14, 1894, which affirmed a judgment in favor of defendants. entered upon a decision of the court dismissing the complaint upon the merits, on trial at Special Term.

This action was originally brought by Mary D. Sanford, since deceased, and revived in the name of her executors, to recover from the defendant, the Fourth National Bank of the city of New York, a portion of the sum of $20,000 alleged to have been the proceeds of a negotiable stock certificate belonging to plaintiff, unlawfully converted by the firm of Mills, Robeson & Smith to its own use, and deposited to its credit in said bank, and also to have determined the rights of other parties to the balance of said sum.

The firm of Mills, Robeson & Smith was a customer of the Fourth National Bank, from which on April 17, 1890, it borrowed $50,000, giving a note therefor secured by collaterals. This note provided that the bank should have a lien for the loan, and for all other liabilities of the maker to it, upon any securities left with it by the maker, and upon any balance of its deposit account with the bank, and further authorized the bank at any time to apply to the payment of any liability of the maker any moneys at any time on deposit to its credit, and also the proceeds realized from the sale of such collateral securities. Thereafter the said firm borrowed from the bank a further sum of $5,000, giving therefor a note secured by collaterals and containing similar provisions. On November 14, 1890, plaintiffs' testatrix delivered to said firm for safe-keeping a certificate of Adams Express Company stock, then worth $15,000. One of the members of the firm unlawfully took this certificate and obtained upon the same, together with other securities which had been forged, a loan of $20,000 from the defendants Ferris & Kimball. The check given by them for the sum thus borrowed was deposited to the credit of said firm in the said bank.

The defendant James II. Fay, on July 2, 1890, also left with said firm for safe-keeping a negotiable railroad bond, and on November 15, 1890, a check for $400, to be collected for his account.

On November 14, 1890, said firm borrowed from Hotchkiss & Co. $10,000, giving its note therefor and depositing certain securities as collateral, among them Fay's bond; the check received therefor was also deposited in said bank and credited to its account. On November 15, 1890, said firm wrongfully deposited Fay's check in said bank, which was also credited to its account and paid to the bank after the assignment hereinafter referred to.

On November 7, 1890, Fay left with said firm another negotiable bond, which on that day it fraudulently pledged with said bank as collateral to said loans.

Prior thereto the defendant Georgiana L. Crabb left with said firm for safe-keeping 100 shares of stock, and five bonds, which, on November 7, 1890, it also wrongfully pledged with said bank as collateral to said loans.

November 15, 1890, the said firm made a general assignment, having in said bank on that day, with a check afterwards collected, a balance of $16,520.77.

On or before November 17, 1890, the bank demanded payment of the aforesaid loans, and in default thereof charged the amount due on them to Mills, Robeson & Smith. This was done before the bank had notice or knowledge that any of the parties to this action, other than the firm and its assignee, claimed to have any interest in the securities or in the amount to the credit of the firm.

The bank afterwards sold all the collaterals, pledged as security for said notes, except the bond owned by defendant Fay; the amount realized from the sale, together with the cash balance to the credit of the firm, after deducting its indebtedness to the bank, produced a surplus of $2,334.19.

Among the securities sold by the bank were those belonging to the defendant Crabb, and by the judgment she was awarded said surplus.

The judgment also awarded to the defendant and appellant Fay the bond in possession of the bank remaining unsold.

It was also adjudged that, as against the bank, the plaintiff was not entitled to recover any sum.

Further facts are stated in the opinion.

George W. Wingate for appellants. The General Term was in error in holding that the plaintiffs were not entitled to claim that the $20,000 in question did not include the proceeds of Mrs. Sanford's stock. (McNeil v. T. N. Bank, 46 N. Y. 325; Fairbanks v. Sargent, 104 N. Y. 108-117; N. Bank v. Hubbell, 117 N. Y. 395; Newton v. Porter, 69 N. Y. 133; Taylor v. Plumer, 3 M. & S. 562; Stephens v. Bd. of Education, 79 N. Y. 193; T. Bank v. Merritt, 1 Paige, 302; M. Bank v. Levy, 3 Paige, 606; Пaddon v. Lundy, 59 N. Y. 320, 329; Barry v. Lambert, 98 N. Y. 300, 305; 123 N. Y. 272; Knatchbull v. Hallett, L. R. [13 Ch. Div.] 696; Baker v. Bank, 100 N. Y. 31; N. Bank v. Ins. Co., 104 U. S. 54; Pennell v. Deffell, 4 De G., M. & G. 372; Holmes v. Gilman, 138 N. Y. 369.) The transactions of Mills, Robeson & Smith with the defendants Fay and Crabb do not affect plaintiffs' right to claim that the deposit of $20,000 consisted of the proceeds of Mrs. Sanford's stock. (In re Hallett, L. R. [13 Ch. Div.] 696; I. & T. Bank v. Peters, 123 N. Y. 272; C. D. Co. v. McLean, L. R. [9 C. P.] 692; Van Allen v. A. N. Bank, 52 N. Y. 1; Calvin v. Gleason, 105 N. Y. 261; Dows v. Kidder, 84 N. Y. 121.) The special contract contained in the notes held by the bank only varied from a general banker's lien in that it permitted the bank to assert such lien, although the indebtedness might not be due at the time of the assignment; which could not be done under a banker's lien. (Jordan v. N. S. & L. Bank, 74 N. Y. 473; Beckwith v. Union Bank, 4 Sandf. 604.) The courts below were in error in deciding that the bank was authorized, after it was informed of the failure and assignment, to appropriate the money standing to the credit of Mills, Robeson & Smith to pay its previously contracted debt, although such money was the proceeds of stolen property, and is now claimed by its true owner. (Bay v. Coddington, 20 Johns. 636; Hall v. Wilson, 16 Barb. 548; Butler v. Harrison, Cowp. 567; Wood v. B. Bank, 129 Mass. 358; C. N. Bank v. Diefendorf, 123 N. Y. 199; Falkland v. S. N. Bank, 84 N. Y. 145;

Points of counsel.

[Vol. 147.

Van Alen v. A. N. Bank, 52 N. Y. 1; Overseers v. Bank, 2 Gratt. 544; Frith v. Cortland, 2 H. & M. 417; Randel v. Brown, 12 How. [U. S.] 406; Comstock v. Hier, 73 N. Y. 269; Hoffman v. Connor, 76 N. Y. 121; Baumann v. Post, 16 Daly, 385; Speights v. Hawley, 39 N. Y. 441; Jordan v. N. S. & L. Bank, 74 N. Y. 389; Barnet v. Brandow, 6 M. & G. 630; Collins v. Martin, 1 B. & P. 648; Lawrence v. S. Bank, 5 Conn. 521; N. Bank v. Ins. Co., 104 U. S. 54; Raynes v. Dumont, 130 U. S. 354; McBride v. F. Bank, 26 N. Y. 450; C. Bank v. M. Bank, 3 Keyes, 337; Mayor, etc., v. Heidelbach, 123 N. Y. 332.) The defendant, Georgiana Crabb, has no claim upon the funds in controversy. (Sillcocks v. Gallaudet, 66 Hun, 523.) Defendant Fay is entitled to the $400 check collected and deposited by the firm as his agents on the day of the failure and not paid to the bank until the next day. The court, on motion, would require a receiver to return this to the true owner. (St. L. & S. F. R. R. Co. v. Johnson, 133 U. S. 566; I. & T. Bank v. Everett, 4 N. Y. Supp. 601; Beal v. City of Somerville, 50 Fed. Rep. 647; S. N. Bank v. Cumming, 18 S. W. Rep. 115.) Plaintiff's contention that she is authorized to claim the moneys deposited in the Fourth National Bank as the proceeds of her property is supported by the decisions of this court. (A. S. R. Co. v. Fancher, 145 N. Y. 552; Roca v. Byrne, 145 N. Y. 182.)

David Willcox for the Fourth National Bank, respondent. The facts regarding the dealings of Mills, Robeson & Smith with the certificate of stock of the Adams Express Company establish no cause of action against the bank. (Justh v. Bank, 56 N. Y. 478; Bank v. Lloyd, 90 N. Y. 530; Cragie v. Hadley, 99 N. Y. 131; People v. S. N. Bank, 77 Hun, 159; Hutchinson v. Co., 9 Misc. Rep. 344; N. B. & D. Bank v. Hubbell, 117 N. Y. 395; Groat v. Walsh, 81 Hun, 457; Falkland v. Bank, 84 N. Y. 145, 152; Baker v. Bank, 100 N. Y. 31, 34; Straus v. Bank, 122 N. Y. 379, 382; N. Y. B. Co. v. Higgins, 79 Hun, 250; I. & T. N. Bank v. Peters, 123

N. Y. Rep.]

Opinion of the Court, per FINCH, J.

N. Y. 272; N. Bank v. Ins. Co., 104 U. S. 54; Raynes v. Dumont, 130 U. S. 390; Barnett v. Brandao, 6 M. & G. 630; School Dist. v. Bank, 102 Mass. 174; Wood v. B. Bank, 129 Mass. 358; Gordon v. Kearney, 17 Ohio, 572; Bank of Met. v. Bank, 1 How. Pr. 234; Sweeny v. Easter, 1 Wall. 166; McBride v. F. Bank, 29 N. Y. 450; G. Bank v. Penfield, 69 N. Y. 502; Stephens v. Board, 79 N. Y. 183; G. Bank v. State, 141 N. Y. 379; Thompson v. S. N. Bank, 113 N. Y. 325; Southwick v. Bank, 84 N. Y. 420; Newhall v. Wyatt, 139 N. Y. 452; A. P. Co. v. C. I. Co., 7 Misc. Rep. 509.)

Henry II. Man for defendant Crabb, respondent. The balance remaining in the hands of the bank was proceeds of the securities of the defendant Crabb, and traceable as such in equity. The $20,000 check deposited by Mills, Robeson & Smith, November 14, 1890, was neither proceeds of Mrs. Sanford's securities nor traceable after deposit in the bank. (Stephens v. Bd. Ed., 79 N. Y. 183; G. N. Bank v. State, 141 N. Y. 379; Bank of B. N. A. v. M. Bank, 91 N. Y. 106; Calvin v. Gleason, 105 N. Y. 256.) The pledge of the deposit account was of equal force with the pledge of the securities, and it follows that Mrs. Crabb has an equitable right to insist that the entire deposit account be applied by the bank in payment before any resort is made to her securities. (Bank of Met. v. N. E. Bank, 1 How. [U. S.] 239; Sillcox v. Gallaudet, 66 Hun, 522.) The plaintiffs can derive no possible advantage from the position that the conversion of their testratrix's securities by Mills, Robeson & Smith was felonious. (Penal Code, $$ 528, 533.)

FINCH, J. We ought to affirm this judgment upon a single ground, which rests upon facts not at all controverted or in dispute. For that purpose we may assume, as true, the plaintiff's version of what actually occurred, without criticism at doubtful points of the way. She was the owner of a certifi cate of stock of the Adams Express Company, of the par