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I do not think that the adjudged cases in this court, to which reference has been made, sustain the validity of the statute of Kansas.

every unsuccessful appellant to a charge for ing of the clause in the Fourteenth Amend the fee of the attorney for the appellee would ment prohibiting any state from denying to afford no ground for complaint as unequal, any person within its jurisdiction the equal for it would operate on all, and such a rule protection of the laws. Jolliffe v. Brown, 14 for the unsuccessful appellant in certain Wash. 155; Randolph v. Builders and Paintcauses of action, tested by the nature and ers Supply Co. 106 Ala. 501; New York Life subject of the actions, will be equally free Ins. Co. v. Smith (Tex. Civ. App.) 41 S. W. from objection on the ground of its discrim-680; St. Louis, I. M. & S. Ry. Co v. Wil inating character; but to say that where cer-liams, 49 Ark. 492; Denver & R. G. Railway tain persons are plaintiffs and certain per- Co. v. Outcalt, 2 Colo. App. 395; Atchison sons are defendants, the unsuccessful appel- & Neb. R. R. Co. v. Baty, 6 Neb. 37 [29 Am. lant shall be subjected to burdens not im- Rep. 356]; O'Connell v. Menominee Bay[120] posed on unsuccessful appellants generally, Shore Lumber Co. [113 Mich. 124] 71 N. W. is to deny the equal protection of the law to 449; San Antonio & A. P. Ry. Co. v. Wilson the party thus discriminated against. It is (Tex. App.) 19 S. W. 911; City of Janesville to debar certain persons from prosecuting a v. Carpenter, 77 Wis. 288 [8 L. R. A. 808]; civil cause before the appellate tribunals of Pearson v. City of Portland, 69 Me. 278; this state. It is an unwarrantable interfer-Burrows v. Brooks [113 Mich. 307] 71 N. W. ence with the 'due course of law' prescribed 460; Middleton v. Middleton, 54 N. J. Eq. for litigants generally. It is doubtless 692 [36 L. R. A. 221]; State v. Goodwill, 33 true that the act was designed for the relief W. Va. 179 [6 L. R. A. 621]. These adjudiof citizens who became litigants in actions cations rest substantially upon the grounds against corporations, because it applies only indicated by this court in Yick Wo v. Hopwhen a citizen is plaintiff, and it was as-kins, 118 U. S. 356, 369 [30: 220, 226], where sumed that the corporation would be appel- it was said that "the equal protection of the lant, and to avoid discrimination between laws is a pledge of the protection of equal parties to the same action it was made to laws." operate on either party as appellant, but it [119] sometimes occurs, and may very *often, that the citizen plaintiff is an appellant, and in such cases the discrimination may operate oppressively on him. The supreme court of In Missouri Pacific Railway Co. v. Humes, Alabama declared its act violative of the 115 U. S. 512, 522 [29: 463, 466], this court Constitution of that state and of the United sustained a statute of Missouri requiring States, because of its unjust discrimination every railroad corporation to erect and mainin establishing peculiar rules for a particu-tain fences and cattle guards on the sides of Irr occupation, i. e., 'such as own or control its roads, and for failure to do so subjectrailroads.' Our objection to the act under ing it to liability in double the amount of consideration is broader, as shown above, em- damages occasioned thereby. The court bracing in its scope the right of the citizen said: "The omission to erect and maintain who sues a corporation, for whom we assert such fences and cattle guards in the face of the right to appeal on the same terms grant- the law would justly be deemed gross neglied to the plaintiffs in like cases, i. e., actions gence, and if, in such cases, where injuries for damages against whomsoever brought. to property are committed, something beThe act was intended to deter from the ap-yond compensatory damages may be awarded pellate court corporations against whom to the owner by way of punishment for the judgments should be rendered for damages, company's negligence, the legislature may fix or citizens of this state suing them for dam- the amount or prescribe the limit within ages. It was conceived in hostility to citi- which the jury may exercise their discrezens as plaintiffs or corporations as defend- tion. The additional damages being by way ants in such actions. In either view it is of punishment, it is clear that the amount partial and discriminating against classes of may be thus fixed; and it is not a valid oblitigants, denying them access to the appel-jection that the sufferer instead of the state late courts on the same terms and with the receives them . . . The power of the same incidents as other litigants who may be plaintiffs or defendants in actions for damages. It is not applicable to all suitors alike in the class of actions mentioned by it. An act 'which is partial in its operations, intended to affect particular individuals alone or to deprive them of the benefit of the general laws, is unwarranted by the Constitution and is void.' 'A partial law, tending directly or indirectly to deprive a corporation or an individual of rights to property, or to the equal benefits of the general laws of the land, is unconstitutional and void.'"

Cases almost without number could be cited to the same general effect. I refer to the following as bearing more or less upon the general inquiry as to the scope and mean

state to impose fines and penalties for a vio-
lation of its statutory requirements is coeval
with government; and the mode in which
they shall be enforced, whether at the suit
of a private party or at the suit of the
public, and what disposition shall be made
of the amounts collected, are merely matters
of legislative discretion. The statutes of
nearly every state of the Union provide for
the increase of damages where the injury
complained of results from the neglect of
duties imposed for the better security of life
and property, and make that increase in[121]
many cases double, in some cases treble, and
even quadruple the actual damages.
The objection that the statute of Missouri
violates the clause of the Fourteenth Amend
ment. which prohibits a state to deny to any


person within its jurisdiction the equal thorized to procure insurance on the prop-
protection of the laws, is as untenable erty upon the route of its railroad.
It was
as that which we have considered. The there said: "The right of the citizen not to
statute makes no discrimination against have his property burned without compen-
any railroad company in its require sation is no less to be regarded than the
ments. Each company is subject to the right of the corporation to set it on fire. To
same liability, and from each the same se- require the utmost care and diligence of the
curity, by the erection of fences, gates, and railroad corporations in taking precautions
cattle guards, is exacted, when its road against the escape of fire from their engines
passes through, along, or adjoining inclosed might not afford sufficient protection to the
or cultivated fields or uninclosed lands. owners of property in the neighborhood of
There is no evasion of the rule of equality the railroads. When both parties
where all companies are subjected to the equally faultless, the legislature may proper-
same duties and liabilities under similarly consider it to be just that the duty of in-


suring private property against loss or injury caused by the use of dangerous instruments should rest upon the railroad company, which employs the instruments and creates the peril for its own profit, rather than upon the owner of the property, who has no control over or interest in those instruments. The very statute now in question, which makes the railroad company li able in damages for property so destroyed, gives it, for its protection against such damages, an insurable interest in the property in danger of destruction, and the right to ob

In Missouri P. Railway Co. v. Mackey, 127 U. S. 205, 209 [32: 107, 109], this court held not to be unconstitutional a statute of Kansas making every railroad company liable for all damages done to one of its employees in consequence of any negligence of its agents or by any mismanagement of its engineers or other employee, to any person sustaining such damage. This court said: "Such legislation does not infringe upon the clause of the Fourteenth Amendment requiring equal protection of the laws, because it is special in its character; if in conflict attain insurance thereon in its own behalf; all with that clause, it must be on other grounds. And when legislation applies to particular bodies or associations, imposing upon them additional liabilities, it is not open to the objection that it denies to them the equal protection of the laws, if all persons brought under its influence are treated alike under the same conditions."


and it may obtain insurance upon all such
property generally, without specifying any
particular property." Observe, that the Mis-[123]
souri statute gave the railroad company for
its protection against the new liability im-
posed upon it the right to insure the prop-
erty likely to be destroyed by fire.

I do not perceive that the judgment now
In Minneapolis & St. Louis Railway Co. v. rendered finds support in any adjudication
Emmons, 149 U. S. 364, 367 [37: 769, 772], by this court. The above cases proceed upon
the court held to be valid a statute of Min- the general ground that in the exercise of its
nesota requiring railroad companies within police powers a state may by statute impose
a named time to build or cause to be built additional duties upon railroad corporations,
good and sufficient cattle guards at all wagon with penalties for the nonperformance of such
crossings, and good and substantial fences duties, and that such legislation is not, be-
on each side of their respective roads, and cause of its special character, a denial of the
that failure by any company to perform that equal protection of the laws. It is said to be
duty should be deemed an act of negligence, of the essence of classification that "upon
for which it should be liable in treble the the class are cast duties and burdens differ-
amount of damage sustained. This court ent from those resting upon the general pub-
said: "The extent of the obligations and lic." But here the state does not prescribe
[122]duties *required of railroad corporations or any additional duties upon railroad com-
companies by their charters does not create panies in respect of the destruction of prop-
any limitation upon the state against im-erty by fire arising from the operating of
posing all such further duties as may be their roads. It simply imposes a penalty
deemed essential or important for the safety which it does not impose upon other litigants
of the public, the security of passengers and under like circumstances. It only prescribes
employees, or the protection of the property a punishment for assuming to contest a
of adjoining owners. The imposing of prop-claim of a particular kind made against it
er penalties for the enforcement of such ad-
ditional duties is unquestionably within the
police powers of the states. No contract
with any person, individual or corporate, can
impose restrictions upon the power of the
states in this respect."

for damages. The railroad company can escape the punishment only by failing to exercise its privilege of resisting in a court of justice a demand which it deems unjust. Undoubtedly, the state may prescribe new duties for a railroad corporation and impose penalIn St. Louis & San Francisco Railway Co. ties for their nonperformance. But, under v. Mathews, 165 U. S. 1, 26 [41: 611, 621], the guise of exerting its police powers, the this court upheld a statute of Missouri pro-state may not prevent access to the courts viding that every railroad corporation owning and operating a railroad in that state should be responsible in damages to the owner of any property injured or destroyed by fire communicated directly or indirectly by locomotive engines in use upon its railroad -the railroad company being, however, au

by all litigants upon equal terms. It may not, to repeat the language of the court in the Ellis Case, “arbitrarily select one corpora tion or one class of corporations, one individual or one class of individuals, and visit a penalty upon them which is not imposed upon others guilty of like delinquency." Ar

bitrary selection cannot, we said in the same | H. F. AUTEN, as Receiver of the First Na-
case, "be justified by calling it classification." tional Bank of Little Rock, Arkansas, Piff.
There is no classification here except one in Err.,
that denies the equal protection of the laws.
It would seem that what was said in the El- UNITED STATES NATIONAL BANK OF

lis Case was exactly in point, namely, “as ne duty is imposed there can be no penalty for nonperformance." Instead of prescrib[124]ing some penalty for the *neglect of the railroad company of duties specifically enjoined upon it, the state attempts-and by the decision just rendered is enabled-to take from the company the right which we declared in the Ellis Case was secured by the Constitution, namely, the right to "appeal to the courts as other litigants, under like conditions and with like protection."



(See S. C. Reporter's ed. 125-149.)

Judgment of circuit court of appeals not
final in an action against receiver of na-
tional bank-rediscounting by bank— no-
tice to bank discounting paper.




An action against a receiver of a national bank appointed by the comptroller of the currency is one arising under the laws of the United States, in which the judgment of the circuit court of appeals is not final.

The rediscounting of paper by one bank

with another cannot be held, as a matter of law, to be out of the usual course of business, so as to charge everybody connected with it with knowledge that it may be in excess of authority.

Some stress is laid upon the fact that the
statute under consideration was passed by a
state in which fires caused by the operating
of railroads may often cause and are likely to
cause widespread injury to grass, crops,
houses, and barns. What, in the light of the
authorities, the state may constitutionally do
in order to protect its people against dangers
of that character, I need not stop to consider.
The only question here is whether, in the
absence of any statutory regulation prescrib-
ing what a railroad corporation shall or shall
not do in order to guard property against de-
struction by fire arising from the operating
of its road, the state can deny to such a cor-
poration, when defending a suit brought
against it to recover damages on the ground
of negligent destruction of property, a priv-
ilege which it accords to its adversary in the
trial of the issues joined. May the state
meet the railroad corporation at the doors
of its courts of justice and say to it, "If you Argued March 9, 1899. Decided April 24,
enter here for the purpose of defending the
suit brought against you it must be subject

to the condition that a special attorney's fee shall be taxed against you if unsuccessful, while none shall be taxed against the plaintiff if he be unsuccessful"? Nothing has ever heretofore fallen from this court sustaining the proposition that the constitutional pledge of the equal protection of the laws admitted of a litigant, because of its corporate character, being denied in a court of justice privileges of a substantial kind accorded to its opponent. If there is one place under our system of government where all should be in a position to have equal and exact justice done to them, it is a court of justice-a principle which I had supposed was as old as Magna Charta.

In my opinion the statute of Kansas denies to a litigant, upon whom no duty has been imposed by statute and whose liability for wrongs done by it depends upon general prin[125]ciples of law applicable to all alike that equality of right given by the law of the land to all suitors, and consequently it should be adjudged to deny the equal protection of the laws. I dissent from the opinion and judgment.

Notice of the want of authority of the presi Ident of a bank to rediscount paper with another bank, or that the indorsement by the bank was merely for accommodation, is not shown by the fact that the indorsements of the bank were made by the president, and not by the cashier, and that the indorsement of the president of the bank was made above that of the bank, where the paper was rediscounted in the usual course of business and was solicited by the cashier.

[No. 206.]


Court of Appeals for the Eighth Circuit to review a judgment of that court affirming the judgment of the United States Circuit Court for the Eastern District of Arkansas in favor of the plaintiff, the United States National Bank of New York, against H. F. Auten, receiver, etc., for the amount of certain promissory notes. Affirmed.

N ERROR to the United States Circuit

See same case below, 27 U. S. App. 605, and 49 U. S. App. 67.

Statement by Mr. Justice McKenna:
*Two of the parties to this action in the[126]
court below were national banks, one located
at New York, the other located at Little
Rock, Arkansas. Sterling R. Cockrill, as
receiver of the latter bank, was also a party.
He resigned and plaintiff in error was ap-
pointed. The banks will be denominated re-
spectively the New York bank and the Little
Rock bank.

The complaint contains the necessary ju-
risdictional allegations, and that "on De-
cember 7, 1892, the City Electric Street Rail-
way Company, a corporation organized and
doing business under the laws of Arkansas,
Mr. Justice Brown, Mr. Justice Peck-in the city of Little Rock, Arkansas, ex-
ham, and Mr. Justice McKenna concur in ecuted and delivered to G. R. Brown and H.
this dissent.
G. Allis, citizens of the state of Missouri, its

McCarthy & Joyce Co.
Geo. Mandlebaum, Sec'y & Treas.
A, 73477. No. 2. Due Ap'l 7-10, '93.

They were indorsed as follows: "James Joyce, H. G. Allis, First National Bank, Little Rock, Ar.; H. G. Allis, P't."

three promissory notes, each for five thou- | maturity, at the rate of ten per cent per sand dollars, payable four months after date, annum, until paid. with interest at the rate of ten per cent per annum from maturity until paid. Said Brown and Allis afterwards indorsed and delivered said notes to the defendant First National Bank, and said bank before maturity and for a valuable consideration indorsed, rediscounted, and delivered said notes to plaintiff. That on December 7, 1892, the McCarthy & Joyce Company, a corporation resident in the city of Little Rock, Pulaski County, Arkansas, and organized and doing business under the laws of Arkansas, executed and delivered to James Joyce, a citizen of the state of Missouri, its two promissory notes, each for five thousand dollars, payable to his order at four and five months respectively after date, with interest from maturity at the rate of ten per cent per annum until paid. Said Joyce afterwards indorsed said notes to the defendant First National Bank, and said bank before maturity and for a valuable consideration indorsed, rediscounted, and delivered said notes to plaintiff. Said notes were each at maturity presented at the First National [127]Bank in Little Rock, Arkansas,*for payment, and payment being refused, they were each duly protested for nonpayment, the fees for which, amounting to twenty-five dollars, were paid by plaintiff. Copies of said notes, with the indorsements thereon, are hereto attached, marked 1 to 5 inclusive, and made part hereof. No part of said notes has been paid, and the same have been presented to the receiver of said bank for allowance, which he has refused to do."

Judgment was prayed for the debt and

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Little Rock, Ark., Dec. 7th, 1892.
Four months after date we, or either of us,
promise to pay to the order of G. R. Brown
and H. G. Allis five thousand dollars, for
value received, negotiable and payable, with
out defalcation or discount, at the First Na-
tional Bank of Little Rock, Arkansas, with
interest from maturity, at the rate of ten
per cent per annum, until paid.

City Electric St. R'y Co.
H. G. Bradford, P't.

W. H. Sutton, Sec'y.
No. A, 73485. Due Apr. 7-10, '93.
The following indorsement appears on
each: "Geo. R. Brown, H. G. Allis, First
National Bank, Little Rock, Arkansas; H.
G. Allis, P't."

Two of the notes were in the following


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*The receiver only answered, and his an-[128] swer as finally amended denied that "either of the notes described in the plaintiff's complaint was ever indorsed and delivered to the First National Bank; he denies that either of said notes was ever the property of or in the possession of said bank; and denies that the said bank ever indorsed or delivered either of said notes to the plaintiff; he denies that said bank ever received any consideration from said plaintiff or any indorsement or delivery of said notes to it;" and averred "that the name of the defendant bank was indorsed on said notes by H. G. Allis for his personal benefit without authority from said bank; that the said Allis, assuming to act for defendant bank, procured the plaintiff to advance or loan upon said notes a large sum of money, which he appropriated to his own use; that said Allis had no authority from said bank to negotiate said loan or to act for it in any way in said transaction; if said transaction created an indebtedness against the defendant bank, then the total liability of said defendant bank to the plaintiff by virtue thereof exceeded one tenth of the plaintiff's capital stock, and the total li ability of the defendant bank thereby exceeded the amount of its capital stock actually paid in; that the plaintiff knowingly permitted its officers to make such excessive loan under the circumstances aforesaid; that the transaction aforesaid was not in the usual course of banking business which either the plaintiff or the defendant bank was authorized to carry on; that the plaintiff is not an innocent holder of either of said notes; that the defendant bank received no benefit from said transaction; that it had no knowledge thereof until a few days prior to its suspension; that no notice of the dishonor of said notes was ever given to the defendant bank." Also that "at the date of the suspension of the First National Bank the United States National Bank was indebted to it in the sum of $467.86, that sum then being on deposit in the said United States National Bank to the credit of the First National Bank of Little Rock; and that the same has never been paid."

The receiver prayed that "he be discharged from all liability upon the notes sued on herein, and that he have judgment against[129] the plaintiff for the said sum of $467.86, and interest from the 1st day of February, 1893."

The plaintiff bank denied the indebtedness of $467.86, and averred "that at the time said First National Bank failed it was indebted to plaintiff in a large amount, to wit, the notes sued upon herein, and plaintiff applied said $467.86 as a credit upon said

Little Rock, Ark., Dec. 7, 1892.
Four months after date we, or either of us,
promise to pay to the order of James Joyce
five thousand dollars, for value received, ne-
gotiable and payable, without defalcation or
discount, at the First National Bank of Lit-indebtedness."
tle Rock, Arkansas, with interest from The issues thus made up were brought to

trial before a jury. Upon the conclusion of | per cent. Money rates are little firmer. Anthe testimony the court, at the request of swer if wanted. U. S. Nat. Bank. the plaintiff bank, instructed the jury to Little Rock, Ark., July 6, 1892. find a verdict for it, which the court did, and United States Nat. Bank, N. Y.: denied certain instructions requested by the We can use fifty thousand additional at defendant. The jury found for the plaintiff, five per cent; will send bills to-morrow. as instructed, for the full amount of the First Nat. Bank. notes sued, less the amount of the set-off,

and judgment was entered in accordance


A writ of error was sucd out to the circuit court of appeals, which affirmed the judgment, and the case was brought here.

There had been two other trials. The rulings in which and the action of the circuit court of appeals are reported in 27 U. S. App. 605, and 49 U. S. App. 67.

The defendant assigns as error the action of the circuit court in instructing the jury to find for the plaintiff bank and in refusing the instructions requested by the defendant. The latter were nineteen in number, and present every aspect of the defendant's defense and contentions. They are necessarily involved in the consideration of the peremptory instruction of the court, and their explicit statement is therefore not necessary.

The evidence shows that the New York bank solicited the business of the Little Rock bank by a letter written by its second assistant cashier, directed to the cashier of the Little Rock bank, and dated June 21,


Among other things the letter stated: "If you will send on $50,000 of your good, shorttime, well-rated bills receivable, we will be pleased to place them to your credit at 4 per


The reply from the Little Rock bank came, not from its cashier, but from its president, H. G. Allis, who accepted the offer and inclosed notes amounting to $50,728, among [230]which *were three of the City Electric Railway Company, the maker of three of the notes in controversy. When first forwarded they were not indorsed, and had to be returned for indorsement. They were indorsed, and the letter returning them was signed by Allis. To the letter forwarding them the New York bank replied as follows:

New York, June 27th, 1892. H. G. Allis, Esq., President, Little Rock, Ark. Dear Sir: We have this day discounted the following notes contained in favor of the 24th inst., and proceeds of same placed to your credit.

made and accepted, H. G. Allis, as president, In accordance with the proposition thus York bank a letter, inclosing what he dewrote on the 9th of July, 1892, to the New nominated "prime paper, amounting to $50,301.88," and requested proceeds to be placed "to our credit and advise." These notes proceeds, less discount, amounted to $49,were discounted and acknowledged. Their


On July 26, 1892, the New York bank telegraphed:

*New York, July 26th, 1892. [131] First National Bank, Little Rock, Ark.: Can take fifty thousand more of your wellrated bills discounted at five per cent.

U. S. Nat. Bank. To this H. G. Allis, as president, answered as follows:

Little Rock, Ark., July 29, 1892.
United States National Bank, New York City.
Gentlemen: Your telegram of the 26th,
saying you could take $50,000 more short-
time, well-rated paper, I placed before our
board to-day.

While it is two weeks earlier than we need
it, on account of the rate we will take it now,
and I inclose herein paper as listed below;
amount, $50,089.93.
Yours very truly,

H. G. Allis, President.
We hold collaterals subject to your order;
see (pencil) notations on paper for rating.
H. G. Allis, Pr.

In the list of notes were two by the City Electric Street Railway Company and two by the McCarthy & Joyce Co., who were the makers of two of the notes in controversy. There was one by N. Kupferle for $5,000, "due Nov. 8, 1892." The significance of this will be stated hereafter.

These notes were discounted and the fact

communicated to H. G. Allis, Esq., president,
Little Rock, Ark.


The next letter contains notes for discount from the Little Rock bank, sent by its cashier, W. C. Denney. The proceeds amounted The notes were enumerated, their amounts to $24,413.05, acknowledgment of which was calculated and footed up and discount at 4 The next communication was about the per cent deducted, and the proceeds, amount-notes in controversy. It was dated Noveming to $50.216.48, placed to the credit of the ber 25, 1892, and was signed by W. C. Denthe notes was sent by H. G. Allis, as presiney, cashier. The letter, however, inclosing dent. The correspondence is as follows:

Little Rock bank.

On July 6, 1892, the following telegrams were exchanged:

The First National Bank of Little Rock, Ark.
Nov. 25, 1892.

New York, July 6th, 1892. First National Bank, Little Rock, Ark.: Will give you additional fifty thousand on short time, well rated bills discounted at five United States National Bank, New York City. 922

174 U. S.

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