[Reid v. Bank of Mobile.] Durr & Co., 63 Ala. 547; Code, §§ 2094-95; Wait's Actions & Defenses, vol. 1, pp. 535, 573. The insertion of negotiable words, in an instrument which is not by law negotiable, does not change its legal character.-Clark v. Farmers' Manufac'g Co., 15 Wendell, 256; 1 Wait's Act. & D. 561, 574. Nor are the rights of the parties in this case at all affected by the fact that the bonds and coupons are made payable in New York. The bonds were transferred here, by and between persons residing here; the trust was created here; the remedial jurisdiction of our courts is asked, and the rights of the parties are to be determined by our statutes.-Lowry's Adm'r v. Western Bank, 7 Ala. 121; 1 Dan Neg. Instr. § 864, 899; 19 N. Y. 436. WM. G. JONES, contra.-The bonds are, unquestionably, negotiable securities, and are not due until the year 1900; and a purchaser of such bonds in good faith, for valuable consideration, without notice of any secret trust, or other defect in the title of the transferror, takes them free and discharged of any such trust. -1 Dillon on Municipal Corporations, 465, note 1, and cases cited; 1 Story's Equity, 409, 411; Daniell on Negotiable Instruments, $ 1492, 1499, 1500; 1 Wallace, 83. Taking them in payment, or part payment of a pre-existing debt, is a purchase for value.-Story on Bills. 188, 192; 1 Parsons on Bills and Notes, 219, 221, 257; 2 Ib. 42; Bank of Mobile . Hall, 6 Ala. 639; Barney v. Earle, 13 Ala. 112. The evidence clearly shows that the bank took these bonds in good faith, in part payment of an existing debt, and at more than their market value; and that this was done after Walsh had ceased to be either president or director, having previously resigned. Even if Walsh had been president at that time, his knowledge of the alleged trust, not being acquired in his offcial capacity, or in the transaction of business for the bank, would not charge it with notice.-Terrell v. Branch Bank, 12 Ala. 502; Story on Agency, §§ 140 et seq. BRICKELL, C. J.-The evidence leaves no room for doubt that the bonds of the Mobile and Alabama Grand Trunk Railroad Company were held by Butt as a trustee to secure and protect the appellants from liability on the promissory note to which they were parties, held by the First National Bank of Tuskaloosa. It was a breach of duty, and a violation of the confidence reposed in him, without the consent of the appellants, to apply these bonds for any other purpose than that of reliev ing them from liability on that note. Pledging them as collateral security, or making an appropriation of them for the payment of his own debt, or the debts of a partnership of which [Reid v. Bank of Mobile.] he was a member, was a wrongful conversion, rendering him chargeable with the value of the bonds at the time of such conversion. It is the right of the appellants to follow the bonds, or the proceeds into which they may have been changed, in the hands of all others than purchasers for a valuable consideration without notice of the trust, and into the hands of such purchasers, if the bonds are not to be taken as negotiable paper. The bonds are payable to bearer, as are the coupons attached for the interest semi-annually, at the office or agency of the railroad company in the city of New York; and in this respect differ from the bonds of the city of Troy, which were the subject of litigation in the case of Blackman v. Lehman, Durr & Co., 63 Ala. 547, which were payable in this State. It was, therefore, with a view to the law of New York, and with the intention that law should govern and control as to the character and operation of the bonds, it must be intended they were issued. By the general commercial law, which, it is presumed, prevails in New York, and which prevails here, so far as not changed by statute, bonds of this character, when expressed in negotiable words, are clothed with all the attributes of commercial paper--they pass by delivery, and in the hands of a holder acquiring them for value before due, without notice, are not subject to equities with which they were affected as between the original parties, or while in the hands of a party holding in trust.-2 Dan. Neg. Inst. $ 1500 et seq. They derived much of their value from being impressed with this legal character and their capacity of passing by mere manual delivery. Deprived of this character and capacity, they would not subserve the purposes for which they are generally issued, the convenient and speedy raising of money for the promotion and accomplishment of the objects of the corporation. When, however, it is shown that a negotiable instrument has been misapplied-that it has been parted with wrongfully, by one having its custody, and in fraud of the rights of the true owner the party claiming protection as a bona fide holder, as against the true owner, must show that he acquired it for a valuable consideration, in the usual course of trade, without knowledge of any defect or infirmity in the title of his transferror. Ross v. Drinkard, 35 Ala. 434. When that appears, he has a valid title, which can not be defeated by the fraud of the transferror, nor by equities affecting his title. It is not necessary to inquire, whether the appellee could be regarded as a bona fide holder, entitled to protection against the equities of appellants, so long as these bonds were held as collateral security for a pre-existing debt. In this State, it has been for a long time a settled doctrine, that taking commercial paper as collateral security for a pre-existing debt, though in [Reid v. Bank of Mobile.] dulgence or forbearance is granted, will not constitute a purchaser for value.-Fenouille v. Hamilton, 35 Ala. 319, and authorities cited. We are aware that this doctrine is in conflict with the great weight of authority, and upon its discussion we do not now enter. Subsequently, the bonds were taken in payment of the debt, at their full value. Receiving negotiable paper in payment of a precedent debt, can not be distinguished from purchasing it with money, or taking it in payment of property sold; and when it is so received, it is taken in the usual course of trade, and the holder is entitled to protection. Bank of Mobile v. Hall, 6 Ala. 639. It is only notice of the equity of the appellants, or notice of the infirmity of the title of the transferror, which will now affect the title of the appellee. It is true that Walsh, the president, and Crawford, a director of the bank, when these bonds. first came to its possession as collateral security, had full knowledge that they were held in trust by Butt, and of the equities of the appellants now asserted. But it is apparent they did not acquire such knowledge while acting in their respective official capacities, or while transacting business for the bank. It was acquired in the course of business, and in transactions, with which the bank had no concern. There was no communication of it to any officer of the bank, nor was there of any fact which would have excited inquiry or suspicion. Notice to an agent, in the course of transactions for which he was employed, operates as notice to the principal; and the rule is as applicable to corporations as to individuals.-Lucas v. Bank of Darien, 2 Stew. 321; Terrell v. Br. Bank of Mobile, 12 Ala. 502; Mundine v. Pitts, 14 Ala. 84; Pepper v. George, 51 Ala. 190. is not the private individual knowledge of the officer of a corporation, acquired in the transaction of his own business, while dealing as if he had no official relation to the corporation, that will operate as notice.-Ang. & Ames Corp. $ 305, 309; Terrell v. Br. Bank of Mobile, supra. It is only knowledge acquired while he is engaged within the scope of his duty and power in the business of the corporation, that can be imputed as notice to the latter. It Such being the aspect of the case, we concur with the chancellor, that the appellee is entitled to protection as a holder for value, against the equity of the appellants; and the decree must be affirmed. [Alexander v. Alexander.] Alexander v. Alexander. Bill in Equity by Legatees and Distributees, for Account and 1. Settlement of accounts of executor or administrator occupying antag onistic relations.-When an executor or administrator becomes also the personal representative of a deceased distributee of the estate, he can not, on account of these antagonistic relations, make a valid settlement of his accounts in the Probate Court; and such attempted settlement being void, although an administrator ad litem was appointed to represent the distributee's estate (Rev. Code, § 1998), the parties interested in that estate may afterwards maintain a bill in equity to compel a settlement of the executor's accounts. 2. When distributees may sue, without administration.-When all the debts against a decedent's estate have been paid, and no other act of administration is necessary than the making of final settlement and distribution, the distributees may, without the appointment and intervention of an administrator de bonis non, maintain a bill in equity to compel a settlement and distribution of an estate in which their ancestor was a distributee. APPEAL from the Chancery Court of Dallas. Heard before the Hon. N. S. GRAHAM. The bill in this case was filed on the 16th November, 1880, by Joseph L. Alexander and others, as distributees of the estate of Dewitt C. Alexander, deceased, and legatees under his will, against John D. Alexander, as executor of the last will and testament of Joseph M. Alexander, deceased, and also as administrator de bonis non of said estate by subsequent appointment, and against the other persons interested as distributees in the estate of said Joseph M. Alexander; and sought to compel a settlement of the accounts of said John D. Alexander, both as executor and as administrator de bonis non, and to remove the settlement of the estate into equity. It appears from the allegations of the bill, with the accompanying exhibits, that said Joseph M. Alexander died in Marengo county, where he resided, in March, 1865, having executed his last will and testament, which was duly admitted to probate in that county on the 24th April, 1865; and on the same day letters testamentary thereon were duly granted to John D. and Dewitt C. Alexander, two of the persons named as executors, who were sons of the testator, and, by the terms of the will, they were relieved from giving bond. The parties interested under the will of said testator were his two sons, who qualified as executors, and the children of a deceased daughter; and there were also some [Alexander v. Alexander.] Dewitt C. Alexan special legacies, which require no notice. der took no active part in the administration of the estate, but confided the entire management and control to his brother and co-executor; and he died on the 31st October, 1865, leaving a widow and several children, as the parties interested in his estate. By the last will and testament of said Dewitt C. Alexander, said John D. Alexander, his brother, was appointed his executor; and his will was duly admitted to probate on the 22d January, 1866, and letters testamentary were granted to the said John D. Alexander on the same day. John D. Alexander continued to act as the personal representative of both estates, by virtue of his appointments as executor, and made several partial settlements as executor of his father's estate; and on the 17th May, 1869, he filed his accounts and vouchers for a final settlement of his accounts as such executor, and the court appointed the 14th June, 1869, as the day for the settlement, and appointed a guardian ad litem to represent the interests of an infant legatee and distributee, and a special administrator ad litem to represent the estate of said Dewitt C. Alexander; and on that day rendered a decree, a copy of which was made an exhibit to the bill, as follows: "This day came on to be heard the account of John D. Alexander, as the executor of the last will of Joseph M. Alexander, deceased, for a final settlement of his administration of the said estate under the will; and thereupon comes the said executor, and also Thomas J. Foster, acting as guardian ad litem for Joseph D. Smith, a minor legatee under the said will, and as special administrator for the estate of Dewitt C. Alexander, and Albert A. Smith, a legatee under the said will, in his own proper person. And it appears to the court that, on the 17th day of May, 1869, the said executor filed in this court his said account and vouchers, with the names of the heirs of the said decedent and legatees under his will, and places of residence, with a statement of those married and under age; and that this day was appointed for hearing the same, and that notice thereof has been given, for three successive weeks, in the Southern Republican; and it further appears that said Thomas J. Foster is the legal and duly appointed guardian ad litem for the said county; and that he was duly appointed said special administrator, and accepted; and that he is present, representing the interests of said Joseph, and the interests of the estate of D. C., on the settlement; and that the Southern Republican is a newspaper published in this county, and the legal one for the publication of said notice; and that the said Joseph M. died, leaving him surviving, as his only heirs at law, the said John D. and Dewitt C. Alexander, who were his sons, and the said. Joseph D., who is a minor under twenty-one years of age, and |