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U.S. Supreme Court

Exchange Nat'l Bank v. Third Nat'l Bank, 112 U.S. 276 (1884)

Exchange National Bank of Pittsburgh v.

Third National Bank of New York

Argued November 6, 1884

Decided November 24, 1884

112 U.S. 276


A bank in Pittsburgh sent to a bank in New York, for collection, eleven unaccepted drafts, dated at various times through a period of over three months, and payable four months after date. They were drawn on "Walter M. Conger, Sec'y Newark Tea Tray Co., Newark, N.J." and were sent to the New York bank as drafts on the Tea Tray Company. The New York bank sent them for collection to a bank in Newark, and, in its letters of transmission, recognized them as drafts on the company. The Newark bank took acceptances from Conger individually, on his refusal to accept as secretary, but no notice of that fact was given to the Pittsburgh bank until after the first one of the drafts had matured. At that time, the drawers and an endorser had become insolvent, the drawers having been in good credit when the Pittsburgh bank discounted the drafts. Held that the New York bank was liable to the Pittsburgh bank for such damages as it had sustained by the negligence of the Newark bank.

The circuit court having, on a trial before it without a jury, made a finding of facts which did not cover the issue as to damages and given a judgment for the defendant, this Court, on reversing that judgment, remanded the case for a new trial, being unable to render a judgment for the plaintiff for any specific amount of damages.

The Exchange National Bank of Pittsburgh, Pennsylvania, brought this suit against the Third National Bank of the City of New York, in the Circuit Court of the United States for the District of New Jersey, to recover damages for the alleged negligence of the defendant in regard to eleven drafts or bills of exchange endorsed by the plaintiff to the defendant for collection. The suit was tried before the court without a jury. It made a special finding of facts and rendered a judgment for chanrobles.com-redchanrobles.com-red

Page 112 U. S. 277

the defendant, to review which the plaintiff has brought this writ of error.

The facts found are these, in substance:

The drafts were drawn by Rogers & Burchfield at Pittsburgh, to the order of J. D. Baldwin, and by him endorsed, on "Walter M. Conger, Sec'y Newark Tea Tray Co., Newark, N.J." and were discounted before acceptance, by the plaintiff at Pittsburgh, for the drawers. They bore different dates, from June 8, 1875, to September 20, 1875, and were in all other respects similar except as to the sums payable, and in the following form:

"$1,042.75 PITTSBURGH, June 8, 1875"

"Four months after date, pay to the order of J. D. Baldwin ten hundred and forty-two 75/100 dollars, for account rendered, value received, and charge to account of"


"To Walter M. Conger"

"Sec'y Newark Tea Tray Co., Newark, N.J."

They were transmitted for collection at different times before maturity by the plaintiff to the defendant in letters describing them by their numbers and amounts, and by the words "Newark Tea Tray Co." They were sent by the defendant to its correspondent, the First National Bank of Newark, enclosed in letters describing them generally in the same way, except that, in two of the letters, they were described as drawn on "W. M. Conger, Sec'y." The drafts were received by the defendant in New York within a day or two of the time of discounting them. They were presented by the First National Bank of Newark to Conger for acceptance, who, except in one instance, accepted them by writing on the face these words: "Accepted, payable at the Newark National Banking Co. Walter M. Conger." When the acceptances were taken, the time of payment was so far distant that there was sufficient time to communicate to the plaintiff the form of the acceptance, and for the plaintiff thereafter to give further instructions as to the form of acceptance. The Newark bank held the drafts for payment, but the plaintiff was not advised of the form of chanrobles.com-redchanrobles.com-red

Page 112 U. S. 278

acceptance until, on the 13th and 19th of October, two of them were returned to it by the defendant. At that time the drawers and endorsers were insolvent, but the drawers were in good credit when the drafts were discounted by the plaintiff. The drafts were duly protested for nonpayment, but none of them was paid. The Newark Tea Tray Company is a New Jersey corporation doing business in that state, and Walter M. Conger is its secretary. The drafts were represented to the plaintiff by Burchfield, one of the drawers, who offered them for discount, to be "the paper of the Newark Tea Tray Company" drawn against shipments of iron by Rogers & Burchfield to that company, and were discounted as such by the plaintiff. He also represented that Walter M. Conger was the person who examined the shipments of iron and "accepted the drafts," and that they were drawn in this form for the convenience and accommodation of the company. On drafts of Rogers & Burchfield on the "Newark Tea Tray Co.," dated May 4, 1874, May 20, 1874, and June 30, 1874, discounted by the plaintiff, and transmitted for acceptance to the defendant, and by it sent to the same Newark bank, that bank took acceptances from Walter M. Conger individually, without notice to the plaintiff, and Conger, during the time drafts sent by the plaintiff to the defendant, addressed to the "Newark Tea Tray Co." and to "Walter M. Conger, Sec'y Newark Tea Tray Co., Newark, N.J.," were in the hands of the Newark bank to procure acceptance, informed the cashier of the Newark bank that he would not accept these drafts in his official capacity as secretary.

The judgment was in favor of the New York bank. The Pittsburgh bank sued out this writ of error to reverse it. chanrobles.com-redchanrobles.com-red

Page 112 U. S. 280


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