McCann v. The State. or handled said drafts, or either of them, without indorsement or authority of the treasurer of the state, the defendants having notice that the drafts, or the proceeds arising therefrom, were the property of the state; or if the defendants without such authority, and knowing such facts, have received or collected the drafts or the proceeds to the credit of any person or officer other than the state treasurer, and that such funds have not been accounted for, or paid to the state treasurer on demand, such acts amount to a conversion of the fund, and the jury will find for the plaintiff and against all of the defendants handling, negotiating, or collecting such drafts, or the funds therefrom arising, with interest from the date or dates of such transactions. Eighth. If the jury believe from the evidence that the defendant bank, received, negotiated, or handled the treasury drafts in question, knowing them to be state property, and received and collected the same to the credit of any person except the state treasurer, and without his indorsement, then such transaction was not in the ordinary course of business, was unauthorized by law, and the bank is liable therefor. Ninth. Payment to Pat O'Hawes without warrant of the auditor, if so made, was utterly unauthorized, and the jury will give no credit or abatement from plaintiff's demand therefor. Tenth. If the jury believe from the evidence that said drafts were indorsed and transferred to or received by the defendant McCann, or to or by defendant bank, for the purpose and with the intention of keeping the same out of the state treasury for a time, such purpose was against public policy and unlawful, and all parties co-operating and assisting therein or consenting thereto are liable for the fund, and the jury will find for the plaintiff and against all the defendants conspiring thereto, or assisting or co-operating therein. McCann v. The State. The defendants objected to the instructions so given, and also to the admission of evidence of O'Hawes relative to his transactions with McCann, which objections were overruled by the court and exceptions taken. A large number of instructions asked for by the defendants were refused, and exceptions taken. Verdict for plaintiff against all of the defendants, for the sum of $8,067.52. Motion for new trial overruled. McCann and the bank come here by petition in error. Mason & Wheedon and E. F. Warren, for plaintiff's in error. I. These drafts are made payable to Acting Governor William H. James' order. He alone could indorse the same. He had the possession of each of them, and the control thereof. He was authorized to receive the money thereon. The drafts were for all purposes commercial paper. Yet notwithstanding this, the first instruction says in plain terms, that Acting Governor W. H. James had no power or authority to negotiate, dispose of, or transfer these drafts except to the state treasurer. II. If the second instruction be correct, no one could acquire title to, or property in said drafts except through the state treasurer; besides, these drafts are payable generally to the order of W. H. James, Acting Governor. Suppose W. H. James, Acting Governor, had indorsed these drafts direct to the treasury of the United States, and received the money and squandered the same, would the State have had a claim against the general government? III. The third instruction is very broad and sweeping, and without qualification, and it seems to us does not contain the law, and is not supported by authority. IV. Notice to McCann could be no notice to the bank, McCann v. The State. except in matters where he was dealing for and in behalf of the bank. The jury would, and doubtless did consider that the bank was bound by what took place between D. J. McCann and James, in Washington, and by what Pat. O. Hawes said to D. J. McCann in Washington, under this instruction. V. McCann acted for himself alone; indeed there is no evidence that he acted otherwise than for himself. Indeed, it is charged in the petition that the drafts were procured by D. J. McCann, and indorsed in pursuance of a fraudulent conspiracy between James and McCann to defraud the state. The bank was not a party to this fraud. The bank simply performed its whole duty in this matter. It should not be held responsible for the conspiracies of McCann made in Washington with Governor James and executed in Nebraska. See the case of the Bank of Columbia v. Patterson's Adm'r, 7 Wend., in which it is said by Mr. Justice Parker, all the learning upon the subject of corporate liabilities is exhausted. VI. In all these matters D. J. McCann did not act officially as president of the bank, and he did not assume to do so, and if he had assumed to do so, it not being within the scope of his authority as president, his acts could not have bound the corporation. Foster v. Essex Bank, 17 Mass., 507. VII. In this case it is to be borne in mind that D. J. McCann was acting out of the line of his duty as president of the bank, and as is alleged, and the proof tends to show, to commit a willful injury, and to perpetrate a fraud. Under such circumstances the bank is not liable. The evidence in the present case upon this question was not submitted to the jury; and the fact appears in this record that the acts complained of were done only McCann v. The State. by D. J. McCann, and in pursuance of an arrangement between him and Acting Governor James. It was error to hold the bank, and to charge the jury in effect, that the bank was liable for McCann's illegal and unauthorized conspiracy with James. George H. Roberts, Attorney General (with whom was T. M. Marquette), for defendant in error, in support of the various instructions given by the court, cited the following cases: Gerrard v. Pittsburgh R. R., 29 Penn. State, 154. State v. Bank, 45 Mo., 544. Porter v. Bank, 19 Vermont, 410. Blaisdell v. Stevens, 16 Id., 179. Sugden on Vendors, 522. Anderson v. Van Alen, 12 Johns., 343. Hunter v. Field, 20 Ohio, 340. They also contended that the objection made to the admission of parts of the deposition of Pat O'Hawes were made for the first time at the trial of the cause, and the only objection that could then be insisted upon was irrelevancy and incompetency; that the evidence all tends to show: First. That the money paid on the drafts belonged to the state. Second. That the defendants had knowledge of the facts. Some of the evidence may be immaterial, but not irrelevant or incompetent. Mich. Cen. R. R. Co. v. Coleman, 28 Mich., 445. MAXWELL, J. The drafts in question were drawn in favor of W. H. James, acting governor, or order, and were drawn for money due the state from the United States. McCann was a stockholder and president of The Nebraska City National Bank, and was fully aware that the drafts in question belonged to the state, and that James had no interest in them whatever, but was merely the medium to transfer them to the state treasury. James testified in regard to the first draft received, that "the transaction took place in The Nebraska City National Bank. All my conver McCann v. The State. sation with McCann was there. I indorsed the treasury draft at the counter of the bank, and received from him, or some one in the bank, a certificate of deposit. I supposed it to be the certificate of the bank, and not that of D. J. McCann, or D. J. McCann & Co. I did not know there was such a firm, or that he was a member of it. I dealt with him in the bank, and as an officer of the bank, and I supposed I was dealing with The Nebraska City National Bank." In regard to the second draft he tes tified: "McCann was present, during all the conversation with O'Hawes, and knew the source from whence the fund was derived. The second draft was also a part of the militia indemnity fund, received from the United States, and was part of the same fund as the first draft which McCann brought from Washington. It was not handed to me until I had consented to allow Pat. O'Hawes to be paid the seven hundred and fifty dollars. It was then handed to me, and I indorsed it and handed it to McCann, who turned and handed it to the cashier or clerk that stood near, who must have heard the previous conversation, for without directions or instructions from McCann as to what was to be done with it, he took the treasury warrant so indorsed, and paid O'Hawes, as I supposed, the seven hundred and fifty dollars." This testimony is not contradicted. The rule is well settled that notice to a director or knowledge derived by him, while not engaged officially in the business of the bank, cannot operate to the prejudice of the latter; but notice to the cashier of a bank ordinarily will be notice to the bank. County Bank, 1 Ohio State, 298. Circleville, 11 Id., 153. Conant v. Seneca Sturges v. Bank of The president of a national bank, being a stockholder and director, is presumed to be desirous of promoting its welfare. He is its chief executive officer, and has a gen |