Franklin MacVeagh & Co., and against the Noblesville Canning Company. It is alleged that the defendants, at the time the contract was entered into, knew that the company was insolvent, and that the plaintiffs believed that it was solvent, and responsible for all contracts made by it. It is also alleged that the capital stock of the company was fixed at $20,000, but that only $9,000 was in fact subscribed, and only $7,192 was ever paid into the treasury, and that the remainder of the stock subscriptions was uncollected, and was subscribed by insolvent and irresponsible persons. It is also alleged that the president and directors did not, nor did any of them, at any time make or sign any certificate stating the amount of capital stock as fixed and paid in, nor was any such certificate ever filed in the office of the clerk of the circuit court of Hamilton county or elsewhere; that on January 1, 1896, the company had been doing business for more than 12 months, and for more than 12 months prior to January 1, 1897, yet said company did not, nor did the defendants, nor did either of them, as such officers and directors or otherwise, within 20 days after January 1, 1896, nor within 20 days after January 1, 1897, nor at any other time, make or publish, or cause to be made or published, in any newspaper, or in any manner whatever, any report stating either the amount of capital stock of the company, the amount of assessments thereon made and actually paid in, or the amount of existing debts; nor was any such report ever signed or verified by the defendant Wild as president, nor by either of the defendants as directors, but they and each of them, at the times aforesaid and at all times wholly failed to give any such notice, and to make any such report. The plaintiffs allege that they were thereby misled and deceived into the belief that the said company was solvent, and responsible for all contracts entered into by it.

It

The defendants have demurred to the complaint for want of facts. Two grounds of insufficiency are pointed out in argument. It is first urged that the complaint is bad because it is shown that the claim for damages for breach of the contract is merged in a judgment in favor of some one else than the plaintiffs; that it appears that a judgment had been rendered by their procurement upon this claim in favor of Franklin MacVeagh & Co., and that this is not and cannot be regarded as a judgment in favor of the other plaintiffs to this action. is then said to be well settled in this state that partners cannot sue and recover judgment in the partnership name, citing Hays v. Lanier, 3 Blackf. 322; Livingston v. Harvey, 10 Ind. 218; Mackenzie v. Board, 72 Ind. 193. These cases hold that a suit ought to be brought in the individual names of each member of the firm, and that, if a suit is brought in the firm name, it constitutes an error for which the judg ment will be reversed. These cases do not decide that a judgment obtained in the name of a firm is invalid in any other sense than that it will be reversible on appeal or writ of error; nor do they lend any support to the contention that the judgment can be successfully assailed in a collateral proceeding. Indeed, it is firmly settled in this state that partners may sue and recover judgment in their firm name, and, where such a judgment has been rendered, that it is perfectly valid against a collateral attack. Thatcher v. Coleman, 5 Blackf.

76; Jones v. Martin, Id. 351; Downard v. Sluder, Id. 559; Bridges v. Layman, 31 Ind. 384; Hopper v. Lucas, 86 Ind. 43; McGaughey v. Woods, 106 Ind. 380, 7 N. E. 7. It is alleged in the complaint, and confessed by the demurrer, that the plaintiffs brought suit and recovered judgment in their firm name of Franklin MacVeagh & Co. against the Noblesville Canning Company. The cases above cited, and especially Jones v. Martin, show that the judgment is valid and that oral proof is competent to show who the real plaintiff's were, and that, when shown, such judgment is enforceable by and in favor of all the partners.

It is next contended that the damage arising from the breach of an executory contract, where the plaintiffs have parted with nothing, is not within the purview of the statute which charges directors for defaults in the performance of official duty. It is insisted that the liability for breach of the contract is one for the recovery of unliquidated damages representing profits only, and is not such a corporate liability as can be enforced against the defendants under the statute of this state. The only authority cited and relied on by counsel to support their contention is 3 Thomp. Corp. p. 3081, § 4193, which reads: "Unliquidated Damages for Breach of Contract. it seems that such statutes do not include unliquidated damages for breach of contract." The only case cited in support of the text is Manufacturing Co. v. Beecher, 26 Hun, 48. This case arose under the statute of the state of New York, which requires the directors to make annual reports, and for failure to do so enacts that they shall be liable for all "existing debts" of the corporation. The statute of this state provides that for failure to make reports, or for making false reports, the officers of the corporation shall be jointly and severally liable for "all damages" resulting from such failure. 2 Burns' Rev. St. 1894, § 5073. The distinction between a statute which provides that the liability shall be for all "existing debts" and one which provides that the liability shall be for "all damages" is so clear and marked that a decision under the former can have no controlling force in a case arising under the latter. The legislature of this state has enacted that the liability shall be for all damages resulting from a failure to make reports as provided by the statute. Manifestly, the words of the statute embrace unliquidated damages just as certainly as they do liquidated damages. Conceding, without deciding, that the present action is one to recover unliquidated damages for breach of a contract, it plainly falls within the very words of the statute. The demurrer is overruled, to which defendants except.

NATIONAL BANK OF OSHKOSH v. MUNGER.

(Circuit Court of Appeals, Seventh Circuit. June 6, 1899.)

No. 497.

1. AGENCY-RESPONSIBILITY OF PRINCIPAL FOR ACTS OF AGENT-AGENT ACTING FOR DIFFERENT PRINCIPALS.

A depositor in a bank authorized the teller to act as her agent in making and collecting loans, but he was not authorized to draw money from her account, except on checks procured from her. The arrangement was continued for a number of years, during which she gave several hundred checks, aggregating over $90,000. During the same time, without the authority or knowledge of the depositor, the bank permitted the teller from time to time to withdraw money from her account on a "teller's memorandum," which was merely a direction to the bookkeeper to charge her account with a stated sum, and such sums he appropriated to his own use. Held. that in such transactions the teller acted in his capacity as an officer of the bank, and not, so far as the bank was concerned, within the apparent scope of his agency for the depositor, and that the bank was liable to her for the amounts so withdrawn.

2. SAME RATIFICATION.

The making of a note by the teller in favor of the depositor, which he placed with her securities in the bank, without her knowledge, and upon her merely expressing her willingness to make him a loan on security, when in fact no loan was made and no check was given by her, but the money had previously been wrongfully taken from her account, could not operate to bind her, as a ratification of such withdrawal, nor relieve the bank from liability to her therefor.

3. SAME-UNAUTHORIZED PAYMENT TO AGENT.

A bank which permits an agent of a depositor to have money transferred from the depositor's account to the credit of a concern which it knows the agent to be chiefly interested in is chargeable with knowledge that he cannot bind his principal in such a transaction, and acts at its peril.

In Error to the Circuit Court of the United States for the Eastern District of Wisconsin. ·

This suit is brought by Harriet E. Munger, the defendant in error, to recover of the National Bank of Oshkosh, the plaintiff in error, a claimed balance of $14,435.06 of moneys deposited to her account in that bank. Prior to the 1st day of March, 1891, she had a deposit account with the bank, and on that day had a balance to her credit of $822.35. She is the daughter and sole heir at law of Jefferson Bray, deceased, and on April 8, 1891, his executors deposited in the bank to her credit the sum of $23,439.49, and delivered to Frank Heilig, who was, and for 20 years had been, the paying and receiving teller of the bank, a box containing the securities of the estate, and which then belonged to the defendant in error. This was done at her request, she having engaged Heilig as her agent to attend to her estate and to make loans for her. At about that date the cashier of the bank asked her who was going to do her business, and she said Mr. Heilig, that her father had confidence in him, and that she intended to intrust him with her affairs. Heilig kept the box in the vault of the bank, no one but himself having access to it. The defendant in error resided at Oshkosh, in which city the bank was located, until the autumn of 1894, when she removed to the city of Chicago. The custom in the transaction of this business was that Heilig, when he made a loan for her, obtained her check upon the bank for the amount of the loan; and several hundred checks so procured, and signed by her, and aggregating in amount over $92,000, are produced in evidence. He had no authority from Mrs. Munger to draw upon her bank account, except upon checks signed by her. Soon after his agency commenced, and from time to time during the six succeeding years, he drew moneys from the bank, delivering to the bookkeeper of the bank memoranda called "teller's memoranda," which were directions to the book

keeper to debit Mrs. Munger's account with the moneys stated thereon, and so taken by him. The claim in suit is properly divisible into three classes: First. The amount taken by Heilig from the bank and appropriated to his own use, for which debit memoranda were made by him and delivered to the bookkeeper, and without check or voucher, or authority from Mrs. Munger. This amount is stated by the court below, and by counsel in this court, to be $13,080.35, while the notes of Heilig, representing the amount abstracted, and which were placed by him in the box containing Mrs. Munger's securities, foot up $13,183. No part of this amount was ever paid to Mrs. Munger, or in any way inured to her benefit. With respect to $5,000, part of the amount, the evidence disclosed that after its appropriation, and without knowledge of it by Mrs. Munger, Heilig, about October 2, 1893, asked her if she would loan him $5,000 upon timber lands, not mentioning where or what they were, and she expressed her willingness to make such loan. Thereupon, without further communication with Mrs. Munger, and without her knowledge, Heilig signed, and placed in the box of Mrs. Munger's securities at the bank, his note for $5,000, dated October 2, 1893, to the order of Mrs. Munger, payable at the National Bank of Oshkosh on or before five years after date, with interest at 6 per cent. per annum. This note contains this further statement:

"Having deposited with the National Bank of Oshkosh certain property (as stated below) as collateral security to this note, for value received I hereby authorize said bank, on the nonpayment of this note at maturity, to sell said property at either public or private sale, with or without further notice to me, and apply the proceeds thereon:

Lands in Michigan, hardwood.

Do "Minnesota,

Indorsed upon the note was the following:

pine."

"Southwest quarter section 29, town 60, range 18, Minnesota. Contains 3,200,000 ft. of pine. I own 1⁄2 interest. Taxes paid for 1893."

No money was taken upon this note. It was so made and deposited by Heilig to represent so much of prior defalcations.

Second. The sum of $2,665 taken from the bank by Heilig upon like debit memoranda, and disposed of as follows: (a) Wall and Spaulding loan, January 9, 1893, at six months, $1.000. Heilig states that this loan was repaid, but he was unable to say whether Mrs. Munger's account was credited with the amount. The bank book shows that it was not. (b) Loan to Arthur C. Payne June 30, 1894, $100; November 1, 1894, $300,-charged in the bank book to Mrs. Munger's account. It is not possible from the record to reconcile or account for the singular entries respecting this loan. On January 13, 1896, Mrs. Munger's bank account is credited "$160, A. C. Payne," and on March 12, 1896, the account is charged with "$217.67, note A. C. Payne," while the notes of Payne found in the box are dated August 25, 1894, for $300, and June 26, 1896, for $100, and on June 16, 1895, Heilig reported a loan to A. C. Payne of $200. (c) Loans to Pearson Refrigerator & Cold-Storage Company. These loans were all made in the year 1896, as follows: May 11, $350; June 4, $300; August 4, $300; September 5, $115; September 26, $200; total, $1,265. Notes of the company were taken, and placed in the box of Mrs. Munger's securities, bearing the dates stated, each payable one year after date to the order of Mrs. Munger. In this transaction Heilig assumed to act both for Mrs. Munger and for the corporation, in which he was one of the chief parties interested. These loans were made by Heilig after he had severed his connection with the bank, and were done in this way: In each case he made a memorandum, not signed, directing the amount to be credited to the Pearson Refrigerator & Cold-Storage Company, and to be charged to Mrs. Munger, delivering them to the bookkeeper, who made entries accordingly in the books of the bank. Heilig states that no one but an officer of the bank ever makes such memoranda, and that no money is ever paid to an outsider upon a memorandum debit, and that he had free access to the bank after he had left its service. Neither of these loans have been paid, nor had Mrs. Munger any knowledge of them.

Third. The sum of $75 withdrawn on July 24, 1896, from the bank by Heilig upon a like debit memorandum, for his own use, without check or voucher from Mrs. Munger, after he had left the service of the bank, and charged to Mrs. Munger, in the bank book, as loaned under the name of “Ad. Domingo."

It should be noted that the total of all these amounts is $15,820.35,-an excess of $1,385.29 over the amount claimed, $14.435.06, to which sum, with interest, the recovery of the plaintiff below was limited by the court.

The record states that in the autumn of 1894, just previous to Mrs. Munger's removal to Chicago, Heilig had an interview with her at her home, and he says: "Took the box containing bank books, with whatever belonged in it,the plaintiff's papers. We then and there looked over the plaintiff's matters. Cannot remember whether rendered her a statement. That he knows that they looked over the contents of the box. Exhibit R2 is a statement he furnished the plaintiff. Cannot state when he furnished it. The pencil mark on exhibit R2 my handwriting. S2 is in his handwriting, including the pencil mark on the same. That he made and furnished it to the plaintiff before the plaintiff went to Chicago." On cross-examination, Heilig stated that Mrs. Munger must have seen his note (referring to the $5,000 note). "I compared at her house before she went to Chicago, and each individual note was taken out: * * checked them up."

There were three statements produced in evidence,-Exhibits R2, S2, and T2. The latter, on its face, refers to receipts and expenditures in the year 1895, and could not have been the statement referred to by Heilig. There is some uncertainty in the evidence respecting which statement was given to Mrs. Munger by Heilig before the former removed to Chicago. The court, in its charge, said that it was not claimed that there was proof of the actual delivery of Exhibit R2 to Mrs. Munger at that particular time, except as it might be determined from the appearance of the paper itself, and left the matter to be determined by the jury. Exhibit R2 contains a statement of Heilig's note for $5,000. Exhibit S2 does not, although it refers to notes of subsequent date. The latter exhibit is manifestly prior in time to the former. Exhibit R2 at the foot, contains a statement in pencil by Heilig of receipts and expenditures, as follows:

In pencli on the statement, and in the handwriting of Heilig, is the following:

2000 Beideman

2800 D. L. Miller

Notes del'd to

12000 Harry & John Munger Mrs. Munger.

$16800

The record discloses that Exhibits R2 and S2 were introduced in evidence by the bank, but from whom they were obtained does not appear by the record. Certain other exhibits, being letters from Heilig to Mrs. Munger, were produced by her. The court, in its charge to the jury, assumed that a statement was produced at the trial by Mrs. Munger, but did not, nor does the record,