Mr. Justice Shore
delivered the opinion of the Court:
It is contended that if a right of recovery exists in the plaintiff, the action should haxTe been brought against the Northxvestern National Bank, and not against the appellant. We are of opinion that the suit was properly brought. The Northwestern National Bank had no notice whatever that the check of appellant represented money belonging to appellee, or that appellee was in anywise interested therein. It never consented to become his debtor, or to become the depository of funds for his use, and received the money without notice that it was charged xvith such use. The check purported to transfer to the Northxvestern National Bank, funds of the Henry Bank, going to its general account, and the same xvas so receixred by that bank and carried- to the credit of the Henry Bank by the Northwestern National Bank. There was no privity of contract between the Northwestern National Bank and appellee. The transfer was made to that bank without his authority or consent. Nor did the Northwestern National Bank consent to act as trustee in respect of this money, for its transmission to the Henry Bank, for his use. No action would lie by appellee to recover of the Northwestern National Bank. Carpen v. Hall, 29 Ill. 512; Trumbull v. Campbell, 3 Gilm. 502; Savings Bank v. Waid, 11 U. S. 195; Wharton on Contracts, 784, 787. 1
Bensley Bros, had been directed by appellee to forward the proceeds of the sale of his cattle to the Henry Bank, at Mineral Point, Wisconsin. For this, purpose they were his agents, and whatever they did in pursuance of that direction was the act of appellee. In the course of transmitting appellee’s money, the agents of appellee deposited it in the appellant bank to the credit of the Henry Bank, for the use of O’Hare, appellee. The deposit was accompanied by a ticket or memoranda, distinctly notifying appellant that the deposit was for the use of appellee. Appellant, with such notice, accepted the deposit, and issued and delivered to appellee’s agents a certificate therefor, in which they certify that the amount has been carried to the credit of the Henry Bank, for the use of appellee. Appellant must be held to have received this money with full knowledge that it belonged to appellee, and of the trust character in which it was to be transmitted to the Henry Bank. The liability assumed by the appellant bank was, to pay to the Henry Bank, for the use of appellee, the amount of this deposit .with it, and upon such payment being made, and acceptance thereof by the Henry Bank, the liability of appellant would cease, and the Henry Bank become liable to account to appellee for the same.
It is, however, urged, that as the deposit was to the credit of the Henry Bank, it alone had the right to demand and receive the money, and alone could recover the same. This position is, we think, untenable. The deposit was by appellee, for transmission of his own funds to the credit of his home bank, for his use. ' The Henry Bank was not a party to the deposit, never gave its consent to receive the credit, or accepted the trust created for appellee’s benefit. On the very day the deposit was made, the Henry Bank, without any notice of this deposit to its credit, closed its doors as a bank, and its affairs passed into the hands of an assignee, for the benefit of its creditors. It will not be questioned, that if, before closing its doors, the Henry Bank had had notice of this deposit to its credit, it would have had the right to decline it, and refuse to assume the trust with which it would be charged upon receiving the money. Common honesty would have dictated such a course, in view of its financial condition. The Henry Bank was a mere intermediary, chosen by appellee,, through which the money should pass in reaching appellee, and it would become liable to appellee only in the event of its coming into possession of the funds, or acceptance of the credit.
The fact that the deposit was made to its credit without its knowledge or consent, created no contract relation between the Henry Bank and appellee, unless the Henry Bank can be held in some way to have assented thereto. (Wharton on Contracts, 787, and authorities cited.) The authorities cited seem fully to support the reasoning of the text. That the Henry Bank did no act indicating" its assent to receiving the credit, is apparent. As stated, at no time since the deposit was made has it been in condition to consent or to act as trustee of this fund. Waiving, then, the question whether the transfer to the Northwestern National Bank, by check, of a like amount of money, constitutes a defence, if the Henry Bank refused to accept the credit, or for any reason it became impossible that it could receive the money in trust, for the use of appellee, it became the duty of appellant to hold the money for the use of the depositor. He, by his agent, deposited the money with appellant, to be transmitted, for his use and benefit, to another bank, which refuses or is unable to receive it, and can not be compelled to do so. The purpose for which the deposit was made has failed, and is incapable of execution, and appellant would hold the funds to the use of appellee, and must account to him for the same. City of St. Louis v. Johnson, 5 Dill. 241; Farley v. Turner, 26 L. J. and C. 710; Wharton on Contracts, supra. Nor does it militate against this view, that appellee may have been indebted, in some ampunt, to the Henry Bank. The evidence wholly fails to show that there was any understanding or agreement that the bank was to be paid out of this fund, or had any interest therein.
It is shown, however, that it is the custom of the city banks, when a deposit is made to the credit of a country bank in a .city bank not its correspondent, to transfer the amount, by check, to the city correspondent of the country bank, and it is urged that the transfer to the Northwestern National Bank, by appellant, was in accordance with this custom, and that appellant is protected from liability. While it probably is true that parties dealing with the city banks, with knowledge of the custom mentioned, would be bound thereby, it is not necessary, in this ease, to determine the effect to be given to that general usage among the city banks. As we have seen, when this money was deposited with the appellant bank, it was impressed with the trust in favor of appellee, and while the Henry Bank would be entitled’to draw it from the appellant bank if it accepted the deposit to its credit, for the use designated, yet it was, as already said, a mere intermediary in the transit of the funds from Chicago to appellee, at Mineral Point, and the Henry Bank would be compelled to account to him therefor. Appellant might hold the money subject to the order of the Henry Bank, which, by its letter of advice and certificate of deposit, would be advised of the use for which it was to receive the money, or appellant might transmit it in the regular course of business, being responsible only for such care and diligence as the law charges upon persons similarly situated. But if the Henry Bank must, from the character given the funds in the hands of appellant, account to appellee therefor, it was the duty of appellant to give notice to any intermediary it might select, of the trust character impressed upon the funds, and not permit it to he carried to the general account of the trustee, to be applied upon its debts.
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Mr. Justice Shore
delivered the opinion of the Court:
It is contended that if a right of recovery exists in the plaintiff, the action should haxTe been brought against the Northxvestern National Bank, and not against the appellant. We are of opinion that the suit was properly brought. The Northwestern National Bank had no notice whatever that the check of appellant represented money belonging to appellee, or that appellee was in anywise interested therein. It never consented to become his debtor, or to become the depository of funds for his use, and received the money without notice that it was charged xvith such use. The check purported to transfer to the Northxvestern National Bank, funds of the Henry Bank, going to its general account, and the same xvas so receixred by that bank and carried- to the credit of the Henry Bank by the Northwestern National Bank. There was no privity of contract between the Northwestern National Bank and appellee. The transfer was made to that bank without his authority or consent. Nor did the Northwestern National Bank consent to act as trustee in respect of this money, for its transmission to the Henry Bank, for his use. No action would lie by appellee to recover of the Northwestern National Bank. Carpen v. Hall, 29 Ill. 512; Trumbull v. Campbell, 3 Gilm. 502; Savings Bank v. Waid, 11 U. S. 195; Wharton on Contracts, 784, 787. 1
Bensley Bros, had been directed by appellee to forward the proceeds of the sale of his cattle to the Henry Bank, at Mineral Point, Wisconsin. For this, purpose they were his agents, and whatever they did in pursuance of that direction was the act of appellee. In the course of transmitting appellee’s money, the agents of appellee deposited it in the appellant bank to the credit of the Henry Bank, for the use of O’Hare, appellee. The deposit was accompanied by a ticket or memoranda, distinctly notifying appellant that the deposit was for the use of appellee. Appellant, with such notice, accepted the deposit, and issued and delivered to appellee’s agents a certificate therefor, in which they certify that the amount has been carried to the credit of the Henry Bank, for the use of appellee. Appellant must be held to have received this money with full knowledge that it belonged to appellee, and of the trust character in which it was to be transmitted to the Henry Bank. The liability assumed by the appellant bank was, to pay to the Henry Bank, for the use of appellee, the amount of this deposit .with it, and upon such payment being made, and acceptance thereof by the Henry Bank, the liability of appellant would cease, and the Henry Bank become liable to account to appellee for the same.
It is, however, urged, that as the deposit was to the credit of the Henry Bank, it alone had the right to demand and receive the money, and alone could recover the same. This position is, we think, untenable. The deposit was by appellee, for transmission of his own funds to the credit of his home bank, for his use. ' The Henry Bank was not a party to the deposit, never gave its consent to receive the credit, or accepted the trust created for appellee’s benefit. On the very day the deposit was made, the Henry Bank, without any notice of this deposit to its credit, closed its doors as a bank, and its affairs passed into the hands of an assignee, for the benefit of its creditors. It will not be questioned, that if, before closing its doors, the Henry Bank had had notice of this deposit to its credit, it would have had the right to decline it, and refuse to assume the trust with which it would be charged upon receiving the money. Common honesty would have dictated such a course, in view of its financial condition. The Henry Bank was a mere intermediary, chosen by appellee,, through which the money should pass in reaching appellee, and it would become liable to appellee only in the event of its coming into possession of the funds, or acceptance of the credit.
The fact that the deposit was made to its credit without its knowledge or consent, created no contract relation between the Henry Bank and appellee, unless the Henry Bank can be held in some way to have assented thereto. (Wharton on Contracts, 787, and authorities cited.) The authorities cited seem fully to support the reasoning of the text. That the Henry Bank did no act indicating" its assent to receiving the credit, is apparent. As stated, at no time since the deposit was made has it been in condition to consent or to act as trustee of this fund. Waiving, then, the question whether the transfer to the Northwestern National Bank, by check, of a like amount of money, constitutes a defence, if the Henry Bank refused to accept the credit, or for any reason it became impossible that it could receive the money in trust, for the use of appellee, it became the duty of appellant to hold the money for the use of the depositor. He, by his agent, deposited the money with appellant, to be transmitted, for his use and benefit, to another bank, which refuses or is unable to receive it, and can not be compelled to do so. The purpose for which the deposit was made has failed, and is incapable of execution, and appellant would hold the funds to the use of appellee, and must account to him for the same. City of St. Louis v. Johnson, 5 Dill. 241; Farley v. Turner, 26 L. J. and C. 710; Wharton on Contracts, supra. Nor does it militate against this view, that appellee may have been indebted, in some ampunt, to the Henry Bank. The evidence wholly fails to show that there was any understanding or agreement that the bank was to be paid out of this fund, or had any interest therein.
It is shown, however, that it is the custom of the city banks, when a deposit is made to the credit of a country bank in a .city bank not its correspondent, to transfer the amount, by check, to the city correspondent of the country bank, and it is urged that the transfer to the Northwestern National Bank, by appellant, was in accordance with this custom, and that appellant is protected from liability. While it probably is true that parties dealing with the city banks, with knowledge of the custom mentioned, would be bound thereby, it is not necessary, in this ease, to determine the effect to be given to that general usage among the city banks. As we have seen, when this money was deposited with the appellant bank, it was impressed with the trust in favor of appellee, and while the Henry Bank would be entitled’to draw it from the appellant bank if it accepted the deposit to its credit, for the use designated, yet it was, as already said, a mere intermediary in the transit of the funds from Chicago to appellee, at Mineral Point, and the Henry Bank would be compelled to account to him therefor. Appellant might hold the money subject to the order of the Henry Bank, which, by its letter of advice and certificate of deposit, would be advised of the use for which it was to receive the money, or appellant might transmit it in the regular course of business, being responsible only for such care and diligence as the law charges upon persons similarly situated. But if the Henry Bank must, from the character given the funds in the hands of appellant, account to appellee therefor, it was the duty of appellant to give notice to any intermediary it might select, of the trust character impressed upon the funds, and not permit it to he carried to the general account of the trustee, to be applied upon its debts. (1 Perry on Trusts, 406, 443, 444, and authorities cited.) In the hands of appellant this money was not liable as assets of the Henry Bank, nor could it be applied by appellant in payment of debts due from the Henry Bank, nor would it be -subject to garnishment, in appellant’s hands, at the suit of creditors of that bank. In what is claimed as an attempt to transfer the funds to the Northwestern National Bank, appellant. withheld all indications of the trust character of the funds, or that it was other than money going to the general account of the Henry Bank. To this, appellee in nowise consented, and appellant stands in no better position than if it had retained the money in its custody.
It is, however, contended, that, under the authority of the letter of W! T. Henry, appellant was justified in transferring this fund to the Northwestern National Bank in the manner it did, and therefore the loss must fall upon appellee, if loss occurs. Without pausing to discuss whether the death of W. T. Henry would, under the circumstances here shown, amount to a revocation of that authority, it is apparent that the direction was from W. T. Henry, who, up to his death, July 1,1883, carried on the banking business in his own name, as W. T. Henry. After his death, the business was carried on by another, who adopted the style of “Henry Bank, ” and it was to this latter institution that the credit was given in this instance. But, independently of this, that letter, if otherwise binding, would not authorize the deposit, in the Northwestern National Bank, of appellee’s money, to the credit of. the Henry Bank, as funds of the Henry Bank generally, and destroy all “ear marks” by which the funds could be identified as held for appellee’s use. While appellant held the funds the trust character continued. When the Henry Bank received them, if at all, it was for the benefit of appellee, and it can not be held that any previous direction of the Henry Bank, relating to a disposition of its funds, would authorize the destruction of the evidences of the trust relation created in respect to this fund.
There is no hardship in the rule requiring the bank to preserve the character of the funds received by it, in transmitting the same. All appellant had to do to protect itself, was to preserve the trust character impressed upon the fund in transferring it to the Northwestern National Bank. If that bank had, with notice of the trust, received this money, it would have held it in the same character it was held by appellant, and charged with the same use, and upon failure of the Henry Bank before the transmission of the funds to it, would be bound to account to appellee therefor.
Perceiving, therefore, no error in this record, the judgment of the Appellate Court will be affirmed.
Judgment\ffirmed.