The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1848-11-29

the views that have already been expressed that IL
company any other manner than out of its surplus
funds, the illegal-and shall farther assume
that the plaintiff in this suit who the credit
tors Of the association, has the right to set up such
There are two questions then to be considered
/: Whether the money lent was used as Is alleged;
2. Whether the loan was made with knowledge on
the pert Of the lenders of the and purposes to
questions Of fact 1t will be necessary to inquire into
the circumstances connected with the loan and to
consider the manner in which II was made.
1t appears from the proofs that shortly after the
ganzation Of the North American Trust and Banking
Company, Shaw. a Londen banker, was in the city Of
New York. attending to the business Of the house Of
which he was q member. It farther appears, that
while he addressed letter to Palmers, Mackilop Dent
Co., At London in which, after represen ting with
great earnestness the valuable services which he sup
posed would be rendered by the North American
Trust and Banking Company in assisting the suspend
OF the country he introduces the to the
ldence of his London friends and correspondents
Upon this business intercourse between
the parties commenced.
At the time when the Banking Company had COM
pleted its organization, 1t supposed that by the
sale Of it's stock it could place itself in condition
to carry the banking operations for which 1t had
been formed In this expectation 1t disappointed
and in meet it's liabilities se mt State stock
which 1t had purchased to a very large amount, to
England, for sale. Palmers, Macklop, Dent Il Co.
were the bankers through whom portion of these
company, in other transactions connected with its
foreign business. These relations continued until
change to the amount Of Sss 500 drawn upon pamers
Mackillop, Dent Co, presented to them for
csptance. These bills had no connection with any
previous transactions between the parties They
not drawn upon any funds which the Banking Com
pany had in the hands Of the drawers, upon any
existing credits and owing to accidental causes they
were not accompanied by any letter Of explanation
Under these circumstances, acceptance of the bills
was refused and they noted for acceptance
IN fha n 80 Axrsl kIxo Iokk1
received from Beers, the president of the Banking
Company bearing date thee of March, 1910, in which
in favor Of Thos f. Davis for slss75 the bills to be
drawn at ninety days sight aud to be renewed in
certain bonds in the hands ofPslmers Mackiop, Dent
Co. should not have been previously Dashed. The
letter speaks in high terms Of the wealth
lily and prudence Of Davis, and refers to their mutual
friend, Fletcher Wilson, for explanation of the
tives which had induced the company to grant the
credit and of the advantages which might be expected
to accrue from it Upon the strength Of this letter
and of representations which made to Palmers
Mackillop. Dent Co., by friend In Londou to the
wealth of Davis they resolved to accept the bills aud
afterwards did So and finally, after two renewals paid
1t is alleged the part Of the plaintiff that these
bills were drawn for the purpose Of enabling the
pany to purchase five thousand shares of It's own
stock and it is also alleged that this fact known
to the drawees at the time Of their acceptance the
bills.
The first question to be considered is whether the
bills were drawn and accepted for the purpose and in
the manner alleged.
OF the directors of the company and VINO is the prin
cpal witness part of the plaintiff that the 2sth
OF February, iS4o the company purchased five thou
in order to make such purchase two sets Of bills
drawn the first set upon Palmers Mackillop, Dent
Co.. in favor of HUH Co.. and other bankers in Eng.
land and the second set upon HUH Co.. and the
other houses in whore favor the first set of bills had
been drawn the second set of bills having been drawn
second set of bills was sold In the city of New York
and 1t with the proceeds of such sale that the
that the stock was not purchased by the bills drawn
on Palmers Mackillop Dent Co., but that it pur
chased with the proceeds of other BILLS and that the
whole transaction had been completed not only be-
fore Palmers Mackinopt Dent Co knew of it. and be.
fore the bills drawn upon them were accepted but be.
It contended, however. on the part of the plain
tiff, that although Palmers Mackillop Dent Co, had
no knowledge Of the purchase before 1t completed
still that Fletcher Wilson their agent and that he
had notice of the intended stock transaction the
time when the bills were drawn and sanctioned it
The frst enquiry here ia, whether Wilson was the
agent Of Pamers, Mackillop, Dent Co. 1t seems t,
me that the proof shows beyond doubt that he was
not The answer of Palmers Msckop, Dent Co.
which, in this respect is to the BILL unequi-
yocaly and positively denies such agency. There lie
agent, that he expressly as such
Neither does the testimony Of Strong or Davis the
two witnesses who relied for this purpose show
any act from which the agency of Wilson can be i'm.
Piled 1t is evident, too, that the 90 npauy did not
consider him an authorized agent. They. never
garded him. The letter of Beers does not pretend
that Wilson had authorized. that he had right
to authorize the drawing Of the bills Of exchange to
which the letter alludes He Is spoken OF as q orr
mutual friend" to whom Beers refers for explanato
which he thinks will satisfy the drawees of the bills
Palmers, Mackllop Dent Co cannot then be charged
with knowledge of the facts which known by
Wilson Such being the case, the firm Of Pamers,
purchase either actual constructive till after the
presentment OF the bills Of exchange to them in Lon
don for acceptance.
m.
sentiment they received notice. The letter Of Beers
was received on the 9Th Of April. In that letter no
reference which It makes to Wilson was of such cSas
ractcr e. 70 put the drawees Of the bills theis inqui
~. and operated constructive notice Co them K is
not necsfsay to examine as to how far the rule in
ference to constructive notice extends For If we
adopt the rule laid down by the counsel for the plain
t that Whatever is calculated to create suspicion "a
to the legality Of transactien Is constructive notice
Of the nature Of such still there would
nothing in this case to charge the drawees with
The reference to Wilson was calculated rather to
allay than excite suspicion And 1t certainly could
Co. when they rsrTed to ths sns Of
the parties for an explanation. which the letter
IDENTIFY implies would prove satisfactory that. in.
qury of their friend would be disclosed to them that
the transaction was Illegal. The same remarks are
applicable to the letter Of Davis.
If am correct in these views. it follows that the
FIRST notice of the stock purchase which Palmers,
Mackllop Dent a. Co. received. that which was
contained in the letter delivered by Murray Palmer
ou .ne esen'pBo vi .ne 'tn oi hpr III pecohcSl mpor-
tant hsre to ascertain what the situation Of the
bills Of exchange at that time. In the of Pal.
which. In this respect responsive he says that
the bills which had beer presented in the
aggregate to f3350o. had been accepted agreed
be accepted. II appears that f19000 we're held by
HUH Co.; that f3 500 were held by Mastermau
Co.; and that f110o were held by PaImers. Mackop,
Dent Co. II also appears by the testimony Of Matt
land. the clerk of Palmers Msokillop Dent Co. thu
the bills in their hands accepted and passed
the credit of the compsny in conse luence Of the
cept of the letter Of Beers although he does not dis
tinctly state whether this done before or afe
Pamer's interview with Murray; and Murray state
in his testimony that In his utervi with Palmer the
latter stated that the receipt Of the letter Of
dit, and on the assurance of his friend Melville VIII
SON as to the responsibility of Davis he had sent
tice to HUH Co., and to Masterman g. Co., that
pslmers, Mackillop. Dent Co had decided to accep
the bills held bv them 1t appears, then, that rs to
upward OF E200 OF the bills drawn them Palmsrs,
Mackillop, Dent Co. had given notice of their in
tended acceptance before the receipt of Fletcher Will
sons letter. .