The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1848-11-29
separate the soundfrom the parts of the


separate the the unsound parts Of the agree
ment
have hitherto considered this case as II the promls
rory notes were the certificates of deposite alluded
slider what would be the effect upon the agreement 10
case they should not be so regarded. The conse-
queuce of course would be that in this respect the
agreement has not been performed. But a court of
equity considers that done which ought to he do
and the agreement must be construed in the same
man ner If certificates of deposit had been given
to Palmers, Macklop Dent Co, and were now held
by them.
The next questions to be considered are:--
i. Whether the agreement or trust deed exc
cuted when the banking company was insolveut or
In contemplation of insolvency. Whether IT was
with the Intent to give particular creditor
1t appears by the testimony that the trust deed
executed the 30th of November. 1910. IL also APP
pears that on the 1st Of Oct 1910, committee was
appointed by the company to examine into the con-
dition Of its affairs On the 23d of December in the
same year, the committee reported. In their report
they state that the accounts OF the company have
been, for time past, in of critical uves-
tigaton, and that statement has been made up to
the LIST Of October $780, since which period they have
undergone little if any relative ohangen That report
signed by the committee and published states
balance Of available assets over debts amounting to
S232l 1896 35. In opposition to this report, and
the rpose of showing its entire alacy and that the
company was at that time insovent, Strong who was
then director of the company. examined az wit
the part OF the plaintiff His Testimony is
general He states, in reference to portion of the
assets that he should think probably third were
that he should think that but small proportion was
collected" The reato his testimony is of the same
definite character Strong Is the only witness this
point whom the plant relies and It is from this
testimony that We are to infer that the company
1t will be remembered in considering how mucb
weight to be attached to the testimony that in the
autumn of lS40 the Commercial Bank of the city of
New York Of which the witness was at the time prss
dent, lent between 500 600 aud $4,000 to the aom
pany and that the loan made with his appreciation
and advice. 1t will also be remarked that in or about
fhn nnrth Inv
amount of at easr cnefourth in the purchase of from
two to three thousand shares Of the stock the CON-
the committee who had made critical investigation
of the affairs of the company signed the report of the
23d December. 1910, showing surplus OF upward of
$4,000 o00 and published 1t to the world with hts as
surapce of its verify
There must generally be difficulty in ascertainins
what the value of liabilities and things In action
at any particular antecedent period But certainly
there can be nearer approximation to It, and upon
more satisfactory testimony than is offered in this
case.
The proof is equally unsatis Glory to show that the
agreement in question was executed In contemplation
OF insolvency. The company did not stop payment
until some months afterward, and all their acts show
that at that time not only its earnest hope but it's
sincere expectation was that it would avoid insol.
vency.
But irrespective of these considerations It does not
appear that any preference intended or has in
fact been made, or that there are not sufficient
assets In the hands OF the receiver pay all the lawful
debts of the company.
1t is farther objected to the agreement that It was
examining this part Of the case would remark that
the decision which made by the Vice Cha ncsllor
of the first circuit In the Of Leavtt Yates ct
al, does not apply to the instrument in question In
that the trust deed executed by the company to
Yates and others made, not to secure debts pre-
viousy contracted, but to secure future liabilities
about to be contracted and which might not be con-
tracted for the period Of thirteen months aferward
The property assigned was thus locked up in trust
for that space Of me when there might not be- dur.
ing the whole period, any cesui que trust who would
acquire an interest in It, In this there was an
terms announced their resolution to continue the
credit any longer In its then existing state 1t was at
that time and for the purpose of obtaining extern
tion and upon the additional the re.
the eisossid d the trust deed was entered into -
ment Of the certificates deposit the property
shall be held in trust for the company It il contend
ed that by this provision the company became the
sole cestui que trust and that for that the trust
is void. Such however Is not the legal effect Of the
agreement. On the contrary, Palmers, MnckiIop,
mediately the execution Of the deed Not absolute
it is true but sbsolute interest as pledge ever
acquires before dsfsnt in property deposited COLA
pspy could OF possession ownership of tho
securities assigned neither could It contrel them ft
fits arising from them. II had no greater interest in
them nor advantage arising out of them than belongs
to every pledgor.
The case Of Goodrich " Down. 20 HILL 4ss) was par.
ticularly relied upon the argument In support of
the views taken behalf Of the plaintiff In that csse
been recovered within the thirty days. stay Of execu
ton then allowed by law assigned nearly all his pro.
perty to his SON. to pay four of his creditors and to
pay over the surplus. If there should be any him
self The Court held that this was an attempt by an
nsovent debtor 10 put his property beyond the reach
tion Of L for bis own benefit The statement Of This
case shows that It is dstinguishable from the be-
fore us In the first place, the assignor admitted
~ ineoivent and judgment recovered against him
remained uneatished. In the next place, there were
other creditors whose debts then due who we're
the contrary it appears that the company paid it's
aecruing debts and liabilities till time after the
The only thing which disting cuisines this from an or
binary case Of pledge is that the persons who
to receive the benefit of 1t not made the deposit
tories Of the property pledged II they had been they
would have become trustees for the benefit of the
pedgors except TO the extent Of the security for their
own debts this case other persons are substituted
as trustees for both parties. q"
But is commended that the agreement Is void be-
cause the trustees in addition to the right to SELL the
In case Of default That is they are authorized to
substitute new pledge in the place Of the created
by the deed this would be the whole effect of borrow
ing money on the urities Now IL one pledge Is le
gal, 10 is not obvious why substitution of another
contract Of precisely the character should not
be equally soncertainly it ought not to vitiats the
The next question to be considered to the effect
of the assignmen Mt of stocks of the Land
Company, the American Land Company, and the
Mississippi Land Company.
1t appears from the testimony that the Apalachcoa
security for his bond conditioned for the payment of
$40 000-thst the stock Of the American Land Com
psny was transferred to the Banking Company by
Beers as security for his bond conditioned for the
payment Of $75 000-a and that the Mississippi stock
was transferred to the company by Sherwood a. So
curity for his bond conditioned for the payment OF
$40 Geo. 1t also appears that neither the bonds was
assigned to Blatchford& Murray.
1t is contepded on the part Of the plaintiff that as
the bt nds of Ogden Beers and Sherwood were never
assigned the stocks never passed to the assignees
Blatchford and Murray state in their answer that
they were not aware that the any such bonds
The company ofcourse had interest in the stocks
than to the extent to which they pledged as So
curity for the payment of the bonds and they could
assign no other greater interest This interest they
must hsve intended to assign and It must have been
either through careeesuess oversight fraud that
the bonds were not assigned The question then Is,
the bonds and stocks beiug separated which shall fol-
low the other! In respect to this matter the re.
ceiver stands in the place of the company and the
question is to be decided in the manner as 1t
would be lila sIlit bad hut