SECOND NAT. BANK.
should he dismissed; whereas he now claims that the debt was the same before and after judgment, and that the discharge in bankruptcy is effectual against the judgment. The status of a debt which existed at the time of an adjudication in bankruptcy, but which was represented by a judgment entered against the bankrupt after the adjudication and before his discharge, was. at the date of the order of October 31, 1876. a matter upon which the decisions were very contradictory. The subsequent decision of the supreme court in Boynton v. Ball, 121 U. S. 457, 7 Sup. Ct. Rep. 981, was against the theory of Davis' petition and the opinion of the district court. The question is thus raised whether Davis can be now permitted to change his position as to the legal effect of the judgment, which, he insisted in 1876, would not be barred by his discharge, and now insists was barred thereby. He obtained the order of the district court upon the old theory, and enjoyed the benefit of it, apd now wishes to obtain the aid of the opposite and recently established theory. The question is not the same which has just been considered. That involved the propriety of abandoning his position in regard to the existence of a judgment, whereas this relates to the propriety of his changing his position in regard to the legal effect of the judgment. The plaintiff says that the principles which govern the decision of the two questions are the same. . I do not propose to decide this question, because I see no difficulty in the plaintiff's having the benefit of this alleged estoppel in his action at Jaw. If Davis his discharge in bankruptcy, it is substantially conceded that the facts which constitute the estoppel can be given in evidence by the plaintiff. Railroad Co. v. Howard, 13.How. 307. There is nothing outside the estoppel whicB. prevents the plaintiff from making it available in his action at law. Drexel v. Berney, 8upra. The demurrer is overruled.
11. SECOND NAT. BANK OF SPRINGFIELD.
(Di,trict Oourt, 8. D. Ohio,
Juay .20, 1889.)
Under Rev. St. U. S. § 5190, providing that "the usual business of each n8tional banking associati()n shall be transacted at an office or bankinll house located in the place specified in its organization certificate, " a national bank cannot make a valid contract for the cashingof checks upon it, at a different place from that of its residence, through the agency of another bank. Whatever the terms of sllch ltn arrangement, being made before the date of the drawee bank's certificate of authorization, it is invalid under Rev. St. U. S. iii 5186. providing that no banking association "shall transact any business except such.as is incidental and uecessarily preliminary to its organization, until!t has been anthorized by tl1e comptroller of the currency to commence the business of banking. " .
SAME-CERTIFICATE OF AUTHORIZATION.
At Law. Action for money had and received. J. W. Wilby, for plaintiff. , J. Warren Keijer, for defendant.
FEDERAL REPOnTER, vol.
SAGE, J. Plaintiff sues to recover for money had and received by / the defendant for his use, the sum of $3,841, being the proceeds of lections for account of the Fidelity National Bank with interest from June 21, 1887. The defense is that on the 20th of June, 1887, at its banking house at Springfield, Ohio, the defendant, without knowledge or notice of the insolvency, or impending insolvency of the Fidelity National Bank, cashed for the Champion Bar & Knife Company, of Springfield, Ohio, its check on the Fidelity National Bank for $1,995, and at the sallle time and place cashed for the Champion Malleable Iron Company, also of Springfield, its check on the Fidelity National Bank for $1,846; the aggregate of the two checks being the sum sued fo1' in this action, the drawers being depositors in the Fidelity National Bank, and each then having to its credit as such a sum at least equivalent to said check drawn by it in favor of the defendant On the same day the defendant, in the usual course of business, indorsed said checks and warded them by mail iJ the Fidelity National&.nk. They were received at the bank on the morning of the 21st ofJune,but the bank being insolvent, it had that morning, before the receipt of the said checks, of United States officials, closed its doors, and passed into the duly authorized, who refused to credit the defendant, the amount of said -checks, as the plaintiff has since refused and still refuses to do. It further appears in·defense that on the 20th 'of June the defendant was indebted to the Fidelity National Bank On ll.collection account in it, 'sum several thousand dollars in excess of the two checks above, referred to, and thafthe defendant has paid over to the plaintiff the amount in its hands standing,to the credit of the said Fidelity National Bank at the time it went into insolvency, that is to say, the entire amount of ,said collections, less the amount aforesaid of said, two, checks. The further statement of the defense, as it appears in the answer, is-
"That, for a considerable period of time inclUding the 20th day of June, 1887, there existed hetween the said two banks. by agreement, a mutual account as will appear, by th,e books of each. The defendanh in the course of business between the two banks, and as clIstomary'between sU'cllbanks, and in pursuance of said agreement. made collect.ions for and on account of the Fidelity National Bank, at its reguest. and, from tilae to time, with its consent, placed the proceeds of such collections to thecltedit of the F.idelityNatiollill Bank onitsbouks, and the defendant also, in the usual course of business between s"id t\\'o banks. and in pursuance Of, said ag"'eement, and as customary between such banks. charged on its books,to the Fidelity National Bank, with its consent and against any credits on bqoks. allY and all enecks received and cashed 'by defendant, drawn by said two corporations and other parties; on said F,idelityNatio!lal Bank. and the, halances .were settled be-:. tween said nationa.! banks frulD tifieto time, interchangeably, drawn on by the creditor bank, ur by draft whenever the creditor bank so directed. And the defendant avers that the two checks aforesaid were rAceived, cashpd, and credited in pursuance of the arrangement; agreement; and business custom aforesaid between said two banks, ll.nd in the due courSe of business between them."
The averments of the answer as to the arrangement and usual course of businsss and custom between the two·banks are' put, in issue by the
ARj'4STRONG 11. SECOND NAT. BA.NK.
reply. The certificate of authorization was issued to the Fidelity National Bank by the comptroller of the currency on the 27th of February, 1886, and the bank commenced business March 1, 1886. The directors and officers were elected February 9, 1886. Shortly after that date, and 'prior to the issuing of the certificate of authorization, Edward L. Harper, vice-president elect of the bank, made what is termed in the answer an agreement with the defendant bank by its president. It was a rather general arrangement and understanding to the effect that the defendant bank should keep an account with the Fidelity, that it should cash at its banking house at Springfield check.s there presented by Fidelity deand have .credit for them positors, resident at Springfield, and in with the and tha.t it make coll.ections for the FIdehty, and remIt balances from bme to tIme, substanbally as set up in the answer. When the witness who testified to this arrangement was asked what was the stipulation or understanding with-reference to any check cashed by the defendant, the no balance to his-credit in the Fidelity or a balance insufficient to meet the check, the answer was that no such case ever occurred; and so far as the, testimony disclosed, no such case was provided -for by the arrangement. After th.e Fidt\lity was authorized by the comptroller of the currency to commence the business of banking, no express arrangement was made" but the business was carried on between the two hanks substantially in accordance with the understanding flS testified to; that is to say, the defendant charged up checks to the Fidelity when it cashed them, and the Fidelity credited them when and as of the date it received them, no case arising which presented the question what should be done when a check had been cashed by the defendant for a depositor who had not funds in the Fidelity Bank sufficient to meet it. The ciifficulties in the way of the defendant under its defense ,are to be found both in the facts and in the law. In the facts, inasmuch a's upon the question which is vital to the defense,viz., Who should bear the lossifthedeft'ndant cashed a check for which there was 110t sufficient funds in the Fidelity? there is. no stipulation or agreement. In. the ab;;ence of a distinct understanding on this point, the charge against the Fidelity Bank and credit to itself by the defendant of the amount of the .check cashed would be provisional merely, and sllbject to be corrected if the check was dishonored. The testimony relating to the custom between the banks was not sufficient to establish any rule or practice to the contrary. The difficulty in law is twofold. The last clause of section 5136, Rev. St. U. S., which relates to the corporate powers of banking associations, provides that "no association shall transact any business ex.cept such as is incidental and necessarily preliminary to its .organization, until it has been authorized by the comptroller of the .currency to commence the business of banking." From this provision it;results that the arrangement, whatever it was, between Mr. Harper, as vice-president 'of the Fidelity Bank, and the defendant bank, made beiore the date of: the certificate of authorization, has no force and cannot be taken into .acco.unt.
If, now, we turn to section 5190, of the United States Revised Statutes, we find it enacted that "the usual business of each national banking association shall be transacted at an office or banking house located in the place specified in its organization certificate." Under this section it certainly would not be competent for a national bank to provide for the" cashing of checks upon it at any other place than at its office or banking house. Whatever risk there Was ill the defendant's business of cashing of checks upon the Fidelity devolved, therefore, necessarily upon the defendant, and not upon the Fidelity. So far as the Fidelity was concerned, the checks were not cashed until they were presented and accepted at its, banking house. They were not so presented until the morning of the 21st of June, after the bank had passed into the, control of a government officer, and after insolvency of the bank had made it unlawful under section 5242, Rev. St., to either cash the checks on account of the defendant, or to gi\"e the defendant credit for them. The questions wbich were argued with reference to the defendant's answer, treatingit as aooullter-elaim, or regarding it in the nature ofa counter-claim, are covered, in the opinion of the court, by Armstrong v. Scott, 36 Fed. Rep. 63. ,The judgment ,will be for the plaintiff for the amount claimed, with interest.
GoULD ". HEAD
May 81, 1889.)
(Circuit (Jourt, D. (Jolorado.
.AJo:nrcAN CATTLlIl TRUST-CORPOnATIONS.
The American Cattle Trust, a voluntary association organized fn New York to c,on,tr,01 corpora,tions, en,gag,edin,live-stock business, having obtained the stock of the Phcenlx Farm & Ranch Company, a New Mexico corporation, has no power to sell or in any manner alienate'such stock, as such an act is incoDl>istent with the,purposes of its'ereatioa. "
(8zI11abm by tJi8 ,(Jourt.)
In Equity. Bill for injunction. Rogerl1 & Cuthbert, for complainant. Hugh Butler, for defendants. HALLETT, J. This controversy relates to the capital stock oftbe Phrenix Farm & Ranch Company, a corporation organized under the laws of the, territory of New Mexico. Complainant obtained the stock of the American Cattle Trust, a voluntary association 'of 13 persons made in New York on the 5th day of January, 1887. At the hearing Of the 1110. tion. for injunction defendant Head made affidavit that he was unable to produce the articles of association of the American Cattle Trust, and gave his recollection of the nature of the organization, from which it appeared that it received the stockas trustee for the original owners, and was with-