The Federal Reporter. Volume 139 Cases Argued and Determined in the Circuit Courts of Appeals and Circuit and District Courts of the United States. September-December, 1905. Page: 426
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139 FEDERAL REPORTER.
reasons stated. I think that validity established. The trustee will therefore
pay the second dividend to the claimant, together with such interest on the
amount ($9,419.85) as it has earned in the depository since the date of decla-
From what goes before it will be seen that in reaching this conclusion only
the following evidence received tentatively has been excluded: (a) The tes-
timony of the witnesses Wedder, Burnet, and Perkins, by deposition taken
in New York, so far as the same relates to what was done with the stock
given by the claimant for the notes after the same were delivered to the
bankrupt; thus sustaining the claimant's objection on page 3 of proceedings
on July 8, 1904, with an exception to the trustee. (b) The testimony of the
same witnesses as to what was received for such stocks when they were sub-
sequently disposed of by the holding company, except so far as such testi-
mony tends to establish their value; thus sustaining, in part, the claimant's
objection on the same page, with exception to both the claimant and the trus-
tee. (c) The testimony of the witness Vedder in the same deposition as to
whether any of such stocks came into his hands as treasurer; thus sustaining
the claimant's objection, with exception to the trustee. (d) The testimony of
the witness Aldrich as to the transaction whereby he, as receiver, disposed
of certain stock of the Manistique Company, save so far as such testimony
tends to establish its value; thus in part sustaining the claimant's objection
on pages 3 and 4 of the proceedings of July 6, 1904, with exception to both
the claimant and the trustee. (e) The testimony of the witness Aldrich as
to the claimant receiving more than dollar for dollar of the holding com-
pany's bonds, thus sustaining the claimant's objection on page 7 of the pro-
ceedings of July 6, 1904, with exception to the trustee. (f) The testimony of
any other witnesses, or of these witnesses elsewhere in the record, to the effect
indicated in "a," "b," "c," "d," and "e," above, if duly objected to, with, in
that event, exception to the party against whom the ruling is given.
Fred D. Corey, for trustee.
Cox, Kernan & Kimball, for claimant.
HAZEL, District Judge. The facts are sufficiently set forth in
the opinion of the referee in bankruptcy, and I concur in the con-
clusions therein stated. Mr. Burnett, witness for claimant, sub-
stantially testified at the hearing that the sight drafts which were
subsequently secured by the transfers of stock in the Boston Car
Wheel Company, and evidenced by the promissory notes upon
which the claim herein is based, were given in renewal of previous
bills of exchange drawn in the same manner. Prior bills of ex-
change had been accepted by the bankrupt in London, and, ac-
cording to the proofs, were received or discounted by the claimant
in the ordinary course of business dealings. It had become a cus-
tom in the course of dealings between the North American Trust
Company and the P. H. Griffin Machine Works for a number of
years to draw on the bankrupt at its London office. The bills of
exchange drawn in the manner indicated by the proofs were sight
drafts in renewal of the original drafts. In the circumstances pre-
sented, which are mentioned more in detail in the opinion of the
referee, it is difficult to conceive of any substantial reason why the
trust company should have been suspicious when the original bills
of exchange were drawn. True, a party to whom negotiable paper
is presented fir discount or sale before maturity by an officer of a
corporation is bound to exercise caution and circumspection in or-
der to escape the charge of bad faith when a defect in his title is
urged. Cheever v. Pittsburgh Railway Co., 150 N. Y. 59, 44 N. E.
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The Federal Reporter. Volume 139 Cases Argued and Determined in the Circuit Courts of Appeals and Circuit and District Courts of the United States. September-December, 1905., legislative document, 1906; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38185/m1/437/: accessed January 18, 2019), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.