for the use of the person making the same shall be void as against
his creditors; it appearing that the reservation was made in good faith,
to protect the sellers' retail trade, and that only a small quantity
of lumber was sold thereunder.
-Stelling v. G. W. Jones Lumber Co., 116 Fed. 261...53 C. C. A. S1
Where logs brought to the mill under such contract were branded
with the brand of the purchaser, and the lumber, when cut, was piled,
and each pile marked with its name, there was all the delivery to the
purchaser of both logs and lumber possible under the contract, which
required the logs to be brought on the seller's premises for manufac-
ture, and such as to satisfy Rev. St. Wis. 1898, § 2310, which makes sales
presumptively fraudulent against creditors of the vendor unless accom-
panied by an immediate delivery, and followed by an actual and con-
tinued change of possession; conceding that such statute applies to a
contract for the sale of property not at the time in esse, but which is
thereafter to be manufactured.
-Stelling v. G. W. Jones Lumber Co., 116 Fed. 261...53 C. C. A. 81
No presumption of a fraudulent intent to hinder and delay other cred-
itors arises from a transfer of property as security to a bona fide cred-
itor, whose debt is due, although it is understood by the parties that
the effect of the transfer will be to give such creditor a preference; nor
can such an intent be inferred from a provision of the instrument of
transfer that the property shall be returned in case a certain contem-
plated adjustment of the affairs of the debtor shall be made, which pro-
vision is favorable to other creditors.
-McCartney v. Earle, 115 Fed. 462....
A bank devised the scheme to run the title to all the real estate
upon which it foreclosed mortgages into a realty corporation whose
stock it held, and to take notes and mortgages upon the real estate
for the amounts due by the former mortgagors. The result was that
it procured notes of the realty corporation, which was insolvent, for
$330.000, many of which were partially secured by mortgages; and
it carried these notes and the worthless stock of the realty company,
$100,000 in amount, at par, among its assets. Held, that the plan dis-
closed an intent to obtain creditors by deceit and to defraud them, and
sheriff's deeds and conveyances made in furtherance of the scheme were
voidable for fraud at the election of the creditors.
-Watson v. Bonfils, 116 Fed. 157..
§ 2. Remedies of creditors and purchasers.
Evidence held insufficient to establish the invalidity of a transfer of
property by an insolvent debtor to the receiver of a national bank by
way of security for a debt due the bank, either on the ground of undue
influence, duress, a fraudulent intent to hinder and delay creditors, or
the insanity of the debtor.
-McCartney v. Earle, 115 Fed. 462.....
Evidence held to support a finding that a transfer of stock in a
national bank was merely colorable, and that a sale of the stock on
execution against the original holder conveyed a good title thereto.
-McDonald v. First Nat. Bank, 116 Fed. 129.........53 C. C. A. 533
The use of sheriff's deeds and other legal instruments to effect a
fraudulent conveyance of property by a debtor is no bar to its avoid-
-Watson v. Bonfils, 116 Fed. 157......
A conveyance by a debtc. of its leviable equitable interest in land
with intent and in furtherance of a scheme to induce parties to be-
come its creditors, and to delay and defraud them, is voidable at the
election of existing and subsequent creditors.
-Watson v. Bonfils, 116 Fed. 157.....
1. Gambling contracts and transactions.
The statute of South Carolina (Rev. St. § 1859 et seq.), which declares
void contracts for the sale and purchase of certain articles, including
cotton, for future delivery, unless it is the bona fide intention of both
parties at the time that the article shall actually be delivered and re-
ceived in kind at the time specified, as construed by the supreme court
of the state, does not preclude the recovery by a broker of margins ad-
vanced for his principal on purchases of cotton for future delivery, on
a cotton exchange, although the principal in fact intended not to receive
the cotton, but to speculate on the fluctuation in price, where he kept
such intention secret, and it was not known to the broker, who made
the purchases in good faith, and in the belief that an actual purchase
was intended.
-Parker v. Moore, 115 Fed. 799....
In an action to recover margins advanced by plaintiffs as brokers for
defendant on purchases of cotton for future delivery made on defendant's
order on the New York Cotton Exchange, where plaintiffs introduced
evidence showing that in each case they advised defendant that the
purchase was made with the distinct understanding that actual delivery
was contemplated, to which he expressed no dissent, it was error to
direct a nonsuit, suo motu, based upon the statute of South Carolina,
declaring such contracts void unless it was the bona fide intention of
both parties at the time the contract was made that the cotton should
be actually delivered and received in kind, merely on the self-serving
testimony of defendant that it was not his intention to receive the
cotton: the question of defendant's actual intention at the time, under
such state of evidence, being one for the jury.
Of witness, see "Witnesses," § 2.
See "Assumpsit, Action of."
Duties, see "Customs Duties."
See "Principal and Surety."
The payment of a judgment by the surety company without the in-
demnitors' consent discharged such indemnitors from liability.
-American Surety Co. v. Ballman, 115 Fed. 292.....53 C. C. A. 152
§ 1. Property and conveyances.
It is the settled law of Missouri that, prior to the adoption of the
constitution of 1865, it was competent for the general assembly, by spe-
cial act, to authorize the sale of lands belonging to minors or persons
non compos mentis; and the law had been so well established, and so
many titles had been acquired on the faith thereof, as to constitute it a
rule of property in the state.
-Garth v. Arnold, 115 Fed. 468......
Power conferred by legislative act upon persons to sell and convey
the interests of certain minors in lands must not only be strictly exer-
cised, but, since the donees have no title to the interests they are author-
ized to convey, one who sets up a title in virtue of the exercise of such
power must furnish the evidence to support it; and, where the validity
of the deed under which he claims depends upon acts in pais, he must
prove the performance of such acts,-the fact that he was an innocent
purchaser, claiming through mesne conveyances, affording him in such
case no protection.
-Garth v. Arnold, 115 Fed. 468....
Where an act of the legislature conferred power upon persons to sell
and convey the land of certain minors "for cash or on credit," a convey-
ance of the land in exchange for personal property was void, and did not
devest the title of the minors.
-Garth v. Arnold, 115 Fed. 468....
A power conferred by the legislature on persons to sell lands of mi-
nors, being dependent on the fact of minority, terminates as to any
one of such minors when he reaches majority and becomes sui juris.
-Garth v. Arnold, 115 Fed. 468...
..53 C. C. A. 200
Of patent, see "Patents," § 5.
Restraining waste, see "Waste."
§ 1. Subjects of protection and relief.
Complainant, a corporation engaged in manufacturing and selling
glucose, grape sugar, starch, and kindred products of a glucose factory,
employed defendant, who was skilled in the business, for the term of
five years, at a salary of $4,000 per year. In the contract defendant
covenanted that he would not engage in, or become interested in any
way in, the same business, except under the contract, during the term,
at any place within a radius of 1,500 miles from Chicago. Defendant
was made superintendent of one of complainant's factories, where, by
reason of his position, he was made acquainted with secret processes
which were then in use, and being constantly devised, for utilizing at
the smallest expense all the products and by-products of the manufac-
ture. At the end of about three years he left the employment without
cause, and engaged himself to another company, which was not then
engaged in a rival business, but which soon thereafter constructed a
glucose factory. Complainant protested, and offered to continue defend-
ant in its service under the contract until the end of the term, but he
refused to return. Held, that complainant was entitled to an injunction
to restrain defendant from violating his covenant.
-Harrison v. Glucose Sugar Refining Co., 116 Fed. 304..
See "Assignments for Benefit of Creditors"; "Bankruptcy."
In civil actions, see "Trial," § 2.
§ 1. The contract in general.
The manager of a large lumber plant, previously uninsured, agreed
on behalf of his principal to place insurance on certain of the properties,
aggregating $70,000, with a firm of insurance agents representing a
number of companies. The amount to be written on each of the
designated properties was fixed, the premiums agreed to, and that the
policies should be written to go into effect on the 1st day of the ensuing
month, but the companies were not agreed upon, nor the amounts or
specific properties which should be insured by any particular company.
The manager requested that not more than $5,000 be placed in any
one company, but the matter was left to the discretion of the agents;
the policies when written, however, to be subject to approval by the
manager or owner of the property. Held, that such agreement did not
constitute a contract of insurance binding any of the companies in
which policies were afterwards written, which became bound only when
their policies had been delivered and accepted, and in accordance with
their terms.
-German Ins. Co. v. Downman, 115 Fed. 481........53 C. C. A. 213
The policies, 18 in number, were written, and included one for
$15.000, covering a drying shed and contents, in defendant company,
which at the time of the agreement the agents did not represent, but
the agency for which they had in the meantime acquired. All were
by their terms to take effect at 12 o'clock noon on the day designated.
During the forenoon of that day, and before the policies had been
delivered or accepted or the premium paid thereon, the drying house
burned. The owner subsequently secured possession of the policies
from the agents, as they claimed, by representing that none of the
property covered by such policies had been injured by the fire, but re-
fused to accept any of them except the one covering the drying house,
on the ground that they were for too large amounts, although that was
the largest, and only one other was for an amount exceeding $5,000.
Held, that the acceptance of defendant's policy under such circum-
stances did not create a contract of insurance covering the loss, even
conceding the claim of plaintiff that under the previous agreement
by the agents the insurance should date from the first moment of the
day specified.
-German Ins. Co. v. Downman, 115 Fed. 481........53 C. C. A. 213
§ 2. Assignment or other transfer of policy.
A mortgagor corporation procured a loan from a bank under a parol
agreement by which the mortgagee was to become surety therefor, and
the mortgage, together with the insurance on the mortgaged property,
which was payable to the mortgagee, was to be given as collateral se-
curity. The policies of insurance were in the hands of the agent from
whom they were procured, who held them for the parties interested.
Advances were made by the bank, under the agreement, from time to
time, on drafts drawn by the corporation on the mortgagee; and sub-
sequently the corporation executed its note covering the same, in favor
of the mortgagee, who indorsed it to the bank. The note contained a
clause reciting the deposit with the payee of "certain property, as stated
below, as collateral security," with the further description, "Fire in-
surance policies, should fire occur." The mortgage was delivered to
the bank, but the policies remained in the hands of the agent until the
property was destroyed by fire. Held, that the parol agreement respect-
ing the insurance was not supplanted by the written agreement in the
note, but, being consistent, the two should be construed together, and,
so considered, did not create a common-law pledge of the policies, to
the validity of which an actual delivery was essential, but an equitable
assignment of a beneficial interest in the picies, should a tire occur,
which gave the mortgagee, on his payment of the bank's debt, a lien
on the proceeds of the policies for the amount thereof, in addition tɔ
the amount of his mortgage debt.
-McDonald v. Daskam, 116 Fed. 276; Roberts v. McDonald, Id...
53 C. C. A. 554
The attaching of riders to insurance policies under which a loss has
occurred, making the loss payable to a creditor holding notes of a prior
date, and the delivery of the policies to such creditor, where there had
been no prior agreement for such security, gave the creditor only such
interest in the proceeds as the assured then had, and subject to all
equities existing against such proceeds in favor of others at the time
the loss occurred.
-McDonald v. Daskam, 116 Fed. 276; Roberts v. McDonald, Id....
53 C. C. A. 554
§ 3. Forfeiture of policy for breach of promissory warranty, cove-
nant, or condition subsequent.
An application to a surety company for a bond to secure the faithful
performance of his duties by the cashier of the applicant, a corporation,
contained the following question and answer: "Will he receive remit-
tances from customers on open accounts? If so, how often will you
render customers a statement of balances due by them, and by whom
will this be done? This should be done by some other person than the
applicant, and is important as a means of verifying balances appearing
on the ledger." Answer: "Yes. Monthly by bookkeeper." Held, that
such answer was not a warranty that such monthly statements should
be delivered to the customers, or deposited in the mail, by the book-
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