Third. The express agreement to "redeem within eighteen months" and the acceptance of the stock as "a temporary arrangement to further your plans" are wholly incompatible with the theory of an absolute sale of the stock.

Fourth. It is true that the letter of April 10 was addressed to Mr. Boocock personally, for the reason that the new company had not then been organized. Subsequently Mr. Boocock became its present and general manager. The actual agreement was between the two corporations and the action of the Educational Company in delivering the stock was an acceptance of the terms stated in the letter of April 10 and a ratification thereof.

The transaction has all the attributes of a pledge. The Educational Company was to have eighteen months in which to pay its debt on condition that it transferred $5,000 stock as collateral and redeemed it within that time. The debt was not paid; the time of payment was extended but the obligation to pay remained.

The use of the words "and redeem within eighteen months the preferred stock and bonus" is inconsistent with the theory of an absolute sale.

"To redeem is defined as to purchase back; to regain possession by payment of a stipulated price; to repurchase; to regain, as mortgage property, by paying what is due; to receive back by paying the obligation.' 24 Am. and Eng. Encyclopedia (2d Ed.) p. 214.

One member of the court is inclined to the opinion that the evidence tends to establish a conditional sale rather than a pledge, but as the same result, though by different methods, must be reached whichever theory is adopted, he concurs in the result.

The order is reversed with costs and the matter is remanded to the District Court with instructions to allow the claim of the appellant in full.

THE GOLDEN ROD.

(Circuit Court of Appeals, Second Circuit. April 4, 1907.)

No. 253.

1. MARITIME LIENS-STATUTORY LIEN FOR SUPPLIES-NOTICE.

The fact that notice of a lien filed under the New York statute for supplies furnished to a vessel did not contain the name of the owner of the vessel is immaterial and does not invalidate the lien, where prior to the filing of such notice the claimant had instituted a suit in rem to foreclose the lien in which the vessel had been seized by the marshal.

[Ed. Note.-Maritime lines, see note to The George Dunvois, 15 C. C. A. 679; The Nebraska, 17 C. C. A. 102; The Electron, 21 C. C. A. 21.] 2. SAME-TIME FOR FILING NOTICE-RUNNING ACCOUNT.

Where supplies of coal for a vessel were ordered and delivered at different times a bill being rendered after each delivery, the several charges do not constitute a running account, but each constitutes a separate and distinct cause of action, and to entitle the seller to a lien for any item under the New York statute notice thereof must have been filed within 30 days after such item was furnished or suit to enforce the lien must have been instituted within that time.

Appeal from the District Court of the United States for the Southern District of New York.

On appeal by the owner of the yacht Golden Rod from a decree of the District Court for the Southern District of New York condemning the yacht to pay a claim of $296.13 for coal supplied to the yacht between May 25, 1905, and June 22, 1905.

The facts fully appear in the opinion of the District Judge, which is reported in 145 Fed. 743.

Wilcox & Green, for appellant.

Wing, Putnam & Burlingham, for appellee.

Before LACOMBE, TOWNSEND, and COXE, Circuit Judges.

COXE, Circuit Judge. We are satisfied with the finding of the District Judge that the agent of the purchaser on board the yacht had authority to bind her for necessaries and that a lien was created under the state statute for coal furnished by the libelant to the Golden Rod. The proof shows that the coal was delivered on board the yacht in May and June, 1905, as follows:

The specification of lien was filed in the county clerk's office July 19, 1905. The libel was filed July 14, 1905, and it is stated, and not denied, that on that day the yacht was seized by the marshal and was actually in his custody.

The criticism of the claimant that the notice of lien as filed was defective, in that it did not contain the name of the owner, need not be considered, for the reason that, prior to the date of filing, the yacht had actually been taken by the marshal on process issued out of the District Court.

The statute gives the materialman a lien for thirty days and during that time, as to a portion of the coal at least, the lienor commenced foreclosure proceedings by an action in rem and a seizure of the yacht. This was notice to all interested persons and rendered the filing of specifications in the clerk's office an idle and unnecessary proceeding.

We fully approve the doctrine of the Niagara (D. C.) 31 Fed. 163, where it is said:

"The presumptive purpose of filing specifications, namely, to give notice to other parties interested in the vessel, would seem to be fulfilled by the filing of the libel and the custody of the marshal."

The first three items, as stated above, were furnished more than thirty days prior to the filing of the libel or the notice of the lien in the county clerk's office. As to them, therefore, the lien had expired unless they may be considered as part of a running account.

The libelant's president testified that he rendered a bill for the coal after each delivery. We are inclined to think that each was an in

dependent transaction and that an action could have been brought after the rendition of each bill.

“An account current is an open or running account between two or more parties, or an account which contains items between the parties from which the balance due to one of them is or can be ascertained, from which it follows that such an account comes under the terms of an open account in so far as it is running, unsettled, or unclosed." 1 Cvc. 363.

In order to constitute a running account there must be an uninterrupted and connected series of transactions; if all the terms be agreed upon so that each item constitutes a separate and distinct cause of action in itself there is no running account.

In Rockefeller v. Thompson, 2 Sanf. 395 (N. Y. Super. Ct.) Judge Vanderpoel says:

"Miller, the clerk of the boat, testified that the boat wanted painting every week or two, and whatever was wanted to be done, they ordered the plaintiffs to do; that the painting of certain parts of the boat was done at different times; they would wear the part painted two or three months, and then paint it again. This gives a fair idea of the character of the work. It was palpably not the result of one entire and indivisible contract. The plaintiffs could have presented their bills and enforced their claims from time to time." We hold, therefore, that there was no lien as to the first three items amounting to $143.75.

It follows that the decree must be reduced to the sum of $152.38 with interest thereon from June 22, 1905, and the costs of the District Court, and the cause is remanded to the District Court with instructions to enter such a decree. Neither party to recover the costs of this court.

OLD COLONY ZINC & SMELTING CO. v. CARRICK et al.
(Circuit Court of Appeals, Eighth Circuit. April 3, 1907.)
No. 2,433.

VENDOR AND PURCHASER-RESCISSION OF SALE-FRAUD-TIME.

Complainant, having purchased a lead and zinc mine in July, 1902, discovered in April, 1903, that its agent had been corrupted by the vendors, and that complainant had been induced to pay $7,000 more for the mine than the owners deemed it worth. With this knowledge, complainant brought suit to recover the amount alleged to have been wrongfully paid to its agent and made a claim against the vendors for the overpayment, but no notice of rescission for fraud was given to the vendors until August, 1904, and suit was not brought for such relief until September of that year, during which time complainant treated the mine as its own and operated the same changing the status of the parties and condition of the property in such a manner as to disclose a purpose to waive the fraud and affirm the sale. Held, that complainant was not entitled to a decree for rescission.

[Ed. Note. For cases in point, see Cent. Dig. vol. 48, Vendor and Purchaser, § 213.]

Appeal from the Circuit Court of the United States for the Southwestern Division of the District of Missouri.

George Hubbert and C. V. Buckley, for appellant.
Thomas Dolan, for appellees.

Before SANBORN, HOOK, and ADAMS, Circuit Judges.

ADAMS, Circuit Judge. This was a suit in equity to set aside a deed and rescind the sale of a lead and zinc mine for fraudulent misrepresentations by the vendors touching the value of the mine and for alleged corruption by them of the agent of the vendee who was deputed to examine and report on its value. We need not stop to consider whether any such representations were made, and, if made, whether they were of the character which entitled the vendee to equitable relief, or whether the agent of the vendee was improperly approached and influenced by the vendors. The facts of the case clearly show that the appellant, who was complainant below, conducted mining operations, speculated on the chances of finding valuable mineral, and postponed beginning its action to rescind the sale so long after the discovery of the alleged wrongdoing by defendants that it now has no standing in a court of equity to obtain the relief sought by the bill. The mine was purchased on July 28, 1902. From that time until August, 1905, when the president of complainant company gave his testimony, the mine was continuously operated by the vendee, and, so far as this record discloses, is now being so operated. He testified that he found just enough encouragement to cause him to keep on mining; that he continued prospecting, drilling, and drifting, and occasionally struck fairly good bodies of ore. He admitted that he learned in April, 1903, that the company's agent had been corrupted, having received from defendants the sum of $2,000 for exerting his influence in bringing about a sale to complainant, his principal; that he then learned that his company had paid $7,000 more for the mine than the owners deemed it worth. He caused suit to be instituted against the agent to recover the $2,000 wrongfully paid him, and asserted a claim for and considered the advisability of instituting suit against the vendors to recover $7,000, which he denounced as their "graft." With all this knowledge he neither stopped work nor took any steps to rescind the sale for sixteen or seventeen months thereafter. In June, 1903, he wrote his attorney, Mr. Gray, as follows:

"If you and Mr. Buckley should judge that we are entitled at this late day to repudiate the sale, demand our money back, you will please advise us whether or not we should take a vote of our directors to that effect and give the defendant notice of it. Will the fact that we have continued to operate and develop the property for a month or two since we gained knowledge of the fraud estop us from rescinding the sale?"

And then, doubtless with a view of not committing himself irretrievably to follow his attorney's advice, he said:

"Possibly our board may not think best to rescind if we can, but it seems to me to make that attack with others, and later make choice for main reliance may be good tactics because it would be most likely to bring out a liberal offer of settlement."

With knowledge in April, 1903, of all the alleged fraud, plainly and unambiguously acknowledged by the president of the company in his letter of June, 1903, no notice of rescission was given to the defendants

until August, 1904, and this suit was not instituted until September, 1904, 17 months after adequate knowledge was acquired. Instead of asserting the right to rescind promptly upon discovering the fraud as required by a rule of equity universally recognized, the complainant waited 16 months before giving the notice of rescission or taking any steps in that direction. During this period it treated the mine as its own, conducted the usual operations, mined and sold ore, changed the status of the parties and the condition of the property, and in every way disclosed a purpose to waive the fraud and affirm the contract, notwithstanding the fraud. It asserted a claim against its unfaithful agent for $2,000 received by him from the defendants for his perfidy, and asserted a claim of $7,000 against the defendants, which it considered to be the amount paid for the mine over and above its value. Its conduct was consistent with the affirmation of the contract, notwithstanding the fraud and the recovery of damages occasioned by the fraud, and was totally inconsistent with the intention to disaffirm and rescind the contract by reason of the fraud.

Even the institution of this suit does not seem to have been the result of a definite purpose to exercise the right of rescission. It appears rather to have been resorted to for the purpose of enforcing a settlement of its claims just mentioned. In the language of the president this suit was "good tactics, * * * most likely to bring out a liberal offer of settlement."

It is difficult to seriously discuss the right of a suitor to resort to a court of equity for relief on the facts and circumstances disclosed by this record. The case falls fully within the recent case of Richardson v. Lowe (C. C. A.) 149 Fed. 625, decided by us and the cases therein cited, and is governed by the rules and principles therein announced. The Circuit Court properly dismissed the bill, and its decree is accordingly affirmed.

CRAFT, Internal Revenue Collector, v. SCHAFER.

(Circuit Court of Appeals, Sixth Circuit. March 5, 1907)

No. 1,589.

INTERNAL REVENUE-OLEOMARGARINE LAW-POWERS OF COLLECTOR.

The oleomargarine acts (Act Aug. 2, 1886, c. 840, 24 Stat. 209 [U. S. Comp. St. 1901, p. 2228], as amended by Act May 9, 1902, c. 784, 32 Stat. 193 [U. S. Comp. St. Supp. 1905, p. 432]) are complete in themselves, only those provisions of the general internal revenue statutes which are expressly enumerated therein being applicable thereto; and a collector is not authorized to exact the penalty of 50 per cent. provided for by Rev. St. § 3176 [U. S. Comp. St. 1901, p. 2068], from a dealer for neglecting to make the proper return.

In Error to the Circuit Court of the United States for the Western District of Kentucky.

For opinion below, see 144 Fed. 907.

George Du Rélle, for plaintiff in error.

Henry M. Johnson, for defendant in error.