Melville Fuller

“ On the 3d of September, 1873, the Importers' & Traders' National Bank returned the above $50,000 bonds.' He considers that the bonds were held by his firm for any balances that the New Orleans National Banking Association might owe, and says that Schuchardt & Sons held them up to the time they were pledged to the bank as security for 'whatever Cavaroc & Son might be indebted for,' but that they had no written authority to hold the bonds collaterally for the bank's indebtedness, that he knew of, other than the letter of Cavaroc, Sr., of February 15, 1873, hereinafter set forth. ”

“ If, as argued by counsel, there is a presumption, as between customer and banker, that the securities or property of the customer, found in the possession of the banker, have been left with him to secure him generally against loss, this is not an irrebuttable presumption, and each case stands upon its own circumstances. ”

“ C. C. & Son, in trust, a deposit of securities, there to remain until the acceptance or the payment, if we deem proper to await the payment.' This was an arrangement made by Schuchardt & Sons, and evidenced by a memorandum prepared, not by Cavaroc, but by Wells. It was not Cavaroc & Son, acting with reference to the bonds, who sought this agreement, but Schuchardt & Sons, acting for their own protection in reference to transactions other than those with which the bonds were connected. ”

“ According to the custom of business at New Orleans, advances are made by bankers to shippers in anticipation of the actual delivery of drafts with accompanying documents, and the New Orleans Bank consequently advanced funds before it could remit drafts, so as to be credited by Schuchardt & Sons with their amount. ”

“ To the Cashier of the New Orleans Banking Association, New Orleans: In reply to your worthy president's letter of the 15th inst., we take pleasure in authorizing you, in accordance with the terms therein stated, to value on us ' a d ecouvert' for a sum not exceeding as maximum $100,000 (one hundred thousand dollars) against exchange purchases. ”

“ Cavaroc that you would only temporarily require such facilities, and that your business would increase to such an extent that the future would largely compensate us for any present sacrifices. To our regret, however, such has not been the case, and your business, instead of increasing, has greatly diminished. ”

“ It was to enable the bank to make such advances in New Orleans that Schuchardt & Sons on their part advanced to the bank; and to assist the bank Cavaroc & Son were willing to, and did, pledge the bonds as collateral, to a maximum of $100,000. The understanding was that the bonds should be held as collateral while Schuchardt & Sons were uncovered, that is to say, not covered by the remittance of exchange purchased, the bonds thus being used to bridge the interval between making the advances and the receipt of the drafts with bills of lading attached by Schuchardt & Sons. ”

“ Translation: 'Advances made by acceptances or cash disbursements, which (advances) are not covered by bills of lading, consigned goods, or other securities.' So Littr e, dictionnarie de la Langue Francaise: 'A d ecouvert. Terme de commerce: Etre a d ecouvert, etre en avance, n'avoir aucune garantie des avances faites. ( A d ecouvert. Commercial expression: To be ' a d ecouvert,' is to be in advance, to have no guaranty of the advances made.) ' So in the Dictionnaire de 1' Acad emie: 'A d ecouvert. ”