The Anaconda standard. [volume] (Anaconda, Mont.) 1889-1970, 1898-07-19
LOWER COURT REVERSED
A Decision of Importance to
Makers of Promissory Notes.
THE CHICAGO BANK WINS
An Interesting Case Growing Out OF Will
Hanks Management ofthe Merchants
National Bank OF Great Falls.
Defendants Must Settle.


Special Dispatch to the Standard.
u.,o,a ruiv Is Makers or endorsers of
- "a , a.,
proHiSsofs no'es va" W
decision rendered by the supreme court
to-day in the case of the American Ex-
49, Ns,,oro, hank NJ Chicago plsint-
III ano appellant vs. "lhiah OA"' . y
Dickey, T. E. Brady, f. r. CIngan, A. Il.
Logneway and A Nathan, an appeal
from the district court of Cascade county.
The case was one OF the echoes OF the sus-
cension OF the Merchants National BANK
OF Great Fails which went TO the wall IN
the panic of 1888. The case is more or less
familiar TO Standard readers IN northern
Montana
In 1891 the defendants signed a note Tor
S1o.l25 payable to the ORDER OF the plaihtin'
-the Chicago bank. VIII Hanks, who was
then president OF the Merchants nation
~ bank Of Great Falls, induced the de-
PENDANTS, who were directors OF the Met-
chants. to sign the note In the oelief that
the proceeds were to be used by the Great
Fails bank. In this they were oecelVeu'
~ IL afterwards appeared. The proceeds
OF the note were applied upon a note Tor
No.o 900 that Hanks had previously nego-
tated with the American EXCHANGE bank.
The defendants, after making some pay
ments upon the note. declined to pay any
more. claiming that they mao been ue-
oeived and that Hanks had ~misappropri-
ated the funds. The Chicago bank brought
suit In the district court Tor the balance
due on the note. %,6so- Judgment was rem
dared against the plaintiff ana In FAVOR
Of the defendants. Plaintin appealed.
Justice Hunt. who prepared the opinion,
m which Chief Justice Pemherton con-
CURED, Justice Pigott being disqualined'
yeverses the lower court. In discussing
the case the court says In part:
The note In the suit was negotiated Tor
the beneft OF the bank, although tho
plaintiff, In ignorance OF the real purpose
OF the note. loaned the money 20 Hanks.
This appears from the evidence, which
shows that after the note was deposited
as collateral Hanks drew a check Tor the
amount of II to the order of Wells, who
was cashier. and who in turn deposited II
to the credit of the Great Falls bank, ana
10 whose credit II was duly placed by the
Chicago bank. Thereafter Hanks, by a
transaction with the cashier OF the bank.
seems to have obtained the money. The
makers OF the note were not injured IN
any way by the act of Hanks In pledglng
the note in the manner In which he dld,
for II was not until the amount OF the
loan was credited to the Great Fails
bank that Hanks committed wrong
against these defendants. He could have
done the same thing II he had discounted
the note and had put the funds directly
20 the banks credit instead OF his own.
" tDIt& W Aht h'Af q " ~ hfNfNg
for the Great Falls bank. The makers
turned the note over TO Hanks that he
might carry out that purpose, and he did
carry IL out. but thereafter m~isappropri-
ated the borrowed funds by diverting
them from the banks credit 20 his indi-
vidual uses. There was, In fact, no wrong
full incorporation OF the note even II
the precise mode OF its use was not that
contemplated. A fraudulent perversion OF
the original object and design OF negotia-
BILE paper is necessary 10 constitute a mis-
appropriation. If the note has erected
the substantial purpose for which II was
designed by the parties an accommodation
endorser cannot object that the accommo-
dalton was not effective in the precise
manner contemplated where there is no
fraud and the interest of the endorser Is
not prejudiced'-Duncan. sherman q Co.
VS.. Gilbert. % n. j. L. 52l, etc.
Respondents were not ~pretudiced by
anv act of this apppllant. who took the