As between a checkholder and the bank upon which such check is
drawn, it is settled that unless the check be accepted by the bank,
an action cannot be maintained by the holder against the bank.
Page 165 U. S. 635
It is also settled that a check drawn in the ordinary form does
not, as between the maker and payee, constitute an equitable
assignment
pro tanto of an indebtedness owing by the bank
upon which the check has been drawn, and that the mere giving and
receipt of the check does not entitle the holder to priority over
general creditors in a fund received from such bank by an assignee
under a general assignment made by the debtor for the benefit of
his creditors.
That the owner of a chose in action or of property in the
custody of another may assign a part of such rights, and that an
assignment of this nature, if made, will be enforced in equity is
also settled doctrine of this Court.
The Keystone Bank, through its president, solicited the Fourth
Street Bank to give to the former $25,000 of gold certificates, for
which the Keystone Bank was to give its check against its reserve
account in the Tradesmen's National Bank of New York City. At the
same time that this request was made, the president of the Keystone
Bank made the further statement that his bank owed a balance at the
clearinghouse which it could not meet "because its funds were in
the City of New York," and exhibited a memorandum showing the
amount to its credit with the Tradesmen's Bank to be in the
neighborhood of $27,000. In reliance upon such representations and
the statements made supported by the memorandum exhibited, the
Fourth Street Bank delivered to the Keystone Bank the certificates
requested, and there was delivered a check for $25,000 upon the
Tradesmen's National Bank of New York. The draft in question was at
once forwarded to the City of New York, and was presented for
payment at the Tradesmen's Bank on the following morning, when
payment was refused. At the time of presentment, the Tradesmen's
Bank had to the credit of the Keystone Bank $19,725.62 in cash and
collection items amounting to $7,181.70, in all $26,907.32. Of this
amount, $18,056.21 had been remitted by the Keystone Bank on the
day previous.
Held:
That, it being established that it was the intention and
agreement of the parties to the transaction that the check drawn
generally should be paid out of a particular fund, such check, as
between the parties, is to be treated as though an order for
payment out of the specific designated fund.
That, as the Fourth Street Bank contracted and parted with its
money on the faith of the representations of the Keystone Bank that
there was to its credit in the Tradesmen's Bank a specific sum, and
the fund which came into the hands of its voluntary assignee was
the fund as to which the representations were made, the Keystone
Bank and its assignee were in equity estopped from asserting, to
the prejudice of the Fourth Street Bank, that the character and
condition of the fund was otherwise than it was represented to
be.
By a bill filed in the Circuit Court of the United States for
the Eastern District of Pennsylvania, appellant sought to
subject
Page 165 U. S. 636
moneys in the hands of the receiver of the Keystone National
Bank to the satisfaction of an alleged equitable charge or lien
thereon. From a decree dismissing the bill, an appeal was taken to
the Circuit Court of Appeals for the Third Circuit. The latter
court thereafter certified to this Court two questions of law
arising upon the facts stated, which facts are set out in the
margin hereof.
*
Page 165 U. S. 637
The following are the questions propounded:
"First. Do the above-stated facts show an equitable assignment
by the Keystone National Bank to the Fourth Street National Bank of
twenty-five thousand dollars of the fund, consisting of cash and
collection items or drafts as aforesaid, belonging to the Keystone
National Bank in the hands of the Tradesmen's National Bank?"
"Second. If the stated facts do not show such equitable
assignment of the whole twenty-five thousand dollars, do they show
such equitable assignment of the cash so in the hands of the
Tradesmen's National Bank, namely, the sum of nineteen thousand
seven hundred and twenty-five and 62/100 dollars? "
Page 165 U. S. 643
MR. JUSTICE WHITE, after stating the case, delivered the opinion
of the Court.
As between a check holder an the bank upon which such check is
drawn, it is settled that, unless the check be accepted by the
bank, an action cannot be maintained by the holder against the
bank.
Bank of Republic v.
Millard, 10 Wall. 152;
First National Bank v.
Whitman, 94 U. S. 343.
It is also settled that a check drawn in the ordinary form does
not, as between the maker and payee, constitute an equitable
assignment
pro tanto of an indebtedness owing by the bank
upon which the check has been drawn, and that the
Page 165 U. S. 644
mere giving and receipt of the check does not entitle the holder
to priority over general creditors in a fund received from such
bank by an assignee under a general assignment made by the debtor
for the benefit of his creditors.
Florence Mining Company v.
Brown, 124 U. S. 385;
Laclede Bank v. Schuler, 120 U. S. 511.
That the owner of a chose in action or of property in the
custody of another may assign a part of such rights, and that an
assignment of this nature, if made, will be enforced in equity, is
also settled doctrine of this Court.
Trist v.
Child, 21 Wall. 441,
88 U. S. 447;
Peugh v. Porter, 112 U. S. 737,
112 U. S. 742.
For recent cases maintaining this principle and referring to the
present state of the law on the subject in the various states,
see James v. Newton, 142 Mass. 366;
Bank v.
McLoon, 73 Me. 498, and
Lanigan v. Bradley & Currier
Co., 50 N.J.Eq. 201.
While an equitable assignment or lien will not arise against a
deposit account solely by reason of a check drawn against the same,
yet the authorities establish that if, in the transaction connected
with the delivery of the check, it was the understanding and
agreement of the parties that an advance about to be made should be
a charge on and be satisfied out of a specified fund, a court of
equity will lend its aid to carry such agreement into effect as
against the drawer of the check, mere volunteers, and parties
charged with notice.
This is but an application of the general doctrine of equitable
assignments or lines announced by this Court in
Ketchum v. St.
Louis, 101 U. S. 306,
where it was held, citing various authorities and text writers,
that:
"A party may, by agreement, create a charge or claim in the
nature of a lien on real as well as on personal property whereof he
is the owner or in possession which a court of equity will enforce
against him and volunteers or claimants under him with notice of
the agreement."
It is immaterial, for the purposes of this case, to draw a line
of distinction between equitable assignments and equitable liens or
charges.
In
Risley v. Phoenix Bank, 83 N.Y. 318, two counts of a
complaint were based upon a check drawn upon the defendant
Page 165 U. S. 645
bank by a depositor in favor of plaintiff, while the third count
based the right to recover upon an alleged oral assignment of a
part of an indebtedness owing by the bank to such depositor, to the
amount of the check. The check in question was drawn May 20, 1861,
by a bank in South Carolina upon a bank in New York. The trial
court ruled that the plaintiff was not entitled to recover upon the
causes of action founded upon the check and the verbal promise of
payment, but that plaintiff was entitled to recover upon the third
cause of action if the jury should find the facts to be as therein
averred. A judgment upon a verdict in favor of plaintiff was
affirmed, it being held (p. 327), to quote the language of the
Court of Appeals in the subsequent case of
Coates v. First
National Bank of Emporia, 91 N.Y. 26,
"in substance, that when, in addition to the check, there was an
oral agreement between the drawer and payee by which the former,
for a valuable consideration, agreed to assign so much of the
indebtedness of the bank to him as was represented by the check,
and the check was given to enable the payee to collect and recover
the portion of the debt assigned, the agreement operated as an
assignment, and was sufficient to vest in the payee a title to that
portion of the debt."
In the
Coates case, the Emporia Bank interpleaded in an
action brought by the assignee in insolvency of the Mastin Bank
against Donnell, Lawson & Co., bankers in New York City, to
recover a balance of a deposit account kept by the Mastin Bank with
Donnell, Lawson & Co. The intervener, the Emporia Bank, claimed
to be entitled to a part of such balance on the ground of an
assignment thereof made to it by the Mastin Bank under the
following circumstances: the Mastin Bank owed the Emporia Bank, and
was requested by the latter to transfer on account thereof funds to
the credit of the Mastin Bank with Donnell, Lawson & Co. The
Mastin Bank replied it would do so, and at once charged the Emporia
Bank, and credited themselves with $5,000, and on the same day, by
letter, informed the Emporia Bank that this had been done, and by
letter also notified Donnell, Lawson & Co. to credit the
account of the Emporia Bank with the sum named.
Page 165 U. S. 646
The Emporia Bank also gave the Mastin Bank credit for the
amount. The Court of Appeals said (pp. 27, 28):
"These circumstances in the conduct of both parties establish an
agreement the effect of which, as between the Mastin Bank and the
Emporia Bank, was to estop the former from setting up that so much
of the credit to which they were before entitled from Donnell,
Lawson & Co. did not belong to the Emporia Bank, and the
Emporia Bank from saying that so much of the debt before due from
the Mastin Bank to it had not been extinguished.
Allen v.
Culver, 3 Denio 284-292. Written out, the contract indicated
by the bank entries and the correspondence is one of assignment of
so much of the credit or funds then to its credit with Donnell,
Lawson & Co. to the Emporia Bank, and a discharge of a debt due
by it to that bank. The whole was completed the moment the letter
of the Mastin Bank to the Emporia Bank was placed in the post
office.
Graves v. American Ex. Bk., 17 N.Y. 205;
Brogden v. Metropolitan Ry. Co., L.R. 2 App.Cas. 666, 692;
Ex Parte Harris, L.R. 7 Ch.App. 596;
Barry v.
Equitable Life Assurance Society, 59 N.Y. 587, 594;
Wayne
Co. Savings Bk. v. Low, 81 N.Y. 566. . . . As between these
parties, the credit or funds had ceased to be the property of the
Mastin Bank. The Emporia Bank was no longer creditor, because it
was paid. The credit, or right to call upon Donnell, Lawson &
Co. for the same amount, was the means of payment."
It was also held (p. 29), upon the authority of
Heath v.
Hall, 2 Rose 271, and
Burn v. Carvalho, 4 M. & C.
690, that as rights of third parties were not involved, it was
immaterial to plaintiff's right to recover that the Mastin Bank
became insolvent, and made a general assignment for the benefit of
its creditors, of which Donnell, Lawson & Co. were notified
before receipt by them of the notice from the Mastin Bank to credit
the Emporia Bank. The court found (p. 30) that the entries made by
the Mastin Bank on its books showed an intention on the part of the
Mastin Bank to transfer to the Emporia Bank a specific amount of
the deposit with Donnell, Lawson & Co., and,
"taken in connection with the letters
Page 165 U. S. 647
between the parties, and the order and letter of advice sent to
the New York firm, were equivalent to an actual transfer of credit,
or of account, and therefore to an assignment at least in equity,
of the fund in the hands of Donnell, Lawson & Co."
In
Cleaner Co. v. Smith, 110 N.Y. 83, 88, it was again
held, to quote from the syllabus in the case, that (p. 83):
"While the mere delivery to a third person of a check or draft
drawn by a creditor upon his debtor does not effect a legal
transfer of the debt, where it appears that the intent was to make
such a transfer, it is the duty of the court to carry out the
intent."
The court in that case, from a review of the evidence, deduced
therefrom as matter of law an actual transfer of the debt owing by
the parties upon which a check or draft had been drawn.
In the still more recent case of
First National Bank v.
Clark, 134 N.Y. 368, the doctrine of
Risley v. Bank
and
Cleaner Co. v. Smith was expressly approved (p. 373.)
The controversy was between the payee of a check and a private
banker upon whom it had been drawn, the defendant denying having
been at any time indebted to the maker of the check. In affirming a
judgment entered upon a verdict in favor of defendant, the Court of
Appeals held, despite the fact that a check had been given, that
the trial judge properly left it to the jury to determine under the
particular circumstances whether the alleged debt had been assigned
to the plaintiff.
In
First National Bank v. Dubuque, Southwestern &c.
Railway, 52 I. 378, the Supreme Court of Iowa held that a bill
of exchange drawn upon a general fund and not accepted by the
drawee does not operate as an assignment of the fund, but is
evidence to be considered with other circumstances in determining
the intention of the parties.
In
Harrison v. Wright, 100 Ind. 515, a similar ruling
was made. The Supreme Court of Indiana there reached the conclusion
(p. 538)
"that a check in the ordinary form upon the drawer's banker,
without words of transfer and drawn upon no particular designated
fund, does not of itself operate
Page 165 U. S. 648
as an appropriation or equitable assignment of a fund in the
hands of the drawee, nor does it operate as an assignment of a part
of the drawer's chose in action against the drawee."
Among the considerations upon which this holding was based was
the following (p. 539):
"Second. In the absence of evidence to the contrary or a showing
of an intention to assign a part of a fund in the hands of the
drawee or a part of the drawer's chose in action against the
drawee, it should be presumed that the payee or holder of a check
takes it upon the credit of the drawer, of whom he may collect, if
payment be refused by the drawee."
In
Gardner v. National City Bank, 39 Ohio St. 601, the
controversy was between assignees in insolvency and the owners and
payees of a check or draft made by the insolvents. The assignees in
insolvency were held to stand in the shoes of the insolvent
debtors, and to have only their rights in the premises, and it was
adjudged that parol evidence that the draft was for the exact
amount owing by the drawers, in connection with other facts
appearing from the evidence, sufficiently established the intention
to transfer the property in the fund, and constituted an equitable
assignment thereof, good as against the general creditors of the
insolvent.
In the subsequent case of
Covert v. Rhodes, 48 Ohio St.
66, it was held that where a check had been given for a part of a
sum on deposit which was not presented for payment until after the
maker had made a general assignment for the benefit of creditors,
the holder acquired no priority over general creditors in the
amount to the depositor's credit which had been surrendered to the
assignee in insolvency. There were, however, no special
circumstances existing in the case to take it out of the operation
of the general rule applicable to a check or draft given in the
ordinary course of business.
In
Hopkinson v. Forster, L.R.19 Eq. 74, it was held
that a check is not an equitable assignment of the drawer's balance
at his banker's, but that circumstances might coexist to create a
charge upon the amount owing. Thus, in answering the contention
that a letter forwarded by the maker of a check to the payee
created a charge on the debt owing, the Master of
Page 165 U. S. 649
the Rolls observed (p. 75):
"You can have no charge in equity without an intent to charge.
The letter on which you rely was not written with any intent to
charge the fund. It was a mere letter of instructions to the
bankers."
So also, in
Shand v. Du Buisson, L.R. 18 Eq. 283, it
was held that a bill of exchange drawn for the exact amount of a
fund was not an equitable assignment of the fund. It was urged,
however (pp. 288-289), that the defendant was entitled to the fund
because he
"advanced money of his own for the payment of the debt of the
debtor, and that, upon a contract then entered into, he was
entitled to the money, and that the bill of exchange is only
evidence of that contract."
The Vice Chancellor, after observing that the claim thus urged
"must rest upon evidence," proceeded to consider the evidence
adduced, and held it to be insufficient.
In
Thomsov v. Simpson. L.R. 5 Ch. 659, it was sought to
establish a lien on funds by reason of the purchase of a bill of
exchange drawn upon the holder of the fund. Lord Hatherley
said:
"It is extravagant to say that a man who has an agent employed
to pay bills creates a charge on the funds in the agent's hands by
the mere drawing of a bill. It is necessary to make out a contract
to charge specific funds which were with the agent, or which were
on their road thither, for if there was only a personal contract,
that would give nothing but a right of action."
In the same case, Lord Justice James observed (p. 662) that
"when it is attempted to make out, in addition to the written
contract contained in a bill of exchange, a collateral parol
agreement, it is most important to have clear and satisfactory
evidence as to the exact words used."
In the case of
Citizens' Bank of Louisiana v. First National
Bank of New Orleans, L.R. 6 H.L. 352, it was attempted to
establish a parol contract that certain bills of exchange payable
sixty days after sight should be paid out of a specific fund. The
House of Lords, however, held that the evidence exhibited merely an
ordinary mercantile transaction for the purchase of a bill of
exchange, and did not establish that it was intended to
specifically appropriate a portion
Page 165 U. S. 650
of a particular fund to the payment of the bills in question. It
was, however, clearly recognized that an oral understanding,
entered into in a transaction where a bill of exchange was
delivered, might constitute an equitable assignment of a fund, for,
in commenting upon the averments of certain facts on the subject of
an assignment, Lord Chancellor Selborne said (p. 359): "That is the
first part of the case, and of course, if proved, it would have
been a very clear case of contract for an equitable
assignment."
In the light of these principles, we proceed to consider the
facts certified in order to ascertain whether, in the transaction
connected with the giving of the check in question, there was
either an express agreement to assign the fund, or to give a lien
or charge thereon, or whether, if not express, such agreement is
necessarily to be implied from the conduct of the parties, the
nature of their dealings, and the attendant circumstances. The
facts, succinctly stated, are that the Keystone Bank, through its
president, solicited the Fourth Street Bank to give to the former
$25,000 of gold certificates, for which the Keystone Bank was to
give its check against its reserve account in the Tradesmen's
National Bank of New York City. At the same time that this request
was made, the president of the Keystone Bank made the further
statement that his bank owed a balance at the clearing house which
it could not meet, "because its funds were in the City of New
York," and exhibited a memorandum showing the amount to its credit
with the Tradesmen's Bank to be in the neighborhood of $27,000. In
reliance upon such representations and the statements made
supported by the memorandum exhibited, the Fourth Street Bank
delivered to the Keystone Bank the certificates requested, and
there was delivered a check for $25,000 upon the Tradesmen's
National Bank of New York. The draft in question was at once
forwarded to the City of New York, and was presented for payment at
the Tradesmen's Bank on the following morning, when payment was
refused. At the time of presentment, the Tradesmen's Bank had to
the credit of the Keystone Bank $19,725.62 in cash and collection
items amounting to $7,181.70, in all $26,907.32.
Page 165 U. S. 651
Of this amount, $18,056.21 had been remitted by the Keystone
Bank on the day previous.
When we look at the situation of the parties and the character
of the transaction disclosed by the facts just referred to, no
difficulty is experienced in ascertaining the intent of the
parties. Both were banking institutions -- banks of deposit. They
were located in the same city. They were not correspondents the one
with the other, and there was no deposit account kept by the one
with the other. Indeed, so far as the usual course of commercial
transactions was concerned, the banks were strangers. The
application, therefore, by the Keystone Bank to the Fourth Street
Bank for accommodation under these circumstances precludes the
conception that the relation between the parties was purely one of
a usual and customary nature.
It cannot be doubted that a mere request for the loan by the
Keystone Bank from the Fourth Street Bank would have been so
surprising that the contract would not possibly have been made
without a statement of the reason which rendered the request
necessary. It is equally clear that the mere statement of the
situation which caused the request to be made would, in itself,
from any standpoint of business prudence, have made it the duty of
the Fourth Street Bank to refuse without full security. It follows
that the same reason which imperatively required the Keystone Bank
to disclose the cause for its request also rendered it absolutely
essential, in order to obtain the loan, that it indicate a specific
source or means of payment outside of and beyond its mere general
credit -- in other words, that it should tender ample security for
the loan which it requested. The deduction arises that as it cannot
be reasonably conceived that the loan would have been made without
the reference to and assignment of the particular fund from which
alone the hope of immediate payment was to be reasonably expected,
the parties must have and did intend to create a particular
appropriation, charge, or lien on the property upon the faith of
which they both dealt. The transaction therefore was a proposition
to borrow, on the one hand, accompanied with the disclosure that
security was necessary
Page 165 U. S. 652
and tendering the security, and on the other hand an acceptance
of such proposal and an advance made on the faith of it. Not to
conclude that such was the agreement and contract contemplated and
actually entered into by the parties would lead to the impossible
and contradictory theory that the minds of the parties could not
and would not have met on the subject of the loan unless a
prerequisite link to that meeting of minds existed, and yet at the
same time to hold that the minds had met without the existence of
that prerequisite which was the very essence and necessary
foundation of the agreement.
Considered in other respects, a like conclusion follows. The
Fourth Street Bank, as stated, was under no obligation to grant the
request of the Keystone Bank. It was to derive no pecuniary
advantage whatever from the proposed transaction. It was not in any
sense for the convenience of the Fourth Street Bank that the
contract was made, and the bank clearly contemplated an immediate
reimbursement if it delivered the certificates asked for. Had the
transaction been an ordinary one -- that of a time or even demand
loan made with a person in good credit in the line of his business
-- and not, as it was, an extraordinary transaction, we might well
presuppose that it was the expectation of the Fourth Street Bank
that the borrower should merely have on hand with the Tradesmen's
Bank, when the check was presented, a sufficient amount to pay
it.
But the Keystone Bank, in disclosing its hazardous situation and
indicating the specific fund dedicated to the payment of the
solicited accommodation, did not represent that it expected to
further check against the Tradesmen's Bank before the check which
it proposed to give might be presented. The statements made clearly
implied to the contrary, exhibiting as they did the embarrassment
of the borrowing bank arising from the need of available cash to
meet its clearings, and proposing a transaction by which the Fourth
Street Bank would obtain from a bank but a few hours distant the
prompt and certain payment of its advance.
As stated, this was manifestly not an ordinary mercantile
transaction, but one of an extraordinary character, and when
Page 165 U. S. 653
we consider the situation and conduct of the parties, the
disclosures made at the time of the contract, and weigh the
probabilities of the case, it is impossible to infer otherwise than
that it was intended that the particular fund in the Tradesmen's
Bank should be not only the source from which payment of the check
to be given should be made, but that the fund should be transferred
and appropriated
pro tanto for that purpose. It is of
course true that the method adopted to evidence the appropriation
was a check drawn generally upon the Tradesmen's Bank, but, as
already stated, the authorities are clear that when it is
established that it was the intention and agreement of the parties
to a transaction the a check drawn generally should be paid out of
a particular fund, such check, as between the parties, will be
treated as though an order for payment out of a specific designated
fund.
It is not material as affecting the rights of the Fourth Street
Bank in the fund that the sum with the Tradesmen's Bank was not
exclusively a cash indebtedness, but in fact consisted partly of
cash then owing and of money or drafts in the course of
transmission to or collection by the New York bank. The receiver
took no greater rights in the property of the insolvent bank which
came into his possession than that which the insolvent bank
possessed.
Scott v. Armstrong, 146 U.
S. 499,
146 U. S.
507.
As the Fourth Street Bank contracted and parted with its money
on the faith of the representations of the Keystone Bank that there
was to its credit in the Tradesmen's Bank a specific sum, and the
fund which came into the hands of its voluntary assignee is the
fund as to which the representations were made, the Keystone Bank
and its assignee are in equity estopped from asserting, to the
prejudice of the Fourth Street Bank, that the character and
condition of the fund was otherwise than it was represented to
be.
In answer to the suggestion made in the argument at bar that
possibly the collection items may not have belonged to the Keystone
Bank, but may have been the property of others for whom the bank
merely held them for collection account, it suffices to say there
is no intimation to this end in the facts
Page 165 U. S. 654
stated. It is consequently unnecessary to determine any question
as to priority of payment out of the fund except that presented by
the conflict between the Fourth Street Bank and the assignee in
insolvency representing the general creditors of the Keystone
Bank.
The first question propounded will therefore be answered in the
affirmative, thus rendering it unnecessary to pass upon the second
question certified, and
It is so ordered.
MR. JUSTICE GRAY, MR. JUSTICE BREWER, and MR. JUSTICE PECKHAM
dissent.
*
"On the 19th day of March, 1891, the said Fourth Street National
Bank advanced twenty-five thousand dollars ($25,000) in
clearinghouse gold certificates to the said Keystone National Bank,
to enable it to meet its debtor balance in the Philadelphia
clearinghouse under these circumstances. On said date, Gideon W.
Marsh, the president of the keystone National Bank, acting on its
behalf and by its authority, came to the banking room of the said
Fourth Street National Bank, in the City of Philadelphia, and there
represented to the officials of that bank that the Keystone
National Bank owed a balance at the clearing house which it could
not meet because its funds were in the City of New York, and
exhibited to them a memorandum showing a balance to the credit of
the Keystone National Bank in the Tradesmen's National Bank of the
City of New York of about twenty-seven thousand dollars ($27,000),
stating that his bank wished to draw against it, and get
clearinghouse certificates, and he asked the Fourth Street National
Bank to accept the draft of the Keystone National Bank for
twenty-five thousand dollars ($25,000) against this 'reserve
account in the New York bank' -- that is to say, against the said
fund in the Tradesmen's National Bank -- and give his bank
clearinghouse gold certificates therefor. Relying upon these
representations of Marsh and on the faith of his statement,
supported by the said memorandum, that the Keystone National Bank
had in the Tradesmen's National Bank the specified fund against
which it proposed to draw, the Fourth Street National Bank gave
Marsh, for the use of the Keystone National Bank, clearinghouse
gold certificates to the amount of twenty-five thousand dollars
($25,000), and took its draft, of which the following is a
copy:"
"
Keystone National Bank No. 5,086"
" Philadelphia,
March 19, 1891"
" Pay to the order of R. H. Rushton, cashier, ($25,000)
twenty-five thousand dollars."
" John Hayes,
Cashier"
" To the Tradesmen's National Bank, New York"
"R. H. Rushton was the cashier of the Fourth Street National
Bank."
"The books of the Keystone National Bank show that, on the 19th
day of March, 1891, it had to its credit in the Tradesmen's
National Bank of the City of New York the sum of twenty-six
thousand nine hundred and seven and 32/100 dollars ($26,907.32),
and on the same day, an entry was made therein charging against
that credit the said draft for twenty-five thousand dollars
($25,000) it had given to the Fourth Street National Bank."
"The draft for twenty-five thousand dollars ($25,000) was duly
forwarded to New York for collection, and was presented for payment
to the Tradesmen's National Bank on the morning of March 20, 1891.
Payment thereof was refused upon the ground that the drawee had not
in hand funds of the drawer sufficient to pay the same. In fact,
the Tradesmen's National Bank had in cash and in collection items
(drafts) for the Keystone National Bank the sum of twenty-six
thousand nine hundred and seven and 32/100 dollars ($26,907.32), of
which eighteen thousand and fifty-six and 21/100 dollars
(18,056.21) were remitted by the latter-named bank to the former on
March 19, 1891, and the rest previously. The Tradesmen's National
Bank then had in hand in cash to the credit of the Keystone
National Bank the sum of nineteen thousand seven hundred and
twenty-five and 62/100 dollars ($19,725.62), and had, in addition,
the said collection items to make up the full sum of twenty-six
thousand nine hundred and seven and 32/100 dollars ($26,907.32).
Afterwards this money was paid, and the said collection items or
drafts were turned over, to Robert M. Yardley, the receiver of the
Keystone National Bank, and out of the collection items he realized
sixty-one hundred dollars ($6,100), and he thus had in his hands
from this source when the bill in this case was filed the sum of
twenty-five thousand eight hundred and twenty-five and 62/100
dollars ($25,825.62) in cash."
On the 20th day of March, 1891 (some time during the morning),
by the order of the Comptroller of the Currency of the United
States, the Keystone National Bank was closed, and thereafter
Robert M. Yardley was appointed receiver thereof.