CASES

IN THE

SUPREME COURT

OF

KENTUCKY.

CHESAPEAKE ETC. RAILWAY COMPANY v. OSBORNE.

[97 KENTUCKY, 112.]

RAILWAYS-EXCURSION

TRAINS,

LIABILITY FOR

WRONGS OF PERSONS IN CHARGE OF.-A railway corporation cannot relieve itself from liability by placing its road, trainmen, and cars under the control of a stranger. Therefore, if a passenger is wrongfully ejected from a train, the corporation cannot escape liability therefor by proving that the train had been hired for an excursion, and was not in charge nor under the control of the corpo

ration at the time the wrong was done.

thousand dollars for being wrongfully ejected from a railway car VERDICT, WHEN NOT EXCESSIVE.-A verdict for one while it was in motion is not so large as to necessarily indicate that

it was due to prejudice or passion.

Wadsworth & Cochran, for the appellant.

Thomas H. Paynter, for the appellee.

113

GUFFY, J. This is an appeal taken from a judgment of the Greenup circuit court rendered in the action of David Osborne against the appellant, Chesapeake & Ohio Railway Company. It appears that appellee, some time prior to the 11th of July, 1891, bought of the ticket agent of appellant, at Russell, Kentucky, a ticket to Ashland, and that soon afterward a train of cars reached Russell, and appellant, with the ticket stuck in his hat, boarded the cars, or at least got upon the steps, and was by one Steward ejected from the car by force, and, as appellee claims, while the car was in motion, and that 114 he was thereby injured, mortified, and humiliated; and to recover damages for the injuries instituted suit in said court. A trial resulted in a verdict and judgment in favor of plaintiff for one thousand dolwhich motion was overruled, and the defendant has appealed. Appellant filed grounds and moved the court for new trial,

lars.

The defendant in the court below denied its liability for the injury, if any was sustained. The substance of the answer was, that it had let I. W. Steward have the train and trainhands, including the conductor, for the purpose of running an excursion train to Kanawha Falls, and that the appellant was in no wise responsible for the acts of Steward, and that appellee had no right to ride on that train.

Public policy and the law alike forbid that a railway company shall be allowed to place its road, trainhands, and cars in the hands of, or under the control of, a stranger for such purpose as is claimed in this action, and thus evade liability for the wrongs done by such person.

Appellant sets out a number of grounds for new trial, nine in all. Inasmuch as defendant finally procured the attendance of the principal witness whose testimony was so much desired, the refusal of the court to continue the case did not interfere with the substantial rights of the defendant. The admission of the testimony of Carner and Hill, although erroneous, did not affect, as we think, the substantial rights of the defendant, especially as the same was afterward withdrawn.

Instructions 1 and 2 given by the court were as favorable to defendant as it was entitled to, and the same may be said as to instructions 3 and 4. Instructions 5, 6, 7, and 8 are not in this record, and under the well-known rule of law they must be held to have been properly refused. It does 115 not appear that the verdict is so excessive as to show that it was the result of passion or prejudice. The other grounds need not be further noticed. It seems to us that the instructions, taken altogether, were not prejudicial to the substantial rights of defendant. All the issues of fact involved in this case were, under proper instructions, submitted to the jury, and the jury, being the judges as to the facts proven and the credibility of the witnesses, found for the plaintiff, and we do not feel authorized to disturb the verdict so found.

Judgment affirmed.

Judge Paynter not sitting.

RAILROADS-LIABILITY FOR WRONGFUL ACTS OF PERSONS IN CHARGE OF EXCURSION TRAIN.-The fact that a carrier of passengers hires its train or steamboat manned by its own crew, under its pay, to the managers of an excursion does not relieve it from liability for injuries to an excursionist, caused by the negligence or wrongful acts of its servants, unless It delegated to such managers the exclusive right to discharge its servants and hire others, although the contract of carriage is between the managers

and the excursionists and the liability of the carrier is not affected by the fact that the train or boat is chartered to run between points not upon the carrier's regular lines: White v. Norfolk etc. R. R. Co., 115 N. C. 631; 44 Am. St. Rep. 489, and note.

PURSIFULL v. PINEVILLE BANKING COMPANY.

[97 KENTUCKY, 154.]

PRINCIPAL AND SURETY-BANK, RELEASE BY.-If bank at which a note is payable and to which it belongs had, when it became due, moneys of the maker on deposit more than sufficient to pay it, and, instead of applying the moneys to such payment, permitted them to be drawn out by the maker, who subsequently became insolvent, his surety on the note is thereby released.

BANKS, OFFSET, RIGHT OF.—A bank having money on general deposit has the right to offset against it a matured note belonging to it and made by the depositor.

W. J. Weller and N. B. Hays, for the appellant.

Warren Montfort, for the appellee.

155 EASTIN, J. This action was brought December 12, 1893, in the Bell circuit court, by appellee, as assignee of the Pineville Banking Company, against appellant and one Hurst, on a note executed by them December 23, 1889, and payable thirty days thereafter to the order of said banking company, and negotiable and payable at said bank. This note was discounted at and was held and owned by said bank at the time of its maturity, January 23, 1890.

Appellant filed an answer in the court below, in which he alleged, among other things, that he was merely a surety and that his codefendant, Hurst, was the principal in said note, and that these facts, as well as the fact that he had received no part of the proceeds of said discount, were well known to the bank at the time. Said answer further alleges that, at the time said note matured, and prior thereto, and for some time thereafter, the principal therein was a depositor with, and had to his credit as a general deposit in said bank a large sum of money, much more than sufficient to pay said note, that the bank had a lien thereon for the payment of said note, but, without the knowledge or consent of appellant, released its said lien and permitted Hurst, the principal in said note, to withdraw the whole of said deposit, leaving the note unpaid; that it did not, at the maturity of said note, or at any other time, notify appellant that the note was unpaid, and that he, knowing that Hurst had this large de

posit in the bank at and after the maturity of the note, supposed it had been paid until this suit was brought against him thereon nearly four years thereafter. The answer further alleges that Hurst has, in the meantime, 156 become and is wholly insolvent, and that if he shall be compelled to pay said note by reason of the bank having released its lien on said deposit, he will now be entirely without remedy against his principal.

To this answer appellee filed a general demurrer, which was sustained by the court, and thereupon, at the same term of court, appellant offered to file and tendered an amended answer in which, after reiterating the statements of his original answer, he also charges that this note, being made negotiable and payable at the bank, was, in effect, an order from Hurst on said bank to appropriate and apply from his deposit therein a sufficient sum to pay the note at maturity; that the bank was thereby made his agent to pay the same, and that, by the negligence of said bank, this application was not made, and the note not paid. It further pleads and relies upon the failure of the bank to apply to the payment of the note other deposits made by Hurst after the maturity of the note and when his insolvency was known to the bank.

To the filing of this amended answer appellee objected and insisted on his demurrer to the answer as offered to be amended, and the court sustained the objection and refused to allow the amended answer to be filed. Appellant declined to plead further, the petition was taken for confessed, a judgment for the amount of the note and interest was entered against him, and from that judgment he prosecutes this appeal.

In view of this statement from the record, and of the action of the court below in sustaining the demurrer to the original answer and refusing to allow the amended answer to be filed, we think there is but one question to be considered by this court.

That question is, whether or not, in this state, the surety 157 on a negotiable note, made payable at, and discounted to and owned by, a bank which holds, on general deposit for the principal in the note, at the maturity thereof, a sum more than sufficient to pay the same, is discharged from liability thereon, by reason of the failure of such bank to apply to the payment of the note a sufficient sum from this unappropriated deposit, and by reason of its permitting the entire deposit to be checked out, for other purposes, by the principal, who afterward becomes insolvent?

This question has never been settled by any adjudication of this court, and we are aware that the decisions of the courts of

other states are not in entire harmony, and that there is some contrariety of opinion among the textwriters on the subject.

In considering the proposition, it is well for us to remember that this bank was the absolute owner of this note and not a mere collecting agent to look after the proper presentment of the note, and to demand payment in behalf of another. The bank was the creditor of Hurst, the principal in the note, to the amount thereof, and was his debtor in the amount of the deposit then standing to Hurst's credit in the bank.

As to the right of the bank, under the doctrine of setoff, to have applied, to the payment of this note, from Hurst's unappropriated deposit, enough money to pay the same, by simply charging the note to his account, there seems to be no difference of opinion, and it is only as to the duty of the bank in this respect as between it and the surety on the note, that the authorities differ.

As to this, Mr. Morse, in his text-book, says: "If a note payable at a bank is sent there for collection, and the bank fails to apply an unappropriated deposit of the maker to its payment, the indorser is discharged. When a creditor 158 has within his control the means of paying the debt out of property of the debtor properly applicable to the purpose, and does not use the opportunity, but gives up the property, the surety is discharged": 2 Morse on Banks and Banking, 3d ed., sec. 562.

A similar doctrine is laid down in some of the decisions of the state courts, particularly in the cases from Pennsylvania, in one of which the learned judge, after referring to the well-recognized principles that the relation between the bank and its depositor is simply one of debtor and creditor, and that the bank has the right to apply an unappropriated general deposit to the payment of a matured note held by it against its depositor, which right it may waive unless the rights of third parties have intervened, propounds the following query which seems to us very aptly to illustrate the situation in this case, to wit: "If I am the holder of A's note indorsed by C, and when the note matures I am indebted to A in an amount equal to or exceeding the note, can I have the note protested and hold C as indorser? It is true A's note is not technically paid, but the right to setoff exists, and surely C may show, in relief of his obligation as surety, that I am really the debtor instead of the creditor of A. If this is so between individuals, why is it not so between a bank and individuals?" Commercial Nat. Bank v. Henninger, 105 Pa. St. 502.