of the court to decide whether a specific answer should or should not have been required. Indeed, the interrogatory seems to have been improvidently submitted, for the Supreme Court, in its opinion, says:

"The evidence disclosed that a large number of Edmisson cattle had been shipped to Kansas City, in various shipments. Bryson testifies that the total number of cattle shipped was 2,578. There was no dispute on the part of the plaintiff as to the number of cattle that were shipped. The entire controversy was as to the number of cattle that were delivered by the plaintiff to the agent of the defendant, and the number converted after allowing the defendant all that it was entitled to under and pursuant to the contract."

5. Plaintiffs in error finally complain as ground of error of certain remarks by the court which, it is contended, were prejudicial. The Supreme Court replied to this assignment of error that no objection had been taken to the remarks complained of. Counsel now say that to have made objection would have made "a bad matter much worse." But we cannot accept the excuse. We have examined the remarks complained of, and we do not think they had the misleading strength that is attributed to them. At any rate, it was the duty of counsel to object to them, and if then the court made matters worse, or did not correct what was misleading or prejudicial, its action would be subject to review.

Judgment affirmed.

RANKIN, RECEIVER OF THE CAPITOL NATIONAL BANK OF GUTHRIE, OKLAHOMA, v. CITY NATIONAL BANK OF KANSAS CITY, MISSOURI.1

ERROR TO THE CIRCUIT COURT OF APPEALS FOR THE EIGHTH

CIRCUIT.

No. 51. Argued November 12, 13, 1907.-Decided February 24, 1908.

In a transaction between two banks the president of one gave his personal note to the other, accompanied by an agreement of his bank, signed by himself as president, that the proceeds of the note should be placed to the credit of his bank by, and remain with, the discounting bank until the note was paid; while there were certain transfers of checks between him and his own bank the record did not show that the maker of the note personally received the proceeds thereof, and no contention was made that the agreement was illegal. Held. that:

Under the circumstances of this case, the discounting bank was entitled to hold the proceeds of the note, as represented by the credit given on its books therefor, as collateral security for the payment of the note and to charge the note against such credit, and relieve itself from further responsibility therefor.

The receiver of a bank stands in no better position than the bank stood as a going concern.

144 Fed. Rep. 587, affirmed.

THE facts are stated in the opinion.

Mr. C. B. Ames, with whom Mr. D. T. Flynn and Mr. W. C. Scarritt were on the brief, for plaintiff in error.

Mr. John A. Eaton for defendant in error.

MR. JUSTICE HOLMES delivered the opinion of the court.

This suit was brought by the receiver of the Capitol National Bank of Guthrie, Oklahoma Territory, which we shall call the Guthrie Bank, to recover the amount of an alleged deposit in the City National Bank of Kansas City, Missouri,

1 Originally docketed as Cherry, Receiver, v. City National Bank; by order of the court George C. Rankin, successor of the former receiver, was substituted as plaintiff in error,

which we shall call the City Bank. At a trial without a jury in the Circuit Court the facts were found and judgment was given for the defendant, which judgment was affirmed by the Circuit Court of Appeals. Cherry, Receiver, v. City National Bank, 144 Fed. Rep. 587; S. C., 75 C. C. A. 343. We give an abridgment of the findings of the Circuit Court.

The bank examiner had complained of excessive loans by the Guthrie Bank and especially of three notes for ten thousand dollars each, made, respectively, by the Missouri, Kansas and Oklahoma Company, the Wild West Show Company, and the Western Horse Show Company, and had directed them to be reduced. Thereupon one Billingsley, its president, who managed its business with the defendant, wrote to the defendant's cashier, saying "I want you to take my note of 30,000.00 and Cr. my Bank with like amount in a special account with the understanding that said account is not to be checked against. My reason for wanting this is that I have that amount of excessive loans that the Department is kicking about. You will not be out any money and loan and deposit will offset each other on your books." The Guthrie Bank had a general deposit with the City Bank, but this on its face was a scheme for a separate paper transaction. The proposal was accepted, Billingsley sent his note, and wrote saying that he had given the Guthrie Bank his check on the City Bank for the amount, adding: "and it is agreed that said [Guthrie Bank] is to keep this 30 Th with you until note is retired together with as large a balance as possible. Chas. E. Billingsley, Pres't."

Billingsley gave the above-mentioned check to the Guthrie Bank, which credited it to his personal account, in which the bank's money was kept, as will be stated later. The same day he gave to the bank a check against his personal account for the same sum, which was charged to that account and credited to bills receivable, and thereupon the three notes objected to by the bank examiner were taken out of the bank's assets and possession. What became of them does not appear. It was argued from several circumstances not necessary to mention

that they were paid by Billingsley, but that fact is not found. Billingsley does not seem to have been personally liable upon them, and all that can be said is that the scheme to get them off the books was carried out. The cashier of the City Bank was away when the letter with Billingsley's note arrived, and there were telegrams; after which the City Bank on September 10 or 11, 1903, charged the note to bills receivable, the check to Billingsley, and credited the Guthrie Bank with $30,000 on general account. On September 14, the cashier, having returned, transferred $30,000 to a special account according to the plan. Billingsley was notified and all transactions in this matter thereafter were entered by the City Bank on this special account.

On November 9, 1903, Billingsley's note falling due, the account was charged with the amount and interest. The same day a letter from Billingsley was received asking an extension. The cashier replied that they had charged his account with the note, but would renew it on satisfactory collateral, and returned the note. Billingsley answered, enclosing a note for $30,000, and requesting that the former arrangement be continued. In answer to this the president of the City Bank wrote that they preferred a demand note, and that to satisfy the comptroller they would rather that it should be for $25,000 instead of $30,000. On November 30, 1903, Billingsley enclosed his note for $25,000 in a letter to the president, requesting that the proceeds be placed as a special deposit to the credit of the bank, and repeating the old agreement: "It being expressly understood and agreed that this fund is not subject to check but is to remain with the City National Bank for the payment of the note, and you are hereby authorized to charge this note to said account at any time you desire." Originally the note was signed "Chas. E. Billingsley Pt." and the letter with his name without addition. On December 12, the president of the City Bank wrote that the note should be signed individually and the letter as president, and enclosed the letter for the change. Billingsley admitted the mistake, added "Prest." to

his signature and returned the letter, at the same time authorizing the City Bank to strike off the "Pt." from the signature on the note, which was done.

On November 30, 1903, in order to make the balance of the City Bank account on the books of the Guthrie Bank correspond with the books of the City Bank, Billingsley gave the teller of the Guthrie Bank his check upon it in favor of the City Bank for $5,000, which was stamped paid, and the amount credited to the City Bank on the books of the Guthrie Bank. On December 7, the City Bank credited the Guthrie Bank with $25,000 on the special account. It credited two per cent interest at the end of each month while the account was open, and there was a small deduction as the result of the first stage for interest on the $30,000 note, so that on April 4, 1904, the special credit to the Guthrie Bank was $24,994.54. On that day the City Bank, having no knowledge that the Guthrie Bank was in a failing condition, charged the note to the account, returned the same duly cancelled, and closed the account. Later on the same day the Guthrie Bank failed and went into the hands of a receiver. The receiver notified the City Bank that the note was not a liability of the Guthrie Bank and that the City Bank would be held.

There are few other facts needing mention. Statements of account were made monthly by the banks to each other up to February 1, 1904, and after that daily reconcilements were made. The statements of the City Bank showed the special or No. 2 account as well as the general one, and these were entered in the Guthrie Bank reconcilement book as No. 1 and No. 2. The Guthrie Bank also recognized the existence of the special account in corrections sent to the City Bank. But the whole amount appeared in its general account. It should be added that the Guthrie Bank was in the habit of borrowing money by issuing notes and crediting the proceeds to Billingsley's personal account, the notes being paid by Billingsley's checks. Billingsley also entered his personal deposits and drew his personal checks upon the same account. It should be added