, 1876-01-09
Suit Brought by the Board Of Trade
Against "Jack - S.urgcs for
$4,000.
Decision Of the Arbitrator that Defendant
Pay the Adjusted Amount with
Interest,


sturges was engaged in running corner, il
which, however, ho was uos wholly suc-
ceasfu1. In September following he
TUNED around and commenced selling,
and during his operations, as margins were
easied for, eavo margin certificates of the Cook
County National Daak. Thcse, however, to the
amount Of $4,000 or S100,oo9, uere not paid.
and suit was thereu7on brought By tie Board OF
Trade on behalf OF the various holders Of the
certificates .gninst the bank to recover the
amount Of the certificates from it, and this suit
vas on trial last week Sturges woe afterwsrd
tried and vote taken to expel him from the
Board Of Trade. but an injunction WIS obtainel
ty him against tue Hoard, aud tho case is now
penliae in the Supreme Court.
It turns out now that this September deal was
not ooe Of Stur.cs' transactions, bat Was run by
him tor B. +. Allen, the President of the Cook
County National Bank. Sturges testified on tho
t1.al that Allen was the PRINCIPAL; that ho only
noted as ..lcn's agcot; that he did not have any
Eoa ey On deposit iu Aliens bank, 10. did he
Keep auv account the.c- Allen furnished tho
money. as he supposed. for the certificates. On
the 2Sth OF September, however, when all tho
certificates had been issued. Alien told him that
he could not pay tnem; that even if SO, OU0 was
demanded 1t would break tho bank.
. Sturges then had an interview with Asa Dow
and Daniel S. Thompson and it was agreed that
he lSturges} should bear the blame and respon-
sio!lty OF tue DEAL as |: was agreed that it
would soduce almost panic on Change to
hear OF the insolvency., OF tho bank. and that
there MAS no money to meet the certificates.
Dow also WAS appointed Trustee to hold the cer-
tificatea for sixty days. within which time Allen
said he could ra;se S5o0, GOO By nortgaSing somo
Iowa pzope1ty SO as to pay all tla claims, which,
however, did not a1cesd 5i00,g97. Sturges kept
bis word, and endured, cftcourse, great deal Of
blame. but ouly few persons dreamed Of this
fact until the trial. before the s!1ty da:s up
the bank closed i,s doors, and the:. all hope OF
collecting more than portion Of the auoant Ut
the certificates as lost.
Alien. however, On the contrary, states that
the deal was 1cins arrangement be-
tween himself md Sturges, but
10 admits that SturSes never had any
nonev deposited in the bani; that no exEect-
e1 TO fur.,ish the funds to ray the certificates;
End that Sturges did not krov that there was no
money oo dcposlt. Allea also a5mi:s that he
received ctn..es' tickets c.'ling for certiicates
e!thoueh no money was paid and putting tnem
into En- envelope, coua::d taelA as cash III his
&ccoElts.
1hc ceclsicn RI Judge Wood contains state
1nert Of the other facs Es to the question Of
the validity Of tho s:.es and it Il giycn in full,
rs follows:
This suit s t-o:s5t to re.ovcr uron certain cer:a-
ca.cs Of Gp3sit, aGI-c~anr in amount ab1u Ss2 un,
Issued by the defend snt to ". n. Surges for the
b. nett OF Ssrious parties Eao had purchased grain Of
:.r- s:uEgss. the same repses enns margins money
deIositel by him to secu-o the er1a1n21ce Of te
contract which he had u.de for the sale Ct grain.
1Ee facts 60 far Is Eaersl TO The appear to Ie
follows.
TIE certificates Of which there are over eighty in
rIInsxr and for different xnloEntH- issued be-
the 18th Of August AMI the I'D Of September.
1884, and :hey NIL certify that " y. Sturses hss do
.a,stcl in the bank ct the defendant cecia amount
OF money margin, or security, On 4 centrac. To-
tween the deroeitor and ether person, who is
ran.cd in each Of the certih c:tee. HE Daed to
lie ps:d by the baaS the jo;It oslsr written thsre
ca Of tie deositor and tho lersau nlo.cd With whoa
. r<r&1ft.a 1C4r
With each certificate ticket Of notification was
Issued containing recital Of lie matte. cf :!4e ecs
eate snd both i crd tho ee-siacAe were signed tJ The
Caehtcr II the hank.
Il appears that before tho transaction IN question:
W \. stusges and B. F. Aiieu The President Of the
defendant b.nk had deslt somewhat in grain upoo |
joint aecoant tat VIXEN t2csc particular transactions
ronuc1ced il WIS a.rarged lttwceu t.cta that NJ.
Alien should ce1htltas 0. deposit TO lie es,1ed
IL t1s ranks 10 cover any rna,gn. That might be de-
snded by the parties with whom S:urgcs dsit. The
nature Of their respective interests therein docs nat
the deal TO be upon joint account befo7e. while
Ssutges s1.s that b: understood that lie ceang
commission merchant. This, howeyer. is not ma
&a1 upon the gutstiors here 1rade excerpt he,riug
upon the COED faith OF Mr. surges It spears that the
hitter had nbey deposit IN the bank and had not
kept any account with it, The ccr:iAcates ikxued
him snl the t,cke!s of notification given ty him to
the several Parties to whom had soil ev@n. Most
Of thcee contracts expired with S.p.e!h"r. Uron the
2th Of SCI teber Mr, Allen noti1t afr 6surges that
his hank would not be able to meet tbs certificates.
u
cf the tckets at which AIR. Asa Dow appointed
Trustee and directed to hold tia certificates fos sixty
The certiaca.es which up to that t:::c hal .can in
The hands Of h1r stuEe then received tie Join; In:
doreeent required in order TO draw tie money there
on Most OF the purchasers Of this grsi1 from Mr..
Stu1Kts finding him unable to deliver, had bought in
The grain aud charged Ar. StRes With the difference
In Ifice cnd this agreed uroa the amount due
the purchasers from Sturges upon tLa marginal cer
tincatc. 80 issued by the bank |
Tie certificates not having been paid nt The end Of
sixty da3a they were delivered to tho s.ser1 pur-
chase-s-
Tbs bank refused payment, and soon after went |
INTO liquidation and 1ccelycr has been appointed
Tho liability Of the bank to pay these certificates OF
my portion Of them is contested various grounds.
it Is first insisted that the issuing cf them was so
ar ont of the regular course Of business TO be
ultra F,Tes anl Therefore, not binding upon the
aank.
round that tbs contract sough! to be enforced is Dot
he Of the corporation, hut upon tic ground that
/ 1s Illegal. Dy fair Interpretation of the prqeis
ions Of the National Banking Law, under which the de-
[eudsnt was organized / think it was invested With
lie incidental do and perform oil os within
he legitimate sphere ct banking business And the
Cashier IN issuing these certificates of deposit must be
held to have been cctenG within the general scope Of
liz ezoIloymeat.
This bank BY authority Of tho Dsrector4 had given
bond and assumed the business OF depository oi
margins for members Of the Beard of Trade. Tho
that no certificate Of deposit ia legally
Esucd nless upon the ccsual deposit OF money is not
Believed TO be tcnabe. fer the reeon that Mr. S,urges
night have established = credit at tie tank which |
feTt41c2feG. 4
Ae money had been actually deposited By Air. S.urGeG
u The bank no question is made bu: thst tho issuing
the certificates would hare been regular and prop
r. |
And while the Issuing Of sucb largo suornt of Ger
ifcatcs without security tc party lad ecpoe-
III the bank presents, to Hay the 1ea.t extraor-
1inaFy spectacle in commercial community. get
,zunot regard the transaction ultra sires under th
Uankne Law, but rather an tEeguiarisy which canuo.
.dect those who lave dealt with the corporation il,
,ood faith.
It was more than this; 1t wrs wrong committed by
he corporation through ita agents, itd President aud
E.res has no application u'hilsdelphta Batsin1or
laiiroad Company IS. Quigle5. q Howard, 2Dl Life
md Fire Insurance Company ys. Aechxucs' Fire L.
urance Company, Wendell. Sly
Mr. SturgeA testines that he made these seles for
1T. Allen in the utmost good fath and surpoeed thas
he money wna really deposit in the bank to pa
hese certificates down to the ty7e that Mr. Allen
o-med him that they could not Ike met.
Some Of the purchasers testify that Mr. Allen IN
ormed them that the money WAS in the b.nk Iav
he certificates and the evidence tends strongly tn
how that Iii the parties purchased grain Of AIR.
;:urees in good faith, relying upon the truth of ths
crtidc.tcs. and without any circumstances tein, |
,roaeht to thes attention which wonld he calculated
rose any suspicion Of their validity This Ie.ng &c,
he hunk is Clearly estopped from saEng that stats
t them {Kerchanta' Bank vs. State Bsnt, 10th Val
.cc. es5.) Admitting that the purchasers Of grain
,n Mr. Sturgcs stand in no better Position than hs
4