Defendant also brought about a forfeiture or termination of alleged that the lease was valid and in full the lease, the defendant's duty to clear the force, and that it was the owner of it.

The trial court made findings of fact, all fendant failed to discharge that duty notfavorable to plaintiffs:

(118 Wash. 528)

(203 P.)

MENTZER BROS. LUMBER CO. v. RUSSELL. (No. 16783.) (Supreme Court of Washington. Jan. 26, 1922.)

Appeal and error 1011(1)-Trial court's judgment on conflicting evidence not reversed. In an action for the price of logs shipped to defendant, where the evidence was conflicting as to the number of feet delivered, the judgment of the trial court will not be reversed.

question cut but 6,600 clear shingles per 1,000 feet according to respondent's scale, and 8,600 according to his own scale, but no account is made of clear shingles less than 12 inches in width and culls, some of each of which, it is admitted, were cut.

Could we say that the witnesses, testifying directly to the scale of the logs, exactly offset each other, then we might hold that the evidence preponderates against the finding of the trial court; but this we cannot do. The trial court had the advantage of seeing both of these witnesses and hearing

Department 1. Appeal from Superior Court, Thurston them testify, and, from the impression thus County; D. F. Wright, Judge.

gained concerning the disinterestedness of

Action by the Mentzer Bros. Lumber Com-one, and the interest of the other, and still

pany against C. E. Russell, doing business as the Russell Mill Company. Judgment for plaintiff, and defendant appeals. Affirmed.

P. C. Kibbe, of Tenino, for appellant.

bearing in mind all the surrounding circumstances shown by the indirect evidence, the court was evidently convinced that respondent's scaler had made a fair and impartial scale of the logs in question, allowing with

T. F. Mentzer, of Tenino, and Troy & reasonable judgment for the defects and Sturdevant, of Olympia, for respondent.

poor quality thereof, and we, lacking the trial court's opportunity of seeing and hearing the witnesses, cannot say that the conclusion reached was wrong.

Appellant made no formal assignments of error, but, as we gather his points from the brief and argument, we are convinced that the trial court committed no reversible error, and the judgment appealed from is therefore affirmed.

TOLMAN, J. Respondent, as plaintiff, sued to recover the value of cedar logs shipped to appellant during the month of September, 1920, at the agreed price of $20 per thousand, f. o. b. Tenino, alleging that it so delivered 157,194 feet of logs, of the value of $3,143.88. Appellant denied that more than 123,991 feet of logs were delivered, and tendered payment for that amount. The only controversy in the case is over the scale PARKER, C. J., and FULLERTON, of the logs. From a judgment against him MITCHELL, and BRIDGES, JJ., concur. for the full amount demanded, appellant appeals.

(187 Cal. 587)

Respondent procured the logging and loading to be done by contractors who were paid for their work at an agreed price per thousand, and for the purpose of determining the SEID PAK SING et al. v. BARKER et al. amount earned by the contractors they agreed with respondent upon a disinterested

scaler, whose scale should be binding upon both. Respondent in billing the logs to appellant used this same scale, and bases this

action thereon.

(S. F. 9935.)

(Supreme Court of California. Dec. 19, 1921.

Rehearing Denied Jan. 16, 1922.)

I. Mortgages 575-Bond necessary on supersedeas to stay sale in foreclosure.

Code Civ. Proc. § 945, providing that upon an appeal from a judgment directing a sale of real property a bond must be given to stay proceedings, applies to a judgment in foreclosure, and hence supersedeas to stay sale under execution will not be granted in the absence of a bond; the fact that the judgment itself gave a stay of 70 days not justifying a stay on appeal without a bond, regardless of whether the judgment be considered interlocutory or final.

The only direct evidence as to the amount of logs delivered to appellant is based upon the testimony of this scaler upon the one hand, and the evidence of appellant, who testified to a scale made by himself as the cars arrived at his mill, upon the other. There was considerable indirect testimony upon both sides. Appellant, by a large number of employees, showed the logs to have been of poor quality, though it is admitted upon both sides that the quality of the logs is largely immaterial if they were properly scaled, allowing for defects and imperfections. Appellant also produced some testimony to the effect that good cedar should judgment denying recovery for loss of profits An appeal by plaintiff from a portion of a cut 10,000 shingles to each 1,000 feet of logs, on failure to deliver land under an agreement and that fair or medium cedar should cut is not so inconsistent with the right to enforce 8,000 to 9,000 shingles. He offered the tally the judgment as would justify a stay of execu. cards of his mill, showing that the logs in tion, where on the appeal the amount of the

2. Appeal and error 479(1)-Stay held not required by inconsistency between appeal and right to enforce judgment.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes
203 P.-47

judgment could not be reduced below the sum due within 60 days, and upon deposit of said already allowed.

3. Mortgages 411-Sale under execution in foreclosure may be had before entire amount due is ascertained on appeal.

A sale under execution in foreclosure before the entire amount due is ascertained on appeal is not in violation of Code Civ. Proc. § 726, prohibiting more than one action for the foreclosure of a mortgage.

In Bank.

Action by Seid Pak Sing and others against Harry B. Barker and others. Judgment for plaintiffs, and defendants apply for a writ of supersedeas to stay sale under execution in foreclosure. Writ denied.

Elston, Clark & Nichols, of Berkeley, and Miller, Thornton & Miller, and Platt Kent, all of San Francisco, for appellants.

A. H. Ashley, of Stockton, and Sterling Carr, of San Francisco, for respondents.

WILBJR, J. The defendants apply to this court for a writ of supersedeas on two grounds: First, that their appeal is taken from an interlocutory judgment upon which they are not required to give a stay bond; and, second, that the plaintiffs, having appealed from a portion of the judgment, cannot take advantage of the portion in their favor not appealed from, because plaintiffs have by their appeal selected a remedy which is inconsistent with the enforcement of the balance of the judgment, because the portions of the judgment appealed from are inextricably interwoven with the portion from which no appeal is taken.

The plaintiffs' mortgage upon 970.93 acres of land was subject to a prior trust deed thereof given to secure an indebtedness of $35,000 and certain advances. Plaintiffs brought this action to enjoin the sale of the land by the trustees for nonpayment of the indebtedness secured by the trust deed, and to have the amount of the indebtedness so secured fixed so that plaintiffs could redeem the property from said trust deed. The trustees claimed the amount of the indebtedness so secured to be $186,000.

[1] By cross-complaint the defendant Grossman, who owned the mortgaged property, sought similar relief against the plaintiffs' mortgage, as the amount admittedly due thereunder was less than $25,000, and plaintiffs were claiming that more than $400,000 was due thereunder, as alleged in plaintiffs' answer to this defendant's cross-complaint. The trial court fixed the amount due upon the trust deed entitled to priority over plaintiffs' claim at $37,091.70, plus $305 taxes, and the amount due upon plaintiffs' mortgage at $133,452.27, and provided that the plaintiffs could redeem from the trust deed by paying the clerk of the court the amount

trust deed and note thereby secured, properly indorsed and assigned to plaintiffs. The decree further declared that the amount due on the mortgage was $133,452.27, and provided for the payment thereof by the owner within 70 days, and that if the amount of plaintiffs' mortgage was not paid within 70 days the property should be sold in satisfaction of the indebtedness found to be due to the plaintiffs, and that a judgment be entered for the deficiency, if any. The time for redemption has expired, and it is not contended that the mortgage has been paid or the amount due tendered. The Code provides that, upon an appeal from a judgment directing a sale of real property, a bond must be given to stay the proceedings, the amount thereof which must be fixed by the court. Code Civ. Proc., § 945. No such bond was given. This is such a judgment. The sale could be stayed or prevented by payment of the amount due within 70 days, or by giving a stay bond on appeal. The fact that the judgment itself in effect gave a stay of 70 days does not justify a stay on appeal without a stay bond. It matters not whether the judgment be considered as interlocutory or final. The defendants are not entitled to a supersedeas on their own appeal.

Notwithstanding defendants' failure to give a bond, they seek to have a writ of supersedeas issued by this court because of the plaintiffs' appeal from portions of the decree denying its claim for judgment for $260,000 more than was given. In order to more clearly present the defendants' position, it will be necessary to state other facts. The defendant Grossman's predecessor rented 970.93 acres of land to plaintiffs at the rental of $25.50 per acre for the year 1918 and $26 per acre for the year 1919. The plaintiffs were to pay the rentals in advance and have paid $35,000 in rentals. The land at the time of the agreement was swamp and overflowed land, incapable of cultivation without reclamation. Grossman's predecessor agreed to have a portion of the land ready for cultivation on February 1, 1918, and the balance March 1, 1918. Only 152.20 acres were ready for cultivation by the plaintiffs in 1918, and 382.90 acres in 1919. The mortgage was given to them to secure the performance by the landlord of the terms of the lease. Plaintiffs claim the return of $22,140.55 on the rental of land not delivered to them, expressly agreed to be refunded by the terms of the lease, and the sum of $7,565.43 for levee work, $410.06 for a siphon, $6,855.03 for expense of pumping, and $96,418.20 for damages to the plaintiffs' growing crop in 1918, due to flooding. These items were allowed by the trial court, aggregating $133,457.27. The court denied the plaintiffs' prayer for loss of profits due to the failure to deliver the land as agreed, amounting to over

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

(203 P.)

$250,000, and it is from this portion of the judgment only that plaintiffs appeal.

The petition for a writ of supersedeas is denied.

We concur: SHAW, C. J.; SLOANE, J.; LENNON, J.; SHURTLEFF, J.

(187 Cal. 667)

PITMAN v. WALKER. (S. F. 9277.) (Supreme Court of California. Jan. 4, 1922. Rehearing Denied Feb. 2, 1922.)

lent acts of agents not imputed to officer of corporation in private dealings.

[2] It is claimed that to enforce the judgment for the amount found due by the court would be inconsistent with the prosecution of the appeal, for the reason that the allowance of damages for lost profits on the undelivered acreage is inconsistent with the allowance of a rebate of rents as provided in the lease for the same land. However that may be, on plaintiffs' appeal the amount of judgment cannot be reduced below the sum already allowed to them, and the only. Corporations 428 (2)-Notice of fraudu. question is whether or not the amount of the judgment can be increased. If, as the plaintiffs claim, there is an inconsistency between the recovery by the plaintiffs of the amount provided in the lease for a failure to deliver to them the land leased, and the right to also recover damages because of loss of profits for such nondelivery, such question goes to the merits of plaintiffs' appeal, and, however determined, could not result in the decrease of the amount of the judgment in favor of the plaintiffs. There is therefore no such inconsistency between the appeal and the rights of the plaintiffs to enforce the judgment as would either justify or require a stay of execution.

It is unnecessary, we think, to review the many cases cited by the petitioners, as both parties agree that no writ can be issued unless there is such inconsistency between the right of appeal and the right of execution to enforce the judgment as require the plaintiffs to elect between the two remedies, and no such inconsistency exists.

[3] The petitioners contend that a sale under execution in foreclosure before the entire amount due is ascertained on appeal would in some manner violate section 726, Code of Civil Procedure, which prohibits more than one action for the foreclosure of a mortgage. There is nothing in this point, as this action will be the same single action after the sale as before, the sale being only one step in the foreclosure proceeding; the ascertainment of the deficiency, if any, being another. It should be said in this connection that it is not contended that the property is worth the amount of the liens thereon, as declared by the court.

If authority is needed for such obvious conclusions stated by us, the cases cited below will be sufficient, and, for the reason stated, we deem it unnecessary to enter into a detailed discussion thereof. Stetson v. Sheehan (App.) 200 Pac. 387 (rehearing denied); Whalen v. Smith, 163 Cal. 361, 363, 125 Pac. 904; Ann. Cas. 1913E, 1319; Ganahl Lumber Co. v. Weinsveig, 168 Cal. 664, 143 Pac. 1025; Lake v. Superior Court, 200 Pac. 1041; Goodlett v. St. Elmo Investment Co., 94 Cal. 297, 29 Pac. 505; First Natl. Bank v. Wakefield, 138 Cal. 561, 72 Pac. 151.

A corporation is bound by the unlawful or fraudulent acts of its agents within the scope of their employment, and notice of such wrongful acts is imputed to the corporation, but this rule does not extend to the imputing of such notice to the officer of the corporation without actual notice or connection with the transaction, and in matters affecting his private and independent dealings with the corporation.

2. Bills and notes 333-Notice of fraudulent acts of agents not imputed to officer of corporation purchasing note from corporation.

Notice of fraudulent and wrongful acts of agents of a corporation while selling stock and taking a note therefor is not imputed to an officer of the corporation, and where such officer purchases the note from the corporation for value and without actual notice of the fraudulent act, the maker is not entitled to set up the fraud in an action on the note. 3. Mortgages 235-Instrument held mortgage which passed to assignee without formal assignment.

An assignment of an interest in the estate of a deceased person as security for a note is a mortgage under Civ. Code, § 2924, and

passes to an assignee of the note without formal assignment under section 2936.

4. Bilis and, notes 167-Mortgage security operates to destroy negotiability.

Mortgage security executed at the time a note is made operates to destroy the negotiability of the note in the hands of a purchaser with notice thereof.

5. Bills and notes 167-Not rendered nonnegotiable by subsequently executed mortgage as security so as to give notice of defects.

Where a note is negotiable as first executed and delivered, but subsequently mortgage security is demanded and given, such note is negotiable in the hands of a subsequent purchaser with knowledge of the security so far as defects in the note are concerned, though tions placed by Code Civ. Proc. § 726, upon acthe mortgage is binding upon him as to restrictions to collect a debt secured by mortgage, in view of St. 1917, p. 1539, § 3128.

In Bank.

Appeal from Superior Court, Fresno County; D. A. Cashin, Judge.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

Action by Eli E. Pitman against Agnes J. | paid $3,000 of the purchase price. She had, Walker. Judgment for defendant, and plain-subsequent to the purchase, spoken to him tiff appeals. Reversed.

Short, Lindsay & Woolley and Short & Sutherland, all of Fresno (F. W. Docker, of Fresno, of counsel), for appellant.

M. K. Harris and Geo. Cosgrave, both of Fresno, for respondent.

SLOANE, J. The plaintiff has appealed from a judgment in favor of the defendant in an action to recover $5,000 on a promissory note.

about her investment, and asked him if he thought the stock was good. He replied that he thought it was; that he had invested in it himself, which was the fact. He testifies that he had no knowledge prior to taking the assignment of her note that she was dissatisfied, knew nothing of any representations that had been made to induce her to buy stock, and was not aware of any irregularity or failure in exhibiting to her the corporation commissioner's permit, which permit had been duly issued. There is nothing in the evidence in rebuttal of this testimony. The only theory upon which can rest the implied finding from the verdict of the jury in defendant's favor that plaintiff was not a purchaser in good faith and without notice of any infirmities in the note is that a presumption or inference arises against him from his connection with and general familiarity with the corporate business. To whatever extent this might be the rule as to transactions in the ordinary course of the corporation's business, it would not apply to irregular conduct or fraudulent acts of other corporate agents not actually brought to his attention. The presumption, if any such may

The note was executed by the defendant to the Boden Automatic Hammer Company, a corporation, in consideration for the purchase price of certain shares of the capital stock of the corporation, and was assigned to the plaintiff before maturity and for a valuable consideration. While the note was negotiable in form, it was assigned to plaintiff with security from the maker given after the execution of the note, but prior to the assignment, and consisting of an equitable mortgage upon the maker's interest in the estate of her deceased husband. It was claimed that, by reason of such security, the negotiability of the instrument had been destroyed, and that the plaintiff took it subject to any defense ex-be indulged by the officers of the company, is isting against the original payee.

The defenses pleaded were that there had been a failure of consideration in that the

stock of the corporation received therefor was without value, and that the defendant had been induced to purchase the same and execute said note therefor by false and fraudulent representations, and that said sale of stock was void under the "blue sky" law by reason of the fact that no certificate or permit of the commissioner of corporations had been exhibited to defendant before the purchase of said stock and execution of said note therefor, as required by law.

The primary question to be determined is whether or not these affirmative defenses are available to the defendant; and this depends upon whether or not the note was negotiable, and the plaintiff a purchaser in due

course.

That the note was negotiable in form, and was assigned for value and before maturity, is beyond dispute. Respondent contends, however, that the assignment was taken by plaintiff with notice of defendant's equities, or at least under circumstances imputing notice sufficient to put the purchaser on inquiry. Plaintiff was at all times covered by the transaction a stockholder, director, and vice president of the corporation, named as payee in the note. He was aware that the note was given on the purchase of the corporate stock. He knew that defendant had a made previous purchase of 5,000 shares of the stock and had

that the sales agents acted fairly and in accordance with law.

[1, 2] The corporation on familiar principles of law is bound by the unlawful or fraudulent acts of its agents within the scope of their employment, and notice of such wrongful acts is imputed to the corporation. of such notice to an officer of the corporabut this rule does not extend to the imputing tion without actual notice or connection with the transaction, and in matters affecting his private and independent dealings with the corporation. Washburn v. Inter-Mountain Min. Co., 56 Or. 578, 109 Pac. 382, Ann. Cas. 1912C, 357; Peckham v. Hendren, 76 Ind. 47; Cook on Stock and Stockholders, 727; 14A Corp. Jur. 100; Doane v. King (C. C.) 30 Fed. 106; King v. Doane, 139 U. S. 166, 11 Sup. Ct. 465, 35 L. Ed. 84.

It has been held that a director or a managing officer of a banking corporation may not claim the immunities of a purchaser without notice of the commercial paper of his bank, where the infirmity of the paper appears on the records of the corporation or arises within the scope of the officer's employment. McCarty v. Kepreta, 24 N. D. 395, 139 N. W. 992. This decision however rests upon the peculiar provisions of the banking laws, and the fact that the infirmity in the note in question appeared from the records of the bank's business.

Such doctrine of notice cannot be fairly applied to a director of a business corporation with relation to undisclosed representations