covenants were in different instruments, they were dependent; this, too, is shown to have been discarded by modern cases, and the fundamental rule, that the undertaking of the respective parties is considered to be dependent unless the contrary intention clearly appears, is generally applied in these contracts for sale and purchase of real property.

cases

Aside from the numerous which deal with the question whether tender of a deed is a necessary condition precedent to the right of the vendor to recover the purchase price of land, sue for breach of contract, etc., there are few cases which fall within the precise scope of this annotation. The reported case (NUNLIST v. KELEHER, ante, 366), applying the rule that if a day be appointed for the payment of money, or a part of it, which is bound to happen or may happen before that which is the consideration of the money is to be performed, action may be brought for the money before performance, holds that a stipulation in a contract for the installation of a heating system, binding the contractor to furnish a separate paper containing a written guaranty of temperature procurable by the heating plant, is an independent covenant, which, if not performed, is no defense to an action for the purchase money.

And the Tennessee court, in Officer v. Sims (1871) 2 Heisk. (Tenn.) 501, held that a stipulation in a covenant to pay for a negro slave, binding the vendor to make a bill of sale to the purchaser upon payment of the purchase price, was an independent and not a dependent covenant, under the rule that if a day be appointed for the performance of a covenant on one part, which is to happen or may happen before the covenant on the other part is to be performed, the covenants are not dependent.

On the other hand, in Blackwell v. Fosters (1858) 1 Met. (Ky.) 88, the court treated a provision in a contract for the sale and delivery of live stock at a future date, binding "the said

parties to give security for their respective performance of this contract, if at any time required," as a dependent covenant, which, if required to be fulfilled at any time after the contract was entered into, must be done within a reasonable time; and, if no security were given within such reasonable time, performance on part of the parties demanding security would be excused.

So, an agreement in a contract for the sale of real property, to furnish title insurance upon the completion of payment, obligates the vendor to procure the insurance, and is concurrent with the vendee's obligation to make final payment, and the vendee will not be in default in refusing to make such payment where the vendor tenders a deed without being prepared to perform his obligation as to title insurance. Brown v. California & W. Land Co. (1920) 145 Minn. 432, 177 N. W. 774.

Likewise, it has been held that a provision in the contract for the sale of merchandise, providing that, before any payment should be made, and before any acceptance should be signed, the vendor would execute and deliver a bond of indemnity conditioned that the goods sold would be of the quality described in the contract, and that appellant would faithfully discharge the terms and conditions thereof, is a condition precedent to the vendor's right to recover the purchase price; and, not having been performed, excuses the purchaser from liability. National Novelty Import Co. v. Griffin (1914)

Tex. Civ. App., 168 S. W. 85.

And if a contract requires that one party should furnish a confirmed bank credit, but specifies no time within which this is to be done, the party obligated may show a general custom, if such exists, as to when the required credit should be furnished; and, if no general custom obtains, the law will imply a reasonable time, to be determined from the character and circumstances of the transaction. Rose v. Lewis (1908) 157 Ala. 521, 48 So. 105. G. S. G.

158 Pac. 68; Baily v. Paxton, 115 Kan. 410, 223 Pac. 278; Nelson v. Paxton, 113 Kan. 394, 214 Pac. 784; Spring Hill v. Paxton, 115 Kan. 412, 223 Pac. 283.

The original bonds were left with the Viola State Bank, and with Spitler, its cashier, "for safe-keeping." No money was paid to anyone for keeping same. A gratuitous bailment resulted for the benefit of the bailors. Consequently the bailor (the bank) was bound to exercise only slight diligence, and would be liable only for gross neglect or negligence.

Merchants Nat. Bank v. Guilmartin, 93 Ga. 503, 44 Am. St. Rep. 182, 21 S. E. 55; Hale v. Rawallie, 8 Kan. 136, 1 Am. Neg. Cas. 493; 7 C. J. 643; 3 R. C. L. 560, 561; Miller v. Bank of Holly Springs, 31 A.L.R. 703, note; Wylie v. Northampton Nat. Bank, 119 U. S. 361, 30 L. ed. 455, 7 Sup. Ct. Rep. 268.

Messrs. John W. Adams, William J. Wertz, and George Adams, for appellee:

A special deposit placed in a bank for a particular purpose is a trust fund; and, if any of those funds are appropriated for the bank or used by the bank, they may be recovered from the bank or the receiver.

Secrest v. Organ, 112 Kan. 23, 209 Pac. 824; Lamb v. Organ, 112 Kan. 26, 209 Pac. 825; Kansas State Bank v. First State Bank, 62 Kan. 788, 64 Pac. 634; Travellers Ins. Co. v. Caldwell, 59 Kan. 156, 52 Pac. 440; Ryan v. Phillips, 3 Kan. App. 704, 44 Pac. 909; Macy v. Roedenbeck, L.R.A. 1916C, 56, note; Hazeltine v. McAfee, 5 Kan. App. 119, 48 Pac. 886; Goodyear Tire & Rubber Co. v. Hanover State Bank, 109 Kan. 773, 21 A.L.R. 677, 204 Pac. 992; Peak v. Ellicott, 30 Kan. 156, 46 Am. Rep. 90, 1 Pac. 499; Myers v. Board of Education, 51 Kan. 87, 37 Am. St. Rep. 263, 32 Pac. 658; Ellicott v. Barnes, 31 Kan. 170, 1 Pac. 767; Hubbard v. Alamo Irrigating & Mfg. Co. 53 Kan. 637, 36 Pac. 1053, 37 Pac. 625; Larned v. Jordan, 55 Kan. 124, 39 Pac. 1030; American Nat. Bank v. Presnall, 58 Kan. 69, 48 Pac. 556; Kimmel v. Bean, 68 Kan. 598, 64 L.R.A. 785, 104 Am. St. Rep. 415, 75 Pac. 1118; Kesl v. Hanover State Bank, 109 Kan. 776, 204 Pac. 994; Brogan v. Kriepe, 116 Kan. 506, 37 Á.L.R. 126, 227 Pac. 261.

The bank appropriated the bond. which Mr. Miller had left there for safe-keeping, and the same became

mingled with the assets of the bank, and augmented the funds which came into the hands of the receiver, as well as the checks.

Nelson v. Paxton, 113 Kan. 394, 214 Pac. 784; Pennington v. Farmers' & M. Bank, 144 Tenn. 188, 17 A.L.R. 1213, 231 S. W. 545; National Bank v. Whitney, 181 Cal. 202, 8 A.L.R. 298, 183 Pac. 789.

Mason, J., delivered the opinion of the court:

On August 31, 1921, James Miller brought an action against the Viola State Bank seeking a recovery on two causes of action. He died during the litigation, and his administratrix was substituted as plaintiff. The bank was closed on October 20, 1921, and a receiver subsequently appointed has been made a defendant. On each cause of action a preferred claim was asserted and allowed. The receiver appeals and contends, not only that the claims are not entitled to a preference, but that they do not constitute any charge whatever against the bank or its assets. For convenience of statement the original claimant will be spoken of as the plaintiff.

The first cause of action is based on these facts: The plaintiff, having $1,300 on deposit in the bank, drew checks for that amount payable to the bank and gave them to the cashier to buy government bonds for him; the checks were charged against the plaintiff's account, but so far as he could learn no bonds were ever purchased, and he never received anything for his money.

The second cause of action is based upon the fact that the plaintiff, having purchased elsewhere a government bond for $1,000, left it with the cashier for safe-keeping by the bank and has never been able to recover it or its proceeds or value. The cashier absconded October 4, 1920.

1. With respect to the latter cause of action, the receiver makes this argument, which is also urged as applying in principle to the other as well: The bank's relation to the

bond left by the plaintiff with the cashier was that of a gratuitous bailee. It was not liable for the theft of the bond by the cashier unless it had failed to use proper diligence to ascertain whether he was honest and otherwise to guard against such a loss. On this issue there was no evidence either way. If the cashier stole the bond (as the record seems to show), he did not do so in his character as cashier, but personally; the act was not done in the course of the performance of his official duties, and the rule of respondeat superior does not apply.

This contention in its general scope is supported by much authority. 3 R. C. L. 562-564; 7 C. J. 643, 644, note f; 6 C. J. 1123, note 79; 1 Morse, Banks & Bkg. 5th ed. § 102, e, h, § 201. In a carefully considered case it was said: "The cases hold that the act of the cashier by which he appropriates exclusively to himself a gratuitous special deposit in the bank, is not an act done in the bank's business and within the scope of his employment. The custody of the deposit implies no act to be done, but only a mere continuance of possession until a return of the property is demanded. The cashier had nothing to do about it except suffer it to remain in a safe place of deposit. Consequently, in taking it to himself he is said to 'step aside' from his employment to do an act for his personal gain, regardless of the business for which he was engaged. Such an act is lacking both in the rendition of, and in the intent to render, any service to the employer. The cashier does not, as a matter of fact, act with the bank's authority, and furthermore does not essay or even profess to act in its behalf. He represents nobody but himself. He throws off all allegiance to his master, and takes the part of a common enemy to all concerned. becomes the same as a stranger from without who by robbery, burglary or stealth, deprives the bank of a special deposit; and the author

He

ities hold that the bank is not chargeable with such a loss, in the absence of gross negligence, but is liable if grossly negligent [citing cases]. Such a fraud, by a wellselected servant duly supervised, is not to be imputed to the bank as its own fraud. The bank cannot be said to have stolen when there is on its part no participation in the theft, no appropriation and no intent to appropriate the property." Merchants Nat. Bank v. Guilmartin, 88 Ga. 797, 801, 802, 17 L.R.A. 322, 15 S. E. 832.

We think this reasoning, and the general rule in support of which it is advanced, are inapplicable to the facts of the present case. Here the cashier was not a mere servant. He was not only an officer of the bank, but for several years had been its manager, the only person in charge, the person "transacting all of its business," and running it "simply as if he was the owner." It was for him to determine in behalf of the bank just where the bond should be kept, how it should be safeguarded, and what steps should be taken in regard to it. If he had by a blunder delivered it to the wrong person, the bank would have been liable. If he did the same purposely, its liability could hardly have been less. If by a reckless exposure of the bond he had caused its loss by the theft of some one else, the bank would clearly have been liable to the owner. If he had gone further and connived at such a theft, his wrongful intent could scarcely have lessened the bank's responsibility. His duty to the bank was to care for the bond-to handle it in such manner that it would be forthcoming when demanded. He did not do this. He handled it so that its return by the bank became impossible. He violated his obligation to the bank, and at the same time the bank through him violated its obligation to the Banks-liability plaintiff. The bank larceny by is liable, not because he committed a crime, but because he failed in the duty which

cashier.

as the representative of the bank he owed the plaintiff.

The act of the cashier and a clerk in extracting a part of the contents of a keg of specie left with a bank for safe-keeping has been held not to have been that of the bank, but in that case the looters were not themselves charged with the care or control of the coin. Foster v. Essex Bank, 17 Mass. 479, 9 Am. Dec. 168, 1 Am. Neg. Cas. 502. It was mentioned in the opinion that the directors represented the bank (page 508) and that "if the cashier had any official duty to perform relating to the subject, it was merely to close the doors of the vault when banking hours were over" (page 511).

In an English case (which cites and quotes from that just referred to), where a bank was held not liable for a theft of a special deposit committed by its cashier, the stolen debentures were in a box to which the customer had access and of which he kept the key, and which was placed with others in a strong room of which the cashier had one key. The manager and a director, rather than the cashier, who was also the accountant, appear to have been the chief executive officers. Giblin v. McMullen, 5 Moore, P. C. C. N. S. 434, 16 Eng. Reprint, 578, 3 Eng. Rul. Cas. 613.

An intimation that the doctrine of the two cases just referred to is obsolete appears to be intended by this language of the federal Supreme Court, which is followed by descriptions of the Massachusetts and similar cases as illustrative of the proposition: "The doctrine of exemption from liability in such cases [that is, those involving the liability of gratuitous bailees] was at one time carried so far as to shield the bailees from the fraudulent acts of their own employees and officers, though their employment embraced a supervision of the property, such acts not being deemed within the scope of their employment." Preston v. Prather, 137 U. S. 604, 609, 34 L. ed. 788,

790, 11 Sup. Ct. Rep. 162, 163, 1 Am. Neg. Cas. 599.

However, an instance of its recent application is to be found in Weissburg v. People's State Bank, 284 Pa. 260, 131 Atl. 181, where a bank was held not liable for the conversion by its president of certificates left for safe-keeping in his control; his custody being assumed to be that of the bank. But it is to be noted; as has already been indicated, that in the Massachusetts and English cases the delinquent official was not definitely charged with the supervision of the property.

2. If it should be assumed that the bank could not be held liable unless upon the ground that it failed to exercise sufficient diligence to guard against such Evidence-sufa loss, the judg- ficiency-aument could still be thority of cashupheld. Where, in

ier.

such a case, the bank has the burden of proving that it used due diligence, the requirement is held to be met only by showing that it not merely used sufficient care in selecting a cashier, but that it exercised some degree of supervision over him, to ascertain whether he should be retained; that "during the whole term of the bailment, it had exercised at least a slight supervision over its cashier, and that in so doing no indications of dishonesty, or other reason for distrusting him had appeared." Merchants Nat. Bank v. Carhart, 95 Ga. 394, 32 L.R.A. 775, 51 Am. St. Rep. 95, 22 S. E. 628. The majority rule is that the burden of showing want of care is on the bailor, although a number of courts hold to the contrary. Note in 26 A.L.R. 232, 238. Assuming the burden here to have been on the plaintiff to show the bank failed to use due care as to the supervision of its cashier, we think the requirement was met by the testimony that for a number of years he managed the bank, being the only person in charge there, transacting all its business, and running it simply as if he were the