as to costs does not apply, for we have paid Colley's costs of the infringement action. Challender v. Royle (57 L. T. Rep. N. S. 734; 36 Ch. Div. 425) shows that our action was begun in time. Aston, Q.C. and R. W. Wallace for the plaintiff. -The defendant's action does not satisfy the proviso. In the first place, it was not commenced with due diligence. In Herrburger Schwander et Cie. v. Squire (5 Pat. Rep. 581) Charles, J. decided that a delay of two months in bringing the action was fatal. The prosecution of the action with due diligence mentioned in the proviso must be something which amounts to justification of the threats. The threats could only be justified by establishing the validity of the patent and proving the infringement. That is, the action must be prosecuted to a successful issue. There is no meaning in prosecuting with due diligence unless it means prosecuting to the end. The object of the section is that the party threatening must show that he has a legal right. His discontinuing his action is confession that he has not. NORTH, J.-I only want to hear you, Mr. CozensHardy, upon the question whether discontinuance is not a failure to prosecute with due diligence. Cozens-Hardy, Q.C. in reply.-We cannot be in a worse position than if at the trial we had a decision against us. To make an action which failed not within the proviso would be to read words into the proviso which are not there. Cur. adv. vult. Feb. 19.-NORTH, J.-I postponed deciding this case till this morning, not because I felt much doubt about it, but because it raised a point which, so far as I know, is not as yet covered by any decision. The facts of the case are shortly these: [His Lordship stated the facts above set out, and continued:] There is no evidence before me that the circular I have read was published maliciously, and therefore there is no right of action whatever in respect of it, unless such a right is given by sect. 32 of the Patents Act 1883. That I think is clear, but I think it is also clear that that letter would have given a right of action under the 32nd section if there had been no proviso in that section. The question therefore is, whether Hart's action for infringement was commenced and prosecuted with due diligence, because, if it was, it prevents there being any cause of action under sect. 32. It is said in the first place that the action commenced by the writ issued on the 6th Dec. was not commenced with due diligence, and in particular a case before Charles, J. (Herrburger Schwander et Cie. v. Squire (ubi sup.) was relied upon. Before referring to that case, I must say that, in my opinion, it is quite impossible to fix any precise time within which an action must be commenced. It would depend altogether upon the circumstances of the case. It is impossible to lay down any general rule. [His Lordship then stated the facts of the case from Charles, J.'s judgment, and proceeded:] I find that in that case the judge relied upon the fact that no proceedings were taken for a certain time after the writ was issued, having regard to the fact that the infringement had been going on for fourteen months before that time to the knowledge of the defendant, and that the defendant had been all the while [CHAN. DIV. threatening proceedings, but did not take them. That is a totally different state of things from anything that I have here. Therefore that case really does not give me any assistance. Then I find great difficulty again in attempting to fix within what time an action must be brought in order to be commenced with due diligence. I will just put this case: Suppose a man gets his patent completed at the end of 1885. I assume that it is a good and valuable patent, and that he is on the look-out for infringements. At the end of 1886 he finds A. infringing, writes a warning letter, and A. submits. The threat is not prosecuted against A. for the best of all reasons, that he has submitted unconditionally. At the end of 1887 the patentee finds B. infringing, and is about to take proceedings when B. dies insolvent. In 1888 he finds C. infringing, and C. submits. At the end of 1889 he finds D. infringing, and writes a warning letter to him. D. does not submit, but replies by commencing at once an action to restrain the threats. The patentee then commences his action against D. In that case I have no doubt that the action against D. would be commenced in time, though the patentee's threats had been continued for the space of three years. That shows how impossible it is to fix any definite time within which an action must be brought. The only case I know of other than the one I have mentioned in which anything has been laid down bearing upon this question of time is Challender v. Royle (57 L. T. Rep. N. S. 734; 36 Ch. Div. 425). I think I should be doing great injustice to the learned judge who decided that case if I thought he intended to lay down any rule as being applicable to all cases, and I do only refer to his remarks by way of illustration. Cotton, L.J. says (57 L. T. Rep. N. S. 738 (a) ; 36 Ch. Div. 437), "Was this action commenced with due diligence? Mr. Bousfield contended that the action must be commenced with due diligence from the time when the defendant first knew that the plaintiff was doing what he alleges to be an infringement. I cannot agree with that view. In my opinion an action must be held to be commenced with due diligence if commenced within a reasonable time after the threats have been made, for the threats are the only matter complained of. Now, assuming the threats to have been made in March, the action against the Manchester Plumbing Company was in my opinion commenced with due diligence after the time when the defendant first issued those threats, for I think that the interval between March and June is not an unreasonable time for a man to take to consider whether he should bring an action in respect of a supposed infringement of his patent." That is to say, three months is a reasonable time to take. Now, I do not apply that as deciding this case, but I give it as an illustration to show what Cotton, L.J. thought, under the circumstances, wonld be a reasonable time within which the action might be brought. In this case the action was brought within the time which Cotton, L.J. thought a reasonable time in the case before him. There is another test to assist me in this matter, and it is this: One sees very plainly, and remarks have been made by judges from time to time (a) The passage is somewhat condensed in the Law TIMES Reports. about the inconvenience of having an action for infringement and an action for threats, perhaps before another judge or in a different division of the court, going on at the same time. In this case there was an action for threats, and an action for infringement must be brought within a reasonable time. I do not attempt to lay down a rule applicable to all cases, but, as a prima facie rule applicable to most cases, I do not think a man can be said to be guilty of undue delay if, when the plaintiff in the action to restrain the threats is the alleged infringer, he waits to see whether he cannot combine the two subjects of action in one action-in other words, if he waits to have a statement of claim delivered in the threats action to see whether he cannot bring his counter action by counter-claim instead of by separate action. In this case what happened? The interlocutory injunction was granted on the 2nd Nov., but the defendant was, in my opinion, justified in waiting some time at least, to see what the statement of claim was, and whether he could not bring his action for infringement by way of counter-claim. Now, Mr. Colley's statement of claim was not delivered till the 8th Feb., two months after Mr. Hart had commenced his action for infringement. I come to the conclusion therefore that there was no undue delay in commencing this action. Then the proviso requires that an action should not only be commenced but prosecuted with due diligence. As regards the prosecution I must draw a line between what happened before the date of the discontinuance (the 7th Nov.) and the discontinuance itself. Up to that date the action was going on. Is there anything to show that it was not being prosecuted with due diligence? I have nothing before me but certain dates given to me by Mr. CozensHardy of the proceedings in the action. not see how it is possible from those dates to say that there was an omission to prosecute with due diligence. The statement of claim was delivered on the 13th May 1889. That seems a long time after the issue of the writ (the 6th Dec. 1888). But the time must have been extended by order, and I must assume that the reasons for extension were sufficient. The defence was put in on the 27th May, and then there were certain proceedings about an inspection and report. I do not find anything to show that the proceedings in the action down to the time of the discontinuance were in any way wanting in due diligence; and I do not think it was seriously contended that they were. Neither Mr. Aston nor Mr. Wallace were able to put their hands upon any point in the course of these proceedings and say that there was any undue delay there. I cannot say therefore that there was any undue delay in prosecuting the action down to the 7th Nov. But it is urged that there was not due diligence in prosecuting the action after that date, because on that date it was discontinued. That is the next point I have to consider. The action was not prosecuted after the 7th Nov., because Mr. Hart on that date discontinued this action for infringement. A report had been made upon which he came to the conclusion that he could not prosecute it with success, and at that point he therefore discontinued it by an order in the action, and he paid the costs. Now, was that discontinuance a want of due prosecution? Mr. Aston says that the I do [CHAN. DIV. proviso in the section that a person making the threats shall with due diligence commence and prosecute an action for infringement means shall prosecute to a successful result. In the first place, the section does not say so, and I should find great difficulty in understanding it if it did. I do not quite know what a successful result would be, considering the multiplicity of points raised in patent actions. More than that, supposing I took other words, and made the section read (as I understand it was suggested I might do) that he must with due diligence commence and prosecute and recover judgment in an action for infringement, because that is the way it would have to be tested. I do not find any words of that sort in the section. It would be a strong addition to the section for me to make or treat it as containing such words as these. It cannot have escaped attention. Nothing would have been easier than to have put in those words if the section was intended to be read as having them in. I do not find such words there, and I do not feel at liberty to add them, and I do not believe that this was the intention of the section. I think it might produce a very unjust result if those words were there. For instance, suppose an action was commenced with due diligence, and while it was being prosecuted with due diligence the infringer died insolvent it is impossible to prosecute such an action as that to a successful result. If the infringer were insolvent, you could not sue his executors. There would be no benefit to be gained by the only action which could be followed against them. The personal action for tort of course would have come to an end. It would be impossible for a man to go on with an action of that sort. To put another case: Suppose the infringer became bankrupt, and had very large liabilities and very small assets. Could it be said that an action which was commenced with due diligence, and prosecuted with due diligence down to that time, failed to be an action within the proviso because it was not prosecuted to judgment after that? Then there is another thing to be borne in mind. A plaintiff might submit and pay damages. Is it to be said that a man has not commenced and prosecuted an action with due diligence because, having got all that he could get, he has not gone on to recover judgment? I do not think it possible to put such a qualification upon the actions required by the section as to say they must be prosecuted to judgment, although he has before judgment received the full benefit which he seeks in the action. There is another thing. A failure to succeed in the action for infringement would not at all necessarily be a fair test as to whether a man was justified in his threats or not. The patent might be perfectly good, but the action for infringement might fail. The plaintiff might have lost valuable witnesses by death; they might fail to attend at the trial, and he might fail to recover judgment solely on that ground. On the other hand, they might attend, and it might turn out that the evidence given by them did not come up to what the plaintiff had been told they would give. His case might break down through the infirmity of his witnesses. Then again, there might be a very serious question whether what was done amounted to an infringement or not. In point of fact the jury might hold that it was, the Divisional Court CHAN. DIV.] REES v. RICHMOND-SIMMONS v. LONDON JOINT STOCK BANK. might hold that it was, the Court of Appeal might take the same view, and the House of Lords in the end might hold that it was not an infringement at all. It would be very strange if the right to utter the threats in the first instance is to be tested by an action of that sort. I might give another instance: Suppose the plaintiff bringing the action for infringement was an assignee of the patent, and that among the defences set up one was that the infringer had a licence from the patentee given before the assignment. The assignee might know nothing of that, and might ask the patentee and be told that it is untrue. He might go on with his action, and it might turn out at the trial that the defendant really had a licence which justified what he had done. I might multiply the number of such cases very much. There are many cases in which a failure to succeed in an action for infringement would be a very unfair test whether a man was justified in making threats founded upon the fact of his having a good title. I do not therefore see my way to add to the section such words as would make it read "with due diligence commence and prosecute and recover judgment in an action." And I can see that, if I were to do so, I might be doing a great injustice. I hold therefore that it is not essential, in order that an action may come within this proviso, that it should be prosecuted to the recovery of judgment by the party bringing it; and therefore that a man may have with due diligence commenced and prosecuted an action within the proviso, though judgment in it is against him. It follows that that action, being within the proviso, prevents there being any right of action against him under the earlier part of sect. 32. In the present case Colley, in my opinion, commenced and prosecuted his action with due diligence down to the 7th Nov. If he had continued it to trial, and then had failed in the action on the ground that there was no infringement, in my opinion the action would not the less have been an action within the proviso. If that is so, how does the matter stand? In November Colley ascertained that his action must fail; he was so advised, and he thereupon, like a wise man, at once discontinued his action and paid the costs. In my opinion he was under no obligation, in order to make his action a good defence under the proviso, to prosecute a hopeless action until trial and then undergo the fate of having it dismissed with costs. As soon as he found out that the action was hopeless it was his duty to put an end to it at once. I do not say that it is a duty of very perfect obligation. It is one that might be difficult to prosecute, but I think he did owe a duty to his adversary not to proceed with a hopeless litigation against him after it was ascertained it was hopeless, and I think he owed a duty to the court not to waste time by the trial of an action in which he felt he could not possibly succeed. Under those cir cumstances of course he is exactly in the same position by discontinuing a hopeless action before trial as he would have been in if he had prosecuted it to trial and had then failed. As failure at the trial would not have prevented the action being one within the proviso, so in my opinion the discontinuance before trial does not put him in a worse position than if he had carried it to trial. Under these circumstances, looking at the [CHAN. DIV. matter as it stands, in my opinion this was an action within the proviso, and therefore it prevents the plaintiff having any cause of action under sect. 32. Solicitors: Truefitt and Gane; Linklater and Co. Thursday, Feb. 20. (Before KEKEWICH, J.) REES v. RICHMOND. (a) Practice Numerous persons having the same interest-Defence on behalf of other personsConsent Submission to judgment—Order XVI., r. 9. Persons authorised by the court to defend an action on behalf of others having the same interest cannot consent to judgment against them; the proper course, in case there is no defence, is to submit on their behalf to judgment. By Order XVI., r. 9: "Where there are numerous persons having the same interest in one cause or matter, one or more of such persons may sue or be sued, or may be authorised by the court or a judge to defend in such cause or matter, on behalf of or for the benefit of all persons so interested." In this case certain defendants had been authorised by the court to defend the action on behalf of numerous persons having the same interest with themselves. At the trial counsel for these defendants consented on behalf of the persons represented to judgment for the plaintiff, on the ground that there was no defence. The registrar took the objection that the order did not include a power to consent, and the matter was brought before the court. Neville, Q.C. and A. Young for the plaintiffs. Finlay, Q.C., Warmington, Q.C., Eyre, and Lloyd Morgan for the defendants. KEKEWICH, J. held that the order did not authorise such a consent, and that, as regarded the persons represented by some of the defendants, the judgment must be drawn in the form of a submission on their behalf to judgment. Solicitors for plaintiffs, H. A. Stephens, for J. E. Stevens, Swansea. Solicitors for defendants, Field and Sumner, for Hartland and Isaac, Swansea; Richard White, for T. W. James, Swansea. March 7, 8, 10, 15, 17, and 18. SIMMONS v. LONDON JOINT STOCK BANK. Banker-Broker - Loan Deposit of securities Purchaser for valueNegotiable securities · Notice-Duty to inquire-Damages-Evidence given in another action-Admissions. The ruling of the House of Lords in Earl of Sheffield v. London Joint Stock Bank (58 L. T. Rep. N. S. 735; 13 App. Cas. 333), that in the case of advances by bankers to their customers, money dealers, on the deposit of negotiable securities to bearer, it is the duty of the bankers (a) Reported by F. GOULD, Esq., Barrister-at-Law. CHAN. DIV.] SIMMONS v. LONDON JOINT STOCK BANK; LITTLE v. SAME. to inquire into the customer's title, applies also where the customer is a stockbroker. Where in such a case the title of the bankers failed on action brought against them by the plaintiff, being the real owner, who had bought the securities merely with a view of selling on a favourable opportunity, and the value had fluctuated while they were held by the bank: Held, that it could not be presumed against the bank that the plaintiff would have realised when the securities had reached their highest price, and that, as regards some of the securities which the bank had sold before demand by the plaintiff, they were liable for the price at which they had sold with interest at 4 per cent., and, as regards those still in their possession, which had depreciated, for the difference between their value on the date of the plaintiff's demand and the date of recovering judgment, with any dividends received in the meantime. The bank manager had in a previous action by another plaintiff given evidence of the practice of the bank in making such loans to customers. Held, that the manager being a person authorised to make admissions on the part of the bank, his evidence might be read on the part of the plaintiff in this action so far as relevant to the matters now in question. THE plaintiff Simmons claimed a declaration that certain bonds had been deposited with the defendant bank in fraud of the plaintiff by the plaintiff's brokers, and that the defendants having taken the same with notice that they belonged to one of the customers of the brokers, had no title thereto as against the plaintiff. In the month of Feb. 1887 the firm of Herapath, Delmar, and Co., who were the plaintiff's stockbrokers, had in their possession on behalf of the plaintiff for safe custody certain bonds of the Buenos Ayres Land Mortgage Bank of the "J" series, for the amount of 14,000 dollars, such bonds being known on the Stock Exchange as "Cedulas." These bonds were payable to bearer, and negotiable securities_within the ruling of Goodwin v. Robarts (35 L. T. Rep. N. S. 179; 1 App. Cas. 476); i.e., they would pass by delivery to a bona fide holder for value. On the 14th June 1888 the brokers suspended payment, and on the 15th June 1888 were declared defaulters on the Stock Exchange. On the same 15th June the plaintiff, being informed of the brokers' default and that the said bonds had been handed over to the defendant bank, applied to have them delivered up to him. The bank had in fact, on the morning of the day on which the plaintiff made his application for a return of the bonds, sold the same in order to recoup themselves for advances made by them to the brokers in accordance with the usual course of business adopted by the bank in their dealing with brokers and moneydealers. With regard to this course of business it was alleged by the plaintiff that brokers or dealers requiring advances from the bank agreed with the bank to pay a certain rate of interest on the advances, and by way of security for the advances the brokers deposited with the bank securities quoted on the Stock Exchange, the market value of which exceeded in a certain fixed proportion the amount of the advances. If the cover for the loan exceeded the required margin, the brokers were allowed to withdraw securities [CHAN. DIV. to the value of the excess, and if the cover, by reason of the changes in the market value, fell below the required margin, the brokers were required to find further cover. It appeared that it was the habit of brokers to obtain such loans on the securities of their clients without mentioning that the securities so deposited were not their own property. The plaintiff alleged that the officers and managing directors of the bank through whom such loan transactions were carried out were, throughout the transaction, aware that the brokers and dealers to whom the loans were made required the same in order to make advances to their own customers, and that the securities deposited with the bank were mainly, if not entirely, the property of such customers, and with this knowledge, and in order to prevent any difficulty arising between the brokers and their customers, the bank gave every facility for the exchange of the securities deposited with them, allowing the brokers and dealers to withdraw considerable portions of the same on the morning of any settling day on the Stock Exchange on an undertaking to restore securities of not less value at the close of such settling day. The plaintiff further alleged that the bank knew and had notice, not only from the general course of business hereinbefore referred to, but also from the particular transactions between them and the plaintiff's brokers, that the securities deposited with them by the plaintiff's brokers were the securities of the customers of such brokers, and in the belief that the brokers who brought them had made sufficient advances on them to justify them in obtaining the amounts which they from time to time obtained from the bank, and, relying on the integrity of the brokers, the defendant bank from time to time made and continued advances to the brokers on such securities as the brokers from time to time deposited with them, and made no specific inquiries as to the ownership of the said securities or the authority, if any, which the brokers had to deposit the same, or the interest, if any, which the brokers had therein by reason of advances on such securities or otherwise. The circumstances under which the bank became the holders of the bonds in question were as follows: On the 12th Oct. 1887 Delmar, one of the firm of brokers above mentioned, fraudulently sold the said bonds for his own purposes, contracting at the same time for a repurchase of the same amount for the next settling day, namely, the 28th Oct. The substituted bonds so purchased by Delmar were paid for by Delmar's cheque. This cheque, as the learned judge held, could not have been met without the advance by the bank to the credit of his account, and the advance would not have been made unless he had given to the bank the security which included the bonds so purchased. The bonds were handed over to the bank on the 28th Oct., though it was not established at the trial that before the bonds were delivered to Delmar there was a contract by him that these very documents should be handed over by him to the bank as cover. Under these circumstances the plaintiff brought his action on the 16th June 1888. By their statement of defence the bank denied that they had notice that the securities deposited with them by the plaintiff's brokers were the CHAN. DIV.] SIMMONS v. LONDON JOINT STOCK BANK; LITTLE v. SAME. securities of the customers of the brokers, and they stated that the said bonds had since the time of deposit remained with them as part of the cover for the debt then owing to them by the brokers, and that they had sold the bonds (as by the terms of the dealings between them and the brokers they were entitled to do) and applied the proceeds in reduction of the debt due to them from the brokers; that they had taken the bonds in good faith and become lawful holders thereof as bonâ fide purchasers for value without notice of the plaintiff's title. They submitted that they were not bound to make, and that there was nothing to suggest to them the necessity or propriety of their making, any inquiries as to the authority of the brokers to deposit the said securities, or as to the interest which the brokers had therein by reason of advances or otherwise. They contended further that, if the bonds in question ever belonged to the plaintiff at all, he had so conducted himself as to represent that they would pass with a good title to anyone taking them in good faith and for value, and put it in the power of his brokers to hand over the bonds with this representation to the defendants. The action now came on for trial. Warmington, Q.C. and Grosvenor Woods for the plaintiff. We submit that the case is covered by the decision of the House of Lords in Earl of Sheffield v. London Joint Stock Bank (58 L. T. Rep. N. S. 735; 13 App. Cas. 333), which was the case of deposit by a money-dealer of similar securities with the bank to secure his loan account. The original bonds held by the plaintiff having been fraudulently sold by Delmar the plaintiff must be presumed to have accepted as a substitute for them those purchased by Delmar in their place: London and County Bank v. London and River Plate [The plaintiff proposed to read part of the evidence given by the defendants' manager in the case of Earl of Sheffield v. London Joint Stock Bank (ubi sup.) as to the practice of the bank in making loans to customers. Sir H. Davey, Q.C. for the defendants. It is not within the authority of the defendants' manager to make admissions to bind the defendants. Of course he can give evidence, but that is another thing. KEKEWICH, J.-No authority is cited on either side on this point. I am referred to the appendix in the case of the Earl of Sheffield before the House of Lords, and it is suggested that there are there admissions by the defendants' manager as to their general course of dealing. Assuming these are statements which may be useful here, I think they are admissible so far as they are relevant to the matters now in dispute; because they are statements made by an officer of the bank as to their general course of dealing.] The plaintiff had a title as against Delmar when the securities were deposited, and the bank cannot have any better title against the plaintiff than Delmar had: (Ex parte Cooke; Re Strachan, 35 L. T. Rep. N. S. 649; 4 Ch. Div. 123.) bank claim on the ground that the bonds were Delmar's property. So long as Delmar was the holder, up to the 28th Oct. 1887, the day on which he deposited them with the bank, he must have been holder on behalf of the plaintiff. It was The [CHAN. DIV. known to the bank that it was the habit of brokers to deposit such securities belonging to their customers; it was therefore their duty to inquire into Delmar's title. Sir H. Davey, Q.C., Finlay, Q.C., and W. Donaldson Rawlins for the defendants.-The securities The in question were negotiable securities. bank have the legal estate and an equal equity with the plaintiff. It was in accordance with their usual practice that the bank did not inquire into Delmar's title. The bonds were not paid for, and could not have been paid for, except with the money of the bank, which money the bank found on the security of the bonds themselves. There never was any agreement by the plaintiff to take the bonds in substitution for his own which were fraudulently sold. As to the question of notice, the bank were bonâ fide transferees for value. If the bank were put on inquiry because Delmar was a broker, that would have been a complete answer in Goodwin v. Robarts (ubi sup.). În Williams v. Colonial Bank (57 L. T. Rep. N. S. 188; 59 Ib. 643; 36 Ch. Div. 659; 38 Ib. 388) it was never suggested that the fact of Thomas and Co. being brokers was decisive of the case. Then, as regards the Earl of Sheffield's case, Mozley, who deposited the securities with the bank, was not an agent of the real owner at all. business was to advance, not out of his own money, but out of money which he borrowed at a lower rate of interest than that at which he lent it; and it was held that the bank knew that he was giving them only a sub-mortgage, and that the securities were not his own. His Cur. adv. vult. March 15.-KEKEWICH, J., without calling for a reply, said: The plaintiff, seeking to make the defendants liable for the value of the bonds in question sold by them, must prove that the bonds were his. That they were his in the sense of having been purchased by him or by his instructions, he does not say, for those which were so purchased, and having been purchased were deposited by him with his brokers, were sold and delivered by them to strangers, and it is not suggested that they can be traced to the defendants. But he says that the bonds in question were purchased under such circumstances that the property therein passed to him before they reached the defendants' hands. The plaintiff's brokers, whom I will refer to as Delmar, held on behalf of the plaintiff bonds known as Cedulas (I drop the letter indicating the particular issue) of the nominal value of 14,000 dollars. It matters not whether they held them for safe custody or for any other purpose, for they certainly had no authority to sell or pledge. In Oct. 1887 they used these bonds, in fraud of the plaintiff, for the purpose of raising money on their own account, and this they did by a method familiar to dealers on the Stock Exchange, which, whatever it may be technically styled, was a sale accompanied by a contract of repurchase. Whether regarded by the light of Stock Exchange rules, or apart from them, it was not a pledge. An essential term of a pledge is that on fulfilment by the pledgor of the conditions of the bargain, commonly called redemption, the pledgee is bound to hand back to the pledgor the very thing deposited with him; whereas on |