unless they exercise the power of preparing it for market, it will often perish or be sacrificed. Of

the propriety and expediency of the measures to be adopted, they must judge in the first instance. Whether they abuse their trust or not, may be inquired into in a proper form of action."

The case of Cunningham v. Freeborn, however, was overruled in Dunham v. Waterman, 17 N. Y. 9, where it was held that a provision authorizing the assignee to work up materials in process of manufacture into machinery, and complete unfinished machinery, at the expense of the assigned fund, as in his judgment might be advisable so as to realize the greatest amount of money therefrom, renders an assignment fraudulent and void on its face, although an actual fraudulent intent is disproved. | The court say: "It is said, that if manufactured articles are assigned in such a state that it is obvious, that by a comparatively small expenditure of money in completing them, their value will be very greatly increased, it would be the duty of the trustee to make the expenditure for the sake of the creditors; and it is insisted that what the law would justify the assignee in doing without authority from the assignor, he may be expressly authorized to do. This position overlooks the distinction between a duty imposed by law and a power conferred by an individual. The first would be under the entire control of the courts. If an assignee should err in the exercise of that legal discretion which is incident to his trust, the courts, on application of the creditors, could correct the error. If the sale of the assigned property was unreasonably delayed, the courts could hasten it. Not so, however, in respect to a discretionary power, expressly vested in him by the assignment. Nothing short of fraud or a want of good faith in the exercise of such a power would authorize the courts to interfere. If an assignment containing such a clause is held valid,

last case, but prefer the doctrine of Cunningham v. Freeborn.

In respect to the unauthorized retention of possession by the assignor, it has been held, in Pennsylvania, Vermont, Illinois and South Carolina, that it is conclusive evidence of fraud: Dawes v. Cope, 4 Binn. 258; Hall v. Parsons, 17 Vt. 271; Thornton v. Davenport, 1 Scam. 296 (but not where the retention is consistent with the deed); Anderson v. Fuller, 1 McMul. Eq. 27. In Massachusetts, Connecticut, New York, Indiana, Arkansas, Maine, New Hampshire, New Jersey, Ohio, Mississippi, Kentucky, Tennessee, Virginia, Georgia, Texas, Missouri, Louisiana, Wisconsin, and Michigan, it is only prima facie evidence of fraud; Boyden v. Moore, 11 Pick. 362; Ingraham v. Wheeler, 6 Conn. 279; Caldwell v. Rose, 1 Smith, 190; Field v. Simco, 7 Ark. 269; and in the other States cited, the rule is inferred from that respecting sales and mortgages. In New York the rule is statutory. In Virginia, Mississippi, North Carolina, Alabama, and. Kentucky, it is no evidence of fraud. Land v. Jeffries, 5 Rand. 252; Comstock v. Rayford, 12 Sm. & M. 369; Dewey v. Littlejohn, 2 Ired. Eq. 495; Vernon v. Morton, 8 Dana, 247; Ravisies v. Alston, 5 Ala. 297. Where the retention is authorized by the instrument, and is consistent with its general nature and object, it has been held valid. Meeker v. Wilson, 1 Gall. 423; Bartlett v. Williams, 1 Pick. 295; Brooks v. Marbury, 11 Wheat. 78; Dawes v. Cope, 4 Binn. 258; Clow v. Woods, 5 S. & R. 278; Land v. Jeffries, 5 Rand. 252. The rule generally applies only to chattels. See Burrill on Assignments, ch. 19.

ROAD-OPENING THROUGH MORTGAGED LANDS.

BY L. T. YALE.

to confer the power; that is, has a right to vest this power in the assignee as a condition upon which he parts with his rights of property. If the courts uphold this condition, must they not execute it? Can they substitute their discretion for that which the owner of the property has vested in the assignee?" "If the court cannot control or interfere with such a discretion, unless it is fraudulently exercised, then the creditors may be kept at bay so long as the assignee selected by the failing debtor may deem it expedient to retain the management of the assigned property. This can never be tolerated. The true principle applicable to all such cases is, that a debtor who makes a voluntary assignment for the benefit of his creditors may direct, in general terms, a sale of the property and collection of the dues assigned, and may also direct upon what debts and in what order the proceeds shall be applied; but beyond this can prescribe no conditions whatever as to the management or disposition of the assigned property. In all other respects the assignee must be left to act under the ordinary rules and principles which apply to trustees in analogous cases." The court in the principal case notice this

period of depression, resulting in the depreciation of mortgage securities, has called attention to a legal question of curious interest, with regard to the laying out of highways through lands covered by mortgage.

Heretofore while the relation between the amount of the loan, and the value of the land that secured it, remained unaltered, the mortgagee deeming his interest secure, made no objection, though a very considerable strip for a public road were carved out of his land security, and the damages paid to the mort

gagor.

The question as developed by the present altered conditions may be thus stated. What rights has a mortgagee with respect to the proceeding for the opening of a road through the lands covered by his mortgage? Has he a right to be heard? Has he any vested claim to the damages assessed? In case he receives neither notice nor damages may he foreclose his security and extinguish the easement of the public? Is he the owner of the land in such sense as to bring him within the protection of the constitutional inhibition against the taking of private property without just compensation?

In some of the States, for example, New York and Connecticut, no provision is made in the statutes prescribing the mode of procedure for laying out of roads, for notice to incumbrancers. In a supposable case, e. g., where a narrow village lot could be taken entire into the limits of a new highway, the owner of a

mortgage thereon might find his land security incumbered by a public easement that would render his mortgage substantially worthless, and this without any previous fault or knowlege on his part.

A mortgagee out of possession under our system of jurisprudence is not regarded as the owner of the land. His mortgage is a chattel and passes to the executor. "Except as against the mortgagee the mortgagor while in possession and before foreclosure is regarded as the real owner and a freeholder. ** ** Whereas the mortgagee, notwithstanding the form of the conveyance, has only a chattel interest, and his mortgage is a mere security for a debt." 4 Kent, 182; marg. p. 160. Careful search has disclosed no case decided in New York State, where, perhaps, the subject has been most often considered, holding that the rights of the mortgagee so far partake of the nature of ownership as to require legislative provision for compensation to him in such a case. Thompson, in his work on Highways (p. 191), discussing this subject, says: "No one but the owner of the land is entitled to the damages," and thus clearly indicates that in his opinion the owner of the fee is the owner who takes. In equity the damages would be held to belong to the mortgagee to the extent of the loan secured, but the State, in the exercise of the right of eminent domain, may deal with the mortgagor only, if in possession, and provide for the payment of land damages to him only, leaving to the courts the determination of the ultimate rights in the fund.

The mortgagee will not be heard to say that he has been deprived of his property without "due process of law," because the lien of his mortgage is transferred from the land to the damages. Coutant v. Catlin, 2 Sandf. Ch. 485; Astor v. Hoyt, 5 Wend. C03; Farnsworth v. The City of Boston, 19 Alb. L. J. 118, Feb., 1879; Pond v. Eddy, 113 Mass. 149; 2 Washb. on Real Prop. 155; marg. p. 548. In the case City of Norwich v. Hubbard, 22 Conn. 587, it is held that in respect to the opening of a highway, a "mortgagee out of possession is not the proprietor of the mortgaged premises, and in common parlance is never spoken of as such, nor is he so recognized in a legal sense. In truth, the mortgagee has only a lien, and cannot be considered or treated as a proprietor or owner of the mortgaged estate."

* *

And subsequently the same court in Whiting v. The City of New Haven, 45 Conn. 304, Dec., 1877, quotes and approves this language, and adds: "In laying out a new highway * or in repairing old ones, no provision is made by law for notice to be given to the mortgagees, nor in practice is this ever done. The interests of the mortgagee are not regarded in these proceedings. They are necessarily connected with the interests of the mortgagor. * ** *The petitioner (mortgagee) was not the owner of land, and as neither the charter nor any other law requires that the petitioner should have had notice of the action of the city, we cannot require it without the exercise of powers we do not possess."

The courts of Massachusetts have gone still further in the same direction. In Farnesworth v. The City of Boston, ante, it was held that a mortgagee not in possession has no claim for compensation for injury done to the land when lawfully used by any party; that such a mortgagee cannot be assessed for improvements and has no estate in the land, which, under the statute relating to the subject of roads, he can surrender. The interests of the mortgagor and mortgagee in such a case are neither joint nor distinct, but identical. The entire estate will be regarded as in the owner of the equity of redemption, except that as between him and the mortgagee, the latter is the owner, not of another, but of the same estate.

The courts in all such cases hold that there must be a strict compliance with the statutory requirements,

or the proceeding on the part of the public will be held irregular. So in Warwick Institute v. City of Providence, 18 Alb. L. J. 397, it was decided that when the statute requires notice to be given to all persons severally interested in the lands proposed to be taken for a public purpose, failure to serve due notice upon a mortgagee would render the proceeding totally ineffectual as to him, and the proceeding could not be alleged on behalf of the public as a defense or as a basis for special relief in an action brought by the incumbrancer for the foreclosure of his mortgage. Notice, however, need not be personal even to those interested, unless expressly required by statute to be so. No provision of the Constitution prescribes the form of the notice or the mode in which it shall be given. Hence it is left to the wisdom of the Legislature to determine by statute in the several cases as they arise the mode and substance of notice which will best promote the public good while affording sufficient protection to private rights. In the exercise of the discretion with which it is vested, it is competent for the Legislature to provide for constructive notice only to those interested. 2 Dillon on Municipal Corporations, § 471. And notice so given, though in fact not received, will be imputed and cannot be controverted. Id., note.

As was said in The People v. Smith, 21 N. Y. 598, in such a case the "appropriation of the property is an act of public administration, and the form and manner of its performance are such as the Legislature shall in its discretion prescribe." In Palmyra v. Mortion, 25 Mo. 593, the court went so far as to say that in the absence of statutory provision requiring other notice, the passage of an ordinance by a municipal corporation directing a local improvement to be made, was sufficient notice to the owners, though in fact it never came to their knowledge. The courts of New York would not probably concur in this view. Stuart v. Palmer, 7 N. Y. Weekly Dig. 203. Here, that "due process of law," without which the citizen cannot be deprived of his property, would be held to require something more than such uncertain, inadequate notice as the mere adoption of a city ordinance.

It is a noteworthy fact that the general statute of the State of New York, providing for the opening of highways, nowhere requires any personal notice of the intent to lay out a road to either the owner of the fee or to any other person interested in the land. All notices under this statute are given by posting, except to the occupant who may or may not be the owner of the fee; but the law, though it has been in force for many years, has never been seriously attacked as unconstitutional by reason of the insufficiency of the notice prescribed.

It seems strongly repugnant to principles of justice that the security of the incumbrancer should be put in jeopardy without notice and without affording him opportunity to protect his rights. But the statute manifests no partiality for the owner of the equity of redemption in respect of the notice required of the intent to create a public easement. Mortgagor and mortgagee, except in those cases where the former happens to be the occupant, have the same means of knowledge, and there is no reason why the owner of a lien should be better protected than the owner of the fee.

In the general statutes providing for the assessment and compulsory discharge of taxes, it has never been thought necessary to make provision for notice to persons having liens upon the premises taxed, though the title of a purchaser at a tax sale supersedes and extinguishes all other claims of title. All notices relating to the imposing of a tax are by publication. The sovereign will not follow the diversified interests with which the fee may be loaded. Every person having rights in the premises is presumed to know the law

and protect himself at his peril. This state of things usually surprises no one, and no one regards a tax sale as oppressive or unjust. But it was said in People v. Brooklyn, 4 N. Y. 422, that "The right of taxation and the right of eminent domain rest substantially on the same footing," and the same proposition was affirmed in People v. Smith, 21 N. Y. 598, where the court says: "The exercise of the right of eminent domain stands on the same ground with the power of taxation." So, Washburn in his work on Real Property (vol. 2, p. 155), says: "Taxes upon lands under mortgage and which constitute a lien upon the same, are assessed to the mortgagor if in possession, and the notices and proceedings necessary to enforce their payment by sale are to and with the mortgagor as owner." It would seem, therefore, to be prejudice and not law or right reason which attempts to enforce a distinction in the character of the notice which should be required in the two proceedings.

In most of the States the statutes providing for, and regulating the proceedings for laying out public ways, are of much earlier date than the mortgages that can be affected by them, and in every case where this is true, a principle of the law of private contracts may help to determine the rights of the mortgagee. Knowledge of the law is imputed to all men, and where two persons enter into an agreement, the law or the statute affecting the subject-matter of the contract becomes a part of the writing. The court will regard it as written in. In Brine v. Hartford Ins. Co., Alb. L. J., vol. 18, p. 51, it was decided by the United States Supreme Court, that "All the laws of a State existing at the time a mortgage or any other contract is made,

which affect the rights of the parties to the contract, enter into, and become a part of it, and are obligatory on all courts which assume to give remedy on such contracts." Thus it would seem, that where, at the time of the making of the mortgage, there is a statute in existence, relating to the opening of roads, providing for notice to the occupant of the premises and for payment of damages to the mortgagor, an agreement to accept such notice and such payment will be imputed to the mortgagee as being a part of his contract.

The Constitution and the statute recognize the power of eminent domain and control the exercise of it, but neither of them is the source of its existence. Mills on Eminent Domain, p. 2. "It is the inherent sovereign power of a State which gives to the Legislature the control of private property for public use." 2 Kent's Com. 339, note. In New York the statute declares, "The people of this State, in their right of sovereignty, are deemed to possess the original and ultimate property in and to all lands within the jurisdiction of the State." 1 Edm. R. S. 666. And when the people exercise their right of sovereignty over any of the lands within their borders they simply "resume possession of that which had been previously granted to the subject upon condition that it might again be resumed to meet the necessities of the sovereign." Mills on Eminent Domain, p. 1. The people are possessed of the "original and ultimate property in all lands, and the right of eminent domain is the power lodged in the people to take for a public purpose, upon making just compensation to the owner of the fee, that which is theirs. Such are the conditions (controlled but not conferred by the Constitution and statute) under which the owner of the inheritance first acquired title, and by virtue of which the rights of the owner may at any time be extinguished by payment of damages to him, and any person holding under him must be presumed to know of, and to take, subject to these fundamental principles essential to the existence of the State. The organic law does not require the people to take cognizance in such matters of those private acts of citizens which do not result in divest

ing one person of, and clothing another with, the ownership of the land. So long as in the eye of the law the owner of the equity of redemption is the owner of the land the people may treat with him only, in exercising their supreme rights.

It may be said therefore, that (1) in the light of authority, (2) by virtue of his contract, and (3) under the application of elementary principles, the mortgagee has no right to notice of the opening of a highway or of the assessment of damages, and has no claim to the damages when assessed, except by proceeding in the courts to reach the fund. The Legislature may make provision for the protection of his interests, but it is not bound to do so.

SPECIFIC ENFORCEMENT OF CONTRACT FOR SALE OF NATIONAL BANK STOCK.

PENNSYLVANIA SUPREME COURT, NOVEMBER 17, 1879.

FOLL'S APPEAL.

In an equitable action to enforce specific performance of an agreement to sell shares in a National bank, which the purchaser wished to obtain for the purpose of securing control of the bank, held, that specific performance would not be decreed, (1) because generally equity will not enforce specific execution of a contract relating to personal chattels, and (2) because a decree enforcing the agreement in question would be against public policy.

APPEAL from a decree of the Court of Common

Pleas of Erie county, directing a specific performance of an agreement to sell National bank shares, in an action in equity by R. M. Greer against John W. Foll. Sufficient facts appear in the opinion.

C. B. Curtis and John P. Vincent, for appellant. Davenport & Griffith, and Benson & Brainerd, for appellees.

PAXSON, J. This case presents some extraordinary features. We have nothing like it in this State since equity powers were conferred upon the courts. It was a bill to compel specific performance of a contract for the sale and delivery of fifteen shares of the stock of the First National Bank of North East, under the following circumstances: The bank in question is situated at North East, Erie county, Pennsylvania, and has a capital of $50,000, divided into five hundred shares of $100 each. R. M. Greer, complainant below and appellee, is a merchant in North East, and at the commencement of the year 1877, owned ten shares of the stock of the bank in question. His mother owned sixty-five shares, and his brother owned forty. About that time R. M. Greer conceived the idea of getting enough of the capital of the bank to control it, and to carry out this plan made an arrangement with his uncle, E. C. Custard, and E. E. Chambers, an operator in oil, to raise sufficient money to buy a controlling interest. They succeeded in buying a considerable amount of the stock, mostly on borrowed capital, but still lacked the few shares necessary for control. John W. Foll, the appellant, had the requisite number, and on March 7, 1877, Greer and Foll entered into the following contract: "I hereby agree to purchase fifteen shares of the First National Bank of North East, from John W. Foll. The price to be paid is to be $2,110.55, and interest from July 20th at ten per cent; said stock to be delivered before the second Tuesday of January, 1878." This contract was in writing, and signed by the parties. Before the time arrived for delivering the stock, Foll informed Greer that he would not deliver it. Foll then made a tender of the money specified in the contract. This bill was then filed and referred to a master, who made his report, recommending a decree

for specific performance. Exceptions were filed to the report by Foll, which, after a hearing, were dismissed by the court below, the master's report was confirmed, and a decree entered commanding Foll to transfer to Greer the shares of stock referred to. From this decree Foll entered an appeal to this court.

The avowed object of the purchase of the stock and the filing of this bill was to get the control of the bank for Greer and his friends. This appears upon the face of the bill, and is the main ground upon which equitable relief is asked. While the primary object was to obtain the control of the bank, there were at the same time secondary objects. As a part of the plan, the said R. M. Greer was to be made cashier, and Custard and Chambers, before mentioned, were to be directors.

The general rule is that equity will not enforce specific execution of a contract relating to personal chattels. 3 Parsons on Contracts, 364. This is so even in England, where the equity jurisdiction is much broader than in this State. The reason for the rule is, that for the breach of a contract of sale of personal chattels, there is an adequate remedy at law. A jury can be in no doubt as to the proper measure of damages. This is especially true of stocks and public securities which have a known market value. The disappointed purchaser can go into the market and purchase a corresponding number of shares of the same stock.

To this general rule, however, there are exceptions. An article of personal property may have certain qualities not common to other articles of like description, or may have an especial value by reason of its antiquity, family association, or the like. A number

of instances are collected in McGowan v. Remington, 2 Jones, at p. 61. They are title deeds of an estate and other muniments of property; an antique silver altar piece; Duke of Somerset v. Cookson, 3 P. Wms. 389; an ancient horn, the symbol of tenure by which an estate is held; Pusey v. Pusey, 1 Ves. 273; heir-looms; 3 Ves. and B. 18; and even a finely carved cherry stone. Ambler, 77.

I know of no instance in this State in which a court of equity has decreed specific performance of a sale of stocks. McGowan v. Remington, supra, which was cited on behalf of the appellee, is not in point. The specific chattels in that case, whose return was sought to be enforced, consisted of a surveyor's maps, plans, and papers of like character. They manifestly came within the exceptions noted, and besides it was a clear case of trust. But we need not pursue this subject further, as the case in hand turns upon a different principle.

While the legal right of the complainant to buy up sufficient of the stock of this bank to control it in the interest of himself and friends may be conceded, it is by no means clear that a court of equity will lend its aid to help him. A National bank is a quasi public institution. While it is the property of its stockholders, and its profits inure to their benefit, it was never

theless intended by the law creating it that it should

be for the public accommodation. It furnishes a place supposed to be safe, in which the general public may deposit their moneys, and where they can obtain temporary loans upon giving the proper security. There are three classes of persons to be protected: the depositors, the noteholders and the stockholders. We have no intimation that the bank, as at present organized, is not prudently and carefully managed. The stock as now held is scattered among a variety of people, and held in greater or lesser amounts. It is difficult to see how the small stockholders, who have their modest earnings invested in it, the depositors who use it for the safe-keeping of their moneys, or the business public, who look to it for accommodation in the way of loans, are to be benefitted by the concentration of a

majority of its stock in the hands of one man, or in such way that one man and his friends shall control it. Especially is this so when an attempt is made to control it by the use of borrowed capital. The temptation to use it for personal ends in such cases are very strong. It is a fact to which we cannot close our eyes, that the financial wrecks of such institutions with which the pathway of the last few years is so thickly strewn, are the result in a great measure of personal management. This purchase has not even the merit of being an investment on the part of the plaintiff. When a man buys and pays for stock with his own money it may be regarded as an investment. When he buys it upon credit, or pays for it with borrowed money, it is a mere speculation.

Were we to affirm this decree, I see no reason why we may not be called upon to use the extraordinary powers of a court of equity to assist in miscellaneous stock jobbing operations. A person who is attempting to make a "corner" in stock, or in any article of merchandise, who had made his contract with that end in view, might with equal propriety call upon us to decree specific performance thereof. But the decree of a chancellor is the exercise of a sound discretion; it is of grace, not of right, and will never be made where the equity and justice of a case is not clear.

We are in no doubt as to our duty in the premises. We are of opinion that the end sought to be attained by this bill is against public policy, and for that reason we refuse our aid.

The decree is reversed and the bill dismissed, at the costs of the appellee.

BANK CHECK-HOLDER OF, HAS NO CLAIM AGAINST DRAWEE-PRIORITY BETWEEN FOREIGN ASSIGNMENT AND LOCAL ATTACHMENT.

UNITED STATES CIRCUIT COURT, S. D. NEW YORK, NOVEMBER 25, 1879.

ROSENTHAL V. MASTIN BANK ET AL.

A bark in Missouri sold to plaintiff for value a draft, wherein it directed a bank in New York, where it had a deposit, to pay to the order of plaintiff a sum less than the sum on deposit. Before the draft was presented for payment, the Missouri bank made an assignment for creditors in Missouri, in which was included its deposit in New York. Payment of the draft being refused, plaintiff brought action in New York against the Missouri bank and attached the deposit. In an equitable action against the two banks and the assignee to have the deposit charged with the payment of plaintiff's claim, held, (1) that the New York bank could not be charged as a debtor to plaintiff and an action on the draft could not be maintaned against it; (2) that the assignment being valid, and prior in time to the attachment, transferred to the assignee the title to the deposit as against plaintiff's claim.

ACTION by Max Rosenthal against the Mastin Bank of Kansas City, Kersey Coates and the Metropolitan National Bank of New York, to have certain moneys adjudged the property of plaintiff, and a claim held by him payable therefrom. The opinion states the case.

John Henry Hull and Joseph I. Stein, for plaintiff. Holmes & Adams, for the Mastin Bank and Coates. Peabody, Baker & Peabody, for the Metropolitan National Bank.

BLATCHFORD, J. This is a suit in equity brought by the plaintiff, a citizen of New York, against the Mastin Bank, a Missouri corporation, and Kersey Coates, a citizen of Missouri, and the Metropolitan National Bauk, a banking corporation established under an act

of Congress, and doing business in the city of New York. The suit was brought in the Supreme Court of New York, and was removed into this court by the plaintiff.

The facts of the case are these: On the 1st of August, 1878, the plaintiff, at Kansas City, Missouri, paid to the Mastin Bank, which was located there, the sum of $2,000, in exchange for which said bank delivered to him a draft dated at Kansas City, August 1, 1878, and signed by its cashier, addressed to the Metropolitan National Bank, New York, and containing this direction, "Pay to the order of Max Rosenthal nineteen hundred and ninety-eight dollars." At that time the Metropolitan National Bank had in its hands the sum of $1,998, belonging to the Mastin Bank. Said draft was presented to the Metropolitan National Bank on the 5th day of August, 1878, by the plaintiff and payment of it was demanded, but said bank refused to pay it, or to pay the $1,998, and the draft was protested and notice of such presentment, refusal and protest was given to the Mastin Bank.

The Metropolitan National Bank then had, and ever since has had and now has, the said sum of $1,998 in its possession. After such demand and refusal, the plaintiff commenced a suit in the Supreme Court of New York, for the city and county of New York, against the Mastin Bank, in which suit moneys belonging to the Mastin Bank in the hands of the Metropolitan National Bank were attached, and thereupon the latter bank gave to the sheriff a certificate dated August 5, 1878, which said, "We hold twenty-three hundred dollars from funds to the credit of the Mastin Bank, Kansas City, Missouri, in matter of attachment of Max Rosenthal, plaintiff, for nineteen hundred and ninety-eight dollars." On the 17th of October, 1878, the plaintiff recovered judgment in said suit for $2,133.15. On the next day the sheriff, in behalf of the plaintiff, demanded the amount of said judgment from the Metropolitan National Bank, but said bank refused to pay it, stating that the money was claimed by the defendant, Coates, as assignee of the Mastin Bank, by virtue of an assignment made August 3, 1878, at Kansas City, by the Mastin Bank to said Coates. Coates claims said $1,998, by virtue of such assignment. The assignment is dated August 3, 1878, and assigns to said Coates "all the lands, tenements, goods, chattels, effects and credits of the said the Mastin Bank, of every kind and nature wherever situate, to have and to hold the same unto him, the said Kersey Coates, and his heirs, successors and assigns, in trust for the use and benefit of all the creditors of the said the Mastin Bank, in proportion to their respective claims as by the law in case of voluntary assignments made and provided."

By a paper at the foot of said assignment, dated the same day and signed by said Coates, he accepted said trust. The assignment and acceptance were recorded on the same day. The Metropolitan National Bank was notified of said assignment on the 5th day of August, 1878, by a telegram. The bill claims that by the delivery of the draft to the plaintiff, the Mastin Bank transferred to him $1,998 out of its moneys, which were then in the hands of the Metropolitan National Bank, and that he is the owner of the said $1,998. By a stipulation, all of the defendants waive the right of a trial at law, and the plaintiff agrees that the sheriff will not bring any action against the Metropolitan National Bank by reason of any of the matters in issue in this suit.

The prayer of the bill is, that the said sum of $1,998 may be adjudged to be the property of the plaintiff, and may be paid by the Metropolitan National Bank to the plaintiff, free from any claims or liens thereon of the defendant, Coates, or any of the other defendants. The Mastin Bank and Coates have put in a joint and several general demurrer to the bill for want of equity,

and the Metropolitan National Bank has also demurred severally to the bill for want of equity.

The question presented for decision is, whether the Metropolitan National Bank ought to pay the $1,998 which it owes, as a debtor to the plaintiff. It is contended for the plaintiff, that he could have sued the drawee, on the draft, before its acceptance, and even before presenting it to the drawee, and that the assignment to the defendant, Coates, after the drawing of the draft and before it was presented to the drawee, did not carry to Coates the title to the $1,998 or affect the right of the plaintiff thereto; that Coates took the property of the assignor, under the assignment, subject to all the equities existing against it in favor of the plaintiff; that Coates succeeded only to the rights of the assignor, and that the drawing of the draft operated as an assignment to the plaintiff of $1,998, then in the hands of the drawee.

It was decided by the Supreme Court of the United States in Bank of Republic v. Millard, 10 Wall. 152, that the holder of a check drawn on a bank cannot sue the bank for refusing payment of it, in the absence of proof that it was accepted by the bank or was charged against the drawer. In that case the court says: "It is no longer an open question in this court since the decisions in the cases of Marine Bank v. Fulton Bank, 2 Wall. 252, and of Thompson v. Riggs, 5 id. 663, that the relation of banker and customer, in their pecuniary dealings, is that of debtor and creditor. It is an important part of the business of banking to receive deposits, but when they are received, unless there are stipulations to the contrary, they belong to the bank, become part of its general funds and can be loaned by it as other moneys.

The banker is accountable for the deposits which he receives as a debtor, and he agrees to discharge these debts by honoring the checks which the depositors shall from time to time draw on him. The contract between the parties is purely a legal one and has nothing of the nature of a trust in it." This subject was fully discussed by Lords Cottenham, Brougham, Lyndhurst and Campbell in the House of Lords, in the case of Foley v. Hill, 2 H. L. Cas. 28, and they all concurred in the opinion that the relation between a banker and a customer who pays money into the bank, or to whose credit money is placed there, is the ordinary relation of debtor and creditor, and does not partake of a fiduciary character, and the great weight of American authority is to the same effect. As checks on bankers are in constant use, and have been adopted by the commercial world generally as a substitute for other modes of payment, it is important for the security of all parties concerned, that there should be no mistake about the status which the holder of a check sustains toward the bank on which it is drawn. It is very clear that he can sue the drawer if payment is refused, but can he also in such a state of case sue the bank? It is conceded that the depositor can bring assumpsit for the breach of the contract to honor his checks, and if the holder has a similar right, then the anomaly is presented of a right of action upon one promise for the same thing existing in two distinct persons at the same time.

On principle there can be no foundation for an action on the part of the holder unless there is a privity of contract between him and the bank. How can there be such a privity when the bank owes no duty and is under no obligation to the holder? The holder takes the check on the credit of the drawer in the belief that he has funds to meet it, but in no sense can the bank be said to be connected with the transaction. If it were true that there was a privity of contract between the bank and the holder when the check was given, the bank would be obliged to pay the check, although the drawer, before it was presented, had