Missouri river at Leavenworth. The termi- the relocation of the signal system was not nal company owns the bridge and leases it to "maintenance" within the restricted definicertain railways which are defendants here- tion set down in the contract. But this court in. The plaintiff owns a railway running is of opinion that the relocation of the signorth and south in close proximity to the nals for the safety of railway trainmen was west end of the bridge. In 1892, and again in clearly within both the letter and the spirit 1898, the plaintiff undertook the obligation of that provision of the contract which reof keeping the bridge signal system in good quired the plaintiff to keep "the bridge sigcondition and maintaining it in proper re-nal system in good condition." And this expair. The defendant owner of the bridge pense was to be borne by the owner of the agreed to pay the bills therefor as rendered; bridge. Moreover, if there had been no speand the tenant railways using the bridge cific provision in the contract covering the guaranteed the prompt payment of the plain- subject, the defendant owner of the bridge tiff's bills for these services. would be bound to make the necessary changDuring the years which have passed since es to keep the signal system in good condithe bridge and its signal system were con- tion, and that would include a condition of structed, a systematic movement among railsafety, and since the defendant had chosen to way men for the safer operation of railroads select the plaintiff as manager and custodian has grown up. This is familiarly known as the "Safety First" policy of railroading. of its bridge signal property, it was bound to Railway companies have committees to de- reimburse the plaintiff for the reasonable vise and suggest the need of improvements to and necessary expenditures made in the lessen or avoid railroad accidents. These proper discharge of its duty. A point is committees are usually composed of the rail- urged that the signal system was installed way superintendent and a railroad man from many years ago in accordance with the plans every branch of the operating service-a of the plaintiff's chief engineer and with his roadmaster, a master mechanic, a trackman, approval. That does not alter the case. Perengineer, fireman, conductor, brakeman, haps the signal system was adequate and switchman, car man, and shop man. One safe at that time. Doubtless it was as good of these committees noticed that the signals as railway knowledge and experience at that But with the lapse of on this bridge and at its western approach time could suggest. were too close to the track; they learned years railway signal engineering has prothat an employé had been struck and knocked gressed the same as other arts and sciences, off a freight car and injured by the sema-and owners of railway property must keep up phore blade of one of the signals. The mat- with the reasonable demands suggested by new ter was brought to the attention of the plain-ideas for the better security of human life; tiff which was charged with the duty of keep- and necessary expenses for such new and iming the bridge signal system in good condi- proved methods and contrivances are merely tion. It set one or more of these signals one of the burdens attendant on the ownerback from the track and changed one or two ship of public utility property. Railway Co. others from high signals to low or "dwarf" v. Henry, 57 Kan. 154, 45 Pac. 576; Id., 60 signals in the interest of safety and in ac- Kan. 322, 56 Pac. 486; Water Co. v. City of cordance with present day ideas of good rail- Wichita, 98 Kan. 256, 259, 158 Pac. 49. roading. For this outlay, plaintiff submitted Moreover, it was shown that railway rolling a bill of costs to the defendant owner of the stock has considerably increased in size and bridge; this the latter refused to pay. width since the signal system was first inThe plaintiff brought this action, and ob- stalled, and this would require the signals tained judgment against the owner of the to be set further from the track than forbridge and against the tenant railways as guarantors that the plaintiff's expenses on [2] The plaintiff questions the competency the signal system of the bridge would be of evidence given by experienced railway promptly paid by the bridge company. The men who testified that a signal system placed bridge company appeals, contending that it is so close to the railway tracks as to cause not properly chargeable with the cost of re- trainmen to be knocked off the cars was not location of these signals, and that its lia- in good condition. This evidence was compebuty is limited by its contract to costs of tent. Duncan v. Railway Co., 86 Kan. 112, maintenance; and that the word "mainte- 119 Pac. 356, 51 L. R. A. (N. S.) 565; Baillod nance" is defined and restricted in the con- v. Grain Co., 93 Kan. 775, 782, 783, 145 Pac. tract of 1898 to mean "the necessary expense $95; Bushey v. Coffman (No. 21507) 173 Pac. incurred in making repairs and renewals to 341, decided June 8, 1918, syl. par. 3. See, said interlocking switch and signal plant." also, discussion on opinion evidence of ex[1] The bill of expenses for which payment pert railway men in Railway Co. v. Railway was demanded was for "labor and material Co. (No. 20943) 175 Pac. 97, decided May 11, in repairing, renewing, relocating and main- 1918.

merly.

taining interlocking plant," etc. Defendant The judgment is affirmed. All the Justices may be technically correct in contending that concurring.

issued. It is true that a part of the testimony of the plaintiff seemed to indicate that he knew the application for the patent was still pending, but it is possible that he was referring to some other device, and in any event it was the province of the jury to resolve any conflict and determine the net effect of the evidence. Acker v. Norman, 72 Kan. 586, 84 Pac. 531. The fact that the patent was afterwards granted may have had some bearing upon the extent of the injury suffered, but could not prevent the false representation from amounting to a fraud.

2. FRAUD 50- FALSE REPRESENTATIONS —— PURCHASE OF STOCK-VALUE-PRESUMPTION. The evidence also justified a finding that In such an action there is a prima facie presumption that, if the property had been as represented, it would have been worth the amount paid for it.

3. APPEAL AND ERROR 1064(1)-TRIAL
260(6)-INSTRUCTIONS-HARMLESS ERROR.
The giving of an instruction that fraud is
never presumed, but must be proved like any
other fact in the case, namely, by a preponder-
ance of the evidence, and the refusal of an in-
struction that fraud cannot be found from mere
conjecture and inference, but must be clearly
proven, are held, upon the entire record, not to
require a reversal.

4. APPEAL AND ERROR

1056(1)—FRAUDULENT REPRESENTATIONS-EXCLUSION OF EVI

the defendant had represented that the stock of the company was fully paid up in cash, whereas it was issued for patents pending, legal services, and good will. The matter was obviously material. The point is made that the representation charged in the petition was, not that the stock had been paid up in cash, but merely that it was fully paid up. In alleging the falsity of the representation, however, the pleading said that the stock had not been paid up in cash or in any other valuable thing, but was subscribed in good will, legal services, and pending patents. This seems sufficient to present the issue; but, if not, the petition may be regarded as amended.

The evidence further warranted a finding that a false representation had been made that 147 of the machines handled by the company had been sold. The defendant claims that the making of such a representation is negatived by the fact that the jury returned affirmative answers to questions submitted by him, asking whether he had represented to the plaintiff that 2 machines had been installed, and that, if these proved satisfactory, the purchaser intended using 147 of them. A construction of these answers, which is reasonable and consistent with the verdict, and which we are therefore required to adopt, if necessary to uphold the judgment, is that the jury meant that, after the stock had been purchased, the defendant, in justification or explanation of what he had previously said, told the plaintiff that 2 machines had been placed, and that 137 would be, if these proved satisfactory.

MASON, J. A. J. Meyers bought 10 shares of the stock of the Acme Iron Company for $1,000. He brought an action against its president, J. T. Woolsey, on the ground that the purchase had been induced by his false We regard it as unnecessary to comment and fraudulent representations. The plain- on any of the six other representations allegtiff recovered a judgment, and the defendanted, as we deem those already mentioned appeals.

sufficient to uphold the verdict.

[1] 1. The defendant maintains that there [2] 2. The defendant urges that no eviwas no evidence whatever of the making of dence was introduced showing what the stock any actionable false representations. We would have been worth if the representations regard the contention as not well taken. made had been true, and that therefore no A device which was handled by the company recovery can be had, because the measure had not been patented at the time of the pur- of damages is the difference between that chase of the stock, although an application amount and the true value of the property. was then pending, and a patent was after-"The price paid for the property should be wards granted. There was evidence sufficient taken as strong, but not conclusive, evidence to sustain a finding that the defendant rep- of what its value would have been if as represented that the patent had already been resented." 12 R. C. L. 453.

[3] 3. The court instructed that the burden (plains that he suffered prejudice thereby, beof proof was on the plaintiff to establish the cause the jury may have been affected by allegations of his petition by a preponderance her testimony. The trial court was obviousof the evidence, and that by this was meant ly convinced that no prejudice resulted, and the evidence which was most satisfactory its conclusion is final on such a matter. and convincing to the minds of the jury, and Complaint is made of the refusal to allow which the jury should accept and believe as the defendant to introduce in evidence a letbeing worthy of the greatest consideration ter, written by the plaintiff to a third perand weight, in the light of all the circum-son, giving reasons for his severing connecstances disclosed. An instruction was also tion with the defendant, in which he made given reading:

"Fraud and deceit are never presumed, but must be proved, like any other fact in the case, namely, by a preponderance of the evidence. It is not necessary that the evidence be direct and positive, but fraud may be proved by circumstantial evidence."

no reference to the fraud alleged to have been practiced upon him. Assuming that it was admissible, we think it not of sufficient importance to justify a reversal on account of its rejection.

A new trial was asked on the ground of

The defendant made a request for the fol-newly discovered evidence. We think the lowing instruction, and complains of its re- ruling of the trial court supportable, both fusal: with regard to diligence and the character of testimony.

"You are instructed that you cannot find the defendant falsely or fraudulently made representations to A. J. Meyers from mere conjecture or mere inference. Fraud must be clearly proven, and the burden of proof is on the plaintiff to establish that fact."

Even on the issue of fraud, the omission to give any instruction relative to the burden of proof, other than the usual one to the effect that a recovery should be based on a preponderance of the evidence, is ordinarily not regarded as material error (Hockett v. Earl, 89 Kan. 733, 133 Pac. 852), although under exceptional circumstances it has been held to require a reversal (Fritts v. Reidel, 101 Kan. 68, 165 Pac. 671). We think the instruction here requested was open to criticism, as adapted to give the impression that circumstantial evidence was not a sufficient basis for a finding of fraud, and that the statement in the charge of the court that fraud is not presumed, but must be proved like any other fact in the case, is not such a minimizing of the degree of proof as to justify setting aside the verdict. [4, 5] 4. An instruction is criticized because seeming to allow a recovery on any one of the representations alleged, some of which it is contended were mere matters of opinion, and, considered alone, would not sustain a recovery. We think it reasonably clear that the verdict was based upon the jury's resolving the substantial controversy between the parties in favor of the plaintiff.

An allowance was made to the plaintiff on account of services he had performed and a room he had furnished, after purchasing the

stock. It is contended that there was no evidence of these matters having been affected by the representations complained of. We think the evidence justified submitting the issue to the jury.

The plaintiff's wife was originally joined as a party with him, and on that account was permitted to testify. Afterwards a dismissal was ordered as to her, and this evidence was stricken out. The defendant com

STOCK-CONSTRUCTION-PAYMENT.

Under contract to purchase 10,000 shares of stock, and to save seller harmless from his indebtedness to company for advances on account of future dividends, and pledging 3,000 shares to belong to buyer on payment of $2,500, the buyer without paying advances, was entitled to 3,000 shares on payment of $2,500. 2. CORPORATIONS 121(7)-SALE OF STOCKAGREEMENT-LIQUIDATED DAMAGES.

Though seller and buyer of stock agreed that a certificate for part of the stock should be a pledge for buyer's performance of whole contract, they might contract that, if the whole contract was not performed, the damages would be measured by the sums paid in part performance.

3. CORPORATIONS 121(7)-SALE OF STOCK

BREACH-DAMAGES.

Under a contract to buy stock, and to save

seller harmless from indebtedness to company for advances and pledging 3,000 shares to secure buyer's performance, which were to belong to him on payment of $2,500, and making his payments the measure of damages for forfeiture, the seller, on a forfeiture, could recover nothing above amount of such payments.

Department 2. Appeal from Superior Court, Spokane County; Bruce Blake, Judge. Action by Lillian M. Friedman against W. F. Padmore and wife. Decree for plaintiff, and defendants appeal. Reversed, with direction to enter decree of dismissal.

Voorhees & Canfield, of Spokane, for appellants. A. E. Barnes, of Spokane, for respondent.

"Whereas, it is the intention of all parties concerned that said amounts so advanced shall be considered as payments out of the dividends to be derived from the company, now, therefore, be it resolved that all advances heretofore and hereafter made to F. G. Meeks, W. J. Doust, and Mrs. Friedman shall be considered to be made on account of dividends to be paid by the "Deliver enclosed papers to W. F. Padmore company, and that, when a dividend or divi- upon final payment to you of the sum of $6,dends shall be declared, the amounts thereto-000.00 in the amounts and at the times stated, fore advanced to them as aforesaid shall be deducted therefrom."

case of default in the performance of the contract treated as an entirety. It is:

"That whenever default in the payment of any of the different sums specified herein and the interest as provided by this contract is made, the fact thereof shall forfeit this contract and all sums theretofore paid hereon, and all stock as herein provided shall be fully forfeited to the party of the first part as liquidated damages, except said certificate of 3,000 shares."

to respondent, and that he exhibited the min-1 contract. The contract fixes the penalty in utes of the meeting of the trustees, and it was agreed between them that the certificate for 10,000 shares of stock should be redelivered by the bank, and that the company should reissue two certificates, one for 7,000 shares and one for 3,000 shares, as contemplated in the original agreement. Respondent denies that there was any such understanding; but, however that may be, we are convinced, from a reading of the entire record, that respondent is mistaken; for on the next day her son-in-law, who seems to have been active in the management of this affair, went with Padmore to the bank, and the stock was taken out, and split into certificates, the one for 3,000 shares being retained by Padmore, and the other for 7,000 shares being redeposited as an escrow.

In addition to the $2,500 appellants have paid $431.50 and respondent received a dividend thereafter declared in the sum of $562.25. Appellants had also paid $225 on account of interest, but, from our view of the case, this item becomes immaterial. Appellants having defaulted on the payment of the first of the $1,000 notes due at the bank, respondent gave written notice of forfeiture,

and took the papers out of the bank, giving the following receipt:

"10-28-16, received enclosed certificate No. 36 for 7,000 shares Cascade Laundry Company stock. Escrow closed by forfeiture.

"Lillian M. Friedman."

On January 15, 1917, the bank delivered the six notes, aggregating $6,000, to appel lant W. F. Padmore, taking a receipt as fol. lows:

"1-19-17, received six notes, aggregating $6,000. W. F. Padmore."

In February, 1917, the Cascade Laundry Company declared a dividend of 6 per cent., which amounted to $420 upon the 7,000 shares of stock then owned by respondent. The company refused to pay this dividend in cash to respondent, whereupon she brought this action to foreclose the pledge which had been made between the parties in the first instance. The court found that there was due respondent the sum of $1,548.70, together with interest from the 1st day of January, 1917, at the rate of 8 per cent. per annum. We have been unable to ascertain from the record or from respondent's brief just how the court arrived at these figures, for it is clear that, under respondent's theory of the case, there could have been no more than $1,067.78 due at the time.

[2] It follows that, although the parties had agreed that the certificate for 3,000 shares should stand as a pledge for the performance of the whole contract, it was within their power, and they so contracted, that if the whole contract was not performed the damages which would follow would be measured finally and forever by the sums paid in the performance of the whole contract. In other words, the charge against the stock now owned by respondent would be released pro tanto to the extent of the payments made by appellant, and she would take the 7,000 shares as if no contract had ever been

made.

[3] Our construction of the contract is that it does not call for a payment of $2,061.43 in money in any event, but is a contract only to save respondent harmless of the possibility of having to repay the company for the money it had advanced if the contract had been performed, and that, the contract having been forfeited and carrying its own measure of damages, respondent cannot now recover anything in addition to the amount paid by appellants, and that her remaining stock is burdened as if no contract had been entered into.

The decree of the lower court is reversed, with directions to enter a decree of dis

missal.

OFFICERS 136-ACTION ON BOND
OF COURT-PLEADING-WAIVER.
Under express provision of Rem. Code 1915,
$960, providing that defendant, in an action
on an official bond, is entitled to nonsuit where
the complaint does not show leave by the trial
court to maintain the action, a prompt demur-
rer answers the purpose of a motion for non-
suit and does not waive defendants' objection.

Department 2. Appeal from Superior
Court, Snohomish County; Guy C. Alston,
Judge.

[1] It is the theory of respondent that appellants agreed to pay $2,061.43 in any event, while it is the theory of appellants that they were to receive a certificate for 3,000 shares of the stock, and save respondent Action by G. G. Hunter against N. S. Berharmless from any liability arising out of ridge and others. Verdict for plaintiff, mothe advancements. That appellants were to tion for judgment notwithstanding the verhave 3,000 shares upon the payment of dict granted, order of nonsuit entered, and $2,500 is clear from a reading of the entire plaintiff appeals. Order affirmed.