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which defendant agreed to pay the premiums

Portland, Ore., Sept. 15, 1906. on all marine insurance so written. There A. H. Birrell,

a/c L. B. French, upon an account was opened by plaintiff, and

To M. C. Harrison & Co., on June 29, 1907, rendered to defendant with

Marine Insurance Brokers and reference to insurance written during that

Average Adjusters. month, when it was agreed there was due To Marine Insurance on One' Crate Pic

Pol. 2527, S. “Azbec," 9/25. plaintiff $531.52, of which on July 31, 1907,

tures to L. A., $1,000 at 12%.. $5.00 defendant paid $289.35, and the account be

Bkge., 10% came stated. The second cause of action is based upon an account stated on or about Paid, Sept. 17, 1906.

$4.50 July 31, 1907, for marine insurance written

M. C. Harrison & Co., per J. W. M. during that month, amounting to $370.35, no part of which has been paid.

Afterward, at the instance and request of Defendant, by his separate answers, denies defendant, other insurance was written, and the allegations of the complaint, "except as

on and between October 31, 1906, and July hereinafter expressly alleged,” and for fur- 31, 1907, several monthly statements were ther and separate answer avers in substance rendered, four being in the name of the St. that plaintiff is not, but that the St. Paul Paul Fire & Marine Insurance Company, with Fire & Marine Insurance Company, a corpo- the words "M. C. Harrison & Co., General ration, is, the real party in interest. For a Agents," stamped on the face thereof, all of second further and separate answer to the which were honored by defendant, except first cause of action defendant alleges that that of June 29, 1907, for $531.52, upon which plaintiff, at the times mentioned in the com- payment of $289.35 was made, and the stateplaint, was doing business at Portland, Or., ment of July 31, 1907, for $370.35, no part for and in behalf of M. C. Harrison & Co., of which was paid. The total amount of the a foreign corporation, as its president, and different payments to plaintiff was $1,032.23. that said corporation has not complied with all the business was sent in by defendant, the laws of the state of Oregon by filing with at whose request it had been written, except the Secretary of State a declaration, has not in one or two instances, when it had been paid the filing fee nor any annual license fee written for one of his clients and reported for the year 1907, as required by law, and to him. To no item in these accounts was that in order to evade the payment of these objection made until some time between the fees this action was begun in the name of 25th and 30th of November, 1907, at which M. C. Harrison.

time defendant objected to the July statePlaintiff interposed a motion to strike the ment; but in no way did he question the second affirmative answers and certain para- June statement until January of the followgraphs of the first affirmative answers as ing year. frivolous, irrelevant, and redundant. This Plaintiff also produced evidence, showing being denied, plaintiff replied, denying the it to be a general custom in marine insurmaterial allegations thereof.

ance business on the Pacific Coast, and parUpon trial of the cause by the court with- ticularly in Portland, for the underwriter of out a jury, plaintiff introduced evidence, such insurance to look to the broker, bringtending to show that he, doing business un ing the business into the office, for the payder the name of M. C. Harrison & Co., is ment of premiums on business so introduced. the general agent in Portland, Seattle, and This custom was well understood, and unSan Francisco for the St. Paul Fire & Ma- der such custom, in case the business was rine Insurance Co.; that in the year 1906 introduced by a broker, it would be regarded an arrangement was entered into for the in- as discourteous for the underwriter to interterchange of insurance business between him view the owner of the cargo or ship upon and defendant, Birrell, an insurance broker which the insurance was written, except with do business in Po nd, in which he the consent of the broker. The St. Paul agreed to pay commissions on all marine in- Fire & Marine Insurance Company looked to surance premiums which defendant should its agents for payment of premiums, and the bring into his office; that thereafter defend agents were obligated to make such payant ordered different policies of marine in- ments, whether or not the premiums were surance to be written by him in the St. Paul collected. The premiums earned on business Fire & Marine Insurance Company, and an noted in the statements rendered to defendaccount was opened by him, in which defendant were, in fact, all paid by plaintiff to the ant was charged with the premiums and St. Paul Fire & Marine Insurance Company, credited with the commissions thereon. All which company, by reason thereof, asserts the transactions were entered in defendant's no claim against the defendant. books also, in an account entitled “Misce At the conclusion of plaintiff's evidence delaneous Insurance Accounts,” which showed fendant moved to strike out all the testimony that he in no instance paid plaintiff for pre- on the subject of custom, and for judgment miums until after he collected same from the of nonsuit, which motions were allowed by insured. The following statement, sent by the court, and exceptions taken by plaintiff. Harrison, the plaintiff, to Birrell, the defend- From a judgment in favor of defendant ant, was by the latter honored and paid: for costs, plaintiff appeals.

Wallace McCamant (Snow & McCamant, , think, some evidence that the entire credit on the brief), for appellant. A. F. Flegel was given to defendant, and that his promise (Flegel & Reynolds and Charles H. Carey, on was an original undertaking, and not within the brief), for respondent.

the statute, even though the transaction in

ured to the benefit of others. Mackey v. BEAN, J. (after stating the facts as above). Smith, 21 Or. 598, 603, 28 Pac. 974; PeterFrom an examination of the answer it ap- son v. Creason, 47 Or. 69, 71, 81 Pac. 574; pears defendant denies the allegations of the Chapin v. Lapham, 20 Pick. (Mass.) 467; complaint, "except as hereinafter expressly Chase v. Day, 17 Johns. (N. Y.) 113; 29 A. alleged,” thereafter alleging, as to each cause & E. Ency. (2d Ed.) 920; 20 Cyc. 180. of action, that all insurance written by plain- [7] The contention is also made that plaintiff in the St. Paul Fire & Marine Insurance tiff is not the real party in interest. The Company for defendant, or at his instance evidence tends to show that plaintiff was and request, during June and July, 2007, was responsible to the St. Paul Fire & Marine written by plaintiff as president of M. C. Insurance Company for the premiums, that Harrison & Co., for and in behalf of said in- he had paid the same to such company, and surance company, and all promises or obli- that he was the real party in interest. gations, if any, to pay premiums, and all [8] When an insurance company looks to dealings, were with the St. Paul Fire & Ma- its general agent for the premiums on inrine Insurance Company. The transactions surance written by him, the agent is the set forth in the complaint, as to defendant's owner of the debt, arising by his extending part therein, are not denied, but are claimed credit for the premiums, so that on payment to have been had with another, and not with thereof he is subrogated to all the rights of the plaintiff.

his principal in the premiums, entitling him [1] For the purpose of qualifying the de- to sue therefor. Waters v. Wandless (Tex. nials and explaining the transactions, we Civ. App.) 35 S. W. 184; Bang v. Farmville, think it proper for defendant to set forth in 1. & B. Co., 2 Fed. Cas. 585; Willey v. Fi. his answer the dealings as he claims they delity & Cas. Co. (C. C.) 77 Fed. 961; Gayswere, and that the motion to strike the first ville Mfg. Co. v. Phænix Mut. Fire Ins. Co., three paragraphs of each of the first further 67 N. H. 457, 36 Atl. 367. See, also, Overand separate answers was properly denied. holt v. Dietz, 43 Or. 194, 199, 72 Pac. 695.

[2] As to the paragraphs of the answers No assignment of the premiums is necessary relating to the filing of a libel in the fed- to enable the agent to recover. Gillett v. eral court, this action appears to have been Insurance Co. of North America, 39 Ill. App. dismissed for want of jurisdiction, and can- 284. But, if an agent has no right by subnot possibly have any effect upon this case. rogation or assignment, he is not entitled to The motion to strike, as to these paragraphs, bring an action. 2 Cooley's Briefs on Ins. should therefore have been allowed.

916. [3] The second further and separate an- As we understand the record, the court swers to each of the two causes of action allowed the motion to strike out all evidence are in the nature of pleas in abatement, and relating to the custom of the underwriter to were waived by defendant pleading to the look to the broker bringing business into merits. Rafferty v. Davis, 54 Or. 77, 102 the office, for the payment of premiums on Pac. 305.

business so introduced, for the reason that [4] A plea in abatement cannot be joined the plaintiff had not pleaded such custom. with a plea in bar, and must be disposed of [9] A general custom or usage need not be before an answer to the merits can be con- pleaded. 12 Cyc. $ 1097. Where a local cussidered. La Grande v. Portland Public Mar- tom is relied upon as entering into, or formket, 113 Pac. 25, and cases there cited. Un- ing a part of, a contract, it must be pleaded. der the provisions of section 6709, L. 0. L., | A local custom which is merely incidental to such pleas should be disposed of before trial an implied contract, and relied upon only as of the case upon its merits.

evidence of some fact in issue, need not be [5] The motion to strike was directed at pleaded. Sherwood v. Home Sav. Bank, 131 the whole of the further and separate an- Iowa, 528, 109 N. W. 9.

We do not think that the sufficien- [10] It may be helpful to inquire whether cy of these defenses should be tested by the custom referred to is a general or a local. such a motion, or that it should perform the one, within the meaning of the rule. The office of a demurrer. The Victorian, 24 Or. witnesses testifying were experts on the sub121, 32 Pac. 1010, 41 Am. St. Rep. 838. The ject of Pacific Coast marine insurance, and, denial of the motion as to these parts of the when they stated that the custom was genanswer was not error. Proper objection up- eral and well understood, they without doubt on the trial would be the only opportunity referred to the Pacific Coast. If defendant's remaining for plaintiff to take advantage of answer should be treated as a denial of the the defects in these separate answers. contract, we think, in order that the trans

[6] It is contended by defendant that the action be fully understood, and to explain alleged contract was to pay the debts of oth- what was said and done, that it was compeers, that is, those insured, and therefore tent for plaintiff to prove such a custom. In


tions use words fraught with much meaning, der a del credere commission, and this rule which would have but little sense to one applies to marine insurance, unless abrogatunacquainted with the business.

ed by a usage, such as prevails in England. [11] Taking the statement of these wit-*

2 Cooley's Briefs on Ins., 917, citnesses, therefore, as correct, it would seem ing Mannheim Ins. Co. v. Hollander (D. C.) that the custom was general in so far as 112 Fed. 549. it in any way affected the dealings between [14] Where an action is based on an implaintiff and defendant.

plied contract general custom or usage may [12] As a matter of fact it might be pre- be offered in evidence to interpret and apsumed that defendant, doing a brokerage ply the acts proved and relied on. Such business in the marine insurance line, had matter is evidentiary, and need not be pleadknowledge of such custom, if one prevailed. ed. Lowe v. Lehman, 15 Ohio St. 179; Fish Whitehouse v. Moore, 13 Abb. Prac. (N. Y.) v. Crawford, 120 Mich. 500, 79 N. W. 793; 142. Mr. Justice Lord, in Sawtelle v. Drew, Whitehouse v. Moore, 13 Abb. Prac. (N. Y.) 122 Mass. 229, says: "A custom, within the 142; Hewitt v. Week Lumber Co., 77 Wis. meaning of the law, if general, is incorpo- 548, 46 N. W. 822. rated into and becomes a part of every con- [15] An account rendered and not objected tract to which it is applicable; if local, of to within reasonable time becomes an acevery contract made by parties having count stated. Fleischner, Mayer & Co. v. knowledge of or bound to know its exist- K. Kubli et al., 20 Or. 328, 25 Pac. 1086; ence.” In our opinion this evidence is ad- Crawford v. Hutchinson, 38 Or. 578, 65 Pac. missible to prove the circumstance of the al. 84. Plaintiff concedes the incumbency upon leged contract, and to explain what was ex- him to show the pre-existing relation of pressed in a general way perhaps, in order debtor and creditor between him and defendto determine the understanding between the ant, in order to form a basis for an account parties at the time of making the arrange- stated. ment, upon what, if anything, their minds [16] It is claimed by defendant that these met, or what their agreement was. McCul- accounts were original bills only; they could sky v. Klosterman, 20 Or. 108, 25 Pac. 366, not become stated for the reason that the ac10 L. R. A. 785; Holmes v. Whitaker, 23 Or. count of July contained no items included in 319, 323, 31 Pac. 705.

the June statement. A similar question In Hewitt v. Week Lumber Co., 77 Wis. arose in the case of Crawford v. Hutchinson, 518, 46 N. W. 822, where the jury found it supra, where it was insisted that an acwas, and had been for many years, a general count stated could properly exist only where custom in the sawmills on the Wisconsin river the accounts on both sides had been examinfor the manufacturer to keep the slabs from ed and the balance admitted as a true balmanufactured logs, it was held that the cus- ance between the parties, or where a statetom was a general one, within the mean- ment, including all the mutual accounts withing of the law, and therefore could be prov- in the knowledge of the creditor, had been ed without allegation thereof. "The proof rendered and not objected to within a reaof such custom is always admitted without sonable time. In the case referred to Mr. pleading it.” And in Fish v. Crawford Mfg. Chief Justice Bean, at page 581 of 38 Or., Co., 120 Mich. 500, 79 N. W. 793: "The plain- at page 85 of 65 Pac., says: “But the failtiff claims that by a local custom the seller ure to include a counterclaim arising out of of lumber to Chicago or Milwaukee purchas- some independent transaction does not necesers pays the entire of the inspection charges, sarily prevent an account rendered from beat least in the first instance. The circuit coming an account stated as to everything judge left it to the jury to find whether the embodied therein, if no objection is made Custom claimed to exist in fact prevailed, thereto within a reasonable time.” If the instructing the jury that a custom, in order account of the plaintiff only be stated, showto be controlling, must be definite, precise, ing the amount due, an acknowledgment or and unvarying. It is contended that it was admission thereof is sufficient to constitute it error to submit the question to the jury, for as stated, although the defendant may have two reasons: First, that the custom was not counterclaims which are admitted. Ware v. declared upon; and, second, that the evi- Manning, 86 Ala. 238, 5 South. 682. And in dence did not show a custom. We think it Filer v. Peebles, 8 N. H. 226, it was held was not necessary to declare specially upon that where an account was stated by the this custom. It was in this case only a mat- parties, and an amount agreed upon as due ter of evidence, adduced for the purpose of plaintiff within certain dates, but the deshowing what the implied contract between fendants claimed something on a prior acthe defendant and plaintiff was."

count, there is a sufficient stating of account (13] In Great Britain, by universal custom, for the amount named, subject only to the the broker is liable to the underwriter for right of the defendant to set off any prior the premium on marine insurance. 19 A. & claim not included therein. See, also, NorE. Ency. (2d Ed.) 979. “A broker who pro- mandin v. Gratton, 12 Or. 505, 8 Pac. 653, cures insurance is a mere 'go-between,' and and Nodine v. Bank, 41 Or. 386, 68 Pac. is not liable for a premium on a policy pro- 1109. cured by him for another, unless he acts un- [17] Upon principle, if it be admitted or

115 P.-10

found that the account for the June premi-s held by the clerk of the court for a stated periums became stated or settled, it would be od, and plaintiff will be required to deposit the unnecessary for the parties in settling the amount of the debt due defendant with costs,

disbursements, and attorney's fees; the stock July account to make another settlement of otherwise to be returned to defendant, and dethe June account.

fendant will be required to deposit the stock [18] On a motion for nonsuit every intend and receive the amount deposited by plaintiff, ment and every fair and legitimate infer- and, if he does not do so, the present value of

the stock shall be educted rom the amount ence which can arise from the evidence must deposited by plaintiff. be made in favor of plaintiff. Herbert v. [Ed. Note.--For other cases, see Corporations, Dufur, 23 Or. 462, 464, 32 Pac. 302; Wallace Cent. Dig. $$ 521-525; Dec. Dig. 134.*] v. Suburban Ry. Co., 26 Or. 174, 37 Pac. 477, 25 L. R. A. 663; Putnam v. Stalker, 50 Or.

Appeal from Circuit Court, Marion Coun210, 91 Pac. 363.

ty; Wm. Galloway, Judge. [19] It is not our purpose to decide any Fankhauser and another. From a judgment

Action by Charles A. Gray against C. K. question of fact in this case. Much of the argument of counsel for defendant is upon

for plaintiff, the first-named defendant apthe force and effect of the evidence. It has

peals. Conditional judgment as stated. been held by this court that the amendment This is a suit to restrain the Capital Nato section 3, art. 7, of the Constitution, does tional Bank of Salem from transferring upon not apply to cases appealed prior to its adop- its books and returning to persons claiming tion, November 8, 1910. Darling v. Miles, to own the same certain shares of stock in 112 Pac. 1081.

the defendant bank. The complaint alleges We think it was error for the court to that plaintiff in May, 1907, was the owner of grant the motion for a nonsuit.

25 shares of stock, which were in the keeping The judgment of the lower court is there of an agent of plaintiff in the city of New fore reversed, and the cause remanded for a York, who wrongfully and without authority new trial.

pledged them as collateral security for money borrowed by him from divers persons,

who now claim to be the owners, and that in (58 Or. 423)

June, 1907, those persons, claiming to be the GRAY V. FANKIIAUSER et al.

owners of 15 shares of such stock, represent(Supreme Court of Oregon. April 19, 1911.) ed by certificates numbered 131, 134, and 135, 1. CORPORATIONS ($123*) - CORPORATE STOCK presented them to defendant, and demanded

A blank assignment of stock certificates that they be transferred to themselves on with power to transfer the stock on the corpo- the books of the corporation. Defendant rate books, indorsed on the certificates, gave the Fankhauser intervened and filed an answer, assignee apparent absolute authority to deal pleading the general issues, and setting up a with the certificates as owner, so that a pledgee in good faith of the assignee without notice of special defense to the effect: That on Janany infirmity in his title could apply the pro- uary 17, 1907, defendant was a broker doing ceeds of the stock to the transferee's debt; the business in the city of New York. That on rights of innocent persons under such circum- such date one Franklin R. Anson, being in stances not depending upon the actual authority of the person with whom they deal, but upon possession of and representing himself to be the apparent authority vested in him by the the owner of 16 shares of the capital stock

of the defendant corporation, represented bị [Ed. Note.-For other cases, see Corporations, certificates numbered 132 and 133 for five Cent. Dig. $8 507–512, 539-516; Dec. Dig. 8shares each, and No. 117 for six shares, ap123.*] 2. BANKS AND BANKING (243*)—NATIONAL plied to him for a loan of $1,000 upon the seBANKS-TRANSFER OF STOCK.

curity of these certificates, and that defendRev. St. U. S. $ 5139 (U. S. Comp. St. ant, relying upon such security, lent Anson 1901, p. 3461), requiring stock to be transferred $1,000, taking from him a stock note which by indorsement on the corporate books, does not is as follows: “New York, Jan. 17, 1907. limit the right to pass title to stock certificates by assignment, being enacted for the protection $1000.00. Two months after date for value of the banks, and the corporation being entitled received, I promise to pay to the order of C. to waive its provisions.

K. Fankhauser, one thousand and no-100 dol[Ed. Note.-For other cases, see Banks and lars, with interest at six per cent. after Banking, Cent. Dig. $$ 90–908; Dec. Dig. $ maturity, at office of C. K. Fankhauser, 27 243.*] 3. CORPORATIONS ($ 131*)-CORPORATE STOCK

William street, New York City, and I have -ACTIONS-JUDGMENT-CONDITIONAL JUDG- deposited with bim, as collateral, security

for the payment of this liability 16 shares Where defendant, to whom stock actually of the capital stock of the Capital National belonging to plaintiff was pledged by one hav

Should the market ing apparent authority from plaintiff to use it Bank, Salem, Oregon. as his own, showed no diligence to protect plain- value of said collateral decline or in the tiff after being informed of his rights, in an ac- event of my failure to pay this obligation at tion to restrain the corporation from transferring the shares on its books, the stock will not maturity said C. K. Fankhauser or his asbe adjudged to be returned to defendant un

signs, shall have full power and authority til his debt is paid by the pledgor, but will be I to forthwith sell, assign, and deliver the

true owner.


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whole or any part of said securities, at pub-| Gray upon the delivery of the certificates to lic or private sale, and without advertise | Anson gave to him the apparent authority to ment or notice to me, and with the right on deal absolutely with the stock; and a pledgee his part to purchase the same at such sale in good faith, without notice of any infirmfreed and discharged from any equity of re- ity in Anson's title, is entitled to have the demption. After deducting the amount of proceeds of the shares applied on Anson's said liabilities, with all costs and expenses debt. When the true owner places in the for collection, sale and delivery, to return hands of another all the indicia of the ownthe overplus, if any, to me. In consideration ership of property, so that he appears to of the loan hereby made the borrower agrees have the full power of disposing of it, innothat the said C. K. Fankhauser or assigns cent persons dealing with such apparent ownshall have the right to make such use of the er will be protected. Their rights in such a collateral security herein named as he may case do not depend upon the actual authority desire, subject only to his obligation to de- of the person with whom they deal, but upon liver to said borrower the same number of the apparent authority with which the conshares of said stock upon the payment of fidence or negligence of the true owner has this note at maturity; and in consideration invested him. MeNeil v. Tenth National of the above, the lender agrees that the bor- Bank, 46 N. Y. 325, 7 Am. Rep. 341. Assignrower's liability shall be limited to the col- ments in blank of the character of that now lateral security hereby pledged. Franklin R. under consideration are perhaps the most Anson." That each of the certificates had common method of transferring the title to indorsed thereon the following transfer: certificates of stock, and have been generally “For value received

* hereby sell, recognized by the courts of our great comassign and transfer unto

shares mercial states. N. Y. & N. H. R, R. Co. v. of the capital stock represented by the within Schuyler, 34 N. Y. 30; Kortright v. Buffalo certificate, and do hereby irrevocably consti- Commercial Bank, 20 Wend. 91. In the lattute and appoint

attorney to trans- ter case the court says: “The execution in fer the said stock on the books of the with blank must have been for the express purin named corporation with full power of pose of enabling the holder, whoever he substitution in the premises. Dated

might be, to fill it up. If intended to have In the presence of: Fred A. Legg. Chas. A. been filled up in the name of the first transGray.” That the note had not been paid, feree, there would have been no necessity for and that in June, 1907, the defendant Fank- its execution in blank. Barker might have hauser furnished certificates No. 132 and No. completed the instrument. The usage, how133 to the defendant corporation for the pur- ever, is well established, and was fully unpose of delivering the same to a prospective derstood by Barker, as he made the transfer purchaser for the price of $1,020. That he in conformity to it; and he or those setting was proceeding to sell the same for the pur- up a claim under him should not now be pose of repaying the amount due him upon permitted to deny its validity. The filling up the promissory note of Anson and for costs is but the execution of an authority clearly and expenses of collection and sales. The conveyed to the holder, is lawful in itself, same facts were also pleaded by way of es and convenient to all parties, as it avoids the toppel. Plaintiff's reply put in issue the af- necessity of needlessly multiplying transfers firmative defenses interposed by defendant upon the books." Fankhauser, and alleges that the certificates [2] We cannot agree with counsel that the were delivered to Anson and indorsed in national banking act limits the right of passblank for the purpose of enabling him, as ing title to stock certificates by assignment. agent for defendant, to sell the same for de- The provisions of the United States' Revised fendant's benefit; that Anson never had any | Statutes, $ 5139 (U. S. Comp. St. 1901, p. authority to mortgage, pledge, or hypothe- 5139), and similar state statutes, providing cate the stock, all of which facts were well that stock shall be transferred by indorseknown to defendant Fankhauser at the time ment on the books of the corporation, have be made the loan; and that at such date generally been held to be for the protection there had been no assignment or transfer on and convenience of the bank, and that no the books of the company, as Fankhauser effect should be given to them except for the well knew. The reply also charged fraud protection of the corporation which and collusion between Fankhauser and An- waive them at pleasure. McNeil v. Tenth son.

National Bank, supra, was a cage arising upThere was a decree for plaintiff in the on a pledge of certificates of national bank court below, and defendant Fankhauser ap- stock under circumstances exactly similar to peals.

the case at bar, and it was there held that Geo. G. Bingham (Williams, Wood & Lin- an assignment in blank, almost word for thicum, on the brief), for appellant. John H. word in the same language as used in the asMcNary (Charles L. McNary, on the brief), signment in the present case, transferred the for respondent.

entire title to the shares, both legal and equi

table. That case is so thoroughly discussed MCBRIDE, J. (after stating the facts as and its every feature so similar to the one at above). [1] The blank assignment made by | bar that we feel constrained to adopt it as


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