upon endorsed it by the firm name to Smith as cashier, and Smith took it without further remark.

Subsequently, pursuant to a like arrangement between the same parties, Smith, as such cashier, made a further purchase of gold and gold certificates from the Merchants' Bank, and converted the gold into gold certificates. The aggregate of the certificates thus procured was $60,000. Thereafter Smith, as such cashier, at the instance of Carter made a further purchase of gold certificates from another bank to the amount of $100,000- All these certificates, amounting to $160,000, were also deposited by Smith in the sub-treasury, in the presence of Carter, and a receipt taken and endorsed as before, to Smith as cashier. The receipts specified that the certificates deposited were "to be exchanged for gold certificates or its equivalent on demand." Only $60,000 of the last deposit is claimed by the appellee. The residue is not involved in this controversy. The total claimed is $480,000. All these things occurred on the 28th of February, 1867. On the following day Smith presented the receipts at the sub-treasury, and payment was refused. The certificates were all canceled and sent to the proper officer at Washington. The gold which they represented has since remained in the treasury of the United States. Carter gave Smith plausible reasons, not necessary to be repeated, for desiring to make the deposits. The Court of Claims found these facts: "He (Carter)

submitted his plan to Hartwell, which was as follows: He proposed to buy gold certificates in New York, bring them to Boston, and borrow money upon them of the Merchants' Bank, and he then proposed to get Smith, the cashier of the State Bank, to pay for these certificates and leave them with Hartwell during the examination. Hartwell made no objection to this plan, but he thought Smith would not do it. The plan was carried into effect by Carter, as hereinbefore set forth, but Hartwell had no agency in carrying it out, except to receive the moneys and gold certificates paid to him on the 28th of February as aforesaid, and he had no actual knowledge of the proceedings taken by Carter on that day to obtain said gold certificates. When Carter and Smith deposited the $420,000

of gold certificates in the sub-treasury as aforesaid, Smith did not know Hartwell, nor did Hartwell know Smith, or know that Smith was connected with any bank or money institution."

The case under another aspect was before us on a former occasion. Merchants' Bank vs. The State Bank, 10 Wall., 604. We there held, after the most careful consideration, that the legal title to the certificates was, by the purchases made by its cashier, vested in the State Bank. We find no reason to change this view. The finding of the court shows clearly that Hartwell knew when he received the certificates that they did not belong to Mellen, Ward & Co., and that they did belong to the plaintiff, and that Smith represented the plaintiff as its agent. Hartwell was privy to the entire fraud from the beginning to the end, and was a participant in its consummation.

It is not denied that Smith acted in entire good faith. What he did was honestly done, and it was according to the settled and usual course of business. Hartwell was the agent of the United States. He was appointed by them and acted for them. He did, so far as Smith knew, only what it was his. duty to do, and what he did constantly for others, and it is not denied that it was according to the law of the land. 12 Stat. 711. Smith no more suspected fraud, and had no more reason to suspect it, than any other of the countless parties who dealt with the sub-treasury in like manner.

There could hardly be a stronger equity than that in favor of the plaintiff. It remains to consider the law of the case.

The interposition of equity is not necessary where a trust. fund is perverted. The cestui que trust can follow it at law as far as it can be traced. May vs. Leclere, 11 Wall., 217; Taylor vs. 3 Maul & Sel. 562.

Where a draft was remitted by a collecting agent to a subagent for collection, and the proceeds were applied by the subagent in payment of the indebtedness of the agent to himself, in ignorance of the rights of the principal, this court held that, there being no new advance made and no new credit given by the sub-agent, the principal was entitled to recover against

him. Wilson & Co. vs. Smith, 3 How., 753; see, also, Bank of the Metropolis vs. The New England Bank, 6 How., 212.

A party who, without right and with guilty knowledge, obtains money of the United States from a disbursing officer, becomes indebted to the United States, and they may recover the amount. An action will lie whenever the defendant has received money which is the property of the plaintiff, and which the defendant is obliged by natural justice and equity to refund. The form of the indebtedness or the mode in which it was incurred is immaterial. Bayne et al. vs. The United States, 3 Otto. 643.

The United States must use due diligence to charge the endorsers of a bill of exchange, and they are liable to damages if they allow one which they have accepted to go to protest. United States vs. Barker, 12 Wheat., 560; Bank U. S. vs. The United States, 2 How., 711; United States vs. Bank of the Metropolis, 15 Pet., 378.

In these cases and many others that might be cited, the rules of law applicable to individuals were applied to the United States. Here the basis of the liability insisted upon is an implied contract by which they might well become bound in virtue of their corporate character. Their sovereignty is in no wise involved.

The cases of the Atlantic Bank vs. The Merchants' Bank, 10 Gray, 532, and Skinner vs. The Merchants' Bank, 4 Allen, 290, are in their facts strikingly like the case before us, and they involved exactly the same point. It was held in each of those cases, after an elaborate examination of the subject, that the defrauded bank was entitled to recover.

But surely it ought to require neither argument nor authority to support the proposition that where the money or property of an innocent person has gone into the coffers of the nation by means of a fraud to which its agent was a party, such money or property cannot be held by the United States against the claim of the wronged and injured party.

The agent was agent for no such purpose. His doings were vitiated by the underlying dishonesty and could confer no rights upon his principal.

The appellee recovered below the amount claimed. A different result here would be a reproach to our jurisprudence. The judgment of the Court of Claims is affirmed.

Supreme Court of the United States.

ABSTRACT OF DECISIONS.

Agency.

I. PRINCIPAL CANNOT RETAIN PROPERTY ACQUIRED THROUGH FRAUD OF AGENT: ACTS OF GOVERNMENT Officer.--Where the money or property of an innocent person has gone into the coffers of the nation by means of a fraud to which its agent was a party, such money or property cannot be held by the United States against the claim of the wronged and injured party. Judgment of Court of Claims affirmed. United States, appellant, v. State National Bank of Boston. Opinion by Swayne, J.

2. MEANS BORROWED TO COVER DEFALCATION.-A firm had borrowed money, belonging to the government, from the cashier of its sub-treasury. In order to enable the cashier to cover up his violation of duty, and in pursuanee of an agreement, one of the firm procured a bank officer to purchase gold certificates, which were to be deposited in the sub-treasury, to remain to the subsequent day. The bank officer did so, and a receipt for the certificates was given by the cashier to C, who indorsed it to the bank officer. The receipt entitled its owner to receive gold certificates for those deposited, or their equivalent, on demand. The bank officer had no knowledge of the plan of the firm and the cashier, and the transaction he entered into was a usual one. Held, that the government obtained no title to the certificates, but was liable to return their value to the bank. Ib.

Carrier of Passengers.

WHO IS NOT A GRATUITOUS PASSENGER STIPULATION ON TICKET AGAINST CARRIERS' NEGLIGENCE INVALID.Plaintiff below was negotiating, at Portland, Me., with defendant below, a railway company, for the introduction on its road of a patent car coupling, and was requested by defendant to go

to Montreal and see one of its officers there, defendant agreeing to pay his expenses. He was given a pass directing conThe pass

ductors to pass him from Portland to Montreal. contained this condition: "The person accepting this free ticket in consideration thereof assumes all risk of all accidents, and expressly agrees that the company shall not be liable, under any circumstances, whether of negligence by their agents or otherwise, for any injury to the person or for any loss or injury to the property of the passenger using the ticket. If presented by any other person than the individual named therein, the conductor will take up this ticket and collect fare." While traveling from Portland to Montreal, on this pass, on one of defendant's trains, plaintiff was injured by defendant's negligence. Held, (1) that plaintiff was carried for hire, in pursuance of an agreement, and not as a gratuitous passenger; (2) that it was not competent for defendant to stipulate against liability for its own negligence in such a case, and it was liable for the injury. Railroad Co. vs. Lockwood, 17 Wall. 357. Judgment of Circuit Court, Maine, affirmed. Grand Trunk R. R. Co., plaintiff in error, vs. Stevens. Opinion by Bradley, J.

National Bank.

INDEBTEDNESS TO, FOR MORE THAN ONE-TENTH OF CAPITAL RECOVERABLE.-Defendant became indebted to plaintiff, a national bank, to an amount exceeding one-tenth of the capital stock of such bank. Held, that the provision of the national banking law (§ 27) forbidding the liabilities of any one person, firm or corporation to a national bank to exceed one-tenth of the capital stock paid in of such bank, did operate to avoid the contract of indebtedness incurred by defendant, and plaintiff was entitled to recover the amount due. Harris vs. Runnels, 12 How. 791; O'Hare vs. Second Nat. Bank of Titusville, 77 Penn. St. 96; Pangburn vs. Westlake, 36 Iowa, 546; Vining vs. Bucker, 14 Ohio St 331. Judgment of Supreme Court of Colorado affirmed. Union Gold Mining Co., plaintiff in error, vs. Rocky Mountain Nat. Bank. Opinion by Hunt, J.