442

94 FEDERAL REPORTER.

have no greater rights in respect to the lands in suit than has that company is also shown by the decision in D. S. v. Southern Pac. R. Co., 86 Fed. 962, and cases there cited. A decree will be entered in accordance with the 'views above expressed.

RICHARDSON v. LOUISVILLE BANKING CO. OF I,OmSVILLE, KY. (Circuit Court of Appeals, Fifth' Circuit. No. 813.
1.

BANKS AS CORRESPONDRNTs-Cor,LlwTIONS-CONTIlACTS.

May 16, 1899.)

In response to letters sOliciting' an acc<mnt and making an offer of servIces .for the care. of business in its, neig)J.borhood, a bank wrote, "If we understand your proposition, you agree' that you will take from us. all items on [neighboring statesj, crooiting our account with the total of our letter on receipt at par; and remitting New York at par the year round on our in excess of . Th\lco:rrespondent wag directed to advise of collections by collection number of the remitting pank, so that they could ,be checked without difficulty, . Each letter of advice contained the passage: "I inclose for collection and Please advise collection by number, and return immediately if not honored." The list of items frequently .directed proteflts, which directions were followed. and immediately' on such protest. the amount of item alld protest fees were charged back to remittip.g "WLnk. Some iteUls "lYere charged with the note "Held," probably meaning held for futuredt.rection. Of many of the items the remitting bank was the mere mandatary for collection. that the c(Jntract was one for collectionof}¥e forwarded, and not of purchase, and the forwarding bank was ,entitled to all items not collected before.suspension of the. ,collecting bank,. and afterwards collected by sub· agents, and traced to of the.:t;P'Ceiver to wind it up. Where it is not shown that a certain col,lection rpade by a receiver of an insolVent national bank was forwarded by a correspondent of the bank, nor included in the list of items sent. it is nQt sufficiently traced; and this thOllgh the Jeceiver testified that the item was collected for the forwarding

2. NATIONAL BANKS.-COLLECTIONS-I;oENTITY;OFFuNDS.

3.

NATIONAL BANKs-REcErvERS-PAYMENT OF IN1'EHEST.

An order di'recting payment of interest by the receiver. of a:national bank from date of judicial demand is erroneous, as funds coming into the hands of a receiver' are turned over the comptroller. and could not earn interest, and any payment .of interest would necessarily be taken from some other trust fund; and this particularly' where the involved circumstances of the case made it impossible to pay over the amount without investigation and an aecounting. A decree which commands .the receiver of an insolvent national bank to pay over a large sum of money within 10 days, where, as a matter of fact, arid in accordance with law, the funds are in the custody of the comptroller of the currency, unduly limits the time for satisfying the decree, and might result in the receiver being in contempt for not paying over moneys Which are not wIthin his control..

"S.

RECErvEHs-DECREE- UNDUE LIMrTATIoNS.

.Appeal from the Circuit Court of the United States for the Eastern District of Louisiana.
On the 5th of March. 1895, the American Kational Bank made a written proposal to the Louisville Banking Company as follows: "Gentlemen: As we have not the pleasure of an account from you, and being in a position to serve you to our mutual advantage, we beg leave to offer

RWHAIWSON V. LOUISVILLE RAl\KI:'\G CO.

443

you our 'Pest services for the care of any business you have in this secti()ll, assuring yoU of our very best attention to your interest. If you will carry an average balance with us of $10,000,' we will take yoUI' items on Louisiana, Mississippi, Georgia, Alabama, and' Texas, crediting your account with total O;f on receipt at par, remitting New YOrk as directed at the same rate theYeat round. On balance in excess of $10,000 we will allow 3% per annum interest. A-\vaitlng the favor of your views on the above. we are, ·W. W. Girault, Cashier." "Yours, very truly, ":.\'1arch 7, 1895. "W. W. Girault, Esq., Cashier American National Bank, New Orleans, La.Dear Sir: Your favor of the 5th inst. is received, and contents carefully noted. In reply, we beg to say that for some years past our UJuisiana business has been handled for us by the Union National of your city. The Lnion National has treated us with great liberality, but we have never enjoyed the advantages which I understand your proposition to offer us. 'Ye would not wish to maintain a balance in New Orleans upon an interest hasis, but, if we understand your proposition, you agree that you will take from us all items on the states of Louisiana, :.\lississippi, Georgia, Alabama, aud Texas, crediting our account with the total of our letter on receipt at par, and remitting New Yot'k at par the year round on our balance in excess of $10,000. If we understand from this that you would remit our balance daily direct to our Xew York correspondent, advising us of the alllount remitted, in excess of $10,000 to be maintained in your hands, it is a proposition which we .are ready to seriously consider. If this is the proposition, therefore, you mean to submit to us, will you he kind enough to state it to us in distinct terms, and Whether, if we enter into suchan agreement, we may consider it in the nature of a contract to be binding for not less than one year. 'We would not care to disturb the very pleasant relations we have now existing, if for any cause they were liable to be disturbed after a short trial of your proposition might be put into effect. Of course, there are some points in all the states you name where we have reciprocal'relations, and which we will continue to hanrlle' as we do now, but your proposition would be very useful to us, and would enable us to concentrate a great deal of zigzag channels. John H. Leathers, Cashier." "Yours, truly, "American National Bank. "New Orleans, March 9th, 1895. "John H. Leathers, Esq., Cashier, Louisville, Ky.-Dear Sir: Replying to your esteemed favor of the 7th inst., our proposition of the 5th inst. is intended to cover the period of one year, and, if mutually satisfactory at the end of that time, will be happy to extend again. On balance in excess of $10,000, we will allow you R% per annum interest; but, if you do not care to carry a balance above that amount, we wlll make daily remittance of your balance over $10,000 direct to your Kew York and advise you. We have extended you a very liberal par list, and I am sure can transact any business that you might be pleased to intrust to us in a manner that will meet with your eptire satisfaction. Hoping to hear from you favorably, we are, "W. 'V. Girault, Cashier." "March 11, 1895. "\V. W. Girault, Esq., Cashier American National Bank, New Orleans, La.Dear EliI': Your favor of the lcHh is received, anll contents fully noted. In reply, I beg to say that we accept the proposition so contained in the 5th inst., and to cover the period of one year from this date, to be continued at the end of that 'time if mutually satisfactory. 'Ve commence sending you to-day on the basis as proposed. \Ve will thank you to remit your balance dally, at least for the present, in excess of ten thousand dollars, which amount we are to carry with you, to the Hanover National Bank of New York; advising us daily of the amount remitted. We will ask to be good enough to instruct the proper depa'rtment in ;rour hank to carefully advise our collections by our number, that The following correspondence ensued:

444

94 FEDERAL REPoRYrER.

weJ,llayhave no difficulty In checking them prOperly. The service you pm[JOfle tOl,'ender Is certainly a very liberal one, and ,we trust that youwlll be able to do 'So with profit and pleasure to yourselves;' and we very cheerfully agree to maintain the balance of $10,000 In your hands, in view of the service you offer us. Trusting that the arrangement may be mutually profitable, pleasant, and satisfactory, we are, John H.Leathers, Oashier." The two bani,s did business under the contract Included in the foregoing correspondence, without any change or modification, for the period of one year, during which time the Louisville Banking Company forwarded items invariably with the following direction: "American National Bank, New Orleans. La.-Dear Sir: I inclose for collecPlease advise collections by number, and return immediately tion and I if not honored." On receipt of which the American Bank gave credit on its books to the Louisville Banking Company for the total sum of the items forwarded, and remitted daily.the balance on its books to the credit of the Louisville Banking Company in excess of $10,000. In the month of March, 1800, the two banks modified their contract, as 81l0WV by the fo,lowing correspondence: . Anlerlcan National Bank. "New Orleans, La., March 14, U!H11 "John H. Leathers, Esq., Cashier Louisville Banking Company, LOUisville, Ky.-Gentlemen: Replying to your favor 12th inst. 'Ve regret exceedingly that our proposition of the 9th inst. does not Jlleet your views, in the matter of continuing your account. 'We appreciate the business you send us very highly indeed, and are Unwilling to have it diverted to other channels;. but many of the points you send us <'Ost us exchange now, and we thought a weekly remittance of your entire balance at a fair rate would be satisfactory. At any l'2.te, we want you to stay with us,' and are willing to continue on the old basis. except, instead of daily we will remit weekly at par. Hoping this will settle the matter to satisfaction, we remain, "Yours, truly, W. vV. Girault, Vice President." "Mar. Hl/oo. "W. VV. Girault, Vice President American National Bank, New Orleans, La.Dear.Sir:Your favor of the 14th just received, and contents noted, and the proposition you now submit is entirelJ' satisfactol'J'.. vVe do not desire ourselves to make any change In our New Orleans account, but you understand, of course, we have to make the very best arrangements we can, because, as we have said before, competition in the bllnldng business l:\as t.hrown the doors wide open, and we have been compelled in self-defense to make the Qest arrangements we can. Under the slime arrangement as lilst year; you remitting our balance at par once a week instead of daily, all in excess of $10,000, which average balance we are to maintain In your bands, and we to have the option of sending you as we have been doing. vVe might suggest this to you, which we will be very glad to do, and may be of some service to you: 'Ve will use for you in whole or in part exchange on LOUisville, C'incinnati, Chicago, and St. Louis. and you can use exchange on these points in place of l'Iew York whenever it may be convenient for you to do so; and probably at times this arrangement may be of advantage to you. We wish to say furtlJermore that, where we have ·dealings with a bank, we want to have them not only mutually profitable, but pleasant at the same time; lind we will be really at all times t.o help you in any territory we may he able to handle for .you, possibly on better terms than you may now enjoy. 'Ve recognize the fact that you are doing a great deal for us In the territory you propose to handle for us. At the same time, we hope that with an average balance of $10,00Q in your hands, and our offer to give you the option of remitting us our balance above t.hat amount in the various cities named above, once a week, that. it will compensate you. \Ve trust that it will be agreeable to you to have it unllerstood that this new arrangement continue in force for one ;,year. \Ve ask this because we like to feel

RICHARDSON V. I,OllISVII,LE BANKING CO.

445

settled in our arrangements with corresponding banks, and not feel that any day we may receive notice of its discontinuance. You can make any time in the week you please. ·We should be glad, however, to have the day you will remit definitely fixed. "Yours, truly, John H. Leathers, Cashier." "American National Bank.' "New Orleans. La., March 18, 1896. "John H. Leathers, Esq., Oashier Louisville Banking Company, Louisville, Ky.-Dear Sir: Yours of the 16th inst. to hand, and it is with pleasure that we note that we are still to be favored with your account. This new arrangement, entered into 16th, we are willing to contil/.ue for one year from that date. \Ve note that it. suits you just as well to receive our check on certain cities on New York, and this will [be] quite a convenience to us, and we are quite sure the business between us will be mutually satisfactory. Monday is tile day we have selected to remit your excess balance, and, unless you prefer some other day, we will make :\Ionday the day. "Yours, truly, ·W. W. Girault, Vice President." "March 30, 1896. "\V. W. Girault, Esq;, Vice President American National BanI;:, New Orleans. La.-Dear Sir: Your favor of the 18th just received. and contents noted, and all right. The day you have selected to remit our excess balance is perfectly satisfactory. vVe untie [unite] with you in the hope that, with the modifications made in the old contract, our future relations will be mutually profitable and pleasant. "Yours, truly, John H. Leathers, Cashier." The two banks continued to do business under the modified contract from March, 1896, to the of the suspension of the American National Bank, which bank closed its doors at :5 p. m. August 5, 1896, and never afterwards opened them for business. It announced its suspension by posting a notice thereof on the doors early in the morning of the following day, Augu;;t 6, 1896. The same day, by direction of the comptroller of the currency, Edward 1. Johnson, bank examiner, took possession of the books, assets, and property found in the bank. Subsequently the appellant, as receiver, took possession of the bank's property; receiving all sums that the bank examiner had collected in the interim. At the time the American National Bank closed its doors. it had received from the Louisville Banking Company various items in remittances of recent date, all of which had been credited on the books of the American National Bank to the Louisville Banking Company, but which items had not been collected by the bank and the proceeds thereof mixed with its funds. Many of these items were afterwards collected by the examiner an<l other collection agencies, and came to the hands of the receiver. The present suit is one to charge the receiver, as the trustee of the Louisville Banking Oompany, for all the items transmitted tbe said bank to the American National Bank, which items at the date of the suspension of the American National Bank had not been collected by the said bank, but which were afterwar<ls collecte<l by the receiver; the same never having been mixed in, or become part of, the funds of the American National Bank, and now subject to full identification. The court below recognized the equity of the L()uisville Banlting Company's demands, and, after lengthy investigation, and hearing of much evidence, rendered a decree, as shown by the amended record, as follows: "This cause came on to be heard on the pleadings, exhibits, and evidence adduced, and was argued by counsel, whereupon, and on consideration thereot, the court being satisfied that the relation of principal and agent existed between the complainant and the American :Xational Bank of New Orleans; that said American National Bank was hopelessly insolvent, and that to the knowledge of the managing officers, the president and cashier, of said bank, on or before July 1, 1896; that said American National Bank was guilty of fraud ·in accepting the collections of complainant transmitted in said complainant's letters of ,Tuly 25, 27, 28, 29, 30, and 31, and August 1 and 3, 1896; that complainant has traced the items for the collections therein set forth to the hands of the

446

,1)41 FEDERAL "REPORTER. "

.defendant, "tI1e l'eeeivtm,' and. that' the same '. have' come. into; the possession of the ,said receiver, ,as -follows!, to' wit: Items on points 'but of' New Orleans 'sendor'collection In complainant's of AllglIst 3, 1896, collected by the .examiner in charge, through tIie Louisiana National Bank, amount.·· :····· ··· ; .., ·.·. ,: ···· , .. .', ············ $ 4,55896 ing to Items remitted froJ+l sundry banks to examiner after failure. . . 1,5&1 59 Items in complainant's letter of July 31st, August 1st, and 3d, collected through the 'examiner,and turnM on New over to the defendant as. receiver, inclUding a United Statel! treasury draft for $55;aIDounting to , . . .. .. . . . . . . . 986 63 Items collected by the batik examiner' and said receiver through 1,324 89 W. L. Moody & Co., atnounting to......................... Items collected' by the' bank examiner and said receiver through " the Farley National Bank of Montgomery, Ala., amount to. . 1,827 53 Items collected by the bank examiner and receiver through the 1,045 97 Fourth National Bank (J.f Atlanta, Ga., amounting

to....... .

All of which came into the hands of the receiver, amounting in the aggregate. to the SlIm of '."f $11,328 57 : ·-And that said amount of $11,328.57 constituted and is a: trust fund In the hands of the defendantteceiver as trustee for the: complainant, and that the complainant is entitled to be paid the same, with interest, out of the funds which came into the hanasof· the defendant as such'receiver: It is therefore ordered, adjudged, and decreed that the complainant have and recover from the defendant, F.L. Richardson, receiver of the American National Bank of New Orleans, the sum of $11,328.57, wi,th)nterest at five per cent. per annum from the date of the filing. of the bllI' or clnnplaint herein, together with all. costs, which is decreed to be paid -within ten days by prJority: 6>:er all uhsecured creditors; that for the balance of cOlDplainant's claim, to wit, $26,967.86, complainant be, and is hereby; recoglllze4 as a general creditor, entitled to participate pro rata with the depositors and other general credlt<!rs of said American National Bank of NewOrIeans ,ill. thedjstribution of Its assets, and it is ordered, adjUdged, and decreed that sai(1'defend:liht i'ecei"er pay to complainantsnch pro rata thereof has been or may .paid to other ..creditors:of said American National Bank.'" . . I,. .
H,' ,

".

F. N. Butler, for appel'ant.. ... E. M. Hudson, John D. Rouse, and Wm. Grant, for appellee. Before PARDEE, and SHELBY, .Circuit Judges. . After stating the facts, the opiniqp. of the c9urt was delivered :by PARDEE, Circuit Judge. 'I.'he main contention on this' appeal relates to the construction of the corresMndence. passing between the two banks in 1895. The appellant, receiver of the American National Bank,eontends that under the contract,' as f;hown by theoorrespondence, whenever an item was remitted by the Louisville Banking Company to the American National Bank, and by, that bank received and credited to the account of the Louisville Banking Company,saiditem then and there became the property, by purchase, Of 'the. illnedcan National Bank, and that the resultant relation between that bank.and the Louisville Banking Company was solely that of debtor and cred'itOI'. On the other hand, the is that the correspondence was with the view to collections of commercial paper, and the arrangements made provided only for the collection of such items as

RICHARDSON V. LOUISVILLE BANKING CO.

447

should be remitted by the Louisville Banking Company to the American National Bank, and that when the American Kational Bank became insolvent and closed its doors the mandate for collection was withdrawn, and the Louisville Banking Company became entitled to the return of all the items which had not been collected by the American National Bank. It is be noticed that the first letter, written by the American National Bank, was inviting an account, and making an offer of services for the care of any business that the Louisville Banking Oompany might have in the New Orleans section. It is very far indeed from a proposition to purchase from the Louisville Banking Company all such items of checks and commercial paper as the said banking companJ' might have in that locality. That the Louisville Banking Oompany had in mind solely the matter of collecting items as it might have in the New Orleans loeality fully appears from its letter of March 11, 1895, which, among other things, contains this passage: ''We will ask you to be good enough to instruct the proper department in your bank to carefully advise our collections by our number, that we may have no difficulty in .checking them properly." The arrangement for business provided for in the letters is entirely consistent with the theory that the provisions related wholly to a matter of collection, and it is inconsistent with any theory that it was a matter of sale and purchase which was in contemplation of the parties. The course of business between the two banks also shows clearly that the arrangement between· the parties was understood to be one for collection solely. Each letter of advice forwarded by the Louisville Banking Oompany Pleasp, contained this passage: "I inclose for collection and advise collections by number, and return immediately if not honored." The list of items as forwarded frequently contained instructions with regard to the protest, or waiver of the same, of specific items; and the books of the American National Bank show that, immediately on protest of any item, the item itself and the protest fee were charged back to the Louisville Banking Company; and in some instances items were charged back with the simple note "Held," probably meaning "held for further direction." Another fact to be noticed in this connection is that for a large portion, if not all, of the items forwarded, the Louisville Banking Oompany was not the owner of the same for sale, or with power to sell, but was the mere mandatary for collection. Oounsel for the appellant ,bases his entire argument upon the language used by the Louisville Banking Oompany in its letter of }farch 7, 1897, as follows:
"We would not wish to maintain a balance In New Orleans upon an Interest basis, but, If we understand your proposition, you agree that you will take from us all Items on the states of Louisiana, Mississippi, Georgia, Alabama, and Texas, crediting our account with the total of our letter on receipt at par, and remitting New York at par the year round on our balance in excess of $10,000."

-And argues therefrom that the American National Bank was compelled to take at par all the checks, notes, and drafts on persons or corporations in Louisiana, Mississippi, Georgia, Alabama, and Texas that the Louisville Banking Company should send, and that the American National Bank was obliged to pay the Louisville Bank-

448;

. 94

REP9l:l'rER.

ing Company for said checks, etc.) on receipt .of said items, and says that:
·"If an agreement on the part of the American· National Bank to take the checks, notes, and drafts jn controversy from the Louisville Banking C<Jmpany at par, and to pay the f)lll face value tqereof to the New York correspondent of the Louisville Banking Company,· on TIlceipt of said items, or within one week {hereafter, is not a contract of ste, which passed the title of those items to the American National Bank, we fail to appreciate what constitutes a contractof13ale. One of the parties ag'l'ees to sell a thing for a fixed price, and the other promises to buy the thing at the price agreed upon, or to pay for it upon delivery, or within a weel, from that.time. All the essential elements of a contract of sale are thus contained. in said agreement, while the conditions of a contrac-tof agency are wanting;" .

'Ve do not think that'any such effect can be given to the clause referred to, and the promise and agreement to take all such items, erediting the account and forwarding at par, cannot be understood as contracting that the taking was by purchase; but the whole tone and purport of the letter are rather to the effect that the word "take," in that connection, meant to handle, collect, look after. "Checks deposited and credited as I cash do not become the property of the bank, SQ that it takes the risk upon itself, even though the depositor has been allowed to check against the deposit before the paper is collected; and the depositor can recover the check or other paper, if it is still in the possession of the depositary." Morse, Banks (3d Ed.) § 586; Beal v. City of Somerville, 1 C. C. A. 598, 50 Fed. 647. See Newm. Bank Dep. p. 211, § 209. See, also, Balbach v. Frelinghuysen, 15 Fed. 675. As we construe the contract between tke parties to be one relating. to the collection, and not the purchase, of the items fOfwarded, the case is controlled by Bank v. Armstrong, 148 U. S. 50, 58, 13 Su,p. Ct. 533. See, also, Evansville Bank v. German-American Nat. Bank, 155 U. S. 564, 15 Sup. Ot. 221. And the complainant bltlow was entitled to a decree for all items not collected by the American· National Bank before suspension, and afterwards collected by subagents, and to the possession of the receiver. The appellant also contends that many of the items allowed for in the decree appealed from have not been sufficiently traced to identify the amounts ill'! coming to the hands of the receiver. In regard to this we have ll1lde as 'fulIan examination as the importance of the case warranted, and find· that the objections to none of the items allowed are well founded,except in regard to certain checks which were collected by Attorney Denegre on the 6th of Auglli!t, aggregating $931.63,which were put in a seplu'ate envelope, and were turned over by nepegre to Examiner JohnsQn, and by Johnson handed intact to the'receiver. In the testimony of Johnson, one item 011 the Louisiana National Bank of $135 was for account of complainant, the evidellce does not shoW that any such item was forwarded by the Louisville Banking Company, and it is not mentioned in any list of items the Louisville Banking Company to the American National Bank. We think that this item is notsnfficiently traced, and it shoula not have been included in the decree of the court below.

RICHARDSON V. LOUISVILLE BANKIJIOG CO.

The decree of the court below allows interest against the receiver from judiCial demand. We are of opinion that this was erroneous. The funds collected, coming into the hands of the receiver, turned over to the comptroller, could. not earn interest, and any interest to be paid thereon would be necessarily taken from some other trust fund. The involved circumstances surrounding the case made it improper, if not impossible, for the receiver to pay over the amount for which he is charged as trustee without an investigation and an accounting; and we think he was in no fault, but rather in the ful· !lllment of his official duties, in refusing to recognize complainant's demands until they were judicially determined. As a general rule in equity, trustees are not required to pay interest unless they a@ in fault in the management of the trust fund, or have so used the trust fund as to earn interest. An objection is .made to the form of the decree rendered in the court below, in that it commands the receiver to pay over to the complainant a certain large sum of money within 10 days, when, as a matter of fact, and in accordance with law, the receiver is not in personal custody of the funds in question, but the !'lame are in the hands of the comptroller of the currency. The effect of the decree, as rendered, might be that the receiver would be in contempt for not paying over moneys which are not within his control. See. Mel'" rill v. Bank, 41 U. S. App. 529, 21 C. C. A. 282, and 75 Fed. 148. Admitting these last·mentioned objections, the decree of the court below should be reversed, and the cause remanded, with instructions to enter a decree as follows: It is ordered, adjudged, and decreed that the complainant, the Louisville Banking C{)mpany. do have and recover from the defendant, Frank L. Richardson, receiver of the American National Bank, the sum of $11,193.59, which said receiver is ordered to pay, out of the funds which have come to his hands as receiver, within 30 days from the signing of this decree, and by priority over all unsecured creditors of the American Bank, or that he do within said delay certify the same to the comptroller of the currency, with a copy of thi!'l decree; and it is further ordered and decreed that for the balance of complainant's claim. to wit, the sum of $27,102.86, the said banking company be, and is hereby, recog· nized as a general creditor, entitled to participate pro rata with the depositors and other general creditors of said American National Bank of New Orleans in the distribution of its assets; and it is or· dered and decreed that the said defendant receiver pay to !'laid Louisville Banking Company such pro rata thereon as has been or may be paid to other unsecured creditors of said American National Bank, or do certify the same to the comptroller to govern his action in the premises. And it is so ordered.
94F.-29

450

94 FEDERAL REPORTER.

OF '(Circuit Court of Appeals, FlfiliCiJ.'cuit.' May 16, '1899.)
;;..,

TENN.

;,:;,

BANK'S

I 'i' :

Ancagreement two banks, by' 'Which one agrees' 'to ',"hanqle" the , ,itlmllJ,,:pf and ,cpmmercial paper of the' otherwlthina certain territorY" crediting the 'f!,qlPunt of, sucl:/.;items tq the account of; the other on receipt,.andunder which tb,e sending bank transmit!l suchitem!l as collections,Indorsedpayable to "a:ny naUpnill or state bank," with directions to protest and: return if unpaid,' is an agreement for the making of collections only; and not of paper, and does not create the the two banks as to items received and credited, but uncollected, at the time, of the failllre ,of, the receiving any such, items,or their, proceed:>, which 'can, be identified as h8.v1ng come into the,Mnds of its receiver, maybe recovered by the send' ing bank.
i . .:

ik

Appea;lfr9n;l,the pourt ern District, pfLouisiana.( ,

,:,'/!:,

,j

,

)'

,',

:.'

"j:

United States fOr the East-

..

The object of tblssuit is to recover the proceeds of a large ,number of checks, notes" denominated, "items between July 31 and August 4,'1800, Py, the lIrJ;lpe,llee, complainant, to t11e AJl'lerlcaI,l,Natlolla} Bank for 'These proceeds, is averred,were collected after the ,faIlure of the insolvent-bank, 'and camle Into the hands of the receiVer" ,Q.ppellant. This is ;oot B. suit claiming any preference on the assets ,of 1;9.e in/ilolventbank, b1;1t simply for recovery 9f the proceeds of its failure, and certain ,Item's,Of, turned 'Ovel"I;to the receiV'erlater, of wpich asseJ;ted in thie by the below; 'appellee here. 'On AUgust 5, IS96, the American' National, Bank ,closed Its dilors at 3 'p. m.,and' never opened them again for 1Jusj,ness. The' ;f()llowlng day, by the comptroller of the currency, 1JJ4ward, I. Johnson" bank eXllminer;, took possession of the books, found,' the ,appellant qua.,lified assets, al'1'd, as receiver' lind toole possession 'of' 'the bank's property. The ,only arrangement eter entered into by the ,oomplainanf',and the Ainti!i'ica:n' National Bank, relacQur/le Of PUl3ineSS ,between, them, is embodied luand based upon' the tive '19 foll()wing two telegrams and complalnant's,letter, all dated July 31,IS00, to wit: Telegram. , ", " , , " M e m p h i s , July 31, 1896. , ,uTo Americ;ap.,National, Bank, New:Orlf,ans, La.: Have ,mislaid your recent terms handle our 0., La., and So. business. letter. ' Please write us May decide give you oUi" bUSiness immediately. , , ' , :, ,,' "0. F. M. Niles, President." Telegram. ' Orleans, La., July 31, 1896. "Continental 'National Bank, Memphis, 'ren;n.: Telegram, received. Will credit cash items on ,points named, also Texas, 'at par on receipt. Start the account. We will please you. ' American National Bank." Letter. "Memphis, Tenn., July 31, 1896. "American National Bank, New Orleans, La.-Gentlemen: I wired you this morning in regard to handling our account, and have received your wire, which Is satisfactory. We will commence sending you our business to-day, and hope you will be able to handle it satisfactorily, and that you will find the account a profitable one. 'We are obliged to send you a somewhat large item on Baton Rouge, but this will be an exceptional one, at least in amount, and I belieye