Opinion of the Court.

tlement of his accounts. If they have the authority to accept cheques and other evidences of debt, where does that authority cease? May they not also receive notes, drafts, bonds, or - other obligations which in their opinion may then or thereafter be good? As was said in Cawley v. People, 95 Illinois, 249, 256, speaking of the duty of auditing boards: "They are limited and controlled in their official acts, and they are not, unless authorized, empowered to do or not to do official acts. In this class of cases they are empowered, and it is enjoined on the board, to require sufficient bond from the treasurer and to approve it. They have no power to dispense with the duty, nor can they, without a proper consideration, release sureties from their obligations under the bond. If they were to do so, in fraud of the rights of the people, the act would have no binding effect and would be void. There can be no question that the treasurer could only discharge himself for county funds in his hands by paying to the county, in money, county orders or jury warrants. The statute requires him. to pay in such funds. It is not intended that he may pay in promissory notes, cheques, drafts, and other paper." Indeed, it is doubtful whether the county commissioners who, under the laws of Dakota, are simply an auditing body, had any authority to receive moneys of the county from the treasurer, for which they gave no bonds, and whether their act in taking possession of his assets, including this cheque, was not beyond the scope of their authority. They did, however, receive the money and the cheque, and at the same time, and as a part of the same transaction, turned them over to the sureties upon his bond, although they did not at that time, or until six days thereafter, pass his accounts or release his sureties. What warrant they had for turning over these securities to the bondsmen does not appear, but there was evidently no intention on their part of releasing the sureties, nor was the county placed in any worse position by that act. If the commissioners had received this cheque believing it to have been issued in good faith and retained it, it is possible the county might have stood in the position of an innocent purchaser. But their receipt of it and their turning it over to the sureties

VOL. CL-16

Opinion of the Court.

was evidently a single act, and intended to assist the sureties in protecting themselves. It was wholly inconsistent with the idea of releasing them from their obligation.

Aside from the somewhat suspicious circumstances attending the sudden production of a cheque of this large amount, which could scarcely be said to be in the ordinary course of business, there was evidence tending to show that about the time of the receipt of the cheque, on January 12, Mr. Wright, the county attorney, was informed by the counsel of the bank that the board should not take the cheque into consideration; that the bank would defend against it, as in the hands of Howard, and refuse payment; and that the next day, when the board was in session, a similar notice was given to them. It is true that some of this testimony, with regard to the notice, is disputed; but in determining whether the case should have been left to the jury, or not, we are to consider only the uncontradicted facts. Beyond this, however, there is some testimony tending to show that the cheque was not delivered by Howard voluntarily, as such delivery involved a plain violation of the condition upon which he had received it; but was extorted by the bondsmen and commissioners under a show of force. If this be true, it was clearly not a receipt of the cheque in the ordinary course of business. Be this as it may, it does not appear that the county commissioners took any action prejudicial to their rights against the county treasurer and his sureties until the 18th, when his settlement was approved, and on the 19th the cheque of the bondsmen, certified by the president of the plaintiff bank, was received in full discharge of such bondsmen.

Without expressing an opinion of our own whether the evidence did or did not establish the fact that the county was an innocent holder for value of this cheque, we are clear that the testimony upon this point should have been submitted to the jury.

There was certainly evidence enough to go to the jury that the plaintiff bank as well as the sureties upon the bond received the paper with notice that its collection would be resisted. The sureties received the paper simply as bailee for

Opinion of the Court.

the county. They paid no consideration for it. It simply passed through their hands to the plaintiff bank, which consented to receive it on deposit and to credit them with the

amount.

With regard to the possession of the plaintiff bank, the evident anxiety of McKinney, its president, to obtain for it the treasurer's deposit; his inquiry whether it was a straight cashier's cheque; his threat that the bank should pay it or close its doors; the substitution of Norton, the cashier of this bank, for Howard as county treasurer; the suspicious manner in which the money was brought to the bank; the prompt commencement of the action against the defendant on the morning after the cheque was refused; the conversation on the following morning, the 15th, between the assistant cashier of the plaintiff bank and the editor of a local paper, in which the former said: "The Sioux Falls National Bank had done a great deal for me, and now was the time for me to stand by them; it was a matter of vital importance to them;" were all suspicious circumstances tending to throw grave doubt upon the claim of the plaintiff bank to be a bona fide holder of the paper. Add to this the fact that twice during the afternoon of the 13th the plaintiff bank presented the cheque for payment, which was refused upon the ground that it was given without consideration, and had been fraudulently diverted from the purpose for which it was issued; that this notice was repeated at a conference between the officers of the two banks the same evening, and the plaintiff bank requested to charge it back to the bondsmen, and it is too clear for argument that the plaintiff did not itself stand in the position of an innocent holder. Bad as the conduct of the defendant bank was in issuing the cheque, the testimony is calculated to engender a strong suspicion that the motive of the plaintiff bank in receiving it was to secure to itself the deposit of the county moneys, and perhaps also to crush out a rival institution.

While it is true the plaintiff bank credited the bondsmen with the amount of the cheque on its receipt, it parted with nothing upon the faith of it until nearly a week thereafter.

Opinion of the Court.

If it had cancelled the cheque on the evening of the 13th, as it was requested to do, it would have done no more than the law required of it. The mere credit of a cheque upon the books of a bank, which may be cancelled at any time, does not make the bank a bona fide purchaser for value. If after such credit and before payment for value upon the faith thereof, the holder receives notice of the invalidity of the cheque, he cannot become a bona fide holder by subsequent payment. Dresser v. Missouri &c. Construction Co., 93 U. S. 92; Mann v. Second Nat. Bank, 30 Kansas, 412; Central Nat. Bank v. Valentine, 18 Hun, 417; Manf. Nat. Bank v. Newell, 71 Wisconsin, 309; Buller v. Harrison, Cowp.

565.

The claim that defendant was estopped by its cheque to deny that the bank was indebted to the county in the amount of such cheque, depends practically upon the same considerations as the question of innocent purchaser. If, upon the faith of such representations, the county commissioners did any act prejudicial to the interests of the county, an estoppel might arise; but if, before such act was done, the commissioners were informed that the cheque was fictitious, they could not be said to have acted upon the faith of its representation, and there could be no estoppel. Even if such estoppel had arisen in favor of the county, it is, at least, doubtful whether the plaintiff bank could avail itself of it. Deery v. Cray, 5 Wall. 795; Mayenborg v. Haynes, 50 N. Y. 675.

We have not deemed it necessary to consider whether this cheque falls within the class upon which we have held that no action will lie in favor of the holder against the drawee before acceptance. Bank of Republic v. Millard, 10 Wall. 152; First Nat. Bank of Washington v. Whitman, 94 U. S. 343; Bull v. Bank of Kasson, 123 N. Y. 105.

In any view we have been able to take of this case, we think the question of plaintiff's title to this cheque and its right to recover upon the same should have been left to the jury under proper instructions.

The judgment of the court below is, therefore, reversed, and the case remanded to the Supreme Court of the State of

Statement of the Case.

South Dakota with instructions to remand the case to the proper court of Moody County, and to direct the verdict and judgment to be set aside and a new trial granted.

MR. JUSTICE BREWER dissented.

ELLIOTT v. CHICAGO, MILWAUKEE AND ST. PAUL RAILWAY COMPANY.

ERROR TO THE SUPREME COURT OF THE TERRITORY OF DAKOTA.

No. 71. Argued November 6, 7, 1893. Decided November 20, 1893.

Though questions of negligence and contributory negligence are, ordinarily, questions of fact to be passed upon by a jury, yet, when the undisputed evidence is so conclusive that the court would be compelled to set aside a verdict returned in opposition to it, it may withdraw the case from the consideration of the jury, and direct a verdict.

THIS case was commenced in the District Court of Clay County, Dakota Territory, on August 31, 1886, by the plaintiff in error, Biddena Elliott, widow of John Elliott, deceased, against the railway company to recover damages on account of the death of John Elliott, alleged to have been caused by the negligence of the defendant and its employés.

The defendant answered, a trial was had at the September term, 1886, and the plaintiff recovered a verdict for seven thousand dollars. Judgment having been entered thereon, the defendant appealed to the Supreme Court of the Territory, which reversed the judgment and remanded the case for a new trial. 5 Dakota, 523.

The case was again tried, though apparently in the District Court of Minnehaha County, at the April term, 1889, upon the same evidence that was presented on the first trial. A verdict was directed in favor of the defendant, and judgment entered thereon. Plaintiff appealed to the Supreme Court, which, on May 31, 1889, affirmed the judgment. Thereupon a writ of error was sued out from this court.