Affirmed in Desmare v. United States, 93 U. S. 609, 612, 23 L 960, an identical case; dissenting opinion in Burbank v. Conrad, 96 U. S. 311, 24 L. 730, majority holding United States on seizure of land in Louisiana took actual, not record interest, of owner therein. See note in 96 Am. Dec. 626, on contracts with enemy.

21 Wall. 354-360, 22 L. 645, HOTCHKISS v. NATIONAL BANKS. Bonds. Agreement incorporated in railroad bonds, to make scrip preferred stock, attached thereto, full-paid stock within ten days after declaration of dividend, does not destroy negotiability of such bonds, p. 357.

Cited in Trustees, etc. v. Lewis, 34 Fla. 428, 43 Am. St. Rep. 212, 16 So. 326, 26 L. R. A. 745, holding detached coupons payable to bearer negotiable paper; State v. Clinton, 28 La. Ann. 227, upholding title of purchaser before maturity of irregularly-issued bonds; dissenting opinion in State v. Funding Board, 28 La. Ann. 258, majority holding bonds invalid for lack of authority to issue. See also notes in 14 Am. Dec. 425, 64 Am. Dec. 434, 98 Am. Dec. 683, and 23 Am. Rep. 16.

Bonds.- Absence from bonds, when received by innocent holder of certificates therein referred to as attached, but which did not affect their liability, is not sufficient to put him on inquiry as to title of his transferrer, p. 359.

Bills and notes.-Taker of negotiable paper before maturity, for valuable consideration, without knowledge of defect of title, and in good faith, can hold it against all the world, p. 359.

Cited and rule applied in Gilbough v. Norfolk, etc., R. R., 1 Hughes, 412, F. C. 5,419, upholding title of innocent purchaser of immature stolen bonds; Tucker v. Bank, 58 N. H. 87, 42 Am. Rep. 583, holding owner of bonds wrongfully pledged as security cannot recover same from innocent pledgee; Texas Banking Co. v. Turnley, 61 Tex. 369, holding possession of negotiable instrument, payable to bearer, indorsed in blank, carries title thereto. See 64 Am. Dec. 435, extended note on bonds and coupons.

Bills and notes.- Suspicion of defect in holder's title, knowledge of suspicious circumstances, or even gross negligence, will not defeat title of purchaser for value of negotiable paper before maturity and without actual knowledge, p. 359.

Cited and rule applied in Doe v. Northwestern Coal Co., 78 Fed. 69, holding knowledge of suspicious facts not sufficient to defeat title of purchaser before maturity; Merchants' Bank v. McClelland, 9 Colo. 611, 13 Pac. 725, holding negligence in inquiry into suspicious facts will not defeat title; Coors v. German Bank, 14 Colo. 206, 23 Pac. 329, 7 L. R. A. 847, upholding title of innocent purchaser from holder for collection merely; Tourtelotte v. Brown, 1 Colo. App. 418, 29 Pac. 133, holding purchaser's knowledge of defects must

be affirmatively established; Freemans' Bank v. Savery, 127 Mass. 79, 34 Am. Rep. 346, applying rule; Fifth Ward Bank v. First National Bank, 48 N. J. L. 516, 7 Atl. 320, holding proof of taking under suspicious circumstances not enough to defeat title; Johnson v. Way, 27 Ohio St. 380, applying rule and reviewing English and American authorities. See note in 26 Am. Dec. 157, on this subject. Distinguished in Bowman v. Metzger, 27 Or. 28, 29, 39 Pac. 4, holding knowlege of suspicious circumstances connected with other notes in vendor's hands properly considered by jury on issue of purchaser's good faith.

See citations under next syllabus.

Bills and notes.- Title of purchaser of negotiable paper for value and before maturity can only be defeated by proof of bad faith, implying guilty knowledge or willful ignorance of defects in his transferrer's title, p. 359.

Cited and applied in King v. Doane, 139 U. S. 173, 35 L. 87, 11 S. Ct. 467, upholding title of purchaser; Johnson v. Lewis, 2 McCrary, 482, 6 Fed. 30, affirming rule; Ex parte Estabrook, 2 Low. 549, F. C. 4,534, holding bona fide purchaser not bound to inquire into character of apparently valid note; Mobile Bank v. Board of Supervisors, 24 Fed. 111, holding lack of averment of knowledge of purchaser of irregularity of bonds, rendered plea demurrable; Richmond Ry. v. Deck, 52 Fed. 381, 8 U. S. App. 99, holding constructive notice not sufficient; United States Bank v. First National Bank, 64 Fed. 990, 27 U. S. App. 605, holding fact that note payable to bank president bears bank's indorsement by himself not sufficient to put transferee on inquiry that indorsement was for accommodation; Clark v. Evans, 66 Fed. 264, 27 U. S. App. 640, applying rule; Fairex v. Bier, 37 La. Ann. 825, holding actual or constructive notice, amounting to mala fides, necessary. See citations under last syllabus.

Bills and notes.- Burden of proof is on assailant of title of purchaser for value of negotiable paper before maturity, p. 359.

Followed in Shirk v. Mitchell, 137 Ind. 195, 36 N. E. 853, holding burden on defendant of proving that holder took with notice.

21 Wall. 360-378, 22 L. 568, CLARK v. ISELIN.

Pledgee does not lose his property in collaterals pledged, by putting them into pledgee's hands for collection, p. 369.

Cited and principle applied in Fulton v. Hammond, 11 Fed. 294, holding discharge in bankruptcy does not discharge debt incurred by refusal to pay over money collected for another; Conger v. New Orleans, 32 La. Ann. 1252, 1253, holding debtor may act as trustee for pledgee, provided his tenure be precarious; Thacher v. Moors, 134 Mass. 165, holding deposit of pledged goods in pledgor's warehouse, did not enable pledgor to convey title; Burnett v. Bank of

Corunna, 38 Mich. 635, holding owner may recover from bank funds deposited by his agent and applied to latter's indebtedness; Leahy v. Simpson, 60 Mo. App. 85, holding redelivery for collection does not invalidate pledge of notes; Bank v. Jennings, 38 S. C. 378, 17 S. E. 19, holding pledgor accountable for notes returned to him for collection by pledgee; Wharton v. Lavender, 14 Lea, 188, holding pledgor may be pledgee's agent; dissenting opinion in Succession of Lanaux, 46 La. Ann. 1070, 1071, 15 So. 720, 721, 25 L. R. A. 590, and n., majority holding debtor, on deposit of pledge with third party, for creditor, loses control thereof.

Distinguished in Casey v. Cavaroc, 96 U. S. 476, 477, 24 L. 783, 784, holding collateral securities returned to pledgor for custody and disposal, not valid pledge, under Louisiana law; Scherrer v. Caneza, 33 La. Ann. 319, holding pledge cannot be asserted against third parties, where article has always remained subject to pledgor's disposal.

Bankruptcy.- Exchange of collateral securities pledged by debtor, for other securities furnished by him, is not a fraud on bankruptcy act, although made within four months prior to debtor's bankruptcy, p. 370.

Followed in Sawyer v. Turpin, 91 U. S. 121, 23 L. 237, upholding exchange of chattel mortgage for bill of sale of same goods; Casey v. La Société de Credit Mobilier, 2 Woods, 87, F. C. 2,496, upholding substitution of pledged securities. Cited and principle applied in In re Reynolds, 20 Fed. Cas. 616, upholding assignment to indemnify sureties; Douglass v. Vogeler, 6 Fed. 57, holding exchange of securities not violative of bankrupt act; Blydenstein v. New York Security Co., 67 Fed. 480, 35 U. S. App. 175, holding release of old security consideration for subjecting new to same lien; Hutchinson v. Murchie, 74 Me. 191, holding exchange of securities for others equally valuable, no preference; Morey v. Milliken, 86 Me. 481, 30 Atl. 108, holding such exchange no preference under Maine inc vency law; New York Security Co. v. Lyman, 157 N. Y. 564, 52 N. E. 599, holding surrender of equal quantity of original security, consideration for substitution of new; Akers v. Rowan, 33 S. C. 474, 12 S. E. 173, 10 L. R. A. 716, and n., holding substitution of valid securities, allowable under State assignment laws.

Cited, but application denied, in In re Jackson Mfg. Co., 13 Fed. Cas. 261, holding mortgage given by insolvent, and not based upon promise to give specific security, invalid; Butler v. Sprague, 66 N. Y. 395, no pertinent application. Distinguished in Upham v. New York Loan Co., 76 N. Y. 8, holding transaction not an exchange of securities, but a settlement.

Bankruptcy.-Creditor may pursue insolvent debtor to judg ment and execution, with full knowledge of the insolvency, notwithstanding provisions of bankrupt act, provided debtor does not aid such pursuit, p. 373.

1

Followed in Watson v. Taylor, 21 Wall. 381, 22 L. 577, upholding judgment entered on confession thereof, given prior to insolvency.

Cited, but not followed, in In re Richards, 96 Fed. 939, holding entry of judgment by confession on note given ten months previous, not anthorized by act of 1898.

Bankruptcy. To constitute fraudulent preference under bankrupt act, there must be guilty collusion between debtor and creditor, p. 375.

Followed in Watson v. Taylor, 21 Wall. 381, 22 L. 577, holding no collusion in entry of judgment on confession given prior to insolvency. Cited and principle applied in Stewart v. Platt, 101 U. S. 743, 25 L. 819, holding insolvent debtor not prohibited from exchanging property prior to proceedings, no fraud being purposed; Dickinson v. Adams, 4 Sawy. 258, F. C. 3,896, holding intention to dispose of property in fraud of act, and knowledge thereof by purchaser, must co-exist; Alderdice v. State Bank, 1 Hughes, 56, F. C. 154, holding special facts of case sufficient to apprise credItor of debtor's fraudulent design; Harmanson v. Bain, 1 Hughes, 203, F. C. 6,072, upholding transfer of notes in absence of intent to prefer; Lindsey v. Lambert Building Assn., 4 Fed. 52, holding parties innocent of collusion; Tyler v. Brock, 68 N. Y. 423, holding debtor must intend to prefer creditor and latter must have reason to believe debtor insolvent; Stewart v. Hopkins, 30 Ohio St. 531, holding assignee must establish collusion to recover money paid creditor by insolvent.

Bankruptcy. Valid judgment may be entered after debtor's insolvency appears, on confession of judgment given creditor for full value, prior to insolvency, p. 377.

Followed in Watson v. Taylor, 21 Wall. 381, 22 L. 577, upholding judgment so entered; Field v. Baker, 12 Blatchf. 442, F. C. 4,762, holding condition of debtor and knowledge of creditor thereof, at time of giving confession, is test of its validity; Blabon v. Hunt, 3 Fed. Cas. 494, upholding execution on such judgment; McCormick v. Buckner, 15 Fed. Cas. 1306. Cited and principle applied in Matthews v. Westphal, 1 McCrary, 450, 48 Fed. 667, upholding chattel mortgage given over four months before filing petition, but recorded within that period; Sherman v. Traders' Bank, 9 Biss. 219, 220, F. C. 12,770, holding making avail of security on knowledge of insolvency not invalid where same was obtained in good faith; Curry v. McCauley, 11 Fed. 368, upholding mortgage given over two months before filing petition, but recorded within said period; Curry v. McCauley, 20 Fed. 584, affirming last citation; In re Baxter, 25 Fed. 703, holding draft on account of produce of drawer, consigned to acceptor, created lien thereon, notwithstanding prior unknown insolvency of drawer; Field v. Geohegan, 125

Ill. 71, 16 N. E. 915, holding lien of execution issued on like judgment prior to that of assignee; State v. Taylor, 3 Mo. App. 355, holding subsequent bankruptcy proceedings do not affect execution lien on debtor's property; Loan Co. v. McPherson, 26 S. C. 437, 2 S. E. 271, holding mortgage given but not recorded ninety days before bankruptcy, valid by State insolvency law; McCaul v. Thayer, 70 Wis. 146, 35 N. W. 356, see also dissenting opinion, p. 150, holding execution levy on like judgment valid under State insolvency law.

Distinguished in In re Herpich, 7 Biss. 389, 391, 392, F. C. 6,418, where warrant of attorney to confess judgment was given for pre-existing debt, doubting doctrine of principal case; In re Tifft, 23 Fed. Cas. 1215, holding debtor's property cannot be attached after commencement of proceedings; Balfour v. Wheeler, 15 Fed. 233, where parties to confession note were in collusion to procure preference, affirmed in 22 Blatchf. 4, 18 Fed. 894, 897, same case in Circuit Court; In re Moyer, 93 Fed. 189, holding entry of such judgment a preference under act of 1898.

Bankruptcy. Where creditor has obtained valid execution lien on debtor's goods, transfer to creditor by debtor, of securities equal in value to amount of judgment, and release thereupon of said execution by creditor, is not an invalid transaction under bankruptcy act, p. 378.

Cited and principle applied in Casey v. La Société de Credit Mobilier, 2 Woods, 83, F. C. 2,496, holding transfer of assets of embarrassed bank to secure loan, valid, though creditor knew bank's condition; Armstrong v. Chemical Bank, 41 Fed. 239, 6 L. R. A. 229, and n., holding mere giving security on creation of debt not preference if free from fraud in fact; Stewart v. Hopkins, 30 Ohio St. 532, holding payment of secured debt by insolvent not preference; In re Cobb, 96 Fed. 826, upholding loan to bankrupt banker in good faith, though large collateral given.

Miscellaneous.- Harmonson v. Bain, 1 Hughes, 201, F. C. 6,072. Miscited in Pauley v. Cauthorn, 101 Ind. 93.

21 Wall, 378-387, 22 L. 576, WATSON v. TAYLOR.

Bankruptcy. Judgment may be entered and executed after debtor's insolvency, on note containing confession of judgment, given prior thereto, and without creditor's knowledge thereof, p. 381.

Followed in Blabon v. Hunt, 3 Fed. Cas. 494, holding execution on such judgment valid; Currey v. McCauley, 20 Fed. 584, upholding acquisition of lien by recordation of mortgage within fourmonth period.

Distinguished in In re Herpich, 7 Biss. 389, 391, 392, F. C. 6,418, where warrant of attorney to confess judgment was given for pre