GILLESPIE fl. UNION STOCK-YARDS NAT. BANK.
281'
one hundred dollars, "etc. As the suit is brought to enforce these sections, the action is clearly one to enforce a criminal law of the state. The nature' of the right asserted is necessarily criminal, and not civil. That the criminal la.w sought to be enforced maybe repealed, so that no recovery at all can be had, does not change the nature of the Buit. The motion to remand will be sustained.
GItLESPIE
et al.
'D. UNION STOCK-YARDS NAT. BANK:
et ale
(Circuit Court, N. D. Illinois. July, 1888.) B.umnro--APPLICATION OF
A defendant firm selected cattle, which plaintiffs paid for and shipped to Chicago, where they were sold by defendants. Two of the plaintiffs, corroborated by a third witness, te.stified that they shipped the cattl.e as their own, wbile the defendant who selected them testifteli that they were not to be shipped as plaintiffs' property, but they were to receive a sllecilic sum per car' for their advancements and trouble. On sale of the cattle, tIckets sbOWlUg weight and price were giVen defendant bank for collection. The bank knew that defendant firm received abd sold cattle for shippers, and, on the day a shipment from plaintiffs arrived. received a draft drawn by plaintiffs on defendant firm. but faUed for over 24 hou,rs to. give notice of its dishonor, and appropriated the proceeds of this and two subsequent shipments to the :payment of a note and the overdraft of defendant firm. Held, that the ownm;shlp or control of the cattle was in plaintiffs, and the had sufficient notil;le to entitle them to the proceeds,as against the appropriatioll by the bank to the account of defendant firm.
FuNDs.'
In Equity. Bisbee, Ahrens & Decker, for' complainants. Peckham & Brown, for defendants. GRESHAM, J., (oraUy.) A. J. Gillespie, John F. Gillespie, and T. E. Gillespie, live-stock commission merchants at Kansas City, brought this suit in equity to recover the net proceeds of three consignments of cattle shipped by them to F. J. Rappal, Sons & Co., at Chicago. Rappal, Sr., selected the cattle at Kansas City, had them weighed, and delivered the weight tickets to Gillespie & who paid for and shipped the cattle to Chicago. Two of the Gillespies swore the contract with the senior Rappal was tha.t Gillespie & Co. Ilhould ship the cattle as their own, and have control ofthem until sold at Chicago and paid for.· In this they were fully c.orroborated by the witness James. The senior Rappal, on the other hand, swore that that was not the arrangement; that the agree-' ment was that the Gillespies should furnish the money for the purchase of the cattle, which they did, and ship them as the property of Bowen & Co.; and that the Gillespies should receive a specific amount per car for their advancements and trouble. The two sons testified that the tract was as their father, the senior Rappal, testified; but they admitted that all they knew of the agreement was what their father·had told them. On this point there is a slluare conflict between the two Gillespies and J.ames onone side, and the senior Rappal on the other, and, his state-
FE:I?Eltt\L,REPORTER,
vol. 41.
me)),t is impropable. It is tlifficult ,to believe that Gi}lespie & Co. furnillhed such large sums of without security, W;hich they did, if they ha.J not the right to control the cattle until sold.. , It is not claimed that the Gillespies had any security whatever for these, large advancements, unless the cattle theirs, or they had authority to control them until disposed of. I hold that the cattle belonged to the Gillespies, or that they were entitled to control them so Jar as necessary to protect themselves for advancements made on the purchases. The first shipment arrived at Chicago on Friday morriing. Gillespie & Co. drew against this shipment, and the draft was discounted by the the, two, subsequent Kansas City.Bank. The GiJIespies also drew shipments, and these drafts ,vere also discounted by the Kansas City Bank, and that bank sent toJhe Union Stock-Yards National Bank for collection. 'The draft drawn against the first shipment was received by the latter hank before, or. certainly as soouas, the cattle received. This draft wa$ptesented to the Rappalsfor payment. was refused, and the draft was protested. This was on Fri· day, and no was given of. it for at least 24 hours, perhaps more. The cattle were consignedto and received by the Stock-Yards Company. the weight-bills, the con"signee was direpted to deliver the cattle to Rappals, whoreceh'ed and sold them at the stock-yards. The were weighed, and the Rappalsfurnished with tickets showing the and price,which they delivered to the Stock-Yards Bank for collection: The bank made tl1eJ:Qllections, and placed the amounts to the credit of Rappal, Sons & Co., who at this time were indebted to the bank on a past-due note and for overdrafts; and the bank claimed against Gillespie & Co. that it had appropriated this money as a credit on the indebtedness of Rappal, Sons & Co. . A bank has a lien on the securities or funds of a depositor to the exte:Gt of any RI:U0ullt owingfi:om him,to the bank for overdrafts, past-due or in other ways, but this is true onlyoffunds which belong to the depositor or debtor, Stock-Yards Bank was familiar with the mode of doing business I1;t the stock,.,yards. It lmew that Rappal, Sons, & Co. were engaged in receividg cattle from shippers, and selling them at Chicago. .Wheu the1?ank received the ticket for the first shipment, (and the other shipments were disposed of in the same showing) the weight and price, it knew, of course, that the nloney called for by that ticket represented cattle, that one had shipped to Rappal, Sons & CQ·. for sale. If the bank did not know this, the facts fa,irly put it upon inquiry , and it could and should have ascertained whether Rappal, Sons & Co. owned the cattle, and .the proceeds of their sale, before appropriating them. FurthElrmore, the failure or refusal of Rappal, Sons & Co. to pay the first draft-the bank knowing the business in which they were engaged-was notice. to the bank that this firm was. probably behind with some shipper, if, indeed, it did not know the shipper was Gillespie & Co. Rappal, Sons & Co. being indebted to the bank for overdrafts and on past-due nates at the time the first draft was presented and protested for. non-payment, it is safe toassu.me that the officers of the.
GILLESPIE 11; UNION STOCK-YARDS NAT. BA.NK.
233
bank then did what business men would be expected to do under such circumstances. How natural that they should then say to Rappal, Sons & Co.: "We want to know what this means. You are indebted to us; explain this thin!!. Who shipped the cattle against which this draft was drawn? Under what circumstances were they shipped to you? Is this or is it the money of some one else?" But, as akeady stated, it is not material whether, at the time the bank claims to have appropriated the money, it. actually knew the relation that existed be.tween Sons & Co. and Gillespie & Co.; for it knew too much to be permitted to make the appropriation as against Gillespie & Co.,:who paid for the cattle and shipped them umler the agreement already stateq. In view ofRappal, Sons & Coo's indebtedness to the Union Stock-Yards it'is'significant, to say the least, that it delayed for 24 hours or more to notify the bank at Kansas City, which had discounted the first draft, and sent it to the bank here for collection, that the draft had, been protested for non-paynldnt. The !'lvidence,shows that th!l Yards Bank had never before failed to send to the J{ansas City Bank prompt notice by telegraph of failure or refusal to pay any draft which tbe l4tter had, sent to the former for This was the first fail'mepf tbeStock-YardsBank tosend'immediate notice by telegraph to the laUer's instructions. 11ie the Kansas City necessity for such notice was obvious. A draft, was usually dra,vn against eath shipment of cattle at Kansas City, and. discounteq by We KansllS (Jity Bank, and sent to the ,Union Stock-Yards Bank for colleetion.'TheKansas City Bank, and the parties for whom. it 'had ,discounted:drafts, required proIIlpt notice by telegraph of non-payment, that it might be able to stop the cattle,against whiCh the drafts hadbeeh drawn, by legal proceedings, if necessary, and thus prevent loss. ' All cattlearrivirig at Chicago are shipped to t11e Stock-Yards Company, and it maybe.that, after the first draft had been protested, an order from GiRespie & Co. to the Stock-Yards Company, not to deliver the cattle to Rappal,S-ons & Co., would have been sufficient for the protection of Gillespie & Co., without resorting' to legal proceedings. The president and cashier(!)f the bank testified that it was notey their direction that the Kansas City Bank was not notified of the protest of the first draft, tbat prompt notice should have been sent by teiegraph, and thaUhe clerk who should have prepared and sent such notices had neglected his duty. It is immaterial that the president and cashier did not know of the failure to send tim{lly notice to the Kansas City Bank, as the neglectofthe clerk was the neglectof the bank. 1 do not mean 'to ,however, that the complainants could not recover if proper notice had been given 'of protest ofthe fii'Elt draft. . . . The remainirigquestion is,-Can this suit be maintained on the equity side of the Qourt? I have had some misgivings on that point, but Judge 'BtODGETT overruled a demurrer to the bill, and National Bank \t. Insurance 0'0., 104 U. S. 54, appears to be authority for that ruling. The decree will.'be for the amount of the net prooeeds of the three shipments, with interest from the date of demand. ' ,
"
"":'
FEDERAL ,', ' ' I
vol. 41. NAT. BANK.
{J
, ARMSTRONG 'D.
OOtt'1> 8. D. .' "
lfClp '¥:OTk. ' I,
January 4,lSIlO.) ·
J.
i.
a
Rev., 8tH ,1'1, 8. § 52i2, whioh prohibit$ natjQnaH:!anking associa.ti':ln made the cOlnmJssion of snact of ips,qlvency, in.coJ;ltemplatipn ,thereof, wIth a vieW' to' the preferenoe of one creliitorw' another, IS dIrected to a preference, ,J;lot the of seourity when a debt,ill orj'lated; and if the '\;rlijlllolj.(ltion be free from frS\lCI'lD fact, and is intended merely to adequatelyprotoct loan made at the 'tiJne; the-creditor oantetain pr<lperty' transferred to soomliuch'aloan until the is paid, 1;bQJJgll is insolvent;snd the oreditorbas l'e.8ll0n 11,' the time , to the fact. " \ ',' A:banker!a:ueU fot! the;amount of the, balance'of its general does not exist when th!'l seeuritiellbave been depo\lited with the bank fora special purpose, 01.' fol' the pitYment '1f a pai:'ticular 10al1; . .' " , "
,
.',': '
In,
to recover balance on accdurit. ' '
It, ; :
',I
June;!4., 1887, NatiopaJ" Cincin· in the city of . natHransmitted to the defendant, ab$nk :;New Y'ork,s,epurities QQJ;lsi&ting drafts, hills of exchange pf over $1;000,000; " NationjU and the appointed its ;',tM' ;N . some of tQ t4e reGe,Hr,er; TQ,e l'eCelVer nOlY SU!3sto recover ,lilP,',' that",iti,S, entitled,to,reta,", ,61,.2',5,87 ,wh,i,Ch tt collecteq f\'P,Ul, and ,apply the tQ that arnoullt it, by the Fidelity: Nati,onal Bank at the' time of #ieffl,ilure of the latter, add that it has return,ed, pr .fo!, the ht¥aI;lC60f the to the plaintiff. facts ap. pear iriJhe reyord; 'rh'e;two banking institutions h8.c1,',fQr a considerable'period'Qi tillleanterlor tothe ,trallsactions acted, ,as for' one anotller at t1?-eir qf busin,ess, time the kept}Vith the,defendant 'aJ;i dlfP9sit accdunt, which ·Wl.tS, a large one,. ThEl:actwobaI,lks, from , and any existing at such or debited, forwa,x;d intpeaccounts. , In Figelity to 'the ,1:imS". ,as it then asked rorM 8360,000, and the defi:mc'lant consented to make the loan, Atld,credite,d ;tq.eacCi,>u,Ilt of the Fidelity "The this s).lit (1!i'lginated Ju.ne14tb, apPWtJ:s by a,nd.p1aij tQ,e t,wo .banks. HtQ the FideIity ·Bank " " . , ; , , tpe ·. ' . · Qefendau.t; .c-'· - . ,;' ' , sending flllse, anollymous, !JirQuJars. and have reported a 'run onus, also false. We .to you choice bills to '0..· :,
I