Rock Island daily Argus. (Rock Island, Ill.) 1886-1893, 1890-03-04
HARPER'S BIG DEAL.
a Decision of Interest to Bank
ing Institutions.
FIDELITY BANKS GREAT FAILURE.

IL Provides a Case for the National SUI
preme Court, IN which Chicago Men
Get q s4OO. 600 ACKNOWLEDGMENT OPP
poses National Educational supreme
Court Decision ON "Jim Crow Cars
Ex-Congressmsn Tsuibce Dangerously
wounded-Nationai Capital Notes.
WASHINGTON CRY, March 4-The claim
OF the American Exchange National bank Of
Chicago against David Armstrong. receiver
out Of the famous Harper wheat deal, was
decided by the supreme court OF the United
States yesterday. The decision not only
gives the Chicago bank everything IL has
asked for, but firmly establishes the very
Important principle, in which all banking
and commercial houses are interested, that q
hank or Arm receiving regularly issued bank
documents as collateral need not ascertain
whether parties Offering the collateral have
given value TO the bank issuing. The de-
eision establishes and protects the validity
and integrity of bank documents issued by
bank officers under the usual authority Of
their positions, and hence will be received
with satisfaction in the financial and com.
mercial world
short History of the Case.
The history Of the case begins June Is,
1881, or at the date when the enterprising
Mr. Harper, of Cincinnati was sndeavoring
10 work great wheat corner with other
peoples money. On that day Joseph VIII
shire, of Cincinnati, delivered to c. ]. Ker-
shaw & Co, of Chicago, draft for 500,
600, drawn by the Fidelity National bank
of Cincinnati ON the Chemical National bank
Of New York, payable to the order OF c. j.
Kershaw & Co. a draft for 800, 900, drawn
by the Fidelity bank on the Chemical Ma
tional bank, payable 10 the order of the
American Exchage National bank, and a
letter of advice issued by tae Fidelity bank
TO the American Exchange bank, stating
that Wiltshire & Co., of Cincinnati, had de-
posted in the Fidelity bank 5000, 900 TO the
credit Of the American Exchange bank for
the use of c. j. Kershaw & Co.
All Went Into the Wheat Deal.
Kershaw & Co. kept an account with the
American Exchange bank, and after receiv-
ing from Wiltshire these documents deposited
them in the American Exchange bank, re-
| ceiving credit therefor in the regular course
of business.
tiary, was then vice president Of the Fidelity
bank, and he was using his banks money in
| the Chicago wheat deal Harper issued these
| documents without any consideration being
paid to his bank When the situation seemed
hopeless he attempted to save himself by in.
volving other parties in his fraudulent acts.
In furtherance of this scheme he stopped
| payment of the New York drafts, and soon
after the Fidelity bank was taken noSseSsifrn
of by the comptroller of the currency, and
ths whole scheme TO rob the Fidelity bank
was exposed
Judgment for the Chicago Bank.
The American Exchange bank cashed
these documents in good faith, without the
| slightest intimation that they were issued in
fraud, and therefore claimed to be innocent
holders for value The receiver of the Fidel-
ity bank refused TO allow these claims when
presented, 50 the American Exchange bank
brought suit against the receiver in the
United states district court Of Ohio 10 re-
cover Judgment was rendered in favor OF
the American Exchange bank for 500, 900
and interest on the dividend, which should
have been paid 10 the American Exchange
bank when other creditors were paid
Confirmed by the Supreme Court.
The cases were submitted 10 the United
States supreme court under the ninety day
rule without argument, and the supreme
court under decision rendered by Justice
Blatchford, affirmed the decision of the
lower courts, deciding that the American
Exchange bank was a bona fide and limo
cent holder OF these documents for value
and entitled to recover both the principal
and the interest claimed