Page:Federal Reporter, 1st Series, Volume 3.djvu/505

 498 FEDEEAIi REPORTER. �or any part of it, and insisting on the truth of the avermenta of the petition on which the order was entered, alleging that he had sold and assigned the policies to one Eoss, and was no longer interested in them. Testimony has been taken upon the petition and answer, and the matter has now been heard upon the papers and the testimony. No point is now made of any assignaient of the policies to Eoss, nor is there any proof of any such assignment. The case has been argued and submitted as if there was no third party, who had acquired intervening rights which the court might be obliged to recognize and protect. �The material facts proven, and which are not disputed, are as follows : In 1870 the bankrupt was in partnership with his son, John E. Hoole, Jr., in the business of book-binders, and the firm borrowed money of Larned on their note, for which he took as collateral security two of the life policies. John E. Hoole, Jr., died in February, 1873, and thereafter the bankrupt continued the business alone. In May, 1872, in order to settle up the affairs of the firm, the bankrupt took up the firm note and gave his own notes for the loan, the policies remaining as collateral security. During 1873 the bankrupt borrowed a further sum of Larned on his own note, giving him as security the third life policy. �Lending money on security was part of Larned's regular business, and he contined to hold the policies dowi^ to the time of the bankraptcy, and tiU the application of the assignee for leave to transfer them to him upon release of the debt. The notes given were demand notes, but some part of the debt has been paid, and the notes were renewed from time to time for the unpaid amounts ; and, at the time of the application to the court by the assignee for leave to make said settlement, Larned held the notes of the bankrupt, on which there was, apparently, due the amount alleged in the petition, $2,715.85, with interest from May 1, 1876. �From the beginning of these transactions, however, John E. Heole & Son and John E. Hoole allowed and paid inter- est on the.loan far in excess of 7 per cent, par annum, gen- «rally at the rate of 2 per cent, a month ; and, if the excess of ����