the offense condemned by the statute. Indeed, under section 332 of the Criminal Code (Comp. St. § 10506), one who commits an act constituting an offense defined in the law of the United States, or aids and abets therein, is a principal, and may be indicted and punished accordingly. Dukich v. United States (C. C. A.) 296 F. 691; Kaufman v. United States (C. C. A.) 212 F. 613. The act is a remedial statute, and its purpose is "to cut up by the roots every form of discrimination, favoritism and inequality." United States v. Koenig Coal Co., 270 U. S. 512, 46 S. Ct. 392, 70 L. Ed. 709; L. & N. R. R. Co. v. Mottley, 219 U. S. 467, 31 S. Ct. 265, 55 L. Ed. 297, 34 L. R. A. (N. S.) 671; Armour Packing Co. v. United States, 209 U. S. 56, 28 S. Ct. 428, 52 L. Ed. 681; N. Y., N. H. & H. R. Co. v. Commission, 200 U. S. 361, 26 S. Ct. 272, 50 L. Ed. 515.

In Union Pacific R. R. Co. v. Updike Grain Co., 222 U. S. 215, 32 S. Ct. 39, 56 L. Ed. 171, referred to by the plaintiff in error, it was held that a railroad may not pay an allowance to one shipper and refuse an allowance to another, when both shippers have rendered the same service to the railroad company in connection with the interstate movement of their grain. This authority does not aid plaintiff in error's present position. Nor does Interstate Commerce Comm. v. Diffenbaugh, 222 U. S. 42, 32 S. Ct. 22, 56 L. Ed. 83, for there it was held that, when a shipper performs transportation service which it is the legal duty of the carrier to perform, it is entitled to reasonable compensation for the performance of that service. The elevator owner, in that case, was the shipper, and it elevated its own grain. It differs in that material fact from the case at bar. In United States v. Cleveland, C., C., etc., Co. (D. C.) 234 F. 178, the indictment alleged that the carrier granted a rebate through the Lake Shore Company as its agent. The carrier was indicted, as was the agent, the Lake Shore Company.

The plaintiff sued the carrier named in the indictment (Kellogg & Sons v. D. L. & W. Co., 204 App. Div. 243, 197 N. Y. S. 380) for 1 cent per bushel, which the railroad company refused to pay, because the plaintiff in error had agreed to pay the rebates here in question, and it was contended that, if it did so, it would subject itself to punishment under the Elkins Act. The civil liability there imposed by that decision did not determine the criminal responsibility which is here found by this verdict of guilty. The penalty is imposed here, not because it was acting for the carrier, but because it per

formed a service of transportation, and gave a rebate to its shipper or consignee from the compensation received for that part which it performed.

We have examined the other errors assigned, and find none which require a reversal of the judgment of conviction. Judgment affirmed.

MOORS et al. v. WEIL et al. Circuit Court of Appeals, Second Circuit. July 5, 1927.

No. 349.

1. Corporations 429-Party dealing with agent, dealing with corporate property for personal benefit, is put on inquiry.

erty for his personal benefit, party so dealing Where agent is dealing with corporate propwith such agent is put on inquiry.

2. Estoppel

72-Instruction that innocent person, first relying on third person whose fraud caused loss, must suffer, held inapplica. ble, where plaintiff indorsed bill of lading to company, whose treasurer wrongfully sold it to defendant.

leather company, treasurer of which, acting for Where plaintiff indorsed bill of lading to himself in hostility to company, negotiated sale thereof to defendant, who made payment to another company owned and controlled by such treasurer, instruction that, where one of two innocent persons must suffer for third person's fraud, one first reposing confidence in him must bear it, held erroneous, being inapplicable to facts, since title did not pass from plaintiffs by indorsement to defendants.

3.

Carriers

59-Defendants, buying bill of lading from indorsee, held not bona fide purchasers, unless showing indorsement by duly authorized agent.

leather company, treasurer of which, acting for himself. in hostility to company, negotiated sale thereof to defendant, who made payment to another company owned and controlled by such treasurer, refusal of instruction that defendants cannot sustain defense of bona fide purchasers, unless they show that leather company's indorsement was by duly authorized agent, held error.

Where plaintiff indorsed bill of lading to

In Error to the District Court of the United States for the Southern District of New York.

Action by Arthur W. Moors and another against Edmond Weil and others, doing business as copartners under the firm name or style of Alphonse Weil & Bros. Judgment for defendants, and plaintiffs bring error. Reversed.

X. Carmody, of New York City, of counsel), for plaintiffs in error.

re

MANTON, Circuit Judge. We shall fer to the parties as they were below. This action is for the conversion of 2,500 horsehides which were shipped, pursuant to a bill of lading, from France to the United States. The plaintiffs, bankers in Boston, Mass., gave the defendants a letter of credit for $33,000 to secure to them the purchase price of the horsehides which had been sold to the Roden Leather Company, of Grand Rapids, Mich., by the defendants. The Roden Leather Company was the trade-name under which the Crohon & Roden Company did their tanning and leather business. The Crohon & Roden Company signed the guaranty of payment for the purchase. The defendants, by the terms of the letter of credit, drew a draft on the plaintiffs for $32,114, which the plaintiffs accepted and later paid, and they have not been reimbursed, although they duly demanded the money from the Roden Leather Company, of Grand Rapids, Mich., in accordance with the contract which the Roden Leather Company made when the letter of credit was issued. The bill of lading came from the defendants' Paris branch to the plaintiffs on August 13, 1919. It was indorsed to the plaintiffs' order as required by the terms of the letter of credit, the latter being issued May 27, 1919. Crohon, who had been treasurer of the Roden Leather Company, on July 14, 1919, ceased to be an officer and severed all connections with it. The Roden Leather Company gave up its Boston office, and thereafter Crohon took possession, but retained its name on the door.

On August 13, 1919, Crohon induced plaintiffs to indorse the bill of lading for the hides to the order of the Roden Leather Company, and it was sent, so indorsed, to the former Boston office of the Roden Leather Company, where a trust receipt was signed by Crohon in the name of the company and given in exchange. This trust receipt forbade the sale of the hides in raw or untanned condition, and restricted the Roden Leather Company to the manufacture of the hides into leather for sale as such. This exchange for the trust receipt was in accordance with the

Pres't." Crohon was not at any time president of the company. The bill of lading was sold to the defendants, and paid by a check drawn to the order of the Continental Leather Company, a corporation known to its manager to be owned and controlled by Crohon. The defendants guaranteed the indorsement of the Continental Leather Company on the check, and in this way enabled Crohon to obtain the money thereon. Crohon later died, and his estate was found to be insolvent. The Roden Leather Company also became insolvent. The plaintiffs demanded that the defendants return the hides, or the avails thereof, and upon refusal to do so brought this action.

It is conceded that both parties believed that the Roden Leather Company was doing business at its Boston branch, and that Crohon was its treasurer at the time of the indorsement. The jury found a verdict for the defendants, and upon this writ errors are alleged to have been committed in the charge to the jury, and the plaintiffs seek a reversal.

The court charged: "Where one or the other of two innocent persons must suffer loss from the fraud or misconduct of a third person, in whose honesty both have reposed confidence, he who first reposes confidence and intrusts him, the third person, with the means by which he may perpetrate the fraud, must bear the loss." The legal title to the bill of lading was in the plaintiffs. The indorsed bill of lading was never delivered to the Roden Leather Company, or any officer thereof. Delivery was essential to the passing of title. The indorsement by Crohon of the name Roden Leather Company was unauthorized, and title did not pass from the plaintiffs by this indorsement, for it remained, as intended by the terms of the trust receipt, in the plaintiffs.

[1,2] As it turned out, Crohon was acting for himself, also in hostility to the Roden Leather Company, in negotiating the sale to the defendants. Crohon was not president of the Roden Leather Company, and had never been held out as such; he was treasurer. Such indorsement did not transfer title to the bill of lading. The plaintiffs did nothing to create an estoppel, or to prevent them from denying

Crohon's authority. If defendants knew, when they bought the bill of lading, that Crohon was no longer connected with the Roden Leather Company and was without power to indorse the bill, or even sell the hides, they would get no title. And neither the plaintiffs nor the Roden Leather Company would be estopped from asserting such title as they had. The defendants' guaranty enabled Crohon to get cash upon it at once. When an agent is dealing with corporate property for his personal benefit, the person so dealing with such agent is put upon inquiry. Havana v. Central Trust Co. (C. C. A.) 204 F. 546, L. R. A. 1915B, 715; Wagner Trading Co. v. Battery Park Natl. Bank, 228 N. Y. 37, 126 N. E. 347; Manhattan Life Ins. Co. v. FortySecond & G. St. F. R. Co., 139 N. Y. 146, 34 N. E. 776.

The defendants did not rely upon the Roden Leather Company, but accepted the representation of Crohon that the hides had been bought for the account of the Continental Leather Company, when asked for an explanation as to why the check was wanted payable to it. This representation to the defendants and its reliance thereon, made it possible for Crohon to obtain and use the proceeds of the sale. Even if the defendants were purchasers for value of the bill of lading and relied upon the continued authority of Crohon to represent the Leather Company, such reliance is no protection to the defendants who dealt with Crohon at their peril, knowing that the check was payable to a corporation other than that which was interested in the sale of the hides. They knew he was acting for himself, for they knew that the Continental Leather Company was owned by him. Therefore the principle of law charged by the trial court, to which exception was taken, had no application as between the plaintiffs and defendants and was prejudicial to the plaintiffs. The defendants, reposing confidence in Crohon, thus put the funds at his disposal, and the notice which it had of his personal relation to the Continental Company and the latter's apparent lack of property interest in the hides, so far as the documents before the defendants would show, made the defendants the parties who accepted the responsibility of paying another not provided for in the bill of lading. Empire Trust Co. v. Cahan (de

cided May 31, 1927) 47 S. Ct. 661, 71 L. Ed.

-; Whiting v. Hudson Trust Co., 234 N. Y. 394, 138 N. E. 33, 25 A. L. R. 1470. They enabled Crohon to commit the fraud by which the plaintiffs have suffered a loss. [3] The court was requested to, and refused to, charge "that the defendants cannot sustain their defense that they are bona fide purchasers for value without notice, unless they establish that the indorsement of the Roden Leather Company on the bill of lading covering the 2,500 French horsehides was the indorsement of Roden Leather Company by a duly accredited or authorized officer or agent."

There was testimony for the jury's consideration which made it incumbent upon the defendants to ascertain the authority of Crohon to indorse the bill of lading, and also to sell the goods to the defendants, before they could safely make the purchase. Crohon in effect advised the defendants that he was dealing in goods for himself on his own account. The manager of the defendants asked why he wanted the money for the Continental Leather Company, to which Crohon replied that the Roden Leather Company purchased the goods for the account of the Continental Leather Company. This information should have led to further inquiry by the defendants. The failure to do so might have led the jury to believe that they were negligent in refraining from pursuing the inquiry further and learning the truth of the transaction. The defendants' manager knew that the contract was for the sale of goods represented by the bill of lading; also that Crohon was in point of fact the Continental Leather Company. All of this was some evidence of lack of authority to indorse the bill of lading. Therefore the principle of law in the language of the request to charge was applicable, and the plaintiffs were entitled to have the jury instructed accordingly. Moores v. Citizens' Nat. Bank, 111 U. S. 156, 4 S. Ct. 345, 28 L. Ed. 385; Commercial Bank v. Canal Bank, 239 U. S. 529, 36 S. Ct. 194, 60 L. Ed. 417, Ann. Cas. 1917E, 25; Wilson v. Met. El. Ry. Co., 120 N. Y. 145, 24 N. E. 384, 17 Am. St. Rep. 625.

These errors in the instructions to the jury require a reversal of the judgment. Judgment reversed, with costs.

KUHLMAN v. W. & A. FLETCHER CO.

Circuit Court of Appeals, Third Circuit. June 29, 1927.

No. 3606.

I. Admiralty 20-Ship carpenter's injury while repairing completed ship in navigable waters of United States, due to employer's negligence, is "maritime tort."

Injury inflicted on ship's carpenter while repairing completed vessel afloat in navigable waters of United States, due to negligence of employer in furnishing unsafe place to work, without experienced superintendent, and in employing inexperienced fellow workmen, held "maritime tort," and rights and liabilities of parties are governed by maritime law.

5. Seamen

29(5)—Federal court has Jurisdiction of law action for personal injuries sustained by ship's carpenter repairing completed vessel in navigable waters of United States; "seaman;" "sailor" (Merchant Marine Act, § 20, as amended by Act June 5, 1920, § 33 [Comp. St. § 8337a]).

Ship's carpenter, injured while repairing completed vessel in navigable waters of United States, held to have right to redress under general maritime law, including Merchant Marine Act, § 20, as amended by Act June 5, 1920, § 33 (Comp. St. § 8337a), authorizing action at law, for though not "sailor," plaintiff was "seaman," within statute.

[Ed. Note. For other definitions, see Words and Phrases, First Series, Sailor; First and Second Series, Seaman.]

2. Seamen 29 (5) Ship's carpenter, suing for maritime tort on law side of federal court, held not entitled to amend pleadings to state cause in admiralty (Act March 4, 1915, § 20, as amended by Act June 5, 1920, § 33 [Comp. St. § 8337a], authorized by Const. art. 3, § 2, art. 1, § 8; Judiciary Act).

Where ship's carpenter, suing for injury while repairing completed vessel afloat in navigable waters of United States, which was maritime tort, brought action on law side of federal court, refusal to allow amendment to state cause in admiralty held not error, in view of Act March 4, 1915, § 20, as amended by Act June 5, 1920, § 33 (Comp. St. § 8337a), authorized by Const. art. 3, § 2, art. 1, § 8, notwithstanding Judiciary Act 1789 (1 Stat. 76, 77).

3. Seamen 29(5)-Injured ship's carpenter cannot commingle rights under statute authorizing action at law and under statute giving admiralty court jurisdiction of maritime torts (Act March 4, 1915, § 20, as amended by Act June 5, 1920, § 33 [Comp. St. § 8337a]; Judiciary Act).

Ship's carpenter, injured while repairing completed ship in navigable waters of United States, cannot commingle rights under Act March 4, 1915, § 20, as amended by Act June 5, 1920, § 33 (Comp. St. § 8337a), authorizing personal injury action at law and under Judiciary Act 1789 (1 Stat. 76, 77), giving admiralty court jurisdiction of maritime torts; but such

rights must be asserted separately in forum which has jurisdiction of them respectively.

4. Seamen 29(5)-Injured ship's carpenter held to have elected to sue at law rather than In admiralty, where facts pleaded brought case within statute authorizing action at law (Act March 4, 1915, § 20, as amended by Act June 5, 1920, 8 33 [Comp. St. § 8337a]).

Where facts as pleaded in action by ship's carpenter for personal injuries while repairing

completed ship in navigable waters of United States brought case within Act March 4, 1915, $ 20, as amended by Act June 5, 1920, § 33 (Comp. St. § 8337a), authorizing action at law for seaman's personal injury, such statute was invoked without reference to it, and plaintiff had elected to institute suit at law rather than in admiralty.

20 F. (2d)-30

diction of ship's carpenter's personal injury action, regardless of citizenship "any;" "every" (Act March 4, 1915, § 20, as amended by Act June 5, 1920, § 33 [Comp. St. § 8337a]; Judicial Code, § 24 [U. S. C. tit. 28, § 41; Comp. St. § 991]).

Federal court held to have jurisdiction of personal injury action by ship's carpenter, injured while repairing completed vessel in navigable waters of United States, without regard to his citizenship, since Act March 4, 1915, § 20, as amended by Act June 5, 1920, § 33 (Comp. St. § 8337a), giving “any" seaman authority to sue at law, applies to "every" seaman, and requirement of federal court's jurisdiction of such action is exclusive of that previously and generally imposed by Judicial Code, § 24 (U. S. C. tit. 28, § 41; Comp. St. § 991).

[Ed. Note.-For other definitions, see Words and Phrases, First and Second Series, Any; Every.]