The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1888-08-15
BANKERS AND BROKERS.
AN IMPORTANT DECISION IN THE
UNITED STATES COURT.
The Question OF tho Responsibilities
OF Brokers in Dealing with the
Paper OF Bank Cashiers Discu ssed
Fully.

Paper OF Bank Cashiers Discu ssed
Fully.
New YORK, Aug. l4.-Judge Wallace,
OF the United States circuit court. yester-
day handed down a decision denying the
motion to set aside the verdict and grant a
rchearing in the suit Of Henry ]. Ander-
son, receiver OF the bank OF Albion, N. Y,
against Kissam, Whitney & Co., the
brokers The Judge lays down some prin-
ciplcs that will interest bank officers,
brokers and the public generally.
Albert j. Warner, the president OF the
bank OF Albion, deiautcd in August, 1854,
and II was discovered that he had misap-
propriated over 100000 worth of the
banks funds. lie had been specializing
in stocks, using Kissam, Whitney * Co.'s
predecessors as agents, and drawing
tho 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 paced them to Warmers
credit on their books. The jury, on the
trial, awarded the receiver Sli7, 100, 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 TO
their hands 10 bo invested and handled
for another person in consideration OF a
small commission, which they paid back
10 The person from whom they received IL.
and thore IL no reason 10 suppose that
they had any active or definite purpose
when they received II or at any time TO
defraud the complainant in any way. IL
is altogether likely that they could have
shown, II they had been permitted, by
the testimony Of any number Of respect
able bankers and brokers that IL IL every
day practice in Wall street for those In
their limo of business TO buy and sell
stocks for bank presidents and cashiers
who ARE specializing there, and TO accept
drafts and negotiable paper Of the cor
porations OF those officers made by them
officially in payment OF tho margins or
purchase money. IL IL not improbable
that they might have produced plenty OF
credible witnesses 10 show that such
transactions are 40 frequent and common
In Wall street that they do not attract
special notice, and do not usually excite n
passing suspicion that they are irregular
or improper. In this view Of the case IL
may be that the defendants are not TO ho
regarded IN intentional wrongdoers, but M
victims OF an unfortunate and fatal en-
! virOnment.
claw, however, deals with acts, test
ing the intention by the necessary consc-
qucnccs Of conduct, aud pronounccs them
fraudulent irrespective Of the moral de-
gree Of turpilude OF the offender, or any
moral turpitudo whatever, whenever they
conirayene the rules. Consequently, al
though the defendants may have been
morally innocent, and although their CON
duct may have been sanctioned by the
uniform and universal custom OF Wall
street, the question nevertheless IL whether
II was legally right and honest for them 10
take the checks IN question IN payment Of
the personal obligations Of the bank officer
| who male them. No usungp, however
common and we'll recognized, can bo In.
voked Ia Justify banker or any ono else
In taking money or negotiable paper in
payment Of an agents debt known 10 bo-
long 10 his principal, or known 20 belong
10 u trust estate, 10 satisfy the trustees
! personal debt or 10 shield bankers who
wiliully close their eyes and shut their ears
10 iaciz and circumstances which impart
notice that the agent or trustee IN misap-
propriating the money or property in.
trusted Ia him. Therefore, II there u any
| significance In the fact that bank prcsi-
dent or cashier offers negotiable paper Of
his corporation made by himself in his
Official character IN payment ol his per-
sonnl debt or Ia raise money for his per.
sonal use, u matters not that bankers gen.
orally do not appreciate IL.
III they regard the Transaction N equiv
| alcni 10 one in which an individual comes
with money In hand, they ignore is real
| character. In that case he comes with
/ what purports 10 DO his own, having the
possession, which implies title and the
right To usc. When he comes with the
/ money obligation Of a corporation, which
u the contract oi the corporation only be-
cause ho has made Il without authority,
the transaction n very different Every
person who takes such an obligation must
ascertain nj his peril that the agent who
has made II was authorized to do 80, and
the moment that II appears that the con
tract has been made Tor the agents own
use and benefit, that moment his authority
il impcachcd. No principle Of the law or
agency is better settled Than that no per.
son can act ~ the agent for another in
making q contract for himself. Therefore
Il Is that bank president or cashier has
no implied authority TO bind his corpora
ton tn negotiate paper made for his own
usc, aud u q appears upon the face oi the
/ paper that Il IN payable 10 the individual
Who has made Il In an official capacity, the
obligation is nugatory and no purchaser
| glu pufnfrp IA