standing he failed to appear, and an interlocutory decree was passed against him under Acts 1820, c. 161, in pursuance of which the cause was conducted to a final decree." It will be observed that the decree in that case was similar to the one now before us, as was the one in the case there relied on by the court. Oliver v. Palmer, 11 Gill & J. 137. Section 143, article 16, Code Pub. Gen. Laws, which embraces some of the provisions of Acts 1820, c. 161, in effect places a defendant in default in the same position as to his right to answer, whether there be merely an interlocutory decree, with authority to proceed ex parte, or a decree pro confesso against him, and section 140, which provides for cases where there is default in not appearing or not answering, is also liberal in its treatment of defendants, even after an order that the bill be taken pro confesso, and the practice requiring plaintiffs to support the allegations of the bill or petition by proof is very generally followed by the courts of this state. The subject is thus referred in 5 Ency. of Pl. & Pr. 1001: "In most jurisdictions, a defendant, against whom a final decree pro confesso has been rendered, may review the same by appeal or error. The legality of the proceedings prior to the order taking the bill as confessed is then open to inspection in the appellate tribunal, and the decree and bill may be examined to ascertain if the decree is warranted by the case made by the bill. But the decree cannot be attacked on appeal for the want of testimony or the sufficiency of the evidence." See, also, Phelps' Jur. Eq. § 57. Under our practice, when a bill is taken pro confesso, and the court requires testimony, the final decree must be sanctioned by the evidence, and not be based upon the allegations of the bill alone. Miller's Eq. Proc. 343; Purviance v. Barton, 2 Gill & J. 311; Oliver v. Palmer, 11 Gill & J. 436. In this case, as Gale Turpin did appear, demur, and plead, he would be entitled to have the action of the court on the demurrer and pleas reviewed, as well as the decree, under the principles above stated. We will therefore overrule the motion to dismiss his appeal.

The demurrer and pleas filed by him cannot avail him for several reasons. The pleas could not properly have been allowed, because there was no affidavit that they were "true in point of fact," as required by section 149 of article 16. Wagoner v. Wagoner, 76 Md. 311, 25 Atl. 338. If the second plea had been valid, the demurrer would have been overruled, as both were to the whole bill (Miller's Eq. Pro. 173; Frederick Com'rs v. Frederick City, 88 Md. 662, 42 Atl. 218); but, as it was invalid, it could not have had that effect, if the court below had stricken it out for want of a proper affidavit. The record does not show that the court took any action on the motion of plaintiffs not to allow the demurrer and pleas, but it seems to have proceeded on the theory that the de

fendant had no right to file them. While the better practice would have been to have passed some order specifically disposing of them, the court was not required to allow them, under the circumstances. Gale was in default and upon his petition the court granted him leave "to appear and answer the allegations" of the bill by September 1, 1904. He filed an answer within that time, which was excepted to, and, the exceptions being sustained, he was granted leave "to file a good and sufficient reason," the record states, but doubtless the order said or meant "answer"; but, instead of filing an answer, he filed the demurrer and pleas, without obtaining any further leave of the court. As he had answered, and exceptions to the answer were sustained, the plaintiffs had the right to require him to answer further, and he could not, without leave of court, then file a demurrer and pleas. If a party in default desires to make his defense by way of demurrer or plea, he ought to obtain leave of the court to do so, and when, notwithstanding his default, he asks and is granted leave to answer, then files an insufficient answer which is excepted to, and leave is given to answer further, he cannot then file à demurrer or plea, without obtaining leave of the court. Our statutes granting indulgence to defendants in default were not intended to furnish them with the means of harassing and unnecessarily delaying plaintiffs, although, when the court sees that it is proper to permit pleas or demurrers to be filed, even after default, it can and ought to do so.

John W. Turpin, not being in default, was entitled to notice of the taking of the depositions; but we find nothing in the record to show that he did not receive notice, and, as we have already said, there are no exceptions to the evidence in the record. The examiner's return states, "Due notice thereof having been given," etc. Nor is there any evidence of a former adjudication of the questions involved. Indeed, the plea of res adjudicata filed by Gale was stricken out, and the pleadings that are in do not present that question. We will not, therefore, further refer to those matters, which were relied on by the appellants.

We have no hesitancy in holding that the purchasers at the sales made by Mr. Miles can have no standing in this proceeding, to obtain the relief sought. We know of no authority or practice that would justify such a proceeding by purchasers at trustee's sales. They have no such interest in the properties, before the sales are ratified, as would give them such right to apply to a court of equity to correct the title to the property sold then by the trustee, as is sought to be done by this bill, and it would be a novel proceeding under our practice to permit purchasers to file an original bill to obtain the ratification of a sale made and reported in another case. But, if Mr. Derickson was still a creditor, he

could, under the circumstances set out in the bill, apply for such relief as is sought, and could make the purchasers parties. They might have been made defendants, but Gale, being in default, cannot now take advantage of any error in reference to that (5 Ency. Pl. & Pr. 986; Luckett v. White, 10 Gill & J. 480), and John W. has not raised the question in such way as to give him the benefit of it.

The real difficulty in the way of the plaintiffs is the fact that, although the answer of John W. Turpin distinctly sets up the defense that James C. Derickson no longer had any interest in the mortgage, there is no evidence in the case to show that he had, and the copy of the mortgage in the record distinctly shows that he assigned the mortgage to H. Gale Turpin on August 16, 1904-a few weeks after the bill was filed and over two years before the decree was passed. It is not very clear as to how that certified copy of the mortgage got in the record; but it is the only one there, and the report of the examiner shows that the plaintiffs offered in evidence "land records in Wicomico county, Liber J. T. T. No. 14, folio 504 & 505, containing the deed from E. Stanley Toadvin, trustee to John W. Turpin and mortgage from John W. Turpin to James C. Derickson, both dated the 20th day of September, 1905. To be read and used as evidence in said cause." Certified copies of those instruments are in the record, and they correspond with the descriptions given by the examiner as to dates and places of record. As the land records of Wicomico county could not be filed, we take for granted that these copies were filed in their place, altnough the proper practice was to file the copies with the examiner, inasmuch as they had not been filed with the bill, or to make some arrangement on the subject if all the parties were represented. We thus have proof by the plaintiff's themselves that, over two years before this decree was passed-some time before any testimony was taken-the only one of the plaintiffs who could possibly have any standing in court to obtain the relief prayed for had assigned the mortgage by which he claimed to be interested to the defendant against whom the proceeding was mainly directed. In short, he was no longer a creditor, and had no interest of any kind in this property, so far as disclosed by the record. on what principle such a decree could be passed at the instance of Derickson against H. Gale Turpin, after the former had assigned to the latter the mortgage, which was the sole foundation upon which he based his claim for relief, we confess our inability to understand. The facts alleged in the bill did present a strong equity in favor of Derickson, and, if proven, would undoubtedly have entitled him to relief; but, when he received his money and assigned the mortgage to Gale, what right did he have to take from

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Gale any interest he had acquired in the property through the ratification of the report of sale made by Toadvin? It is not shown, or even alleged, that there are any other creditors of John W. who were such when he made the deed of trust; but, if there are, they are not parties to this bill, and Derickson does not represent them. From what we have said, it will be seen that the other plaintiffs had no right to obtain such a decree. How they got possession of the property, or why they expended large sums of money in improving it, as alleged in the bill, before the sale was ratified, is not explained; but it is clear that they neither had the right to possession, nor were under any obligation to improve the property, until the sales were confirmed, and hence neither of those facts could give them ground for the relief sought by this bill.

It follows that the decree must be reversed, and, as neither of the plaintiffs are entitled to the relief prayed, the bill must be dismissed.

Decree reversed, and bill dismissed; the appellees to pay the costs.

(105 Md. 435)

KING v. ZELL & MERCERET. (Court of Appeals of Maryland. April 2, 1907.) 1. APPEAL HARMLESS ERROR.

The error in striking out the answer of a witness for defendant was harmless, where defendant was thereafter permitted to fully testify as to the conversations regarding which the witness had testified in his answer.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 3. Appeal and Error, §§ 4194, 4200, 4201, 4203.1

2. GAMING-ACTION BY STOCKBROKER-CONTRACT FOR SALE OF STOCK-BURDEN OF PROOF.

In an action by stockbrokers to recover a balance due for certain stocks alleged to have been purchased for defendant, the burden of showing that the contracts were mere gambling contracts was on defendant; the law presuming their validity.

[Ed. Note. For cases in point, see Cent. Dig. vol. 24, Gaming, § 100.]

3. BROKERS-ACTIONS FOR ACCOUNTING.

Where, in an action by stockbrokers to recover a balance due for certain stocks alleged to have been purchased for defendant, there was no evidence of the market value of the stocks at the time of an alleged order to sell, an instruction that, even though plaintiffs failed to execute defendant's order to sell certain shares of stock, there was no evidence to show that defendant suffered any damage by reason thereof, was correct.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 8, Brokers, § 33.]

4. SAME-FAILURE OF BROKER TO OBEY INSTRUCTIONS-DAMAGES.

A stockbroker, failing to obey the orders of a customer regarding the sale of stocks, is liable only for the actual loss which the customer sustains by reason of such failure.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 8, Brokers, § 36.]

Appeal from Baltimore City Court; Daniel Giraud Wright, Judge.

Action by Zell & Merceret against Ernest F. King. Judgment for plaintiffs, and defendant appeals. Affirmed.

Argued before BRISCOE, BOYD, PEARCE, SCHMUCKER, BURKE, and ROGERS, JJ.

James McEvoy, Jr., and George R. Willis, for appellant. W. G. Bowdoin, Jr., and Frank Gosnell, for appellees.

SCHMUCKER, J. The appellees, Zell & Merceret, who are stockbrokers, obtained a judgment in the Baltimore City court against the appellant, Dr. E. F. King, for a balance due for certain stocks purchased for him, and he took the present appeal therefrom. The record contains four bills of exceptions, two to rulings on evidence, and two to the court's action on the prayers. There is evidence in the record tending to prove the following facts: On January 25, 1900, Zell & Merceret purchased on margin for Dr. King 10 shares of Cotton Duck common stock, and on February 8th they purchased in the same manner for him 20 shares of Guardian Trust Company stock. While these stocks were being carried on margin, the corporations which had issued them were merged into other companies, with the result that 9 shares of the Cotton Duck common stock were converted into six shares of stock of the United States Cotton Duck Company, and the 20 shares of Guardian Trust Company stock were converted into 10 shares of Maryland Trust Company stock, and the remaining 1 share of Cotton Duck common stock was sold. Zell testified that King consented to these conversions and sale of stock, and King denied consenting to them, but admitted that he had acquiesced in them, after they had been made, and continued to put up margins with Zell & Merceret for carrying the converted stocks, and received credit on his account for the dividends declared on them. Statements of account, 11 in all, of the dealings between the parties in reference to these stocks were from time to time rendered by Zell & Merceret to King, who received them and made no objection to their contents. On these statements, some of which appear in the record, King was charged with the price paid for the stock and interest thereon, and was credited with the amounts from time to time paid by him on account and interest, and a balance was struck. The Maryland Trust Company stock, which represented the Guardian Trust Company stock that had been purchased at a cost of $126.58 per share, amounting in the aggregate to $2,531.70, declined heavily, and Zell & Merceret made successive demands upon King for additional margin thereon. For a time he responded to these demands, putting up in all $750 of margins in addition to the dividends credited to him; but thereafter he failed to respond to any further demands. Zell & Merceret thereupon, after giving notice to King, sold the Maryland

Trust stock, and credited the account with the proceeds of sale, and sued King in the Baltimore City court for the balance due on the account, and recovered the judgment from which the present appeal was taken.

Zell & Merceret both testified positively that the stocks involved in the account were actually purchased at the Stock Exchange in Baltimore, in which they held a membership, and paid for by them for the account of King, and Merceret testified explicitly that the firm were ready at all times to deliver the certificates to King, and would have done so at any time upon receipt from him of the balance due them thereon, and their testimony was uncontradicted. King testified that Merceret, before he went into the firm of Zell & Merceret, had frequently solicited and obtained from him orders for bucketshop dealings in stocks, and that he (King) had indulged in bucket-shop stock transac- · tions with several different parties, but in none of those ventures had there been any actual purchases of the stocks. He said: "I had it with several men of that kind, in what they call bucket shop's, but I never dealt in any regular board way before on the exchange. That is the first I ever had in that way." King also testified that, after he had put up all the money he could spare as margins, he went to Zell & Merceret's office, and told Mr. Zell that he (King) had put up money enough on this thing, that it was no good, and further said to him: "I want you to sell it at the market price.' He (Zell) replied: 'It is suicidal to try to sell out at any such price as this. It is outrageous to think of doing so.' I said: 'I do not care whether it is outrageous or not. I want it sold, and I ain't going to put up any more money. I don't want it any longer.' He said we are not going to sell it, but 'will carry it.' I said, "Then you will carry it at your own expense,' and I went out." King said this occurred a few days after he paid the last $100 on October 1, 1903. There is no evidence in the record showing what was the market price or the value of the stock at that time. Merceret, when on the stand, was asked in cross-examination whether he had any conversation with King after the purchase of the Guardian Trust stock, and, if so, what King said. The witness replied: "He said to me one day he met me on the street, he said: 'Frank I came to your office to see you, but you were not about.' He seemed very much worried at the time, Dr. King was. He said: 'I gave Mr. Zell the order to sell my Maryland Trust stock, and he said that it would be suicidal, and not to do it, that he would carry it.'" The court, upon motion of the plaintiff, struck out this answer, and its action in so doing forms the subject of the first exception.

The appellees, in support of their objection to this answer, rely mainly on section 3 of article 35 of the Code of Public General Laws, which in part provides as follows:

Nor shall it be competent in any case for any party to the cause who has been examined therein as a witness to corroborate his testimony when impeached by proof of his own declaration or statement made to third persons out of the presence and hearing of the adverse party. But there

was here no attempt on the part of King to corroborate his own testimony, for he had not yet gone upon the stand when the answer of Merceret was made. We think the answer should not have been stricken out; but the defendant was not injured by the court's action, as he himself testified fully as to what he told Zell to do with the stock, and Merceret later on in his testimony said, without objection, that King told him that he had told Zell what to do with the stock.

The second exception was to the court's overruling the objection of the defendant, and allowing Zell, when on the stand, to answer the question whether he had said to King that he would carry the stock at his own risk, when King told him to sell it. The answer to the question, if there was any answer, does not appear in the record, and we cannot therefore say whether it tended to injure the defendant or not. It may be observed, in this connection, that Zell elsewhere in his testimony denied that any interview between him and King in reference to the sale of the stock ever occurred.

At the close of the case, the plaintiffs offered the two following prayers, both of which the court granted: "(1) The plaintiffs pray the court to instruct the jury that there is no evidence in this case legally sufficient to show that, when the orders to buy the stocks mentioned in the evidence were given by the defendant to Merceret, one of the plaintiffs, said transactions were understood and intended by the parties to be a dealing in the rise and fall of the market prices of said stocks, and that the stocks were not intended by them to be bought in fact for delivery to the defendant, and that the difference in the rise and fall of said market prices of said stocks, and the profits and losses, as the case might be, was to be settled and adjusted between the plaintiffs and the defendant by the payment by the plaintiffs to the defendant of the amounts of any rise in the market prices of said stocks, and by payment by the defendant to the plaintiffs of the amounts of any losses on account of any fall in the market prices; that is to say, the jury are instructed that said dealings between the parties were not gaming or waging transactions, and the jury are further instructed that there is no evidence in the case legally sufficient to show that said transactions were other than bona fide and lawful business transactions. (2) The plaintiffs pray the court to instruct the jury that, even though they may find from the evidence that the defendant directed the plaintiffs in the month of October, 1903, to sell his 10 shares of Maryland Trust Company stock, and that the plaintiffs

failed or neglected to execute such order, there is no evidence in the case legally sufficient to show that the defendant suffered or sustained any pecuniary loss or damage by reason thereof."

There was no error in granting either of these prayers. We have already referred to the positive testimony of Zell & Merceret that the stocks were actually bought and paid for and carried by them. That testimony is uncontradicted. Even King did not undertake to say that he intended these stock purchases made through Zell & Merceret to be merely fictitious, and not actual ones, or to be mere deals in the rise and fall of the market prices of the stocks; the losses or profits to be adjusted between the parties. The law presumes the validity of the contracts, and the burden of proof to show that they were mere gambling contracts is upon the defendant. Dryden v. Zell & Merceret (decided by this court November 16, 1906) 65 Atl. 33. The second prayer is correct, because, there being no evidence in the record of the market value of the stocks at the time of the alleged order to sell them, the jury could not determine what, if any, loss was suffered by the defendant through the failure to execute the order, if they should find that the order had in fact been given.

The defendant offered the following three prayers, which the court rejected.

"(1) The defendant prays the court to instruct the jury that if the jury shall find that the transactions between the plaintiffs and the defendant were intended to be dealings in the rise and fall of the market prices of the stocks, and the same were not to be delivered, but the differences between the prices on the day of the purchase and the prices on the day of settlement to be adjusted, then the plaintiffs cannot recover. (2) That if the jury believe from the evidence that the defendant gave to the plaintiffs an order to purchase the stocks mentioned in the account in this case, and that the defendant, upon the receipt of a demand on behalf of the plaintiffs for the payment of further margin, called upon the plaintiffs and declined to make any further payment, and directed the plaintiffs to sell the stocks, and that the plaintiffs declined to so sell the stocks, and did not sell the same in accordance with the direction of the defendant, then the plaintiffs cannot recover in this case. (3) That unless the jury believe from the evidence that the stocks mentioned were actually purchased by the plaintiffs, and were in the possession of the plaintiffs from the date of the purchase of the same, and ready to be delivered to the defendant upon the payment of the balance of the purchase money therefor, their verdict must be for the defendant."

The plaintiffs excepted specially to each one of the defendant's prayers. They excepted to the first for want of legally sufficient evidence to support its hypothesis, or to show that the stock transactions between

(1) For

the plaintiffs and defendant were intended to be mere dealings in the rise and fall of the market price of the stocks. They excepted to the defendant's second prayer: want of evidence legally sufficient to support its hypothesis, and (2) because there is no evidence in the case to show that the market value of the stocks referred to at the time the alleged order to sell the stocks was given was any higher or greater than the market value of the said stocks at any period subsequently thereto, and (3) because there is no evidence in the case to show that the defendant suffered any damage by reason of the failure of the plaintiffs to execute the order for the sale of the stocks alleged to have been given by the defendant to the plaintiffs. They excepted to the third prayer because it ignores the sale of one share of Cotton Duck common stock and the conversion of the remaining nine shares of that stock into six shares of United States Cotton Duck stock and the merger of twenty shares of Guardian Trust stock into ten shares of Maryland Trust stock, and the alleged order of the defendant to the plaintiffs to sell the stocks.

There was no error in rejecting the defendant's first and third prayers. Nor was there error in rejecting his second prayer, unless it be the law, as contended by the appellant, that the failure of a broker to execute an order to sell stocks which he is carrying for a customer, instead of making him responsible to the customer for any loss caused by his failure to execute the order, releases the customer from liability to him for loss incurred in carrying the stocks before the order to sell was given. We are aware of no authority to support that contention. The cases of Zimmermann v. Heil, 33 N. Y. Supp. 391, 86 Hun, 114, affirmed in 156 N. Y. 703, 51 N. E. 1094, Rogers v. Wiley, 131 N. Y. 527, 30 N. E. 582, and Jones v. Marks, 40 Ill. 313, cited by the appellant in that connection, do not support it. On the contrary, they treat contracts between stockbrokers and their customers like contracts between other persons, and support the sound and rational doctrine that a customer, in an action against his broker for failure to obey his instructions, can only recover the actual loss which he has sustained by reason of such failure.

Finding no reversible error in the rulings of the learned judge below, we will affirm the judgment appealed from.

Judgment affirmed, with costs.

the directors for certain losses was not demurrable on the ground that one of the receivers was also a director of the company, the suit being in reality under the control of attorneys appointed by the court to institute the same in the name of the receivers, though the practice of a person in his representative capacity, suing himself as an individual, is not to be commended.

2. SAME.

The bill, in a suit against the directors of an insolvent corporation to hold them personally liable for certain losses sustained by the corporation, alleged that the directors and each and all of them failed to perform their professional duties to diligently and carefully administer the affairs of the company as they were bound to do; that they permitted the assets of the company to be wasted and the corporate property lost by negligence so culpable as to amount to a legal breach of trust; that their acts and omissions were abuses of their authority; that they failed to do what men of ordinary caution ought to have done to protect the interests of the corporation; that they disregarded not only the charter and by-laws of the company and general laws of the state, but the ordinary rules of business. The bill made specific charges of negligence which were alleged to have resulted in loss to the company, alleging the failure to attend meetings, failure to use due diligence in the selection of subordinate officers, and to watch the acts of executive officers and agents, and alleged abuses of authority in making loans to officers and directors of the company, in contravention of its charter and by-laws. Held, on a demurrer to the bill by one of the directors, that the bill was not demurrable as being indefinite and uncertain and not stating with sufficient certainty any fact which would give the plaintiffs cause of complainant against him.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 12, Corporations, § 2280.]

3. EQUITY-BILL-MULTIFARIOUSNESS.

A bill in equity by the receivers of an insolvent corporation, to enforce the liability of the directors of the company for certain losses. made charges of negligence which were alleged to have resulted in great loss to the company against the directors and each and all of them, in that they failed to attend meetings, failed to use due diligence in the selection of subordinate officers and agents, and to watch the acts of the executive officers and agents, and to do what men of ordinary caution ought to have done to protect the interests of the corporation, and alleged abuses of authority and breach of their contractual relations with the corporation in wasting its assets and in making loans to officers and directors of a company in contravention of its charter and by-laws. Held, on a demurrer to the bill by one of the directors, the bill was not demurrable as being multifarious. [Ed. Note.-For cases in point, see Cent. Dig. vol. 19, Equity, § 340.]