Page:Federal Reporter, 1st Series, Volume 2.djvu/546

 HECOX V. CITIZENS' INS. CO, OF ST. LOUIS. 539 �tances in the same way, and his remittances both before and subsequent to the execution of the bond were, by his direc- tion, applied upoii ail such of his unpaid monthly accounts as were earliest due. To illustrate : Subsequent to the exe- cution of the bond he from time to time directed, by letter, that remittances then sent in the form of oheck should be applied on a designated account, and his remittances were so applied, thus reducing the amount of his default existing at the time of the execution of the bond. It does not appear that eomplainants were induced to become Pottle's sureties by any act or upon any solicitation of the company. They signed the bond as friends of Pottle, at his request, and on his assurance that they should never suffer. �Now, while there is force in the view urged by counsel, that the appropriation of moneys which Pottle received upon cur- rent busicess and remitted, after the execution of the bond, to the satisfaction of old indebtedness, would necessarily oper- ate to the injury of the sureties, I am of the opinion that eomplainants' right to the relief they now seek, even admit- ting that the facts would not constitute a defence to the action at law, depends upon the point of knowledge on the part of the Insurance company, at the time it received such remittances, that they were of the moneys which Pottle re- ceived from current business aeoruing after the execution of the bond. This, I thmk, is the decisive and turning point in the case, and, in my judgment, upon this point the proofs are inadequate. The officers of the insurance company were resident at St. Louis. Their business transactions with Pottle were conducted wholly by correspondence, and this correspondance is in evidence. It is not proven that it was agreed between the company and Pottle that if he would pro- cure a bond he might deposit in his own name the moneys which he should receive as agent. There is no proof that the insurance company knew that he thus dealt with their moneys except as such knowledge may be inferred from the f act that his remittances were in the form of his individual checks. The case is devoid of satisfactory evidence that the company knew that the remittances which they received after the exe- ����