MASSEY 0. FISHER.
8, 1l:l91, the Spring Garden National Bank suspended payment, and its assets were taken possession of by the bank examiner, who on June 1, 1891, transferred them to Benjamin l<'isher, the receiver appointed for the bank by the comptroller of the currency. Among the other assets which came Into the hands of the bank examiner on the fallure of the bank was the sum of $34,042.73 In bills, silver dollars and fractional currency, which sum, less about $1,000 paid out by him for wages, etc., was turned over to the receiver. At no time between April 29, 1891, and the day on which it closed its doors, did the bank have on hand in cash iess than $24,000. On June 17, 1893, jUdgment was entered against the complainants In favor of the clearing-house committee, in an action Instituted by the latter for collection of this note, in court of conin:lOn pleas No.4 for the county of Philadelphia, of term, 1892, No. 881, for the amouut of $1.377.50, and this judgment, with interest and costs, was paid by the complainants November 9, 1893."
The pl<aintiffs claim. that the transaction established a fiduciary relation between the -parlies, while the defendant claims that it establislted the relation of and creditor only. If the question was new, its proper solution might be open to doubt. Even in such case however, I would adopt the plaintiffs' view. The money was delivered and received to extinguish the note. Neither party contemplated that the bank might use it for another leaying the note outstanding, and the plaintiffs' liability unexting-uished. Such application of it therefore, would be a violation of duty, and a fraud. But the question is not new; it arose, and was decided, in People v. City Bank of Rochester, 96 N. Y. 32. The facts there were substantially like those before us. It is true the check in that ease was drawn in terms, to pay the note. This, however, is an immaterial difference. It is as plain here as it was there that the mOMy was delivered and received to take up the note. In Peak v. Ellicott, 30 Kan. 156 [1 Pac. 499], tbe facts were identical with those l,efore us. In each of these cases it was beld that the transaction established a fiduciary relation between the parties. The bank having failed to apply the money to the note can it be recovered from the receiver? His Coounsel thinks not, because the bank placed the money in its vaults with other money of its OWll, whereby its identity was lost. Why should this wrongful act defeat the plaintiffs' right? Nobody is injured by allowing the plaintiffs to take the amount from the deposit. The receiver and credit· ors stand on no higher plane than the bank, and can no more assert that it was the bank's money than the bank could. It is true they are entitled to all the bank's properly; but this was not its property. It is not important that the plaintiffs' money bore no murk, and can· not be identified. It is sufficient to trace it into the bank's vaults, and find that a sum equal to it (and presumably representing it), continuously remained there until the receiver took it. The modern rules of equity require no more. Knatchbull v. Hallett, 13 Ch. Div. 696; National Bank v. Insurance Co., 104 U. S. 54; Bank v. King, 57 Pa. St. 202; Stoller Y. Coates, 88 Mo. 514; McBeod v. Evans, 66 Wis. 401 [28 N. W. 173, 214]; People v. City Bank of Rochester, n6 N. Y. 32; Bank v. Weams(Tex. Sup.) 6 S. W. 802; Harrison v. Smith, 83 Mo, 210; Beech, Eq. JUl'. § 2'85; Fisher v. Night, [9 C. C. A. 582,) 61 Fed. 491.
I have not o:verlooked Bank v. Dowd,88 Fed. 172. If that case can be. distinguished from Knatchbul1v. :aallett, as the judge who ,deCided it believes, then it can as readily be distingublhed from this. If it cannot, with all my respect ·for that distinguished judge, I Ulust disregard it There 1s a class of cases-to which Bank v. Beal, 49 Fed. 606, and Bank Y; Armstfong, 148 U. S. 50 [13 Sup. Ct. 533], belOJig-in which it is held that although the relations of the parties there involved, were in the beginning fiduciary, they ceased to be so when the agent commingled the money with its own. These, however, were cases where commercial p.aperwas delivered for collection and credit, and where the collection and credit consequently terminated the agency. The commingling and use of the money were in pursuance of the understanding; and upon this construction of the transaction these decisions test. The distinction is noticed in Knatchbull v. Hallett, 13 Ch; Div. 702. The bill is therefore sustained and a decree may be drawn accordingly.
AMERICAN 0$: GENERAL MORTG. & INV. CORP., Limited, v. MARQUAM et at (Circuit Court, D. Oregon. August 13, 1894.) No. 1.
Bill by the American & General Mortgage & Investment Corporation, Limited, against U. S. G. Marquam and others, to foreclose a mortgage. Snow, for plaintiff. Milton W. Smith and U. S. G. Marquam, for defendants. BELLINGER, District Judge. This is a suit to foreclose a mortgage to secure promissory notes made by Marquam and wife and Campbell. On April 5, 1890, Campbell owned the entire mortgaged premises, and on that date he conveyed an undivided one-half thereof to Marquam. On April 10th following, Marquam conveyed an undivided one-half of his undivided one-half to Livingstone; and, on June 25th, Livingstone reconveyed the same to Marqua:m. About June 28, 1890, Marquam and wife and Campbell executed the mortgage in suit, to the. tract, to the complainant, to secure their promissory notes for $5,500, to become due July 1, 1893. On Sep-