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an advantage; and the construction which treats the motive of the debtor as indifferent seems artificial and awkward. But it is enough to say that a belief that a debtor is insolvent is a very different thing from a belief that he intends a preference; for it would often, and probably generally, happen that a person, though in fact insolvent, would while continuing his business in the usual way make payments without a thought of disparagement of other creditors and with confidence in his ability to pay them all. And upon like considerations the creditor may share in the confidence of his debtor, and may wel? suppose that the debtor while paying him his debt in the common course of business is acting without any purpose of giving special favor. Such considerations have often been adverted to by the courts as the basis of decision, and were the principal motive for the amendment of 1903. Grant v. National Bank, 97 Ū. S. 80, 24 L. Ed. 971; Stucky v. Mfasonic Savings Bank, 108 U. S. 74, 2 Sup. Ct. 219, 27 L. Ed. 610; In re Eggert, 102 Fed. 735, 43 C. C. A. 1; Off v. Hakes, 142 Fed. 364, 73 C. C. A. 464; Hardy v. Gray, 144 Fed. 922, 75 C. C. A. 562; J. W. Butler Paper Co. v. Geombel, 143 Fed. 295, 74 C. C. A. 433; Loveland on Bank. (3d Ed.) § 194c.

Moreover, this appropriation of the $1,000 was made pursuant to a stipulation entered into at the time when the last previous loan and assignment of accounts was made. That stipulation was that the assigned accounts should stand as security for the payment of the earlier debt, as well as for the loan then made. The making of that loan was a valid consideration for the assignment of the accounts as security for a pre-existing debt. Peters v. Merchants' & Farmers' Bank, etc., 149 Fed. 373, 79 C. C. A. 193 ; Jones on Pledges, § 361 (2d Ed.); 1 Brandt on Suretyship and Guaranty (3d Ed.) § 26, and note 16; Johnston v. Nichols, 1 Com. B. 250; Boyd v. Moyle, 2 Com. B. 644; Burgess v. Eve, L. R. 13 Eq. 450; Morrell v. Cowan, L. R.

Ch. Div. 151; Leask v. Scott, L. R. 2 Ch. Div. 376; Sitgreaves v. Farmers' & Mechanics' Bank, 49 Pa. St. 359; Buchanan v. International Bank, 78 Ill. 500.

The assignment was an executed agreement, and was not an agreement to be subsequently performed. No facts are found by the referee which impeach the good faith of the assignment. There is no finding that at the time it was made the Martin Company was in contemplation of bankruptcy or was then insolvent. That being so, the right of the bank attached when the agreement was made and would not be displaced by the subsequent bankruptcy of the assignor.

The order complained of in the petition for review must be reversed, with costs, and the original order allowing the complainant's claim as a secured claim will be restored.


(Circuit Court of Appeals, Second Circuit. April 30, 1907.)

No. 131.


A testator by a will made certain devises and bequests to each of his three sons, and left his residuary estate to his wife, "absolutely and without reservation,” but expressing his desire that she should make a will, after advising with the sons, to carry out his wishes as far as practicable, confiding in her sense of justice and discretion. subsequently revoked such will and made another leaving his entire estate to his wife, confiding in her ability and integrity to make “as early as practicable contemplated bequests which she is aware of” to the sons. After his death his wife made her will, by which she divided the greater part of her estate between the sons, share and share alike. Prior her death a large part of the property was divided between the sons with her consent, each receiving more than was left them by the first will of their father. Held that, if the will of the father created a precatory trust, in the absence of any evidence as to what bequests were contemplated except the prior will, such trust had been fulfilled by the mother prior to her death, and that on her death after the bankruptcy of one of the sons the property received by him under her will came from her

estate and was not a part of the assets of his estate in bankruptcy. Petition to Review Order of the District Court of the United States for the Southern District of New York.

E. Adams and E. Bisbee, for petitioner.
E. A. Turrell, for respondent.

Before WALLACE, LACOMBE, and TOWNSEND, Circuit Judges.

PER CURIAM. In view of the very considerable pecuniary interests involved in the disposition of this case, we have thought it proper to state for future reference the reasons which were assigned orally at the conclusion of the argument for affirming the order under review. The order refused the application of the trustee to compel the bankrupt to assign and turn over to him the property which came to the bankrupt's hands from the estate of his deceased mother after the adjudication in bankruptcy. If the bankrupt's title to this property vested in him by the will of his deceased father, it inured prior to the adjudication, and would be part of the assets belonging to his creditors to be distributed in the bankruptcy proceeding.

The facts are these: April 1, 1889, John Harper, the father of the bankrupt, made his will, by which, after leaving certain bequests to nieces and nephews, he gave to his son John certain real estate and certain shares of stock, and to his son Charles certain real estate and certain shares of stock, and to his son Orlando, the bankrupt, he gave $40,000, “the sum I loaned him for aid in business and took memorandums for same payable on demand," and he also gave to him a certain watch. The remainder of his estate, real and personal, he bequeathed and devised to his wife, Lydia, “absolutely and without reservation.”. In a subsequent clause was this statement:


"It is also my desire that she will as soon as practical make a judicious will, advising with my sons, and being guided by the equitable laws of Pennsylvania, and to carry out my wishes as far as practicable. There are many things to do which I leave to her sense of justice and discretion."

June 3, 1889, he made a codicil to this will, revoking the devise and legacy to John, and substituting therefor a devise and bequest in trust for him of the rents and profits during his life, “the same not to be liable * *

for any debts or liabilities” of John or “subject to any execution or attachment against him," and whereby at the death of John the trustees were to account for the property to his wife and children. November 6, 1889, he canceled the will and codicil in writing, and on November 8th made a new will revoking all wills theretofore made, and giving to his wife all his real and personal estate, “confiding in her ability entirely and faultless integrity that should it be the will of God to withdraw me suddenly from earthly life that she make as early as practicable contemplated bequests which she is aware of to my sons John A. Harper, Orlando M. Harper and Charles S. Harper.” In April, 1891, the testator died, leaving an estate of the value of about $1,000,000. Shortly thereafter his wife, Lydia, made her will, in which, after making a provision for her grandson, she bequeathed all the rest and residue of her estate, real and personal, to her sons, John, Orlando, and Charles, share and share alike. In February, 1902, the three sons made an agreement in respect to the distribution of the mother's estate upon her death. During her life, and with her approval, they distributed among themselves a considerable portion of her property. Mrs. Harper died in January, 1904, and subsequently her will was duly proved and admitted to probate in the probate court having jurisdiction thereof.

If a precatory trust was created by the will of the father, it was one which devolved upon the mother the duty of making by will certain contemplated bequests. There is no satisfactory evidence what bequests were contemplated, except those which were mentioned in the previous will and codicil of the father. That will indicates that he had expressed his wishes to her, and wished her to carry them out as far as practicable, being guided by the advice of her sons and the equitable laws of the state, and that he meant to leave that which remained to be done to her sense of justice and discretion. The codicil indicates that he did not wish the bequests to his sons to be such that they would lose the benefit of them in case they became financially irresponsible. So far, then, as regards all the evidence in the case, except the will of the mother herself and the subsequent arrangements made between the sons, it establishes merely that when the last will was made the father contemplated that the sons should have certain definite bequests, and such other provisions out of his estate as their mother at her discretion should see fit to make by her will. The request in the earlier will that she should be guided by the advice of her sons and the laws of Pennsylvania was omitted in the last will. She was at liberty, therefore, giving the precatory clause of the will due force, to make such disposition of all the estate coming to her by his will as she thought bect and just, except as to the definite bequests in the earlier will and codicil. The fact that after the father's death she made by her own will more liberal provisions for the sons is not very important. She knew that she haj the widest discretion, and if she advised with the sons, as the father had requested her to do in the earlier will, it was not strange that she should have concluded to devise the bulk of the estate equally between them. The

The agreement between the sons themselves is still less important; they all wanted such a division of the estate as the one they agreed upon. The whole evidence, therefore, leads us to the conclusion that there was no precatory trust by which it became the mother's legal duty to make any disposition of the estate in favor of the sons, other than to recognize and to effectuate the bequests mentioned in the first will and codicil

. The petition in bankruptcy was filed in August, 1902. The bankrupt had previously, and during the years 1891 to 1898, inclusive, received from his father's estate in the hands of his mother money and property far in excess of any interest he had in it under the precatory trust. There was consequently no existing interest to which the title of the trustee could attach.


(Circuit Court of Appeals, Second Circuit. June 10, 1907.)

No. 286.



One who was notified that shares of stock in a national bank had been transferred into his name, although he had in fact no interest therein, and who indorsed the certificates in blank, but took no steps to have the stock transferred to the name of the true owner, cannot avoid liability for an assessment thereon made by the comptroller to meet the debts of the bank after its insolvency.

[Ed. Note.For cases in point, see Cent. Dig. vol. 6, Banks and Banking, $ 916.

Who liable as shareholders in national banks, see notes to Beal v. Essex Savings Bank, 15 C. C. A. 130; Earle v. Carson, 46 C. C. A. 503.] In Error to the Circuit Court of the United States for the Northern District of New York.

D. R. Cobb, for plaintiff in error.
Fowler, Crouch & Vann, for defendant in error.
Before LACOMBE, TOWNSEND, and COXE, Circuit Judges.

COXE, Circuit Judge. The action was brought by the receiver of the American Exchange National Bank of Syracuse to recover an assessment on 40 shares of stock standing in the name of the defendant on the books of the bank. The defense is that the stock was issued, and his name as owner entered upon the books, without his knowledge or consent.

It is apparent that the record does not present the entire transaction, but the salient features, so far as they appear, are as follows:

The stock register of the bank contains entries showing that on December 11, 1903, two old certificates for 20 shares each in the name of Herman Bartels were surrendered and two new certificates for the same number of shares were issued in the name of Otis W. Kenyon, the defendant. This business was done by Carl H. Reynolds, a broker, who took the Bartels certificates to the bank, received the new certificates and receipted for them on the stubs of the scrip book. With the new certificates he went to the office of the defendant where the following interview took place:

"I told Mr. Kenyon that this was the stock of Jim Ratchford, and that Jim wanted the stock put in his [Kenyon's] name, and I told him 'here are the certificates made out in your name,' and asked him to put his name on the back of them, and assign them in blank, which he did. I took the certificates over to the office of Mr. Ratchford and delivered them to him. Never heard of them since."

The defendant testified that he first knew that his name appeared on the books of the bank some time after the failure of the bank, which occurred in February, 1904; that he never purchased any of its stock or authorized any other person to purchase for him. Regarding the interview with Reynolds he gives the following account:

“He came to my office and I was very busy, and be called me out and said, 'You are a stockholder of a bank.' He said, 'I have got the certificates here,' but I don't know whether there was one or two, “in your name, and I wish you would assign them in blank.' I didn't even look at them; turned them on my desk bottom side up; put my name on them and he went out. I never saw them after that."

The answer contains an averment as follows:

“In the latter part of the year 1903, or early in the year 1901, one Carl H. Reynolds came to defendant's office and informed him that he had just purchased some stock in the American National Exchange Bank of Syracuse, and had taken it in his [defendant's name), and asked defendant, since he had no interest in the same, to formally assign it, which defendant then and there did.”

We are of the opinion that the following facts are established:

First. The defendant's name appeared on the books of the bank as a stockholder, two certificates for 20 shares' each having been issued in his name.

Second. The defendant knew that the certificates were taken in his name and he knew, or should have known, that his name appeared as a stockholder on the books of the bank.

Third. In December, 1903, the defendant duly assigned the certificates in blank and has not seen them since.

Fourth. The defendant made no effort to have his name removed from the books of the bank as a stockholder or to have the name of the legal owner of the certificates substituted.

Fifth. On August 9, 1904, the Comptroller of the Currency made an assessment of $67 per share on the stockholders of the bank pursuant to the provisions of the National Bank Act.

Upon the undisputed testimony it was the duty of the court to direct a verdict, it being manifest that there was no question of fact for the jury to determine.

It cannot be denied that the rule invoked by the plaintiff, and followed by the Circuit Court, is a severe and drastic one imposing upon the

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