The Wheeling daily intelligencer. [volume] (Wheeling, W. Va.) 1865-1903, 1888-08-15
THE VERDICT STANDS.
A Decision of Importance to BANKERS, Bro
kers and the Public Generally.

Decision OF Importance to BAnkerS, BRO"
kers and the Public Generally.
New YORK, August 14.-Judge Wal
lace, of the United States Circuit Court,
has handed down a decision denying
the motion to set aside the verdict and
grant a rehearing in the suit of Henry
J. Anderson, receiver OF the Bank OF
Albion, N. Y, against Kissam, Whitney
& Co., the brokers,
The Judge lays down some principles
that will interest bank officers, brokers
and the public generally.
Albert ]. Warner, the President OF the
Bank OF Albion, defaulted in August,
1884, and it was discovered that he had
misappropriated over 100000 worth OF
the banks funds. He had been speCu-
lating in stocks, using Kissam, Whitney
& Co.'s predecessors as agents, and draw
ing the banks checks to their order on
the Third National Bank Of this city,
with which the Bank OF Albion kept IN
account. The brokers kept the checks
and placed them to Warmers credit on
their books. The jury on the trial
awarded the receiver Sl47,729, the
amount OF the transactions with interest.
Judge Wallace in his decision says:
"ln some respects this is hard case for
the defendants. II the verdict stands,
they are made responsible to pay over n
very large sum OF money which came
into their hands TO be einvested and han
died for another person in consideration
OF small commission which they paid
back To the person from whom they re-
Ceiyed it, and there is no reason to sup
pose that they hadany actiue or defined
purpose when they received it or Mt any
time, to defraud the complainant in
any way. 1t is altogether likely that
they could have shown, ii they had been
permitted, by testimony OF any number
Of respectable bankers and brokers that
it is everyday practice in Wall street for
those in their line OF business to buy
and sell stocks for bank presidents and
cashiers who are speculating there, and
10 accept drafts and negotiable paper OF
the corporations OF those officers made
by them officially in payment OF the
margins or purchase money. 1t is not
that they might have pro-
duced plenty OF credible witnesses to
show that such transactions are 80 ire-
quent and common in Wall street that
they do not attract special notice, and
do not usually excite n passing suspi-
cion that they are irregular or improper.
III this view OF the case it may be that
the defendants are not to be regarded us
wrong-doers, but us victims
OF an unfortunate and fatal environ
ment.
claw, however, deals with acts, test
ing the intention by the necessary con-
sequences OF conduct, and pronouncing
them fraudulent irrespective OF the
moral degree OF turpitude OF the offen-
der, or any moral turpitude whatever,
whenever they contrivene its rules.
Consequently, although the defendants
may have been morally innocent, and
their conduct may have been
by the uniform and uniyer-
sal custom OF Wall street, the question
is whether it was legally
right and honest fOI them to take
the checks in question in payment OF
the personal obligations OF the bank
officer who made them. No usage, how
ever common and well recognized, can
be- invoked to justify banker or any
one else in taking money or negotiable
paper in payment OF an agents debt
known to belong to his principal, or
known to belong to trust estate to sat
isfy the trustees personal debt, or to
shield bankers who wilfully close their
eys and shut their ears to facts and cir
which impart notice that
the agent or trustee is misapproprlatlng
the money or property intrusted to
him.
"Therefore, if there is any significance
in the fact that bank president or cash
ier offers negotiable paper of his cOrpo.
ration, made by himself in his official
in payment OF his personal
debts or to raise money for his personal
use, it matters not that bankers gener-
ally do not appreciate it. II they regard
the transaction as equivalent TO one in
which an individual comes with money
in hand, they ignore its real character.
In that case he come with what pur-
ports to be his own, having the pos
session, which implies title and the
right to use. When he comes with the
money obligation Of a corporation: which
is the contract OF the corporation only
because he has made it without authorl-
ty, the transaction is very different.
Every person who takes such an obliga-
ton must ascertain at his peril that the
agent who has made 1t was authorized
to do so, and the moment that it appears
that the contract has been made for the
agents own use and benefit, that mo-
ment his authority is inpeached. No
principle OF the law or agency is better
settled than that no person can act as
the agent for another in making Il con-
tract for himself.
"Therefore it is that bank president
or cashier has no implied authority to
bind his corporation to negotiate paper
made for his own use; and il it appears
upon the face Of the paper that it is
payable to the individual who has made
It in an official capacity, the obligation
is nugatory and no purchaser can en-
force IL ~