Auten v. United States Nat'l Bank of New York
174 U.S. 125 (1899)

Annotate this Case

U.S. Supreme Court

Auten v. United States Nat'l Bank of New York, 174 U.S. 125 (1899)

Auten v. United States National Bank of New York

No. 206

Argued March 9, 1899

Decided April 24, 1899

174 U.S. 125

Syllabus

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 nonpayment, 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 setoff. 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.

Page 174 U. S. 126

(2) That it was competent for the directors of the Arkansas bank to empower the president, or cashier, or both to endorse 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 setoff 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 contains 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 percent per annum from maturity until paid. Said Brown and Allis afterwards endorsed and delivered said notes to the defendant, First National Bank, and said bank, before maturity and for a valuable consideration, endorsed, rediscounted, and delivered said notes to plaintiff. That on 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 percent per annum until paid. Said Joyce afterwards endorsed said notes to the defendant, First National Bank, and said bank, before maturity and for a valuable consideration, endorsed, rediscounted, and delivered said notes to plaintiff. Said notes were each at maturity presented at the First National Bank in Little Rock, Arkansas,

Page 174 U. S. 127

for payment, and, payment being refused, they were each duly protested for nonpayment, the fees for which, amounting to twenty-five dollars, were paid by plaintiff. Copies of said notes, with the endorsements thereon, are hereto attached, marked 1 to 5, inclusive, and made part hereof. 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:

"$5,000 34,131 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 percent per annum until paid."

"City Electric St. R'y Co."

"W. H. Sutton, Sec'y H. G. Bradford, P't"

"No. A, 73,485. Due Apr. 7-10, '93"

The following endorsement 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:

"$5,000 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 percent per annum until paid."

"McCarthy & Joyce Co."

"Geo. Mandlebaum, Sec'y & Treas."

"A, 73,477. No. 2. Due Ap'l. 7-10, '93."

They were endorsed as follows: "James Joyce; H. G. Allis; First National Bank, Little Rock, Ar., H. G. Allis, P't."

Page 174 U. S. 128

The receiver only answered, and his answer, as finally amended, denied that

"either of the notes described in the plaintiff's complaint was ever endorsed and delivered to the First National Bank; he denies that either of said notes was ever the property of, or in the possession of, said bank, and denies that the said bank ever endorsed or delivered either of said notes to the plaintiff; he denies that said bank ever received any consideration from said plaintiff for any endorsement or delivery of said notes to it,"

and averred

"that the name of the defendant bank was endorsed 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; 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 is 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 judgment

Page 174 U. S. 129

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, 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 setoff, 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 assigns 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 19 in number, and present every aspect of the defendant's defense 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 percent"

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

Page 174 U. S. 130

were three of the City Electric Railway Company, the maker of three of the notes in controversy. When first forwarded, they were not endorsed, and had to be returned for endorsement. They were endorsed, and the letter returning them was signed by Allis. To the letter forwarding them, the New York bank replied as follows:

"New York, June 27th, 1892"

"H. G. Allis, Esq., President, Little Rock, Ark."

"Dear Sir: We have this day discounted the following notes contained in favor of the 24th inst., and proceeds of same placed to your credit."

The notes were enumerated, their amounts calculated and footed up, and discount at 4 percent deducted, and the proceeds, amounting to $50,216.48, placed to the credit of the Little Rock bank.

On July 6, 1892, the following telegrams were exchanged:

"New York, July 6th, 1892"

"First National Bank, Little Rock, Ark.:"

"Will give you additional fifty thousand on short-time, well rated bills, discounted at five percent. Money rates are little firmer. Answer if wanted."

"U.S. Nat. Bank"

"Little Rock, Ark., July 6, 1892"

"United States Nat. Bank, N.Y.:"

"We can use fifty thousand additional at five percent. Will send bills tomorrow."

"First Nat. Bank"

In accordance with the proposition thus made and accepted, H. G. Allis, as president, wrote on the 9th of July, 1892, to the New York bank a letter enclosing what he denominated "prime paper, amounting to $50,301.88," and requested proceeds to be placed "to our credit, and advise." These notes were discounted and acknowledged. Their proceeds, less discount, amounted to $49,641.68.

On July 26, 1892, the New York bank telegraphed:

Page 174 U. S. 131

"New York, July 26th, 1892"

"First National Bank, Little Rock, Ark.:"

"Can take fifty thousand more of your well rated bills, discounted at five percent."

"U.S. Nat. Bank"

To this, H. G. Allis, as president, answered as follows:

"Little Rock, Ark., July 29, 1892"

"United States National Bank, New York City."

"Gentlemen: Your telegram of the 26th, saying you could take $50,000 more short-time, well rated paper, I placed before our board today."

"While it is two weeks earlier than we need it, on account of the rate, we will take it now, and I enclose herein paper as listed below; amount, $50,089.93."

"Yours very truly, H. G. Allis, President"

"We hold collaterals subject to your order; see (pencil) notations on paper for rating."

"H. G. Allis, Pr."

In the list of notes were two by the City Electric Street Railway Company and two by the McCarthy & Joyce Company, who were the makers of two of the notes in controversy. There was one by N. Kupferle for $5,000, "due Nov. 8, 1892." The significance of this will be stated hereafter.

These notes were discounted, and the fact communicated to H. G. Allis, Esq., president, Little Rock, Ark.

The next letter contains notes for discount from the Little Rock bank, sent by its cashier, W. C. Denney. The proceeds amounted to $24,413.05, acknowledgment of which was made.

The next communication was about the notes in controversy. It was dated November 25, 1892, and was signed by W. C. Denney, cashier. The letter, however, enclosing the notes, was sent by H. G. Allis, as president. The correspondence is as follows:

"The First National Bank of Little Rock, Ark."

"Nov. 25, 1892"

"United States National Bank, New York City:"

"Gentlemen: Kindly advise us if you can give us $25,000

Page 174 U. S. 132

more in discounts. We have not decided whether we will make further discounts this year, although it is more than probable that we will have to, as our cotton men do not want to sell at present."

"We believe the advance in price will cover shortage of crop, and that our collections will be equal to those of last year. If our cotton men continue to hold their cotton, it will be necessary for us to make further rediscounts, and we want to know what we can do in case they refuse to sell."

"If you can grant us this favor, kindly let us know what rate of interest you will want. Your immediate reply is requested."

"Yours, very truly,"

"W. C. Denney, Cashier"

"New York, Nov. 28, 1892"

"Mr. W. C. Denney, Cashier, Little Rock, Ark"

"Dear Sir: Yours of the 25th is to hand."

"We will give you the additional discounts as requested. You may send on your paper, and we will put same to your credit at 6%."

"Yours, very truly,"

"H. C. Hopkins, Cashier"

"Little Rock, Ark., Dec. 13, 1892"

"United States Nat. Bank, New York City"

"Gentlemen: In accordance with our letter of the 25th ult., and your reply of the 28th ult., we find that we shall need some more money, as our cotton men are not shipping out any cotton. It seems to be the inclination of all of them to hold for a better price, and we are now carrying $175,000 in demand loans on cotton, which we may have to carry two or three months longer."

"We enclose herein paper as scheduled below. Kindly wire us proceeds to our credit, and oblige,"

"Yours, very truly,"

"H. G. Allis, President."

Dickenson Hardware Co., due March 3 . . . . . . . $ 2,500.00

Dickenson Hardware Co., due April 6 . . . . . . . 5,000.00

City Electric St. Ry. Co., due April 10 . . . . . 5,000.00

Page 174 U. S. 133

City Electric St. Ry. Co., due April 10 . . . . . 5,000 00

City Electric St. Ry. Co., due April 10 . . . . . 5,000 00

McCarthy & Joyce Co., due May 10 . . . . . . . . 5,000 00

McCarthy & Joyce Co., due April 10. . . . . . . . 5,000 00

----------

$32,500 00

"We hold all collaterals recited subject to your order and for your account."

"New York, Dec. 16th, 1892"

"H. G. Allis. Esq., Pres't, Little Rock, Ark."

"Dear Sir: We have this day discounted the following notes contained in your favor of the 13th inst., and proceeds of same placed to your credit:"

Dickenson Hardware Co., due M'ch 3, '93 $2,500 disct. $32.08

do. do. " Ap'l 6, '93 5,000 " 92.50

City Electric St. R'y Co. Ap'l 10 5,000 " 95.83

" " Ap'l 10 5,000 " 95.83

do. do. Ap'l 10 5,000 " 95.83

-------

Amount of notes . . . . . . . . . . . $32,500

Less discount at 6% . . . . . . . . . 628.73

----------

Proceeds . . . . . . . . . . . . $31,871.27

"We enclose herewith note of Dickenson Hardware Co. $5,000, due Apl. 6th, for insertion of amount in body, and return to us."

"Yours, truly,"

"Jno. J. McAuliffe"

"Asst. Cashier"

"New York, December 17, 1892"

"First National Bank, Little Rock, Arkansas:"

"Letter thirteen received notes discounted proceeds credited account."

"United States National Bank"

Page 174 U. S. 134

"The First National Bank of Little Rock, Ark."

"Dec. 20, 1892"

"United States National Bank, New York City"

"Gentlemen: We have your favor of the 16th inst., enclosing the Dickenson Hardware Company note for completion, which we herewith return."

"We charge your account with $31,871.27, proceeds of $32,500.00 of discounts."

"Yours, very truly,"

"W. C. Denney, Cashier"

In the subsequent correspondence, Allis takes part but once, and sent the following telegram, December 21, 1892:

"Little Rock, Ark., Dec. 21, 1892"

"U.S. Natl. Bank, N.Y.:"

"Can you discount thirty thousand country banks' paper secured by cotton thirty days no renewal desire to carry over holidays answer day message?"

"H. G. Allis, President"

Henry C. Hopkins, cashier of the New York bank, was called as a witness in its behalf, and, after explaining the letters and telegrams which were sent by the banks, and the transactions which they detailed, testified that the dealings between the banks were such as take place between banks carrying on legitimate banking business, in the usual course of business, and that the notes were not discounted in any other way, and that the bank had no notice or intimation that the notes had not been regularly received by the First National Bank, or offered by it in the regular course of business, or for the benefit of any person other than the bank, or interested in the proceeds, and that the United States National Bank, in its correspondence and dealings, did not recognize H. G. Allis, W. C. Denney, or S.S. Smith personally or in any capacity than as representing the First National Bank, and that the transactions were solely with the First National Bank, and that the correspondence and transactions were usual for the president and cashier of a United States

Page 174 U. S. 135

national bank to carry on, and that the proceeds of the various discounted notes were withdrawn by the Little Rock bank in the regular course of business by its officers.

There was a detailed statement of the transactions between the banks attached to Hopkins' deposition, which is not in the record, but instead thereof there appears the following:

"The account current here referred to began June 27, 1892, and continued until the suspension of business of the First National Bank. It shows almost daily entries of debit and credit. It shows that the several notes discounted by the United States National Bank, and referred to in the depositions of the officers of that bank, being forty-nine in number, were charged against the account of the First National Bank by the United States National Bank at the several dates of their maturity. In two-thirds of the instances where such charges were made, the balance to the credit of the First National Bank on the books of the United States National Bank was sufficient to cover the charge. In other instances, the balance to the credit of the First National Bank was insufficient to meet the charge at the time of the entry, and in the other instances, the account of the First National Bank was in overdraft, as shown by the books of the United States National Bank at the time the charge was made."

"The account shows that at the time of the suspension of the First National Bank, the latter bank had a credit of $467.86 upon the books of the United States National Bank. Against this balance, the notes in suit, with protest fees, were charged on the account April 17 and May 15, 1893, making the account show a balance in favor of the United States National Bank of $24,558.03."

"This is the paper marked '77,' referred to in the depositions of Henry C. Hopkins, James H. Parker, Joseph W. Harriman, and John J. McAuliffe, hereto annexed."

The record also shows that

"J. H. Parker, president, Joseph W. Harriman, second assistant cashier, and John J. McAuliffe, assistant cashier, each testified to identically the same facts in the identical language as Henry C. Hopkins, and it is agreed that the depositions of Hopkins shall be treated as the deposition

Page 174 U. S. 136

of each of the said witnesses, without the necessity of copying the deposition of each witness."

There was proof made of the protest of the notes.

There was testimony on the part of the plaintiff showing that it was the custom of the banks at Little Rock to rediscount, through their presidents and cashiers, until after a decision in the National Bank case of Cincinnati, in January, 1893. After that, it was done by resolution of the board of directors, and the banks of New York and other commercial cities commonly require that now.

By a witness who was cashier of the Little Rock bank from November, 1890, to October, 1891, Allis then being president, it was shown that it was the custom of the bank, as to rediscounting notes, for the cashier or assistant cashier to refer them to the president, and the president generally directed what amount and where to send them. Whether they were referred to the board of directors the witness was unable to say.

On cross-examination, the witness testified that when the discounts were determined on, the cashier or assistant cashier transacted the business. He, however, only remembered sending off one lot of discounts; Mr. Denney, the assistant cashier, usually carrying on the correspondence. He did not remember that the president ever did anything of that kind.

"Either Mr. Denney or I would say to him that something of the kind was needed, and he would direct the quantity and what correspondents usually to send to."

There were introduced in evidence

"the reports or statements by the bank to the Comptroller of the Currency, showing the rediscounts and business of the bank, of date May 17, 1892, and July 12, 1892, as follows: the report of May 17th was sworn to by W. C. Denney, cashier, and attested by James Joyce, E. J. Butler, and H. G. Allis, directors, and showed, 'Notes and bills rediscounted, $16, 132.40.' The report of July 12th was sworn to by H. G. Allis, president, and attested by Charles T. Abeles, E. J. Butler, and John W. Goodwin, directors, and showed, notes and bills rediscounted, $81,748.80."

The testimony on the part of the plaintiff in error showed

Page 174 U. S. 137

(we quote from brief of defendant in error) that

"the notes never belonged to the First National Bank; that the three notes of the Electric Street Railway Company were executed to Brown and Allis for accommodation of Allis, and the two notes of McCarthy & Joyce Company were executed and delivered to Allis for the purpose of raising money for the company, to be placed to its credit with the First National Bank, to which McCarthy & Joyce Company was indebted; that neither of the notes was ever passed upon by the discount board of the bank or appeared on the books of the bank; that, after the bank was notified that the notes had been discounted and placed to its credit, Allis directed the proceeds of the notes ($25,000) to be placed to his credit on the books of the bank, at which time there was an overdraft against him of $10,679.44; that Allis was at that time indebted to the Little Rock bank on individual notes for at least $50,000, and was continuously thereafter indebted to the bank until its failure."

As to the power of the president to direct rediscounts or to endorse the notes of the bank, E. J. Butler, N. Kupferle, and C. T. Abeles, who were directors of the bank at the time of the transactions between it and the New York bank, testified, respectively, as follows:

"Butler: Was a pretty regular attendant at the board meetings during the year -- at nearly all the meetings."

"Q. Did Mr. Allis have authority to discount notes for the bank or to rediscount them?"

"A. Never that I knew of. I knew that, when Colonel Roots was president, he asked and received authority from the board to make rediscounts, but I do not know that Mr. Allis ever asked, and the board, when I was present -- He never was given any authority to make rediscounts for the bank."

"Q. Did he have authority from the bank to endorse its papers for rediscount?"

"A. No, sir; never that I was aware of."

On cross-examination, he testified that he did not recollect of Allis asking for authority; that the question never came before the board as to discounts.

Page 174 U. S. 138

He knew that there were discounts made, but did not recollect any particular ones, but in case there were, he would suppose they were on the authority of the board, given in his absence, but did not remember that the question was brought up at all.

"Q. There are a couple of statements made by the bank (being the statements heretofore introduced by the plaintiff) of May 17, 1892, and July 12, 1892, to which you as a director certify, which show -- one of May 17 shows rediscounts, $16,172.40, and the one of July 12, 1892, shows rediscounts, $81,748.88. Did you sign these?"

"A. I couldn't say without referring to the original reports."

"Q. These are the published reports, are they not?"

"A. They purport to be the published report, but I do not know anything about it. I was one of the directors at that time."

"Q. That is one of the usual forms of the reports published in the papers, isn't it?"

"A. Yes, sir."

"Q. You now tell the jury that you do not know anything about the extent of rediscounts made by it?"

"A. No, sir; I cannot remember."

Mr. Denney was cashier in 1892, and he supposed that Denney transacted the business as to endorsements and rediscounting, but did not know and did not recollect that Allis did. Did not hear of him endorsing the notes in suit until after the bank failed.

"Kupferle: Mr. Allis did not have the power from the board of directors of the bank to endorse its paper for rediscount."

"Cross-examination: There was nothing said in the board about such power. The question was not brought before the board. The bank during that time rediscounted paper. The cashier generally attended to that. I knew that the bank was discounting paper. I recall once where the president requested of the board that the bank should borrow some money. That was in the fall of 1892. I knew that the bank had been discounting paper long before that, and borrowing money before

Page 174 U. S. 139

that, and no authority had been asked of the board to do it. I knew that they were borrowing money and rediscounting paper continually."

"Redirect: We had eleven or thirteen members of the board of directors; I forget which. Never less than eight or nine. There was seldom a meeting when all were present -- a majority present."

"Q. Did they at any time rediscount or authorize the rediscounting of paper? Did they have that authority?"

"A. No, sir; that was not their business."

"Q. Theirs was to discount paper for customers of the banks?"

"A. The daily offerings; yes, sir."

Did not know of Mr. Allis endorsing the name of the bank upon the paper for the purpose of rediscounting it.

"Q. Did you, as a member of the board of directors, or otherwise, have any information that Mr. Allis was using the name of the bank upon his or other people's paper, for accommodation?"

"A. No sir, I never did."

Cross-examination:

"Q. You didn't know he was using the name of the bank on the bank's paper?"

"A. No, sir."

"Q. You knew he was discounting paper?"

"A. No, sir; it was not his place."

"Q. Didn't the correspondence there show he was sending the paper for discount all over the country?"

"A. No, sir; I don't know anything about that."

"Q. Wasn't it your business to know it?"

"A. I do not know."

"Q. You were vice-president and one of the directors?"

"A. Yes, sir; I never knew anything about it until the failure of the bank, -- that he ever used the bank's name."

"Abeles: Not while I was there [at the meetings of the board] was authority given to Allis, as president, to endorse or rediscount the notes of the bank. I do not think it was ever mentioned. I knew of the bank's rediscounting paper, and

Page 174 U. S. 140

somebody was transacting that part of the business. I think I inquired of some of the directors who it was, and was told that the authority vested in the cashier. I do not recollect that I inquired of Allis or Denney."

"Cohn: Was not a director in 1892 -- was for ten years prior to that time -- and Allis was president in 1891, but did not recollect that he had authority from the board to endorse its paper or to rediscount it."

"Cross-examination: Knew that rediscounting was being done, but supposed it was being done by the cashier -- didn't stop to inquire."

Redirect:

"Q. Who was authorized in the bank to perform that duty?"

"A. I understood the cashier."

Cross-examination:

"Q. How was he authorized?"

"A. By law."

"Q. You are simply giving your legal opinion?"

"A. Well, I understood that was authority."

Other facts are stated in the opinion of the Court.

Upon filing the record, the defendant in error made a motion to dismiss, which was postponed to the consideration of the merits.

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