laws of the United States in said territory," from which it is manifest that the subsequent direction to sell the property within 120 days at public auction was inserted by the assignor or his attorney upon the assumption that that was the method of disposition enjoined by the statute. Nor is it by any means strange that such a mistake was made, since it would not be immediately apparent to any one who consulted the statute concerning assignments that the positive requirement of section 309, "to sell all the property assigned to him for the payment of debts at public auction within one hundred and twenty days after the execution of the bond," had been modified by implication by the provisions of section 307. Many lawyers would probably have accepted that construction of the stat ute with grave doubt, even if they did not reject it altogether. In our opinion, it was the duty of the assignee who was named in the assignment to dispose of the assigned property and effects according to the provisions of the local assignment law, because the paramount direction given by the assignor to his assignee was to carry out or execute the trust in conformity with the laws of the territory. And the subsequent language which was employed should not be construed as containing a contrary direction, when it appears that in so far as the last direction was in conflict with the first, or in seeming conflict with it, it was superinduced by a mistake made by the assignor or his attorney in interpreting the statute. The rule upon which courts always act in construing contracts and all other written instruments is to give them effect according to the intention of the parties, as it may be collected from the four corners of the instrument and surrounding circumstances. And where an assignment for the benefit of creditors is concerned, and the instrument is of doubtful meaning or ambiguous, the court should rather lean to that construction which will render the assignment operative, than to one which will render it nugatory. We are of opinion, therefore, that the assignment in question should be read as requir ing the assignee to dispose of the assigned property and effects according to the provisions of the local assignment law, properly construed; and when thus read it is a valid conveyance.

The assignment to Neel, and his title derived therefrom, are further challenged by the plaintiffs in error because the clerk of the United States court in the Indian Territory did not formally indorse on his bond as assignee the fact that it was approved by him. The statute concerning assignments (Mansf. Dig. § 305) provides, in substance, that before an assignee shall take possession, sell, or control any of the assigned property, he shall be required to file in the office. of the clerk of the court exercising equity jurisdiction a full and complete inventory of the property, and make and execute a bond in double the estimated value of the property covered by the assignment, with good and sufficient security, to be approved by the clerk of said court. In the case at bar the judge of the United States court in the Indian Territory, in which the assignment was pending, indorsed his approval upon the bond which was tendered by the assignee; and two days later it was presented to the clerk of said court, who accepted it and filed it among the papers in the case, and

made an indorsement on the bond to that effect. He did not, however, write over his signature the word "Approved." The clerk testified that when the bond was handed to him, and he saw that the judge had indorsed it, "Approved," he considered it a good bond, and therefore filed it. An indorsement on a bond, by an officer who is authorized to approve it, of the word "Approved," is clearly not essential, inasmuch as such an indorsement is merely evidence of his approval, which fact may be established by evidence aliunde unless some statute makes such indorsement the sole proof that the instru ment has been approved. No such statute was in force in the Indian Territory. Therefore it was competent to show by the acts or declarations of the clerk that he approved the bond, and the fact that he accepted it without questioning its sufficiency, and that he placed it on file as a part of the proceedings in the cause, was competent evidence from which an approval by the clerk could be inferred. It has been held in a number of cases that when a clerk or other officer is required to file a paper, or make a given entry on the filing of a paper or document, a person dealing with such officer discharges his full duty, and is entitled to protection, when he delivers the document or paper to the officer and tenders his legal fees, and the officer accepts the document or paper so handed to him. Oats v. Walls, 28 Ark. 244; Camp v. Gullett, 7 Ark. 524; Petray v. Howell, 20 Ark. 615. We are of opinion, therefore, that the acts of the clerk in the present instance should be held tantamount to an approval of the assignee's bond. It results from what has been said that the judg ments of the United States court in the Indian Territory and of the court of appeals in that territory should be affirmed, and it is so ordered.

(100 Fed. 559.)

GUARANTEE CO. OF NORTH AMERICA v. MECHANICS' SAV.
BANK & TRUST CO.

(Circuit Court of Appeals, Sixth Circuit. March 24, 1900.)

No. 792.

1. SURETY-CONSTRUCTION OF CONTRACT-BOND OF BANK CASHIER.

A surety on the bond of a bank cashier, conditioned to make good those losses of the bank which might result from such fraudulent actions of the cashier as were equivalent to embezzlement or larceny, cannot be held liable for the amount of overdrafts on the bank paid by the cashier without authority from the bank, when it is not shown that the cashier received any part of such amount, or any benefit therefrom.

2. APPEAL-REVIEW-QUESTIONS ARISING UPON THE RECORD.

Where, in a suit on the bond of a bank cashier, the accuracy of the averments of complainant's pleading as to the amount of the cashier's defalcations was denied by the answer of the surety, and no exception was taken to the sufficiency of such denial, the question whether an item of loss shown to have resulted to the complainant from the action of the cashier was within the terms of the bond is a substantial one, necessarily arising upon the record, and which may be reviewed on appeal, whether specifically called to the attention of the court on the hearing or not.

GUARANTEE CO. OF NORTH AMERICA V. MECHANICS' SAV. B. & T. CO. 543

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

Wm. L. Granbery, for appellant.

E. H. East, for appellee.

Before LURTON and DAY, Circuit Judges, and EVANS, District Judge.

EVANS, District Judge. The facts in this case are fully stated in the opinion of the court announced when it was previously here, and which is reported in 26 C. C. A. 146, 80 Fed. 766. They need not be repeated, further than to say, generally, that the action is based upon the stipulations of two separate covenants executed by one John Schart to the Mechanics' Savings Bank & Trust Company, with the appellant as surety on each,-one binding the appellant to make good losses which might result from the misconduct of Schart as teller and bookkeeper of the bank, and the other to make good those losses of the bank, not exceeding $20,000, which might result from such fraudulent conduct of Schart, as its cashier, as should be equivalent to embezzlement or larceny. After the case was decided here, it was removed by a writ of certiorari into the supreme court of the United States, where the judgment was reversed upon the single ground that the court had not jurisdiction of the appeal, because the judgment upon which the appeal was taken was not final. 173 U. S. 582, 19 Sup. Ct. 551, 43 L. Ed. 818. Upon the return of the case to the circuit court, a final judgment was rendered. This judgment, however, was substantially the same as the one upon which the first appeal had been taken.

Upon the pending appeal, and as the case is again presented, various errors are assigned, some based upon the judgment of the circuit court as it applied to the teller's bond, and others upon the judgment as it applied to the bond of Schart as cashier. Without again stating the reasons therefor, which were elaborately given in the former opinion of this court, we deem it sufficient to say that we reaffirm the conclusions of the court then announced, except in respect to that error complained of which relates to the sum of $5,992.35, made up of overdrafts upon the bank which had, with out its authority, been paid by the cashier. It is true that this question was also passed upon when the case was heard before, but, coming to us again, we find ourselves unable, as the matter is now presented, to agree to what was then said upon that point. The cashier's bond stipulated that the appellant, as surety, should make good those losses of the bank which might result from such fraudulent actions of Schart, the cashier, as were equivalent to embezzlement or larceny. The obligation of the surety, by its express terms, was limited to that character of wrongdoing upon the cashier's part. The evidence in the case is very explicit that the defalcations of Schart during the period when the cashier's bond was in force, namely, from January 1, 1893, to April 17, 1893, was $22,964.17, of which the sum of $5,992.35 was on account of overdrafts paid by him, but not authorized by the bank. This defalcation, even if it

had been in some respects fraudulent, must necessarily have been on account of moneys paid out on the checks of customers who had no funds to their credit to meet them; but it is not shown that Schart embezzled or appropriated any part of the proceeds of these overdrafts, or received any benefit therefrom. If this be true, it is manifest that while Schart was individually responsible for it to the bank, as his principal, no act was done by him which was either embezzlement or larceny, and consequently that the loss was not one which by any fair interpretation would bring it within the obligation of the surety on the bond of the cashier.

It is insisted, however, that this question was not brought to the attention of the court below, and cannot, for that reason, be reviewed here. It is altogether certain that the appellee should not recover from the surety anything which is not embraced within the terms of the contract, and the pleading by which this action was commenced could not properly claim anything else, and in fact did not. By its answer the appellant in plain terms admitted certain abstractions of money by Schart from the funds of the bank, but it by no means admitted (on the contrary, it expressly denied) the accuracy of complainant's averments as to the amount thereof. While this denial of the answer may not have been as explicit as the complainant could have demanded, and as it may have been entitled to demand, still it was in no sense an admission that the charges of the bill were accurate as to the amount of loss that came within the stipulation of the surety. The complainant took no step, by exception to the answer or otherwise, to have the issue on that point made more distinct or definite. This condition of the pleadings left the burden upon the complainant to show the extent of its losses resulting from such fraudulent actions of Schart as were equivalent to embezzlement or larceny. As has been indicated, losses from acts of that character are shown by the evidence only to the extent of $16,971.82, instead of $22,964.17, as adjudged by the court below; the difference being the amount of the overdrafts which were paid out by Schart, instead of being received by him by any act which in any wise resembled embezzlement or larceny. We think this question legitimately and necessarily arose upon the record when the case was heard upon all the testimony presented, whether the attention of the court was specifically called to it or not before the time of settling the decree, when in fact it does appear to have been urged or at least mentioned to the court. This was not a matter of form, merely, which might be regarded as waived if not insisted upon, but was matter of substance arising upon the record, and vitally affecting the correctness of the court's decree, which must be based upon the record and supported by the evidence. It is not, therefore, too late to insist upon it here, and it appears to us to be entirely obvious that the judgment appealed from was erroneous to the extent indicated, though in all other respects correct.

It results from what has been said that the judgment of the cir cuit court should be affirmed, except as to so much of the item of $5,992.35 as may have been included in the decree, and so as to

limit the recovery on the cashier's bond to $16,971.82, and interest thereon. The case is therefore remanded to the circuit court, with directions to modify its judgment to the extent indicated; the costs of this appeal to be borne equally by appellant and appellee.

(100 Fed. 561.)

BROWNE v. KING et al.

(Circuit Court of Appeals, Eighth Circuit. March 5, 1900.)

No. 1,300.

1. MASTER AND SERVANT-PERSONAL INJURY-NEGLIGENCE OF FELLOW SERVANT-SUFFICIENCY OF COMPLAINT.

Plaintiff, who was employed as a helper to the operator of an air drilling machine in a mine, was injured by reason of the drill striking a "missed shot," or drill hole filled with unexploded powder, and causing an explosion. The complaint alleged that plaintiff was under the direction and control of the operator, and that it was the duty of the operator and other drill runners working in the mine to look out for such "missed shots," and, after the explosion of any drill holes, to examine same, and, if they had failed to explode, to cause the powder to be removed; that it was not plaintiff's duty to examine as to such "missed shots," except when notified that one had occurred; that at the time of said explosion plaintiff had no notice nor knowledge thereof, nor any reason to believe that one existed, nor would he, as defendant well knew, be at all likely to discover such missed shot in doing the work he was employed to do; that neither defendant, nor the operator to whom plaintiff was helper, nor any other of the drill owners in the mine, after the explosion which preceded the accident to plaintiff, attempted to find said "missed shot," and to remove the powder therefrom, and, because of their failure so to do, defendant failed to furnish plaintiff such a reasonably safe place in which to work as it was in duty bound to do, and which plaintiff had reason to believe it had done. Held, that the complaint warranted the, construction that the "missed shot" by which plaintiff was injured was planted by himself and the operator in the progress of the work which they, as fellow servants, had jointly undertaken to perform, and that they had returned to the use of the drill without making a search for "missed shots," and, therefore, the complaint failed to state a cause of action for damages against the employer. 2. SAMF.

Conceding that defendant had made it the "particular duty" of the drill runners to look out for and guard against "missed shots," and, after the explosion of any drill holes, to examine them, and, in the event that "missed shots" were found, to remove the powder, or notify the employés in the vicinity, and that the operator to whom plaintiff was helper neglected these duties, yet, it appearing that plaintiff knew that there was no absolute certainty that every shot they attempted to explode would do so, and that the operator neglected to search for "missed shots," the complaint fails to state a cause of action, since it is not alleged that defendant had not exercised reasonable care in the selection of the drill operator, nor that he was incompetent or unfit for any reason, nor that the place in the mine where plaintiff was set to work was unsafe when he entered defendant's employment.

3. SAME.

The drill operator and plaintiff, as his helper, being engaged in the common service of running the drill, and the very service they had been employed to perform, they were fellow servants, and, having proceeded to work the drill without taking steps to find out whether there was a "missed shot" or not, when they had full knowledge that shots had been 40 C.C.A.-35