Page:Federal Reporter, 1st Series, Volume 1.djvu/381

 eABBBTT V. BATIiHa^ 878 �the cdrreàt debt was about $500,000 Among other loans was one of $50,000, made May 10, 1872, for which notes of third persons were deposited. These were afterwards ex- ohanged for a cargo of sugar imported by the Shiloh, for vrhioh Kirkland, Chase & Co. deposited with Garrett & Sons the warehouse receipt. By the arrangement between the partieB ail seourities were to be held for the general balance of acconnt. �' Kirkland, Chase & Co. failed, July 11, 1872, and it was then made known, for the first time, to Garrett & Sons that the cargo of sugar had been sold on the thirtieth of May, whUe tbey still held the warehouse receipt. Presently, after the failure, Chapman handed to Garrett & Sons, instead of the cargo of sugar, the bonds of the file company, with an assignment, dated May 30, 1872. The firm of Kirkland Chase & Co. and saoh of its members, became bankrupt in October, 1872, and the assignees disputed the title of Garrett & Sons to these bonds and several other securities as a fraudulent preference. A settlement was afterwards made by which the assignees relinquished ail title to the several securities, and paid certain laoneys to Garrett & Sons, and the latter relinquished the right to prove against the assets for the excess of their debt above the value of the securities, which turned ont to be a very considerable sum. The agree- ment, which was approved by the court of bankruptcy and carried ont, was in writing, and contained this stipulation: "And said Eobert Garrett & Sons likewise further agree that, whereas, said assignees bave been offered the sum of 50 cents on a dollar for certain bonds of the American File Com- pany, now held by Messrs. Eobert Garrett & Sons, which were received as collaterals from Messrs. Kirkland, Chase & Co,, and an indemniflcation against loss or damage of any kind as holders of certain stock of said American File company as assignees of A. A. Chapman and Kirkland, Chase & Co., said Robert Garrett & Sons hereby agree to indemnify said assignees against loss or damage of any kiud as holders of the stock aforesaid; and, in consideration of eaid acts of said assignees, said Eobert Garrett & Sons do ��� �