Brock v. Nw. Fuel Co., 130 U.S. 341 (1889)

The Northwestern Fuel Company, a Minnesota corporation, brought this action, February 18, 1882, to recover from the plaintiffs in error, citizens of Iowa, the sum of $1309.50, alleged to be due under a written contract, made July 21,1881, between the latter and the What Cheer Land and Coal Company, a corporation alleged to be “ doing business in the State of p. 342Iowa; ” the benefits of which contract were assigned by that company to the plaintiff. The contract related to coal to be mined by the What Cheer Land and Coal Company at its mine in Iowa, and which Brock & Co. agreed to receive and pay for at certain specified rates. The defendants, Brock and McKenzie, in their answer, asserted a counter claim of $20,000 against the plaintiff. There was a verdict against the defendants for $1402.47. The case was brought here for review in respect to numerous errors of law alleged to have been committed by the court below, to the prejudice of the defendants.

The judgment is reversed upon the ground that it does not p. 343appear, affirmatively, from the record that the Circuit Court had jurisdiction, Metcalf v. Watertown, 128 U. S. 588, and the cause is remanded for further proceedings in accordance with law.

The allegation of the petitioner is that the court which tried him had not at that time, and in the mode of trial which was pursued, any jurisdiction of the case against him. It is argued p. 344by counsel and alleged in the petition that the District Courts* of the United States in the Territory of Arizona, as in all other Territories, have two distinct jurisdictions: that in the one they sit to exercise the powers and to try the same class of cases that the Circuit Courts of the United States do within the States and in the same manner, while in the other they sit as courts having jurisdiction of the ordinary contests between private parties and of criminal offences arising under the territorial laws.

“ The grand jurors of the United States of America, within and for the Second Judicial District, Territory of Arizona, p. 345being duly impanelled, sworn, and charged to inquire within and for the body of said district, of all offences committed therein against the United States of America, upon their oath present: That Gon-shay-ee, an Apache Indian, late of the Second Judicial District, Territory of Arizona, with force and arms, in said district and Territory, on or about the 5th day of June, a .d. one thousand eight hundred and eighty-eight, and before the finding of this indictment, did then and there feloniously, wilfully, deliberately, premeditately, and with malice aforethought, make an assault on a human being, to wit, William Deal, in the peace of the United States then and there being, and with a certain gun, which then and there was loaded with gun-powder and a leaden bullet, and by him, the said Gon-shay-ee, had and held in his hands, he, the said Gon-shay-ee, did then and there feloniously, wilfully, deliberately, premeditately, and with malice aforethought, shoot off and discharge at, to, against, and upon the said William Deal, thereby and by thus striking the said William Deal with the said leaden bullet, inflicting on and in the body of him, the said William Deal, one mortal wound, of which mortal wound the said William Deal then and there instantly died.

AU these circumstances are so variant, in the nature of the p. 348jurisdiction and the mode in which it must be exercised, that the conviction of the prisoner under the one mode by the law prescribed for the procedure under the other cannot be held to be within the power of the court which proceeded under the wrong jurisdiction. That there exists this system of a distinct jurisdiction, administered by the same court, in the Territory of Arizona, as it does in nearly all the others, is undoubted. The language of § 1910 of the Revised Statutes points very clearly to this distribution of the functions of the courts of the United States in the Territories. It reads as follows:

“The District Court has two distinct jurisdictions. Asa territorial court it administers the local law of the territoria government; as invested by act of Congress with jurisdiction to administer the laws of the United States, it has all the p. 349authority of Circuit and District Courts; so that, in the former character, it may try a prisoner for murder committed in the Territory proper, under the local law, which requires the jury to determine whether the punishment shall be death or imprisonment for life, Laws of Dakota, 1883, c. 9; and, in the other character, try another for murder committed within the Indian reservation, under a law of the United States, which imposes, in case of conviction, the penalty of death.”

“That immediately upon and after the date of the passage of this act, all Indians, committing against the person or property of another Indian or other person any of the following crimes, namely, murder, manslaughter, rape, assault with intent to kill, arson, burglary and larceny, within any Territory of the United States, and either within or without an Indian reservation, shall be subject therefor to the laws of such Territory relating to said crimes, and shall be tried therefor in the same courts and in the same manner, and shall be subject to the same penalties, as are all other- persons charged with the p. 350commission of said crimes respectively; and the said courts are hereby given jurisdiction in all such cases; and all such Indians committing any of the above crimes against the person or property of another Indian or other person within the boundaries of any State of the United States, and within the limits of any Indian reservation, shall be subject to the same laws, tried in the same courts and in the same manner, and subject to the same penalties, as are all other persons committing any of the above crimes within the exclusive jurisdiction of the United States.”

In that case the offence was charged to have been committed within the boundaries of a State of the Union, and the Indian was tried in the Circuit Court of the United States for the District of California, from which a certificate of a divas- p. 351ion of opinion was made to this court, embracing the question whether a murder committed by an Indian on the reservation of Hoopa Valley in that State could be tried in that court. We held that the statute gave this jurisdiction, and that it was constitutional. Incidentally, however, in remarking upon cases of crime committed by Indians in the Territories, the court said that “in this class of cases the Indian charged with the crime shall be judged by the laws of the Territory on that subject and tried by its courts.”

On the 14th of June, 1877, Frederick Dumont, August Henry Reine, and John David Moekel, who composed the firm of F. Dumont & Co., filed their bill in the Circuit Court of the United States for the Southern District of New York against Charles M. Fry, trustee of Schuchardt & Sons, bank-* rupts; Francois Laborde and E. H. Reynes, assignees of Charles Cavaroc & Son, bankrupts; the Louisiana National Bank of New Orleans, and N. W. Casey, receiver of the New Orleans National Banking Association, claiming to be the owners of two hundred and thirty-two bonds of the city of New Orleans, each for the amount of one thousand dollars, which had been in the possession of Schuchardt & Sons and were then in the p. 356possession of Fry, their trustee in bankruptcy, who also held moneys received from the coupons attached to the said bonds; and by amendment set forth that the bonds were purchased by Cavaroc & Son with the money of Dumont & Co., for their joint account, but not in the name of Dumont & Co., nor in the joint names of Dumont & Co. and Cavaroc & Son; that Fry, trustee, refused to deliver up the bonds, and claimed to hold them as security for sums due him from Cavaroc & Son and Casey, as receiver; and that Fry is not entitled to hold the bonds. The bill prays that he be decreed to deliver them up, with the money received from the sale of coupons cut therefrom, and for further relief.

Both the Cavarocs testify that the bonds were left with Schuchardt & Sons for safe-keeping, Cavaroc, Jr., referring to a particular loan on them in the fall of 1870, which led to their p. 358being sent to New York, where they then remained on account of the heavy express charge, and the fact that New York was a better market in which to dispose of them; but Wells, a member of Schuchardt & Sons, testifies:

He considers that the bonds were held by his firm for any balances that the New Orleans National Banking Association might owe, and says that Schuchardt & Sons held them up to the time they were pledged to the bank as security for “ whatever Cavaroc & Son might be indebted for,” but that they had no written authority to hold the bonds collaterally for the bank s p. 359indebtedness, that he knew of, other than the letter of Cavaroc, Senior, of February 15, 1873, hereinafter set forth. He testifies, however, that there was “ a general understanding to that effect arrived at with (in) conversations with C. Cavaroc, Jr., at different times when he was in New York; among others, in August or September, 1873,” although in another portion of his evidence he says: “ I think they were alluded to in 1873, during his visit to New York, in the fall of 1873. I feel quite confident they were alluded to in 1873,” which is “as positive” as he “can be upon the subject.” Any such understanding is specifically denied by Cavaroc, Jr., who asserts that he —

The New Orleans National Banking Association dealt largely in foreign bills of exchange, which it negotiated through Schuchardt & Sons. By the course of business the amount of the foreign bills it remitted from time to time to. Schuchardt & Sons was credited by the latter to the former, and the latter drew upon the former from time to time as funds were required. According to the custom of business at New Orleans, advances are made by bankers to shippers in anticipation of the actual delivery of drafts with accompanying documents, and the New Orleans Bank consequently advanced funds before it could remit drafts, so as to be credited by Schuchardt & Sons with their amount. For the mutual profit of both concerns the bank had at times been permitted by Schuchardt and Sons to draw in advance of remittances. Cavaroc & Son were not p. 360only bankers but large shippers of cotton abroad, and drew against the proceeds of their bills of exchange, which were accompanied by bills of lading.

“ In your letter of the 11th instant you say: ‘ The credit of $100,000, (one hundred thousand dollars,) à découvert, was p. 362predicated upon the deposit of New Orleans city bonds, and on their withdrawal we, of course, supposed the agreement cancelled.’ You know that exchange at New Orleans is purchased by making advances until such time as the drafts are delivered, and it was with view of making our mutual transactions more active that we asked this credit, découvert' at the time. In view of your remark I have nothing to say, except to authorize you to consider a portion of the bonds belonging to my firm, which you have in your possession, as collateral security in case you should not be covered (en cas de découvert).

“When the bank sends the drafts of the bank on third p. 364parties (Havre, Bordeaux, Marseilles, etc., etc.) it must put in the hands of Messrs. C. C. & Son, in trust, a deposit of securities, there to remain until the acceptance or the payment, if we deem proper to await the payment.

From this debt, certain amounts collected being deducted, a balance of $180,624.58 was left, making, with $14,691.05 due on gold account, a total indebtedness from the bank to p. 367Schuchardt & Sons of $195,315.63, for which a certificate was issued by the receiver April 8, 1879.

“ Schuchardt & Sons were bankers, in New York, through whom the New Orleans National Banking Association was in the habit of drawing on foreign houses, and who indorsed and disposed of the drafts, or transmitted them for collection, and made advances thereon. They were thus in the habit of indorsing and advancing on bills drawn by the bank on Seignouret Frères, of Bordeaux. In August and September they became uneasy, and required security; and it was agreed p. 368between them and the bank that they would receive and indorse drafts on Seignouret Frères, and accept the drafts of the bank on themselves to a certain limited amount, upon being secured by a pledge of commercial securities, to be deposited in the hands of Charles Cavaroc & Son. In pursuance of this arrangement, on the 17th of September, the bank transmitted to Schuchardt & Sons its drafts on Seignouret Frères to the amount of 250,000 francs, and, at the same time, drew on Schuchardt & Sons against said drafts for the sum of $50,000. On the same day, or the day following, securities of the bank to the amount of $60,000 were selected by the note clerk, by direction of Charles Cavaroc, president of the bank, put into an envelope indorsed with the name of Schuchardt & Sons, and handed to Cavaroc, who handed them to the cashier; and thereafter they were treated in precisely the same manner as the securities which were selected for the Crédit Mobilier and the Park Bank, as shown in the cases which have just been decided.”

vol. cxxx—24 p. 370within a few cents with the account current rendered by you under date of Oct. 1st, it appears that all the drafts which the bank has made on you up to this day have been properly covered, and that is all we guaranteed by the deposit of our bonds.

“ Découvert, n. m. 1 (com.) (of accounts), uncovered balance. Cavaroc, Senior, testifies: “ There is a usage and meaning. The words ‘ à découvert p. 371we use more frequently in French than ‘credit.’ If I write in French to ask an open credit to a banker I will merely ask him: ‘ Let me draw on you à découvert for one or two hundred thousand dollars.’ If I say to the banker, ‘ I will cover you with exchange to that amount,’ as soon as I cover to that amount it is finished. I don’t owe a cent to that amount, à découvert is closed, and I have a right to go on again. It is a revolving credit. For instance, with Schuchardt, suppose I draw to-day $100,000 on Schuchardt and it was à découvert, and the next morning or day after I sent to Schuchardt $100,000 of exchange bought from different houses here, my à découvert is finished — it is closed. As soon as I have remitted exchange for the $100,000 draft of the day preceding the à découvert is closed. Schuchardt is covered then. On the same day or next morning I have aright to draw $100,000 and cover again. As soon as I have remitted $100,000 exchange I have a right to draw again. Therefore, when the bank remitted exchange to cover what the bank had drawn under that credit, à découvert, the guarantee made by me, C. Cavaroc, ceased, and the right to hold these bonds ceased under that guarantee. ... I desire to say, in explanation of the ‘ à découvert ’ spoken of in my testimony, that it had no relation to guarantee and to payment of the exchange remitted by the bank, nor of the solvency of the drawers or indorsers or acceptors, but merely embraced remittance of exchange by the bank. This is the signification of the words ‘ a découvert ’ here and in France, and in the letters sent and received by me, extracts of which are annexed, the words are so understood.”

I. The defendant and appellee Fry, as trustee in bankruptcy for Schuchardt & Sons, had a lien upon the bonds in p. 373question for the payment of the sum of $25,715.22, being the balance due that firm on the account between it and C. Cavaroc & Son, as adjudged by the decree of the court below.

While the banker may have several accounts with his customer, the general or drawing account relates solely to deposits of money on one side, and drafts of money on the other, or their equivalents. Whenever in the course of the transactions, of whatever character, a debt becomes due to the customer, the amount is passed to his credit in this general account; and whenever, on the other hand, a debt becomes due from him it is passed to his debit in the same account. The balance of that account represents & present debt due and owing to the customer or the banker, as the case may be. The conditions of the business, the frequent occasions which p. 374the customer has to suddenly call for money, the possibility that discounted bills or notes will be returned unpaid, the necessity of maintaining confidence and credit with the banker so that he may not hesitate in furnishing discounts or paying an occasional over-draft, all lead to the common practice on the part of customers of keeping securities of various kinds with their bankers, which may serve any purpose which the exigencies of business may require. Collateral which has been furnished for loans or discounts is allowed to remain after the loans have been paid; uncollected paper, bonds, stocks and other securities, and sometimes other valuables are left in the possession of the banker.

It would be to no purpose for the appellants to urge that a demand was made upon Schuchardt & Sons at the time of the p. 375bankruptcy and that at that time there was no adverse balance against Cavaroc & Son, and that Schuchardt & Sons could not retain the bonds as security for a debt not then matured. This suggestion overlooks the material circumstance of the intervening bankruptcy. In the view of a court of equity the occurrence of insolvency which made it impossible that the credit side of the account with Cavaroc & Son should be improved, is a sufficient reason for imposing a stoppage at that point and declaring that the real balance is that which it must inevitably turn out to be.

There are two general forms of financial transactions which are common between a banker and his customers, both of p. 376which are illustrated by the dealings between Schuchardt & Sons and Cavaroc & Son, and also between the former and the National Banking Association. The one consists in the receipt of financial paper, notes, bills, &c., for collection, discount or negotiation, and results in a legitimate credit to the customer of the amount advanced in anticipation, of the collections, or of the amount of the proceeds of an actual discount or sale. For this form of business no other security is required than the paper received.

If, therefore, the ultimate debt to Schuchardt & Sons was created by drafts drawn upon the latter of the à découvert character above described, the bonds would stand as security for it until it was finally paid. The subsequent transmission of foreign bills subsequently dishonored would not pay it and release the security ; even if Schuchardt & Sons had negotiated the bills, they would be obliged, having indorsed them, to take p. 377them up. But if the debt was created by naked drafts drawn upon other parties by Cavaroc & Son, and cashed by way of discount or otherwise by Schuchardt & Sons, the substance of the transaction would still be the making of a loan to Cavaroc & Son upon the security of the bonds.

The precise terms of the pledge are stated in the letter of Cavaroc, Sen., of February 15th, 1873, and by this the bonds are to be held as collateral security “ en cas de découvert,” and the object declared by the correspondence, to gain which the pledge was made, was to obtain for the Banking Association the privilege of drawing “ à découvert” The literal meaning of these expressions shows that the real intent of the pledge was to secure the payment by the Banking Association of any adverse balance of accounts created by its overdrafts; that is, by drawing when it had no balance to draw against. The phrase “à découvert” is, according to the best authorities, a commercial one used in relation to accounts, and means an overdrawn account. To draw, therefore, “ à découvert,” which was the privilege sought and gained by the pledge, is to draw when there is no balance to draw against. The substantive p. 378découvert ” means an uncovered bala/nce of account, which is, of course, an adverse balance of account. There seems to be no support for the effort of the appellants to limit a drawing “ à découvert ” to the case of a draft unaccompanied by a merchandise bill. If the Banking Association should draw such a draft, and yet had at the time a balance in its favor equal to the amount of the draft the drawing would surely not be “ à découvert : ” but a draft drawn without an existing balance, and which would therefore be “ à découvert ” considered by itself, would, if accompanied by a merchandise bill, cease to be “ à découvert” But this would be for the reason that the bill would instantly create a balance in favor of the Banking Association on the general account.

This assertion as to the deposit of bonds was denied by the cashier, and he then referred Schuchardt & Sons to a letter from the president, and that letter is the one in question. After quoting from Schuchardt’s letter of February 11, their statement that the one hundred thousand dollar credit was predicated on the deposit of New Orleans city bonds, Cavaroc thus proceeds: “ You know that exchange at New Orleans is purchased by making advances until the drafts are delivered, and it was in order to accelerate our transactions that we requested that credit of you at that time. In view of your suggestion, there is nothing to be said, except to authorize you, in case you are uncovered, to treat as collateral security a portion of the bonds in your possession belonging to my firm.”1 And p. 383to this Schuchardt & Sons responded to the bank, that, “in accordance with the terms therein stated,” (i.e., in Cavaroc’s letter,) the bank might value on them “ ‘ à découvert,’ for a sum not exceeding as maximum $100,000 (one hundred thousand dollars) against exchange purchases.” Thus the written authority relied on was in no respect different from the understanding in the beginning, as shown by the letter of 1871, that the drafts to be drawn by the bank on the Schuchardts were “ to represent exchange bought and paid for,” and the bonds were to be held under the letters of February, 1873, as collateral to advances by the Schuchardts before remittances of the exchange. And as late as September 19th, 1873, Wells wrote that Schuchardt & Sons still authorized the bank “to draw against purchases of exchange, and in advance of the remittances, to the extent of $100,000, on the conditions specified in the letter of Mr. Cavaroc of 15th February last.”

The drafts on Seignouret Frères & Co. appear to have been drawn September 17th, 1873, for, with damages, $56,410.26, but the dates of the other drafts are not given, and the account between the bank and Schuchardt & Sons, prior to the first of October, 1873, is not before us. The drafts on Dutfoy & Co., amounting, with damages, to $90,256.41, were protested November 29th, December 10th, 13th and 19th. The drafts on Honorât & Co. were protested October 28. No evidence is adduced on behalf of Schuchardt & Sons’ trustee in p. 385bankruptcy as to the length of time on. which these drafts were drawn. We believe we are justified, then, in assuming that it was after the interview between Cavaroc, Jr., and Wells, placed by the latter as transpiring the last of August or first of September, when it was agreed that the amounts of business paper, that is, according to Wells, “bills of exchange drawn against shipments,” which they would take, Schuchardt & Sons might limit, and the limitation was directly imposed of “not more than £10 | M per week on Hambro,” and “not more than fr. 200 | M on first bankers of Paris;” and, further, that when the bank sent “the drafts of the bank on third parties (Havre, Bordeaux, Marseilles, etc., etc.) it must put in the hands of Messrs. C. C. & Son, in trust, a deposit of securities, there to remain until the acceptance or the payment, if we deem proper to await the payment.” This was an arrangement made by Schuchardt & Sons and evidenced by a memorandum prepared, not by Cavaroc, but by Wells. It was not Cavaroc & Son, acting with reference to the bonds, who sought this agreement, but Schuchardt & Sons, acting for their own protection in reference to transactions other than those with which the bonds were connected. The drafts of the bank on third parties were not exchange bought and paid for, nor were drafts drawn by the bank on Schuchardt & Sons against these bills drawn by it directly on Europe, advances made by Schuchardt & Sons against “ purchases of exchange advised by telegraph.” Schuchardt & Sons could have had no expectation of receiving another set of bills drawn against shipments to repay advances made to the bank on these “ clean ” bills already in their hands. They must have relied, as to these bills, upon the credit of the bank, the indorsers and the drawees, and other securities deposited in the hands of Cavaroc & Son; and when Schuchardt, who appears to have been out of town, returned, and it was concluded to limit their operations, Wells writes to Cavaroc that they had “determined to request the bank to limit its exchange business with us to the forwarding of such drafts made by third parties as it shall deem proper to purchase.” There is no intimation up to the 19th of September that Schuchardt & Sons regarded the

VOL. CXXX—25 p. 386bonds as pledged for anything except the remittance of exchange created by drafts against shipments. The transactions in purchasing such exchange, and transactions in the way of accommodation to the bank, or of the purchase of its own drafts on Europe, were kept perfectly distinct, so far as appears. Cavaroc, Jr., testifies that in his interview with Wells, late in August or the first of September, when it was agreed that if the bank sent its own drafts there must be a deposit of securities to insure their acceptance or payment, no agreement was made, verbal or otherwise, in reference to these bonds, and nothing said about them, other than perhaps a casual remark. Wells does not deny this, although he says he feels “ quite confident they were alluded to.” But for a resolution purporting to have been passed by the directors of the bank on the 20th of September, there would be absolutely no evidence in this record that the bonds were to be or had ever been held as security for drafts by the bank directly. These bonds did not belong to the bank. They were largely owned by Dumont & Co. They had never been used except upon a direct order from Cavaroc & Son. A distinct agreement with the latter that they should be held for the debts of the bank must be shown in order to the maintenance of a lien upon them. The resolution does say that the bank, in order to secure its president against any eventual loss ” of the bonds a belonging to the firm of C. Cavaroc & Son, and actually pledged to F. Schuchardt & Sons, agents of the bank at New York, as collateral security for the payment of all foreign exchange bills sent them for negotiation, and by them indorsed,’ thereby authorizes him “ to select as guarantee from the portfolio of the bank such papers as he may think proper, to the extent of (100,000) one hundred thousand dollars,” and that statement may be inconsistent with the theory that all the bonds were pledged for was simply until remittances of exchange actually bought and paid for were made; but when we consider the circumstances under which Cavaroc was situated, that resolution, under which securities to the amount of §100,000 were to be put into his hands, which might be held to secure drafts drawn by the bank itself, in accordance with

There is no element of estoppel about it, and it is a mere question whether a resolution of that kind, passed when both Cavaroc & Son and the bank were on the brink of bankruptcy, should be taken as evidence of such cogency as to overthrow all the correspondence and testimony to the contrary. It may go to the credibility of Cavaroc, it is true. He may have told one story on the stand under oath, and may have told his directors another story in the bank, although it does not appear that he drew the resolution or was consulted as to the particular language in which it should be couched. The facts as we hold them to be were, that the bonds had been pledged, to the extent of $100,000, as collateral to the remittance of exchange, and that it had been agreed with Schuchardt & Sons, by Cavaroc, on behalf of the bank, that, in relation to drafts drawn by the bank directly, other securities should be put in the hands of Cavaroc & Son to secure such last-named drafts. Cavaroc therefore needed to have a resolution of the bank that he might take from its portfolio those additional securities, and the fact that the language of the resolution is broader than the terms of the pledge, or that it was inartificially drawn, or that it misrepresented the ownership of the bonds, does not entitle it to the weight attributed to it on the argument. As against third parties, the terms of a resolution of the directors of a national banking association, when the exigencies of a financial crisis are upon them, in the attempt to prefer one of the bank’s officers, cannot properly be regarded as decisive upon the question of the facts actually existing in respect to such third parties in a given case, and Dumont & Co. and the general creditors of Cavaroc & Son ought not to be foreclosed by Cavaroc’s presence when this resolution was passed. Besides, it is not inconsistent with the terms of the resolution, to confine the reference to foreign bills to all exchange actually purchased, in which view the resolution would simply assert that the pledge was designed to secure, not only the remittance, but the ultimate payment of such exchange, p. 388but could not be stretched to cover “ clean ” bills drawn by the bank itself.

The answer of Fry sets up that they “ were deposited with the said Frederick Schuchardt & Sons, as security for any indebtedness or balances of account which at any time might or could arise in the course of their aforesaid dealings in their p. 390aforesaid character with the said Charles Cavaroc & Son and the said New Orleans Banking Association.”

In our judgment, the bonds, being in effect all pledged to guarantee the remittance by the bank of exchange purchased, could not be held by implication as security for the indebtedness of Cavaroc & Son on a balance of account. The specific pledge withdrew them from the operation of the alleged banker’s lien, for it was inconsistent with the presumed intention of the parties. And, applying the principles upon which such a lien rests, it is doubtful whether it ever existed in favor of Schuchardt & Sons. Undoubtedly while “a general lien for a balance of accounts is founded on custom, and is not favored, and it requires strong evidence of a settled and uniform usage, or of a particular mode of dealing between the parties, to establish it,” and “ general liens are looked at with jealousy, because they encroach upon the common law, and disturb the equal distribution of the debtor’s estate among his creditors, (2 Kent Com. *636,) yet a general lien does arise in favor p. 391of a bank or banker out of contract expressed, or implied from the usage of the business, in the absence of anything to show a contrary intention. It does not arise upon securities accidentally in the possession of the bank, or not in its possession in the course of its business as such, nor where the securities are in its hands under circumstances, or where there is a particular mode of dealing, inconsistent with such general lien. Brandao v. Barnett (Common Pleas), 1 Man. & Gr. 908; S. C. (Exch. Chamb. In error), 6 Man. & Gr. 630; $. C. (House of Lords), 3 C. B. 519, 532 and also 12 Cl. & Fin. 787, 806; Bock v. Gorissen, 2 De G., F. & J. 434, 443. In this latter case the foreign correspondents of a London firm directed the firm to purchase for them Mexican bonds to a specified amount at a specified price, and to hold the bonds at the disposal of the correspondents. The London firm made the purchase and wrote the correspondents that they would, until further order, retain the bonds for safe custody, and it was held that the letters constituted a special contract sufficient to exclude a general lien on the part of the London firm, if they would otherwise have been entitled to any.

In Duncan v. Brennan, 83 N. Y. 487, 491, the language of the court is: “ The general lien which bankers hold upon bills, notes, and other securities deposited with them for a balance due on general account, cannot, we think, exist where the pledge of property is for a specific sum and not a general pledge; ” and in Neponset Bank v. Leland, 5 Met. 259: “ The notes were deposited under special circumstances; they were not pledged generally, but specifically; and this negatives any inference of any general lien, if, in the absence of such special agreement, the law would imply one;” and in Wyckoff v. Anthony, 90 N. Y. 442, that “ where securities are pledged to a banker or broker for the payment of a particular loan or debt, he has no lien on the securities for a general balance or for the payment of other claims.” See also Masonic Savings Bank v. Bang's Administrator, 84 Kentucky, 135; Bank of the United States v. Macalester, 9 Penn. St. 475 ; Hathaway v. Fall Biver Nat. Bank, 131 Mass. 14. The facts in Biebinger v. Continental Bank, 99 U. S. 143, were that a customer of a bank had deposited with it, as collateral security for his current indebtedness on discounts, a note secured by mortgage, which he withdrew for foreclosure, at the sale under which he p. 393purchased the property, and left the deed he received with the bank at its request. His indebtedness to the bank was then fully paid, but after a temporary suspension of his dealings he again incurred debts to it. It was held that as it did not appear that money was loaned or debt created on the faith of possession of the deed, the bank could not claim against the debtor’s assignee an equitable mortgage by the deposit of the conveyance. There are instances of an express pledge of securities for a specific loan, where the surplus realized from them has been directed to be applied to satisfy a general debt, In re General Provident Assurance Company, ex parte National Bank, L. R. 14 Eq. 507; but there is no pretence in the case at bar of any ground for the application of the principle of tacking.

The bonds were not lodged in the hands of the Schuchardts in the ordinary course of banking business. They were sent to New York for a specific purpose, and, when that purpose was accomplished, permitted to remain for “ safe-keeping,” and because New York was a better market than New Orleans, and the express charges for their return very heavy, as is said on one side; and for convenience in procuring loans as is asserted on the other. But the loans made were always specific loans, and the bonds were always otherwise subject to Cavaroc & Son’s call; and when the Schuchardts themselves loaned, as they did once or twice, it was upon an express pledge of a designated number of the bonds as security. Cavaroc & Son were bankers as well as Schuchardt & Sons, and the latter appear to have reposed implicit confidence in them, yet there is no satisfactory evidence that they extended to Cavaroc & Son any special indulgence in the way of general accommodation. Their cashier thinks he can specify a case in which the bills of exchange sent by Cavaroc to Schuchardt were not accompanied by bills of lading, but he does not do so, and the acceptances of Dumont & Co. were on account of the purchase price of the bonds. If, as argued by counsel, there is a presumption, as between customer and banker, that the p. 394securities or property of the customer, found in the possession of the banker, have been left with him to secure him generally against loss, this is not an irrebuttable presumption, and each case stands upon its own circumstances.

We are asked to dispose of the case adversely to appellants upon the ground that they received the remaining bonds and money after the liens decreed in Fry’s favor were satisfied; but such receipt does not oust the jurisdiction. The acceptance by appellants of what was confessedly theirs cannot be construed into an admission that the decree they seek to reverse was not erroneous, nor does it take from appellees anything, on the reversal of the decree, to which they would otherwise be entitled. Embry v. Palmer, 107 U. S. 3, 8. Nor can the objection be sustained that there was an absence of jurisdiction in equity because of the adequacy of the remedy at law. The Schuchardts had collected many thousands of dollars on coupons cut from the bonds after October 4, 1873, and before their own failure. Fry, their assignee, had made similar collections. Fry claimed to hold the moneys and the bonds to secure a balance of account due to the Schuchardts from the Cavarocs, and also as collateral to the indebtedness of the New Orleans Bank. Dumont & Co. claimed a large part of the bonds as against the general creditors of the Cavarocs and as against Schuchardt & Sons, and Cavaroc’s general creditors claimed the residuum. As to the amount due to Fry, controversy over some thousands of pounds in the Union Bank of London was involved. An accounting was necessary between the parties, and a multiplicity of suits was inevitable, unless the determination of the conflicting rights set up could be arrived at in a proceeding in equity. And, in addition to these considerations, we think we ought not to regard with p. 395favor the raising of this objection, for the first time, at this stage of the cause.