or commerce can be affected thereby only | that reason. A claim that such refusal may
most remotely and indirectly, and if, for the thereby lessen the number of active traders
purpose of compelling this membership, the on the market, and thus possibly reduce the
association refuse business relations with demand for and the prices of the cattle there
those commission merchants who insist upon set up for sale, and so affect interstate trade,
buying from or selling to yard traders who is entirely too remote and fanciful to be ac-
are not members of the association, we see cepted as valid.
nothing that can be said to affect the trade
or commerce in question other than in the
most roundabout and indirect manner. The
agreement relates to the action of the asso-
ciates themselves, and it places in effect no
tax upon any instrument or subject of com-
merce; it exacts no license from parties en-
gaged in the commercial pursuits, and pre-
scribes no condition in accordance with
which commerce in particular articles or be-
tween particular places is required to be con-
ducted. Sherlock v. Alling, 93 U. S. 99 [23:
819]; Smith v. Alabama, 124 U. S. 465, 473
[31: 508,510]; Pittsburg & S. Coal Company
v. Louisiana, 156 U. S. 590, 598 [39: 544,
548, 5 Inters. Com. Rep. 18].

This case is unlike that of Hopkins v. Oxley Stave Company [49 U. S. App. 709] 83 Fed. Rep. 912, to which our attention has been called. The case cited was decided without reference to the act of Congress *upon[620] which alone the case at bar is prosecuted, and the agreement was held void at common law as a conspiracy to wrongfully deprive the plaintiff of its right to manage its business according to the dictates of its own judgment. It was also said that the fact could not be overlooked that another object of the conspiracy was to deprive the public at large of the benefits to be derived from a labor-saving machine which seemed to the court to be one of great utility. No question as to interstate commerce arose and none was decided.

If for the purpose of enlarging the membership of the exchange, and of thus procuring the transaction of their business upon a proper and fair basis by all who are engaged therein, the defendants refuse to do business with those commission men who sell to or purchase from yard traders who are not members of the exchange, the possible [619]effect of such a course of conduct upon interstate commerce is quite remote, not intended, and too small to be taken into account. The agreement lacks, too, every ingredient of a monopoly. Everyone can become a member of the association, and the natural desire of each member to do as much business as he could would not be in the least diminished by reason of membership, while the business done would still be the individual and private business of each member, and each would be in direct and immediate competition with each and all of the other members. If all engaged in the business were to become members of the association, yet, as the association itself does no business, it can and does monopolize none. The amount and value of interstate trade is not at all directly affected by such membership; the competition among the members and with others who are seeking purchasers would be as large as it would otherwise have been, and the only result of the agreement would be that no yard traders would remain who were not members of the association. It has no tendency, so far as can be gathered from its object or from the language of its rules and regulations, to limit the extent of the demand for cattle or to limit the number of cattle marketed or to limit or reduce their price or to place any impediment or obstacle in the course of the commercial stream which flows into the Kansas City cattle market. While in case all the yard traders are not induced to become members of the association, and those who are such members refuse to recognize the others in business, we can see no such direct, necessary or natural connection between that fact and the restraint of interstate commerce as to render the agreement not to recognize them void for

2.

From what has already been said regarding rule 10, it would seem to follow that the other rules (11, 12, and 13) are of equal validity as rule 10, and for the same reasons. The rules are evidently of a character to enforce the purpose and object of the exchange as set forth in the preamble, and we think that for such purpose they are reasonable and fair. They can possibly affect interstate trade or commerce in but a remote way, and are not void as violations of the act of Congress.

We are of opinion, therefore, that the order in this case should be reversed and the case remanded to the Circuit Court of the United States for the Western Division of the Western District of Missouri with directions to dismiss the complainants' bill with costs.

Mr. Justice Harlan dissented.

Mr. Justice McKenna took no part in the decision of this case.

NORTHWESTERN

NATIONAL BANK, Riordan Mercantile Company, and Arizona Lumber & Timber Company, Appts.,

V.

B. N. FREEMAN, F. L. Kimball, and J. H. Hoskins, Copartners, as the Arizona Central Bank, and John Vories.

(See S. C. Reporter's ed. 620-631.) Chattel mortgage; when valid-notice to subsequent assignee—mortgage of domestic animals.

1.

A chattel mortgage of a given number of articles out of a larger number is valid as against those who know the facts.

The record of a chattel mortgage to other mortgagees is not notice to an assignee of a subsequent mortgage; but he is chargeable with notice of the record of a prior mortgage on the same property by the same mortgagor to his assignor.

thereof, nor were any of said sheep or the in crease thereof ever by anyone identified, designated, or in any way segregated, apportioned or substituted to the or on account

Argued April 15, 18, 1898. Decided October of the said pretended mortgages, or of either thereof. From date of said mortgages (July 24, 1898. 10, 1890) to January 4, 1893, said Fulton from time to time sold of said sheep as folby said Fulton accounted for, and the prolows: 1,700 head, at $3 per head, that were ceeds of which he deposited with the apsaid appellees knew of these sales and conpellee Arizona Central Bank; that both of

sented to them.

on said described sheep, and by means there
of, sold, assigned, indorsed, and delivered
said note and mortgage to the Northwestern
National Bank, one of the appellants herein
and one of the defendants in the court below,
said Northwestern National Bank becoming
an innocent purchaser for value.

asking for a foreclosure of its said alleged mortgage, the same being the above-entitled cause.

"That said action was tried and judgment was rendered foreclosing said alleged mortgages of both of appellees herein and also the said mortgage dated January 4, 1893, of "That on December 18, 1893, said Fulton, said Arizona Lumber & Timber Company and being then indebted to Riordan Mercantile the mortgage owned by said Northwestern Company, one of the appellants herein and National Bank as aforesaid, in which said a defendant in the court below, in the sum of judgment said court adjudged that appellees $810.91, it brought its action in said district have a prior and first lien on said property, court against said Fulton whereby to collect viz., the Arizona Central Bank upon 5,000 the same, and at the same time caused to be sheep of the Fulton mark by reason of its issued out of the clerk's office of said court a said mortgage and the said Vories on 1,000 writ of attachment, which was then levied sheep of the Fulton mark by reason of his [624]on the property following, *namely: 'All the said mortgage; and said court decreed and right, title, and interest of the defendant ordered that an order of sale issue for the Harry Fulton in and to the following-de-sale of all of said property to the sheriff of scribed sheep: 2,926 ewes, marked hole in left ear, split in right; 900 wether sheep, marked hole in right ear, split in left ear; 1.287 lambs, ewe lambs marked hole in left ear, split in right, wether lambs marked hole in right ear, split in left; 118 rams,' same being all of the sheep then owned by said Fulton.

said county, and that the proceeds arising therefrom be divided by the sheriff and applied as follows, namely, at the ratio of five dollars to said Arizona Central Bank and one dollar to said Vories; that in case anything should be left after the payment of said two mortgages to said bank and Vories, the same should be applied to the payment of the judg ments of said Northwestern National Bank and said Arizona Lumber & Timber Company and Riordan Mercantile Company in the order named."

There are seventeen assignments of errors, which are somewhat confused. They are grouped and presented by counsel under

"That on 16th March, 1894, judgment was
rendered in said suit in favor of said plain-
tiff company and against said Fulton, for
said amount, and said attachment lien was
foreclosed; that on the 31st day of March,
1894, the sheriff of said county of Coconino,
by virtue of and pursuant to said judgment,
sold said property and delivered the same to
the appellant Riordan Mercantile Company,
who then entered into the possession there-it
of, was so in the possession thereof when this
cause was tried in the lower court, and are
still in possession thereof.

seven heads as follows:

is set forth that the trial court erred in "First. In the first assignment of error erred in affirming said judgment, that the adjudging, and the territorial supreme court

therein.

eighth assignments of error it is set forth
"Second. In the second, third, fifth, and
that the trial court, and the territorial su

"That by virtue of said writ of attach-mortgages of the appellees were prior liens ment the sheriff attached all the sheep then ton at the time of the execution of said morton all of the sheep owned by defendant Fulowned by said Fulton, and that on said day, to wit, on the 18th day of December, 1893, gages, even though said mortgages had been there were of said sheep only 1,000 head of good and prior liens on the sheep specified ewes remaining out of all the sheep that existed on July 10, 1890, the date of said alleged mortgages to appellees; that the remainder of said ewes, all the male sheep and the lambs, had by that time died, been con-preme court in sustaining its holding, erred in admitting in evidence the mortgages from sumed, sold, or lost. defendant Fulton to the appellees, marked[626] Exhibit 'A' and 'B,' against the objections of the appellants, and in overruling motion of appellants to strike out of the evidence the said mortgages, and in holding that said mortgages were valid and subsisting liens on all of said property, and in holding and deciding that the description of said property in appellees' said mortgages was a sufficient description.

"That subsequent to the making of said alleged mortgages to said appellees, an oral agreement between them and the said Fulton was made that the securities of appellees were to be kept good out of the increase by substitution, the consideration therefor being that said Fulton might sell and dispose of the said sheep without interference from appellees.

"That Sisson, a witness for appellants in
this case, is and was during all of said trans-
"Third. In the fourth and seventh assign-
actions the treasurer of both the Riordan ments it is set forth that the court erred in
Mercantile Company and the Arizona Lum-admitting, over the objection of the appel-
ber & Timber Company, appellants herein, lants, testimony concerning a conversation
and that these two corporations have prac-between J. H. Hoskins, John Vories, F. W.
tically the same officers.

"That in said district court said Arizona Central Bank brought its suit as plaintiff against said Fulton, Vories, Donahue as sheriff, the Arizona Lumber & Timber Company, [625] the Riordan Mercantile Company, and the Northwestern National Bank, as defendants,

Sisson, and Harry Fulton, and evidence rela-
tive to an alleged agreement, and evidence
tending to prove a breach of contract between
the appellees and appellant Arizona Lumber
& Timber Company.

"Fourth. The trial court erred, as set forth
in the fifteenth and sixteenth assignments,

in adjudging that on the date of its decree
herein the mortgage of said appellee bank
covered five thousand head of sheep of the
Fulton herd and mark, such adjudication at-
tempting to substitute five thousand head of
sheep after the making of said two mort-
gages to appellees; the trial court erred in
attempting said substitution, and then hold-wise than that applicable to all of that
ing it good as to appellants Riordan Mercan- class, nor any selection nor delivery, nor
tile Company, and Northwestern National any specification as to which are intended
Bank.
out of a larger lot on hand, such mortgage
will be ineffectual to pass any title to any
particular property, or any interest in the
property on hand.

Where there is a larger number of the same kind in the possession of the mortgagor, and no particular description other

"Fifth. The trial court erred, as set forth in the eleventh assignment, in adjudging that said mortgages of appellees were mere securities for debts, the legal title to said sheep remaining in said Fulton, notwithstanding said mortgages, and in adjudging that said sheep should be sold and the proceeds paid to said Arizona Central Bank and said Vories, in the proportion of five dollars to the former and one to the latter.

of description that will serve to distinguish
the property embraced therein from all
other property of the same kind.
Pingree, Chat. Mortg. § 142.

Stonebraker v. Ford, 81 Mo. 538; Fowler v. Hunt, 48 Wis. 345; Richardson v. Alpena Lumber Co. 40 Mich. 203; Blakely v. Patrick, 67 N. C. 40, 12 Am. Rep. 600; Kelly v. Reid, 57 Miss. 89; Parsons Sav. Bank 7. Sargent, 20 Kan. 576; Rood v. Welch, 28 Conn. 157; Newell v. Warner, 44 Barb. 258; Payne v. Wilson, 74 N. Y. 348.

"Sixth. The trial court erred, as set forth in the seventeenth assignment, in adjudging that appellant Northwestern National Bank was bound by said pretended agreement of substitution or was bound by said pretended mortgages of appellees, or that said mortgages were prior liens on said property, or on any of it, to the mortgage owned by said appellant. "Seventh. In the sixth, ninth, tenth, [627]twelfth, thirteenth, and fourteenth assignments it is set forth that the court erred in denying and overruling defendants' motion for a new trial of said cause; and in deciding that the mortgage to said appellee, the Arizona Central Bank, conveyed five thousand head of sheep, marked: ewes with hole in left ear and split in right, wethers with hole in right ear and split in left ear, and that a thousand more of said sheep were conveyed by mortgage to said appellee Vories, with the same marks; and in adjudging that the property included in the said attachment lien of the said Riordan Mercantile Company and sold and delivered to said company thereunder was the same property that is conveyed, or attempted to be conveyed, by the mortgages of said appellees; and in adjudging that the rights, title, and interests obtained by said Riordan Mercantile Company, by virtue of said attachment lien and sale, was subject to the alleged rights of said appellees by virtue of their said pretended mortgages; and in adjudging that appellants Riordan Mercantile Company and Arizona Lumber & Timber Company had actual notice of the Pom. Eq. Jur. § 726; Hunt v. Bullock, 23 property conveyed by the said alleged mort-Ill. 320; Powers v. Freeman, 2 Lans. 127; gages of said appellees; and in adjudging Titus v. Mabbe, 25 Ill. 257; Rhines v. Phelps, that F. W. Sisson, as the treasurer of 8 Ill. 455. said Riordan Mercantile Company, agreed with said appellees that the number of sheep in said mortgages of appellees should be kept good out of the increase of said sheep, and that the wool was released by said agreement to said company, and that the consideration thereof was an alleged forbearance to foreclose said mortgages of said appellees."

Messrs. A. B. Browne, E. E. Ellenwood, and A. T. Britton, for appellants:

There can be no agreement by the parties, which will bind others, that there shall be a substitution of other property for that first specified.

Hutton v. Arnett, 51 Ill. 198; Elliott v. Long, 77 Tex. 467.

That the mortgages were to be kept good cut of the increase by substitution, the consideration therefor being that Fulton might sell and dispose of the sheep without interference from appellees, would of itself render the mortgage absolutely void.

Peiser v. Peticolas, 50 Tex. 638, 32 Am. Rep. 621.

The increase of the sheep attempted to be mortgaged, if there were increase, would therefore not be covered thereby.

Winter v. Landphere, 42 Iowa, 471; Enright v. Dodge, 64 Vt. 502; Darling v. Wil son, 60 N. H. 59, 49 Am. Rep. 305; Rogers v. Gage, 59 Mo. App. 107.

Substituted property is not held by virtue of the mortgage, but by virtue of the agreement of the parties, whereby an equitable lien, cognizable only in a court of equity, arises in favor of the mortgagee.

Pom. Eq. Jur. § 1235; Simmons v. Jenkins, 76 Ill. 479.

There can be no substitution or exchange of property by the parties to the mortgage, that will bind third parties, unless the mortgagee takes actual possession of the substituted articles before the rights of third parties intervene.

Where an equitable mortgage is claimed as the result of an agreement, there must be, at the time such agreement is made, such identification of the property that the equitable mortgagee may see with a reasonable degree of certainty what property it is that is subject to his lien.

Payne v. Wilson, 74 N. Y. 352; Newell v. Warner, 44 Barb. 258.

To be held in equity, the description of the property mortgaged must be certain. Hughes v. Menefee, 29 Mo. App. 192; Mor

A chattel mortgage must contain terms' rill v. Noyes, 56 Me. 458, 96 Am. Dec. 486.

The claim of the mortgage is to be enforced on the identical property included in the mortgage.

After stating the case, Mr. Justice Mc-[627]
Kenna delivered the opinion of the court:
The contest is for priority. The terri-
torial supreme court awarded it to the mort-

Kelly v. Reid, 57 Miss. 89.

Upon breach of the conditions the mortgages of the appellees. The appellants *con-[628] gagee may take possession of the property, tend that this was error because of the fact and henceforth treat it as his own. He that the mortgages respectively covered may sell it or give it away, squander or des- 5,000 and 1,000 head of sheep, and that Fultroy it. ton owned 6,200 head, and that hence the mortgages were invalid on account of insufficient descriptions. The mortgages do not state that Fulton owned a greater number than those he mortgaged, but the fact is found by the court.

Heyland v. Badger, 35 Cal. 404; Wright v. Ross, 36 Cal. 414; Pom. Eq. Jur. § 1229; Parshall v. Eggert, 54 N. Y. 18; Blake v. Corbett, 120 N. Y. 327; Tompkins v. Batic, 11 Neb. 147, 38 Am. Rep. 361.

Messrs. Fred Herrington and Cass E. Herrington, for appellees:

A mortgage of a certain number out of a larger number is not void.

Oxsheer v. Watt, 91 Tex. 124; Leighton v. Stuart, 19 Neb. 546; Frost v. Citizens' Nat. Bank, 68 Wis. 234; Gurley v. Davis, 39 Ark. 394.

Such mortgage is good as to parties having notice.

Clapp v. Trowbridge, 74 Iowa, 550. The rights of appellants are to be deter mined by the circumstances existing at the time their rights were acquired.

Cole v. Green, 77 Iowa, 307; Interstate Galloway Cattle Co. v. McLain, 42 Kan. 680. Appellee bank's mortgage covered the in

crease.

Pyeatt v. Powell, 10 U. S. App. 200, 51 Fed. Rep. 551, 2 C. C. A. 367; Arkansas Valley Land & Cattle Co. v. Mann, 130 U. S. 78, 32 L. ed. 857; Fowler v. Merrill, 11 How. 375, 13 L. ed. 736; Cahoon v. Miers, 67 Md. 573; Meyer v. Cook, 85 Ala. 417;

Funk v. Paul, 64 Wis. 35, 54 Am. Rep. 576.

Where two mortgages are of record, one of which correctly describes the property and refers to the other as being upon the same property, the description of such other mortgage is rendered definite, and the record is sufficient to impart notice to the world.

Tompson v. Anderson, 94 Iowa, 554; Newman v. Tymeson, 13 Wis. 172, 80 Am. Dec.

735.

of

Means of knowledge, with the duty using them, are in equity equivalent to knowledge itself.

Cordova v. Hood, 17 Wall. 1, 21 L.

ed.

587.

The holder of a mortgage "in terms" made subject to another mortgage cannot defeat it upon technical grounds.

Eaton v. Tuson, 145 Mass. 218; Flory v. Comstock, 61 Mich. 522; Gammon v. Bull, 86 Iowa, 754; Cassidy v. Harrelson, 1 Colo. App. 458; Clapp v. Halliday, 48 Ark. 258; Hoagland v. Shampanore, 37 N. J. Eq. 588. A written agreement, although not signed by the parties, will, if orally assented to by them, constitute the agreement between

them.

Dutch v. Mead, 4 Jones & S. 427; Farmer v. Gregory, 78 Ky. 475; Bacon v. Daniels, 37 Ohio St. 279.

A party is presumed to have actual notice and to have consented to all that appears in his own conveyance.

Finley v. Simpson, 22 N. J. L. 311, 53 Am. Dec. 252.

The rule is laid down that, as to third persons who have acquired interests, a description in a mortgage of a given number of articles out of a larger number is not sufficient. Jones, Chatt. Mortg. §§ 56 et seq., and cases cited.

But such a mortgage is valid against those who know the facts. Cole v.Green, 77 Iowa, 307; Clapp v. Trowbridge, 74 Iowa, 550.

The mortgage of January 4, 1893, executed by Fulton to the Arizona Lumber & Timber Company was undoubtedly taken by the latter, not only with actual notice, but it was expressly made subject to the prior ones to appellees. The finding of the court is: "At the instance of appellees said appellant, Arizona Lumber & Timber Company, permitted the following recital to be inserted in said last-mentioned mortgage, namely: "This being subject to a mortgage Bank, and one on 1,000 head, and the resion 5,000 of above sheep to Arizona Central dence property to John Vories, said number, as described in mortgages, to be kept good for the foregoing recital in the mortgage of January 4, 1893, namely, that the appellees should forbear to foreclose their mortgages, and should release their claim on the wool clip of 1893, the wool at that time not having been shorn."

out of increase.' There was consideration

30, 1893, Fulton paid to the Arizona Lumber
The court further finds that on August
& Timber Company $3,000 out of the proceeds
of the wool from the mortgaged sheep, se-
cured from the company an advance of $500,
and for that and the amount due on his note
"executed his negotiable promissory note
payable in ninety days, securing the same
by a chattel mortgage for the sum of $6,000."
In this mortgage there was no recital or ref-
erence to the existence of any other mort-
gage. On the 29th of September, 1893, and
prior to this *maturity, the "appellant, the[629]
Arizona Lumber & Timber Company, repre-
senting that said mortgage was a first lien,
sold, indorsed, and delivered the note and
mortgage to the appellant the Northwestern
National Bank." It is this note and mort-
gage that are in controversy and which are
claimed as prior liens to the mortgages of
appellees. The bank is found to be an inno-
cent purchaser for value. By this is meant
that it had no actual notice of the prior
mortgages. Did the law impute notice to it?
Certainly not by the record of the mortgages
to appellees. Did it by the record of the
mortgage of January 4, 1893, to the Arizona