The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1876-06-02

,.J.,vS Not HOUND TO BE 4 DISlNTER-
..rrn rtETN-A VIRGINIA CIRCUIT
JI~psr QVoTED-TIIE LIBEL PROCEED.
.xG- AGAINST MYERS'S DISTIIIERY-
r.p.E HUGHES 0NERRJLEn-MYERS'
raaKS To EE NOT EXCLUDED As EvI-
rrVrY-rHE MAIN QUESTIONS NOT CON
~pEEElD-k RAILROAD CoMPANI's DE-
rl-EErH uVEENULED By TIE CHIEF
.U>TlCE.
IN the United States Circuit Court ycstcr-
H.; Culrf-.lu>ticr Waite delivered the opln-
IN The ease oi The National Bank OF Peters
burr, against William 7. Conway, trustee,
ana others aS follows:
ON the 10th July. 1915, the defendants
were. and for many years before had been,
FARMERS in business as bankers and stock
and nott-brokerS at Fredericksburg. NJ.
.4u-htcl & Son, 4 firm composed OF Mont
emery Slaughter, the father, and William
{ Slaughter. the son. were extensive mil
ar. 1t the same place, and the defendants
ut-r accustomed 10 discount and ne
.a,ia,g their commercial paper. as occasion
rfguirri IN tue course of business. The
rulr oj the defendants was to require salts
factory ,ud1r>erS upon paper discounted by
or through them, but upon the representa-
lion oi VI. Slaughter, with whom ali transac-
iia,l, for his Iirm were had, that he did not
endorse for others and on that account could
not ask others 10 endorse for him. it was
a.rtcd that a deed OF trust from him, con-
yayiu- the property now in controversy,
wrUld tC accepted rs security Tor the paper
u lis firm offered for discount or ncgotia-
{. n. in lieu Of IN cndor>er. Under this ar
r.a.cmcnt ii was his custom. when offering
;lrrr 10 the defendants. TO accompany it
with deed OF trust. conveying this property
% the defendant. William p. Conway, us Sc
c.rlty for the benefit OF the holder in case it
should br discounted. The deed was always
delivered To the trustee and retained by him
until the payment OF the paper, when 1t was
surrendered or cancelled. No recOnVey-
anrc> were ever executed, and, prior TO the
cl." now under consideration, none OF the
dr,0> 30 executed were recorded, but the
trustee had full power to have this done
whenever he or the holder of the paper
deemed i; necessary.
CHARACTER OF THE TRANSACTIONS.
Alter this arrangement was made no un-
endorsed paper OF Slaughter IL Son was
ever discounted by the defendants as firm
for their own account or for others without
such deed. The transactions OF the kind,
which were numerous. were not unneceS;l-
riypubIi>hed: neither were they concealed.
The character OF the security was always
explained 10 those interested in the paper
or negotiating for its purchase.
The property conveyed belonged to n.
Slaughter individually. The firm had no in
tcrcst in il.
ON the 10Th OF July, 1915, the defendants
held three notes made by VI. Slaughter &
>ou. payabl" to their own order, and by
them endorsed, az follows:
one for one thousand dollars, dated March
80, 1873. payable six months after date.
one for the same amount, dated May ID,
1870, and also payable six months after
date.
And the other for fifteen hundred dollars,
dated .iUy II, 1875, and payable ninety
days after date.
It i admitted that Ill these notes were Sc
cured bv deeds OF trust in the usual form,
aut which were never recorded.
Slaughter 4 Son, desiring q further ac-
OF two thousand dollars, made
their note for that amount in the usual
form, dated July 20thss and payable Deccm-
bcr 1923. 1875, and offered it to the de-
PENDANTS for discount or negotiation.
THE DEED N QUESTION.
N the same time NJ. Slaughter executed
TO the defendant, Conway, the deed i'll
question TO secure this note Of two thou
sand dollars a. we'll aS the other three notes
then held by the defendant. The deed was
before the defendant, Car
nett, a notary public, and delivered to Con-
way. The note was delivered to the de-
PENDANTS, hy whom it was discounted, and
the proceeds placed subject to the check OF
". Slaughter d Son on the 2lst Of July.
The note falling due September 22-2o
WAS paid al maturity; but on the 10Th OF
October. when that for fifteen hundred dol
lars fcl! due, Slaughter & Son informed the
defendants that they would not be able to
meet il, and that they found themselves
TO suspend payment generally.
Conway, Immediately upon receiving this
placed his deed Of july Goth
on record. Until this time the solvcncy OF
the firm had never been doubted. Their
suspension was matter OF surprise to all.
THE FIRM ADJUDGED BANKRUPTs.
Within short time after their suspension
Slaughter Son were adiudged bankrupts
upon the petition Of the National Bank OF
fredericksburg and other creditors. The
Gcbt owing the bank was evidenced by two
notes OF TWENTY-FIVE hundred dollars each,
i1ade by NJ. Slaughter, and endorsed by W.
l.. Slaughter and NJ. Slaughter Son.
After the adjudication Of bankruptcy,
Conway advertised the trust property for
ale under the powers OF the trust on the
I'd Of November. On the llth OF Novem-
Icr before the appointment OF an assignee,
he bank filed this bill, in behalf OF itself
nd the other creditors, to enioin the sale as
advertised and to have the deed adludged
Invalid, as against the assignee when APP
pointed and those whom he represented.
olher creditors afterwards made themselves
Iartlcs TO the suit, as did the assignee when
appointed.
TIE DECREE AND APPEAL.
The District Court decreed in favor OF the
in accordance with the prayer
i the bill. From that decree this appeal
ls been taken.
The Supreme Court Of the United States
ccided at its last term, in Sawyer as. Tur"
in, not yet reported, that ii a mortgage TO
ccurc preGXisting debt was executed
lorc than four months before the filing OF
petition for the adjudication Of the mort
agor bankrupt it would be good as against |
ne assignee III bankruptcy when appointed !
recorded before his rights attached, but /
ithin the four months. This case arose |
efore the act of June 20, 1874 rs Stat, Pt. |
1907, changing the time OF the prohibited
reference to a period within two months
~ ~AtA ~