RICHARDSON v. SHAW. ?09 U. ?. OPinion of the Cou?t. Ms. JUS?CE DAY delivered the opinion of the court. This case somes hero upon a writ of certiorari to the Uni- ted States Circuit Court of Appeals for the Second Circuit. The petitioner Richardson brought suit in the District Court of the United States for the Southern District of New York, as trustee in bankruptcy of J. Francis Brown, against Joim M. Shaw and Alexander Davidson, respondents, to recover cer-. tam alleged proferences. Brown, the bankrupt, was a stockbroker transacting busi- ness in Boston. The respondents John M. Shaw and Alex- ander Davidson were partners and stockbrokers transacting busine? in New York as John M. Shaw & Company, and, as customers of Brown, they transacted business with him on spec- uiative account for the purchase and sale of stocks on margin. The account was carried on in Brown's books in the name of "Royal B. Young, Attorney," as agent of Shaw & Company. The transactions between Brown and Shaw & Company wero carried on for several months, from February to June, 1903. A debit and credit account was opened February 10, when Shaw & Company deposited with Brown $500 as margin, which was credited to them on the account, and Brown purchased for them certain s, ecuritics at a cost of $3,987.50, which was charged to them on the account. By agreement between the parties it was understood and agreed that all. securities carried in the account or deposited to secure the same might be carried in Brown's general loans and might be sold or bought at public or private sale, without notice, if Brown deemed such sale or purchase necessary for his protection. On the accounts ronderod by Brown the fol- lowing memorandum was printed: "It is understood and agreed that all securities carried in this account or deposited to secure the same may be carried in our general loans and may be sold or bought at public or private sale, without notice, when such sale or purchase is deemed necessary by us for our protection."
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