delivered the opinion of the Court:

In Richardson v. Shaw, 209 U. S. 365, 52 L. ed. 835, 28 *598Sup.Ct. Rep. 512, 14 Ann. Cas. 98, it was ruled that, although a broker who carries stocks for a customer on a margin “may not be strictly a pledgee, as understood at. common law, he is essentially a pledgee, and not the owner of the stock, and turning it over upon demand to the customer does not create the relation of a preferred creditor, within the meaning of the bankrupt law.” The court rejected the contention of counsel for the trustee in bankruptcy, “that the insolvency of the broker at once converts every customer, having the right to demand pledged stocks, into a creditor who'becomes a preferred creditor when the contract with him is kept and the stocks are redeemed and turned over to him.” There, as here, stocks were held upon a contract requiring the broker, upon demand, to turn over the purchased shares, or similar shares, to the customer upon payment of advances, interest, and commissions. The court said: “These stocks were redeemed and turned over to him [the customer] ; as a consequence the relation of debtor and creditor as'between the broker and customer did not arise.” We see no escape from the conclusion that this decision is controlling here. Mr. Williams merely exercised his right to take up part of the securities carried for him by his brokers, and by that transaction the relation of debtor and creditor “as between broker and customer did not arise.” In Sexton v. Kessler, 225 U. S. 90, 97, 56 L. ed. 995, 1000, 32 Sup. Ct. Rep. 657, the court said: “When a broker agrees to carry stock for a customer, he may buy stocks to fill several orders in a lump; he may increase his single purchase by stocks of the same kind that he wants for himself; he may pledge the whole block thus purchased for what sum he likes, or deliver it all in satisfaction of later orders, and he may satisfy the earlier customer with any stock that he has on hand or that he buys when the< time for delivery comes.” See also Duel v. Hollins, 241 U. S. 523, 60 L. ed. 1143, 36 Sup. Ct. Rep. 615.

Mr. Williams testified that the first intimation he received of the financial plight of his brokers was on the 19th of October, 1914, and there is no evidence to the contrary. Indeed, the circumstantial evidence strongly corroborates Mr. Williams, *599for he had a right to take up all his securities, or withdraw the excess of his margin over 10 per cent, unless there was some agreement to the contrary, which the record does not disclose. And yet, after taking up the fifty shares of Southern Pacific stock, his balance was increased from $2,400 to $2,600, and his margin from about 30 per cent to about 47 per cent. It may be that the American Security & Trust Company had reason to suspect that all was not well with Lewis Johnson & Company, but nothing was said about this by the officials of that bank to Mr. Williams, and under the facts disclosed knowledge may not be imputed to him, for the agency of the bank was limited to receiving the fifty shares of stock and the delivery of the check for $2^425.

It would be difficult, however, under any view of the case, to reach the conclusion that Mr. Williams was not a purchaser for value. The brokers did no more with Mr. Pirkey’s stock than they were authorized to do; and even though Mr. Williams had known from what source they obtained these ten shares of stock, he could not have known that they would fail to invest the proceeds which they received from him in Mergenthaler stock, as directed by Mr. Pirkey. They still were a going concern, and apparently doing business as usual. As a matter of fact, Mr. Williams had no knowledge of Mr. Pirkey’s transactions with the brokers, and, like Mr. Pirkey, he had the right to assume that they would act in good faith toward all other customers. This, therefore, is a case where one of two innocent parties must suffer by the act of a third, and, as Mr. Pirkey, by his indorsement in blank, made possible the loss, he must bear it. National Safe Deposit Sav. & T. Co. v. Hibbs, 229 U. S. 391, 57 L. ed. 1248, 33 Sup. Ct. Rep. 818.

• The decree is affirmed, with costs. Affirmed.