The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1888-08-15
LAWFUL OBLIGATIONS.
Judge Wallace Renders Decision that Will
Interest Banks and Bank officials.

NEW YORK, Aug. I4-Judge Wallace, Of the
United States Circuit Court, yesterday handed
down decision denying the motion to set aside
the verdict and grant . rehsaring in the suit Of
Henry j. Anderson. receiver Of the bank Of
Albion, n. z. against K;ssam, Whitney & Co,
brokers. The Judge lays down some principles
thas will interest bank officers, brokers and the
public generally. Albert J. Warner. the presi-
dent Of the bank Of Albion, dsfaulted in August.
1884, and it was discovered that he had misap-
propriated over $4,000 worth of the banks
funds. He had been specuating in stocks.
using Kissam, Whitney g. Co. g predecessors a.
agents, aud drawing the banks checks to their
order on the Third National Bank Of this city.
with which the bank Of Albion kept an account.
The brokers collected the checks and placed
them to Warmers credit on their books. The
jury. on the trial. awarded the receiver s147. 729
the amount Of the transactions. with interest.
Judge Wallace. In his decision, says:
In some respects this is Q hard case for the
dsfendanta Ii the verdict stands, they are
made responsible to pay over very large sum
OF money which came to their hands to be in
vested and handled for another person in con-
paid back TO the person from whom they re-
ceived il, and there 10 no reason to suppose that
they had any active or defined purpose whom
they received IL, or ss any time to defraud the
complainant In any way. II is altogether likely
that they could have shown, II they had been
permitted. hy she testimony of any number Of
respectable bankers and brokers, that il Is
everyday practice 10 Wall street for those in
their line Of business to buy and sell stocks for
bank presidents and cashiers who are speculat-
ing there. and TO accept drafts and negotiable
paper of the corporations Of those officers made
by them officially IN payment OF the margins or
purchase moner. IL 10 not improbable that
they miRht have produced plenty of credible
witnesses TO show that such transactions are SO
frequent and common in Wall street that they
do not attract special notice, and dc not usually
excite passing suspicion that they are irreeu-
lar or improper. In this view CT the case it
gardsd Intentional wrong -doers, but as victims
Of an unfortunate and fatal environment Law,
however. deals with acts. testing the intention
by the necessary consciousness of conduct. and
pronounces thsm fraudulent irrespective Of the
moral degree OF turpitude Of the offender. or
any moral turpitude whatever, whenever they
contravens its rules. Consequently, although
the defendants may have been morally innocent,
sanctioned by the uniform and universal custom
of Wall street. the question, nevertheless, Is
whether IL was legally right or honest for them
TO take ths checks in question in payment OF
the personal obligations OF the bank officer who
made them. No usage, however common and
we'll recognized, can be invoked to justify a
banker or Anyone else in taking money nego-
table paper in payment OF an agents debt
known TO belong 10 his principal. or known TO
belong 70 trust estate. to satisfy the trustee s
personal debt or to shield bankers who willfully
close their eyes and shut their ears to facts and
circumstances which impart notice that the
agent or trustee is msappropriating the money
or property intrusted TO him. Therefore, if
there Is any Significance in the fact that bank
president or cashier offers negotiable paper OF
his corporation made by himself in his official
character in payment of his personal debs. or TO
raise money for his personal use. it matters not
that bankers generally do not appreciate It If
tley regard the transactian as equivalent to one
IN which an individual comes with money in
hand. they ignore its real character. In that
case he comes with what purports to be his own.
having the possession which implies title and
the right to use. When he comes with the
money obligation OF . corporation, which is the
contract OF the corporation only because he bad
made it without authority the transaction 10 very
different Every person who takes such an OBJ
legation must ascertain at his peril that the agent
who has made it was authorized to do So and
the moment tnat itappesrs that the con tract has
bsen made for the agents own use and benefit
that moment his authority is impeached No
prsnciple OF the law Of sgeucy is better settled
than that no person can act as the agent for an
other in making q contract for himself There
fore it Is that bank president or cashier has no
implied authority TO bind his corporation to ne
gotiate paper made for his own use; and IL il
appears upon the face of the paper that il is pay
ao.e to the individual who has made il in an ofi-
clal capacity, the obligation is nugatory and no
purchaser can enforce IL.