{ "id": 2736968, "name": "Simon W. Straus et al., Appellants, v. The National Live Stock Bank of Chicago, Appellee", "name_abbreviation": "Straus v. National Live Stock Bank", "decision_date": "1911-10-05", "docket_number": "Gen. No. 15,130", "first_page": "310", "last_page": "356", "citations": [ { "type": "official", "cite": "163 Ill. App. 310" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "247 Ill. 490", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3397345 ], "opinion_index": 0, "case_paths": [ "/ill/247/0490-01" ] }, { "cite": "13 Peters 263", "category": "reporters:scotus_early", "reporter": "Pet.", "case_ids": [ 3338473 ], "opinion_index": 0, "case_paths": [ "/us/38/0263-01" ] }, { "cite": "187 Ill. 463", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3229754 ], "opinion_index": 0, "case_paths": [ "/ill/187/0463-01" ] }, { "cite": "190 Ill. 156", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3244824 ], "opinion_index": 0, "case_paths": [ "/ill/190/0156-01" ] } ], "analysis": { "cardinality": 2037, "char_count": 89686, "ocr_confidence": 0.5, "pagerank": { "raw": 4.4793276177203605e-08, "percentile": 0.28065593785583637 }, "sha256": "2767db69c249de9a7ec2472b58292a8ac432faff1a604b27f484c555261f5255", "simhash": "1:92ed755159b4a041", "word_count": 15462 }, "last_updated": "2023-07-14T18:45:41.237543+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Simon W. Straus et al., Appellants, v. The National Live Stock Bank of Chicago, Appellee." ], "opinions": [ { "text": "Mr. Presiding Justice Brown\ndelivered the opinion of the court.\nMuch the larger portion of the \u2022 material facts involved in this cause are not in dispute between the parties, or are proven by such evidence that we may assume them, for the purposes of this review, to be practically incontestable.\nWe should be justified in reversing the judgment on the ground of its being contrary to the evidence only in two contingencies\u2014one, that in view of these undisputed or incontestably proven facts, the verdict on which it is based cannot be sustained, even on the assumption that the disputed matters of fact were justifiably determined by the jury in favor of the defendant; and the other, one in which two conditions should concur, (a) that the determination of the disputed matters in favor of the defendant was necessary to sustain the verdict; and, (b), that the clear weight of the evidence was against such a determination.\nIf neither of these conditions exists we cannot disturb the verdict and judgment on the basis of plaintiffs\u2019 contentions over the facts, and shall have only to inquire whether substantial and material error which, in our opinion, could have affected the ultimate result of the litigation has intervened in the trial which we are called on to review.\nThis last inquiry, in the view which we take of the cause, will be simpler and therefore can be more conveniently made after the questions before noted, involving the effect and weight of the evidence are disposed of. To this disposition a full review of the evidence is necessary.\nNelson Morris in 1902, when the transactions which are the subject of this litigation began, was and for many years had been a man of great wealth, engaged in many business enterprises connected with the raising, feeding, shipping, and killing and packing of cattle. He was not only engaged in such business personally and as a member of the firm of Morris & Company, but was the controlling factor in various corporations (some of them with and some without his family name in their title), carrying on their affairs in the same general business headquarters' at the Union Stock Yards of Chicago, and called in the testimony, genetically, the Morris concerns. He continued in this business and held this interest in the various concerns through which the aggregate of it was done up to and beyond November 1, 1905, when the transactions herein involved cub minated. He was known at all times as a very closely figuring, carefully calculating business man. In the course of the enormous business thus done by the Mor-, ris concerns a great number of drafts were drawn on them. Every business day, drafts, sometimes as many as fifty, were drawn on one or more of the Morris concerns, and as we read the evidence, any of them may have been refused, or may have been paid by the personal check of Nelson Morris or by the check of any one of the component parts of the Morris \u2018 \u2018 outfit, \u2019 \u2019 as it was denominated at some places in the testimony. The usual and customary method of presenting and collecting these drafts by the Banks in the Stock Yards through which they came is important, in connection with the theory on which this suit was brought.\nThe Drovers Deposit National Bank sent its collection clerk with the drafts on the Morris concerns, together with a list of them, to the office occupied by those concerns in the Exchange Building. This clerk carried, besides, such drafts as the Bank might have received on the other business houses in the same building. He would leave the \u201cMorris\u201d drafts themselves with or for the cashier or draft clerk of Nelson Morris, one James A. Bell, at about noon, in order that the different departments of the business might be communicated with and a decision reached as to each draft, whether it should be paid, accepted or refused. After the same collection clerk, one Harry P. Grates during the period of the transactions herein involved, had made the round of the other offices in the building, and before the close of banking hours, he would call again on Bell and take from him the rejected drafts and a check or checks for those that were paid, which then were duly surrendered to Bell.\nThe defendant herein, the National Live Stock Bank, had a slightly different method of collection. Its custom was to send over \u201cthe Morris drafts\u201d (that is, the drafts on any of the Morris concerns) which it received on any particular day to the Morris offices during the forenoon and leave them with or on the desk of Bell. Later in the day, before the close of business hours, a messenger from the Morris offices would bring back to the Bank all these drafts. The rejected ones were of course kept by the Bank. For those that were paid a Morris check (the collection clerk of the National Live Stock Bank says it was usually a check of \u201cNelson Morris per I. Morris\u201d) was brought by the messenger with the drafts. These paid drafts were then stamped by the collection teller \u201cpaid\u201d and surrendered to the messenger. Divergence, however, from this course in the matter of the particular series of drafts described in the declaration is the occasion- of this litigation.\nSamuel N. Hoffheimer was the son of a sister of Mrs. Nelson Morris, thus standing by marriage in the relation of nephew to Nelson Morris. In 1879, being then thirteen years old (according to his mother\u2019s testimony), he went into the employment of Nelson Morris and in connection with the Morris concerns had occupied important if not confidential positions in the service of Mr. Morris up to within a comparatively short time before 1902. During 1902, 1903, 1904 and 1905, he was very often in and out of the office of Nelson Morris, almost daily there,\u2014in the idiomatic English phrase, \u2018\u2018 a tame cat about the place. \u2019 \u2019 So constant was he in this attendance that although from the testimony of Edward Morris and others it is quite plain that Hoffheimer was not an employe of Mr. Morris after about 1900, Mr. Bell declined to say more when first interrogated on the subject, than that he did not believe he was so employed in 1903-4 and 5, but did not know. Mr. Francis, who had general supervision of the office and knew that Hoffheimer was not employed there, said that he was there very often, and while he knew that he was there sometimes about the sale of \u25a0cotton seed meal and hulls, it was impossible to say that he was not transacting other business there, \u201cthe office being very open and people coming in there all the time.\u201d\nThe fact was, however, that Hoffheimer left the employment of Nelson Morris in or about 1900, and after.ward went into business on his own account. One small business he was conducting seems to have been the manufacture or mixture of poultry feed in a loft which he rented; another, the exact date of the beginning of which it is impossible from the evidence to fix, was a larger enterprise, in the manufacture of soap, which ' is a business in many cases connected with or allied to packing interests. This business developed into the incorporation of a Company called the Hoffheimer Soap Company, which in the Spring of 1905 built a factory. The extent of the business done by this Company, with which the plaintiffs as well as S. N. Hoffheimer were connected, and the amount of money which may have been lost in the enterprise, do not appear; but it does appear that the Company went into bankruptcy immediately on the culmination of the transactions which are the subject of this litigation, that its plant was foreclosed upon, and that its assets were practically worthless. It also appears that between February, 1905, and November, 1905, when the crash came, the Company had built a factory, and enlarged its offices from one room in the Royal Trust Co: Building to four, which it occupied, however, in conjunction with the other enterprises of Hoffheimer, apparently doing a large business and employing in its offices alone a large number of persons, of whom nine besides himself were mentioned by name by one witness, with the statement there were \u201clots of others.\u201d\nThis is mentioned only with reference to the hypothesis advanced in the argument of the appellee that in the working out of the fraudulent scheme which is hereinafter detailed, Hoffheimer\u2019s plan was \u201cto increase the drafts in number and amount to the end that he might obtain a larger sum of money when he had carried the scheme as far as he deemed safe, and elected to keep the proceeds of the checks given him by the plaintiffs and let the drafts go unpaid, or, in the language of the street, \u2018to unload.\u2019 \u201d An alternative hypothesis, quite as probable to our minds, is that the money which he fraudulently procured from the plaintiffs was expended in a failing business, begun, the evidence would seem to indicate, by a financially involved manager on fictitious capital and carried on on a scale which in the case of \u201ca straw\u201d basis like that was certain to invite disaster. If Hoffheimer\u2019s motives or intentions were material in this controversy, we should deem it more likely that he was frantically endeavoring to turn some failing collateral undertaking into a successful one through money obtained by his wickedly ingenious scheme, than that through years he was daily increasing the amount involved in his frauds, in the hope of a larger booty at the end.\nHowever this may be, and in the absence of evidence, it must be all conjecture,\u2014the transactions herein involved were these: Besides his soap business and chicken feed business, Hoffheimer had apparently from the time of leaving Nelson Morris\u2019 service, a comparatively small business in the purchase and resale to Morris, or to the Morris concern, of cotton seed meal and hulls, an important and largely used feed for fattening cattle. Although Nelson Morris was perhaps the largest feeder of cattle in the world, four or five carloads of. such meal and hulls a day, or less than one hundred and seventy-five tons, was an outside estimate of his possible consumption. It would seem probable, therefore, from the amount which the evidence shows was actually purchased from or through Hoffheimer, that a considerable part of Morris\u2019 supply was obtained through that channel. Hoffheimer was doing this business up to the Fall of 1902 (at least so he told the plaintiffs) in partnership with Mr. Harrington and under the firm name of J. L. Harrington & Co. His representation to the plaintiffs was that this firm had done a good business in selling cotton seed meal and hulls to Nelson Morris and others, that he could buy meal and hulls and sell it all to Nelson Morris at a profit of 25 cents a ton (about 1 per cent on its purchase price) on the meal and 12% cents a ton (or about two per cent on the purchase price) on the hulls; that he had been giving Bartlett, Frazier & Carrington, a brokerage house with which Harrington had affiliations, 33% per cent of the profits for financing the business in the way that he proposed to the plaintiffs to do it, but that he was going to disjoin himself from Harrington and cary on the business alone, and would give the plaintiffs 20 per cent of the accruing profits if they would take the place of Bartlett, Frazier & Carrington in the transactions.\nThe plaintiffs, Simon W! and Samuel J. T. Straus, to whom Hoffheimer made this proposition, were acquainted and connected both with him and the Morrises. The wife of Samuel Straus, the younger of the plaintiffs, was, like Hoffheimer, a child of a sister of Mrs. Nelson Morris and was therefore a cousin of Hoffheimer and stood by marriage in the relation of a niece to Nelson Morris. She had lived before marriage in the family of the Hoffheimers (with S. N. Hoffheimer and his mother), and Samuel Straus had married her at their house.\nSimon W. Straus, the other plaintiff, was a schoolmate of Edward Morris (the son of Nelson), and was socially acquainted with his father and family.\nSimon Straus had been in the banking business since his boyhood, having been employed by Lazarus Silver-man in his bank before 1884. Then after working for his father in a country bank in Indiana and afterward in Chicago, he went into the banking business for himself in the partnership of Kahn & Straus, which conducted a private banking business in Chicago from 1888 to 1894. After 1894 he was for a year or so in the banking business again with his father under the name of Straus Bros. & Company, a firm which became, on his father\u2019s retirement, S. W. Straus & Company, and ceased to do a regular banking business, but busied itself with mortgage loans and investments. As Samuel Straus, who joined his brother in this firm and business in 1899, expressed it in his testimony, \u201cThe business was one of making loans on real estate or other investment securities and buying or selling real estate for our own account or on a commission basis, and insurance and like business that goes with that character of business.\u201d\nIt was not unnatural that the proposition thus made by Hoffheimer to the plaintiffs should have been attractive to them. The business seemed to be established. Hoffheimer had the sources of supply and the fixed market for his stock in trade apparently arranged. Moreover, that market apparently had been fixed by agreement with the prospective buyer at a safe profit over the cost. The arrangement and representation may have been bona fide, and Nelson Morris may, in favor of the close connection of his family, in transactions involving $150 perhaps on the average daily (see Record 1016 and 1027) have been willing to allow what would have been in effect a brokerage fee or small profit of a few dollars on each transaction, and it does not seem unreasonable or improbable that he should have been willing,' under the same circumstances, to have agreed to such a profit or compensation for Hoffheimer\u2019s attention to the business (supposing Hoffheimer to be making his purchases around the country and exercising supervision as to quality), even when these actual transactions grew, as they did between July 3, 1903, and June 18, 1904, and between October 27,1904, and November 6, 1905 (see Rec. 473 and 542), to an average of something like $400 a day.\nThe existence of such an arrangement, however, on the part of a man of the close attention to expenditure and of the business sagacity which Mr. Morris is shown by the evidence to have had, if transactions involving $150,000 a day or more were to give a profit of $1,500 daily, for what would have been practically the mere transmission of a bill of lading from the Illinois Central offices to the Stock Yards office of Morris, is far from so conceivable. To the improbability of this we shall allude hereafter.\nThe plaintiffs undertook to carry out the arrangement proposed to them, and from September, 1902, at least until July 3, 1903, it followed normal business lines. Hoffheimer would make purchases comparatively small in amount, averaging, as we have indicated, perhaps $150 a day, and drafts for the purchases from various dealers in meal and hulls throughout the country, with a bill of lading attached, would be drawn on the Union Cotton Seed Company (under which name the business was conducted) or on Hoffheimer or on S. W. Straus & Co. (presumably by Hoffheimer\u2019s direction) \u2018\u2018ace. of S. N. Hoffheimer.\u201d In either case the draft would be paid by a check of S. W. Straus & Co. on their bank account in the First National Bank of Chicago or on Foreman Bros. Banking Co. of Chicago, either to the order of the Bank itself or of Hoffheimer or the Union Cotton Seed Co. to be endorsed and handed over by Hoffheimer or otherwise used by him in paying the purchase price. At the same time,. at each transaction, drafts on Nelson Morris were drawn in the office of S. W. Straus & Co., signed The Union Cotton Seed Company (a stencil stamp being used for this name), per Charles H. Grekler (in Grekler\u2019s hand-writing) for the amount of the selling price, which was the cost with 25c a ton added for the meal and 12%c for the hulls. The bill of lading received on the payment of the purchase draft was attached to this draft and it was deposited by S. W. Straus & Co. in the First National Bank or in Foreman Bros. Bank to the credit of S. W. Straus & Co., and they were given-immediate credit on which they had power to draw and did draw checks. The pass book in which the deposits of the drafts were entered bore inside of the cover the usual printed matter, which Chicago Banks place there, to the effect that \u2018 \u2018 This bank in receiving checks or deposits for deposit or for collection, acts only as your agent, and beyond carefulness in selecting agents at other points and forwarding to them, assumes no re- ' sponsibility. \u201d\nCharles H. Grekler was the bookkeeper and cashier of S. W. Straus & Co., at a salary from them of $25 a week. Hoffheimer, however, arranged for an additional payment to him at first of $10 a month and afterward of $15 a month, for attending to this business. This additional amount was paid by S. W. Straus & Co. and charged to Hoffheimer\u2019s account.\nThe entries in the books of S. W. Straus & Co. of each transaction would be, (1), a credit to the Bank on which the check was drawn of the amount of it; (2), a debit to the Bank for the amount of the draft deposited; (3), a debit to the Union Cotton Seed Company of the amount of the check; (4), a credit to the Union Cotton Seed Company (which was but another name for Hoffheimer) for the amount of the draft, less 20 per cent of the apparent profit of the transaction; and, (5), a credit to a \u201ccommission account\u201d of S. W. Straus & Co. of that 20 per cent of the profits. This amount was first carried into a general commission account, but afterward when the apparent transactions grew large in the manner to be hereinafter described, a separate account known as the \u201cUnion Cotton Seed Commission Account\u201d was initiated to segregate the statement of the profits in this particular business from the other dealings of Straus & Co. It was to the account of the Union Cotton Seed Co. that the payments of additional wages of G-ekler were charged.\nFrom time to time payments were made by S. W. Straus & Co. to Hoffheimer on account of Ms share of the profits, by checks made payable to him individually. The entry for this on the Straus books would be a credit to the bank and a debit to the UMon Cotton Seed Company. As Samuel Straus testified, transactions were \u2018\u2018in the Banks, a transaction with the Union Cotton Seed Company, and in the office of Straus & Co., with S. N. Hoffheimer.\u201d\nWe have said that some of the checks given by Straus & Co. from the Fall of 1902 to July, 1903, at which last named date the transactions especially involved in this cause began, were given to the Banks holding drafts for the purchase price, with the bills of lading attached, and some to Hoffheimer. It does not, however, very satisfactorily and precisely appear in the evidence, whether any of these were deposited by Hoffheimer in the account in the National Bank of the Republic of \u201cR. Hoffheimer,\u201d which afterward figured so materially in these transactions. \u201cR. Hoffheimer\u201d was the mother of S. N. Hoffheimer, and appears, from her own testimony taken in the cause, to have known nothing of the business except that she had a bank account in the National Bank of the Republic, on which S. N. Hoffheimer had authority to sign checks.\nSamuel Straus testifies, however, that he knew from the \u201cvery first transaction,\u201d some time in the fall of 1902, that Hoffheimer on account of \u201csome financial trouble, owing some money or something of that sort,\u201d was using his mother\u2019s bank account and had none of his own, and that \u201che should say he knew that the checks given Hoffheimer by Straus & Co. were deposited by him in the National Republic to the credit of his mother.\u201d If that were the case, of course such drafts as were paid by Hoffheimer for the purchase money of the meals and hulls, to secure the bills of lading, were the checks of R. Hoffheimer by S. N. Hoffheimer, as were the subsequent checks in 1903-4 and 5, which took -up the Union Cotton Seed Co. drafts.\nThe drafts and bills of lading thus deposited by Straus & Co. with the First National Bank and Foreman Bros Banking Co., practically alternately, were sent by those banks to their correspondent collection banks at the Union Stock Yards, the defendant, the National Live Stock Bank, and the Drovers Deposit National Bank, presented in due course at the offices of Nelson Morris, and paid by the check of Morris, the bill of lading being also delivered in due course to him with the draft.\nUp to July, 1903, the drafts were all small, very seldom above a few hundred dollars; perhaps on a very few occasions running up to two thousand.\nIn July, 1903, Hoffheimer came to the Straus Brothers, and both brothers being present told them this story: That floods in the South had left on the hands of the Hlinois Central Railroad Company a quantity of damaged cotton seed, meal and hulls; that the Railroad people had sent for him and told him this, and said that they knew that he had means of disposing of the stuff; that Nelson Morris had agreed to take it, and that he (Hoffheimer) would have to get a check to take up the hill of lading for Morris. Something of this story may have been true, if the rather indefinite recollection of the Straus brothers be correct, that Hoffheimer did, on receiving the first check, bring in a bill of lading from the Illinois Central Railroad to attach to a draft on Nelson Morris; but if so, the bill of lading could not have been, at the outside, for more than a thousand dollars worth of meal and hulls\u2014 about a single carload\u2014for the largest draft drawn during July, 1903, on Nelson Morris by the Union Cotton Seed Company was $940, on July 17th.\n\u25a0 At all events, either on the first telling by Hoffheimer of the story noted, or on the following day, began, according to the testimony of the plaintiffs, a series of amazing frauds on the part of Hoffheimer and a two and half years season of astonishing credulity and delusion on the part of S. W. Straus & Co. For on the next day, the plaintiffs say, he told them that the Railroad Company had more of that stuff; that it would require him to pay for the bills of lading before it would deliver them, and that he therefore desired the plaintiffs to give him their check without receiving the bills of lading, and that in order to save \u201cdemurrage\u201d (by which the witnesses using the expression apparently mean delay and not demurrage in the technical business sense of that word), he would not bring them the bills of lading from the Illinois Central Railroad (as he did from the other sellers he purchased from) to attach to the drafts on Nelson Morris, but instead would give them merely a memorandum list made out by himself of the car numbers and weights, taken from the bills of lading, which they could copy and attach to the drafts drawn on Nelson Morris, while he took the bills of lading direct from the Illinois Central Bailroad to Nelson Morris\u2019 offices. To all this the plaintiffs assented, because, as they say, \u201cHoffheimer had our confidence.\u201d He told them that they would get their money back quicker that way.\nThere is a contradiction in the testimony as it appears in the record, and a discrepancy in addition between the record and the abstract, which are somewhat confusing, about a part of the conversation or understanding between the plaintiffs and Hoffheimer as to the purchases and sales Hoffheimer expected to make after this first arrangement was made. According to the record (page 865), Simon Straus was asked whether in July, 1903, when he had this \u201cIllinois Central\u201d conversation with Hoffheimer, the latter told him from whom from that time forward he was buying the cotton seed meal and hulls, and answered, \u201cNo, he told us, however, that he was going to buy considerable from the Illinois Central Bailroad Company. He did not. say who altogether was going to purchase from him at that conversation.\u201d This appears in the abstract, page 186: \u201cHe told me he was going to buy considerable from the Illinois Central Bailroad. He did not say he altogether was going to purchase from them at that conversation.\u201d Considering the context, it may well be that the abstract, although an incorrect statement of the record, gives more nearly the actual testimony.\nBut on page 895 of the Becord, 194 of the abstract, the same witness is reported as testifying that Hoffheimer told him he was buying all the stuff from the Illinois Central, and on page 860 of the Becord, that Hoffheimer told him that the Illinois Central \u201chad heard that he had a number of customers that were buying the stuff, and that he (Hoffheimer) believed that Nelson Morris had agreed to take the hulls and meals.\u201d\nIn the abstract, page 185, the latter part of this testimony is given as \u201cWe\u201d (i. e. the plaintiffs) \u201cbelieved Nelson Morris had agreed to take the hulls and meals,\u201d presumably on the assumption, which was very probably correct, that the record contained a clerical error. Afterward on cross-examination Mr. Straus said, page 1120, that he did not understand that Hoffheimer was purchasing all his stuff from the Illinois Central Railroad Co.\nBut nevertheless from the subsequent transactions assuming the plaintiffs\u2019 good faith in them, it seems clear that by the plaintiffs it was understood, with Hoffheimer\u2019s assent, that the entire series of drafts thereafter drawn on Nelson Morris, with invoices containing memoranda of car numbers and weights and no hills of lading attached, were drawn for the sale by Hoffheimer to him of cotton seed meal and hulls purchased from the Illinois Central Railroad Company.\nAnd this series, beginning with the first transaction in July, 1903, continued without interruption daily, except on Sundays and holidays, from July, 1903, to October 31, 1905.\nAt first there were also other drafts drawn in the same form, \u201cUnion Cotton Seed Company per Charles H. G-ekler,\u201d and treated in the same way as between Hoffheimer and the plaintiffs, except that they had hills of lading attached, most of them (but not all) on Nelson Morris, for small amounts as compared even with those which began the \u201cmemoranda\u201d or \u201cinvoice\u201d series.\nAnswering a question on cross-examination (Rec. 894) as to how it happened that two series of drafts were running through the office of the plaintiffs from July, 1903, to January, 1904, one a series of small drafts, having actual bills of lading attached to them, and another series being for larger amounts, having nothing but the \u201cmemoranda\u201d attached, Simon Straus' said one series represented purchases from out of town houses that sold a carload or so at a time; while the other series represented constant purchases from the Illinois Central, where the quantities were larger, and added, \u201cThat is the only explanation I could give.\u201d\nWhatever was the understanding between the plaintiffs and Hoffheimer, this was the fact\u2014that not a single one of the drafts without a bill of lading attached (but having instead annexed what Hoffheimer said was a copy of a memorandum containing the data taken from a bill of lading) was anything but a bare faced fabrication. No cotton seed meal or hulls had been purchased, as the memorandum purported to indicate, and no sale had been made to Nelson Morris or to anybody else. Nor had Nelson Morris paid one of the drafts.\nThe proceedings of Hoffheimer in relation thereto were simply these: Out of the fertility of his invention he would prepare each day in his own handwriting a yellow sheet of paper, containing a great number of figures in parallel columns, but nothing more. The first column was the supposed car numbers (the railroad to which they belonged not named); the second, the supposed weight in each car (approximating in varying amounts 70,000 pounds or 35 tons) of the cotton seed meal or hulls contained therein. Pencil footings were made by him to show the aggregate amount of the weights of these fictitious carloads and the purchase price thus arrived at, for which he expected to receive checks. This sheet he would, between two and three o\u2019clock each day, bring into the plaintiffs\u2019 office in the Stock Exchange Building on LaSalle Street in Chicago, and hand to Charles H. G-ekler, who at once wrote a check or checks for S. W. Straus or his brother to sign (one of them evidently must always have been present for that purpose) for the amount of the purchase price thus figured.\nAs we have said, for a time, although these fictitious transactions.,were reported at the office of Straus & Cp: with great regularity, they were not the only ones dealt with there. Up to some time in January, 1904, actual purchases (as before July, 1903) were paid for by the Straus checks to the Union Cotton Seed Co., and drafts with bills of lading attached drawn on Morris.\nBut by February, 1904, the operation, which proceeded without a break until October 31, 1905, was in full swing. No other but the invoice or fictitious transactions took place between Hoffheimer and the plaintiffs, and these involved each day two checks and two drafts. Hoffheimer on his yellow memorandum sheets had divided the alleged purchases into two tabulated aggregates. Why the aggregate amount of purchase price and of the selling price should have been thus divided does not appear in the evidence. It was undoubtedly, however, to make easier in Hoffheimer\u2019s estimation the manipulation of his scheme.\n(Hoffheimer was apparently from January, 1904, up to June, 1904, drawing other genuine drafts with bills of lading attached in the name of the Union Cotton Seed Company, to the order of the Royal Trust Company Bank, but owing to an evident mistake in making up the record by duplicating one exhibit and omitting another (pages 464 and 540 of Record, Abstract pages 114 and 129) we are unable to say with certainty in what form these were drawn and endorsed. It is a plain inference from the testimony, however, that they were not signed by Grekler nor negotiated through Straus & Co. After June, 1904, Hoffheimer conducted his comparatively small legitimate business in selling feed to Morris in the name of Hoffheimer & Co., and the drafts on Morris representing it were made payable to the Royal Trust Company Bank and signed \u201cHoffheimer & Co., Inc., per Richard Kearney.\u201d Kearney was an employe of the Hoffheimer Soap Co.)\nDaily, as soon as Hoffheimer had secured the two checks of S. W. Straus & Go., he hurried from their office to the National Bank of the Republic and deposited them in the account of \u201cR. Hoffheimer,\u201d his mother, dealing with the account thus augmented in the manner hereafter to he described in the payment of drafts of the Union Cotton Seed Company on Morris already drawn and in the hands of the defendant or some other Bank at the Stock Yards for collection.\nAfter drawing and delivering the checks to Hoffheimer Gekler would make a computation by adding to the supposed purchase price appearing on the yellow sheet 25c a ton on the meal and 12%c a ton on the hulls, and fill out two drafts on Nelson Morris with the checks, one for the amount of each of the checks with the \u201cprofit\u201d added. These drafts were signed \u201cUnion Cotton Seed Co. per Charles H. Gekler,\u201d and being made to the order of \u201courselves\u201d were endorsed in the same way. Then the stenographer of Straus & Co. would make a copy in typewriting of the \u2018\u2018 car numbers\u201d and \u201cweights,\u201d add to it the memorandum of the selling price and prefix it with the date and a bill-head, \u201cNelson Morris & Co. to Union Cotton Seed Co.\u201d Why the drafts were drawn on Nelson Morris individually and the invoices made to Nelson Morris & Co., is not explained. This copy would then be attached to the drafts, the drafts additionally endorsed specially by S. W. Straus & Co. to the order of the First National Bank or of Foreman Bros. Banking Company, according to the alternation which, as the transactions went on, became more and more regular, and then deposited by Gekler before banking hours in those banks respectively to the credit of S. W. Straus & Co. under the conditions previously noted.\nWhen Gekler had then made the book entries, previously indicated, of the day\u2019s transactions, the business seemed to be closed so far as the plaintiffs were concerned, with a profit to themselves on their books of something more than 1-5 of one per cent of the amounts involved, and a credit t\u00f3 Hoffheimer of the remaining four-fifths. Under these circumstances, and as the drafts were always larger than the checks and were undoubtedly paid from the pro-coeds of the checks of the subsequent day, and the alleged transactions, so far as Hoffheimer was concerned, were all fictitious, it perhaps might be expected that as long as the scheme lasted and until the end came by some successful flotation of the Soap Company or of some other enterprise of Hoffheimer\u2019s, or by his ignominious exposure, the daily amounts of the drafts would increase. But it was not to be expected, one would think, that they would increase as they actually did. The entire amount of them was something over twenty-three millions of dollars.\nOn a rough estimate it may be said that in July, 1903, they averaged only $700 a day; in January, 1904, they had reached $5,000 a day; in July, 1904, they averaged $6,000 daily; in January, 1905, $30,000; in February, 1905, $36,000; in March $45,000; in April $50,-000; in May $60,000; in June $80,000; in July $100,-000; in August $120,000; in September $140,000, and in October $160,000. It is difficult to realize what these daily amounts of money meant in bulk and weight of the meal and hulls. . They represented an increase in the daily supply to one cattle feeder of a particular kind of feed, from thirty tons to something approaching seven thousand and from one carload a day to almost two hundred, a number which would have necessitated the making up of several trains.\nDuring all this time, the testimony of the plaintiffs is that they entertained no suspicion of anything irregular or strange in the transactions, and made no inquiries of and had no conversation with anybody but Hoffheimer about the purchases and sales.\nSimon W. Straus testified that there were certain seasons\u2014a certain part of the year before July, 1903\u2014 in which he knew Nelson Morris did not buy cotton seed meal, but seems to have lost sight of that after July, 1903. He says the plaintiffs had implicit confidence in Hoffheimer and believed every word he told them. Hoffheimer said, \u201cMorris was getting more cattle,\u201d \u201calways would give some plausible reason.\u201d\nStraus, testifying that he never made any inquiries by telephone or otherwise from the Illinois Central Railroad or the Morrises as to the genuineness of the drafts, added, \u201cWhy should we? We always got our money. \u2019 \u2019\nThe plaintiffs, or more accurately the Banks, the First National and Foreman Bros. Banking Company, in which the plaintiffs deposited the drafts, did always get their money (paid, however, by the certified checks of B. Hoffheimer) on this series of drafts from July, 1903, to October 31, 1905, when, for some reason not clearly disclosed by the record, the machinery ceased to work. It appears, however, from the record that on October 28, 1905, which was Saturday, there were two checks on Foreman Bros, to the order of the Union Cotton Seed Company, given to Hoffheimer in the Straus office for $79,919 and $84,091.75, respectively. Drafts were drawn corresponding to them for $80,-718.19 and $84,932.67. These drafts were deposited that day in Foreman Bros. Bank and undoubtedly reached the National Live Stock Bank for collection on Monday, the 30th. The one for $80,718.19 was evidently taken up that day, and the one for $84,932.66 carried over until the next day, according to the arrangement previously made, which we shall hereafter mention. On Monday, , October 30th, checks were drawn by S. W. Straus & Co. on the First National Bank for $79,767.38 and $84,585.05, and corresponding drafts for $80,565.05 and $85,439.84 deposited in that Bank to the credit of S. W. Straus & Co. These drafts reached the National Live Stock Bank on October 31st, and therefore, on that morning, there were three drafts in the National Live Stock Bank for collection; the one from Foreman\u2019s Bank of October 28th for $84,-932.67, and the two from the First National Bank of October 30th for $80,565.05 and $85,439.84.\nThe draft from the Foreman Bros. Bank of October 28th for $84,932.67, and the one from the First National of October 30th for $80,565.05, were paid on October 31st by check of E. Hoffheimer for $165,-497.72, (Rec. p. 622) to the National Live Stock Bank, and if the course of proceeding theretofore pursued had been followed, the other from the First National Bank of $85,439.84 would have been carried over until the next day, Wednesday, November 1st. But this did not happen. There must have been some departure from the usual course, if the recollection of Mr. Wet-more of the First National Bank is correct, that he was advised on October 31st that this draft had not been paid. (Rec. p. 164). He notified Mr. Straus of its nonpayment, and Mr. Straus came in and paid the amount of it (for which of course he was liable as endorser) to the First National Bank before it came back from the National Live Stock Bank. Presumably this was during banking hours of Wednesday, November 1st. Mr. Wetmore had, on learning of its non-payment, telephoned instructions to the Live Stock Bank to hold it for orders, and it was transmitted to the First National Bank by letter of November 2nd.\nBut meanwhile, on Tuesday, October 31st, the usual proceedings had taken place in the Straus offices. A check of S. W. Straus & Co., of that date, for $85,814.72 (Rec. 769, Abst. 169), and another for $79,729.38, both on Foreman Bros. Banking Co. (the latter we find on page 349 of the Becord, but not in the Abstract, except in the index of exhibits), to the order of the Union Cotton Seed Co., had been given to Hoffheimer and by him endorsed in the usual way and deposited in the account of B. Hoffheimer & Go. in the National Bank of the Bepublic. It was from the proceeds of these checks that he was enabled on that day to pay to the National Live Stock Bank two of the three drafts which they held for collection on that day, as hereinbefore stated. But the corresponding drafts of October 31st for $86,693.25 and $80,526.68 (with the fictitious invoices in due form appended), which were deposited in Foreman Bros. Bank on that date, and reached the National Live Stock Bank on Wednesday, November 1st, were, like the draft for $85,439.84 of October 30th, which came from the First National Bank, not paid. The \u201cexplosion,\u201d as it was termed during the trial below, had come, and the account of \u201cR. Hoffheimer\u201d had in it on November 1st only $156.27.\nAlthough the two drafts of October 31st were not actually returned to the Foreman Bros. Banking Co. until November 2nd, the notification to Straus Bros, on November 1st and the requirement of the First National Bank, which was complied with, that the unpaid draft of October 30th must be taken up by them, must have become known to Hoffheimer on the morning of November 1st, for he intermitted the visit to the office of Straus & Co., which had been a daily occurrence for two years and a half, and both the Straus Brothers were looking for him from some time before two o,\u2019clock in the afternoon until six. Richard Kearney,' a material witness for the defendant on a point to be hereafter alluded to, saw Mr. Straus in an excited condition looking for Hoffheimer at about four o\u2019clock in the afternoon of November 1st.\nIt may be noted that although the testimony of the collection clerk at the National Live Stock Bank (Rec. 1600) is that on November 1st, \u201cwhen he had not received a check at the usual time,\u201d he notified the First National Bank of the non-payment of the draft of October 30th, as well as Foreman Bros, of the non-payment of those of October 31st; the inference from the rest of the evidence is very plain that before then something unusual had happened as to this draft, and that the First National Bank knew by October 31st that it had not been and was not likely to be paid at the Stock Yards.\nSamuel Straus testified that when the three drafts were returned, S. W. Straus & Co. paid them (aggregating $252,659.77) to the First National Bank and Foreman Bros. Banking Company, respectively, and the plaintiffs claim that they are losers to this amount, with interest, by these fraudulent transactions of Hoffheimer, less only $7,297.27, which they have been able to collect from him. This estimated loss, therefore, which they reckon at $270,153.45 (Bee. 935), includes their supposed profits on these fictitious deals as well as interest. For this loss they claim the defendant is liable to them because of its alleged deceit or negligence, or both, in the process of the collection of drafts connected with these fraudulent transactions between July, 1903, and November, 1905.\nWe turn, therefore, now to the facts in relation to the payment of these \u201cinvoice\u201d drafts.\nThey were at first, so fair as all the banks into whose hands they went are concerned, handled exactly like the similar drafts of the Union. Cotton Seed Co., which had bills of lading attached. They were sent by the First National Bank and Foreman Bros. Banking Company to their correspondents at the Union Stock Yards for collection. The First National Bank between July, 1903, and August, 1904, sent almost 250 Union Cotton Seed Co. drafts, out of about 500 received, to the Drovers Deposit National Bank for collection, and the rest to the National Live Stock Bank.\nThe Foreman Bros. Banking Company sent most of those received by it to the National Live Stock Bank, but as late as December, 1904, sent two of the invoice drafts to the Peoples Trust & Savings Bank.\nA comparison of the drafts of the \u201cUnion Cotton Seed Co.\u201d with bills of lading attached, paid by Nelson Morris (Bee. 473) (and the evidence is that none without bills of lading were paid by him or by his check), and those sent to the Drovers Bank for collection (Bee. 446), shows that five only of the 230 and more of those so sent were of the \u201cgenuine\u201d as distinguished from the \u201cfictitious\u201d series; and yet the entire lot were paid and paid at the \u201cMorris offices\u201d after presentation there by the collection clerk of the Drovers Bank. The method of collection used by that Bank has already been described. The evidence leaves no doubt in our mind that these drafts were left with the others on the- Morris concerns from various parties, with Bell, the draft clerk of Morris, that 230 drafts of this particular \u201cinvoice\u201d series were paid there to the Drovers Bank clerk by \u201cR. Hoffheimer\u2019s\u201d certified checks, either by Hoffheimer himself or by James A. Bell, the Morris cashier, who would occasionally hand the Hoffheimer check to the Bank collector and some times apologize for or explain Hoffheimer\u2019s absence. Hoffheimer\u2019s intimate connection with and continued presence in Morris\u2019 offices rendered it possible for him there to await the presentation of these drafts, but he must have \u00abhad, to render him able to meet them as he did with the \u201cR. Hoffheimer\u201d checks, the assistance and aid of Bell, who may possibly, in those comparatively small beginnings of the \u201cbusiness,\u201d have supposed it to be some \u201cdeal\u201d in which Morris and Hoffheimer were interested, of which, however, he knew nothing and with which he had no interest further than to accommodate Hoffheimer. The only alternative to this is to suppose a less innocent knowledge on his part.\nBut the necessity to be present in the Morris offices when drafts were presented and to secure the active assistance or aid of anybody in the Morris offices, must have become, if not impossible, exceedingly difficult and irksome to Hoffheimer as the fraudulent business developed into its huge proportions; and Bell testifies that at some date he cannot remember he warned \u201cHoffheimer to discontinue drawing the drafts on Nelson Morris.\u201d This, however, like much of his testimony, is very indefinite.\nWe have noted the manner, differing from that of the Drovers Bank, in which the National Live Stock Bank treated the drafts on the Morris concerns received by it for collection.\nIt sent them over to the offices twice a day and there left them, trusting to their return to the Bank, with due reports, later in the same day. Manifestly this was for Hoffheimer a safer course for the \u201cinvoice drafts\u201d to take. Those of them that had come to the National Live Stock Bank had been thus sent over with the other Morris drafts, but had been brought in with \u201cR. Hoffheimer\u201d checks to pay them later than the ones which were paid by the check of Nelson Morris. The same messenger, during the first five months of the series of invoice drafts, according to the testimony of Kendall, the collection clerk of the National Live Stock Bank, brought the \u201cR. Hoffheimer\u201d check for their payment, that brought the \u201cMorris\u201d check for the other Morris drafts, and was supposed by Kendall to be in the employ of Morris. There is no reason to doubt this, considering the way that Bell treated the Drovers Bank drafts of the same kind. It was only of the later time of the business in 1905, when the drafts had become enormous, that we know from the evidence that a different messenger brought the checks\u2014a messenger coming direct from Hoffheimer\u2019s down town office, and not from the Morris offices.\nHad either party put Hoffheimer on the stand, perhaps something more of the proceedings in the earlier part of the transactions might have been disclosed; but he was not produced.\nIt was manifestly easier for Hoffheimer, with the run of the Morris offices that he plainly had, to look at his- leisure over the drafts there left, pick out the ones which he was concerned to see taken up, and send a messenger from the Morris offices (perhaps paying him as he paid Gekler), than to await in the Morris offices the collection clerk of the Drovers Bank and personally give him a check. It became, therefore, Hoffheimer\u2019s concern to secure the transmission of all the \u201cinvoice\u201d drafts to the National Live Stock Bank, and this he undertook to do in the late summer, or early fall of 1904. It was his first attempt to change the course of procedure before adopted. He went to Simon Straus and told him that Nelson Morris would prefer to have the drafts all sent through the Live Stock Bank, with which he did all his business. Simon Straus accepted the suggestion at once and went to Wetmore of the First National Bank and to E. G. Foreman of the Foreman Bros. Banking Company, and made the necessary request, which was complied with, except that by mistake two of these invoice Union Cotton Seed drafts, one on December 29, 1904, of $14,394.25, and one on December 30, 1904, of $14,-842.94, were sent by Foreman\u2019s Bank to the People\u2019s Trust & Savings Bank at the Stock Yards. The one of December 29th was sent by that Bank to the Morris office on the 30th by a messenger. The messenger there saw Bell, who told him to wait awhile. After waiting half an hour Bell gave him a check. Although the description of the check could not be recalled by the messenger, it was undoubtedly a \u201cR. Hoffheimer\u201d check, for no such draft was paid by Nelson Morris or by Nelson Morris \u2019 check. On the 31st of December the draft of December 30th arrived at the People\u2019s Bank for collection. Because of the delay on the day before, the cashier telephoned Mr. Bell at the Morris office, and told him that a draft on Morris for $14,-842.94 by the Union Cotton Seed Co. had been received. Mr. Bell told the cashier to hold the draft until later in the day and he would send a man over to take it up. In the afternoon a man, unidentified, but answering. the general description of Hoffheimer, came over to the Bank and presented a certified check on the National Bank of the Republic in payment. The cashier could not otherwise describe the check, but there can be no reasonable doubt that it was, like the others, a \u201cR. Hoffheimer\u201d check.\nAll the other \u201cinvoice\u201d drafts were sent to the National Live Stock Bank, but at about the same time as, pursuant to the instructions noted, they began to be all sent to the National Live Stock Bank, a change was made in the method of handling them by that Bank. Instead of being sent to the Morris offices, with the other Morris drafts, they were held by the National Live Stock Bank and taken up each day by a young man who brought a certified \u201cR. Hoffheimer check\u201d to pay them.\nThe occasion of this change is one of the few disputable and disputed matters of fact in the case. Kendall, the collection teller of the National Live Stock Bank, testified that he received a telephone message from Bell (the Morris cashier), whose voice he recognized, asking him to hold \u201cthe large Union Cotton Seed Co. drafts at the Bank, as they would be taken care of separately and it would be more convenient to handle them that way.\u201d To this he assented, and the two drafts of that day, which had been sent with the other Morris drafts to the Morris offices; were shortly after returned unpaid to the Bank by the Morris messenger. Later in the day, however, another messenger appeared with a \u201cR. Hoffheimer\u201d certified check and took up the drafts.\nBell testified that he never had this telephonic conversation with Kendall, and in the absence of any corroborating testimony, it may be assumed that Bell\u2019s identification as Kendall\u2019s interlocutor was not satisfactorily proven. But there is, in our mind, no reason to doubt that through Hoffheimer\u2019s agency such a conversation between Kendall and some person