rupt and certain of its employees were appointed custodians by the warehouse company and had the keys to the inclosures. No goods other than those of the bankrupt were stored therein, and there were no signs on the buildings indicating their occupancy as public warehouses, the only signs of such character being on the inside of the inclosures and on the padlocks. It was also shown that employees of the bankrupt from time to time removed and shipped goods from such inclosures and replaced them with others."

sale of sugar, that defendant was induced to make the contracts by false and fraudulent representations by plaintiff of a world shortage of sugar, and that it was protecting its customers whereas in fact, the supply was normal and . by making equitable allotments between them, plaintiff and others in combination were withholding large quantities from the market to create a scarcity, held to state a good affirmative defense.

2. Monopolies

in the pledgee the Supreme Court said:

"The general law of pledge requires possession, and it cannot exist without it. Casey v. Cavaroc, 96 U. S. 467. There was scarcely a semblance of an attempt at such change of possession from the hands of the knitting company to the hands of the warehousing company. Actual possession of the property in question was exercised by and existed with the knitting company substantially the same after the issuing of the receipts as before. It is a trifling with words to call the various transactions between the knitting company and the warehousing company a transfer of possession from the former to the latter. There was really no delivery, and no change of possession, continuous or otherwise. The alleged change was a mere pretense, a sham." Casey v. Cavaroc, 96 U. S. 467, 24 L. Ed. 779; Union Trust Co. v. Wilson, 198 U. S. 530, 25 S. Ct. 766, 49 L. Ed. 1154; Fourth National Bank v. Millbourne, 172 F. 177, 96 C. C. A. 629, 30 L. R. A. (N. S.) 552; Moors v. Reading, 167 Mass. 322, 45 N. E. 760, 57 Am. St. Rep. 460; Drury v. Moors, 171 Mass. 253, 50 N. E. 618; American Can Co. v. Erie Preserving Co., 183 F. 96, 105 C. C. A. 388.

[3] This case being here properly on an appeal, the petition to superintend and revise will be dismissed, and the decree appealed from will be affirmed.

Case No. 2233, dismissed.
Case No. 2244, affirmed.

BELL v. LAMBORN et al. (Circuit Court of Appeals, Fourth Circuit. October 23, 1924.)

No. 2209.

1. Sales 354(6)—In action against buyer for breach of contract, answer held to state good affirmative defense.

act being exclusive.

3. Sales 48-Violation of Food Conservation Act does not affect validity of contracts for sale of goods.

That a seller has violated the provisions of Food Control Act Aug. 10, 1917 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §§ 3115%e3115kk, 3115%-3115r), by hoarding or otherwise, does not affect the validity of contracts for sale of goods.

4. Sales 55-Law of state where contract was made and to be performed governs.

Where a contract of sale between parties in different states, made by offer and acceptance, was accepted and to be performed in one of the states, the law of that state governs as to the measure of damages for breach.

5. Sales 333- Buyer refusing to accept goods entitled to notice that they will be sold for his account.

Under the law of Georgia, where merchandise which a buyer has refused to accept under his contract is sold by the other party, he is required to give the buyer notice of such sale, though not necessarily of the time and place where the goods are offered in the open market. 6. Sales 332-That commodity sold was not segregated does not affect seller's right to resell on breach of contract.

That the subject-matter of a contract of sale was a commodity not segregated from a mass in store does not affect the right of the seller to resell the same quantity from the mass for the buyer's account on his breach of the contract. 7. Sales

332-Seller may resell on breach, though contract is executory.

That a contract of sale is executory does not affect the right of the seller to resell on repudiation of the contract by the buyer. 8. Sales 384 (7) Interest recoverable on

damages for breach of contract of sale.

Under the law of Georgia (Civ. Code 1910, § 3434), interest is recoverable on damages recovered for breach of a contract of sale by the buyer from the time the amount of damages became fixed by a resale.

In Error to the District Court of the United States for the Western District of South Carolina, at Greenville; Henry H. Watkins, Judge.

action

J. Hertz Brown, of Spartanburg, S. C. (Carlisle & Carlisle, of Spartanburg, S. C., on the brief), for plaintiff in error.

A. B. Lovett, of Savannah, Ga. (Lyles, Daniel & Drummond, of Spartanburg, S. C., Hitch, Denmark & Lovett, of Savannah, Ga., and C. E. Daniel, of Spartanburg, S. C., on the brief), for defendants in error. Before WOODS, WADDILL, and ROSE, Circuit Judges.

WOODS, Circuit Judge. Defendant Bell, doing business in Spartanburg, S. C., in response to quotations from plaintiffs, Lamborn & Co., wired them to "book" certain quantities of sugar for him. Lamborn & Co. accepted the orders, and sent forward contracts signed by themselves for Bell to execute and return. These contracts dated April 2, April 5, and June 4, 1920, were signed and returned by Bell. He refused to accept the sugar when tendered. Plaintiffs then resold at a loss of $21,570.26, and brought this action to recover that amount and interest.

The District Judge sustained a demurrer to the affirmative defenses alleging the invalidity of the contracts. In response to motions of both sides for a directed verdict, the jury was instructed to find for plaintiff the whole amount claimed. The facts will sufficiently appear in the discussion of the errors assigned.

[1] The defense of fraud alleged against the plaintiffs is difficult to analyze, because it is stated in long and involved sentences; one of them being 22 pages in length. As we understand, the defendant means to allege that he was deceived into making the contracts sued on by the fraud of the plaintiffs acting in concert with Savannah Sugar Refining Company and other brokers and refiners. As alleged by the defendant, the fraudulent scheme was carried out in this way: The plaintiffs and others acting with them knew that the defendant and other individual dealers in sugar in like situation were unable to obtain and analyze information concerning the world's supply of sugar without prohibitive expense, and that they relied on plaintiffs for expert information and advice concerning the supply and movement of sugar and the trend of the market. The plaintiff under these conditions by letters and circulars falsely and fraudulently represented to the defendant and all dealers in the southeast "that it was practically impossible to obtain a supply of raw sugar in the world market, that there were fre

quent times at which no sugar at all was available for distribution by them, that there were frequent times at which it was impossible for them to secure more than a limited amount of sugar, that there were frequent times and long intervals during which the Savannah Sugar Refining Company had entirely withdrawn from the refined sugar market and had oversold its output and was neither taking orders nor able to supply sugar for immediate delivery." The plaintiffs further represented to defendant that they were brokers for Savannah Sugar Refining Company and as such were alloting and would continue to allot available sugar to the trade "in accordance with the plan put in operation by the President of the United States during the war with Germany." This allotment plan the plaintiffs represented was the only equitable way of distributing sugar under the conditions alleged to exist.

At the time these statements were made by plaintiffs the world's supply of sugar was normal, and plaintiffs could procure it through the ordinary channels of trade; sugar was being imported into the United States and received by the plaintiffs in normal and reasonable quantities; the Savannah Sugar Refining Company had ample stocks on hand for distribution to the trade; the plaintiffs and Savannah Sugar Refining Company had abandoned the allotment method of distributing sugar at a time when they were representing that it was the only fair and equitable way of distributing. In conjunction with these false representations of the actual scarcity of sugar and as a part of the fraudulent scheme, the plaintiffs and the Savannah Sugar Refining Company collected and withdrew from the market such large quantities of sugar as to bring about a sugar famine. The defendant avers that all this was done and defendant was induced to make the contracts sued on by the false representations set out, at a time when plaintiffs were falsely assuring defendant that they were looking after his interest and keeping him informed as to the supply and movement of sugar and to protect defendant.

We are unable to agree with the District Judge that these allegations of fraud, if true, constitute no defense. One may be adjudged guilty of fraud when he falsely expresses his opinion knowing that the facts are not what the opinion implies they are, and the other party is known to rely on the opinion. Authorities cited in note 35 L. R. A. 425; 12 R. C. L. 248; Pomeroy's

Equity Jurisprudence (4th Ed.) §§ 904, 956. The defendant's allegations here are not confined to such opinions expressed by the plaintiffs. The averment is that although plaintiffs knew the defendant was relying on them for information as to the supply of sugar and the sugar market, they knowingly made to the defendant the false statement that there was a great scarcity of sugar and that it was practically impossible to obtain a supply of this necessary article of commerce. Added to this is the allegation that at the very time the plaintiffs were deceiving the defendant by these false statements of the supply of sugar into making the contracts sued on, they themselves in combination with others had accumulated great stores of sugar which enabled them to greatly increase the price. The defense of fraud stated in the answer is thus shown to be very different from expressions of opinion as to future market prices or other matters depending on unknown contingencies as in Gordon v. Butler, 105 U. S. 553, 26 L. Ed. 1166; Southern Development Co. v. Silva, 125 U. S. 247, 8 S. Ct. 881, 31 L. Ed. 678; Green v. Societe Anonyme, etc. (C. C.) 81 F. 64; W. H. Goff Co. v. Lamborn & Co. (C. C. A.) 281 F. 613. It is also very different from the vague allegations chiefly legal conclusions, set out in Franklin Sugar Refining Co. v. Hanscom Brothers, 273 Pa. 98, 116 A. 140. In W. H. Goff Co. v. Lamborn & Co. (C. C. A.) 281 F. 613, relied on by plaintiffs' counsel, the allegation of fraud held to be insufficient does not appear. The demurrer to the defense of fraudulent procurement of the contracts should have been overruled.

[2] The defense that in violation of the Sherman Act (Comp. St. 88 8820-8823, 8827-8830) the plaintiff in association with others created a monopoly or trust in sugar is not available to the defendant to defeat the recovery of the purchase price of goods. The remedy provided by the Anti-Trust Act of 1890 is exclusive. Connolly v. Union Sewer Pipe Co., 184 U. S. 540, 22 S. Ct. 431, 46 L. Ed. 679; D. R. Wilder Mfg. Co. v. Corn Products Refining Co., 236 U. S. 165, 35 S. Ct. 398, 59 L. Ed. 520, Ann. Cas. 1916A, 118; Geddes et al. v. Anaconda Copper Mining Co., 254 U. S. 590, 41 S. Ct. 209, 65 L. Ed. 425. In Continental Wall Paper Co. v. Louis Voight & Sons Co., 212 U. S. 227, 260, 29 S. Ct. 280, 53 L. Ed. 486, it was held that the seller could not recover because both buyer and seller were parties to an illegal conspiracy to put all wall paper into a trust forbidden by law,

[3] The defense that the plaintiffs cannot recover because they violated the provisions of the Food Control Act, 40 Stat. 276 (Comp. St. 1918, Comp. St. Ann. Supp. 1919, §8 3115e-3115kk, 3115l3115gr), falls under the same rule and is controlled by the same authorities. There is no provision in the statute making invalid sales because made at unreasonable or excessive prices, or because made without the required license. The act provides:

"Whenever the President shall find that any storage charge, commission, profit, or practice of any licensee is unjust, or unreasonable, or discriminatory and unfair, or wasteful, and shall order such licensee, within a reasonable time fixed in the order, to discontinue the same, unless such order, which shall recite the facts found, is revoked or suspended, such licensee shall, within the time prescribed in the order, discontinue such unjust, unreasonable, discriminatory and unfair storage charge, commission, profit, or practice. The President may, in lieu of any such unjust, unreasonable, discriminatory, and unfair storage charge, commission, profit, or practice, find what is a just, reasonable, nondiscriminatory and fair storage charge, commission, profit, or practice, and in any proceeding brought in any court such order of the President shall be prima facie evidence."

The act provides a penalty for doing business without a license or refusal or failure "to discontinue any unjust, unreasonable, discriminatory and unfair storage charge, commission, profit, or practice" in accordance with the President's order under this section. These regulations, remedies, and punishments are exclusive, and the courts have no power to attach the additional remedy and regulation of the loss of the price of the goods sold.

[4] The District Judge correctly held the

A

necessity the time and places Se Vila mare de tecndant a jogerm protect us mest mi prenent a s of the prope VIS sretn Ansley. 12 31 4A7DSEN ÷ d Rep. 111. Das Superdre Cam lanta Grand Co. 19 H. BASE D 1012. The sorrespondence abers i geet effort to get the cest prve for the SIA and the defendant has nothing to sempa of in that respect. The state does not re quire sale at auction, and as man fast when one is trying the market for the best price it would be impossible to bild open an offer to give a defaulting pambuser notice of the time and place of sale.

On October 16, 1920, plaintifs received an offer of eleven cents a pound for sugar. They then wired the defendant that they would accept the offer unless defendant furnished a better offer by 10 o'clock on October 16, 1920. The sufficiency of the notice as to time might have been properly left to the jury but for the fact that defendant wrote immediately on receipt of the notice that he had no interest in the sugar. Having thus made clearly known that he would take no measures to protect his interest, he is not in a position to complain that the notice was inadequate.

[6] Modern methods of business forbid any distinction as to the right of resale at the risk of the purchaser between goods segregated and goods sold from a mass in a

makes no difference that the unRobson &

sale were executory.

Frans. J. R. Hale & Sons, 139 G SSET; Gilbert Grocery Co. v. Howel CA 289 F. 474; Williston on Sales Se and authorities cited.

M

Interest was recoverable under the

Georgia from the date the amount of Lamages became fixed by the resale (Georra Code § 3434), and under the law of Soma Carolina (Woods v. Cramer, 34 S. C ES 33 S. E. 660; Walker v. Southern Ravan, 79 S. C. 308, 313, 56 S. E. 952). The faler mes to allow interest on such demards in the absence of statutory regala

Kapten Mfg. Co. v. Freeman, 247 FWCC. A. 272; Second National Sana v. Cucumbia Trust Co. (C. C. A.) 288 F.. A. L. R. 1299.

The paiement is reversed for error in sustaining the demurrer to the defense of fraud.

Reversed.

LATHAM et al. v. UNITED STATES. (Circuit Court of Appeals. Fourth Circuit. October 21, 1924.)

No. 2206.

whether there is any substantial evidence of guilt.

2. Criminal law 97(3)-Persons in charge of whisky-laden vessel coming within territorial waters of United States, though inadvertently, subject to arrest if they intended violating the law.

Persons in charge of a vessel sailing along

near the territorial waters of the United States with a cargo of whisky, and who sold a part of the same to boats from shore, are subject to arrest if they come within those waters, though inadvertently, and to prosecution as principals for aiding and abetting the illicit traffic in the United States, and it is not a defense that their sales were made in the high seas.

Smith, District Judge, dissenting.

In Error to the District Court of the United States for the Eastern District of Virginia, at Norfolk; D. Lawrence Groner, Judge.

Criminal prosecution by the United States against B. W. Latham, W. B. Cowart, and V. A. Schwarz. Judgment of conviction, and defendants bring error. Affirmed.

Leon T. Seawell, of Norfolk, Va. (Hughes, Little & Seawell and R. M. Hughes, Jr., all of Norfolk, Va., on the brief), for plaintiffs in error.

Paul W. Kear, U. S. Atty., and L. S. Parsons, Asst. U. S. Atty., both of Norfolk, Va. Before WOODS and WADDILL, Circuit Judges, and SMITH, District Judge.

WOODS, Circuit Judge. The defendants Latham, Cowart, and Schwarz, tried together by consent, were convicted on identical informations charging in the first, second, and third counts respectively possession, sale, and transportation of 28,838 bottles of whisky on board the schooner Pesaquid, about two miles off Portsmouth Island, Va., within the territorial waters of the United States.

[1] Error is assigned in the refusal of a motion to instruct the jury to acquit made at the close of the evidence for the government, on the ground that nothing had been adduced tending to prove the defendants guilty of any of the crimes charged. This

motion should have been renewed at the close of all the testimony, and if refused an exception should then have been noted in or

der to require consideration of the question by this court. Hansen v. Boyd, 161 U. S.. 397, 16 S. Ct. 571, 40 L. Ed. 746; Perovich v. United States, 205 U. S. 86, 27 S. Ct. 456, 51 L. Ed. 722. But even in the absence of an exception the appellate court may consider whether there is any substantial evidence of the guilt of the accused. Wiborg v. United States, 163 U. S. 632, 16 S. Ct. 1127, 1197, 41 L. Ed. 289; Clyatt v. United 2 F. (2d)-14

States, 197 U. S. 207, 25 S. Ct. 429, 49 L. Ed. 726; Crawford v. United States, 212 U. S. 183, 29 S. Ct. 260, 53 L. Ed. 465, 15 Ann. Cas. 392. In this case the court will do so more readily because the liberty of the defendants is at stake and an important public question is involved.

There is little dispute as to the facts which we regard material. The defendant Latham was the master, and the defendants Cowart and Schwarz were the supercargoes on the schooner Pesaquid, a vessel flying the British flag and owned by the Bahama Fisheries Company, Ltd., of Nassau. According to her papers her destination was St. Pierre, Miquelon. She left Nassau on July 5, 1923, with a cargo of 3,500 cases of whisky owned by Pender, Collins, and Byrum of Nassau. She did not make for her pretended destination, but on July 20, 1923, was sighted by the coast guard cutter Manning about seventeen miles east of Cape Henry, Va. The Manning followed the Pesaquid to the limit of the waters she was assigned to guard. The Pesaquid was next sighted by the cutter Mascoutin on July 30, 1923, near Hog Island, Va., headed away from her pretended destination. The direct voyage from the Bahamas to the Virginia Capes should have been made by the schooner in five to seven days. The officers of the Mascoutin kept watch on the whisky-laden schooner and seized her when, according to their testimony, she approached within two miles of the Virginia coast.

After leaving Nassau and while sailing along the coast of the United States, the supercargoes had sold from the schooner to boats coming from the shore about 1,350 of her cargo of 3,500 cases of whisky. The testimony on behalf of the defendants was to the effect that the schooner was not at any

time within the territorial waters of the United States. The issue of fact thus made as to possession and transportation of whisky in the United States was properly submitted to the jury, and their findings thereon against the defendants is binding here.

[2] The officers of the Pesaquid testified that if the schooner sailed into the terri

torial waters of the United States, the entry was accidental and involuntary when she was on her voyage back to Nassau for water and food supplies. On this point the District Judge charged the jury to acquit if they believed the schooner involuntarily crossed the line while sailing for Nassau with no intention of stopping or unloading any part of her cargo of whisky in the United States. Conversely, the instruction was given that