
    Michael Weirick and Rayen Kirkpatrick v. The Mahoning County Bank.
    Where a party depositing money in one bank to the credit of another bank, but without the knowledge of the latter, took a letter from the former baúl!; addressed to the latter, advising it of the deposit, and afterward delivered the letter to a third person, with his own name indorsed in blank thereon, for presentation to the bank to whose credit the deposit was made: Held—
    1. That, as between the depositor and the latter bank, in the absence of notice to the contrary, the bearer of the letter had authority to control the fund, and, for that purpose, to write a check or order over the blank signature.
    2. The fact that the bank held the note of the party making the deposit, then overdue, did not constitute a notice that the fund was to be applied on such note.
    Error to the district court of Trumbull county.
    The original petition was filed by the Mahoning County Bank to recover j udgment upon a note, of which the following is a copy:
    *“ $600.00. Youngstown, August 26,1854.
    “Ninety days after date, we, Michael Weirick as principal, and the other as surety, jointly and severally promise to pay to the Mahoning County Bank, at Youngstown, six hundred dollars for value received.
    “Michael Weirick,
    “Rayen Kirkpatrick.”
    The defendants, by way of defense, set up in their answer that Michael Weirick, who is named as principal in the note, caused the same to be executed for the sole use and benefit of one Thomas M. Wolfe, who was bound to pay it, or furnish the funds for that purpose ; that this was well known to the Mahoning County Bank, the plaintiff below; that on the 22d of October, 1855, Weirick had in his hands, of the funds of Wolfe, the sum of four hundred and eighty dollars, upon which Weirick held a lien, for the purpose of having the same applied in part payment of the note sued upon; that the sum named was the proceeds of a flock of sheep which Wolfe had placed in the possession of Weirick to be converted into money for the purpose of being applied as aforesaid; that Weirick caused said funds to be deposited and paid into the hands of the plaintiff at its banking-house, with notice of his interest therein; and that the same should have been applied as so much in discharge of said note, and of which sum, as a payment, the defendants still insist they should have the benefit.
    The reply denies any knowledge on the part of the plaintiff that the note was executed for the benefit of Wolfe, or that he was to pay the same, or furnish the money to do so; and also denies the several allegations in the answer in relation to the deposit of any sum to be applied toward the payment of the note.
    On the trial a bill of exceptions was taken, from which it appears that the defendants gave evidence tending to prove that the note sued on was made by Weirick to raise money for the use of Wolfe, and that the note, as between Weirick and Wolfe, was the debt of -the latter, and that the plaintiff had notice of the fact at the time of discounting the note, *and afterward treated the same as the debt of Wolfe, in transactions between the bank and Wolfe. That afterward, in September, 1855, Wolfe placed in the possession of Weirick a flock of sheep to drive East and sell, and that the money realized thereby he should deposit in a bank in the city of Philadelphia, to the credit of the plaintiff, so that the same might be held by the plaintiff and applied on said note; that Wei-rick took the sheep to New Jersey and sold them, from which he realized the sum of four hundred and fifty dollars, which, on the 2d of October, 1855, he deposited in the Philadelphia Bank, to the credit of the Mahoning County Bank, and received from the proper officer of the former the following letter to R. W. Taylor, who was then the cashier of the plaintiff:
    “ Philadelphia Bank, )
    “Philadelpaia, October 2,1855. }
    
      “It. W. Taylor, Cashier: Sir—Your favor of the — received. Yóur account has credit four hundred and fifty ($450) dollars, deposited to-day by Michael Weirick, to whom this letter is handed.
    “Yours respectfully,
    “B. B. Comegys, C.”
    That Weirick, with this letter in. his possession, returned to his home in Trumbull county, passing through Youngstown, but out of business hours, so that he was unable to leave the same in bank; that soon afterward, and before he had an opportunity to deliver the letter to the bank, he met Wolfe, who informed him that he was going to Youngstown, and proposed to take the letter and carry it to the bank, and have the amount properly credited on the note; that Weirick handed the letter to Wolfe, who then directed Weirick to indorse his name on it, as the same might be considered necessary by the bank; that Weirick thereupon wrote his name upon the back of the letter, in blank, to be by Wolfe handed to the cashier of the plaintiff, for the purpose of having the credit applied on the note, and for no other purpose.
    The letter having been produced in court by the plaintiff, was given in evidence. The indorsement on it was as follows: “ Pay the within to T. M. Wolfe. October 22, 1855. Michael Weirick.” *It was admitted that the indorsement, except the signature of Weirick, was in the handwriting of R. W. Taylor,- cashier of said bank; and that the bank, in their periodical settlement made shortly after with the Philadelphia Bank, received the benefit of said credit.
    The plaintiff, to sustain the issues on its part, called R. W. Taylor, who testified, among other things, that he was cashier of the plaintiff; that at the time Wolfe brought the letter to the bank, which was on the 22d of October, 1855, and after the same had been presented to the cashier, he asked Wolfe if Weirick had deposited the money to apply on his note; that Wolfe answered “ no,” and turned the certificate over and pointed to the indorsement of Weirick, saying that Weirick had sent it to him to get the money for his own use, and he could not apply it on Weirick’s note ; he then' stated that he wanted to pay out of it certain money which he had before got, as he alleged, to drive sheep, being two hundred dollars paid him on his check, hereafter mentioned; that the cashier desired to apply the money on Weirick’s note, and so claimed to Wolfe, but that with Weirick’s indorsement he thought he could do but one of two things, either to refuse to recognize the deposit at all, or do it upon Wolfe’s terms.
    The plaintiffs books were also given in evidence, by which it appeared, that among the transactions of that day, besides the reception of the certificate, and the charging the amount to the Philadelphia Bank and crediting the same to,Wolfe, were the charging Wolfe the amount of his check for two hundred dollars previously paid by the bank, and by charging him an amount, credited to T. M. Wolfe & Brothers, equal to the residue.
    The evidence being closed, the defendants’ counsel requested the court to charge the jury as follows:
    1. That the indorsement in blank by Michael Weirick upon the letter did not, when presented to the bank by Wolfe in the absence of Weirick, import any request or authority from Weirick to give to Wolfe the benefit of the amount deposited in the Philadelphia Bank.
    2. The presentation of the paper, under the circumstances stated in the first proposition, with the request of Wolfe to *have the benefit of the deposit, did not constitute such request or authority on the part of Weirick.
    3. Nor did the circumstances previously stated, though accompanied by the affirmation of Wolfe that it was agreed by Weirick that he, Wolfe, should have the benefit of said deposit, unless it was in fact so agreed by Weirick.
    4. That the character of the paper, with the facts, if they were such, that twenty days had elapsed from the making of said paper to its presentation to the bank; that it was then presented bj Wolfe, in the absence of Weirick, to the bank, indorsed by him in blank, without any communication from Weirick regarding said paper, except what was contained in the same; that said note was then overdue nearly one year, and Wolfe then insolvent—these facts then being known and occurring to the cashier at the time of doing the business, taken by themselves, if they so existed, would be sufficient in law to put the cashier on his guard as to the purpose of the deposit and indorsement by Weirick, and if so put on his guard, the cashier would, at his peril, take the statements of Wolfe as to his authority or right to have the benefit of the deposit.
    These charges the court refused to give to the jury, except the first, which was given at the instance of the plaintiff’s counsel; and to such refusal the defendants .excepted.
    The verdict was for the plaintiff. The defendants moved for a new trial, which was overruled, and j udgment entered on the verdict.
    To reverse this judgment, and the judgment of the district court affirming the same, is the object of the present petition in error.
    
      George M. Tuttle, for plaintiffs in error:
    1. No person who receives a written promise indorsed in blank, can claim any other benefit of the indorsement or use it for any other purpose than is implied from it in law, unless he can show that the indorser has, by some extrinsic means, authorized some other effect to be given to the indorsement. Storv on Prom. Notes, " sec. 138; Bradley v. Phelps, 2 Root, 325, 327; Huntington v. Harvey, 4 Conn. 124; Perkins *v. Catlin, 11 Conn. 213; Castle v. Candee, 16 Conn. 223; Beckwith v. Angell, 6 Conn. 325.
    2. What shall, in law, be implied from such indorsement in blank must be determined from the character of the paper on which the blank indorsement appears. Dean v. Hall, 17 Wend. 214; Robinson v. Abell, 17 Ohio, 36 ; Greenough v. Smeed, 3 Ohio St. 415.
    3. In all casos in which the object of the indorsement is to be made out from the tenor of the writing on which it appears, the object inferred must not be inconsistent with the import of the writing from which it is inferred, so long, at least, as an effect may be fairly given to it which is consistent with that import.
    4. In the case before us, the import of the paper indorsed is a promise by the Philadelphia Bank to account to the Mahoning County Bank for four hundred and fifty dollars of money which Michael Weirick had deposited in the former bank, for the use of the latter bank, for the purpose of making payment upon a debt due from him to the latter bank. This purpose, though not expressed in the paper, is implied from the transaction expressed, and the fact that Weirick was then indebted to the bank on the note in suit, then overdue, and upon which he was sole principal and severally liable. 2 Grennl. Ev., sec. 112; 2 Phil. Ev. 121; 2 Stark. Ev. 597; 9 Wend. 324.
    5. It is not consistent with these terms, and with this import, to consider Weirick’s blank indorsement as requesting the Mahoning County Bank to pay to the holder four hundred and fifty dollars on account of the deposit stated in the paper, and it is wholly unnecessary to resort to this construction in order to give ample operation to the indorsement.
    I maintain; therefore, that in determining from the paper what was implied in law from its indorsement in blank by Weirick, it is inconsistent with the fair construction of the indorsed paper to consider the indorsement as importing a request to the bank to give to Wolfe the benefit of the money deposited in Philadelphia; that no such, request can be implied from the indorsement, and that the paper and its indorsement, although presented to the bank by Wolfe, did *not authorize the bank to comply with his request so to deal with that deposit.
    6. But if the blank indorsement was authority to the bank to do as was dono, provided they acted in good faith, still it was a question for the jury and the court whether the bank did not have sufficient notice of the fraud of which Wolfe was proved to be guilty in his use of the paper.
    
      Milton Suiliff, also for plaintiffs in error:
    Wolfe, being insolvent, had, by special agreement, put property into Weirick’s hands to take to market and sell, and out of the proceeds pay off the note. Weirick accepted the property upon these’ terms, took it to market, converted it into money, and from the proceeds paid the $450, for the Mahoning County Bank, into the Philadelphia Bank, the bank of their deposits, and had the amount placed to the general credit of the Mahoning County Bank. The money so paid ceased to belong, even as a credit, where paid, either to Weirick or Wolfe.- The letter to the Mahoning County Bank was Weirick’s voucher of having so paid and put that sum to the credit of that bank. The letter gave Weirick no rights. He could not with the letter reclaim the money; nor could he, by any special indorsement thereon, authorize any third person to do so. The letter, by his accepting it, showed that Weirick had parted with all right to the money, and had consented to its being a simple credit in the general account of the Mahoning County Bank—as much so as if paid by that bank to the Philadelphia Bank. When the Mahoning County Bank received the letter upon which Weirick wrote his name in blank, at the hands of Wolfe, who had before made partial payments on the note, they were thereby informed that Weirick had paid the amount of the overdue note. Nor was any other information given by the indorsement, unless it was that Wolfe was with it authorized to make final payment as he had partial payments, and take up the note. It seems absurd to liken this letter to commercial paper.
    
      B. B. Hutchins, for defendant in error :
    1. The legal effect of the indorsement and delivery of *the paper to Wolfe, uninfluenced by extrinsic circumstances, was to pass all the title and interest of Weirick in the paper and the money represented by it, and to authorize the bank to give to the person to whom it was thus indorsed and delivered, the benefit of the deposit. Ring & Rice v. Foster, 6 Ohio, 279; Mitchell v. McCabe, 10 Ohio, 405; Moore v. Gans et al., 12 Ohio, 300; Howe v. 
      Hartness, Hill & Co., 11 Ohio St. 449; Comuell v. Kinney et al., 1 Handy (S. C. ), 496; 3 Ohio St. 420, 421.
    2. The fourth charge requested was properly refused, because, upon the facts upon which it was predicated, it is not law; and, again, there were other material facts in the case proper for the jury to consider. Goodman v. Simonds, 20 How. 343; Primm v. Hasen, 27 Miss. (6 Jones) 205; Roth v. Colvin, 32 Vt. 125; Williams v. Clinton, 28 Conn. 264; Sellers v. Jones, 22 Pa. (10 Harris) 423.
    3. Weirick, by the act stated, made Wolfe his agent to take this paper to the bank and direct the bank how to apply the money. Story on Agency, secs. 93,127.
   White, J.

The question on which the controversy in this case turns is this: Did Weirick, by affixing his signature in blank upon the letter of the Philadelphia Bank acknowledging the deposit, as between himself and the Mahoning County Bank, a third party, impliedly authorize Wolfe, to whom the letter thus indorsed was delivered by Weirick for presentation, to write, or cause to be written, over the signature, the words “ Pay the within to T. M. Wolfe? ”

It is clear that if Weirick himself had written this order or draft, or expressly authorized it to bo written, the Mahoning County Bank, on presentation of the letter, and on its consenting to accept the deposit made by Weirick in its name, would have been warranted in paying the money to Wolfe, or in applying it according to his direction, although his actual instructions may have required him to pay the money on Weirick’s note.

But as between the bank and Weirick, the liability of the latter for the acts of Wolfe does not depend upon what his actual authority or instructions may have been; but upon *what the acts of Weirick may have induced the officers of the bank, as fair and reasonable men, to believe, in dealing with Wolfe, in regard to the deposit, was the extent and scope of his authority. 1 Parsons on Notes and Bills, 100.

It does not appear that there was any evidence tending to show that the deposit in Philadelphia, to the credit of the plaintiff below, by Weirick, was made upon any previous arrangement or understanding between them. The first knowledge the plaintiff had of the fact appears to have been when the letter was presented by Wolfe, and lie claimed that Weiriek, by his indorsement, had authorized him to draw the money for his own benefit.

The agreement under which the sheep of Wolfe were placed in Weirick’s possession, and by which the proceds of their sale were to be deppsited, as is claimed, for the purpose of being applied to pay the Weiriek note, was made between Wolfe and Weiriek exclusively. It does not appear that the bank had any notice of it. When Wolfe presented the letter, and claimed to control the money, he directed two hundred dollars of the amount to be applied in payment of a like amount, which he had previously obtained from the bank, on his check, to drive the sheep east. It may bo inferred from this that the deposit was known to consist of the proceeds of the sale of the sheep. But no intimation appears from the evidence that the bank had any notice that the sheep did not continue the property of Wolfe up to the time they were sold, or that Wei-rick had acquired any interest in them, or in the proceeds arising from their sale.

, The evidence did tend to show that, though Weiriek was principal on the note sued on, yet, as between him and Wolfe, the money was borrowed for the exclusive benefit of the latter, and that this fact was known to the bank. This, however, is only material in respect to the question under consideration, as showing the intimate relations that subsisted between Weiriek and Wolfe in their business transactions, and was certainly not calculated to awaken suspicion in the officers of the bank as to the good faith of Wolfe.

It is also claimed that Wolfe was insolvent at the time he presented the letter to the bank, and this fact is assumed in *one [305 of the charges asked to be given to the jury; but the fact is neither admitted in the pleadings, nor is there any evidence in the bill of exceptions tending to prove it. But if the fact be admitted, it can hardly be claimed to have been sufficient to cause the bank to distrust Wolfe’s integrity in matters which the defendant had, notwithstanding such insolvency, intrusted him to manage.

Eecurring, then, to the main question : Had Wolfe, in presenting the letter or certificate indorsed in blank, an apparent or implied authority to fill up the blank with an order for the amount of the deposit, payable to himself, upon which the bank might fairly and reasonably rely ?

It is manifest that the object of Weiriek was to get the four hundred and fifty dollars transferred from Philadelphia to tho Mahoning County Bank. The first step toward attaining this end was to deposit the amount in the Philadelphia Bank to the credit of the Mahoning County Bank. The next was to get the latter bank to accept the deposit thus made to its credit, and to give Weirick, in exchange or payment therefor, credit on its books for a like amount, or for such sum as might be agreed on as an equivalent. The certificate does not show that the deposit was made to pay the note in question, or for any special purpose. The manner in which the Mahoning County Bank should pay for the credit thus given it, was a proper subject for arrangement when it should be advised of the fact and should consent to accept the deposit. The letter or certificate was taken by Weirick from the Philadelphia Bank for the twofold purpose of a voucher for himself, and to satisfy the Mahoning County Bank of the fact that he had made the deposit to its credit. On accepting the deposit, it was competent for the bank, with the consent of Weirick, to have either paid him the money, leaving the note to stand, or to have applied the amount on the note, or to have made the application which was made under the direction of Wolfe; or, in the absence of any direction on the subject, it might, of its own motion, have applied the amount on Weirick’s note.

If the letter had been sent to the bank without the indorsement, the bearer would, perhaps, have had no control over the fund, and the bank, if it had accepted the deposit, would *have been bound either to give Weirick credit for the amount as so much money deposited, or to have applied it as a payment on the note.

The counsel for the plaintiffs in error, defendants below, claim that this was what the bank was bound to have done under the circumstances as they occurred.

Weirick must be presumed to have known what would have been the effect of his sending the paper to the bank without his indorsement, and to have designed to authorize something more by the act of indorsing it. It is admitted by counsel'that he must be presumed to have intended something. They claim, however, that this presumption is satisfied by inferring that he designed, either to guaranty the genuineness of the certificate, or that the Philadelphia Bank would account-to the Mahoning County Bank for the amount.

But this claim, it seems to us, considering the nature'of the transaction, is less reasonable than the presumption that the intention of Weirick was to transfer his interest in the fund, of which the paper was evidence. No reason is shown why he should have supposed that the Mahoning County Bank would require him, before accepting the deposit, to guaranty either the solvency or the genuineness of a letter or certificate of its own banking correspondent.

The claim of Weirick is, that his actual instruction to Wolfe was to require the bank to apply the amount toward the payment of the note, and to no other purpose. Whatever the object or purpose of Weirick was, in making and delivering the blank indorsement, or whatever the instructions were which were actually given, the authority to fill up the blank according to the truth, must be presumed. The authority was intrusted to Wolfe, and to him was also confided the duty of procuring a compliance therewith on the part of the bank. If this confidence was misplaced, and a loss results from the fraud of Wolfe in departing from his actual instructions, as between the bank dealing with him in good faith on his apparent authority over the fund, and Weirick, who conferred such authority, the loss must be borne by Weii'ick. It would be the case where one of two innocent persons must suffer by the fraud of a third; and, in such case, he who ^trusted the third person and placed the means in his hands to commit the wrong, must bear the loss.

It is well settled that if one intrusts his name iu blank to another to procure a discount, he is liable to the full extent to which such other may see fit to bind him, when the paper is taken in good faith without notice, that the authority given has been exceeded. The authority conferred by such blank signatures is said to be that of a general letter of credit. It is no defense against a bona fide holder to prove that the person to whom the paper was intrusted was only authorized to use it for a particular purpose, and had fraudulently converted it to a different purpose; or that he was only authorized to fill the blank upon a certain condition which had not happened. 1 Parsons on Notes and Bills, 110; Fullerton v. Sturges, 4 Ohio St. 529; Putnam v. Sullivan, 4 Mass. 45 ; Selser v. Brock, 3 Ohio St. 307.

It is true, the present is not a ease of discount, but its peculiar facts are such as to warrant the application of the principles which govern in cases of commercial paper made in blank. The letter or certificate was the only evidence Weirick had of his having made the deposit, and the only authority upon which he could rely to obtain credit for the amount from the Mahoning County Bank. The blank signature referred, and could be presumed to refer, to that fund only. Thus limited it had, in the hands of "Wolfe, under the circumstances, the effect of a check signed in blank, designed, in fact, for the use of the maker, but which the holder directed to be filled payable to himself, and upon it obtained the money from the drawee, the latter having no notice of the fraud.

The indorsement in blank having been made, and, with the voucher, delivered by Weirick to Wolfe, before , a credit for the fund to which it related had been obtained at the Mahoning County Bank, and for the purpose of being presented to the bank, it was, as a check in blank", to be regarded as conditional upon the fact of the acceptance, by the bank, of the deposit as so much money in its own possession. But on accepting the deposit, the bank, in the absence of any just grounds to suspect the bona fides of Wolfe, had the right to *presume him invested with full authority over the fund, and might safely pay him the money or apply it as he might direct.

Judgment affirmed.

Scott, C. J., and Day, Welch, and Brinkerhoee, JJ., concurred.  