less convinced beyond a reasonable doubt, dered 2,000 plugs at 25 cents each, paid $50 on that the defendant Darling sent the former account, and instructed Henzler to ship them and talked with Conners over the latter.

C. O. D. to "F. S. George, Portland, Maine, by American Express." When asked for his address, George declined to give it. Later Henzler asked Morrison to ship the plugs C. O. D., but he refused to do it, stating that

Henzler refused to complete the purchase. About three hours later George notified Henzler that he had bought the plugs elsewhere, canceled his order, and asked for the return of his deposit.

[2-4] False representations may be made by acts as well as words. G. L. c. 277, § 39. They "may be made in any of the ways in which ideas may be communicated." Commonwealth v. Drew, 19 Pick. 179, 185; Rex it must be a cash transaction, whereupon v. Barnard, 7 Car. & P. 784. A misrepresentation as to a person's present intention may be a false pretense. Commonwealth v. Walker, 108 Mass. 309; Donovan v. Clifford, 225 Mass. 435, 114 N. E. 681. When a person enters into a contract to buy goods, he impliedly represents that he intends to make a genuine contract; if such is not his intention, he may be found to have made a false representation. Commonwealth v. Stone, 4 Metc. 43; Commonwealth v. Harley, 7 Metc. 462; Commonwealth v. Walker, supra. In such a case the intention not to pay for the goods is merely incidental; the false pretense is the assumption of a false character as a contracting party.

[5] The facts in Commonwealth v. Althause, 207 Mass. 32, 93 N. E. 202, 31 L. R. A. (N. S.) 999, make it inapplicable to the case under consideration. Moreover, there were additional facts which would justify Conners in believing that Darling was making a genuine contract. A deposit of $100 was made, the balance to be collected when the goods were delivered; and the telegram indicated that the buyer was in pressing need of the plugs to fill orders. It is not necessary to have direct evidence that a representation was false. It is enough if all the circunstances considered together would warrant the jury in concluding that it was untrue. Commonwealth v. Farmer, 218 Mass. 507, 106 N. E. 150.

[6-8] Upon the testimony the jury could have found that the defendant Darling gave a fictitious order for spark plugs, which were of little or no value, for the purpose of inducing Conners to part with his money, to Morrison with whom Darling was in collusion. Commonwealth v. Mulrey, 170 Mass. 103, 49 N. E. 91. Men are presumed to in tend the natural consequences of their own acts. Commnowealth v. Hersey, 2 Allen, 173, 174. If two parties are working with a common purpose to obtain the money of another by false pretenses, both are criminally liable. "The act of one was the act of both. Com monwealth v. Harley, 7 Metc. 462." Com monwealth v. Murley, 170 Mass. 103, 110, 49 N. E. 91, 94.

On October 28, 1922, the defendant George brought a metric spark plug to the store of Joseph W. Henzler, a dealer in automobile accessories, and asked him if he could supply plugs like the sample. Henzler told him to leave it and call the next day. Henzler then saw Morrison, who told him he could supply them at 16 cents each. Later George or

In December, 1922, Morrison tried to sell some of the spark plugs to Ramsdell, and prevailed upon him to take a few samples, saying: "Somebody may drop in and be interested in them." Within a few weeks the defendant George, giving his name as F. J. Coggswell, called upon Ramsdell with a sample plug and asked if he had any like it. Upon being shown the one Ramsdell had received from Morrison, he said he wanted to purchase a large quantity of them. Ramsdell, after communicating with Morrison and finding that he could buy them from him at 24 cents apiece, agreed to sell 1,700 to George at 40 cents each. George sent Ramsdell a cash deposit of $68 on his purchase, and ordered them shipped to F. J. Coggswell, Philadelphia, Pennsylvania, by American Express, balance C. O. D., and, when asked for his address, said he could be reached at the Continental Hotel, Philadelphia, Pa. Morrison insisted on receiving cash from Ramsdell, who paid him $408 for the plugs, which were shipped to the address and in the manner directed by George Ramsdell several times inquired of the express company about the goods, but received no payment for them and in about two weeks they were returned to him.

From the foregoing recital of facts the jury could find that the defendants Morrison and George were in a conspiracy to defraud, as alleged in both indictments; that the contracts which they purported to make with Ramsdell were not genuine; that Ramsdell parted with his money to Morrison relying on the truth of the representations made to him; and that the defendants were guilty of obtaining money by false pretenses.

[9] In the Henzler case the jury had a right to consider the Ramsdell transaction on the question of the defendants' intent; they could have found that George had performed his part of the plan by pretending to buy the plugs, making a deposit, and giving directions for shipment; and that Morrison was endeavoring to perform his when the accomplishment of his purpose was prevented by Henzler's refusal to pay cash for the goods. The parties had gone far enough by their overt acts to warrant a finding of criminal attempt. Commonwealth v. Peaslee, 177 Mass. 267, 59 N. E. 55.

(147 N.E.)

et al.*

(Supreme Judicial Court of Massachusetts. Suffolk. April 17, 1925.)

I. Bills and notes 230-Partner's indorsement of partnership note creates individual obligation, separate and distinct from firm obligation.

Partner's indorsement of partnership note creates individual obligation, separate and distinct from firm obligation.

[10] For reasons hereinbefore stated, the defendants' motions for directed verdicts INTERNATIONAL TRUST CO. v. MYERS were properly denied. Their requests for rulings also were rightly refused. The first related to the alleged false pretense and has been sufficiently considered. The second and third related to failure to prove delivery of the plugs to the addresses given. There was ample evidence to warrant the jury in reaching the conclusion that the alleged crimes were committed, without further evidence concerning delivery by the express company. In view of the testimony that George gave Ramsdell a fictitious name and had the goods sent to a city distant from his home without designating street or number, that Darling's home address, according to the hotel register, was Lewiston, Me., while the goods were ordered shipped to him at Plattsburg, N. Y., that in one of the cases the goods were being held for demurrage charges, and that neither, so far as appears, made complaint about the nondelivery of the goods, the jury could find that the goods were returned because there was no one at the places designated to pay for and receive them.

[11, 12] It is no defence to these indictments that the Conners Company and Ramsdell paid their money to Morrison in accordance with the terms of contracts made with him, under the circumstances disclosed. It could still be found that the money was obtained by Morrison as a direct result of the false pretenses of Darling and George, made in pursuance of a prearranged fraudulent scheme of which the contract made with Morrison could have been found to be a part and was, therefore, of no validity. It is not necessary to prove that the false representation was the only inducement; it is enough if it was a decisive influence. Commonwealth v. Farmer, supra. The remaining requests have been sufficiently covered in the foregoing dis

cussion.

[13] Testimony was admitted of what purported to be a telegram partly in code from someone by the name of Morrison to someone by the name of Darling. Later this testimony was stricken out and the jury told to disregard it. It must be assumed that the jury followed the instructions and that the defendants were not prejudiced. Commonwealth v. Scott, 123 Mass. 222, 25 Am. Rep. 81; Commonwealth v. Ham, 150 Mass. 122, 22 N. E. 704; Clark v. Boston & Maine Railroad, 164 Mass. 434, 439, 41 N. E. 666.

The portion of the charge objected to, taken in connection with the whole charge, was an accurate statement of the controlling principles of law which should govern the jury in deciding whether the crime of obtaining money by false pretenses had been committed.

Exceptions overruled.

2. Bankruptcy 387-Composition with creditors, effected in bankruptcy proceedings against partnership, held not to preclude enforcement of liability of individual partners on indorsement of partnership note.

In involuntary proceedings in bankruptcy against partnership, where partners listed only partnership assets and liabilities, denied individual debts or assets, and where there was no adjudication of bankruptcy, due to confirmation of composition with creditors, held, bank which held partnership note, indorsed by partners individually, and which shared assets under composition agreement, was not precluded from subsequent proceeding to enforce individual liabilities of partners.

Composition partakes of nature of contract. 4. Bankruptcy 387-Confirmation of composition with creditors discharges bankrupt from his debts.

Confirmation of composition with creditors discharges bankrupt from his debts.

5. Bankruptcy 429-Discharge of partnership has no effect on individual liability of partners.

Discharge of partnership has no effect on individual liability of partners.

Appeal from Superior Court, Suffolk County; Marcus Morton, Judge.

Suit by the International Trust Company against Samuel A. Myers, Harry Myers, and S. A. & H. Myers, a partnership. From a decree of dismissal, plaintiff appeals. versed, and decree ordered entered for plaintiff.

Re

J. R. Lazenby, of New York City, for appellant.

E. F. McClennen, of Boston (W. W. Johnson, of Boston, on the brief), for appellees.

CARROLL, J. This is an appeal from a final decree April 17, 1925, dismissing the plaintiff's bill to reach and apply the interest of S. A. Myers and Harry Myers in the partnership of S. A. & H. Myers to the payment of indebtedness arising out of their individual indorsements of a series of promissory notes. The defendants carried on business under the name of S. A. & H. Myers. The partnership gave 10 notes for

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*Certiorari granted 45 S. Ct. 640, 69 L. Ed.

(147 N.E.).

McNeal

assets; the partnership schedules stating, firm was adjudicated bankrupt. that the debtors named in the "foregoing brought a petition asking that the separate petition" make oath that the statements | estate of Francis be turned over for administherein were true. The indorsement on the tration in bankruptcy; his petition was grantschedule reads: ed. In the course of the opinion (page 701

"Debtors' Schedules-Samuel A. Myers and [33 S. Ct. 703]) it was said: Harry Myers, as S. A. & H. Myers."

The offer in composition incorporated the schedule of creditors, and it was to those

creditors who were listed in the schedulethat is, the partnership creditors-to whom the offer was made. The defendants made

no offer of compromise to individual creditors, or to any creditors except those whose names were upon the schedule. The confirmation of the composition was based on the schedule of creditors filed.

[3] A composition partakes of the nature of a contract. Cumberland Glass Manuf. Co. v. De Witt, 237 U. S. 447, 453, 35 S. Ct.

636, 59 L. Ed. 1042, citing In re Lane (D. C.) 125 F. 772, 773; Nassau Works v. Brightwood Co., 265 U. S. 269, 44 S. Ct. 506, 68 L. Ed. 1013; In re Adler (D. C.) 103 F. 444. “A law which compels a creditor, against his will, to accept in discharge of his debt just what the debtor sees fit to offer, should be strictly construed." In re Rider (D. C.) 96 F. 808, 809, 810. See In re Kinnane Co. (D. C.) 221 F. 762, 766; In re Goldstein (D. C.) 213 F. 115, 116. Under the Bankruptcy Act of 1874 (18 Stat. 178), it was decided by

this court that:

"A creditor, whose name or the amount of whose debt is not truly stated in the debtor's schedule, is not affected or prejudiced by the composition." Stone v. Simonds, 131 Mass. 457, 462.

See Hewes v. Rand, 129 Mass. 519; Ex parte Trafton, 2 Lowell, 505, 506, Fed. Cas. No. 14,133.

"It would be a third incongruity to grant a discharge in such a case from the debt considered as joint but to leave the same persons

liable for it considered as several."

In that case there was an adjudication of bankruptcy and no question arose concerning the effect of a discharge upon the individual debts of Francis apart from his individual liability for the firm debts. In Abbott v. Anderson, 265 Ill. 285, 106 N. E. 782, L. R. A. 1915F, 668, Ann. Cas. 1916A, 741, the question was: Did the adjudication in bankruptcy of the insolvent partnership partnership as individuals? It was held that carry into bankruptcy the members of the the adjudication did have this effect; that the approval of the composition discharged the partners as well as the firm of the partnership's debts. In that case there was an adjudication of bankruptcy and the question of the discharge of the individual members for their individual debts apart from the firm debts was not involved. See in this connection Liberty National Bank v. Bear, 265 U. S. 365, 44 St. Ct. 499, 68 L. Ed. 1057; Carter v. Whisler (C. C. A.) 275 F. 743.

[5] It has also been held that the discharge of a partnership has no effect upon the individual liability of the partners. Horner v. Hamner, 249 F. 134, 161 C. C. A. 186, L. R. A. 1918E, 465. See In re Sugar Valley Gin Co. (D. C.) 292 F. 508, 509. Cf. McClintic-Marshall Co. v. New Bedford, supra. It was said by Hough, J. in In re Pincus (D. C.) 147 F. 621, 625, that "in-' dividual discharges cannot be granted under an adjudication against the partnership only." See Curlee Clothing Co. v. Hamm, supra; In re E. W. Adams & Co. (D. C.) 283 F. 431, 433.

If the composition was in the nature of a contract, the plaintiff was a party to it only to the extent in which its claim against the partnership was concerned; it was not recognized as an individual creditor; no offer was made to it as the holder of a claim The question presented on this record is against the individuals. In this respect it the liability of the defendants, not for the was a stranger to the offer; it stood as any firm debts, but for their own individual other individual creditor whose demand was debts; there having been no adjudication in not listed, to whom no offer of compromise bankruptcy, the offer of compromise includwas made and who entered into no bargaining the firm creditors only. Assuming, when with the defendants. See Curlee Clothing a partnership is adjudicated bankrupt, the Co. v. Hamm, 160 Ark. 483, 254 S. W. 818. members are brought into the proceeding, [4] Confirmation of the composition discharges the bankrupt from his debts. Bankruptcy Act, § 14c (U. S. Comp. St. § 9598); McClintic-Marshall Co. v. New Bedford, 239 Mass. 216, 223, 224, 131 N. E. 444. In Francis v. McNeal, 228 U. S. 695, 33 S. Ct. 701, 57 L. Ed. 1029, L. R. A. 1915E, 706, creditors filed a petition in bankruptcy against Francis and two others, alleging they were bankrupt individually and as a firm. Francis was found to be a partner. McNeal was the receiver and was appointed trustee; the 147 N.E.-38

and if a discharge is granted that the debts of the partners can no longer be enforced, it does not follow from this, in our opinion, if there is no adjudication of bankruptcy, the claims of all creditors of all classes not being before the court for adjustment, the individual creditors having no notice of the proceeding and no opportunity to be heard, and the petition being brought by partnership creditors that a confirmation of an offer of compromise to the firm creditors alone, will prevent the individual creditors from

1. Taxation 3632-Net business loss deducted in federal income return for 1923 held allowable in computing net income for taxable year of 1923.

Where petitioner corporation sustained net business loss for year 1921, as defined by Revenue Act 1921, §§ 204, 232, 239 (U. S. Comp. St. Ann. Supp. 1923, §§ 6336% cc, 633600, 6336%s), which was deducted in its federal return due March 15, 1923, tax commissioner, in determining its net income for taxable year 1923, under G. L. c. 63, § 30, subsecs. 5, 6, as amended by St. 1922, c. 302, should have allowed such deduction.

BRALEY, J. The petitioner, a domestic business corporation, brings this petition as provided in G. L. c. 63, § 77, to recover an excise tax for the year 1923 assessed under G. L. c. 63, as amended by St. 1922, c. 302. If the petitioner prevails the amount recoverable is not in dispute. It is conceded by the respondent that the petitioner sustained a net business loss of $64,026.21 for the year 1921 as defined in section 204 of the federal Revenue Act of 1921 (U. S. Comp. St. Ann. Supp. 1923, § 6336% cc), and that in its last federal return of income due March 15, 1923, this loss was deducted.

[1] The question for decision is whether the tax commissioner, in determining the petitioner's net income for the taxable year of 1923, should have allowed this deduction. The tax in question was assessed April 1, 1923. G. L. c. 63, § 30, subsections (5) and (6), as amended by St. 1922, c. 302, in so far as pertinent, provides:

"5. "Net income' except as otherwise provided in sections thirty-four and thirty-nine, the net income for the taxable year as required to be returned by the corporation to the federal government under the federal Revenue Act of nineteen hundred and eighteen or the federal revenue act of nineteen hundred and twenty-one, whichever of said acts may be applicable, and, in the case of a domestic business corporation, such interest and dividends, not so required to be returned as net income, as would be taxable if received by an inhabitant of this commonwealth, less, both in the case of a domestic business corporation and of a foreign corporation, interest, so required to be returned, which is received upon bonds, notes and certificates of indebtedness of the United States."

2. Taxation 3632-Rule to determine net taxable income, where there has been con- "6. "Taxable year,' the fiscal or calendar version of capital assets before federal Cor-year for which the corporation was required poration Excise Tax Act effective, stated. to make its last return to the federal government due prior to April first of the year in which the tax is to be assessed, or, if such return was for a fractional period, a full year, including and ending with such fractional period."

In determining net taxable income, if any, where there has been conversion of capital assets acquired by corporation before federal Corporation Excise Tax Act took effect, an amount sufficient to restore capital value is to be deducted from gross proceeds of conversion.

Case Reserved from Supreme Judicial Court, Suffolk County.

Petition by the Charlton Woolen Company against the Commonwealth of Massachusetts to recover excise tax for the year 1923. Case reserved on pleadings and agreed statement of facts. Decree for petitioner.

The tax is to be levied in accordance with the statute, by which the net taxable income of the petitioner is to be measured by the net income for the taxable year required to be returned "to the federal government under the federal Revenue Act of nineteen hundred and twenty-one." The petitioner made such return prior to April 1, 1923, and if under that return, the accuracy

T. Hovey Gage and M. S. June, both of of which is not challenged, the loss was apWorcester, for petitioner.

J. R. Benton, Atty. Gen., and Alexander Lincoln, Asst. Atty. Gen., for the Commonwealth.

Choate, Hall & Stewart and C. O. Pengra, all of Boston, for American Hide & Leather Co., amici curiæ.

Ropes, Gray, Boyden & Perkins, of Boston, for Connecticut Mills Co., amici curiæ.

parently deductible it should have been so
treated in the assessment of the state tax.
It was said in Stratton's Independence v.
Howbert, 231 U. S. 399, 415, 34 S. Ct. 136,
140 (58 L. Ed. 285) "'income' may be defined
as the gain derived from capital, from labor,
or from both combined," and in Doyle v.
Mitchell Bros. Co., 247 U. S. 179, 184, 185, 38
S. Ct. 467, 62 L. Ed. 1054, it was held that

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