we are of the opinion that the judgment and order should be affirmed. It is so ordered. Affirmed.

HOLLOWAY and SMITH, JJ., concur.

(36 Mont. 25)

JUDITH INLAND TRANSP. CO. v. WILLIAMS.

(Supreme Court of Montana. Oct. 21, 1907.) 1. ACTION-NATURE-ACCOUNTING.

An action was one at law for the recovery of money, and not a suit for accounting, where plaintiff sued to recover a balance collected by defendant as its agent and retained after plaintiff's demand for the "payment of all moneys belonging to" it, and to recover money defendant collected for, but failed to remit to, others, which plaintiff was compelled to pay, and where the answer did not allege that an accounting was necessary, and none was asked; full payment of plaintiff's claim being pleaded, and judgment in a fixed amount demanded by way of counterclaim.

[Ed. Note.--For cases in point, see Cent. Dig. vol. 1, Action, §§ 124, 125.]

2. PRINCIPAL AND AGENT-RECOVERY OF MONEY FROM AGENT PLEADING-DEMAND.

A complaint, in an action to recover from plaintiff's agent a balance collected by him and retained after plaintiff "demanded from the defendant the payment of all moneys belonging to this plaintiff," and to recover money collected for, but not paid to, others, which plaintiff was compelled to pay, and which defendant has not paid to plaintiff, "though frequently requested by plaintiff so to do," sufficiently alleges a demand for payment before suit.

tends that it is an action at law, to recover a money judgment, fixed in amount, as set forth and demanded in the complaint. The first cause of action pleaded is to recover the sum of $1,748.31, being a balance of moneys collected by the defendant, while acting as plaintiff's agent, which defendant has failed to pay over, after plaintiff had "demanded from the defendant the payment of all moneys belonging to this plaintiff." By its second cause of action plaintiff seeks to recover the sum of $105, being the amount collected on several C. O. D. packages by defendant, which amount he failed to forward to certain express companies, as was his duty, and which amount of $105 plaintiff was compelled to and did pay to the said express companies. Defendant by his answer avers that he has paid over to the plaintiff all moneys collected by him, except the sum of $96.38, which is still in his hands; and by way of counterclaim alleges that plaintiff is indebted to him in the sum of $922.81, balance due him as commissions on the business transacted by him for plaintiff, and demands judgment for that sum. The allegations of this counterclaim are all put in issue by the reply. Plaintiff had a verdict for $1,853.31, with interest, and from a judgment entered thereon, and an order overruling his motion for a new trial, defendant appeals.

We have carefully examined these pleadings. The cause was tried to the court sitting with a jury, to which all the issues were submitted. Defendant's counsel pro

3. SAME-NECESSITY FOR DEMAND.

Where an agent claimed he had fully paid his principal all moneys collected for it by him, and that, instead of being indebted to it, it was indebted to him, no demand upon him was necessary before suit by the principal to recover the sums due it.

[Ed. Note.--For cases in point, see Cent. Dig. vol. 40, Principal and Agent, § 169.]

4. TRIAL-INSTRUCTIONS EVIDENCE TO SUP

PORT.

An instruction not supported by evidence is properly refused.

[Ed. Note.--For cases in point, see Cent. Dig. vol. 46, Trial, §§ 596-612.]

Appeal from District Court. Fergus County; E. K. Cheadle, Judge.

Action by Judith Inland Transportation Company against C. H. Williams. From a judgment for plaintiff, and an order overruling a motion for a new trial, defendant appeals. Affirmed.

H. L. De Kalb, E. W. Mettler, and O. W. Belden, for appellant. J. C. Huntoon and E. G. Worden, for respondent.

SMITH, J. The nature of this action is put in issue in this court, although there seems to have been no such question raised by counsel in the court below. The defendant now claims that this is an equitable action for an accounting, while plaintiff con

given to the jury, and took exception to the action of the court in refusing them. There is no allegation in the answer that an accounting was necessary in order to arrive at the amount due the plaintiff, nor to ascertain how the accounts between the parties stood, and no accounting was asked for in the answer. Full payment of plaintiff's claim was pleaded, and judgment in a fixed amount demanded by way of counterclaim. We are clearly of opinion that this is an action at law to recover a money judgment, ascertained and certain in amount, clearly set forth in the complaint, and that the same was so regarded at the trial by counsel for the defendant, notwithstanding a remark of the learned trial judge, as shown in the record, that this is a suit for an accounting.

At the close of plaintiff's case, the defendant interposed a motion for a nonsuit, as follows: "If the court please, at this time the defendant moves for a nonsuit on the ground that the plaintiff fails to allege in his complaint any sufficient demand having been made, and he fails wholly to allege that a refusal to pay has been entered up by Mr. Williams, and for the further reason that the evidence in the case fails to cure this in this particular. There has been no definite amount mentioned by Mr. Mears demanded of Mr. Williams. Now, we take it that in a

case of this kind those things are essential -are essential and necessary." By the phraseology of this motion the defendant's counsel shows that he regarded this as an action at law. In his brief the defendant argues that this motion should have been granted, because "there was no allegation of demand for a general accounting, and because no proof was introduced of any demand for a general accounting, or, indeed, proof of any sufficient demand to support a cause of action for a money judgment, by a principal against an agent." It will be readily seen from the wording of the motion that it contains no reference to a general accounting. And, in so far as it relates to a demand for money, it is only necessary to say that the motion for a nonsuit refers generally to both causes of action, and in its second cause of action plaintiff alleges "that the defendant has not paid said sum of $105, or any part thereof, to this plaintiff, although frequently requested by plaintiff so to do." We think the complaint sufficiently alleges a demand in each cause of action. An examination of the testimony offered by the plaintiff discloses that there was some evidence of a demand under each cause of action, before suit brought. This disposes of the motion for a nonsuit.

But was a demand necessary? This brings us to a consideration of the instructions refused by the court. They are as follows: Instruction No. 4, requested by the defendant: "The jury are instructed that it is a material allegation of the complaint that the plaintiff demanded the amount sued for of the defendant before the institution of this action, and, unless you find by a preponderance of all the evidence that the plaintiff did make a demand of the defendant and apprise him of the amount due at the time of making such demand, then it will be your duty to find for the defendant." Instruction No. 3, refused by the court: "You are further instructed, if you find from all the evidence that the plaintiff made such demand, then you are instructed that it was incumbent upon him to specify substantially the correct amount due at the time of making such demand, and that a demand from him of a materially greater amount than he claims to be due in its complaint in this action would vitiate such demand." The testimony shows that the plaintiff company was engaged in the express and passenger business between Lewistown and Harlowtown, and that defendant was its agent at Lewistown. John L. Mears was the general manager of the plaintiff, and one Frank McKechnie was an employé of the defendant, Williams, and seems to have had general charge, as such employé, of the transportation company's business, with the knowledge and consent of Mears. McKechnie kept the books of the agency. There is testimony tending to show that, when Williams' agency terminated, he failed to pay over to plaintiff the balance re

maining in his hands of moneys collected by him. Williams' agency terminated about the middle of April, 1902, and this action was begun on March 25, 1903. It clearly appears from the testimony of the defendant himself that he has always claimed that he had fully paid plaintiff all moneys collected for it by him, and that, instead of being indebted to plaintiff, the plaintiff was indebted to him. He pleaded this in his answer, and attempted to prove the same at the trial. Under these circumstances, no formal demand un him was necessary.

In the case of Walradt v. Maynard, 3 Barb. (N. Y.) 584, the court said: "The legitimate object of a demand is to enable the party to discharge the liability agreeably to the nature of it, without a suit at law. If he denies the liability, or the right of the other to call upon him, a demand must be as unnecessary as it would be useless." In the case of Wiley v. Logan, 95 N. C. 564, the court said: "A demand previous to bringing an action for money collected by an agent is to enable the latter to pay it over without incurring the cost of suit, for the principal must seek him, and not he the principal. But a demand is not required where the agency is denied, or a claim set up exceeding the amount collected, or the agent's responsibility is disputed in the answer." See, also, Ayer v. Ayer, 16 Pick (Mass.) 327, and Mechem on Agency, § 531. Our own court has passed upon the principle herein involved. In the case of Christiansen v. Aldrich et al., 30 Mont. 446, 76 Pac. 1007, the court uses this lan'guage, in a case involving the specific performance of a contract: "It is said that the complaint is defective for failing to show a tender of the balance of the purchase money before the action was brought. It is undoubtedly the general rule that, if a part of the purchase price is still due and payable, the plaintiff seeking to have the conveyance compelled must allege and prove a tender of it, and bring it into court. But the rule is not invariable. An exception to it is where it is apparent from the pleading that a tender would be useless. Where the vendor claims to have rescinded, repudiates, and denies the obligation of the contract, placing himself in such a position that it appears that, if the tender were made, its acceptance would be refused, then no tender need be made by the vendee."" The appellant has directed our attention to the case of Anderson v. Hulme, 5 Mont. 295, 5 Pac. S65, in which it was held, in effect, that, in an action for money had and received by an agent or attorney for the use of the plaintiff, it is nec essary to allege a demand and refusal to pay before recovery can be had, and such demand will not be presumed. The question in that case did not arise upon the evidence, which was not in the record; but the defendant contended that the complaint did not state a cause of action because of the absence of an allegation of demand before suit brought.

we read it. shows that an examination of the accounts disclosed that defendant had failed to turn over to plaintiff all moneys received by him, and that he himself was so ignorant of the real state of the accounts that he was unable to know whether he was indebted to plaintiff or not.

The only other point urged by appellant is that the court erred in refusing the following instruction, requested by him: "You are instructed that if you find, from all the evidence in the case, that Mr. McKechnie was employed by the defendant. Williams, as subagent, with the express or implied assent thereto of the Judith Inland Transportation Company, through its managing agent. J. L. Mears, then if you further find from all the evidence in the case that the accounts and collections testified to were handled and attended to in a negligent manner, or the affairs of the business were by him improperly conducted, and the amount sued for was lost to the plaintiff occasioned by such negligence or misconduct of McKechnie as such subagent, after such assent being expressly or impliedly given, then you are instructed that the defendant is not liable to the plaintiff for such acts of McKechnie as his subagent. The assent of such appointment may be given either expressly, by word of mouth, or by implication. Assent may be implied by conduct of the plaintiff. the usage of trade, or the nature of the business to be conducted." The court, in lieu thereof, instructed the jury as follows: "You are instructed that the agent is responsible for the acts of his subagent connected with the carrying out of the agency, and the court instructs you further that, if you believe from the evidence that the moneys belonging to the plaintiff were collected by the defendant or his subagent, McKechnie, and were not turned over to the plaintiff, the Judith Inland Transportation Company, through the fault or negligence of the subagent. McKechnie, that fact, if you find it to be true, does not in any way relieve the defendant from his liability to pay such money so collected to the plaintiff, and you will, accordingly, find for the plaintiff, for any such money so collected and not turned over or paid out for the plaintiff within the scope of the defendant's agency." It is sufficient answer to this contention to sey that there is no evidence in the record to show that any one has suffered any loss by reason of the fact that the accounts and collections were handled or attended to in a negligent manner, or that the amount sued for was lost to plaintiff by reason of negligence or mismanagement on the part of M ·Kechnie, or anybody else. The evidence, as,

The judgment of the court below is af

Affirmed.

BRANTLY, C. J., and HOLLOWAY, J..

concur.

WALTER V. COX.

(36 Mont. 20)

Supreme Court of Montana. Oct. 21, 1907.) JUSTICES OF THE PEACE-CIVIL JURISDICTION --COUNTERCLAIMS.

Code Civ. Proc. § 691, providing that a counterclaim must tend to diminish plaintiffs recovery and be a cause of action arising out of the contract or transaction set forth in the complaint, or be connected with the subject of the action, or in an action on contract any other cause of action on contract existing at the commencement of the action, has no application in determining whether a cause of action may properly be pleaded as a counterclaim in an action in a justice's court: but section 1524, providing that an answer, in an action in a justice's court, may contain a general denial, and also a statement of any other facts constituting a defense or counterclaim, on which an action might be brought by defendant against plaintiff in a justice's court, and section 1525, providing that if defendant, in an action in a justice's court, omit to set up a counterclaim, he cannot afterward maintain an action against plaintiff thereon, are exclusive, and plaintiff. having failed in an action in a justice's court against him by defendant. to set up as a counterclaim a cause of action of which a justice's court had jurisdiction, he could not thereafter maintain an action thereon against defendant.

Appeal from District Court, Flathead County J. E. Erickson. Judge.

Action by James S. Walter, Jr., against L. A. Fox. in justice's court, and brought to the district court by appeal. From a judgment for defendant and an order denying a new trial, plaintiff appeals. Affirmed. McIntire & Kendall, for appellant. C. H. Foot, for respondent.

BRANTLY. C. J. This action originated in a justice of the peace court, and was brought into the district court by appeal. It was brought to recover damages alleged to have resulted to the plaintiff from the burning of certain grain and straw of the plaintiff. through the negligence of defendant while threshing for plaintiff. It is alleged that the negligence of defendant caused a loss to the plaintiff of 160 bushels of grain. of the value of $17.20, and of straw of the value of $15. Judgment is demanded for $122.20. The answer, among other defenses, contains the following: (1) That at the time of the commencement of said action another action was pending in said court, wherein this defendant was plaintiff and said plaintiff was defendant, wherein the defend

in bankruptcy of the estate of Frederick A. Bartlett, against Henry R. Bartlett, to recover as to an alleged preference made to defendant by bankrupt. From a judgment for defendant, and an order denying a new trial, plaintiff appeals. Affirmed.

John A. Shelton, for appellant. John J. McHatton, for respondent.

HOLLOWAY, J. On February 4, 1899, and for some time prior thereto, Frederick A. Bartlett was engaged in the mercantile business in Butte. On February 4th he sold his entire stock of goods to Ras Rochester. At that time he was indebted to the First National Bank of Butte in the sum of $1,500, which indebtedness was evidenced by a promissory note upon which his brother, Henry R. Bartlett, this defendant and respondent, was surety. Immediately after the sale Frederick A. Bartlett gave Henry R. Bartlett a check, signed by Rochester, for something over $1,530, with directions to pay the indebtedness to the bank, and such payment was made on February 6th, and the balance received from the check, over and above the amount of the indebtedness to the bank, was deposited in the name of Frederick A. Bartlett or his wife. For the purposes of this appeal it may be said that this payment to the bank was made at the instance and request of Henry R. Bartlett, though there seems to be some controversy as to this fact. On February 8th Frederick A. Bartlett filed a petition asking that he be adjudged a bankrupt, and upon such adjudication the plaintiff herein was selected as trustee, qualified as such, demanded of Henry R. Bartlett that he turn over to the plaintiff an amount equal to the amount paid to the bank, and, upon his refusal to do so, this action was commenced. The complaint alleges that the payment made to the bank was made with the intent to prefer Henry R. Bartlett over the other creditors of Frederick A. Bartlett, and that the defendant had reasonable cause to believe that such preference was intended. These allegations were denied in the answer. Upon the first trial the district court excluded certain evidence offered by the plaintiff, and then granted defendant's motion for a nonsuit, and entered judgment in his favor. Upon appeal this court held that the ruling of the trial court in excluding the offered evidence was erroneous, and remanded the cause for a new trial. Mackel v. Bartlett, 33 Mont. 123, 82 Pac. 795. Upon retrial the district court found that on February 6th Frederick A. Bartlett was insolvent, but that Henry R. Bartlett was "without reasonable cause to believe * ** that by payment of said note as aforesaid Frederick A. Bartlett intended to give to him, Henry R. Bartlett, a preference over other creditors of said Frederick A. Bartlett." As a conclusion of law the court held that plaintiff was not entitled to recover, and entered judg

ment in favor of the defendant, from which judgment, and an order denying his motion for a new trial, the plaintiff appeals.

Appellant's specifications of error raise only the question of the sufficiency of the evidence to justify the finding and the conclusion of the court. There is some conflict in the evidence; but appellant insists that the testimony discloses facts and circumstances sufficient to have put Henry R. Bartlett upon inquiry, which, if pursued, would have led him to but one conclusion, viz., that it was intended to give him a preference over the other creditors of Frederick A. Bartlett. And it is true that some facts are disclosed by the testimony which, if standing alone, would seem to justify appellant's contention; but, when the testimony is considered as a whole, the conclusion of the district court seems to be fully sustained. The liabilities of Frederick A. Bartlett listed in his petition in bankruptcy, exclusive of the Joseph A. Hyde claim, which the bankrupt testified he did not owe, amounted to $4,734.48, and, including his indebtedness to the bank, his liabilities did not exceed $6,264.48, while the bill of sale from Frederick A. Bartlett to Rochester, offered in evidence by the plaintiff upon this trial, recites that the consideration for the sale was $6,344.25; and. in another action by this plaintiff against Rochester, plaintiff himself alleged that the stock of goods sold by Frederick A. Bartlett to Rochester exceeded in value the sum of $8,563. In view of what appears to have been a studied effort on the part of counsel for plaintiff to avoid asking Frederick A. Bartlett, while on the witness stand as a witness for plaintiff, what amount in fact he actually received from the sale of his stock of goods to Rochester, and the testimony of the defendant that he considered the stock of goods of a value greater than the amount of his brother's liabilities, that he advised his brother to sell, pay his debts, and start in business anew, that he did not know that his brother was in failing circumstances, that he believed he had money sufficient from the sale to pay his debts, and knew nothing of his contemplating bankruptcy proceedings until after the petition was filed, the finding and conclusion of the court attacked upon this appeal seem fully warranted.

Mere grounds of suspicion on the part of the creditor that the debtor is in failing circumstances, or is insolvent, is not sufficient to avoid a payment to such creditor, even though it has the effect of giving him a preference over other creditors. In order to succeed in his action, it was incumbent upon the plaintiff to prove that the defendant had reasonable cause to believe that his brother intended to give him a preference over other creditors, and this necessarily involves proof upon the part of plaintiff that defendant knew, or had reasonable cause to believe, that Frederick A. Bartlett was in fact insolvent when