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Thomas Johnson Michie.

Banking cases, annotated. A collection of all cases affecting banks decided by the courts of last resort in the United States (Volume 2) online

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KINS. Jr,




UNIVERSITY

OF CALIFORNIA

LOS ANGELES



SCHOOL OF LAW
LIBRARY





AriNOTATED.



A COLLECTION OF ALL



CASES AFFECTING BANKS DECIDED BY THE
COURTS OF LAST RESORT



IN THE



UNITED STATES.



EDITED BY

THOMAS JOHNSON MICHIE.



Volume II.



THE MICHIE COMPANY, Publishers,
Charlottesville, Virginia.






v-^



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PUBLICATIONS

of

THE MICHIE COMPANY,

Charlottesville, Va.

Virginia Reports, Annotated.

American and English Railroad Cases, N. S.

American and English Corporation Cases, N. S.

Municipal Corporation Cases.

Banking Cases.



Copyright, 1901,

BV

The Michie Company.



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TABLE OF CASES.



VOIvUMB II.



Abeles ei al. , O'Leary ef al. v. (Ark.) 773

Aldrich v. Campbell (CCA.) 481

Aldrich, Receiver, v. Chemical Nat. Bank (U. S.) 446

American Exch. Bank of St. l/ouis, National Bank of Commerce

of Kansas City (Mo.) 101

Andrews et al. v. State Bank of Wheatland (N. D.) 508

Attten, Binghamton Trust Co. v. (Ark.) 502

Auten V. Manistee Nat. Bank (Ark.) 215

Bacon v. United States (CCA.) 26

Bank of Blackwell v. Dean (Okla.) 232

Biirnett et al., Santa Rosa Nat. Bank v. (Cal.) 749

Bevin, First Nat. Bank of Willimantic v. (Conn.) 340

Bimetallic Bank, Gregg- v. (Colo.) 424

Binghamton Trust Co. v. Auten (Ark.) 502

Blades v. Grant County Deposit Bank et al. (Ky.) 494

Bradlej' v. Chesebrough et al. (Iowa) 409

Broas et al., Foster v. (Mich.) 700

Buffalo German Ins. Co. v. Third Nat. Bank of Buffalo (N. Y.) . . 325

Bull, Fealey v. (N. Y.) 497

Bunting, C & Co. et al. (Bingham County et al.. Interveners,)

First Nat. Bank of Pocatello v. (Idaho) 239

: Cadwallader, State v. (Ind.) 651

_ Campbell, Aldrich j-. (C C A.) 481

W Campbell, Collector of the Town of Newton, State (Myers, Prose-
cutor,) z'. (N. J.) 195

Carlin, Dillman v. (Wis.) 89

Cassidy v. Uhlmann (N. Y.) 661

Chambers, County Treasurer, Commercial Nat. Bank v. (Utah). . 682

Chatfield ^/f a/., Commercial Bank t^. (Mich.) 21

Chesebrough et al., Moore v. (Iowa) 221

Chemical Nat. Bank, Aldrich, Receiver, v. (U. S.) 446

Chesebrough et al. , Bradley v. (Iowa) 409

Citizens' Sav. Bank of Detroit, First Nat. Bank of Chicago V.

(Mich.) 430

Citizens' Sav. Bank v. Walden et al. (Ky.) 1

Clark, James, Co. et al. v. Colton ct al. (Md.) 530

Clifton Mfg. Co., Merchants' & Planters' Nat. Bank v. (S. Car. ) . . 128






IV



TABLE OF CASES [vOL II



C. M. Henderson & Co. v. United States Nat. Bank (Neb.) ... 85

Colton et a/., Clark, James, Co. e( al. v. (Md.) 530

Colton et al. v. Dover Perpetual Building and Loan Ass'n of

Baltimore (Md.) 243

Commercial Bank v. Chatfield et al. (Mich.) 21

Commercial Nat. Bank v. Chambers, County Treasurer, (Utah). . 682
Commercial Nat. Bank of Detroit, Mich., Warren-Sharf Asphalt

Pav. Co. z-. (CCA.) 172

Continental Nat. Bank of Memphis, Tenn., Richardson v. (C C

A.) 438

Continental Nat. Bank, James, J. M. Co. v. (Tenn.) 573

Cosgrove et al. v. Provident Inst, for Savings in Jersey Citj-

(N. J.) 755

Courtney, Fidelity & Deposit Co. of Maryland v. (C C A.) 633

Darragh, State v. (Mo.) 257

Dean, Bank of Blackwell v. (Okla.) 232

Dent, Receiver, Matteson et al. V. (U. S.) 469

Diamond Nat. Bank, Safe-Deposit & Trust Co. v. (Pa.) 408

Dillman v. Carlin (Wis.) 89

Dingley v. McDonald et al. (Cal.) 153

Dover Perpetual Building and Loan Ass'n of Baltimore, Colton

et al. V. (Md.) 243

Druein et al., German Nat. Bank v. (Ky.) 50

Earle, Quin v. (Pa.) 161

Fealey z*. Bull (N. Y. ) 497

Fidelity & Deposit Co. of Maryland v. Court;ney (C C A.) 633

First Nat. Bank of Charles City, Mereness t*. (Iowa). 623

First Nat. Bank of Chicago v. Citizens' Sav. Bank of Detroit

(Mich.) 430

First Nat. Bank of Corunna, Mich.,!'. Michigan City Bank (N.

D.) 5

First Nat. Bank of Louisville, Ky., et al., Hindman v. (C C A.) 198
First Nat. Bank of Pocatello t'. C Bunting & Co. et al. (Bingham

Connty et al.. Interveners,) (Idaho) 239

First Nat. Bank of Willimantic v. Bevin (Conn.) 340

Flynn v. Third Nat. Bank et al. (Mich.) 212

Foster V. Broas et al. (Mich.) 700

Ft. Dearborn Nat. Bank et at., Wyman v. (111.) 58

German Nat. Bank v. Druein et al . (Ky.) SO

German Nat. Bank v. Grinstead et al. (Ky.) 50

German Nat. Bank v. Herndon et al. (Ky.) SO

German Nat. Bank v. Otter et al. (Ky .) SO

German Nat. Bank, Speckert et al. v. (C C A.) 307

German Nat. Bank J'. Sullivan (Ky.) SO

German Nat. Bank v. Wedekind et al. (Ky.) SO

Goodrich Bros. Banking Co., Schofield Z'. (C C A.) 253



BKG CAs] TABLE OF CASES V

Grant County Deposit Bank et al.. Blades v. (Ky . ) 494

Gregg- V. Bimetallic Bank (Colo.) 424

Grinstead et al., German Nat. Bank v. (Ky.) 50

Harter et al., Mechanics' Nat. Bank of Trenton v. (N. J.) 81

Henderson Trust Co. v. Rag-an et al. (Ky. ) 92

Herndon et al., German Nat. Bank v. (Ky.) 50

Hill et al., Utley v. (Mo.) 371

Hindman v. First Nat. Bank of Louisville, Ky., et al. (C. C. A..). 198

Hodg-in r'. People's Nat. Bank (N. Car.) 222

Home Bank, Martin et al. v. (N. Y.) 112

In re Hullitt (Ohio) 121

Iowa Paper-Bag Co. et al., Thilmany v. (Iowa) 97

James, J. M. Co. v. Continental Nat. Bank (Tenn.) 573

Killen f. State Bank of Manitowoc et al. (Wis.) 342

Kiper et al., Omaha Nat. Bank v. (Neb.) 419

Land-Title & Trust Co. v. Northwestern Nat. Bank (Pa.) 588

Lantry v. Wallace (CCA.) 314

Litchfield v. Preston et al. ( Va.) 628

McClure v. People (Colo.) 728

McDonald et at., Dingley v. (Cal.) 153

McDonald v. State of Nebraska (C C A.) 600

NcNulta V. West Chicago Park Com'rs (CCA.) 764

NcNulta, West Chicago Park Com'rs z/. (C C A.) 764

McWilliams, Winfield Nat. Bank v. (Okla.) 277

Manistee Nat. Bank, Auten z'. (Ark.) 215

Martin et al. v. Home Bank (N. Y.) 112

Mason, State z'. (Kan.) 12

Matteson et al. v. Dent, Receiver, (U. S.) 469

Mayor, etc., of Baltimore et al., National Bank of Baltimore v .

(CCA.) 665

Mechanics' Nat. Bank of Trenton v. Harter et a/. (N. J.) 81

Merchants' & Planters' Nat. Bank v. Clifton Mfg. Co. (S. Car.) 128

Mereness v. First Nat. Bank of Charles City (Iowa) 623

Michigan City Bank, First Nat. Bank of Corunna, Mich., v. (N.

D.) 5

Moore v. Chesebrough et al. (Iowa) 221

Myers z'. Southwest Nat. Bank (Penn.) 74

National Bank of Baltimore v. Mayor, etc., of Baltimore et al. (C.

C A.) 665

National Bank of Commerce of Kansas City v. American Exch.

Bank of St. Louis (Mo.) ,101

New Orleans Coffee Co., Limited, Richardson v. (C C A.) 522

New Orleans Debenture Redemption Co., Limited, Richardson i'.

(CCA.) 514

Northwestern Nat. Bank of Superior, Slack v. (Wis.) 66

Northwestern Nat. Bank, Land-Title & Trust Co. v. (Pa.) 588



VI



TABLE OF CASES [vOL II



O'Leary et al. v. Abeles et al 773

Omaha Nat. Bank v. Kiper ct al. (Neb.) ... 419

Otter f/ (t/., German Nat. Bank z/. (Ky.) 50

Pacific Nat. Bank of Tacoma v. Pierce County etal. (Wash.) 293

People, McClure v. (Colo.) , 728

People's Nat. Bank, Hodg-in v. (N. Car. ) 222

Perry, Studebaker z-. (C. C. A.) 620

Piedmont Bank of Morg-anton^/ al. v. Wilson et al. (N. Car.) 42

Pierce County etal.. Pacific Nat. Bank of Tacoma v. (Wash.) 293

Preston et al., Litchfield v. (Va.) 628

Provident Inst, for Saving-s in Jersey City, Cosg-rove et al. v. (N.

J. ) 755

guin V. Earle (Pa.) 161

Rag-an et al., Henderson Trust Co. v. (Ky.) 92

Richardson v. Continental Nat. Bank of Memphis, Tenn., (C. C.

A.).. 438

Richardi.:z f, New Orleans Coffee Co., Limited (C. C. A.) 522

Richardson v. New Orleans Debenture Redemption Co., Limited,

(CCA.) 514

Safe-Deposit & Trust Co. v. Diamond Nat. Bank (Pa.) 408

Santa Rosa Nat. Bank v. Barnett etal. (Cal.) 749

Schofield V. Goodrich Bros. Banking- Co. (C C A.) 253

Schofield V. State Nat. Bank of Denver, Colo., (C C A.) 182

Slack V. Northwestern Nat. Bank of Superior (Wis.) 66

Somersworth Sav. Bank v. Town of Somersworth (N. H.) 304

Southwestern Nat. Bank, Myers v. (Penn.) 74

Speckert et al. v. German Nat. Bank (C C A.) 307

State V. Cadwallader (Ind.) 651

State V. Darrag-h (Mo.) 257

State V. Mason (Kan. ) 12

State Bank of Manitowoc et at., Killen v. (Wash.) 342

State Bank of Wheatland, Andrews et al. v. (N. D.) 508

State Exch. Bank of Parkersburg- z\ Town of Parkersburg^ (Iowa) 747
State (Myers, Prosecutor,) v. Campbell, Collector of the Town of

Newton, (N.J.).. 195

State Nat. Bank of Denver, Colo., Schofield v. (C C A.) 182

State of Nebraska, McDonald z'. (C C A.) 600

Studebaker v. Perry (C C A.) 620

Sullivan, German Nat. Bank t'. (Ky.) 50

Thilmany v. Iowa Paper-Bag- Co. et al. (Iowa) 97

Third Nat. Bank et at., Flynn v. (Mich.) 212

Third Nat. Bank of Buffalo, Buffalo German Ins. Co. v. (N. Y.) 325
Town of Parkersburg, State Exch. Bank of Parkersburg^ v.

(Iowa) 747

Town of Somersworth, Somersworth Sav. Bank v. (N. H.) 304

Uhlmann, Cassidy v. (N. Y.) 661



BKG CAs] TABLE OF CASES



Vll



United States, Bacon v. (C. C. A.) 26

United States Nat. Bank, C. M. Henderson & Co. v. (Neb. ) 85

Utley V. Hill et al. (Mo.) 371

Walden et al.. Citizens' Sav. Bank v. (Ky.) 1

Wallace, Lantry v. (C. C. A.) 314

Warren-Scharf Asphalt Pav. Co. v. Commercial Nat. Bank of

Detroit, Mich., (CCA.) 172

Wedekind et at., German Nat. Bank v. (Ky.) 50

West Chicag-o Park Cora'rs v. McNulta (CCA.) 764

West Chicag-o Park Com'rs, McNulta v. (C C A.). 764

Wilson et a I., Piedmont Bank of Morg-anton et al. v. (N. Car.) . . . 42

Winlield Nat. Bank v. McWilliams (Okla.) 277

Wyman v. Ft. Dearborn Nat. Bank et al. (111.) 58



BANKING CASES.



VOLUME II.



Citizens' Sav. Bank

V.

Walden et al .
Same

V.
lyYDDANE et al .
(Court of Appeals of Kentucky, Oct. /j, i8gg.)

Discounting Notes — Fraud Knowledge of Cashier Notice to Bani<.*

— M, who was a director and stockholder in a fence company, and
also the cashier of the plaintiff bank, as the agent of the company,
procured notes by fraud, which were discounted by the bank through
the cashier. Held, that its cashier's knowledge of the fraud was.
notice to the bank.

Appeal by plaintiff from Daviess count}' circuit court.
Affirmed.

Robt. S. Todd, Reuben A. Miller, and \V. S. Pryor, for
appellant.

Walker & Slack, for appellees.

White, J. These two actions were never consolidated,
but, the two transactions, the two actions, and the defenses
being very similar, the court below heard them together,
and rendered one opinion. Like action has been followed
in this court.

The facts, as they appear admitted by the pleadings, and
the contentions of each party, are : In 1S90 W. H. Moore
was the cashier of appellant bank, and at the same time a
director and stockholder in a corporation known as the Ken-
tucky & Indiana Hedge -Fence Compau}' ; and, as director

*See note, 1 Banking- Cases 28.



2 OFFICERS [vol II

Citizens' Sav. Bank v. Walden

of the last-named corporation, Moore was authorized to sell,
and did sell, shares of stock of the fence company. He sold
stock to appellee Ivyddane, and also to appellee Walden,
taking notes for each sale, due 18 months after date ; the notes
payable in appellant bank. Before maturit^^ of these notes
they were each discounted by the directors of the fence com-
pany to the appellant bank, the indorsement being \>y the
individual directors in each case. The note of appellee
Lyddane was twice renewed ; interest being added in the
renewal, and some interest being paid. By the contention
of appellant, the note of Walden was paid or renewed by a
bill of exchange drawn by J. P. Moreland on Walden, and
for the benefit of J. A. Fuqua, and, by the proper indorse-
ment, discounted at and assigned to appellant bank. These
actions are brought, as against Lyddane, on the last renewal,
and, as to Walden, on the bill of exchange. Appellee Iy3'd-
dane pleaded as a defense that the original note of his was
•obtained by false and fraudulent representations of W. H.
Moore at the time as to the condition of the affairs of the
fence compnay ; that appellee was ignorant of the falsity,
while Moore knew the statements to be false; that the two
renewals were procured by Moore, who at the time was the
cashier of appellant and a director in the fence company, by
further false and fraudulent representations of the condition
■of the fence company, and by reiterating the former false
and fraudulent representations, all of which Moore knew to
be false, and also knew ai)pellee to be ignorant as to the
truth or falsity of the statements, upon which statements the
■appellee relied. It is further pleaded that Moore being the
•cashier of appellant, and having himself full knowledge of
the fraud used in procuring the original and renewal notes,
the appellant is not an innocent purchaser, but is chargeable
with notice of all infirmities of the paper. This same defense
is pleaded by Walden as to the original note given for stock.
Walden also pleads further that the bill sued on, drawn by
JNIoreland, accepted hy Walden, and indorsed by Fuqua,



BKG CAs] OFFICERS 3

Citizens' Sav. Bank v. Walden

was also obtained by the fraud of Moore, cashier of appellant.
Hesays that, at the time this bill was drawn and discounted,
he ( Walden) was indebted to appellant in several sums, due at
different times, and on which Moreland and Fuqua were his
sureties, and that, when this bill was drawn and indorsed,
they (Walden, Moreland and Fuqua) were told it was a re-
newal of one of these several debts on which Moreland and
Fuqua were already bound, and, relying on this statement
by Moore, cashier, the bill was drawn and indorsed ; that-
the original note for the stock was not delivered up or can-
celed or paid off by this bill ; and that appellant still holds
the original note for stock, but that in any event the bill is
without consideration, if not for renewal of the fence-stock
note, but, if for fenc€ -stock note, he relies on the fraud of
Moore in procuring that note. Appellant denied the fraud
or false statements of Moore in the sale of the stock in the
fence company to either I^yddane or Walden, and denied the
statements alleged to have been made by Moore in the re-
newals hy Lryddane, or in the renewal by bill b}' Walden ;
denied that it was bound by any statements made by Moore,
as director or agent, in the sale of the stock in the fence
compan}— averred it was a purchaser for value, before
maturity, and without notice of an}- infirmity or defense.
On the issues of fact, proof was taken, and upon trial the
court dismissed the actions, canceled the notes, and restored
the shares of stock. It is conceded that the stock in the
fence companj- is of very little, if any, value. From that
judgment in each case appellant appeals.

We are of opinion that the conclusion reached by the
learned trial judge in his opinion, that the appellant is not
entitled to recover, is correct. We are of opinion from the
evidence that the original notes and the renewals in the one
case, and bill in the other, were obtained by the false repre-
sentations of Moore, who was the authorized agent of the
fence compau}' to sell stock, and at the same time cashier of
appellant bank. In reaching this conclusion, we do not



1 OFFICKRS [vol II

Citizens' Sav. Bank v. Walden

take into consideration the testimony of the various witnesses
who testified as to having purchased stock from Moore under
like representations. This testimony was objected to, and
\ye do not decide whether or not it was admissible evidence.
We deem it unnecessary, in our view of the case. We are
also of opinion that the purchase or discount bj' appellant
through its cashier, Moore, who knew of the false represen-
tations and the fraud used in obtaining the notes, will operate
as notice to the bank of the infirmities in the paper, and appel-
lees still are entitled, as against appellant, to any defense
the}' may have had as against the original payor. It cannot,
be denied that, if the notes were obtained by fraud, the
chief executive oflScer of appellant had full knowledge of the
fact. Appellant is a corporation, and can onl}^ act through
some agent, and, if notice can be given to the corporation,
it must be given to some agent. Common usage generally
has made the cashier the chief officer and agent of the bank,
and notice to the cashier, Moore, was notice that will bind
the bank. 2 Am. & Eng. Enc. Law, 118, 119, and cases
there cited. We are also of opinion from the evidence that
the bill of Walden was procured b}' false and fraudulent rep-
resentations that it was to renew and extend some liability
other than the note for the fence -companj^ stock. There is a
motion by appellees to dismiss the appeal in the Walden
case, but a decision of this question becomes unnecessary.
Finding no error, the judgment of the circuit court is af-
firmed.



BKG CAs] OFFICERS

First Nat. Bank of Corunna z'. Michigan City Bank



First Nat. Bank of Corunna, Mich.,

V.

Michigan City Bank.

(Supreme Court of North Dalzota, Oct. 20, iSgg.)

Authority of Cashier to Borrow Money.*— The cashier of a state
bank organized under chapter 23 of the L,aws of 1890 has no author-
ity to borrow money, unless it is specially given by the board of
directors.

Bank's Liability for Money Borrowed by Officers.— One who seeks
to charge a banking corporation organized under said act upon a
loan made by one of its officers must show that such officer had
express authority from the directors to make the loan, or that it
was ratified by them.

Same— Cashier Rediscounting Forged Notes.— The plaintiif seeks
to recover the amount due upon four notes, which are admitted to
be forgeries as to the makers, which notes it claims to have redis-
counted for the defendant in reliance upon the latter's promise to
pay plaintiff the amounts they call for, when they became due.
Plaintiff dealt with defendant's cashier only. Hetd, under the facts
stated in the opinion, that the transaction was a loan. Held, fur-
ther, that inasmuch as it does not appear that the cashier was
authorized to make such loan by the directors of the defendant
bank, or that his acts were ratified \>y them, the defendant is not
liable therefor.

(Syllabus by the Court.)

Appeal by plaintiff from Grand Forks county district court.
Affirmed.

Burke Corbet, for appellant.
Cochrane & Corliss, for respondent.

Young, J. The First National Bank of Corunna, Mich.,
sues the Michigan City Bank to recover the amount due

*See the recent case of Auten v. United States Nat. Bank of New
York (U. S.), 1 Banking Cases 416, and 7iote, p. 441.



6 OFFICERS [vol II

First Nat. Bank of Corunna v. Michigan City Bank

upon certain promissory notes which it alleges it purchased
from said bank in due course of business, and for

Case Stated.

value. It is conceded that the notes were forgeries
as to the makers. Plaintiff states its cause of action in three
counts, — the first upon a purchase; second, upon defendant's
indorsement of the notes; and, third, upon a separate written
guaranty of pajanent. The answer of defendant denies that
it sold, indorsed, or guarantied the payment of said notes.
A jury was waived, and the case was tried to the court,
resulting in findings and a judgment favorable to the defend -
ant. Plaintiff appeals, and the case is here for trial anew.
It is undisputed that all of the transactions which took
place between the plaintiff and defendant upon which the
alleged liability of the defendant is based were had with
one H. B. Cram, who purported to be defendant's cashier,
and to ])e acting as such in such transactions as occurred.
It is not claimed by i)laintiff that it did any portion of the
business with any other person or officer of the defendant
bank, and it does not appear that there ever was any deal-
ing between the plaintiff and defendant other than that here
in question; so that the entire alleged liabilit}' of the defend-
ant is based upon the acts of Cram. The defendant is
organized under chapter 23 of the Laws of 1890, providing
for the organization and government of state banks. Its
certificate of authorit}-, authorizing it to commence the busi-
ness of banking, was issued by the secretar}^ of state on
January 23, 1893. Prior to that time the stockholders had
named its directors in the articles of association. There is no
record of a formal meeting of the directors for any purpose
until June 6, 1893, when a president and vice president were
elected, and B. H. Cram was also elected as cashier. It is
admitted by the defendant, however, that it had been doing
a l)anking business since April 6th, and that during
such time Cram acted as cashier, with the knowledge
and consent of the directors. Plaintiff contends that
he acted as cashier with the same consent and knowl-
edge on the part of the directors prior to April 6th, and at all



BKG CAs] OFFICERS 7

First Nat. Bank of Corunna v. Micliigan City Bank

times after the bank was organized to do business. Whether
his assumption of authority to act as cashier during this
earlier period was with the consent and knowledge of the
directors is a mooted question of fact, to which counsel for
both parties have devoted much attention. The view which
we take of the limitations upon a cashier's authority to bind
his bank to the obligations which are here sought to be
enforced is necessarily decisive of the case, and renders a
determination of this disputed question unnecessary. It may
be assumed that Cram was at all times the cashier of defend-
ant bank, and that he was clothed with the usual authority
of cashiers. Nevertheless, in our opinion, his acts, which
are here relied upon to create a liability against the defend-
ant, are so far beyond the ordinary duties and implied
authority of a cashier that they do not bind the corporation,
unless it is shown that he was specially authorized by the
directors to do what he did, or unless his acts have been rati-
fied by them. The transaction was this : Earlj- in the
winter of 1893, Cram called at plaintiff's bank to interest it
in discounting some paper for the defendant bank. It seems
that plaintiff's cashier then orally agreed to rediscount a
reasonable amount, and that the plaintiff then and at all times
relied wholly upon Cram's promise that the defendant would
itself pay all of the notes it should rediscount, when they
became due. After this conversation, on Fel^ruarj^ 22, 1893,
Cram wrote plaintiff as follows : "If we make a deal, we
guaranty all paper, and will pa}- all paper as fast as it becomes
due. You send the notes to this bank for collection, and, as
fast as they become due, we will send you New York draft
for same." Plaintiff's reply seems to have been favorable,
for on February 27th Cram mailed to it 14 notes, aggregating
in amount $2,527, and in his letter accompanj-ing them said :
"I note what you say in regard to discounts. These notes
are all due next fall, and, as I told you before, we will send
N. Y. draft for these as fast as they become due." Some
time after receiving these notes, plaintiff remitted for them
by sending two drafts drawn upon its New York correspond-



S OFFICERS [vol II

First Nat. Bank of Corunna v. Michigan City Bank

ent, paj'able to H. B. Cram, cashier. It sent $1,050 March
16th, and $1,47 7 on April 7th. Both drafts were received by
Cram, and were deposited by him in the National German -
American Bank of St. Paul, to the credit of an account which
the evidence shows he carried there in the name of the Michi-
gan City Bank, and were paid by the New York bank, and
charged to plaintiff's account, in due course of business.
When the notes matured, plaintiff sent them to the defendant
"for payment." Upon their receipt. Cram wrote to plaintiff,
using this language : "I will remit to j^ouon the 13th of this
month on the past-due discounts;" and on November 13th
he sent plaintiff a New York draft for $1,889.58, covering-
the amount due on 9 of the notes. On January 25, 1894,
Cram sent ])laintiff 14 other notes, requesting it to discount
them, and. after taking out the balance due on the notes for-
merly discounted, to remit the balance. Plaintiff selected 4
notes out of the 14, which amounted to $773.64. Out of this
amount it reserved the balance due it, which was $743.60,
and for the excess sent its draft on a Chicago bank, payable
to H. B. Cram, cashier, in the letter returning the notes not
discounted. This small draft was deposited by Cram in the



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