of the identical money he had gotten from the Puget Sound National Bank, and it was turned over to the officers of the bank in his presence without any objection. The $8,000 obtained from Mrs. White was voluntarily surrendered by her. She apparently knew from whom it had been obtained, and how, and that the intention was to restore it to its rightful owners. Neither of said parties has at any time since then undertaken to recover said money or any part of it, or brought any action for the taking against any of the parties concerned; and this tends strongly to support the claim that the money was restored with their consent. Aside from this, however, and conceding that the money was taken from them without their consent and against their will, and that the officer acted as a trespasser in so doing, we are of the opinion that, under the authorities, it was not subject to garnishment while in his hands or in the hands of the parties to whom it was delivered. The garnishment process only reaches debts or credits owing to or held for the defendant in the principal action by the garnishee, or property of the defendant held by the garnishee as the property of the defendant. A trespasser in possession of another's goods cannot be charged as garnishee of the owner. Despatch Line of Packets v. Bellamy Manuf'g Co., 37 Am. Dec. 203; Bank v. McLeod (Iowa) 19 N. W. 329; Richardson v. Anderson (Tex. App.) 18 S. W. 195.

We are also of the opinion that the point first raised by the respondents was well grounded, and that the appellant should have been held to have lost his rights under the writs of garnishment by a failure to prosecute. Waiting for two years after the service before citing the garnishees to appear and answer should be held equivalent to an abandonment of said proceedings, regardless of the fact as to whether such final action was barred by the statute of limitations. A creditor should diligently prosecute his proceedings against garnishees. The service of the writs upon the garnishees was not the commencement of an action against them. No issue was formed which they could force to trial, and they were not put in a position where they could take any action in the premises to have the question of their liability put at rest. Such action rested with the plaintiff creditor, the moving party, and he should be required to prosecute the same with reasonable diligence.

A further point has been urged here which was not raised in the lower court, but which is claimed to be yet available, as going to the jurisdiction of the court in the premises. The attachment garnishment law, under which the first proceedings were had, was repealed before the respondents were cited to appear and testify. The repealing act was approved March 8, 1893, and it contained no v.40P.no.4-15

saving clause; and it is contended that, as such appeal was absolute and unconditional, the effect was to quash all pending proceedings. This point also seems to be well taken. End. Interp. St. §§ 478-480. Affirmed.

HOYT, C. J., and GORDON, J., concur.

ANDERS, J. I fully concur in the conclusion arrived at in the foregoing opinion, but upon the point as to whether the service of writs of garnishment is or is not the commencement of an action against the garnishees I do not wish to be understood as expressing an opinion.

(11 Wash. 550)

ROBERTS v. WASHINGTON NAT. BANK. (Supreme Court of Washington. April 6, 1895.) EQUITY-REVIEW ON APPEAL COMMON AGENTVALIDITY OF TRANSACTIONS-ACTS OF DIRECTORS-FRAUD.

1. Under the act of 1893, in an equity case, it is the duty of the appellate court to determine the facts for itself, upon the proofs contained in the record. Webster v. Thorndyke, 39 Pac. 677, overruled.

2. Where the boards of directors of two corporations had a mutual understanding authorizing a common agent to transact business between them, followed by a course of dealing of which each of the boards had knowledge, their action is voidable, and not void; and such transactions will be valid, although no formal resolution was passed, or the record thereof kept.

3. The court will not be warranted in finding fraud from the fact, alone, that circumstances tending to show it have been proven.

Appeal from superior court, Spokane county; Norman Buck, Judge.

Action by W. B. Roberts, receiver of the Washington Savings Bank of Spokane, against the Washington National Bank, for the recovery of certain property, or the value thereof. From a decree in plaintiff's favor, defendant appeals. Reversed.

Blake & Post, for appellant. Turner, Graves & McKinstry, for respondent.

HOYT, C. J. This action was brought by the plaintiff, W. B. Roberts, as receiver of the Washington Savings Bank, against the Washington National Bank of Spokane Falls, to recover certain property, or the value thereof, which it was claimed had been fraudulently obtained by the defendant from the Washington Savings Bank, and to recover the money paid by the savings bank for certain notes transferred to it by the national bank in fraud of its rights. It was alleged that the transactions which led to the transfer of the property should be set aside, and held for naught, for two reasons: First, because there was actual fraud intended and consummated by the officers of the defendant; and, secondly, legal fraud, by reason of the relation of the officers of

the two corporations through which the business was transacted. The business was done through one F. E. Goodall, who assumed to act for each of the corporations, and it was claimed that it was beyond his power, as such common agent, to do the business which culminated in the transfer of the property. Elaborate briefs have been filed upon the question of the powers and duties of agents, and of the want of power in an agent to act as such in behalf of two principals in relation to adverse transactions between them. These and kindred questions have been ably discussed in the briefs of counsel and in oral argument, but in our opinion the rights of the parties depend little, if at all, upon such questions. An inspection of the briefs of counsel will show that, notwithstanding the elaborate presentation of these and other questions of law, the propositions upon which the appellant and respondent radically differed were as to the facts established by the proofs. The authority of few, if any, of the cases cited upon either side is disputed by the other; and it is apparent that the application of the principles established by such cases would have led to little dispute if the discussion on either side had related to facts as to which the parties agreed. The trial court made findings of fact in substantial compliance with the claims of the plaintiff, as set out in the complaint; and, if these findings were warranted by the proofs, there would be little reason for questioning the correctness of its legal conclusions. The defendant excepted to all of these findings of fact, and requested the court to find substantially different upon nearly all the propositions involved; and if such exceptions had been sustained, and the facts found as requested, there could be little doubt but that the legal conclusions to be drawn therefrom would have resulted in a decree for the defendant. It follows that the substantial question which we are called upon to decide is as to whether the proofs in the record sustain the findings of the court, as made, or would better sustain those requested on the part of the defendant. If the former, the decree is substantially right, and should be affirmed; if the latter, it is wrong, and should be reversed, and the action dismissed.

Under the act of 1893, findings of fact in an equity case and in one at law are placed upon substantially the same basis; but thereunder it is made the duty of the appellate court, when exceptions are properly taken to such findings, to examine the proofs contained in the record de novo. This requirement, construed in the light of the practice of courts of equity in the determination of facts upon appeal by a trial de novo upon the record, compels us to hold that, at least in an equity case, the findings of fact do not stand upon the same footing as the verdict of a jury. On the contrary, the statute can only be given force by holding that it is the

duty of the appellate court to determine the facts for itself, upon the proofs contained in the record. It does not follow that the finding of the lower court will have no weight in such determination, but it does follow that it cannot have any such weight as does the verdict of a jury in a law case. If it did, it would only be necessary for the appellate court to ascertain that there was evidence introduced upon which the fact could be found, in order that the finding should be affirmed. And it is clear that such an inves tigation would not be an examination of the proofs de novo in the appellate court, as re quired by the express terms of the statute. What we have said as to the effect of the findings of fact under the appeal act of 1893 is, to some extent, inconsistent with what was said by us in the case of Webster v Thorndyke (decided March 9, 1895) 39 Pac. 677, and to that extent that case is overruled. The question, though involved int that case, was not necessary to its determi nation, for the reason that the findings of fact were warranted by the proofs. It af firmatively appeared from the proofs that the findings were right; hence it was unnec essary to the decision to say anything as to their effect, and what was said was by way of argument, and for that reason not as fully considered as it otherwise would have been. A more thorough examination of the question has satisfied us that this holding did violence to some of the provisions of the statute, and we now feel compelled to con strue it differently. The rule before announced was the more convenient one, and we had hoped to be able to sustain it, but find ourselves unable to do so. In the case at bar, all of the findings of fact were excepted to, and the record contains all of the proofs offered upon the trial in the court below. Hence it becomes the duty of this court to find substantially, as a new question, the facts within the pleadings established by such proofs, and determine the rights of the parties upon the facts so found, even although the trial court, upon such proofs, had found them differently. In determining the facts established by the proofs, the findings of the trial court should receive consideration, but cannot be allowed to control when, in the opinion of this court, they are contradicted by a clear preponderance of the evidence.

Before proceeding to a discussion of the disputed facts, it will be proper to say that the undisputed proofs show that the Washington Savings Bank was in existence and doing business for some time prior to the organization of the Washington National Bank; that the scheme for the organization of said national bank originated with the stockholders and officers of the savings bank; that the stock of the national bank, when organized, was owned by substantially the same persons as the stock of the savings bank; that the board of directors of the national bank and

the board of trustees of the savings bank were in the main, but not entirely, identical; that, at the time the organization of the national bank was determined upon, it was also determined to import one F. E. Goodall from the East, to act as cashier of the national bank, and in a similar capacity, but under the name of "treasurer," for the savings bank; that the two banks were to occupy the same banking office.-the business of the national bank to be conducted on one side, and that of the savings bank on the other; and that it was while the two banks were so occupying this common banking office, and the business of each being managed mainly by said F. E. Goodall, that the transactions in question were had. This statement is necessary, that we may properly examine one of the claims of the defendant, by which it sought to meet the case made by the plaintiff. Its contention was and is that at the time of the organization of the national bank there was an agreement, or such a mutual understanding among the directors of the two corporations as amounted to an agreement, that they should not only occupy a common banking room, but should also do business together, through the agency of said F. E. Goodall, in the manner in which the business which it is sought to invalidate was afterwards actually transacted. It is not seriously contended on the part of the respondent but that this proposition, if supported by the proofs, would fully meet his contention that the transactions were invalid. There is some little contention that such an arrangement could not be made between the corporations by their respective boards of trustees, for the reason that the same persons constituted the boards of each of the banks. But this contention has not been strongly urged, and, if it had been, we do not think it entitled to much consideration, for the reasons (1) that the boards were not identical; and (2) if they were, such fact would, at most, make the transactions voidable only, and hence capable of ratification, which must be presumed from the circumstances disclosed by the evidence. That it would be competent to prove such facts in aid of an allegation of actual fraud in reference to any transaction between the two corporations of which they were the common officers is undoubtedly true, but the transaction of business between them would not, by reason of such fact, be conclusively fraudulent.

It is contended, however, on the part of the respondent, that the only evidence of authority to make such an agreement would be by some resolution of the proper board, and that such action could only be shown by the record of its proceedings. There is some force in this claim, but we are not prepared to indorse that doctrine, to the extent that would be necessary to sustain the contention of the respondent. A corporation cannot escape responsibility for an act which its board of directors has expressly authorized, or which its

manager has done or authorized under such circumstances as would warrant the belief by one transacting business with the corporation that it had been duly authorized, and thereafter escape liability on account of the act authorized or done by reason of the fact that its record fails to disclose any authority therefor. If the boards of directors of the two banks had in fact each of them passed formal resolutions, and made them of record in the minutes of their proceedings, authorizing business to be transacted between them by the common agent, F. E. Goodall, such transactions through him, in pursuance of such authority, would, in our opinion, have bound each of the corporations for which he assumed to act. The general rule, to the effect that such transactions by him would be unauthorized, would be nullified by the express authority thus conferred; and in our opinion, if the passing of such resolutions by the respective boards could authorize him so to act, an understanding to that effect, followed by a course of dealing of which each of the boards had knowledge, would have the same effect.

If these conclusions are correct, there is but a single question of fact which it is necessary for us to decide, upon the proofs contained in the record; and that is as to whether or not it is thereby shown that there was an understanding among the members of the boards of directors of the banks that said F. E. Goodall should transact business between them as the agent of each, or the common agent of both. And, if it was, was such understanding carried into effect by a course of dealing between the two banks in pursuance thereof, to the knowledge of the members of the boards of directors? If the understanding and course of dealing so existed, the claim of the respondent that these transactions were illegal cannot be sustained. The proof in reference to the understanding is not as full and complete as it might be, but substantially all the evidence upon that question went to sustain the contention of the defendant. Two or three witnesses gave evidence which tended directly to prove that there was such an understanding between the panks, and several others testified to facts which indirectly tended to show the same fact. The talk that was had at the time the organization of the national bank was determined upon, the importation of a man from abroad to act as the common agent, what was said in reference to the character of paper which could be handled by one bank that could not be handled by the other, all tended to support the direct testimony that there was an agreement or understanding that they should do business together in substantially the same way that the business in question was done. We think that the existence of such an understanding or agreement was abundantly established by the proofs. It also abundantly appears therefrom that the transactions between the banks, almost from the day of the organization of

the national one, was such as would have been justified only by such an understanding or agreement. That such was the course of dealing is not very strongly disputed by the respondent, but it is claimed by him that the boards of directors of each of the banks were not shown to have had any knowledge of this course of dealing. It appeared from the practically undisputed proofs that this course of dealing had been continued for two years; that its existence during all of this time would have been shown by an examination of the books of either of the banks, and especially by an examination of those of the savings bank. This being so, we think it must be presumed that the board of directors had knowledge thereof. That even a superficial examination of the books of the savings bank would have shown these transactions is evident from the proofs, and that it was the duty of the board of directors to make at least a superficial examination many times during this period of two years is a fact of which the court will take judicial notice; and, if they did not make it, they, or those whom they represent, must stand the consequences, and not those with whom the corporation may have had dealings. Besides, there is some proof tending directly to show knowledge on the part of at least a portion of the board of directors of the savings bank of the existence of this course of dealing between the two banks. This testimony tended to show that all who were actively participating in the business of the savings bank had such knowledge. If the other members saw fit to intrust the management to these active members, they and the stockholders must abide the results of their management.

In our opinion, the course of dealing between the two banks, duly authorized by each of them, was such that the transactions in question did not amount to legal fraud. Was there proof of actual fraud? We have carefully examined the entire record, and have been unable to find anything that even remotely tends to prove actual fraud in any of the transactions prior to those of June 5, 1893. As to the transactions on that day, there are some circumstances shown by the proofs which have some tendency to show that there was an intent on the part of the national bank, by its agent, to overreach the savings bank. But these circumstances were not sufficient to warrant a finding of actual fraud; for, while it is true that such fraud may be shown by circumstances, yet the court will not be warranted in finding fraud from the fact alone that circumstances tending to show it have been proven. Fraud will not be presumed, and must be established by proof, either direct or circumstantial. If by the latter, the circumstances relied upon must be such as to be reasonably consistent only with the intent to defraud, and to be in some degree inconsistent with an honest intent.

The transaction upon which the larger part of the claim of the respondent was founded

grew out of business with a partnership known as the Custer Mining Company. What we have said is perhaps enough to show that these transactions could not be avoided by the respondent, but it is claimed on the part of the defendant that there was another reason why these transactions should be held binding upon both the banks. It was that, at the time the agreement to extend credit to the partnership was made, it was so made as well in behalf of the savings bank as in that of the national bank; that the arrangement was consented to by both banks, and was to the effect that the paper of the partnership should be carried by each of them in substantially equal proportions; that the taking of the paper by the national bank was simply a matter of convenience, and, to the extent of half of it, the national bank, in so taking, acted as the agent of the savings bank. Upon these questions the proofs are also somewhat unsatisfactory, but in view of the fact that there was some positive testimony to that effect, and other circumstances tending to establish its reasonableness, while there was not a particle, either direct or indirect, to the contrary, we think the fact should be held to have been established by the proofs, and that for that reason, as well as the one already stated, the savings bank could not recover on account of the Custer Mining Company notes which were transferred to it by said national bank.

It is further suggested by the respondent that the transactions of June 5th were illegal for the reason that at that time the savings bank was insolvent. The proofs upon the question of insolvency were such as to show that, in the light of the events that afterwards developed, the bank was insolvent, but they failed to show that under ordinary circumstances the assets would not have exceeded the liabilities. For some purposes the bank was undoubtedly insolvent, but whether it was so for the purpose of construing transactions between it and its creditors may be open to question. But it is not necessary that we should decide as to such insolvency, for the reason that in our opinion the transactions of that day between the two banks were supported by such consideration moving from the national bank as to make them valid, even although the savings bank was insolvent. The savings bank was in need of ready money on that day, and, to secure it, transferred part of its property to the national bank.

Some other reasons have been assigned and argued by the appellant why the decree of the lower court should be reversed, but what we have said substantially determines the rights of the parties, and we shall leave the others without further consideration. The decree will be reversed, and the cause remanded, with instructions to dismiss the action.

ANDERS and GORDON, JJ., concur.

(26 Or. 320)

BELLINGER v. THOMPSON et al. (Supreme Court of Oregon. Dec. 17, 1894.) ACTION ON ADMINISTRATOR'S BOND. In an action on an administrator's bond, the validity of the bond and the liability of the defendants alone are triable, and the rights of the defendants among themselves cannot be determined.

On motion to recall mandate. Denied.
For former opinion, see 37 Pac. 714.

BEAN, C. J. The motion of defendants Dekum and Thompson for an order recalling the mandate in this case, with a view to the determination of the rights of the defendants among themselves, must be denied. This is an action at law against the defendants, as sureties on the official bonds of Ingalls as executor; and the only question made by the pleadings, considered by the court, or properly triable in the action, is the validity of the bonds sued on, and the liability of the defendants to the plaintiff. The rights and duties of the defendants as among themselves, or the amount each should contribute towards the payment of plaintiff's judgment, depend upon the application of equitable principles to a state of facts not disclosed, but only hinted at by the record. In order to prevent further possible litigation, it would be, gratifying to the court to be able to enlarge the scope of its decision, so as to embrace the respective rights and liabilities of the defendants as between themselves; but it is very doubtful whether this could be done, even if the issues had been framed for that purpose. Such a question is wholly foreign to the object of the action, and entirely unnecessary to its determination; and within Hovenden v. Knott, 12 Or. 267, 7 Pac. 30, it would seem, could not be considered. But, however this may be, no such issue was tendered or made, and there are no findings of fact upon which a decision could be based. Nor do we think the judgment, as entered, in any way determines this question, or will affect the right of contribution between the defendants, in a proper proceeding for that purpose. It is a judgment in favor of the plaintiff against the defendants jointly and severally, and fixes their liabilities as to the plaintiff, but not among themselves. Motion overruled.

WELCH v. CITY OF ASTORIA. ASTORIA LAND & TRUST CO. v. SAME. HAMIL TON REAL-ESTATE CO. v. SAME. WARREN et al. v. SAME. WINGATE v. SAME. KINNEY V. SAME. LEINENWEBER v. SAME.

(Supreme Court of Oregon. July 5, 1894.) Appeal from circuit court, Clatsop county; T. A. McBride, Judge.

Bills by D. H. Welch, the Astoria Land & Trust Company, Hamilton Real-Estate Company, H. S. & W. E. Warren, George Wingate, M. K. Kinney, and Mary Leinenweber against

the city of Astoria to restrain the collection of taxes. Bills dismissed. Plaintiffs appeal. Affirmed, on the authority of Welch v. City of Astoria (Or.) 37 Pac. 66.

George Noland, for appellants. F. D. Winston, for respondent.

STATE v. WOOD.

(Supreme Court of Oregon. Jan. 10, 1895.) Appeal from circuit court, Multnomah county. H. C. Wood appeals from conviction. Affirmed.

Edw. Mendenhall, for appellant. John H. Hale, for the State.

PER CURIAM. As there is no one present to represent the appellant, and no brief on file, the judgment of the court below is affirmed.

STATE v. VANN.

(Supreme Court of Oregon. Jan. 10, 1895.) Appeal from circuit court, Multnomah county. Tomasio Vann appeals from conviction. Dismissed.

Edw. Mendenhall, for appellant. John H. Hall, for the State.

PER CURIAM. It now appearing to the court that the defendant is dead, this case is dismissed.

STATE v. WHITE.

(Supreme Court of Oregon. Jan. 10, 1895.) Appeal from circuit court, Multnomah county. Georgie White appeals from conviction. Dis missed.

John F. Logan, for appellant. John H. Hall, for the State.

PER CURIAM. At the suggestion of the state's attorney that the defendant has been pardoned by the governor, the appeal herein is dismissed.

CURTIS v. SESTANOVICH et al.1 (Supreme Court of Oregon. July 5, 1894.) Appeal from circuit court, Marion county: George H. Burnett, Judge.

Action by E. D. Curtis against A. M. Sestanovich and others. Judgment for defendants, and plaintiff appeals. Reversed.

John H. Hall, for appellant. G. G. Bingham and P. H. D'Arcy, for respondents.

PER CURIAM. The notice of lien in this cause in its material averments is identical with that of Curtis_v. Sestanovich (this day decided) 37 Pac. 67. In the case at bar the court sustained the demurrer to the complaint, and dismissed the cause, from which decree the plaintiff appealed. The opinion in the case referred to being applicable to the facts alleged in the complaint therein, the decree of the court below must be reversed, the demurrer overruled, and the cause remanded, for further proceedings not inconsistent with said opinion. Reversed.