be no possible doubt but that it was the intention of the Congress to protect innocent vendors or mortgagees, as far as possible. * * [3] Discussion of the principles of law found in U. S. v. Stowell, 133 Ū. S. 1, 10 Sup. Ct. 244, 33 L. Ed. 555, U. S. v. Mincey, 254 Fed. 287, 165 C. C. A. 575, 5 A. L. R. 211, Logan v. U. S., 260 Fed. 746, 171 C. C. A. 484, U. S. v. One Saxon Automobile, 257 Fed. 251, 168 C. C. A. 335, and similar cases, are not germane, as prosecutions in those cases arose under section 3450 of the Revised Statutes (Comp. St. § 6352) which is a statute to protect the revenue of the government, and provides that the "conveyance * used * * in the removal shall be forfeited." No provision whatever is made to protect bona fide innocent vendors, or even owners. The conveyance is confiscated, and the confiscation is absolute, whether or not good cause is shown to the contrary; nor does it offend against the Fifth Amendment to the Constitution, which prohibits the taking of life, liberty, or property without due process of law. Grant Co. v. United States of America, 254 U. S. 505, 41 Sup. Ct. 189, 65 L. Ed. decided by the Supreme Court on January 17, 1921. * [4] To justify an order for the return of the truck to the petitioner, reliance is placed by the petitioner on U. S. v. Brockley, 266 Fed. 1001; but the facts there are not the facts here. In that case Brock ley borrowed the automobile, and on page 1002 the court said: "The admitted facts in the present case show ownership and want of knowledge on the part of the vehicle's owners as to the purpose for which the vehicle was to be employed." And continuing Judge Witmer said: "Without any other attending circumstances, this is sufficient to warrant the court to order its return." In that case the wrongdoer had no interest whatever in the automobile, and therefore there existed no interest which could be confiscated, while here we are asked to return the truck to the assignee of the conditional vendor, because it was sold on a conditional bill of sale, where it appears that about 45 per cent. of the purchase price has been paid by the vendees, thereby showing an interest that the wrongdoer had in the vehicle to that extent. It is thus apparent that the ruling in the Brockley Case cannot control here. The intent of the Congress, as disclosed in section 26, here under discussion, is clearly expressed. The conclusions respecting its interpretation are: First-The seizure, forfeiture, and sale of vehicles is not absolute, as under section 3450 of the Revised Statutes, but is subject to the order of court after it has heard all the facts of each case. Second-An owner who transports intoxicating liquor illegally forfeits the intoxicating liquor and the vehicle and suffers a penalty. Third-A conditional vendor or a mortgagee, who allows the vehicle to be used for such unlawful purpose with his knowledge, or who gives his consent to the illicit transportation, shall also forfeit all interest in or his lien upon the vehicle. (273 F.) Fourth-A bona fide vendor or mortgagee, without having any notice that the vehicle was being used or was to be used for the illegal transportation of intoxicating liquor, shall be protected to the amount of his bona fide lien, as far as possible. Fifth-The owner of a vehicle, who loaned it to another, who, in turn, transported intoxicating liquor therein, is entitled to a return of the vehicle, where he had no knowledge of the purpose of the borrower, and no facts are shown which should have aroused his suspicion. Sixth-In the second and third instances, the vehicle shall be sold by the United States marshal at public auction, and after the costs are paid, as provided by law, then the balance of the proceeds of the sale shall be turned into the treasury of the United States. Seventh-In the fourth instance, after the bona fide lien and lack of notice or knowledge have been established, the vehicle shall be sold at public auction, and after the costs, as provided by law, have been paid, the United States marshal shall then pay, if possible, the amount of the bona fide lien in full to the proper person, and the balance, if any, shall be turned into the treasury of the United States. [5] To grant this petition would permit a lienor or mortgagor to profit by the transaction, and that result was never intended by the framers of the law. Cases may arise where the application of this rule would result in realizing an insufficient amount at the sale to pay the full amount of the bona fide lien; but where a substantial amount has already been paid, as here, on a new truck, undoubtedly the full amount of the balance due, plus the costs, will be realized, so that the lienor will be fully protected. [6] Where, however, the amount paid by the purchaser is small in proportion to the purchase price, so that a large amount will have to be realized by the United States marshal at the sale, and where the highest bid is insufficient to meet the costs and the amount of the bona fide lien, the United States marshal shall then abandon the sale and report the facts to the court for further instructions. In such event further hearing will be had before the court to determine then whether the lienor has shown "good cause" why the vehicle should not be sold. As the instant case clearly falls under the fourth and seventh conclusions, stated supra, the prayer of the petitioner, in so far as it requests the return of the truck, is denied. Therefore let an order be prepared forthwith, providing for the sale by the United States marshal, at public auction, of one Diamond T motor truck, No. 12347, described in the petition, in accordance with the provisions of section 26, title 2, of the National Prohibition Act, and let the proceeds of the sale, after costs as provided by law are paid, be turned over to the petitioner to the amount of its lien of $1,833.34, plus interest at 6 per cent. from October 26, 1920, the date when the first defaulted payment became due in accordance with the terms of the conditional bill of sale, and let the balance, if any, be turned into the treasury of the United States. Ordered accordingly. 273 F.-17 ALEXANDER et al. v. SECURITY BANK & TRUST CO. et al. No. 136. 1. Trusts 358 (1)—Sufficient to trace trust funds into deposit of agent, appropriated by bank to his personal debt. In tracing trust money, misappropriated by a bank, with the connivance of a depositor, in payment of his private debt to the bank, it is sufficient if the trust funds can be sufficiently traced to be reflected in the deposit, and it is not essential that the identical money be located. 2. Trusts 356 (2)-Bank held liable for trust funds applied to depositor's indebtedness. A depositor of defendant bank was a shipper of produce, in part of that bought by him, and in part as agent for others, and in making shipments he deposited drafts on consignees, which were accepted by defendant as cash and credited to his account. He had small capital, and in the course of an unfavorable season became indebted to defendant in the sum of $15,000. During the next season, when he was making large shipments, known by defendant to be in large part on commission for plaintiffs and others, but depositing the drafts in the usual way to his own credit, defendant obtained from him a number of checks, and from time to time, as his account warranted, applied such checks in payment of his indebtedness. Held that, so far as drafts for shipments owned by plaintiffs could be traced into the deposit so withdrawn, defendant was liable therefor. 3. Estoppel 88 (1)—Attempted settlement with agent for funds misappropriated held not an estoppel to follow the funds. Where a bank in which an agent had deposited funds of his principals to his own credit, with knowledge of their trust character, had procured their application in payment of a debt of the agent, the owners of the funds held not estopped to maintain a suit against the bank by taking notes of the agent, with personal security, for part of the amount, pursuant to an agreement for settlement made without knowledge by them that the bank had received the money, and which was not carried through, so as to constitute an accord and satisfaction. 4. Subrogation 10 (1)-Trustee ex maleficio is not entitled to subrogation. A trustee ex maleficio held not entitled in equity to be subrogated to securities held by complainants for their own protection. In Equity. Suit by Joseph Alexander and others against the Security Bank & Trust Company and another. Decree for complain ants. This is a suit in equity by the complainants, seeking to follow certain moneys of theirs which came into the hands of Martin, as their agent, and which were by him deposited in the Security Bank & Trust Company, and thereafter checked out to persons other than plaintiffs. The admitted facts are these: That Jesse Martin, doing business in Wharton county, Tex., under the firm name of Jesse Martin & Co., conducted on his own account and as broker for others the business of buying and selling potatoes, grain, hay, and other kinds of produce. That he had been conducting this kind of business for some time prior to 1918, when the facts out of which this controversy arose transpired; that it was, and had been, his custom for some time to do his banking business through the Security Bank & Trust Company in his own name. That in the year 1917 he had handled for plaintiffs in this case their potato crop, which was planted, grown, and marketed at and from Wharton, Tex., in 1917 For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes (273 F.) and 1918, and that during both these years he also handled a large amount of business, some on his own account and some as agent for others, and that practically all of his business was, and had been for a long time, transacted through the defendant bank. That the course of handling the business of plaintiffs was in 1917, when the potatoes were loaded on the cars, that he would handle the shipping and sale of same, make all proper deductions which arose in closing up the account sales for the respective cars, and after deducting his commission of $15 per car would remit to complainants the net amount due them. The same arrangement existed in 1918, with the exception that he had an understanding with complainants that, instead of paying them by checks, he would deposit their net funds to their account in the Wharton Bank & Trust Company, and pursuant to that agreement he did deposit the sum of $8,000 in that bank; the balance of their funds, $16,000 in round numbers, he deposited in the Security Bank & Trust Company, and checked them out to persons other than com plainants; and complainants, with the exception of some small amounts later paid them by Martin after the misappropriation of their funds was discovered, have received none of said $16.000. The evidence shows that Martin was a man of small capital, or, as one of the directors of the Security Bank & Trust Co. stated, "His stock in trade was a lead pencil and a piece of paper;" but the evidence also shows that he was a very active, energetic trader, and handled quite a large volume of business during the crop year. Due to weather conditions, which affected corn which Martin was handling in the year 1917, and due to delays and congestion in railroad traffic and other causes beyond Martin's control, during the year 1917 and the first part of 1918, there was accumulated a considerable debt to the bank, reaching in April, 1918, about $15,000. This debt was represented by drafts which, in accordance with their regular custom, the bank had taken as cash items, payment on which had been delayed or refused, so that, instead of the case being, as it had formerly been, that with few exceptions the drafts which Martin put through the bank sufficed, upon their acceptance and payment by the drawee, to keep his account with the Security Bank in proper condition, such an unsatisfactory condition from a banking standpoint had arisen that Martin had a conference with the president of the bank and Wright, the cashier and active manager, in April, in which this condition was called to his attention, he was advised that the bank could not, without great embarrassment, continue to carry these long overdue drafts, and was induced to promise that as soon as possible he would take up these drafts, giving the bank cash therefor. That subsequently the potato season came on, and Martin handled a large amount of potatoes, some of which he bought outright, but at least 90 per cent. of which was handled by him on commission. As the result of moving these cars of potatoes there went through Martin's account, after the 1st of May, something over $40,000, and while these funds were going through the bank Mr. Wright, the cashier, went to Martin and called his attention to the fact that he had promised to take up the $15,000 or so of long overdue drafts which they held of Martin's, and wrote out and caused Martin to sign checks on his account with them, aggregating the amount of the overdue drafts. This transaction took the form, according to the testimony of the cashier, of several checks, so that they could be passed through the bank as Martin's account would warrant, and covered a period of five or six days. As before stated, the funds which went to Martin's credit during this active period were realized in large part by the delivery by Martin to the bank of drafts with bills of lading on moving cars attached, which drafts were taken by the bank as cash items, and for the amount of the drafts Martin was given immediate credit. Some few of these drafts were later returned unpaid, but that fact is immaterial, since the receipt of the drafts as cash items and the deposit of their value in cash stands, as to complainants, exactly the same as though Martin had gotten the money from the consignees and placed it to their credit, and any claim which might accrue to the bank because of the nonpayment of drafts would be a different cause of action, resting upon a different consideration. The above are the undisputed facts. The only matters upon which there was any dispute on this branch of the case were: (1) Whether the bank knew, when they got Martin to sign checks on his account to pay up a past-due indebtedness to them, that these checks were being satisfied with moneys actually belonging to complainants; in other words, whether they knew that Martin was using his clients' moneys to pay his own debts; and (2) if they did know it, what amount of complainants' moneys the evidence sufficiently shows were appropriated by the bank to pay Martin's debt to it. On the first of these matters the case presents no difficulty, for, notwithstanding the fact that the officers of the bank, particularly Wright, testified that they did not know that Martin was doing business as a broker, and did not know that any of the funds deposited by him were moneys of his principals, the testimony of Martin is equally positive that they did know these facts, and every fact and circumstance in the case in an overwhelming way points to the same conclusion. It is simply inconceivable that a banker, in the position which Wright occupied toward a customer such as Martin, who was heavily indebted to the bank, could have been as ignorant of Martin's business and condition as Wright claims to have been; nor is his claim to credence strengthened by the testimony of his conversations with Ingram, which, to put the most favorable light on them, were distinctly uncandid. I have therefore no difficulty in holding that the bank knew that Martin was operating on a shoestring, and handling his customers' money, and particularly the money of complainants in this case. The second point in dispute, as to the amount of complainants' money which the bank actually misappropriated, is more difficult. The evidence establishes without contradiction that the major part of Martin's potato business in May and June was commission business, or, as he himself testified, about 10 per cent. of the business was his own, the balance commission, and with the exception of about $8,000, which he depoited in the Wharton Bank & Trust Company to the credit of complainants in this suit, all moneys received by him on account of all his clients were deposited by him in his own name in the Security Bank & Trust Company; the books of the bank showing that during the months of May and June there was over $40,000 deposited by Martin in the bank, of which approximately $16,000 was the money of complainants in this case, the balance belonging in part to Martin, but the larger part to clients of his. Martin testified that the drafts for the potato crop were put in in May and June; that the crop started rolling in May, but most of it rolled in June. He also testified that about half of the drafts covering complainants' potatoes were deposited prior to the 1st of June, and about half between that day and the 10th, but that this was just a matter of opinion. That he did not think it would be possible to check over the papers and determine which drafts belonged to complainants and which belonged to others. The drafts and other records of the bank covering Martin's account were offered in evidence, and from them the respective counsel have made up a statement undertaking to trace the complainants' drafts into the bank, and by comparing these receipts with the checks upon which the bank satisfied Martin's debt to it to determine just how much of complainants' money the bank actually got. The results obtained by respective counsel have not been alike, nor is the court entirely satisfied, after checking the matters himself in the light of counsel's efforts, that the evidence is in the shape it ought to be in to permit of an entirely satisfactory tracing. I am of the opinion, however, and will so find, that the evidence is sufficient to show that of the funds of complainants which were deposited in the bank the bank obtained on the checks of Martin $7,800. In view, however, of the unsatisfactory character of the evidence, either party may make application, should it so desire, to reopen the case on this point. In addition to the issues set out in the foregoing statement of facts the case presents an issue of estoppel, based upon the following facts, most of which are undisputed: That after the plaintiffs had discovered the fact that their moneys had been misappropriated by Martin, and before they had obtained the precise information as to who had gotten their money, an attempt was made to make a set |