he would not have entered upon, but for this misleading influence, will not be allowed afterwards to come in and assert his right to the detriment of the person so misled. That would be a fraud." Norfolk & Western Ry. Co. v. Perdue, 40 W. Va. 442, Syl. 4, 21 S. E. 755.

The same principle will be found in the following authority: Williamson & others v. Jones & others, 43 W. Va. 572, 27 S. E. 411, 38 L. R. A. 694, 64 Am. St. Rep. 891; Bates v. Swiger, 40 W. Va. 420, 21 S. E. 874; Atkinson v. Plum, 50 W. Va. 110, 40 S. E. 587, 58 L. R. A. 788.

Practically every element necessary to constitute an estoppel exists in the present

case:

1. The defendant concealed the fact that the certificate purchased by plaintiff was forged, if such it was, and represented to the plaintiff that it was genuine.

2. The defendant had full knowledge of the true state of facts concerning the certificate at the time of plaintiff's inquiry by telegram.

3. The plaintiff knew nothing concerning this certificate, and made inquiry about it, and was ignorant of the truth of the matters represented by defendant in its letters.

4. Defendant made these representations with the intention that plaintiff should act upon them, and for the purpose of inducing plaintiff to purchase the certificate.

5. The plaintiff was misled to his injury by the representations of the defendant, as it purchased the certificate for value on the representations, and the defendant should now be estopped from claiming that it was not its paper because forged.

6. Defendant failed to speak when it should have spoken, and cannot now be heard when it should be silent.

Leps was cashier, an executive officer of the defendant bank. As cashier, "his specific duties are to attend to the correspondence. He receives all letters and communications addressed to the bank, and should make it his business to open and attend to the contents of same." McGee on Banks and Banking, 153.

It was within the sphere of Leps' authority to answer the telegram sent by plaintiff on January 7, 1922, as to whether the paper purporting to be the obligation of the defendant was its obligation, and, being the cashier of the bank, he was the proper person to whom to make inquiry concerning this certificate. His answer is the answer of the

bank. No authority was required from the stockholders, directors, or any officer of the bank to authorize Leps to issue the certificate of deposit in question, and no countersignature or seal was needed to make it the legal obligation of the bank. The defendant bank elected Leps cashier, and placed him in a position of trust, and made the position for him to issue either good or fraudulent certificates of deposit.

Some one must lose the money involved in this action. Shall it be the plaintiff, who had nothing to do with placing Leps in a position of trust in the People's Bank of Keyser? Or shall it be the defendant in this action? "When one of two innocent parties must suffer by the act of a third, he, who by his act has enabled such third person to cause the loss, must sustain it.' This rule is absolutely necessary to the protection of innocent holders of commercial paper and the interest of the whole country demands that the rule be strictly adhered to. It is much better to suffer a few individuals to be defrauded out of their property, than to relax this salutary rule, and let the whole country suffer." First Nat. Bank of Parkersburg v. Johns, 22 W. Va. 535, 46 Am. Rep. 506; N. & W. R. R. Co. v. Perdue, 40 W. Va. 442, Syl. 3, 21 S. E. 755; McConnell v. Rowland, 48 W. Va. 279, 37 S. E. 586; Mercantile Bank v. Boggs, 48 W. Va. 293, 37 S. E. 587; National Bank of San Mateo v. St. John Whitney, 181 Cal. 202, 183 P. 789, 8 A. L. R. 298.

Plaintiff was induced to purchase defendant's certificate of deposit by the representation of defendant's cashier that this very certificate was bona fide and would be paid at maturity. Regardless of whether or not this certificate was a forgery, it was regular in its appearance and form, and it was within the scope of the cashier's authority to issue it. The cashier was the proper officer of the bank of whom to make inquiry concerning the certificate. It was within the scope of his authority to give information concerning the validity of the certificate. His answer is binding on the defendant. Tatum v. Commercial Bank & Trust Co., 193 Ala. 520, 69 So. 508, L. R. A. 1916C, 772.

To hold the certificate in this case was a forgery because of an alleged excess of authority on the part of the cashier to issue, would be to strike a deathblow to the law of negotiable instruments. The certificate sued upon is not forged paper in any sense, but is a genuine certificate, signed by the

cashier, the proper official of the bank, authorized to issue such instrument, and turned over by him to the payee. The fact that the bank received no consideration for the same, and that the payee misused it, is no defense as against the plaintiff, who is a holder in due course. Paton's Digest, vol. 2, p. 1353, and cases cited; Benedum v. Citizens' Bank, 72 W. Va. 124, 78 S. E. 656, Syl. 11.

If the contrary is held, who would dare accept these "couriers without luggage" in business transactions? If excess of authority constitutes an absolute defense in the hands of a bona fide holder, how is one dealing with certificates of deposit or certified checks to be protected? Can it be possible that, in order to protect oneself it is necessary to visit the bank itself, confer with its officers and directors, consult by-laws and minutes of the board of directors and of its several committees, in order to ascertain whether there be some want of authority on the part of the bank's cashier? In other words, to search each and every particular transaction with the same care and scrutiny that a buyer of real estate would make as to the title to the property to be conveyed to him? The mere statement of this proposition is enough to answer the defense interposed by the defendant bank on the ground of forgery.

From all the evidence and circumstances in this case it is clear, and I hold:

1. That the plaintiff is the holder in due course for value before maturity and without any notice of any infirmity of the certificate of deposit sued upon.

2. That the plaintiff has established by a clear preponderance of all the evidence that it acquired the certificate of deposit sued upon for value and is a holder in due course and without any knowledge of any infirmity therein.

3. That the cashier, Leps, of the defendant bank, had authority to execute certificates of deposit of the character here sued upon; that it is one of the specific duties of the cashier of any bank.

4. That the certificate sued upon was not a forgery.

5. That the defendant is estopped from setting up the defense of forgery.

An order may be drawn, giving judgment for the plaintiff.

27 F. (2d)-34

MORDELL v. DORAN, Prohibition Commissioner, et al.

Circuit Court of Appeals, Third Circuit. June 20, 1928.

No. 3796.

Intoxicating liquors 106 (2)-Disappearance of 10 barrels of alcohol overnight warranted Commissioner's finding that liquor was improperly diverted by permittee, justifying revocation of permit.

Disappearance of 10 barrels of denatured alcohol, for which permittee was liable, overnight, was fact on which Commissioner could properly base finding that liquor was improperly diverted by permittee, justifying revocation of permit.

Appeal from the District Court of the United States for the Eastern District of Pennsylvania; William H. Kirkpatrick, Judge.

S. O. Wing, Prohibition Administrator, revoked the permit of Irvin Mordell, trading as the Mordell Manufacturing Company. The permittee sued James M. Doran, Prohibition Commissioner, and the Administrator, to set aside the revocation and for an injunction. The revocation was sustained, and the permittee appeals. Affirmed.

Michael Serody and Benjamin M. Golder, both of Philadelphia, Pa., for appellant.

Warren C. Graham, Howard Benton Lewis, Asst. U. S. Atty., and Richard Hay Woolsey, all of Philadelphia, Pa., for appellees.

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

PER CURIAM. In this case the prohibition administrator revoked the permit of Irvin Mordell. The case was reviewed by a hearer and the court below, and revocation sustained.

Examination of the proofs discloses no error. 10 barrels of denatured alcohol, for which the permittee was liable, disappeared overnight. He alleged they were stolen, but his proofs failed to satisfy the prohibition administrator of the integrity of his alleged explanation. In that regard the court below held, and we reach the same conclusion, "that the disappearance of the liquor under the circumstances in this case is a fact upon which the Commissioner could properly base a finding that the liquor was improperly diverted by the permittee."

Without, therefore, discussing other contentions, we limit ourselves to affirming the decree below.

HARTFORD-CONNECTICUT TRUST CO. v. EATON, Collector of Internal Revenue. District Court, D. Connecticut. June 23, 1928. Nos. 3150, 3151.

Internal revenue 25-Previously decided case held reasonable cause for failure to file return, but not excuse for unreasonable de

98).

Under Rev. St. § 3176, as amended by Revenue Act 1918, § 1317 (26 USCA §§ 97, 98; Comp. St. § 5899), previously decided case, holding that particular profits were not income, held reasonable cause for failure to file tax return at time when otherwise due, but not protection against imposition of penalty for failure to make such return for more than two years after the case relied on had been reversed.

At Law. Action by the Hartford-Connecticut Trust Company, trustee, estate of Philip Corbin, and action by the HartfordConnecticut Trust Company, trustee, estate of Orlando Miner, both against Robert O. Eaton, Collector of Internal Revenue. Judg

ment for defendant in each case.

The plaintiff claims that the collector was not justified in imposing any penalty because the decision of Judge Thomas in the case of Brewster v. Walsh was reasonable cause for not filing returns on or before March 15, 1921, and as there was reasonable cause for not filing them on that date, the Commissioner is thereafter precluded from imposing any penalty. Further, that under section 3176, as amended by section 1317 of the Revenue Act of 1918 (26 USCA §§ 97, 98; Comp. St. § 5899), the only penalty that can be imposed is for failure to file within the prescribed time without reasonable cause for such failure; that the ground for penalty is complete on March 15, 1921, and that nothing that is done thereafter can change the situation.

BURROWS, District Judge. As the same question is in dispute in each of the above cases, they will be disposed of together in one memorandum. As the parties have stipulated to the material facts in each of these cases, it is unnecessary to review them.

Additional evidence, however, was offered by the plaintiff, through Clark T. Durant, vice president and trust officer of the plaintiff trust company, that at the time of filing the returns of income in the said two estates he consulted with the collector of internal revenue, and was advised to make return of the profit from the sale of property in each case, about which there was a question as to the liability to pay a tax, on fiduciary return form No. 1041, with a statement that the decision in the Brewster v. Walsh Case, 268 F. 207, decided by Judge Thomas in this district (dated December 16, 1920), held that said profits were not income. Mr. Durant further testified that he rested upon the decision of Judge Thomas in Brewster v. Walsh, and did not follow the course of the case at all, other matters of business engaging his attention.

The only question involved in these cases

March 15, 1921, in view of the Brewster v. Walsh Case. The decision of the Supreme Court, however, rendered the cause for not filing of no effect after March 28, 1921. The fact that the plaintiff did not follow the course of the Brewster v. Walsh Case, and that it had other business to perform, does not seem to me a reasonable cause for failure to file a return for more than 22 years after the Supreme Court decision in the Brewster v. Walsh Case, and then not until two months after demand having been made by the collector.

It is not probable that section 3176, as amended, was ever intended to mean that, if a reasonable cause existed on the date set for filing returns, and such cause was thereafter eliminated, the taxpayer could not be subjected to a penalty for failure to file, no matter how much time elapsed. The purpose of this statute is to facilitate the collection of taxes, and, if such a construction were given as urged by the plaintiff, a person could neglect to file his return not only 21⁄2 years, but any number of years, and the penalty statute would avail nothing, which is clearly not a reasonable construction.

Judgment may therefore be entered for the defendant in each case, without costs.

PINAUD, Inc., v. HUEBSCHMAN. District Court, E. D. New York. January 30, 1928.

No. 2966.

1. Trade-marks and trade-names and unfair competition 57-Unnecessary adoption of substantial part of plaintiff's trade-mark, by using name descriptive of plaintiff's goods, generally constitutes infringement.

Unnecessary adoption of trade-mark, by use of mark identical with name derived from plaintiff's trade-mark which has been sufficiently descriptive of plaintiff's goods, is generally regarded as an infringement, where the adoption is of a substantial part of the mark.

2. Trade-marks and trade-names and unfair competition 57-Defendant's subtractions from or additions to plaintiff's "trade-mark" proper will not void infringement, where sufficient imitation remains to create confusion.

Neither subtractions from nor additions to a trade-mark proper will avoid infringement, when such imitation as is likely to lead to confusion still remains on defendant's use of part of identical trade-mark; "trade-mark" meaning distinctive mark of authenticity, by which products of particular manufacturers or merchants may be distinguished, consisting of symbols or words which point out distinctively the origin or ownership of the articles to which the mark is affixed.

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, TradeMark.]

3. Courts 3512-If court's jurisdiction depends upon trade-mark violation, accompanying cause of action for unfair competition is properly dismissed, where separable and depending on proof of distinct facts.

Where court has jurisdiction in suit for infringement of trade-mark and unfair competition solely by reason of trade-mark violation, damages are rarely allowed for aggravation pursuant to theory of unfair competition unless clearly inseparable from violation of trademark, and suit for unfair competition will be dismissed where separate allegations and proof are required to support it.

4. Trade-marks and trade-names and unfair competition 21-Term "Lilas de France," used to describe plaintiff's toilet water, although primarily merely descriptive of extract, held valid trade-mark, where used over ten-year period before registration (TradeMark Act, § 5, as amended [15 USCA § 85]). Term "Lilas de France," used to describe plaintiff's toilet water for period of over ten years before registration, though words in their primary meaning are but description of the extract or perfume, constituted valid trade-mark, where registered under proviso of Trade-Mark Act, § 5, as amended (15 USCA § 85).

5. Trade-marks and trade-names and unfair competition 3(4)-Term "A La Corbeille Fleurie" or "basket of flowers," used in connection with plaintiff's perfume, held valid trade-mark.

Term "A la Corbeille Fleurie," or "basket of flowers," used in connection with plaintiff's per

fume, held to constitute valid trade-mark, since not merely descriptive of the article but a distinctive mark.

6. Trade-marks and trade-names and unfair competition 97-On discontinuance of infringement of trade-mark, plaintiff need not rely upon defendant's promises to avoid future Infringement, where defendant still claims right to use name.

Where infringement of trade-mark has been discontinued before bringing of suit, plaintiff is not obliged to rely upon mere promises of defendant to avoid infringement in future, provided it appears that defendant still claims right to use of trade-name.

7. Trade-marks and trade-names and unfair competition 97, 98-Where defendant had voluntarily abandoned infringement of trademark, prior to commencement of suit, plaintiff was entitled to injunction without accounting for past use.

Where, in suit for infringement of trademark, proof showed that defendant did not use mark at time of commencement of suit or subsequently thereto, and had voluntarily abandoned its use, plaintiff was entitled to injunction to prevent its future use, but not to an accounting for its use in the past.

8. Trade-marks and trade-names and unfair competition ~4, 58—Trade-mark representing spray of lilacs in connection with perfume held valid and infringed by defendant's representation of spray of lilacs in small vase (Trade-Mark Act, §§ 2, 5, as amended, and § 16 [15 USCA §§ 82, 85, 96]).

Trade-mark No. 204,999, representing spray of lilacs in connection with plaintiff's perfume, held valid and infringed by defendant's mark representing spray of lilacs in small vase though no vase was used in connection with plaintiff's mark, under Trade-Mark Act, §§ 2, 5, as amended, and section 16 (15 USCA §§ 82, 85, 96), prohibiting registration of mark resembling prior mark or likely to cause confusion or deceive purchasers.

9. Courts 351/2-Suit for unfair competition, accompanying suit for trade-mark infringement between residents of same state, held subject to dismissal, where not inseparably connected.

In suit for infringement of trade-marks and for unfair competition, brought in federal court between residents of same state, case for unfair competition depending on issues not inseparably involved in the infringement of trademark covering plaintiff's perfume products held subject to dismissal, Trade-Mark Act, § 19 (15 USCA § 99), providing redress for violation of trade-mark as such.

10. Trade-marks and trade-names and unfair competition 84-Registered trade-marks must be marked as such to constitute basis of Infringement suit (Trade-Mark Act, § 28 [15. USCA § 107]).

In suit for infringement of registered trademarks, trade-marks must be marked by statement giving notice of registration required by Trade-Mark Act, § 28 (15 USCA § 107).