notes.

Hogencamp further says that at the time of procuring the loan from the bank upon the Shaw note he gave to the bank as collateral thereto the 100 shares of stock of the Second National Bank, which he says he had sold to Denton on the 23d of April, 1900, and which he says Denton left with him as collateral for the payment of the purchase price to him. This alleged transfer of collateral was entirely a mental operation, there not being any physical thing done with respect thereto, the stock remaining as before in the possession of Hogencamp. He also says that the mortgage on Denton's Lakewood property and the Hanford mortgage, which was owned by Denton, were also to be held by him as collateral to the Shaw note. It will be recalled that the mortgage on the Lakewood property was not yet in existence, and that the Hanford mortgage, which ran to Denton, had not yet been assigned to Hogencamp.

On the 1st of September, 1900, Denton made to Hogencamp the mortgage on the Lakewood property for $12,000. (This is the mortgage in suit.) And also he made a written assignment upon that date to Hogencamp of the Hanford mortgage. On the 12th day of August, 1901, Hogencamp transferred on the books of the Second National Bank three certificates of stock to Henry M. Denton, 347-A for 40 shares, 348-A for 50 shares, and 349-A for 10 shares. Just before this time Denton was being very severely pressed by a New York lawyer named McKelvey, who represented the New York & Batavia Wood Working Company, a judgment creditor in New York of Denton's. Application was made to Hogencamp to advance to Denton the two thousand odd dollars which McKelvey then demanded as consideration for refraining from pressing Denton upon the balance of the judgment at that time. Hogencamp was not in a position to respond with cash at that time, but offered to loan Denton 50 shares of stock in the Second National Bank which Denton could use to raise money upon to satisfy McKelvey.

On the 15th day of August, 1901, Hogencamp gave to Denton and his New York lawyer O'Callaghan certificate No. 348-A for 50 shares. It will be observed that this is one of the certificates which were issued to Denton under the transfer from Hogencamp on the 12th of August, 1901. Denton took the certificate for 50 shares and his note for $6,000 to McKelvey, who had the same discounted at the Chase National Bank, and retained the amount then agreed to be paid to him, namely, two thousand and odd dollars, gave to Denton the balance, some three thou

camp deposited in an account in the Second National Bank which he carried under the title of William Hogencamp, trustee. At the same time Hogencamp demanded and

upon a property which Denton owned in New York, which mortgage the testimony shows was by Hogencamp subsequently assigned to some third person, and presumably he received a consideration equivalent to the amount of the mortgage. This mortgage the testimony shows was given to him to secure him for having loaned to Denton the 50 shares of stock of the Second National Bank.

On the 20th day of August, 1901, Hogencamp wrote a letter upon the letter head of the Second National Bank, addressed to himself as president, requesting him to deliver to Henry M. Denton the 100 shares of stock of the Second National Bank, and cause the same to be signed by Robert L. Shaw. On the 22d day of August, 1901, Hogencamp caused Denton's mortgage on the Lakewood property (the mortgage in suit) and the assignment of the Hanford mortgage to him to be recorded.

On the 23d day of August, 1901, Hogencamp gave to Denton the two certificates heretofore adverted to, one for 40 and one for 10 shares, of stock of the Second National Bank, which Denton then took to the. Commercial Trust Company in Jersey City and pledged as collateral to Denton's note for $6,000, which $6,000 Denton brought back to Hogencamp, who deposited it in the account heretofore referred to, entitled, "William Hogencamp, trustee."

On the 16th day of November, 1901, Hogencamp wrote two letters, one of which he signed himself, and the other of which he caused Mr. Hasking, the cashier of the Second National Bank, to sign. Just before this time Denton's note in the Chase National Bank of New York, which he had given to McKelvey, and with which the 50 shares of stock which Hogencamp gave to Denton on the 15th day of August, 1901, were pledged as collateral, became due and was unpaid, and McKelvey had taken the note and collateral out of the bank. McKelvey was threatening to hold the stock to satisfy not only the $6,000 represented by the note with which it had been pledged as collateral, but also for a balance due upon the judgment against Denton which his client, the wood working company, held.

At the date before mentioned, November, 16, 1901, Hogencamp wrote the letters before mentioned, one of which was to Honeck, an officer of the wood working company, and in that letter Hogencamp informed him that he had transferred 50 shares to Denton on August 12, 1901, by certificate 348-A, and that before that time Denton was not a stockholder in the bank. In the other letter, which was addressed to McKelvey, the attorney for

It is practically undisputed that, beginning about 1901, all Denton's real estate speculations in New York were carried on jointly by Hogencamp and Denton; whether there was to be any joint participation in profits and losses does not appear, and does not have to be decided.

It does appear that Hogencamp personally participated in directing what should be done concerning these properties, to whom and for what price they should be sold, and that the purchase price coming to Denton after payment of incumbrances in each instance passed to Hogencamp, and in addition there passed to Hogencamp the money represented in numerous mortgages upon the properties which Denton was acquiring and was selling in the city of New York. In addition to this, loans were made from the bank to Hogencamp and to Denton, the proceeds of which were used in these New York operations; and, beginning some time, I think, in 1903, Denton took out of the proceeds of his New York speculations only $25 a week for living expenses, and all the balance went to Hogencamp, and Hogencamp seemed to have assumed the personal direction, if not responsibility, of finishing the uncompleted buildings then in process of erection upon Denton's property, and of selling the properties when completely constructed. Hogencamp contends, with respect to all of these transactions and to the entire course of dealings between him and Denton, that he passed through one of these three accounts, or through his own and Denton's account, all moneys which came to his hands in such a way that Denton got the benefit of them. He did not attempt to demonstrate this, and it only could be demonstrated after an accounting which would require a vast amount of time to take.

Denton is practically ignorant of the result of his dealings with Hogencamp and the bank, and is not shown to have any records, books, or the like which would enable him to determine how he stood. Hogencamp kept no books of any use, and it is only by the most laborious tracing of items through the bank's books that any result can be reached concerning them.

If, in any aspect of the case, the right of the complainants to foreclose this mortgage depends upon a finding that Denton is indebted to Hogencamp, there will have to be a reference to a master to take proofs as to the accounting and to report a conclusion as to the result of such proofs. To avoid any such necessity as that last suggested, the complainants put forward the first of their two theories. That theory may be fairly set forth as follows: Denton, on the 23d of April, 1900, gave to Hogencamp his notes for $24,000. We may leave aside, in discussing this present theory, whether the transaction with respect to the stock upon that occasion was a

ceeding, because, on the 23d of July, 1900, it is admitted that Shaw gave his note to Hogencamp for $24,000, as an accommodation to take the place of the two Denton notes, aggregating $24,000 previously given. The bank having loaned $24,000 on the Shaw note, dated July 23, 1900, and the Denton mortgage having been agreed to be given as collateral for this indebtedness (although not actually executed until September 1, 1900), was, when executed and delivered, held as collateral for this loan by the bank on the Shaw note. The bank still holds the Shaw note and the collateral, to wit, the mortgage in suit; and, since the Shaw note has not been paid, the bank has the right to foreclose the Denton mortgage which was held as collateral to it. I think this is a fair statement of the position taken by the counsel for the complainants with respect to this first theory.

So far as any one can express himself with assurance in a case that is so involved as this one, I am prepared, in considering this theory, to accede to the conclusion if the premises upon which it is rested are correct in fact. I do not find, however, that the precedent factors exist to justify the conclusion. It must be recalled in the first instance that there is no documentary or other proof of any description, excepting Hogencamp's testimony, that the Denton mortgage of $12,000, dated September 1, 1900, was to be held by the bank, or by any one. At the time that the mortgage was given by Denton, on the 1st of' September, 1900, Shaw's note of $24,000 was in the bank, having been loaned upon by the bank on the 23d day of July, 1900, the day of its date. At the same time that Denton gave the mortgage upon his Lakewood property he assigned to Hogencamp the $12,000 mortgage which had been made by Hanford to Denton upon the undivided interest of Hanford in the Rink Stable property in Jersey City. There is nothing on the books of the bank nor elsewhere to show that these titles thus vested in Hogencamp (one to the mortgage on Denton's Lakewood property, and one to the mortgage which Denton had of Hanford's) were as collateral to any transactions whatever with the bank, or, in fact, with Hogencamp. The books of the bank with respect to other transactions do show mortgages that were held by the bank and upon which money had been loaned-the money, presumably, of course, was loaned upon notes to which the mortgages were security.

Passing this question, however, and assuming in favor of the complainants that their contention is correct that these securities when created were intended to be, and, after being created actually were, held by the bank as collateral to the Shaw notes, we next come to the transaction of July 24, 1902, when the Shaw note of $24,000 was taken out of the bank.

There is no testimony of any value, if there is any at all, which shows that at that time

there was any agreement between the parties and the bank that the mortgages of Hanford to Denton assigned to Hogencamp, and of Denton directly to Hogencamp (the latter on the Lakewood property) were to be collateral to the two notes which Shaw then gave, one of $12,000 and one of $13,000. It may very well be argued on behalf of Denton that, assuming the previous point which has just been dealt with to be decided against him, and that the mortgage on his Lakewood property was given by him to Hogencamp in order that he might turn it over to the bank as security for the $24,000 Shaw note of July 23, 1900, it does not at all follow that, when that $24,000 note was taken up, as it was, and new notes were secured from Shaw, the collateral which was obtained for the loan of July 23, 1900, should still be held for the new loans.

Passing this, in turn, and deciding, for the purpose of the further discussion of the point, that the result of the transaction of July 24, 1902, when the bank loaned $25,000 upon Shaw's notes of $12,000 and $13,000, respectively, was to vest them still with the Denton mortgage as security for the payment of those loans, there is no evidence that any agreement of the parties split up the collateral with respect to any part of the indebtedness that day arising; that is to say, on that day, July 24, 1902, two notes of Shaw were loaned upon by the bank. The item appears in the bank's books as one transaction; that is, on that day, in the demand loan account, the only place where the item appears, Shaw is charged with $25,000. This, the proofs show, was upon two notes of Shaw's, one dated June 30, 1902, and the other dated July 23, or 24, 1902; that the first note was for $12,000 and the latter for $13,000. There is not the slightest evidence to show that the parties then, or at any other time, agreed that the Denton mortgage of $12,000 upon the Lakewood property was to be held as collateral for any part of this indebtedness. If the complainants obtain the benefit of all their debatable points so far considered, the utmost that they could claim would be that Denton's $12,000 mortgage was collateral for the entire indebtedness and not for any specific part of it.

cided in favor of the complainants that the circumstance just adverted to does not prevent them from asserting their right to foreclose the Denton mortgage in suit if they can establish the validity and nonpayment of the Shaw note of $12,000, we next come to the most important and determinative feature:

Here, it should be recalled and firmly fixed in the memory, that it is admitted by all concerned that Shaw was an accommodation maker, and that his original $24,000 note, and his two subsequent notes, of $12,000 and $13,000, respectively (leaving out of account $1,000 represented by the last two notes, with which we are not at all concerned in this case), were executed by him solely to accommodate Denton and Hogencamp, and that as to each of the last two-named persons no obligation arose by reason of the execution by Shaw of the notes in question; and no liability to those two persons arose as against Shaw by reason of the notes signed by Shaw. It is only when these notes, or any of them, passed into the hands of bona fide holders for value that Shaw can be held liable. Of course, if Shaw cannot be held liable upon his notes, or, in the particular case before this court, on his $12,000 note to which the Denton mortgage is asserted to be collateral, then the collateral may not be utilized by the holder. That is to say, the only right which the complainants here can assert as against Denton must rest upon their right to assert a valid claim against Shaw upon his $12,000 note; they cannot foreclose the $12,000 mortgage upon the Denton Lakewood property unless they prove that the note of Shaw of $12,000, to which this mortgage was collateral, was valid and enforceable against Shaw.

In my view the proofs do not establish this last-mentioned contention. In my view the proofs show that on March 24, 1906, Hogencamp paid off to the Second National Bank the Shaw notes and became vested with title to such notes and to the collateral which had been held by the bank for their payment. It will be recalled that in the previous portion of this opinion I have briefly referred to the testimony of Hogencamp concerning the transaction with Harding and the bank at the time that he got the loan of $35,000 from the bank on March 24, 1906, which was credited to the suspended debt account to take out of it the Shaw notes and the remaining $10,000 of the Pratt & Weliman note. Hogencamp's own oral testimony is to the effect that I have just referred to, and the entries in the books of the bank and the other documentary proofs bear him out.