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mined. The real test of liability is whether the party sought to be charged as partner is a partner in fact. The doctrine laid down in this case has been uniformly followed by the English courts. Bullen v. Sharp, L. R., 1 C. P. 86; Holme v. Hammond, L. R., 7 Exch. 218; Molwoo v. Court of Wards, L. R., 4 P. C. 419; Ex parte Tennant, L. R., 6 Ch. Div. 303; Kelly v. Scotto, 49 L. J. (N. S.) Ch. 383; S. C., 42 L. T. (N. S.) 827; Gilpin v. Anderby, 5 B. & Ald. 594.

The purport of the opinions delivered in Cox v. Hickman in the House of Lords is very clearly and succinctly stated in Holme v. Hammond, supra: "The principle to be collected from them appears to be that partnership, even as to third parties, is not constituted by the mere fact of two or more persons participating or being interested in the net profits of the business, but that the existence of such partnership implies also the existence of such a relation between those persons as that each of them is a principal, and each an agent for the others."

Blackburn, J., in Bullen v. Sharp, supra, in referring to Cox v. Hickman, says: "I think that the ratio decidendi is that the proposition laid down in Waugh v. Carver, viz., that a participation in the profits of a business does of itself, by operation of law, constitute a partnership, is not a correct statement of the law of England; but that the true question is, as stated by Lord Cranworth, whether the trade is carried on on behalf of the person sought to be charged as partner, the participation in the profits being a most important element in determining the question, but not being in itself decisive; the test being in the language of Lord Wensleydale whether it is such a participation in the profits as to constitute the relation of principal and agent between the person taking the profits and those actually carrying on the business.

The case of Molwoo v. Court of Wards, supra, is an exceedingly strong authority. It was a case of a loan of money, for which the borrower was to pay a share of the profits of the business in which the money was to be used. The borrower agreed with the lender to allow him to control the business in several important particulars; and yet it was held that the lender was not thereby rendered liable to creditors as partner. We must not omit the terse and cogent argument of Mr. Baron Bramwell in Bullen v. Sharp. He says: "They say that the defendant is a partner with his son, and that if not partners inter se, they are so as regards third parties. A most remarkable expression. Partnership means a certain relation between two parties. How then can it be correct to say that A. and B. are not in partnership as between themselves; they have not held themselves out as being so, and yet a third person has a right to say they are so as relates to him? A. is not the agent of B. B. has never held him out as such; yet C. is entitled as between himself and B. to say that A. is the agent of B. Why is he so entitled if the fact is not so, and B. has not so represented?"

Under these authorities it is clear that the question of liability to creditors in England depends entirely upon the existence of a partnership inter se. If a partnership has been established between the parties, of course all the partners are responsible for firm debts; but no one can be charged as partner who is not a partner in fact, unless he has by his acts or declarations estopped himself from claiming that he is not a partner.

There are therefore only two grounds of liability to creditors; the party sought to be charged as partner either must be a partner in fact or he must have estopped himself from denying the existence of a partnership relation between himself and another.

Mr. Lindley, after reviewing the English cases,

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comes to this sensible conclusion. He says: In fact the strong tendency of the above decisions is to establish the doctrine that no person who does not hold himself out as partner is liable to third persons for the acts of persons whose profits he shares, unless he and they are really partners inter se; and it is perhaps not going too far to say that this is now the law." 1 Lind. on Part. 42. This was the rule of the Roman law, and is the doctrine of the modern foreign law throughout Europe. That the courts of this country have always felt the rule enunciated in Grace v. Smith to be unsound and unjust is manifested by the numerous exceptions to the rule which have been established in cases in which the rule could have been applied as reasonably as in any case in which it has been applied. One exception is in favor of servants and employees. The courts have uniformly held that an agreement to receive a certain percentage of profits as compensation for services does not render the participant in profits liable to the creditors of his principal or master. Bradley v. White, 10 Metc. 303; S. C., 43 Am. Dec. 435; Deming v. Cabbott, 6 Metc. 82; Richardson v. Hughitt, 76 N. Y. 55; S. C., 32 Am. Rep. 267; Burckle v. Eckhardt, 1 Den. 341; S. C., 3 N. Y. 132; Loomis v. Marshall, 12 Conn. 69; S. C., 30 Am. Dec. 596; Nicholas v. Thielges, 50 Wis. 491; Smith v. Bodine, 74 N. Y. 30; Lewis v. Greicher, 51 id. 231; Ambler v. Bradley, 6 Vt. 119, Hanna v. Flint, 14 Cal. 73; Barber v. Cazalis, 30 id. 92; Higgins v. Graham, 51 Mo. 17; Edward v. Tracy, 62 Penn. St. 374;and cases cited in note 1 at page 20, volume 1, Lind. on Part.

Another exception to the rule is that a lease of a farm on shares, or of any property on condition that the lessee is to pay as rent a certain share of profits, will not impose upon the lessor the liability of a partner. McDonnell v. Battle House Co., 67 Ala. 90; S. C., 42 Am. Rep. 99; Beecher v. Bush, 45 Mich. 188; S. C., 40 Am. Rep. 465; Brown v. Jaquette, 94 Penn. St. 113; Putnam v. Wise, 1 Hill, 234; Christian v. Crocker, 25 Ark. 327; Holmes v. Old Colony R. Co., 5 Gray, 58; Donnell v. Harsh, 67 Mo. 242; Dwinell v. Stone, 30 Me. 384; Jeter v. Penn, 28 La. Ann. 230; S. C., 26. Am. Rep. 98.

Numerous other authorities might be cited, but these are sufficient, as the point is well settled. This doctrine of non-liability applies in all cases in which the party sought to be charged as partner has received, or is to receive a share of profits as compensation for services performed or for the use of property furnished. Story on Part., §§ 41-48; 3 Kent, 33. There has been frequently before the courts of this country the question whether an agreement to receive a certain portion of profits as compensation for the use of money loaned will render the participant in profits who merely lends his money liable as partner to creditors. The decided weight of authority is against the liability. Williams v. South, 7 Iowa, 434; Hart v. Kelly, 83 Penn. St. 286; Smith v. Knight, 71 Ill. 148; S. C., 22 Am. Rep. 94; Harvey v. Childs, 28 Ohio St. 319; S. C., 22 Am. Rep. 387; Eastman v. Clark, 53 N. H. 276; S. C., 16 Am. Rep. 192; Eagar v. Crawford, 76 N. Y. 97; Richardson v. Hughitt, id. 55; S. C., 32 Am. Rep. 267; Curry v. Fowler, 87 N. Y. 33; Boston & Col. Smelt. Co. v. Smith, 13 R. I. 27; S. C., 43 Am. Rep. 3; In re Francis, 2 Sawy. 286, Polk v. Buchanan, 5 Sneed, 721; Gibson v. Stone, 43 Barb. 285; S. C., 28 How. Pr. 468; Lord v. Proctor," Phila. 630; Campbell v. Dent, 54 Mo. 325; Benedict v. Heterick, 35 Supr. Ct. (N. Y.) 405. There are some authorities which apparently militate against this doc. trine; but a careful analysis of them will show that they are only apparently and not really opposed to it. Parker v. Canfield, 37 Conn. 250; S. C., 9 Am. Rep. 317; Leggett v. Hyde, 58 N. Y. 272; S. C., 17 Am. Rep. 244; Wood v. Mallett, 7 Ohio St. 172; Mason v. Partridge, 66

N. Y. 633; Rosenfield v. Haight, 53 Wis. 260; S. C., 40 merely provided that Hyde should become a partner Am. Rep. 770.

Mason v. Partridge is not in point, for it appears in that case that the parties had endeavored by agreement to restrict the liability of Partridge, who was sought to be charged as partner to the sum of $2,000. There was therefore an actual partnership between the parties, and of course Partridge was liable, because the common law recognized no special or limited partnership, and his attempt to restrict his liability as partner was therefore futile. In Rosenfield v. Haight the court based its decision that Haight, whom creditors were seeking to charge as partner, was liable as such on the ground that he was to receive three-fifths of the profits, not as compensation for the use of his money, but as a party interested as principal in the business.

In other words the court held that the agreement made Haight a partner in fact for all purposes, because he was actually interested in the management and prosecution of the business. At page 266 the court say: "But it is said in answer to this view that the intention of the parties was, that Haight should receive three-fifths of the profits as a mode of compensation for the use of his money, but that he was not to participate in the profits as such. On looking at the different clauses of the agreement, it is very clear to our minds that this construction is not correct." The court expressly recognized the soundness of the doctrine that there is no liability as partner when there is a mere participation in profits as compensation for the use of money by distinguishing the case at bar from Richardson v. Hughitt, 76 N. Y. 55, in which that doctrine was enunciated:

"The case of Richardson v. Hughitt is much more similar to the one at bar, but still that is distinguishable. The court construed the agreement in that case as amounting to a contract for a loan, and the provision as to profits being intended merely as a mode of providing compensation to the lender for the use of his money advanced." The lender there received the share of the profits not as a partuer but on account of the debt owing to him by the firm, the court holding that he was only interested in the profits of the business as a measure of compensation for the use of his money. Leggett v. Hyde, supra, has been practically overruled by the Court of Appeals in Richardson v. Hughitt and Curry v. Fowler, 87 N. Y. 33.

In Richardson v. Hughitt the court attempted to distinguish Leggett Hyde from the case at bar, and based that distinction upon the statement that in Leggett v. Hyde the "money was advanced with a view to a partnership and for the benefit of Hyde himself." If the money had been advanced with a view to a partnership in the immediate present, then the distinction would have been sound, for the very obvious reason that that fact would have rendered Hyde liable on the ground that he was a partner in fact. Such however was not the purport of the agreement. The loan was made with a view to a partnership not at the time of making the loan, but "at the end of the year * * *if the firm and he should feel satisfied." Hyde was sought to be charged as partner by creditors whose claims accrued before the end of the year, and therefore before he was to become an actual partHence he was not a partner at that time and the fact that there was a possibility of his becoming a partner in the future does not render that case any different on principle from Richardson v. Hughitt. When the debts were contracted Hyde was a mere lender of money to the firm as Hughitt was in the last case. By virtue of the agreement, executed at the time of the loan, Hyde possessed no greater rights and was under no greater obligations with respect to becoming a partner than Hughitt, for the agreement

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at the end of the year "if the firm and he should feel satisfied;" that is, if they should then both agree. Under this agreement Hyde could not become a partner without the firm's being satisfied at the end of the year. The firm must therefore then consent. Nor could the firm compel Hyde to enter the partnership without his being satisfied at the end of the year. therefore must then consent. The only effect of the agreement was, that Hyde might become a partner at the end of the year if they should both agree to it then. So might Hughitt in Richardson v. Hughitt have become a partner at the end of the year if both himself and the firm had then agreed to it. There this slight and immaterial difference between the two cases, which in the fog of an ill-considered opinion looms up as a distinction of considerable magnitude, fades away into a distinction involving no difference in principle under the clear light of searching analysis. The case of Leggett v. Hyde should not have been decided as it was decided; and it is clear that the court would never have pronounced the judgment it did pronounce had it not been fettered, or rather had it not deemed itself fettered by authority. It is true that at the time of the decision of that case the rule laid down in Grace v. Smith had been considered by the courts of that State, to be the correct rule. error crept into the jurisprudence of the State because of an unquestioning adherence to the unsound doctrine enunciated in Grace v. Smith. That doctrine has at last been emphatically repudiated in Richardson v. Hughitt. Wood v. Mallett, 7 Ohio St. 172, has been so far as it can be construed as sustaining the principle that mere participation in profits as compensation for a loan creates a liability as partner, overruled by the case of Harvey v. Childs, 28 Ohio St. 319; S. C., 22 Am. Rep. 387. This case is an exceedingly strong one, and it will be well to advert very briefly to the facts which were therein involved. The plaintiff sought to recover of the defendant the value of certain hogs sold by plaintiff to one Potter, on the ground that defendant was Potter's partner. The following are the facts on which it was claimed that defendant was liable to the plaintiff as partner: Potter went to defendant and told him that he had contracted for about two car loads of hogs to be delivered the next day at Loudonville, and that he had no money to pay for them. He requested defendant to advance the money and take an interest in the hogs, but defendant refused to do so. Potter then proposed that if defendant would let him have the money to enable him to pay for the hogs he had bought and others he might have to buy to make the two car loads, defendant should take possession of the hogs when carried to Loudonville as security for the money; take them to Pittsburgh; sell them and take his pay from the proceeds of the sale; that he might have one-half of the net profits, and that in no event should he sustain any loss, but that Potter should pay the money advanced by defendant in case the amount realized from the sale of the hogs should be insufficient.

The defendant accepted the proposition and advanced Potter $2,500. Afterward Potter, without the knowledge of defendant, bought of plaintiff the hogs, the value of which the plaintiff sought to recover from defendant in this case. These hogs formed part of the two car loads which were sold by defendant in Pittsburgh. The proceeds of the sale were not suffi cient to pay defendant the money loaned, and Potter paid him the balance.

The court held that defendant was not liable as partner.

The case is a very strong one, for the reason that there not only was an agreement to share profits, but the defendant was authorized to and actually did take

possession of and sell the property. The only remaining authority which would seem to sanction the early doctrine of liability from mere participation in profits as compensation for a loan is Parker v. Canfield, 37 Conn. 250; S. C., 9 Am. Rep. 317. That case on a careful examination will appear to sustain no such rule. It is apparent from the facts of the case that it was the intention of the parties that a partnership should exist between the parties, and that the device of a loan was resorted to under advice of counsel, in order that certain of the partners might escape liability as such.

This appears from the statement of facts in the opinion of the court, which is as follows: "In January, 1866, counsel was applied to to draw the papers, and the parties then learned that their agreement would make them partners. Thereupon it was agreed upon by the defendants that the money invested by Canfield and Hutchinson (who were sought to be charged as partners) should be regarded as a loan, and the attorney was requested to prepare a writing which should secure to them one-third of the profits without subjecting them to liability as partners."

The debts on which Canfield and Hutchinson were held liable as partners were debts that were contracted after the agreement was attempted to be changed into a loan. Now it is clear that they were both partners in fact prior to that time. The court so expressly held. "The defendants, while acting under their verbal agreement, were clearly partners both inter se and as to third parties." There was nothing in the modification of the agreement which indicated that that relation was to be changed. Canfield & Hutchinson were to lose no right to exercise the same control over the business which they could exercise before as partners. The only purport of that modification was that for the purpose of shielding them from liability, their investment in the business should be “regarded as a loan." They were therefore still partners, and their attempt to restrict their liability of course afforded them no exemption from partnership responsibilities.

While the court referred with approval to the doctrine of Grace v. Smith, yet what was said on the subject was mere obiter, as the court based its decision on the ground that the two defendants, Canfield and Hutchinson, were parties in fact as well after as before the modification of the original agreement. The court say: "The business is one in which the defendants are all interested. The defendants are all principals. Andrews, as their agent, is using funds furnished by them all in a manner agreed upon by them all for their joint benefit and profits."

These are all the cases which appear to give any countenance to the notion that participation in profits as compensation for a loan rendered the recipient liable as partner. We have already referred to the American cases, which most emphatically denounce that heresy in the law. We will now briefly advert to the English authorities. The case of Molwoo v. Court of Wards, L. R., 4 P. C. 419, has been referred to already. In that case the person whom the creditors attempted to hold as partner advanced large sums of money to certain merchants, and took as security a charge on their business with extensive power of control, and stipulated for a large commission on their profits whilst any thing remained due to them, and for payment of bis principal and twelve per cent interest. The court held that the transaction was a loan, and that the lender was not liable as partner. This, like the case of Harvey v. Childs, supra, is a very strong one, as the lender, like the lender in that case, had, by the terms of his agreement, a right to exercise an extensive control over the business. Pooley v. Dwier, 5 Ch. D. 458, is not in conflict with this case. It was not a case of loan. The so-called lenders were not abso

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lutely entitled to a repayment of their loan. right to a return of their advances depended upon the success of the business, and so far from having under their agreement a right to insist on a repayment of the full amount loaned, they might be compelled to refund whatever they had already received by way of profits, or on account of their loan. It was therefore not a mere loan of money, to be repaid at all events, but the investment of capital in business, with the risk of loss of that capital in case the business should prove unsuccessful. The parties having agreed to share losses, were partners inter se under all the authorities, and they were liable for all losses, even beyond the amount of their investment, because it was not in their power to restrict their liability as partners without forming a special partnership under the statute.

We will now refer more particularly to a few of the American cases already cited. In Curry v. Fowler, 87 N. Y. 33, the court say: "In Richardson v. Hughitt, 76 N. Y. 55, it was held by this court that a person who has no interest in the business of a firm or in the capital invested, save that he is to receive a share of the profits as compensation for services or for money loaned for the benefit of the business, is not a partner, and cannot be held liable as such by a creditor of the firm. The case cited is very similar in its leading aspects to the one at bar."

The question was directly involved. Fowler, who was sought to be charged as partuer, had loaned $50,000 to certain owners of real estate to enable them to erect certain buildings thereon. Fowler was to receive as compensation for the use of his money interest thereon and one-half of the profits arising on a sale. The claim was for work performed and materials furnished in the erection of these buildings. Held, that Fowler was not liable as partner. In Boston and Colorado Smelting Co. v. Smith, 13 R. I. 27; S. C., 43 Am. Rep. 3, the syllabus accurately states the decision: "An agreement to lend money and indorse to a certain amount for the purposes of the borrower's business, in consideration of a certain percentage of the net profits of that business, does not constitute the parties partners as between themselves or as to third parties."

The authorities are unanimous to the effect that an agreement to receive a certain share of profits as compensation for a loan does not render the parties partners inter se. Ruddick v. Otis, 33 Iowa, 402; Emans v. Westfield, 97 Mass. 230; Linter v. Milkin, 47 Ill. 197; Adams v. Fink, 53 id. 219; Pinkney v. Keyler, 4 E. D. Smith, 469; Salter v. Ham, 31 N. Y. 321. In Smith v. Knight, 71 Ill. 148, the Supreme Court of Illinois, after referring to the two cases in that State cited first above, decided that the lender in that case could not be a partner as to creditors, as he was not a partner in fact; that the only question in the absence of estoppel was whether the party sought to be charged as a partner actually was a partner. After citing those two cases the court say: "Those cases were between the alleged partners. It remains to inquire, as this is a case between alleged partners and a third party, whether any act was done by Knight, Baker & Co. to make them partners as to third parties. Notwithstanding this agreement, did they hold themselves out to the public as partners?" The court thus expressly held that the test of a partnership between the parties is the test of a partnership as to creditors in the absence of estoppel, and that therefore no creditor can hold a person liable as partner who is not in fact a partner, provided he has not estopped himself from denying the partnership relation. This case was also a case of a loan. The purport of the decision is clearly stated in the syllabus: "A. agreed to advance money to B. from time to time up to a certain amount to enable B. to carry on business, and B. agreed to pay interest to A. an the average balance advanced, and also

to divide the profits after deducting a fixed sum for expenses; but A. was not to bear any losses. Held, that A. and B. were not partners as to third persons." This case is reported in 22 Am. Rep. 94, also.

In Beecher v. Bush, 45 Mich. 188; S. C., 40 Am. Rep. 465, the plaintiff endeavored to hold the defendant liable, on the ground of participation in profits. The court decided that the defendant was not liable, and Cooley, J., at the close of his opinion in the case, added the weight of his great name as a jurist to the authorities in favor of the only sound and logical doctrine, that there can be no partnership as to creditors where there is no partnership in fact, provided the defendant has not by acts or declarations estopped himself from denying that he is a partner. He says: "We also think there can be no such thing as a partnership as to third persons, when as between the parties themselves there is no partnership, and the third person has not been misled by concealment of factors or by deceptive appearances."

It has sometimes been stated that participation in profits ought to render the recipient liable on the ground that he has a right to bring an action in equity for an account of the profits in order to fix the amount coming to him. Now the fallacy of this argument lies in the assumption that no one other than a partner can maintain such an action. This is not the law. It is well settled that any person who has a right to a certain share of profits, though he be not a partner, may file a bill for an account of such profits. Bentley v. Hurris, 10 R. I. 434; S. C., 14 Am. Rep. 695; Hargrave v. Conroy, 4 C. E. Green, 280; Harrington v. Churchward, 29 L. J. Ch. 521; Sheppard v. Brown, 4 Giff. 208; Buel v. Sely, 5 Ill. App. 116; Garr v. Redman, 6 Cal. 574; Ferry v. Henry, 4 Pick. 75; Hallett v. Clemstone, 110 Mass. 32; Eastman v. Clark, 16 Am. Rep. 192-249; Collyer on Part., § 45, n.; Story on Part., § 50, n.; 2 Lindley on Part. 946. The distinctions which some of the courts have made between partnerships between the parties and partnerships as to creditors has necessitated the use in this article of an expression that is tautological. We refer to the phrase "partnership inter se." The word partnership implies the existence of an agreement between two or more, and there can be no partnership even as to creditors unless there be a partnership in fact. It is incorrect to say that one not a partner is liable as such because he has held himself out as such to the world. He is not a partner; but is liable on the ground of estoppel. Having shown that upon principle and authority there can be no liability as partner in the absence of estoppel, unless the party sought to be charged is in fact a partner, it remains to be determined what will constitute one the partner of another. The question is not whether he has agreed to sustain a share of the losses; nor does it depend upon his being interested in the partnership funds and property. He may be a partner, even though he has stipulated that he shall not suffer any loss; and even though he has no interest in the partnership assets. These and other circumstances are to be considered in determining the question of partnership, but they are not decisive of that question. The ultimate inquiry in all cases is whether the party claimed to be a partner has become by agreement a principal trader in the

business with another. In other words, has he a right to participate as principal trader in the management of the business? If he has, he is a partner. If he has not, he is not a partner, with a single exception, which however is rather apparent than real. The exception is this: A person may be a partner, even though he has by express agreement intrusted the control of the business exclusively to his associate in the business. The question, strictly speaking, is not whether the party has a right to control the business as principal trader in the particular case, but whether he would

have such right in that case by virtue of the agreement between himself and another, in the absence of any express provision conferring that right upon his associate in the business. If it appears that he would have had such right had it not been for his agreement to the contrary, then he is a partner, and his agreement merely operates as a surrender to his associate of a right which he would otherwise have enjoyed. We submit that upon principle the question of partnership is to be determined by the three following rules: 1st. When the recipient of profits has, by virtue of an agreement with another, a right to participate as principal trader in the management of the business out of which the profits are to arise, then he is a partner, and liable as such; and no secret intent not to become a partner, and no provision in the contract restricting his liability or exempting him from all liability will afford him immunity from the responsibilities of a partner.

2d. When the recipient of profits would, in the absence of any express provisions in the agreement to the contrary, have by virtue of such agreement a right to participate as principal trader in the management of the business, then he is a partner, even though he has expressly agreed that his associate in the business shall have the right to exercise exclusive control in conducting the business.

3d. In all other cases the recipient of profits is not a partner, and cannot be held liable to creditors unless he has estopped himself from denying that he is a part

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PHOENIX BANK V. RISLEY.*

Money in a bank in New York, held to the credit of an institution in South Carolina, is not of such specific quality that it is liable to seizure by a United States marshal in confiscation proceedings.

In an action by defendant in error in the State court, on an assignment of part of the amount standing to the credit of the South Carolina institution, the plaintiff in error set up that the money due said institution had been seized, condemned, and paid over to a United States marshal by virtue of confiscation proceedings. Held no defense, and that the assignee's right to recover was unaffected by such proceedings.

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Appeals of New York.

The defendant in error recovered against the plaintiff in error the sum of $10,000 and interest by the verdict of a jury, which found, as matter of fact, that the

Bank of Georgetown, South Carolina, having a balance with the Phoenix Bank of New York on the 20th day of May, 1861, assigned to Risley, the plaintiff, in the State court, $10,000 of that sum, of which the Phoenix Bank had due notice by demand made by Risley,January 4, 1865.

With the questions which arose out of this transaction in the State court we have nothing to do, except as they concern the defense set up by the bank that

*Affirming 83 N. Y. 318.

the money in its hands due to the Bank of Georgetown had been seized, condemned, and paid over to the marshal of the Southern District of New York by virtue of certain confiscation proceedings in the District Court of the United States for that district.

The sufficiency of those proceedings as a defense to the action raises a question of a claim asserted under an authority of the United States, and as the Court of Appeals sustained the judgment of the inferior court of that State rejecting the defense, the case, as to that question, is cognizable in this court.

The record of the confiscation proceedings in the District Court was rejected by the State court when offered in evidence by defendant, and our inquiry must be directed to ascertain, whether if admitted, it would have been a good defense.

The judge, before whom the jury trial was had, refused to receive the record in evidence, because it showed that the confiscation proceedings, being in rem, were directed against certain specific money, which was the property of the Georgetown Bank and which the Phoenix Bank held as a special deposit in the nature of a bailment, and not against the debt which the Phoenix Bank owed to the Georgetown Bank arising out of their relations as corresponding banks; that this debt being assigned to Risley, the plaintiff was unaffected by the confiscation proceedings, because it was not mentioned in them, and no attempt was made to subject that debt to condemnation.

That the relation of the Phoenix Bank and the Georgetown Bank was that of debtor and creditor and nothing more, has been the settled doctrine of this court, as it is believed to be of all others, since the case of the Marine Bank v. Fulton Bank, 2 Wall. 252. In that case it was said, that "all deposits made with bankers may be divided into two classes, namely, those in which the bank is bailee of the depositor, the title to the thing deposited remaining with the latter; and that other kind of deposit of money peculiar to the banking business, in which the depositor, for his own convenience, parts with the title to his money and loans it to the banker; and the latter, in consideration of the loan of the money and the right to use it for his own profit, agrees to refund the same amount, or any part thereof, on demand." "It would be a waste of time," said the court, "to prove that this latter was a debtor and creditor relation." This proposition has been reaffirmed in Thompson v. Riggs, 5 Wall. 572; Bank v. Millard, 10 id. 155; Oulton v. Savings Institution, 17 id. 503; Scammon v. Kimball, 92 U. S. R. 370; and Newcomb v. Wood, 97 U. S. 583.

Mr. Parker, the cashier of the Phoenix Bank, speaking of the time when the marshal served the monition in the confiscation case on him, says that there were no specific funds, separate in kind, in the bank belonging to the Georgetown Bank, and only a general indebtedness in account for money, or drafts remitted, which has been collected. "It was a debt. No specific money or bills, the property of the Georgetown Bauk."

The libel of information in the District Court commences by saying that it is "against the estate, property, money, stocks, credits, and effects, to wit: against $15,000 (fifteen thousand dollars), more or less, belonging to the Bank of Georgetown, a corporation doing business at Georgetown, in the State of South Carolina, which said $15,000 is now in cash, and is now on deposit in the Phoenix Bank, a corporation doing business in the city of New York, all of which are owned by and belonging to and are the property of the said Bank of Georgetown."

And it is alleged, that by reason of the use of this property in aid of the rebellion, and the treasonable practices of the Georgetown Bank, the said property,

estate and effects are subject to lawful prize, capture and seizure, and should be confiscated and condemned.

The monition, after reciting the libel against $15,000 belonging to the Georgetown Bank, which said $15,000 is now in cash and on deposit with the Phoenix Bank, commands the marshal to attach the said $15,000, and to detain the same in his custody until the further order of the court.

The return of the marshal is that he attached $13,000, more or less, deposited in the Phoenix Bank, belonging to the Bank of Georgetown, and gave notice to all persons claiming the same that the court would try the case on January 24 thereafter.

The decree of the court is, that he, the judge, doth hereby order, sentence, and decree that $12,117.38 belonging to the Bank of Georgetown, of Georgetown, in the State of South Carolina, and now on deposit in the Phoenix Bank, in the city of New York, which said $12,117.38 has been heretofore seized by the marshal in this proceeding, be and the same is hereby condemned as forfeited to the United States.

On this sentence a venditione exponas was issued to the marshal, in which he is ordered to sell this $12,117.38, and to have the moneys arising from the sale at the District Court on a day mentioned.

It is not possible to understand that this case proceeded on any other idea than the actual seizure of a specific lot of money, supposed at first to amount to $15,000, but which turned out to be less, and that that lot of money was seized, was formally condemned and ordered by the court to be sold, and the proceeds of the sale brought into court for distribution under the confiscation law. The specific money is described by apt words, as the property of the Bank of Georgetown, for whose misconduct it is seized, condemned and forfeited.

The very language is used, and no other, that would be if it were twelve hundred horses instead of twelve thousand dollars, of which the Georgetown Bank was owner, though in the possession of the Phoenix Bank.

There is not the slightest intimation in the libel, the monition, the return to that monition, or in the final decree, that a debt due by the Phoenix Bank to the Georgetown Bank is attached, and no language appropriate to such a purpose is found in the whole proceeding from the beginning to the end. On the contrary, the whole case presents the idea of tangible property, actual cash taken by manual seizure, in the hands of the Phoenix Bank, the ownership of which was in the Georgetown Bank; that these dollars, whether of gold, silver, or bank bills, were to be placed in the hands of the marshal and sold, and the sum bid for them brought into court under its order.

In further illustration of this idea, the libel charges that the Bank of Georgetown, the owner of the property libelled, did purchase and acquire said property, and the same was sold and given to it by a person unknown to the attorney, with intent to them to use and employ, and to suffer the same to be used and employed, in aiding, abetting and promoting the insurrection, and resistance to the laws, and in aiding and abetting the persons engaged therein, and that the Georgetown Bank did knowingly use and consent to such use of the property, contrary to the provisious of an act to confiscate property used for insurrectionary purposes," approved August 6, 1861.

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It is beyond question that this act was directed to the confiscation of specific property used with the consent of the owner to aid the insurrection, and had no reference to the guilt of the owner, and could only apply to visible, tangible property which had been so used.

If the thing seized and condemned in the District

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