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Company a swinging draw-bridge at the cross- structure or working of the bridge rendered it ing of its road over Amelia River, in Florida, liable to be injured or destroyed by vessels naviin accordance with a submitted plan and trac-gating the river, and what number of hands ings, for the sum of $4,360, the bridge to be were required to work the draw bridge, and made of iron except the cords, and ready for what number would be necessary if it had been delivery to the Company by the first of Febru- properly constructed. ary following, and the money for its construction to be paid on its completion in accordance with the specifications.

The exclusion of these interrogatories and the answers to them constitutes the first error assigned for a reversal of the judgment. The objection to them was that they related to speculative damages. This objection cannot ap

The present action is brought upon this contract, and is in form to recover damages for its breach, but in fact to recover the money stipu-ply to two of the inquiries, the first and the last 257*] lated for the *work, the plaintiffs contending that the bridge was constructed by them in accordance with the contract, and was received by the Company in the summer of 1867. In defense to the action the Company sets up part payment of the demand, and also alleges that the bridge was constructed in an imperfect and defective manner, so as to be unfit for the uses for which it was designed, and that to remedy its defects and make it of use, the Company was compelled to incur large expenditures for material and labor, and was subjected to special damages by the detention it caused to a vessel on the river. The expenditures thus incurred and the special damages thus sustained, the Company seeks, by way of recoupment, to deduct from the demand of the plaintiffs.

On the trial the defendant introduced evidence to show that the bridge was improperly constructed; that the draw was defective and worked with difficulty: that the contractors were frequently notified of the defects and that they had admitted that the arrangements were imperfect and had made repeated efforts to remedy the defects until September, 1869; that the floor-beams and stringers placed in the bridge were made of wood instead of iron and that the difference between their cost and that of iron beams and stringers was about $2,500; that the bridge was not completed so as to enable the cars of the Company to cross upon it until the summer of 1867, and although then used by the Company for the passage of cars, it was never formally received as constructed in accordance with the contract.

The defendants also offered the deposition of a witness by the name of Meador, taken in the case, and part of it was received and read. Some of the interrogatories to this witness and his answers to them were excluded. The deposition as read showed that the witness had acted as engineer of the Florida Company during the construction of the bridge and until the summer of 1869; that its construction did not fulfill the conditions of an ordinary railroad draw-bridge, on account of the difficulty in opening and closing it; that it was not in good 258* working order at any time during his connection with the road; that the defects in the turning arrangements were communicated to the plaintiffs soon after the bridge was built, and that complaints continued to be made until he left in 1869.

The interrogatories, the answers to which were excluded, inquired whether the structure and arrangements of the bridge caused any injury or damage, hindrance or delay to the Company in the running of its railroad, and whether any hindrance or delay was caused by the imperfect construction of the bridge to any vessel in the navigation of the river, and whether the

stated. The damages sustained by the Company by any detention of its cars from the imperfect working of the bridge would be the subject of actual estimation; and the same thing may be said when the difference was ascertained between the number of hands required to work the bridge and the number necessary if it had been properly constructed. The facts the inquiries sought to elicit would at least have furnished elements to the jury for a just estimate of the damages to be recouped from the demand of the plaintiffs. All damages directly *arising from the imperfect character of ]*261 the structure which would have been avoided had the structure been made pursuant to the contract, and for which the defendant might have instituted a separate action against the contractors, were provable against their demand in the present action. The law does not require a party to pay for imperfect and defective work the price stipulated for a perfect structure; and when that price is demanded, will allow him to deduct the difference between that price and the value of the inferior work, and also the amount of any direct damages flowing from existing defects, not exceeding the demand of the plaintiffs. This is a rule of strict justice, and the deduction is allowed in a suit upon the contract to prevent circuity of action. In some States the law goes further and permits the defendant to recover judgment for any excess in his damages over the demand claimed. But, although the interrogatories were pertinent and proper in themselves, we are unable to decide whether any barm resulted from the ruling of the court in excluding them and the answers obtained, for the answers are not contained in the record. For aught that we can know, the witness may have answered that he was unable to state what injury or damage, hindrance or delay was occasioned to the Company in the running of the road by the defective character of the bridge, or what number of hands were employed or would have been necessary if the bridge had been properly constructed. We cannot, therefore, see that any harm resulted to the defendant from the exclusion. Whatever may be the rule elsewhere, to render an exception available in this court it must affirmatively appear that the ruling excepted to affected or might have affected the decision of the case. If the exception is to the refusal of the interrogatory, the record must show that the answer related to a material matter involved; or, if no answer was given, the record must show the offer of the party to prove by the witness particular facts, to which the interrogatory related, and that such facts were material. Such has been the decision of this court in several cases, and was distinctively affirmed at the *present term in the case of Packet Co. [*262

com

a specified day, was not excused by the fact that there was a latent defect in the soil in consequence of which the walls sank and cracked, and the house became uninhabitable and dangerous and had to be partially taken down and rebuilt on artificial foundations. The present is a much stronger case for the application of the same principle. Here there was no latent defect discovered after the work was menced. Whatever defect there was, was necessarily known to the agent of the contractors under whose supervision both the pier and the bridge were constructed. His knowledge in this particular was their knowledge. The contract called for the construction of a bridge upon which the cars of the Company could cross, and implied that the bridge should be serviceable for that purpose and capable of be- [*264 ing used with the like facility and ease as similar bridges properly constructed are used. If the condition of the pier, by its variation from a level or any other cause, prevented this result from being attained, it was the duty of the contractors to insist upon its alteration or to make the necessary alteration themselves. The position of counsel is, therefore, not tenable, and the instruction of the court upholding it was erroneous.

v. Clough, ante, 406. We must, therefore, dis- | ready for occupation, and be delivered over on miss the first assignment of error as untenable. But the defendant also offered to prove by experts, among other things, that the plan of the machinery and the machinery itself on which the bridge rested and swings, was so defective and so unskillfully put up, and the turning gear itself was so defective and unskillfully attached that it took eight or ten men to swing the bridge, and that the bridge had to be swung twice a week on an average at a cost of fifteen dollars each time; and that under a contract to build such a draw-bridge as is specified in the contract between the parties, it is the common understanding among persons skilled in bridge building that the bridge should be so constructed as to be easily turned in two or three minutes by one man; and also, that the quality of the material of the bridge, both wood and iron, was bad, and was put together in an unworkmanlike manner. The circuit court held that the proof thus offered was inadmissible and irrelevant, and in this ruling there was manifest error. It in fact denied the right of the defendant to set up any damages sustained by way of recoupment. Whereas, that right exists in all cases where an action is brought upon a building contract, which imposes mutual duties and obligations, and there has been a breach of its terms, either in the manner or time of execution, on the part of the plaintiffs, for which a cross-action might be maintained by the defendants.

The counsel of the plaintiffs seek to avoid the error of this ruling by insisting, that the imperfect working of the bridge was owing to a defect in the pier and not to any defect in the bridge, and that it was the duty of the defendant to put the pier in proper order to receive the bridge. The court below took this view of the duty of the defendant, and instructed the jury, in substance, that for any defects in the pier the defendant was alone chargeable, and that if the difficulty in turning the bridge arose 263*] from a defect in the pier and not *in the bridge, the plaintiffs were not responsible to the defendant for the result and consequent damages. The evidence shows that the pier was built under the supervision of an agent of the contractors, and in accordance with his directions, and was adopted by him as sufficient. He was superintendent in the construction of the bridge, and the plaintiffs were bound and he as their superintendent was bound, before proceeding with the construction, to see that the pier was in a proper condition for the bridge. His adoption of the pier as built was, therefore, directly within the sphere of his agency. The alleged defect in the pier, if any existed, consisted in its variation from a level as it was originally laid and, of course, as justly observed by counsel, was patent to the builders at the inception and at every stage of the construction. Under such circumstances, the contractors can no more justify their proceeding with the work without satisfying themselves of the fitness of the pier for the superstructure intended, than they could justify the erection of the bridge at some other point on the river. In the case of Dermott v. Jones, 2 Wall., 7, 17 L. ed. 764, it was held that the performance of a contract to build a house for another on his soil, and that the work should be executed. finished, and

Other exceptions were taken to the rulings of the court, but as we have noticed those that went to the substance of the defense and the attempted answer to it, it is unnecessary to consider the case further.

The judgment must be reversed and the cause remanded for a new trial.

GEORGE JEROME and Fernando C. Beauman,
Assignees of the Lake Superior Ship-Canal,
Railroad and Iron Company, a Bankrupt, Im-
pleaded with the Lake Superior Ship Canal,
Railroad, and Iron Company, and the Union
Trust Company of New York, Appts.,

0.

THOMAS N. MCCARTER, Trustee.

(See S. C., 21 Wall., 17-33.)

Security on appeal—when new security ordered -security in foreclosure case.

1. The justice who takes the security on appeal is the sole and exclusive judge of what it should be, and his decision is final, unless he violates a statute or rule of practice.

2. If, after the security has been accepted, the circumstances have changed, So that security which, at the time it was taken, was "good and sufficient," does not continue to be so, this court may, upon a proper application, so adjudge and order as justice may require.

3. The proper security on an appeal in a mortgage foreclosure case considered.

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Messrs. Alfred Russell and Geo. F. Edmunds, in support of motion.

Messrs. Matt. H. Carpenter, W. P. Wells, F. Knox & Crosby A. Hopkins and W. H. Peckham, in opposition to motion.

28*] *Mr. Chief Justice Waite delivered the opinion of the court:

This is a bill filed by a junior mortgagee of the Lake Superior Ship-Canal Railroad and Iron Company against the Company, a Bankrupt, and its assignees in Bankruptcy, for the foreclosure of his mortgage and a sale of the mortgaged property, subject to certain prior incumbrances. The decree appealed from ordered the payment of $1,057,686.37 to the complainant by the Company or the assignees, and in default of such payment, the sale of the mortgaged property, subject to an incumbrance thereon of $1,500,000 and upwards. From this decree both the Company and the assignees have appealed. The justice who granted the appeal and signed the citation accepted a supersedeas bond in the sum of $10,000. The appellee now moves to increase the amount of the bond and require additional sureties.

The 22d section of the Judiciary Act of 1789 provides that every justice or judge signing a citation or any writ of error shall take good and sufficient security that the plaintiff shall prosecute his writ of error to effect and answer all damages and costs if he fail to make his plea good. The 23d section provides that if the judgment or decree is affirmed upon the writ of error, the court shall adjudge and decree to the respondent in error just damages for his delay, and single or double costs, at its discretion. 1 Stat. at L., 85. The Act of 1803, 2 Stat. at L., 244, provides that appeals shall be subject to the same rules, regulations and restrictions as are prescribed in cases of writs of error.

Under the Act of 1789 the amount of the security to be taken is left to the discretion of the judge or justice accepting it. The statute is satisfied if in his opinion the security is "good and sufficient."

Doubts having arisen as to the extent of the security to be required where there was no su persedeas or stay of execution, an Act was passed directing that in such cases the amount should be such as in the opinion of the judge would be sufficient to answer all such costs as 29*] upon the affirmance *of the judgment or decree might be adjudged or decreed to the respondent in error. 1 Stat. at L., 404.

the bond ought to give good and sufficient security." Accordingly it was ordered that the suit stand dismissed unless security should be given to an amount sufficient to secure the whole judgment.

the recovery of money not otherwise secured, That was a judgment in an action at law for and the decision established a rule of practice Afterwards, in Stafford for that class of cases. V. Bk., 16 How., 139, decided in 1853, the court, with one dissenting judge, held that a supersedeas which had been allowed upon an appeal from a decree for the foreclosure of a mortgage on slaves should be vacated unless a bond was given which would secure the payment of the decree. Mr. Justice McLean, who delivered the opinion of the court, after referring to the case of Catlett v. Brodie, said: "If this construction of the statute be adhered to, the amount of the bond given on the appeal must be the amount of the judgment or decree. There is no discretion to be exercised by the judge taking the bond where the appeal or writ of error is to operate as a supersedeas." Thus the Rule which had been adopted in respect to judgments at law was extended *to decrees in chancery. It [*30 was a Rule controlling to some extent the discretion of the judge in such cases, and to be observed so long as it continued in force.

It did continue until the case of Rubber Co. v. Goodyear, 6 Wall., 156, 18 L. ed. 763, decided in 1867, and the adoption at the same time by the court of the present Rule 29. That Rule provides that where the judgment or decree is for the recovery of money not otherwise secured, the security must be for the whole amount of the judgment or decree, including just damages for delay, and costs and interest on the appeal; but in all cases where the property in controversy necessarily follows the event of the suit, as in real actions, replevin, and in suits on mortgages; or where the property is in the custody of the marshal under admiralty process, as in case of capture or seizure; or where the proceeds thereof, or a bond for the value thereof, is in the custody of the court, indemnity in all such cases is only required in an amount sufficient to secure the sum recovered for the use and detention of the property, and the costs of the suit, and just damages for the delay and costs and interest on the appeal. Such was the established Rule of practice under the Act when the bond now in question was taken. To some extent the old practice had been changed. The Act itself remained the same, but experience had shown that the rules which had been adopted to give it effect were not suited to all the cases arising under it, and the new Rule was made for the better adaptation of the practice to the protection of the rights of litigants.

In Catlett v. Brodie, 9 Wheat., 553, decided in 1824, this court held that in cases where the writ of error operated as a supersedeas, the security ought to be sufficient to secure the whole amount of the judgment. Mr. Justice Story, in delivering the opinion of the court, said: "It has been supposed at the argument that the Act meant only to provide for such damages and costs as the court should adjudge for the delay. But our opinion is that his is not the tive interpretation of the language. The word 'damages' is here used not as descriptive of the nature of the claim upon which the original judgment is founded, but as descriptive of the indemnity which the defendant is entitled to if the judgment is affirmed. Whatever losses he In Black v. Zacharie, 3 How., 495, it was may sustain by the judgment's not being satis-held that in such a case the *justice tak- [*31 fed and paid after the affirmance, these are the ing the security was the sole and exclusive damages which he has sustained and for which judge of what it should be. Since then, in

This is a suit on a mortgage and, therefore, under this rule, a case in which the judge who signs the citation is called upon to determine what amount of security will be sufficient to secure the amount to be recovered for the use and detention of the property, and the costs of the suit, and just damages for the delay and costs and interest on the appeal. All this, by the Rule, is left to his discretion.

be justified in accepting a bond for a com paratively small amount.

There is another consideration which will jus

Rubber Co. v. Goodyear, supra, and French v. Shoemaker, 12 Wall., 99, 20 L. ed. 271, remarks have been made by judges announcing the opinion of the court which, if considered by them-tify the action of the judge under the rule. As selves, would seem to indicate that this discre- has been seen, the suit is brought for the fore tion could be controlled here upon an appro- closure of a mortgage. The debtor is a bank priate motion. The precise point involved in rupt Corporation. Its whole property, includ this case was not, however, before the court for ing its corporate franchises, has passed to its consideration in either of those, and we think assignees in bankruptcy. It is in no condition was not decided. We all agree that if, after to accumulate property which can be subjectthe security has been accepted, the circumstan- ed to the payment of its debts. It is, to all inces of the case or of the parties or of the sure- tents and purposes, dead. No damage can reties upon the bond have changed, so that se- sult, therefore, from the appeal by reason of the curity which, at the time it was taken, was delay in obtaining an execution against the "good and sufficient," does not continue to be Company under the provisions of Rule 92, reguso, this court may, upon a proper application, lating the practice in courts of equity, for the so adjudge and order as justice may require. collection of any balance which may remain due But upon facts existing at the time the security to the complainant upon the mortgage [*33 was accepted, the action of the justice within debt after the security is exhausted. If the the statute and within the rules of practice Company were not in bankruptcy the pendency adopted for his guidance is final. And we will of this suit would not prevent an action at law presume that when he acted every fact was pre- to recover the debt from other property pendsented to him that could have been. So, while ing the appeal. For these reasons a judge, we agree that in a proper case, after an appeal in the exercise of a reasonable discretion, might or writ of error taken here, this court may properly accept security less than would be interfere and require additional security upon sufficient to insure the payment of accumulata supersedeas, it will not attempt to direct or ing interest. even upon an appeal by the Corcontrol the discretion of a judge or justice in poration itself. respect to a case as it existed when he was called upon to act, except by the establishment of rules of practice. If we can be called upon to inquire into the action of the justice in respect to the amount of the security required, we may be as to the pecuniary responsibility of the sureties at the time they were accepted.

But it is apparent that the Corporation is only a nominal party to this appeal. The real parties in interest are the assignees. The complainant is a creditor of the estate. Upon proof of his claim he will be entitled to receive his dividend with the other creditors. The accumulated interest will participate in this dividend as well as the principal of his debt. He has, therefore, without any further security, all the indemnity which the assignees can give him without they or their sureties assume personal responsibility.

All these facts were proper for the consideration of the judge when he determined upon the amount of security necessary to indemnify the appellee against loss by the appeal. We think, therefore, upon the case made, the action of the justice approving the bond is conclusive. The motion is denied.

We understand the counsel for the appellee to contend, however, that in this case the justice dia not act within the established rule, and that on this account we may review his action. The claim is, that the Rule requires indemnity for interest upon the appeal, and this is construed to mean that the security must be such as to secure the payment of all the accumulation of interest upon the mortgage indebtedness 32*] *pending the appeal and supersedeas. This we think is not the requirement of the Rule. The object is to provide indemnity for loss by the accumulation of interest consequent upon the appeal, not for the payment of the interest. *COUNTY OF CHAMBERS, Plff. in [*317 What the loss is likely to be depends upon the facts. As to this the justice, after consideration of the case, must determine.

In this case there can be no loss to the appellee if, as is contended by the appellants, the value of the mortgage security is sufficient to pay all the incumbrances, with accruing interest, when a decree of affirmance shall be rendered upon the appeal. Neither can there be if, as is contended by the appellee, the value of the property is much less than the amount of the prior incumbrances. If, upon the case made by him, the property depreciates in value during the continuance of the appeal, he will suffer no loss, because if sold now, upon his theory, he would receive nothing. Not being worth as much as the amount of the prior incumbrances, it is not to be supposed that a purchaser can be found to take it at a price that would yield anything to apply on his debt. The appellee may lose the opportunity of bidding in the property at a reduced price and speculating upon its rise, but the loss of such profits is not recognized by the court as legitimate "damages for the delay." In either view of the case, therefore, a judge would

Err.,

v.

HENRY CLEWS and Theodore S. Fowler as
Henry Clews and Company.

COUNTY OF LEE, Plff. in Err.,

HENRY

v.

CLEWS and Theodore S. Fowler as
Henry Clews and Company.

(See S. C., 21 Wall., 317-325.)

Overruled demurrer-general issue-holders, for value, of bonds-invalid objection—revepue stamps-state decision-improper evidence.

1. Where a demurrer to a plea was wrongly overruled, the error was a harmless one, if the defendants had another plea which covered the same

ground and presented the same issue.

2. In assumpsit, any matter which shows that the plaintiff never had a cause of action may be proved under the general issue.

3. Where the plaintiffs produce the bonds and coupons sued on, the execution of them not being

conflict with state constitution not reviewable by U. NOTE. Decision that state legislation is not in s. Supreme Court-see note, 63 L. R. A. 576.

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put in issue, this establishes the plaintiff's case and establishes presumptively that they are holders for value before maturity without notice. 4. Where, by the laws of the State where the trial was, the execution of a written instrument cannot be questioned unless the defendant by a sworn plea denies its execution, and the only plea is the general issue, the objection that there was no evidence that the bonds were authorized to be is sued by the defendants, or that the seal annexed was the seal of the defendants, was not valid. 5. The objection that there were no stamps upon the bonds, as required by the Act of Congress, where the bill of exceptions is silent as to whether any or what stamps were on the bonds, cannot be considered.

revenue

6. Where the constitutionality of the Act of the Legislature authorizing the issue of the bonds, by the municipality, has been examined by the Supreme Court of the State, and the Act has been held to be valid, such decision is binding upon this

court.

7. Evidence in relation to the proposal for their issue offered by the defendant, but not offered as evidence of want of ownership or of good faith for value, or a knowledge of the defects alleged, was properly excluded.

[Nos. 80, 79.]

Argued Nov. 30, 1874. Decided Dec. 21, 1874. N ERROR to the District Court of the UnitIN ERROR to the Distilt Court of the lab

ma.

Suit was brought in each of these cases in the court below, by the defendants in error, upon certain bond coupons. Judgment having been given for the plaintiffs, the defendants sued out these writs of error.

The case is fully stated by the court. Mr. R. T. Merrick, for plaintiff in error in No. 80:

If, as the plea alleges, the bonds were issued without authority, and were void in law, and the plaintiffs were affected with knowledge of the invalidity by reason of their not being bona fide holders without notice, these were certainly valid grounds of defense which the defendants should have been allowed to establish by testimony, if it could do so.

Whether the matters stated in the plea were or were not true in fact, was a question for the jury and not one of law proper, to be decided on demurrer.

The bonds and coupons were admitted in evidence, without any testimony whatever to show that they had been authorized to be issued by the County.

"Jo. Grace, County Treasurer," without specifying of what county he is treasurer, or stating what authority he claims to possess in regard to these bonds and coupons, by reason of his office as treasurer; neither do these instruments purport to have the seal of the "Court of County Commissioners of Chambers County," declared by statute to be a court of record, vested with exclusive jurisdiction in the municipal affairs of said County, and the only authority authorized by law to issue said bonds on behalf of said County. On the contrary, they bear the seal of the court of probate, another and distinct tribunal, having no authority whatever in the municipal affairs of said County, but exercising a totally different and disdefined by statute. Revised Code of Alabama, tinct jurisdiction as a court of law, limited and

1867 § 781.

Mr. Samuel F. Rice, for defendants in error in No. 80:

The Act conferring this authority, is a general and public Act of the Legislature, of which the courts of the United States take judicial notice. See Pamphlet Acts of 1868 of Alabama, pp. 514, 520.

The constitutionality of that Act has been settled by the Supreme Court of Alabama, since its June Term, 1871.

Ex parte Selma and Gulf R. Co., 45 Ala., 696, 724; see also Lockhart v. Troy, 48 Ala. 579; Comrs. Court of Limestone Co. v. Rather, 48 Ala., 433.

Repeated decisions of the Supreme Court of the United States show that no such defenses as were disclosed in the primary court can be available against holders, for value of the coupons here sued upon, especially when, as here, the title of the holders accrued before the maturity of the bonds or coupons.

Grand Chute v. Winegar, 15 Wall., 355, 21 L. ed. 170, and cases therein cited; Lynde v. The County, 16 Wall., 6, 21 L. ed. 272; St. Joseph Township v. Rogers, 16 Wall., 644, 21 L. ed. 328; Railroad Company v. Otoe, 16 Wall., 667, 21 L. ed. 375.

The factum of no written instrument can be questioned unless the defendant has, by sworn There was plea, denied the execution of it. no such sworn plea here. Sorelle v. Elmes, 6 Ala., 706; Lazarus v. Shearer, 2 Ala., 718.

(Opinion record is entitled in both Nos. 79

and 80.)

Mr. Justice Hunt delivered the opinion of the court:

The corporate seals of the defendants, and the signatures of their authorized officers and agents, as well as their authority, must be proved before the Counties can be held liable. But it is contended that the proof above in dicated was not requisite, because the factum Clews & Company brought their action at of the instrument sued upon was not put in is-law, to procure payment for three hundred and sue by the sworn plea of defendant. seventy-two coupons attached to one hundred and fifty $1,000 bonds, issued by the County of Chambers.

Section 2,682, of the Code of 1867, provides that "All written instruments, the foundation of the suit, purporting to be signed by the defendant, his partner, agent or attorney in fact. must be received in evidence without proof of the execution, unless the execution thereof is denied by plea verified by affidavit."

The bonds purport to be issued in aid of a certain railway named in each of them, and to have been issued under the authority, and in pursuance of an Act of the Legislature of the State of Alabama, approved December 31, 1868.

It is apparent that this provision does not The defendants pleaded the general issue and apply to the instruments sued upon in this case, two special pleas. Special demurrers were infor these instruments do not purport to be terposed to the special pleas and the demurrers signed by "the defendant," nor by its "agent," were sustained. The cause was tried upon the or "attorney in fact"; they purport to be general issue and a verdict was rendered and signed by one "John Appleby, Judge of Pro- judgment given for the plaintiffs for the amount bate," without indicating in what relation said of their claim. The assignment alleges error Appleby stands to said defendant, either per-upon the trial and in the judgment upon the sonally or in his official capacity, and by one demurrers.

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