actly in point, when we consider that conduct equivalent to actual representation, inter partes, is likewise equivalent thereto in effect, as to estoppel in pais. It is particularly applicable here, since FitzGerald, as we have seen, must have known from the nature of Herman's business that he was liable to, and probably would, sell the securities to some person without disclosing the nature of his business relations with the payer.

Bogart v. Stevens, 69 N. J. Eq. 800, 115 Am. St. Rep. 627, 63 Atl. 246, is quite like this case. We are unable to see any material distinction between clothing an agent with the semblance of being the owner of securities accompanied by actual authority to transfer the same for value, and vesting the actual title to such securities in a person with all the semblance of absolute ownership, knowing that he is liable to, and probably will, transfer them to another, for value, having no knowledge, or reasonable means of knowledge, of any present or future defense thereto.

100 In McNeil v. Tenth Nat. Bank, 46 N. Y. 325, 7 Am. Rep. 341, it is said, in effect, that, except as regards the effect of the law-merchant, an assignee of assignable papers obtains no greater right than his assignor possesses; but said the court: "It does not interfere with the well-established principle, that where the true owner holds out another, or allows him to appear, as the owner of, or as having full power of disposition over, the property, and innocent third parties are thus led into dealing with such apparent owner, they will be protected. Their rights in such cases do not depend upon the actual title or authority of the party with whom they deal directly, but are derived from the act of the real owner, which precludes him from disputing, as against them, the existence of the title or power which, through negligence or mistaken confidence, he caused or allowed to appear to be vested in the party making the conveyance.'

Counsel for respondent place their sole reliance on the idea that the note was without consideration at the start, hence without validity, which is wrong, as we have seen, and on the law-merchant as incorporated into section 1676-19 of the negotiable instrument statute (Laws 1899, c. 356), to the effect that the taker for value of a negotiable instrument without indorsement takes no better title than his assignee had thereunder, and section 1676-28, to the effect that a holder. of negotiable paper, who does not acquire it in due course, is subject to the same perils as regards defenses by the payer as the payee was. Those rules, as we have seen, give way to the supreme rule of estoppel in pais. We are referred with conAm. St. Rep., Vol. 131-64

fidence to Boyle v. Lybrand, 113 Wis. 79, 88 N. W. 904. Suffice it to say, we are unable to see that it touches the question in hand.

We are further referred to Rapps v. Gottlieb, 142 N. Y. 164, 36 N. E. 1052, where the court grounded its decision on the doctrine that an assignee, without indorsement, of negotiable paper, takes it subject to all the defenses available as to the original parties, holding it to be applicable because the note and mortgage in question never had validity as obligations, 101 since they were delivered to the named payee to take effect according to their tenor and not otherwise at all. only upon the happening of a condition precedent. Under those circumstances, negligence or inexcusable holding out on the part of the payer essential to efficient application of the doctrine of estoppel in pais was not found to exist. Without appreciation of the precise grounds for the decision, one would be quite liable to be led astray, especially in view of a brief discussion at the closing of the opinion of the invocability of the doctrine of estoppel in pais. The court reasoned thus: "It is a rule of last resort, applicable only where all others fail; it is a doctrine subordinate and not dominant, which reverses no other, but submits to the authority of all, and is adequate to an ultimate decision only when it has the field to itself."

As those expressions are liable to be understood, they hardly give proper dignity to the doctrine of estoppel in pais. True. it is a rule of last resort, but where it is applicable it is not subordinate. It stays the operation of other rules which have not run their course, when to allow them to proceed further would be a greater wrong than to permanently enjoin them. It is a rule of justice which, in its proper field, has a power of mastery over all other rules. It is a rule by no means to be discredited, but rather one entitled to the distinction of being one of the greatest instrumentalities to promote the ends of justice which the equity of the law affords.

There is this further insurmountable difficulty in sustaining the judgment: The rule that a negotiable instrument in the hands of an assignee for value and without notice of defenses as between the original parties is subject, nevertheless, to such defenses, has relation to such equities or defenses as existed at the time of the transfer, not to latent defenses or equities which possibly may at some future time exist. As said in Bush v. Cushman, 27 N. J. Eq. 131: "It does not embrace equities or defenses springing from defaults, or even fraud of the assignor, committed subsequent to the assign

ment, 102 and which had no existence, and were simply possibilities, at the time of the assignment."

The same doctrine was applied in Coster v. Griswold, 4 Edw. Ch. 364. The views of the court are thus expressed: "All that the court of law or equity can do in such cases, since they recognize and protect the rights of assignees of choses in action, is, to allow them to take, subject always to any defense, legal or equitable, which existed in favor of the debtor against the original holder or creditor at the time of the transfer or assignment. Now, the question arises: What existing equity or defense was there against these bonds" when they were pledged to the "United States Bank as collateral security?" And, again: "Where an assignee takes in good faith, his right to hold will not be disturbed or devested by any subsequent event or after-accruing right or equity of the debtor."

To the same effect are Chance v. Isaacs, 5 Paige Ch. 592; Cornish v. Bryan, 10 N. J. Eq. 146; Losey v. Simpson, 11 N. J. Eq. 246; Murray v. Lylburn, 2 Johns. Ch. 441; Flemming v. Hoboken, 40 N. J. L. 270; North Bergen v. Eager, 41 N. J. L. 184; Ex parte Hale, 3 Ves. Jr. 304; Terney v. Wilson, 45 N. J. L. 282.

Here, as we have seen, at the time of the assignment to George Ellis, Herman was the absolute owner of the note and mortgage. They were not waiting upon the happening of any event to give them validity. Herman owed Ellis three thousand dollars, but was not in default. He had, at best, a possible contingent defense or equity. Under those circumstances, within the authorities cited, Ellis could safely take, in good faith, for value, the note from Herman. The latter's subsequent mere default could not operate to his prejudice.

By the COURT. The judgment is reversed, and the cause remanded for judgment according to the prayer of the complaint.

Barnes, J., dissents.

Mortgages to Secure Future Advances are discussed in the note to Merchants' State Bank v. Tufts, 116 Am. St. Rep. 690.

MILBRATH v. STATE.

[138 Wis. 354, 120 N. W. 252.]

CORPORATION.-The Legal Fiction that a Corporation is a Person or Legal Entity cannot be urged to an extent and purpose not within the reason and policy of that fiction. (pp. 1016, 1018.)

EMBEZZLEMENT-Accused Representing His Corporation.Where the members of a real estate and loan firm, after making a loan of money intrusted to them, organize their business into a corporation in which they hold all the stock, and the loan is repaid to the corporation and mingled with its funds while insolvent, and the payment is concealed from the principals, the president of the corporation, who is a stockholder and the officer in charge, having knowledge of all these things, may be convicted of embezzlement, and cannot urge the legal fiction of separate corporate personality or the distinction between the acts of a person as an officer of the eorporation and his acts as an independent natural person. (pp. 1015, 1016.)

CONVERSION-Officer in Charge of Corporation.-A person may convert money to his own use by paying it into the treasury and mingling it with the funds of an insolvent corporation which is under his control and of which he is a stockholder and the officer in charge. (p. 1017.)

CRIMINAL LAW-Defense that Accused Represents Corporation. In a criminal prosecution the accused cannot be heard to say in justification that he committed the offense in his official capacity as officer of a corporation, nor can he assert that acts in form corporate were not his acts merely because carried out by him through the instrumentality of a corporation which he controlled and dominated and which he employed for that purpose. (p. 1019.)

EMBEZZLEMENT-Necessity of Demand to Complete Offense. Where officers in charge of an insolvent corporation have mingled money with its funds, no demand by the owner is necessary before prosecuting them for embezzlement, where they have concealed the fact that they collected the money for him and such fact is unknown to him until after the bankruptcy of the company. (p. 1021.)

Julius E. Roehr, for the plaintiff in error.

Frank L. Gilbert, attorney general, and F. C. Eschweiler, assistant district attorney, for the defendant in error.

356 TIMLIN, J. The plaintiff in error (hereinafter called defendant) was convicted in the said circuit court of the of fense of embezzlement, and sentenced to imprisonment for three years in the state prison. The information upon which the defendant was tried charged him, Edward J. Wagner, and William E. Milbrath, as agents and employés of Helena Mizer, having the care, custody and possession of $300 of her money, with the embezzlement of said sum and the unlawful and fraudulent conversion thereof to their own use on February 27, 1903. A motion for a new trial was made and overruled, and the defendant assigns thirty-four errors, twenty-one of

which relate to the admission of evidence, one to the refusal to discharge the defendant because the offense charged in the information had not been established, seven to the charge of the court, and five in refusing to instruct the jury as requested by defendant.

At the beginning of the first trial in the municipal court the defendant Edward J. Wagner, after the jury had been sworn, announced to the court that he would testify for the state. After having so testified, and at the conclusion of this trial, he was by order of the court discharged. The defendant William E. Milbrath was also discharged by the court at the conclusion of this trial upon the ground that no case had been made out against him. The jury disagreed and the case was removed to the circuit court, where the defendant was 357 tried upon the same information as the sole defendant, and this trial resulted in the conviction which is here for review.

I knew the defendant well. He had been for many years engaged in business at Milwaukee, respected, honored with confidential business patronage and with important public offices. He had reached the age of fifty-eight years and had children and grandchildren. I know of no sadder story than that of such a man in the afternoon of a well-spent life, under the pressure of unexpected business calamities, and yielding to the delusions of hope, being tempted to lay his hands unlawfully upon the moneys of others intrusted to his keeping. I regret his misfortunes and sympathize with him in his misery, but neither regret nor sympathy can be allowed to swerve the mind from a consideration of the case according to law and the evidence.

The defendant, together with Edward J. Wagner and H. C. Roethlisberger, were copartners carrying on a real estate and 358 loan business in the city of Milwaukee from prior to April 29, 1891, to June 6, 1894. On the former date they loaned to one Kafura for Conrad Mizer $300 of the money of the latter, taking a note and mortgage to secure the loan executed by Kafura to one Ferdinand Groth, a person from whom the defendant held a power of attorney authorizing him to make investments, release mortgages, etc. Groth had no interest in the matter. He merely allowed the defendant to use his name. The defendant, as attorney in fact of Groth, assigned this mortgage to Conrad Mizer, who assigned it to Helena Mizer, both assignments unrecorded. This making of loans upon mortgage security for other persons was part of the business of said copartnership. June 6, 1894, the said copart