a transfer of the mortgage, except the part,tary public to some of the deeds referred tc which had been released, from Louis N. Col-above, and as he signed as treasurer, together well to one William E. Bowen, dated Feb- with Colwell as president, the deed from the ruary 24, 1914, recorded March 6, 1914.

The plaintiff further testifies that August 1, 1910, he saw Randall, who then informed him that the property had been sold to Sayles, and at that time plaintiff says he knew that the person to whom the deed was made probably represented Warren. He did not at that time claim that Randall owed him any commission, and he never has made any charge on his books against Randall for services or commission due. He also knew that Warren claimed to have had the property brought to his attention before plaintiff had taken up the subject with either Perry or Warren; defendant had previously sold some shore property to Warren in 1905. In 1913 and 1914 plaintiff sold a piece of the Boyden Heights property, the title was then in the First National Realty Corporation, and he acted by direction of Mr. Perry.

East Providence Electric Lighting Company, that this, with the other evidence, is sufficient to warrant a finding that he continued to act as agent.

At the conclusion of the testimony, on motion of the defendant, the trial justice directed the jury to find a verdict for the defendant, and it is upon the exception taken to this action of the trial court that the plaintiff in his bill of exceptions now mainly relies.

Certain other objections to rulings in regard to evidence were made, but they are of no weight, and we find no error in the rulings complained of.

Upon consideration of the evidence we find no error in the action of the trial justice, and are of the opinion that there was no sufficient evidence to warrant the court in submitting the case to the jury.

[1] A deed of November 28, 1913, was of- [2-4] The property was sold for $30,000. fered in evidence by plaintiff to show Perry The plaintiff claims he was an agent of dewas president of the First National Realty fendant; that he brought the proposition to Corporation, and it was sought thereby to the attention of Perry and Warren, and that show that, as the deed purported to have later the sale was made to Perry and Warbeen executed by Perry as president of this ren, or one or the other, and as a consequence corporation, it could therefrom be inferred he is entitled to his commission. Assuming that he was president at the time of the that this proposition is correct in law, plaintransfer of the property to this corporation, tiff has failed to establish the facts on which and was in fact the real purchaser of the he bases his claim. On the evidence it approperty, and that the corporation was but the nominal purchaser. This last offer of evidence was properly excluded by the court, and in the circumstances it requires no citation of authorities to support this ruling.

pears that plaintiff never was the agent of the defendant or his undisclosed principal. He was fully informed that he was not a broker for the defendant, and would not be Although the plaintiff's cause of action, if entitled to any commission from him. At any, arose in May, 1910, no action was taken his own solicitation, plaintiff was given a by the plaintiff until the issuance of the chance to sell the land, if he could, with the writ in this case on March 25, 1916. The de- distinct agreement that he must look to any fendant testified that he first knew plaintiff purchaser for any commission, the amount of made any claim against him for a commis- which was a matter of indifference to desion in 1916, shortly before the issuance of fendant, whose sole interest was as stated, the writ in the case, when claim was then that the net price to the vendor was to be made upon him by the attorney for plaintiff. $30,000. By plaintiff's own action, which he During this time, between 1910 and 1916, one says was contrary to custom, he disclosed to or more of the parties to the different trans-Perry that defendant was for the time being fers, including Mr. Colwell, have deceased the person to whom Perry's bid was to be and the corporation, the East Providence communicated. Thereafter these parties reElectric Lighting Company, has ceased to fused to deal with plaintiff, who has lost a exist.

commission for a sale he hoped to make. Whatever the suspicions of the plaintiff may be in regard to the entire transaction, he has failed to show that he was the agent of defendant. This conclusion is decisive of the question, but the plaintiff also fails on his second ground, namely, he has failed to show that either Perry or Warren were the pur chasers of the property.

The plaintiff at this late day has elected to sue defendant as an agent acting for an undisclosed principal. The defendant testifies that, although he had acted as an agent in many transactions for Colwell before and after the sale in question, as his advice to Mr. Colwell prior to the sale was not followed in regard to certain details connected with the lease to Sayles, he took no part in the All of the plaintiff's exceptions are oversale, and he never received any commis- ruled, and the case is remitted to the susion for the sale. It is argued, as defend- perior court, with direction to enter Judg. ant took various acknowledgments as a no- ment on the verdict.

(79 N. H. 402)

(111 A.)

time the accident happened. In other words, BJORK v. UNITED STATES BOBBIN & counsel was testifying rather than advocatSHUTTLE CO. ing his client's cause, when he made this statement.

(Supreme Court of New Hampshire. Hillsborough. April 6, 1920.)

Trial120 (2) Argument based on attorney's knowledge held erroneous.

In an action for personal injuries, a statement by plaintiff's counsel that he and his associate knew plaintiff was right as to a disputed fact, and inquiry of the jury whether it was counsel's duty to retire from the case and take the witness stand, in so far as it attempted to justify the attorney's action in not testifying, though he knew plaintiff was right, was giving testimony rather than arguing the cause, even if it was permissible for him to have justified the action of his associate in testifying.

Transferred from Superior Court, Hillsborough County; Branch, Judge.

Case for negligence by Arved L. Bjork, by his next friend, Claus Bjork, against the United States Bobbin & Shuttle Company. Verdict for plaintiff. Case transferred on defendant's exceptions. Exceptions sustained.

See, also, 111 Atl. 284.

Transferred on the defendant's exception to the following statement of plaintiff's counsel:

"It appears in the testimony that Mr. Jordan and myself saw the machine some day last July, and seeing it, and knowing the young man was right [as to the distance of the spreader from the saw], what was our duty? Was it my duty to retire from the case and take the witness stand, or was it my duty, if it could be done, * to let some one else do it?"

*

MECHANICS' SAV. BANK v. BERRY. (Supreme Judicial Court of Maine. Nov. 18, 1920.)

I. Bills and notes 345-Facts held not to support inference of bad faith by indorsee.

The fact that a bank in Iowa discounted for a party in Tennessee notes given by a resident of Maine, with only an investigation of an accountant's statement and letters of recommendation of the indorser of the notes and

the financial ratings of the makers, that it 4 to 8 months without interest before maturity, charged 10 per cent. on notes maturing in from and retained a portion of the purchase price to cover nonpayment of the notes, does not show bad faith in taking the notes, where the bank president stated he believed them to be valid, and hence the bank may recover the amounts from the maker, though the notes were originally procured by fraud.

2. Bills and notes

337-Circumstances which merely excite suspicion do not show knowledge of infirmity by indorsee.

Under Negotiable Instruments Act, § 56, requiring actual knowledge of the infirmity, or knowledge of such facts as make the taking bad faith to constitute notice of the infirmity in the instrument, the existence of circumstances calculated to excite suspicion in the mind of a prudent man does not prevent recov

Taggart, Tuttle, Wyman & Starr, of Man-ery by a bona fide purchaser. chester, for plaintiff.

Streeter, Demond, Woodworth & Sulloway, of Concord, for defendant.

YOUNG, J. If the language counsel used in the statement excepted to is given any meaning of which it is fairly capable, he was attempting, not only to justify his associate for testifying, but also to justify himself for not taking the witness stand. As his associate had testified, his veracity was in issue; consequently counsel was well within his rights in making so much of the statement as asks the jury to find that it was his associate's duty to testify if he knew any facts that would aid it in its search for the truth. But that is not true as to that part of the statement in which he asks the jury to find that he was justified in not taking the stand, notwithstanding he knew "the young man was right." That part of the statement could only have been made to bolster up his contention that the spreader was three or four inches from the saw at the

Exceptions from Supreme Judicial Court, Somerset County, at Law.

Action by the Mechanics' Savings Bank against Richard H. Berry. Verdict directed for plaintiff by the presiding justice, and defendant excepts. Exceptions overruled.

Argued before CORNISH, C. J., and SPEAR, PHILBROOK, MORRILL, and WILSON, JJ.

Thomas A. Anderson, of Pittsfield, for plaintiff.

John W. Manson, of Pittsfield, for defendant.

CORNISH, C. J. The plaintiff bank is the indorsee of 2 promissory notes, for $225 each. The defendant is the maker, and resists payment on the ground that they were obtained of him by the payee, the Partin Manufacturing Company, of Memphis, Tenn., through fraud. The plaintiff replies that, even though fraud existed in the inception of the notes,

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cover.

the plaintiff was a bona fide purchaser for five different parties, aggregating $4,500 in value before maturity and without notice of amount; the bank paying the face value the fraud, and therefore is entitled to re- thereof less 10 per cent. discount, the notes carying no interest until maturity and being Two exceptions were taken by the defend-given on from 2 to 8 months' time. The deant. The first is based upon the exclusion of fendant's notes were not in this group first evidence offered by him under his brief state- negotiated. ment tending to show fraud on the part of On July 26, 1917, before any of the notes the original payee, without first showing purchased on June 7th had matured, Mr. knowledge of the fraud on the part of the Partin came to the bank again and desired to plaintiff. It is unnecessary to consider this, negotiate another lot of 28 notes against six as the second exception, which was to the di- different parties, aggregating $6,100 in rection of a verdict for the plaintiff by the amount. Among these notes were 4, of $225 presiding justice, covers the entire case, and, each, against the defendant Berry, all dated in considering the second, the defendant's July 7, 1917, and due in October, November, rights under the first are preserved, by as- December, and January respectively. After suming that all the offered testimony relat-looking up the commercial ratings of the seving to the original fraud is in the case. In eral makers, including that of the defendant, other words, we may assume the existence of the bank on July 27th purchased this lot on such deception and fraud on the part of the the same basis as the first; that is, face Partin Manufacturing Company in obtain-value less 10 per cent. discount. These notes ing the notes as would afford a valid defense also carried no interest until maturity. Payin a suit between the original parties.

knew nothing of the nature of the business carried on by the Partin Manufacturing Company, or the consideration they had given for the notes, except that in a general way the notes were given for advertising matter sold the parties; that the purchase, indorsement, and transfer were made in good faith on the part of the bank, in the ordinary course of banking business; and that the bank believed them to be free from infirmity. This constitutes a summary of the evidence for the plaintiff.

ment in both cases was made partly by cerIt is further admitted that the plaintiff tificates of deposit, partly by cash, and the took the notes before maturity. Therefore balance of $1,400 in a deposit account not the only issue left for determination is the subject to check. This precaution was takplaintiff's actual knowledge of the fraud or en in order to protect the bank against loss its bad faith, and that is a question of fact. on any notes that might be returned unpaid Upon this point the plaintiff introduced the when sent forward for collection at maturity. deposition of Mr. Mackinnon, the president Several protested notes were subsequently of the plaintiff bank, who testified that the charged off, and these exhausted this probank is located at Des Moines, Iowa, and tecting account. Most of the notes, howhas been in existence since 1904; that he has ever, have been paid; the defendant himbeen connected with it since its organiza-self having paid 2 of his, leaving unpaid the tion, at first as cashier, later as vice presi-2 in suit. dent, and for the past 9 years as president; Mr. Mackinnon further testifies that he that the total resources are over $2,000,000; that on June 6, 1917, Mr. G. H. Partin, president of the Partin Manufacturing Company, called at the bank and was introduced to the cashier and himself by one Graham, then a practicing attorney in Des Moines, and now a judge advocate in the United States Army. Mr. Partin stated that he desired to negotiate some paper with the bank, and produced a statement of a firm of public accountants in Memphis, dated April 2, 1917, and covering the sales, operating costs, and net gains of the company for the months of January, February, and March, 1917, showing net gains of over $40,000. He also produced copies of letters of recommendation, either of Mr. Partin or of the company, from the officers of the Germania Savings Bank & Trust Company, the National City Bank, and the People's Savings Bank & Trust Company, all of Memphis, and the National Bank of the Republic, of Chicago, Ill.; the originals being in the hands of their New Hampshire attorneys. The cashier, at the request of the president, then ascertained the financial rating of the parties whose notes Mr. Partin wished to negotiate, found it to be satisfactory, and so reported to the president.

The defendant offered no testimony whatever in contradiction of this evidence and frankly admitted that he had none to offer on this point. His evidence was confined to the proof of the original fraud.

But he claims that, from the evidence of the president and from the circumstances of the case, a jury would be warranted in inferring, and therefore in declaring, that the bank did have actual knowledge of the initial fraud, or knowledge of such facts that its action in taking the notes amounted to bad faith.

The fraud which created the infirmity in the Berry notes is alleged to have been perpetrated by an agent of the Partin Company On the following day, June 7, 1917, Mr. in Pittsfield, the residence of the defendant. Partin returned to the bank and the transac- That company is a sales promotion busition was completed. The 4 notes, against ness, and the consideration of these notes

(111 A.)

was a contract on its part to increase the suspicion, if proved, is not sufficient to conbusiness of the defendant, who was a retail stitute a defense. druggist, and to furnish certain valuable prizes for him to display for 6 months and then award to the successful competitors. The principal prize was an automobile. The agent further agreed that the company had not inaugurated and would not inaugurate or carry on the same or a similar campaign within 20 miles of Pittsfield.

It is the designed breach of all these agreements which the defendant says constituted fraud on the part of the company.

Admitting this to be true, what does the defendant rely upon here to prove actual knowledge of that fraud on the part of the bank or to show bad faith on its part?

es.

[2] This is the first case to come before this court under the so-called Uniform Negotiable Instrument Act passed by the Legislature in 1917 (P. L. 1917, c. 257); that act having taken effect on July 6, 1917, and these notes being dated July 7, 1917. Section 56 of that act defines what constitutes notice of defect, viz.:

"To constitute notice of an infirmity in the instrument * the person to whom it is negotiated must have had actual knowledge of the infirmity * * * or knowledge of such facts that his action in taking the instrument amounted to bad faith."

to excite suspicion in the mind of a prudent man is not sufficient to prevent recovery. Farrell v. Lovett, 68 Me. 326, 28 Am. Rep. 59. "Suspicious circumstances attending the

As already stated, he relies wholly on inThis is in harmony with the previous deciferences to be drawn, as he says, from the sions of this court to this effect: That the plaintiff's evidence and from the circumstanc- mere existence of circumstances calculated These may be summarized as follows: That the purchase by a bank in Iowa from a party in Tennessee of notes against a party in Maine was an unusual transaction; that it would not ordinarily be completed without transaction of indorsement, especially if aided more investigation of the maker's financial by auxiliary evidence, may have a tendency to condition than an examination of his rating show to the minds of a jury that the indorser in a commercial agency; that 10 per cent. knew of the fraud, or that he acted in bad faith. But such circumstances do not, as a was an excessive discount; that although the Partin Company was afterwards rumored to dorsee had reasonable cause to know that fraud matter of law, show such a thing. If an inbe in bankruptcy no notice was sent to the had been perpetrated upon the maker by the bank; that the accountants' statement fur-payee of the note, a jury would generally_be nished the bank was valueless, that the let-justified in finding that he did know it. But ters of recommendation may have been forged, and that the method of payment and the retention of $1,400 for protection might indicate fraud.

See, also, Wing v. Ford, 89 Me. 140, 35 Atl. 1023.

it would not necessarily follow. Reasonable cause to know a fact is one thing; an actual knowledge of it is another. What convinces one may not convince another. The point to All these points are strongly urged in ar- be found is, not whether the indorsee might gument by the learned counsel for the de- have ascertained and could have known that fendant, but the plaintiff replies that the tained, but whether he in fact knew it or acted the note he purchases was fraudulently obtransaction was not an unusual one in bank-in bad faith." Kellogg v. Curtis, 69 Me. 212, ing circles, that the investigation in a repu- 31 Am. Rep. 273. table commercial agency is in accord with usual practice, that 10 per cent. is not an extraordinary rate for discount by Western banks, especially as the notes bore no interest Fraud on the part of the payee and its until after maturity and the longest ones knowledge by the indorsee are two distinct ran 8 months; that the accountants' state- facts, and proof of the former must not be alment showed a concern doing a prosperous lowed to color the latter. Nor should natural business; that there is no evidence that the sympathy for the defendant affect the result. letters of recommendation were forged, and Our attention has been called by the dethat, even if forged by the Partin Company, fendant to two recent cases in New Hampif they were presented to the bank as gen-shire, where similar notes originally taken uine and acted upon by it, the forgery could by the Partin Manufacturing Company were in no degree affect its good faith; that the manner of payment was not irregular, full payment in cash not being required (Hobart v. Penny, 70 Me. 248); and that the retention of $1,400 as a guaranty fund was a safe and conservative move on the part of a prudent investor.

in litigation and the defendants prevailed.

The first was Mechanics' Bank v. Feeney, 108 Atl. 295, decided June 28, 1919, in which a verdict was directed for the plaintiff and the court sustained exceptions. Two reasons for that conclusion are given in the opinion: First, because the transaction as tes[1] In our opinion the points raised by the tified to by the cashier, with a discount of defendant do not furnish a reasonable basis 10 per cent., and a payment of $1,450 in cash for the inference of actual knowledge of and a draft for the balance, $4,040, payable fraud or bad faith on the part of the plain- in one year, seemed to the court to be out of tiff. They do not rise above mere surmise or the usual course of banking business and insuspicion, even if they amount to that, and consistent with a purchase in good faith;

All the stock has been issued and sold for cash at par except 2,500 shares of common stock. A vote has been passed to issue this stock and to offer it to stockholders, both common and preferred, in proportion to their holdings, at $150 per share, a price (Supreme Judicial Court of Maine. Nov. 18, which the case shows to be materially below

The plaintiff, holding 1,000 shares of the common stock, asks that the defendants may be enjoined from carrying this vote into effect on the ground that to give the preferred shareholders a pre-emptive right to purchase common stock at less than its value is in effect to pay them a dividend in addi

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