Opinion of the Court.

Fidelity Bank on the same day replied: "Not yet made," and the draft was not sent forward. In consequence of this promise of Wilshire, and the previous course of dealing between the two banks, the plaintiff was prepared to receive, on the morning of June 15, as hereafter mentioned, the certificate of deposit for $200,000.

The state of the account of Kershaw & Co. with the plaintiff, on the morning of June 14, 1887, was this: They owed the plaintiff $380,378.37 overdraft and $280,000 in notes; against which the plaintiff held as collateral security 692,688 bushels of wheat, 5000 bushels of corn, and certain wheat then being loaded for shipment. The total value of such collateral, on the morning of that day, was $736,000, and the total indebtedness of Kershaw & Co. to the plaintiff wPS $660,378.37. During that day there was a panic in wheat, and the price fell from 92 cents to 744 cents a bushel. The security of the plaintiff fell in value at a corresponding rate, and at 1 o'clock in the afternoon was worth only $544,894. Kershaw & Co. then owed the plaintiff $525,477.01, namely, $280,000 in notes and $245,477.01 overdraft. Thereupon the plaintiff stopped paying the checks of Kershaw & Co., the amount of the checks refused being about $60,000.

The state of the account between the Fidelity Bank and the plaintiff on the 14th of June, 1887, was as follows: The former owed the latter a balance of something over $100,000, consisting in part of a draft drawn on the former by Wilshire, Eckert & Co., to the order of Kershaw & Co., on the 13th of June, and deposited by Kershaw & Co. with the plaintiff on that day. The plaintiff, in accordance with its custom, had treated such draft as a cash item, and had paid the checks of Kershaw & Co. against it, on the 14th. On the night of the 13th, that draft had been sent by the plaintiff to the Fidelity Bank for payment, and on the 14th the latter telegraphed the plaintiff that it was paid. Payment was made by placing the amount to the credit of the plaintiff on the books of the Fidelity Bank. On the same day (June 14) the plaintiff telegraphed to the Fidelity Bank, "remit at once hundred thousand, clearing-house currency or gold;" in re

Opinion of the Court.

sponse to which it received, on the morning of the 15th, $50,000 in currency by express, and a draft for $50,000, drawn by the Fidelity Bank on the Chemical National Bank of New York, which was duly paid by the drawee. At the close of business on the 14th of June, the plaintiff had security enough to make itself whole as respected Kershaw & Co., and it had called upon the Fidelity Bank for substantially the whole balance of account due from that bank, and the same had been sent on. The plaintiff had, therefore, no inducement to take any unusual risk, in regard to the transactions now to be stated.

Just after the plaintiff had closed its bank for business on the 14th of June, it received the following telegram:

"Am. Ex. Nat. Bank:

"CINCINNATI, O., 6/14, 1887.

"Joseph Wilshire will be at your bank to-morrow morning with six hundred thousand dollars to make his trade with Kershaw and others good if they are protected until he arrives. "FIDELITY NAT. BANK."

The cashier of the plaintiff sent for Kershaw & Co., showed them this telegram, and told them that, while the plaintiff wanted to do everything in its power to assist them, it could not agree to protect them in any manner. Kershaw & Co. replied in substance that if Wilshire came from Cincinnati that night, he would arrive about 8 o'clock the next morning, and that they needed no protection for the time before his arrival. Kershaw & Co. then suggested and dictated the following telegram, which was sent by the cashier of the plaintiff:

"CHICAGO, 14 June, 1887.

"Fidelity National Bank, Cincinnati, Ohio:

"If Wilshire is here to-morrow morning with six hundred thousand currency the deal will be safe. Answer quick.

VOL. CXXXIII-29

"AM. EXCH. NAT. BANK."

Opinion of the Court.

The same night, two telegrams were received by the plaintiff, which read as follows:

"CINCINNATI, Ohio, June 14, 1887.

"American Exchange Natl. Bank:

"Wilshire will be there on the morning train.

"FIDELITY NATL. BANK."

"CINCINNATI, Ohio, 6/14, 1887.

"American Exchange National Bank, Chicago:

"Have already wired you that he will be there with six

hundred thousand in the morning.

"FIDELITY NAT. BANK."

Kershaw & Co. were also advised by telegram from Cincinnati the same afternoon that $600,000 would be sent to Chicago that night.

Wilshire arrived in Chicago on the morning of June 15, and went to the plaintiff's bank, where he had an interview with Kershaw, Dewar and Eggleston, all the members of the firm of Kershaw & Co. Kershaw and Dewar figured up how much money they needed, and estimated that they needed $68,000 to settle up trades through the clearing-house of the board of trade, $90,000 to deposit for additional margins, and $60,000 to make good the checks which the plaintiff had refused to pay the day before, making a total of $218,000. The cashier of the plaintiff took down those figures at the time. Wilshire went out and shortly afterwards returned with an envelope from which he took four drafts, (one of which was the draft in suit in No. 1110,) and the certificate of deposit in suit in No. 1111. Each of the four drafts was for the sum of $100,000, dated June 14, 1887, and drawn by the Fidelity Bank on the Chemical National Bank of New York. One was payable to the order of Wilshire, Eckert & Co., one to the order of J. W. Wilshire, (not sued on,) one to the order of C. J. Kershaw & Co., and the other (in suit in No. 1110) to the order of the plaintiff. The four drafts and the certificate of deposit made up the sum of $600,000.

Opinion of the Court.

The two instruments involved in suits Nos. 1110 and 1111 were taken by Wilshire from the envelope and delivered by him to Kershaw & Co. The plaintiff took them on deposit from Kershaw & Co., and placed the amounts of them to the credit of the latter, in accordance with the usual course of business, together with another of the drafts, for the sum of $100,000. Kershaw & Co. thus received $400,000 of the paper, Irwin, Green & Co. receiving the remainder, $200,000. The evidence shows that the two drafts and the certificate of deposit were taken by the cashier of the plaintiff on its behalf, and placed to the credit of Kershaw & Co. by the plaintiff, without any agreement or arrangement on the part of the plaintiff, except to credit them to Kershaw & Co. as cash.

Before the plaintiff received this $400,000, the account of Kershaw & Co. with it was overdrawn $245,477.01, as before stated. On receiving the deposit the plaintiff placed to the credit of Kershaw & Co., as cash, in a single item, $399,200, the full amount of the deposit less $800 charged for exchange. This was according to the usual course of business between the plaintiff and Kershaw & Co., and according to the understanding of the parties at the time. This deposit cancelled the overdraft of $245,477.01, and left a balance to the credit of Kershaw & Co., on the morning of June 15, of $153,722.99. As soon as the plaintiff opened its bank on that day there was a run upon the account of Kershaw & Co., and before 11 o'clock in the morning the plaintiff had paid or certified their checks to the amount of $239,930.78. Meanwhile the plaintiff received on deposit $25,249.40, but this was a draft drawn against a shipment of wheat which the plaintiff had held as collateral security, and the plaintiff's condition was not bettered thereby. The plaintiff, therefore, in reliance upon such deposit of $399,200, not only cancelled Kershaw & Co.'s overdraft of $245,477.01, but also gave them $239,930.78 of fresh money, making a total of $485,407.79. By crediting the paper as cash, and using it to cancel the overdraft, the plaintiff also waived its right to sell for that purpose the grain which it held as collateral security. The result was that when the plaintiff did sell the grain, after the

Opinion of the Court

paper of the Fidelity Bank was dishonored, it realized only $449,194.88 for the same grain which, when the plaintiff stopped paying Kershaw & Co.'s checks on June 14, was worth $544,894, being a shrinkage of $95,699.12.

When the plaintiff had paid Kershaw & Co.'s checks to the amount of $239,930.78, their account was overdrawn $60,958.39; and when it was found by Kershaw & Co. that it would take $200,000 (instead of $68,000) to pay their differences in the board of trade clearing-house, the plaintiff refused to certify their checks for $200,000, and they therefore suspended payment.

The Fidelity Bank placed the amount of the certificate of deposit involved in suit No. 1111 to the credit of the plaintiff, and the latter charged the same on its books to the Fidelity Bank, as a cash deposit, and notified the Fidelity Bank that it had done so. From the 28th of April, 1887, when the Fidelity Bank sent the first certificate of deposit to the plaintiff, down to the 15th of June, 1887, the Fidelity Bank had represented that Wilshire, Eckert & Co. were depositing funds with it, which it was remitting to the plaintiff; and the telegrams of June 14, 1887, from the Fidelity Bank, held out Wilshire as the owner of the $600,000 which he was to take to Chicago to protect the trades. During the six days while the Fidelity Bank remained open after the paper in question was taken by the plaintiff, the Fidelity Bank made no complaint that the plaintiff had not acted in all the transactions. in an honest manner, and in accordance with the instructions of the Fidelity Bank.

What took place between the officers of the Fidelity Bank and Wilshire, which the receiver alleges in his answer amounted to a conspiracy to embezzle the funds of that bank, was not revealed to the plaintiff until it was disclosed by the evidence taken in the suits.

In regard to No. 1110 it is contended by the receiver that the draft could not take effect until it was delivered to the plaintiff; that such delivery must have been made by the Fidelity Bank; that therefore Wilshire was acting for that bank in delivering the draft; and that, as between the Fi