Burton v. Burley

• Decision Date: 01 January 1880
• Citation: 13 F. 811
• Parties: BURTON, Receiver, v. BURLEY, Receiver.
• Court: U.S. District Court — Northern District of Illinois

13 F. 811

BURTON, Receiver, v. BURLEY, Receiver.

United States Circuit Court, N.D. Illinois.

January, 1880

I Holmes and Losey & Bunn, for complainant.

Monroe & Ball, for defendant.

DRUMMOND C. J.

At the time the transactions which are the subject of controversy in this case took place, the City National Bank of Chicago was the correspondent of the First National Bank of La Crosse and a large amount of business was done between the two banks, amounting often to the sum of $100,000 per month. Generally the Chicago bank had a large balance in its hands to the credit of the La Crosse Bank; and it was the custom of the Chicago bank to transmit regularly copies of the accounts between the two banks, showing the debits and credits, and these accounts were in all cases acknowledged by the La Crosse bank; and if there was any error or mistake it was pointed out. During the time this business was transacted the La Crosse bank was in the habit of drawing checks and directing payment out of the funds in the hands of the Chicago bank; and everything concerning the matters in controversy in the case was done substantially in the same way as in other business matters between the banks; and not only was no objection made to the disputed charges, but they were admitted by the La Crosse bank, and everything that was done between the two banks was on the basis that the disputed charges were at the time acknowledged by the La Crosse bank.

Sutor was formerly connected with the City National Bank of Chicago. He went to La Crosse and became the cashier of the First National Bank of that place, and remained in that position some time; and the result was that he obtained the control of that bank and subsequently became president. There may have been some circumstances which enabled the president of the City National Bank, who held that position up to January, 1874, to know that Mr. Sutor was not a man of very large means, and that he would not have resources enough of his own to obtain control of that bank; but admitting that to be so, the question is whether there were facts known to authorize the officers of the bank here to conclude that at the time these various transactions took place, which are the subject of controversy, there was a fraud practiced upon the bank of La Crosse by Mr. Sutor. Fraud is not to be presumed. It must be proved. It is sufficient, of course, if it is proved by circumstances, which are sometimes the most satisfactory evidence to establish fraud.

Mr Sutor owed the bank here for a loan that had been made. He had executed his note for the amount, ($7,000) and when he became president of the bank at La Crosse he gave instructions to the bank here to charge the sum of $2,000 to the La Crosse bank, and it was done; and he stated at the same time that he gave these instructions that the balance of the amount which he personally owed, which, I take it for granted, referred to the note for $7,000 which he had given, would soon be paid, and accordingly instructions were...