was in goon oredit, and with no intention of perpetrating frand, yet, at the same time, he was the only pel'son, in the eye of the law, at least, to whom the oreditors of the bank will be presumed to have looked for the purpose of giving oredit to the bank, and therefore it is his misfortune if he delayed ohange of title until insolvency intervened. It is further urged, in support of some of the exceptions taken, that the proof in the case shows that a large number of the debts of the bank which have been reported by the master have been actually paid out of the assets of the hank, and therefore no longer form a claim against the bank, or against the shareholders. The facts, as I gather them from the proof in the record, are briefly these: The bank, by a resolution of its stockholders, went into liquidation on the twenty-fifth of September, 1873. Ira Holmes, president, was left in charge of its assets, and immediately proceeded to settle with the creditors. The bank had some money, and a large amount of commercial paper, and owed a large amonnt to its depositors and other creditors. Mr. Holmes made settlements with a great many of these creditors by paying them some money, and turning out to them the commercial paper of the bank. It is now insisted that the testimony of Mr. Holmes shows that this paper was taken in payment of the indebtedness of the bank. It appears, however, that in all cases he either indorsed the commercial paper in the name of the bank, or guarantied it in the name of the bank; and in many cases suits have against tho bank upon the guaranties and indorsements been thus made, and judgments rendered which have formed the basis of the proof upon which the master has found the amount of indebtedness of such creditors. And it is further urged that Mr. Holmes, from the time the bank went into liquidation, had no authority to bind the bank by an indorsement or guaranty; and that, therefore, these judgments, rendered upon such indorsements and guaranties, are void and inoperative as against shareholders. I am satisfied, however, from the proof, that the creditors who took the commercial paper of ·the bank did not take it in payment of the indebtedness due them from the bank, but took it as collateral to such indebtedness; and that only so far as such paper has proved collectible, and been made available by such creditors, should it be deemed a payment of the bank's indebtedness. I do not think the proof justifies the assumption that the creditors of the bank took this paper as absolute payment of their demands, but that they took it to be collected and applied upon their debts. But if I had any doubt as to the terms on which these creditors took this paper, I should still deem the bank liable. because Ihava no doubt that Mr. Holmes, the chief executive officer of the bank, had the power to bind the bank and the shareholders by indorsements or guaranties, in the due course of business, as well after the vote to go into liquidation as before. Bank v. Insurance Co., 104 U; S.54;
IRONS 11. MANUFACTURERS' NAT. BANK.
People's Bank v. National Bank, 101 U. S. 181. Turning over this commercial paper llpon the debts of the bank was not the contracting of a new debt, but an attempt to satil:lfy an old one; and the indorsements or guaranties of the paper only operated to keep the obligation of the bank alive, and give the holder recourse over against the bank in case the paper turned over was not collectible. The report of the master shows that, for the, purpose of ascertaining the amount due each creditor, he took the jndgments which had been rendered in favor of very many creditors against the bank on these guaranties and indorsements as the amount due such creditors, and has computed interest upon 8uch judgments up to the time fixed in his report., for the purpose of determining the amount now due; while in the case of creditors who have not brought suit, the amount due them is ascertained by simply taking their credit balance from the books of the bank, and computing interest from the day the bank suspended, at the'rate of 6 per cent. per annum. In these suits upon indorsements and guaranties judgment was rendered against the bank for the amount due on the indorsed or guarantied paper, with interest theron, and often at the rate of 10 per cent. from the time such paper was given, or from the time it was turned out to the credo itors, whereby such creditors have obtained a compounding of interest upon their claims; thus giving to these judgment creditors an unequal claim as against the creditors who have not put their claims into judgment. I am, however, of opinion that the master, for the purpose of ascertaining the amount due each creditor, shQuld have taken the amount shown to be due such creditor by the books, and, after deducting from that amount any payments which were made to the creditor by the bank,or collected by him from paper which he accepted, he should be allowed credit for the balance of such indebtedness from the date of the suspension of the bank to the time the account was taken, and thereby all creditors would be placed upon an equal footing. The case will therefore be again committed to the master, with directions to ascertain and report the total amount of the indebtedness of the bank at the time of its suspension, and the amount which has been paid on such indebtedness since that time; and to compute interest on the balance of such indebtedness remaining unpaid up to the first day of the present month of May; and reo port the aggregate amount of the same, with a finding as to the percentage which must be assessed against the shareholders for the purpose of paying such indebtedness, together with the costs of the receivership. The exceptions to the master's report are overruled, except in so far as they are impliedly sustained by this re-reference to the master.
N. D. fllinoia. May 24, 1886.)
AGIST1>rENT-CONTRACT TO FEED CATTLE CONSTRUED.
Contract, which provides that contractor shall take certain cattle to his farm; that he shall feed and fatten them there until certain date; that he shall be liable for all losses of such cattle from death, disease, escape, or theft at a fixed price per head; that he waives any lien on said cattle as an agister, or in any otber character; that contractee shall sell said cattle; and that contractor shall receive, in full for his services, price realized at sa'e in excess of fixed sum per head and expenses of sale,-construed not to give contractor title to aaid cattle nor right to sell them.
A creditor who takes a conveyance of personal property merely in payment of a pre-existing debt is not a bona fide purchaser, withfn the meaning of the Missouri statute for the protection of bona fide from apparent owners in possession. Such statute (Rev. Code Mo. § 2507) provides that. where purchaser of personal property has possession, a condition in the contract of sale for the retention of title in the seller until the completion of the payment of the purchase money is void against subsequent bona fide purchasers and creditors, unless such sale is evidenced by written contract executed and recorded as in the case of mortgages of personal property.
SALE-BONA FIDE PURCHASER FROM APPARENT OWNER, WIlEN PROTECTED.
Laws of Missouri in relation to recording chattel mortgages, or conditional titles tp personal property, protect only persons dealing in good faith with apparent owner in possession. They do not protect one uniting with apparent owner in upon true owner.
UNITING IN FRAUD WITH ApPARENT OWNER FORFEITS PROTECTION.
McCoy, Pope cf McCoy, for plaintiff. R. A. Childs, for defendants.
BLODGETT, J. This suit was tried before the court without the intervention of a jury. It is an action of replevin, involving the ownership and right to the possession of 79 head of beef cattle. The material facts, as they appear from the proof, are that on or about the eighth of November, 1884, the plaintiff was the owner and in possession of 150 head of beef cattle, designated as Colorado steers, and on that day entered into a contract with one J. W.Moad by which Moad was to take the cattle to his farm in Caldwell and Ray counties, Missouri, and there to properly feed, fatten, and care for them folthe purpose of their being profitably marketed by plaintiff; that Moad should be liable for all losses of such cattle from death, disease, escape, or theft at an agreed value of $44.86 per head; that the time of feeding should extend to the first of June, 181:>5; that the cattle were to be sold or shipped for sale by plaintiff; and that Moad was to receive, as full compensation for his care and feeding of the cattle, all moneys realized by plaintiff on the sale of the cattle over the sum of $44.86 per head, after deducting all costs .and expenses of shipment and sale, and Moad expressly waived all lien on the cattle, either as an agister or of any other charaoter. In removing the cattle
Edited by Russell H. Curtis, Esq., of the Chicago bar.