
    Paulson and another, Receivers, Appellants, vs. Boyd, imp., Respondent.
    
      'November 27 —
    December 15, 1908.
    
    
      Evidence: Written instruments: Contemporaneous verbal agreements: Admissibility: Bills and notes: Defenses: Bona fide purchasers.
    
    1. Under tlie evidence, stated in tile opinion, it is held that an agreement existed between the defendant and the payee of the note in suit, whereby the note was not intended and agreed to he a present binding agreement, hut was delivered upon condition that if defendant paid the interest for eighteen months the payee should twice renew the note within that period, and if at the end of that period the defendant did not wish to purchase certain mining stock the prior agreement to purchase was to he terminated at defendant’s election and the note canceled.
    2. Under the elements of such agreement the delivered note did not ' become a completed contract in prmsenti, and the oral agreements relative to its status are held not to he contradictions of the note itself.
    3. A newly incorporated hank obtained the assets of a private hank, including the note of defendant on which the instant action was brought, pursuant to a resolution of the stockholders instructing the directors to assume the liabilities of the private bank in consideration of the transfer of such assets, defendant’s note being subject- to an oral agreement whereby it never became a completed contract in prmsenti. Held, that defendant could assert such incompleteness as a defense to the note in the hands of the new bank.
    Timlin, Kerwin, and Marshall, ÍJ., dissent.
    
      Appsal from a judgment of the circuit court for Ash-land county: John K. Parish, Circuit Judge.
    
      Affirmed.
    
    This is an action upon a promissory note by the receivers of the Security Savings Bank, incorporated, against the mater of the note and the former owner of the note as in-dorser. L. T. Boyd is the maker of the note and J. S. Ellis is the payee and indorser. It appears from the evidence of Boyd and Ellis that the note was given to Ellis by Boyd as a part of a transaction concerning the sale of some mining-stock. Boyd was to give his note to Ellis for $2,500, the purchase price of the stock. The note, dated October 17, 1902, was for six months, and was to be renewed twice for the same length of time. The testimony of Boyd as to the terms of the parol agreement is admitted by Ellis to be correct; and the agreement, in effect, is embodied in Boyd's evidence, set out in the record as follows:
    “Shortly prior to the date of the first note he persuaded me as a good friend of his to go into this deal with him and take some of his mining stock. I told him then that I had no money, and that I was in debt and couldn’t afford to take the chance. He said he wouldn’t urge me to do this if he didn’t know all about it. I stated that I didn’t have any money to buy it with, and he said, ‘That doesn’t make any difference,’ and he said, ‘I will carry it with the bank. I will carry it eighteen months if you will pay the interest.’ Then I said, ‘Suppose at the end of eighteen months I can’t pay it ?’ He said, ‘Then I will take it off your' hands; But I am sure that you will have realized enough on it to pay it and make a good profit.’ I said, T don’t see any reason why you should do that for me;’ and he said, ‘I know you have been up against it pretty hard, and I would like to see you make some money,’ and I said, ‘That is very friendly of you, and I will accept the offer,’ and in that case I took the stock conditionally, and signed the note which he was to renew twice, and at the expiration of the eighteen months, if I didn’t want the stock, he would take it off my hands.”
    There was no actual delivery of the certificates of stock by Ellis to Boyd. At the time of this agreement Ellis conducted a private hanking business under the name “Security Savings Bank.” Pursuant to the provisions of ch. 234, Laws of 1903, the Security Savings Bank was incorporated - for the purpose of succeeding to the business and assets of the private bank of the same name previously conducted and managed by J. S. Ellis. The new hank was incorporated August 21, 1903, the incorporators and stockholders being Ellis and his relatives. J. S. Ellis, his brother, E. H. Ellis, and his sister, Mrs. Loranger, each took a quarter of the entire capital stock. Mrs. Kennedy, a sister of J. S. Ellis, took the remaining quarter, with the exception of one share taken by her son Ellis. At the stockholders’ meeting which succeeded the meeting of the ipcorporators the stockholders were elected directors and by-laws were adopted. The record of this meeting shows the following:
    “On motion it was ordered that the board of directors be and are directed to assume the liabilities of the private bank heretofore known as the Security Savings Bank of Ashland, Wisconsin, in consideration of the transfer of the assets of said bank to their corporation.”
    At the directors’ meeting J. S. Ellis was elected president, E. H. Ellis, his brother, vice-president, and Ellis Kennedy, a nephew and former employee of the president, was elected cashier. Under the agreement between Boyd and Ellis three notes were given by Boyd to Ellis and deposited by Ellis at the bank. All were payable to the order of Ellis. Two of them were made before the incorporation of the bank, and one, the note in suit, thereafter. In each instance Boyd and Ellis conducted these transactions. The note in suit was received by Ellis as president and turned over to the cashier with instructions. The mining stock was always in the possession of Ellis and the transfer of the stock on the books of the corporation was not made until after the execution of the last note. The certificate of stock then made out was sent to Ellis and held by him. Boyd offered to transfer any interest in the shares of mining stock to which the agreement between him and Ellis referred, and renewed this offer at the trial. Plaintiffs refused to accept his offer of a written assignment. Both parties moved for the direction of a verdict. The court granted the motion of the defendant, and judgment was entered in accord with the verdict so ordered. This is an appeal from the judgment.
    For the appellant there were briefs by Sanborn, Lam-oreux & Pray and H. B. Walmsley, and oral argument by Mr. Walmsley.
    
    They contended, inter alia, that the corporation was not charged with knowledge possessed by its officer where he is committing an independent fraudulent act on his own account, and this applies in the case of a president and director like the defendant Ellis. Broolehouse v. Union P. Go. 13 N. H. 368, 6 Am. & Eng. Ann. Cas. 675; Allen v. South Boston B. Go. 150 Mass. 200, 22 N. E. 911; Indian Head Nat. Banle v. Glorie, 166 Mass. 27, 43 N. E. 912; Produce Bxch. T. Go. v. Bieberbach, 176 Mass. 577, 588, 58 N. E. 162; Gamden S. D. &■ T. Go. v. Lord, 67 N. J. Eq. 489, 58 Atl. 607; Davis v. Boone Go. D. Banle (By.) 80 S. W. 161; Central Banle v. Thayer, 184 Mo. 61, 82 S. W. 142; Southern Gomm. Sav. Banle v. Slattery’s Adm’r, 166 Mo. 620, 66 S. W. 1066; Mead v. Pettigrew, 11 S. Dak. 629, 78 N. W. 945; First Nat. Banle v. Briggs’s Assignees, 70 Vt. 594, 41 Atl. 580; Graham v. Orange Go. Nat. Banle, 59 N. J. Law, 225, 35 Atl. 1053; Nat. Banle v. Feeney, 9 S. Dak. 550, 70 N. W. 874; People’s Sav. Barde v. Nine, 131 Mich. 181, 91 N. W. 130; Gunster v. Scranton I., H. & P. Go. 181 Pa. St. 327, 37 Atl. 550; Frenleel v. Hudson, 82 Ala. 158; American S. Go. v. Pauly, 170 U. S. 133; Ciarle v. Marshall, 62 N. H. 498, 500; Bank of Overton v. Thompson, 118 Fed. 798; First Nat. Bank v. Bevin, 72 Conn. 666, 45 Atl. 954, 955; First Nat. Banle v. Tompkins, 57 Fed. 20; Winchester v. B. & S. B. Go. 4 Md. 231; Johnston v. Shortridge, 93 Mo. 227, 6 S. W. 64; Wyeth v. Benz-Bowles Go. (By.) 66 S. W. 825; Corcoran v. Snow C. Co. 
      151 Mass. 74, 23 FT. E. 727; Hatch v. Ferguson, 66 Fed. 668; Levy & G. M. Co. v. Kauffman, 114 Fed. 170; Seixas v. Citizens' Banlc, 38 La. Ann. 424; Graham v. Orange Co. Nat.'Bank, 59 FT. J. Law, 225; Lamson v. Beard, 94 Fed. 30; Knobelock v. Germania 8av. Bank, 50 S. 0. 259, 27 S. E. 962; Richardson v. Watson, 51 La. Ann. 1390, 26 South. 422; Victor G. & 8. M. Co. v. Nat. Barde, 15 Utah, 391, 49 Pac. 826; Tate .v. Security T. Co. 63 1ST. J. Eq. 559, 52 Atl. 313; Seaverns v. Presbyterian Hospital, 173 Ill. 414, 50 FT. E. 1079; Terrell v. Branch Bank, 12 Ala. 502; Lyne v. Bank of Ky. 5 J. J. Marsh. 545; Parrel Foundry v. Dart, 26 Conn. 376; La Farge F. Ins. Co. v. Bell, 22 Barb. 54. Where the hank acts entirely through another or others in the transaction, the knowledge of the oSender is not imputable to the bank. Nat. Bank v. Feeney, 9 S. Dak. 550, 70 FT. W. 874, 876.. The director’s knowledge is not imputable to the bank where he turns the note over to it through its cashier and does not himself act as a director upon the discount. EnglisHAm. L. & T. Co. v. Hiers, 112 Ga. 823, 38 S. E. 103; Powles v. Page, 10 Jur. 526; Lucas v. Bank of Darien, 2 Stew. 280; Farmers & Citizens Bank v. Payne, 25 Conn. 444; Louisiana Slate Bank v. 8enecal, 13 La. 525; Shaw v. Clark, 49 Mich. 384, 13 FT. W. 786; Johnston v. Shortridge, 93 Mo. .227, 6 S. W. 64; Buffalo Co. Nat. Bank v. Sharpe, 40 FTeb. 123, 58 FT. W. 734; First Nat. Bank v. Christopher, 40 FT. J. Law, 435; Fulton Bank v. N. Y. &■ S. C. Co. 4 Paige, 127; Westfield Bank v. Cornen, 37 FT. T. 320; Commercial Bank v. Bw*-giuyn, 110 FT. O. 267, 14 S. E. 623; Merchants’ Nat. Bank v. Lovitt, 114 Mo. 5T9, 21 S. W. 825; Loomis v. Eagle Bank, 10 Ohio St. 327; Custer v. Tompkins Co. Bank, 9 Pa. St. 27; New York v. Tenth Nat. Bank, 111 FT. T. 446, 18 FT. E. 618.
    For the respondent there were briefs by Winkler, Flanders, Bottum & Fawsett, and separate briefs signed also by 
      ■James 0. Flanders, and oral argument by Mr. Flanders.
    
    They contended, inter alia, tbat the bank was charged with notice of the facts within the knowledge of Ellis as its director and president at the time of its incorporation and the taking over of the assets of the old bank. Bank of U. S. v. Davis, 2 Hill (N. T.) 451, 461, 463; Wis. Cent. B. Go. v. Wis. B. L. Go. 71 Wis. 94, 107; In re Plankinton Bank, 87 Wis. 378, 383; Nat. Bank v. Hunger, 95 Eed. 87, 92; Holden v. New York & F. Bank, 72 N. T. 286; Union Bank v. Campbell, 4 Humph. 394; Nat. 8. Bank v. Gushman, 121 Mass. 490; Waynesville Nat. Bank v. Irons, 8 Eed. 1; Loving v. Brodie,. 134 Mass. 453, 457.
   SiebeckeR, J.

At the trial the defendant Boyd relied upon an agreement between him and Ellis, the payee in the note given by the defendant. The transaction between the defendant and Ellis for the purchase of mining stock is admitted by Ellis to have constituted the agreement for which the notes were given. The primary question is: What was the parol agreement between these parties? The evidence of it is not voluminous or contradictory, and is, in effect, that Ellis undertook to assist Boyd in securing the advantages of an interest in a mine, if it should prove a profitable enterprise at the expiration of eighteen months. To accomplish this Boyd contracted for the purchase of some mining stock from Ellis at an agreed price of $2,500 upon the following arrangement: Since Boyd had no available means to-make such a purchase, Ellis made him an offer for such purchase, under which Bpyd was to give him a note for the amount, which Ellis was to carry and renew for eighteen months. If the stock had not then realized enough to pay the purchase price and Boyd did not then want the stock, then Ellis was to take it off his hands and cancel the note. The stock realized nothing, and Boyd insists that, under the parol agreement with Ellis at- and before the delivery to Ellis of the first note, the notes never went into effect as completed contracts. He contends that.he was to have the right at the expiration of eighteen months to elect whether he wanted the stock. We are of the opinion that the facts sustain this claim and show such an agreement between the parties.

An examination of the evidence, in view of the relations of the parties and the considerations which induced him to make and deliver the note, leads us to the conclusion that it was not intended and agreed by them that'the note should be a present binding agreement, but that it was delivered to Ellis upon the condition that if Boyd paid interest on the-sum for eighteen months Ellis was to renew the notes as agreed, and if at the expiration of that time Boyd did not want the stock the agreement to purchase was to be terminated at Boyd's election and the note canceled. The significance of the terms of the transaction, as shown by the evidence of the situation, is that Boyd had the right at the expiration of eighteen months to elect whether he would accept a transfer of the stock at the price fixed and evidenced by the note. The elements of the agreement constitute an arrangement under which the note delivered to Ellis did not become a completed contract m prcesenti, but was to take effect as a completed contract only in the event that Boyd, under the agreement, elected to take a transfer of the stock within the time agreed on. Such oral agreements are not contradictory of the written instrument. This rule was declared and fully discussed in the recent case in this court of Hodge v. Smith, 130 Wis. 326, 110 N. W. 192, where it was held:

“It is familiar law, notwithstanding some conflict in the authorities, that a person may manually deliver an instrument, though it be in the form of commercial paper, to another, on its face containing a binding obligation in prce-senti of such person to such other, with a contemporaneous verbal agreement that it shall not take effect until the happening of some specified event, and that the paper, as between the parties, will have no validity as a binding contract till the condition shall have been satisfied; and that proof of such-condition does-not violate the rule that a written instrument cannot he varied by a contemporaneous parol agreement; that such evidence only goes to show that the instrument never had vitality as a contract” — citing cases.

It is there also held that this principle is recognized in the Negotiable Instrument Law (sec. 1675 — 16, Stats.: Supp. 1906) by providing that:

“Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties, and as regards a remote party other than a holder in due course, . . . delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument.”

In the case of Burke v. Dulaney, 153 U. S. 228, 14 Sup. Ct. 816, the circumstances of the transaction are in their main features very like the instant case, and it was held by the court that a note covering the price for the sale of property by the payee to the maker, which had been delivered under an oral agreement between the parties to the effect that the note should represent the price if the maker should determine to retain the interest in a mine after having worked and inspected it, under such circumstances there was not such a delivery of the note as to malee it unconditionally binding upon the obligor according to its terms, but it was delivered to become absolute if the maker elected to take the property under the terms of the oral agreement. Other cases on the subject are State ex rel. Jones v. Chamber of Comm. 121 Wis. 110, 98 N. W. 930; Ware v. Allen, 128 U. S. 590, 9 Sup. Ct. 174; Wilson v. Powers, 131 Mass. 539.

The question arises: Can defendant avail himself of this agreement between himself and Mr. Ellis as against the plaintiffs, the receivers of the Security Savings Bank? It is without dispute that the Security Savings Bank became in-eorporated in August, 1908, and that it obtained this note and other securities from the private bank which Mr. Ellis had conducted prior to its incorporation. .We are of opinion that the evidence is clearly to the effect that the newly incorporated bank obtained the assets, including this note, pursuant to a resolution of the stockholders directing the directors to assume the liabilities of the private bank in consideration of a transfer of the assets of the private bank to the new bank. There is no dispute but that the note obtained by the new bank by such transfer was one given in renewal of the former note given by Boyd to Ellis under the parol agreement for the purchase of the mining stock, and that when this second note matured the bank took the note sued on in renewal of it. There is no evidence tending to show that at the time of the renewal the original agreement was in any way changed or modified. The new notes were taken in place of the first one and represent the original obligation. First Nat. Bank v. Case, 63 Wis. 504, 22 N. W. 833; Gallagher v. Ruffing, 118 Wis. 284, 95 N. W. 117.

Can defendant assert this defense to the note in the hands of the new bank? This must be answered in the affirmative in view of the circumstances of the transfer of the assets from the private to the new bank. The condition of the transfer is that the new bank.“assume the liabilities of the private bank ... in consideration of the transfer” of its assets to the new bank. As stated, there is no question but that the transfer was in fact so made. This transfer im- . ports that the new bank received-the assets charged with the conditions to which they were subject in the hands of the priva Le bank, and constitutes an express assumption of all defenses to which they were subject in the hands of the former owner. The note having come into the hands of Mr. Ellis as manager of the private bank, subject to the conditions of the parol agreement with Mr. Boyd, it follows that the new bank holds it subject to the defense that its delivery was conditional, “or for a special purpose only, and not for the purpose of transferring the property in the instrument.” Hodge v. Smithy 130 Wis. 326, 110 N. W. 192.

This result renders all other questions discussed by counsel immaterial, and calls for affirmance of the judgment

By the Court. — Judgment affirmed.

Timxikt, J.

(dissenting). With that part of the decision holding that the plaintiffs toot the note in question subject to all defenses available by the mater against Ellis and which would go to defeat the instrument I am in accord. But I consider it a serious menace to commercial paper and in breach of the rule of law, hitherto well upheld in this state, which forbids the reception of parol evidence to vary or contradict a written contract, to admit for the purpose of defeating the note the defense here pleaded and .attempted to be proved by the testimony of the defendant Boyd. There is no doubt about the rule of law which should be applied. It is found in the prior decisions of this court and in sec. 1675 — 16, Stats. (Supp. 1906) :

“Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties, and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made by or under the authority of the party making, drawing, accepting, or indorsing, as the case may be; and in such case the delivery may be shown to have been conditional, or for a special purpose only, -and not for the purpose of transferring the property in the instrument. . . . And, where the instrument is no longer in the possession of the party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved.” Sec. 1675 — 16, supra; Hodge v. Smith, 130 Wis. 326, 110 N. W. 192, and cases cited; Thomas v. Watkins, 16 Wis. 549; McLean v. Nugent, 33 Wis. 353.

It must be borne in mind that this action is by an indorsee of a promissory note negotiable in form and against the in-dorser, Ellis, and the maker, Boyd. The answer of the defendant Boyd avers:

“Thereupon said Ellis offered to take a note for said sum of $2,500 and renew it twice for a period each time of six months, and that, if said defendant Boyd was not ready or inclined to pay for said stock, he, the said defendant Ellis, would take the stock and return and cancel the defendant Boyd's note, and under these circumstances, and pursuant to-this agreement, said defendant Boyd did sign and put into the possession of said defendant Ellis a writing in the form, of a promissory note for $2,500, running six months from October 17, 1902, and at the expiration of said six months-the same was surrendered and a new note for another period of six months delivered to said defendant Ellis, and at the-end of said second period a new one for the same amount and running six months was put in the possession of said Ellis, and that the last one so put in the possession of said Ellis is the instrument for the payment of which this action is brought.”

The oral testimony of the defendant Boyd quoted in the-majority opinion was given in answer to the following question: “Q. Will you state'the facts and circumstances connected with the execution of that note?” To this he answered, showing that, in urging Boyd to take some of his-mining stock, Ellis said: “I can carry it with the hank. I will carry it eighteen months if you will pay the interest.”' Boyd answered: “Suppose at the end of the eighteen months-I can’t pay it ? ” Ellis: “Then I will take it off your hands, hut I am sure that you will have realized enough on it to-pay it and make a good profit.” Boyd: “I don’t see any reason why you should do that for me.” Ellis: “I know you have heen up against it pretty hard, and I would like to see you make some money.” Boyd: “That is very friendly of you, and I will accept the offer.”

In the foregoing quoted testimony it is not quite clear-when the word “it” represents the mining stock and when the note. But, taking the further testimony of the same witness, it is apparent that in the expression, “I can carry it •with the bank. I will carry it eighteen months if you will 'pay the interest,” “it” refers to the note. Changing to the narrative form, the witness testified: “And in that case I took the stock conditionally, and signed the note which he was to renew twice, and at the expiration of the eighteen months if I didn’t want the stock he would take it off my hands.” He further testified:

“The agreement was that they kept the shares of stock as collateral to the note. They were not in my physical possession. At the expiration of the first note I paid the interest and renewed the note, and at the expiration of the second note I paid the interest and gave a new note. I only know that . . . Ellis would take care of it [the note] at the hank. He told me he would take care of it at his bank. ■Q. Did you understand from J. S. Ellis, when the first note was given, that he was to put it in the bank? A. Yes, sir. Q. Did you understand, when the second note was given, that it was to be carried by the bank? A. I understood that the whole loan was to be carried by the bank.”

Again on another subject:

"Q. Did you give the third note — that one here involved —before or after you received the letter that your counsel has? A. After I received that letter. . . . My recollection is that I held the note until I heard from him.”

This letter is in evidence, and is as follows:

“Eeieed T'im: Your letter came this a. m. and under my agreement with you I must carry this paper for six months yet — if you do not want the stock at that time I will accept it in payment of the note. I think though that you will want the stock. Yours, J. S. Ellis.”

After thus setting forth the pleading and evidence it seems .■superfluous to say that not only was the presumption of a valid and intentional delivery created by sec. 1675 — 16, supra, not overcome, but there was affirmative proof of the' delivery of the note as a note and to be in force and effect as a note. Could defendant Boyd avoid the force of his own undisputed testimony that he withheld delivery of the last renewal note, the note in suit, until he received the letter above quoted, and then upon receipt of this letter delivered the note? If he could not, then the case is ruled by Perry v. Bigelow, 128 Mass. 129; Racine Co. Bank v. Keep, 13. Wis. 209; and Hubbard v. Marshall, 50 Wis. 322, 6 N. W. 497.

The majority of the court seem to have overlooked the force and significance of this undisputed evidence regarding the delivery of the note in suit. But, examining the ease without this letter, there was a delivery of the note. The agreement to pay interest and the payment of interest,, the agreement to renew and the renewals pursuant to that agreement, are consistent only with absolute-delivery. The agreement that the payee should carry .the note at the bank even where the payee owned the carrying bank means that the note was considered by the parties to have been delivered. . All of these are inconsistent with nondelivery or with conditional delivery. Again, in the light of the additional testimony above quoted interpreted in harmony with the pleading, the whole testimony of Boyd is plainly to the effect that it was orally agreed that he should give his note for $2,500 for certain shares of mining stock to be held by the seller as collateral security to that note, that the note was to run six months and to be twice renewed, Boyd to pay interest thereon and to have the right to avail himself of any rise in the price of the stock in the meantime, but if he did not during or at the end of the eighteen months avail himself of this right to take the shares, Ellis was to lake- or keep the stock and cancel or discharge the note. There is here no evidence of nondelivery or of conditional delivery, but rather evidence showing delivery coupled with an oral agreement that the note should be discharged or paid in a certain manner differing from that specified in the instrument itself. Burke v. Dulaney, 153 U. S. 228, 14 Sup. Ct. 816; 8. C. in court below, Dulaney v. Burke, 2 Idaho, 719, 23 Pac. 915. I need not Rere discuss at length the facts in the case last cited. The difference between that case and the instant case is obvious, and is emphasized in the opinion by Mr. Justice Hablan. I have no doubt the oral contract between Boyd and Ellis collateral to this note was founded upon a valuable consideration and enforceable by Boyd against Ellis. It was a sale of the shares to Boyd with an agreement to repurchase at the end of the eighteen months at the same price, at the option of Boyd. Vohland v. Gelhaar, 136 Wis. 75, 116 N. W. 869. But that is not the question here. This right of action of Boyd against Ellis did not accrue until the last renewal note became due and Boyd exercised his option, which was long after the note was indorsed to the bank of which the plaintiffs are receivers. Sec. 2606, Stats. (1898), and cases in note, and subd. 6, sec. 4258, Id.

Keewiw, J. I concur in the foregoing dissenting opinion of Mr. Justice Timlin.

MaRSi-iaxl, J.

(dissenting). I concur in the opinion of Mr. Justice Timlin. It seems to me that my Brother Tim-lin has shown with a certainty .equivalent to a mathematical demonstration that the note in question was intended to take effect as soon as parted with by the payor. The cotempo-raneous agreement was with reference to a contingency which might enable the payor to discharge his obligation otherwise than according to its tenor. It seems quite manifest that my brethren of the majority have mistaken a condition subsequent created by parol at the time of delivery of the paper, which all agree could not be used to defeat it, for a condition subsequent contemplating necessity for the happening of a specific circumstance to give the paper effect as ■ an obligation.

I dissent from the decision of the court upon another ground which I will mention without taking time to discuss it. Tbe assumption, of liability by tbe new bank, in my judgment, bad no reference to secret defenses to commercial paper due in tbe future, but to liabilities of the bank as they are ordinarily understood and commonly carried upon tbe books; in general, consisting of indebtedness to depositors.

There are other questions discussed upon the appeal not mentioned in the court’s opinion, but I take it that if it were not for tbe conclusion reached upon tbe two points I have mentioned there would have been an agreement resulting in a reversal of tbe judgment. In my opinion it should be reversed and judgment rendered in favor of tbe plaintiffs.  