checks against the bankrupt's deposit account is a payment and a
preference and a set-off cannot be allowed. Mechanics' National
Bank v. Ernst, 60.
9. Preferences; delivery of securities after knowledge of impending insol-
A general promise to give security on demand puts the creditor in no
better position than an agreement to pay money and does not
justify a delivery of securities after knowledge of impending bank-
ruptcy. It is an illegal preference. Ib.
10. Preferences; delivery of securities constituting.
National City Bank v. Hotchkiss, ante, p. 50, followed to effect that
the delivery by the bankrupt of securities to a bank to secure a
clearance loan constituted an illegal preference. Ib.
11. Preferences; delivery by bank of securities to customer.
An understanding that the proceeds of a loan made by a bank to a cus-
tomer and placed to the credit of his general account are to be used
to take up certain securities does not, in the absence of any special
agreement to that effect, create a lien upon those securities, and the
delivery of such securities to the bank with notice of the customer's
impending insolvency is an illegal preference under the Bankruptcy
Act. National City Bank v. Hotchkiss, 50.
12. Preferences; liability of holder of securities constituting preference in
suit to recover back.
Under an agreement, made in a suit by a receiver against a bank to
recover securities in specie as an illegal preference, that the bank
should hold them pending the decision of the suit with a power to
sell in its discretion which had not been exercised, held that the
bank was only liable for the securities and not for their value at the
time the agreement was made. Ib.
13. Preferences; knowledge of preferred creditor.
This court approves the findings of the court below that the bank knew
of the impending bankruptcy when it demanded and accepted se-
curity for an existing loan. Mechanics' National Bank v. Ernst, 60.
14. Preferences; knowledge of preferred creditor.
An unusual proceeding in the banking business, such as an officer
leaving the bank and going to the customer's office and demanding
additional security for a loan made earlier the same day, indicates
knowledge of the impending bankruptcy of such customer. Ib.
15. Preferences; knowledge; sufficiency of showing of.
A notice to a bank demanding securities for a loan made to the bank-
rupt that bankruptcy was impending and that it was receiving a
preference is sufficient to show that the bank had cause to believe
that it was obtaining a preference. National City Bank v. Hotch-
kiss, 50.
16. Suits against assignee; limitation provided by § 5057, Rev. Stat.;
application of.
Dushane v. Beall, 161 U. S. 513, followed, to effect that the two year
limitation provided by § 5057, Rev. Stat., applies only to suits
growing out of disputes in respect of property and of rights of prop-
erty of the bankrupt which came to the hands of the assignee to
which adverse claims existed while in the hands of the bankrupt
and before assignment. (Hammond v. Whittredge, 204 U. S. 538.)
Yazoo & M. V. R. R. Co. v. Brewer, 245.
17. Limitation on right of trustee to attack sale made by bankrupt.
After the estate has been closed and the two year period prescribed by
§ 11d of the Bankruptcy Act has run, the proceeding cannot be
reopened on ex parte statements to enable the trustee to attack on
the ground of fraud a sale made by the bankrupt, where, as in this
case, the trustee had the opportunity of commencing an action for
that purpose before the expiration of the period. Kinder v.
Scharff, 517.
18. Limitation prescribed by § 11d of act; power of court to remove bar.
The bankruptcy court cannot under § 2 (8) remove the bar of § 11d
at its own will simply because the trustee may have changed his
mind and wishes to institute a suit which he might have instituted
prior to the operation of § 11d. Ib.
19. Vendor's right of recovery of goods consigned for sale on commission.
A contract under which goods are delivered by one party to another
to be sold by the latter and proceeds paid to the former less an
agreed discount, the unsold goods to be returned to the consignor,
is really a contract of bailment only, and the consignor can, in the
absence of fraud, take them back in case of the consignee's bank-
ruptcy. Ludvigh v. American Woolen Co., 522.
See EVIDENCE, 3;
PRACTICE AND PROCEDURE, 3.
1. Intent in transactions between bank and customer; attitude of courts.
Courts may go far in giving financial transactions between banks and
customers any form which will carry out the mutually understood
intent, Sexton v. Kessler, 225 U. S. 90; but if the intent is doubtful
or inconsistent with the legal effect of dominant facts it will fail.
National City Bank v. Hotchkiss, 50.
Although a loan may be made for a specified purpose, if the lender
places it in the stream of the borrower's general property there is
no right of subrogation. Ib.
3. Payment of taxes on deposits; effect of provision of state statute as duress.
A provision in a statute permitting a bank to stipulate with the State
to pay the taxes on deposits and thereby relieve its depositors from
making returns does not place the bank under duress. Clement
National Bank v. Vermont, 120.
See BANKRUPTCY, 8-15;
CONSTITUTIONAL LAW, 7;
NATIONAL BANKS.
BATTERIES.
See EMINENT DOMAIN.
BILLS AND NOTES.
1. Consideration; pleading; burden of proof.
While generally the payee of a note need not allege consideration in
declaring upon it, if there is conflicting evidence he has the bur-
den of proof. Tinker v. Midland Valley Co., 681.
2. Consideration; effect of excess of amount of note over what permitted by
statute; quare as to.
Quare, whether the fact that a note is very largely in excess of the
amount permitted to be given by statute does not constitute a
prima facie case against the holder even if the burden were not
upon him. Ib.
See JURISDICTION, C 1, 3.
1. Government contractor's; right of recovery under.
A bond given pursuant to the act of August 13, 1894, c. 280, 28 Stat.
278, for a contract for building a stone breakwater, under the terms
of this contract, covers claims for labor or work at the quarry
and for hauling and delivering the stone. United States Fidelity
Co. v. Bartlett, 237.
2. Government contractor's; assigned claims; right of action on.
Under the circumstances of this case held that the claims of laborers
for wages had been properly assigned to the claimant and clothed
him with legal right to maintain an action upon the bond given
under the act of August 13, 1894. Ib.
3. Government contractor's; against claim; fraud; sufficiency of showing.
A claim against the surety on bond of a government contractor will
not be rejected as fraudulently excessive where it is shown that
claimant's books have been destroyed but he offers to allow credits
properly shown on the contractor's books and the records do not
disclose an attempt to recover more than the amount actually due.
Ib.
4. Government contractor's; suit against surety; laches.
A claimant will not be charged with laches when the record does not
disclose any delay which affected the relations of the parties or
such that should relieve a surety from liability on the contractor's
bond. Ib.
5. Discharge of surety, extension of time of performance of contract.
In this case, as the bond in terms contemplated an extension of time
and the contract provided for modifications, the surety was not dis-
charged by waiver of time limit or for modifications without its
express consent. Graham v. United States, 474.
6. Recovery in action on.
An instruction that the Government was entitled to recover, in case of
breach found, an amount, not exceeding the penalty of the bond,
equal to the difference between the reasonable and necessary cost
to it for transporting, cutting and delivering the granite mentioned
in the case and the amount specified in the contract, held to have
referred simply to the granite actually in controversy; and there
being evidence in the case to warrant the finding, and as the meas-
ure followed the contract, a verdict for the amount was correct.
Ib.
BURDEN OF PROOF.
See BILLS AND NOTES, 1, 2;
Bridgeport Savings Bank v. Feitner, 191 N. Y. 88, approved in Amoskeag
Savings Bank v. Purdy, 373.
Coyle v. Oklahoma, 221 U. S. 559, distinguished in United States v.
Sandoval, 28.
Gorman v. Littlefield, 229 U. S. 19, distinguished in National City Bank
v. Hotchkiss, 50.
International Text Book Co. v. Pigg, 217 U. S. 19, distinguished in
United States Fidelity Co. v. Kentucky, 394; New York Life Ins.
Co. v. Deer Lodge County, 495.
Lottery Cases, 188 U. S. 321, distinguished in New York Life Ins. Co. v.
Deer Lodge County, 495.
People v. Weaver, 100 U. S. 539, distinguished in Amoskeag Savings Bank
v. Purdy, 373.
Southern Railway Co. v. Green, 216 U. S. 400, distinguished in Baltic
Mining Co. v. Massachusetts, 68.
United States v. Joseph, 94 U. S. 614, distinguished in United States v.
Sandoval, 28.
United States v. McMullen, 222 U. S. 460, distinguished in Graham v.
United States, 474.
United States ex rel. Taylor v. Taft, 203 U. S. 461, distinguished in
United States v. Antikamnia Co., 654.
Western Union Tel. Co. v. Kansas, 216 U. S. 1, distinguished in Baltic
Mining Co. v. Massachusetts, 68.
Louisville v. Cumberland Telephone Co., 225 U. S. 430, explained in In
re Louisville, 639.
Adams v. Russell, 229 U. S. 358, followed in DeBearn v. DeBearn, 741.
Aetna Life Ins. Co. v. Moore, 231 U. S. 543, followed in Prudential Ins.
Co. v. Moore, 560.
Allen v. Southern Pacific R. R. Co., 173 U. S. 479, followed in Roney v.
Van Ness, 737.
Anglo-Californian Bank v. United States, 175 U. S. 37, followed in
Pacific Creosoting Co. v. United States, 737.
Aspen Mining Co. v. Billings, 150 U. S. 31, followed in Roney v. Van
Ness, 737.
Bayard v. Lombard, 9 How. 530, followed in Vicksburg v. Vicksburg
Water Works Co., 740.
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