the accident, and did not urge the obvious defense that an administrator had no such cause of action. This is no ground for criticism, and was within the defendant's rights, but was a waiver of objection. to suit in this district, if the suit could be taken advantage of by the widow, as held in the Spokane R. R. Case, supra.

It is necessary to hold, therefore, that the motion for substitution of party plaintiff and to further amend the complaint should be granted, as the right to object to jurisdiction over the defendant in this district, for the cause of action given by the Pennsylvania statute, has been waived. If the children were plaintiffs, or if the children and their mother were the persons entitled to bring the action (assuming that the minor children could sue in propriis personis), it would be proper to remand the case to the state court, which might have jurisdiction over a suit brought by nonresidents against a defendant, if the defendant were properly brought into court, whether the nonresident plaintiffs be citizens or aliens, and whether they be inhabitants of the same state as the defendant or not.

But the children are minors, and by the law of 1851 the cause of action should be alleged as vested in the mother, if she be living. The effect of section 8 of article 17 of the Mining Law is to specify those entitled to share in distribution, and under the Haughey Case, supra, does not change the enactment that the suit shall be brought in the name of the mother.

The present plaintiff, the mother, an alien, can sue the defendant in this district, when the defendant has failed to plead an objection to jurisdiction over the defendant and over the cause of action upon service of the amended complaint, and has expressly removed the case into this court, where such waiver gives the court the right to hear the case. The objection to the motion to amend the complaint will be overruled, and the motion to amend granted.

1. COURTS 345-UNITED STATES COURTS-JURISDICTION-WAIVER OF OBJEC

TIONS.

A waiver by general appearance in a federal court merely covers the right to object to the district in which a case of which United States Courts generally have jurisdiction should be heard.

[Ed. Note. For other cases, see Courts, Cent. Dig. § 917.]

2. REMOVAL OF CAUSES 112-JURISDICTION-WAIVER OF OBJECTIONS.

Where, in an action by a resident of New York against a New Jersey corporation in a New York court, plaintiff alleged nothing as to his citizenship, but defendant, on an allegation that plaintiff was a citizen of New York, removed the case to the federal court, it could not, on discovering that he was an alien, claim surprise, and object to a trial of the case in that district.

[Ed. Note. For other cases, see Removal of Causes, Cent. Dig. § 238.] For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

3. PLEADING 111-PLEA TO JURISDICTION-RIGHT TO ANSWER ON MERITS. In an action in a New York court against a New Jersey corporation, plaintiff alleged nothing as to his citizenship, but defendant, on an allegation that plaintiff was a citizen of New York, removed the case to the federal court. On learning that plaintiff was an alien, defendant by permission withdrew its general appearance and pleaded specially that the action could not be maintained in the federal court for that district. Held that, while judgment upon the plea should go for plaintiff, defendant should not be penalized for raising the question of jurisdiction, but should be allowed to reinstate its answer and have a trial on the merits, as plaintiff in effect concealed the information that he was an alien.

[Ed. Note.-For other cases, see Pleading, Cent. Dig. §§ 234-236.]

At Law. Action by John Sawickas against the Singer Manufacturing Company. On plea to the jurisdiction of the court. Judgment for plaintiff, with leave to defendant to reinstate its answer on the merits.

Baltrus S. Yankaus, of New York City, for plaintiff.

Ver Planck, Prince & Flanders, of New York City, for defendant.

CHATFIELD, District Judge. The plaintiff sued in the Supreme Court of Richmond county, alleging that the defendant was a corporation resident in the state of New Jersey, but stating nothing as to the citizenship or residence of the plaintiff. The defendant appeared and answered generally, and upon an affidavit supplied by itself, alleging that the plaintiff was a citizen and resident of New York, obtained removal into this court. Upon the trial it developed that the plaintiff was an alien. The defendant then moved to withdraw its general appearance and answer, and to plead specially that the action could not be maintained in this district and court.

Upon consideration of this motion, under authority of Lehigh Valley Coal Co. v. Washko, 231 Fed. 42, 145 C. C. A. 230, and Lehigh Valley Coal Co. v. Yensavage, 218 Fed. 547, 134 C. C. A. 275, the court granted the application. The plea was entered and called for hearing before a jury. The plaintiff offered evidence tending to show that, at the time the case was removed, the defendant, through its agents and servants, had knowledge that the plaintiff was an alien and had not resided in the United States the requisite five years, so that he could have become a citizen, if he had so desired. Before the plea could be submitted upon this testimony, the plaintiff withdrew the testimony from the record and asked to have the case disposed of upon the jurisdictional question presented by the record alone. The defendant concurred in this application, and the plea was therefore disposed of upon the joint motion to direct a verdict.

As the minutes will show, some portions of three or four days had been already occupied in consideration of this case, and the question of jurisdiction required an examination of the record and consideration of authorities, for which an adjournment was requested. The court therefore directed a verdict upon the plea for the defendant, in order to release the jury, and immediately entertained a motion by the plain

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

tiff to set aside the verdict and to give judgment for the plaintiff upon the plea; both sides waiving the drawing of another jury. This motion has now been submitted upon the briefs and considered upon the entire record.

The case is not complicated by an allegation in the pleadings on the part of the plaintiff that he was either a resident or citizen of the state of New York, and the only information as to the plaintiff's status was based upon the defendant's affidavit that the plaintiff was a "citizen. of New York," because he was residing in Staten Island.

The record on removal shows that he had gone to work for the defendant only a short time before that, and the obligation rested upon. the defendant, before removing the case, to consider the effect of such removal. If the defendant had appeared specially, or had relied upon the plaintiff's statements, then surprise might have been occasioned by a sudden change on the plaintiff's part in claiming to be an alien. But a suit by a resident of another state, or a suit by an alien, could be maintained in this court, if the defendant appeared generally and removed the case into this court, with knowledge of those facts. Ex parte Wisner, 203 U. S. 449, 27 Sup. Ct. 150, 51 L. Ed. 264; In re Moore, 209 U. S. 490, 28 Sup. Ct. 706, 52 L. Ed. 904, 14 Ann. Cas. 1164; Western Loan Co. v. Butte & Boston Min. Co., 210 U. S. 368, 28 Sup. Ct. 720, 52 L. Ed. 1101; Male v. Atchison, etc., Ry., 240 U. S. 97, 36 Sup. Ct. 351, 60 L. Ed. 544.

[1] A waiver by general appearance merely covers the right to object to the district in which the case should be heard, as the United States courts generally, under the Constitution and statutes, have jurisdiction of such cases. Macon Grocery Co. v. Atlantic Coast Line, 215 U. S. 501, 30 Sup. Ct. 184, 54 L. Ed. 300, and the cases cited supra.

[2] The defendant did not even seek to save its right to contest the plaintiff's failure to allege citizenship or residence. It saw fit to supply the lack, and to draw its own conclusion as to the citizenship of the plaintiff from his place of residence. If the defendant had drawn the other conclusion, viz., that a person who had been in the country for a short time only, who had been born abroad, and who resided in New York rather than in New Jersey, was presumptively an alien resident of the state of New York, and if upon that allegation the defendant had asked the removal of the case, it would certainly have constituted a waiver to object to being sued in this district, when the defendant interposed a general appearance and answer.

It must be held, therefore, that the defendant was not in a position to claim surprise, and was not in a position to object to the trial of the case upon the merits, in this district and in this court, after it had expressly sought to get the case into this court for trial, and out of a court in which the case might have been heard, if no election or application for removal was made by the defendant.

[3] The verdict, therefore, should be set aside, and a new trial or hearing had of this issue. Inasmuch as both parties waived the question of drawing another jury, and as the question is purely one of law, judgment upon the plea should go for the plaintiff, with costs to await the event of the action upon the merits. However, the plaintiff did not

present a proper complaint, and in effect concealed the information. that he was an alien, and the defendant should not be penalized for raising the question of jurisdiction, but should be allowed to reinstate his answer and have the case tried upon the merits.

For this purpose, upon the entry of judgment upon the plea, the defendant's answer may be reinstated, and the case put upon the trial calendar for call.

In re FRIEDMAN.

(District Court, E. D. New York. March 30, 1917.)

The physical delivery of a bond and mortgage, with an agreement to pass title, is sufficient basis for an action of specific performance.

[Ed. Note. For other cases, see Specific Performance, Cent. Dig. §§ 249-256.]

2. MORTGAGES 261-ASSIGNMENT-NOTICE OF EQUITIES-POSSESSION BY THIRD PERSON.

Where a bank had physical possession of a bond and mortgage under an agreement to pass title, one taking an assignment of the same without delivery of the instrument will take subject to notice of the bank's equities.

[Ed. Note. For other cases, see Mortgages, Cent. Dig. § 693.]

3. BANKRUPTCY 151-TRUSTEES-RIGHTS OF.

Where a bankrupt delivered a bond and mortgage under an agreement to pass title, creditors have no greater rights therein than the bankrupt, and the trustee in bankruptcy would be no more than a subsequent lienor to the rights of the bank.

[Ed. Note.—For other cases, see Bankruptcy, Cent. Dig. § 193.]

4. BANKRUPTCY 154-SET-OFF-PRIMARY DEBT.

A borrower delivered to a bank a second mortgage, which the bank received as his attorney in fact, agreeing to apply payments on the mortgage against the debt. Subsequently the borrower became bankrupt. Held, that the bank had the right to use, as against the primary debt due from the borrower, payments received on the mortgage, as a bank has the right to apply deposits and other securities to the payment of indebtedness due it.

[Ed. Note. For other cases, see Bankruptcy, Cent. Dig. §§ 451-455.] 5. BANKRUPTCY

186(1)—Creditors-RIGHTS OF.

A bankrupt, who attempted to secure a loan from a bank by depositing as collateral a second mortgage, the bank being prevented by law from taking the second mortgage as collateral, entered into an agreement with the borrower that it should receive the same as his attorney in fact or agent, and protect itself by collecting the installments due and using them to discharge the debt. Held that, after bankruptcy, the bank, while it might be deemed a secured creditor, was not entitled to an assignment of the mortgage by the trustees as a matter of law, and could not compel such assignment; the trustee having the option of disposing of the mortgage and discharging the claim of the bank, or having such claim attach to the proceeds.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. § 319.]

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

In Bankruptcy. In the matter of the bankruptcy of Jacob Friedman. On petition for assignment of a bond and mortgage. Petition denied, without prejudice to other proceedings.

Wingate & Cullen, of New York City (T. Ellett Hodgskin, of New York City, of counsel), for petitioner.

Frank H. Reuman, of New York City, for trustee.

CHATFIELD, District Judge. [1] The bankrupt attempted to make a loan with the petitioner by depositing as collateral a second mortgage, which he held upon the property of a third person, in the amount of $1,000. The loan which the bankrupt was negotiating amounted to $1,000, and the petitioner, being prevented by law from taking second mortgages as collateral, but having a perfect right to act as attorney in fact, or as agent for the borrower, agreed to loan him money upon his note, and to protect itself by collecting for him the installments due upon the second mortgage, which he would then use to pay the amount due upon the note. At the present time one or two of the installments upon the second mortgage have been paid and were credited to the borrower's account, and he in turn used them before bankruptcy as a payment upon the note, which was reduced correspondingly in amount. This enabled the trust company to comply with the law, in that they carried the loan and met the requirements of the banking law, without counting doubtful or forbidden collateral; but they at the same time had in their possession property which, if necessary, they had the right to hold, and to look to it, if collection of the note became necessary. The physical delivery of the bond and mortgage, with an agreement to pass title, is sufficient basis for an action of specific performance. Urbansky v. Shirmer and Others, 111 App. Div. 50, 97 N. Y. Supp. 577.

[2, 3] If a party takes an assignment of a bond and mortgage without physical delivery (which cannot be given so long as the papers are in the possession of the bank), he would not get good title, but would take subject to notice of the bank's equities. Creditors get no more rights than the bankrupt had, and the trustee in bankruptcy would be no more than a subsequent lienor to the rights of the bank.

[4] We come back, therefore, to the original proposition, that the bank had in its possession, coupled with a power of attorney for a certain purpose, property which had not been assigned or transferred to the bank as collateral, but which could not be obtained from the bank without demand, and which the bank had the right to proceed against in case of need to collect its debt. From this would arise the ordinary proposition of set-off. The primary debt to the bank upon the note is one provable in bankruptcy, and as against this the bank has the right to use deposits (Studley v. Boylston Bank, 229 U. S. 523, 33 Sup. Ct. 806, 57 L. Ed. 1313; N. Y. County Bank v. Massey, 192 U. S. 138, 24 Sup. Ct. 199, 48 L. Ed. 380), and also any obligations or securities which are in its hands for future collection, and without a specific agreement to apply them for the purpose of third parties (In re Radley Steel Const. Co. [D. C.] 212 Fed. 463).