Syllabus. ples of law applicable to all alike, that equality of right given by the law of the land to all suitors, and consequently it should be adjudged to deny the equal protection of the laws. I dissent from the opinion and judgment. AUTEN. UNITED STATES NATIONAL BANK OF NEW YORK. ERROR TO THE CIRCUIT COURT OF APPEALS FOR THE EIGHTH CIRCUIT. No. 206. Argued March 9, 1899. — Decided April 24, 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, Arkansas. The latter, through its president, accepted the proposition, and opened business, by enclosing 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 non-payment, and the payment of the fees of protest, made by the New York bank, have 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 credited 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 suit 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 dismiss the writ of error on the ground that jurisdiction below depended on diversity of citizenship, and hence was final. Held: (1) That the 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 had jurisdiction; Statement of the Case. (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. Two of the parties to this action in the court below were national banks, one located at New York, the other located at Little Rock, Arkansas. Sterling R. Cockrill, as receiver of the latter bank, was also a party. He resigned and plaintiff in error was appointed. The banks will be denominated respectively the New York bank and the Little Rock bank. The complaint contained the necessary jurisdictional allegations, and that on December 7, 1892, the City Electric Street Railway Company, a corporation organized and doing business under the laws of Arkansas, in the city of Little Rock, Arkansas, executed and delivered to G. R. Brown and H. G. Allis, citizens of the State of Missouri, its three promissory notes, each for five thousand dollars, payable four months after date, with interest at the rate of ten per cent per annum from maturity until paid: that said Brown and Allis afterwards indorsed and delivered said notes to the defendant First National Bank, and said bank before maturity and for a valuable consideration indorsed, rediscounted and delivered said notes to plaintiff that ou December 7, 1892, the McCarthy & Joyce Company, a corporation resident in the city of Little Rock, Pulaski County, Arkansas, and organized and doing business under the laws of Arkansas, executed and delivered to James Joyce, a citizen of the State of Missouri, its two promissory notes, each for five thousand dollars, payable to his order at four and five months respectively after date, with interest from maturity at the rate of ten per cent per annum until paid: that said Joyce afterwards indorsed said notes to the defendant First National Bank, and said bank before maturity and for a valuable consideration indorsed, rediscounted and delivered said notes to plaintiff that said notes were each at maturity presented at the First National Bank in Little Rock, Arkansas, Statement of the Case. for payment, and payment being refused, they were each duly protested for non-payment, the fees for which, amounting to twenty-five dollars, were paid by plaintiff. Copies of said notes, with the indorsements thereon, were thereto attached, marked 1 to 5 inclusive, and made part thereof. No part of said notes has been paid, and the same have been presented to the receiver of said bank for allowance, which he has refused to do. Judgment was prayed for the debt and other relief. Three of said notes are in the following form: "$5000. 34131. LITTLE ROCK, ARK., Dec. 7, 1892. Four months after date we, or either of us, promise to pay to the order of G. R. Brown and H. G. Allis five thousand dollars, for value received, negotiable and payable, without defalcation or discount, at the First National Bank of Little Rock, Arkansas, with interest from maturity, at the rate of ten per cent per annum, until paid. W. H. SUTTON, Sec'y. CITY ELECTRIC ST. R'Y Co. No. A, 73485. Due Apr. 7-10, '93." The following indorsement appears on each: "Geo. R. Brown, H. G. Allis, First National Bank, Little Rock, Arkansas; H. G. Allis, P't. Two of the notes were in the following form: "$5000. 34128. LITTLE ROCK, ARK., Dec. 7, 1892. Four months after date we, or either of us, promise to pay to the order of James Joyce five thousand dollars, for value received, negotiable and payable, without defalcation or discount, at the First National Bank of Little Rock, Arkansas, with interest from maturity, at the rate of ten per cent per annum, until paid. MCCARTHY & JOYCE CO. GEO. MANDLEBAUM, Sec'y & Treas. A, 73477. No. 2. Due Ap'l 7-10, '93." They were indorsed as follows: "James Joyce, H. G. Allis, First National Bank, Little Rock, Ar.; H. G. Allis, P't." Statement of the Case. The receiver only answered, and his answer as finally amended denied that either of the notes described in the plaintiff's complaint was ever indorsed and delivered to the First National Bank; he denied that either of said notes was ever the property of or in the possession of said bank; and denied that the said bank ever indorsed or delivered either of said notes to the plaintiff; he denied that said bank ever received any consideration from said plaintiff for any indorsement or delivery of said notes to it; and averred that the name of the defendant bank was indorsed on said notes by H. G. Allis for his personal benefit without authority from said bank; that the said Allis, assuming to act for defendant bank, procured the plaintiff to advance or loan upon said notes a large sum of money, which he appropriated to his own use; that said Allis had no authority from said bank to negotiate said loan or to act for it in any way in said transaction; that if said transaction created an indebtedness against the defendant bank, then the total liability of said defendant bank to the plaintiff by virtue thereof exceeded one tenth of the plaintiff's capital stock, and the total liability of the defendant bank thereby exceeded the amount of its capital stock actually paid in; that the plaintiff knowingly permitted its officers to make such excessive loan under the circumstances aforesaid; that the transaction aforesaid was not in the usual course of banking business which either the plaintiff or the defendant bank was authorized to carry on; that the plaintiff was not an innocent holder of either of said notes; that the defendant bank received no benefit from said transaction; that it had no knowledge thereof until a few days prior to its suspension; that no notice of the dishonor of said notes was ever given to the defendant bank. Also that at the date of the suspension of the First National Bank the United States National Bank was indebted to it in the sum of $467.86, that sum then being on deposit in the said United States National Bank to the credit of the First National Bank of Little Rock; and that the same has never been paid. The receiver prayed that "he be discharged from all liability upon the notes sued on herein, and that he have judg Statement of the Case. ment against the plaintiff for the said sum of $467.86, and interest from the 1st day of February, 1893." The plaintiff bank denied the indebtedness of $467.86, and averred" that at the time said First National Bank failed it was indebted to plaintiff in a large amount, to wit, the notes sued upon herein, and plaintiff applied said $467.86 as a credit upon said indebtedness." The issues thus made up were brought to trial before a jury. Upon the conclusion of the testimony the court, at the request of the plaintiff bank, instructed the jury to find a verdict for it, which the court did, and denied certain instructions requested by the defendant. The jury found for the plaintiff, as instructed, for the full amount of the notes sued, less the amount of the set-off, and judgment was entered in accordance therewith. A writ of error was sued out to the Circuit Court of Appeals, which affirmed the judgment, and the case was brought here. There had been two other trials, the rulings in which and the action of the Circuit Court of Appeals, are reported in 27 U. S. App. 605, and 49 U. S. App. 67. The defendant assigned as error the action of the Circuit Court in instructing the jury to find for the plaintiff bank and in refusing the instructions requested by the defendant. The latter were nineteen in number, and presented every aspect of the defendant's defence and contentions. They are necessarily involved in the consideration of the peremptory instruction of the court, and their explicit statement is therefore not necessary. The evidence shows that the New York bank solicited the business of the Little Rock bank by a letter written by its second assistant cashier, directed to the cashier of the Little Rock bank, and dated June 21, 1892. Among other things the letter stated "If you will send on $50,000 of your good, short-time, well-rated bills receivable, we will be pleased to place them to your credit at 4 per cent." The reply from the Little Rock bank came not from its cashier, but from its president, H. G. Allis, who accepted the offer and enclosed notes amounting to $50,728, among which VOL. CLXXIV-9 |