Page:United States Reports, Volume 209.djvu/410

 384 OCTOBER TERM, 1907. Hous, J., oomrri. 209 U.S. After a. eanintion of the Massachusetts cases, Judge Lowell held in In re qw/fi, 105 Fed. Hep. 493, while following the Massachusetts rule as between broker and customer, that no cause of action arase until after denrand by the customer. And the same view was tken in the same case upon review in the Court of Appends for the First Circuit in an opinion by Judge Putnam. 112 Fed. Hep. 315. While both courts held that under the law, as defined in the Maachusetts cases, bankruptcy excused demand, they held that the customer did not become a creditor upon insolvency, but only after de- mand and refusal or its equivalent. How then stood the parties at the time of the demand for the return of these shares of stock? They were held upon a contract, which requh,i the broker, upon demand, to turn over the shares purchased, or sirnilgr shares, to the customer upon payment of advancements intent and commitions. These stocks were redeemed and turned over to him; as a consequence the relation of debtor and creditor as between the broker and customer did not arise. Upon the principles heretofore discussed, we think the pay- ment of the $5,000, on June 24, was not a preferential payment to a creditor. The customer had demanded .settlement, the broker had paid the $5,000, and on the following day this sum was taken into account in settling the account before turning over to the customer the stock bcloning to him, ac- cording to the understanding of the parties. We find no error in the judgment of the Court of Appeals, and the same is MR. JUSTXCZ HOLMRS: If I had been left to decide this case alone I should have ad- hered to the opinion which, upon authority and conviction, I helped to enforce in another plae. I have submitted a memorandum of the reasons that prevailed in my mind to my brethren, and as it has not convinced them I presume that

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