Manhattan Bank of Memphis v. Walker - 130 U.S. 267 (1889)
U.S. Supreme Court
Manhattan Bank of Memphis v. Walker, 130 U.S. 267 (1889)
Manhattan Bank of Memphis v. Walker
Nos. 205, 682
Argued March 14-15, 1889
Decided April 8, 1889
130 U.S. 267
APPEALS FROM THE CIRCUIT COURT OF THE UNITED
STATES FOR THE WESTERN DISTRICT OF TENNESSEE
A state bank gave a receipt or certificate, stating that J., agent for W., had placed with it, on special deposit, $5,200 of railroad mortgage bonds, and a note for $5,000. The receipt was sent by the bank by mail directly to W. on the request of J. At the same time, the bank entered the note and the bonds in its special deposit book as deposited by J., agent for W. Afterwards, with the concurrence of J. but without authority from W., the bank discounted the note and applied its avails to pay a debt due to it from a firm whose business J. managed, and delivered up the bonds to J., knowing that he intended to pledge them as security to another bank for a loan of money to the same firm. The bank also knew that J. held the note and bonds as investments for W., and that it was not a safe investment to lend their avails to the firm. Held that the bank was liable to W. for the amount of the note and the value of the bonds.
A suit in equity by W. against the bank for the return of the property or the payment of its value, would lie, as it was a suit to charge the bank, as a trustee, for a breach of trust in regard to a special deposit.