author: Mr. Chief Justice TANEY

text:
    Samuel L. Forgay and Eliza Ann Fogarty, Wife of E. W. Wells, Appellants, v. Francis B. Conrad, Assignee in Bankruptcy of Thomas Banks.
    A decree of the court -below, that certain deeds should, be set aside as fraudulent ' and void; that certain lands and slaves should be delivered up to the complainant ; that one of the defendants should pay a certain sum of money to the complainant ; that the complainant should, have execution for these several matters; that the master should take an account of the profits of the lands and slaves, and also an account of certain money and notes, and then said decree concluding as follows, viz. “ and so much of the.said bill as contains or relates to matters hereby referred to the master for a report is retained for further decree in the premises, and so much of the said bill as is not now, nor has been heretofore, adjudged and decreed upon, and which is not above retained for the purposes aforesaid, be dismissed without prejudice, and that the said defendants do pay the costs,” — Was ' a final decree within the meaning of the acts of Congress, and an appeal from it will lie to this court.
    But a decree that money shall be paid into court, or that property shall be delivered ' to a receiver, or that property held in trust shall be delivered to a new trustee appointed by the court, is interlocutory only,- and intended to preserve the subject-matter in dispute from waste or dilapidation, and to keep it within the control of the court until the rights of the parties concerned can be finally adjudicated. From such a decree no appeal lies.
    ■The attention of the Circuit-Courts, is called to the propriety'^merely announcing their opinion in an interlocutory ord,er, and withholding a decree setting aside tivy ties and conveyances until the case is ready for a final decree.
    The difference between the English and American practice upon this subject explained. .
    Wnere the defendants claimed separate pieces of property, conveyed at different times by separate conveyances, and the decree against them was several, it was not necessary for all to join in an appeal.
    This was an appeal from the Circuit Court of the United States for the District of Louisiana.
    The facts in the case are set forth in the opinion of the court. ,

      Mr. Sergeant moved to dismiss the appeal, because the decree of the, court below- was not final, and because the appeal was not regularly brought up. On. the second point, he said .that there were several defendants, one only of whom had appealed. Rut all the parties must join. 7 Peters, 399. He referred the court, however, upon this point, to Todd v. Daniel, 16 Peters, 521. A case must not come up in fragments. 3 Peters, 307 ; 3 Dali. 188.
    To show that the decree was not final, he referred to The Palmyra, 10 Wheat. 502; Chace v. Vasquez, 11 Wheat. 429; Brown v. Swarm, 9 Peters, 1; Young v. Grundy, 6 Cranch, 51; Rutherford v. Fisher, 4 Dali. 22 ; Lea v. Kelly, 1 Peters, 213 ,- Young v. Smith, 12 Peters, 287.

      Mr. May, contra.

    Against the motion to dismiss, it is submitted,, — -
    1st. There are proper parties to this appeal.
    The appellants have separate and distinct interests, and the decree is several. Todd v. Daniel, 16 Peters, 523; McDonough v, Dannery, 3 Dallas, 188, ,193,198..
    On order of. court. The petition for an appeal by appellants alone is found in the record, p. 198. This was notice to the Other defendants below of the appeal.
    2d. The decree is final.
    It decides, the title of all the property in dispute, decrees that it be delivered up to the complainant, and that execution issue, &c. Wilson v. Daniel, 3 Dallas, 404. The whole law of the case, so far as the appellants are concerned, is settled by the decree; nothing is left to. he done hut the ministerial duty of stating an account, which in this case is in the nature of an execution to carry out the decree; the principles of.the account are .prescribed. It is like the case of Ray v. Law, 3 Granch, 179 (explained in 10 Wheaton, 503). Whiting v. Bank of the United States, 13 Peters, 15.
   Mr. Chief Justice TANEY

delivered the opinion of the court.

A- motion has been made to dismiss this appeal, upon, the ground, that rthe. decree in the Circuit Court is not a final decree, within the meaning of the.acts of Congress of 1789 and 1803.

The bill was filed by the appellee, as the assignee in bankruptcy of a certain Thomas Banks, in the Circuit Court of the United State? for the District of Louisiana, against the appellants, and Banks the bankrupt, and three other defendants. The object of the bin was to set aside sundry deeds made by Banks for lands and slaves, which the complainant charged to be fraudulent, and for an account of the rents and profits of the property so conveyed; and also for an aceount of sundry sums of money which hé alleged had been received by one or more of the defendants, as specifically charged in the bill, which belonged to the bankrupt’s estate at the time of his bankruptcy.

. The case was proceeded in until it came on for heating, When the court passed a decree declaring sundry deeds therein mentioned to be fraudulent and void, and directing the land® and slaves therein mentioned to be delivered up to the complainant, and also directing one of the’ defendants named in the decree to pay him eleven thousand dollars, received from the bánkrúpt in fraud of his creditors, and ‘(that the complainant do have execution for the several matters aforesaid, in conformity with law and the practice prescribed by the rules of the Supreme Court of the United States.” The decree then directs that the master take an account of the profits of the lands and alavés ordered to he delivered up, from the time of the filing of the .bill until the property Was. delivered, or to the date of the master’s report, and also an account of the money and notes received by one of the defendants- (who has not appealed) in fraud of the creditors Of the bankrupt, and concludes in the following words: *— “ And so much of the said bill as contains or relates to matters hereby referred to the master for a report is retained for further decree in the premises 5 and so much of the said bill as is not now, nor has been heretofore, adjudged and decreed upon, and which is not above retained for the purposes, aforesaid, be dismissed without prejudice, and that the said defendants do pay the costs.”

Among the deeds set aside as fraudulent is one from the bankrupt to Ann Fogarty, otherwise called Anp Wells, for two lots in the city of New Orleans and sundry slaves which she afterwards'conveyed to Forgay, the other appellant. Both of these deeds are declared null and void, and. the lots, with the improvements thereon, and the negroes, directed to be delivered to the complainant for the benefit of the bankrupt’s creditors. This part of the decree is one of the matters of which the complainant was to have execution. But the account of the rents and profits of this property is, like other similar accounts, .referred to the master, and reserved for further decree.

The appeal is taken-by Samuel L. Forgay and Ann Fogarty, otherwise, called Ann Wells; . and they alone are interested in that portion of-the decree last above mentioned. The bankrupt and the three, other, defendants have not appealed. These three defendants claimed other property, which had been conveyed to them at different times and by Separate conveyances, as mentioned in the proceedings. And it Was not, therefore, necessary that they shoúld join in tins appeal. Todd v. Daniel, 16 Peters, 523.

The question upon the motion to dismiss is whether this is a. final 'decree, Within the moaning of the acts of Congress. Undoubtedly, it is not final, in the' strict, technical sense of that ten». But this court has not heretofore understood the words “final -decrees ” in this strict and technical sense, but has given to them a more liberal, and, as wé think, a more reasonable construction, and one inore consonant to the inteotion of the legislature.

■In the case of Whiting v. The Bank of the United States, 13 Peters, 15, it was held that a decree of foreclosure and ¡sale of mortgaged premises, was a final decree, and the defendant entitled to his appeal without waiting for the return and Confirmation of the-sale by a decretal order. And this decision is placed by the court upon the ground, that the decree of foreclosure and sale was final upon the merits, and the ulferior proceedings but a-mode of executing the original decree. The same rule of construction was acted on in: the case of Michaud and others v. Girod and others, 4 Howard, 503.

The case before us. is a stronger one for. an appeal than the cáse last mentioned. For here the decree not only decides the . title- to the property in dispute, and annuls the deeds under which the defendants claim, but also directs the property in dispute to be delivered to the complainant, and awards execution. And according to .the last paragraph- in the -decree, the bill is retained merely for the. purpose of adjusting the accounts referred to the master. In all other respects, the whole of the matters brought into controversy by the bill are finally disposed of as to all of the defendants, and the bill as to themjs no longer pending before the court, and the decree which it passed could not have been afterwards reconsidered or modified in relation to the matters decided, .except upon a petition for a rehearing, within the time prescribed by the rules of. this court regulating proceedings in equity in the. Circuit Courts: If these appellants, thérefore,.must wait until the accounts are reported by the master and confirmed, by the court, they will be subjected to irreparable injury. For the lands and slaves which' they claim will be. taken out of their possession and sold, and the proceeds distributed among the creditors of -the bankrupt, before they can have an opportunity of being heard m this court in defence of their rights. We think, upon sound principles of construction, as well as upon the authority of the. cases referred to, that such is not' the meaning of .the. acts of Congress. And when the decree decides the right to the property in contest, and 'directs it to be delivered, up by the' defendant to the complainant, or directs it to be sold:, or directs the defendant to pay a certain sum of money to the complainant, and the complainant is entitled to have such decree- ■ carried immediately into execution, the decree must he regarded as a final one to that extent, and authorizes an appeal to this court, although so much of the bill is retained-, in the Circuit Court as. is necessary for the purpose of adjusting by a further decree the accounts between the parties pursuant to the.-decree passed.

This rule, of course, does not extend to cases where money is directed to be paid into court, or property to be delivered to a receiver, or property held in trust to be delivered to a new trustee appointed by the court, or to cases of a like description. Orders of that kind are frequently and necessarily made in the progress of a cause. But they are interlocutory only, and intended to preserve the subject-matter in dispute from waste Oí dilapidation, and to keep it within the control of the court until the rights of the parties Concerned can be adjudicated by á final decree; The case before us, however, cdmes vhthin the .rule abbve stated and the motion to dismiss is therefore overruled. 'We, however, feel it our duty to say, that we cannot approve of thé manner in which this casé has been disposed of by the decree. In limiting the right of appeal to final decrees, it was obviously the object of the law to save, the unnecessary expense and delay of repeated appeals- in the same suit; and.to have the whole case and every matter in. controversy in it decided in a single appeal.

In this respect the practice of the • United States chancery courts differs from the English, practice. For appeals to the House of Lords may be taken, from an interlocutory' order of the chancellor, which decides a right of property in dispute; and therefore there is no irreparable injury to the party by ordering his deed to be cancelled, or the property he holds to be delivered up, because he may immediately appeal; and the execution of the order is suspended until the decision of the appellate court. But the case is otherwise in the courts of the United States, where the right to appeal is by law limited to final decrees. And if, by an interlocutory order or decree, he is required to . deliver up property which he claims, or tp pay money which he denies to be due, and the order immediately carried.into execution by the Circuit Court,his^ right.of appeal is of very little value to him, and he may be. ruined before he is. permitted .to avail himself of the right. It is exceedingly important, therefore, that the Circuit Courts of the United' States, in framing their interlocutory orders, arid in •Caixying them into execution, should, keep in view the difference between the. right of appeal as practised in the English chancery jurisdiction and as restricted by the act of Congress, and. abstain from changing unnecessarily the possession of property, or compelling' the payment of money by an. interlocutory order.

Cases, no doubt, sometimes arise, where the purposes of justice require that thé -property in. controversy should be placed in the hands óf a receiver, or a trustee be changed, or money . be paid into court. But.orders of this description stand upon . very different principles from the interlocutory orders of which we are'speaking.

In the case before us, for example, it would certainly have been proper, and entirely consistent with chancery practice, for the Circuit Court to have announced in an interlocutory order or decree the opinion it had formed as to,the rights Of the , parties, and the deeree it would' finally pronounce -upon the titles and conveyances in contest. But there couM be no necessity for passing immediately ,a final decree annulling the" conveyances, and orderirig the property to be delivered to the assignee of the bankrupt. The dfecree upon these matters might and ought to have awaited the master’s report; and when the accounts, were before the court, then every matter in dispute might have been adjudicated in one final decree; and .if either' party thought himself aggrieved, the whole m'atterwould be brought here and decided in one appeal, and the object and policy of the acts of Congress upon, this subject carried into effect.

These remarks are not made for the purpose of censuring the learned judge by whom this decree was pronounced.;, but in order to call the attention of the Circuit Courts to an inconvenient practice- into which some of them have sometimes fallen, and which is regarded by this court as altogether inconsistent with the objeet and policy of the acts of Congress, in relation to appeals, and at the same time needlessly burdensome and expensive to the parties concerned, and. calculated) by successive appeals, to produce great and unreasonable delays in sults in chancery, For. it may well happen, that,, when the accounts are taken and reported by the master, this case may again come here upon exceptions to his report, allowed, or disallowed by the Circuit Court, and thus- two appeals made necessary, when the matters in dispute could more 'conveniently .and speedily, and with less expense, have been decided in one.

Order.

On consideration of the motion filed by Mr. Sergeant, of counsel for the appellee, to dismiss this appeal, and of the arguments of counsel thereupon had, as well against as in supr. port of the said motion, it is now here ordered by this court, that the said motion be and the same is hereby overruled.


source: Caselaw Access Project

license: Public Domain

text:
    John Perkins, Appellant, v. Edward F. Fourniquet and Wife, and Martin W. Ewing and Wife.
    Where the Circuit Court decreed that the complainants were entitled to two sevenths of certain property, and referred the matter to a master in chancery .to take and reportan account of it, and then reserved all other niatters in controversy between the parties until the coming in of the master’s report, this was : pot such a final decree as can be appealed from to this court.
    This was an .appeal from the Circuit Court of the United States for the District of Louisiana, the circumstances of which am stated in the opinión of the’ court.

      Mr. Henderson and Mr. Fendall moved, to dismiss it,
    for want of jurisdiction, because the decree of the Circuit Court was not a final decree. The motion was opposed by Mr* Mayer and Mr. Coxe.

      Mr. Henderson, in support of the motion.
    The record shows that the appeal taken in this Case is Upon an interlocutory decree to account, and before any account taken or any final decree made.
    The appellees move to dismiss the case, for the reason, that in this state of the record this eóüTt has ¿Ó jurisdiction. Appeal only lies from a “ final decree.” Act of 1789, bcc. 22; 9 Peters, 1 — 3; 2 Howard, 64
    It seems this court, in the casé of MichóUd et al. U. Girod, 4 Howard, 534-537, did entertain an appeal from an interlocutory decree, but the fact, it is presumed, escaped notice; The like omission is noticed as having occurred in- the case of the Washington Bridge Co. v. Stewart; but the Court say, had the defect been noticed the appeal would have been .dismissed. 3 Howard, 424. The appeal in' this casé, being how shown to be prematurely taken, will of course be dismissed.

      Mr. Mayer and Mr. Coxe, against the motion,
    referred to and commented upon the cases in 4 Howard, 524 ; 3 Howard, 424 ; 3 Cranch, 179; 4 Cranch, 216; 10 Wheat. 503, in which last the court review the former cases.

      Mr. Fendall, in support of the motion,
    cited and remarked . Upon the following authorities: — Judiciary Act, 24 September, 1789, sec. 22,1 Statutes, at Large, 60 ; Canter v. American Insurance Company, 3 Peters, 318; Rutherford v. Fisher, 4 Dali. 22;. Young v. Grundy, 6 Cranch, 51; Houston v. Moore, 3 Wheat. 433; Gibbons D. Ogden, 6 ib. 448; The Palmyra, 10 ib. 502 ; Weston %. City of Charleston, 2 Peters, 464, 465; Boyle v. Zacharie and Turner, 6 ib; 648; Brpwn v. Swann, 9 ib. 1; Young ét al. v. Smith, 15 ib. 287; McCollum v. Eager, 2 Howard, 61; Pepper et al. 'o. Dunlap, 5 ib. 51; Mayberry v. Thompson, 5 ib. 126 ; Clagett V. Crawford, 12 Gill & Johns. 275;'
   Mr. Chief Justice TANEY

delivered the opinion of the court.

This, like the case just decided, is a motion to dismiss the appeal, upon the ground, that the decree in the Circuit Court was not a final one.

In the preceding case, we have stated the construction which this court has given to the. acts of. 1789 and 1803 upon this subject; and we have stated it more fully than the cáse itself required, in order that the Circuit Courts might distinctly understand the opinion entertainedXby this court, and.to prevent, ixy future, appeals from decrees ana, orders merely interlocutory in their character. Appeals from decrees of this description appear to be a growing evil, imposing át every term useless labor upon the court, and subjecting the parties to unnecessary expense and delay. For, having, no jurisdiction in such cases, they are not legally before the court upon the appeal, and must of course be dismissed, without any decision upon the matters in dispute.

The case now before us may be stated in a few words. It is an appeal from,the Circuit Court of the United States for the District of Louisiana; and it appears by the record that Harriet I. Fourniquet and Mary T. Ewing are two of seven heirs and representatives of Mary Perkins, who was the wife of the áppellant, and who died about .twenty years before the filing of this bill; that- the appellees above named were the children of a former marriage, and with their respective husbands filed the bill now before us, against the appellant, charging that, during the marriage of the appellant with their mother, there existed a community of acquests -and gains in certain property, and praying that the appellant might be ftompelled to account and pay over the amount due them as heirs of their mother. The appellant denied, in his answer, that any community existed, and the case was proceeded in to hearing, when the Circuit Court passed a decree declaring that the community did existj and that the appellees, as heirs of their deceased mother, had a right to recover two sevenths of all their mother’s rights of community which accrued during her marriage with the appellant ; and also two thirds of one seventh, as representatives of so much of the interest of a deceased brother; and referred the matter to a master in chancery, to take and report an account of the acquests and gains; and prescribing fully and with proper precision the principles and manner in which the lands acquired were to be divided and the accounts taken; and the decree concludes by reserving all other matters in controversy between the partiés until the coming in of the master’s report.

This clearly is not a final decree in any respect. It is the common and ordinary interlocutory order or decree passed by courts of chancery in cases of this kind, and is absolutely necessary to prepare the case for a final hearing and final decree, wherever the complainant is entitled to a partition of property' or an account. For the principles upon which an account is to be stated by the master, or a partition made, cannot. be prescribed by the court until it first determines the rights of the parties by an interlocutory order or decree ; arid the case cannot proceed to final hearing without it. And the appellant is not injured by denying him an appeal in this stage of the proceedings. Because these interlocutory orders and decrees remain under the control of the Circuit Court, and subject to their revision, until the master’s report comes in and is finally acted upon by'the court, and the whole of the matters in controversy between the parties disposed of by a final decree. And upon an appeal from that decree, every matter in dispute will be open to the parties in this court, and may all be heard, and decided at the same time.

The decree in the case before us being interlocutory only, the. appeal must be dismissed for want of jurisdiction,

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the District of Louisiana, and was argued by counsel. And it appearing to the court here that the decree of the said Circuit Court is an interlocutory and not a final decree, it is therefore now here ordered .and decreed by this court, that this appeal be and the same is hereby dismissed for the want of jurisdiction.


author: Mr. Justice McLEAN

text:
    Samuel T. Pulliam and others, Appellants, v. Edmund Christian, Assignee, in Bankruptcy of William Allen.
    A decree of the Circuit Court, setting aside it deed made by a'bankrupt before his bankruptcy; directing the trustees under the deed to deliver over to the assignee in bankruptcy all the property remaining undisposed of in their hands, but without deciding how far the trustees might be liable to the assignee for the proceeds of sales previously made and paid away to the creditors; directing an account to be taken of these last-mentioned sums in order to .a final decree, — is not such a final decree as can be appealed from to this court.
    This was an appeal from the Circuit Court of the United .States for Eastern Virginia.
    The circumstances of the ease axe stated in the opinion of the court.
    It was argued by Mr. Lyons, for the plaintiff in error, and Mr. Brooke and Mr. Myers, for the appellees.
    It is not deemed necessary to insert the arguments of counsel upon the merits, of the case.

      Mr. Lyons stated the case, and argued the preliminary question of jurisdiction, as follows. -
    Williaih Allen, of the city of Richmond, a merchant-tailor, being very much embarrassed in his affairs, though he believed himself solvent, on the 20th day. of January, 1842, executed -a conveyance to. the plaintiffs, as trustee, by which he conveyed his whole property of every kind, for the purpose of satisfying his debts. The conveyance provides, for all the creditors of Allen full satisfaction of all their debts, if the assets .be sufficient, but divides them into two classes, and the first is to be fully paid, before the second receives any things The trustees took possession .of the trust-subject, and proceeded, to convert it into money. On the 13th of August, 1842, the said Alien filed his petition, praying to be declared a bankrupt. His petition was allowéd, and,on. the 7th of September, 1842, he was declared a bankrupt, and on the 11th of January, 1843, he was duly discharged by the decree of the court, after. due notice to all persons interested, to show.' cause against the discharge.
    On the 23d of August, .1842, two of the creditors of Allen notified the trustees that they.intended to.impeach the,deed under the bankrupt law, and claim an equal distribution. of the funds; and on the 20th of September, 1842, Edmund Christian, the general assignee in bankruptcy in Virginia, exhibited his bill before the Circuit Court of the United States, for the Eastern District of Virginia, in which he impeached the deed • as fraudulent within the meaning of the bankrupt law, and prayed that it might be set aside.
    The trustees and many of the creditors answered the bill, denying that the deed was made in contemplation of bankruptcy, and denying that it was embraced by the bankrupt law, or coúld be reached by any proceeding under it,' as it was made-before the law went into operation, and therefore made when., there was no bankrupt law. The Circuit Court held that the • deed'was fraudulent within the meaning of the bankrupt, law, and decreed that it should be set. aside ; and that' the trustees should surrender the entire trust-subject in their hands to the plaintiffs, and render an account before a commissioner of the court... Prom. this decree the appeal was taken, and the question upon the merits is, whether the word “ future,” in the second section of the bankrupt law, can properly be construed to embrace conveyances which were made before the law went into operation.
    ■ Before proceeding to consider this question, a word, may be bestowed upon a preliminary point, which is alluded to by the counsel for the appellee, in their note, but not formally made, viz. whether the appeal in this case was well .taken, being, as it is said, from an interlocutory decree. It is submitted, that, on. this point, there can be no difficulty. The decree may be regarded as interlocutory in one. sense, that is,- as being made before the. cause is finally ended and removed from the docket of the court; but in respect to its own effect and operation the decree is a .final one, because it adjudges and determines. the rights of the parties to the property in controversy, and all that remains now to be done is in execution of this decree. The. finality of a decree does not depend upon its termination of the whole case, but upon its effect in settling the principles of the cause, and adjudicating the rights of the parties to the subject in controversy. The decree in this cause performs all these functions. It settles all the principles of the cause. ' It adjudges the rights of all the parties, plaintiffs and defendants, to the subject, and it directs the defendants who have the subject to deliver it up to the plaintiffs. All that remains now to be done is simply in execution of that decree. A judgment, is not interlocutory because execution must be made of it. The decree might have directed the assignee to distribute the fund, as soon as received from the defendants, among the creditors of Allen, or the next decree may do it, and yet not end the cause, and when the fund is distributed an appeal may be wholly unavailing,, because the payees of the fund may be in.solvent.
    Again. Why should the parties be continued in expensive litigation in the court below, as the consequence of the decree already pronounced, if that, decree be erroneous, and when no such litigation and expense will be incurred if that decree be set aside and a correct decree pronounced ?
    The counsel for the appellees submitted the question of jurisdiction to the court without arguing that branch of the case.
   Mr. Justice McLEAN

delivered the opinion of the court.

• This is an appeal in chancery from the Circuit Court of the Eastern District of Virginia.

- This case arises under the bankrupt law. William Allen, a merchant-tailor in Richmond,, being embarrassed, conveyed his whole property to the plaintiffs, as trustees, to pay his debts. In the trust-deed he divides his creditors into two classes, the first of which was to be fully, paid before the. second received any thing. Shortly after this, he took the benefit of the bankrupt law. The assignee in bankruptcy filed his bill to impeach the above conveyance, as fraudulent under the bankrupt law.

In their decree, the Circuit Court ordered that the deed executed; by Allen, as above stated, should be set aside. And, without deciding how far the trustees may be liable to the assignee for the sums received for the proceeds of the property, which may have been paid over by.them to the creditors of Allen before they received notice, &c., the court ordered feud decreed that the trustees should deliver over the property conveyed to them which had not been disposed of, and that they render an account to one of the commissioners of the court of all the property which came to their hands, or either of them, by virtue of said deed, and of moneys paid to the creditors, &c.; which account the said commissioner is directed to -state and settle, and report the same to the court, With any matters specially stated deemed pertinent by himself, or which may be required by the parties, in order to a final decree. ■

This decree is final only as to the trust-deed. All the matters arising under the trust axe referred to a commissioner for a statement of the account, to enable the court to enter a final decree. There is no sale; or change of the property ordered which can operate injuriously to the parties. • Under such circumstances, the decree not being final as to the whole matter in controversy, the appeal must be dismissed.

Order.

This cause came on to be heard on the transcript of the record from the Circuit Court of the United States for the Eastern District Of Virginia, and was argued by counsel. On consideration whereof, and it appearing to the court here that the decree of the said Circuit Court in this cause is an interlocutory and not a final one, it is thereupon now here ordered, adjudged, and decreed by this court, that this cause be and the' same is hereby dismissed for the want of jurisdiction.


text:
    The President and Directors of the Bank of the Metropolis, Plaintiffs in error, v. The President, Directors, and Company of the New England Bank.
    Referring to the case of the Bank of the Metropolis against the ÑéW England Bank, reported in 1 Howard, 234, the following instructions to the jury upoh the second trial would have carried out the opinion of this court, .viz.: —
    Jst. If, upon the whole evidence before them, the jury should find that the Bank of the Metropolis, at the time of the mutual dealings between them; had notice that the Commonwealth Bank had no interest in the bills or notes in question, and that it transmitted them for collection merely as agent, then the Bank of the Metropolis was not entitled to retain against the New England Bank for the general balance of the account with the Commonwealth Bank.
    2d. And if the Bank of the Metropolis had not notice that the Commonwealth Bank was merely an agent, but regarded and treated it as the owner of the paper transmitted, yet the Bank of the Metropolis is riot entitled against the real owners, unless credit was given to the Commonwealth Bank, or balances suffered to remain in its hands, to be met by the negotiable paper transmitted, or expected to be transmitted, in the usual course of the dealings between the two banks.

      3d. But if the jury found, that, in the dealings mentioned in the testimony, the Bank of the Metropolis regarded and treated the Commonwealth Bank as the owner of the negotiable paper which it transmitted for collection, and had no - notice to the contrary, and, upon the credit of such remittances, made or ¿nticipated in the usual course of dealing between them, balances were, from time to time; suffered to remain in the hands of the Commonwealth Bank, to be met by the proceeds of such negotiable paper, then the Bank of the Metropolis is entitled to retain against the New England Bank for the balance of account due from the Commonwealth Bank.
    This case was brought up by writ of error from the Circuit Court of the United States for the District of Columbia, sitting for the county of Washington.
    It was the same case which was before this court at January term, 1843, and is reported in 1 Howard, 234. It is unnecessary, therefore, to state again the facts of the case which existed prior to that report.
    The Supreme Court having .reversed the.judgment of the Circuit Court, and directed it to award a venire facias de novo, the cause came up again for trial in the Circuit Court, at March term, 1844. The result of the second trial was a judgment in favor of the New England Bank for $ 4,245.24, with interest upon parts of this sum from variouá times.
    The evidence offered on the part Of the plaintiff, and also that on the part of the defendant, are. stated in the bill of er ceptions, with a reference to a great number of letters' and accounts, ' This evidence must be inserted in substance, in order to render intelligible the prayers to the -court. The first ' prayer was made by the defendant, and does not appear to have been excepted to by the plaintiff, although granted'by the court; but the plaintiff then made a prayer for himself, which was also granted by the court, and excepted to by the defendant, and upon this exception the case came up. But the case cannot be fully understood without spreading all this upon the report of it.

      Evidence on the part of the plaintiff, viz. the' New England Bank.

    On the trial of this cause, the plaintiffs, to maintain the is-sue on their part joined, offered evidence tending to show, that, from the year 1834 to . the year 1838, there had been extensive mutual dealings between the Bank of the Metropolis, in the city of Washington, and "the Commonwealth Bank, a bank in 'Boston, in the State of Massachusetts, at which place the plaintiffs’ bank is also situatedthat both of these banks (the Metropolis and the Commonwealth) were selected by the govémment of the United States as deposit banks, and in consequence bbcame extensively employed as agents for ether banks, and for'individuals, in the transmission of negotiable paper for collection, in the manner usual among such institutions; that the usage well known and established universally in the District of Columbia, and throughout this country, in such cases, is for the holder of negotiable paper to indorse and deliver it, without any consideration, to a bank (or, if the bank is the holder, to another bank), to be indorsed and delivered by such bank with which it has been so deposited to another bank, and so on to transmit it from bank to bank till it reaches its place of destination; that when it is paid, the proceeds axe credited to the bank by which it was last indorsed, and hy that bank to its indorser, and so on back to the owner; but it is not usual for the banks to remit the precise amount so collected at the time of such collections, but to place the same to the general credit of the bank from which it was received; to be settled by drafts or otherwise, as might be most convenient for such banks respectively; and in case of non-payment, the costs thereof and postage até charged from, the one bank to the other till the owner is charged therewith; that it is also the usage and custom of the banks receiving such paper to treat it in alb respects as they do their' own paper, but it is not usual for any bank to purchase negotiable paper from another bank. That the said Bank of the Metropolis and the said Commonwealth Bank were extensively engaged in collecting and remitting to each other for collection, on account of other banks and individuals, negotiable paper, deposited with either for that purpose’, and in that business they conformed to the usage aforesaid in the mode of transmitting such paper by indorsement, and also in the mode of keeping their1 accounts of such business; and it Was the uniform practice of the said Commonwealth Bank, in transmitting such paper, to accompany the same with a letter, advising the Bank of the Metropolis that it was “ forwarded1 for collection ” (letters copied in pages 22, &c.); but in some instances they transmitted negotiable paper by letters in the following form (copied in pages 25, &c.); that in the course of the said dealing between the said two banks, repeated instances occurred in which the Bank of the Metropolis directed the said Commonwealth Bank to. deliver to third parties negotiable paper, Which had been forwarded by the former to the latter; and such direction was complied with, and the paper delivered according to such order, without reference to the state of the accounts between the said two banks; and also, that either óf the said two banks drew upon the other, from time to time, or directed remittances to be made, without having regard to the negotiable paper which had been befóte them, or was expected to be remitted for collection. , .
    They further offered evidence tending, to Show, that, during the fall of the year 1837, the plaintiffs, being the holders of certain negotiable paper coming due in the District of Columbia, at various times during the said fall and winter, indorsed and delivered such paper to the said Commonwealth Bank, without consideration, as the agent of the plaintiffs for that purpose, and according to the usage and custom above stated, to be transmitted by said Commonwealth Bank to the said District for collection; and the said Commonwealth Bank, from time to time, as it received the said paper from the plaintiffs, indorsed, and delivered the same, without consideration, and ac-. cording to the said usage and custom, to the said defendants, and in delivering them to defendants, they advised defendants that such paper was forwarded for collection.
    That on the 13th. day of January, 1838., there were in the hands of the defendants certain bills and notes, the property of the plaintiffs, and which had. been indorsed and delivered by plaintiffs to the Commonwealth Bank, in manner and according to the usage and custom above stated, for collection, without consideration, and which had been indorsed by the last-mentioned bank to. the Bank of the Metrópolis, and forwarded to the said defendants in letters, advising them in every instance that the said paper was forwarded for collection; that on the said 13th day of January, 1838, the said Commonwealth Bank gave to the plaintiffs an order in writing, addressed to the defendants, as follows (. pied in pages 27, áte.);' that the said letter was immediately forwarded by due course of mail to, and received by, the defendants; that the said negotiable paper amounts to the sum of $ 4,466.75; that none of the said paper was due or had been paid to the defendants at the time of the receipt by them of said order of the 13th January, 1838, except the sum of $241.01, and that sum had been carried to the credit of the Commonwealth Bank in the general account with said bank, and that the residue of the said paper was. afterwards, and before the bringing of this suit, paid to the said defendants.; that the said negotiable paper, in the .said, order of the 13th January, 1838, mentioned, was* part of the paper indorsed and delivered in the fall of 1837, as above stated, to the Commonwealth Bank by the plaintiffs, according to the usage and custom above stated, without consideration, to be collected for the plaintiffs, according to the said usage and custom, and. was, at the time of such dehvéry, and ever after,, the property of the plaintiffs.
    And the plaintiffs further offered in evidence the following deposition of Charles Hood, viz.: —
    .“I, Charles Hood, now of Dorchester, inthn county of Norfolk, in Massachusetts, formerly of the city of Boston, in the county of Suffolk, on oath depose and say, that I was cashier of the Commonwealth Bank from the time of its commencing to the time of its closing business; said bank having been a bank established by law in the Commonwealth of Massachusetts, and having transacted business in Boston. I further depose and say, that the papers exhibited by me to the magistrate taking my deposition, for the purpose of being annexed thereto, and marked A, B, and C (copied in pages 33, &c.), are original accounts current rendered by the Bank of the Metropolis, in Washington city, to said Commonwealth Bank.
    “ The said papers axe all the accounts rendered by the said Bank of the Metropolis to the said Commonwealth Bank, which I can noAV find; said Bank of the Metropolis rendered one or more accounts subsequent to these, 'which I cannot find, the same having been lost or mislaid. I cannot find any previous account rendered by said Bank of the Metropolis. The principal part of the items on the credit side of said account consists of checks and drafts, drawn by said Bank of the MetropcA lis on said Commonwealth Bank; each draft or check being indicated in the account by its number. I further depose and say, that there was not, to my knowledge, at any time any agreement or understanding between said two banks, that- the balances due, from time to time, from' one bank to the other, should be suffered to remain in the- hands of either, to be met by the proceeds of negotiable paper already transmitted, on expected to be transmitted, in the usual course of business betAveen them. If there had been any such understanding or agreement between said banks, I. have not the least doubt I should have known it. There was no usage or practice between said banks to allow any such balances due to the Commonwealth Bank to remain undrawn for, to be met. by the proceeds of negotiable paper transmitted, or expected to be transmitted, I do not know of any usage or practice on the part of the Bank of the Metropolis to allow balances due to said bank from the Commonwealth Bank to remain undrawn, for, to be met by proceeds of paper transmitted, or to be transmitted, in the usual course of business between said banks. I further depose and say, that, in fact, the Commonwealth Bank drew on the Bank of the Metrópolis for its balances as often as its. business or convenience required, Avithout reference to the negotiable paper held at the time, or expected to be transmitted in the usual course of business, for payment or collection, between said banks. This practice was uniform. I further depose and sáy, that, in pursuance of ,'an understanding between said'banks, each of . them occasionally overdrew upon the other, as its convenience required. I further depose and say, the two papers exhibited by me to the magistrate taking this deposition, for the purpose of being annexed thereto, marked D, E (copied in page 55, &c.), are true copies of letters transmitted by said Commonwealth Bank to said Bank of the Metropolis, at or about the time of their respective dates. I further depose and say, that the said two banks were, among others, originally selected as deposit banks by the .government. The deposit banks became extensively the agents of other banks and institutions, for thq purpose of making collections in various and distant parts of the United States. ' It has never been the practice of banks, as far as I know, to purchase negotiable paper held by other banks, and take the indorsement of such other banks, or without such indorsement.
    , “ Charles Hood,”
    The plaintiffs also offpred in evidence a great number of letters and accounts which had been transmitted between the Bank of the Metropolis dnd the Commonwealth Bank.
    The evidence, offered on the part' of the Bank of the Me-, tropolis was as follows.
    • “ And the said defendants, in order to maintain and prove the issue on their, part, gave to the jury competent and legal evidence tending to prove that it is. and. has long been the uniform practice and usage of the banks in the District of Columbia, when- commercial paper is transmitted to it for collection by banks or individuals, when indorsed by the party so remitting it, and in the absence of information that any other person or party has an interest therein, to treat and deal with the party so making the remittance as the owner of the same, the. proceeds, when received, are credited to his account, and he is charged in said account with all the éxpenses attending the same, as costs, protests, postage, «fee. That this usage and practice uniformly prevailed in the- dealings between the said Commonwealth Bank and the Bank of the Metropolis; that they mutually transmitted funds and paper of different kinds, to each other, government drafts, certificates of deposit, bills, notés, and drafts of private -individuals; that all, of every description, were carried into' the generMs-aoesunts. current between the two institutions, which,are both banking institutions, regularly and duly'chartered, and engaged exclusively in the business of banking ;■ that, in .the account current, each-bank was regularly credited by the other with the proceeds of all such commercial paper thus received by it from -the -other, when collected, and charged with the costs of collection, protests, and postage cóñriécted with the same. That on the 13th of January; 1838, the said Bank of the Metropolis was in the possession of the bills, drafts, notes, &c., being all' commercial and negotiable paper, enumerated and mentioned in the said letter from C. Hood of that date, the same, having been, from time to time, transmitted by said Commonwealth Bank to said Bank of the Metropolis, in the course of their said mutual dealings and business, in letters; which letters'from said Commonwealth Bank, so far. as they are deemed material, are as follows (copied in the record). That each of said drafts, bills, notes, &c., was indorsed by the payees thereof, respectively, to the New England Bank, specially indorsed by the cashier of said New England Bank to the cashier of the Commonwealth Bank, and by him likewise specially indorsed to the cashier of the Bank of the Metropolis; that the same had all been transmitted within the two or three months preceding the said 13th of January; that all said paper was indorsed and transmitted in the same form in which paper the property of the bank remitting the same was indorsed and sent. That the said Commonwealth Bank failed, and became publicly insolvent, early in January, 1838, before the said letter of the 13th of January was written; that said letter contained and gave the first information, or notice, ever received by the Bank of the Metropolis, that said New England Bank was, or claimed to be, the owner of said paper so held by the Bank of the Metropolis. That the accounts between said parties, so kept as aforesaid, were regularly received by, and transmitted from, said banks respectively (the Commonwealth and Metropolis Banks), and no objection was ever made to the -form or manner thereof, the last of which is here inserted (A, defendants’ statement, copied in the record); that the balances Were sometimes large, sometimes small, sometimes in favor of the one, sometimes of the other; that on the 24th of November, 1837*, the balance was in favor of the Commonwealth Bank to the amount of $ 2,200; that at the time the said letter of 13th of January, 1838, was written and received, the balance due to the Bank of the. Metropolis was $> 3,541.17^.”

      Defendants' Prayer.

    Whereupon the defendants, by their counsel, prayed the cohrt to instruct the jury, —.
    That if, from the evidence aforesaid, they shall find that the course of dealing between the said Commonwealth Bank and the Bank of the Metropolis; as stated in said evidence, actually existed, and had continued for several years prior to January, 1838; that their dealings had been mutual and extensive ; that accounts current existed between them; in which they‘"were respbctively credited with the proceeds of ail nótes, bills, drafts, &c., transmitted to the other for collection when the same were réceived, and charged with all the expenses attending the same, as postage, costs of protests, &c.; that from time to time such accounts Were regularly transmitted from each to the other, which accounts were mutually acquiesced in without objection ; that the balances on the account current fluctuated from time to time, according to the amount of money, bills, notes, &c.,. remittedthat upon the credit of such negotiable paper thus transmitted or expected to be sent, or upon the credit of such mutual dealings, each party was in the practice of drawing and accepting drafts and orders on or by the other'; that said banks uniformly received .the notes, bills, drafts, &c., transmitted by the other for collection, and . always regarded and treated them as the property of the other; that the notes, drafts, and bills enumerated in the letter from C. IJood *to G. Thomas of the 13th of January, 1838, were all so received, regarded, and treated; that the defendants had no notice or knowledge, until the receipt of sard letter of the 13th of January, 1838, that said Commonwealth Bank was not the.absolute and only owner of the same, or that plaintiffs hád any interest in, or claim to, the same; that said Commonwealth Bank became insolvent some few days prior to- the said 13th of January, 1838, at which time the Bank of the Metropolis had in its possession, so held and received in the course of said mutual business, the notes, bills, &c., mentioned in said letter of 13th of January, 1838; that in the course of said mutual business, it was the practice and usage of each of said banks (the Commonwealth and Metropolis) to draw upon the other, as its exigencies or conveniences required, even beyond the amount of the balances then due. to it on general account, which drafts it was also their usage and practice to accept and pay on the credit of anticipated remittances of negotiable paper or funds, or on the credit of such mutual dealings and course of business ; and it was also the practice and usage of both said banks to suffer and permit, ascertained,balánces to lie undrawi. for on the same credits; that at the time the said Commonwealth Bank became.insolvent, and when said letter of January 13, 1838, was written and received, there was a balance of $ 2,900 or other sum due on said general account from said Commonwealth Bank to the Bank of the Metropolis; — then the defendants were entitled to hold and retain the said notes, drafts, bills, &c., so in their possession, and the proceeds of the same, when received, until the tender or payment of such balance; and the plaintiffs are not entitled to recover in this action, until they show, to the satisfaction of the jury, that before action brought such balance was paid or tendered to said defendants. Which was given.

      Defendants' Bill of Exceptions.

    And thereupon, and after the court had given the said instruction to the jury on the prayer of said defendants, the plaintiff prayed the court to instruct the jury, that if, from the evidence aforesaid, the jury shall find that the notes mentioned in the said letter, dated the 13th day of January, 1838, from Charles Hood,.cashier of the Commonwealth Bank, to George Thomas, cashier of the Bank of the Metropolis, were received by the said Commonwealth' Bank from the said plaintiffs, and were at the time of such receipt the property of the plaintiffs.
    . That they were deposited by the plaintiffs with the said Commonwealth Bank, to be transmitted by it for collection only.
    That the said Commonwealth Bank rec ived the said notes -only as the agent of the plaintiffs, and without giving any consideration for them, or receiving any compensation as such agent to transmit them for collection, and never had any right, title, or interest in. or. claim or lien lipón, the said notes, except as agent as. aforesaid
    That the said Commonwealth Bank, as agent as aforesaid, and not otherwise, did in fact transmit the said- notes to said defendant Tor collection o
    That the said notes were' indorsed by the cashier of thé ■plaintiffs, as cashier,.and by the cashier of the said Commonwealth Bank, as cashier, in the mode and form commonly used by banks in the United States.in the"transmission of negotiable paper deposited with, and transmitted through, such banks for collection.
    That- the usage to deposit in one bank such paper so indorsed to be transmitted, and for such deposit bank to indorse such paper in the manner aforesaid, and to transmit the same so indorsed to another bank, is a common usage throughout the United States, and that the custom so to indorse such negotiable paper is universal.
    . That the Bank'of the Metropolis and the said Commonwealth .Bank were extensively engaged as the agents of other .banks, and with each other, in the transmission for collection and in the collection of negotiable paper belonging to third parties,, in the years 1836 and 1837, in various and distant parts of the. United States } and that the common form of indorsement used in the transmission of such negotiable paper by the said Commonwealth Bank and the Bank of the Metropolis was such as was used by the said Commonwealth Bank .in the indorsement arid transmission of said notes, for the proceeds of which this suit, is brought; and that neither of the said banks, under the said usage and custom, held the other liable upon such indorsement.
    That the said notes last mentioned were transmitted to the said Bank of the Metropolis in letters, notifying the defendants that they were transmitted for collection in the form commonly used by said banks in transmitting negotiable paper for collection, and with no other inténtion ás to who was the real owner of such negotiable paper; ■ then it is competent for the jury to infer, from the facts aforesaid, that the defendants had notice that the said paper was transmitted by the said Commonwealth Bank as agent, and not as the owner thereof. And if the. jury shall so find, then the plaintiff is entitled to recover, notwithstanding the jury shall find that the said Commonwealth Bank and the Bank of the Metropolis treated each other as the true owners of the paper so ¡remitted ; and notwithstanding they, shall further find that balances were, from time to-time, suffered, to remain in the' hands of each other, to be met by the proceeds of negotiable paper deposited, or expected to be transmitted, in the usual course of dealing between them;• and notwithstanding, the course of dealing, stated in the instruction heretofore given at the instance of the defendants.
    To the giving of which instruction, as prayed, the counsel for the defendant objected; but the court overruled such objection, and instructed the jury as requested; to which the defendant by his counsel excepts, and prays the court to seal this .bill of exceptions, which is accordingly done, this sixth day of September, 1844.,.
    W. Cranch,
    [seal.]
    James S. Morsell.
    [seal.]
    Upon this exception, the case came up ¡to this court.
    It was argued by Mr. Coxe, for the plaintiff in error, and Mr. Bradley, for the defendant in error.
    . Mr. Coxe, for the plaintiff in error.
    This cause was before this court in 1843, and is reported in' 1 Howard,.234.
    The proceedings remain as they originally stood! The evidence on the second trial is supposed to be substantially the same as on the first.
    On the former argument, this court decided, that, wherever a banker has advanced money to another, he has a lien on all. the paper securities which are in his hands for the amount of Kis general balance, unless such securities were delivered to him under a particular agreement. 1 Howard, 239. That the paper in question was, however, the property of' the New England Bank, and was indorsed and delivered to the Commonwealth Bank for collection, without consideration, as its agent,, in the ordinary course of business, it being usual, and indeed necessary, so to indorse it in order to enable the agent to receive the money. Yet the possession of the paper was prima fade evidence that it was the property of the last-mentioned .bank; and, without notice to the contrary, the plaintiff in error had a right so to treat it, and was under no obligation to inquire whether it was held as agent or owner. Ibid.
    The instructions asked of the court by the parties respectively .are found in the present record, pp. 31-33. The court gave both, as asked. In the defenda it’s statement, the facts given in evidence are detailed. In the instruction given at the instance of plaintiff, some portion of these facts is stated.
    ■ The main difference between the two seems to consist in this. In the defendant’s .prayer, the supposed state of facts to be found by the jury includes this, — “that the defendant had no notice or knowledge, until the receipt of said letter from C. Hood to G. Thomas, of the 13th January, 1838, that said Commonwealth Bank was not the absolute and only owner of the same, or that plaintiff had any interest in or claim to the same.”
    In the plaintiff’s prayer, the court is called upon to instruct the jury, that “it is competent for them to infer, from the facts aforesaid, that the defendant had notice that the said paper was transmitted b;y the Commonwealth Bank as agent, and not as the owner” ; and so finding, their verdict should be for plaintiff.
    The main, if not the entire, ground upon which the plaintiff below rested, to establish this fact of notice, is the usage to deposit in one bank indorsed paper to be transmitted to' a distant bank for collection, and for the bank with whom such deposit is made to indorse and transmit the same, as was done in this case.
    The prayer to the court below, offered on the part of the Bank of the Metropolis, was in nearly the words of this court in the former case. (Mr. Coxe then read and compared the prayer with the opinion of the court in 1 Howard, 234)

      Mr. Bradley, for the defendant in error, laid down the following propositions: —
    1st. There was evidence to go to the jury to sustain each one of the propositions stated in the prayer granted by the Circuit Court, and the granting of which is alleged as er* for..
    2d. The inference which the court instructed* the jury it was competent for them to draw was fully justified by those propositions. And,
    3d. If that inference was drawn by the jury, the instruction of the court was fight.
    In maintaining these propositions, it is proposed to show, —
    1st. That the Commonwealth-Bank was the agent of the defendant , in error for a particular purpose, in the course of a well-known and long-established business, the Usages of which' required the employment of sub-agents, who are responsible directly to the principal, and the plaintiff in error was sub-agent.
    2d. That no agreement or understanding between the agents could destroy, or in any manner impair, the rights of the principal, he being known, and not a party or privy to such agreement.
    3d. That no lien could have existed in favor of the' plaintiffs in error for any balance, general or otherwise, due to them from their correspondent, the Commonwealth Bank, which could attach to the negotiable paper, or the proceeds thereof, of the defendants in error, forwarded to them by that- bank for collection, in the course of the regular business of collecting.
    4th. There is abundant evidence to show, that the sub-agents, the plaintiffs in error, knew, or might and ought to have known, that they were not the property of the Commonwealth Bank, but had been forwarded for account of others. And
    There is. no error in the instruction given by the Circuit Court.
    On the first proposition, Mr. Bradley cited 9 East, 12; 7 Bingh. 284; 6 Mass. 430; 19 Yes! 299; 1 Rose, 154, 243, 232; 1 Bos. & Pul. 648, 546.
    The Commonwealth Bank was an agent in the course of a well-understood and long-established business, the.course of which required the employment of sub-agents. Its whole authority was to appoint a sub-agent. Triplett v. Bank of Washington, 1 Peters, 28, 30, 35.
    The. known usages of trade r-nd business often become the true exponents of the nature and extent of an implied authority ; for in áll such cases the presumption is, the agency is to be exercised according to the practices which are allowed and justified by such usages, &c. 2 Kent’s .Comm. lect. 41, pp. 814, 616 (4th ed.); Wilshire v. Sims, 1 Camp. 258; Young v. Cole, 4 Scott, 489.
    A person who employs a broker must be supposed to give him authority to act as other brokers in like cases. Dalton v. Tatham, 10 Adolph. &• Ell. 27, 29, 30.
    A person who employs a broker on the stock exchange impliedly gives him authority to act in accordance with the rules there established, though such principal may be ignorant of the rules.
    Every authority as agent carries with it or includes all the powers which are necessary or proper or usual as a means to effectuate the purposes for which it was created. In every case it embraces the appropriate means to accomplish the end. Ekins v. Macklish, Ambl. 184, 186; Paley on Agency (Lloyd’s), 198, note, 290, 291; 1 Livermore, 103.104; Story on~Agency, ** 97,-85.
    And in many cases the power to delegate his authority is implied from the ordinary custom of trade, or it is understood by the parties to be the mode in which the particular business would or might be done. Story on Agency, § 14, cites Coles v. Trecothick, 9 Yes. 234, 51, 52; 1 Bell’s Comm. 387-391; Shipley v. Kymer/1 Maul. & Selw. 484; Cockran «.Trlam, 2 Maul. & Selw. 301,303, note; Laussatt v. Lippincott, 6 Serg. & Rawle, 386 ; Johnson v. Cunningham, 1 Alab. Ñ. S. 249. And wherever any express or implied authority'to appoint a sub-agent is given or allowed by the principal, a privity is created between^ them. Livermore, ch. 2, <§> 4, pp. 56 - 59 ; Story, 201; Gos-"* well v. Dunjdey, 1 Str. 681; and see Brandy v. Coswell, 2 Bos. & Pul. 438; Cockran v. Irlam, 2 Maul. & Selw. 301, 303, note; Merrick v. Barnard, 1 Wash. C. G. R. 479; Foster v. Preston, 8 Cow. 198.
    Second point. That no agreement ur understanding between the agents could destroy, or in any manner impair, the rights of the principal, he being known and not a party or privy to such agreement. 10 Adolph. & Ell. 27, 29, 30; 1 Peters, 25 ; 15 Wend. 486 ; 22 ib. 216 et seq.; 12 Conn. 303.
    3d. That no lien could have existed in favor of the plaintiffs in error for any balance, general or otherwise, due to them from their correspondent, the Commonwealth Bank, whichcould attach to the negotiable paper, or the proceeds thereof, of the defendants in error, forwarded to them by that bank for collection, in the course of the regular business of collecting. Story, Agency, <§> 360 and cases there cited ; ibid. §§ 362, 379, 381.
    ■ Upon the 4th point, Mr. Bradley entered into a minute examination of the letters and accounts.
    The grounds of the former decision were two.
    1st. That the Bank of the Metropolis received the. paper without, any notice that it was the property of a third person, and treated it as if the Commonwealth Bank was.the true owner, and was therefore factor, broker, or banker, of the Commonwealth Bank.
    2d. That balances were from time to time suffered to remain in the hands of these banks respectively, to be met by the proceeds of negotiable paper deposited or expected to be transmitted in the usual course of dealing between them.
    But there is abundant evidence in the present record to show, —
    1st. Notice.
    • 2d. That they drew without regard to the balances, and also without regard to the negotiable paper.
    1. As to evidence of notice.
    1st. The forms of the indorsements showed that there was a bank before the Commonwealth Bank, ■ and it “ is not usual for any bank to purchase negotiable paper from- another bank.”
    2d. All this paper was transmitted in letters notifying the Bank of the Metropolis that it was “ forwarded for collection,” while in regard to other paper they adopted a different form.
    3d. The usage.
    4th; That the parties did not hold each other liable on the indorsements.
    5th. That they were indorsed and forwarded by the Commonwealth Bank to the Bank of the Metropolis, without consideration, and with notice that they were for collection.

    2. They drew without regard to the balances, and therefore advances were not made on the faith of the notes. This is shown by the accounts current between the parties;'by the correspondence between the cashiers, and by the deposition of Mr. Hood, all of which are in the record.

      Mr. Core,-in reply,
    said that this court had formerly decided, that unless the Bank of - the Metropolis had notice of the ownership of the bills, it had a right to hold them for its lien. Was there such notice ? The plaintiffs below had tried to make it out, but only made out such a usage as had appeared to this court on the former trial. All the five points discussed by the counsel on the opposite side were before the court in the former case.

      {Mr. Core then made an examination of them in order to show this.)
   Mr. Chief Justice TANEY

delivered the opinion of the court.

This case was before the court at January term, 1-843, and is reported in 1 Howard, 234. The judgment of the Circuit Court was then reversed,, and the case remanded, with directions to award'a venire facias de novo.

Upon the second trial some additional testimony appears to have been offered, and two instructions given by the court to the jury, one upon the prayer of the defendant, the other upon the prayer of the plaintiff, to the last of which the defendant, who is now the plaintiff in error, excepted ,• and the judgment of the Circuit Court being against him, he has again brought the case here by writ of error.

The opinion expressed by this court in reversing .the former judgment and remanding the case is summed up in the following paragraph in .1 Howard, 240.

“ If, therefore,” say the court, “the jury find that the course of dealing between the Commonwe .1th Bank and the Bank of the Metropolis was such as is stated in the testimony; that they always appeared to be-and treated each other as the true owners of the paper mutually remitted, and had no notice to the contrary; and that balances were from time to time suffered to remain in the hands of each other, to be met by the proceeds of negotiable paper deposited or expected to be transmitted in the usual course of dealing between them, then the plaintiff in error is entitled to retain for the amount due on the settlement of the account.”

The only question now open upon this second writ of error is; whether the Circuit Court, in their instructions to the jury, have conformed to this opinion. We have examined them with a good deal of care, and regret to find them so complicated and involved, that we have some difficulty in ascertaining the meaning of the Circuit Court. It would seem to be almost impossible for a jhry acting under such instructions to comprehend distinctly the issues of fact upon which they were to find their verdict. Indeed, as we understand these two instructions, the last paragraph in the second seems to this court to be inconsistent with the direction contained in the first. And if the last . instruction stood by itself, without any reference to the first, it might perhaps be construed to be substantially the same with the directions given by the Circuit Court at the former trial, which were reversed upon the. former writ of error.

It is not usual in remanding a case to state in the opinion of this court the particular manner in which the instructions to the jury should have been framed, but to state in the opinion the principles .of law which govern the case as it appears in the record, and leave 'it to the Circuit Court to apply them to the case, as it may appear in evidence upon the second trial, in such manner and form as it may think advisable. From, the manner, however, in which the directions of the Circuit Court appear in the record before us, upon the trial under the mandate,- we may perhaps prevent future difficulty by stating the form in which instructions to the jury might have been given so as to carry into effect the opinion of this court, and enable the jury to understand more clearly the points in issue before ■ them. Of course'we. do not mean to prescribe this form to the Circuit Court when the case again comes before it, because the testimony, then offered may.differ materially from that now contained in the record. But if, instead of the complex instructions under which the case was decided at the last trial, the following directions had been given, it would have conformed to the opinion of this court when the case was formerly before it, and at the same time have enabled the jury, to understand more distinctly the matters of fact in dispute between the parties, and submitted to them for decision

1. If, upon the whole evidence before them, the jury should find that the Bank of the Metropolis, at the time of- the mutual dealings between them, had notice that the Commonwealth Bank had no interest in the bills and notes in question, and that it transmitted them for collection merely as agent, then the Bank of the Metropolis was not entitled to retain against the' New England Bank for the general balance of the account with the Commonwealth Bank.

2. And if the Bank of the Metropolis had not notice that the Commonwealth Bank was merely an agent, but regarded and treated it as the owner of the paper transmitted, yet the Bank of the Metropolis is not entitled to retain against the real owners, unless credit was given to the Commonwealth-Bank, or balances suffered to remain in its hands to be met by the negotiable paper transmitted or expected to be' transmitted in the usual course of the dealings between the two banks.

3. But if the jury found that, ■ in the dealings mentioned in the testimony, the Bank of the Metropolis regarded and treated the Commonwealth Bank as the owner of the negotiable paper which it transmitted for collection,, and had no notice to the contrary, and upon the credit of such remittances made or anticipated in the usual course of dealing between them bal-, anees were from time to time suffered to remain in the hands , of the Commonwealth Bank, to be met by the proceeds of such negotiable paper, then the plaintiff in error is entitled to retain against the defendant in error for the balance , of account due from the Commonwealth Bank.

We restate the former opinion of this court in this form, because we presume it must have béen misunderstood by the Circuit Court. And as it was not followed in the proceedings under the mandate, the judgment must be reversed, and the cause remanded, with directions to award a venire facias de novo.

Order..

This cause came on to be. heard on the transcript of the record from the Circuit Court of the United States for the District of Columbia, holden in and for the county óf Washington, and was argued by counsel. Oh consideration whereof, it is now here ordered and adjudged by this court', that the judgment of the said Circuit Court in this cause be and the same is hereby; reversed; with costs, and that .this cause be and the same is hereby remanded to the said Circuit Court, with directions to award a venire facias de novo.