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."

v.

NEW YORK.

(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.

1.

2.

3.

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.]

1889.

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 27]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."

Three of said notes are in the following form: $5,000.

34131

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, without defalcation or discount, at the First National 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

form:

*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 liability 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 ap plied 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, negotiable 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

therewith.

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,

1892.

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

cent."

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

641.68.

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.

made.

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.