have referred was to annul and avoid the policy. For while there is some conflict in the decisions elsewhere as to whether the purchaser of personal property under a conditional contract of sale is the sole and unconditional owner thereof (20 L. R. A. [N. S.] 779 note), there can be no question as to the rule in force in this state, since the decision in Westchester Ins. Co. v. Weaver, 70 Md. 542, 17 Atl. 402, 5 L. R. A. 478, in which this court said:

"The sale by Willig & Co. to the plaintiff was a conditional sale, and the title did not vest in the plaintiff until all the conditions had been complied with, and he was not, as the policy expressly required him to be, the unconditional owner of it at the time of the insurance. The clause in the instrument of sale which requires the plaintiff to pay the full value, in case of the destruction by fire, does not affect the question. The terms of the policy required him to be the unconditional owner, at the time of the insurance, and this, it appears, he was not."

And while there is some conflict in the decisions the weight of authority supports that

view. Ballard v. Globe & Rutgers Fire Ins. Co., 237 Mass. 34, 129 N. E. 290; Spring

field F. & M. Ins. Co. v. Chandlee, 41 App. D. C. 209; 14 R. C. L. 1059; Insurance Co. v. Erickson, 7 Ann. Cas. 499.

consent. Worthington v. State, 58 Md. 403, 42 Am. Rep. 338; Canton Bank Co. v. American Bond. Co., 111 Md. 45, 73 Atl. 684, 18 Ann. Cas. 820; Williams v. Fidelity Co., 105 Md. 490, 66 Atl. 495.

Applying these principles to the facts before us, we cannot say that Alderhardt's action in driving the car on the Annapolis road on the day in question amounted in law to larceny. His possession of it was that of a bailee, and not that of a servant, and its possession had been intrusted to him both by the appellant and the garage company, and it does not appear that he committed any fraud in obtaining such possession, and as the general rule is that in order to convict of larceny, under such circumstances it is necessary to prove a "fraudulent intention on the part of the accused at the time of the

bailment by which fraud he obtained such special possession" ([11th Ed.] Wharton, Cr. L. 1418), it follows that his act did not constitute larceny. When the appellant dismissed Alderhardt at 12 o'clock, he did not

tell him to take the car back to the garage, but only told him to return with it at 2 o'clock in the afternoon; that is, he left it in Alderhardt's possession, without giving him any directions at all as to where the car

was to be taken or what was to be done with it during that time, but left those mat

while the chauffeur abused the confidence thus placed in him, and used the property intrusted to his care for his own pleasure, his conduct, while wrongful and reprehensible, did not amount in law to larceny, in the absence of any evidence tending to show an intention of stealing the car; and, while he acted in a reckless and wanton disregard of the appellant's rights and interests, it does not appear that he did so with any expectation of personal gain, or that he intended to permanently convert the automobile to his use.

[3] But even if it could be assumed that the policy was in force at the time the ap-ters to the discretion of the chauffeur; and, pellant suffered the loss for which he seeks to recover in this case, the action could not be maintained, because the record contains no evidence to support his contention that his loss was due to the "theft, robbery or pilferage" of the automobile referred to. The words "theft," "robbery," and "pilferage" all describe some form of larceny. "Theft" is a "popular term for larceny" (Bouvier L. Dict.; Hochheimer's Cr. L. par. 355); "robbery" is larceny from the person, accompanied by violence or by putting in fear (1 Leach, 195; Com. v. Humphries, 7 Mass. 242); while "pilferage" means stealing (Becket v. Sterrett, 4 Blackf. [Ind.] 499, 500), or petty larceny (Bouvier L. Dict.). Larceny has been defined as the "fraudulent taking and carrying away of a thing without claim of right, with the intention of converting it to a use other than that of the owner without his consent." 2 Wharton, Cr. L. 1313 (11th Ed.). It is essential to the crime of larceny that there be a fraudulent taking from the possession of another, without his pellee.

Under such circumstances, in our opinion, the appellant failed to show that the loss of which he complains was due to the "theft, robbery or pilferage" of the automobile. Gunn v. Globe & Rutgers F. Ins. Co., 24 Ga. App. 615, 101 S. E. 691.

Finding no error in the rulings of the lower court, the judgment appealed from will be affirmed.

Judgment affirmed, with costs to the ap

(139 Md. 413)

(115 A.)

inquiries as to the defendants' financial standEDELEN et al. v. FIRST NAT. BANK OF ing, or that the account of the person placing

HAGERSTOWN. (No. 8.)

(Court of Appeals of Maryland. Nov. 16, 1921.)

1. Bills and notes 343- Bank held holder in due course.

Where notes were presented to a bank as collateral by a known patron for moderate loans made in the customary way, and intended and used for purposes of investment in a local enterprise, the fact that the notes were truthfully said to have been given for stock in an oil producing and refining company, and that the bank did not inquire of the bank where by their terms they were made payable, held not to affect the position of the bank as a holder in due course; such bank having no actual knowledge that the notes were obtained by fraud, under Code Pub. Gen. Laws 1904, art. 13, §§ 71, 74, 75, 78.

2. Bills and notes 537 (6)-Court may instruct jury that plaintiff is holder in due

course.

the notes with the bank as collateral was allowed to be overdrawn subsequent to the loan for which he pledged the notes.

Appeal from Circuit Court, Montgomery County; Edward C. Peter and Glenn H. Worthington, Judges.

Action by the First National Bank of Hagerstown against Edward G. Edelen and another. Judgment for plaintiff, and defendants appeal. Affirmed. See, also, 115 Atl. 602.

Argued before BOYD, C. J., and BRISCOE, THOMAS, PATTISON, URNER, STOCKBRIDGE, ADKINS, and OFFUTT, JJ.

Robert B. Peter, of Rockville, and L. Allison Wilmer, of Leonardtown (Mitchell & Digges, of La Plata, on the briefs), for appellants.

Thomas L. Dawson, of Rockville, and Harvey R. Spessard, of Hagerstown (Henry F. Wingert, of Hagerstown, Ferdinand C. Cooksey, of La Plata, and Dawson & Daw. son, of Rockville, on the briefs), for appellee.

Under Code Pub. Gen. Laws 1904, art. 13, § 78, providing that the burden is on the holder of a note to prove that he acquired the title as a holder in due course when it is shown URNER, J. The principal question in this that the title of one who has negotiated the instrument was defective, the court may right-case is whether the court below erred in fully instruct the jury that there is no evidence granting a prayer which instructed the jury legally sufficient to show that plaintiff had any that the plaintiff bank was entitled to recovknowledge or notice of the defect, where the er the amount of the two promissory notes plaintiff proves the circumstances under which sued on if they were signed and indorsed by he acquired the instrument, and the evidence the defendants and were delivered to the thus offered is uncontradicted, and the proven plaintiff for a valuable consideration before circumstances do not admit of a rational in-maturity, and if the plaintiff, at the time it ference of knowledge or bad faith. acquired the notes, had no notice of any

3. Bills and notes 509-Statement of party fraud in their obtention or any failure of the held inadmissible in action of note.

In action by a holder of note obtained by fraud, in that stock for which they were given was never delivered, court properly refused to allow defendants to prove that after the maturity of the notes the president of plaintiff

bank offered to see that defendants would re

ceive the stock for which the notes were given if they were paid, as it did not tend to show that plaintiff, when it accepted the notes knew that the stock had not been delivered; it appearing from defendants' testimony that they had themselves furnished this information to the plaintiff after the notes' maturity and before the president made the proposal.

4. Bills and notes 501-Offered evidence held properly excluded as immaterial in action on note.

In action by holder of note obtained by fraud, in that stock for which given was not delivered, court properly refused to admit evidence offered by the defendant as to their ownership of property, or answer to a question asked the president of plaintiff bank in regard to his subsequent investigation as to value of such stock, some of which was pledged to the bank as collateral along with the note, or that after the notes became due the bank made

consideration therefor, and then concluded with the statement that there was no evidence in the case legally sufficient to show that the plaintiff had any knowledge or notice of such fraud or failure of consideration. It is to the concluding portion of the instruction that the defendants object. They contend that the trial court was not justified in thus disposing of the question as to whether the plaintiff took the notes with notice of their proven infirmity. The verdict and judgment being in the plaintiff's favor, the defendants have appealed.

The two notes on which the suit is based are identical in amount and terms. Each is dated, "Leonardtown, Md., Jan. 18, 1919," is for the sum of $700, and is payable four months after date "to the order of myself." They were made "negotiable and payable at the First National Bank of St. Mary's, at Leonardtown, Md." The defendants signed the notes both as makers and indorsers. As thus executed, they were delivered to a cer tain J. C. Gordon in substitution for notes which he had obtained from the defendants about a month previously for 200 shares of

the capital stock of the Wright Producing & Refining Company sold to each of them at that time. The stock was not delivered, and the notes which those in suit were intended to replace were never returned. On March 10, 1919, all of the notes referred to were pledged by Gordon to the plaintiff, the First National Bank of Hagerstown, Md., as collateral security for a loan of $500. As additional security two notes of other persons for amounts aggregating $1,500 were pledged. A week later Gordon procured from the bank a further loan of $3,500 on the collateral already furnished, to which he added 400 shares of stock of the Wright Producing & Refining Company.

The proceeds of the loans were used in the purchase of a restaurant business in Hagerstown, for which Gordon had contracted some time before his application for the loans, and when he acquired title to the restaurant he gave the bank a chattel mortgage on the stock and fixtures as additional security for his indebtedness. Prior to the first loan he was operating the restaurant while he was awaiting a transfer of the title. He was a depositor with the bank for some weeks before he asked for a loan, and he exhibited to its officers several deposit books of other banks showing substantial credits in his fa

vor.

"Every holder is deemed prima facie to be a holder in due course, but when it is shown that the title of any person who has negotiated the instrument was defective, the burden is on the holder to prove that he, or some person holder in due course." under whom he claims, acquired the title as a Section 78.

"A holder in due course is a holder who has taken the instrument under the following conditions: 1. That it is complete and regular on its face. 2. That he became the holder of it before it was overdue, and without notice that it had been previously dishonored, if such was the fact. 3. That he took it in good faith and for value. 4. That at the time it was negotiated to him he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it." Section 71.

"To constitute notice of an infirmity in the instrument or defect in the title of the person negotiating the same, the person to whom it is negotiated must have had actual knowledge facts that his action in taking the instrument of the infirmity or defect, or knowledge of such amounted to bad faith." Section 75.

In this case the plaintiff unquestionably acquired the notes before maturity and for value. The only inquiry is whether it accepted them without knowledge of the fraud in their origin, or of such facts as would subject it to the imputation of bad faith in

the transaction.

[1] The circumstances under which the notes were presented to the bank were not The transactions relating to the loans for such as to create a doubt as to their validwhich the defendant's notes were pledged as ity. They were offered by a known patron collateral were conducted on behalf of the of the bank as part of the collateral secubank by its president and cashier. The tes-rity for moderate loans made in the customtimony of those officers shows that they ac-ary way, and intended and used for the purcepted the notes in the usual course of busi-poses of an investment in a local enterprise. ness as collateral security for the loans de The fact that they were truthfully said to scribed, for which only the legal rate of in- have been given for stock in an oil producing terest was charged, and that they had no and refining company was certainly not sufknowledge as to the circumstances under ficient to raise an inference that they were which the notes were obtained from the de- obtained by fraud. In their testimony as to fendants. They were informed by Gordon the fraud actually committed the defendants that the notes had been given for oil stock, did not refer to the value of the stock, but and they were assured by him that the mak-complained of its nondelivery. It is suggesters and indorsers were financially responsi-ed that inquiry in reference to the notes ble. It was testified by the president that one of the motives for making the loans was to secure deposits for the bank from the restaurant business to the purchase of which the proceeds of the loans were to be applied. Deposits were subsequently received by the bank from that source for a time, but Gordon left Hagerstown towards the end of the year and the restaurant was sold under the bank's chattel mortgage.

It is not disputed that the notes involved in this suit were obtained by fraud, and that the title of the person who pledged them with the bank was defective within the meaning of the Negotiable Instrument Act (Code, art. 13, § 74). Under such conditions the following provisions of the act are appli

should have been made of the Leonardtown Bank, where by their terms they were made payable. But the omission to make such an inquiry could hardly be held to affect the position of the plaintiff as a holder in due course. The designation in a promissory note of a bank at which it is to be presented for payment at maturity does not indicate that information will be available there as to the circumstances under which the note was executed. There is nothing in the record to support the theory that the plaintiff's officers designedly refrained from seeking independent information as to the origin of the notes offered in this instance. The proof wholly fails to prove the existence of conditions which might have imposed the duty

(115 A.)

tion. Under the plain terms of the law it is entitled to the rights of a holder in due course, unless it had "actual knowledge of the infirmity" in the notes, or "knowledge of such facts that its action in taking the notes amounted to bad faith." There is no reason in the evidence for the conclusion that the plaintiff was possessed of such knowledge. No rational inference can be drawn from the record that the plaintiff actually knew of any fraud or failure of consideration affecting the notes, or was cognizant of any facts on account of which its good faith in the transaction could be denied.

was placed upon the cases of Canajoharie Nat. Bank v. Diefendorf, 123 N. Y. 191, 25 N. E. 402, 10 L. R. A. 676; Arnd v. Ayleseworth, 145 Iowa, 185, 123 N. W. 1000, 29 L. R. A. (N. S.) 638, and Griffith v. Shipley, Cover v. Myers, and Arnd v. Heckert, supra. Each of those cases involved conditions which gave support to the inference of bad faith in the plaintiff's acceptance of the negotiable instrument on which the suit was instituted. In the pending case no such conditions are presented.

has been shown, must be wholly consistent with the theory that he was not guilty of bad faith in its acquisition. This is the theory upon which the decisions of this court in such cases have uniformly proceeded. In the cases in which proposed instructions as to the legal insufficiency of the evidence to prove bad faith on the part of the plaintiff were disapproved, the reason assigned for such a ruling was not simply that the burden of proof was on the plaintiff as to that issue, but that there were circumstances from which bad faith could be inferred. Totten v. Bucy, 57 Md. 446; Williams v. [2] In view of the conclusión just stated, Huntington, 68 Md. 591, 13 Atl. 336, 6 Am. the instruction we are considering must be St. Rep. 477; Griffith v. Shipley, 74 Md. 599, approved, unless a contrary ruling is requir- 22 Atl. 1107, 14 L. R. A. 405; Cover v. Myed by the provision, already quoted, that "the ers, 75 Md. 406, 23 Atl. 850, 32 Am. St. Rep. burden is on the holder to prove that he, or 394; McCosker v. Banks, 84 Md. 297, 35 Atl. some person under whom he claims, acquir- 935; Arnd v. Heckert, 108 Md. 300, 70 Atl. ed the title as a holder in due course," when 416. Upon the undisputed facts of the presit has been "shown that the title of any per-ent case the instruction to which we have reson who has negotiated the instrument is de- ferred was properly granted. fective." If the existence of such a burden The cases cited in opposition to the view of proof under the conditions mentioned in just expressed were very different from the the act is incompatible with the exercise of one now being decided. Special reliance authority by the court to determine whether in a particular case the evidence is legally sufficient to justify the inference that the plaintiff had knowledge of an infirmity in the note or acted in bad faith in acquiring it, then it would be necessary to hold that the instruction in question should not have been granted. But we do not understand the law to have that effect. In the case of Valley Savings Bank v. Mercer, 97 Md. 458, 55 Atl. 435, the right of the court to pass upon the legal sufficiency of the evidence on such an issue was distinctly recognized, and an instruction was approved which was virtually identical in terms with the one now under review. The effect of the transfer to the plaintiff of the burden of proof upon a question of this nature is to make it incumbent upon him to prove the circumstances under which he acquired the instrument upon which he seeks to recover. If the evidence thus offered is uncontradicted and the proven circumstances do not admit of a rational inference of knowledge or bad faith on the part of the plaintiff, the court may rightfully so instruct the jury. To adopt the contrary view would mean that in every suit by an indorsee of a negotiable instrument, affected by some original infirmity, the question as to whether the plaintiff acted in bad faith would have to be submitted to the jury no matter how conclusively his good faith may be proven by the uncontradicted evidence. It is not the mere denial of [4] The second and third exceptions relatknowledge by the plaintiff that entitles him ed to the exclusion of evidence offered by the to an instruction in his favor on such an is- defendants as to their ownership of properBut the circumstances under which he ty. A question asked, and disallowed, in took the note, and which he has the affirma- the cross-examination of the president of the tive duty to prove after its fraudulent origin bank in regard to his subsequent investiga

sue.

The prayers offered by the defendants were properly refused, as they were in conflict with the plaintiff's granted prayer which we have approved.

[3] Six exceptions were taken to rulings on the admissibility of testimony. The first was to the refusal of the court to allow the defendants to prove that some time after the maturity of the notes sued on the president of the plaintiff bank offered to see that the defendants would receive the stock for which the notes were given, if they were paid. This did not tend to show, as the defendants suggested, that the plaintiff knew, when it accepted the notes, that the stock for which they were given had not been delivered; it appearing from the defendants' testimony that they had themselves furnished this information to the plaintiff after the notes matured and before the president of the bank made the proposal to which the exception refers.

tion as to the value of the oil company stock! Action by the First National Bank of Hapledged with the bank as collateral, forms gerstown against Edward G. Edelen. Judgthe basis of the fourth exception. The two ment for plaintiff, and defendant appeals. remaining exceptions refer to the rejected Affirmed. offers to prove that, after the notes became due, the bank made inquiries as to the defendants' financial standing, and that the account of Gordon was allowed to be overdrawn during the period subsequent to the loans for which he pledged the notes as collateral security. The proffered testimony to which the five last noted exceptions relate was clearly immaterial.