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seven or eight residences. It will be noticed that the complaint charged appellant with maintaining the woodyard within one hundred and fifty feet of a particular residence located in block 20 and fronting on Selby avenue.

Appellants claim that the ordinance is void because of uncertainty, for the reason that "residence district" is not defined, and that it is impossible to determine what is meant by "inhabited" portion of a residence 428 district. In a general sense the residence portion of the city of St. Paul may be distinguished from the central business section; but it would be a difficult matter to locate any definite line between the business and residence sections. There are many business sections within the general residence district, and, as developed in this case, nearly the entire frontage of a block on a particular street is devoted to business. If it be conceded that the common council, in enacting this ordinance, had in mind the general outlying residence portion, as distinguished from the central business portion, of the city, then it is uncertain what is meant by the inhabited portion of such residence district. Does this mean within one hundred and fifty feet of any house occupied as a residence? Such seems to have been the idea of the state in drawing the complaint. Or does it mean that territory, embraced within a circle the diameter of which is three hundred feet, wherein the majority of the houses are residences? Such seems to have been the position of the state at the trial. Or does it mean a block, or ward, or some other division? We are of the opinion that appellants' objection to the ordinance upon the ground of uncertainty and indefiniteness is well taken, and that it is void for that reason.

Order reversed.

Municipal Ordinances regulating the location of dairies (St. Louis v. Fischer, 167 Mo. 654, 97 Am. St. Rep. 614), livery-stable keepers (Chicago v. Stratton, 162 Ill. 494, 53 Am. St. Rep. 325), slaughterhouses (Portland v. Meyer, 32 Or. 368, 67 Am. St. Rep. 538), laundries (Ex parte Sing Lee, 96 Cal. 354, 31 Am. St. Rep. 218), and other business places of a more or less objectionable character, are generally regarded as constitutional if reasonable and definite in their terms.

UNION NATIONAL BANK OF COLUMBUS v. WINSOR. [101 Minn. 470, 112 N. W. 999.]

BANKS AND BANKING-Discount of Note-Bona Fide Holder. If a bank discounts paper for a depositor and gives him credit upon its books for the proceeds thereof, it is not a bona fide holder for value so as to be protected against infirmities in the paper, so long as no part of the deposit is drawn or the balance of the account exceeds the proceeds of the discounted paper, unless, in addition to the mere fact of crediting the depositor with the proceeds of the paper, some other and valuable consideration passes. (p. 642.)

C. A. Dickey and G. C. Stiles, for the appellant.

Reynolds & Roeser, for the respondent.

470 ELLIOTT, J. The Union National Bank of Columbus, Ohio, brought an action against Samuel Winsor and eleven other persons to recover the sum of $840 and interest thereon, alleged to be due upon a certain promissory note dated June 11, 1902, due July 1, 1905, signed by the defendants, payable to McLaughlin Brothers, and by said payees claimed to have been transferred, sold and assigned for a good and valuable consideration to the bank before maturity. The answer denied that the bank was a bona fide purchaser of the note for value before maturity, and alleged that the note was obtained by McLaughlin Brothers through fraud and false representation. When the case came to trial it was conceded, for the purposes of a motion to direct a verdict in favor of the plaintiff on the ground that it was a bona fide purchaser of the note for value, that the note was obtained by fraud, and that as between McLaughlin Brothers and defendants a defense existed, or at least that the evidence was such as required the issue to be submitted to the jury. 471 The court

directed a verdict for the plaintiff on the ground that the undisputed evidence showed that the plaintiff bank purchased the note in good faith before it became due and paid therefor the sum of $840. The appeal is from an order denying the defendants' motion for a new trial.

The question is whether the evidence required the court to direct a verdict in favor of the plaintiff. McLaughlin Brothers were dealers in horses, and through their agents sold a stallion to the appellants. The note upon which this suit was brought was one of three given as a consideration for a horse. McLaughlin Brothers, who resided in Ohio, assigned Am. St. Rep., Vol. 118-41

and delivered the note to the Union National Bank of Columbus. It appears that the bank took the note in good faith without knowledge of the fraud; but it also appears that the bank paid McLaughlin Brothers nothing for the note. John R. McLaughlin, a member of the firm of McLaughlin Brothers, testified that he sold the note to the Union National Bank and that the money received therefor was placed to the credit of McLaughlin Brothers. The cashier of the bank testified as follows:

"Q. How much, if anything, did the bank pay McLaughlin Bros. for this note? A. Eight hundred forty dollars. "Q. How was this amount paid? A. It was credited to their account in the ledger.

"Q. You may state from your personal knowledge, if you can, how soon after credit was given to McLaughlin Bros. for this note that they drew the money out of the bank? A. The only answer I could give to that question would be that all of the deposits of McLaughlin Bros. are checked out from time to time in the regular course of business. This, as all others, was checked out in the regular course of business.

"Q. Can you state what their balance was on April 24, 1905? A. Yes, I can; $19,002.66 is the amount of their balance after this credit was given them on April 24, 1905.

"Q. Can you state from your personal knowledge what their balance was on July 1, 1905? A. Six thousand nine hundred and twenty-seven dollars and sixteen cents."

It does not appear that the account of McLaughlin Brothers was at any time less than the sum last mentioned. This does not show that the bank was a purchaser for value.

472 Where a bank discounts paper for a depositor, and gives him credit upon its books for the proceeds of such paper, it is not a bona fide holder for value, so as to be protected against infirmities in the paper, unless, in addition to the mere fact of crediting the depositor with the proceeds of the paper, some other and valuable consideration passes. Such a transaction simply creates the relation of debtor and creditor between the bank and the depositor, and so long as that relation continues and the deposit is not drawn out, the bank stands in the same position as the original party to whom the paper was made payable, even though the bank took the paper before maturity and without notice. By giving credit to the indorser on his deposit account the bank in effect agrees to pay him that amount of money on demand by check or

order, and parts with nothing of value. As long as the amount thus credited remains undrawn by the depositor, the bank, if it receives notice of the fraud, is still in a position to return the note to the depositor and cancel the credit. As said by Mr. Justice Brewer in Mann v. National Bank, 30 Kan. 412, 1 Pac. 579: "The proposition rests on the plainest principles of justice, and in no manner impairs the desired negotiability and security of commercial paper. Whenever the holder is a bona fide holder, he has a right to claim protection, but protection only to the extent he has lost or been injured by the acquisition of the paper. If he has parted with value, either by a cash payment, or the cancellation of a debt, or giving time on a debt, or in any other manner, to that extent he has a right to claim protection; but, when he has parted with nothing, there is nothing to protect. A mere promise to pay is no payment. He may rightfully say to the party from whom he purchased, "The paper you have given me is valueless, and therefore I am under no obligations to pay'; and, if the paper be in fact valueless, payment cannot be compelled. Now, the relation of a bank to its depositor is simply that of debtor. The bank owes the depositor so much. If the deposit is valueless, its obligation to pay is without consideration, and it may decline to pay. There is nothing in the relation of a bank to its depositor which takes its obligation to its depositor out of the general rule of debtor to creditor": Manufacturers' Nat. Bank v. Newell, 71 Wis. 309, 37 N. W. 420; Mann v. National Bank, 30 Kan. 412, 1 Pac. 579; Fox v. Bank of Kansas City, 30 Kan. 441, 1 Pac. 789; Dreilling v. First Nat. Bank, 43 Kan. 197, 19 Am. St. Rep. 126, 23 Pac. 94; Lancaster Nat. Bank v. Huver, 114 473 Pa. 216, 6 Atl. 141; Dresser v. Missouri & I. Ry. C. Co., 93 U. S. 92, 23 L. ed. 815; Thompson v. Sioux Falls Nat. Bank, 150 U. S. 231, 244, 14 Sup. Ct. Rep. 94, 37 L. ed. 1063; Drovers' Nat. Bank v. Blue, 110 Mich. 31, 64 Am. St. Rep. 327, 67 N. W. 1105; City Deposit Co. v. Green (Iowa), 103 N. W. 96; Merchants' Bank v. Marine Bank, 3 Gill, 96, 48 Am. Dec. 300; Central Nat. Bank v. Valentine, 18 Hun, 417, and cases cited; Albany County Bank v. People's C. I. Co., 92 App. Div. 47, 86 N. Y. Supp. 773; Citizens' State Bank v. Cowles, 180 N. Y. 346, 105 Am. St. Rep. 765, 73 N. E. 33; 2 Morse on Banks and Banking, sec. 603; 1 Daniel on Negotiable Instruments, 5th ed., sec. 779b; 4 Am. & Eng.

Ency. of Law, 2d ed., 298; 7 Cyc. 929; Randolph on Commercial Paper, sec. 994.

The burden was upon the plaintiff to show that it paid a valuable consideration for the note. This it failed to do. The evidence shows that when the note was discounted the bank was the debtor of McLaughlin Brothers to a large amount, and that the only effect of the discount of the note was to increase the indebtedness by the amount of $840. So long as McLaughlin Brothers did not reduce their account to less than $810, the bank was not a purchaser of the note for value. Upon receiving notice of the fraud, it had the right to charge the note to McLaughlin Brothers' account, and leave them to contest the validity of the note with the makers. The order is therefore reversed, and a new trial granted.

Bona Fide Purchasers or Holders.-If a Bank Discounts a Note before maturity, and places the amount to the credit of the payee, this alone does not constitute the bank a bona fide holder; but if the payee subsequently checks against and exhausts the amount of his credit at the time the note was placed to his account, before the bank has notice of any equities, it will be considered an innocent purchaser for value: Dreilling v. First Nat. Bank, 43 Kan. 197, 19 Am. St. Rep. 126. And the mere crediting on a depositor's account by a bank on its books of the amount of a check drawn on another bank, where the depositor's account continues sufficient to pay the check in case it is dishonored, does not constitute the bank a holder in due course: Citizens' State Bank v. Cowles, 180 N. Y. 346, 105 Am. St. Rep. 765.

SECURITY BANK OF MINNESOTA v. PETRUSCHKE. [101 Minn. 478, 112 N. W. 1000.]

BANKS AND BANKING-Discount of Depositor's PaperBona Fide Holder.—If a bank discounts a note for its depositor and gives him credit on its books for the proceeds, it becomes a bona fide purchaser of the note for value so as to protect it against infirmities in the paper, if, before it receives notice of such infirmities, it pays to the depositor or to his order an amount which reduces his deposit to a sum less than was placed to his credit, as the proceeds of the note. (p. 646.)

A. N. McGindley, for the appellant.

Crasweller & Crassweller, for the respondent.

478 ELLIOTT, J. This is an action in which the plaintiff, the Security Bank of Minnesota, sought to recover upon a

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