(after stating the facts as above). It is needless to cite the almost innumerable decisions that might readily be cited to the effect that the discretion possessed and exercised by a judge in appointing a receiver is not an arbitrary discretion, and where shown to be such will not be sustained by an appellate court. In "the present case, however, we are unable to hold that there was any violation of the sound discretion witji which the court below was invested, in making the appointment complained of. The showing made on the hearing of the application disclosed, among other things, that, at and prior to the time of the purchase of the vessel from her then Japanese owners, Smith was president of the plaintiff corporation, and was personally present at a meeting of its stockholders held at the office of the company in the city of San Francisco, October 9, 1920, at which meeting “it was decided to purchase the Taigi Maru/ ” at a certain stated price, and at which meeting “it was also decided to place the steamer under Norwegian flag, and,” according to the record, “the ownership of the steamer will be in the name of the California & Oriental Steamship Company, with a corresponding owner in Norway, according to law.”

The record further shows that at a meeting of the board of directors of the plaintiff corporation held April 18, 1921, Smith tendered his resignation as a member of the board, “to take effect immediately,” which resignation was thereupon accepted; that on the next day— April 19, 1921 — at a meeting of the board of directors of tire plaintiff at which Smith was present, this resolution was adopted :

“With the unanimous consent of all the directors of this corporation, O. Henry Smith, manager, was directed to send the following telegram to’ Arthur Mathiesen, corresponding owner, in Kristiania, Norway, to wit:

“Inasmuch as steamer Pacifico is owned by California & Oriental Steamship Company, please cable declaration that such is the fact that you are the representative .of this company. [Signed] Smith”

—and that Smith sent the telegram. The record further shows that two days thereafter, to wit, April 21, 1921, Smith exhibited to the company a reply to his telegram, in these words :‘

“Referring to your telegram just received, Pacifico is actually owned by the California & Oriental Steamship Company. I am registered owner of the steamer and representative of this company. Accordance with your instructions bill of sale has been deposited with the Norsk-Hydro Kristiania as security for your debts to them. They are entitled to have clean bill of sale at any time transferred to them.”

The record further shows that among the records of the plaintiff corporation are what purport to be copies of two letters signed Irv Smith, one dated October 23, 1920, and the other October 25, 1920. They are as follows:

“Oct. .28. 1920.

“Chr. Barth, Esq,, Attorney at Law, Christiania, Norway — Dear Mr.'Barth: Referring to my letter of September 25th, I have had, in the meantime, occasion to transfer a steamer to Norwegian flag which was purchased for *693friends here from Japanese owners, named the ‘Taigi Maru’ or now named ‘Pacifico.’ Inasmuch as all negotiations were carried on by cable, I had to appoint a corresponding owner in Norway in order to avoid any delay to the boat, and shipowner. Mr. Arthur H. Mathiesen, Kristiania, has agreed to act as correspondent for the steamer, and I have so advised the broker, Messrs. Pinkney & Oo., Cardiff, and they are therefore sending the necessary papers to Mr. Mathiesen. If you will be willing to attend to the matter of incorporating the steamer in a Norwegian company for the owners here, please send me a cable. X do not know whether your specialty is admiralty Jaw, but if you, for any reason, could not handle ¡his matter, probably you conic recommend some one to us, by cable. In the meantime, I beg to mention the necessary particulars to follow in this case:

“The owners here of the S. S. Pacifico bought the steamer on a cash basis of £18-0-0 per deadweight ton, or £98,154-0-0, and the capital stock of the company should bo one-half of this amount, or £49,077 -0-0, or the equivalent amount in Norwegian currency. I presume it will he necessary, according to Norwegian law. to have at least three Norwegian directors besides myself, as 1 am an American citizen, and if you in that case should be willing to stand as one of the directors, I would name my brother, X'rivisor Arthur Smith, Sarpsborg, besides Mr. Arthur H. Mathiesen, and I will write him In the matter in the same mail. The name of the company should be A/S Pacifico. As to your remuneration, we shall, no doubt, be able to agree on this.

•‘On account of having boon obliged to make the necessary arrangements by cable with Mr. Mathiesen. who will act as corresponding owner for the steamer, we have had no opportunity for drawing up any contract. As the steamer is owned by a company here, it would be necessary for me to have some sort of ¡m agreement with MV. Mathiosen, and I have offered him a remuneration of Kr. 12,000 per year during the time he is standing as corresponding owner, and the du1ies will be principally to engage officers whenever any vacancies occur: to make up returns for taxes from statements that we will furnish him from here covering the earnings and expenses; also to attend to the insurance at rates which are no higher than can be obtained from here. The stock is to be issued in the name of the California & Oriental Steamship Company, San Francisco, California, as this company is the actual owner of the boat, and the shares to he in denominations of Kr. 0,000 or Kr. 12,000.

“If there are any other points that have not been fully explained, we can easily do so by cable. In the meantime, remain with kind regards,

“Yours very truly, C. Henry Smith.”

“Oct. 25, 1920.

•Mr. Arthur II. Mathiesen, Kristiania, Norway — Dear Sir: Referring to your cable to-day. as per copy inclosed, in which you suggested a limited company be formed according to Norwegian laws, I telegraphed in reply thereto that I had already sent full particulars by mail. You will appreciate that, on account of the limited time I had to take over this boat. I had not made any such arrangement, and I am very much obliged to you for accepting ihe proposition I made, to act as correspondent for the boat, and I have now written my friend, Advokat Barth, at Kristiania, with regard to this company. I asked Mr. Barth to get in touch with your good self, and as I also thought it would be necessary to have a third director under Norwegian law, I suggested my brother, Arthur Smith, Sarpsborg, who also will call on you in this connection. I am thankful for the Information in your cable that six-tenths of the capital must bo owned by Norwegian subjects, and I am writing Advokat Barth with regard to this stipulation.

“Insurance: T hog to confirm cable in which T asked you to cover Kr. 2,000,000 hull 6 per cent, and interest and disbursements Kr. 700,000 2% per cent. Tire valuation of the steamer is Kr. 2,600.000, which kindly keep private. I have cabled London for rates, but so far have not had any reply, as they are very particular about which trade the steamer was to operate. *694so under the circumstances, not having anything definite from London, I accepted your rates on the basis as just mentioned.

“I also appreciate very much that you have engaged three engineers, 750, 575, and 480, respectively, and three mates, 560, 460, and 350 monthly, which is satisfactory, and may say that I had already engaged a captain through Messrs. Pinkney & Co. on the basis of Kr. 12,000 per year.

“Loan with Mortgage in Steamer: I have been' in communication with a bank in Norway and also an attorney with regard to a loan, and thought possibly you could arrange such a loan with the Skibs-Hypothek Bank for one-half of the valuation, basis Kr. 2,600,000, and X shall be glad to hear on what terms such a loan can be obtained and particularly at what rate of interest. Messrs. Pinkney & Co. will be sending you the papers after they have made transfer, and may say that the transfer will be delayed a couple of days on account of the London bills for the balance of the payment being mailed by our bank from New York, instead of being telegraphed, but presume that these bills will arrive there not later than Thursday of this week.

“Yours very truly, C. Henry Smith.”

The records above referred to, if genuine, very clearly show that Mathiesen held the title to the ship in trust for the plaintiff corporation; and as the defendants, according to their own pleading, knew that he held it in trust for somebody, it cannot be supposed that they would not have ascertained the truth by making inquiry of the trustee, which it does not appear that they did or tried to do. See our own decision in Sternfels v. Watson (C. C.) 139 Fed. 505; Geyser-Marion Gold Min. Co. v. Stark, 106 Fed. 558, 45 C. C. A. 467, 53 L. R. A. 684; Jones v. Williams, 24 Beav. 62.

The order is affirmed.