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Vol. I.)

BLAKE CRUSHER Co. v. WARD.

[No. 10.

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District of Connecticut.

" NEW HAVEN, 4th October, 1873. " Then personally appeared before me John A. Blake, agent and director of the orators in the foregoing bill of complaint, and made solemn oath that the same, and the allegations therein contained, are true, upon his knowledge, information, and belief. " (Signed)

GEORGE SHERMAN, (Notarial Seal.]

Notary Public."

blic." Without this verification there is no proof of the allegations of the bill as to complainant's title to the patent in question, the novelty of the same, complainant's use and enjoyment, of the decisions of courts sustaining the same, all material to be proven on an application for a preliminary injunction. 2 Dan. Ch. Pr. 1644. The question of the validity of the verification is therefore important.

Equity rule ninety-five is as follows: “ That bills in equity may be verified by the agent or solicitor of the complainant:

“First. When the party is at the time absent from the district.

“ Second. When the facts are within the personal knowledge of the agent or solicitor."

Aside from this rule (and it is doubtful if this rule can be applied to bills by corporations, as in this case), there is no rule or provision of law, by act of Congress or otherwise, prescribing the manner of verifying bills, or even requiring them to be verified at all, in any case. Beyond all doubt, however, the material allegations of injunction bills, especially in patent and copyright cases, upon which a preliminary injunction is moved, must be verified in some manner. In England, this appears to have been done by affidavit, subscribed and sworn to in the usual form (1 Dan. Ch. Pr. 392 and note ; 3 Ib. 2165); and in the absence of any law or rule to the contrary, such should be the practice here. Equity Rule 90.

A practice has grown up, however, in the equity courts of the United States, and is of long standing in this district, and no doubt in most of the others, of verifying bills by the complainant, his agent, or solicitor, making oath to the truth of the bill itself, the officer administering the oath adding his jurat, or certificate of the fact, as was done in this case. And I am inclined to the opinion that such practice has been of sufficiently long standing, and of such uniformity, as to give it the authority of a rule of practice, and therefore to hold that this manner of verifying bills is competent in this court.

The certificate or jurat of the officer should show clearly and specifically that all those things necessary for the court to know and be informed of were sworn to. It should appear that the person making oath is the same person who signed the bill; and when the bill is signed by an agent or officer of a corporation complainant, or by an agent or the solicitor of the complainant, it should appear that the person made oath that he was such agent, officer, or solicitor; and when by the agent or solicitor of complainant (except perhaps in the case of a corporation complainant) it should appear that such agent or solicitor made oath to the reason for his making the oath instead of the complainant, in order that the court may see that such agent or solicitor was competent to make the oath under equity rule

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VOL. I.

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Vol. I.]

Tome v. PARKERSBURG BRANCH R. R. Co.

[No. 10.

nine-five; it should also appear, although perhaps this is not essential, that the person making oath made oath to his knowledge of the contents of the bill; and when he swears partly upon his knowledge, and partly upon his information and belief, it should clearly appear what portions of such contents he so swears to upon knowledge, and what portions upon information and belief.

Apply these tests to the jurat to the present bill and fatal defects are at once apparent — so apparent as to avoid the necessity of specifying them here.

It results that the motion cannot be granted as the case now stands. It will not, however, be dismissed, but it will be allowed to stand over, with leave to complainant to have its bill properly verified, and to file and serve affidavits in support of the motion within thirty days, and to the defendants to file and serve affidavits in opposition within ten days thereafter. Ordered accordingly.

COURT OF APPEALS OF MARYLAND.

[TO APPEAR IN 39 MARYLAND.]

PRINCIPAL AND AGENT. RESPONSIBILITY OF PRINCIPAL FOR FRALD

ULENT CONDUCT OF AGENT. DAMAGES. EVIDENCE TOUCHING GENUINENESS OF SIGNATURES. PHOTOGRAPHIC COPIES WITH EXPLANATIONS BY PHOTOGRAPHER.

TOME V. PARKERSBURG BRANCH R. R. CO.

By the by-laws of a railroad company, its treasurer was made the custodian of the ledger and other books relating exclusively to the ownership and transfer of the capital stock of the company; he was required to prepare and countersign all certificates of ownership of stock and scrip that might be issued, and to receire and enter upon the proper books all transfers thereof. It was made his duty. also, to affix the seal of the company to all certificates of ownership of stock and scrip properly issued by the company, and signed by the president. Such treasurer, wishing to obtain money for his own use, fraudulently issued from the office of the company sundry certificates of stock, signed by himself, sealed with the corporate scal of the company, and haring also the signature of the president, and purporting to be genuine in erery respect. Upon the stock so issued, the treasurer through the agency of a broker, borrowed large sums of money, the lender not knowing for whom the money was wanted, and advancing the same solely upon the faith of the certificates, which he beliered to be genuine. Two of the certificates were issued directly to the lender, and the third was issued to the broker and by him assigned to the lender. Some months afterward it was discorered that there had been a fraudulent issue of stock to a large amount by the treasurer, uho soon after the discovery absconded. The company thereupon gave notice requesting the holders of its genuine stock to present their certificates and receire in exchange new certificates. Upon presentation of the above certificates by the holder thereof, in pursuance of this notice, he was informed that they were spuri

Vol. I.)

TOME ». PARKERSBURG BRANCH R. R. Co.

[No. 10.

the

ous, and the treasurer of the company refused to exchange them for new certificates. On suit brought against the company, by the holder of these certificates, for its refusal to excchange them for new certificates, it was held, that the defendant was liable for the fraudulent acts of its agent ; and the jury in assessing the damages to which the plaintiff was entitled might allow him the amount of

money advanced on the stock with interest, or the amount of the market value of the stock at the date of the loan with interest (if they deemed it proper to allow interest), the amount allowed, however, not to exceed the amount of the money loaned with interest, if the value of the stock should be greater than the

loan and interest. Shortly after the discovery of the fraudulent conduct of the treasurer in the orer

issue of stock, the directors of the company, on the 10th of August, 1870, held a meeting at which a report was made by the Finance Committee, setting out in detail the extent of such over-issue. In this report there was no mention made of one of the certificates held by the plaintiff. The plaintiff offered to read in evidence the record of the proceedings of this meeting, from the record book of proceedings of the company, having previously read, without objection, from the record of the various meetings of the stockholders and directors of the company, held prior to this meeting. The defendant objected to the admission of the proffered testi mony. Held, that the proceedings of the meeting of the 10th of August were admissible, the report of the Finance Committee, that one of the certificates of stock held by the plaintiff did not appear upon the list of " over-issues of the stock of the company,furnishing the strongest negative proof that such

certi ficate was genuine and not spurious. On the question of the genuineness of the signature of a Mr. Van Winkle to cer

tain certificates of stock sued on, a witness professing to be an expert in the matter of handwriting was offered to prove that the signature to such certificates was not genuine. He stated that he had never seen Mr. Van Winkle write, nor receired any letter from him, nor had he become acquainted with it in the course of business, but that his only knowledge on the subject was derived from an examination of the signatures of said Van Winkle, in the two certificate books in evidence, which had been placed in his hands by the defendant to enable him to testify, and that he had carefully examined them for five or six months, and had thus acquired a knowledge of the handwriting of Van Winkle. Held, that the witness was not competent to testify as to the genuineness of Mr. Van Winkle's signature, his opinion being derived solely from a comparison of handwriting. On the same question, a photographer by profession and expert in handwriting,

offered as a witness by the defendant, stated that he had, at the instance of the defendant, made photographic copies of the signatures of Van Winkle to the certificates sued on, and of others admitted to be genuine ; that some of these copies were of the actual size of the original, and others of an enlarged size. The defendant thereupon proposed to offer said copies in evidence, to be examined by the jury, together with explanations by the witness as to the differences between the genuine and those alleged to be forged, and his opinion, derived from a comparison of those copies, as to the genuineness of the signatures to the certificates sued on. The plaintiff objected. Held, that the projfered evidence was inadmissible. The facts appear in the opinion.

The cause was argued before Bartol, C. J., Stewart, Bowie, Miller, and Alvey, JJ.

Messrs. Saml. Snowden, Wm. F. Frick f I. Nerett Steele, for appel. lant.

Messrs. C. J. M. Gwinn, J. H. B. Latrobe of Reverdy Johnson, contra.

Vol. I.]

TOME v. PARKERSBURG R. R. Co.

(No. 10.

BOWIE, J., delivered the opinion of the court.

The main question involved in this cause is the extent of the liability of private corporations for the acts of their agent, done within the scope of their employment, expressed or implied.

The inquiry is of peculiar interest, not because of any novelty of principle, but on account of its application to a class of corporations, which have multiplied with amazing rapidity in modern times, and absorbed a vast proportion of the capital and commerce of the country.

As the relation of principal and agent is common to all classes and conditions of life, the principles which govern it are of universal application.

All persons, natural and artificial, capable of entering into this relation are subject to its laws. From the humblest position of domestic service, to the highest grade of financial or commercial employment, a common principle controls its obligations.

The maxim,“ qui facit per alium facit per se," on which it is said the whole law of principal and agent rests, is based on the instinct of natural justice, – that in all employments and business of men, those who create or appoint agents for their own convenience and advantage should be liable for their acts of omission or commission, in the course of their employment.

From considerations of policy, public corporations, such as states or municipalities, are exempt in a great degree froin responsibility for implied authority, founded on the conduct of those they employ; but private corporations, like the individuals who compose them, are held to rigid accountability for the acts of those whom they have held out to others as worthy of trust.

The record contains six bills of exceptions, taken by the appellant ; the first five, to the rejection and admission of certain evidence ; the sixth, to the rejection of the prayers of the appellant, and the granting of those of the appellee.

The last exception presenting questions of laws, which are peculiar to and govern the case, and the preceding exceptions, such only as are incidental, we shall examine them inversely.

As the pleadings contain a summary of the facts and the issues to which the prayers apply, a synopsis of them will be a proper preliminary.

The suit was instituted on the 1st of April, 1871, in the superior court of Baltimore city, by the appellant against the appellee, for the refusal of the latter to issue to the former certain new certificates of stock, in lieu of others previously issued to and held by the appellant, and presented for renewal, in pursuance of notice requiring the holders of stock to present and renew their certificates.

The narr. contained six counts: the first, second, and third for refusing to renew a certificate of 200 shares, issued the 8th of April, 1870; the fourth, fifth, and sixth for refusing to renew a certificate of 350 shares, issued the 2d of October, 1869.

The gist of these several counts is referred to and traversed by the pleas.

The defendants pleaded to the first and fourth counts, that the certificates in said counts mentioned were spurious and not genuine, as the name of the president of the Parkersburg Railroad Company, upon the face of

Vol. I.)

TOME ». PARKERSBURG BRANCH R. R. Co.

(No. 10.

said certificates, is not the genuine handwriting of said president. To the second and fifth counts, that in issuing the certificate mentioned in said counts, the same being spurious and not genuine, inasmuch as the name of the president is not the handwriting of the president, the agent of the said company, mentioned in said count, acted without the scope of his employment. To the third and sixth counts the defendants deny that they have prosecuted their business, in the matter of issuing certificates of stock, in a grossly unskilful and improper manner, and with want of proper care, skill, and diligence.

The defendants afterwards filed additional pleas, alleging that the certificates mentioned were issued without authority and fraudulently, and not for the use and benefit of the defendants, but for the use and benefit of the agent.

To the additional pleas the plaintiff (the appellant) replied that John L. Crawford was the treasurer and transfer agent of the defendants, and placed in sole charge of its office in Baltimore, and in possession of their books, containing certificates of stock, signed in blank by the president, and in issuing the certificates, Crawford acted in the exercise of a power conferred upon him by the defendants as their treasurer and transfer agent; that the plaintiff advanced his money upon the collateral security of the certificates without any knowledge or suspicion that Crawford, as treasurer and transfer agent, was acting fraudulently, and that the defendant is estopped from saying the certificates were fraudulently issued, &c.

For replication to the defendants' second amended plea, the plaintiff said, that whether said certificates were fraudulently issued by Crawford, without lawful authority or not, or whether they were issued for his use and not for the benefit of the defendants, or whether the defendants received any benefit, nevertheless the plaintiff was entitled to maintain his action, because Crawford, in issuing the certificates, acted within the scope of his employment as treasurer and transfer agent.

The issues made by the pleadings, briefly expressed, are as follows:

1st. Whether the certificates of stock alleged to be issued by the appellees to the appellant were genuine or spurious ?

23. Whether they were issued by the treasurer and transfer agent within the scope of his employment ?

3d. Whether the appellees conducted their business in the matter of issuing the certificates of stock in a grossly unskilful manner, and without due care and diligence ?

4th. Whether the certificates were issued without authority and fraudulently by the treasurer and transfer agent?

5th. Whether the appellees were estopped by the facts and circumstances of the case from denying the authority of their agent and the genuineness of the certificates ?

Some of these issues present, perhaps, questions of law as well as of fact, but all errors of pleading were waived, and it was agreed that either party might present, for the judgment of the court, any question that the facts might authorize.

The appellant's prayers, upon the hypothesis, that the facts contained in them respectively are proved, without referring to them specifically, present the following propositions substantially, viz. :

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