, 1877-03-17
Provided the Remainder of the Fitch
Tract Docs Not Cancel the
Mortgage.
l. n. Lancaster Wants New Trial On the
Ground Of Insanity.
important Suit Touching the Lila
bility Of Banks on Raised
Drafts
PAYING RAISED DRAFTS,


the United States Court. at the instance OF the
Union aid the o:her by the First National The
decisions 10 be rendered in either will deter
mine The other H. both are founded on exactly the
aa1ne statement If fscts. End the Judgment
fail To be Of great interest 10 the banking and COM
mercial community rs determining the liability Of
bankers under certain conditions. The facts are
~ follows:
About Feb person wearing the air OF q busl-
ness u1an, and of .uod address, called upon Nr. j.
Irwin. pearcr. and desired 10 open Ill account with
the Third National Funk Of which Mr.. Pcarce IL
President. lie gave his ns T. j. Henderson,
and stated that he was abuat tu engage in the
mission business ut it, Washington street., lie
tuld 50 plausible story ahoIt his business pros
y,ects the amount of trade he expected to con-
troll, and the general character Of the operations
in which he was about to embark, that Mr. Pcarce
consented to open the account desired Af. Hen
dcrson d.ew from his c1racious pocket small
roll o: currency and some checks. passed them
over to the receiving, teller. had his signature
properly recorded. and received the regulation pass
box. lie checked on his deposit in small sums
during the following Jays 1t intervals. and made
d.pos.ls OF small amounts all o! which seemed TO
bear th. ;nheren: impress OF Legitimate business.
IIa,in: IN ;t,, WY made himself comparatively
solid, he determined 10 take advantage OF the SIT
uat:on and proit accordingly. Feb. 70 he aepos-
lied draft on the First National Bank of this
city issued bs the First National Bank Of hilwnu-
kec pa, able to T. j. Henderson. or order, and
1,urpos*iuy 1o tc for s., 500. The Third National
Bank took the draft, credited Mr. Henderson with
The amount on his pa=s-t,ok, and sent it through
the Clearing -Hoa~e for collection. The
neu cay he dropped into the bank.. aud
orpo=tl draft is-ucd ;'y ll:c National Exchange
ro.t'ny TO order lhc payment Of s. 800 10 7: !;
Henderson or order. Tiis draft was a1su credited
up, saa the SAINT c: ne' day il passed through The
<hur.n-- !1nasr. 10th transactions seemed 10 be
perfectly regular Mr. Henderson deposited the
sl.sfs, it:2 tste Eoncha1nrce OF Rotheehild. aud
Gouh: h:+ soa' would have indulsed in 'irtuo!'s
lndi-natinn had the ssnuinentSs Of the paper been
in least degree qu,ssioncd. Two or three days
xf:eru ards he began IL check against the proceeds
Of tht drafts. s.. stia, and gradually redncei
ta: tslsoce 10 his credit to little less than San:
TN The 1st iE~r II" First and Union National
Danl:s matig up the ususi nlouthly statements u
the accounts Of their Milwaukee, correspondents.
aui nailed them to their destination inclosl..,
tEt.ewlth The dialts ps:d during the month a.
vouchers. When thu milwaukee banks cl.ac 10
in the balances witt, their Chicago correspondents.
All iaye-:i...:on developed tho fact that the
s.. so draft issued sy thea Fisst Ss::o,al had
b1on raised fr..I :23: :lid the 50 400 orc ::
s.'. III the Nat:eu.l Exchange had been altered
f." il S::s TIE tso s:csEo banks wer, rot5e,i OF
1ne ,7:". L.; 1cvsraptl y and 4 ne fol:o~ln: :sy i1s
no',lri III. Tuis1 oI the ncw colld1:on of affairs.
ant .uaa. dcr:aId !os 1ec!ail:ti.a Mss'
+
,I.n,:e.ron lor IN explanation lie ha.!
:..e.: time by the for.uck. aud was not to bs:
5oa:.! i's'ahte*s lie wa- in sosle o'h"r cit: re-
:.a',ns ,.s::;@slf on cha arasne anu o7stes Pres;
.l..:.t pe.rcr. OF the Thru Sai,nnal diI no. feel
l.Ar a-.u:ain. the responsibility .: pairing Ire
reclamation. cr,.andeG. and called meeting 81 his
3Gr2crrs. After c,::~nltati'n WITH counsel they
r.iH-:l III. ,y '.lt nut bclit: i5el7 bank
W. i:asr- The. bank si:n:'y se1t as a.cai in
~ tte-::o:; y: the a:1;oHLt Of t drafts fo: the
1.t~c. I4 :ti guarantee Lie -cnai.,"sess uf the
5..;., ti is.'l nr.o:se H. ana believed that the
Should have t::c:eistc c.u>e7 sc:ullns OF
The drafts i''foc: p:y:n:, 'i.t'n. N':e than .uf-
s:r;,1 .;.c i,! .I;,-r,. between the t1tt 0! pay
~ 1hlt " detection t" c'sco' e: fhs fraud
anu tue !:crs Of cas:t exposure "a@ eae 20 iaches
I'll the l%l.1 vi :tIc IEawec-
;.r con;r.t ii. i.t:r- claim that the stamp
- r,.ici National i:~as-f'a:s placid on the
h:e. u tn tE.:'s rr.' I" :'e:: :":n: through
In .'asia- iiu-s'. Y II. tsi.'n1 II uoi in Inv"
a14 i1.i ''-:arn il. al c::'rs IN which tbcEs +
Wearing s..uc: that .l~ -:o is nstu instead ~
tar =i1"zu:a tsa:ik a:e'-!- III .,rGrr 10 faci-
1siu business X.,aL Ct,l-'l1!ls tOu H11cE time
IL .uae ne atcc :,t ll"t ec!ente. II II cal::cd
1.1::rr. t:.r i; very fEcGueat!t hap:ens that
fun:s .r. thu reclamation therefor is promptly
r..d-. The r:i1~ are friendly cnrs and are tr-
1e.v.. into to an settlement Of the 'ia5l-
itv o. bsnis under like ci1cii>t:':,ccs hereafter
LEGAL OPINIONS.
Mr J. II. Thmnps"n. atst'ncy for the Ihl7a
National Eank, sa:4: II see;:S TO be pfcts wei
bank Gu which it Is drawn can recover the lAoney
il II pays il fr th,' lr.wrr aId the re1sn Is BE-
cause tho LAM laying has the bert opportunity u
iud ring is lis signature. In the case Of ralseu
CT a!tercd check Jr't the same priEcii'e> apply
u >u:e extent. The oa1,E Oh which the check oE
draft J" drawn has te bel nseans Of SHINING no'
ncr If Grawt,. checks end drafts. and 80 Is best
lifted 10 dc:ecx any II aai. Ne think the Nilwau-
Ecc banks i:.c loT mol using device OF safe
.-,:a-,: ..2in-: tos,1ssicn of zach f-aud. We
4,.e Tls:rI Nlun=l are III the position of an in
zaocent pa1E th"nsh y. COLLECTED re money; ana
time afar1 the drafts were uad- We would not have
suffered, fo- the last Of the nioney drawn out OF
the bank MT drawn until thu Gath vi February
tie la. lr-ft paid u. tnc :e''i.
The attornes u the Union National Bank, who
t1;c not wish his name 1.entolcd s;4d II If set
ntn.n.s. OF the drawers signature. and that the
drawer has funds. the, rule does not apply where
lie forgery Is in the body of 'he n1ll - n ts sum
t. t,e uait. The aud Justice Of the bill s1.
tcnd 10 further than 10 the signature or the fact
fh4t the drawer has funds. And. therefore. IL u
held by hc Sapreme conn o. tne Ineu N uses s,;
t.s + ,rcy ne recovered back a. paid without con-
s;e-;,on- II the Milwaukee b1nk which drew the
drafts IN question WI us ., nhi ,cenys sne -
II Compelled to pay those who paid the amount Of
The raisea drafts. Bul even though the Third IA,
r. arrc,ta recovery a.ninst it By the banks which
paid tue drafts presented to them for payment os
1ne Third Aational-
thnf the money obtained from them on these 5aiscu
drsf1s should 6ret be paid back ~ them ny tne
Thirt National. which IN turn Wall nsse Ills re-
corr4e against Mr.. Henderson. bF whom they "ers
denoeited With the Third: and that Henderson II
yiriinized can resort to The pcrEou tfon "ho1u ne
ob,aintd the raised check for satisfaction. out
tnis is considered poor reasoning py me otne1
side; in the first place. oecanfe NJ ncnaetsoh ~
not particrlarally set-nrable II this moment nc
two after he had checked out all the funds Nor
it il clain,ed, does the Third MaGonal 81 GU ars
annre whatever in tie case. These drafts were
ssn;,lr deposited with it for collection. IN one
sense II never mad the money, or, ~ Ieast. WIZ
never benefited By it It received. me money "
the drafts held il for cay in order thaf the ra1st
National Ut the Union National m.snt
taSe Of IT,; and then, no reclamation ,.na Ion
being rlade, allowed the money 70 5e chcekeo eut
bv Wr Henderson. 1t had no business fe!at'ons
with the Milwaukee hank4 and 10 oppo1!unlt; ~
trdcne N fc rbe ren:ncrrss .! drafts. other taaA
VII. their fac. sho.vtd- Their genunsness "fs
To be u zrd Of BY the drawees.
Jt is fun:.e. ciaincd that the ihlrn Natlonat Ha
t one Tia. should have judged Of the honrsls oa
The 4:sper: that il had oppoftuEtlss for CON- ~
7n;r could 1,,i be enjoyed By ths Clearing hoase
oscers ;.pyiac the rcsh an the a1iry Ct transact
lp- cr siucss there: that anything unusca ~ the
p1le.. -Auy;lin, indicative OF ifaaeaIsut ~. -
farc-shou:a hare been detected bE tue oa'esss ~
zhe Third National But " this 1t y rspiea.n = Was
the durY OF the d.Ewec which avaE iaa1aeGAEe!s ~
feresfej and which had business relations win the
Milwaukee hsnk, to dctect these fEauds maj y nau
ample 1ime to 90 20, and that the money WAS nelo
bv he Third National subject to reclamation 1o9
sufficiently lonc period allow 1t 70 oe fegnnea
due diligence had been exeued o9 t18 oi4ee'7 "a
fhe inf