of the drawer in collecting it, and not receiving the money on it till after its failure, the draft was not paid till then, and that it held the proceeds of the draft as a special trustee for the plaintiff. Levi v. National Bank of Missouri, 5 Dill., 107; S. C., 7 Cent. L. J., 250.

§ 310. Who may sne.-An agent to whom commercial paper has been indorsed for the purposes of suing the same, but who has no interest whatsoever therein, cannot maintain an action thereon as indorser. Thatcher v. Winslow, 5 Mason, 58. See SS 205, 230.

§ 311. An agent to whom a bill is sent for collection, indorsed in blank, may fill in such indorsement to himself, and sue thereon in his own name. Orr v. Lacy, 4 McL., 244.

§ 312. Where a bailee of a note voluntarily delivered the same to an attorney at law for collection, it was held that he parted with all interest in the note, and could not maintain a suit against the attorney for negligence in failing to collect the note, etc. Sevier v. Holliday, Hemp., 160.

§ 313. Negligence.- Where a note is deposited as collateral security, and for collection, it falls within the law of agency, and the agent is only bound to use due diligence to collect the same; it does not fall within the strict rules of commercial law applicable to commercial paper in respect to demand and notice. Lawrence v. McCalmont, 2 How., 426. Where a bill is forwarded to an agent for collection, and demand and notice is neglected, the agent is responsible only for the damages sustained. Allen v. King, 4 McL., 130. See $$ 560-562.

§ 314. A bank, receiving commercial paper "for collection, according to the known and established mode of transacting business" at that bank, is not liable as for negligence by following such custom as to presentation for payment, though it differs from the custom at other places. Patriotic Bank of Washington v. Farmers' Bank of Alexandria, 2 Cr. C. C., 560. § 315. Where an agent was authorized to collect money and transmit it by mail or some responsible person, receiving a compensation for his trouble, and he collected it and delivered it for transmission to a trustworthy youth of eighteen years of age, from whom the money was stolen, held, that the agent was not liable. Pelham v. Pace, Hemp., 223. See § 194. § 316. A note payable at N., in Mississippi, was forwarded by the owner to bankers in N. for collection, with instructions to protest and notify indorsers if not paid. The note was not paid, and in due time was delivered to a reputable notary to protest and notify the indorsers. The bankers gave the notary no instructions, and he failed to charge the indorsers. In an action against the bankers, it was held that they were not liable for the negligence of the notary, especially, as by the decisions of the supreme court of Mississippi, the notary, in such case, acted as the agent of the owner of paper given him to protest. Britton v. Niccolls, 14 Otto, 765.

§ 317. The T. bank drew a sight draft on the K. bank, against funds actually on deposit with the latter, and sent it to the D. bank for collection on the 10th day of January. The D. bank at once sent it to the drawee, which was its correspondent, and credited the T. bank with the amount and charged the same to the K. bank. The draft miscarried and was never received by the K. bank. It would ordinarily have been received at the K. bank in two days. The drawer had funds sufficient to meet the draft had it been presented before January 29th, and on that day failed. The D. bank made no inquiries of the K. bank as to the draft till February 9th. On learning the facts, the D. bank at once charged the T. bank back with the amount, against the latter's objection, and refused to pay or give credit for the amount of the draft. In an action by the T. bank against the D. bank, it was held that the D. bank was the agent of the T. bank in collecting the draft, and that in not making inquiries about the draft and procuring payment before the failure of the K. bank was negligent, and that it was liable to the T. bank for the amount of the draft. First National Bank of Trinidad v. First National Bank of Denver, 4 Dill., 293.

$318. The drawers of a sight draft on “A., treasurer of the M. S. Co.," delivered it to a bank in Michigan for collection, which at once transmitted it for collection to a bank in Connecticut, of which A. was known by the Michigan bank to be president, with instructions to return at once if not paid. The draft was presented, and A. said he would look up his account and inform the bank. At the time of sending the draft the drawers also wrote A. that they had sent the draft, and in due time received answer from him that he had paid the draft. This letter was shown the Michigan bank, and it not having received the draft back, and hearing nothing of it, paid the amount to the drawers. The draft was never paid, in fact, and a few days later was returned to the Michigan bank. If it had been returned according to instructions, the payment to the drawers would have been prevented. Repayment by the drawers was refused. In an action by the Michigan bank against the Connecticut bank the latter was held liable for the amount of the draft on the ground that it acted as the agent of the plaintiff, and had been guilty of negligence in not at once returning the draft. Merchants' & Manufacturers' Bank v. Stafford Bank, 44 Conn., 567.

§ 319. A. sold B. certain lumber and drew on him for the purchase price. A. negotiated the draft to C., a banker, delivering therewith the bills of lading as security, who indorsed

the draft to a bank "for collection," and forwarded the bills of lading with instructions to collect and remit the proceeds of the draft. By the terms of the draft all parties thereto waived presentment and notice. The draft was payable in fifteen days, and, before the arrival of the lumber, was presented and accepted by B., and the bills of lading were delivered to him. Before the maturity of the draft B. failed. In a suit against the bank for the amount of the draft, on the ground that it was negligent in delivering the bills of lading before the payment of the draft, it was held that it was not liable, and that as the draft was drawn on time, the acceptor was entitled to the bills of lading. Woolen v. New York & Erie Bank, 12 Blatch., 363.

§ 320. Loss by depreciation.-Where a bank collects money as the agent of another bank, and places it with its own funds, giving credit to the principal for the amount, the money becomes the property of the collecting bank, and it must bear the loss resulting from a depreciation in the value of the money. Marine Bank v. Fulton Bank, 2 Wall., 252.

§ 321. Miscellaneous.—If a time draft is forwarded to an agent for collection, with bill of lading of merchandise deliverable to order, without special instructions, the agent may surrender the bill of lading to the drawee on his acceptance of the draft. National Bank of Commerce v. Merchants' Bank, 1 Otto, 93. See § 289.

§ 322. Where a party accepts a consignment of goods, with the accompanying bill of lading, and a draft drawn against the goods, with instructions to deliver the goods when the draft is paid, the transaction is a bailment, and the title of the owner is not transferred. Dows v. Nat. Exch. Bank, 1 Otto, 618. See § 289.

§ 323. Attorneys to whom a claim is intrusted for collection have authority to take from the debtor a general assignment as security, if they shall deem it expedient. Gordon v. Coolidge, 1 Sumn., 544. See §§ 306, 373.

§ 324. Where an attorney is employed to collect a note, in the absence of special instructions he has no authority to take demands due the debtor for collection, to collect and apply the proceeds on the note, and to agree not to sue the claim. Such an agreement is void, and does not release an indorser. Varnum v. Bellamy, 4 McL., 91.

§ 325. An agent employed to collect notes is entitled, when suit is brought, to his reasonble expenses for counsel fees and costs, and also a reasonable commission for transacting the business. Howe v. Wade, 4 McL., 320.

§ 326. Where a check is sent to a bank for collection, it is its duty to present the same, and demand payment within the time prescribed by law, and if not paid, to notify the proper parties of its dishonor. But if, instead, it procures the check to be certified, it becomes liable for the amount itself. Essex County Nat'l Bank v. Bank of Montreal,* 15 Am. L. Reg., 419; S. C., 7 Biss., 197.

See § 290.

§ 327. An agent employed to collect a claim, afterwards assigned in trust to pay a debt of his principals, is a proper party defendant in an action to enforce the trust. So where the principals, being indebted to the United States, assigned to L. and T., as trustees, certain property to pay the debt, and also a certain claim due them in Norway, in the collection of which they had previously employed M. as their agent, it was held that M. was a proper party in an action to enforce the trust. United States v. Myers, 2 Marsh., 526.

§ 328. An agent authorized to collect a debt cannot cancel the same by offsetting one due by himself to the debtor. Kingston v. Kincaid,* 1 Wash., 454.

§ 329. Where an agent employed to collect money on bills places the bills in the hands of his own private agent, to collect the money and enter it to the private account of the original agent, and a loss occurs, such loss falls on the original agent. Taber v. Perrot,* 2 Gall., 565.

VIII. RATIFICATION OF ACTS OF AGENT.

SUMMARY Must be with knowledge of all the facts, § 330.- Breach of instructions, § 331.

§ 330. Where a principal approves of the acts of an agent, but without a knowledge of all the facts, this will not be deemed a ratification; and whether the acceptance and sale of a cargo purchased by an agent in breach of his instructions will amount to a ratification is a question of fact for the jury. Bell v. Cunningham, §§ 332-337. See §§ 38, 57, 58, 93, 206, 447, 553, 556, 557, 565, 576, 577.

§ 331. An agent in commercial transactions is held to a faithful execution of his orders. If he omit to purchase property at L. for sale at H., and there is no ratification by the principal, the actual value of the property at H. affords a reasonable standard for estimating the damages. Vindictive damages not allowed. Ibid. See §§ 140. 141.

[NOTES.-See §§ 338-371.]

STATEMENT OF FACTS.- This is a writ of error to a judgment rendered in the court of the United States for the first circuit and district of Massachusetts, in a suit brought by Cunningham & Co., against Bell, De Yough & Co., on a special contract.

Cunningham & Co., merchants of Boston, had let their vessel, The Halcyon, to Messrs. Atkinson & Rollins, of the same place, to carry a cargo of sugars from the Havana to Leghorn. The cargo was consigned to Messrs. Bell, De Yough & Co., merchants of Leghorn; and Cunningham & Co. addressed a letter to the same house, instructing them to invest the freight, which was estimated at four thousand six hundred petsos, two thousand two hundred in marble tiles, and the residue, after paying disbursements, in wrapping-paper. Messrs. Bell, De Yough & Co. undertook to execute these orders. Instead, however, of investing the sum of two thousand two hundred petsos in marble tiles, they invested the whole amount of freight which came to their hands, amounting to three thousand four hundred and forty-nine petsos and seventhirds, instead of four thousand six hundred in wrapping paper, which was received by the captain of The Halcyon,, shipped to the Havana and sold on account of Messrs. Cunningham & Co. One of the partners of Messrs. Bell, De Yough & Co. having visited Boston on business, this suit was instituted against the company. At the trial all the correspondence between the parties was exhibited, from which it appeared that Cunningham & Co., as soon as information was received that their orders had been broken, addressed a letter to Messrs. Bell, De Yough & Co., expressing in strong terms their disapprobation of this departure from orders, but did not signify their determination to disavow the transaction entirely and consider the wrapping-paper as sold on account of the house in Leghorn. In addition to the correspondence, several depositions were read to the jury, which proved that the orders respecting the marble tiles might have been executed without difficulty, but that the house in Leghorn, expecting to receive more money on account of freight than actually came to their hands, had contracted for so much wrapping-paper as to leave so inconsiderable a sum for the tiles that they determined to invest that small sum also in wrapping-paper.

§ 332. Approbation of the acts of an agent will not be held a ratification unless the principal is informed of all the facts. (a)

At the trial the counsel for the defendants in the court below prayed the court to instruct the jury on several points which arose in the cause. Exceptions were taken to the rejection of these prayers, and also to instructions which were actually given by the court, and the cause is now heard on these exceptions. The defendants' counsel prayed the court to instruct the jury that the letter of the 9th of December, 1824, from the defendants to the plaintiffs, was notice to them of the exercise of the aforesaid authority in contracting for five thousand reams of paper to be paid for out of the freight money of The Halcyon, and was admitted by the plaintiffs in their letter of the 7th of March, 1825, to be a rightful exercise of such authority; and that the freight money of The Halcyon was pledged for payment of the said quantity of paper. But the court so refused to instruct the jury, because it did not appear on the face

(a) The opinion in this case in the lower court is reported in 5 Mason, 161

of the said letter at what price the said wrapping-paper was purchased, so as to put the plaintiffs in possession of the whole facts that there had been a purchase of paper to an extent and at a price which would amount to a deviation from the orders of the plaintiffs, or that defendants had deviated from such orders, without which there could arise no presumption of notice of any deviation from such orders, or of any ratification of any such deviation from such orders. But the court did instruct the jury that if, from the whole evidence in the case, the jury were satisfied that the letter of the 9th of December, connected with the letter of the 14th of January, did sufficiently put the plaintiffs in possession of all the facts relative to such purchase and the price thereof, and of such deviation, and that the letter of the 7th of March, in answer thereto, was written with a full knowledge and notice of all the facts, and that the plaintiffs did thereupon express their approbation of all the proceedings and acts of the defendants relative to such purchase, then, in point of law, it amounted to a ratification thereof, even though there had been a deviation from the orders in this behalf. This first exception is very clearly not supported by the fact, and was very properly overruled for the reasons assigned by the judge. The plaintiffs in that court when the letter of the 7th of March, 1825, was written, had no reason to presume that their orders had been violated, and consequently could not be intended to mean by that letter to sanction such violation.

§ 333. An agent is not justified in departing from the instructions of his principal as to the investment of stated sums of money in succession. (See § 176.) The said defendants' counsel further prayed the court to instruct the jury that if they believed, from the evidence submitted to them, that the required quantity of tiles could be had in season for the return cargo of The Halcyon, without any previous contract therefor, and that the five thousand reams of paper could not be had in season for said vessel without a previous contract therefor, that inasmuch as the plaintiffs admit in their declaration that they did not furnish the defendants with freight money enough to purchase twentytwo hundred petsos' worth of tiles and pay the disbursements and pay for the said five thousand reams of wrapping-paper, but only with three thousand four hundred and forty-nine petsos, 7.3 (as in their declaration is expressed), and which latter sum was only sufficient for the payment of said disbursements and for the performance of the defendants' own contract in paying for said wrapping-paper, the defendants were not holden to purchase any tiles, but were holden to ship the said five thousand reams of paper on board The Halcyon as the property of the plaintiffs. But the court refused so to instruct the jury; and the court did instruct the jury that if the defendants undertook to comply with the original written orders of the plaintiffs, and no deviation therefrom was authorized by the plaintiffs, the defendants were bound, if funds to the amount came into their hands, in the first instance to apply two thousand two hundred petsos of the funds which should come into their hands and be applied to this purpose, to the purchase of tiles, and in the next place to deduct and apply as much as was necessary to pay the disbursements and then to apply the residue to the purchase of paper; that if it were necessary or proper under the circumstances to make a purchase of the paper before the arrival of the vessel, the defendants were authorized to act upon the presumption that four thousand six hundred petsoз would come into their hands, and therefore the plaintiffs would have been bound to any purchase of paper made by the defendants to the amount of the balance remaining of the said four thousand

six hundred petsos, after deducting the two thousand two hundred petsos for tiles and the probable amount of such disbursements. But that it was the duty of the defendants, if they had funds, to deduct in the first instance, from the whole amount, two thousand two hundred petsos for tiles; and if they did not, but chose to purchase paper without any reference thereto, it was a deviation from the plaintiffs' orders, and unless ratified by the plaintiffs the defendants were answerable therefor; that if the defendants had purchased paper before the arrival of the vessel to the amount only of such residue or balance as aforesaid, and the funds had afterwards fallen short of the expected amount of four thousand six hundred petsos, the defendants were not bound to apply any more than the sum remaining in their hands after deducting the amount of such purchase of paper and such disbursements to the purchase of tiles; and that after the receipt of the letters of the 20th of September, and the duplicate of the 15th of September, if the defendants undertook to perform the orders therein contained, there was an implied obligation on them to apply the seven hundred petsos mentioned therein for the plaintiffs' benefit to the purposes therein stated; that to illustrate the case, if the jury were satisfied that the whole funds which came into the hands of the defendants for the plaintiffs (independent of the seven hundred petsos) were three thousand four hundred and fifty petsos, then the said seven hundred petsos should be added thereto as funds in the defendants' hands, making in the whole four thousand one hundred and fifty petsos.

In the view of the facts thus assumed by the court, and to illustrate its opinion, the practical result under such circumstances would be thus: the defendants were authorized to act on the presumption of funds to the amount of four thousand six hundred petsos. Deduct two thousand two hundred petsos for tiles, and six hundred and fifty for probable disbursements, the balance left to be invested in paper would be one thousand seven hundred and fifty. The defendants would then be authorized, if the circumstances of the case required it, to contract for, or purchase, to the amount of one thousand seven hundred and fifty petsos in paper, before the arrival of the vessel; and if the funds should afterwards fall short of the expected amount of four thousand six hundred petsos, the sum of one thousand seven hundred and fifty petsos and the disbursements, say six hundred and fifty petsos, were to be first deducted out of the funds received and the balance only invested in tiles. That if the funds which actually came to the defendants' hands (without the seven hundred petsos) and the sum of seven hundred petsos were also received, the whole amount would be four thousand one hundred and fifty petsos, then the defendants would be justified in deducting therefrom, for the purchase of paper, one thousand seven hundred and fifty petsos, and disbursements six hundred and fifty petsos, leaving the sum of one thousand seven hundred and fifty petsos to be invested in tiles; and to this extent, if there was no ratification, the defendants would be bound to invest for the plaintiffs in tiles, and were guilty of a breach of orders if they did not so invest, and the plaintiffs entitled to damages accordingly. But the court left the whole facts for the consideration of the jury, and stated the preceding sums only as illustrations of the principles of decisions, if they were found conformable to the facts. This prayer was properly overruled for the reasons assigned by the court. The orders were peremptory to apply two thousand two hundred petsos in the first instance to the purchase of tiles. The residue only of the funds which came to the hands of Bell, De Yough & Co. was applied to the purchase of wrap