Page:Federal Reporter, 1st Series, Volume 2.djvu/13

g FEDERAL RErORTER, �In Equity, �Hitchcock, Luhke e Plajjer, for complainants. �M. B. Jonas, for respondents. �McCraky, C. J., (orally.) This case is submitted upon ex- ceptions to the report of the master. It is a bill filed to fore- close a mortgage upon 640 acres of land in this state, executed to secure 100 bonds issued by the defendant corporation. Several parties appear in this case, claiming to be owners of Bome of these bonds. The master bas reported bis conclu- sions with regard to the title of each of the claimants. The only questions presented relate to the title of the plaintiff Chew and the defendant Burch. Chew claims to be the owner of several of these bonds, and the master finds that he bas no title. There is an exception to his finding. Burch claims to own a large number of them, and the master finds in his favor. There is an exception also to this finding. The bonds are negotiable, and, according to the repeated decisions of the supreme court of the United States, they bave ail the quali- ties of negotiable commercial paper. They were placed in the hands, a portion of them at least, of one Muir, with authorityto negotiate them for the benefit of the corporation. I think the language of the resolution of the corporation was "for the purpose of raising monoy to develop the mines." �Muir held these bonds in New York as the agent of the cor- poration, with this authority, and no other. He placed some of them in the hands of a man by the name of Dever, who trans- f erred them to plaintiff Chew, in order to raise money ; not, how- ever, for the corporation, but for Muir's private purposes. Of course the question hero is, and the only question is, as to notice. Where a corporation places its bonds in the hands of an agent, with power to negotiate them, and puts them in that way upon the market before maturity, the purehaser bas a right to presume that the agent is acting within the scope of his authority, and is not bound to inquire into the applica- tion he is to make of the proceeds of the sale. But if the pui-chaser is informed upon this subject, and bas notice, tben, of course, be takes them at hia peril. The proof ujoni this ����