The res was thereby drawn into the exclusive jurisdiction and dominion of the United States; and, for the purposes of that suit, it was at the same time withdrawn from the jurisdiction of the courts of New Jersey. Any proceeding against it, involving the control and disposition of it, in the latter, while in that condition, was as if it were a proceeding against property in another state. It was vain, nugatory, and void, and as against the proceedings and judgment of the district court of the United States, and those claiming under them, was without effect.

In this aspect, the case is directly within the rule of decision established in Wiswall v. Sampson, 14 How. 52. That was a controversy as to the title to real estate, one party claiming under a sale upon execution issued on judgments rendered in the circuit court of the United States, the property being at the time of this sale in the possession of a receiver of a state court, under whose subsequent decree and sale the defendant claimed title. It is a significant fact, in that case, that, at the time of the appointment of the receiver by the state court, the executions upon the judgments had been issued and levied, and were a subsisting lien upon the premises. It was said in that case by Mr. Justice NELSON, delivering the opinion of the court: "It has been argued that a sale of the premises on execution and purchase occasioned no interference with the possession of the receiver, and hence no contempt of the authority of the court, and that the sale, therefore, in such a case should be upheld. But, conceding the proceedings did not disturb the possession of the receiver, the argument does not meet the objection. The property is a fund in court to abide the event of the litigation and to be applied to the payment of the judgment creditor who has filed his bill to remove impediments in the way of his execution. If he has succeeded in establishing his right to the application of any portion of the fund, it is the duty of the court to see that such application is made. And, in order to effect this, the court must administer it independently of any rights acquired by third persons pending the litigation. Otherwise the whole fund may have passed out of its hands before the final decree, and the litigation become fruitless." And the conclusion was: "It is sufficient to say that the sale under the judgment, pending the equity of the suit, and while the court was in possession of the estate, without the leave of the court, was illegal and void." And the same conclusion must prevail here, for, although the sale under the judgments in the state court was not made until after the property had passed from the possession of the district court by delivery to the purchaser at the sale under the decree, yet the initial step on which the sheriff's sale depended-the commencement of the proceedings to enforce the mechanic's lien, asserting the jurisdiction and control of the state court over the property sold-took place when that? property was in the exclusive custody and control of the district court; and, by reason of its prosecution to a sale, was an invasion of the jurisdiction of that court. No stress is laid on the fact that notice of the proceeding by affixing a copy of the summons upon the building, which was required by the statute, could only be made by an actual entry by the sheriff upon the property, to that extent disturbing the possession of the marshal, because the same result, in our opinion, would have followed if no such notice had been required or given. The substantial violation of the jurisdiction of the district court consisted in the control over the property in its possession, assumed and asserted, in commencing the proceedings to enforce against it the lien claimed by the plaintiffs in those actions, prosecuting them to judgment, and consummating them by a sale. The principle applied in Wiswall v. Sampson, ubi supra, must be regarded as firmly established in the decisions of this court. It has been often approved and confirmed. Peale v. Phipps, 14 How. 368; Hagan v. Lucas, 10 Pet. 400; Williams v. Benedict, 8 How. 107; Pulliam v. Osborne, 17 How. 471; Taylor v. Carryl, 20 How. 583; Yonley v. Lavender, 21 Wall. 276; People's Bank v. Calhoun, 102 U. S. 256; Barton v.

303

908.

306

Barbour, 104 U. S. 126; Covell v. Heyman, 111 U. S. 176; S. C. 4 SUP. CT REP. 355.

But it is to be understood, as a qualification of what has been said, that we do not mean to decide that the plaintiffs in the actions in the state court might not, without prejudice to the jurisdiction of the district court, commence their actions, so far as that was a step required by the mechanics' lien law of New Jersey, for the mere purpose of fixing and preserving their rights to a lien: provided, always, they did not prosecute their actions to a sale and disposition of the property, which, by relation, would have the effect of avoiding the jurisdiction of the district court under its seizure. That was the course, under similar circumstances, adopted and sanctioned by the supreme judicial court of Massachusetts in Clifton v. Foster, 103 Mass. 233, where a petition to enforce a mechanic's lien, which, by statute, it was necessary to file within a fixed time in order to preserve it, was permitted to be filed after the property, by the bankruptcy of the owner, had passed into the custody of the district court; but all further proceedings thereon were stayed to await the action of that court in the bankruptcy proceedings, on the ground that such seasonable filing was necessary to keep the lien alive, and that, without further proceedings, it could not be construed as an encroachment upon the jurisdiction of the bankruptcy court. The distinction seems to us reasonable and just, and is supported by the decisions in Williams v. Benedict, 8 How. 107, and Yonley v. Lavender, 21 Wall. 276. In conformity with it, we refrain from pronouncing the proceedings in the state courts of New Jersey invalid, so far as they do not affect the legal title of the purchaser at the marshal's sale to the premises in controversy. We decide, not that they are invalid for the purpose of declaring and establishing the lien, but that they are not good for the purpose of enforcing it, as was attempted, by a sale and conveyance of the premises in controversy. This view, though decisive of the case and resulting in the affirmance of the judgment of the circuit court, proceeds upon assumptions the most favorable which can be indulged to the plaintiff in error. It is merely an application of the familiar and necessary rule, so often applied, which governs the relation of courts of concurrent jurisdiction, where, as is the case here, it concerns those of a state and of the United States, constituted by the authority of distinct governments, though exercising jurisdiction over the same territory. That rule has no reference to the supremacy of one tribunal over the other, nor to the superiority in rank of the respective claims in behalf of which the conflicting jurisdictions are invoked. It simply requires, as a matter of necessity, and therefore of comity, that when the object of the action requires the control and dominion of the property involved in the litigation, that court which first acquires possession, or that dominion which is equivalent, draws to itself the exclusive right to dispose of it, for the purposes of its jurisdiction. It was in accordance with this principle that, in Pulliam v. Osborne, 17 How. 471, this court confirmed the legal title of land to a purchaser under an execution upon *judgment rendered in the state court, because first actually levied as against one claiming under an execution out of the district court of the United States, which had a priority of lien by reason of having been first issued.

We therefore now determine that the plaintiff in error does not hold the legal title of the premises in controversy, as against the defendant in error, claiming under the marshal's sale and the decree of the district court; and we decide nothing beyond that. The other questions argued at the barwhether the forfeiture decreed by the district court operated to transfer the whole title of the premises against all claimants; whether, if it operated only upon the interest of the owner at the time the alleged offenses were committed, subject to all valid liens then existing, nevertheless, those liens were transferred to the proceeds of the sale, and the claimants were bound at their peril to intervene in their own behalf in that proceeding; or whether the sale, as

made, passed the legal title, subject to all existing liens, including those sought ineffectually to be enforced by the proceedings under which the plaintiff in error claims; and whether, in that event, these may be enforced against the land or present owners, and if so, in what mode-we have passed by without considering, as not necessary to the decision of the case. The judgment of the circuit court is accordingly affirmed.

(112 U. S. 276)

EXCHANGE NAT. BANK OF PITTSBURGH, PA., v. THIRD NAT. BANK OF THE CITY OF NEW YORK.1

(November 24, 1884.)

1. BANKS ANd Banking-NEGLIGENCE-COLLECTION OF DRAFTS.

A bank in Pittsburgh sent to a bank in New York, for collection, 11 unaccepted drafts, dated at various times through a period of over three months, and payable four months after date. They were drawn on "Walter M. Conger, Sec'y Newark Tea Tray Co., Newark, N. J.," and were sent to the New York bank as drafts on the tea tray company. The New York bank sent them for collection to a bank in Newark, and, in its letters of transmission, recognized them as drafts on the company. The Newark bank took acceptances from Conger individually, on his refusal to accept as secretary, but no notice of that fact was given to the Pittsburgh bank until after the first one of the drafts had matured. At that time the drawers and an indorser had become insolvent, the drawers having been in good credit when the Pittsburgh bank discounted the drafts. Held, that the New York bank was liable to the Pittsburgh bank for such damages as it had sustained by the negligence of the Newark bank.

2. PRACTICE-FINDING OF CIRCUIT COURT-DAMAGES-REMANDING CASE FOR NEW TRIAL. The circuit court having, on a trial before it without a jury, made a finding of facts which did not cover the issue as to damages, and given a judgment for the defendant, this court, on reversing that judgment, remanded the case for a new trial, being unable to render a judgment for the plaintiff for any specific amount of damages.

In Error to the Circuit Court of the United States for the District of New Jersey.

John R. Emery and Thos. N. McCarter, for plaintiff in error. bey, for defendant in error.

A.Q. KeasBLATCHFORD, J. The Exchange National Bank of Pittsburgh, Pennsylvania, brought this suit against the Third National Bank of the city of New York, in the circuit court of the United States for the district of New Jersey, to recover damages for the alleged negligence of the defendant in regard to 11 drafts or bills of exchange indorsed by the plaintiff to the defendant for、 collection. The suit was tried before the court without a jury. It made a special finding of facts and rendered a judgment for the defendant, to review which the plaintiff has brought this writ of error.

The facts found are these, in substance: The drafts were drawn by Rogers & Burchfield, at Pittsburgh, to the order of J. D. Baldwin, and by him indorsed, on "Walter M. Conger, Sec'y Newark Tea Tray Co., Newark, N. J.," and were discounted before acceptance, by the plaintiff, at Pittsburgh, for the drawers. They bore different dates, from June 8, 1875, to September 20, 1875, and were in all other respects similar except as to the suis payable, and in the following form:

"$1,042.75.

PITTSBURGH, June 8, 1875.

"Four months after date, pay to the order of J. D. Baldwin ten hundred and forty-two 75-100 dollars, for account rendered, value received, and charge to account of ROGERS & BURCHFIELD.

"To Walter M. Conger, Sec'y Newark Tea Tray Co., Newark, N. J."

1 S. C. 4 Fed. Rep. 20.

.

a

*28་

They were transmitted for collection at different times before maturity by the plaintiff to the defendant in letters describing them by their numbers and amounts, and by the words "Newark Tea Tray Co." They were sent by the defendant to its correspondent, the First National Bank of Newark, inclosed in letters describing them generally in the same way, except that, in two of the letters, they were described as drawn on "W. M. Conger, Sec'y." The drafts were received by the defendant in New York within a day or two of the time of discounting them. They were presented by the First National Bank of Newark to Conger for acceptance, who, except in one instance, accepted them by writing on the face these words: "Accepted, payable at the Newark National Banking Co. WALTER M. CONGER." When the acceptances were taken, the time of payment was so far distant that there was sufficient time to communicate to the plaintiff the form of the acceptance, and for the plaintiff thereafter to give further instructions as to the form of acceptance. The Newark bank held the drafts for payment, but the plaintiff was not advised of the form of acceptance until, on the thirteenth and nineteenth of October, two of them were returned to it by the defendant. At that time the drawers and indorsers were insolvent, but the drawers were in good credit when the drafts were discounted by the plaintiff. The drafts were duly protested for non-payment, but none of them were paid. The Newark Tea Tray Company is a New Jersey corporation doing business in that state, and Walter M. Conger is its secretary. The drafts were represented to the plaintiff by Burchfield, one of the drawers, who offered them for discount, to be “the paper of the Newark Tea Tray Company" drawn against shipments of iron by Rogers & Burchfield to that company, and were discounted as such by the plaintiff. He also represented that Walter M. Conger was the person who examined the shipments of iron and "accepted the drafts," and that they were drawn in this form for the convenience and accomodation of the company. On drafts of Rogers & Burchfield on the "Newark Tea Tray Co.," dated May 4, 1874, May 20, 1874, and June 30, 1874, discounted by the plaintiff, and transmitted for acceptance to the defendant, and by it sent to the same Newark bank, that bank took acceptances from Walter M. Conger individually, without notice to the plaintiff; and Conger, during the time drafts sent by the plaintiff to the defendant, addressed to the "Newark Tea Tray Co." and to "Walter M. Conger, Sec'y Newark Tea Tray Co., Newark, N. J.," were in the hands of the Newark bank to procure acceptance, informed the cashier of the Newark bank that he would not accept these drafts in his official capacity as secretary. * The negligence alleged consists in not obtaining acceptance of the drafts by the Tea Tray Company, or having them protested for non-acceptance by that company, or giving notice to the plaintiff of such non-acceptance, and in failing to give notice to the plaintiff that the company would not accept the drafts, or that Conger would not accept them in his official capacity. The decision of the circuit court proceeded on the ground that, at most, the defendant erred in judgment as to the import of the address on the drafts; that it had no information to qualify or explain such import; that for it to regard the drafts as addressed to Conger in his individual capacity was not a culpable error, because it followed decisions to that effect made by courts of the highest standing in New Jersey and New York and elsewhere; that it exercised intelligent and cautious judgment on the information it had; and that the plaintiff knew who was the intended drawee, as understood between it and the drawers, and ought to have advised the defendant, but failed to do so. 4 Fed. Rep. 20.

The only question presented by the record is that of the sufficiency of the facts found to support the judgment. It is contended by the defendant that its liability, in taking at New York for collection these drafts on a drawee at Newark, extended merely to the exercise of due care in the selection of a competent agent at Newark, and to the transmission of the drafts to such

agent, with proper instructions; and that the Newark bank was not its agent, but the agent of the plaintiff, so that the defendant is not liable for the default of the Newark bank, due care having been used in selecting that bank. Such would be the result of the rule established in Massachusetts, (Fabens v. Mercantile Bank, 23 Pick. 330; Dorchester Bank v. New England Bank, 1 Cush. 177;) in Maryland, (Jackson v. Union Bank, 6 Harr. & J. 146;) in Connecticut, (Lawrence v. Stonington Bank, 6 Conn. 521; East Haddam Bank v. Scovill, 12 Conn. 303;) in Missouri, (Daly v. Butchers' & Drovers' Bank, 56 Mo. 94;) in Illinois, (Etna Ins. Co. v. Alton City Bank, 25 Ill. 243;) in Tennessee, (Bank of Louisville v. First Nat. Bank, 8 Baxt. 101;) in Iowa, (Guelich v. National State Bank, 56 Iowa, 434; S. C. 9 N. W. Rep. 328;) and in Wisconsin, (Stacy v. Dane County Bank, 12 Wis. 629.) The authorities which support this rule rest on the proposition that since what is to be done by a bank employed to collect a draft payable at another place cannot be done by any of its ordinary officers or servants, but must be intrusted to a subagent, the risk of the neglect of the subagent is upon the party employing the bank, on the view that he has impliedly authorized the employment of the subagent; and that the incidental benefit which the bank may receive from collecting the draft, in the absence of an express or implied agreement for compensation, is not a sufficient consideration from which to legally infer a contract to warrant against loss from the negligence of the subagent.

The contrary doctrine, that a bank, receiving a draft or bill of exchange in one state for collection in another state from drawee residing there, is liable for neglect of duty occurring in its collection, whether arising from the default of its own officers, or from that of its correspondent in the other state, or an agent employed by such correspondent, in the absence of any express or implied contract varying such liability, is established by decisions in New York, (Allen v. Merchants' Bank, 22 Wend. 215; Bank of Orleans v. Smith, 3 Hill, 560; Montgomery County Bank v. Albany City Bank, 7 N. Y. 459; Commercial Bank v. Union Bank, 11 N. Y. 203, 212; Ayrault v. Pacific Bank, 47 N. Y. 570;) in New Jersey, (Titus v. Mechanics' Nat. Bank, 6 Vroom, 588;) in Pennsylvania, (Wingate v. Mechanics' Bank, 10 Pa. St. 104;) in Ohio, (Reeves v. State Bank, 8 Ohio St. 465;) and in Indiana, (Tyson v. State Bank, 6 Blackf. 225.) It has been so held in the second circuit, in Kent v. Dawson Bank, 13 Blatchf. C. C. 237, and the same view is supported by Taber v. Perrot, 2 Gall. 565, and by the English cases of Van Wart v. Woolley, 5 Barn. & C. 439, and Mackersy v. Ramsays, 9 Clark & F.818. In the latter case, bankers in Edinburgh were employed to obtain payment of a bill drawn on Calcutta. They transmitted it to their correspondent in London, who forwarded it to a house in Calcutta, to whom it was paid; but that house having failed, the bankers in Edinburgh, being sued, were by the house of lords held liable for the money, on the ground that, they being agents to obtain payment of the bill, and payment having been made, their principal could not be called on to suffer any loss occasioned by the conduct of their subagents, between whom and himself no privity existed.

The question under consideration was not presented in Bank of Washington v. Triplett, 1 Pet. 25; for, although the defendant bank in that case was held to have contracted directly with the holder of the bill to collect it, the negligence alleged was the negligence of its own officers in the place where the bank was situated. In Hoover v. Wise, 91 U. S. 308, a claim against a debtor in Nebraska was placed by the creditor in the hands of a collecting agency in New York, with instructions to collect the debt, and with no other instructions. The agency transmitted the claim to an attorney at law in Nebraska. The attorney received the amount of the debt from the debtor in Nebraska, in fraud of the bankrupt law, and paid it over to the agency, but the money did not reach the hands of the creditor. The assignee in bankruptcy having sued the creditor to recover the money, this court (three jus