It was to that extent a rightful application of sage of the resolution to suspend, neither the the proceeds of the mortgage under the trust president, cashier, assistant cashier, nor teller redeed. The bonds which the mortgage was given mained in the bank. The doors of said bank to secure were void as personal obligations of remained open until May 2, 1877, and Ashton Mrs. Kerper. They were neither at law or in C. Borhek, one of the trustees of the bank, but equity any charge upon her estate. none of its executive officers, received payment of notes falling due, but he neither received any money on deposit nor made any payments. On May 1, 1877, a citation was issued by the Court at the instance of a creditor, directed to said bank, requiring them to show cause why they should not be decreed to make a general assignment for the benefit of creditors, returnable May 7, 1877. On that day the defendants filed their answer, admitting their insolvency and willingness to assign to G. B. Linderman, and a decree was made as prayed for. On May 9, 1877, a general assignment was executed according to the decree, under Act of Assembly of 16th April, 1850.

We are of opinion that so much of the decree as sequestered the rents and profits of Mrs. Kerper's estate to be paid to the complainants was erroneous, as was the order of sale of the mortgaged premises, the proceeds to be invested and the interest paid to the plaintiffs towards satisfaction of their mortgage, but we are of opinion that the complainants are entitled to the security of their mortgage to enforce the payment of $1128, or whatever was the exact amount of the balance paid on the $2000 mortgage with interest.

To this extent the mortgagees have a full remedy at law upon their mortgage, and it will be the duty of the Court below to permit them to proceed thereon for the purpose of realizing that

amount.

Decree reversed and bill dismissed, each party to pay their own costs in the Court below and on this appeal.

Opinion by SHARSWOOD, J.

Jan. '78, 272.

On May 2, 1877, Levin J. Krause, a director or trustee of said bank, acting on behalf of William Leibert (both said Krause and said Leibert knowing the insolvent and suspended condition of said bank) presented to Ashton C. Borhek, at the banking house of said bank, the following checks :

April 3, 1878. dred and Sixty and

Endorsed-LEVIN J. KRAUSE.

Lanback v. Leibert, Banks and banking-Checks-Effect of drawing upon fund.

As between the depositor and his banker, a check drawn by the depositor operates as an appropriation of the fund from the date of its presentment, and the banker cannot refuse to receive it in payment of an independent debt due by the depositor to him.

Error to the Common Pleas of Northampton County.

Assumpsit, by Lanback, assignee for the benefit of the creditors of the Dimes Saving Bank, against Wm. Leibert. The following case stated was agreed upon for the opinion of the Court :Leibert, being assignee for the benefit of the creditors of John Krause, had to his credit as "assignee" in the Dimes Saving Bank, on May 2, 1877, the sum of $4476.53, funds belonging to the said estate. The Saving Bank, on May 2, 1877, was the holder of certain notes, on which Leibert was liable as maker and endorser, to the amount of $5150.

No.

WILLIAM LEIBERT,

Received this under protest.

Bethlehem, Pa., May 2, 1877

Dimes Saving Institution of Bethlehem. and Fifty Dollars, to make up three notes, one for $450.1%, Pay to the order of William Leibert Fifteen hundred one for $600., and one for $500.. $1550.100.

No.

WILLIAM LEIBERT, Assignee.

Endorsed-WILLIAM LEIBERT.

Received this under protest.

Bethlehem, Pa., May 2, 1877. Dimes Saving Institution of Bethlehem. Pay to the order of Levin J. Krause, one hundred and Seventy-eight and Dollars. 100 WILLIAM LEIBERT, Assignee. $178,00

Endorsed—LEVin J. Krause.

Amounting to the sum of three thousand nine hundred and eighty-eight (3988) dollars, which checks were received by said Ashton C. Borhek under protest, and so marked.

The question submitted for the opinion of the Court is, whether William Leibert is bound to pay the assignee in cash the whole of the said On April 30, 1877, the said Dimes Saving In- notes on which he is individually and as endorser stitution resolved to suspend, and to apply for a liable, or whether the said checks, amounting to receiver to wind up the affairs of the concern. $3988, are payment to that amount of the said They were incorporated by act of General As-notes. If the Court be of opinion that said Leisembly of October 23, 1863, and after the pas-bert is so liable, then judgment to be entered for

After argument upon this case stated, the Court below entered judgment in favor of the plaintiff. MEYERS, P. J., in an elaborate opinion, held that the transaction of May 2, 1877, between Krause, on behalf of the defendant, and Borhek, on behalf of the bank, was not, either in law or fact, a payment on the notes in suit.

the plaintiff for the amount of said notes and in- on a bank, and the defendant in the attachment, terest from the maturity of said notes, but if not, subsequently acting as agent for a third person, then judgment to be entered in favor of plaintiff deposited cash with the garnishees in his own only for the balance remaining due on said notes name, and also procured said garnishees to disafter deducting said sum of $3988; the costs to count drafts drawn by said defendant, though in follow the judgment. fact as agent, which were paid by his principal. Subsequent to the attachment, the defendant drew out the funds by his checks and applied them to the business of his principal. Yet it was held that the garnishees were liable to the attaching creditor, although the jury found that all the funds were deposited and drawn out by the defendant as agent for others. It does not clearly appear from the history of the case whether the bank had knowledge at the time the money was deposited that it did not in fact belong to the depositor, but the fact being that it stood in his name and apparently subject to the operation of the attachment, the bank had no right to pay out the money to the defendant, on the information that it belonged to him as agent. Especially where the cestui que trust never gave notice to the attaching creditor of any claim, or never appeared in court to move that the attachment should be quashed, nor took any steps asserting ownership or indicative of it. (Jackson v. Bank of U. S., 10 Barr, 61.)

On the question of set-off, his opinion was as follows:

Can said checks or indebtedness be deducted from said notes by way of set-off? Generally where one person is indebted to another the latter can set off a debt due in the same right. The objection on the part of plaintiff to allow said checks or indebtedness to be treated as a set-off is based on the ground that they are not due by the bank in the same right; that two of said checks are signed by the defendant as assignee, and that the credit of the defendant on the books of the bank is in the name of the defendant as "assignee ;" and the fact, admitted in the case stated, that said credit was in fact for trust funds of the assigned estate of John Krause to the defendant and another, for the benefit of creditors. There is no doubt that the objection would be well taken if said credit had been in the name of the defendant as one of the assignees of John Krause for the benefit of creditors. It is contended on the part of the defendant that the addition of the word "assignee" to the name of the defendant as depositor does not without any further designation give the deposit the character of a trust fund, and make the depositor a creditor of the bank in a fiduciary character. In other words, it is claimed that the word "assignee" is mere surplusage, and that the credit in its legal effect between the depositor and the bank is the credit of the depositor in his individual right, and as such he has a legal right to the deposit, and to sue for and recover the same. Swartwout v. Bank, 5 Denio, 555.

The reason for this decision, as collected from the opinion of the Court, seems to be, that the defendants, to protect themselves from payment to the plaintiff, must show that by their account so kept they are liable to pay the United States this balance.

This case was somewhat doubted by HARE, J., in Paxton v. Sanderson (3 Phil. R. 303), but was fully sustained in Bank v. King (5 P. F. S. 207), on the ground that at the time the money was paid in bank the latter had no knowledge that the money belonged to another, and that before attachment they could not have resisted the claim of the depositor in the absence of notice, but that a subsequent payment of the money on the checks of the defendant in the attachment would not entitle the garnishee to defend against the scire facias by attempting to show that the money deposited in fact was the money of some undisclosed principal of the depositor. But neither the case of Jackson v. Bank nor Bank v. King decides that, if the garnishee had not paid out the fund to the depositor, the former could not have defended on the ground that the money did not belong to the depositor. But in Bank v. Jones (6 Wr. 536, 8 Wr. 254), and Bank v. Ryan (14 P. F. S. 236), it was held, that, where money was deposited in the name of a person simply as agent, it was competent for the bank, as garnishee in an attachment against the depositor, to show by evidence aliunde that the money belonged to a third person. It was, however, said by READ, J., in the latter case, that, where the depositor can at any time draw money out on his own check, and no person could interpose to prevent it, it is liable to attachment. The same principle is ruled in Bank v. King (7 P. F. S. 202). In Stair v. Bank (5 P. F. S. 364), Wolf, the sheriff of York County, and also

W. S. Kirkpatrick, contra.

Although Leibert deposited this fund in his name as assignee, the addition of that appellation did not prevent him maintaining an action for it in his own name. This has been well established in cases against executors or administrators.

Coe v. Hutton, 1 S. & R. 404.
Kline v. Guthart, 2 P. & W. 490.
Wilmarth v. Mountford, 8 S. & R. 124.

executor of Shearer, deposited money in bank which was credited to Wolf in his account as sheriff, but noted in his bank book by a bank officer as belonging to Shearer's estate. Wolf died, and letters de bonis non c. t. a. were granted to another person, who drew a check on said bank for the money deposited by Wolf and noted in his bank book as belonging to Shearer's estate. The bank refused to pay it. Suit was brought by the administrators against the bank, and on proof of said facts the Court held that the action was properly brought and the plaintiff en-was an individual depositor, and the liability of May 6, 1878. THE COURT. William Leibert other could check for the money or prevent its the bank was to him and in his own right. assignee" appayment to him. The word “ pended to his name in the account did not earmark the fund, and gave it no identity as belonging to any particular person or fund. Assignee of whom, or for whom, or of what fund was it? Nothing in the addition answers these questions. Leibert's checks were therefore good for the purposes indicated on their face. The fact that they were received under protest made no differ

case.

titled to recover.
A careful examination of the principle on
which these cases were decided renders it some-
what difficult to apply them to the facts of the
We can well understand, where a princi-
pal is entitled to a fund deposited in bank in the
name of his agent, why the former should be
entitled to recover it, whether on the ground of
fraud or the mere fact that he is the lawful owner
thereof. So also, where money attached in the
hands of a person received in the name of the
defendant in the attachment, but in fact the
third person, that this fact could be
set up as a defence by the garnishee when notice
had been given by the true owner, or where the
latter appeared in court and sought its assistance
to protect him against the attaching creditor. .
. . Moreover, it does not appear that the trust
estate is in any way jeoparded by this plea of

money

of a

set-off, for neither the sureties of the trustees nor their cestuis que trusts are in court asking for relief against said act of the defendant in the manner before stated, and, until that is done, or it is made to appear that the contract between the plaintiff and defendant with respect to said money deposited was not on the part of the defendant in his individual right, but with him as one of the assignees of John Krause for the benefit of creditors, we are compelled to hold that the defendant is entitled to set off against the plaintiff's claim the full amount of defendant's credit standing in plaintiff's books, as "William Leibert, assignee," as stated in case stated.

And now, December 3, 1877, judgment is entered in favor of the plaintiff, amount to be ascertained by the prothonotary.

The plaintiff took this writ, assigning for error the entry of judgment for plaintiff, on the question of set-off, "which question was not submitted in the case stated."

W. E. Doster, for the plaintiff in error. The Court below sustained the intention of the plaintiff upon the main question raised in this case, but fell into error by permitting that to be used as a set-off which could not have been used as payment. In this the Court exceeded its powers. In determining a case stated, they are limited to the consideration of questions raised upon the case.

ence.

No

What right had the bank to protest? Its duty was payment to its depositor, and the checks were sufficient vouchers. The protest could other. All it could do was to pay the money to avail no one else, for it was not a trustee for anLeibert. The checks were therefore his appropriation of his deposit to the purpose expressed, of which the bank had notice when they were received. The delay in payment resulting from the refusal and protest did not change the effect hands of the bank itself and subject to his draft, of the appropriation. The money being in the and the checks being an immediate appropriation of this money, operated to extinguish the notes held by the bank against Leibert. It was not a mere assignment of a fund in the hands of a third party, but a direct application of the money, which the bank itself held and was bound to pay over to him, to the notes in question, and therefore the bank was bound so to apply it. On what principle can the bank, with the money in its own hands, and a direction to apply it to payment, maintain suit on the notes and recover the cash, leaving the money in its hands, already appropriated, to go to payment of its other debts? Clearly this would be grossly inequitable. The question propounded in the case stated is whether Leibert was liable to pay the notes in cash at the suit of the bank. The Court answered this substantially correctly. The criticism on the socalled set-off is therefore unavailing. Judgment affirmed.

Opinion by AGNEW, C. J.

By the laws of Georgia, the return of the of ground rent, and brought $3000, subject to the The premises in question were sold for arrears sheriff may be traversed after notice to the plain-ground rent principal of $7000. tiff. (See Laws of Georgia.) Every State must ground rent principal of $7000. give the same force and effect to a judgment as

there; and further that the price was inadequate, The trustees filed exceptions to the above adthere being two persons who would give double what it brought.