The Federal Reporter with Key-Number Annotations, Volume 272: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States and the Court of Appeals in the District of Columbia, June-August, 1921. Page: 20
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272 FEDERAL REPORTER
the power of appointment does not, within the prohibition of the Ohio
statute, grant any estate to any person not in being. If it leads to a
fee in the grandmother-as we have assumed that it does not-that
would not change the result in this case.
 It follows that Halliday had no title to the farm which he
could mortgage or convey to any one or which passed to his trustee in
bankruptcy. The precise character of the estate taken by his children
does not now call for attention.
 The life estate of the mother could be mortgaged by her, and
did pass to her trustee and seems to be of substantial value. It must
therefore be determined whether the mortgage, as to that estate, was
a forbidden preference.
The mortgage which is attacked as a preference was given to the
bank on September 1, 1916, and was for $20,000. It covered the farm
and was signed by Halhday and his mother. Since it affected only
her life estate, we pass, without consideration, the claim of the bank
that, because the mortgage was to secure money recently loaned to
Halliday on the faith of the promise of a mortgage, the debt secured
was not of the same class as others, and so the security could not be
preferential, and we come to the claim of the plaintiff, as bankruptcy
trustee for Halliday's mother, that the security was an invalid prefer-
ence by her as against her estate in bankruptcy. We conclude that
her debts and liabilities, on the date of the mortgage, were not such as
to call for reasonable apprehension that she was insolvent. She had no
liabilities, excepting as accommodation indorser upon about $50,000
of her son's notes. Of some of these the bank had no knowledge, and
apparently, no notice; but we disregard that matter and take into the
computation her entire debts. Her estate consisted of some miscella-
neous items of about $2,000, her life estate in the farm, and an $11,000
claim against the railroad company for the recently sold right of way
through the farm. It may be that this $11,000 was not really owing
wholly to her. The sale was apparently upon the theory that it was by
the grandmother, under the powers in the grandfather's will, and it
was treated by all as having been practically completed before her
death. In that event the proceeds were personal property, and passed
to Halliday's mother under the grandmother's will. There is no rea-
son for now excluding it from the computation of her assets. The
evidence indicates that $18,000 was a fair estimate of the present value
of her life estate in the farm. This should be computed as it would
be if the fee was to be sold at judicial sale and the life estate treated
as an incumbrance to be paid off. Treating it as worth only what it
might sell for separately would be unfair. Her assets were thus at
[14, 15] We think it clear that upon the ultimate accounting as
between the two estates in bankruptcy the mother's estate would be im-
paired only to the extent of the deficiency left on the indorsed notes
after Halliday's estate was exhausted, and that, in estimating her in-
solvency for the purpose of determining the bank's duty of appre-
hension, we should take into account, not her total, contingent liability,
but only such deficiency as ought to have been feared. We find no
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The Federal Reporter with Key-Number Annotations, Volume 272: Cases Argued and Determined in the Circuit Courts of Appeals and District Courts of the United States and the Court of Appeals in the District of Columbia, June-August, 1921., legislative document, 1921; Saint Paul, Minnesota. (digital.library.unt.edu/ark:/67531/metadc38843/m1/42/: accessed February 23, 2017), University of North Texas Libraries, Digital Library, digital.library.unt.edu; crediting UNT Libraries Government Documents Department.