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ASSIGNMENT - Continued.

to payee as security for loan.
Note was not paid and plaintiff
brought suit and claimed forfeiture
of policy. The charter of company
provided against policy being liable
for debt of insured where "wife
and children" were beneficiaries.
Held no forfeiture judgment for
defendant. 85a, No. 877, p. III.
F executed and delivered his promis-
sory notes together with a chattel
mortgage on some cattle as col-
lateral, to a commission company.
The company transferred the notes
to a Chicago bank. The mortgage
was duly filed in the State of
Wyoming, where mortgagor resided.
The latter had the right to sell
cattle and apply proceeds on the
mortgage. F sold part of the cattle
mortgaged to B, who made pay-
ments to commission company, and
took its releases. The company
had indorsed the notes on their
transfer to the bank. In an action
by the bank against B for conver-
sion, held that such indorsement
transferred the mortgage as well
as the notes to plaintiff and the
bank alone could execute an effect-
ive release. 224a, No. 923, p. 329.

ATTORNEY AND CLIENT:
Decedent executed her promissory
note to her nephew for $1,000 and
left the same with her attorney to
be delivered to payee on her death,
when the note by its terms became
due. The note was intended as a
payment for services, although the
nephew made no charge for such.
He had rendered services she ap-
preciated by speaking of in her life-
time. Held, good consideration for
the note. 313a, No. 917, p. 301.

AUTHORITY TO CONTRACT:
Where a corporation guarantees the
indebtedness of a third party for
materials to be used in the manu-
facture of goods for such corpora-
tion, it is estopped from pleading
ultra vires or want of authority to
make such contract of guaranty.
172a.

BAD CHECK:

In an action by the makers to have
their promissory note canceled, it
was shown that the bank, holding
the same for collection, delivered
it to the indorser on the day of
maturity in exchange for the in-
dorser's check upon another bank,

BAD CHECK- Continued

and after inquiring, by telephone,
of the drawee if the check would
be paid, and by a mistake being
informed that it would, when an-
other check was intended, held,
that this transaction did not affect
the payment of the note.
147a, No.
892, p. 185.

BANKRUPT:

Where a contract is made between
parties accompanied by a delivery
of the goods mentioned containing
a provision that the title shall not
pass until the purchase price has
been paid, the rule in Pennsylvania
is, that as against creditors, the
transaction is a conditional sale,
where the goods were delivered to
a bankrupt. 202a.

In an action to replevin personal prop-
erty included in a bill of sale and
not delivered at the time against the
trustee of an involuntary bankrupt,
judgment for defendant was af-
firmed on appeal. 136a.

BANKRUPTCY:

Where there was evidence showing
the debtor's insolvency and a
knowledge of the same by the
bank to whom he had made as-
signments of his outstanding ac-
counts, the trustee in bankruptcy
could recover so much of the
from
bank's collection
transfer
made within four months, as had
been applied to the payment of the
indebtedness due it at the time the
arrangement was made with the
bankrupt for the assignment of the
accounts, but could not recover so
much of the fund as had been ap-
plied by the bank to the payment
of the bankrupt's liabilities to third
persons. No. 905, p. 244..
In bankruptcy and in other insolvency
cases before the federal courts the
debts of either party are properly
set off one against the other,
whether such debts are matured or
not. In a majority of the State
courts only debts that are matured
are subject to set-off one against
the other. No. 868, p. 62.

S. Manufacturing Corporation having
wrongfully converted to its use
certain raw material a short time
before its failure, held that the
shipper or his assigns are entitled
to recover the full value of said
goods from the assets of the bank-
rupt, in preference to the claims of
general creditors. 245a.

BANKS:

In an action by the makers to have
their promissory note canceled, it
was shown that the bank, holding
the same for collection, delivered
it to the indorser on the day of
maturity in exchange for the in-
dorser's check upon another bank,
and after inquiring, by telephone,
of the drawee if the check would
be paid, and by a mistake being
informed that it would, when an-
other check was intended. Held,
that this transaction did not affect
the payment of the note. 147a,
No. 892, p. 185.

BANKS AND BANKING:

C, the holder of a draft drawn by
the bank of T on a Kansas City
bank, brought suit against the re-
ceiver of the first-named bank, it
having failed, and the drawee bank
having refused payment for the
Held,
full amount of the draft.

that C could collect only his share
pro rata with all the creditors. 180a.
Where by the Civil Code, section 2223-
2224, of California, a bank becomes
the involuntary trustee for the sum
of $1,893.56, a deposit, the property
of decedent's estate, the administra-
tor of said estate cannot release the
bank from its relation and responsi-
bility as trustee. 230a, No. 926, p.
345.

A bank makes payments upon forged
indorsements of commercial paper
at its peril. Its relation to its de-
positor is that of debtor and cred-
itor and there is an implied contract
on its part to disburse the deposi-
tor's money only upon his order.
Delay in suing a bank for paying
a check on a forged indorsement
was no defense to the action where
the forgery was concealed from
plaintiff until the time of action was
commenced. 242a.

L deposited $100 in savings bank and
delivered to A his post-dated check
for the amount. Before the check
was due he notified bank not to pay
same. The bank did pay and then
refused L's demand for the sum.
In an action by L against the bank
for the amount of the deposit, held
that the defendant was liable. 241a.
The plaintiff bank brought an action
to recover on a note which defend-
ant's intestate had signed as surety.
In the meantime, after the note be-
came due and before the commence-
ment of the action, the cashier of
the bank had informed defendant
that her intestate was not surety

BANKS AND BANKING - Continued.
for the bank on such a note. Held,
that the surety's estate was not
liable. 212a, No. 916, p. 299.

BENEFICIARIES:

T. gave his promissory note to plain-
tiff, a life insurance corporation,
for a loan and assigned a paid-up
life policy, in which his wife and
children were named as beneficiar-
ies, to payee as security for loan.
Note was not paid and plaintiff
brought suit and claimed forfeiture
of policy. The charter of company
provided against policy being liable
for debt of insured where "wife
and children' were beneficiaries.
Held no forfeiture judgment for
defendant. 85a, No. 877, p. III.

BENEFIT CERTIFICATE:

Plaintiff, on receiving less than the
face amount of a benefit certificate
on the life of her husband, gave a
receipt for the full amount, at the
same time writing and signing a
statement on the back of the certifi-
cate that the sum was accepted un-
der protest. Held, that as a matter
of law such receipt did not consti-
tute an accord and satisfaction of
plaintiff's claim. 126a.

BILLS AND NOTES:

Parol evidence is admissible to prove
the real object of a mortgage and
that it was given for a purpose not
disclosed in the condition as recited
in the instrument. 96a, No. 883, p.
138.

Mere knowledge on the part of plain-
tiff; a contractor of the wrongful
repledging of bonds did not work
an estoppel in favor of one making
loans on the security of the bonds
as against the contractor he not
having ratified the wrong. 81a, No.
875, p. 96.

Plaintiff brought suit on certain notes
given for balance of usurious in-
terest on other notes. He claimed
- to be purchaser in good faith and
a holder in due course. The payee
who transferred the instruments to
plaintiff had knowledge of the
usury. Held, that under Negotiable
Instruments Law the notes were
tainted with usury and plaintiff
could not recover. 92a, No. 881, p.

129.

Amy H. Kellogg, a married woman,
and a resident of the State of New

Jersey, indorsed her husband's
promissory note, in blank, signing

BILLS AND NOTES - Continued.

the same at their house in New
Jersey. Amy Kellogg, the defend-
ant, claimed that she was not liable,
because the laws of New Jersey do
not allow a married woman to be-
come an accommodation indorser.
Held, that contract was to be de-
termined by the laws of New York
State, and that defendant was liable.
94a, No. 882, p. 134.

M signed the note of O after execu-
tion and delivery to the bank
which discounted the paper. The
note was not paid, and an action
brought by the bank on
same it
was held that as to M the note was
without consideration. 189a.
In an action by plaintiff against a
corporation to recover wages of
defendant's employees assigned as
security for payment of certain
notes, held, defendant could not
defend on the ground that the con-
tracts were usurious. 191a.
M executed and delivered his prom-
issory note for the benefit of the
payee and an indorser and he had
to pay it. Held, that the persons

for whose accommodation the note
Iwas made were liable to M for
the amount with interest. 163a,
No. 902, p. 226.

Defendant made certain false repre-

sentations as to the value of cer-
tain commercial paper by which
plaintiff was induced to assume the
liability of a third party on a prom-
issory note, and on account of
which he paid $706.70 when it be-
came due. Held, that the defend-
ant was liable in that amount to
plaintiff. 170a, No. 913, p. 283.
Where an administrator of the in-

dorser of a note had no defense on
the merits, and the only question
raised by him on the trial was
whether the claim in issue had
been presented and rejected, and
its collection barred by section
1822 of the Code of Civil Pro-
cedure, he was held to have un-
reasonably defended within sec-
tion 1836 of Code of Civil Pro-
cedure. 164a, No. 903, p. 228.
A purchaser of a promissory note
from a bona-fide holder is entitled
to stand in the place of the latter
in enforcing collection although he
himself has knowledge of equities
existing between the original par-
ties. But the payee of the note,
or one acting in collusion with
him, is not entitled on purchase of
same to be so placed.
150a, No.
893, p. 194.

BILLS AND NOTES - Continued.
A creditor entitled to resort to a
principal debtor and a surety for
the discharge of his claim owes
no duty to the latter of vigilance to
collect the debt of the principal.
The law imposes the duty of
vigilance in such circumstances on
the surety rather than on the cred-
itor. At all times after the ma-
turity of an indebtedness, for the
payment of which there is a prin-
cipal and sureties, any one of the
latter may pay off the same for
his protection, and enforce his
rights of subrogation and contri-
bution. No. 904, p. 232.

Under Negotiable Instruments Law,
Laws of N. Y. State 1897, c. 612,
§ 133, providing that a presentation
of a note for payment is properly
made at the place of payment
specified therein, a note payable at
a bank is properly presented for
payment at the bank, though the
bank is in the hands of a receiver.
193a.

A note payable to the order of the
maker on demand drew interest.
It was indorsed by a third person,
and it was not negotiated until
ten days after date. Held, that
presentation for payment within
ten months was sufficient to hold
the indorser. 193a.

J, the cashier of a national bank, was
duly authorized by plaintiff, "S,"
to loan her money. He made a
loan of $2,000 to T, taking the
latter's note, payable to the bank's
order. The bank unconditionally
indorsed the same and delivered it
to plaintiff. In an action by "A"
against the bank, as an indorser, to
recover balance due on the note,
held that defendant was not liable.
222a, No. 922, p. 326.

Where a check for collection is to be
forwarded by mail, the general rule
is that it must be mailed the next
day after delivery, by the payee or
his agent. However, neither the
payee nor his agent is required to
transmit such check on the next day
after its receipt, if the only mail for
that day departs at an hour so early
as to render it inconvenient for the
holder to avail himself of it. 218a,
No. 920, p. 312.

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Where "A" purchased a note from
"B," who executed a writing that
on account of the purchase he
would collect the note without ex-
pense to "A," held, that the
guaranty was one of collection, not
payment, and it was incumbent on
"A" to show due diligence against

BILLS AND NOTES- Continued.

the principal before he could hold
"B." No. 932, p. 369.
Where the right to contract involves
the right to bring an action for a
breach of contract when the law
creates a new right to contract, the
mere creation of such right also in-
cludes an appropriate remedy by
action for its notation. 248a.
A renewal promissory note indorsed
for accommodation of maker by
Mrs. G was, after such indorsement,
altered by changing the name of
one payee for another and the strik-
ing out of the word "jointly."
Held, that under the Negotiable In-
struments Law, she was not liable
on the note. 207a, No. 914, p. 289.
Decedent executed her promissory
note to her nephew for $1,000 and
left the same with her attorney to
be delivered to payee on her death,
when the note by its terms became
due. The note was intended as a
payment for services, although the
nephew made no charge for such.
He had rendered services she ap-
preciated by speaking of in her life-
time. Held good consideration for
the note. 213a, No. 917, p. 301.
The drawees of a negotiable draft
paid the amount thereof to a holder
in due course; the drawers claimed
to have made a shipment to the
drawees; the latter became insol-
vent, and it was discovered that no
shipment had been made. Held,
that drawees could not recover the
amount paid from a bona fide
holder. 215a, No. 918, p. 304.
K executed and delivered to D his
promissory note due six months
after date for $60 value received,
"interest at 8 per cent. per annum.'
Held, that the note bore interest
only from maturity. The note bore
indorsement of three payments,
March 5, 1892, $4.80; Oct. 12, 1892,
$4.80; Dec. 11, 1893, $4.80. Held, it
was error for the court to direct a
verdict for principal and interest on
the note from Dec. 11, 1893. 227a,
No. 924, p. 337.

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Where an agent, authorized to indorse

the checks of customers and deposit
them in a designated bank for col-
lection, indorsed them in his princi-
pal's name and deposited them with
a broker to his own account for
speculative purposes, the broker was
held liable to the principal for the
amount of the checks, because he
had notice of the wrongful act of
the agent. But a bank receiving the
checks from the broker for collec-

BILLS AND NOTES- Continued.

tion without notice was not liable
to the principal for conversion.
229a, No. 925, p. 340.

BILL OF LADING:

A receipt or bill of lading issued by
an express company is a contract
between the company and the ship-
per and the latter, in the absence of
fraud or concealment on the part of
the company, is bound by its terms.
In an action for damages for an
alleged injury to a painting, held
that a failure on the part of the
shipper to read the bill of lading did
not release her from its terms.
239a.

Whether a shipper was negligent in
failing to read a condition printed
on the back of a bill of lading limit-
ing the valuation of property, in
the case of loss, is not material on
an issue as to whether he was bound
thereby, which depends on whether
he assented to the condition. 262a.
Haas & Co. ordered from one Klyce
in another city a car load of corn
meal. Klyce shipped meal, taking
a bill of lading to his own order.
Indorsing the bill of lading, he at-
tached it to a sight draft for the
full amount of the purchase. He
obtained the money from the Citi-
zens' Bank. The bank forwarded
the draft and the bill of lading for
collection, and Haas & Co., without
opportunity to inspect the goods,
paid the draft. The goods were
defective and short in quantity.
Held, that the bank stood in the
shoes of Klyce as seller of the
goods, and was bound to make good
the implied warranty of quantity and
quality. There is a sharp conflict
on this point as to the liability of
the bank in the courts of several of
the States. 7a, No. 856, p. 4.

BILL OF SALE:

Where a contract is made between
parties, accompanied by a delivery
of the goods mentioned, contain-
ing a provision that the title shall
not pass until the purchase price
has been paid, the rule in Pennsyl-
vania is that, as against creditors,
the transaction is a conditional sale
where the goods were delivered to
a bankrupt. 202a.

In an action to replevin personal prop-
erty included in a bill of sale and
not delivered at the time against the
trustee of an involuntary bankrupt,
judgment for defendant was af-
firmed on appeal. 136a.

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BONA-FIDE HOLDER:

One W. held a certificate of deposit
payable to W. Trustee. Indorsing
it under that name he procured
the money on it and used the money
for his individual purposes. The
certificate came into the hands of a
bank which took it in good faith
and which forwarded it for col-
lection. Before it was paid by the
issuing bank the beneficiary of the
trust, and also W., notified the is-
suing bank not to pay it, that it
represented trust funds. Held, that
being payable to one as trustees
that the purchaser took it as non-
the
negotiable paper subject to
equity of the true owner.
104a, No.
885, p. 154.

An investment company, the payee
of a note with interest coupons at-
tached, indorsed it to a third party,
who retained the securities in her
possession. The payor of the note
paid the interest then due to the
company, and received later the
He at the
coupon interest note.
same time paid the company the prin-
cipal of the note which it retained,
the owner of the note receiving no
part of it. Held, that the owner
of the note and mortgagee could
enforce them. 74a, No. 870, p. 67.
Certain irregular indorser of a note
held, under the negotiable instru-
ments law, to be a strict indorser,
and under the provisions of the
same law the holder of the note
could enforce it according to its

BONA-FIDE HOLDER - Continued.

original tenor, although, without
the holder's knowledge or consent,
the maker has materially altered it
after it was indorsed. 47a.

Where the owner of a note for $2,600,
duly indorsed, deposited the same
for safe keeping with a third party,
and such third party wrongfully sold
the note for $2,000, and did not ac-
count to the owner for any part
thereof, held, that such purchaser
thereby obtained an interest in the
note to the extent of $2,000. 51a,
No. 863, p. 40.

Pays check from which payment has
been stopped. 55a.

Certain note secured by mortgage was
paid by the maker to the payee after
the payee had transferred it to the
third party, who at all times re-
tained possession of it. Held, that
the note and mortgage were to be
read together as one instrument;
that non-negotiable clauses in the
mortgage made the note non-nego-
tiable; that recording of the assign-
ment of the mortgage was, in this
instance, notice to the maker that
the payee was not the owner of
the note nor the proper person to
receive payment and discharge the
mortgage. 58a.

The signature to a promissory note
held procured by such fraud as to
render it worthless in hands of in-
nocent purchaser. 72a, No. 871,
р. 69.
A corporation sent its note to an
agent, requesting him to have it
discounted for the benefit of the
corporation and the proceeds remit-
ted to it. The agent stated these
facts to a bank and requested the
bank to discount the note, which
the bank declined to do. Subse-
quently the agent represented to the
bank that he was the owner of the
note, and it discounted the note for
him individually and allowed him
to use the proceeds for his own
benefit. Held, that as against the
makers of the note the bank was
not a holder in due course, and
that the bank could not collect of
the makers. 9a.

Contracts of an insane person even
though his insanity is successfully
disguised, held to be not only void-
able, but absolutely void. And
where such insane person was payee
of a note which he transferred to a
third party, such third party could
not enforce the note against the
maker. 26a, No. 861, p. 31.

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