Dean as vice president in his favor as an individual, and indorsed by him. This check was charged in the account of the First National Bank with the Baltimore bank, and no objection was made to it. But the check indicates that Dean paid for it, and there is nothing in the record tending to show that he did not.

From this statement it will be observed that the First National Bank had nothing to do with the making of the debt which is the foundation of the note in suit; that it received no part of the consideration; that neither in the contract with the trust company nor in any other way did it assume the payment of the note; that Dean in all the transactions concerning it was acting in his own interest, and in fraud, first of the trust company, and then of the First National Bank.

Nevertheless, since Dean was intrusted with the general transaction of the business as vice president of the First National Bank, he had authority to borrow money and bind the bank therefor, by making or indorsing notes in its name and assigning its bills receivable as security in the usual course of business, and to bind the bank in any other matter which in due course of business fell under the authority of an executive officer of a bank. Auten v. United States National Bank, 174 U. S. 125, 19 Sup. Ct. 628, 43 L. Ed. 920; Aldrich v. Chemical National Bank, 176 U. S. 618, 20 Sup. Ct. 498, 44 L. Ed. 611.

But, on the other hand, if the transactions here under review were so out of the usual course of business as to put the Baltimore bank on notice that Dean was acting beyond his authority, or using the bank's name and credit in his own interest, or that he was representing his own interest, or any antagonistic interest, then he stood before the Baltimore bank stripped of his representative capacity, and powerless to bind the First National Bank. West St. L. S. Bank v. Shawnee County Bank, 95 U. S. 557, 24 L. Ed. 490; Lamson v. Beard, 94 Fed. 30, 36 C. C. A. 56, 45 L. R. A. 822; 7 Corpus Juris, 541; Wagner v. Central Bk. & T. Co., 249 Fed. 145, 161 C. C. A. 197.

The scope of banking business is constantly enlarging, and the usual course of business becoming broader. The number and rapidity of banking transactions require banks to rely on the authority and good faith of the executive officer of correspondent banks. But, on the other hand, the stockholders and directors of banks, especially small banks, must rely on the honesty of their executive officers, and they have a right to demand that officers of other banks shall be reasonably diligent as capable business men to observe and act upon evidences that a president or cashier is acting beyond his authority, or for himself or some other person, while using the bank's name and credit. Taking the most liberal view in favor of the Baltimore bank, every transaction it had with Dean in relation to the $15,000 note was unusual; and all the transactions taken in connection carried notice of improper use of the bank's credit by Dean.

It has been held that a note of an officer to his own bank is presumed to be for value, and if nothing more appears it may be dis

counted for the bank on its own indorsement without question by another bank. Hiawatha Iron Co. v. John Strange Paper Co., 106 Wis. 111, 81 N. W. 1034. But assuming, without deciding, that to be the law, it does not protect the Baltimore bank, for it accepted Dean's note payable to the trust company, his own bank, and indorsed by him in the name of the bank, on the representation that he was thus making himself the primary obiigor for the debt of the bank as a mere accommodation to the bank, though the bank itself was to become secondarily liable only as an indorser.

It is contended that there was nothing unusual in such a transaction; that Mr. Owens, the vice president of the Baltimore bank, suggested or required this method merely to increase the security by having Dean's personal liability. It is true he does so testify in his direct examination; but he also testified that Dean became maker of the note "simply at the suggestion, I cannot recall now, possibly of ours, to add somewhat to the security of the note." But, whoever originated the plan, it could not have been adopted to obtain additional security by making Dean liable for the debt, for he was already liable as indorser of the Thompson note taken as collateral. Indeed, Dean's willingness to make himself primarily liable for a debt of the trust company ought to have arrested attention, in view of his already existing secondary liability as indorser of the Thompson note. What is more significant, the Thompson note on its face was notice to the Baltimore bank that Dean was an officer who was using the trust company to finance his own affairs; for his indorsement and that of the trust company indicated that Dean had been the owner of the Thompson note, and had indorsed it to the trust company and received the money for it. The use of this note so indorsed by him to draw money for himself from the trust company, as collateral to his own note for $15,000 to the trust company and indorsed by him for it, we cannot help thinking so clearly signified that he was mixing his own. affairs with those of the trust company as to require at least inquiry. of the directors or other officers of the trust company by the officers of the Baltimore bank before proceeding further.

Much stress is laid on the testimony of Mr. Owens, vice president of the Baltimore bank, and the new testimony of other bankers that the transaction was in accordance with the usual course of business. While Mr. Owens' general statement to that effect is broad, he was candid enough to say that the transaction may not have been prudent, as it shows upon its face. The testimony of other bankers is guarded and limited to the statement that it would not be unusual to make a loan to a bank in the form of the note here involved, when there was no collateral, or the collateral given was of uncertain value. This testimony does not apply to this case (1) because there is no testimony. that the Thompson note was not ample collateral; and (2) because the making of the note of $15,000 by Dean individually to the trust. company and its indorsements to the Baltimore bank had no advantage over a direct note from the trust company to the Baltimore bank, since Dean was already liable as indorser of the Thompson note. Considering the transaction in all of its circumstances, we

171 C.C.A.--4

think the conclusion inevitable that it was so out of the usual course that only the credulous would accept without inquiry Dean's false representation that the bank as indorser was to receive the entire benefit to the exclusion of himself as maker.

Next, when the note fell due, the Baltimore bank accepted Dean's untrue statement, without verification, that the trust company had been merged into the First National Bank, and inferred contrary to the fact, without a direct statement to that effect even from Dean, that in the merger the National Bank had assumed the note of Dean indorsed by the trust company. But the bank itself recognized that due care required it to have Dean's statements verified in a matter in which he was personally concerned, and required a resolution of the board of directors of the First National Bank as authority to protect it in renewal of Dean's note with the indorsement of the First National Bank substituted for that of the trust company. Indeed, the record shows that the banking custom-the usual course of business-adopted by the Baltimore bank was to require a resolution of the board of directors of the borrowing bank, duly certified, as a condition of lending money, and this makes a very marked distinction between this case and Auten v. United States National Bank, 174 U. S. 125, 19 Sup. Ct. 628, 43 L. Ed. 920.

In sending his own note, indorsed by him in the name of the First National Bank, to take up his old note, indorsed by the trust company, Dean wrote of his old note as "my note," and he inclosed a fictitious paper, in form a copy of a resolution of the board of directors of the First National Bank authorizing him as vice president to borrow $15,000 from the Baltimore bank. This pretended authority. to borrow, even if it had been genuine, by no means conferred authority on Dean to assume for the bank the liability of Dean and the trust company, and thus it did not even in form meet the requirement which the Baltimore bank thought necessary to bind the First National Bank. But, aside from that, it was a forged resolution, and the Baltimore bank was content to accept as sufficient proof of its authenticity the pretensive certificate of Dean alone as vice president and as secretary of the board of directors. In addition to this, the check sent to the Baltimore bank for $225, the discount, was issued by Dean, as vice president, to Dean individually and indorsed by him. Indeed, in all of its dealings about a transaction in which Dean was personally liable and interested, not only as maker of the $15,000 note, but indorser of the collateral Thompson note, the bank accepted, without verification of any kind, Dean's own statements that liability for the note had been assumed by the First National Bank.

[2] It is contended, however, that the contract between the First National Bank and the trust company was in effect a merger or consolidation of the two banks, and that by operation of law the former corporation became liable for all the debts of the latter. In the opinion rendered when the case was here before, the contract was inadvertently referred to as intended to be a merger. But it was not. A purchase by definite contract by one corporation of the assets of

another, and the assumption of debts specified in the contract, does not constitute a merger or consolidation, and does not, in the absence of fraud, make the purchasing corporation liable for the debts of the selling corporation. In this instance there was no fraud in the purchase, every asset purchased and every debt assumed was particularly specified, the stock of the trust company was not purchased, no obligation was assumed to the stockholders of the selling corporation, and the trust company continued its business for the purpose of winding up its affairs, including the payment of the note given to the First National Bank. The contract, therefore, was not a merger or consolidation and by it the First National Bank did not become liable for any debt of the trust company not mentioned in the contract. E. E. Taenzer v. Chicago, R. I. & P. R. Co., 170 Fed. 240, 95 C. C. A. 436; Hoard v. Chesapeake & Ohio Ry., 123 U. S. 222, 8 Sup. Ct. 74, 31 L. Ed. 130; W. E. Austin Co. v. T. L. Smith Co., 138 Ga. 651, 75 S. E. 1048, Ann. Cas. 1913E, 1042, and note, 7 R. C. L. 180, § 156.

It is true that, in the advertisement of the change of business published by the First National Bank after its contract with the trust company, the change was referred to as a consolidation and merger. But that could not change the actual nature of the transaction, and it could not operate as an estoppel in favor of the Baltimore bank, because it did not act upon it. Indeed, no officer or agent of that bank even knew of the publication.

[3] Dean's untrue representation that there had been a merger and assumption by the First National Bank of the debts of the trust company, even if made in good faith, would not bind the First National Bank. There is no ground in reason or authority upon which it can be asserted that an officer of a bank may bind it for the debt of another bank on his mere false assertion that his bank has merged with another and assumed all its obligations. Merger of a corporation with another, and assumption by it of the entire debts of the other corporation, is not in the usual course of business of a corporation, and the corporation is not bound by the false statement of a vice president or other official in charge of its current business that there has been such a merger and assumption of liabilities. The Baltimore. bank, therefore, cannot recover on the assertion that the First National Bank was bound by Dean's false representation that a merger had taken place, and the entire indebtedness of the trust company assumed. Merchants' Bank of Valdosta v. Baird, 160 Fed. 642, 90 C. C. A. 338, 17 L. R. A. (N. S.) 526, 3 R. C. L. 425, 7 C. J. 595. Nor can the Baltimore bank avail itself of the fictitious resolution presented by Dean, because, even if it had been genuine, that only authorized the borrowing of money, and not the assumption of the debts of another bank. We conclude the Baltimore bank cannot recover against the First National Bank for these reasons:

(1) The First National Bank did not, by its contract with the trust company or otherwise, become liable for the debts of the trust company not expressly assumed.

(2) Dean had no authority as its managing officer to bind the First National Bank by his untrue representation that there had been a merger and consequent general assumption of the debts of the trust. company.

(3) Dean had no authority as an officer of the First National Bank to assume for it, by accommodation indorsement or otherwise, the debt of himself and the trust company.

(4) Even if he had been clothed with the general authority to make such representation and indorsement, he appeared before the Baltimore bank representing three separate interests. As an individual maker of the note, and indorser of the Thompson note, he was interested that he should not be called on to pay this debt; as treasurer of the trust company he was interested in having the trust company relieved of the indorsement; and as vice president of the First National Bank his duty was to see that the First National Bank should not assume the liability of another without consideration. When these interests were evidently involved in antagonistic relations, the Baltimore bank cannot hold the First National Bank bound by Dean's attempt to assume for it a debt for which it held the obligation of other parties in interest, including Dean himself, whom he attempted to represent. True, the First National Bank, in the conduct of its general current business, held Dean out as its agent; but the implied. authority fell from him as soon as his antagonistic interest appeared. Affirmed.

(260 Fed. 16)

WEISSENGOFF v. DAVIS.*

(Circuit Court of Appeals, Fourth Circuit. July 1, 1919.)

No. 1700.

1. DEATH 35-ACTION for WrongFUL DEATH IN ONE STATE MAINTAINABLE IN ANOTHER STATE IF ITS PUBLIC POLICY PERMITS.

Under the decisions of the Supreme Court, which, being upon a question of general law, are binding upon all federal courts, where the statute of a state permits recovery for wrongful death an action for a death occurring in that state may be maintained in any state whose statute or public policy is not inconsistent with the statute sought to be enforced. 2. DEATH 14(1)-ACTION FOR WRONGFUL DEATH LIES AGAINST ONE UNLAW

FULLY RESISTING ARREST.

Where a sheriff stepped upon the running board of a moving automobile driven by defendant, and placed him under arrest for a misdemeanor, it was the duty of defendant, knowing the sheriff held a warrant, to stop the car; and where he kept it running, in an attempt to escape into another state, and engaged in a struggle for its control, until it struck a bridge support and the sheriff was killed, his action was an active and unlawful resistance of authority, which rendered him liable for the sheriff's death.

In Error to the District Court of the United States for the District of Maryland, at Baltimore; John C. Rose, Judge.

Action by George R. Davis, administrator of the estate of Donald P. Davis, deceased, against Peter Weissengoff. Judgment for plaintiff, and defendant brings error. Affirmed.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes: *Certiorari denied 250 U. S. 674, 40 Sup. Ct. 54, 64 L. Ed.