Since insolvency of a national bank does not interfere with or change any liens existing at the time of the insolvency, the clearing-house has a perfect right to enforce upon the securities deposited with it any lien which is existing at the date of the insolvency, but not a lien for any claims against an insolvent national bank accruing after insolvency. It is for this reason that the decision referred to in the last section but one in the case of O'Brien v. Grant, 146 N. Y. 163, is so radically unsound. The reason that such a lien will not be permitted is that it creates an unlawful preference. This is the result arrived at in the litigation that culminated in the decision of the Supreme Court of the United States in Yardley v. Philler, 167 U. S. 344. The deposit of securities in that case was twofold - a deposit to secure clearing-house certificates, and the retention of the paper of the insolvent bank upon each day until it settled its balance with the clearinghouse for that day. The clearing-house was allowed its lien for the daily balances up to notice of the insolvency upon the proceeds of the collections in its hands, but it was not allowed a lien upon these proceeds for its certificates of deposit issued on the security of other deposits of paper, nor for a balance accruing from the transactions had after notice of the insolvency.1 Another case arising upon the insolvency of a clearing-house member showed the following state of facts: Securities were deposited with the clearinghouse to secure the members' daily balances and then any other indebtedness due to members of the association. The clearing-house was given a lien for its certificates issued to aid in maintaining the credit of the bank.2 Another case presented facts similar to Yardley v. Philler, supra, and the clearing-house was held to be a holder for value of such de-

1 See Sec. 327, ante, note a posits of paper to the amount of its lien.3 In a former section (327) it was pointed out that these decisions are questionable because the clearing-house must have had notice that the bank was so near insolvency that it could not maintain its daily business without help. If it could be shown that the bank was actually insolvent, there might be a serious question whether the clearing-house was justified in lending it funds so that it could continue longer to deceive and defraud the public.

2Philler v. Jewett, 166 Pa. 456. Indebtedness to members of the association was treated as indebtedness to the clearing-house. But it would appear that the clearinghouse had notice of insolvency. .

3 Philler v. Patterson, 168 Pa. 468. This case informs the profession that the issuance by a clearinghouse of its certificates is not a violation of the national banking act. They are therefore valid.