on presentation, and on receipt of each certificate by Mead & Co. they would stamp in red ink across the face thereof the word "PAID." This they testify was done to prevent the re-presentation of the certificates in case of their loss.

If a laborer desired goods, and had no certificate, or store due-bill, and goods were given him, they would be charged him on their books, and on afterwards delivering them a certificate for the amount thereof, such charge would be marked paid. Goods delivered upon certificates were not charged to the persons named therein, but were credited to merchandise, and the certificates charged to the Rolling Mill Company.

To show still more clearly the surrounding circumstances and the practical construction placed upon these certificates by the parties, and especially as it was claimed that no agreement existed under which these orders were to be so drawn and taken by Mead & Co., we will quote from the testimony of the plaintiffs' witnesses at some length, as all the testimony is given in the bill of exceptions.

Mr. Wheaton, the treasurer and general agent of the corporation, was examined as follows:

Q. Will you state whether you made any arrangement, or whether there was any arrangement with Mead & Company, by which Mead & Company should give the company credit for the goods given to laborers? A. There was no arrangement of that kind made.

E. H. Mead was examined and testified as follows:

Q. Will you state whether the Marquette & Pacific Rolling Mill Company had any arrangement of any kind with E. H. Mead & Co. whereby Mead & Co. should give goods to their laborers, and charge them to the company? A. No.

In this connection it may be proper to say that Mead also testified: "Dacey asked me, and I trusted him for goods, and took his labor certificate, knowing that the stockholders of the company were good, not trusting the company."

John Scudder was examined and gave testimony as follows:

In speaking of certain entries made upon the books of

Mead & Co. showing a monthly settlement and surrender of certificates, which will again be referred to, he testified:

*

*

*

*

*

*

*

*

"All the entries were made this way, with the understanding that Wheaton was to settle once a month with E. H. Mead & Co. and when he failed to do that, these duebills were not given up." "I made the entry with the understanding that Wheaton was going to take up these due-bills once a month; and when the end of the month came, I made the entry as if the due-bill would be given up; and they would be, provided he would take them." Question. Didn't you say that Mr. Wheaton was to settle with you once a month on behalf of the Marquette & Pacific Rolling Mill Company? Answer. Yes, sir; he was to settle with Mead & Co. Q. When I say 'you' I mean, Mead & Co. Was that the agreement? A. That was the understanding." Q. You say you talked it over with Wheaton. Give us the details of that agreement with Wheaton, on behalf of the Marquette & Pacific Rolling Mill Company, to pay these orders, take care of them. What was the agreement? A. The agreement was that Wheaton was to pay cash for all accounts, that is, for all goods that the Marquette & Pacific Rolling Mill Company got for its own use as well as these certificates. Q. The agreement was cash in this instance-nothing else? A. Yes, sir, cash. Q. Weren't they settled at the end of the month? A. Not quite at the end of the month but to make a monthly settlement. Q. In other words, the agreement was that at the end of the month, or when the month came around, that they would pay cash, and take up these orders and duebills, and pay also for what goods they had themselves? A. Yes, sir. Q. And wasn't it under this arrangement that you went on and accepted these certificates or due-bills and paid goods out on them? A. I think it was. Q. You know it was, don't you? A. Knowing that the certificates were good. Q. You knew the Marquette & Pacific Rolling Mill Company were perfectly good? A. I knew the Marquette & Pacific Rolling Mill Company were not good. Q. But you knew Marquette & Pacific certificates were good? A. I knew the stockholders were good."

This is all the direct evidence we have touching the fact whether there was an agreement or not. The orders upon their face would imply an agreement of some kind, as it would seem highly improbable that they would be drawn in

such manner in the absence of some understanding in the first instance. But the practice at first was strictly in accordance with such an agreement, except perhaps as to the full payment being made in cash. And the books of Mead & Co. in reference to their dealings for 1876 show that they had received from Mr, Wheaton for the Rolling Mill Company, cash, notes and drafts, sufficient to balance the amount of orders, due-bills and certificates received by Mead & Co., and their books were in that way balanced. In this connection Mr. Scudder also testified that although the books were so balanced, their claim was not considered paid, and the certificates were not all surrendered. So monthly statements were made upon their books, showing a surrender of the certificates after 1876, but subsequently changed.

It also appeared, and was not controverted, that the total amount of labor certificates taken by Mead & Co. was upwards of eighty thousand dollars; that they also had other claims against the Rolling Mill Company; that they received from the Rolling Mill Company over thirty-five thousand dollars in cash, and over sixty-eight thousand dollars of the paper of the Marquette & Pacific Rolling Mill Company, which if paid would have left a balance due Mead & Co. of less than two thousand dollars.

Of the paper of the Rolling Mill Company some was used and some was not, and a large amount was afterwards returned; all that had not been used was returned, some of it having been held but a day or two; some that had been used was returned, and some used was to be returned, so as to leave the balance against the corporation about fifty thous and dollars.

In case of doubt as to the proper construction of the certificates, it becomes the duty of the court to construe them in the light of the surrounding circumstances and of the practical construction given by the parties, by their course or dealing, and certainly in so far as the facts were undisputed there was nothing to submit to the jury.

The controversy after all was not so much upon the facts as the legal effect thereof. There was no controversy as to

45 MICH-7

the form of the certificates or the total amount issued and taken by Mead & Co., or as to the amount of cash and paper of the corporation paid to or received by Mead & Co., or as to the manner in which they kept their books in the main, or as to the returns of a large amount of the paper of the Rolling Mill Company. Whether the paper of the corporation was given to and received by Mead & Co. in payment. of these certificates, or on account thereof, or merely as accommodation paper, was controverted, and we may as well dispose of this part of the case here as at any other time.

This paper was not given or received as payment of the certificates: there is no evidence showing that it was, and in the absence thereof it must be held no payment. It is equally clear that it was not given as mere accommodation paper, within the customary meaning of that term. A corporation organized for mining and manufacturing purposes would have no authority to issue and deliver to third parties accommodation paper, and we cannot attribute any such unauthorized dealings to these officers, so long as a legitimate reason is apparent.

That there was an agreement made in the first instance, that certificates should be issued payable in goods at Mead & Co.'s store; that they were to deliver goods thereon, and that the corporation should settle with them monthly and pay the amount thereof, can scarcely be said to admit of any doubt or question. That the corporation failed to make such cash payments is equally clear; and that in lieu thereof it gave its paper to Mead & Co. is also beyond controversy, but such paper was given upon and because of the claims held by Mead & Co. It was given to them so they might use it, and to this extent was a benefit or accommodation to that firm, but because of the debt of the corporation upon which it was given and to be applied if paid, it was not what is known as accommodation paper.

The agreement entered into and course of dealing thus far referred to would indicate pretty clearly that Mead & Co. did look to the corporation for the payment of these certificates, and not exclusively to the stockholders. The fact that

there was no formal assignment of these certificates, or of the labor debt, also tends strongly in the same direction. It would be almost incredible to suppose that Mead & Co. possessing, as we may fairly presume, ordinary business prudence and sagacity, would take over eighty thousand dollars in claims against an insolvent corporation, intending to rely upon their right and ability as assignees thereof to collect from the stockholders, and yet have taken no formal assign

ment.

In this connection the written agreement of January 4, 1878, a copy of which is given below, should not be overlooked. It is true the evidence is that this agreement did not go into effect because never delivered, but whether delivered or not, the terms thereof were understood, so that it did not misrepresent the parties thereto, to say the least.

By this agreement the corporation was to deliver one hundred tons of ore "for each and every seventy-five dollars of due-bills, payable in goods at their store in Negaunee or Marquette, issued by W. W. Wheaton, treasurer, in payment for labor at said Rolling Mill mine, and taken up and paid by said E. H. Mead & Co. during the months of January, February, March and April, 1878."

The corporation was also after the opening of navigation to deliver a like quantity of ore for a similar amount "of such due-bills taken up and paid by them thereafter, until enough ore shall be delivered to pay said due-bills, and other labor due-bills of the said party of the first part, held by the said E. H. Mead & Co."

This indicates pretty clearly that even at the date of this agreement the parties understood that the laborers had been paid in goods, and that Mead & Co. looked to the corporation. And this undoubtedly was the understanding from the first. The orders as taken by Mead & Co. were marked "paid.” There is no doubt that thus marking them paid would prevent a re-presentation thereof, had they been lost, yet this is hardly the word that would have been used for such purpose alone, especially where the order was not for any purpose to be considered as paid.