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this subject has been tersely expressed by Mr. Justice Davis in this
axiom: “There is no authority to import a word into a statute in
order to change its meaning.” Newhall v. Sanger, 92 U. S. 765, 23
L. Ed. 769.

The decision of the Supreme Court in Burrell v. Montana in effect
overrules Mackel v. Rochester, 102 Fed. 314, 42 C. C. A. 427, and
agrees with the decision of Judge McDowell in U. S. v. Goldstein
(D. C.) 132 Fed. 789, on the point that section seven (9) of the
bankruptcy act does not deprive à bankrupt of his constitutional priv-
ilege of refusing to answer a question, if the answer'may tend to
incriminate him, by showing that he had committed an offense defined
by the act.

In the Marx Case (D. C.) 102 Fed. 676, Judge Evans overruled an objection to the discharge of a bankrupt on the ground that he had made false statements in his examination, and for the reason that in his opinion the crime of perjury committed by a bankrupt in the course of his examination, pursuant to section seven (9), is not punishable. See In re Logan (D. C.) 102 Fed. 876. Other courts have disapproved this decision, but they have not attempted to show that perjury by a bankrupt, committed in giving testimony in the proceedings in his case, may be punished. See In re Dow (D. C.) 105 Fed. 889; In re Goodale (D. C.) 109 Fed. 783; In re Gaylord, 112 Fed. 668, 50 C. C. A. 415; In re Leslie (D. C.) 119 Fed. 406.

The most forcible expression concerning the meaning and effect of the last clause of section seven (9) of the bankruptcy law found in the above list of cases is by Judge Ray in 119 Fed., at page 409, as follows:

"This last clause was not written into the law as an encouragement to, or as a premium on, perjury. Nor was it placed there to license the bankrupt as a liar in the proceedings, and protect him from the consequences of his misstatements when he comes to apply for his discharge. The evidence cannot be used against him in any criminal proceeding. This is all."

This excerpt from Judge Ray's opinion contains two propositions. The first strongly combats Judge Evans' conclusion; the second fairly concedes his premises, and is a simple declaration that the law means exactly what its words import, and nothing else. That identical idea is controlling in this case.

It is my conclusion that, although the statute does not, in terms, grant immunity from prosecution, it does create an obstacle equally effective to prevent a conviction of the defendant.

Demurrer sustained.

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BAUERSMITH V. EXTREME GOLD MIN. & MILL. CO.

(Circuit Court, W. D. Pennsylvania. June 20, 1906.)

No. 29.

1. CORPORATIONS-UNAUTHORIZED CONTRACT BY OFFICER-RATIFICATION BY AC

CEPTANCE OF BENEFITS.

Plaintiff entered into a written contract with the secretary of defendant corporation, made in its name, by which he agreed to undertake the sale of its stock on commission. The secretary was without authority to make such contract, but the officers and directors were aware that plaintiff was holding himself out as the company's agent, and assuming to act for it in making sales, and, in addition to their knowledge of sales made and attempted to be made by him, they accepted by formal resolution a proposition secured by him for the purchase of a large block of stock. Held that such acceptance was a ratification of the contract, whether or not they knew its terms, which they could not afterwards avoid by an attempted repudiation, and which entitled plaintiff to the stipulated commission on the sale.

[Ed. Note.-For cases in point, see vol. 12, Cent. Dig. Corporations, $$

1713, 1714.] 2. BROKERS—COMMISSION ON SALE OF STOCKS-ACQUIESCENCE IN REDUCTION OF

AMOUNT OF SALE.

Where a broker made a contract on behalf of a corporation for a sale of its stock, on which he was to receive a commission, but on account of difficulty in collecting the price a compromise was made with the purchaser, by which he took and paid for a smaller amount, in which the broker took part, and to which he did not at the time object, he was entitled to commission only on the amount of the actual sale. On Rule for Judgment in Favor of Defendant Non Obstante Veredicto on Reserved Point. Also rule for new trial.

H. J. McAllister and E. L. Grantham, for the rules.
William M. Hall, for plaintiff.

ARCHBALD, District Judge.* The plaintiff, a Pittsburg broker, sues to recover commissions on the sale of certain stock of the defendant company. There was a verdict in his favor, which was taken subject to the point reserved whether there was any evidence on which he was entitled to recover, and the defendants now move for judgment non obstante veredicto upon it. The action is based on an agreement in writing, which was executed in the name and on behalf of the defendant company by W. H. Chambers, its secretary, by whom the arrangement with the plaintiff was made. That Dr. Chambers had no authority to enter into the agreement is practically conceded, he himself so testifying, as well as the other directors, and the by-laws also standing in the way. It is claimed, however, that the agreement was subsequently ratified, the company acting upon and accepting benefits under it, and it is on this that the right of the plaintiff to recover depends.

The Extreme Gold Mining & Milling Company is a South Dakota corporation, but its affairs at the time of this transaction were in the hands of parties residing in the vicinity of Pittsburg; Dr. J. Y. Scott being president, W. J. Andrews, treasurer, Dr. Chambers, secretary,

*Specially assigned.

and E. R. McClure, a director. That all of these gentlemen knew at an early day that the plaintiff was engaged in trying to make sale of the company's stock, there can be no question. Not only was the name of the company put up on the door of his office in Pittsburg, which they are shown to have visited, but letterheads were printed, and an elaborate prospectus got up and copyrighted, on which his name was prominently displayed as fiscal agent; all of which, sooner or later, came under their notice. In the latter part of June, also, soon after the agreement was executed, the plaintiff and his assistant, Mr. Houghton, went to Washington, Pa., where Dr. Scott, the president, lived, and obtained from him a letter recommending the stock to a druggist whom he knew in Pittsburg, for the purpose of enabling them to make sale, if possible, to him; and while it is true that Dr. Scott says he thought it was Dr. Chambers' stock that was being sold, this is disputed, and in the present consideration the evidence favorable to the plaintiff must be taken. But, whatever controversy there may be as to this transaction, there can be none as to the one following, for on August 11th the plaintiff, through Houghton, having secured H. C. Whitaker, of Wheeling, W. Va., as a prospective purchaser, and having taken him out to South Dakota to see the company's property, a proposition was submitted to the company, which was accepted by due resolution, to sell him 25,000 shares, at 75 cents a share, for which he was to pay $10,000 in cash, and the balance by note to the company at one year. To assist in carrying through this sale, an effort was made by Dr. Scott, at the instance of the plaintiff, to secure a loan of $10,000 for Mr. Whitaker at some of the Washington banks, but without suc

Soon after this, the plaintiff, having been furnished by Dr. Chambers with a certificate of stock made out to Mr. Whitaker, delivered it to him on his promise to make the down payment in a few days. This he failed to do, and the matter lingered along; the plaintiff by much insistence finally getting two payments of $500 each-one in September and the other in October—which he retained on account of his commissions. On November 15th, however, by the efforts of Dr. Chambers, Mr. Whitaker gave a 10-day note for $10,000, payable to the order of the company. This was put in bank for collection, but by mistake was sent to Washington, Pa., instead of Wheeling, and was there protested for nonpayment; and, nothing outside of this being done by Whitaker to meet it, steps were thereupon taken to enforce the purchase. After consultation between the plaintiff and the officers of the company, an attorney was employed at Wheeling, and one or more interviews had with Mr. Whitaker there, at which he finally proposed that his subscription for 25,000 shares should be canceled, and that in place of it he would pay $10,000 in cash, and take a correspondingly reduced amount of stock, which was agreed to. In accordance with this arrangement, after deducting the $1,000 paid to the plaintiff, he gave a draft for $9,000, surrendered the certificate for 25,000 shares which he had received, and took a new one for 13,3331/3; the company, through Dr. Chambers, executing a release under seal for the balance. The plaintiff testifies that he did not agree to let Whitaker off in this way, on the strength of which he has claimed, and the

cess.

jury have allowed him, full commissions, as though the sale had gone through for the 25,000 shares. There was evidence, also, that, upon being appealed to by the plaintiff by long distance telephone, when the negotiations for a settlement with Whitaker were in progress, Dr. Scott declared that Dr. Chambers was not authorized to take anything less than the full amount, and that the company proposed to hold to the deal as it had been originally made. The settlement with Whitaker was December 21, 1904. Soon after that, Dr. Chambers says, he went to Washington to turn over the money, and have the stock which he had delivered reimbursed to him out of the stock in the treasury, but that the company refused to accede to this. Dr. Scott says that the deal fell through, and that no money was brought in, and no request made for a certificate. There is evidence outside of both that Dr. Chambers held on to the $9,000 with the idea of getting the benefit of the transaction for himself and making it his own, and that the other directors took umbrage at this, feeling that he was not treating the company right in doing so. It was about this time that the plaintiff had a talk with Dr. Scott, in which, for the first time, he informed him that his commissions were to be 25 per cent. ; Dr. Scott, in reply, stating that those which the company were allowing would warrant paying him as much as 377/2, in conformity with which, he, McClure, and Andrews, acting on behalf of the company, by letter of January 14, 1905, put a block of 50,000 shares of treasury stock in the plaintiff's hands to dispose of on these terms. In addition to the sale to Whitaker, as well as several other unsuccessful efforts with others, which the directors, one or more, knew about, the plaintiff effected a further sale in September, 1904, of 666% shares to a man named Dietrich in Philadelphia for $500. For this two notes of $250 each' were given, made payable to the company, which were turned over to Dr. Chambers as secretary, and subsequently paid. The stock to complete this transaction, the same as in the sale to Whitaker, was supplied by Dr. Chambers; being transferred, as shown by the stock certificate book, from the shares standing in his individual name.

This brings us to the resolution of February 10, 1905, on which both parties in a measure rely. By the minutes of a meeting of the directors of the defendant company of that day, it appears that Dr. Chambers made two alternative propositions, based upon the transactions detailed above, in substance as follows: Reciting that, having undertaken the sale of treasury stock, he had expended large sums in advertising the property, in taking parties to investigate it, and in securing prospective purchasers, and for the pairpose of effecting sales had contracted with the plaintiff in the name of the company; being compelled, however, by reason of the latter's unfaithfulness, to advance various sums, and $1,000 having been received and kept by the plaintiff out of the proceeds of a sale, of which a settlement and compromise had been effected by the delivery of 14,000 shares of his own individual stock, he thereupon proposed: (1) That the company reimburse him for all expenses incurred in the premises, assuming the attendant obligations, and holding him harmless as agent

146 F.-7

of the company, and recognizing and ratifying the contracts which he had made in its behalf; or (2) allowing him to make such contracts and obligations his own, issuing his own individual stock, as he had done, and receiving the proceeds, and assuming the responsibility therefor, he agreed to effect, if possible, a sale of treasury stock of the company to the amount of 14,000 shares, upon the same terms and conditions as contemplated in the sale undertaken as before mentioned; upon the acceptance of which proposition he further agreed to hold the company harmless from all expenses, liability, damage, claim, or demand, by reason of the dealings referred to. The second of these propositions was accepted; the following resolution being passed: Reciting that in his attempted sale of treasury stock Dr. Chambers had incurred large and extraordinary expenses, and to save himself from heavy financial loss had made a compromise and settlement of the same by a delivery of his own individual stock; that no money or proceeds of such sale had been paid or tendered to the company, and no treasury stock issued or demanded, nor any sale thereof made, contracted, or consummated in compliance with the rules of the company; that the company did not desire to assume any responsibility or liability for or upon such sale or settlement, or upon any sales the proceeds of which had not been received by the company; thereupon, expressing confidence in the ability of Dr. Chambers to effect a sale of treasury stock such as he suggested, and relying upon his undertaking to save the company harmless, it was resolved: (1) That the proposition to ratify the attempted sale and settlement be rejected, and that all parties be relieved from any and all liability to the company on account of them; and, further (2) that the offer to sell 14,000 shares of treasury stock be accepted; Dr. Chambers being authorized to bring or defend any action in the name of the company which he might deem proper under his obligation to protect it.

This resolution was prepared by counsel, and was evidently intended to get the benefit of the sales which had been made to Whitaker and Dietrich, without being responsible for them; but in the face of the facts, at least as to the Whitaker sale, it was not competent to do so. By due action taken August 11, 1904, the application of Mr. Whitaker for 25,000 shares had been accepted, and the sale which the plaintiff had solicited was thereby adopted and confirmed. It may be that this was done without direct knowledge of the existence of the writing on which the plaintiff relies, and so without knowledge as to the amount of commissions which he was to get, or the provision with regard to paying for the printing of prospectuses, letterheads, etc. But it certainly was known by the directors that, in seeking to effect this and other sales, he was acting for the company on authority which proceeded from somewhere, and, in accepting the benefit of his services, they necessarily committed themselves to the means by which these services were secured. This is not to impute or presume knowledge; it is not that they might or ought to have known, and are therefrre to be held as though they did. Murray v. Nelson Lumber Co., 143 Mass. 250, 9 N. E. 634. But, having taken advan

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