Portland, Ore., Sept. 15, 1906.

a/c L. B. French,

which defendant agreed to pay the premiums
on all marine insurance so written. There- A. H. Birrell,
upon an account was opened by plaintiff, and
on June 29, 1907, rendered to defendant with
reference to insurance written during that

To M. C. Harrison & Co.,

Marine Insurance Brokers and
Average Adjusters,

Pol. 2527, S. "Azbec," 9/25.

month, when it was agreed there was due To Marine Insurance on One Crate Pic

plaintiff $531.52, of which on July 31, 1907, defendant paid $289.35, and the account became stated. The second cause of action is

tures to L. A., $1,000 at 2%..
Bkge., 10%

$5.00

.50

$4.50

M. C. Harrison & Co., per J. W. M.

based upon an account stated on or about Paid, Sept. 17, 1906.
July 31, 1907, for marine insurance written
during that month, amounting to $370.35, no
part of which has been paid.

Defendant, by his separate answers, denies the allegations of the complaint, "except as hereinafter expressly alleged," and for further and separate answer avers in substance that plaintiff is not, but that the St. Paul Fire & Marine Insurance Company, a corporation, is, the real party in interest. For a second further and separate answer to the first cause of action defendant alleges that plaintiff, at the times mentioned in the complaint, was doing business at Portland, Or., for and in behalf of M. C. Harrison & Co., a foreign corporation, as its president, and that said corporation has not complied with the laws of the state of Oregon by filing with the Secretary of State a declaration, has not paid the filing fee nor any annual license fee for the year 1907, as required by law, and that in order to evade the payment of these fees this action was begun in the name of M. C. Harrison.

Plaintiff interposed a motion to strike the second affirmative answers and certain paragraphs of the first affirmative answers as frivolous, irrelevant, and redundant. This being denied, plaintiff replied, denying the material allegations thereof.

Afterward, at the instance and request of defendant, other insurance was written, and on and between October 31, 1906, and July 31, 1907, several monthly statements were rendered, four being in the name of the St. Paul Fire & Marine Insurance Company, with the words "M. C. Harrison & Co., General Agents," stamped on the face thereof, all of which were honored by defendant, except that of June 29, 1907, for $531.52, upon which payment of $289.35 was made, and the statement of July 31, 1907, for $370.35, no part of which was paid. The total amount of the different payments to plaintiff was $1,052.23. All the business was sent in by defendant, at whose request it had been written, except in one or two instances, when it had been written for one of his clients and reported to him. To no item in these accounts was objection made until some time between the 25th and 30th of November, 1907, at which time defendant objected to the July statement; but in no way did he question the June statement until January of the following year.

Plaintiff also produced evidence, showing it to be a general custom in marine insurance business on the Pacific Coast, and parUpon trial of the cause by the court with- ticularly in Portland, for the underwriter of out a jury, plaintiff introduced evidence, such insurance to look to the broker, bringtending to show that he, doing business un- ing the business into the office, for the payder the name of M. C. Harrison & Co., is ment of premiums on business so introduced. the general agent in Portland, Seattle, and This custom was well understood, and unSan Francisco for the St. Paul Fire & Ma- der such custom, in case the business was rine Insurance Co.; that in the year 1906 introduced by a broker, it would be regarded an arrangement was entered into for the in- as discourteous for the underwriter to interterchange of insurance business between him view the owner of the cargo or ship upon and defendant, Birrell, an insurance broker which the insurance was written, except with doing business in Portland, in which he the consent of the broker. The St. Paul agreed to pay commissions on all marine in- Fire & Marine Insurance Company looked to surance premiums which defendant should its agents for payment of premiums, and the bring into his office; that thereafter defend agents were obligated to make such payant ordered different policies of marine in- ments, whether or not the premiums were surance to be written by him in the St. Paul collected. The premiums earned on business Fire & Marine Insurance Company, and an noted in the statements rendered to defendaccount was opened by him, in which defend- ant were, in fact, all paid by plaintiff to the ant was charged with the premiums and St. Paul Fire & Marine Insurance Company, credited with the commissions thereon. All which company, by reason thereof, asserts the transactions were entered in defendant's no claim against the defendant. books also, in an account entitled "Miscellaneous Insurance Accounts," which showed that he in no instance paid plaintiff for premiums until after he collected same from the insured. The following statement, sent by Harrison, the plaintiff, to Birrell, the defendant, was by the latter honored and paid:

At the conclusion of plaintiff's evidence defendant moved to strike out all the testimony on the subject of custom, and for judgment of nonsuit, which motions were allowed by the court, and exceptions taken by plaintiff.

From a judgment in favor of defendant for costs, plaintiff appeals.

Wallace McCamant (Snow & McCamant, I think, some evidence that the entire credit on the brief), for appellant. A. F. Flegel (Flegel & Reynolds and Charles H. Carey, on the brief), for respondent.

tions use words fraught with much meaning, der a del credere commission, and this rule which would have but little sense to one unacquainted with the business.

*

applies to marine insurance, unless abrogated by a usage, such as prevails in England. 2 Cooley's Briefs on Ins., 917, citing Mannheim Ins. Co. v. Hollander (D. C.) 112 Fed. 549.

[11] Taking the statement of these wit-* nesses, therefore, as correct, it would seem that the custom was general in so far as it in any way affected the dealings between plaintiff and defendant.

Whitehouse v. Moore, 13 Abb. Prac. (N. Y.) 142; Hewitt v. Week Lumber Co., 77 Wis. 548, 46 N. W. 822.

[14] Where an action is based on an implied contract general custom or usage may [12] As a matter of fact it might be pre- be offered in evidence to interpret and apsumed that defendant, doing a brokerage ply the acts proved and relied on. Such business in the marine insurance line, had matter is evidentiary, and need not be pleadknowledge of such custom, if one prevailed. ed. Lowe v. Lehman, 15 Ohio St. 179; Fish Whitehouse v. Moore, 13 Abb. Prac. (N. Y.) | v. Crawford, 120 Mich. 500, 79 N. W. 793; 142. Mr. Justice Lord, in Sawtelle v. Drew, 122 Mass. 229, says: "A custom, within the meaning of the law, if general, is incorporated into and becomes a part of every contract to which it is applicable; if local, of every contract made by parties having knowledge of or bound to know its existence." In our opinion this evidence is admissible to prove the circumstance of the alleged contract, and to explain what was expressed in a general way perhaps, in order to determine the understanding between the parties at the time of making the arrangement, upon what, if anything, their minds met, or what their agreement was. McCulsky v. Klosterman, 20 Or. 108, 25 Pac. 366, 10 L. R. A. 785; Holmes v. Whitaker, 23 Or. 319, 323, 31 Pac. 705.

In Hewitt v. Week Lumber Co., 77 Wis. 548, 46 N. W. 822, where the jury found it was, and had been for many years, a general custom in the sawmills on the Wisconsin river for the manufacturer to keep the slabs from manufactured logs, it was held that the custom was a general one, within the meaning of the law, and therefore could be proved without an allegation thereof. "The proof of such custom is always admitted without pleading it." And in Fish v. Crawford Mfg. Co., 120 Mich. 500, 79 N. W. 793: "The plaintiff claims that by a local custom the seller of lumber to Chicago or Milwaukee purchasers pays the entire of the inspection charges, at least in the first instance. The circuit judge left it to the jury to find whether the custom claimed to exist in fact prevailed, instructing the jury that a custom, in order to be controlling, must be definite, precise, and unvarying. It is contended that it was error to submit the question to the jury, for two reasons: First, that the custom was not declared upon; and, second, that the evidence did not show a custom. We think it was not necessary to declare specially upon this custom. It was in this case only a matter of evidence, adduced for the purpose of showing what the implied contract between the defendant and plaintiff was."

[13] In Great Britain, by universal custom, the broker is liable to the underwriter for the premium on marine insurance. 19 A. & E. Ency. (2d Ed.) 979. "A broker who procures insurance is a mere 'go-between,' and is not liable for a premium on a policy procured by him for another, unless he acts un115 P.-10

[15] An account rendered and not objected to within reasonable time becomes an account stated. Fleischner, Mayer & Co. v. K. Kubli et al., 20 Or. 328, 25 Pac. 1086: Crawford v. Hutchinson, 38 Or. 578, 65 Pac. 84. Plaintiff concedes the incumbency upon him to show the pre-existing relation of debtor and creditor between him and defendant, in order to form a basis for an account stated.

[16] It is claimed by defendant that these accounts were original bills only; they could not become stated for the reason that the account of July contained no items included in the June statement. A similar question arose in the case of Crawford v. Hutchinson, supra, where it was insisted that an account stated could properly exist only where the accounts on both sides had been examined and the balance admitted as a true balance between the parties, or where a statement, including all the mutual accounts within the knowledge of the creditor, had been rendered and not objected to within a reasonable time. In the case referred to Mr. Chief Justice Bean, at page 581 of 38 Or., at page 85 of 65 Pac., says: "But the failure to include a counterclaim arising out of some independent transaction does not necessarily prevent an account rendered from becoming an account stated as to everything embodied therein, if no objection is made thereto within a reasonable time." If the account of the plaintiff only be stated, showing the amount due, an acknowledgment or admission thereof is sufficient to constitute it as stated, although the defendant may have counterclaims which are admitted. Ware v. Manning, 86 Ala. 238, 5 South. 682. And in Filer v. Peebles, 8 N. H. 226, it was held that where an account was stated by the parties, and an amount agreed upon as due plaintiff within certain dates, but the defendants claimed something on a prior account, there is a sufficient stating of account for the amount named, subject only to the right of the defendant to set off any prior claim not included therein. See, also, Normandin v. Gratton, 12 Or. 505, 8 Pac. 653, and Nodine v. Bank, 41 Or. 386, 68 Pac. 1109.

[17] Upon principle, if it be admitted or

found that the account for the June premi-held by the clerk of the court for a stated periums became stated or settled, it would be unnecessary for the parties in settling the July account to make another settlement of the June account.

We think it was error for the court to that plaintiff in May, 1907, was the owner of grant the motion for a nonsuit.

whole or any part of said securities, at pub-| Gray upon the delivery of the certificates to lic or private sale, and without advertise- Anson gave to him the apparent authority to ment or notice to me, and with the right on his part to purchase the same at such sale freed and discharged from any equity of redemption. After deducting the amount of said liabilities, with all costs and expenses for collection, sale and delivery, to return the overplus, if any, to me. In consideration of the loan hereby made the borrower agrees that the said C. K. Fankhauser or assigns shall have the right to make such use of the collateral security herein named as he may desire, subject only to his obligation to deliver to said borrower the same number of shares of said stock upon the payment of this note at maturity; and in consideration of the above, the lender agrees that the borrower's liability shall be limited to the collateral security hereby pledged. Franklin R. Anson." That each of the certificates had indorsed thereon the following transfer: "For value received 串 * hereby sell, assign and transfer unto * * shares of the capital stock represented by the within certificate, and do hereby irrevocably constitute and appoint * * * attorney to transfer the said stock on the books of the within named corporation with full power of substitution in the premises. Dated

In the presence of: Fred A. Legg. Chas. A. Gray." That the note had not been paid, and that in June, 1907, the defendant Fankhauser furnished certificates No. 132 and No. 133 to the defendant corporation for the purpose of delivering the same to a prospective purchaser for the price of $1,020. That he was proceeding to sell the same for the purpose of repaying the amount due him upon the promissory note of Anson and for costs and expenses of collection and sales. The same facts were also pleaded by way of estoppel. Plaintiff's reply put in issue the affirmative defenses interposed by defendant Fankhauser, and alleges that the certificates were delivered to Anson and indorsed in blank for the purpose of enabling him, as agent for defendant, to sell the same for defendant's benefit; that Anson never had any authority to mortgage, pledge, or hypothecate the stock, all of which facts were well known to defendant Fankhauser at the time he made the loan; and that at such date there had been no assignment or transfer on the books of the company, as Fankhauser well knew. The reply also charged fraud and collusion between Fankhauser and An

son.

There was a decree for plaintiff in the court below, and defendant Fankhauser appeals.

Geo. G. Bingham (Williams, Wood & Linthicum, on the brief), for appellant. John H. McNary (Charles L. McNary, on the brief), for respondent.

MCBRIDE, J. (after stating the facts as above). [1] The blank assignment made by

deal absolutely with the stock; and a pledgee in good faith, without notice of any infirmity in Anson's title, is entitled to have the proceeds of the shares applied on Anson's debt. When the true owner places in the hands of another all the indicia of the ownership of property, so that he appears to have the full power of disposing of it, innocent persons dealing with such apparent owner will be protected. Their rights in such a case do not depend upon the actual authority of the person with whom they deal, but upon the apparent authority with which the confidence or negligence of the true owner has invested him. McNeil v. Tenth National Bank, 46 N. Y. 325, 7 Am. Rep. 341. Assignments in blank of the character of that now under consideration are perhaps the most common method of transferring the title to certificates of stock, and have been generally recognized by the courts of our great commercial states. N. Y. & N. H. R. R. Co. v. Schuyler, 34 N. Y. 30; Kortright v. Buffalo Commercial Bank, 20 Wend. 91. In the latter case the court says: "The execution in blank must have been for the express purpose of enabling the holder, whoever he might be, to fill it up. If intended to have been filled up in the name of the first transferee, there would have been no necessity for its execution in blank. Barker might have completed the instrument. The usage, however, is well established, and was fully understood by Barker, as he made the transfer in conformity to it; and he or those setting up a claim under him should not now be permitted to deny its validity. The filling up is but the execution of an authority clearly conveyed to the holder, is lawful in itself, and convenient to all parties, as it avoids the necessity of needlessly multiplying transfers upon the books."

[2] We cannot agree with counsel that the national banking act limits the right of passing title to stock certificates by assignment. The provisions of the United States' Revised Statutes, § 5139 (U. S. Comp. St. 1901, p. 5139), and similar state statutes, providing that stock shall be transferred by indorsement on the books of the corporation, have generally been held to be for the protection and convenience of the bank, and that no effect should be given to them except for the protection of the corporation which can waive them at pleasure. McNeil v. Tenth National Bank, supra, was a cage arising upon a pledge of certificates of national bank stock under circumstances exactly similar to the case at bar, and it was there held that an assignment in blank, almost word for word in the same language as used in the assignment in the present case, transferred the entire title to the shares, both legal and equitable. That case is so thoroughly discussed and its every feature so similar to the one at bar that we feel constrained to adopt it as