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family, (11) and in helping her to make her property productive he is but discharging this duty, (12) and is presumedly amply compensated with the home and support she allows him. (13) Moreover, as one's talents and capacity to labor are not property, (14) and as therefore no debtor can be made to work for his creditors, (15) a husband who is entitled to his wife's services, may give them to her even against his creditors, (16) and may likewise give her his own labor, (17) but not his accumulations. (18)

3. Apparent or Pretended Agency.- A husband may thus as his wife's agent manage her property or business without acquiring any rights in said property or business, or subjecting it to the claims of his creditors. (19) But while apparently her agent and pretending to act in that capacity, he may be conducting a business of his own under her name simply for the purpose of evading his creditors, (20) or he may be using her property as a gift to him (21) or as a loan; (22) in such cases the business is his and the remedies of his creditors against the assets thereof

(11) Cooper v. Ham, 49 Ind. 393, 416; Com. v. Fletcher, 6 Bust, 171, 172; Gage v. Dauchy, 34 N. Y. 293, 297; Abbey v. Deyo, 44 N. Y. 343, 346.

(12) Cooper v. Ham, 49 Ind. 393, 416.

(18) McIntyre v. Knowlton, 6 Allen, 565, 566.

(14) Cases cited infra nn, 15, 16.

(15) Abbey v. Deyo, 44 N. Y. 343, 347; Rush v. Vought, 55 Penn. St. 437, 445; Hodges v. Cobb, 8 Rich. 50, 56.

(16) Peterson v. Mulford, 36 N. J. L. 481, 487; Hoyt v. White, 46 N. H. 45, 47; ante § 65. He cannot give her money already earned by her, ante § 65.

(17) Miller v. Peck, 18 W. Va. 75, 99; infra n, 19.

(18) Isham v. Shafer, 60 Barb. 817, 331; Rush v. Vought, 55 Penn. St. 437, 445; Holdship v. Patterson; 7 Watts, 547.

(19) Aldridge v. Muirhead, 101 U. S. 397, 399; Voorbes v. Bonesteel, 16 Wall. 16, 31; Lewis v. Johns, 24 Cal. 98, 103; Coon v. Rigden, 4 Col. 275, 287, 288; Martinez v. Ward, 19 Fla. 175, 188, 189; Keller v. Mayer, 55 Ga. 406, 409; Wells v. Smith, 54 id. 262, 264; Olsen v. Kern, 10 Ill. App. 578, 582; Langford v. Ghieson, 5 Ill. App. 362; Cnbberly v. Scott, 98 Ill. 38, 40; Bongard v. Core, 82 Ill. 19, 20; Bellows v. Rosenthal, 31 Ind. 116, 118; Cooper v. Ham, 49 id. 893, 400, citing many cases; Carn v. Royes, 55 Iowa, 650; Parker v. Bates, 29 Kan. 597; Com. v. Fletcher, 6 Bush, 171, 172; McIntyre v. Knowlton, 6 Allen, 565, 567; Merrick v. Phemley, 29 Mass. 566; Rankin v. West, 25 Mich. 200; Hossfeldt v. Dill, 28 Minn. 469; Hamilton v. Booth, 55 Miss. 60; Gloss v. Thomas, 6 Mo. App. 157; Abbey v. Deyo, 44 N. Y. 343, 346; 44 Barb. 382; Owen v. Cawley, 36 N. Y. 600, 604, 605; Smith v. Sweeny, 35 id. 234, 235; Gage v. Dauchy, 34 id. 293, 297, 299; Buckley v. Wells, 33 id. 518, 521; Knapp v. Smith, 27 id. 277, 280; Rush v. Vought, 55 Pa. St. 437, 445; Holdship v. Patterson, 7 Watts. 547; Hodges v. Cobb, 8 Rich. 50, 56; Webster v. Hildreth, 83 Vt. 457, 458; Miller v. Peck, 18 W. Va. 75, 79-97, citing many cases; Feller v. Alden, 23 Wis. 301, 304; Boss v. Gomber, 23 id. 284, 286; Dayton v. Walsh, 47 id. 118. But see Penn v. Whiteheads, 12 Gratt. 74, 80; Wilson v. Loomis, 55 Ill. 352, 354. Compare cases infra n, 28.

(20) See Hurlbut v. Jones, 25 Cal. 225; Wortman v. Price, 47 Ill. 22; Brownell v. Dixon, 37 id. 198, 208; Cooper v. Ham 49 Ind. 393, 416; Laing v. Cunningham, 17 Iowa, 510; National v. Sprague, 20 N. J. Eq. 18, 25; Knapp v. Smith, 27 N. Y. 277, 280; Woodsworth v. Sweet, 51 id. 8; Gage v. Dauchy, 34 id. 293, 298.

Slough, 40 Ala. 518; Freeman v. Orrer,

(21) See Dent v.

5 Duer, 476.

(22) Glidden v. Taylor, 16 Ohio St. 509, 520.

are full. (23) So when she has no power by statute to trade, but with his consent is in a business which he conducts, (24) it is his business; (25) the right of his creditors against a business which he conducts can be questioned only when by statute she can trade alone.(26) When he has been using her property in his business, her rights are at best those of a creditor.(27) In some cases where a wife has amassed a fortune through the efforts of her husband, it has been held that a court of equity would in favor of his creditors make some apportionment (28) - treat the husband and wife as it were as partners.(29) Whether the business is the husband's or the wife's is simply a question of fact, (30) the burden of proof being generally on the wife to show that the business was hers. (31) So whether there is fraud is a question of fact. (32)

4. Illustrations. Thus where a husband with his team did a great deal of work on his wife's property, and his creditors attempted to sell the crop for his debts, the court held that he could give to her the labor of himself and his beasts, and that the accretions to her property continued hers and could not be touched by his creditors. (33) Where a manufacturer of large experience failed, and then started up again with his wife's money and in her name, and made a fortune, the court allowed her her money and interest, but held the remaining profits liable for his debts. (34) Where while the wife's earnings belonged to her husband, he consented that she should trade in her own name, but took part himself in the business, the business was held his, and therefore liable for his debts. (35)

5. Statutes. In some States there are statutes expressly referring to this subject. (36)


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(29) In Glidden v. Taylor, 16 Ohio St. 509, the wife was allowed only her money and legal interest; in National v. Sprague, 20 N. J. Eq. 13, the whole was held liable for the husband's debts; to treat them as partners would be fairer when there is really a mingling of goods, etc.

(30) Keller v. Mayer, 55 Ga. 406, 409; Knapp v. Smith, 27 N. Y. 277, 280; Abbey v. Deyo, 44 id. 343, 347; of course, her capacity to trade is a question of law. (31) 23 Amer. Law Rep. N. S. 625. (32) Myers v. King, 42 Md. 65, 70. (33) Miller v. Peck, 18 W. Va. 95, 102.

(34) Glidden v. Taylor, 16 Ohio St. 509, 520, 521.

(35) National v. Sprague, 20 N. J. Eq. 18, 25.

(86) In Porter v. Gomba, 43 Cal. 165, 169; Youngworth v. Jewell, 15 Nev. 45.


DISSOLUTION - APPOINTING the required bond, ordered him to take charge and

possession of the property of said company at once,
and to administer the same according to law, subject
at all times to the further order and direction of the


On November 10, 1883, the receiver preferred his petition to said court, setting forth that on October 4, 1883, the court ordered that all creditors of said company should present and prove their claims to him by December 1, 1883; that under and pursuant to said order, a very large number of the creditors of said company had presented their claims with proof thereof, and that he had reason to believe that all or nearly all outstanding claims against said company would be presented, with proof thereof, within the time limited therefor; and further setting forth the provision of said charter above recited, and that a considerable number of persons had presented claims, accompanied with proof, for debts due from said company incurred by deposits in favor of minors, insane persons, and married women in their own right, and insisted that said claims should be preferred and be satisfied before any

ETITION for the appointment of a'receiver,brought other debts due from said corporation were paid; that


On petition setting forth that it was believed that defendant company was insolvent, a receiver was appointed and an injunction was issued restraining the trust company,its president, treasurer, and other officers, from transacting any further business, etc., and from all custody of or interference with its property, until further order. The charter provided "that in case of the dissolution of said company," the deposits in favor of minors, insane persons, or married women, should have a preference. It

did not appear that the company had lost its power to resume its business, or that it was insolvent in fact, but insolvent only in the sense of inability to meet its obligations in due course of business. Held, that there was not a dissolution of the corporation, and consequently no class of creditors could be preferred.


charge of the St. Albans Trust Company. Also a petition brought by C. W. Rich, the receiver of said company, praying that the court might prescribe the order, proportion, and manner of distribution of the funds of the trust company. Heard, September Term, 1883. Royce, Chancellor, held that all the depositors stood upon terms of perfect equality, that no class of depositors was entitled to any preference over others, and decreed that the funds should be distributed pro rata to the depositors.

Edson, Cross & Start, Farrington & Post, and A. G. Safford, for certain depositors claiming priority.

Noble & Smith and Daniel Roberts, for appellees.

ROWELL, J. The charter of this trust company, granted in 1868, Stat. 1868, No. 157, provides "that in case of the dissolution of said company, by act of law or otherwise, the debts due from said company, incurred by deposits in favor of minors, insane persons or married women, such deposits having been made for married women in their own right, shall have a preference and be satisfied before any other debts due from said corporation are paid."

On August 17, 1883, the inspector of finance, pursuant to the statute in such case made and provided, applied to the Court of Chancery by petition, setting forth that he had ascertained and believed said company to be insolvent, and praying for an injunction against the same, its officers, agents, and servants, restraining it and them from all interference with or control of the books, assets, and property of said company, and for the appointment of a receiver to take charge thereof, subject to the order and direction of the court, and for such further orders and directions

as to the court should seem meet.


Thereupon notice to show cause was duly issued and served, and said company appeared, whereupon no cause being shown nor objection made, the court granted an injunction restraining said company, its president, treasurer, and other officers and directors, and each and every of them, its and their agents and servants, from transacting any further business as such trust company until further order, and from all custody of or interference with the books, papers, assets, and property of every name and nature belonging to said company, except to safely keep and preserve the same until delivered to the receiver thereafter to be appointed or until further order. At the same time the court appointed a receiver, and upon giving

*S. C., 56 Vt. 476.

the assets of said company, and expected to realize more therefrom from time to time, and that it was for the interest of the creditors of said company that the funds thus realized and to be realized should be paid and distributed to and among said creditors according to their legal rights as soon as reasonably might be; that the creditors of said company who claimed no preference insisted upon an equal and a ratable payment and distribution of said funds to and among all the creditors thereof; and praying for an order, directing him in the premises, and prescribing in what order, proportion, and manner payment and distribution should be made with reference to the demands for which preference was claimed as aforesaid and to the other debts due from said company.

Due notice of said last-mentioned petition having been given, the same came on to be heard on December 4, 1883, the parties appearing and being fully heard in the premises, whereupon it was ordered and decreed that all the depositors who had proved or might prove their claims as such stood and should stand "on terms of perfect equality of right to share in the division and distribution of the funds or assets of said company, and that no depositor or class of depositors is entitled to any preference over others," and the receiver was ordered and directed to pay out and distribute said funds and assets accordingly. From this order, some of those claiming a preference have appealed.

I have now stated the substance of all the record discloses, and hence all there is in the case on which to base judgment.

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it would still remain to inquire, insolvency in what sense?

The term "insolvency" is not always used in the same sense. It is sometimes used to denote an insufficiency of the entire property and assets of an individual to pay his debts. This is its general and popular meaning. But it is also used in a more restricted sense, to express the inability of a party to pay his debts as they become due in the ordinary course of business. It is in this latter sense that the term is used when traders and merchants are said to be insolvent; and as applied to them, it is the sense in which the National Bankrupt Act used the term. Toof v. Martin, 13 Wall. 40. So under the Massachusetts insolvent acts, the term is not construed to mean an absolute inability to pay one's debts at some future time on the settlement and winding up of his affairs; but an inability to pay in the ordinary course, as persons carrying on trade usually do. Thompson v. Thompson, 4 Cush. 127, 134. So under the English Bankrupt Act, the phrase "insolvent circumstances" is construed to mean an inability to pay in the ordinary course, as persons carrying on trade usually do. Bayly v. Schofield, 1 M. & S. 338, 349; Shone v. Lucas, 3 D. & R. 218.

Denike v. New York & Rosendale Lime & Cement Co., 80 N. Y. 599, was an action in favor of some of the stockholders of said company for a dissolution of the corporation and the appointment of a receiver and the winding up of its affairs. It was alleged and claimed, among other things, that the company was insolvent. The statutes of New York provide that "whenever any incorporated company shall have remained insolvent for one whole year * * * it shall be deemed to have surrendered the rights, privileges, and franchises granted by any act of incorporation * * * and shall be deemed to be dissolved." In denying the relief sought, the court said: "There is no finding that the property of this company was not sufficient to pay all its debts. It was simply found that it was insolvent, and that may mean simply an inability to pay and discharge its obligations as they accrue * * * in the ordinary course of its business. The plaintiffs gave evidence tending to show that the property of the company was not equal in value to the amount of its debts; and the defendant gave evidence tending to show that there was property sufficient to pay all the debs and still leave the capital nearly or quite intact. What the precise truth was as to the value of the property the referee did not determine and was not requested to determine, and hence we do not know."

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mere insolvency, though total, is sufficient evidence of such surrender.

In Slee v. Bloom, 19 Johns. 456, the corporation had not only ceased to own any property, real or personal, but had totally ceased from acting for the space of about a year and four months. It was possessed of nothing and had abandoned the end and object of its creation, without pretense of expectation or hope of ever resuming its functions. Chancellor Kent says of this case: "It amounts only to this, that if a private corporation suffer all its property to be sacrificed, and the trustees actually relinquish their trust, and omit the annual election, and do no one act manifesting an intention to resume its corporate functions, the courts of justice may, for the sake of the remedy and in favor of creditors, who in such case have their remedy against the individual members, presume a virtual surrender of the corporate rights and a dissolution of the corporation. This is the utmost extent to which the doctrine was carried, and to this extent it is a safe and reasonable doctrine." 2 Kent Com. 311.

Penniman v. Briggs, Hopk. 300; S. C., in error, 8 Cow. 387, adopts and applies the doctrine of Slee v. Bloom. There a corporation for manufacturing purposes, established under the general act of March 22, 1811, had all its property, real and personal, sold on execution and otherwise applied for the payment of its debts, and ceased to hold any property whatever, and was totally insolvent, and had ceased to manufacture or act as a corporation in any respect, and the trustees had no power to resuscitate the company by a call on the stockholders, as their shares were paid up; and it was held that the corporation was to be deemed dissolved for the purpose of the remedy of creditors against the stockholders individually.

But the rule established by these cases is qualified by another rule.

In Brinckerhoff v. Brown, 7 Johns. Ch. 217, it is said that "it does not follow that a corporation is dissolved by the sale of its visible and tangible property for the payment of its debts and the temporary suspension of its business, so long as it has the moral and legal capacity to increase its subscription, call in more capital, and resume its business." And the court refused to carry the doctrine of Slee v. Bloom to the extent of holding that the sale of all the visible property of a corporation was of itself sufficient evidence of a surrender, when all the other material circumstances were wanting, and said that the best evidence of a surrender that Slee v. Bloom afforded was, that the trustees had virtually renounced their trust and ceased to act, and the regular annual election of trustees had been discontinued.

Bradt v. Benedict, 17 N. Y. 93, was a suit in favor of a creditor of a manufacturing corporation against a stockholder of the company to enforce his individual liability under the statute of 1811. In reviewing Slee v. Bloom, Penniman v. Briggs, and other decisions in that State, Selden, J., says: "It appears from these cases that in order to justify the inference that a corporation has surrendered its franchises it is not sufficient that it has become utterly insolvent, nor even that every vestige of its property has been sold by a sheriff, but it must also have lost all power to continue or to resume its business," and that nothing short of this is equivalent to a surrender except as otherwise provided by statute. And in the same case Pratt, J., says that the doctrine of Slee v. Bloom should not be carried beyond the precise facts on which the case rested.

Can it be said of the defendant company that it has lost all power to resume its business? Obviously not. It does not even appear that it is insolvent in fact, much less that it is insolvent to such an extent that depositors can suffer thereby; nor is there any thing

to show that it has lost its power to resume its business if permitted to do so. Hence we have absolutely none of the essential elements for presuming a surrender of corporate rights and privileges, which is the ground and reason of holding a dissolution in effect as distinguished from a dissolution in fact.

But another question remains for consideration: Did the appointment of the receiver, with the power given him, have the effect of virtually dissolving the corporation? The receiver is ordered to take charge and possession of the property and effects of the corporation, and administer the same according to law, subject to the order of the court.

It is to be observed that the statute under which the receiver is appointed is unlike the statute under which a receiver is appointed to close up the affairs of a private corporation whose charter has expired or been annulled by forfeiture or otherwise. Under the latter statute (R. L., § 3275) the receiver, by virtue of the power conferred on him by the statute, not only pays the debts of the corporation, but distributes the balance of the funds, if any, among the stockholders or members of the corporation or their legal representatives, thereby finally settling and winding up all the affairs of the corporation; whereas under the former statute (R. L., § 3555) the receiver pays the debts only, and does not distribute the surplus among stockholders, because evidently the corporation is still in existence, legally capable of receiving the surplus and of resuming its business and accomplishing the end and object of its creation. And even though the capital is wholly gone, there would seem to be no legal reason before a surrender or a forfeiture to prevent the members from furnishing renewed capital, and then proceeding to use their corporate powers. Coburn v. Boston Papier Maché Manufacturing Co., 10 Gray, 243.

But in case of the expiration or annulment of a charter the corporate existence is gone for the purpose of continuing the business for which the corporation was established (R. L., § 3272), and nothing remains to be done with the surplus except to divide it among the stockholders or members.

receiver is said to be a statutory assignee, that after the appointment of such a receiver the answer of the corporation under the corporate seal is of no effect, the corporation being virtually dissolved by the appointment, the statute substituting the receiver for the corporation as to all the corporate property and effects. Davenport v. City Bank of Buffalo, 9 Paige, 12.

Now, the receivership in the case at bar is little else than a common-law receivership. The receiver has no particular statutory powers conferred upon him; but in the language of the statute, he is "subject to the Court of Chancery," and is made so by the order of his appointment; and said order is not strictly a judicial act in the sense of being a decree or judgment fl nally determining rights; and hence it is that the Leg. islature may authorize the executive department of the government to appoint receivers with authority to take charge of and wind up the affairs of insolvent cor. porations, such as banking institutions. High Receivers, § 343. And as the object of this proceeding is to protect and preserve the corporate assets for the benefit of creditors, the court may on motion discharge the receiver and allow the corporation to resume the management of its affairs, if satisfied that the interest of all parties would be best subserved in that way; and for aught that appears this company may now be in condition to successfully make such a motion.

We do not think that such a receivership as this, in view of the facts disclosed in this case, can be said in any just sense to operate a virtual dissolution of the corporation.

Decree affirmed and cause remanded.
Taft, J., dissents.



COMMERCIAL NATIONAL BANK V. HENNINGER.* Where a bank is the holder of a note payable at the banking house, and upon maturity the maker has a deposit in excess of the amount of the note which deposit is not specially applicable to a particular purpose, the bank is bound to apply a part of said deposit to meet the note, and cannot elect to let the note go to protest and hold the indorser. Where such a course is taken the indorser is discharged from liability.

Where such a course was taken by a bank, the cashier of which was maker of the note in question, evidence was inadmissible in an action by the bank against the indorser to show that the cashier had agreed in his official capacity that the indorser should not be bound, and further, in case the said agreement was unauthorized, to show that the bank was fully protected against loss by reason of stock owned therein by the cashier and by his official bond.

In Bank Commissioners v. Bank of Buffalo, 6 Paige, 497, it is said that as the statute relating to proceedings in equity against corporations contemplates the making of a final decree on the bill or petition against the company that is to deprive it of all its corporate property and powers, and as a receiver appointed upon such a proceeding, unless restrained in his powers by the order appointing him, is absolutely vested with all the corporate property and effects, and authorized to distribute the surplus thereof among the stockholders after payment of the debts of the company, it follows of course that a final order or decree for the ap. pointment of such a receiver is a virtual dissolution of the corporation.

The powers thus referred to as conferred upon the receiver are given by statute; and it is said in Verplanck v. Mercantile Ins. Co. of New York, 2 Paige, 438, that the order appointing such a receiver is in effect a final order in the cause, and unless altered or revoked operates a virtual dissolution of the corporation; that it is not a common-law receivership, but that the receiver is a statutory assignee, vested with nearly all the powers and authority of the assignee of an insolvent debtor. And the court points out the difference between such a receiver and a receiver under another section of the same statute and under an earlier statute, which are strictly common-law receivers, such as are usually appointed in suits between party and party, and who have no powers except such as are con

ferred upon them by the order of their appointment ERROR to the Common Pleas of Berks County.

and the course and practice of the court.

Indeed, so effective is the statute under which the

*8. C., 15 Week. Notes, 33.


executed two promissory notes made payable to the order of B. at a bank of which A. was cashier. B. indorsed the notes and had them discounted at the said bank. A. refused to pay at maturity, and the notes were protested. In an action by the bank on B.'s indorsement: Held, evidence to show an agreement between A. and B. that

B.'s indorsement should impose upon him no obligation to pay, and that the bank was protected from loss through this agreement by stock in the bank owned by A., and by his bond as cashier, is irrelevant and inadmissible.

Held, further, A.'s account with the bank is admissible in evidence to show a balance in his favor, on the day of the maturity of the notes, sufficient to have paid them.

Assumpsit by the Commercial National Bank of Reading against Charles Henninger, upon two promissory notes indorsed by defendant. Pleas, non-assumpsit with leave, etc. On the trial, before Hagenman, P. J., the following facts appeared: Charles Henninger, the defendant, sold to B. F. Young certain shares of stock in the Penusylvania Graphite Mining Company, and received therefor his three promissory notes made payable at the Commercial National Bank of Reading, of which Young was the cashier, three, six and nine months after date respectively. They were Indorsed by Henninger and discounted by the said bank. Young, the maker, alleging that Henninger had defrauded him in the sale of the Graphite stock, resolved not to pay the said notes, and at the time of the maturity of the second, handed it and the first, which he had renewed, to a notary, who made demand at the bank for payment. Young, the maker, as cashier of the bank, answered that the notes had not been pro vided for, whereupon they were protested, and notice thereof given to Heuninger. He paid the third note when it matured, but refused to pay the first and second, and the bank brought this suit to charge him as indorser.

Defendant offered to prove an agreement by Young, as cashier, at the time of the giving of the notes that Henninger's indorsement should impose upon him no obligation to pay, but should operate merely as a transfer of the notes, and further to show that if this transaction between Young and Henninger was unauthorized by the bank, the latter was protected from loss by shares of the capital stock of the bank owned by Young and by his bond as cashier. All of which was objected to by the plaintiff as irrelevant. Objection overruled. Exception. (First, second and third assignments of error.) Defendant also offered to prove a custom among the Reading banks to charge notes made payable at the bank to the account of the maker, without any special direction from the maker so to do. Objected to by plaintiff as irrelevant. Objection overruled. Exception. (Fifth and sixth assignments of


Defendant further offered in evidence Young's account with the plaintiff bank on February 28, 1882, to show that at the time of the maturity of the notes there were funds on deposit to his credit sufficient to have paid the same. Objected to by plaintiff as irrelevant. Objection overruled. Exception. (Fourth assignment of error.)

Mr. Young testified that the sum deposited to his credit at the time of the maturity of the notes had been raised by the sale of certain securities for the purpose of paying notes other than the ones in suit, and subsequently maturing, and the said balance was actually applied to the payment of such other and subsequently maturing notes. There was no other evidence upon this point.

The plaintiff requested the court, inter alia, to charge: (1) A bank is not bound when a note owned by it, and made payable at its banking house, becomes due, to appropriate moneys of the maker on deposit with it to the payment of the note. The indorser has no right to ask that the bank shall do so.

Answer. We answer and charge that if Mr. Young had a deposit in bank sufficient to pay these notes on the day they became due, and there were no circumstances shown in the case that would forbid the bank from so doing, the bank was obliged to charge up these notes against Mr. Young's deposit. Especially was the bank required to do so if the jury find that there was some understanding between the cashier and the president that the defendant would not be called upon to pay these notes, and such credit would be no injury to the bank. (Eighth assignment of error.)

(2) If the jury believe that B. F. Young made the deposit which composed the balance in bank at the time of the maturity of the notes in suit for the purpose of paying notes other than the ones in suit, he had a right to appropriate said balance to the payment of such other notes; and the defendant was not released from his liability as indorser of the notes in suit.

Answer. If the jury believe that Mr. Young made a deposit with the specific agreement with the bank at the time it was made, that the money so deposited was to be used for other notes, then the defendant would not be released from his liability. But the jury will carefully consider the evidence. The deposit was credited on Mr. Young's general account without any entry that it was for a special purpose; and the only evidence of any special purpose is the testimony of Mr. Young, who was the depositor and cashier. He does not say that he ever notified any other officer of the bank of the disposition he intended to make of this deposit. And so far as the evidence goes, it seems to have been an understanding he had with himself. (Ninth assignment of error.)

Verdict for defendant and judgment thereon. Whereupon plaintiff took this writfassigning for error, inter alia, the admission of the testimony excepted to, and the answers of the court to the points above set forth.

Cyrus G. Derr (D. N. Schaeffer with him), for plaintiff in error.

Jeff. Snyder (George F. Baer with him), for defendant in error.

PAXSON, J. The fourth and eighth assignments raise the prominent questions of this case. The fourth alleges error in admitting in evidence the account of Mr. Young with the bank on February 28, 1882, for the purpose of showing that there were funds on deposit to his credit sufficient to have paid the notes in controversy; while the eighth alleges the court erred in instructing the jury, in answer to the plaintiff's first point, "that if Mr. Young had a deposit in bank sufficient to pay these notes on the day they became due, and there were no circumstances shown in the case that would forbid the bank from so doing, the bank was obliged to charge up these notes against Mr. Young's deposit. Especially was the bank required to do so if the jury find that there was some understanding between the cashier and the president that the defendant would not be called upon to pay these notes, and such credit would be no injury to the bank."

The defendant was the indorser of the notes in suit. The maker was B. F. Young, who was also the cashier of the bank. The notes had been discounted by the bank, and were payable there on the day they matured; at the close of banking hours there was on deposit to the credit of Mr. Young a balance sufficient to meet the notes. Instead of charging up the notes against the deposit, the cashier handed them to a notary for protest. The object of this was to hold the indorser, and compel him to proceed against the maker in order to let in a defense which the maker could not set up against the bank. The defendant contends that the failure of the bank to charge up the notes against Mr. Young's deposit relieved him as indorser.

That there were no circumstances in the case to prevent the bank from applying the deposit to the notes has been found by the jury. There is no doubt as to the right of a depositor to control his deposit up to the point where the rights of others attach. He may draw it out by his check; he may apply it to a particular purpose by making it a special deposit, or by specific directions communicated to the bank. None of these things is found in the case. The mere mental inten

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