Page:Federal Reporter, 1st Series, Volume 6.djvu/768

 756 PEDBHAL EEPOBTEB. �were then held by the London & San Francisco Bank, hav- ing been hypothecated by Newman to secure a private loan of $6,000. The money had been originally obtained, as Newman asserted, and as appears to be the fact, from the respondent, and there is evidence tending to show that New- man had, without the knowledge of his partners, executed a note in the firm name to Lewis for $17,000 of the amount. On this point the testimony is conflicting. Itis net material; for the note, if executed, was a fraud upon his other part- ners, and the respondent well knew that the firm note to New- man for the loan was outstanding. It had, in fact, been transferred by Newman to Lewis, and had been by the latter lent to Newman to enable him to deposit it as collateral security for his loan from the bank. At the first meeting nothing definite was effected. At the next meeting Mr. New- ihan explained the embarrassed condition of the firm. He stated that he owed $20,000, viz: the $18,000 already men- tioned,!and $2,000 which Lewis had loaned to the firm, and for which bel held their gentiine note ; that Lewis was his only friend in the world, etc., and he insisted that he should be protected. • Mr. Sohoenfeld replied that if Lewis was to be protected, his confidential creditor should also be secured. This was assented to, and it was agreed that a firm note for $«,■000 should be executed to Bremer, "so that the $8,000 should stand valid against the firm instead of against an individual member, in case any action should be taken." This wks accordingly done on the succeeding day. The note was delivered to Mr. William Bremer, agent for H. Bremer, who wasto hold it for presentation as a firm debt in case any suit was brought against the firm. Mr. Bremer did not then, nor at any time up to the trial of this cause, surrender the individ- ual notes of Schoenfeld originally given by the latter to his brother. �A few days subsequently Mr. Schoenfeld received a peremp- tory notice from the Anglo-California Bank to make good the firm's indebtedness. This notice he communicated to Mr. Newman. A meeting was at once held to make arrange- ments for the consummation of the fraud which was in con- ��� �