for, the defects found and reported by the inspectors in December, 1890. If counsel perceived at the time the danger of this or any other instruction being misunderstood, it was their privilege and duty to ask a correction, and, if they did not perceive the danger, the greater the improbability that it was real, and the stronger the reason for enforcing the rule designed to prevent the subsequent hunting out of objections to be urged on appeal which were not brought to the attention of the trial court.

The court, we deem it clear, did not err in admitting proof of tests made during the progress of the trial, at the shops of the defendant, of collars produced in court by the plaintiff in error as samples of defective collars received of the defendant under the contract. The supposed defect being in the collars, it did not affect the competency of the evidence that the test was made by applying them to pipe which had not been delivered under the contract. The court, on the other hand, excluded evidence of tests made by the National Tube-Works Company of one mile of pipe composed of "regular eight-inch line pipe manufactured by that company"; but, as that line was constructed for the purpose of making the test, and contained neither pipe nor collars which had been delivered under the contract, it was a collateral matter, not directly pertinent to any issue in the case, and even if, in its discretion, the court might have admitted the evidence offered concerning it, the refusal to admit it was not error.

The court refused a special request for an instruction defining the obligation of the defendant under the contract, and declaring it not sufficient to relieve the defendant from the obligation, if, in the opinion of the jury, a pipe made with the best skill and materials, according to the specifications of the contract, would be incapable of standing the stipulated pressure test. The court in its own charge very clearly defined the obligation of the defendant to furnish pipe capable of standing the required pressure, and proving tight in line. There was no suggestion or claim by the defendant that it could be relieved from the obligation of full performance on account of any supposed or proven impossibility or difficulty of making pipe capable of doing what was required. On the contrary, the persistent contention of the defendant was that the pipe delivered had that capacity, the shop tests made before delivery as well as that made during the trial showed that it had, and the verdict shows that the jury was convinced of the fact. But, if the request had been in itself unobjectionable, there would have been no error in refusing it, because, in substance, it was embraced in the charge given.

Considering the length of the court's charge, and that it was not given in writing, it is not remarkable that in some respects it is obnoxious to verbal criticism; but as a whole it was notably clear and impartial, and, convinced as we are that the trial was a fair one, we do not think that for any reason offered it ought to be annulled. The judgment below is affirmed.

(99 Fed. 18.)

HAMILTON et ux. v. FOWLER et al.

(Circuit Court of Appeals, Sixth Circuit. December 4, 1899.)

No. 717.

1. PROMISSORY NOTES-RIGHTS OF TRANSFEREE-BONA FIDE Holder.

The transfer of negotiable obligations as security for an antecedent debt is as much in the usual course of business as their transfer in payment of a debt, and in neither case is the bona fide holder affected by equities between prior parties of which he had no notice.

2. SAME-NOTES SECURED BY REAL-ESTATE MORTGAGE.

By the indorsement of notes secured by mortgage on real estate as collateral security to debenture bonds issued by the indorser the transferees become bona fide holders for value, and entitled to all the protection extended to any other bona fide holder of commercial paper against defenses between the original parties of which they had no notice.

3. SAME-INDORSEMENT WITHOUT RECOURSE.

That a note is indorsed "Without recourse" does not affect its negotiability nor operate as a notice of defenses.

4. FOREIGN CORPORATIONS-BUSINESS DONE IN VIOLATION OF STATUTE-VALIDITY OF NOTES TAKEN.

The Tennessee statute (Acts 1891, c. 122) requiring foreign corporations doing business in the state to record their charters with the secretary of state and in each county where they do business, and making it unlawful for such corporations to do business in the state without having complied with its requirements, does not declare that negotiable notes made in the course of a business carried on in violation of its provisions shall be void in the hands of bona fide holders for value without notice of their illegality, nor is it to be so construed; and, where such a note appears on its face to be a contract made in another state, a holder who acquired it for value before maturity is not charged with notice that it grew out of a transaction within the prohibition of such statute, although it is secured by a mortgage on real estate in Tennessee.

5. MORTGAGE-Defenses-BONA FIDE PURCHASER OF NOTE SECURED.

. Where the maker of a negotiable note cannot defend against the same in the hands of a transferee by showing the illegality of the consideration, he is equally debarred from resisting the enforcement of a mortgage given to secure it, which passed as a mere incident to the transfer of the debt.

6. USURY EFFECT UPON NOTE-BONA FIDE PURCHASER.

Where a usurious note is not made void by statute, but is voidable only to the extent of the usury included therein, an innocent purchaser for value, before maturity and without notice, is unaffected by the fact that an unlawful rate of interest is secretly included as principal. 7. SAME-LAW GOVERNING-PLACE OF CONTRACT.

A note which purports on its face to have been made in Missouri, and is there payable, is a Missouri contract, and governed by the law of that state as to usury, although the makers reside in another state, and the note is secured by a mortgage on real estate situated in such state where the note and mortgage were in fact executed.

8. PROMISSORY NOTES-NEGOTIABILITY-PROVISION FOR ATTORNEY'S FEES IN MORTGAGE.

A provision in a mortgage for the payment of attorney's fees in case of foreclosure does not affect the negotiability of the note secured, even where, under the law of the state, it would have had that effect if contained in the note itself.

9. DEED-CONSTRUCTION-ESTATE CONVEYED.

A deed conveying all the right, title, and interest of the grantor in real estate to a husband and wife, "to have and to hold as joint

*

tenants during the period of their natural lives," upon the death of either the said real estate "to be and become the property in fee simple absolute of the survivor of them," does not convey merely a joint life estate to the grantees, but vests the fee in them jointly.

10. SAME-POWER TO CONVEY-MORTGAGE.

A provision, in a deed of real estate to a husband and wife, that "during their natural lives the same may be conveyed by their joint deed," if treated as a power only, and not as a statement of the character of the title conveyed, is sufficient to support a mortgage made by the husband and wife jointly.

11. MORTGAGE-FORECLOSURE-TERMS OF SALE.

In Tennessee, where, by statute, the right of redemption does not extend to a sale made under a power in a mortgage, wherein the right of redemption is waived, where such a mortgage is foreclosed by suit, the court may order a sale without redemption in accordance with the terms of the mortgage.

12. SAME-SALE-ADVERTISEMENT.

A provision in a mortgage authorizing the trustee, in case of default, to sell "after having advertised such sale 30 days in a newspaper," does not require 30 consecutive advertisements, but that the sale shall not be made until 30 days after the first advertisement, and is satisfied by a publication each week for four successive weeks.

18. SAME-ELECTION OF REMEDIES.

Where, in a suit by mortgagors to restrain a sale of the mortgaged property by the trustee under a power of sale in the mortgage, the mortgagees file a cross bill, asking a foreclosure by the court, they cannot complain that the court treated such cross bill as an election of remedies, and, upon granting the relief prayed for therein, enjoined them from proceeding under the power of sale.

Appeal from the Circuit Court of the United States for the Western District of Tennessee.

The original bill was filed by Thomas A. Hamilton and his wife, Elizabeth H. Hamilton, in the chancery court for Shelby county, Tenn., for the purpose of enjoining the sale of certain premises situated in that county under a power of sale contained in a mortgage made by the complainants to secure a certain promissory note theretofore made by them to the Jarvis-Conklin Mortgage Trust Company, a corporation of the state of Missouri, whose principal office was at Kansas City. The note aforesaid was in these words:

"Negotiated by Jarvis-Conklin Mortgage Trust Co., Kansas City, Mo. "Five years after date, for value received, we promise to pay to the order of the Jarvis-Conklin Mortgage Trust Co., at its office in Kansas City, Mo., ten thousand ($10,000.00) dollars lawful money of the United States, with interest thereon at the rate of six per cent. per annum, payable semiannually on the first days of January and July in each year, according to the tenor and effect of the interest notes of even date herewith, and hereto attached. This note is to draw interest from date at the rate of six per cent. per annum if either principal or interest remain unpaid ten days after due. At the option of the legal holder, after any of said interest notes remain due and unpaid ten days, the whole of the principal and interest may be declared immediately due and payable. This note is given for an actual loan of the above amount,

and is secured by a trust deed of even date herewith, which is a first lien on the property therein described.

"Dated at Kansas City, Mo., July first, 1891.

"Witness: W. A. Smith."

"Thos. A. Hamilton.
"Elizabeth H. Hamilton.

Relief against the sale was sought mainly upon the ground that the note was for money loaned in Tennessee by a foreign corporation engaged in doing business in Tennessee without having first complied with the Tennessee statute requiring foreign corporations, before carrying on business in the state. to record their charters, and the note and mortgage therefore void. Other objections to the right of the trustee to enforce the mortgage were also urged, which will be hereafter stated. A stay order was granted by the chancellor. Thereafter the defendants removed the cause to the circuit court of the United States for diversity of citizenship. The defendants Fowler and Caesar then answered, and, after denying the averments of the bill, averred that they were bona fide purchasers of the note secured by the mortgage before maturity, for value, and without notice of any of the infirmities alleged, if they in fact existed. Later the same defendants filed a cross bill, and sought a foreclosure of the mortgage by a sale under decree. Upon final hearing the issues were decided for Messrs. Fowler and Caesar, the note and mortgage were held valid, and a decree settling the amount of the debt due and ordering foreclosure by sale, as prayed by the cross bill, was granted, but enjoining the trustee from proceeding with the sale theretofore advertised. 83 Fed. 321.

Wm. M. Randolph, for appellants.

Thomas M. Scruggs, for appellees.

Before TAFT, LURTON, and DAY, Circuit Judges.

LURTON, Circuit Judge, after making the foregoing statement of facts, delivered the opinion of the court.

Hamilton and wife have appealed from the decree upon the cross bill, and Fowler, Caesar, and Maxwell have appealed from the decree enjoining a foreclosure by sale by Maxwell as trustee under the mortgage. The Tennessee act of 1891, c. 122 (Acts Tenn. 1891, p. 264), provides that all foreign corporations proposing to carry on business in Tennessee shall record their charters with the secretary of state, and in each county in which it is proposed to do business, and that "it shall be unlawful for any foreign corporation to do or attempt to do any business or to own or acquire any property in this state, without having first complied with the provisions of this act, and a violation of this statute shall subject the offender to a fine, of not less than $100, or more than $500, at the discretion of the jury trying the case." Though this act does not, in express terms, declare void the contracts of corporations doing business within the state in violation thereof, yet it is well established by the Tennessee decisions that every contract made in the state by a foreign corporation doing business within the state, not having complied with the law, is unenforceable as between the parties thereto. Cary-Lombard Lumber Co. v. Thomas, 92 Tenn. 587, 22 S. W. 743; Association v. Cannon, 99 Tenn. 344–348, 41 S. W. 1054. These cases are in accord with a line of earlier decisions of the state holding that every contract made in the conduct of a business, or for or about a business which is prohibited and made unlawful, is, by implication, void, and unenforceable. Wetmore v. Brien, 3 Head,

40 C.C.A.-4

723; Stevenson v. Ewing, 87 Tenn. 46, 9 S. W. 230; Haworth v. Montgomery, 91 Tenn. 17-19, 18 S. W. 399. But the Tennessee act has no application to interstate commerce, and a mortgage to secure the price of mill machinery sold by an Indiana corporation and set up on realty in the state was held valid and enforceable, although the corporation had not complied with the Tennessee law; the court holding that a contract made outside of the state was not within the prohibition of the statute, and that a mortgage on lands in the state was not a carrying on of business within the state under the statute. Manufacturing Co. v. Gorten, 93 Tenn. 590, 27 S. W. 971, 26 L. R. A. 135. In Neal v. Association, 100 Tenn. 607, 46 S. W. 755, the court held that a contract for the loan of money by a foreign corporation having no office or agency in the state, made direct from its home office in Louisiana, and secured by a mortgage on land in Tennessee, was a Louisiana contract, and that same was valid and enforceable. The question as to whether the Jarvis-Conklin Mortgage Trust Company was at the time of the transaction with Hamilton and wife carrying on business within the state, or whether the loan to Hamilton and wife was in fact a loan negotiated and made in Tennessee, is not material in view of the fact that the appellees Fowler and Caesar are bona fide purchasers of the note made by Hamilton and wife, for value, and before maturity, and without notice that it had been made in the course of a prohibited business. The note purports on its face to have been made at Kansas City, Mo., and is there made payable. It is true that it recites that it is secured by a mortgage upon land in Tennessee. But neither the fact that the note was secured by a mortgage upon realty situated in that state, nor that the mortgage was acknowledged there before a Tennessee notary, operates to make the note a Tennessee contract, nor to require the purchaser thereof to make further inquiry. The note purports to be a Missouri contract, and is payable to a Missouri corporation. This note, before maturity, was indorsed in blank by the payee to Messrs. Lubbock & Lubbock, London bankers, as security for certain debenture bonds theretofore or then issued, which does not clearly appear, and negotiated for value by the JarvisConklin Mortgage Trust Company. Default was thereafter made in the payment of interest on those bonds, and this note, with others held as collateral security, were, by the terms of the trust under which they were held, forfeited, and by a decree of an English court of competent jurisdiction, delivered to Messrs. Fowler and Caesar as trustees for the debenture bondholders. It is immaterial whether these bonds were originally issued upon the security of this and other notes, or that they were subsequently assigned to secure them. The transfer of negotiable obligations as security for an antecedent debt is as much in the usual course of business as its transfer in the payment of the debt. In neither case is the bona fide holder affected by the equities between prior parties of which he had no notice. Swift v. Tyson, 16 Pet. 1, 10 L. Ed. 865; McCarty v. Roots, 21 How. 432, 438, 439, 16 L. Ed. 162; Brooklyn City & N. R. Co. v. National Bank, 102 U. S. 14-28, 26 L. Ed. 61.

Counsel for the mortgagors have placed much reliance upon Bank