalLet al., First National Bank of Cambridge, 111. v 17, 127, 187 Hall et al. ,• Robinson v 314, 337 Hallam p. Tillinghast 99 Hallettfl. Fish... 162,547 Hallowell National Bank v. Mars- ton 288 Hallowell Savings Institution i: Titcomb et al 128 Halsey, Ackeraian v - . 345 Halsey, Alabama National Banki'. 292 Halsey, Conway v 345 Hamer v. First National Bank of Ogden, Utah 161 Hambright v. National Bank 238 Hammond, American National Bank of Denver v 437 Hammond, Maine Mile Track As- sociation v 60 Hampton v. Foster 485 Hancock v. Colyer 26 Page. Hancock National Bank v. Ellis . . 487 Hanna et al. v. Drovers' National Bank 45,50,535 Hanna et al. o. People's National Bank 34,346 Hanover Nantional Bank, Bell v. 205, 330 Hanover National Bank v. Cocke etal 456 Hanover National Bank of City of New York v. First National Bank, Burlingame... 324,329,415,438 Hanover National Bank v. John- son 398 Hanson, Merchants National Bank of St. Paul v 289, 423 Hanwav, Guarantee Company of North Dakota v 13, 253 Harbine Bank of Fairbury, Be- dell v 104 Harding, Des Moines National Bank v 276 Harding, Phipps etal. v 282 Harmon, National Park Bank of City of New York v 472 Harmon, Tecumseh National Bank v 411 Harper, United States v 349, 352, 355 Harriman Iron Company, Wins- low v 297 Harrington v. First National Bank (Illinois case) 60 Harrington v. First National Bank of Chittenango (New York case) 303 Harris, Atlantic National Bank v. 405 Harris, First National Bank of Rochester v 416 Harris, First National Bank of Seattle v 292 Harrison, Bank of Commerce v. 135, 145 Harrisons. Smith 137 Harrison et al., Third National Bank v 289, 298 Hartford Deposit Company, Chem- ical National Bank of Chicago v 181, 200, 256 Hartford National Bank, State v . . 404 Harter et al., Mechanics' National Bank of Trenton v..,. 169 Harvey v. Allen 21 Harvey v. Girard National Bank. . 105 Harvey, receiver, etc., v. Lord ... 484 Haseltine et al. v. Central National Bank of Springfield, Mo 229, 231, 236, 237 Haskell et al., Cochecho National Bank v 148, 320, 331 Haskell et al., Union Stock Yards National Bank v 536 Hastings, Third National Bank v.. 9 Hatch v. City Bank 447 Hatch v. First National Bank of Dexter 16, 135 Hatch v. Fourth National Bank ... 84 Hatch v. Johnson Loan and Trust Company et al 64, 183 574 TABLE OF CASES. Hathaway v. First National Bank of Cambridge 15,408 Hauerwas v. Goodloe 152, 155 Haugan v. Sunwal 315 Haughey, Prescott v 336 Hauptmans. First National Bank. 130 Haven, American Railroad Frog Company v 447 Havens v. Bank of Tarboro et al . . 40 Havens v. National, City Bank of Brooklyn 25 Havermale, Chemical National Bank of New York v 421, 422, 478 Hawkins v. Cleveland, Cincinnati, Chicago and St. Louis Railroad Company 540 Hawkins, Citizens State Bank of Noblesville v 478 Hawkins, Cooper Insurance Com- pany v 479 Hawkins, First National Bank of Concord v 420, 436, 478 Hawkins v. Glenn 494 Hawkins v. State Loan and Trust Company 195 Hawkins, Wasson v 210 Hawley, Molson v 7 Hayden v. Brown 197 Hayden v. Chemical National Bank ofNewYork 203 Hayden, Stuart v 17, 409, 468 Hayden v. Thompson 164, 193, 196, 197, 343 Hayden v. Williams 152, 197 Hayes v. Fidelity Insurance, Trust, and Safe Deposit Company. .... 472 Hayes, Hughitts 393,394 Hayes v. Shoemaker 466 Hayes, receiver, v. Beardsley 206 Hayes, Auburn Savings Bank «... 190 Haynes v. Wesley 49 Hay ward v. Eliot National Bank.. 38 Hazards. National Exchange Bank of Newport 454 Hazleton v. Union Bank 121 Hazlett v. Commercial National Bank 107 Heath v. Second National Bank of Lafayette -_ 424 Hecox, Gibbonss -.... 259 Hedlund v. Dewey 469 Heidelbachs.NatfonalParkBank. 65, 396 Heilbron, Millers 528 Heinz v. Fourth National Bank . . 297 Heironimus v. Sweeny 133 Helweges. Hibernia National Bank 71 Helyer, First National Bank v 159 Hendee v. Connecticut and Pas- sumpsic Railroad Company 246 Henderson, Georgia National Bank v 103 Henderson, Meldrum v 543 Hendersons. Myers 196 Hendersons. O'Connor 93 Henderson, C. M., & Co. u. United States National Bank 60 Page. Henderson National Bank, Alves v 220,224 Henderson Trust Company v. Ragan et al 169 Henderson, to use of Second Na- tional Bank of Titusville.ti.Waid. 224 Hennessy v. City of St. Paul et al. 436 Hennessy Bros. & Evans Co. v. Memphis National Bank 62, 63 Hepburn v. Danville National Bank, Texas 412 Hepburn v. Kincannon 32, 188 Hepburn v. School Directors of Carlisle 518,521 Hepburn, Short et al. v 162, 189, 410 Heppes, Boston Commercial Banks 299 Herbert, State treasurer, First Na- tional Bank of Wilmington v. 502 Herider v. Phoenix Loan Associa- tion 105 Herman, in re 184 Herod, Rankin v 191 Herold, Sickless 390 Hershire, First National Bank v. . . 522 Hershire v. First National Bank. 504, 522 Hettinger, Myers v 32, 190, 286 Hewitt, Second National Bank of Reading v 290 Hibernia National Bank, appeal of. 471 Hibernia National Bank, Hel- wege v 71 Hide v. Holmes 447 Hiers, English-American Loan and Trust Company v 298 Higbee, Bellvue Bank v 39 Higgins v. Fidelity Insurance, TrustandSafeDepositCompany. 472 Higgins, New York Breweries Company v 212 Higgins, Tomblin v 235 Higgins v. Worthington 392 Highley v. First National Bank of Beverly 231 Hill, Blairs 89 Hill, Bowkerw 26 Hill, Cooper v 304, 337, 343, 432 Hill, Leach v 64,68 Hill v. National Bank of Barre. . 224, 233 Hill, admr., etc., Roberts, re- ceivers 204,208 Hill et al., Union National Bank of Kansas City et al. v 340 Hilletal., Utley v 147 Hill, Geo. M., Company in re 396 Hilliard, Bank of Utica v 448 Hills v. National Albany Exchange Bank 248,511,523 Himrods. Baugh 387 Hindman v. First National Bank of Louisville et al 38,322,333,437 Hines v. Marmolejo 226 Hintermister v. First National Bank 221,233,239 Hirsch v. Jones et al 345 Hiscock v. Lacy 246 TABLE OF OASES. 575 Page. Hitchcock v. Bank of Suspension Bridge 106 Hitz v. Jenks 185 Hitz, Keyser v. 145, 274, 398, 400, 403, 475 Hoagland, Farmers and Mechanics Bank v 229 Hobart, receiver, v. Gould 482 Hobart, receiver, etc., v. Johnson. 458 Hobbs v. Chemical National Bank . 410 Hobbs v. Chicago Packing and Pro- vision Company 112 Hobbs v. Western National Bank. 454 Hoch, First National Bank of Allentown v 418, 422 Hocking, Wadsworth v 498 Hodgin v. People's National Bank. 127, 389, 395 Hodgson v. McKinstray 267 Hoffman, Farmers and Traders' National Bank v 502, 503 Hoffstetter, Dougherty v 291 Hoke v. People 385 Holaii, National Bankof Decorahw. 292 Holder v. Western German Bank. 113 Holloway , Sy kes v 467, 469 Holm etal. , Atlas National Bank v. 281, 288 Holmes v. Boyd 427 Holmes v. Goldsmith 248 Holmes, Hide v 447 Holmes, executor, Benton v 386 Holt v. Thomas 483 Home Bank, Martin et al. v 104 Home Company, Fox v 11 Homer v. National Bank of Com- merce of St. Louis 260, 395 Honig v. Pacific Bank 123, 132 Hood, Wallaces 419,490 Hoover v. Wise 108 Hopley, Hunt v 129 Hopper v. Moore 404 Hornblower et al., Randolph Na- tional Bank v 72 Home v. Greene 75 Horton v. Mercer - 470 Hot Springs Independent School District, etc., v. First National Bank of Hot Springs 192 Houghton v. Hubbell 463 Houston, Citizens' Bank v 94 Houston, Skiles v 393 Houston, J. M., Grocery Company v. Farmers' Bank 53 Howard, Gibbs v .' 386 Howard National Bank of Bur- lington v. Loomis 426 Howe v. Barney et al 345 Howell v. Adams 145 Howell, Citizens' Bank v 109 Howell v. The Village of Cassop- olis 513 Hower v. Weiss Malting ahd Ele- vator Company et al 176 Hubbard et al., First National Bank of Montpelier v 255 Hubbard, county treasurer, Mer- cantile National Bank of Cleve- land v 523 Hubbell, Houghton v 463 Hubbell et al., Smithson v 191 Huffaker v. National Bank of Mon- ticello 147,401 Huggins et al. v. Citizens' National Bank of Kansas City 230 Hughes, Commercial Bank v 125 Hughes, First National Bank v ... 86 Hughes v. Neal Loan and Banking Company Ill Hughes, People's Savings Bank v. 320 Hughes v. School District 404 Hughes v. Settle 295 Hughes et al., First National Bank of Youngstown v 509 Hughitt v. Hayes 393,394 Hughitt, United States v 356 Hulburd, Van Antwerp v 76, 184, 251 Hulings v. Hillings Lumber Com- pany et al 54 Hulitti). Bell etal 34 Hulitt v. Ohio Valley National Bank 471 Hulitt, in re 34, 458 Hull et al., Wickham*. 194, 248, 479, 489 Hum v. Union Bank 109 Hummel v. First National Bank of Central City 398 Humphrey, Depeau" v 218 Humphreys, Marine National Bank v 288, 290 Humphreys v. Third National Bank of Cincinnati ... 15, 155, 159, 408 Hungerford National Bank r. Van Nostrand 398 Hunt, appellant 132 Hunt, in re 423 Hunt v. Hopley 129 Hunt v. Townsend 95 Hunter, City National Bank of Fort Worth v 273 Hunter, First National Bank of Morristown v 237 Huntington Distilling Company, First National Bank of Ceredo v. 262 Hutchins v. Planters' National Bank of Richmond 431 Hutchinson National Bank v. Crow 157, 443 Hutton, Taylor v 303, 327 Huyler v. Cragin Cattle Company. 447 I. Ihl v. St. Joseph Bank 120 Illinois, Bradley v 514 Illinois National Bank v: Kinsella. 511 Illinois Paper Company v. North- western National Bank 205 Illinois Trustand Savings Company v. First National Bank and an- other, receiver 539 576 TABLE OF CASES. Page. Imperial Roller Milling Company v. First National Bank of Cle- burne 387 Implement Company ?'. Stevenson. 31 Importers and Traders' National Bank, Freund v 71 Importers and Traders' National Bank, McGhee v 176 Importers and Traders' National Bank v. Peters et al 95, 211 Indiana National Bank v. First National Bank 166 Indiana National Bank, Meyer et al.« 167 Indianapolis National Bank, Lake Erie and Western Railroad Com- pany v 211 Indian Head National Bank v. Clark 9 Industrial Manufacturing Com- pany, Davis v 391, 395 Ingersoll et al., Nehawka Bank v . 51 lngerson, Bank of Montreal v 107 Insurance Company, National Bank v 44, 122, 181, 264, 498, 540 Insurance Company c. Phinney - . 17 In re Aldrich et al 74 In re Armstrong (2 cases) 91, 203 In re Baldwin's Estate 133, 135 In re Bank of Minnesota 89 In re Bank of West Superior, Good- vin v. Nichols . . . . : 156, 278, 317 In reBates 439 In re Beard's Estate 480 In re Braden's Estate 37 In re Burtons and Saddler's Com- pany 447 In re certain shareholders of Cal- ifornia National Bank of San Diego 480 In re City National Bank of Fort Worth 273 In re Claasen 383 In re Commercial Bank 212, 537 In re Connaway, receiver 409 In re Duryea 249 In re Earle 83, 191, 480 InreEdson 270,287 In re Eno 385 In re First National Bank of St. Albans 475 In re Friend 95 In re Herman 184 In re Hill, Geo. M., Company 396 InreHulitf. 34,458 In re Hunt 423 In re Josephson 276 In re Joint Stock Discount Com- pany 447 In re Lilienthal 24 In re Madison Bank 119 In re Manufacturers' National Bank 179 In re McMahon v. Palmer 533 In re Meyers . . - : 85 In re Mutual Building Society 137 In re Non-Magnetic Watch Com- pany of America 79 Page. In re North River Bank : 539 In re Penn Bank 145 In re Sage v. Lake Shore and Mich- igan Southern Railway Com- pany 448 In re Scherzer 396 In re State Bank 108 In re Third National Bank 184 In re Van Campen 351, 353, 357 In re Washington Bank, receiver- ship of 97 In re West Devon, etc 448 Inre Wild 225 Interstate National Bank of Texar- kana, Norwood v 14, 268 International Trust Company, Weeks?) 249,257 Iowa, Easton v 384, 385, 413 Iowa National Bank of Des Moines, White etal. v 18,263 Iowa Paper Bag Company et al., Thilmanyi) 431 Irasburg National Bank of Orleans, ' Dow?; 240 Iron City National Bank v. Peyton. 171 Iron City National Bank of Llano v. Fifth National Bank of San Antonio 150,322 Iron National Bank of Plattsburg et al., Tuttle et al. v 268, 406 Irons, Richmond?'. 183, 201, 215, 217, 265, 266, 335, 457, 463, 465, 466, 479, 481, 497 Irons, Weaver v 67 Irons, executor, v. Manufacturers' National Bank of Chicago 180, 202, 265, 467, 497 Irving Bank v. Wetherwald 69 Irwin v. Reeves Pulley Company. . 109 Israel v. Gale 7,10 J. Jackson, Bundy, receiver, v 36, 453 Jackson v. Fidelity Casualty Com- pany 182 Jackson v. United States 76, 214 Jackson Insurance Company v. Cross 121 Jackson Paper ManufacturingCom- pany v. Commercial National Bank 70 Jacksonville National Bank, Bos- worth v 53 Jacobson v. Monongahela National Bank of Brownsville 22 Jacobus v Bank of Commerce. . 43, 60, 66 Jacoby, First National Bank of Riverside v 112 James, J. M., Company v. Conti- nental National Bank 52, 160 Jamison, McGough et al. v 145 Janin (Third National Bank of New York, intervener) , Citizens' Bank of Louisiana v 79 Jansen, Metropolitan National Banku 16 Jefferson County Savings Bank v. Commercial National Bank 107 TABLE OF OASES. 577 Page. Jenkins v. National Village Bank of Bowdoinham 82 Jenkins v. Neff 518 Jenks, Hitzi; '.. 185 Jewett, Philler v 395 Jewett, United States v 12, 359, 366 Jewett v. United States 12, 353, 359, 362, 366 Jewett v. Whitcomb et al 192 Jewett et al. v. Yardley 542 Johnson, Bowden v 459, 467, 481, 486 Johnson v. Charlottesville National Bank 6,7 Johnson, Exchange National Bank v 291 Johnson, Hanover National Bank v . 398 Johnson, Hobart, receiver, etc., v . 458 Johnson, National Bank of Glovers- villew 219,225,226 Johnson, St. Louis, City of , v 535 Johnson, Ward v 137, 535 Johnson Loan and Trust Company etal., Hatch v 64,183 Johnston, First National Bank of Decatur v 204 Johnston v. Laflin 451, 452, 453 Johnston, Rosenplatt v. 186 Johnston, receiver, St. Louis and San Francisco Railway Com- pany v 91,209 Johnstone Fife Hat Company v. Na- tional Bank of Guthrie 332 Joint Stock Discount Company, in re 447 Jones, Bank of Northern Liber- ties v 119 Jones, Davey v 108 Jones v. First National Bank of Lin- coln 301 , 326 Jones, May v 56 Jones, Moore v 461, 471 Jones v. Eushville National Bank . 523, 526, 530 Jones et al., Hirsch v 345 Jones, Governor of Arkansas, et al., Farmers' National Bank of Hud- son v 256, 273 Joplin Savings Bank, Currey v 136 Jordan, administratrix, etc., v. Na- tional Shoe and Leather Bank. . 389 Jose, Boston National Bank of Seat- tle v 283 Josephson, in re 276 Joyce v. Auten 258 Joyce, Cockrillu 80,259 K. Kain, State Bank v 121 Kaiser et al. v. First National Bank of Brandon 288, 289 Kaiser v. United States National Bank 10 Kansas Grain Company, First Na- tional Bank v 50 Kansas National Bank, Martin v.. 44 4049—05 37 Page. Kansas National Bank v. Quinton. 416 Kansas State Bank v. First State Bank of Marion et al 91 Kansas Valley National Bank v. Kowell 427 Kassler v. Kyle et al . 33 Karmany, Lebanon National Bank v 228, 231, 233, 237, 240 Keating, Gladstone Exchange Na- tional Bank v 44 Kelley v. Phcenix National Bank. . 89 Kellogg, Dern v 104 Kelly?;. Phelan 80 Kelly, Weaver v 191 Kelly, Maus & Co. v. Sioux City National Bank et al 254 Kelsey v. National Bank of Craw- ford 405 Kemp et al. *. National Bank of the Republic of New York 19, 275,341,441 Kennedy, Baker v 119 Kennedy, California National Banka 250,421,477 Kennedy v. First National Bank of Wilson 456 Kennedy v. Gibson .... 146, 181 , 245, 456, 457, 459, 483, 485, 486, 487, 497 Kennedy, Le Sassier v 255 Kennedy, National Bank of the Metropolis v .• 182 Kenneth Investment Company v. National Bank of the Republic of St. Louis 44,153,165 Kenney, United States v 358 Kensington National Bank, De Haven v 140 Kent v. Dawson Bank 86 Kentucky, First National Bank of Louisville v 499 Kentucky Flour Company, as- signee, v. Merchants' National Bank, Kentucky 395 Kentucky National Bank, Louis- ville Trust Company v ... 233, 239, 242 Kerrt). Urie..' 470,475 Kershaw v. Ladd et al 110 Ketner, Commonwealth ex rel., Torrey v 385 Keysert). Hitz. 145, 274, 398, 400, 403, 475 Kidd, First National Bank of Mem- phis v 398 Kilby v. First National Bank 391 Kilgore v. Bulkley 131 Killen v. State Bank of Manitowoc etal 498 Kimball v. Dunn 162 Kimball, German National Bank of Chicago v 526 Kimball, Scammon v 386 Kimball, United States v 359 Kimball, Wickerson v 528, 529 Kimborlands, First National Bank of Wellsburg v 324, 325, 326 Kimble, German Insurance Com- pany of Freeport v 94 5T8 TABLE OF CASES. Kincannon, Hepburn v 32, 188 King v. Pomeroy 1 266 King et al. v. Armstrong, receiver. 482, 485, 495 King County, Commercial National Bank v 517 King County, Washington National Bank of Seattle v 517 King County et al., Puget Sound National Bank of Seattle v ... 517, 520 Kinsella, Illinois National Bank v. 511 Kiper et al., Omaha National Bank v 19,87 Kipp, McCartney v 270 Kirchway, Garfield National Banka 17 Kirkham v. Bank of America 98, 104 Kirkwood v. Exchange National Bank 289 Kirkwood v. First National Bank of Hastings 289 Kirtley's admrx. v. Shinkle 38 Kissam v. Anderson ' 322, 390 Kleopfer v. First National Bank of Herrington 50 Klepper v. Cox 544 Knapp, Williamsport National Bank» 160,251 Knecht v. U. S. Savings Inst 119 Knickerbocker v. Wilcox 5,7 Knight, Fisher v 386 Knipe, Yakima National Bank v. 227,400 Knipp, Davis v 392 Knox, United States v 457, 461 Knox, Whiter 215,216 Kost, Wheelockt; 147,179,401,461 Kountz, Richards v 277, 429 Kuenster, Waterloo Milling Com- pany V-. "88,109 Kuhns, Gettysburg National Bankw 122 Kuler, Buggies v 386 Kyle et al., Kassler v 33 Kyle v. The Mayor, etc 513 L. Lacy, Hiscock v 246 Ladd etal., Kershaw v 110 La Dow v. First National Bank . . . 227 Lafayette County Bank, With- ers v 300 Laflin, Johnston v 451, 452, 453 La Follette et al., Germania Bank of New York v 8 La Grande National Bank v. Blum . 283 La Grange Butter Tub Company v. National Bank of Commerce 439 Laingw. Burley 463 Lake Erie and Western Railroad "Company v. Indianapolis Nation- al Bank 211 Lake National Bank v. Wolfebor- ough Savings Bank etal 189 Lake Shore and Michigan South- ern Railway Company, in re Sage?; 448 Paget Lake Shore and Michigan South- ern Railway Company, Peo- ples 447, 448 Lamb, Wasson v 121 Lamb, James et al., First National Bank of White Hall, respond- ent, v 225 Lambert, First National Bank of Hastings v 278 Lamson v. Beard 160, 294, 300, 325 Lanaux, succession of 471 Lancaster Bank v. Woodward 62 Lancaster County National Bankt). Boffenmyer 285 Lancaster County National Bank, County of Lancaster v 509 Land, Camp v 428,436 Land Title and Trust Company v. North Western National Bank. . 167 Lander v. Mercantile National Bank 522,524 Lanham v. First National Bank of Crete 243 Lanier, First National Bank of South Bend v 38, 269, 419, 451 Lanterman v. Travous 541 Lantry v. Wallace 419, 449, 483, 490 Larabee, Welles v 472 Large v. Consolidated National Bank 448 La Rose et al. v. The Logansport National Bank et al 304, 306, 310 Larsen v. Utah Loan and Trust Company 272 Lasater, First National Bank of Jacksboro v 219,239,243 Latimer v. Bard et al 30, 31 Latimer, Boone County National Banku 538,540 Latimer, Ripley National Bank v. 65, 159 Latimer, Scott v 27, 449, 456 Latimer v. Wood et al 199 Laughlin, First National Bank of Decorahv-- 283 Laurie, Wadsworth v 498 Law, Armstrong v 481 Lawrence v. Greenup 196 Lawrence, Stearns v 150, 327, 341 Lazear v. National Union Bank, Baltimore 222, 223, 238, 423 Leach v. Hale 141,418 Leach v. Hill 64, 68 Lealos v. Union National Bank . 238, 241 Lease v. Barschall et al 458, 461 Leather Manufacturers Bank, Dy- kers v 43, 48 Leather Manufacturers' National Bank v. Cooper, jr 254 Leather Manufacturers' National Banku. Treat 534 Leavitt, Curtis et al. v 218 LebanonNationalBank,Groves«. 304, 306 Lebanon National Bank v. Kar- many 228, 231, 233, 237, 240 Ledbetter, First National Bank of Mason v 223, 297 Lee, United States v 349,352 TABLE OF CASES. 570 Page. Lee, Washington County National Bank v 399 Lee et al. , Movius, receiver, v 303, 337, 338, 339, 347 Leffingwell, Swope v 424, 428 Lehman v. Rothbarth 16 Leiter, Murry, Nelson & Co. v 269 Leland, Bushnell v 180, 459 Leland, Neponset Bank v 80 Leonard, German National Bank v. 157 Le Sassier v. Kennedy 255 Levy, Bastrop State Bank v 124 Lewis v. Brainerd 447 Lewis, National Bank of Auburn v. 230, 231, 233, 236 Lewis v. Switz 462 Lexington Town Council v-. Union National Bank 418, 436 L'Herbette v. Pittsfield National Bank 124,435 Libby v. Union National Bank . . . 424 Liebermann v. First National Bank of "Wilmington 306 Liggett, Glenn v 494 Lilienthal, in re 24 Lilly v. Board of Commissioners of Cumberland County 75, 115 Lincoln et al., Foster v 469 Lincoln Fuel Company, Commer- mercial National Bank v 68, 168 Lincoln National Bank v. Butler. . 282 Lincoln Savings Bank, Wallace v. . 345 Lindenstruth, First National Bank of Baltimore fl 262 Lindsay v. Gladstone 447 Linn County National Bank v. Crawford 8,189 Linton, tax collector, v. Childs 505 Little, Ellis?) 187 Little's administrator v. City Na- tional Bank of Fulton 387 Little Rock, Bank of, Exchange National Bank of Spokane v 172 Lionberger v. Rouse 499, 503, 514 Livingston County National Bank, Barker v 416 Lloyd, Metropolitan National Bank ofNewYorku 546 Lloyd v. Scott 219 Locke v. First National Bank 145 Lockwood v. Mechanics' National Bank ' 314,403 Lockstitch Fence Company etal., First National Bank of Worces- ter, Mass. ,v 281 Loeb, Teutonia National Bank v.. 80 Logan v. United States 76 Logan County National Bank v. Townsend . . 148, 250, 331, 414, 418, 432 Logan National Bank v. William- son 132 Logansport National Bank et al., La Rose et al., v 304, 306, 310 Lomb v. Pioneer Building and Loan Company 398 .Page. Lombard Investment Company of Kansas, New York Security and Trust Company et al. v... 174, 175, 202 Long v. Citizens' Bank 132, 334 Loomis, Howard National Bank of Burlington v 426 Lord, Harvey, receiver, etc. v 484 Louisiana National Bank v. Union National Bank 56 Louisville Banking Company v. Asher 151 Louisville Banking Company, Richardson v.... 101, 157, 185, 215, 543 Louisville Butchers' Hide and Tal- low Company, German National Bank v 434 Louisville, Nashville, Atlanta, and Cincinnati Railway Company, Uni6n National Bank of Chi- cago v 220 Louisville, New Albany and Chi- cago Railway Company, Louis- ville Trust Company v 294 Louisville Trust Company v. Ken- tucky National Bank 233, 239, 242 Louisville Trust Company v. Louis- ville, New Albany and Chicago Railway Company 294 Love, American National Bank v. . 283 Lovitt, Merchants' National Bank of Kansas City z> 300 Lowenstein v. Bressler 60, 108 Luberg v. Commonwealth 385 Lucas v. Coe 470 Lucas v. Government National Bank of Pottsville 224, 243 Luman, Rock Springs National Banki) 300 Lumbermen' s Bank v. Bearce 218 Lydane, Citizens' Savings Bank v. 296 Lynch v. First National Bank (N. Y. case) 69 Lynch, First National Bank of Ar- lington v. (Tex. case) 151 Lynchburg National Bank v. Marye, auditor public accounts. . . 116, 526, 527 Lyndonville National Bank v. Fletcher 151, 173 Lyons v. Lyons National Bank . . . 418 Mc. McAden v. Commissioners of Meck- lenburg County 512 McAnultv, Merchants' National Bankt/. 16,156,285 McBee v. Purcell National Bank.. 130 McCague Investment Company et al. n. Wallace et al 267, 432, 456 McCann v. First National Bank of Jeff ersonville 34 McCartney v. Kipp 270 McCartney et al. v. Earle 187, 190,251,440 McClaine, Aldrich * 496 580 TABLE OF CASES. Page. McClaine v. Kankin 484, 495 McClellan v. Chipman 440 McClure v. People 161 McClure, United States v 369 McConville v. Gilmore et al 12, 13 McCord v. California National Bank 60 McCormick Harvesting Machine Company v. Yankton Savings Bank et al 98, 161 MeCormick v. Market National Bank 117,256,401,402 McCreary v. First National Bank of Morristown 234, 240 MoCrory v. Chambers 416 McCulloch t>. Maryland 115, 507 McDonald v. American National Bank 144 McDonald, receiver, v. Chemical National Bank 67, 204, 207 McDonald v. Dewey et al 470 McDonald et al., Dingle'y v. . 47, 154, 496 McDonald v. First National Bank. 21 McDonald, National Gold Bank and Trust Company v 58 McDonald, Schaberg's estate v. - . 263, 485, 490, 493, 496 McDonald v. State of Nebraska . 134, 192 McDonald, receiver, v. Thomp- son 495, 496 McDonald, receiver, v. Williams.. 196 McDonnell, National Commercial Bank« 82,147 McDonnough v. National Bank of Houston 402 McDowell v . Bank of Wilmington and Brandywine 125 McEntire, First National Bank of Daltonu 222,234 McEwen v. Davis 122 McFarlan, Wherman v 435 McFarlin et al. v. First National Bank of Kansas City, Kansas. . . 464 McGee v. Importers and Traders' National Bank 176 McGeoch, Continental National Bank of Chicago v 18, 299, 418 McGhee v. First National Bank of Tobias 225,235 McGorray v. Stockton Saving and Loan Society et al 143 McGough et al. v. Jamison 145 Mclnturf, First National Bank of Hutchinson v 231, 233 Mclntyre, Bank v 405 Mclver v. Robinson 517 McKay, Young v 466 McKinney, First National Bank of Chadron v 158 McKinstray, Hodgson?) 267 McKnight v. United States 359, 361, 366, 371, 373, 374, 375, 379, 380 McLoghlin v. National Mohawk Valley Bank 125,161 McMahon, Palmer v. . . 517, 518, 524, 532 Page. McNair, United States National Bank v 290 McNier, Merchants' National Bank v 154 McNulta, Gilbert V '. '.'. ......... '.'. 194 McNulta v. West Chicago Park Commissioners . . 124, 129, 157, 539, 544 McPike, Tapleyn 495 McVay, Hade, receiver, v . . 230, 240, 392 McVeagh v. City of Chicago et al 520,529,530 McWilliams, Winfield National Banku 59,100,246 M. MacCarty, Wrights 70 Madison Bank in re v 119 Madison Insurance Company, Mix et al. v 218 Magruder v. Colston 471 Maguire v. Board of Revenue and Road Commissioners of Mobile County 502 Maher, receiver, Albany City National Bank * . . , '. 516, 525 Main, appeal of 16,128 Main, assignee, v. Second National Bank of Chicago 247 Main Mile Track Association v. Hammond 60 Manchester, etc., Railway Com- pany, Draper v 1 447, 448 Mandeville, Alexandria, Bank of, v. 218 Manhattan Savings Bank and Trust Company, Balling ?; 128 Manistee National Bank, Auten v 291,322 Mann, First National Bank v 80 Mann, United States v 506, 510 Mansfield Savings Bank, First Na- tional Bankfl 108 Manufacturers' National Bank v. Baack 444 Manufacturers' National Bank v. Barnes 46 Manufacturers' National Bank v. Continental National Bank 94 Manufacturers' National Bank in re 179 Manufacturers' National Bank, Schrader v ...... . 217, 264, 265, 335, 430 Manufacturers' National Bank of Chicago, Irons, executor, v 180, 202, 265, 467, 497 Manufacturers' National Bank of Chicago, People's Bank of Bell- ville v 430 Manufacturers and Mechanics' Bank of Philadelphia, Com- monwealth of Pennsylvania v. . 50fi Mapest). Scott 421 Maple, Merchants' National Bank v 55,387 Marberry v. Farmers and Mechan- ics' National Bank 82 TABLE OF CASE8. 581 Page. Marbury, Glenn v 494 Marine National Bank of New York, Crocker v 255 Marine National Bank v. Hum- phreys 288, 290 Marine Bank of Buffalo, Cottle et al. v -. 134 Marion National Bank, Brown v.. 234, 241, 244 Market National Bank, McCor- ' mickt) 117,256,401,402 Market National Bank of New York ii. Pacific National Bank of Boston 22,179,203 Market and Pulton National Bank v. Sargent 286 Marmolejo, Hines v 226 Marshall, First National Bank of Centralia v 406 Marshall, First National Bank of Concordia v 276 Marshall and Illsley Bank of Mil- waukee, First National Bank of Manistee v 148, 149, 276, 330 Marshall National Bank v. O'Neal. 65 Marshalltown State Bank, First National Bank of Marshalltown v 170 Marston, Hallowell National Bank v 288 Martin, Good v 281 Martin et al. v. Home Bank 104 Martin v. Kansas National Bank. . 44 Martin, Tapley v 306,399 Marye, auditor of public accounts, First National Bank of Lynch- burg «... 116,526,527 Marye, auditor of public accounts, Lynchburg National Bank v 116, 526, 527 Marye, auditor public accounts, National Exchange Bank of Lynchburg v 116, 526, 527 Marye, auditor public accounts, People' s National Bank of Lynch- burg v 116,526,527 Maryland, McCulloch v 115, 507 Mason v. Pewabic Mining Com- pany j 265 Mason, Williamson v 38 Masonic Savings Bank v. Bangs. . . 80 Massachusetts National Bank, Mat- thews v 319 Massey, Blair v < 447 Massey v. Fisher 137, 207 Matheny , Ridgely National Bank v . 278 Matteson v. Dent 457, 462, 475, 479 Matthews v. Abbott 427 Matth ews, Columbia NationalBan k of Tacoma et al v 29, 30, 451 Matthews v. Creditors 119, 137 Matth e ws v. Massachusetts National Bank 319 Matthews v. Skinker 428, 429 Matthews, Union National Bank v. 424, 426, 427, 428 Page. May v. Jones 56 Maynard v. Bank 405 Mayor, Birmingham National Bank i' 25,267 Mayor, etc., Kyle v 513 Mayor ■<: First National Bank of Macon 508 Mead v. National Bank of Pawling. 9 Mead v. Pettigrew 40 Meadowcroft, German National Banku 434,437 Meagher County, Mont., School District No. 8, Merchants' Na- tional Bank v 212, 215 Means et al. , United States v 304, 313, 355 Mears, Merchants' National Bank v 426, 427 Mechanics' National Bank, Lock- wood v 314, 403 Mechanics' National Bank, Na- tional Bank of Commonwealth v . 124, 202, 214 Mechanics' National Bank of New- ark, N . J. , Corn Exchange Bank v. 21 Mechanics' National Bank of New- ark, N. J., National Shoe and Leather Bank of the City of New York« 21 Mechanics' National Bank of New- ark, People's Bank of the City of New York v 22,255 Mechanics' National Bank of New- ark, N. J. , West Side Bank i> . . . 21 Mechanics' National Bank of Tren- ton v. Baker, tax receiver 507, 532 Mechanics' National Bank of Tren- ton v. Harter et al 169 Mecklenburg County, Commission- ers of, Mc Aden v 512 Mecosta County Savings Bank, Sun- derlin v 100 Medcalf, Eegester v 398 Meigs, Billings v 123 Meldrum v. Henderson 543 Memphis National Bank, Hennessy Bros. & Evans Company v 62, 63 Memphis National Bank v. Sneed. 11, 295 Memphis National Bank, Sturdi- vant v 219, 285 Mercantile Bank, Fabens v 109 Mercantile National Bank, Lan- der v 522, 524 Mercantile National Bank v. Shields 507, 511 Mercantile National Bank of City of New York v. Mayor, etc., of City of New York and another . 506, 507, 516, 517, 518, 520, 532, 533 Mercantile National Bank of Cleve- land v. Hubbard, county treas- urer '.. 523 Mercantile National Bank of Cleve- land, Whitbeck v 519 Mercantile National Bank of New York, Phillips v 331 582 TABLE OF CASES. Page. Mercer v. Dyer 394 Mercer, Horton v 470 Mercer National Bank of Harrods- burg, Cassell v 315 Merchant Tailors' Company, Eex v . 447 Merchants' Bank, People v 95 Merchants and Farmers' Bank *. Austin 99 Merchants and Manufacturers' Bank v. Pennsylvania 503, 533 Merchants and Manufacturers' Na- tional Bank v. Cummings 81 Merchants and Manufacturers' Na- tional Bank of Pittsburg, Com- monwealth of Pennsylvania v. .. 534 Merchants' Exchange National Bank v. Cordozo , 399 Merchants' Loan and Trust Com- pany of Chicago, Wilson v 17, 157, 473, 489 Merchants' National Bank v. Ault 18 Merchants' National Bank v. Car-, hart 139 Merchants' National Bank, Cha- pins v 420 Merchants' National Bank u. De- mere 85 Merchants' National Bank, Du- mond v 130 Merchants' National Bank, Fair- banks v 301 Merchants' National Bank, First National Bank v 68 Merchants' National Bank v. Gas- lin 181,264,268 Merchants' National Bank, Gil- liam v 55 Merchants' National Bank v. Maple 55,387 Merchants' National Bank v. Mears 426,427 Merchants' National Bank v. Mc- Anulty 16,156,285 Merchants' National Bank v. Mc- Nier 154 Merchants' National Bank i>. Na- tional Bank of Commerce 62 Merchants' National Bank, Ornn v 427, 428 Merchants' National Bank v. Peet. 18 Merchants' National Bank, Phil- lips v 46 Merchants' National Bank v. School District No. 8, Meagher County, Mont 212,215 Merchants' National Bank, Second National Bank v 109 Merchants' National Bank v. Se- veir et al 220 Merchants' National Bank v. Spates 160,285 Merchants' National Bank Tap- pan v 504 Merchants' National Bank, Third National Bank v 166 Page. Merchants' National Bank v. Tracy 297 Merchants' National Bank, Wright v 180 Merchants' National Bank of Ban- gor v. Glendon 399 Merchants' National Bank' of Bos- ton v. State National Bank 27, 42, 68, 69, 318, 331, 402, 414, 416 Merchants' National Bank of Chi- cago, Chicago Railway Equip- ment Company v 280 Merchants' National Bank of Chi- cago v. Sabin et al 410 Merchants' National Bank of City of New York v. 'Samuel et al 48 Merchants' National Bank of Kan- sas City v. Lovitt 300 Merchants' National Bank, Ken- tucky, Kentucky Flour Company, assignee v 395 Merchants' National Bank of Little Bock v. United States 75, 115 Merchants' National Bank of Lou- isville v. Robinson 396 Merchants' National Bank of Mem- phis, National Bank of Com- merce in Boston v Ill Merchants' National Bank of Mem- phis, Pickett v 225,255 Merchants' National Bank of Rome ii. Fouche 34,294 Merchants' National Bank of Sa- vannah v. Guilmartin 139 Merchants' National Bank of St. Paulw. Hanson 289,423 Merchants' National Bank of To- ledo v. Cumming 522, 523 Merchants' National Bank of West "Virginia, Chatham National Bank of New York v 253 Merchants and Planters' Bank v. Penland 288, 297 Merchants and Planters' National Bank v. Clifton Manufacturing Company 66, 537 Merchants and Planters' National Bank v. Trustees of Masonic Hall 181,198,265 Merchants' State Bank v. State Bank of PhillipB 106 Mereness v. First National Bank of Charles City 145 Meridian National Bank of Indian- apolis v. First National Bank of Shelbyville 72 Merrill v. Florida Land and Im- provement Company 36,449 Merrill v. National Bank of Jack- sonville. . . 17, 18, 150, 199, 202, 216, 250 Merritt, Tradesmen's National Bank?) 62 Metropolis, Bank of, v. Orcutt 401 Metropolitan National Ban"k, American Exchange National Bank* 102.109 TABLE OF CASES. 588 Page. Metropolitan National Bank, Cin- cinnati, Hamilton and Dayton Railroad Company v 54 Metropolitan National Bank v. Claggett 247,404 Metropolitan National Bank, Evansville National Bank v 38 Metropolitan National Bank v. Jansen 16 Metropolitan National Bank, Min- neapolis Sash and Door Com- pany v 108, 110 Metropolitan National Bank, Un- derwood v. 274 Metropolitan National Bank of Kansas City, Mo., v. Campbell Commission Company 540 Metropolitan National Bank of New York v. Lloyd 546 Metropolitan Trust Company v. Farmers andMerchants' National Bank. . . . 26, 149, 188, 261, 272, 289, 439 Meyer v. Chas. Rosenheim & Co. . 169 Meyer et al. v. Indiana National Bank , 167 Meyers, in re 85 Meyers v. New York County Na- tional Bank 127 Meyers v. Valley National Bank. 419, 455 Michigan Insurance Bank v. El- dred 404 Middlesex County Bank, Perth Amboy Gas Light Company v.. 59 Middletown National Bank v. Town ofMiddletown 508 Midland National Bank of Kansas City v. Brightwell 100, 544 Midland National Bank v. Schoen. 285 Millard, Bank of Republic v 52 Miller, Earlea 394 Miller v. Farmers' Bank 80 Miller, First National Bank (Ne- braska case) v 47 Miller v. First National Bank of Cincinnati (Ohio case) 385, 501 Miller, Flour City National Bank v. 221 Miller, Gottfried v 499 Miller v. Heilbron 528 Miller v. National Bank of Lancas- ter 250 Miller, Third National Bank of Philadelphia v 220, 223, 236 Miller, Thurberu 246 Miller 11. Tiffany 218 Miller, treasurer of Hamilton County, Union National Bank of Cincinnati jj 249 Miller, Walker v 160 Miller v. Western National Bank. 124 Miller's Estate 81 Miller & Co., National Commercial Bank v 43, 48, 53, 58, 69 Mills v. Scott 485,486 Milmo National Bank v. Berg- strom 149 Page. Minneapolis Sash and Door Com- pany v. Metropolitan Bank. . . 108, 110 Ming, Hackettstown National Banku 149 Mintuan v. Fisher 42 Missouri National Bank, Eufaula Grocery Company v 87 Missouri River Telegraph Com- pany v. First National Bank of Sioux City ;. 240,241 Mitchell v. Easton 131 Mitchell v. First National Bank of Chicago 117 Mittlebuscher, collector, et al. , Dav- enport National Bank v 116 Mix et al. v. Madison Insurance Company 218 Mix o. National Bank, Blooming- ton 399 Mixter, Pacific National Bank v. . 21, 22,176,196,208 Mize v. Bates County National Bank 535 Mobile County, Board of Revenue and Road Commissioners of, Maguire v 502 Mobile, Mayor, etc., of, National Commercial Bank of Mobile v 501 Modern Woodmen of America v. Union National Bank of Omaha. 15, 135, 150 Mohrenstecher et al. , Westervelt v. (first case) 309,314 Mohrenstecher v. Westervelt et al. (second case) 16,309,311,313 Molson v. Hawley 7 Monarch, M. V., Company et al. v. Farmers and Drovers' Bank 6 Moncure v. Dermott 225 Monongahela National Bank, Bank of Bay of Biscayne (of Miami, Fla.) v 103 Monongahela National Bank v. Overholt 237,239 Monongahela National Bank of Brownsville, Jacobus v 22 Monongahela National Bank of Brownsville, Stephens v 163, 233 Montague, Cox v 467, 488 Montagu et al. v. Pacific Bank et al . 207 Monticello Bank v. Bostwick et al . . 173 Montgomery, Albion National Bank« 233,238 Montgomery County v. Cochran et al 15,47 Montgomery County, Board of Commissioners of, v. Elston 75 Montgomery County National Bank, First National Bank of Cherryvale v 478 Moody v. First National Bank 170 Moore, Hopper v 404 Moore v. Jones 461,471 Moore v. Citizens' National Bank ofPiqua, Ohio 299 584 TABLE OF CASES. Moore v. Mayor and Commission- ers of Fayetteville 533 Moore et al., Union Stock Yards National Bank v 409, 535 Moragne, First National Bank of Gadsen ■» 64 Morehouse?;. Second National Bank of Oswego 244 Moreland v. Brown 137 Morgan, First National Bank of Charlotte v 241,247,248 Morgan, Second National Bank of Clarion?; 224,239 Morris?). Eufaula National Bank. 58, 105 Morris v. Union National Bank. . . 106 Morrison v. Price, receiver 35, 482 Morsman v. Wallace et al. . . 267, 432, 456 Morton et al. v. Wallace et al 267, 432, 456 Mosher, Bailey v 342 Mosher et al. , Gerner v 245, 336 Moss v. Whitzel 458 Mott, People v 447, 448 Mottley, Vance v 342 Mound City Paint and Color Co. v. The Commercial National Bank. 102 Mount Morris Bank v. Twenty- third Ward Bank 77 Mount Sterling National Bank v. Green 50 Mount Sterling National Bank o. Priest et al 438 Mount Sterling National Bank, Snyder v 235 Movius State Bank, Drinkall v. 48, 60, 159 Movius, receiver, v. Lee et al 303, 337, 338, 339, 347 Muchler, Gordon et al. v 56 Mudgett, Veeder v 31 Muir v. Citizens' National Bank of Fairhaven 268 Muir, United States Fidelity and Guaranty Company v 307 Multnomah County et al. v. Ore- gon National Bank et al 213 Munce, Earle v 195 Muncie National Bank, Barnet v. . 229, 232, 233 Munzeheimer, First National Bank?) 432 Murphy v. First National Bank ot Cedar Falls 132 Murphy v. Pacific Bank, etc 131 Murphy et al. v. Bordwell 128 Murrayw. Pauly 133 Murry, Nelson & Co. v. Letter 269 Muse, Pickle?) 54 Mustard v. Union National Bank . 125 Muth v. St. Louis Trust Company. 156 Mutual Building Society, in re ... 137 Myers, First National Bank of La- con v 133 Myers, Anderson v 196 Myers v. Hettinger 32, 190, 286 Myers v. Southwestern National Bank 165 Page. Mylin, . Auditor-General, Third National Bank of Pittsburg v ... 248 N. Nahant Bank, officers of, Burrill v. 317 Nashville, Mayor, etc. , of, Adams v. 499 Nassau Bank v. National Bank of Newburgh 170 National Albany Exchange Bank, Hills* 248,511,523 National Bank, Belknap ?> 63 National Bank v. Case 77 National Bank v. Commonwealth. . 503, 534 National Bank, Driesbach v 229, 233 National Bank, Durkee v 125 National Bank v. Eliot Bank 119 National Bank, Ellerbee v 422 National Bank, Goldthwaite v. . 387, 388 National Bank, Hambright v 238 National Bank v. Insurance Com- pany 44, 122, 18 1 , 264, 498, 540 National Bank v. Matthews (see Union National Bank i. Mat- thews) . National Bank v. Nolting (first case) 169 National Bank, Peoples Bank v. . . 5, 434 National Bank, Volz v 436 National Bank and Loan Com- pany, Carr v 433 National Bank and Loan Com- pany v. Petrie 333 National Bank of Commerce v. Atkinson 5,323 National Bank of Commerce, Al- berger v 206 National Bank of Commerce v. City of Seattle 517 National Bank of Commerce v. Fitze 296 National Bank of Commerce, La Grange Butter Tub Company?).. 439 National Bank of Commerce, Mer- chants' National Bank v 62 National Bank of Commerce, Wy- man v 65 National Bank of Commonwealth v. Mechanics' National Bank . . 124, 202, 214 National Bank of the Common- wealth, Security National Bank of New York v 181 National Bank of Dakota v. Tay- lor 37,292,450 National Bank of Illinois, Wolf v . . 198 National Bank of the Metropolis v. Kennedy 182 National Bank of D. O. Mills & Co., People v 501 National Bank of Missouri, Cof- fey v 141,405 National Bank of New York, Gra- ham v 429 National Bank of Bedemption v. Boston 504, 516, 517, 520, 531 TABLE OP CASES. 585 Page. National Bank of the Republic, Brooklyn and Newtown Railroad Company v 117, 281 National Bank of the Republic, Doppeltu 58,88 National Bank of the Republic, Freeman Manufacturing Com- pany v 176 National Bank of the Republic, Na- tional Board of Marine Under- writers v 173 National Bank of the Republic, National Reserve Bank v 105 National Bank of the State of Mis- souri, Tiffany v 226 National Bank of Virginia v. City of Richmond 500 National Bank of Virginia, Molt- ing v. (second case) 126 National Bank of Allen town, Pa., Palmer v 21 National Bank of Allentown, Pa., Rhoneru 21 National Bank of Asheville et al., United States v 128, 129 National Bank of Athens v. Dan- forth 220 National Bank of Auburn v. Lewis. 230, 231,233,236 National Bank of Baltimore v. Bal- timore, Mayor, etc. , of .• . . 507, 531 National Bank of Baltimore, States 505 National Bank of Barnwell v. City Hall Bank 6 National Bank of Barre, Hill v. . 224, 233 National Bank of Birmingham, Sharp v 81,83 National Bank, Bloomington, Mixw 399 National Bank of Canton, Dunnw. 149 National Bank of Chattanooga v. Chattanooga, Mayor of 508 National Bank of Chester Valley, Scott v 140 National Bank of Chemung v. El- mira 502 National Bank of Clinton, Iowa, v. Dorset Pipe and Paving Com- pany 410 National Bank of Commerce in Boston v. Merchants' National Bank of Memphis Ill National Bank of Commerce in Denver v. Allen 438,498 National Bank of Commerce of Kansas City v. American Ex- change Bank of St. Louis. 59,89,97,107 National Bank of Commerce of New London, Conn., et al., Globe Savings Bank v 126 National Bank of Commerce in New York v. National Mechanics' Banking Association 71 National Bank of Commerce of Pierre v. Feeney 297 Page. National Bank of Commerce of St. Louis, Homer v 260, 395 National Bank of Commerce of Tacoma v. Galland 284, 400- National Bank of Commerce of Tacoma v. Wade et al . . . . 164, 343, 344 National Bank of Crawford, Kel- sey v 405 National Bank of Daingerfield v. Ragland 242 National Bank of Decorah v. Holan . 292 National Bank of Denison, Ful- ton v 78,80' National Bank of Fairhaven v. Phoenix Warehousing Com- pany 26,147,401,403 National Bank of Fayette County v. Dushane 230- National Bank of Fort Edward v. Washington County National Bank 131 National Bank of Gainsville, Sum- ter County v 501 National Bank of Genesee v. Whit- ney 424,428 National Bank of Gloversville v. Johnson 219,225,226 National Bank of Gloversville v. Wells 5 National Bank of Guthrie v. Earl. 417 National Bank of Guthrie, John- stone Fife Hat Company v 332 National Bank of Houston, Mc- Donnough v 402 National Bank of Jacksonville, Merrill v. . 17, 18, 150, 199, 202, 216, 250 National Bank of Jefferson v. Bruhn & Williams 82, 227 National Bank of Jefferson v. Fare etal 115,255 National Bank of Lancaster, Mil- ler v 250 National Bank of Lawrence, Wat- kins v , 264 National Bank of Madison v. Davis. 235 National Bank of Monticello, Huf- fakerw 147,401 National Bank of Mount Pleasant, Overholtv 232 National Bank of Newbern, Rob- inson v 255 National Bank of Newburgh, Nas- sau Bank v 170 National Bank of Newburgh, re- spondent, v. Smith (Daniel), ap- pellant v 126,290 National Bank of Pawling, Mead v . 9 National Bank, Port Jarvis, Yerkes v 418 National Bank of Pottstown, Na- tional Bank of Spring City v 261 National Bank of Rahway v. Car- penter 243 National Bank of the Republic of New York, Kemp et al. v 19, 275, 341, 441 586 TABLE OF CASES. Page. National Bank of the Republic of St. Louis, Kenneth Investment Company v 44, 153, 165 National Bank of Rockwell v. Sec- ond National Bank of Lafayette. 66 National Bank of Rollo, Wilson, assignee, v 231 National Bank of Somerset, New- ell v 227,240 National Bank of South Reading, Upton v 424 National Bank of Spring City v. National Bank of Pottstown 261 National Bank of Winterset v. Byre 235,236,387 National Broadway Bank, Camp- bell v 320 National Citizens' Bank v. Citizens' National Bank 89 National City Bank of Brooklyn, Havens v 25 National City Bank of New York, Oddie et al. v 42 National Commercial Bank v. Mc- Donnell 82,147 National Commercial Bank v. Mil- ler & Co 43,48,53,58,69 National Commercial Bank of Mo- bile v. Mobile, mayor, etc., of .. 501 National Eagle Bank, Bullard v... 36, 38 National Exchange Bank, Feck- heimer v 419 National Exchange Bank v. Gay . . 406 National Exchange Bank, Thorn- ton v 81 National Exchange Bank of Balti- more, First National Bank of Charlottes 421,422 National Exchange Bank of Balti- more v. Peters et al 342, 347 National Exchange Bank of Dallas w. Beal 93,101 National Exchange Bank of Lynch- burg v. Marye, auditor of public accounts 116,526,527 National Exchange Bank of Lex- ington v. Wilgus's executors 285 National Exchange Bank of Mil- waukee, United States v 251 National Exchange Bank of New- port, Hazard v 454 National Exchange Bank of Tiffin, Barbour v 388 National German- American Bank, Hagerv 296 National German-American Bank, Tomlinson v 73 National German-American Bank of St. Paul, Shaw v 478 National Gold Bank and Trust Company v, McDonald 58 National Lafayette Bank, Cincin- nati Oyster and Fish Company v. 73 National Mechanics' Bank, Shoe- makers 77,269,346,422 Page. National Mechanics' Banking Asso- ciation, National Bank of Com- merce in New York v 71 National Mohawk Valley Bank, McLoghlinw 125,161 National Newark Banking Com- pany v. City of Newark, mayor, etc., of 506,516,531 National Pahquioque Bank, First National Bank of Bethel v 146, 162, 181, 183, 188, 245, 255 National Park Bank, Asher v 121 National Park Bank, .Clinton Na- tional Bank v •- 82 National Park Bank, Doud et al. v. 174 National Park Bank v. German American Mutual W. and S. Com- pany 11 National Park Bank v. Goddard.. 24 National Park Bank v. Gunst 412 National Park Bank, Heidel- bach v 65, 396 National Park Bank of the City of New York v. Harmon 472 National PembertonBanka. Porter. 255 National Revere Bank v. National Bank of the Republic 105 National Savings Bank, People v. . 398 National Security Bank v. Butler. . 208 National Security Bank v. Cush- man, EdVard F 298,316 National Security Bank v. Price. . . 204 National Shoe and Leather Bank, Clark v 165 National Shoe and Leather Bank, Jordan, administratrix, etc., v. 389 National Shoe and Leather Bank of the City of New York v. Me- chanics' National Bank of New- ark, N.J 21 National State Bank v. Young 505 National State Bank of Burling- ton, Guelichw 88,109 National State Bank of Camden v. Pierce 402,513 National State Bank of Elizabeth, Danforth et al. v 220, 422 National State Bank of Lafayette v. Ringel 134,136 National State Bank of Newark v. Boylan 230,231 National State Bank of Newark, Trustees of First Presbyterian Churcha 406,417 National Surety Company, First National Bank of Nashville v. . . 310 National Union Bank v. Earle 97 National Union Bank, Baltimore; Lazearu 222,223,238,423 National Union Bank of Maryland, Stewart v 269 National Union Bank, Swanton, Vt.; Sowles (two cases) v 22, 184 National Village Bank of Bowdoin- ham, Jenkins v 82 TABLE OF CASES. 587 Page. National Board of Marine Under- writers v. National Bank of the Republic 173 National Loan and Investment Company v. Rockland Company . 303 National Safe and Lock Company v. People 43 National Wall Paper Company, American National Bank a 434 Nead». Wall 459,487 Neal v. First National Bank 168 Neal etal. v. Coburn 170 Neal Loan and Banking Company, Hughes v Ill Neale, United States v 314 Nebeker, Twin City v 75, 527 Nebraska National Bank of York v. Ferguson 283 Needles National Bank, Bowen v. 5, 6, 7, 68, 71, 410, 431, 432 Neely v. Grayson County National Bank 391 Neff , Jenkins v 518 Nehawka Bank v. Ingersoll et al.. 51 Neill v. Rogers Bros. Produce Com- pany 26,79 Nelson v. Burroughs 345 Nelson, First National Bank v. (Alabama case) 61,67 Nelson v. First National Bank of ( Killingly (Minnesota case) 81, 158, 287, 293 Neponset Bank v. Leland 80 Nevada National Bank of San Fran- cisco, Crocker- Wool worth Na- tional Bank of San Francisco v. 76 Nevada National Bank of San Fran- cisco v. Portland National Bank. 333 Newark, City of, Mayor etc., of, National Newark Banking Com- panyw 506,516,531 Newark, City of, North Ward Na- tional Bank of Newark v 502, 505 Newbegin v. Newton National Bank ( first case) 200 Newbegin, Newton National Bank v. (second case) 450 Newberry v. Trowbridge 132 Newcombe, Franklin National Banka , 83,84 Newell, Bowen v 42 Newell v. National Bank of Som- erset 227,240 New England Bank, Bank of Me- tropolis v 80 New Farmers' Bank, Trustee, v. Cockrell 543 New Orleans Banking Association v. Adams 245 New Orleans, City of, Castles v 531 New Orleans Coffee Company (Limited), Richardson v. . 93,210,541 New Orleans Debenture Redemp- tion Company, Richardson v ... 210 New Orleans National Bank, Fortiert) 425,428 Page. New Orleans National Banki>. Ray- mond 427 Newport National Bank v. Board \ of Education 418 Newton National Bank, Newbegin v. (first case) -- 200 NewtonNationalBanktf. Newbegin (second case) 450 Newton National Bank, State Bank of S. t. Joseph v 319 New York v. Weaver 511, 520 New York Breweries Company v. Higgins 212 New York County National Bank, Meyers t>. .- 127 New York, Mayor, etc. , of, v. Tenth National Bank , 272 New York, Mayor, etc., City of, and another, Mercantile Na- tional Bank of City of New York «) 506, 507, 516, 517, 518, 520, 532, 533 New York National Exchange Bank, Seeley v 34 New York Security and Trust Com- pany et al. v. Lombard Invest ment Company of Kansas. 174,175,202 Niagara County Savings Bank, Richt> 121 Niblack, Burrows v 36, 419 Niblack v. Cosier 143, 294 Niblack v. Park National Bank 47, 55 Nichols v. State 62 Nichols, in re Bank of West Su- perior, Goodvin v 156, 278, 317 Nicholson v. Randall Banking Com- pany 124,155 Nickerson v. Kimball 528, 529 Nicollet National Bank of Minne- apolis v. City Bank 454, 455 Nilesc Shaw 512 Nineteenth Ward Bank v. First Na- tional Bank of South Weymouth. 127 Ninth National Bank, Ohipman v. 126 Noble, Glenn v 42 Noble, Pettilona 254 Nolting, National Bank v. (first case) 169 Nolting v. National Bank of Vir- ■ ginia (second case) 126 Non-Magnetic Watch Company of America, in re 79 Nonotuck Silk Company v. Flan- ders 541 NorfolkNationalBanki;. Schwenk. 240 Northampton National Bank, Wy- liev 139,418 North Carolina, Cross v 384 Northern Bank of Kentucky, Chambers v 43, 56 Northern Bank of Kentucky v. Farmers' National Bank of Cyn- thiana et al 214 North River Bank, in re .' 539 North Ward National Bank of New- ark v. City of Newark 502, 505 588 TABLE OF CASES. Page. Northway, United States v 361 Northwestern National Bank, Dil- way v 73 Northwestern National Bank, Illi- nois Paper Company v 205 Northwestern National Bank, Land Title and Trust Company v 167 Northwestern National Bank v. J. Thompson & Sons Manufacturing Company 81 Northwestern National Bank of Chicago, First National Bank of Chicago v 73, 166 Northwestern National Bank of Su- perior, Slack v 208, 396 Northwestern Guaranty and Loan Company of Minneapolis, Minn. , et al., Elkhart (Ind.) National Bank« 245,498 Norton v. Derry National Bank. . . 6, 431 Norvell, Christopher et al. v 475 Norvel, Western German Bank v. 538, 547 Norwood v. Interstate National Bank of Texarkana 14, 268 Novich, Farmers and Merchants' National Bank i) 283 0. Oates v. First National Bank of Montgomery 80,116,222 Ober, Bankt; 109 O'Brien et al. v. East River Bridge Company 214 O'Brien, Pauly v 8, 290 Ocean National Bank v. Carll... 188, 193 Ocean National Bank, First Na- tional Bank of Lyons v 140, 141, 317, 320, 334 Oceana County Bank, Union Na- tional Bank v 54 O'Connor v. Brandt 390 O' Connor, Henderson v 93 O'Connor v. Witherby 459, 487 Oddie et al. v. National City Bank of New York 42 Oddfellows Savings and Commer- cial Bank, Green v 145 Officer v. Officer et al. (Stewart intervener) 123 Ogilvie, Clark v 470, 496 O'Hare, Drovers' National Bank v. 535 O'Hare v. Second National Bank of Titusville 269 Ohio Valley National Bank, Hulitt v 471 Oldham v. Bank 230,427 Old National Bank et al., Pronger v 158,437 Old National Bank of Evansville v. German-AmericanNationalBank 91 Old National Bank of Providence, Frater, receiver, v 473 O'Leary et al. v. Abeles et al 107 Olivier, Richardson v 541, 542 Page OmahaNational Bank v. Kiper et al. 19, 87 Omaha National Bank v. Walker etal 175 O'Neal, Marshall National Bank v. 65 Onondaga County Savings Bank v. UnitedStates 112 Orchard, Exeter National Bank i). 234, 237 Orchard, Wingate v 482 Orcutt, Metropolis, Bank of v 401 Ordway v. Central National Bank of Baltimore 181, 240, 255, 264 Oregon National Bank et al., Mult- nomah County et al. v 213 Ornn v. Merchants' National Bank 427,428 Orton, Stevens^ 311 Osborne et al., appellants, v. Bank of the United States 115, 507 Overholt, Monongahela National Bankw 237,239 Overholt«.NationalBankof Mount Pleasant 232 Overman, First National Bank of Tecumseh v 240 Overstolz, Stephens v 164, 343, 348 Overton, Bank of, v. Thompson . . ' 295 Owens v. Stapp 63 O wensboro National Bank v. O wens- boro 500,508 Owsley v. Bank of Cumberland 126 Oxford Iron Company, Delaware, Lackawana and Western Rail- road Company v 38 Oxford Lake Line v. First National Bank of Pensacola 112 P. Pacific Bank, Anderson v 207 Pacific Bank, Honig v 123, 132 Pacific Bank et al., Montague et al. v 207 Pacific Bank, etc. , Murphy v 131 Pacific National Bank v. Eaton . 28, 29, 482 Pacific National Bank v. Mixter. . . 21, 22, 176, 196, 208 Pacific National Bank, Raynor v.. 21, 22 Pacific National Bank, Shute v 389 Pacific National Bank of Boston, Market National Bank of New Yorkv 22,179,203 Pacific National Bank of Tacomav. Pierce County et al 504, 520 Pacific Mail Steamship Company, People v 448 Packing Company, Drovers' Nar tionalBankw 69 Paducah, City National Bank v... 515 Palme™. McMahon . 517, 518, 524, 532, 533 Palmer v. National Bank of Allen- town, Pa 21 Palmer, Schofield v 189 Pape v. Capitol National Bank of Topeka 422 Papin, St. Louis National Bank v. 521 TABLE OF OASES. 589 Page. Parker v. Robinson 479 Parker, Whitney National Bank v. 503, 510 Parkersburg National Bank v. Als. 125 Parkhurst v. First National Bank of Clyde 230 Park Hotel Company v. Fourth National Bank of St. Louis 10 Park National Bank, Niblacku... 47,55 Patterson, Cate v 131 Patterson, Columbia Bank v 499 Patterson, Philler v 79, 417 Patterson v. Plumer 444 Patterson, United States v 382, 384 Patterson v. Wade 338 Pattison v. Syracuse National Bank 137,138,139,414 Patton & Hamilton, Ridgely Na- tional Bank v 55, 127 Paul v. Draper 137, 202 Paul et al., Gager et al. v 197 Pauley, American Surety Com- pany v. (2 cases) . 305, 306, 308, 309, 312 Paulsen v. People 372 Paulv, Murray v 133 Pauly ?>. O'Brien 8,291 Pauly v. State Loan and Trust Com- pany 473, 474 Pauly, Wilsons 18,293 Paxton v. Vincennes Manufactur- ing Company 84 Paynes Clark 131 Payne, First National Bank v 86 Payson, Turnbull v 488 Pearce v. Rice 176 Pearce & Miller Engineering Com- pany v. Brouer 80 Pease, Dooley v 23 Pease, First National Bank v 168 Peavey, First National Bank of Sioux City v 32, 249, 409 Peck et al. v. First National Bank. 92 Pederson v. South Omaha National Bank 53 Peet, Merchants' National Bank?). 18 Pella City, independent district of, Beard v 213, 539 Pel ton, v. Commercial National Bank 518,523 Peltz, First National Bank of Lock Haven v \ 126 Penland, Merchants and Planters' Bank v 288, 297 'Penn Bank, in re 145 Penn Bank v. Farmers' Deposit National Bank 395 Penniman, Brobstron v 300 Penn Mutual Life Insurance Com- pany v. Conoughy 42 Pennsylvania, Merchants and Man- ufacturers' Bank v 503, 533 Penoyer, Warner v 339 People v. Backus 406 People v. Consolidated National Bank 448 Peoples. Cornell 447 Page. People v. Dolan 511 People v. Fonda 385 People, Hoke v 385 People v. Lake Shore and Michigan Southern Railroad Company . 447, 448 People, McClure v 161 People v. Merchants' Bank 95 People d. Mott 447,448 People o. National Bank of D. O. Mills & Company 501 People, National Safe and Lock Company?) 43 People v. National Savings Bank. . 398 People v. Pacific Mail Steamship Company 448 People, Paulsen v 372 People v. Remington 202 People v. St. Nicholas Bank 70, 390 People v. The Commissioners of Taxes and Assessments (two cases) ■. 515,521 People?). Throop 447,448 People, ex rel. Tradesman's Na- tional Bank, v. Commissioners of Taxes 521 People, ex rel. Williams, v. Weaver (New York v. Weaver) 511, 520 People's Bank v. National Bank . . 5, 434 People's Bank of the City of New York v. Mechanics' National Bank of Newark 22, 255 People's Bank of Bellville v. Manu- facturers' National Bank of Chi- cago 430 People's Bank and Trust Company v. Tufts 390 People's National Bank, Charles- ton?) 29, 502 People's National Bank v. Clayton. 289 People's National Bank (Ohio), Francis v 127 People's National Bank v. Free- man's National Bank 112 People's National Bank, Hanna etal. v 34,346 People's National Bank, Hodgin v. 127, 389, 395 People's National Bank, Pickle v . 54 People's National Bank, Van Reed?) 21,407 People's National Bank of Lynch- burg v. Marye, auditor of public accounts 116, 526, 527 People's National Bank of Pitts- burg, Wood v 428, 429 Peoples' National Bank of Shelby- ville, Bobo?) 243 People's Savings Bank v. Hughes. 320 People' s State (N. Dak. ) v. Francis . 188 Pepperday v. Citizens' National Bank of Latrobe 421, 422 Pequonnock National Bank, Scott etal. v 452,454 Perea, Albuquerque National Bankw 525 Perry, receiver, Studebaker, v 460 590 TABLE OF OASES. Page. Perth Amboy Gas-Light Company v. Middlesex County Bank 59 Peterborough, First National Bank v 505 Peterborough National Bank v. Childs 230 Peters v. Bain 186,439,440 Peters v. Foster 194 Peters, Gibson v 146 Peters, Griffin v 439, 440 Peters, United States v 356, 369, 372, 377, 379 Peters et al., Importers and Trad- ers' National Bank v 95, 211 Peters et al., National Exchange Bank of Baltimore v 342, 347 Petition of Piatt 183, 252 Petri v. Commercial National Bank of Chicago 246 Petrie, National Bank and Loan Company?) ,. 333 Pettigrew, Mead v 40 Pettilonu. Noble 254 Pewabic Mining Company, Ma- son v 265 Peyton, Iron City National Bank v. 171 Phelan, Kelly v '.. 80 Phelps v. Beard 294 Phelps, City National Bank of Poughkeepsie v 405 Philadelphia, City of, v. Aldrich. . 210 Philadelphia, City of, v. Eckels. . 88, 210 Philadelphia National Bank v. Dowd 95 PhiladelphiaNationalBank, Smith v 421,422 Philadelphia Warehouse Company, Anderson, receiver, v 472 Philbrook, Voset) 386 Philler?). Essler 423 Philler?). Jewett 395 Philler v. Patterson 79, 417 Philler, Yardley v 76, 208, 395, 544 Phillips v. Bossard et al ; . . 306, 309 Phillips v. Mercantile National Bank of New York 331 Phillips v. Merchants' National Bank 46 Phillips, Ryan?) 96 Phinney, Insurance Company v . . 17 Phipps'etal. v. Harding 282 Phoenix Bank, States 404 Phoenix Bank, Watson v 137 Phoenix Iron Company, Common- wealth v 447 Phoenix -Loan Association, Heri- der v 105 Phoenix National Bank, Daggs v.. 226 Phoenix National Bank, Kelly v.. 89 Phenix National Bank v. Taylor. . 64, 171 Phoenix Warehousing Company, National Bank of Fairhaven v . . 26, 147, 401, 403 Pickett v. Merchants' National Bank of Memphis 225, 255 Pickle v. Muse 54 Page. Pickle v. People's National Bank. . 54 Piedmont Bank of Morgantown et al. ?). Wilson et al 291,389 Pierce, Fifth National Bank of Grand Rapids v 428, 436 Pierce, National State Bank of Camden o 402,513 Pierce, Reeves v 540 Pierce, Washington National Bank?) 295 Pierce County et al., Pacific Na- tional Bank of Tacoma v 504, 520 Pierson, First National Bank of Rochester v 423 Pioneer Building and Loan Com- pany, Lomb v 398 Pirie et al., Commercial National Bank et al. v 6 Pittsburg and Castle Shannon Railroad Company, Fifth Na- tional Bank of Pittsburg v 252 Pittsburg Locomotive and Car Works v. State National Bank, Keokuk 77,271 Pittsfield National Bank, L'Her- bette?) 124,435 Placer County Bank, Pullen etal. v. 43, 67 Piano Manufacturing Company v. Auld 90 Planters' Bank v. Farmers' Bank.. 137 Planters' Bank, Union Bank v - 145 Planters' National Bank of Rich- mond, Hutchins v 431 Piatt v. Adriance 483 Piatt v. Beach _ 194 Piatt v. Beebe 180 Piatt, Graham v 464 Piatt, petition of 183, 252 Piatt, receiver, v. Bently 391 Plumer, Patterson v 444 Pollard v. State, ex rel. Zuber 115 Pollard v. Welford 165 Pomeroy, King v 266 Pomeroy National Bank, Arm- strong v 46 Pond, Andrews v 218 Pool, Thompsons 190,194 Poole, Butler?; 495 Poppleton v. Wallace et al. . 267, 432, 456 Porter, Glen v 455 Porter, National PembertonBank?;. 255 Porter v. United States 361 Porter et al. , Frantz et al. v 67 Portland National Bank, Nevada National Bank of San Francisco v . 333 Potter?). Bealetal 142 Potter v. Traders' National Bank. . 277 Potter v. United States 350, 364, 365, 368, 381 Potter, United States v 366 Potter et al. , Zeis v 83, 275, 295 Potter's Bank, Carley v 66 Potvin, Drovers' National Bank?). 296 Power v. First National Bank 108 Powers, Corcoran & Riggs v 218 Prather, Preston v 138, 139 TABLE OF CASES. 591 Page. Pratt, Central National Bank v ... 221 Prescott v. Haughey 336 Prescott National Bank of Lowell *. Benjamin F. Butler 422, 423 Preston, Coates * 60 Preston National Bank *. The Geo. T. Smith Middlings Purifier Co. 155 Preston *. Prather 138, 139 Price, National Security Bank v. . . 204 Price, receiver, *. Abbott 181 Price, receiver, *. Colson 181 Price, receiver, Morrison v 35, 482 Price, receiver of Venango Na- tional Bank, *. Yates 116, 183,247,263,480,495,496 Price, receiver, *. Whitney 462 Prince of Wales Insurance Com- pany, Williams v 447 Priest, First National Bank of De- catur * 435 Priest et al., Mount Sterling Na- tional Bank v 438 Pritchard, Summerfield v 447 Pronger *. Old National Bank etal 158,437 Prosser *. First National Bank of Buffalo 463 Providence Institution of Savings and Jewell v. City of Boston 531 Pryse v. Farmers' Bank of Beatty- ville 342 Puget Sound National Bank, Sno- homish County * 191 Puget Sound National Bank of Se- attle *. King County et al 517, 520 Pullen et al. v. Placer County Bank. 43, 67 Purcell National Bank, McBee v. . 130 Purcell National Bank (Ind. T.), Green * 62 Putnam *. United States 325, 358, 370, 376, 382 Putnam Savings Bank *. Beal. . . 141, 546 Q. Quin*. Earle 211 Quinsigamond National Bank, Taft* 59 Quinton, Kansas National Bank *. 416 R. Eagan et al., Henderson Trust Company « 169 Bagland, National Bank of Dainger- field* 242 Eagsdale, treasurer, Whitney et al. , appellants, * 513, 530 Rahr et al., Rehbeim * 491 Railsback, First National Bank v.. 50 Rand *. Tillinghast 493 Rand et al. *. Columbia National Bank of Tacoma et al 493 Randall, Davis* 221 Randall, First National Bank *.. 57,400 Randall Banking Company, Nichol- son* 124,155 Pago. Randolph National Bank *. Horn- blower et al 72' Rankin *. Chase National Bank . . . 320 Rankin v. City of Big Rapids et al. 489 Rankin v. Colonial Bank 71, 73 Rankin *. Fidelity; Insurance, Trust and Safe Deposit Company 474 Rankin v. Herod 191 Rankin, McClaine * 484, 495 Raymond, New Orleans National Bank* 427 Raynor *. Pacific National Bank. . 21, 22 Rea, Becker's Investment Agency * 272 Read, Shenandoah National Bank * 177,411 Real Estate Bank, Dawson * 125 Red River Valley National Bank, Commercial Bank * 103 Reeves *. JPierce 540 Reeves *. State Bank 108 Reeves etal., Baker* 467 Reeves Pulley Company, Irwin v. . 109 Regester *. Medcalf 398 Rehbein v. Rahr etal 491 Reid, Guthrie v.. 85,224,236 Remington, People v 202 Reno County Bank, First National Bank of Chicago v 90 Reno Savings Bank, Thompson v.. 32 Republic, Bank of, v. Millard 52 Resh v. First National Bank of Allentown 131 Reynes v. Dumont 259 Reynolds c. Bank of Mount Vernon 417 Reynolds v. First National Bank of Crawfordsville 424, 425, 428 Rex v. Babb 447 Rex, First National Bank of Allen- town* 140, 141 Rex*.MerchantTailors' Company. 447 Rhawn, United States * 510 Rheum, Bunt * 177 Rhoner *. National Bank of Allen- town, Pa 21 Ricaud *. Tyson 493 Ricaud i>. Wilmington Savings and Trust Company et al . 47& Rice, Columbia National Bank of Lincoln* 148,156,301 Rice, Griffin* 127 Rice, Pearce * 176 Rice et al. *. Citizens' National Bank 169 Rice County, Commissioners of, *. Citizens' National Bank of Fari- bault 509 Rich *. Niagara County Savings Bank 121 Rich *. State National Bank of Lincoln 417 Richards *. Attleboro National Bank 268,406,451,456 Richards *. Kountz 277, 429' Richardsetal. *. Incorporated Town of Rock Rapids 253, 512, 516. 592 TABLE OP CASES. Page. Richardson v. Continental National Bank of Memphis 101, 537 Richardson v. Dfinegre et al 99 Eichardson v. Louisville Banking Company 101, 157, 185, 215, 543 Eichardson v. New Orleans Coffee Company (Limited) 93,211,541 Eichardson v. New Orleans Deben- ture Eedemption Company 210 Eichardson v. Olivier 541, 542 Eichardson v. Turner 84 Bichardson v. Wallace 12 Eichardson, F. L.,receiverof Amer- ican National Bank, Turner, Sumpter, Syndic of M. Schwartz & Co., plaintiff in error, v 15, 193 Richland National Bank, Central National Bank v 21 Eichmond, Burt?; 464 Eichmond, City of, et al., First National Bank of Richmond v. . 501 Eichmond, City of, National Bank of Virginia v 500 Richmond, City of, v. Scott 517 Richmond v. Irons 183, 201, 215, 217, 265, 266, 335, 457, 463, 465, 466, 479, 481, 497 Rickert v. Suddard 54 Riddles Dow 276 Riddle v. First National Bank of Butler, Pa 145, 182, 186, 423 Ridgely et al. v. First National Bank 279 Ridgely National Bank v. Matheny . 278 Ridgely National Bank v. Patton & Hamilton 55, 127 Rieger v. United States 353, 362, 379 Riggins, First National Bank v 483 Rincker, Foster v 102 Ringel, National State Bank of Lafayette v.'. 134, 136 Ripley National Bank v. Latimer. 65, 159 Riverside Bank v. First National Bank of Shenandoah 74 Riverside Bank, Walton v 59 Riverside Bank *. Woodhaven Junction Land Company 49 Roberts v. Corbin 56 Roberts, receiver, v. Hill, admin- istrator, etc 204,208 Robertson v. Buffalo County Na- tionalBank 326 Robinson v. Aird 284, 392 Robinson, Chapman v 218 Robinson v. City of Wilmington etal 251 Robinson, Cox v 415 Robinson, Farmers and Merchants' National Bank v 428 Robinson v. Gardner 119 Robinson v. Hall et al 314, 337 Robinson, Mclver v 517 Robinson, Merchants' National Bank of Louisville v 396 Robinson v. National Bank of New- bern 255 Robinson, Parker v 479 Page. Robinson v. Turentine 475 Robinson et al., Adair, tax collec- tor, v 510 Robinson et al. , Warren et al. v . . . 338 Robinson et al. , Wright v 65 Robinson, receiver, etc., v. South- ern National Bank of New York 82,472,473 Rock Island Lumber and Manu- facturing Company v. Fourth National Bank of Wichita et al . . 24 Rockland Company, National'Loan and Investment Company v 303 Rock Rapids, Incorporated town of, Richards et al. v 253, 512, 516 Rock Springs National Bank v. Luman 300 Rockwell v. Farmers' National Bank of Longmont 226, 230 Rocky Mountain National Bank, Union Gold Mining Com- pany v 163,269 Roe v . Bank of Versailles 433 Roebling Sons Company v. First National Bank 424 Rogers, Attleboro National Bank v . 423 Rogers, Farmers and Mechanics' National Bank of Buffalo*;. 400, 410, 411 Rogers et al. v. Citizens' National Bank of Baltimore et al 217,262 Rogers etal., Earle v 480 Rogers Brothers Produce Company, Neillt; 26,79 Rolio, Drake v 393 Rollo, Gray?; 386 Rootu. Erdelmeyer 530 Rosenblatt v. Johnston 186 Rosenfeld v. Einstein 447 Rosenheim, Chas., & Co., Meyeru- 169 Rosenheim Real Estate Company v. Southern National Bank 246 Rose v. Winnsboro National Bank. 154 Rothbart, Lehman v 16 Row, Foster v. ( See Broas, Fos- ter v. ) Rowan, Union National Bank v. . . 416 Rowell, Kansas Valley National Bank v...'. 427 Rowley, Commercial State Bank of Genoa v 56 Rowley, First National Bank of Concordia v 239 Rowse, Lionberger v 499, 503, 514 Ruffin v. Board of Commissioners. 75 Ruggles v. Kuler 386 Rulison, Grundy County National Bank v 162 Rush v. First National Bank of Kansas City , 281 Rushville National Bank, Jones v. 523, 526, 530 Ryan v. Phillips... 96 S. Sabin, Smith v 16 Sabin et al., Merchants' National Bank of Chicago v 410 TABLE OF CASES. 593 rage. Sac County, Cromwell v 218 Sadilek, Western Wheeled Scraper Company v 105, 110 Safe Deposit and Trust Company v. Diamond National Bank 537 Safford v. First National Bank of Pittsburgh 494 Sagadahock National Bank, Bath Savings Institution v 39, 268 Salisbury v. First National Bank of Cambridge City 156, 282 Salt Springs National Bank, Bates v 262 Samuel etal., Merchants' National Bank of City of New York v ... 48 San Diego County v. California National Bank 212, 540 San Francisco, City and County of, v. Crocker-Woolworth National Bank 500 San Francisco National Bank (Ne- vada, National Bank of) v. Dodge 528 Sanford, First National Bank v 94 Sanger'?). Upton 31 Santa Rosa National. Bank v. Bar- nett etal 125 Santa Rosa National Bank, Ulrich v 17,144 Santos, Bowden v.. 419, 467, 468 Sargent, Market and Fulton Na- tional Bank v 286 Savary v. Savary 386 Savery, Atlas National Bank v 255 Savings Bank v. Davis 316 Savings Bank of Louisville, Bobb?) 124,130,216,334 Sawyer, Bailey, receiver, v 193, 457, 459, 485 Sayles v. Cox 543 Scammon v. Kimball 386 Schaberg's Estate v. McDonald- .. 263, 485,490,493,496 Schalucky v. Field 145 Scherzer, in re 396 Schierenberg v. Stephens 28, 201 Schintz et al., Brown et ux. v 43 Schleier, Brown v 183, 186, 200, 425 Scliley, Chattahoochee National *Bank v 138, 139, 140, 141, 334 Schmelling v. State et al 16, 137, 202 Schmidt, First National Bank v. (Colo, case) 79 Schmidt v. First National Bank of Selma (La. case) 261 Schneider, Boyd et al. v 346, 348 Schoen, Midland National Bank v. 285 Schoendelen, Schollmier v 56 Schofield v. Goodrich Brothers' Banking Company 421, 478 Schofield v. Palmer 189 Schofield v. State National Bank of Denver 316-116 Schofield v. Twining 264, 453 Schollmier?). Schoendelen 56 School District, Hughes v 404 Page. Schrader v. Manufacturers' Na- tional Bank 217, 264, 265, 335, 430 Schuchmann, Stephens v 394 Schumaker v. Trent 89, 108 Schwenk, NorfolkNationalBanku. 240 Schuyler National Bank v. Bol- long 236,241 Schuyler National Bank v. Gad- sen .'... 222,429 Scofield v. State National Bank of Lincoln 278, 427 Scott v. Armstrong. 182, 389, 392, 393, 394 Scott, Armstrong?) 7, 8 Scott v. Deweese, receiver . . 449, 491, 499 Scott v. Latimer 27, 449, 456 Scott, Lloyd?) 219 Scott, Mapes v 424 Scott, Mills?) 485,486 Scott v. National Bank of Chester Valley 140 Scott et al. v. Pequonnock National Bank 452,454 Scott, Richmond, City of v 517 Scott v. United States 366 Scotten, Arnsworth v 74 Scovil, East Haddam Bank v... 109, 113 Scoville v. Thaver 31 Scully, Fowler"?) 428, 429 Searle v. First National Bank. . . 421, 422 Seattle, City of, Boston National Bank t> 517 Seattle, City of, Commercial Na- tional Bank ?> 517 Seattle, City of, First National Bank v 517 Seattle, City of, National Bank of Commerce?) 517 Seattle, City, of, Puget Sound Na- tional Bank ?> 517 Seattle, City of, Seattle National Bank v 517 Seattle, City of, Washington Na- tional Bank of Seattle v 517 Seattle National Bank ?>. City of Seattle 517 Sebrell, Dyer ?> 392 Second National Bank, Cogswell etal. v 33 Second National Bank, Conklin v. 36, 39 Second National Bank, Forster?)., 285 Second National Bank, Garner?).. 21 Second National Bank v. Mer- chants' National Bank 109 Second National Bank v. Sproat . . 84 Second National Bank, Weyer v . . 451 Second National Bank ?j. Williams. 43 Second National Bank of Altoona v. Dunn 281 Second National Bank of Chicago, Main, assignee, v 247 Second National Bank of Clarion ti. Morgan 224, 239 Second National Bank of Erie, Brown v 237, 238, 243 Second National Bank of Lafayette, Heath?) 424 4049^05- -38 594 TABLE OP CASES. Page. Second National Bank of Lafayette, National Bank of Rockville v... 66 Second National Bank of Louis- ville, Winstandley et al., v 95, 542 Second National Bank of Oswego v. Burt 342 Second National Bank of Oswego, Getman v 243 Second National Bank of Oswego, Morehouse v 244 Second National Bank of Pittsburg v. Guarantee Trust and Safe De- posit Company of Shamokin . . . 169 Second National Bank of Reading v. Hewett 290 Second National Bank of Reading u.Wentzel 171 Second National Bank of Richmond v. Fitzpatrick 224, 232, 233, 237, 238 Second National Bank of Spring- field, Armstrong v 26, 402, 415 Second National Bank of Titusville, appeal of 224,228 Second National Bank of Titusville, O'Harea.. 269 Second National Bank of Titusville ■cWaid 224 Security Bank of Renville, Fort Dearborn National Bank v 102 Security National Bank, First National Bank v 135 Security National Bank of New York v. National Bank of the Commonwealth 181 Security National Bank of Sioux City, Iowa, v. St. Croix Power Company 260, 413 Sedalia National Bank, Arnold v. . 119, 122, 125 Sedalia, School District of City of v. DeWeese 157,263,335 Seeber v. Commercial National Bank of Ogden 6, 318, 430 Seeley v. New York National Ex- change Bank 34 Seiburn, Frazer v 514 Seldon, First National Bank of Chicago?; 217 Seligman, Burgess?) 116 Seligman v. Charlottesville Na- tional Bank . 5 Selover v. First National Bank of Minneapolis 160 Settle, Hughes?) 295 Sevier et al., Merchants' National Bank v 220 Seymour, Fort Dearborn National Bank v 6, 296 Shackleford, Beckham v 391 Shafer v. First National Bank of Russell 224 Shall, Conway?) 198 Shappard, Cage v 14, 267, 268 Sharp?). National Bank of Birming- ham 81,83 Page. Shaw v. National German-Ameri- can Bank of St. Paul, Minn 478 Shaw, Niles v 512 Shawnee County Bank, Western St. Louis Savings Bank v 320 Sheafe, Watson?) 120 Shenandoah National Bank v. Read 177,411 Sherburne, First National Bank of Greenville v 294, 422 Sherwood, Christie v 296 Shields, Mercantile National Bank?) 507,511 Shinkle v. First National Bank of Ripley 222,231 Shinkle, Kirtley's administra- trix?) 38 Shipman v. Bank of the State of New York 46 Shoemaker, Hayes?) 466 Shoemaker v. National Mechanics' Bank 77,269,346,422 Shoeman, Cleveland, Brown & Co.?) 78,422 Short et al. v Hepburn 162, '189, 410 Showaltern. Cox 60,538 Shunk v. First National Bank of Galion 224 Shute v. Pacific National Bank 389 Sibley et al. , Charnley v 386, 387 Sickels?). Herold 390 Silver Bow County, Talbot v 500, 506, 531, 534 Silver Bow County, Commissioners of, v. Davis 520 Simmons v. Aldrich 506 Simmons v. Cincinnati Savings So- ciety 43 Simmons v. Bank of Greenwood . . 57 Simmons v. United States 380 Simons?). Fisher 1 323 Simons, Fisher ?> 183 Simpson v. First National Bank of Denver 19, 155 Sinclair, T. M., & Co., v. Goodell. 55 Sioux City First National Bank, Talbot?) 221, 237, 239, 242, 243, 250 Sioux City National Bank et al., Kelly, Maus & Co. v '254 Sioux City Stove Works, Wachu- setts National Bank v 248 Sioux City Terminal Railroad and Warehouse Company, Trust Com- pany of North America, inter- vener, First National Bank of Montpelier?) 279 Sioux Falls National Bank, Thomp- son v 61 Sioux Valley State Bank v. Drovers' NationalBank 61 Skiles v. Houston 393 Skinker, Matthews v 428, 429 Skinner, Aldrich ?> 457, 495 Slack ?■. Northwestern National Bank of Superior 208, 396 TABLE OP CASES. 595 Page. Slack, St. Luke's Church v 448 Slaughter v. First National Bank of Montgomery 222, 227, 398 Sleight, Fallkill National Bank v. . 277 Slemmons, Bank of Cadiz v. 147, 232, 236 Sleppv v. The Bank of Commerce etal 134 Small et al. , Case, receiver, v 183, 462 Smith, Brown v 494 Smith v. Carmack 295 Smith, Cragie v 95 Smith, Deweese v 457, 459, 460, 494 Smith v. Eighth Ward Bank 260 Smith v. Exchange Bank of Pitts- burg 223, 423 Smith, • Elizabethport Banking Company v 139 Smith, Farmers and Merchants Na- tional Bank v 320, 418, 422 Smith v. First National Bank of Chadron 270 Smith v. First National Bank of . Crete 243 Smith, First National Bank of Dor- chester v 243 Smith, First National Bank of Men- dotau 452,513 Smith, First National Bank of Pierre v 423, 436 Smith v. First National Bank of Westfield, Mass 139, 416 Smith, Fonner v 56 Smith, Harrison ~v 137 Smith v. Philadelphia National Bank 421,422 . Smith v. Sabin 16 Smith, Stevens?) 311 Smith, Wichita National Bank et ali> 246,252 Smith (Daniel), appellant, Na- tional Bank of Newburgh, re- spondent,?) 126, 290 Smith, Geo. T., Middlings Purifier Company et al., Preston Na- tional Bank v 155 Smithson i\ Hub bell et al 191 Smyth, Sturgis National Bank v... 284 Sneed, Memphis National Bank v. 11, 295 Snodgrass, Farmers and Traders' National Bank of La Grande v. . 277 Snodgrass v. Sweetser 63 Snohomish County v. Puget Sound National Bank 191 Snyder v. Foster 467 Snyder r. Mount Sterling National Bank 235 Snyder's Sons Company v. Arm- strong , 390 Solicitors' Loan and Trust Com- pany et al., Corn Exchange Na- tional Bank v 542 Somerset National Banking Com- pany's receiver, et al. , v. Adams. 36 Somerville, City of, Beal v.. 96, 209, 210 Somerville, George v. : , 436 Page. Southern Banking and Trust Com- pany, Camp v 299 Southern National Bank, Rosen- heim Real Estate Company v. . . 246 Southern National Bank of New York, Robinson, receiver, v 82. 472, 473 Southern Pacific Company et al., Donohoe-Kelly Banking Com- pany v 53 South Omaha National Bank, Pederson v 53 South Park Foundry and Machine Company v. Chicago Great West- ern Railway Company 89 Southwestern National Bank, Myers v 165 South worth, Strong, receiver,?). 193,459 Sowles et al. , First National Bank of Plattsburg v. (first case) 340 Sowles v. First National Bank of Plattsburg (second case) 287 Sowles v. National Union Bank, Swanton, Vt. (two cases) 22,184 Sowles et al., Witters, receiver, v. (first case) 339, 340 Sowles, executor, Witters, receiver, v. (second case) 477, 482 Sowles et al., assignees, Witters, receiver, v. (third case) 117, 193, 263, 296, 304, 453, 475 Sowles et al., Witters, receiver, v. (fourth case) 141 Sowles and wife, Witters, receiver, v. (fifthcase) 274 Sowles et al. v. Witters (sixth case) . 199 Sowles v. Witters et al. (seventh case) 483- Sowles et al. v. Witters (eighth case) 197 Sowles v. Witters et al. (ninth case) 192 Spafford v. First National Bank, Tama City, Iowa 416, 426 Spates, Merchants National Bank v 160, 285 Spaulding, Briggs v 313, 337, 338 Speckert et al. v. German National Bank etal 192,194,252 Spokane, City of, v. First National Bank 539 Spokane County v. Clark 213 Spokane County v. First National Bank 544 Spokane Drug Company, Adams v. 390 Spokane National Bank, Weber etalD 271 Spokane National Bank et al., Grout v 188 Sprague et al. v. Farmers' National Bank, Arkansas City, et al 103 Sprague, First National Bank v 109 Spratlen, Central National Bank of Pueblo v 142 Springfield, City of, v. First Na- tional Bank 501 596 TABLE OF CASES. Page. Sproat, Second National Bank «... 84 Spurr v. United States 358, 372, 379 Squires v. First National Bank. . .144, 317 St. Croix Power Co., Security National Bank of Sioux City, Iowa, v 260, 413 St. Joseph Bank, Ihl v 120 St. Louis, City of, v. Johnson 535 St. Louis National Bank v. Allen etal 247 St. Louis National Bank v. Bloch . 67 St. Louis National Bank v. Brink- man 252 St. Louis National Bank, Daniel v. 100 St. Louis National Bank v. Papin. 521 St. Louis and San Francisco Rail- way Company v. Johnston, re- ceiver 91,209 St. Louis Trust Company, Mutht>. 156 St. Luke' s Church v. Slack ....... 448 St. Nicholas Bank, People * 70, 390 St. Nicholas National Bank, Thomp- son v 71, 288, 414, 423, 436 St. Paul, City of, et al., Hennessy v 436 St. Paul National Bank, West v . . . 105 Stacy v. Dane County Bank 109 Stadler v. First National Bank of Helena 393 Stair v. York National Bank 122 Stanage, Armstrong v 28, 31 , 200 Standard National Bank, Davis v.. 51 Stanley, Albany County (super- visors) v. (first case). 116,511,515,532 Stanley v. Board of Supervisors of Albany County (second case).. 248, 521 526 532 Stanton zj.Wilkeson. 190, 193, 194' 458^ 484 Stapp, Owens v 63 Stapylton v. Anderson et al 7 Stapylton v. Carmicheal 7 Stapylton v. Cie. des Phosphates de France 210 Stapylton v. Stockton 205, 323 Stapylton v. Teague 7 Stapylton v. Thaggard 185, 501, 508 Starbuck, Wiley v 227 State, Ahrens v 181 State j). Bank of CommerceofGrand Island 98,540,541 State, Bartley v 59 State v. Bienville Oil Works Com- pany 447 State, Boynoll v 514 State, Burrows v 63 State v. Carpenter 273 State v. Clements 153 State, Collins v 119 State v. First National Bank 451 State v. Gasting 75 State v. Goll 448 State, Goshen National Bank v ... 331 State v. Hartford National Batik. . 404 State v. National Bank of Balti- 505 State, Nichols v State v. Phoenix Bank. 62 404 Page. States Tuller 385 State, VanSlykew 514 State et al., Schmelling v 16, 137, 202 State ex rel. Anderson et al. v. Thum 212 State ex rel. Bowling, assessor, Ap- plegate v 273, 509 State ex rel. Burke v. Citizens' Bank of Jennings 446 State ex rel. German Savings Bank v. Fawcett 151 State ex rel. St. Amand v. Bank of Commerce 56 State ex rel. Zuber, Pollard v 115 State of Idaho v. First National Bank of Boise City '.. 508 State of Nebraska v. First National Bank of Orleans 129, 271, 415 State of Nebraska, McDonald v. - 134, 192 State (Myers, prosecutor) v. Camp- bell, collector of town of New- ton 512 State Bank, in re 108 State Bank, Billingsley v 218 State Bank, Dabney v 119 State Bank, Fogarties & Still- man v 57 State Bank v. Kain 121 State Bank, Beeves v 108 State Bank, Svendsonu 50 State Bank, Thatcher v 120, 121 State Bank, Tyson v 108 State Bank of Manitowoc et al., Killens 498 State Bank of Phillips, Merchants' " State Bank v 106 State Bank of Pike v. Brown 154 State Bank of Wheatland, An- drews et al. v 124, 155 State National Bank v. Flatbers. . . 428 State National Bank v. Freedmen's Savings and Trust Company 136 State National Bank, Merchants' National Bank of Boston v 27, 42, 68, 69, 318, 331, 402, 414, 416 State National Bank of Boston, Cooke v 72 State National Bank of Denver, Schofield v 316, 416 State National Bank, Fort Worth, i. Thomas Manufacturing Com- pany 108 State National Bank, Keokuk, Pittsburg Locomotive and Car Works v 77,271 State National Bank of Lincoln, Richa 417 State National Bank of Lincoln, Scofleldw 278,427 State National Bank of Maysville, Weiands, administrator, v 43,48 State National Bank of Minneapo- lis, Baldwin v 422 State National Bank of Minneapo- lis, Canfieldw.-l 271,422 State National Bank of St. Joseph !'. Newton National Bank 319 TABLE OF CASES. 597 Pagu. State Loan and Trust Company, Hawkins v 195 State Loan and Trust Company, Pauly v 473, 474 State Savings Bank, Glines v ..... 62 Stauffer, First National Bank of Uniontown v 224 Stearns v. Lawrence 150, 327, 341 Stearns, Twenty-sixth Ward Bank of Brooklyn?) 299 Steckel v. First National Bank of Allentown 132,143,334 Steinway etal., First National Bank of Chicago v 247 Steel City National Bank, An- drews v 181,411 Stephens v. Bernays 117, 194, 494 Stephens v. Follett et al 493 Stephens, Furber v 210 Stephens v. Monongahela National Bank of Brownsville 163, 233 Stephens v. Overstolz 164, 343, 348 Stephens, Schierenberg v 28, 201 Stephens v. Schuchmann 394 Stetson v. City of Bangor 115, 502 Stevens v. Catlin 286 Stevens, Davis, receiver, v 462, 463 Stevens v. Orton 311 Stevens v. Smith 311 Stevens v. White 311 Stevens, Wiggins v 59 Stevenson, Implement Company v. 31 Stewart v. Armstrong 148, 199, 330 Stewart, First National Bank of Xenia v 39, 419, 420 Stewart v. National Union Bank of Maryland 269 Stewart et al. , Xenia Bank v 318 Still, First National Bank of Kauf- man v 311 Stillwater Gas Company, Third National Bank v 536 Stockgrowers' National Bank of Pueblo, United States v 129 Stockton Saving and Loan Society et al. , McGorray v 143 Stockton, Stapylton v 205, 323 Stoddard, Freiburg v 100 Stolteben, Tourtelot v 473, 489 Stone, First National Bank of Kala- mazoo v 148, 331 Stone, Third National Bank of Louisville v 500 Stone, Wallace* 94,538 Stout, Welles* 35,459,481 Stowe *. First National Bank 84 Stowe v. Yarwood 386 Strafford National Bank *. Dover. 505 Strang, First National Bank of Monmouth * 402 Strong, receiver, *. South worth. 193,459 Stuart v. Bank of Staplehurst. ' 16, 253, 336 Stuart *. Hayden 17, 409, 468 Stuart, Grueter* 17,468 Stuart et al. , Wrights 121 Studebaker *. Perry, receiver 460 Stuetzer, First National Bank v... 286 page Stufflebeam *. De Lashmutt .... 450, 490 Sturdivant et al. v. Farmers and Merchants' Bank of Rushville. . 7 Sturdivant v. Memphis National Bank 219,285 Sturgis National Bank, Gregory etal. v...'. 113 Sturgis National Bank v. Smyth . . 284 Succession of Lanaux 471 Suddard, Rickert * 54 Summerfield *. Pritchard 447 Sumter County v. National Bank of Gainesville 501 Sunman *. Gatch etal 481 Sunderlin *. Mecosta County Sav- ings Bank 100 Sunwal, Haugan * 315 Sutton Manufacturing Company *. Farmers' National Bank of Val- paraiso, Ind 116 Svendson v. State Bank 50 Sweeney, Edwards * 133 Sweeney, Heironimus * 133 S weetser, Snodgrass v 63 Swift, Barnes v 256 Swift*. Whitney 131 Swift v. Williams 45 Switz, Lewis * 462 Swope v. Lefflngwell 424, 428 Sykes v. Holloway 467, 469 SvracuseNationalBank, Pattison v. 137, 138, 139, 414 T. Tabor v. Commercial National Bank of Cleveland 15 Taft v. Bowker 25 Taf tv. Quinsigamond National Bank 59 Taintor, United States * 376 Talbert, First Commercial Bank v. 406 Talbot v. Sil verbo w County 500. 506, 531, 534 Talbot v. Sioux City First National Bank 221, 237, 239, 242, 243, 250 Talcott v. First National Bank of Lamed 121, 407 Tallent, Brummagim v 131 'Talmage v. Third National Bank of City of New York 255,259 Tapley v. Martin 306, 399 Tapley v. McPike 495 Tappan v. Merchants' National Bank 504 Taylor, Bonnardet v '. . . 447 Taylor v. Commercial Bank 333 Taylor v. Hutton 303, 327 Taylor, National Bank of Da- kota* 37,292,450 Taylor, Phoenix National Bank v. 64, 171 Taylor, Venango National Bank v. 392 Teague *. First National Bank of Salina 238 Teague, Stapylton * 7 Teal, Third National Bank of Bal- timore v 398,400 Tecumseh National Bank v. Cham- berlain Banking House et al 81 598 table op cases. Page. Tecumseh National Bank i>. Har- mon 411 Tehan v. First National Bank et al . 192 Tenney, Commonwealth v 385 Tenth National Bank, Mayor, etc., of New York v 272 Terrell, Case v 182, 245 Terry *. Birmingham National Bank 38,85 Terry's administrators, First Na- tional Bank of Roanoke v 156, 260 Teutonia National Bank v. Loeb . . 80 Texarkana NationalBank, Baker?'. 19 TexarkanaNational Bankv. Daniel . 262 Thaggard, Stapylton v 185, 501, 508 Thatcher v. State Bank 120, 121 Thatcher v. West River National Bank 399 Thayer *. Butler 29, 482 Thayer, Sctiville v 31 The Dalles National Bank, Greer v . 539 Thilmany v. Iowa Paper Bag Com- pany et al 431 Third National Bank v. Angell ... 290 Third National Bank v. Blake. . 274, 417 Third National Bank, Bowden v. . 63 Third National Bank, Citizens' Na- tional Bank v 103 Third National Bank, Dana v 60 Third National Bank, Exchange National Bank v 108 Third National Bank v. Harrison et al 289, 298 Third National Bank v. Hastings . 9 Third National Bank, in re 184 Third National Bank v. Merchants' National Bank 166 Third National Bank v. Stillwater Gas Company 536 Third National Bank of Baltimore v. Boyd 78,82 Third National Bank of Baltimore . r. Teal 398,400 Third National Bank of Buffalo v. Buffalo German Insurance Com- pany 36,270,420 Third National Bank of Chatta- nooga, Gordon v 287 Third National Bank of Cincinnati, H umphreys v 15, 155, 159, 408 Third National Bank of City of New York, Talmage v 255, 259 Third National Bank of Detroit, Flynn » 345 Third National Bank of Louisville v. Stone 500 Third National Bank of Louisville v. Vicksburg Bank 109 Third National Bank of Philadel- phia v. Miller 220, 223, 236 Third National Bank of Pittsburg v. Mylin, Auditor-General . . 248 Thomas v. City National Bank of Hastings (first case) ... 5, 324, 326, 430 Thomas, City National Bank of Hastings v. (second case) 431 Thomas v. Exchange Bank 56 Page. Thomas, Farmers' National Bank v . 11 Thomas v. Farmers' Bank of Mary- land 404 Thomas, Holti> 483 Thomas Manufacturing Company, State National Bank, Ft. Worths. 108 Thompson v. German Insurance Company et al 486, 494 Thompson, Gerner v 164, 343 Thompson, Hayden v 164, 193, 196, 197, 343 Thompson, McDonald, receiver, v 495, 496 Thompson, Overton, Bank of ', v . . 295 Thompson v. Pool 190, 194 Thompson v. Reno Savings Bank . 32 Thompson e. Sioux Falls National Bank 61 Thompson v. St. Nicholas National Bank 71,288,414,423,436 Thompsons. Union TrustCompany 392 Thompson National Bank v. Dow. -276 Thompson National Bank of Put- nam et al., Corwine et al. v 442 Thompson, J. & Sons Manufactur- ing Company, Northwestern Na- tional Bank v 81 Thomson v. Beal 133 Thornton v. National Exchange Bank 81 Thorpe v. Wegef rath 75, 405 Throop, Peoples 447,448 Thuemmler, American Exchange 94 National Bank v 94 Thumm, State ex rel. Anderson et al. v 212 Thurber, Cecil National Bank v . . 177 Thurber v Miller 246 Ticonic National Band v. Bagley . . 409 Tiffany, Miller v 218 Tiffany v. National Bank of the State of Missouri 226 Tildeh v. Blair 218 Tillinghast, Bailey v . 30, 31, 486, 492, 494 Tillinghast, Brown i> 29, 458 Tillinghast v. Carr 195, 421 Tillinghast, Follett v 191 Tillinghast, Hallam v 99 Tillinghast, Rand v 493 Timberlake et al. v. First National Bank 220 Tintsman, First National Bank of Mount Pleasant d...,. 226 Titcomb etal., Hallo well Savings Institution v 128 Title and Trust Company of West Pennsylvania, Bank of Saginaw v 133,134,280 Tolman v. American National Bank 167 Tomblin v. Higgins 235 Tomlinson v. National German- American Bank 73 Tompkins, First National Bank of Sheffield etal. v 298 Tompkins County National Bank v. Bunnell & Eno Investment Company 288 TABLE OF CA.SE8. 599 Pago. Tootle etal. v. First National Bank of Port Angelea 435 Tourtelot v. Stolteben 473, 489 Tourtelot v. Whitehead 187, 324, 433 Townsend, Logan County National Bank v 148, 250, 331, 414, 418, 432 Townsend, Hunt v 95 Townsend v. Williams 341 Tracey, Cadle v 150,255 Tracy, Merchants' National Bank v . 297 Traders' National Bank, Dresser v. 432 Traders' National Bank, Potter v.. 277 Tradesmen's National Bank v. Bank of Commerce 272 Tradesmen's National Bank, Brooke v 51 Tradesmen's National Bank, Bur- roughs v 51 Tradesmen's National Bank, Fisher i> 203 Tradesmen's National Bank v. Mer- ritt : 62 Tradesmen's National Bank of New York, Continental National Bank of New York v 71, 170 Tramel i>. Farmers' National Bank . 48 Trautman et al. , Armstrong v 190 Travous, Lanterman v 541 'Treat, Leather Manufacturers Na- tional Bank v 534 Trenholm, Comptroller, v. Com- mercial National Bank 163 Trenholm, Comptroller v. Fidelity National Bank 163 Trent, Schumaker v 89, 108 Trent Title Company v. Fort Dear- born National Bank of Chicago. 73 Trexler, Allentown National Bank v 9 Tribilcock, Upton v 31 Trowbridge, Newberry v 132 Trustees of First Presbyterian Church v. National State Bank of Newark 406,417 Trustees of Masonic Hall, Mer- chants and Planters' National Banku 181,198,265 Tufts, People's Bank and Trust Company v 390 Tuller, States 385 Turentine, Robinson v 475 Turnbulla. Payson 488 Turner o. First National Bank of Keokuk etal 199,201 Turner v. First National Bank of Madison 424 Turner, First National Bank of Newton v 232, 238, 241 Turner, Richardson v 84 Turner v. Union National Bank . . 144 Turner*. Utah Title Insurance and Trust Company 144 Turner v. Wells, Fargo & Co 144 Turner, Sumpter, Syndic, of M. Schwartz & Co., pltff. in error, v. F. L. Richardson, receiver of the American National Bank.. 15, 193 Page. Tuttle v. Frelinghuy sen 207 Tuttle et al. v. Iron National Bank of Plattsburg et al 268, 406 Twenty-sixth Ward Bank of Brook- lyn v. Stearns 299 Twenty-third Ward Bank, Mount Morris Bank v 77 Twin City v. Nebeker 75, 527 Twining, Schofleld v 264, 453 Tyler v. United States 272, 380 Tyson, Eicaud v 493 Tyson v. State Bank 108 Tyson v. Western National Bank of Baltimore 90 U. Ueland, Brusegard v 97 Uhlmann et al. , Cassidy v 161 Ulrich v. Santa Kosa National Bank 17,144 Ulster County Savings Institution v. Fourth National Bank 256 Underwood v. Metropolitan Na- tional Bank _ 274 Union Bank, Cockburn v 447, 448 Union Bank, Commercial National Bank* 107 Union Bank v. Crine 7,8 Union Bank, Hazleton v 121 Union Bank, Hum v 109 Union Bank v. Planters' Bank 145 Union County National Bank, Eaton* 530 Union Gold Mining Company v. Rocky Mountain National Bank . 163, 269 Union National Bank v. Citizens' Bank of Union City et al. . . 88, 97, 543 Union National Bank v. Chicago, City of 521 Union National Bank a. Cleveland, City of 261 Union National Bank v. Dreyfus & Co., Henry 386 Union National Bank, Gage Hotel Company v 55 Union National Bank, Hagar v ... 22, 39, 258, 420 Union National Bank, Lealos v. . 238, 241 Union National Bank, Lexington Town Council* 418, 436 Union National Bank, Libby v 424 Union National Bank, Louisiana National Bank v 56 Union National Bank W.Matthews. 424, 426, 427, 428 Union National Bank, Morris v. . . 106 Union National Bank, Mustard v 125 Union National Bank v. Oceana CountyBank 54 Union National Bank v. Rowan . . 4-16 Union National Bank, Turner v. . . 144 Union National Bank, Wilder v . . 254 Union National Bank of Bruns- wick, Dearborn v 78 600 TABLE OF CASES. Page. Union National Bank of Chicago v. Louisville, Nashville, Atlanta, and Cincinnati Railway Com- pany 220 Union National Bank of Cincinnati v. Miller, treasurer of Hamilton County 249 Union National Bank of Kansas City etal. v. Hill et al 340 Union National Bank of New Or- leans v. Grant 282 Union National Bank of Omaha, Modern Woodmen of America v. 15, 135, 150 Union National Bank of Pittsburg, Wheelers 241 Union National Bank of Troy, Vietsv 51,145 Union Stock Yards National Bank v. Dumond 130 Union Stock Yards National Bank v. Gillespie 44 Union Stock Yards National Bank v. Haskell etal 536 Union Stock Yards National Bank v. Moore etal 409,535 Union Trust Company, Bank of Antigo v 107 Union Trust Company, Thomp- son v 392 United Security Life Insurance and Trust Company v. Central National Bank 165 United States, Agnew v 354, 370, 378 United States v. Allen 376 United States v. Allis 374, 376, 381 United States v.- American Ex- change National Bank 112, 172 United States, Bacon v. 152, 356, 370, 374 United States ex rel. v. Barry 451 United States, Bashaw v 146 United States, Batchelor v 362 United States v. Bennett 74 United States v. Berry et al 366, 374 United States v. Booker 350, 356 United States, Branch v 128 United States, Breese v. (first trial) 361,371,378,382 United States v. Breese (second trial ) 351, 352, 354, 374, 376 United States v. Britton 350, 352, 354, 362, 364 United States, Burton v 122 United States v. Cadwallader 359 United States, Central National Banka 504 United States, Claasen v.. 15, 19, 360, 382 United States v. Clinton National Bank 166 United States, Cochran v 356, 357, 364, 368, 443 United States, Coffin v. 350, 357, 367, 377 United States v. Conant 351, 359 United States v. Conners 350 United States, Cook County Na- tional Bank v 117, 213, 216 United States v. Crecelius 355 Page. United States v, Curtis 313, 359 United States, Dorsey v 364, 371. 376. 378. 380 United States, Dow et al. v '. . 353, . 355,366,372,378 United States v. Eastman 363 United States v. Edgerton 360, 369 United States v. Ege 357 United States v. Eno 362 United States, Evans v 358 United States v. Eish 350, 352, 357 United States, Flower v 373 United States v. Folsom 357, 376 United States v. French et al . . . 356, 365 United States, Gallot v 16, 358, 380, 381, 383 , United States, Gardes v 376, 381 , 382 United States v. German 380; 382 United States, Girault v 376, 381, 382 United States v. Graves 356, 357 United States, Graves v 378, 444 United States v. Harper 349, 352, 355 United States v. Hughitt 356 United States, Jackson v 76, 214 United States, Jewett v 12, 353, 359, 362, 366 United States v. Jewett 12, 359, 366 United States v. Kenney 358 United States v. Kimball . - 359- United States v. Knox 457, 461 United States v. Lee 349,352 United States, Logan v 76 United States v. Mann 506, 510 United States v. McClure 369 United States, McKnight v 359, 361, 366, 371, 373, 374, 375, 379, 380 United States v. Means et al. 304, 313, 355 United States, Merchants' National Bank of Little Rock v 75, 115 United States v. National Bank of Asheville et al 128,129 United States v. National Ex- change Bank of Milwaukee 251 United States v. Neale 314 United States v. North way 361 United States, Onondaga County Savings Bank v 112 United States v. Patterson 382, 384 United States v. Peters 356, 369, 372, 377, 379 United States, Porter v 361 United States, Potter v 350, 364. 365. 368. 381 United States v. Potter , . . 366 United States, Putnam v 325, 358, 370, 376, 382 United States v. Rhawn 510 United States, Rieger v 353, 362, 379 United Stales, Scott» 366 United States, Simmons v 380 United States, Spurr v 358, 372, 379 United States v. Stockgrowers' Na- tional Bank of Pueblo 129 United States v. Taintor 376 United States, Tyler v 372, 380 United States v. Voorhees 117 United States v. Warner 368 TABLE OF OASES. 601 Page. United States v. Young 355 United States v. Youtsey 351, 355 United States Bank, Ooote v 45, 123 United States Bank, Fleckner v... 499 United States Bung Manufacturing Company v. Armstrong 387 United States Fidelity and Guar- anty Company v. Muir 307 United States National Bank, Branch v 94 United States National Bank v. First National Bank of Little Bock 17,301,323,416 United States National Bank, Fisher v 541 United States National Bank v. Greer '97 United States National Bank, Hen- derson, C. M., & Co. v 60 United States National Bank, Kaiser v 10 United States National Bank v. McNair 290 United States National Bank v. Westervelt 87 United States National Bank of Holdredge v. Forstedt 302 United States National Bank of New York, Auten v. . 190, 289, 316, 388 United States Savings Institute, Knechta 119 Upton, Chubb « 31 Upton v. National Bank of South Reading 424 Upton, Sanger v 31 Upton v. Tribilcock 31 Urie, Kerru 470,475 Utah Loan and Trust Company, Larsen v 272 Utah Title, Insurance and Trust < Company, Turner v 144 Utley v. Hill et al 147 V. Valdetero v. Citizens' Bank of Jen- nings et al 48 Valley National Bank, Meyers v. 419, 455 Valley State Bank of Hutchinson et al., First National Bank of Sharon, Pa., v 536 Van Allen v. American National Bank 537,540,546 Van Allen v. Assessors . 115, 510, 514, 515 Van Antwerp v. Hulburd 76, 184, 251 Van Campon, in re 351, 353, 357 Vancew. Mottley 342 Van Leuven it. First National Bank 418 Van Ness, First National Bank of Haileyi) 292 Van Nostrand, Hungerford Na- tional Bank v 398 Van Reed v. People's National Bank 21,407 VanSlykeo. State 514 Varrell, Andrews v 387 Veazie Bank v. Fenno 75, 115 Page. Veederv. Mudgett 31 Venango National Bank v. Taylor. 392" Venner v. Cox 212' Vermont LoanandTrust Company, Dygert et ux v 219' Vermont National Bank of St. Al- bans, Eastern Township Bank v . 330 Vickery, Waxahachie National Bankw 1 332 Vicksburg Bank, Third National Bank of Louisville v 109' Vicksburg Bank v. Worrell 509 1 Viets v. Union National Bank of Troy 51,145. Vilas National Bank v. Barnard ... 11 Vincennes Manufacturing Com- pany, Paxton v 84 Volz v. National Bank 436 Voorhees, United States v 117 Vosea. Philbrook 386 W. Wachusett National Bank v. Sioux City Stove Works 248 Waco Electric Railway and Light Company, Farmers and Mer- chants' National Bank i> 18,. 26, 149, 188, 261, 272, 289, 439> Wade, Patterson v 338 Wade et al. , National Bank of Com- merce of Tacoma v 164, 343, 344 Wadsworth v. Duncan 498 Wadsworth v. Hocking 498 Wadsworth v. Laurie 498. Waid, Henderson, to use of Second National Bank of Titus ville r v... 224 Waite v. Dowley 451, 504 Walden, Citizens Savings Bank v . 296 Walden National Bank v. Birch . . 306, 311,420 Walker, Custer County v 261 Walker, Hale v 461 Walker v. Miller 160' Walker et al., Omaha National Bank v 175 Walker et al. v. Windsor National Bank 248,313 Walkill National Bank, Green v.. 182 Wall, Neal v 459, 487 Wallace v. Bacon 450 Wallaces. Hood 419,490 Wallace, Lautry v 419, 449, 483, 490 Wallace v. Lincoln Savings Bank . 345 Wallace, Richards v 12 Wallaces. Stone 94,538 Wallace et al., Brownlee et al. v.. 267, 432, 456 Wallace et al., George et al. v 12, 267, 432, 456 Wallace et al., McCague Invest- ment Company et al. v. . . 267, 432, 456 Wallace et al., Morsman v. . 267, 432, 456 Wallace et al., Morton et al. v. 267, 432, 456 Wallace et al., Poppleton «..267, 432, 456 Waller et al. v. Coler 249 Walsh et al. , Breyfogle v 176 602 TABLE OP CASES. Page. "Walton v. Riverside Bank 59 "Walton & .Whann Company, Wheeler v 201 Ward v. Johnson 137, 535 "Warner, Armstrong v 391, 394 Warner v. Penoyer 339 Warner, United States v .'. 368 Warren v. De Witt County National Bank 426 Warren v. First National Bank of Columbus 262 Warren et al. v. Robinson et al . . . 338 Warren-Scharf Asphalt Paving Company v. Commercial Na- tional Bank of Detroit 166, 167 Warwick, Inhabitants of» Golds- bury v 513 Washington Bank, Receivership of , in re 97 Washington County National Bank v. Lee 399 Washington County National Bank, National Bank of Fort Edwards v 131 Washington National Bank v. Pierce 295 Washington National Bank of Se- attle v. City of Seattle 517 Washington National Bank of Se- attle v. King County 517 Washington National Bank of Ta- coma v. Eckels et al 180, 265 Washington Savings Bank, Dear- born v 120 Wasson v. First National Bank of Indianapolis 512, 514 Wasson v. Hawkins 210 Wasson v. Lamb 121 Waterloo Milling Company v. Kuenster 88,109 Waters et al., First National Bank of Utica« 516 Watkins, Davis Estate v 401, 481 Watkins v. National Bank of Law- rence 264 Watson v. Phoenix Bank 137 Watson v. Sheafe 120 Watt, John W., First National Bank of Lake Benton, Minn., plaintiff in error, v 233 Waxahachie National Bank v. Beil- harz 150,328 Waxahachie National Bank v. Vickery 332 Wayne County, Bressler v 512 Weaver v. Irons 67 Weaver v. Kelly 191 Weaver, New York v 511, 520 Weaver, People ex rel.Williamsu. 511, 520 Webb, Bank of Guntersville v . . 122, 123 Webber, Beardsley v 131, 284 Weber et al. v. Spokane National Bank 271 Weckler v. First National Bank of Hagerstown 418, 422 Wedge Mines Company v. Denver National Bank 46 Page. Weed, Davisw 479,480 Weeden, Falls Point Savings Insti- tution v 145 Weeks v. International Trust Company 249,257 Wegefrath, Thorpe v 75, 405 Wehr-lie, Falls City State Bank r. . 57 Wehrman v. McFarlan 435 Weiand's administrator v. State National Bank of Maysville 43, 48 Weinhard, Commercial National Bank?) 35 Weiss Malting and Elevator Com- pany etal., Ho wee v 176 Welford, Pollards 165 Welles, Booth et al v 545 Welles v. Graves et al. . 163, 164, 343, 344 Welles v. Stout 35, 459, 481 Welles v. Larabee 472 Wells, National Bank of Glovers- ville v 5 Wells, Fargo & Co., First National Bank of Houston v 20 Wells, Fargo & Co. , Turner v 144 Wempe et al., Young v. 145, 457, 459, 485 Wentzal, Second National Bank of Reading v 171 Wesley, Haynes v 49 West v. Bank of Rutland 81 West v. Elmira Bank 132, 334 West v. St. Paul National Bank. . . 105 West Chicago Park Commissioners, McNulta v 124, 129, 157, 539, 544 West Devon, etc., in re " 448 Western German Bank, Holder v . 113 Western German Bank v. Norvel.. 538, 547 Western Improvement Company v. Des Moines National Bank . . . • 316 Western Iron and Steel Company, Columbia National Bank v 412 Western National Bank v. Arm- strong 201, 326, 328, 335, 414 Western National Bank, Hobbs v . 454 Western National Bank, Miller v. . 124 Western National Bank v. Wood. . 289 Western National Bank of Balti- more, Tyson v 90 Western St. Louis Savings Bank v. Shawnee County Bank 320 Western Union Telegraph Com- pany v. Bimetallic Bank 168 Western Union Telegraph Com- pany v. Davenport 452 Western Wheeled Scraper Com- pany v. Sadilek 105,110 Westervelt v. Mohrenstecher et al. (first case) 309,315 Westervelt et al., Mohrenstecher v. (second case) 16, 309, 311, 313 Westervelt, United States National Bank v 87 Westminster Bank v. Wheaton ... 42 Weston v. Estey 332 Weston, First National Bank v 289 West RiverNational Bank, Thatcher v 399 TABLE OF OASES. 603 Page West Side Bank, Crawford * 43 West Side Bank *. Mechanics' Na- tional Bank of Newark, N.J 21 Wetherwold, Irving Bank * 69 Weyer *. Second National Bank . . 451 Wheaton, Westminster Bank 42 Wheeler, Baltimore, etc., Railway Company * 80 Wheeler *. Union National Bank of Pittsburg 241 Wheeler *. Walton & Whann Com- pany 201 Wheelock v. Kost 147, 179, 401, 461 Wherry *. Hale 424, 426, 428 Whitbeck v. Mercantile National Bank of Cleveland 519 Whiteomb et al., Jewett * 192 White, Bank of Montreal * 78 White, Central National Bank * . . 447 White *. Commercial and Farmers' Bank, Bockhill, et al 542 White, Foster * 447 White?;. Knox 215,216 White, Stevens v 311 White et al., Central Guarantee Trust and Safe Deposit Com- Vpany * ! 70 hite et al. *. Iowa National Bank of Des Moines 18, 263 "Whitehead, Tourtelot v 187, 324, 433 Whitman, First National Bank of Washington * 52 Whitney *. Butler 465, 466 Whitney, Crocker v 428 Whitney, National Bank of Gen- esee?; 424, 428 Whitney, Price, receiver, * 462 Whitney, Swift* 131 Whitney v. First National Bank of Brattleboro 140 Whitney et al. *. General Electric Company of New York et al 186 Whitney et al., appellants, *. Rags- dale, treasurer... 513,530 Whitney National Bank v. Parker 503, 510 Whittaker v. Amwell National Bank 1 84,154 Whittemore *. Amoskeag National Bank 247 Whitwood, Attorney-General v. . . 447 Whitzel, Moss * 458 Wichita CattleCompany, Exchange National Bank of Atchison v 249 Wichita National Bank et al. v. Smith 246,252 Wickham v. Hull et al 194, 248, 479, 480, 489 Wiggins v. Stevens 59 Wilcox, Knickerbocker v 5, 7 Wild, inre 225 Wilder, First National Bank of Denver * 282 Wilder *. Union National Bank . . . 254 Wiley v. Bunker Hill National Bank 50 Wiley *. First National Bank of Brattleboro 138 Wiley?). Starbuck 227 Wilgus, Yardley* 470 Wilgus' executors, National Ex- change Bank of Lexington v 285 Wilkeson, Stanton * 190, 193, 194, 458, 484 Williams, Allentown Bank v ... 132, 334 Williams u. American National Bank of Arkansas City, Kans., et al. (first case) 40, 80 Williams, American National Bank *. (second case) 150, 215 Williams v. Board of Supervisors of County of Albany 519, 521 Williams *. City National Bank. . . 314 Williams, Commercial National Bank* 35 Williams*. Cox 59,538 Williams, Ferry * 447 Williams, Hayden * 152, 197 Williams, McDonald, receiver, *. . 196 Williams *. Prince of Wales In- surance Co 447 Williams, Second National Bank * 43 Williams, Swift * 45 Williams, Townsend * 341 Williams, Peopleex rel. *. Weaver. 511 Williamson et al. *. American Bank etal 14,266,497 Williamson, Logan National Bank*. 132 Williamson *. Mason ^ 38 Williamsport National Bank *. Knapp 160,251 Wilmington, City of, Robinson *. . 251 Wilmington Savings and Trust Company et al., Ricaud * 476 Wilmington and Weldon Railroad Company, First National Bank of Richmond * 112 Wilson, Balch*. 387 Wilson *. Carlinville National Bank 109,110 Wilson *. Cheyenne First National Bank 40 Wilson, Foster * 477 Wilson *. Merchants' Loan and Trust Co. , of Chicago, 111 17, 157, 473, 489 Wilson*. Pauly 18,293 Wilson, assignee, *. National Bank of Rollo 231 Wilson et al., Piedmont Bank of Morgantown et al. * 291, 389 Wills Creek Coal Company, First National Bank * 62 Winchester Bank *. Clark County National Bank 25, 57 WindischMulhauser BrewingCom- pany, Bank of Marysville * 119 Windsor National Bank, Walker et al. * 248,313 Winfield National Bank *. Mc- Williams 59,100,246 Wingate *. Orchard 482 Winnsboro National Bank, Rose *. 154 Winslow *. Everett National Bank . 169 604 TABLE OF CASES. Page. Winslow v. Harriman Iron Com- pany 297 Winstandley et al. v. Second Na- tional Bank of Louisville 95, 542 Winter v. Baldwin 446,447 Winters v. Armstrong 28, 31, 182 Winters v. Wood 182 Winthrop State Bank, Bloom v. . . 56 Wintler, Citizens' National Bank of Tacoma v 284 Wisdom's executors, First Na- tional Bank of Paducah v 171, 286 Wise, Hoover v 108 Witherby, O'Connor v 459, 487 Withers v. Lafayette County Bank . 300 Witters, receiver, v. Foster, admin- istrator 246,348 Witters, receiver, v. Sowles et al. (flrstcase) 339,340 Witters, receiver, v. Sowles, execu- tor (second case) 477, 482 Witters, receiver, v. Sowles et al., assignees (third case) 117, 193, 263, 296, 304, 453, 475 Witters, receiver, v. Sowles et al. (fourth case) 141 Witters, receiver, v. Sowles and wife (fifth case) 274 Witters, Sowles et al. v. (sixth case) , 199 Witters et al., Sowles v. (seventh case) 483 Witters, Sowles et al. v. (eighth case) 197 Witters et al., Sowles v. (ninth case) 192 Wolf, Babcocki; 411 Wolf v. National Bank of Illinois . . 198 Wolfeborough Savings Bank et al., Lake National Bank v 189 Wolverton v. Exchange National * Bank (first case) 228 Wolverton, Exchange National Bank of Spokane v. (second case) 284 Wood v. American National Bank. 15, 52 Wood, appeal of 37 Wood, Armstrong v , 28, 31 Wood v. Boylston Bank 80 Wood, First National Bank v 9 Wood v. People's National Bank of. Pittsburg 428,429 Wood, Western National Bank v. . 289 Wood, Winters v 182 Wood et al., Latimer v 199 WoodbineSavingsBank,Bartlettt>. 294 Woodhaven Junction Land Com- pany, Riverside Bank v 49 Wood River Bank v. First Na- tional Bank of Omaha 65, 106 Woods et al. v. Colony Bank 171 Woodward v. Ellsworth 186 Woodward, Lancaster Bank v 62 Woodward et al., Blackmore v . 476, 479 Woolmana. Capital National Bank. 386 Worcester National Bank v. Chee- ney 205 Worrell, Vicksburg Bank t> 509 Page. Worthington, Higgins v 392 Wright, Berrien v 218 Wright v. First National Bank of Greensburg 239 Wright v. MacCarty 70 Wright v. Merchants' National Bank 180 Wright v. Robinson et al 65 Wrights. Stuartetal 121 Wrotens, assignee, v. Armat 429 Wyant et al., Zang et al. v . 134, 152, 498 Wylie v. Commercial and Fanners' Bank :... 201 Wylie v. Northampton National Bank 139,419 Wyman v. Citizens' National Bank of Faribault 270 Wyman, Fort Dearborn National Bank v 56 Wyman v. National Bank of Com- merce 65 X. Xenia Bank v. Stewart et al 318 Y. Yakima National Bank v. Knipe . 227, 400 Yankton Savings Bank et al., McCormick Harvesting Machine Company?) 98, 161 Yardley v. Clothier 390 Yardley, Fourth Street National Bank of Philadelphia v 52, 545 Yardlev, Jewett etal. v 542 Yardley v. Philler 76, 208, 395, 544 Yardley v. Wilgus 470 Yarwood, Stowe v 386 Yates, Aldrich v 459, 461, 495 Yates, Price, Receiver of Venango National Bankw 116, 183, 247, 263, 480, 495, 496 Yates et al., Gerner v 382 Yerkes v. National Bank, Port Jervis 418 Yoder, Fishery 190 York National Bank, Stair v 122 Young v. Andrews 117, 278, 429 Young v. Bank of Princeton 25 Young v. McKay 466 Young, National State Bank v 505 Young, United States v 355 Young v. Wempe et al . 145, 457, 459, 485 Youtse'y, United States v • 351, 355 Z. Zang et al. v. Wyant et al . . 134, 152, 498 Zeigler v. First National Bank, Allentown 131 Zeims, First National Bank of • Grand Haven v. 283 Zeis v. Potter et al 83, 275, 295 Zent, First National Bank of Mans- field v 138 Zimmerman t>. Carpenter. . . 479, 486, 494 Zinn v. Baxter etal.... 345 ABBREVIATIONS. A U , . ^ Atl Rerj (•Atlantic Keporter. Abb. N. Abbott's New Cases (New York). Abb. U. S Abbott's U. S. Circuit Court Reports. A. K. Marsh A. K. Marshall's Kentucky Reports. Ala Alabama Eeports. Alb. L. J Albany Law Journal. Am. L. T. (N. S. ) American Law Times (New Series). Am. L. Reg American Law Register (Philadelphia) . Am. Rep American Reports (selected cases) . Ariz Arizona Reports. Ark . . _, Arkansas Reports. B. & Ad Barnwell and Adolphus' English King's Bench Re- ports. B. C i A collection of all cases affecting banks decided by Banking Cases / courts of last resort in the United States. Barb Barbour's Supreme Court (New York) Reports. Baxt Baxter's Tennessee Reports. Beav Beavan's English Rolls Court Reports. Ben Benedict's U. S. District Court Reports. Biss Bissell's U. S. Circuit Court Reports. Black Black's U. S. Supreme Court Reports. Blackf . Blackford' s Indiana Reports. Blatchf i Tji . . VBlatchford's TJ. S. Circuit Court Reports. Bradw Bradwell's Appellate (Illinois) Reports. Bush Bush's 'Kentucky Reports. Cal California Reports. Cent. L. J Central Law Journal, St. Louis, Mo. Ch. D Chancery Division English Law Reports. rClark's Reports (58) Alabama. " "(Clark's Pennsylvania Law Journal Reports. Col Colorado Reports. Col. App Colorado Court of Appeals. Conn Connecticut Reports. Cow Oowen's New York Reports. Cranch Cranch's U. S. Supreme Court Reports. Cush Cushing's Massachusetts Reports. Dallas Dallas U. S. Supreme Court Reports. De G. F. & J De Gex Fisher & Jones' English Chancery Reports. Del Delaware Reports. Dill 1 jjjjj on f-Dilloh's U. S. Circuit Court Reports. Drew Drewry's English Vice-Chancellor's Reports. 605 606 ABBREVIATIONS. E. C. L English Common Law Reports. Fed. Rep Federal Reporter. Fla Florida Reports. Flippin Flippin's U. S. Circuit Court Reports. Ga Georgia Reports. Grattan Grattan's Virginia Reports. Gray Gray's Massachusetts Reports. Harr Harrington's Delaware Reports. Hask Haskell's United States District Court Reports. Heisk Heiskell's Tennessee Reports. Holm Holmes' IT. S. Circuit Court Reports. Howard Howard's TJ. S. Supreme Court Reports. How. Pr Howard's New York Practice Reports. Hughes Hughes' TJ. S. Circuit Court Reports. Hun Hun's New York Supreme Court (Appellate Division) Reports. Idaho Idaho Reports. Ills Illinois Reports. 111. App Illinois Court of Appeals. Ind Indiana Reports. Ind. App Indiana Appeals. Ind. T. Indian Territory Reports. la Iowa Reports. Ir. Eq Irish Equity. Johns Johnson's New York Reports. J.&H Johnson & Hemming's English Vice-Chancellors' Reports. Jur. N. S The Jurist (New Series), London. Kans Kansas State Reports. Kans. App Kansas Court of Appeals. Ky Kentucky State Reports. La. Ann Louisiana Annual Reports. L. J Law Journal, London. L. J. Ch Law Journal, Chancery (English). L. J. Q. B Law Journal (New Series), Queen's Bench. L. R. Eq English Law Reports, Equity. Lea Lea's Pennsylvania Reports. Lea Lea's Tennessee Reports. Mackey Mackey's District of Columbia Reports. Md Maryland State Reports. Mass Massachusetts State Reports. Me Maine State Reports. Mich Michigan State Reports. Minn Minnesota State Reports. Miss Mississippi State Reports. Metcalf Metcalf ' s Massachusetts Reports. Metcalfe Metcalfe' s Kentucky Reports. Mo Missouri Reports (Supreme Court). Mo. App Missouri Court of Appeals. Moll Molloy's Irish Chancery Reports. Mon 1 jy[ on t XMontana Reports. Montg. Co. Law Montgomery County Law Reports. ABBREVIATIONS. 607 N. B. C National Bank i N. E \ N. E R jNorth Eastern Reporter. Neb Nebraska Reports. Nev Nevada Reports. N. H New Hampshire Reports. N- J New Jersey Reports. N. J. Eq New Jersey Equity Reports. N. J. L New Jersey Law Reports. N. M New Mexico Reports. N. Y New York State (Court of Appeals) Reports. N. Y. S New York Supplement, containing decisions of all courts below Court of Appeals. N. C North Carolina Reports. N. D North Dakota Reports. N. W 1 „ w -p [North Western Reporter. Ohio Cir. Ct. R Ohio Circuit Court Reports. Ohio Ohio Reports (Supreme Court, prior to 1852). Ohio State . Ohio State Reports (Supreme Court, since 1852). ' Ohio N. P Ohio Nisi Prius Reports (Common Pleas and Supe- rior Courts). Okl Oklahoma Reports. Ore ■ Oregon State Reports. Otto Otto's U. S. Supreme Court Reports. Paige Paige's New York Chancery Reports. 'Pa .'. 1 Pa. St [Pennsylvania State Reports. Penna J P 1 Pac [Pacific Reporter. Pac. R j Pearson' s Decisions Decisions by Hon. John J. Pearson, judge of twelfth judicial district of Pennsylvania. Pennewills Pennewills' Delaware Reports. Pet Peters' V. S. Supreme Court Reports. Phila Philadelphia. Rich Law Rich' s South Carolina Law Reports. R. I Rhode Island State Reports. Rob. La . . : Robinson's Louisiana Reports. „ P [Southern Reporter. S. C South Carolina Reports. S. Ct Supreme Court (U. S.) Reporter. S. D South Dakota Reports. S E 1 „' u ™ [South Eastern Reporter. S. W a w t? [South Western Reporter. ' Story Story's U. S. Circuit Court Reports. Sup .Supreme Court. Super Superior Court. 608 ABBREVIATIONS. Term Tennessee Reports. Tex Texas Reports. Tex. Civ. Appls Texas Civil Appeals. T. R Term Reports (Durnford & East), English. Thomp. & Cook Thompson & Cook New York Supreme Court Reports. U. S. (at end of Citation) United States Supreme Court Reports. U. S. C. C United States Circuit Court. TL S. C. C. A United States Circuit Court of Appeals. U. S. Sup. Ct United States Supreme Court. U. S. Comp. St United States Compiled Statutes. U. S. Ct. Cls United States Court of Claims. Utah Utah Reports. Va Virginia Reports. Vt Vermont Reports. Vroom Vroom's New Jersey Reports. Wall Wallace, U. S. Supreme Court Reports. I Walker's Reports (Michigan). Walker's Reports (Mississippi). Walker's Reports (Pennsylvania). Walker's Reports (Texas). Wash Washington Reports. Wend Wendell's New York Reports. W. L. Bui Western Law Bulletin. Wis Wisconsin Reports. Wheat Wheaton's U. S. Supreme Court Reports. Woods Woods' U. S. Circuit Court Reports. W. N. C Weekly Notes of Cases (published in Philadelphia) . W. Va West Virginia Reports. W. & W. Civ. Cases White and Wilson's Civil Cases (Texas Court of Appeals). Wyo Wyoming Reports. Walker . ^y^&^^s^^4^w^y^'^