It is suggested that, in the circumstances stated, even if the compress company held the possession of the cotton as the agent of the Southern Railway Company, such possession was held in the character of a warehouseman, and not of a carrier. But, as no exoneration of the defendant in either character was attempted, the suggestion avails nothing. Moreover, the distinction was not adverted to upon the trial. For these reasons we do not consider the point further.

One incidental question which we have left by the way is presented by the contention for the plaintiff in error that the bill of lading issued by the Kansas City, Memphis & Birmingham Railroad Company was not proven at the trial; and perhaps the record bears this contention out. We do not critically consider how this may be, for the declaration makes profert of the bill of lading and sets it out verbatim. The only proper pleas of the defendant, the Southern Railway Company, confess the bill of lading as set out on oyer, and aver matter in avoidance.

We are therefore constrained to adhere to our former opinion, and the judgment entered thereon will not be disturbed.

JOSLYN et al. v. DOWNING, HOPKINS & CO. et al.

(Circuit Court of Appeals, Ninth Circuit. October 8, 1906.)

No. 1,290.

1. GAMING-GAMBLING TRANSACTIONS-BETS ON RISE OR FALL OF PRICES. Evidence held to support a finding that a defendant conducted a bucket shop, and that its pretended buying and selling for a customer were merely gambling transactions.

2. TRUSTS-USE OF TRUST FUNDS-RECOVERY BY CESTUI QUE TRUST.

Where a customer in his dealings with defendant, which conducted a bucket shop, used funds which he held in trust, and lost the same to defendant, such dealings being merely gambling transactions between themselves, without any actual buying or selling of stocks or commodities, defendant, having obtained such funds without giving any lawful consideration therefor, may be required in equity to restore the same to the rightful owners.

Appeal from the Circuit Court of the United States for the Northern Division of the Western District of Washington.

The appellees were the complainants in a bill in equity which they brought to recover from the appellant money which had been held in trust for them by Howard Joslyn, their son, but which it was alleged had been lost to the appellant by Howard Joslyn in a course of speculation on the rise and fall of the market prices of stock, grain, and produce during the months of March and April, 1900. The money was the proceeds of the sale of certain lots in Seattle which had belonged to appellees, and which had been sold by Howard Joslyn under a power to sell and remit the proceeds. The amount received was $10,800, all of which, excepting $200 paid as commission to a broker, Howard Joslyn embezzled. Howard Joslyn had no money of his own. He opened his account with the appellant by depositing money with it, not in his own name, but in that of N. S. Joslyn, and he testified that, when he did so, he explained to the appellant's manager that he wished to carry the deposit in that name because of his personal embarrassment, and because he did not wish to have the money subject to attachment by his creditors. The trial court found for the appellees on all material averments of their bill, found

that the transactions between Howard Joslyn and the appellant were simply bets upon the fluctuations of the market, and that the appellees were entitled to recover under the pleadings the aggregate amount of their money received by the appellant during the months of March and April, 1900, amounting in all to $7,708. A decree was rendered in favor of appellees for that sum, with legal interest thereon from May 1, 1900.

Thomas R. Shepard and Shepard & Bailey, for appellant.

Wm. Martin, George H. Bailey, and Franklin K. Lane, for appellees. Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

GILBERT, Circuit Judge, after stating the case, delivered the opinion of the court.

The appellant's contentions, in the order in which we shall consider them, are, first, that the transactions which it had with Howard Joslyn were legitimate business contracts. The appellant is a corporation organized under the laws of Washington, and having its principal place of business at Seattle. Its codefendant in the suit is an incorporation of the same company under the same name, organized under the laws of Oregon, having its principal place of business at Portland. The appellant had branch offices also at Walla Walla and Spokane, in Washington, and at Salem, Or. In all of the nearly daily transactions which Howard Joslyn had with the appellant there never was one actual delivery of stock or commodity. In some of the transactions Joslyn figured as purchaser, in others as seller, and all were had with reference to what purported to be the prices of the Chicago Board of Trade-prices represented to have been received by the appellant by daily telegraphic reports. The real price of the stocks or commodities so dealt in would in a single day amount to from $50,000 to $60,000. The appellant, through its manager, admitted that the appellant itself carried on all these transactions with Howard Joslyn, and charged him commissions thereon aggregating $7,722.50, that the only orders which it placed anywhere were hedging orders placed with its own branch offices, and that the appellant had no stocks or commodities to deliver, and was not in the market buying the same from the owners thereof. It is true that the manager pretended to say that the appellant had the opportunity to buy, and would have done so, if delivery had been insisted upon, but he was unable to mention a single instance of such sale and delivery, either to Howard Joslyn or to any one, at any time before the commencement of the present suit. It is too evident to require discussion that no such delivery was ever contemplated in the course of the appellant's business. The testimony convinced the trial court, as it does us, that the transactions were gambling deals or bets on the market price of stocks and commodities, and that the appellant was conducting what is commonly known as a "bucket shop." This view of the nature of the business which it carried on is sustained by its own admission in a case proper here to be adverted to (Cullison v. Downing [Or.] 71 Pac. 70), in which it made a successful defense to an action brought against it on a contract for commissions by one of its employés on the ground that the business it was engaged in was

unlawful, and that its contracts were gambling contracts. In that case the following is found in the opinion of the court:

“A careful examination of the testimony introduced by the plaintiff shows that defendants falsely represented to their customers that all orders received for the purchase of grain were transmitted by telegraph to the Chicago Board of Trade, and, after the commodity had been thus secured, orders for the sale thereof were sent in the same manner, for which the defendants charged a commission of one-eighth or one-fourth of a cent a bushel; that but few of such orders were ever sent, the defendants "crossing" in their office orders for the purchase of wheat with orders for the sale thereof, whereby they secured two commissions without performing any service therefor. The methods pursued by them were fictitious."

It is contended that the appellant was not aware that the money which it took from Howard Joslyn was a trust fund, and that since he, even if the transactions were illegal, could not recover the money, the appellees stand in no better attitude. The appellant had notice at the beginning of its dealings with Howard Joslyn that he was embarrassed financially. His account was opened in a name other than his own. He did not tell the appellant who N. S. Joslyn was, but he informed its manager that he wished to carry his deposits in that name on account of his personal embarrassment and to avoid attachment by creditors. The appellant thus had knowledge of facts sufficient, we think, to put it upon inquiry to ascertain who N. S. Joslyn was, and whose the money was that was being so used. But it is unimportant whether knowledge of those facts was or was not sufficient to put the appellant upon inquiry, for the right of the owners in this instance to recover the money does not depend upon notice to the appellant that the money was held in trust. The appellees did not participate in the gambling transactions. They had no knowledge that their money was being thus used. Howard Joslyn had possession of their money in trust only for the purpose of transmitting it to them. The appellant in receiving the money parted with nothing of value. It was not a holder for value. It received the money without lawful consideration, and it has no legal or equitable ground for refusing to restore it to the true owner, with interest thereon from the dates on which it was received. No objection has been interposed to the nature of the remedy by which it is sought to recover the money in this equitable suit. Central Stock & Grain Exchange v. Bendinger, 109 Fed. 926, 48 C. C. A. 726, 56 L. R. A. 875.

The further contention is made that the appellees cannot recover for the reason that they have failed to distinguish their money paid to the appellant by Howard Joslyn from the money paid by him which belonged to him. Howard Joslyn testified that all the money which he received from the sale of appellee's property was paid by him to the appellant. The trial court found the dates and amounts of specific payments of money made during March and April, amounting to the total sum of $7,708. Its finding is amply sustained by the record, an examination of which leaves no doubt that those sums were paid by Howard Joslyn to the appellant out of the proceeds of the sale of appellees' property. We are convinced, moreover, that that sum does not represent the full amount which the appellant should, in equity, be

required to account for, and that at least $1,500 in addition thereto is justly due to the appellees from the appellant.

But, in view of the issues framed in the pleadings upon which the case went to trial, and the absence of a cross-appeal, we think that we are without power to extend further relief to the appellees than to affirm the decree of the court below, which we do.

FOX et al. v. MILLER et al.

(Circuit Court of Appeals, Ninth Circuit. October 1, 1906.)

No. 1,310.

BASEMENTS-RIGHT OF WAY-MANNER OF USE-LOGS AND LOGGING-STREAMS. Where a lease gave the lessee a right of way 50 feet wide, to be used for logging, either for a road, flume, tram, or in any other manner the lessees might decide, and it was undisputed that a stream as used by the lessees was within the limits of the grant, the lessees were not confined to the use of the right of way for the purposes of a road, flume, or tram, but were entitled to use the stream to float logs.

Appeal from the Circuit Court of the United States for the District of Idaho.

The appellees are the owners of 15 acres of land lying in a triangular shape, with the apex to the south, from which point the hypothenuse, running northeasterly, is bounded by a county road. The land is traversed by a small stream known as "Cowles' Creek," which flows through it into Loff's Bay, an arm of Lake Coeur d'Alene, on which the land abuts on the north. The stream enters the land near the apex of the triangle and runs parallel with and adjacent to the county road, until it reaches a point about 40 rods from the bay. At this point the main channel turns northwesterly, but for several years the stream has followed a second channel which leaves the main channel at the point above referred to, and runs northeasterly, parallel with and adjacent to the county road. The second channel carries nearly as much water as the main channel, and had been used for several years prior to 1904, during certain seasons of the year, for the purpose of transporting logs to the lake. The appellees' land traversed by these channels is low marshy ground, overflowed during the flood seasons and covered with a growth of willows. It has never been cleared or improved. In December, 1903, the appellants, who owned timber which they desired to transport to market across the land of the appellees, began negotiations with the latter to secure a right of way for that purpose.

The negotiations culminated in a lease made on January 9, 1904, by the appellees as parties of the first part to the appellants as parties of the second part, which provides as follows: "That the said parties of the first part do by these presents lease and demise unto the said party of the second part a right of way fifty feet wide, to be used for logging purposes either for a road, flume, tram or in any manner the party of the second part may decide upon as will best meet their needs, in the transportation of their logs or forest products; the said right of way commences at a point hereinafter mentioned and is described as follows, to-wit: Commencing at a point on the north line of the county road, where said road crosses the west line of the N. W. 14 N. W. 4 of sec. 35, T. 49 N. R. 4 W. B. M., thence running in a northerly direction paralleling the south bank of the creek (which creek crosses said west line of the said N. W. 4 N. W. 4, near the point where the said road does) about 20 rods thence running in a northeasterly direction to the north line of said county road, thence paralleling said county road to the shore of Lake Coeur d'Alene, thence easterly along the south shore of Loff's Bay of Coeur d'Alene Lake about 30 rods to the point of rocks that extends out into said bay, to

gether with the right to use the water front adjacent to said right of way for booming and landing purposes. It is expressly agreed between the parties hereto that, the rights above granted shall not conflict and may be amenable to grants or leases of like nature heretofore granted to others by the parties of the first part, with the appurtenances for the term of years which it may take to remove all the forest products of the party of the second part, which may be tributary to said Loff's Bay of Coeur d'Alene Lake, at the rent or sum of two hundred dollars payable in gold coin of the United States of America, for said period in advance. And it is hereby agreed, and not to let or underlet the whole or any part of said premises without the written consent of the said parties of the first part, except to parties taking contracts to remove forest products belonging to the party of the second part. And at the expiration of the said term, the said party of the second part will quit and surrender the said premises in as good state and condition as reasonable use and wear thereof will permit (damage by fire or elements excepted)."

At the time of the execution and delivery of this instrument the appellants paid to the appellees $200, the consideration therein provided for. In the fall of 1904 one McKenzie, who had a contract from the appellants to take out their logs, deepened and cleared out the right-hand channel of the creek, and ditched the northernmost 300 feet thereof. The appellees knew of this work at the time thereof, and made no objection thereto. On February 11, 1905, they filed their bill of complaint, alleging in substance that the appellants procured the lease by fraud and by fraudulent representation; that they represented that they were a corporation, whereas, in fact, they were a partnership; that they represented that the rent was to be $200 per annum, whereas by their fraud in drawing the lease the rent actually reserved therein was $200 for the entire term; that they expressly promised and agreed to use the right of way for no other purpose than for a flume, and expressly promised not to interfere with or disturb the soil; and that, in violation of these promises, they were engaged in digging a large ditch on the land of the appellees for the purpose of driving their logs and diverting the waters of Cowles' Creek into the ditch, which acts it was alleged would work irreparable injury to the appellees. The prayer of the bill was for the cancellation of the lease, for an injunction enjoining the appellants from asserting any right in the appellees' land, from interfering with the actual flow of Cowles' Creek, from continuing the construction of the ditch, and from interfering with the soil of the appellees' land. Issue was joined on these allegations of the bill, and on the testimony taken the trial court found that the appellants practiced no fraud in procuring the lease, but held that the lease itself conferred upon the appellants the right to use the right of way only for the purpose of a road, flume, or tram. Accordingly, the court entered a decree enjoining the appellants from using the right of way for any purpose other than for a road, flume, or tram, and enjoining them from excavating any ditch or canal thereon, and from in any wise disturbing the soil except for such purpose, and from running or floating any logs through the ditch which they had already constructed on said right of way.

From that decree the appeal is taken.

F. M. Dudley, for appellants.

W. T. Stoll and Edwin McBee, for appellees.

Before GILBERT and ROSS, Circuit Judges, and DE HAVEN, District Judge.

GILBERT, Circuit Judge, after stating the case as above, delivered the opinion of the court.

The principal question here presented, and the only one necessary to be decided, is what is the proper construction of the terms of the lease. The lease gives to the appellants "a right of way 50 feet wide to be used for logging purposes either for a road, flume, tram or in any

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